Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (x) form or acquire any Subsidiary, or (y) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock of, or otherwise combine with or acquire, any Person, whether in a single transaction or a series of related transactions, individually or together with any other Credit Parties, except (i) as permitted by Section 6.1(b) below, (ii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, (A) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to Borrower provided that Borrower is the surviving entity from any such transaction, (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any Subsidiary of Borrower may form a Subsidiary organized under the laws of the United States so long as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on the Closing Date. (b) Notwithstanding Section 6.1(a), after the Closing Date, (x) Borrower or any Subsidiary Guarantor may acquire all or substantially all of any division, unit or business of or all or substantially all of the assets of, or (y) Borrower or any Subsidiary of Borrower that is a Credit Party may acquire all of the Stock of, any Person (the “Target”) (in each case, a “Permitted Acquisition”) subject to the satisfaction of each of the following conditions: (i) Agent shall receive at least thirty (30) Business Days’ prior written notice (or such shorter period as Agent may agree) of such proposed Permitted Acquisition, which notice shall include a reasonably detailed description of such proposed Permitted Acquisition; (ii) such Permitted Acquisition shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, of the type engaged in by the Credit Parties as of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case which business would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of approvals applicable to the exercise of such rights and remedies with respect to the Guarantors prior to such Permitted Acquisition; (iii) such Permitted Acquisition shall be consensual and shall have been approved by the Target’s board of directors (or other governing body); (iv) no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or other contingent liabilities shall be Incurred or otherwise be reflected on a consolidated balance sheet of Borrower and Target after giving effect to such Permitted Acquisition, except (A) Loans made hereunder, (B) Indebtedness secured by purchase money Liens and Capital Leases entered into in the ordinary course of Target’s business, provided that (1) the principal amount of such Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) Guaranteed Indebtedness permitted by Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition; (v) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combined; (vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall not have incurred an operating loss for the trailing twelve-month period preceding the date of such Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Permitted Acquisition; (vii) the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances); (viii) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisition, and at or prior to the closing of any Permitted Acquisition, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant thereto, consistent with the provisions of the Security Agreement, and in the outstanding Stock of the Target, and the applicable Credit Parties and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested by Agent in connection therewith; (ix) concurrently with delivery of the notice referred to in clause (i) above, Borrower shall have delivered to Agent and Lenders, in form reasonably satisfactory to Agent: (A) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower and its Subsidiaries (the “Acquisition Pro Forma”), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position and results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes), but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall reflect that on a Pro Forma Basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period); (B) updated versions of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and (C) a certificate of the chief financial officer of Borrower to the effect that: (w) Borrower (after taking into consideration all rights of contribution and indemnity each Credit Party has against each other Credit Party) will be Solvent upon the consummation of such Permitted Acquisition; (x) the Acquisition Pro Forma fairly presents in all material respects the financial position of Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders; (x) (A) at least five (5) days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received the then current draft of the acquisition agreement, in form and substance reasonably satisfactory to Agent (it being agreed that an acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender (collectively, the “Related Documents”), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and (C) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents; (xi) at the time of such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and (xii) Agent and Lenders shall have received reasonably satisfactory evidence of compliance with all regulatory requirements with respect to such Permitted Acquisition.
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Samples: Credit Agreement (Otelco Inc.), Credit Agreement (Otelco Telecommunications LLC)
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or -------------------------- indirectly, by operation of law or otherwise, (xa) form or acquire any Subsidiary, or (yb) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock capital stock of, or otherwise combine with or acquire, any Person, whether in a single transaction or a series of related transactions, individually or together with any other Credit Parties, except (i) as permitted by Section 6.1(b) belowBermans may be merged with and into Borrower or another Loan Party, (ii) one or more Store Guarantors may be merged with any other Store Guarantor or any Loan Party so long as such Loan Party is the survivor in any merger involving a Loan Party; (iii) cash and financial assets may be transferred among the Loan Parties so long as no Default or Event of Default has occurred and is continuing continuing; (iv) the Stock or would result therefromfixed assets, Trademarks and Trademark Licenses of Store Guarantors may be transferred to other Store Guarantors or to any Loan Party; (Av) any Subsidiary of Borrower the Credit Parties may merge or consolidate with or convey all or substantially all of its assets to Borrower form new wholly-owned domestic Subsidiaries; provided that Borrower is (x) the surviving entity from any such transaction, (B) any aggregate initial -------- ---- cash investment in each new domestic Subsidiary in the form of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction equity shall not exceed $300,000 and (Cy) Borrower or any the Credit Parties and each new domestic Subsidiary of Borrower may form a Subsidiary organized under the laws shall execute and deliver to Agent forms of the United States so long Loan Documents executed by or with respect to the Loan Parties as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on of the Closing Date.
; and (bvi) Notwithstanding Section 6.1(a), after the Closing Date, Ultimate Parent or any of its Subsidiaries may (x) Borrower form or any Subsidiary Guarantor may enter into Joint Ventures, (y) create or acquire all Foreign Subsidiaries or substantially all of any division, unit or business of or (z) acquire all or substantially all of the assets of, or (y) Borrower or any Subsidiary capital Stock of Borrower that is a Credit Party may acquire all of the Stock of, any Person (the “"Target”") (in each case, a “------ "Permitted Acquisition”Investment") subject to the satisfaction of each of the following conditions:
(i1) Agent shall receive at least thirty twenty (3020) Business Days’ days' prior written notice (or such shorter period as Agent may agree) of such proposed Permitted AcquisitionInvestment, which notice shall include a reasonably detailed description of such that proposed Permitted AcquisitionInvestment;
(ii2) such all Permitted Acquisition Investments shall only involve (A) assets located or to be located in the United States and comprising a business, States; provided that assets owned by Joint Ventures or those assets Foreign Subsidiaries may be located outside of a business, of the type engaged in by the Credit Parties as of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise so long as the investment in such a businessJoint Ventures or Foreign Subsidiaries, and in each case which business would not subject Agent or any Lender to regulatory or third party approvals their respective assets, is in connection compliance with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of approvals applicable to the exercise of such rights and remedies with respect to the Guarantors prior to such Permitted Acquisitionclause (4) below;
(iii3) at the time of the Permitted Investment and after giving effect thereto, the Loan Parties shall be in compliance with Section 6.5(b);
(4) the aggregate amount invested in Joint Ventures and Foreign Subsidiaries shall not exceed $5,000,000 in any Fiscal Year;
(5) such Permitted Acquisition Investment shall be consensual and and, if applicable, shall have been approved by the Target’s 's board of directors (or other governing body)directors;
(iv6) no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or other contingent liabilities shall be Incurred incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrower the Credit Parties and Target after giving effect to such Permitted AcquisitionInvestment, except (A) Loans made hereunder, hereunder and (B) Indebtedness secured by purchase money Liens and Capital Leases entered into in the ordinary course of Target’s businesstrade payables, provided that (1) the principal amount of such accrued expenses and Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on Target within the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) Guaranteed Indebtedness limits permitted by Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition6.3;
(v7) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date Investments (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith costs and all Indebtedness Indebtedness, liabilities and any earn out payments contingent obligations incurred or similar obligations Incurred assumed in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower the Credit Parties and Target) shall not exceed $25,000,000 20,000,000 (including $5,000,000 of Permitted Investments involving assets outside the United States and investments in Joint Ventures) during any Fiscal Year for all Credit Parties combinedYear;
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall not have incurred an operating loss for the trailing twelve-month period preceding the date of such Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Permitted Acquisition;
(vii) 8) the business and assets acquired in such each Permitted Acquisition Investment shall be free and clear of all Liens (other than Permitted Encumbrances);
(viii9) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisitionexcept for Foreign Subsidiaries and Joint Ventures, and at or prior to the closing of any Permitted AcquisitionInvestment, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant thereto, consistent with thereto or in the provisions assets and capital stock of the Security Agreement, Target and in the outstanding Stock of the TargetTarget shall have become a Guarantor, and the applicable Credit Parties and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested required by Agent in connection therewith; and in the case of Foreign Subsidiaries and Joint Ventures Agent will be granted, as applicable, a pledge of 100% of any domestic Joint Venture equity owned directly or indirectly by Ultimate Parent, sixty-five percent (65%) of the stock of any Foreign Subsidiary and/or the maximum percentage of any foreign Joint Venture equity as will not result in tax liability under IRC (S) 965;
(ix10) concurrently with delivery of the notice referred to in clause (i) above, Borrower shall have delivered to Agent and Lenders, in form reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower and its Subsidiaries (the “Acquisition Pro Forma”), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position and results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes), but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall reflect that on a Pro Forma Basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and
(C) a certificate of the chief financial officer of Borrower to the effect that: (w) Borrower (after taking into consideration all rights of contribution and indemnity each Credit Party has against each other Credit Party) will be Solvent upon the consummation of such Permitted Acquisition; (x) the Acquisition Pro Forma fairly presents in all material respects the financial position of Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders;
(x) (A) at least five (5) days prior to the date of such Permitted AcquisitionInvestment, Agent and Lenders shall have received the then current draft of the acquisition agreementreceived, in form and substance reasonably satisfactory to Agent (it being agreed that an in all material respects, copies of the acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, and related agreements and instruments, and all opinions, certificates, lien search results and other material documents reasonably requested by Agent or any Lender (collectively, the “Related Documents”), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and (C) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi11) at the time of such Permitted Acquisition Investment and after giving effect thereto, no Default, Default or Event of Default, Interest Deferral Period or Dividend Suspension Period has Default shall have occurred and is be continuing;
(12) Ultimate Parent and Target, on a consolidated basis after giving effect to a Permitted Investment, shall have a Fixed Charge Coverage Ratio of at least 1.0 to 1.0 on a pro forma basis for the twelve months preceding the date of the Permitted Investment and the twelve months following the Permitted Investments; and
(xii13) Agent and Lenders if the Target has incurred an operating loss for the trailing twelve month period preceding the date of the Permitted Investments, as determined based upon the Target's Financial Statements for its most recent interim financial period completed not more than ninety (90) days prior to the date of the consummation of such Permitted Investment, Borrower shall have received reasonably satisfactory evidence Borrowing Availability of compliance with all regulatory requirements at least $10 million, on a pro forma basis after giving effect to that Permitted Investment. Notwithstanding the foregoing, the Inventory of the Target shall not be included in Eligible Inventory prior to completion of a successful field audit with respect to such Permitted Acquisitionthereto.
Appears in 1 contract
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (xa) form any Subsidiary other than any of the Non-Guarantor Subsidiaries or acquire any Subsidiary, or (yb) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock of, or otherwise combine with or acquire, any PersonPerson (or business unit thereof). Notwithstanding the foregoing, whether in a single transaction or a series of related transactions, individually or together with (i) any Credit Party may merge into any other Credit PartiesParty that is not a Non-Guarantor Subsidiary; provided, except (i) as permitted by Section 6.1(b) belowthat a Borrower shall be the survivor of any such merger to which a Borrower is a party, (ii) so long as no Default or Event of Default has occurred and any Credit Party that is continuing or would result therefrom, (A) any not a Non-Guarantor Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to Borrower provided that Borrower is the surviving entity from any such transaction, (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any Subsidiary of Borrower may form a Subsidiary organized under the laws of the United States so long as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on the Closing Date.
(b) Notwithstanding Section 6.1(a), after the Closing Date, (x) Borrower or any Subsidiary Guarantor may acquire all or substantially all of the Stock of any divisionother Credit Party, unit (iii) any Credit Party that is not a Borrower or business of or a Non-Guarantor Subsidiary may acquire all or substantially all of the assets of, or (y) of any other Credit Party that is also not a Borrower or a Non-Guarantor Subsidiary, (iv) any Subsidiary of Borrower that is a Credit Party may acquire all or substantially all of the assets or Stock ofof any other Credit Party, (v) any Credit Party that is not a Non-Guarantor Subsidiary may acquire all or substantially all of the assets or Stock of any Person (the “TargetTarget Company”) and, (vi) any Credit Party that is not a Non-Guarantor Subsidiary may form a Subsidiary in order to acquire all or substantially all of the stock or assets of a Target Company (in each casecase of (i) through (vi), herein referred to as, a “Permitted Acquisition”) subject to the satisfaction of each of the following conditions, each to the reasonable satisfaction of Agent:
(i1) Agent shall receive prompt written notice after the completion of any Permitted Acquisition with total consideration and other amounts payable of less than $5,000,000 (a “Threshold Acquisition”), and (2) with respect to any proposed Permitted Acquisition with total consideration and other amounts payable of $5,000,000 or more, Agent shall receive at least thirty fifteen (3015) Business Days’ prior written notice (or such shorter period as Agent may agree) of such proposed Permitted Acquisition, which notice shall shall, in each case, include a reasonably detailed description of such proposed Permitted Acquisition;
(iiB) At the time of such Permitted Acquisition and after giving effect thereto, (1) no Default or Event of Default has occurred and is continuing; (2) the sum of all consideration and other amounts payable (including all transaction costs, non-competition payments or similar payments and all Indebtedness and Guaranteed Indebtedness incurred or assumed in connection therewith or Indebtedness, liabilities and contingent obligations otherwise reflected in a consolidated balance sheet of the Credit Parties after giving effect to such Permitted Acquisition) in connection with all Permitted Acquisitions completed subsequent to the Closing Date shall not exceed $50,000,000 in the aggregate or $15,000,000 for the period commencing on the Closing Date and ending on August 28, 2009 and (3) such Permitted Acquisition shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, that primarily involve the provision of hospice or home health services such that the type engaged in by the Credit Parties as consummation of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case which business Permitted Acquisition would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of the approvals applicable to a hospice or home health service provider;
(C) the exercise consideration and other amounts payable in connection with such Permitted Acquisition shall be payable in cash on the date of such rights and remedies with respect to the Guarantors prior to consummation of such Permitted Acquisition, other than (1) unsecured Indebtedness in an amount not to exceed 20% of the aggregate consideration and other amounts payable in connection with such Permitted Acquisition and (2) amounts due and payable after the date of the consummation of such Permitted Acquisition under customary non-competition agreements in an amount not to exceed $1,000,000 per agreement;
(iiiD) such Permitted Acquisition shall be consensual and shall have been approved by the TargetTarget Company’s board of directors (or other governing body)body and, if applicable, the Target Company’s Stockholders;
(ivE) no additional Indebtedness, Indebtedness or Guaranteed Indebtedness, contingent obligations or other contingent liabilities Indebtedness shall be Incurred incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrower Borrowers and Target Company after giving effect to such Permitted Acquisition, except (A1) Loans made hereunder, (B) Indebtedness secured by purchase money Liens hereunder and Capital Leases entered into in the ordinary course of Target’s business, provided that (1) the principal amount of such Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) and/or Guaranteed Indebtedness permitted by under Section 6.3 or Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisitionas applicable;
(vF) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) Target Company shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combined;
(vi) on a have Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall Acquisition EBITDA of not have incurred an operating loss less than $0 for the trailing twelve-twelve month period preceding the date of such the consummation of the Permitted Acquisition, as determined based upon the TargetTarget Company’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) 60 days prior to the date of consummation of such Permitted Acquisition;
(viiG) the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances);
(viiiH) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisition, and at or prior to the closing of any Permitted Acquisition, subject to Section 5.9(b), Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant theretothereto or, consistent with the provisions of the Security Agreementas applicable, and in the outstanding assets and Stock of the TargetTarget Company, and the applicable Credit Parties Party and the Target Company shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested required by Agent in connection therewith;
(ixI) concurrently with delivery of the notice referred to in clause (iA) above, Borrower Borrowers shall have delivered to Agent and LendersAgent, in form reasonably and substance satisfactory to AgentAgent in its reasonable credit judgment:
(A1) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower Holdings and its Subsidiaries (the “Acquisition Pro Forma”), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position condition and results of operations and cash flows of Borrower Holdings and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes)applied, but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall (x) reflect that that, on a Pro Forma Basispro forma basis, Holdings and its Subsidiaries would have had a Leverage Ratio not in excess of the ratio permitted by Annex F hereto for the four quarter period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to the consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Loans funded in connection therewith as if made on the first day of such period), and (y) reflect that, on a pro forma basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and
(C2) a certificate of the chief financial officer of Borrower Holdings to the effect that: (wx) Borrower (after taking into consideration all rights of contribution and indemnity each the Credit Party has against each other Credit Party) Parties will be Solvent upon the consummation of such the Permitted Acquisition; (xy) the Acquisition Pro Forma fairly presents in all material respects the financial position condition of Borrower Holdings and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such the Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties Holdings and its Subsidiaries have completed their due diligence investigation with respect to the Target Company and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenderscommercially reasonable manner, consistent with past practices;
(xJ) (A) at least five (5) days on or prior to the date of such Permitted Acquisition (or promptly thereafter for any Threshold Acquisition), Agent and Lenders shall have received the then current draft (1) a copy of the acquisition agreementagreement and (2) copies of all other related agreements, in form and substance reasonably satisfactory to Agent (it being agreed that an acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender Agent. Notwithstanding anything to the contrary in this Section 6.1, Borrowers shall not be required to satisfy the conditions set forth in subsections (collectively, the “Related Documents”C), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to AgentF) and (CI) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi) at the time of such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and
(xii) Agent and Lenders shall have received reasonably satisfactory evidence of compliance with all regulatory requirements with respect to such Permitted above for any Threshold Acquisition.
Appears in 1 contract
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (xa) form or acquire any Subsidiary, provided, however, that Borrower may form a new Domestic Subsidiary to be known as "CF XxxxxX.xxx Incorporated" so long as Borrower timely complies with all of the requirements set forth in Section 5.10 relating thereto or (yb) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock capital stock of, or otherwise combine with or acquire, any Person, whether in a single transaction or a series ; provided that the provisions of related transactions, individually or together with any other Credit Parties, except this Section 6.1 shall not prohibit (i) as permitted by Section 6.1(b) belowthe formation of the Receivables Subsidiary, (ii) so long as no Default the merger, consolidation or Event other combination of Default has occurred and is continuing or would result therefrom, (A) any Subsidiary of Borrower may merge (other than the Receivables Subsidiary) with Borrower or consolidate any other Credit Party (other than the Receivables Subsidiary) so long as (A) in the case of any merger, consolidation or other combination involving the Borrower, the Borrower is the surviving entity (B) in the case of any merger, consolidation or other combination involving CF Delaware, CF Delaware is the surviving entity and (C) in the case of any merger, consolidation or other combination involving any Credit Party (other than the Borrower or CF Delaware), a Credit Party is the surviving entity or the Target becomes a wholly- owned Subsidiary of a Credit Party and complies with the requirements of Section 5.10, or convey (iii) the sale of all or substantially all of its the assets to Borrower provided that Borrower is the surviving entity from any such transaction, (B) or capital stock of any Subsidiary of Borrower may merge (other than CF Delaware or consolidate with or convey all or substantially all of its assets the Receivables Subsidiary) to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any other Subsidiary of Borrower may form a (other than the Receivables Subsidiary organized under the laws or any of the United States so long as contemporaneously therewith such Subsidiary becomes a Foreign Subsidiaries), or (iv) the sale or contribution of CF Delaware's Receivables Assets pursuant to the Receivables Sale and Contribution Agreement. Notwithstanding the foregoing, any Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on the Closing Date.
(b) Notwithstanding Section 6.1(a), after the Closing Date, (x) Borrower or any Subsidiary Guarantor may acquire all or substantially all of any division, unit or business of or all or substantially all of the assets of, or (y) Borrower or any Subsidiary capital Stock of Borrower that is a Credit Party may acquire all of the Stock of, any Person (the “"Target”") (in each case, a “"Permitted Acquisition”") subject to the satisfaction of each of the following conditions:
(i) Agent the Lender shall receive have received at least thirty (30) Business Days’ 30 days' prior written notice (or such shorter period as Agent may agree) of such proposed Permitted Acquisition, which notice shall include a reasonably detailed description of such the proposed Permitted Acquisition;
(ii) such Permitted Acquisition the business acquired shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, be of the type engaged in by the Credit Parties Borrower or its Subsidiaries or such other business as of the Closing Date or, as applicable, a business, or those assets of a business, may be reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case which business would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of approvals applicable to the exercise of such rights and remedies with respect to the Guarantors prior to such Permitted Acquisition;thereto,
(iii) such the Permitted Acquisition shall be consensual and shall have been approved by the Target’s board 's Board of directors (or other governing body)Directors;
(iv) no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or other contingent liabilities shall be Incurred or otherwise be reflected on a consolidated balance sheet of Borrower and Target after giving effect to the Acquisition Price payable in connection with such Permitted Acquisition, except (A) Loans made hereunder, (B) Indebtedness secured by purchase money Liens and Capital Leases entered into in the ordinary course of Target’s business, provided that (1) the principal amount of such Indebtedness and Capital Lease Obligations with respect to such Capital LeasesAcquisitions, together with the aggregate amount of Acquisition Price paid in connection with all other outstanding purchase money Indebtedness and Capital Lease Obligations of Permitted Acquisitions consummated during the Credit PartiesFiscal Year, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) Guaranteed Indebtedness permitted by Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition25,000,000;
(v) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combined;
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall not have incurred an operating loss for the trailing twelve-month period preceding the date of such Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Permitted Acquisition;
(vii) the business and assets acquired in such Permitted Acquisition Acquisitions shall be free and clear of all Liens (other than Permitted Encumbrances);
(viiiA) in the case of any merger, consolidation or other combination involving the Borrower, the Borrower shall be is the surviving entity (B) in the case of any merger merger, consolidation or consolidation other combination involving Borrower CF Delaware, CF Delaware is the surviving entity and (C) in connection with any Permitted Acquisition, and at or prior to the closing case of any Permitted Acquisitionmerger, Agent will be granted consolidation or other combination involving any Credit Party (other than the Borrower or CF Delaware), a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all Credit Party is the assets acquired pursuant thereto, consistent surviving entity or the Target becomes a wholly-owned Subsidiary of a Credit Party and complies with the provisions requirements of the Security Agreement, and in the outstanding Stock of the Target, and the applicable Credit Parties and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested by Agent in connection therewithSection 5.10;
(ixvii) concurrently with delivery of the notice referred to in clause (i) above, Borrower Lender shall have delivered to Agent received a proforma balance sheet and Lenders, in form reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income statement and cash flow statement of the Borrower and its Subsidiaries (the “"Acquisition Pro Forma”), ProForma") based on the most recent financial statements, statements which shall be complete and shall fairly present in all material respects the assets, liabilities, financial position and results condition of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes), but taking into account such Permitted Acquisition and the funding of all Loans in connection therewithAcquisition, and such Acquisition Pro Forma ProForma shall reflect that (A) the average aggregate daily Excess Liquidity for the 60 day period preceding the consummation of such Permitted Acquisition would have exceeded $25,000,000 on a Pro Forma Basisproforma basis and (B) after giving effect to such acquisition, Borrower would have been in compliance with the required financial covenants for the four quarter period reflected in the compliance certificate most recently delivered to Lender prior to the consummation of the proposed acquisition;
(viii) the Lender shall have received a balance sheet and income statement and cash flow statement projections of the Borrower and its Subsidiaries, which shall reflect that such average aggregate daily Excess Liquidity, after giving effect to payment of accounts payable (including those assumed in connection with such Permitted Acquisition) consistent with past practices, of at least $25,000,000 shall continue for at least 60 days after the consummation of such Permitted Acquisition;
(ix) no additional indebtedness, guaranteed indebtedness, contingent obligations or other liabilities shall be incurred, assumed or otherwise be reflected on a consolidated balance sheet of such Credit Party and Target after giving effect to such Permitted Acquisition, except (A) ordinary course trade payables and accrued expenses (to the extent of current assets being acquired of the Target), (B) unsecured indebtedness of the Target (to the extent no Default or Event of Default has shall have occurred and is be continuing or would result after giving effect to such Permitted Acquisition Acquisition) and (C) other Indebtedness incurred by a Credit Party in connection with such acquisition to the Credit Parties would extent such Indebtedness is expressly permitted to be incurred under Section 6.3;
(x) the Lender shall have been in compliance with received a draft copy of the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to acquisition agreement and within one Business Days after consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions acquisition a copy of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisitionfinal acquisition agreement; and
(Cxi) a certificate of at the chief financial officer of Borrower to the effect that: (w) Borrower (after taking into consideration all rights of contribution time and indemnity each Credit Party has against each other Credit Party) will be Solvent upon the consummation of such Permitted Acquisition; (x) the Acquisition Pro Forma fairly presents in all material respects the financial position of Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates , no Default or Event of the future financial performance of Borrower Default shall have occurred and its Subsidiaries subsequent be continuing. Notwithstanding anything herein to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders;
(x) (A) at least five (5) days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received the then current draft of the acquisition agreement, in form and substance reasonably satisfactory to Agent (it being agreed that an acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender (collectivelycontrary, the “Related Documents”requirements of clauses (i), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agentvii) and (Cviii) on or prior above shall not apply to two (2) Business Days after any acquisition made in any particular Fiscal Year if the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy sum of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi) at Acquisition Price payable in connection therewith plus the time of aggregate Acquisition Prices payable in connection with all other acquisitions by any Credit Parties made in such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and
(xii) Agent and Lenders shall have received reasonably satisfactory evidence of Fiscal Year without compliance with all regulatory requirements with respect to such Permitted Acquisitionclauses (i), (vii) and (viii) does not exceed $2,500,000.
Appears in 1 contract
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (xa) form or acquire any Subsidiary, or (yb) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock capital stock of, or otherwise combine with or acquire, any Person, whether in a single transaction or a series of related transactions, individually or together with any other Credit Parties, except (i) as permitted by Section 6.1(b) belowBermans may be merged with and into Borrower or another Loan Party, (ii) one or more Store Guarantors may be merged with any other Store Guarantor or any Loan Party so long as such Loan Party is the survivor in any merger involving a Loan Party; (iii) cash and financial assets may be transferred among the Loan Parties so long as no Default or Event of Default has occurred and is continuing continuing; (iv) the Stock or would result therefromfixed assets, Trademarks and Trademark Licenses of Store Guarantors may be transferred to other Store Guarantors or to any Loan Party; (Av) any the Credit Parties may form new wholly-owned domestic Subsidiaries; PROVIDED THAT (x) the aggregate initial cash investment in each new domestic Subsidiary in the form of Borrower may merge or consolidate with or convey all or substantially all of its assets to Borrower provided that Borrower is the surviving entity from any such transaction, (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction equity shall not exceed $300,000 and (Cy) Borrower or any the Credit Parties and each new domestic Subsidiary of Borrower may form a Subsidiary organized under the laws shall execute and deliver to Agent forms of the United States so long Loan Documents executed by or with respect to the Loan Parties as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on of the Closing Date.
; and (bvi) Notwithstanding Section 6.1(a), after the Closing Date, Ultimate Parent or any of its Subsidiaries may (x) Borrower form or any Subsidiary Guarantor may enter into Joint Ventures, (y) create or acquire all Foreign Subsidiaries or substantially all of any division, unit or business of or (z) acquire all or substantially all of the assets of, or (y) Borrower or any Subsidiary capital Stock of Borrower that is a Credit Party may acquire all of the Stock of, any Person (the “Target”"TARGET") and form Subsidiaries in connection therewith (in each case, a “"Permitted Acquisition”Investment") subject to the satisfaction of each of the following conditions:
(i1) Agent shall receive at least thirty twenty (3020) Business Days’ days' prior written notice (or such shorter period as Agent may agree) of such proposed Permitted AcquisitionInvestment, which notice shall include a reasonably detailed description of such that proposed Permitted AcquisitionInvestment;
(ii2) such all Permitted Acquisition Investments shall only involve (A) assets located or to be located in the United States and comprising a business, States; provided that assets owned by Joint Ventures or those assets Foreign Subsidiaries may be located outside of a business, of the type engaged in by the Credit Parties as of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise so long as the investment in such a businessJoint Ventures or Foreign Subsidiaries, and in each case which business would not subject Agent or any Lender to regulatory or third party approvals their respective assets, is in connection compliance with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of approvals applicable to the exercise of such rights and remedies with respect to the Guarantors prior to such Permitted Acquisitionclause (4) below;
(iii3) at the time of the Permitted Investment and after giving effect thereto, the Loan Parties shall be in compliance with Section 6.19;
(4) the aggregate amount invested in Joint Ventures and Foreign Subsidiaries shall not exceed $5,000,000 in any Fiscal Year;
(5) such Permitted Acquisition Investment shall be consensual and and, if applicable, shall have been approved by the Target’s 's board of directors (or other governing body)directors;
(iv6) no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or other contingent liabilities shall be Incurred incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrower the Credit Parties and Target after giving effect to such Permitted AcquisitionInvestment, except (A) Loans made hereunder, hereunder (B) Indebtedness secured by purchase money Liens and Capital Leases entered into in the ordinary course of Target’s businesstrade payables, provided that (1) the principal amount of such accrued expenses and Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens Target within the limits permitted by Section 6.3 and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations consisting of indemnities given to sellers with respect to assumed liabilities, assumed letter of credit obligations, and nonmaterial contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) Guaranteed Indebtedness permitted by Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisitionthereto;
(v7) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date Investments (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith costs and all Indebtedness Indebtedness, liabilities and any earn out payments contingent obligations incurred or similar obligations Incurred assumed in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower the Credit Parties and Target) shall not exceed $25,000,000 40,000,000, during the Fiscal Year ending in January, 2001, and $20,000,000 during any Fiscal Year for all Credit Parties combined;thereafter (including, in each case, $5,000,000 of Permitted Investments involving assets outside the United States and investments in Joint Ventures).
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall not have incurred an operating loss for the trailing twelve-month period preceding the date of such Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Permitted Acquisition;
(vii) 8) the business and assets acquired in such each Permitted Acquisition Investment shall be free and clear of all Liens (other than Permitted Encumbrances);
(viii9) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisitionexcept for Foreign Subsidiaries and Joint Ventures, and at or prior to the closing of any Permitted AcquisitionInvestment, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant thereto, consistent with thereto or in the provisions assets and capital stock of the Security Target and the Target shall have become a Guarantor and each Target that is a Store Guarantor shall have become a party to the Consignment Agreement, and in the outstanding Stock of the Target, and the applicable Credit Parties and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested required by Agent in connection therewith; and in the case of Foreign Subsidiaries and Joint Ventures Agent will be granted, as applicable, a pledge of 100% of any domestic Joint Venture equity owned directly or indirectly by Ultimate Parent, sixty-five percent (65%) of the stock of any Foreign Subsidiary and/or the maximum percentage of any foreign Joint Venture equity as will not result in tax liability under IRC ss. 956;
(ix10) concurrently with delivery of the notice referred to in clause (i) above, Borrower shall have delivered to Agent and Lenders, in form reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower and its Subsidiaries (the “Acquisition Pro Forma”), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position and results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes), but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall reflect that on a Pro Forma Basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and
(C) a certificate of the chief financial officer of Borrower to the effect that: (w) Borrower (after taking into consideration all rights of contribution and indemnity each Credit Party has against each other Credit Party) will be Solvent upon the consummation of such Permitted Acquisition; (x) the Acquisition Pro Forma fairly presents in all material respects the financial position of Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders;
(x) (A) at least five (5) days prior to the date of such Permitted AcquisitionInvestment, Agent and Lenders shall have received the then current draft of the acquisition agreementreceived, in form and substance reasonably satisfactory to Agent (it being agreed that an in all material respects, copies of the acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, and related agreements and instruments, and all opinions, certificates, lien search results and other material documents reasonably requested by Agent or any Lender (collectively, the “Related Documents”), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and (C) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi11) at the time of such Permitted Acquisition Investment and after giving effect thereto, no Default, Default or Event of Default, Interest Deferral Period or Dividend Suspension Period has Default shall have occurred and be continuing;
(12) After giving effect to a Permitted Investment, Ultimate Parent and Target, on a consolidated basis ( if consolidation is continuingrequired under GAAP), or Ultimate Parent alone (if consolidation is not required under GAAP) shall have a Fixed Chrge Coverage Ratio that complies with Schedule I for the 12 months preceding and the 12 months following the Permitted Investment; and
(xii13) Agent and Lenders if the Target has incurred an operating loss for the trailing twelve month period preceding the date of the Permitted Investments, as determined based upon the Target's Financial Statements for its most recent interim financial period completed not more than ninety (90) days prior to the date of the consummation of such Permitted Investment, Borrower shall have received reasonably satisfactory evidence Borrowing Availability of compliance with all regulatory requirements at least $10 million (excluding Seasonal Over-Advances), on a pro forma basis after giving effect to that Permitted Investment. Notwithstanding the foregoing, the Inventory of the Target shall not be included in Eligible Inventory prior to completion of a successful field audit with respect to such Permitted Acquisitionthereto.
Appears in 1 contract
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (x) form or acquire any Subsidiary, or (y) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock of, or otherwise combine with or acquire, any Person, whether in a single transaction or a series of related transactions, individually or together with any other Credit Parties, except (i) as permitted by Section 6.1(b) below, (ii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, (A) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to Borrower provided that Borrower is the surviving entity from any such transaction, (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any Subsidiary of Borrower may form a Subsidiary organized under the laws of the United States so long as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Maine Acquisition consummated on the Restatement Closing Date.
(b) Notwithstanding Section 6.1(a), after the Restatement Closing Date, (x) Borrower or any Subsidiary Guarantor may acquire all or substantially all of any division, unit or business of or all or substantially all of the assets of, or (y) Borrower or any Subsidiary of Borrower that is a Credit Party may acquire all of the Stock of, any Person (the “"Target”") (in each case, a “"Permitted Acquisition”") subject to the satisfaction of each of the following conditions:
(i) Agent shall receive at least thirty (30) Business Days’ prior written notice (or such shorter period as Agent may agree) of such proposed Permitted Acquisition, which notice shall include a reasonably detailed description of such proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, of the type engaged in by the Credit Parties as of the Restatement Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case which business would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of approvals applicable to the exercise of such rights and remedies with respect to the Guarantors prior to such Permitted Acquisition;
(iii) such Permitted Acquisition shall be consensual and shall have been approved by the Target’s board of directors (or other governing body);
(iv) no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or other contingent liabilities shall be Incurred or otherwise be reflected on a consolidated balance sheet of Borrower and Target after giving effect to such Permitted Acquisition, except (A) Loans made hereunder, (B) Indebtedness secured by purchase money Liens and Capital Leases entered into in the ordinary course of Target’s business, provided that (1) the principal amount of such Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 1,500,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) Guaranteed Indebtedness permitted by Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition;
(v) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Restatement Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combined;
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall not have incurred an operating loss for the trailing twelve-month period preceding the date of such Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Permitted Acquisition;
(vii) the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances);
(viii) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisition, and at or prior to the closing of any Permitted Acquisition, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant thereto, consistent with the provisions of the Security Agreement, and in the outstanding Stock of the Target, and the applicable Credit Parties and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested by Agent in connection therewith;
(ix) concurrently with delivery of the notice referred to in clause (i) above, Borrower shall have delivered to Agent and Lenders, in form reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower and its Subsidiaries (the “"Acquisition Pro Forma”"), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position and results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes), but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall reflect that on a Pro Forma Basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “"Acquisition Projections”") and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and
(C) a certificate of the chief financial officer of Borrower to the effect that: (w) Borrower (after taking into consideration all rights of contribution and indemnity each Credit Party has against each other Credit Party) will be Solvent upon the consummation of such Permitted Acquisition; (x) the Acquisition Pro Forma fairly presents in all material respects the financial position of Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders;
(x) (A) at least five (5) days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received the then current draft of the acquisition agreement, in form and substance reasonably satisfactory to Agent (it being agreed that an acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender (collectively, the “"Related Documents”"), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and (C) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi) at the time of such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and
(xii) Agent and Lenders shall have received reasonably satisfactory evidence of compliance with all regulatory requirements with respect to such Permitted Acquisition.
Appears in 1 contract
Samples: Credit Agreement (Otelco Inc.)
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (xa) form any Subsidiary other than any of the Non-Guarantor Subsidiaries or acquire any Subsidiary, or (yb) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock of, or otherwise combine with or acquire, any PersonPerson (or business unit thereof). Notwithstanding the foregoing, whether in a single transaction or a series of related transactions, individually or together with (i) any Credit Party may merge into any other Credit PartiesParty that is not a Non-Guarantor Subsidiary; provided, except (i) as permitted by Section 6.1(b) belowthat a Borrower shall be the survivor of any such merger to which a Borrower is a party, (ii) so long as no Default or Event of Default has occurred and any Credit Party that is continuing or would result therefrom, (A) any not a Non-Guarantor Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to Borrower provided that Borrower is the surviving entity from any such transaction, (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any Subsidiary of Borrower may form a Subsidiary organized under the laws of the United States so long as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on the Closing Date.
(b) Notwithstanding Section 6.1(a), after the Closing Date, (x) Borrower or any Subsidiary Guarantor may acquire all or substantially all of the Stock of any divisionother Credit Party, unit (iii) any Credit Party that is not a Borrower or business of or a Non-Guarantor Subsidiary may acquire all or substantially all of the assets of, or (y) of any other Credit Party that is also not a Borrower or a Non-Guarantor Subsidiary, (iv) any Subsidiary Borrower may acquire all or substantially all of Borrower that is a the assets or Stock of any other Credit Party, (v) any Credit Party may acquire all or substantially all of the assets or Stock of, of any Person (the “"Target”") and, (vi) any Borrower may form a Subsidiary in order to acquire all or substantially all of the stock or assets of a Target (in each casecase of (i) through (vi), herein referred to as, a “"Permitted Acquisition”") subject to the satisfaction of each of the following conditions, each to the reasonable satisfaction of Agent:
(i1) Agent shall receive prompt written notice after the completion of any Permitted Acquisition with total consideration and other amounts payable of less than $5,000,000 (a "Threshold Acquisition"), and (2) with respect to any proposed Permitted Acquisition with total consideration and other amounts payable of $5,000,000 or more, Agent shall receive at least thirty fifteen (3015) Business Days’ ' prior written notice (or such shorter period as Agent may agree) of such proposed Permitted Acquisition, which notice shall shall, in each case, include a reasonably detailed description of such proposed Permitted Acquisition;
(iiB) At the time of such Permitted Acquisition and after giving effect thereto, (1) no Default or Event of Default has occurred and is continuing; (2) the sum of all consideration and other amounts payable (including all transaction costs, non-competition payments or similar payments and all Indebtedness and Guaranteed Indebtedness incurred or assumed in connection therewith or Indebtedness, liabilities and contingent obligations otherwise reflected in a consolidated balance sheet of the Credit Parties after giving effect to such Permitted Acquisition) in connection with all Permitted Acquisitions completed subsequent to the Closing Date shall not exceed $50,000,000, and (3) such Permitted Acquisition shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, that involve the provision of hospice or home health services such that the type engaged in by the Credit Parties as consummation of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case which business Permitted Acquisition would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of the approvals applicable to a hospice or home health service provider;
(C) the exercise consideration and other amounts payable in connection with such Permitted Acquisition shall be payable in cash on the date of such rights and remedies with respect to the Guarantors prior to consummation of such Permitted Acquisition, other than (1) unsecured Indebtedness in an amount not to exceed 20% of the aggregate consideration and other amounts payable in connection with such Permitted Acquisition and (2) amounts due and payable after the date of the consummation of such Permitted Acquisition under customary non-competition agreements in an amount not to exceed $1,000,000 per agreement;
(iiiD) such Permitted Acquisition shall be consensual and shall have been approved by the Target’s 's board of directors (or other governing body)body and, if applicable, the Target's Stockholders;
(ivE) no additional Indebtedness, Indebtedness or Guaranteed Indebtedness, contingent obligations or other contingent liabilities Indebtedness shall be Incurred incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrower Borrowers and Target after giving effect to such Permitted Acquisition, except (A1) Loans made hereunder, (B) Indebtedness secured by purchase money Liens hereunder and Capital Leases entered into in the ordinary course of Target’s business, provided that (1) the principal amount of such Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) and/or Guaranteed Indebtedness permitted by under Section 6.3 or Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisitionas applicable;
(vF) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combined;
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall have Pro Forma Acquisition EBITDA of not have incurred an operating loss less than $0 for the trailing twelve-twelve month period preceding the date of such the consummation of the Permitted Acquisition, as determined based upon the Target’s 's financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) 60 days prior to the date of consummation of such Permitted Acquisition;
(viiG) the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances);
(viiiH) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisition, and at or prior to the closing of any Permitted Acquisition, subject to Section 5.9(b), Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant theretothereto or, consistent with the provisions of the Security Agreementas applicable, and in the outstanding assets and Stock of the Target, and the applicable Credit Parties Borrowers and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested required by Agent in connection therewith;
(ixI) concurrently with delivery of the notice referred to in clause (iA) above, Borrower Borrowers shall have delivered to Agent and LendersAgent, in form reasonably and substance satisfactory to AgentAgent in its reasonable credit judgment:
(A1) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower Holdings and its Subsidiaries (the “"Acquisition Pro Forma”"), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position condition and results of operations and cash flows of Borrower Holdings and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes)applied, but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall (x) reflect that that, on a Pro Forma Basispro forma basis, Holdings and its Subsidiaries would have had a Leverage Ratio not in excess of 1.0 to 1.0 for the four quarter period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to the consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Loans funded in connection therewith as if made on the first day of such period), and (y) reflect that, on a pro forma basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and
(C2) a certificate of the chief financial officer of Borrower Holdings to the effect that: (wx) Borrower (after taking into consideration all rights of contribution and indemnity each the Credit Party has against each other Credit Party) Parties will be Solvent upon the consummation of such the Permitted Acquisition; (xy) the Acquisition Pro Forma fairly presents in all material respects the financial position condition of Borrower Holdings and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such the Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties Holdings and its Subsidiaries have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenderscommercially reasonable manner, consistent with past practices;
(xJ) (A) at least five (5) days on or prior to the date of such Permitted Acquisition (or promptly thereafter for any Threshold Acquisition), Agent and Lenders shall have received the then current draft (1) a copy of the acquisition agreementagreement and (2) copies of all other related agreements, in form and substance reasonably satisfactory to Agent (it being agreed that an acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender Agent. Notwithstanding anything to the contrary in this Section 6.1, Borrowers shall not be required to satisfy the conditions set forth in subsections (collectively, the “Related Documents”C), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to AgentF) and (CI) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi) at the time of such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and
(xii) Agent and Lenders shall have received reasonably satisfactory evidence of compliance with all regulatory requirements with respect to such Permitted above for any Threshold Acquisition.
Appears in 1 contract
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (x) form or acquire any Subsidiary, or (y) merge with, consolidate with, acquire all or substantially all a substantial portion of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the assets or Stock of, or otherwise combine with or acquire, any Person, whether in a single transaction or a series of related transactions, individually or together with any other Credit Parties, except (i) as permitted by Section 6.1(b) below, (ii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, (A) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to Borrower provided that Borrower is the surviving entity from any such transaction, (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any Subsidiary of Borrower may form a Subsidiary organized under the laws of the United States so long as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on the Closing Date.
(b) Notwithstanding Section 6.1(a), after the Closing Date, (x) Borrower or any Subsidiary Guarantor may acquire all or substantially all a substantial portion of any division, unit or business of or all or substantially all of the assets of, or (y) Borrower or any Subsidiary of Borrower that is a Credit Party may acquire all of the Stock of, any Person (the “Target”) (in each case, a “Permitted Acquisition”) subject to the satisfaction of each of the following conditions:
(i) Agent shall receive at least thirty (30) Business Days’ prior written notice (or such shorter period as Agent may agree) of such proposed Permitted Acquisition, which notice shall include a reasonably detailed description of such proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, of the type engaged in by the Credit Parties as of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case which business would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of approvals applicable to the exercise of such rights and remedies with respect to the Guarantors prior to such Permitted Acquisition;
(iii) such Permitted Acquisition shall be consensual and shall have been approved by the Target’s board of directors (or other governing body);
(iv) no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or other contingent liabilities shall be Incurred or otherwise be reflected on a consolidated balance sheet of Borrower and Target after giving effect to such Permitted Acquisition, except (A) Loans made hereunder, (B) Indebtedness secured by purchase money Liens and Capital Leases entered into in the ordinary course of Target’s business, provided that (1) the principal amount of such Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations ordinary course trade payables and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) Guaranteed Indebtedness permitted by Section 6.6accrued expenses, and (ED) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition;
(v) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combined;
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall not have incurred an operating loss (disregarding nonrecurring charges or credits directly attributable to such Permitted Acquisition) for the trailing twelve-month period preceding the date of such Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Permitted Acquisition;
(vii) the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances);
(viii) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisition, and at or prior to the closing of any Permitted Acquisition, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant thereto, consistent with the provisions of the Security Agreement, and in the outstanding Stock of the Target, and the applicable Credit Parties and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested by Agent in connection therewith;
(ix) concurrently with delivery of the notice referred to in clause (i) above, Borrower shall have delivered to Agent and Lenders, in form reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower and its Subsidiaries (the “Acquisition Pro Forma”), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position and results of operations and cash flows of Borrower and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes), but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall reflect that on a Pro Forma Basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three one (31) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and
(C) a certificate of the chief financial officer of Borrower to the effect that: (w) Borrower (after taking into consideration all rights of contribution and indemnity each Credit Party has against each other Credit Party) will be Solvent upon the consummation of such Permitted Acquisition; (x) the Acquisition Pro Forma fairly presents in all material respects the financial position of Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders;
(x) (A) at least five (5) days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received the then current draft of the acquisition agreementreceived, in form and substance reasonably satisfactory to Agent (it being agreed that an Agent, substantially final copies of the acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, and related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender (collectively, the “Related Documents”)Lender, including those specified in the last two sentences of Section 5.9, and (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy copies of the substantially final acquisition agreement and, upon request of Agent, Related Documents and related agreements and all such documentation agreements shall not differ in any material respect from the previous draft substantially final agreements provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser shall have approved of such assets or Stock in such industry differences (which approval shall not be reasonably satisfactory to Agent) and (C) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documentsunreasonably withheld);
(xi) at the time of such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and
(xii) Agent and Lenders shall have received reasonably satisfactory evidence of compliance with all regulatory requirements with respect to such Permitted Acquisition.
Appears in 1 contract
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (xi) form or acquire any Subsidiary, or (yii) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock of, or otherwise combine with or acquire, any Person, whether in a single transaction or a series of related transactions, individually or together with any other Credit Parties, except (i) as permitted by Section 6.1(b) below, (ii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, (A) any Subsidiary of Borrower Credit Party may merge or consolidate with or convey all or substantially all of its assets to Borrower provided another Credit Party, PROVIDED that Borrower is shall be the surviving entity from survivor of any such transaction, merger to which it is a party and (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any Subsidiary of Borrower Secured Guarantor may form consummate a Subsidiary organized under the laws of the United States so long Permitted Acquisition as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor defined in and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iiiSECTION 6.1(b) below or form one or more Acquisition Companies for the Mid-Missouri Acquisition consummated on the Closing Datesole purpose of completing a Permitted Acquisition.
(b) Notwithstanding Section 6.1(a)Any Credit Party or an Acquisition Company (or Holdings, after the Closing Dateso long as contemporaneously therewith, (x) all assets so acquired are transferred to Borrower or any Subsidiary Guarantor other Credit Party), may (i) acquire all or substantially all of any division, unit or business of or all or substantially all of the assets ofof a Qualified Target or assets that constitute all or substantially all of the assets of a division or operating unit of a Qualified Target, (ii) purchase 100% of the outstanding Stock of a Qualified Target, (iii) purchase not less than 80% of each class of outstanding Stock of a Qualified Target as long as, without limitation to conditions required for Permitted Acquisition set forth below, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances and except as contemplated by CLAUSES (A) and (C) of SECTION 6.1(b)(iv)) in all in the assets and Stock of the Qualified Target, and Agent shall have received lien search results, financing statements and supplemental security agreements, a Guaranty, environmental indemnity agreements, blocked account agreements and other collateral documents in connection therewith as requested by Agent, or (yiv) participate in a merger of a Qualified Target with and into Borrower or any Subsidiary a Secured Guarantor or the merger of an Acquisition Company into a Qualified Target (with Borrower that is as the sole Stockholder of Qualified Target after giving effect thereto) or the merger of a Credit Party may acquire all Qualified Target into an Acquisition Company (each such acquisition, purchase or merger being an "ACQUISITION"), subject to satisfaction of each of the Stock of, any Person following conditions (the “Target”) (in and each case, such Acquisition shall be a “Permitted Acquisition”) subject to the "PERMITTED ACQUISITION" only upon satisfaction of each of the following conditions:):
(i) Agent shall receive at least thirty (30) Business Days’ 30 days' prior written notice (or such shorter period as Agent may agree) of such proposed Permitted Acquisition, which notice shall include a reasonably detailed description of such proposed Permitted Acquisition, which may be subject to further negotiation, and a copy of any executed letter of intent relating thereto;
(ii) such Permitted Acquisition shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, of the type engaged in by the Credit Parties as of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case Qualified Target which business would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of approvals applicable to the exercise of such rights and remedies with respect to the Guarantors Borrower prior to such Permitted Acquisition;
(iii) such Permitted Acquisition shall be consensual and shall have been approved by the Qualified Target’s 's board of directors (or other governing body)or, in the case of a Qualified Target in bankruptcy, a court of competent jurisdiction;
(iv) no additional Indebtedness, Guaranteed Indebtedness, contingent obligations Indebtedness or other contingent liabilities shall be Incurred incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrower and Qualified Target after giving effect to such Permitted Acquisition, except (A) Loans Revolving Credit Advances made hereunderhereunder that are made in accordance with the terms of SECTION 2.3, (B) Indebtedness secured by trade payables and accrued expenses, each in existence at the time of the Acquisition and not created in anticipation thereof and each arising in ordinary course, (C) Industrial Revenue Bond Financing, Capital Leases and purchase money Liens Indebtedness, not to exceed in the aggregate 25% of total consideration paid for such Permitted Acquisition (including the book value of assumed liabilities), each in existence at the time of Acquisition and Capital Leases entered into not created in anticipation thereof and each arising in the ordinary course of Target’s business, provided that and (D) unsecured Acquisition Subordinated Debt (1) with a maturity date after the principal maturity of the Obligations in an amount of such Indebtedness and Capital Lease Obligations with respect not to such Capital Leases, together with exceed $5,000,000 in the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, or (2) such purchase money Liens and Capital Leases are not created with an earlier maturity but subject to Reserve against the Borrowing Base in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) Guaranteed Indebtedness permitted by Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition an amount equal to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisitionmaximum aggregate payments payable thereunder;
(v) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combined;
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall not have incurred an operating loss for the trailing twelve-month period preceding the date of such Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Permitted Acquisition;
(vii) the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted EncumbrancesEncumbrances and except as contemplated by CLAUSES (A) and (C) of SECTION 6.1(b)(iv));
(viiivi) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisition, and at or prior to the closing of any Permitted Acquisition, Agent will be granted a first priority perfected Lien (subject to Permitted EncumbrancesEncumbrances and except as contemplated by CLAUSES (A) and (C) of SECTION 6.1(b)(iv)) in substantially all the assets acquired pursuant theretothereto or, consistent with the provisions of the Security Agreement, and in the outstanding case of equity purchase, in the assets and Stock of the Qualified Target, and the applicable Credit Parties and the Target Borrower shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested required by Agent in connection therewith, and Agent shall have received lien search results, financing statements and supplemental security agreements, a Guaranty, environmental indemnity agreements, blocked account agreements and other collateral documents and other documents reasonably requested by Agent;
(vii) at the time of such Acquisition and immediately after giving effect thereto (including any Revolving Credit Advance in connection therewith), no Default or Event of Default shall have occurred and be continuing;
(viii) at least 5 days before the closing date for the Permitted Acquisition, Agent shall have received the following financial statements consisting of balance sheets, statements of income and retained earnings and cash flows with respect to the Qualified Target to the extent such financial statements exist or are obtained by such date: (A) annual financial statements for the most recent 3-year period preceding the Acquisition; (B) monthly financial statements for the most recent 4-quarter period preceding the Acquisition; and (C) monthly financial statements for year-to-date preceding the Acquisition, setting forth in comparative form the figures for the two previous years;
(ix) concurrently at least 5 days before the closing date for the Permitted Acquisition, Agent shall have received all pro forma financial statements consisting of balance sheets, statements of income and retained earnings and cash flows with delivery respect to the Qualified Target prepared by Borrower or a Secured Guarantor, as applicable, in connection with such Acquisition;
(x) Agent shall have not less than 7 days to review (without, however, the right to approve or disapprove), environmental audits with respect to real estate acquired in connection with a Permitted Acquisition and with respect to Qualified Targets acquired by merger or Stock purchase or where contingent liabilities are to be assumed, litigation, actuarial studies and similar contingent liability analyses with respect to the Qualified Target;
(xi) at least 7 days prior to the date of such Acquisition, Agent shall have received copies of the notice referred draft acquisition agreement (which may be subject to in clause further negotiation) and related agreements, instruments, and other documents reasonably requested by Agent and, promptly following the closing date for such Permitted Acquisition, final drafts of the foregoing;
(ixii) aboveat least 5 days prior to the closing of an Acquisition, Borrower shall have delivered to Agent and Lenders, in form reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower Holdings and its Subsidiaries (the “Acquisition Pro Forma”"ACQUISITION PRO FORMA"), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position condition and results of operations and cash flows of Borrower Holdings and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes)applied, but taking into account such Permitted Acquisition and the funding of all Loans the Revolving Loan in connection therewith, including detailed acquisition adjustments acceptable to Agent, and such Acquisition Pro Forma shall reflect that (x) average daily Borrowing Availability for the 90-day period preceding the consummation of such Permitted Acquisition would have exceeded $7,500,000 on a Pro Forma Basispro forma basis (after giving effect to such Permitted Acquisition (including acquired Eligible Accounts and Eligible Inventory as to which an audit has been completed) and the Revolving Loan funded in connection therewith as if made on 38 the first day of such period) and the Acquisition Projections (as hereinafter defined) shall reflect that such Borrowing Availability of $7,500,000 shall continue for at least 2 years after the consummation of such Acquisition, and (y) on a pro forma basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties Borrower would have been in compliance with the Fixed Charge Coverage Ratio Financial Covenants Covenant set forth in ANNEX G for the Test Period four quarter period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 ANNEX E prior to the consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances the Revolving Loan funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three (3) 1-year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”"ACQUISITION PROJECTIONS") and based upon historical financial data of a recent date reasonably satisfactory to Requisite LendersAgent, taking into account such Permitted Acquisition; and;
(C) a certificate of the chief financial officer Chief Financial Officer of Holdings and Borrower to the effect that: (w) Borrower Holdings on a consolidated basis (after taking into consideration all rights of contribution and indemnity each Credit Party Borrower has against Holdings and each other Credit PartySubsidiary of Holdings) will be Solvent upon the consummation of such the Permitted Acquisition; (x) the Acquisition Pro Forma fairly presents in all material respects the financial position condition of Borrower and its Subsidiaries Holdings (on a consolidated basis) as of the date thereof after giving effect to such Permitted the Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries Holdings (on a consolidated basis) subsequent to the date thereof based upon the historical performance of the Credit Parties Holdings, Borrower and the Qualified Target and show that the Credit Parties Holdings (on a consolidated basis) shall continue to be in compliance with the Financial Covenants Fixed Charge Coverage Ratio set forth in ANNEX G for the 32-year period thereafter; and (z) the Credit Parties Holdings and Borrower have completed their due diligence investigation with respect to the Qualified Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders;
(x) (A) at least five (5) days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received the then current draft of the acquisition agreement, in form and substance reasonably satisfactory to Agent (it being agreed that an acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender (collectively, the “Related Documents”), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and (C) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi) at the time of such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and
(xiiD) Agent and Lenders shall have received reasonably satisfactory evidence a certificate in the form of EXHIBIT 6.1 (the "ACQUISITION COMPLIANCE CERTIFICATE") showing compliance with all regulatory requirements the terms and provision of CLAUSES (C) and (D) of SECTION 6.1(b)(iv), and a designation of assets, if any, in accordance with SECTION 6.8(d) with respect to such Permitted Acquisition. Notwithstanding the foregoing, the Accounts and Inventory of the Qualified Target shall not be included in Eligible Accounts and Eligible Inventory until a field audit of Qualified Target has been satisfactorily completed, including the establishment of Reserves required in Agent's reasonable credit judgment to address the incrementally adverse effect of laws applicable to a Qualified Target located outside of the United States of America.
Appears in 1 contract
Samples: Credit Agreement (Roller Bearing Co of America Inc)
Mergers, Subsidiaries, Etc. (a) No Credit Party shall directly or indirectly, by operation of law or otherwise, (xa) form or acquire any Subsidiary, or (yb) merge with, consolidate with, acquire all or substantially all of any division, unit or business of, acquire all or substantially all of the assets of, acquire all or a substantial portion of the Stock of, or otherwise combine with or acquire, any PersonPerson (or business unit thereof). Notwithstanding the foregoing, whether in a single transaction or a series of related transactions, individually or together with (a) any Credit Party may merge into any other Credit PartiesParty; provided, except (i) as permitted by Section 6.1(b) below, (ii) so long as no Default or Event that that a Borrower shall be the survivor of Default has occurred and is continuing or would result therefrom, (A) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets such merger to Borrower provided that which a Borrower is the surviving entity from any such transactiona party, (B) any Subsidiary of Borrower may merge or consolidate with or convey all or substantially all of its assets to a Subsidiary Guarantor provided that such Subsidiary Guarantor is the surviving entity from any such transaction and (C) Borrower or any Subsidiary of Borrower may form a Subsidiary organized under the laws of the United States so long as contemporaneously therewith such Subsidiary becomes a Credit Party, becomes a Subsidiary Guarantor and grants a Lien on its assets to Agent in accordance with Section 5.13, and (iii) the Mid-Missouri Acquisition consummated on the Closing Date.
(b) Notwithstanding Section 6.1(a), after the Closing Date, (x) Borrower or any Subsidiary Guarantor Credit Party may acquire all or substantially all of the Stock of any divisionother Credit Party, unit or business of or (c) any Credit Party that is not a Borrower may acquire all or substantially all of the assets of, or (y) Borrower or of any Subsidiary of Borrower other Credit Party that is also not a Borrower, (d) any Borrower may acquire all or substantially all of the assets or Stock of any other Credit Party, (e) any Credit Party may acquire all or substantially all of the assets or Stock of, of any Person (the “"Target”") and, (f) any Borrower may form a Subsidiary in order to acquire all or substantially all of the stock or assets of a Target (in each case, a “"Permitted Acquisition”") subject to the satisfaction of each of the following conditions, each to the reasonable satisfaction of Agent:
(i) Agent shall receive receive, (A) with respect to any proposed Permitted Acquisition with total consideration and other amounts payable of less than $5,000,000, at least thirty ten (3010) Business Days’ ' prior written notice of such proposed Permitted Acquisition or, (B) with respect to any proposed Permitted Acquisition with total consideration and other amounts payable of $5,000,000 or such shorter period as Agent may agreemore, at least fifteen (15) Business Days' prior written notice of such proposed Permitted Acquisition, which notice shall shall, in each case, include a reasonably detailed description of such proposed Permitted Acquisition;
(ii) At the time of such Permitted Acquisition and after giving effect thereto, (A) no Default or Event of Default has occurred and is continuing; (B) the sum of all consideration and other amounts payable (including all transaction costs, non-competition payments or similar payments and all Indebtedness and Guaranteed Indebtedness incurred or assumed in connection therewith or Indebtedness, liabilities and contingent obligations otherwise reflected in a consolidated balance sheet of the Credit Parties after giving effect to such Permitted Acquisition) (x) in connection with all Permitted Acquisitions shall not exceed $70,000,000 in any calendar year (it being understood that the calendar year ending December 31, 2004 shall include the period from January 1, 2004 through the Closing Date), (y) in connection with all Permitted Acquisitions shall not exceed $175,000,000 during the term of this Agreement and (z) in connection with such Permitted Acquisition shall not exceed $15,000,000; and (C) such Permitted Acquisition shall only involve (A) assets located in the United States and comprising a business, or those assets of a business, that involve the provision of hospice services such that the type engaged in by the Credit Parties as consummation of the Closing Date or, as applicable, a business, or those assets of a business, reasonably related thereto or (B) the Stock of a Person organized in the United States whose assets comprise such a business, and in each case which business Permitted Acquisition would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than types of the approvals applicable to the exercise of such rights and remedies with respect to the Guarantors prior to such Permitted Acquisitiona hospice service provider;
(iii) the consideration and other amounts payable in connection with such Permitted Acquisition shall be payable in cash on the date of consummation of such Permitted Acquisition, other than (A) unsecured Indebtedness in an amount not to exceed the lesser of (x) $2,000,000 and (y) 20% of the aggregate consideration and other amount payable in connection with such Permitted Acquisition and (B) amounts due and payable after the date of the consummation of such Permitted Acquisition under customary non-competition agreements in an amount not to exceed $500,000 per agreement.
(iv) such Permitted Acquisition shall be consensual and shall have been approved by the Target’s 's board of directors (or other governing body)directors;
(ivv) no additional Indebtedness, Indebtedness or Guaranteed Indebtedness, contingent obligations or other contingent liabilities Indebtedness shall be Incurred incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrower Borrowers and Target after giving effect to such Permitted Acquisition, except (A) Loans made hereunder, hereunder and (B) Indebtedness secured by purchase money Liens and Capital Leases entered into in the ordinary course of Target’s business, provided that (1) the principal amount of such Indebtedness and Capital Lease Obligations with respect to such Capital Leases, together with the aggregate amount of all other outstanding purchase money Indebtedness and Capital Lease Obligations of the Credit Parties, shall not exceed $1,000,000 at any one time, (2) such purchase money Liens and Capital Leases are not created in contemplation of such Permitted Acquisition and secure only those principal obligations and any charges or interest accruing thereon which such purchase money Liens or Capital Leases secure on the date that such Permitted Acquisition is consummated, (3) such Indebtedness does not exceed 100% of the purchase price of the subject assets, and (4) such purchase money Liens or Capital Leases do not extend to any asset other than the assets being purchased or acquired with such purchase money Indebtedness or the assets being leased in connection with such Capital Leases, (C) contingent obligations and contingent liabilities that do not exceed $500,000 for each such Permitted Acquisition, (D) and/or Guaranteed Indebtedness permitted by under Section 6.3 or Section 6.6, and (E) Indebtedness of Borrower Incurred to finance such Permitted Acquisition to the extent such Indebtedness is expressly permitted under Section 6.3(a)(vii), (xv) or (xvi) and to the extent that no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition;
(v) the sum of all amounts payable in connection with all Permitted Acquisitions made after the Closing Date (including all deferred payments, all non-compete payments, all transaction costs, the fair market value of all Stock issued in connection therewith and all Indebtedness and any earn out payments or similar obligations Incurred in connection therewith or otherwise reflected on a consolidated balance sheet of Borrower and Target) shall not exceed $25,000,000 in any Fiscal Year for all Credit Parties combinedas applicable;
(vi) on a Pro Forma Basis, after giving effect to such Permitted Acquisition, the Target shall have Pro Forma Acquisition EBITDA of not have incurred an operating loss less than $0 for the trailing twelve-twelve month period preceding the date of such the consummation of the Permitted Acquisition, as determined based upon the Target’s 's financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) 60 days prior to the date of consummation of such Permitted Acquisition;
(vii) the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances);
(viii) the Borrower shall be the surviving entity of any merger or consolidation involving Borrower in connection with any Permitted Acquisition, and at or prior to the closing of any Permitted Acquisition, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in substantially all the assets acquired pursuant theretothereto or, consistent with the provisions of the Security Agreementas applicable, and in the outstanding assets and Stock of the Target, and the applicable Credit Parties Borrowers and the Target shall have executed such documents (including a Joinder Agreement, if applicable) and taken such actions as may be reasonably requested required by Agent in connection therewith;
(ix) concurrently with delivery of the notice referred to in clause (i) above, Borrower Borrowers shall have delivered to Agent and LendersAgent, in form reasonably and substance satisfactory to AgentAgent in its reasonable credit judgment:
(A) a pro forma consolidated balance sheet, income statement and cash flow statement of Borrower Holdings and its Subsidiaries (the “"Acquisition Pro Forma”"), based on recent financial statements, which shall fairly present in all material respects the assets, liabilities, financial position condition and results of operations and cash flows of Borrower Holdings and its Subsidiaries in accordance with GAAP consistently applied (subject to normal year end audit adjustments and the absence of footnotes)applied, but taking into account such Permitted Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall (x) reflect that that, on a Pro Forma Basispro forma basis, Holdings and its Subsidiaries would have had a Leverage Ratio not in excess of 1.0 to 1.0 for the four quarter period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to the consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Loans funded in connection therewith as if made on the first day of such period), and (y) reflect that, on a pro forma basis, no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition and the Credit Parties would have been in compliance with the Financial Covenants for the Test Period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Section 4.1 prior to consummation of such Permitted Acquisition (after giving effect to such Permitted Acquisition and all Advances funded in connection therewith as if made on the first day of such period);
(B) updated versions of the most recently delivered Projections covering the three (3) year period commencing on the date of such Permitted Acquisition and otherwise prepared in accordance with the Projections (the “Acquisition Projections”) and based upon historical financial data of a recent date reasonably satisfactory to Requisite Lenders, taking into account such Permitted Acquisition; and
(CB) a certificate of the chief financial officer of Borrower Holdings to the effect that: (wx) Borrower (after taking into consideration all rights of contribution and indemnity each the Credit Party has against each other Credit Party) Parties will be Solvent upon the consummation of such the Permitted Acquisition; (xy) the Acquisition Pro Forma fairly presents in all material respects the financial position condition of Borrower Holdings and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to such the Permitted Acquisition; (y) the Acquisition Projections are reasonable estimates of the future financial performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of the Credit Parties and the Target and show that the Credit Parties shall continue to be in compliance with the Financial Covenants for the 3-year period thereafter; and (z) the Credit Parties Holdings and its Subsidiaries have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenderscommercially reasonable manner, consistent with past practices;
(x) (A) at least five (5) days on or prior to the date of such Permitted Acquisition, Agent and Lenders shall have received the then current draft (A) a copy of the acquisition agreementagreement and (B) copies of all other related agreements, in form and substance reasonably satisfactory to Agent (it being agreed that an acquisition agreement reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and, upon request of Agent, related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent or any Lender (collectively, the “Related Documents”), including those specified in the last two sentences of Section 5.9, (B) at least two (2) Business Days prior to the date of such Permitted Acquisition, Agent and Lenders shall have received, a copy of the substantially final acquisition agreement and, upon request of Agent, Related Documents and all such documentation shall not differ in any material respect from the previous draft provided to Agent and Lenders, unless in each case changes to the previous draft are reasonably satisfactory to Agent (it being agreed that changes reflecting commercially reasonable terms otherwise acceptable to a prudent purchaser of such assets or Stock in such industry shall be reasonably satisfactory to Agent) and (C) on or prior to two (2) Business Days after the closing of such Permitted Acquisition, Agent and Lenders shall have received a copy of the final acquisition agreement and, upon request of Agent, Related Documents;
(xi) at the time of such Permitted Acquisition and after giving effect thereto, no Default, Event of Default, Interest Deferral Period or Dividend Suspension Period has occurred and is continuing; and
(xii) Agent and Lenders shall have received reasonably satisfactory evidence of compliance with all regulatory requirements with respect to such Permitted Acquisition.
Appears in 1 contract
