Exhibit 10.21
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of May 26, 2005
among
UNIVERSAL HOSPITAL SERVICES, INC.,
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent, Administrative Agent, Collateral Agent and Lender
GECC CAPITAL MARKETS GROUP, INC.,
as Sole Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT..................................................2
1.1. Credit Facilities.....................................................2
1.2. Letters of Credit.....................................................5
1.3. Prepayments...........................................................5
1.4. Use of Proceeds.......................................................7
1.5. Interest and Applicable Margins.......................................7
1.6. Eligible Accounts and Eligible Unbilled Accounts.....................10
1.7. Eligible Rental Equipment, Eligible Wholesale Disposables and
Eligible Equipment Disposables......................................14
1.8. Cash Management Systems..............................................16
1.9. Fees.................................................................16
1.10. Receipt of Payments..................................................16
1.11. Application and Allocation of Payments...............................17
1.12. Loan Account and Accounting..........................................18
1.13. Indemnity............................................................18
1.14. Access...............................................................19
1.15. Taxes................................................................20
1.16. Capital Adequacy; Increased Costs; Illegality........................21
1.17. Single Loan..........................................................23
1.18. Effect of Amendment and Restatement..................................23
2. CONDITIONS PRECEDENT.......................................................24
2.1. Conditions to the Initial Loans......................................24
2.2. Further Conditions to Each Loan......................................25
3. REPRESENTATIONS AND WARRANTIES.............................................26
3.1. Corporate Existence; Compliance with Law.............................26
3.2. Executive Offices, Collateral Locations, FEIN........................26
3.3. Corporate Power, Authorization, Enforceable Obligations..............27
3.4. Financial Statements and Projections.................................27
3.5. Material Adverse Effect..............................................28
3.6. Ownership of Property; Liens.........................................28
3.7. Labor Matters........................................................29
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness........................................................29
3.9. Government Regulation................................................30
3.10. Margin Regulations...................................................30
3.11. Taxes................................................................30
3.12. ERISA................................................................31
3.13. No Litigation........................................................32
3.14. Brokers..............................................................32
3.15. Intellectual Property................................................32
3.16. Full Disclosure......................................................33
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3.17. Environmental Matters................................................33
3.18. Insurance............................................................34
3.19. Deposit and Disbursement Accounts....................................34
3.20. Government Contracts.................................................34
3.21. Customer and Trade Relations.........................................34
3.22. Agreements and Other Documents.......................................35
3.23. Solvency.............................................................35
3.24. HIPAA Compliance.....................................................35
4. FINANCIAL STATEMENTS AND INFORMATION.......................................36
4.1. Reports and Notices..................................................36
4.2. Communication with Accountants.......................................36
5. AFFIRMATIVE COVENANTS......................................................36
5.1. Maintenance of Existence and Conduct of Business.....................36
5.2. Payment of Charges...................................................37
5.3. Books and Records....................................................37
5.4. Insurance; Damage to or Destruction of Collateral....................37
5.5. Compliance with Laws.................................................39
5.6. Supplemental Disclosure..............................................39
5.7. Intellectual Property................................................40
5.8. Environmental Matters................................................40
5.9. Landlords' Agreements and Real Estate Purchases......................40
5.10. Further Assurances...................................................41
6. NEGATIVE COVENANTS.........................................................41
6.1. Mergers, Subsidiaries, Etc...........................................41
6.2. Investments; Loans and Advances......................................44
6.3. Indebtedness.........................................................44
6.4. Affiliate Transactions...............................................46
6.5. Capital Structure and Business.......................................46
6.6. Guaranteed Indebtedness..............................................47
6.7. Liens................................................................47
6.8. Sale of Stock and Assets.............................................48
6.9. ERISA................................................................49
6.10. Financial Covenants..................................................49
6.11. Hazardous Materials..................................................49
6.12. Sale-Leasebacks......................................................49
6.13. Cancellation of Indebtedness.........................................49
6.14. Restricted Payments..................................................50
6.15. Change of Corporate Name or Location; Change of Fiscal Year..........50
6.16. No Impairment of Intercompany Transfers..............................51
6.17. No Speculative Transactions..........................................51
6.18. Changes Relating to Subordinated Debt and Certain Agreements.........51
7. TERM.......................................................................52
7.1. Termination..........................................................52
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7.2. Survival of Obligations Upon Termination of Financing Arrangements...52
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.....................................52
8.1. Events of Default....................................................52
8.2. Remedies.............................................................54
8.3. Waivers by Credit Parties............................................55
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT........................55
9.1. Assignment and Participations........................................55
9.2. Appointment of Agent.................................................58
9.3. Agent's Reliance, Etc................................................59
9.4. GE Capital and Affiliates............................................60
9.5. Lender Credit Decision...............................................60
9.6. Indemnification......................................................60
9.7. Successor Agent......................................................61
9.8. Setoff and Sharing of Payments.......................................61
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.............................................................62
9.10. Additional Titled Agents.............................................65
10.SUCCESSORS AND ASSIGNS.....................................................65
10.1. Successors and Assigns...............................................65
11.MISCELLANEOUS..............................................................65
11.1. Complete Agreement; Modification of Agreement........................65
11.2. Amendments and Waivers...............................................66
11.3. Fees and Expenses....................................................68
11.4. No Waiver............................................................69
11.5. Remedies.............................................................70
11.6. Severability.........................................................70
11.7. Conflict of Terms....................................................70
11.8. Confidentiality......................................................70
11.9. GOVERNING LAW........................................................71
11.10.Notices..............................................................72
11.11.Section Titles.......................................................73
11.12.Counterparts.........................................................73
11.13.WAIVER OF JURY TRIAL.................................................73
00.00.Xxxxx Releases and Related Matters...................................73
11.15.Reinstatement........................................................74
11.16.Advice of Counsel....................................................74
00.00.Xx Strict Construction...............................................74
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) - Commitments as of Restatement Closing Date
Annex K (Section 1.18) - Commitments of Original Lenders
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Disclosure Schedule 1.1 - Agent's Representatives
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices; Collateral Locations; FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.14 - Brokers
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.21 - Customer and Trade Relations
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.2 - Permitted Investments
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.6 - Guaranteed Indebtedness
Disclosure Schedule 6.7 - Existing Liens
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This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 26, 2005 among
UNIVERSAL HOSPITAL SERVICES, INC., a Delaware corporation ("Borrower"); the
other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (in its individual capacity, "GE Capital"), for itself, as
Lender, and as Agent for Lenders, and the other Lenders signatory hereto from
time to time.
RECITALS
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WHEREAS, Borrower, GE Capital and the additional financial institutions
party thereto have entered into that certain Credit Agreement dated as of the
Original Closing Date (as amended or otherwise modified through but not
including the date hereof, the "Original Credit Agreement"), pursuant to which,
on the terms and conditions set forth therein, certain Lenders have extended
revolving credit facilities to Borrower of up to One Hundred Million Dollars
($100,000,000) in the aggregate for the purposes of funding a portion of the
consideration due and owing on the Original Closing Date under the
Recapitalization Agreements, refinancing certain indebtedness of Borrower, and
providing (a) working capital financing for Borrower, (b) funds for other
general corporate purposes of Borrower and (c) funds for other purposes
permitted thereunder, including without limitation the consummation of Capital
Expenditures and Permitted Acquisitions; and
WHEREAS, Borrower has secured all of its obligations under the Original
Credit Agreement and the "Loan Documents," as such term is defined therein, by
granting to Agent, for the benefit of Agent and Lenders, a security interest in
and lien upon all of its existing and after-acquired personal and real property;
and
WHEREAS, Borrower has requested that GE Capital and the Lenders agree to
amend and restate the terms and provisions of the Original Credit Agreement
pursuant to the terms of this Agreement and, in connection herewith, extend
revolving credit facilities to Borrower of up to One Hundred Twenty-Five Million
Dollars ($125,000,000) in the aggregate, to provide (a) working capital
financing for Borrower, (b) funds for other general purposes of Borrower and (c)
funds for other purposes permitted hereunder, including without limitation the
consummation of Capital Expenditures and Permitted Acquisitions; and
WHEREAS, Borrower has agreed to continue to secure all of its obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, and reaffirming to Agent, for the benefit of Agents and Lenders, its
prior grant of, a security interest in and lien upon all of its existing and
after-acquired personal and real property; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A shall govern. All
Annexes, Disclosure Schedules, Exhibits and other attachments (collectively,
"Appendices") hereto, or expressly identified to this Agreement, are
incorporated herein by reference, and taken together with this Agreement, shall
constitute but a single agreement. These Recitals shall be construed as part of
the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1. Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each Lender
agrees to make available to Borrower from time to time until the Commitment
Termination Date its Pro Rata Share of advances (each, a "Revolving Credit
Advance"). The Pro Rata Share of the Revolving Loan of any Lender shall not at
any time exceed its separate Revolving Loan Commitment. The obligations of each
Lender hereunder shall be several and not joint. Until the Commitment
Termination Date, Borrower may borrow, repay and reborrow under this Section
1.1(a); provided, that the amount of any Revolving Credit Advance to be made at
any time shall not exceed Borrowing Availability at such time. Borrowing
Availability may be reduced by Reserves imposed by Agent in accordance with the
provisions of Sections 1.6 and 1.7, as applicable. Each Revolving Credit Advance
shall be made on notice by Borrower to one of the representatives of Agent
identified in Schedule 1.1 at the address specified therein. Any such notice
must be given no later than (1) 11:00 a.m. (Chicago time) on the Business Day of
the proposed Revolving Credit Advance, in the case of an Index Rate Loan, or (2)
11:00 a.m. (Chicago time) on the date which is 3 Business Days prior to the
proposed Revolving Credit Advance, in the case of a LIBOR Loan. Each such notice
(a "Notice of Revolving Credit Advance") must be given in writing (by telecopy
or overnight courier) substantially in the form of Exhibit 1.1(a)(i), and shall
include the information required in such Exhibit and such other information as
may be reasonably required by Agent. If Borrower desires to have the Revolving
Credit Advances bear interest by reference to a LIBOR Rate, Borrower must comply
with Section 1.5(e).
(ii) Except as provided in Section 1.12, Borrower shall execute
and deliver to each Lender a note to evidence the Revolving Loan Commitment of
that Lender. Each note shall be in the principal amount of the Revolving Loan
Commitment of the applicable Lender, dated the Restatement Closing Date and
substantially in the form of Exhibit 1.1(a)(ii) (each a "Revolving Note" and,
collectively, the "Revolving Notes"). Each Revolving Note shall represent the
obligation of the Borrower to pay the amount of the applicable Lender's
Revolving Loan Commitment or, if less, such Lender's Pro Rata Share of the
aggregate unpaid principal amount of all Revolving Credit Advances to Borrower
together with interest thereon as prescribed in Section 1.5. Subject to the
provisions of Annex B with respect to Letters of Credit, the entire unpaid
balance of the aggregate Revolving Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date.
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(iii) The parties hereto agree that any "Revolving Loans", as
such term is defined in the Original Credit Agreement, outstanding on the date
hereof shall be deemed to be Revolving Loans outstanding on the date hereof
under this Agreement.
(b) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon Agent's receipt
of any Notice of Revolving Credit Advance. Subject to the terms and conditions
hereof, the Swing Line Lender may, in its discretion, make available from time
to time until the Commitment Termination Date advances (each, a "Swing Line
Advance") in accordance with any such notice. The provisions of this Section
1.1(b) shall not relieve Lenders of their obligations to make Revolving Credit
Advances under Section 1.1(a); provided, that if the Swing Line Lender makes a
Swing Line Advance pursuant to any such notice, such Swing Line Advance shall be
in lieu of any Revolving Credit Advance that otherwise may be made by Lenders
pursuant to such notice. The aggregate amount of Swing Line Advances outstanding
shall not exceed at any time the lesser of (A) the Swing Line Commitment and (B)
the lesser of the Maximum Amount and the Borrowing Base, in each case, less the
outstanding balance of the Revolving Loan at such time ("Swing Line
Availability"). Moreover, the Swing Line Loan outstanding to Borrower shall not
exceed at any time the Borrowing Base less the Revolving Loan outstanding to
Borrower. Until the Commitment Termination Date, Borrower may from time to time
borrow, repay and reborrow under this Section 1.1(b). Each Swing Line Advance
shall be made pursuant to a Notice of Revolving Credit Advance delivered to
Agent by Borrower in accordance with Section 1.1(a). Any such notice must be
given no later than 11:00 a.m. (Chicago time) on the Business Day of the
proposed Swing Line Advance. Unless the Swing Line Lender has received at least
1 Business Day's prior written notice from Requisite Lenders instructing it not
to make a Swing Line Advance, the Swing Line Lender shall, notwithstanding the
failure of any condition precedent set forth in Section 2.2, be entitled to fund
that Swing Line Advance, and to have each Lender make Revolving Credit Advances
in accordance with Section 1.1(b)(iii) or purchase participating interests in
accordance with Section 1.1(b)(iv). Notwithstanding any other provision of this
Agreement or the other Loan Documents, the Swing Line Loan shall constitute an
Index Rate Loan. Borrower shall repay the aggregate outstanding principal amount
of the Swing Line Loan within 3 Business Days after demand therefor by Agent.
(ii) Borrower shall execute and deliver to the Swing Line Lender
a promissory note to evidence the Swing Line Commitment. Each note shall be in
the principal amount of the Swing Line Commitment of the Swing Line Lender,
dated the Restatement Closing Date and substantially in the form of Exhibit
1.1(b)(ii) (each a "Swing Line Note" and, collectively, the "Swing Line Notes").
Each Swing Line Note shall represent the obligation of Borrower to pay the
amount of the Swing Line Commitment or, if less, the aggregate unpaid principal
amount of all Swing Line Advances made to Borrower together with interest
thereon as prescribed in Section 1.5. The entire unpaid balance of the Swing
Line Loan and all other noncontingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date if not sooner paid in full.
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(iii) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion, but not less frequently than weekly, shall on
behalf of Borrower (and Borrower hereby irrevocably authorizes the Swing Line
Lender to so act on its behalf) request each Lender (including the Swing Line
Lender) to make a Revolving Credit Advance to Borrower (which shall be an Index
Rate Loan) in an amount equal to that Lender's Pro Rata Share of the principal
amount of Borrower's Swing Line Loan (the "Refunded Swing Line Loan")
outstanding on the date such notice is given. Unless any of the events described
in Sections 8.1(h) or 8.1(i) has occurred (in which event the procedures of
Section 1.1(b)(iv) shall apply) and regardless of whether the conditions
precedent set forth in this Agreement to the making of a Revolving Credit
Advance are then satisfied, each Lender shall disburse directly to Agent, its
Pro Rata Share of a Revolving Credit Advance on behalf of the Swing Line Lender
prior to 2:00 p.m. (Chicago time) in immediately available funds on the Business
Day next succeeding the date that notice is given. The proceeds of those
Revolving Credit Advances shall be immediately paid to the Swing Line Lender and
applied to repay the Refunded Swing Line Loan.
(iv) If, prior to refunding a Swing Line Loan with a Revolving
Credit Advance pursuant to Section 1.1(b)(iii), one of the events described in
Sections 8.1(h) or 8.1(i) has occurred, then, subject to the provisions of
Section 1.1(b)(v) below, each Lender shall, on the date such Revolving Credit
Advance was to have been made, purchase from the Swing Line Lender an undivided
participation interest in the Swing Line Loan in an amount equal to its Pro Rata
Share of such Swing Line Loan. Upon request, each Lender shall promptly transfer
to the Swing Line Lender, in immediately available funds, the amount of its
participation interest.
(v) Each Lender's obligation to make Revolving Credit Advances in
accordance with Section 1.1(b)(iii) and to purchase participation interests in
accordance with Section 1.1(b)(iv) shall be absolute and unconditional and shall
not be affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right that such Lender may have against the Swing
Line Lender, Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of any Default or Event of Default; (C) any inability
of Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement at any time or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Lender does
not make available to Agent or the Swing Line Lender, as applicable, the amount
required pursuant to Sections 1.1(b)(iii) or 1.1(b)(iv), as the case may be, the
Swing Line Lender shall be entitled to recover such amount on demand from such
Lender, together with interest thereon for each day from the date of non-payment
until such amount is paid in full at the Federal Funds Rate for the first 2
Business Days and at the Index Rate thereafter.
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(vi) The parties hereto agree that any "Swing Line Advances", as
such term is defined in the Original Credit Agreement, outstanding on the date
hereof shall be deemed to be Swing Line Advances outstanding on the date hereof
under this Agreement.
(c) Reliance on Notices. Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
to be genuine. Agent may assume that each Person executing and delivering any
notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the contrary.
1.2. Letters of Credit.
Subject to and in accordance with the terms and conditions contained
herein and in Annex B, Borrower shall have the right to request, and Lenders
agree to incur, or purchase participations in, Letter of Credit Obligations in
respect of Borrower. The parties hereto agree that any "Letter of Credit
Obligations", as such term is defined in the Original Credit Agreement,
outstanding on the date hereof shall be deemed to be Letter of Credit
Obligations outstanding on the date hereof under this Agreement.
1.3. Prepayments.
(a) Voluntary Prepayments. Borrower may at any time, and from time to
time, prepay all or any portion of the Revolving Loan. Further, Borrower may at
any time on at least five (5) days' prior written notice to Agent terminate the
Revolving Loan Commitment; provided, that upon such termination, all Loans and
other Obligations shall be immediately due and payable in full and all Letter of
Credit Obligations shall be cash collateralized or otherwise satisfied in
accordance with Annex B. Any such voluntary prepayment and any such termination
of the Revolving Loan Commitment must be accompanied by the payment of any LIBOR
funding breakage costs in accordance with Section 1.13(b). Upon any such
termination of the Revolving Loan Commitment, Borrower's right to request
Revolving Credit Advances, or request that Letter of Credit Obligations be
incurred on its behalf, or request Swing Line Advances, shall simultaneously be
terminated.
(b) Mandatory Prepayments.
(i) If on any date on which a Borrowing Base Certificate is
delivered pursuant to Annex F, the aggregate outstanding balance of the
Revolving Loan and the Swing Line Loan exceeds the Borrowing Base, Borrower
shall, no later than the Business Day immediately following the date of delivery
of such Borrowing Base Certificate, prepay the Revolving Credit Advances and/or
cash collateralize (in a manner consistent with the requirements of Annex B) or
replace Letters of Credit in an amount equal to the amount of such excess.
(ii) If on any date the aggregate outstanding balance of the
Revolving Loan and the Swing Line Loan exceeds the Maximum Amount, Borrower
shall, within one Business Day of such occurrence, prepay the Revolving Credit
Advances and/or cash collateralize (in a manner consistent with the requirements
of Annex B) or replace Letters of Credit in an amount equal to the amount of
such excess.
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(iii) Borrower shall prepay the Revolving Credit Advances in an
amount equal to (i) one hundred percent (100%) of the Net Proceeds of any sale
or issuance of debt securities, and seventy-five percent (75%) of the Net
Proceeds of any sale or issuance of any equity securities, in either case by
Borrower or any Subsidiary, whether in a public offering, a private placement or
otherwise, but excluding any equity investment made by X.X. Childs or its
Affiliates or Halifax or its Affiliates, any of their applicable limited
partners or the limited partners of their applicable Affiliates, any equity
investment made by any officer, director, consultant or employee of or to
Borrower pursuant to the Stockholder's Agreement, any stock option plan or
otherwise, and any Stock issued to the owners of a Target in connection with a
Permitted Acquisition, (ii) one hundred percent (100%) of the Net Proceeds of
any sale, lease, assignment, exchange or other disposition for cash of any asset
or group of assets (including, without limitation, but subject to Section
5.4(c), insurance proceeds paid as a result of any destruction, casualty or
taking of any property of Borrower or any Subsidiary), not made in the ordinary
course of business, by Borrower or any Subsidiary of Borrower, and (iii) one
hundred percent (100%) of the Net Proceeds from the termination of any pension
plans of Borrower or any Subsidiary, in any such case no later than 3 Business
Days following receipt by Borrower or such Subsidiary of such proceeds, together
with accrued interest to such date on the amount prepaid; provided that except
as otherwise provided in Section 5.4(c), no such prepayment shall be required
pursuant to subclause (ii) of this Section 1.3(b)(iii) with respect to up to
$2,000,000 of such Net Proceeds received by Borrower and its Subsidiaries during
any Fiscal Year of Borrower so long as (x) Borrower shall have notified the
Agent in writing of such receipt of such Net Proceeds, the amount thereof and
that Borrower or such Subsidiary intends to reinvest such Net Proceeds in
Inventory or other property useful in the business of Borrower and its
Subsidiaries within 180 days following such receipt, and (y) such Net Proceeds
are so reinvested during such 180-day period. To the extent that Borrower shall
have so notified Agent that it intended to so reinvest any such Net Proceeds and
such Net Proceeds were not so reinvested within 180 days following receipt
thereof, Borrower shall immediately give Agent notice thereof and prepay the
Revolving Credit Advances in an amount equal to such amount of Net Proceeds
which were not reinvested. Any such prepayment shall be applied in accordance
with Section 1.3(c). Notwithstanding anything herein to the contrary, no
prepayment shall be required with respect to the proceeds of Indebtedness
permitted under Section 6.3.
(iv) If on any date that is 270 days following the receipt by
Borrower or any of its Subsidiaries of any "Net Proceeds" from any "Asset Sale"
(as such terms, solely for purposes of this clause (iv), are defined in the
Senior Note Indenture) there shall exist "Excess Proceeds" (as such term, solely
for purposes of this clause (iv), is defined in the Senior Note Indenture) in
excess of $10,000,000 (such excess amount being the "Specified Payment Amount"),
then Borrower shall, within 5 Business Days of such date, prepay Revolving
Credit Advances by an amount equal to the Specified Payment Amount. Any such
payment shall be applied in accordance with Section 1.3(c).
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(c) Application of Certain Mandatory Prepayments. Any prepayments made
by Borrower pursuant to Section 1.3(b)(iii) above, and any prepayments from
insurance or condemnation proceeds in accordance with Section 5.4(c), shall be
applied as follows: first, to Fees and reimbursable expenses of Agent then due
and payable pursuant to any of the Loan Documents; second, to interest then due
and payable on the Swing Line Loan; third, to the principal balance of the Swing
Line Loan until the same has been repaid in full; fourth, to interest then due
and payable on Revolving Credit Advances; fifth, to the principal balance of
Revolving Credit Advances until the same has been paid in full; and sixth, to
any Letter of Credit Obligations of Borrower to provide cash collateral therefor
in the manner set forth in Annex B, until all such Letter of Credit Obligations
have been fully cash collateralized in the manner set forth in Annex B. Neither
the Revolving Loan Commitment nor the Swing Line Commitment shall be permanently
reduced by the amount of any such prepayments. Any prepayments made by Borrower
pursuant to Section 1.3(b)(iv) above shall be applied to the principal balance
of outstanding Revolving Credit Advances and as a concurrent and permanent
reduction of the Revolving Loan Commitment, pro rata among all Lenders.
(d) No Implied Consent. Nothing in this Section 1.3 shall be construed
to constitute Agent's or any Lender's consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan Documents.
1.4. Use of Proceeds.
Borrower shall utilize the proceeds of the Revolving Loan and the
Swing Line Advances solely to provide funds (a) for Borrower's working capital,
(b) for other general corporate purposes and (c) for other purposes permitted
under this Agreement, including without limitation the consummation of Capital
Expenditures and Permitted Acquisitions.
1.5. Interest and Applicable Margins.
(a) Borrower shall pay interest to Agent, for the ratable benefit of
Lenders in accordance with the various Loans being made by each Lender, in
arrears on each applicable Interest Payment Date, at the following rates: (i)
with respect to the Revolving Credit Advances, the Index Rate plus the
Applicable Revolver Index Margin per annum or, at the election of Borrower, the
applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based
on the aggregate Revolving Credit Advances outstanding from time to time; and
(ii) with respect to the Swing Line Loan, the Index Rate plus the Applicable
Revolver Index Margin per annum.
As of the Restatement Closing Date, the Applicable Margins are as follows:
------------------------------------------------------------
Applicable Revolver Index Margin 1.00%
------------------------------------------------------------
Applicable Revolver LIBOR Margin 2.25%
------------------------------------------------------------
Applicable L/C Margin 2.25%
------------------------------------------------------------
7
The Applicable Margins shall be adjusted (up or down) prospectively on a
quarterly basis as determined by Borrower's consolidated financial performance,
commencing with the first day of the first calendar month that occurs more than
5 days after delivery of Borrower's quarterly Financial Statements to Lenders
for the Fiscal Quarter ending June 30, 2005. Adjustments in Applicable Margins
shall be determined by reference to the following grids:
--------------------------------------------------------------------------------
If Total Leverage Level of
Ratio is: Applicable Margins:
-------- ------------------
--------------------------------------------------------------------------------
>4.75 to 1.0 Level I
--------------------------------------------------------------------------------
>4.00 to 1.0, but Level II
<4.75 to 1.0
--------------------------------------------------------------------------------
<4.00 to 1.0 Level III
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Applicable Margins
------------------
--------------------------------------------------------------------------------
Level I Level II Level III
------- -------- ---------
--------------------------------------------------------------------------------
Applicable Revolver Index Margin 1.25% 1.00% 0.75%
--------------------------------------------------------------------------------
Applicable Revolver LIBOR Margin 2.50% 2.25% 2.00%
--------------------------------------------------------------------------------
Applicable L/C Margin 2.50% 2.25% 2.00%
--------------------------------------------------------------------------------
All adjustments in the Applicable Margins after June 30, 2005 shall be
implemented quarterly on a prospective basis, for each calendar month commencing
at least 5 days after the date of delivery to Lenders of the quarterly unaudited
or annual audited (as applicable) Financial Statements evidencing the need for
an adjustment. Concurrently with the delivery of those Financial Statements,
Borrower shall deliver to Agent and Lenders a certificate, signed by its chief
financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the first day of the
first calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required. If a Default or Event of
Default has occurred and is continuing at the time any reduction in the
Applicable Margins is to be implemented, that reduction shall be deferred until
the first day of the first calendar month following the date on which such
Default or Event of Default is waived or cured.
(b) If any payment on any Loan becomes due and payable on a day other than
a Business Day, the maturity thereof will be extended to the next succeeding
Business Day (except as set forth in the definition of LIBOR Period) and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and interest
shall be made by Agent on the basis of a 360-day year, in each case for the
actual number of days occurring in the period for which such interest and Fees
are payable. The Index Rate is a floating rate determined for each day. Each
determination by Agent of an interest rate and Fees hereunder shall be final,
binding and conclusive on Borrower, absent manifest error.
8
(d) So long as an Event of Default has occurred and is continuing under any
of Sections 8.1(a), (h) or (i), at the election of Agent (or upon the written
request of Requisite Lenders), the interest rates applicable to the Loans and
the Letter of Credit Fees shall be increased by two percentage points (2%) per
annum above the rates of interest or the rate of such Fees otherwise applicable
hereunder ("Default Rate"), and all outstanding Obligations shall bear interest
at the Default Rate applicable to such Obligations. Interest and Letter of
Credit Fees at the Default Rate shall accrue from the initial date of such Event
of Default until that Event of Default is cured or waived and shall be payable
upon demand.
(e) Subject to the conditions precedent set forth in Section 2.2, Borrower
shall have the option to (i) request that any Revolving Credit Advance be made
as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans
(other than the Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii)
convert any LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR
breakage costs in accordance with Section 1.13(b) if such conversion is made
prior to the expiration of the LIBOR Period applicable thereto, or (iv) continue
all or any portion of any Loan (other than the Swing Line Loan) as a LIBOR Loan
upon the expiration of the applicable LIBOR Period and the succeeding LIBOR
Period of that continued Loan shall commence on the first day after the last day
of the LIBOR Period of the Loan to be continued. Any Loan or group of Loans
having the same proposed LIBOR Period to be made or continued as, or converted
into, a LIBOR Loan must be in a minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of such amount. Any such election must be made
by 11:00 a.m. (Chicago time) on the 3rd Business Day prior to (1) the date of
any proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of
each LIBOR Period with respect to any LIBOR Loans to be continued as such, or
(3) the date on which Borrower wishes to convert any Index Rate Loan to a LIBOR
Loan for a LIBOR Period designated by Borrower in such election. If no election
is received with respect to a LIBOR Loan by 11:00 a.m. (Chicago time) on the 3rd
Business Day prior to the end of the LIBOR Period with respect thereto (or if a
Default or an Event of Default has occurred and is continuing or if the
additional conditions precedent set forth in Section 2.2 shall not have been
satisfied), that LIBOR Loan shall be converted to an Index Rate Loan at the end
of its LIBOR Period. Borrower must make such election by notice to Agent in
writing, by telecopy or overnight courier. In the case of any conversion or
continuation, such election must be made pursuant to a written notice (a "Notice
of Conversion/Continuation") in the form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this Section 1.5,
if a court of competent jurisdiction determines in a final order that the rate
of interest payable hereunder exceeds the highest rate of interest permissible
under law (the "Maximum Lawful Rate"), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Agent, on behalf of Lenders,
is equal to the total interest that would have been received had the interest
rate payable hereunder been (but for the operation of this paragraph) the
interest rate payable since the Restatement Closing Date as otherwise provided
in this Agreement. Thereafter, interest hereunder shall be paid at the rate(s)
of interest and in the manner provided in Sections 1.5(a) through (e), unless
and until the rate of interest again exceeds the Maximum Lawful Rate, and at
that time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in Section 1.11 and thereafter shall refund any excess to Borrower or as a court
of competent jurisdiction may otherwise order.
9
1.6. Eligible Accounts and Eligible Unbilled Accounts.
All of the Accounts owned by Borrower and its Subsidiaries and reflected in
the most recent Borrowing Base Certificate delivered by Borrower to Agent shall
be "Eligible Accounts" or, as applicable, "Eligible Unbilled Accounts" for
purposes of this Agreement, except any Account to which any of the exclusionary
criteria set forth below applies. Agent shall have the right, in its
commercially reasonable judgment that there has been a material and adverse
change from historical performance with respect to the value of Eligible
Accounts and/or Eligible Unbilled Accounts, at any time either (x) an Event of
Default has occurred and is then continuing and/or (y) Borrowing Availability is
less than the Borrowing Base Adjustment Limit, to (i) establish, modify or
eliminate Reserves against Eligible Accounts and/or Eligible Unbilled Accounts
from time to time and/or (ii) adjust from time to time any of the criteria set
forth below, establish new criteria and adjust advance rates with respect to
Eligible Accounts and/or Eligible Unbilled Accounts, in each case effective on
prior written notice delivered by Agent to Borrower, the effect of which, along
with any other changes to Reserves, eligibility criteria, advance rates and the
exercise of other Agent rights under this Section 1.6 and/or under Section 1.7,
shall not reduce the Borrowing Base by an aggregate amount in excess of the
Borrowing Base Adjustment Limit. Any exercise of rights by Agent pursuant to the
immediately preceding sentence (A) shall be reversed, automatically and without
further action by Agent, at such time that no Event of Default shall have
occurred and remain continuing and Borrowing Availability, calculated without
giving effect to any actions taken by Agent pursuant to the immediately
preceding sentence, is greater than the Borrowing Base Adjustment Limit and (B)
subject to the provisions of the immediately preceding clause (A), shall be
subject to the approval of Supermajority Lenders in the case of adjustments, new
criteria, changes in advance rates or the elimination of Reserves which have the
effect of making more credit available.
10
Eligible Accounts shall not include any Account of Borrower or any of its
Subsidiaries:
(a) that does not arise from the sale or rental of goods or the performance
of services by Borrower or any of its Subsidiaries in the ordinary course of its
business;
(b) (i) upon which Borrower's or any Subsidiary's right to receive payment
is not absolute or is contingent upon the fulfillment of any condition
whatsoever or (ii) as to which Borrower or any Subsidiary is not legally able to
bring suit or otherwise enforce its remedies against the Account Debtor through
judicial process or (iii) to the extent that both (x) the Account represents a
progress billing consisting of an invoice for goods sold or used or services
rendered pursuant to a contract under which the Account Debtor's obligation to
pay that invoice is subject to Borrower's or any Subsidiary's completion of
further performance under such contract or is subject to the equitable lien of a
surety bond issuer and (y) the aggregate face amount of all Accounts described
in this clause (iii) exceeds $500,000;
(c) to the extent that any defense, counterclaim, setoff or dispute has
been asserted as to such Account, up to the amount of the defense, counterclaim,
setoff or dispute so asserted;
(d) that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for merchandise sold to or services
rendered to the applicable Account Debtor;
(e) with respect to which an invoice, reasonably acceptable to Agent in
form and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by Borrower or any Subsidiary or (ii) is subject
to any right, claim, security interest or other interest of any other Person,
other than Liens in favor of Agent, on behalf of itself and Lenders;
(g) that arises from a sale or rental to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity that has any common
officer or director with any Credit Party (it being understood and agreed that
sales to any portfolio companies of X.X. Childs and Halifax shall not be
excluded from the category of Eligible Accounts solely by operation of this
clause (g));
(h) to the extent that both (x) the Account is the obligation of an Account
Debtor that is the United States government, or any department, agency or
instrumentality thereof, unless Agent, in its sole discretion, has agreed to the
contrary in writing and Borrower or a Subsidiary, if necessary or desirable, has
complied with respect to such obligation with the Federal Assignment of Claims
Act of 1940, and (y) the aggregate face amount of all Accounts described in this
clause (h) and in clause (h) below with respect to Unbilled Accounts, exceed
$1,000,000;
11
(i) that is the obligation of an Account Debtor located in a foreign
country other than Canada unless payment thereof is assured by a letter of
credit assigned and delivered to Agent, reasonably satisfactory to Agent as to
form, amount and issuer;
(j) to the extent Borrower or any Subsidiary is liable for goods sold or
services rendered by the applicable Account Debtor to Borrower or any Subsidiary
but only to the extent of the potential offset;
(k) that arises with respect to goods that are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, sale or return,
sale on approval, guaranteed sale or other terms by reason of which the payment
by the Account Debtor is or may be conditional;
(l) that is in default, as established upon the occurrence of any of the
following:
(i) the Account is not paid within 90 days following its original
invoice date;
(ii) the Account Debtor obligated upon such Account suspends business,
makes a general assignment for the benefit of creditors or fails to pay its
debts generally as they come due; or
(iii) a petition is filed by or against any Account Debtor obligated
upon such Account under any bankruptcy law or any other federal, state or
foreign (including any provincial) receivership, insolvency relief or other law
or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if fifty percent (50%) or
more of the Dollar amount of all Accounts owing by that Account Debtor are
ineligible under the other criteria set forth in this Section 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself and Lenders, is
not a first priority perfected Lien;
(o) as to which any of the representations or warranties in the Loan
Documents are untrue;
(p) to the extent such Account is evidenced by a judgment, Instrument or
Chattel Paper; or
(q) to the extent that such Account, together with all other Accounts owing
by such Account Debtor and its Affiliates as of any date of determination exceed
ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled
Accounts.
Eligible Unbilled Accounts shall not include any Account of Borrower or any
of its Subsidiaries:
12
(a) that does not arise from the sale or rental of goods or the performance
of services by Borrower or any of its Subsidiaries in the ordinary course of its
business;
(b) (i) upon which Borrower's or any Subsidiary's right to receive payment
is not absolute or is contingent upon the fulfillment of any condition
whatsoever (other than the issuance of an invoice) or (ii) as to which Borrower
or any Subsidiary is not legally able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process;
(c) to the extent that any defense, counterclaim, setoff or dispute has
been asserted as to such Account, up to the amount of the defense, counterclaim,
setoff or dispute so asserted;
(d) that is not a bona fide indebtedness incurred in the amount of the
Account for merchandise sold to or services rendered to the applicable Account
Debtor;
(e) that is not an Unbilled Account;
(f) that (i) is not owned by Borrower or any Subsidiary or (ii) is subject
to any right, claim, security interest or other interest of any other Person,
other than Liens in favor of Agent, on behalf of itself and Lenders;
(g) that arises from a sale or rental to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity that has any common
officer or director with any Credit Party (it being understood and agreed that
sales to any portfolio companies of X.X. Childs and Halifax shall not be
excluded from the category of Eligible Accounts solely by operation of this
clause (g));
(h) to the extent that both (x) the Account is the obligation of an Account
Debtor that is the United States government, or any department, agency or
instrumentality thereof, unless Agent, in its sole discretion, has agreed to the
contrary in writing and Borrower or a Subsidiary, if necessary or desirable, has
complied with respect to such obligation with the Federal Assignment of Claims
Act of 1940, and (y) the aggregate face amount of all Accounts described in this
clause (h) and in clause (h) above with respect to Billed Accounts, exceed
$1,000,000;
(i) that is the obligation of an Account Debtor located in a foreign
country other than Canada unless payment thereof is assured by a letter of
credit assigned and delivered to Agent, reasonably satisfactory to Agent as to
form, amount and issuer;
(j) to the extent Borrower or any Subsidiary is liable for goods sold or
services rendered by the applicable Account Debtor to Borrower or any Subsidiary
but only to the extent of the potential offset;
(k) that arises with respect to goods that are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, sale or return,
sale on approval, guaranteed sale or other terms by reason of which the payment
by the Account Debtor is or may be conditional;
13
(l) that is in default, as established upon the occurrence of any of the
following:
(i) the Account Debtor obligated upon such Account suspends business,
makes a general assignment for the benefit of creditors or fails to pay its
debts generally as they come due; or
(ii) a petition is filed by or against any Account Debtor obligated
upon such Account under any bankruptcy law or any other federal, state or
foreign (including any provincial) receivership, insolvency relief or other law
or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if fifty percent (50%) or
more of the Dollar amount of all Accounts owing by that Account Debtor are
ineligible under the other criteria set forth in this Section 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself and Lenders, is
not a first priority perfected Lien;
(o) as to which any of the representations or warranties in the Loan
Documents are untrue;
(p) to the extent such Account is evidenced by a judgment, Instrument or
Chattel Paper;
(q) to the extent that such Account, together with all other Accounts owing
by such Account Debtor and its Affiliates as of any date of determination exceed
ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled
Accounts; or
(r) that has remained an Unbilled Account for more than seven (7) Business
Days following the date of the Borrowing Base Certificate that includes such
Unbilled Accounts as Eligible Unbilled Accounts.
1.7. Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible
Equipment Disposables.
All of the Rental Equipment, Wholesale Disposables and Equipment
Disposables owned by Borrower or any of its Subsidiaries and reflected in the
most recent Borrowing Base Certificate delivered by Borrower to Agent shall be
"Eligible Rental Equipment", "Eligible Wholesale Disposables" and "Eligible
Equipment Disposables" for purposes of this Agreement, respectively, except any
Inventory or Equipment (as applicable) to which any of the exclusionary criteria
set forth below applies. Agent shall have the right, in its commercially
reasonable judgment that there has been a material and adverse change from
historical performance with respect to the value of Eligible Rental Equipment,
Eligible Wholesale Disposables and/or Eligible Equipment Disposables, at any
time either (x) an Event of Default has occurred and is then continuing and/or
(y) Borrowing Availability is less than the Borrowing Base Adjustment Limit, to
(i) establish, modify or eliminate Reserves against Eligible Rental Equipment,
Eligible Wholesale Disposables and Eligible Equipment Disposables from time to
time, and/or (ii) adjust from time to time any of the criteria set forth below,
establish new criteria and adjust advance rates with respect to Eligible Rental
Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables, in
each case effective on prior written notice delivered by Agent to Borrower, the
effect of which, along with any other changes to Reserves, eligibility criteria,
advance rates and the exercise of other Agent rights under this Section 1.7
and/or under Section 1.6, shall not reduce the Borrowing Base by an aggregate
amount in excess of the Borrowing Base Adjustment Limit. Any exercise of rights
by Agent pursuant to the immediately preceding sentence (A) shall be reversed,
automatically and without further action by Agent, at such time that no Event of
Default shall have occurred and remain continuing and Borrowing Availability,
calculated without giving effect to any actions taken by Agent pursuant to the
immediately preceding sentence, is greater than the Borrowing Base Adjustment
Limit and (B) subject to the provisions of the immediately preceding clause (A),
shall be subject to the approval of (i) Supermajority Lenders in the case of
adjustments, new criteria, changes in advance rates or the elimination of
Reserves (in each case following the Restatement Closing Date) which have the
effect of making more credit available and (ii) all Lenders in the case of
adjustments, new criteria, changes in advance rates or the elimination of
Reserves (in each case following the Restatement Closing Date), the effect of
which is to make credit available to Borrower in respect of Rental Equipment,
Wholesale Disposables and Equipment Disposables in excess of eighty-five percent
(85%) of the orderly liquidation value of such assets as reflected in the audit
of such assets most recently conducted by or at the request of Agent. Eligible
Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment
Disposables shall not include any Inventory or Equipment of Borrower or any of
its Subsidiaries that:
14
(a) is not owned by Borrower or a Subsidiary free and clear of all Liens
and rights of any other Person (including the rights of a purchaser that has
made progress payments and the rights of a surety that has issued a bond to
assure Borrower's or any Subsidiary's performance with respect to any Inventory,
but excluding the rights of any customer under a customer contract entered into
by Borrower in the ordinary course of business and consistent with past
practices), except the Liens in favor of Agent, on behalf of itself and Lenders,
and Permitted Encumbrances in favor of landlords and bailees;
(b) is placed on consignment, sale or return or sale on approval;
(c) is covered by a negotiable document of title, unless such document has
been delivered to Agent with all necessary endorsements, free and clear of all
Liens except those in favor of Agent and Lenders;
(d) is unrentable, obsolete, or slow-moving;
15
(e) consists of display items or packing or shipping materials,
manufacturing supplies or work-in-process Inventory;
(f) is not of a type held for sale or rent in the ordinary course of
Borrower's or any Subsidiary's business;
(g) is not subject to a first priority lien in favor of Agent on behalf of
itself and Lenders, subject to Permitted Encumbrances;
(h) breaches any of the representations or warranties pertaining to
Inventory set forth in the Loan Documents;
(i) consists of Hazardous Materials;
(j) is not covered by casualty insurance reasonably acceptable to Agent; or
(k) is not located in the United States of America or Canada.
1.8. Cash Management Systems.
Borrower will maintain until the Termination Date the cash management
systems described in Annex C (the "Cash Management Systems").
1.9. Fees.
(a) Borrower shall pay to GE Capital, individually, the Fees specified in
that certain fee letter dated as of the Restatement Closing Date between
Borrower and GE Capital (the "GE Capital Fee Letter"), at the times specified
for payment therein.
(b) As additional compensation for the Lenders, Borrower shall pay to
Agent, for the ratable benefit of Lenders, in arrears, on the first Business Day
of each month prior to the Commitment Termination Date and on the Commitment
Termination Date, a Fee for Borrower's non-use of available funds in an amount
equal to thirty-seven and one-half hundredths of one percent (0.375%) per annum
(calculated on the basis of a 360 day year for actual days elapsed) multiplied
by the difference between (x) the Maximum Amount (as it may be reduced from time
to time) and (y) the average for the period of the daily closing balances of the
aggregate Revolving Loan and the Swing Line Loan outstanding during the period
for which such Fee is due.
(c) Borrower shall pay to Agent, for the ratable benefit of Lenders, the
Letter of Credit Fee as provided in Annex B.
1.10. Receipt of Payments.
Borrower shall make each payment under this Agreement not later than 2:00
p.m. (New York time) on the day when due in immediately available funds in
Dollars to the Collection Account. For purposes of computing interest and Fees
and determining Borrowing Availability as of any date, all payments shall be
deemed received on the Business Day on which immediately available funds
therefor are received in the Collection Account prior to 2:00 p.m. (New York
time). Payments received after 2:00 p.m. (New York time) on any Business Day or
on a day that is not a Business Day shall be deemed to have been received on the
following Business Day.
16
1.11. Application and Allocation of Payments.
(a) So long as no Default or Event of Default has occurred and is
continuing, (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied, first, to the Swing Line Loan and,
second, the Revolving Loan; (ii) payments matching specific scheduled payments
then due shall be applied to those scheduled payments; (iii) voluntary
prepayments shall be applied as determined by Borrower, subject to the
provisions of Section 1.3(a); and (iv) mandatory prepayments shall be applied as
set forth in Sections 1.3(c). All payments and prepayments applied to a
particular Loan shall be applied ratably to the portion thereof held by each
Lender as determined by its Pro Rata Share. As to any other payment, and as to
all payments made when a Default or Event of Default has occurred and is
continuing or following the Commitment Termination Date, Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of Borrower, and Borrower hereby irrevocably agrees
that Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records. In
the absence of a specific determination by Agent with respect thereto (with the
concurrence of Requisite Lenders) and at all times following the declaration of
the Obligations becoming due pursuant to Section 8.2, payments shall be applied
to amounts then due and payable in the following order: (1) to Fees, Agent's
expenses reimbursable hereunder and Agent's Indemnified Liabilities hereunder;
(2) to interest on the Swing Line Loan; (3) to principal payments on the Swing
Line Loan; (4) to interest on the other Loans, ratably in proportion to the
interest accrued as to each Loan; (5) to principal payments on the other Loans
and to provide cash collateral for Letter of Credit Obligations in the manner
described in Annex B, ratably to the aggregate, combined principal balance of
the other Loans and outstanding Letter of Credit Obligations; and (6) to all
other Obligations, including expenses of Lenders to the extent reimbursable
under Section 11.3 and all Lender Indemnified Liabilities.
(b) Agent is authorized to, and at its sole election may, upon written
notice to Borrower, charge to the Revolving Loan balance on behalf of Borrower
and cause to be paid all Fees, expenses, Charges, costs (including insurance
premiums in accordance with Section 5.4(a)) and interest and principal, other
than principal of the Revolving Loan, owing by Borrower under this Agreement or
any of the other Loan Documents if and to the extent Borrower fails to pay
promptly any such amounts as and when due, even if the amount of such charges
would exceed Borrowing Availability at such time or would cause the balance of
the Revolving Loan and the Swing Line Loan to Borrower to exceed the Borrowing
Base after giving effect to such charges. At Agent's option and to the extent
permitted by law, any charges so made shall constitute part of the Revolving
Loan hereunder.
17
1.12. Loan Account and Accounting.
Agent shall maintain a loan account (the "Loan Account") on its books to
record: all Advances, all payments made by Borrower, and all other debits and
credits as provided in this Agreement with respect to the Loans or any other
Obligations. All entries in the Loan Account shall be made in accordance with
Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall, absent manifest error, be presumptive evidence
of the amounts due and owing to Agent and Lenders by Borrower; provided, that
any failure to so record or any error in so recording shall not limit or
otherwise affect Borrower's duty to pay the Obligations. Agent shall render to
Borrower a monthly accounting of transactions with respect to the Loans setting
forth the balance of the Loan Account for the immediately preceding month.
Unless Borrower notifies Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within 30
days after the date thereof, each and every such accounting shall (absent
manifest error) be deemed final, binding and conclusive on Borrower in all
respects as to all matters reflected therein. Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrower.
Notwithstanding any provision herein contained to the contrary, any Lender may
elect (which election may be revoked) to dispense with the issuance of Notes to
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
1.13. Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "Indemnified
Person"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct. Without limitation of the rights to indemnification specified
herein, each Indemnified Person hereby agrees to provide Borrower with
commercially reasonable notice of (i) any suit, action, proceeding, claim,
damage, loss, liability or expense which, in the determination of such
Indemnified Person, could reasonably be likely to result in a claim or demand
for indemnification in accordance with the provisions of this Section 1.13(a) by
such Indemnified Person and (ii) any settlement or judicial or administrative
determination of any matter described in the preceding clause (i). NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR
ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR
AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
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(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or occurs
as a result of acceleration, by operation of law or otherwise); (ii) Borrower
shall default in payment when due of the principal amount of or interest on any
LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing of, or shall
request a termination of, any borrowing of, conversion into or continuation of,
LIBOR Loans after Borrower has given notice requesting the same in accordance
herewith; or (iv) Borrower shall fail to make any prepayment of a LIBOR Loan
after Borrower has given a notice thereof in accordance herewith, then Borrower
shall indemnify and hold harmless each Lender from and against all losses, costs
and expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained. For the purpose of
calculating amounts payable to a Lender under this subsection, each Lender shall
be deemed to have actually funded its relevant LIBOR Loan through the purchase
of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount
of that LIBOR Loan and having a maturity comparable to the relevant LIBOR
Period; provided, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written calculation
of all amounts payable pursuant to this Section 1.13(b), and such calculation
shall be binding on the parties hereto unless Borrower shall object in writing
within 10 Business Days of receipt thereof, specifying the basis for such
objection in detail.
1.14. Access.
Each Credit Party that is a party hereto shall, during normal business
hours, from time to time upon 5 Business Days' prior notice as frequently as
Agent reasonably determines to be appropriate: (a) provide Agent and any of its
officers, employees and agents access to its properties, facilities, advisors
and employees (including officers) of each Credit Party and to the Collateral,
(b) permit Agent, and any of its officers, employees and agents, to inspect,
audit and make extracts from any Credit Party's books and records, and (c)
permit Agent, and its officers, employees and agents, to inspect, review,
evaluate and make test verifications and counts of the Accounts, Inventory,
Equipment and other Collateral of any Credit Party; provided, that activities
described in this sentence (collectively, the "Audits and Inspections") shall be
limited to no more than two per calendar year absent the occurrence of an Event
of Default; provided, further, that so long as no Event of Default has then
occurred, the second Audit and Inspection conducted in any calendar year shall
be at Agent's expense. If an Event of Default has occurred and is continuing or
if access is necessary to preserve or protect the Collateral as determined by
Agent, each such Credit Party shall provide such access to Agent and to each
Lender at all times and without advance notice. Furthermore, so long as any
Event of Default has occurred and is continuing, Borrower shall provide Agent
and each Lender with access to its suppliers and customers. Each Credit Party
shall make available to Agent and its counsel, as quickly as is possible under
the circumstances, originals or copies of all books and records that Agent may
reasonably request. Each Credit Party shall deliver any document or instrument
necessary for Agent, as it may from time to time reasonably request, to obtain
records from any service bureau or other Person that maintains records for such
Credit Party, and shall maintain duplicate records or supporting documentation
on media, including computer tapes and discs owned by such Credit Party. Agent
will give Lenders at least 5 days' prior written notice of regularly scheduled
audits. Representatives of other Lenders may accompany Agent's representatives
on regularly scheduled audits at no charge to Borrower. Notwithstanding any of
the provisions of this Section to the contrary, no Credit Party shall be
required to provide Agent or any Lender access to information, books or records
to the extent subject to patient confidentiality requirements.
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1.15. Taxes.
(a) Any and all payments by Borrower hereunder (including any payments made
pursuant to Section 12) or under the Notes shall be made, in accordance with
this Section 1.15, free and clear of and without deduction for any and all
present or future Taxes. If Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder (including any sum payable
pursuant to Section 12) or under the Notes, (i) the sum payable shall be
increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 1.15) Agent or Lenders, as applicable, receive an amount equal to
the sum they would have received had no such deductions been made, (ii) Borrower
shall make such deductions, and (iii) Borrower shall pay the full amount
deducted to the relevant taxing or other authority in accordance with applicable
law. Within 30 days after the date of any payment of Taxes, Borrower shall
furnish to Agent or the applicable Lender the original or a certified copy of a
receipt evidencing payment thereof. Agent and Lenders shall not be obligated to
return or refund any amounts received pursuant to this Section.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within 10 days of demand therefor, pay Agent and each
Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 1.15) paid by Agent or such
Lender, as appropriate, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted.
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(c) Each Lender organized under the laws of a jurisdiction outside the
United States (a "Foreign Lender") as to which payments to be made under this
Agreement or under the Notes are exempt from United States withholding tax under
an applicable statute or tax treaty shall provide to Borrower and Agent a
properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender's entitlement to such exemption (a
"Certificate of Exemption"). Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower and
Agent prior to becoming a Lender hereunder. No foreign Person may become a
Lender hereunder if such Person fails to deliver a Certificate of Exemption in
advance of becoming a Lender.
1.16. Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty, governmental
(or quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law),
in each case, adopted after the Restatement Closing Date, from any central bank
or other Governmental Authority increases or would have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Lender and thereby reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder, then Borrower shall from time to time
upon written demand by such Lender (with a copy of such demand to Agent) pay to
Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction; provided, that Borrower shall not be
obligated to pay any such amount or amounts which are attributable to any period
of time occurring more than 120 days prior to the date of receipt by Borrower of
such written demand; provided, further, that such Lender shall disclose to
Borrower the calculations of the amount necessary to compensate for any
shortfall in the rate of return. A certificate as to the amount of that
reduction and showing the basis of the computation thereof submitted by such
Lender to Borrower and to Agent shall, absent manifest error, be final,
conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) or (ii) the compliance
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), in each case adopted after
the Restatement Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon written demand by such Lender (with a
copy of such demand to Agent), pay to Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost;
provided, that Borrower shall not be obligated to pay any such amount or amounts
which are attributable to any period of time occurring more than 120 days prior
to the date of receipt by Borrower of such written demand; provided, further,
that such Lender shall disclose to Borrower the calculations of the amount
necessary to compensate for such increased cost. A certificate as to the amount
of such increased cost, submitted to Borrower and to Agent by such Lender, shall
be conclusive and binding on Borrower for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of
any circumstances referred to above which would result in any such increased
cost, the affected Lender shall, to the extent not inconsistent with such
Lender's internal policies of general application, use reasonable commercial
efforts to minimize costs and expenses incurred by it and payable to it by
Borrower pursuant to this Section 1.16(b).
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(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Borrower through Agent,
(i) the obligation of such Lender to agree to make or to make or to continue to
fund or maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith
prepay in full all outstanding LIBOR Loans owing to such Lender, together with
interest accrued thereon, unless Borrower, within 5 Business Days after the
delivery of such notice and demand, converts all LIBOR Loans into Index Rate
Loans.
(d) Within 15 days after receipt by Borrower of written notice and demand
from any Lender (an "Affected Lender") for payment of additional amounts or
increased costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b), Borrower
may, at its option, notify Agent and such Affected Lender of its intention to
replace the Affected Lender. So long as no Default or Event of Default has
occurred and is continuing, Borrower, with the consent of Agent, may obtain, at
Borrower's expense, a replacement Lender ("Replacement Lender") for the Affected
Lender, which Replacement Lender must be reasonably satisfactory to Agent. If
Borrower obtains a Replacement Lender within 90 days following notice of their
intention to do so, the Affected Lender must sell and assign its Loans and
Commitments to such Replacement Lender for an amount equal to the principal
balance of all Loans held by the Affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale in accordance with the
procedures set forth in Section 9.1(a); provided, that Borrower shall have
reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment. In the event that an Affected Lender does not execute an
Assignment Agreement pursuant to Section 9.1(a) within five (5) Business Days
after receipt by such Affected Lender of notice of replacement pursuant to this
Section 1.16(d) and presentation to such Affected Lender of an Assignment
Agreement evidencing an assignment pursuant to this Section 1.16(d), such
Affected Lender shall be deemed to have consented to the terms of such
Assignment Agreement, and any such Assignment Agreement executed by Agent, the
Replacement Lender and, to the extent required pursuant to Section 9.1(a),
Borrower, shall be effective for purposes of this Section 1.16(d).
Notwithstanding the foregoing, Borrower shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within 15 days following its receipt of Borrower's
notice of intention to replace such Affected Lender. Furthermore, if Borrower
gives a notice of intention to replace and does not so replace such Affected
Lender within 90 days thereafter, Borrower's rights under this Section 1.16(d)
shall terminate and Borrower shall promptly pay all increased costs or
additional amounts demanded by such Affected Lender pursuant to Sections
1.15(a), 1.16(a) and 1.16(b).
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1.17. Single Loan.
All Loans to Borrower and all of the other Obligations arising under this
Agreement and the other Loan Documents shall constitute one general obligation
of Borrower secured, until the Termination Date, by all of the Collateral.
1.18. Effect of Amendment and Restatement.
(a) Upon the execution and delivery of this Agreement, the "Obligations"
(as defined under the Original Credit Agreement) shall continue in full force
and effect as Obligations hereunder, and shall now be governed by the terms and
conditions set forth in this Agreement and the other Loan Documents. Such
Obligations, together with any and all additional Obligations incurred by
Borrower hereunder or under any of the other Loan Documents, shall continue to
be secured by the "Collateral" (as defined in the Original Credit Agreement), as
well as by all other Collateral. Borrower hereby reaffirms its obligations under
each "Loan Document" (as defined in the Original Credit Agreement, collectively,
the "Original Loan Documents") to which it is party, as amended, supplemented or
otherwise modified by this Agreement and by the other Loan Documents delivered
on the Restatement Closing Date. Borrower further agrees that each such Original
Loan Document shall remain in full force and effect following the execution and
delivery of this Agreement and that all references to the "Credit Agreement" in
such Original Loan Documents shall be deemed to refer to this Agreement.
(b) Upon the execution and delivery of this Agreement, (i) certain of the
Original Lenders are assigning a portion of their Revolving Loans and Revolving
Loan Commitments to certain Lenders and (ii) several new Lenders are assuming
Revolving Loan Commitments and providing new Revolving Loans hereunder. The
Commitments of each Lender under this Agreement, as of the Restatement Closing
Date, are set forth on Annex J hereto. The "Commitments" of the Original
Lenders, immediately prior to the effectiveness of this Agreement, are set forth
on Annex K hereto. On the Restatement Closing Date, each Lender agrees to
purchase and sell from each other Lender, as necessary, such portions of the
Revolving Loan Commitments and the outstanding Revolving Loans as are necessary
so that immediately after the effectiveness of this Agreement, and the
completion of such purchases and sales, each Lender has the Commitments and the
outstanding Loans set forth on Annex J. Notwithstanding the foregoing, Borrower,
Lenders and Agent hereby agree that any and all accrued and unpaid interest on
the "Loans" under, and as such term is defined in, the Original Credit
Agreement, together with any and all accrued and unpaid fees, charges and
expenses owing under the Original Credit Agreement, shall be due and payable for
the pro rata benefit of the Original Lenders on the date hereof.
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2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans.
No Lender shall be obligated to make any Loan or incur any Letter of Credit
Obligations on the Restatement Closing Date, or to take, fulfill, or perform any
other action hereunder, until the following conditions have been satisfied or
provided for in a manner satisfactory to Agent, or waived in writing by Agent
and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or counterparts hereof
shall have been duly executed by, and delivered to, Borrower, Agent and Lenders;
and Agent shall have received such documents, instruments, agreements and legal
opinions as Agent shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including all those
listed in the Closing Checklist attached hereto as Annex D, each in form and
substance reasonably satisfactory to Agent.
(b) Approvals. Agent shall have received (i) satisfactory evidence that the
Credit Parties have obtained all required consents and approvals of all Persons,
including all requisite Governmental Authorities, to the execution, delivery and
performance of this Agreement and the other Loan Documents or (ii) an officer's
certificate in form and substance reasonably satisfactory to Agent affirming
that no such consents or approvals are required.
(c) Opening Availability. The Eligible Accounts, Eligible Unbilled
Accounts, Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible
Equipment Disposables supporting the initial Revolving Credit Advance and the
initial Letter of Credit Obligations incurred (or deemed incurred) shall be
sufficient, as determined by Agent, to provide Borrower with Borrowing
Availability, after giving effect to the initial Revolving Credit Advance and
the incurrence of any initial Letter of Credit Obligations (on a pro forma
basis, with trade payables being paid currently, and expenses and liabilities
being paid in the ordinary course of business and without acceleration of sales)
of at least $50,000,000.
(d) Payment of Fees. Borrower shall have paid the Fees required to be paid
on the Restatement Closing Date in the respective amounts specified in Section
1.9 (including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all fees, costs and expenses of closing presented as of the
Restatement Closing Date.
(e) Capital Structure; Other Indebtedness. The capital structure of each
Credit Party and the terms and conditions of all Indebtedness of each Credit
Party shall be acceptable to Agent in its sole discretion (it being understood
that the execution and delivery of this Agreement by Agent shall conclusively
evidence Agent's acceptance thereof).
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(f) Due Diligence. Agent shall have completed its business and legal due
diligence, including a roll forward of its previous Collateral audit, with
results reasonably satisfactory to Agent (it being understood that the execution
and delivery of this Agreement by Agent shall conclusively evidence Agent's
completion of, and satisfaction with, such due diligence).
2.2. Further Conditions to Each Loan.
Except as otherwise expressly provided herein, no Lender shall be obligated
to fund any Advance, convert or continue any Loan as a LIBOR Loan or incur any
Letter of Credit Obligation, if, as of the date thereof:
(a) any representation or warranty by any Credit Party contained herein or
in any other Loan Document is untrue or incorrect in any material respect as of
such date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted or
consented to or expressly contemplated by this Agreement and Agent or Requisite
Lenders have determined not to make such Advance, convert or continue any Loan
as LIBOR Loan or incur such Letter of Credit Obligation as a result of the fact
that such warranty or representation is untrue or incorrect in any material
respect;
(b) any event or circumstance having a Material Adverse Effect has occurred
since the date hereof as determined by the Requisite Lenders and Agent or
Requisite Lenders have determined not to make such Advance, convert or continue
any Loan as a LIBOR Loan or incur such Letter of Credit Obligation as a result
of the fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is continuing or would
result after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligation), and Agent or Requisite Lenders shall have determined not to
make any Advance, convert or continue any Loan as a LIBOR Loan or incur any
Letter of Credit Obligation as a result of that Default or Event of Default; or
(d) after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligations), the outstanding principal amount of the aggregate Revolving
Loan would exceed the lesser of the Borrowing Base and the Maximum Amount, in
each case, less the then outstanding principal amount of the Swing Line Loan.
The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrower that the conditions
in this Section 2.2 (other that any such conditions that are subject to Agent's
and/or Lenders' sole determination or control) have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of Agent's Liens, on
behalf of itself and Lenders, pursuant to the Collateral Documents.
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3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1. Corporate Existence; Compliance with Law.
Each Credit Party (a) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation or organization set
forth in Disclosure Schedule 3.1; (b) is duly qualified to conduct business and
is in good standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect; (c) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its properties,
to lease the property it operates under lease and to conduct its business as
now, heretofore and proposed to be conducted; (d) subject to specific
representations regarding Environmental Laws, has all material licenses,
permits, consents or approvals from or by, and has made all material filings
with, and has given all material notices to, all Governmental Authorities having
jurisdiction, to the extent required for the ownership, operation and conduct of
its business; (e) is in compliance with its charter and bylaws or partnership or
operating agreement, as applicable; and (f) subject to specific representations
set forth herein regarding ERISA, Environmental Laws, healthcare, tax and other
laws, is in compliance with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including, without
limitation, Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56), except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.2. Executive Offices, Collateral Locations, FEIN.
As of the Restatement Closing Date, the current location of each Credit
Party's chief executive office and the warehouses and premises at which any
Collateral is located are set forth in Disclosure Schedule 3.2, and except as
indicated on Disclosure Schedule 3.2, none of such locations has changed within
the twelve months preceding the Restatement Closing Date. In addition,
Disclosure Schedule 3.2 lists the federal employer identification number of each
Credit Party.
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3.3. Corporate Power, Authorization, Enforceable Obligations.
The execution, delivery and performance by each Credit Party of the Loan
Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Person's power; (b) have been duly authorized by
all necessary corporate, limited liability company or limited partnership
action; (c) do not contravene any provision of such Person's charter, bylaws or
partnership or operating agreement as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Person other than those in favor of Agent, on
behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in Section 2.1(b), all of which will have been
duly obtained, made or complied with prior to the Restatement Closing Date. Each
of the Loan Documents shall be duly executed and delivered by each Credit Party
that is a party thereto and each such Loan Document shall constitute a legal,
valid and binding obligation of such Credit Party enforceable against it in
accordance with its terms, except as enforceability may be limited by (i)
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
3.4. Financial Statements and Projections.
Except for the Projections, all Financial Statements concerning Borrower
and its Subsidiaries that are referred to below have been prepared in accordance
with GAAP consistently applied throughout the periods covered (except as
disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes and normal year-end audit adjustments) and present
fairly in all material respects the financial position of the Persons covered
thereby as at the dates thereof and the results of their operations and cash
flows for the periods then ended.
(a) Financial Statements. The following Financial Statements attached
hereto as Disclosure Schedule 3.4(a) have been delivered on the date hereof:
(i) The audited balance sheet at December 31, 2004 and the related
statement of income and cash flows of Borrower for the Fiscal Year then ended,
certified by PriceWaterhouseCoopers LLC.
(ii) The unaudited balance sheet at March 31, 2005 and the related
statement of income and cash flows of Borrower for the three calendar months
then ended.
(b) Projections. The Projections delivered on the date hereof and attached
to the Delivery Items Certificate as Delivery Item 3.4(b) have been prepared by
Borrower in light of the past operations of its business, and reflect
projections for the five year period beginning on January 1, 2005 on a
year-by-year basis. The Projections are based upon estimates and assumptions
stated therein, all of which Borrower believes to be reasonable and fair in
light of current conditions and current facts known to Borrower and, as of the
Restatement Closing Date, reflect Borrower's good faith and reasonable estimates
of the future financial performance of Borrower and of the other information
projected therein for the period set forth therein.
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3.5. Material Adverse Effect.
Between December 31, 2004 and the Restatement Closing Date: (a) no Credit
Party has incurred any obligations, contingent or noncontingent liabilities,
liabilities for Charges, long-term leases or unusual forward or long-term
commitments that have not been disclosed in writing to Agent and that, alone or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect, (b) no contract, lease or other agreement or instrument has been entered
into by any Credit Party or has become binding upon any Credit Party's assets
and no law or regulation applicable to any Credit Party has been adopted that
has had or could reasonably be expected to have a Material Adverse Effect, and
(c) no Credit Party is in default and to the best of Borrower's knowledge no
third party is in default under any material contract, lease or other agreement
or instrument, that alone or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Between December 31, 2004 and the Restatement
Closing Date no event has occurred, that alone or together with other events,
could reasonably be expected to have a Material Adverse Effect.
3.6. Ownership of Property; Liens.
As of the Restatement Closing Date, the real estate ("Real Estate") listed
in Disclosure Schedule 3.6 constitutes all of the real property owned, leased,
subleased, or used by any Credit Party. Each Credit Party owns good and
marketable fee simple title to all of its owned Real Estate, and valid and
marketable leasehold interests in all of its leased Real Estate, all as
described on Disclosure Schedule 3.6, and copies of all such leases or a summary
of terms thereof reasonably satisfactory to Agent have been delivered to Agent.
Disclosure Schedule 3.6 further describes any Real Estate with respect to which
any Credit Party is a lessor, sublessor or assignor as of the Restatement
Closing Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal property and assets. As of the
Restatement Closing Date, none of the properties and assets of any Credit Party
are subject to any Liens other than Permitted Encumbrances, and there are no
facts, circumstances or conditions known to any Credit Party that may result in
any Liens (including Liens arising under Environmental Laws) other than
Permitted Encumbrances. Each Credit Party has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's
right, title and interest in and to all such Real Estate and other properties
and assets. Disclosure Schedule 3.6 also describes any purchase options, rights
of first refusal or other similar contractual rights pertaining to any Real
Estate. As of the Restatement Closing Date, no portion of any Credit Party's
Real Estate has suffered any material damage by fire or other casualty loss that
has not heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied. As of the Restatement Closing Date,
all material permits required to have been issued or appropriate to enable the
Real Estate to be lawfully occupied and used for substantially all of the
purposes for which it is currently occupied and used have been lawfully issued
and are in full force and effect.
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3.7. Labor Matters.
As of the Restatement Closing Date (a) no strikes or other material labor
disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) hours worked by and payment made to employees of each
Credit Party comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) except as set
forth in Disclosure Schedule 3.7, no Credit Party is a party to or bound by any
collective bargaining agreement, management agreement, consulting agreement,
employment agreement, bonus, restricted stock, stock option, or stock
appreciation plan or agreement or any similar plan, agreement or arrangement
(and true and complete copies of any agreements described on Disclosure Schedule
3.7 have been delivered to Agent); (e) there is no organizing activity involving
any Credit Party pending or, to any Credit Party's knowledge, threatened by any
labor union or group of employees; (f) there are no representation proceedings
pending or, to any Credit Party's knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of any Credit
Party has made a pending demand for recognition; and (g) except as set forth in
Disclosure Schedule 3.7, there are no material complaints or charges against any
Credit Party pending or, to the knowledge of any Credit Party, threatened to be
filed with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness.
Except as set forth in Disclosure Schedule 3.8, as of the Restatement
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. As of the Restatement Closing Date, all of the issued and outstanding
Stock of each Credit Party is owned by each of the Stockholders and in the
amounts set forth in Disclosure Schedule 3.8. Except as set forth in Disclosure
Schedule 3.8, there are no outstanding rights to purchase, options, warrants or
similar rights or agreements pursuant to which any Credit Party may be required
to issue, sell, repurchase or redeem any of its Stock or other equity securities
or any Stock or other equity securities of its Subsidiaries. All outstanding
Indebtedness and Guaranteed Indebtedness of each Credit Party as of the
Restatement Closing Date (except for the Obligations) in an outstanding
principal or commitment amount in excess of $200,000 is described in Section 6.3
(including Disclosure Schedule 6.3).
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3.9. Government Regulation.
No Credit Party is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940. No Credit Party is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any other federal or state statute that restricts or
limits its ability to incur Indebtedness or to perform its obligations
hereunder. The making of the Loans by Lenders to Borrower, the incurrence of the
Letter of Credit Obligations on behalf of Borrower, the application of the
proceeds thereof and the repayment thereof will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10. Margin Regulations.
No Credit Party is engaged, nor will it engage, principally or as one of
its important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect (such securities being referred to herein as "Margin Stock"). No
Credit Party owns any Margin Stock, and none of the proceeds of the Loans or
other extensions of credit under this Agreement will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any Indebtedness that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
of the Loans or other extensions of credit under this Agreement to be considered
a "purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. No Credit Party will take or permit to be taken any action that
might cause any Loan Document to violate any regulation of the Federal Reserve
Board.
3.11. Taxes.
All federal tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party
have been filed with the appropriate Governmental Authority and all Charges have
been paid prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding Charges or other amounts
being contested in accordance with Section 5.2(b). All state and local tax
returns, reports, statements, including information returns, required by any
Governmental Authority to be filed by any Credit Party have been filed with the
appropriate Governmental Authority, other than any such items the failure of
which to file could not reasonably be expected to have a Material Adverse
Effect, and all Charges have been paid prior to the date on which any fine,
penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid) excluding
(i) Charges or other amounts being contested in accordance with Section 5.2(b)
and (ii) Charges or other amounts the failure of which to pay could not
reasonably be expected to have a Material Adverse Effect. Proper and accurate
amounts have been withheld by each Credit Party from its respective employees
for all periods in material compliance with all applicable federal, state, local
and foreign laws and such withholdings have been timely paid to the respective
Governmental Authorities. Disclosure Schedule 3.11 sets forth as of the
Restatement Closing Date those taxable years for which any Credit Party's tax
returns are currently being audited by the IRS or any other applicable
Governmental Authority, and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except as
described in Disclosure Schedule 3.11, no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. None of the Credit Parties and their respective
predecessors are liable for any Charges: (a) under any agreement (including any
tax sharing agreements) or (b) to each Credit Party's knowledge, as a
transferee. As of the Restatement Closing Date, no Credit Party has agreed or
been requested to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which could reasonably be expected to
have a Material Adverse Effect.
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3.12. ERISA.
(a) Disclosure Schedule 3.12 lists, in each case as of the Restatement
Closing Date, (i) all ERISA Affiliates and (ii) all Plans and separately
identifies all Pension Plans, including Title IV Plans, Multiemployer Plans,
ESOPs and Welfare Plans, including all Retiree Welfare Plans. Copies of all such
listed Plans, together with a copy of the latest IRS/DOL 5500-series form for
each such Plan, have been delivered to Agent. Except with respect to
Multiemployer Plans, as of the Restatement Closing Date each Qualified Plan has
been determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in material
compliance with the applicable provisions of ERISA and the IRC, including the
timely filing of all reports required under the IRC or ERISA, including the
statement required by 29 CFR Section 2520.104-23. Neither any Credit Party nor
ERISA Affiliate has failed to make any contribution or pay any amount due as
required by either Section 412 of the IRC or Section 302 of ERISA or the terms
of any such Plan. Neither any Credit Party nor ERISA Affiliate has engaged in a
"prohibited transaction," as defined in Section 406 of ERISA and Section 4975 of
the IRC, in connection with any Plan, that would subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule 3.12: (i) no Title IV Plan
has any Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
any Credit Party, threatened claims (other than claims for benefits in the
normal course), sanctions, actions or lawsuits, asserted or instituted against
any Plan or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party
or ERISA Affiliate has incurred or reasonably expects to incur any liability as
a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated, whether or not in a "standard termination" as
that term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of
any Credit Party or any ERISA Affiliate (determined at any time within the last
five years) with Unfunded Pension Liabilities been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate (determined at such time); (vi) except in the
case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than ten percent (10%) of fair market value of the
assets of any Plan measured on the basis of fair market value as of the latest
valuation date of any Plan; and (vii) no liability under any Title IV Plan has
been satisfied with the purchase of a contract from an insurance company that is
not rated AAA by the Standard & Poor's Corporation or an equivalent rating by
another nationally recognized rating agency.
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3.13. No Litigation.
No action, claim, lawsuit, demand, investigation or proceeding is now
pending or, to the knowledge of any Credit Party, threatened against any Credit
Party, before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, "Litigation"), (a) that challenges any Credit Party's
right or power to enter into or perform any of its obligations under the Loan
Documents to which it is a party, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (b) that has a reasonable risk of
being determined adversely to any Credit Party and that, if so determined, could
be reasonably be expected to have a Material Adverse Effect. Except as set forth
on Disclosure Schedule 3.13, as of the Restatement Closing Date there is no
Litigation pending or, to any Credit Party's knowledge, threatened, that seeks
damages in excess of $1,000,000 or injunctive relief against, or alleges
criminal misconduct of, any Credit Party.
3.14. Brokers.
Except as set forth on Disclosure Schedule 3.14, no broker or finder
brought about the obtaining, making or closing of the Loans, and no Credit Party
or Affiliate thereof has any obligation to any Person in respect of any finder's
or brokerage fees in connection therewith.
3.15. Intellectual Property.
As of the Restatement Closing Date, each Credit Party owns or has rights to
use all Intellectual Property necessary to continue to conduct its business as
now or heretofore conducted by it or proposed to be conducted by it, and each
Patent, Trademark, Copyright and License is listed, together with application or
registration numbers, as applicable, in Disclosure Schedule 3.15. Each Credit
Party conducts its business and affairs without infringement of or interference
with any Intellectual Property of any other Person in any material respect.
Except as set forth in Disclosure Schedule 3.15, no Credit Party is aware of any
infringement claim by any other Person with respect to any Intellectual
Property, which infringement could reasonably be expected to have a Material
Adverse Effect.
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3.16. Full Disclosure.
No information contained in this Agreement, any of the other Loan
Documents, any Projections, Financial Statements or Collateral Reports or other
written reports from time to time delivered hereunder or any written statement
furnished by or on behalf of any Credit Party to Agent or any Lender pursuant to
the terms of this Agreement contains or will contain any untrue statement of a
material fact or, when taken as a whole, omits or will omit to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which they were made. The Liens granted to
Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents
will at all times be fully perfected first priority Liens in and to the
Collateral described therein, subject, as to priority, only to Permitted
Encumbrances.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule 3.17, as of the Restatement
Closing Date: (i) to the knowledge of Borrower, the Real Estate is free of
contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and
that would not result in Environmental Liabilities that could reasonably be
expected to exceed $500,000; (ii) no Credit Party has caused or suffered to
occur any Release of Hazardous Materials on, at, in, under, above, to, from or
about any of its Real Estate; (iii) the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance that would
not result in Environmental Liabilities which could reasonably be expected to
exceed $500,000; (iv) the Credit Parties have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as proposed
to be conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities that could
reasonably be expected to exceed $500,000, and all such Environmental Permits
are valid, uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts, circumstances or conditions, including any
Releases of Hazardous Materials, that are likely to result in any Environmental
Liabilities of such Credit Party which could reasonably be expected to exceed
$500,000, and no Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material that seeks damages, penalties, fines, costs or
expenses in excess of $500,000 or injunctive relief against, or that alleges
criminal misconduct by, any Credit Party; (vii) as of the Restatement Closing
Date, no notice has been received by any Credit Party identifying it as a
"potentially responsible party" or requesting information under CERCLA or
analogous state statutes, and to the knowledge of the Credit Parties, there are
no facts, circumstances or conditions that may result in any Credit Party being
identified as a "potentially responsible party" under CERCLA or analogous state
statutes; and (viii) as of the Restatement Closing Date, the Credit Parties have
provided to Agent copies of all existing environmental reports, reviews and
audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case relating to any Credit Party.
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(b) Each Credit Party hereby acknowledges and agrees that Agent (i) is not
now, and has not ever been, in control of any of the Real Estate or any Credit
Party's affairs, and (ii) does not have the capacity through the provisions of
the Loan Documents or otherwise to influence any Credit Party's conduct with
respect to the ownership, operation or management of any of its Real Estate or
compliance with Environmental Laws or Environmental Permits.
3.18. Insurance.
Disclosure Schedule 3.18 lists all insurance policies of any nature
maintained, as of the Restatement Closing Date, for current occurrences by each
Credit Party.
3.19. Deposit and Disbursement Accounts.
Delivery Item 3.19 attached to the Delivery Items Certificate lists all
banks and other financial institutions at which any Credit Party maintains
deposit or other accounts as of the Restatement Closing Date, including any
Disbursement Accounts, and such Delivery Item correctly identifies the name,
address and telephone number of each depository, the name in which the account
is held, a description of the purpose of the account, and the complete account
number therefor.
3.20. Government Contracts.
Except as set forth in Disclosure Schedule 3.20, as of the Restatement
Closing Date, no Credit Party is a party to any contract or agreement with any
Governmental Authority and no Credit Party's Accounts are subject to the Federal
Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local
law.
3.21. Customer and Trade Relations.
Except as set forth in Disclosure Schedule 3.21, as of the Restatement
Closing Date, there exists no actual or, to the knowledge of any Credit Party,
threatened termination or cancellation of, or any material adverse modification
or change in the business relationship of any Credit Party with any customer or
group of customers whose purchases during the preceding twelve months caused
them to be ranked among the ten largest customers of such Credit Party, or the
business relationship of any Credit Party with any supplier material to its
operations.
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3.22. Agreements and Other Documents.
As of the Restatement Closing Date, each Credit Party has provided to Agent
or its counsel, on behalf of Lenders, accurate and complete copies of all of the
following agreements or documents to which it is subject and each of which is
listed in Delivery Item 3.22 attached to the Delivery Items Certificate:
equipment supply and maintenance contracts, giving rise to rental and/or service
income in excess of $2,500,000 per annum; supply agreements and purchase
agreements not terminable by such Credit Party within 60 days following written
notice issued by such Credit Party and involving transactions in excess of
$2,500,000 per annum; leases of Equipment having a remaining term of one year or
longer and requiring aggregate rental and other payments in excess of $2,500,000
per annum; and licenses and permits held by the Credit Parties, the absence of
which could be reasonably likely to have a Material Adverse Effect.
3.23. Solvency.
Both before and after giving effect to (a) the Loans and Letter of Credit
Obligations to be made or incurred (or deemed made or incurred) on the
Restatement Closing Date or such other date as Loans and Letter of Credit
Obligations requested hereunder are made or incurred, (b) the disbursement of
the proceeds of such Loans pursuant to the instructions of Borrower; and (c) the
payment and accrual of all transaction costs in connection with the foregoing,
each Credit Party is and will be Solvent.
3.24. HIPAA Compliance.
To the extent that and for so long as (i) Borrower is a "covered entity" as
defined in 45 C.F.R. ss. 160.103, (ii) Borrower and/or its business and
operations are subject to or covered by the HIPAA Administrative Requirements
codified at 45 C.F.R. Parts 160 & 162 (the "Transactions Rule") and/or the HIPAA
Security and Privacy Requirements codified at 45 C.F.R. Parts 160 & 164 (the
"Privacy and Security Rules"), and/or (iii) Borrower sponsors any "group health
plans" as defined in 45 C.F.R. ss. 160.103, Borrower has: (x) completed, or will
complete on or before any applicable compliance date, thorough and detailed
surveys, audits, inventories, reviews, analyses and/or assessments, including
risk assessments, (collectively "Assessments") of all areas of its business and
operations subject to HIPAA and/or that could be adversely affected by the
failure of Borrower to be HIPAA Compliant (as defined below) to the extent these
Assessments are appropriate or required for Borrower to be HIPAA Compliant; (y)
developed, or will develop on or before any applicable compliance date, a
detailed plan and time line for becoming HIPAA Compliant (a "HIPAA Compliance
Plan"); and (z) implemented, or will implement on or before any applicable
compliance date, those provisions of its HIPAA Compliance Plan necessary to
ensure that Borrower is HIPAA Compliant. For purposes of this Agreement, "HIPAA
Compliant" shall mean that Borrower (1) is, or on or before any applicable
compliance date will be, in full compliance with any and all of the applicable
requirements of HIPAA, including all requirements of the Transactions Rule and
the Privacy and Security Rules and (2) is not subject to, and could not
reasonably be expected to become subject to, any civil or criminal penalty or
any investigation, claim or process that could reasonably be expected to have a
Material Adverse Effect.
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4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that from and
after the Restatement Closing Date and until the Termination Date, it shall
deliver to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and in
the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby agrees that, from and
after the Restatement Closing Date and until the Termination Date, it shall
deliver to Agent, as required, the various Collateral Reports (including
Borrowing Base Certificates in the form of Exhibit 4.1(b)) at the times, to the
Persons and in the manner set forth in Annex F.
4.2. Communication with Accountants.
Each Credit Party executing this Agreement authorizes (a) Agent, at Agent's
expense so long as no Event of Default has occurred and is continuing, and (b)
so long as an Event of Default has occurred and is continuing, each Lender, to
communicate directly with its independent certified public accountants,
including PriceWaterhouseCoopers LLC, and authorizes and, at Agent's request,
shall instruct those accountants and advisors to disclose and make available to
Agent and each Lender any and all Financial Statements and other supporting
financial documents, schedules and information relating to any Credit Party
(including copies of any issued management letters) with respect to the
business, financial condition and other affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
5.1. Maintenance of Existence and Conduct of Business.
Each Credit Party shall: do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and its
rights and franchises; continue to conduct its business substantially as now
conducted or as otherwise permitted hereunder; at all times maintain, preserve
and protect all of its assets and properties used or useful in the conduct of
its business, and keep the same in good repair, working order and condition in
all material respects (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all necessary or appropriate
repairs, replacements and improvements thereto consistent with industry
practices, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and transact business only in such corporate and
trade names as are set forth in Disclosure Schedule 5.1.
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5.2. Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and discharge or
cause to be paid and discharged promptly all Charges payable by it, including
(i) Charges imposed upon it, its income and profits, or any of its property
(real, personal or mixed) and all Charges with respect to tax, social security
and unemployment withholding with respect to its employees, (ii) lawful claims
for labor, materials, supplies and services or otherwise, and (iii) all storage
or rental charges payable to warehousemen or bailees, in each case, before any
thereof shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other
than payments to warehousemen and/or bailees) that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met; and (v) Agent has not advised Borrower in writing that Agent believes that
nonpayment or nondischarge thereof could reasonably be expected to have or
result in a Material Adverse Effect.
5.3. Books and Records.
Each Credit Party shall keep adequate books and records with respect to its
business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the Financial Statements attached as Disclosure Schedule 3.4(a).
5.4. Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense, maintain the
policies of insurance described on Disclosure Schedule 3.18 as in effect on the
date hereof or otherwise in form and amounts and with deductibles as is
customary for similarly situated businesses and with insurers reasonably
acceptable to Agent; provided, that the Credit Parties shall be entitled to
self-insure for the risks associated with business interruption. Agent and the
Lenders confirm that the form, amounts and insurers described on Disclosure
Schedule 3.18 are acceptable as of the Restatement Closing Date, and shall
continue to be acceptable to Agent until not less than 30 days' prior written
notice by Agent to Borrower to the contrary. Such policies of insurance (or the
loss payable and additional insured endorsements delivered to Agent) shall
contain provisions pursuant to which the insurer agrees to provide 30 days prior
written notice to Agent in the event of any non-renewal, cancellation or
amendment of any such insurance policy. If any Credit Party at any time or times
hereafter shall fail to obtain or maintain any of the policies of insurance
required above, or to pay all premiums relating thereto, Agent may at any time
or times thereafter obtain and maintain such policies of insurance and pay such
premiums and take any other action with respect thereto that Agent deems
advisable. Agent shall have no obligation to obtain insurance for any Credit
Party or pay any premiums therefor. By doing so, Agent shall not be deemed to
have waived any Default or Event of Default arising from any Credit Party's
failure to maintain such insurance or pay any premiums therefor. All sums so
disbursed, including reasonable attorneys' fees, court costs and other charges
related thereto, shall be payable on demand by Borrower to Agent and shall be
additional Obligations hereunder secured by the Collateral.
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(b) Agent reserves the right at any time (but not to be exercised more than
once per Fiscal Year) upon (i) any material change in any Credit Party's risk
profile (including any change in the product mix maintained by any Credit Party
or any laws affecting the potential liability of such Credit Party), as
determined by Agent in its commercially reasonable judgment, and (ii) not less
than 30 days' prior written notice to Borrower, to require additional forms and
limits of insurance to, in Agent's commercially reasonable judgment, adequately
protect both Agent's and Lender's interests in all or any portion of the
Collateral and to ensure that each Credit Party is protected by insurance in
amounts and with coverage customary for its industry. If reasonably requested by
Agent, each Credit Party shall deliver to Agent from time to time a report of a
reputable insurance broker, reasonably satisfactory to Agent, with respect to
its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and substance
reasonably satisfactory to Agent, endorsements to (i) all "All Risk" and (to the
extent not self-insured) business interruption insurance naming Agent, on behalf
of itself and Lenders, as lender loss payee or mortgagee (as the case may be),
and (ii) all general liability and other liability policies naming Agent, on
behalf of itself and Lenders, as additional insured. Each Credit Party
irrevocably makes, constitutes and appoints Agent (and all officers, employees
or agents designated by Agent), so long as any Event of Default has occurred and
is continuing or the anticipated insurance proceeds exceed $2,500,000, as such
Credit Party's true and lawful agent and attorney-in-fact for the purpose of
making, settling and adjusting claims under such "All Risk" policies of
insurance, endorsing the name of such Credit Party on any check or other item of
payment for the proceeds of such "All Risk" policies of insurance and for making
all determinations and decisions with respect to such "All Risk" policies of
insurance. Agent shall have no duty to exercise any rights or powers granted to
it pursuant to the foregoing power-of-attorney. Borrower shall promptly notify
Agent of any loss, damage, or destruction to the Collateral in the amount of
$500,000 or more, whether or not covered by insurance. After deducting from such
proceeds the expenses, if any, incurred by Agent in the collection or handling
thereof, Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with Section 1.3(c); or permit or require the
applicable Credit Party to use such money, or any part thereof, to replace,
repair, restore or rebuild the Collateral in a diligent and expeditious manner
with materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the foregoing, if the
casualty giving rise to such insurance proceeds could not reasonably be expected
to have a Material Adverse Effect and such insurance proceeds do not exceed
$2,500,000 in the aggregate, Agent shall permit the applicable Credit Party to
replace, restore, repair or rebuild the property; provided, that if such Credit
Party shall not have completed or entered into binding agreements to complete
such replacement, restoration, repair or rebuilding within 180 days of such
casualty, Agent may apply such insurance proceeds to the Obligations in
accordance with Section 1.3(c). All insurance proceeds that are to be made
available to Borrower to replace, repair, restore or rebuild the Collateral
shall be applied by Agent to reduce the outstanding principal balance of the
Revolving Loan (which application shall not result in a permanent reduction of
the Revolving Loan Commitment). Thereafter, such funds shall be made available
to Borrower to provide funds to replace, repair, restore or rebuild the
Collateral as follows: (i) Borrower shall request a Revolving Credit Advance be
made to Borrower in the amount requested to be released; and (ii) so long as the
conditions set forth in Section 2.2 have been met, Lenders shall make such
Revolving Credit Advance. To the extent not used to replace, repair, restore or
rebuild the Collateral, such insurance proceeds shall be applied in accordance
with Section 1.3(c).
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5.5. Compliance with Laws.
Each Credit Party shall comply with all federal, state, local and foreign
laws and regulations applicable to it, including those relating to healthcare
matters, ERISA and labor matters and Environmental Laws and Environmental
Permits, except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.6. Supplemental Disclosure.
From time to time as may be reasonably requested by Agent (which request
will not be made more frequently than once each year absent the occurrence and
continuance of a Default or an Event of Default), the Credit Parties shall
supplement each Disclosure Schedule hereto, or any representation herein or in
any other Loan Document, with respect to any matter hereafter arising that, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided, that (a) no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
the Restatement Closing Date, have been consented to in writing by Agent and
Requisite Lenders or are expressly stated to be made as of an earlier date.
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5.7. Intellectual Property.
Each Credit Party will conduct its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect.
5.8. Environmental Matters.
Each Credit Party shall and shall cause each Person within its control to:
(a) conduct its operations and keep and maintain its Real Estate in compliance
with all Environmental Laws and Environmental Permits other than noncompliance
that could not reasonably be expected to have a Material Adverse Effect; (b)
implement any and all investigation, remediation, removal and response actions
that are appropriate or necessary to maintain the value and marketability of the
Real Estate or to otherwise comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in, under,
above, to, from or about any of its Real Estate; (c) notify Agent promptly after
such Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate that is reasonably likely to result in Environmental Liabilities
in excess of $500,000; and (d) promptly forward to Agent a copy of any order,
notice, request for information or any communication or report received by such
Credit Party in connection with any such violation or Release or any other
matter relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in Environmental Liabilities in excess of
$500,000, in each case whether or not the Environmental Protection Agency or any
Governmental Authority has taken or threatened any action in connection with any
such violation, Release or other matter.
5.9. Landlords' Agreements and Real Estate Purchases.
Each Credit Party shall use commercially reasonable efforts in connection
with the execution of any new lease agreement pertaining to such Credit Party's
operating headquarters to obtain a landlord's agreement from the lessor of such
leased property, which agreement shall (i) contain a waiver or subordination of
all Liens or claims that the landlord may assert against the Collateral at that
location, (ii) otherwise be reasonably satisfactory in form and substance to
Agent. Each Credit Party shall timely and fully pay and perform its obligations
under all leases and other agreements with respect to each leased location or
public warehouse where any Collateral is or may be located, except where such
Credit Party contests the amounts in good faith, subject to the terms of the
proviso set forth in Section 5.2(b). To the extent otherwise permitted
hereunder, if any Credit Party proposes to acquire a fee ownership interest in
Real Estate after the Restatement Closing Date, it shall first provide to Agent
a mortgage or deed of trust granting Agent a first priority Lien on such Real
Estate, together with environmental audits, mortgage title insurance commitment,
real property survey, local counsel opinion(s), and, if required by Agent,
supplemental casualty insurance and flood insurance, and such other documents,
instruments or agreements reasonably requested by Agent, in each case, in form
and substance reasonably satisfactory to Agent.
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5.10. Further Assurances.
Each Credit Party executing this Agreement agrees that it shall and shall
cause each other Credit Party to, at such Credit Party's expense and upon
reasonable request of Agent, duly execute and deliver, or cause to be duly
executed and delivered, to Agent such further instruments and do and cause to be
done such further acts as may be necessary or proper in the reasonable opinion
of Agent to carry out more effectively the provisions and purposes of this
Agreement or any other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees as
to all Credit Parties that from and after the date hereof until the Termination
Date:
6.1. Mergers, Subsidiaries, Etc.
Except as otherwise permitted under Sections 6.2 or 6.8, no Credit Party
shall directly or indirectly, by operation of law or otherwise, (a) form or
acquire any Subsidiary, or (b) merge with, consolidate with, acquire all or
substantially all of the assets or Stock of, or otherwise combine with or
acquire, any Person. Notwithstanding the foregoing:
(i) Borrower may acquire all or substantially all of the assets or all
of the Stock of any Person (the "Target") (in each case, a "Permitted
Acquisition") with the consent of Requisite Lenders or without consent of Agent
or Requisite Lenders, but subject to the satisfaction of each of the following
conditions:
(A) Agent shall receive reasonable (and, in any event, not less
than 14 days') prior written notice of the expected consummation date of such
proposed Permitted Acquisition, which notice shall include a reasonably detailed
description of such proposed Permitted Acquisition;
(B) such Permitted Acquisition shall only involve assets located
in the United States and comprising a business, or those assets of a business,
of the type engaged in by Borrower as of the Restatement Closing Date and other
businesses that, in the good faith judgment of the board of directors of
Borrower, are reasonably related, ancillary or complimentary thereto, or
reasonable extensions thereof, including without limitation the leasing of
medical equipment, and which businesses 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
approvals applicable to the exercise of such rights and remedies with respect to
Borrower prior to such Permitted Acquisition;
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(C) such Permitted Acquisition shall be consensual and shall have
been approved by the Target's board of directors (or comparable governing body);
(D) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred, assumed or shall
otherwise be reflected on a consolidated balance sheet of Borrower and Target
after giving effect to such Permitted Acquisition, except (x) Indebtedness
otherwise permitted under Section 6.3, (y) Guaranteed Indebtedness otherwise
permitted under Section 6.6 and (z) ordinary course trade payables and accrued
expenses of the Target;
(E) the sum of all amounts payable in connection with any
Permitted Acquisitions in any Fiscal Year (including all transaction costs and
all Indebtedness, liabilities and contingent obligations incurred or assumed in
connection therewith or otherwise reflected in a consolidated balance sheet of
Borrower and Target) shall not exceed $15,000,000;
(F) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
(G) Concurrently with delivery of the notice referred to in
clause (A) above, Borrower shall have delivered to Agent, in form and substance
reasonably satisfactory to Agent:
(x) a pro forma consolidated balance sheet, income statement and
cash flow statement of Borrower and its Subsidiaries utilizing the Pro Forma
Basis (the "Acquisition Pro Forma"), based on recent financial statements, which
shall be complete and shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of Borrower and its
Subsidiaries in accordance with GAAP consistently applied, but taking into
account such Permitted Acquisition and the funding of all Loans in connection
therewith, and such Acquisition Pro Forma shall reflect that (i) Borrowing
Availability after giving effect to such Permitted Acquisition shall not be less
than $10,000,000, and (ii) on a pro forma basis, no 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 four quarter period reflected in the Compliance
Certificate most recently delivered to Agent pursuant to Annex E 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
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(y) a certificate of the chief financial officer of Borrower to
the effect that: (i) Borrower will be Solvent upon the consummation of the
Permitted Acquisition; and (ii) the Acquisition Pro Forma fairly presents the
financial condition of Borrower (on a consolidated basis) as of the date thereof
after giving effect to the Permitted Acquisition;
(H) on or prior to the date of consummation of such Permitted
Acquisition, Agent shall have received, in form and substance reasonably
satisfactory to Agent, copies of the acquisition agreement and related
agreements and instruments, and all opinions, certificates, lien search results
and other documents reasonably requested by Agent; and
(I) at the time of such Permitted Acquisition and after giving
effect thereto, no Default or Event of Default has occurred and is continuing;
(ii) any Subsidiary of Borrower may be merged or consolidated with or
into Borrower (provided that Borrower shall be the continuing or surviving
corporation) or with or into any one or more wholly-owned Subsidiaries of
Borrower (provided that the wholly-owned Subsidiary or Subsidiaries shall be the
continuing or surviving corporation); and
(iii) Borrower or any wholly-owned Subsidiary may form one or more
wholly-owned Subsidiaries, either to facilitate the consummation of Permitted
Acquisitions or for other lawful business purposes.
Without limitation of the other provisions of this Section 6.1, no Credit Party
shall acquire or form any Subsidiary unless, (i) such Subsidiary is organized
under the laws of a State of the United States and (ii) within 10 days of such
formation or acquisition, such Subsidiary shall execute a guarantee and a
security agreement in favor of the Agent for the benefit of the Lenders, and the
Borrower and/or any Subsidiary which is a holder of any capital Stock of such
Subsidiary shall execute such pledge agreements, each in form and substance
reasonably satisfactory to the Agent, and shall take such other action as shall
be necessary or advisable (including, without limitation, authorizing the filing
of financing statements on form UCC-1) in order to perfect the Liens granted by
such Subsidiary in favor of the Agent for the benefit of the Lenders and to
effect and perfect the pledge of all of the capital Stock of such Subsidiary in
favor of the Agent for the benefit of the Lenders. Until such time that the
provisions of this paragraph shall have been complied with respect to any
Subsidiary, (i) none of the Accounts, Inventory and Equipment of such Subsidiary
shall be deemed to be Eligible Accounts, Eligible Unbilled Accounts, Eligible
Rental Equipment, Eligible Wholesale Disposables or Eligible Equipment
Disposables, as applicable and (ii) the financial performance of such Subsidiary
shall be disregarded for purposes of calculating EBITDA over any applicable
measurement period.
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6.2. Investments; Loans and Advances.
Except as otherwise expressly permitted by this Section 6, no Credit Party
shall make or permit to exist any investment in, or make, accrue or permit to
exist loans or advances of, or commitments to advance money to, any Person,
through the direct or indirect lending of money, holding of securities or
otherwise, except:
(i) extensions of trade credit in the ordinary course of business;
(ii) investments in Cash Equivalent Investments;
(iii) loans and advances to officers and employees of Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the ordinary
course of business in an aggregate amount for Borrower and its Subsidiaries not
to exceed $2,000,000 at any one time outstanding;
(iv) investments by the Borrower in any Subsidiary, and investments by
any Subsidiary in another Subsidiary;
(v) the investments held by Borrower on the Restatement Closing Date
and described on Disclosure Schedule 6.2, provided that any additional
investments made with respect thereto shall be permitted only if independently
justified under the other provisions of this Section 6.2;
(vi) intercompany Indebtedness permitted by Section 6.3;
(vii) Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of and other disputes with, customers and suppliers arising in the
ordinary course of business;
(viii) Borrower may hold any promissory notes acquired in connection
with the dispositions of assets permitted under Section 6.8(ii) or (iii);
(ix) Permitted Acquisitions; and
(x) additional Investments of Borrower and its Subsidiaries not
exceeding $1,000,000 at any time outstanding.
6.3. Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication):
(i) Indebtedness secured by purchase money security interests and
Capital Leases permitted in Section 6.7(c);
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(ii) the Loans and the other Obligations;
(iii) Indebtedness outstanding in an aggregate amount not to exceed
$325,000,000 at any time, issued pursuant to the Senior Note Indenture;
(iv) unfunded pension fund and other employee benefit plan obligations
and liabilities to the extent they are permitted to remain unfunded under
applicable law;
(v) existing Indebtedness described in Disclosure Schedule 6.3 and
extensions and refinancings thereof or amendments or modifications thereto that
do not have the effect of increasing the principal amount thereof or changing
the amortization thereof (other than to extend the same) and that are otherwise
on terms and conditions no less favorable to any Credit Party, Agent or any
Lender than the terms of the Indebtedness being extended, refinanced, amended or
modified;
(vi) Indebtedness of Borrower to any Subsidiary that is a Guarantor,
or of any such Subsidiary to Borrower or any other Guarantor;
(vii) Indebtedness under Interest Rate Agreements relating to
Indebtedness otherwise permitted under this Section 6.3 entered into for bona
fide and non-speculative hedging purposes;
(viii) Indebtedness owing to the sellers of a Target (or to the
Target, in the case of asset sales) arising in connection with a Permitted
Acquisition in an aggregate principal amount with respect to all such
Indebtedness not to exceed $10,000,000 at any time outstanding; provided, that
the terms of such Indebtedness shall provide for (w) no cash payment of
principal or interest following the occurrence and during the continuance of an
Event of Default, (x) not less than 180 days' prior written notice to Agent by
the holder or holders of any such Indebtedness prior to the exercise of any
enforcement remedies thereunder, including, without limitation, the acceleration
of all or any portion of such Indebtedness, (y) no scheduled or other mandatory
principal payments or prepayments prior to the date six months following the
date set forth in clause (a) of the defined term "Commitment Termination Date"
and (z) provide for no voluntary principal payment or prepayment, absent the
written consent of Agent and Requisite Lenders;
(ix) Subordinated Debt of Borrower to X.X. Childs or Halifax evidenced
by Qualified Subordinated Notes; and
(x) additional Indebtedness of Borrower and its Subsidiaries not
exceeding $4,000,000 in aggregate principal amount at any time outstanding.
(b) No Credit Party shall, directly or indirectly, voluntarily purchase,
redeem, defease or prepay any principal of, premium, if any, interest or other
amount payable in respect of any Indebtedness described in any of Sections
6.3(a)(iii) and Section 6.3(a)(x).
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(c) Notwithstanding anything to the contrary in the preceding clauses (a)
and (b), no Credit Party shall create, incur, assume or permit to exist any
Indebtedness (other than the Obligations) under any "Credit Facilities", as such
term is defined in the Senior Note Indenture.
6.4. Affiliate Transactions.
No Credit Party shall enter into any transaction or series of transactions
after the Restatement Closing Date whether or not in the ordinary course of
business, with any Affiliate of any Credit Party other than on terms and
conditions that are no less favorable to such Credit Party as would be
obtainable by such Credit Party at the time in a comparable arm's length
transaction with a Person other than an Affiliate of any Credit Party; provided
that the foregoing restrictions shall not apply to (i) advances to officers or
employees of Borrower and its Subsidiaries to the extent otherwise expressly
permitted pursuant to Section 6.2, (ii) Restricted Payments to the extent
otherwise expressly permitted pursuant to Section 6.14, (iii) transactions
between Borrower and its Subsidiaries to the extent otherwise expressly
permitted under this Agreement, (iv) employment arrangements (including
arrangements made with respect to bonuses) entered into in the ordinary course
of business with members of the board of directors and officers of Borrower and
of its Subsidiaries, (v) the Stockholder's Agreement and (vi) the payment of
management fees to the extent otherwise expressly permitted pursuant to Section
6.14.
6.5. Capital Structure and Business.
No Credit Party shall (a) make any changes in any of its business
objectives, purposes or operations that could in any way adversely affect the
repayment of the Loans or any of the other Obligations or could reasonably be
expected to have or result in a Material Adverse Effect, (b) make any change in
its capital structure as described in Disclosure Schedule 3.8, including the
issuance or sale of any shares of Stock, warrants or other securities
convertible into Stock or any revision of the terms of its outstanding Stock;
provided, that Borrower may issue or sell shares of its common Stock as
consideration in connection with Permitted Acquisitions (so long as no Change of
Control occurs after giving effect thereto), and may further issue or sell
shares of its common Stock for cash so long as (i) the proceeds thereof are
applied in prepayment of the Obligations as required by Section 1.3(b)(iii), and
(ii) no Change of Control occurs after giving effect thereto, or (c) amend its
charter or bylaws in a manner that would adversely affect Agent or Lenders or
such Credit Party's duty or ability to repay the Obligations. No Credit Party
shall engage in any business other than the businesses currently engaged in by
it and other businesses that, in the good faith judgment of the board of
directors of Borrower, are reasonably related, ancillary or complimentary
thereto, or reasonable extensions thereof, including, without limitation, the
leasing of medical equipment.
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6.6. Guaranteed Indebtedness.
No Credit Party shall create, incur, assume or permit to exist any
Guaranteed Indebtedness except:
(i) by endorsement of instruments or items of payment for deposit to
the general account of any Credit Party;
(ii) for Guaranteed Indebtedness incurred for the benefit of any other
Credit Party if the primary obligation is expressly permitted by this Agreement;
(iii) Guaranteed Indebtedness in existence on the Restatement Closing
Date and listed on Disclosure Schedule 6.6 and any subsequent affirmation,
extension or renewal thereof which does not include an increase in the principal
amount guaranteed thereunder, or an increase in the fees or the rate of interest
guaranteed with respect thereto;
(iv) any guaranty or other similar agreement in favor of Agent, for
itself and the ratable benefit of Lenders, in connection with the transactions
contemplated by the Agreement and the other Loan Documents; and
(v) any unsecured guaranty or other similar agreement in favor of the
holders of the Senior Notes, to the extent such guaranty or other agreement is
required pursuant to the terms of the Senior Note Indenture.
6.7. Liens.
No Credit Party shall create, incur, assume or permit to exist any Lien on
or with respect to its Accounts or any of its other properties or assets
(whether now owned or hereafter acquired) except for (a) Permitted Encumbrances;
(b) Liens in existence on the date hereof and summarized on Disclosure Schedule
6.7 securing the Indebtedness described on Disclosure Schedule 6.3 and permitted
refinancings, extensions and renewals thereof, including extensions or renewals
of any such Liens; provided, that the principal amount of the Indebtedness so
secured is not increased and the Lien does not attach to any other property; (c)
Liens created prior to or following the date hereof by conditional sale or other
title retention agreements (including Capital Leases) or in connection with
purchase money Indebtedness with respect to Equipment (exclusive of Equipment
held for rent or sale) and Fixtures acquired by any Credit Party in the ordinary
course of business, involving the incurrence of an aggregate amount of purchase
money Indebtedness and Capital Lease Obligations of not more than $10,000,000
outstanding at any one time for all such Liens (provided that such Liens attach
only to the assets subject to such purchase money debt and such Indebtedness is
incurred within 20 days following such purchase and does not exceed one hundred
percent (100%) of the purchase price of the subject assets) and (d) other Liens
securing Indebtedness not in excess of $500,000 at any time outstanding. In
addition, no Credit Party shall become a party to any agreement, note, indenture
or instrument, or take any other action, that would prohibit the creation of a
Lien on any of its properties or other assets in favor of Agent, on behalf of
itself and Lenders, as additional collateral for the Obligations, except
operating leases, Capital Leases or Licenses which prohibit Liens upon the
assets that are subject thereto.
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6.8. Sale of Stock and Assets.
No Credit Party shall convey, sell, lease, assign, transfer or otherwise
dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's capital Stock to any Person other than Borrower or any wholly-owned
Subsidiary, except:
(i) The sale, lease or other disposition of Inventory, Equipment and
leases in the ordinary course of business (consistent with past practice, in the
case of sales of leases), other than obsolete or worn out property;
(ii) the sale or other disposition of obsolete or worn out property in
the ordinary course of business for proceeds consisting solely of not less than
(A) 75% cash and (B) Indebtedness evidenced by promissory notes;
(iii) other sales or dispositions of assets not described in the
preceding clauses (i) and (ii) for proceeds consisting solely of not less than
(A) 75% cash and (B) Indebtedness evidenced by promissory notes; provided, that
the aggregate book value of all assets so sold in any Fiscal Year shall not
exceed $5,000,000;
(iv) the lease by Borrower and its Subsidiaries (as lessee) and
license of real or personal property in the ordinary course of business (so long
as such lease is not a Capital Lease not otherwise permitted by Section 6.3);
(v) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 6.2;
(vi) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(vii) as permitted by either of Sections 6.1 and 6.12;
(viii) the sales, transfer, conveyance or other disposition of Real
Estate by a Credit Party;
(ix) the sale or issuance of any Subsidiary's capital Stock to the
Borrower or any wholly-owned Subsidiary; and
(x) dispositions of property to Borrower or to any wholly-owned
Subsidiary.
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To the extent Requisite Lenders (or, if required pursuant to Section 11.2, all
of the Lenders) waive the provisions of this Section 6.8 with respect to the
sale or other disposition of any Collateral, or any Collateral is sold or
otherwise disposed of as permitted by this Section 6.8, such Collateral (unless
sold to another Credit Party) shall be sold or otherwise disposed of free and
clear of the Liens created by the Security Agreement, and the Agent shall be
authorized to take any actions deemed appropriate in order to effect the
foregoing. Nothing set forth in this Section 6.8 shall be construed to modify in
any respect Borrower's prepayment obligations set forth in Section 1.3.
6.9. ERISA.
No Credit Party shall, or shall cause or permit any ERISA Affiliate to,
cause or permit to occur an event that could result in the imposition of a Lien
under Section 412 of the IRC or Section 302 or 4068 of ERISA or cause or permit
to occur an ERISA Event to the extent such ERISA Event could reasonably be
expected to have a Material Adverse Effect.
6.10. Financial Covenants.
Borrower shall not breach or fail to comply with any of the Financial
Covenants.
6.11. Hazardous Materials.
No Credit Party shall cause or permit a Release of any Hazardous Material
on, at, in, under, above, to, from or about any of the Real Estate where such
Release would (a) violate in any material respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
or (b) otherwise materially adversely impact the value or marketability of any
of the Real Estate or any of the Collateral.
6.12. Sale-Leasebacks.
No Credit Party shall engage in any sale-leaseback, synthetic lease or
similar transaction involving any of its assets; provided, however, that the
Credit Parties may consummate sale-leaseback, synthetic lease and similar
transactions so long as (i) each such sale-leaseback, synthetic lease and each
such similar transaction is an arms-length transaction, and (ii) the aggregate
consideration received by the Credit Parties in connection with the disposition
of Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible
Equipment Disposables pursuant to this Section 6.12 does not exceed $3,000,000.
6.13. Cancellation of Indebtedness.
No Credit Party shall cancel any claim or debt owing to it, except for
reasonable consideration negotiated on an arm's length basis and in the ordinary
course of its business consistent with past practices.
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6.14. Restricted Payments.
No Credit Party shall make any Restricted Payment, except:
(i) dividends and distributions by Subsidiaries of Borrower paid to
Borrower;
(ii) employee loans and advances permitted under Section 6.2;
(iii) so long as no Event of Default has occurred and is continuing or
would result after giving effect thereto, in each case solely with respect to
any of Sections 8.1(a), 8.1(b) (solely as it pertains to Annex G), 8.1(h) and
8.1(i), payments of management fees in an aggregate amount not to exceed
$750,000 (plus the reimbursement of reasonable out-of-pocket expenses) in any
Fiscal Year pursuant to (a) that certain Management Agreement dated as of
February 25, 1998 by and between X.X. Childs Associates, L.P., a Delaware
limited partnership, and Borrower, as amended by that certain Amendment to
Management Agreement dated as of October 17, 2003 and (b) that certain
Management Agreement dated as of October 17, 2003 by and between Halifax GenPar,
L.P., a Delaware limited partnership, and Borrower, as in existence on the
Original Closing Date;
(iv) so long as no Event of Default has occurred and is continuing or
would result after giving effect thereto, the redemption or repurchase for cash,
at fair value, of the Stock of Borrower (or options to purchase capital stock)
from any employee of Borrower upon the death, disability, retirement or other
termination of such employee, provided, that all such repurchases under this
clause (iv) shall not exceed $2,000,000 in any given year; and
(v) Restricted Payments in the form of, or with respect to, Qualified
Subordinated Notes issued to X.X. Childs or Halifax, to the extent permitted to
be issued pursuant to Section 6.3.
6.15. Change of Corporate Name or Location; Change of Fiscal Year.
No Credit Party shall (a) change its name as it appears in official filings
in the state of its incorporation or other organization, (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which Collateral is held or stored, or the location of its
records concerning the Collateral, (c) change the type of entity that it is, (d)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation or
organization, in each case without at least 30 days prior written notice to
Agent and after Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including to continue the perfection
of any Liens in favor of Agent, on behalf of Lenders, in any Collateral, has
been completed or taken, and provided that any such new location shall be in the
continental United States. No Credit Party shall permit its Fiscal Year to end
on a date other than December 31.
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6.16. No Impairment of Intercompany Transfers.
No Credit Party shall directly or indirectly enter into or become bound by
any agreement, instrument, indenture or other obligation (other than this
Agreement, the other Loan Documents and the Senior Note Indenture) that could
directly or indirectly restrict, prohibit or require the consent of any Person
with respect to the payment of dividends or distributions or the making or
repayment of intercompany loans by a Subsidiary of Borrower to Borrower.
6.17. No Speculative Transactions.
No Credit Party shall engage in any transaction involving commodity
options, futures contracts or similar transactions, except solely to hedge
against fluctuations in the prices of commodities owned or purchased by it and
the values of foreign currencies receivable or payable by it and interest swaps,
caps or collars.
6.18. Changes Relating to Subordinated Debt and Certain Agreements.
(a) No Credit Party shall change or amend the terms of any Subordinated
Debt (or any indenture or agreement in connection therewith) if the effect of
such amendment is to: (a) increase the interest rate on such Subordinated Debt,
to the extent such interest is payable in cash; (b) change the dates upon which
payments of principal or interest are due on such Subordinated Debt other than
to extend such dates; (c) change any default or event of default other than to
delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt; (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (e) grant
any security or collateral to secure payment of such Subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Subordinated Debt in a manner adverse to
any Credit Party, Agent or any Lender; provided, that any Subordinated Debt owed
to X.X. Childs or Halifax may be paid and discharged at any time by issuance of
Borrower's common Stock.
(b) No Credit Party shall change or amend the terms of the Senior Note
Indenture; provided that, so long as Borrower provides Agent with prompt
notification thereof, Borrower may amend the Senior Note Indenture for the sole
purpose, subject to the provisions of Section 6.3(a)(iii), of authorizing the
issuance of additional Senior Notes; provided, further, that no such amendment
shall either (x) make the economic terms of any Senior Notes issued following
the date hereof (including the principal amortization thereof, but excluding the
interest rate thereon) more burdensome to Borrower, as compared with the terms
of the Senior Notes existing on the date hereof, or (y) make any
representations, warranties, affirmative or negative covenants or default events
more burdensome to Borrower, as compared to the terms of the Senior Note
Indenture on the date hereof except, in each instance with respect to this
clause (y), as consented to in writing from time to time by Agent and Requisite
Lenders.
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(c) Subject to the provisions of the preceding clause (b), no Credit Party
shall change or amend any of (i) any Recapitalization Agreement, (ii) the
Stockholder's Agreement, or (iii) any of the management agreements described in
Section 6.14, except for such changes or amendments which are neither material
nor reasonably likely in any manner to be in any way materially adverse to the
interests of the Lenders; provided, that Borrower promptly provide Agent with
copies of any such amendments or modifications.
7. TERM
7.1. Termination.
The financing arrangements contemplated hereby shall be in effect until the
Commitment Termination Date, and the Loans and all other Obligations shall be
automatically due and payable in full on such date.
7.2. Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that the
provisions of Section 11, the payment obligations under Sections 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1. Events of Default.
The occurrence of any one or more of the following events (regardless of
the reason therefor) shall constitute an "Event of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of the Loans when
due and payable, (ii) fails to make any payment of interest on, or Fees owing in
respect of, the Loans or any of the other Obligations when due and payable, and
the same shall remain unremedied for 5 days or more, or (iii) fails to pay or
reimburse Agent or Lenders for any expense reimbursable hereunder or under any
other Loan Document within 10 days following Agent's demand for such
reimbursement or payment of expenses.
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(b) Any Credit Party fails or neglects to perform, keep or observe any of
the provisions of Sections 1.4, 1.8, 5.4(a) or 6, or any of the provisions set
forth in Annexes C or G, respectively.
(c) Borrower fails or neglects to perform, keep or observe any of the
provisions of Section 4 or any provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for 5 days or more.
(d) Any Credit Party fails or neglects to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents (other
than any provision embodied in or covered by any other clause of this Section
8.1) and the same shall remain unremedied for 30 days or more.
(e) A default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $5,000,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $5,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case, regardless of whether such default or breach is waived,
or such right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base Certificate is untrue
or incorrect in any respect (other than inadvertent, immaterial errors in any
Borrowing Base Certificate), or any representation or warranty herein or in any
Loan Document or in any written statement, report, financial statement or
certificate (other than a Borrowing Base Certificate) made or delivered to Agent
or any Lender by any Credit Party is untrue or incorrect in any material respect
as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of $2,500,000 or
more are attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of any Credit Party and such condition
continues for 60 days or more.
(h) A case or proceeding is commenced against any Credit Party seeking a
decree or order in respect of such Credit Party (i) under the Bankruptcy Code,
or any other applicable federal, state or foreign bankruptcy or other similar
law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for such Credit Party or for any substantial
part of any such Credit Party's assets, or (iii) ordering the winding-up or
liquidation of the affairs of such Credit Party, and such case or proceeding
shall remain undismissed or unstayed for 90 days or more or a decree or order
granting the relief sought in such case or proceeding shall be entered by a
court of competent jurisdiction.
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(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner the institution of proceedings thereunder or the filing of
any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or for any substantial part of any such Credit Party's
assets, (iii) makes an assignment for the benefit of creditors, (iv) takes any
action in furtherance of any of the foregoing; or (v) admits in writing its
inability to, or is generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in excess of
$2,500,000 in the aggregate not fully covered by insurance at any time are
outstanding against one or more of the Credit Parties and the same are not,
within 60 days after the entry thereof, discharged or execution thereof stayed
or bonded pending appeal, or such judgments are not discharged prior to the
expiration of any such stay.
(k) Any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Credit Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien
created under any Loan Document ceases to be a valid and perfected first
priority Lien (except as otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any default or breach by Borrower occurs and is continuing (after the
expiration of any applicable grace period therein) under the Senior Note
Indenture, or the Senior Note Indenture shall be terminated for any reason,
other than in connection with the full payment and defeasance of all
Indebtedness arising in connection therewith.
8.2. Remedies.
(a) If any Default or Event of Default has occurred and is continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice, suspend the Revolving Loan facility with respect to additional Advances
and/or the incurrence of additional Letter of Credit Obligations, whereupon any
additional Advances and additional Letter of Credit Obligations shall be made or
incurred in Agent's sole discretion (or in the sole discretion of the Requisite
Lenders, if such suspension occurred at their direction) so long as such Default
or Event of Default is continuing. If any Event of Default has occurred and is
continuing under any of Sections 8.1(a), (h) or (i), Agent may (and at the
written request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the Loans
and the Letter of Credit Fees to the Default Rate.
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(b) If any Event of Default has occurred and is continuing, Agent may (and
at the written request of the Requisite Lenders shall), without notice: (i)
terminate the Revolving Loan facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrower and each other Credit Party; or (iii) exercise any rights and remedies
provided to Agent under the Loan Documents or at law or equity, including all
remedies provided under the Code; provided, that upon the occurrence of an Event
of Default specified in Sections 8.1(h) or (i), the Revolving Loan facility
shall be immediately terminated and all of the Obligations, including the
aggregate Revolving Loan, shall become immediately due and payable without
declaration, notice or demand by any Person.
8.3. Waivers by Credit Parties.
Except as otherwise provided for in this Agreement or by applicable law,
each Credit Party waives (including for purposes of Section 12): (a)
presentment, demand and protest and notice of presentment, dishonor, notice of
intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which any Credit Party may in
any way be liable, and hereby ratifies and confirms whatever Agent may do in
this regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may make an
assignment to a Qualified Assignee of, or sell participations in, at any time or
times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and, so
long as no Event of Default has occurred and is then continuing, Borrower (which
consent shall not be unreasonably withheld or delayed; provided, that any
assignment to Black Diamond Capital Management or any of its Affiliates shall
require the consent of Borrower so long as no Event of Default pursuant to
Sections 8.1(a)(i), 8.1(a)(ii), 8.1(h) or 8.1(i) has occurred and is then
continuing), and the execution of an assignment agreement (an "Assignment
Agreement") substantially in the form attached hereto as Exhibit 9.1(a) and
otherwise in form and substance reasonably satisfactory to, and acknowledged by,
Agent; (ii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Loans to be assigned to it
for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) after giving effect to any such partial assignment,
the assignee Lender shall have Commitments in an amount at least equal to
$5,000,000 and the assigning Lender shall have retained Commitments in an amount
at least equal to $2,500,000; and (iv) include a payment to Agent of an
assignment fee of $3,500, unless waived by Agent. In the case of an assignment
by a Lender under this Section 9.1, the assignee shall have, to the extent of
such assignment, the same rights, benefits and obligations as all other Lenders
hereunder. The assigning Lender shall be relieved of its obligations hereunder
with respect to its Commitments or assigned portion thereof and/or Loans, other
rights, obligations or interests assigned from and after the date of such
assignment. Borrower hereby acknowledges and agrees that any assignment shall
give rise to a direct obligation of Borrower to the assignee and that the
assignee shall be considered to be a "Lender". In all instances, each Lender's
liability to make Loans hereunder shall be several and not joint and shall be
limited to such Lender's Pro Rata Share of the applicable Commitment. In the
event Agent or any Lender assigns or otherwise transfers all or any part of the
Obligations, Agent or any such Lender shall so notify Borrower and Borrower
shall, upon the request of Agent or such Lender, execute new Notes in exchange
for the Notes, if any, being assigned. Notwithstanding the foregoing provisions
of this Section 9.1(a), (a) any Lender may at any time pledge the Obligations
held by it and such Lender's rights under this Agreement and the other Loan
Documents to a Federal Reserve Bank, and any Lender that is an investment fund
may assign the Obligations held by it and such Lender's rights under this
Agreement and the other Loan Documents to another investment fund managed by the
same investment advisor; provided, that no such pledge to a Federal Reserve Bank
shall release such Lender from such Lender's obligations hereunder or under any
other Loan Document; and (b) in the case of an assignment to a Qualified
Assignee which is, immediately prior to such assignment, an Affiliate of the
assigning Lender, such assignment shall be effective between such Lender and its
Affiliate immediately without compliance with the conditions for assignment
under this Section 9.1(a), but shall not be effective with respect to Borrower,
Agent, L/C Issuer or any Lender, and each of Borrower, Agent, L/C Issuer and
each Lender shall be entitled to deal solely with such assigning Lender under
any such assignment, in each case until the conditions for assignment under this
Section 9.1(a) have been complied with. Agent hereby agrees to provide Borrower
with commercially reasonable prior written notice of any assignment or sale
contemplated by this Section 9.1(a), the consummation of which does not require
consent of Borrower.
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(b) Any participation by a Lender of all or any part of its Commitments
shall be made with the understanding that all amounts payable by Borrower
hereunder shall be determined as if that Lender had not sold such participation,
and that the holder of any such participation shall not be entitled to require
such Lender to take or omit to take any action hereunder except actions directly
affecting (i) any reduction in the principal amount of, or interest rate or Fees
payable with respect to, any Loan in which such holder participates, (ii) any
extension of the scheduled amortization of the principal amount of any Loan in
which such holder participates or the final maturity date thereof, and (iii) any
release of all or substantially all of the Collateral (other than in accordance
with the terms of this Agreement, the Collateral Documents or the other Loan
Documents). Solely for purposes of Sections 1.13, 1.15, 1.16 and 9.8, Borrower
acknowledges and agrees that a participation shall give rise to a direct
obligation of Borrower to the participant and the participant shall be
considered to be a "Lender". Except as set forth in the preceding sentence,
neither Borrower nor any other Credit Party shall have any obligation or duty to
any participant. Neither Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.
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(c) Except as expressly provided in this Section 9.1, no Lender shall, as
between Borrower and that Lender, or Agent and that Lender, be relieved of any
of its obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loans,
the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any Lender
permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their respective affairs contained in any selling materials provided by them
and all other information provided by them and included in such materials,
except that any Projections delivered by Borrower shall only be certified by
Borrower as having been prepared by Borrower in compliance with the
representations contained in Section 3.4(b).
(e) Any Lender may furnish any information concerning Credit Parties in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided, that such Lender
shall obtain from assignees or participants written confidentiality covenants
substantially equivalent to those contained in Section 11.8.
(f) So long as no Event of Default has occurred and is continuing, no
Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.16(a), increased
costs under Section 1.16(b), an inability to fund LIBOR Loans under Section
1.16(c), or withholding taxes in accordance with Section 1.15(a).
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(g) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrower, the option to provide to Borrower all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrower pursuant
to this Agreement; provided, that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrower and Agent and without paying any processing fee therefor
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by Borrower and Agent) providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Loans and (ii) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC. This Section 9.1(g) may not be amended without the
prior written consent of each Granting Lender, all or any of whose Loans are
being funded by an SPC at the time of such amendment. For the avoidance of
doubt, the Granting Lender shall for all purposes, including without limitation,
the approval of any amendment or waiver of any provision of any Loan Document or
the obligation to pay any amount otherwise payable by the Granting Lender under
the Loan Documents, continue to be the Lender of record hereunder.
9.2. Appointment of Agent.
GE Capital is hereby appointed to act on behalf of all Lenders as Agent
under this Agreement and the other Loan Documents. The provisions of this
Section 9.2 are solely for the benefit of Agent and Lenders and no Credit Party
nor any other Person shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person. Agent shall have no duties or responsibilities except
for those expressly set forth in this Agreement and the other Loan Documents.
The duties of Agent shall be mechanical and administrative in nature and Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Except as expressly set forth in this Agreement and the other Loan Documents,
Agent shall not have any duty to disclose, and shall not be liable for failure
to disclose, any information relating to any Credit Party or any of their
respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence, bad faith or willful misconduct.
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If Agent shall request instructions from Requisite Lenders, Supermajority
Lenders or all affected Lenders with respect to any act or action (including
failure to act) in connection with this Agreement or any other Loan Document,
then Agent shall be entitled to refrain from such act or taking such action
unless and until Agent shall have received instructions from Requisite Lenders,
Supermajority Lenders or all affected Lenders, as the case may be, and Agent
shall not incur liability to any Person by reason of so refraining. Agent shall
be fully justified in failing or refusing to take any action hereunder or under
any other Loan Document (a) if such action would, in the reasonable opinion of
Agent, be contrary to law or the terms of this Agreement or any other Loan
Document, (b) if such action would, in the reasonable opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Supermajority Lenders or all affected Lenders, as
applicable.
9.3. Agent's Reliance, Etc.
Neither Agent nor any of its Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for damages caused by its or their own gross
negligence, bad faith or willful misconduct. Without limiting the generality of
the foregoing, Agent: (a) may treat the payee of any Note as the holder thereof
until Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form reasonably satisfactory to Agent; (b) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or the other Loan Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Credit Party or to inspect the Collateral
(including the books and records) of any Credit Party; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (f) shall incur no liability under or in respect of this Agreement
or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
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9.4. GE Capital and Affiliates.
With respect to its Commitments hereunder, GE Capital (or any successor
Agent, as the case may be) shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Lender and may exercise the
same as though it were not Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include GE Capital (or such successor
Agent, as the case may be) in its individual capacity. GE Capital (or any
successor Agent, as the case may be) and its Affiliates may lend money to,
invest in, and generally engage in any kind of business with, any Credit Party,
any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital (or
such successor Agent, as the case may be) were not Agent and without any duty to
account therefor to Lenders. GE Capital (or any successor Agent, as the case may
be) and its Affiliates may accept fees and other consideration from any Credit
Party for services in connection with this Agreement or otherwise without having
to account for the same to Lenders. Each Lender acknowledges the potential
conflict of interest between GE Capital (or any successor Agent, as the case may
be) as a Lender holding disproportionate interests in the Loans, and GE Capital
(or such successor Agent, as the case may be) as Agent.
9.5. Lender Credit Decision.
Each Lender acknowledges that it has, independently and without reliance
upon Agent or any other Lender and based on the Financial Statements referred to
in Section 3.4(a) and such other documents and information as it has deemed
appropriate, made its own credit and financial analysis of the Credit Parties
and its own decision to enter into this Agreement. Each Lender also acknowledges
that it will, independently and without reliance upon Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement. Each Lender acknowledges the potential conflict of
interest of each other Lender as a result of Lenders holding disproportionate
interests in the Loans, and expressly consents to, and waives any claim based
upon, such conflict of interest.
9.6. Indemnification.
Lenders (severally and not jointly) agree to indemnify Agent (to the extent
not reimbursed by Credit Parties and without limiting the obligations of
Borrower hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence, bad
faith or willful misconduct. Without limiting the foregoing, each Lender agrees
to reimburse Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Credit Parties.
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9.7. Successor Agent.
Agent may resign at any time by giving not less than 30 days' prior written
notice thereof to Lenders and Borrower. Upon any such resignation, the Requisite
Lenders shall have the right to appoint a successor Agent, which successor
Agent, absent the occurrence and continuance of an Event of Default, shall be
subject to approval by Borrower, such approval not to be unreasonably withheld
or delayed. If no successor Agent shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within 30 days after the
resigning Agent's giving notice of resignation, then the resigning Agent may, on
behalf of Lenders, appoint a successor Agent, which shall be a Lender, if a
Lender is willing to accept such appointment, or otherwise shall be a commercial
bank or financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $300,000,000. If no successor Agent has
been appointed pursuant to the foregoing, within 30 days after the date such
notice of resignation was given by the resigning Agent, such resignation shall
become effective and the Requisite Lenders shall thereafter perform all the
duties of Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor Agent as provided above. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the earlier of the acceptance of any appointment as
Agent hereunder by a successor Agent or the effective date of the resigning
Agent's resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Agent's resignation hereunder, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was acting as Agent under this Agreement and the other
Loan Documents.
9.8. Setoff and Sharing of Payments.
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default and subject to Section 9.9(f), each Lender
is hereby authorized at any time or from time to time, to offset and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of Borrower or any Guarantor (regardless of whether such
balances are then due to Borrower or any Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for the
credit or for the account of Borrower or any Guarantor against and on account of
any of the Obligations that are not paid when due. Each Lender agrees to
promptly notify Borrower and Agent of any such setoff made by such Lender;
provided, that the failure to give such notice shall not affect the validity of
such set-off. Any Lender exercising a right of setoff or otherwise receiving any
payment on account of the Obligations in excess of its Pro Rata Share thereof
shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender entitled thereto or holder
in accordance with their respective Pro Rata Shares (other than offset rights
exercised by any Lender with respect to Sections 1.13, 1.15 or 1.16). Each
Lender's obligation under this Section 9.8 shall be in addition to and not in
limitation of its obligations to purchase a participation in an amount equal to
its Pro Rata Share of the Swing Line Loans under Section 1.1. Each Credit Party
that is Borrower or a Guarantor agrees, to the fullest extent permitted by law,
that (a) any Lender may exercise its right to offset with respect to amounts in
excess of its Pro Rata Share of the Obligations and may sell participations in
such amounts so offset to other Lenders and holders and (b) any Lender so
purchasing a participation in the Loans made or other Obligations held by other
Lenders or holders may exercise all rights of offset, bankers' lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender or holder were a direct holder of the Loans and the other
Obligations in the amount of such participation. Notwithstanding the foregoing,
if all or any portion of the offset amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of offset, the
purchase of participations by that Lender shall be rescinded and the purchase
price restored without interest.
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9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Lenders shall refund or participate in the Swing Line Loan in
accordance with clauses (iii) and (iv) of Section 1.1(c). If the Swing Line
Lender declines to make a Swing Line Loan or if Swing Line Availability is zero,
Agent shall notify Lenders, promptly after receipt of a Notice of Revolving
Credit Advance and in any event prior to 1:00 p.m. (New York time) on the date
such Notice of Revolving Advance is received, by telecopy, telephone (promptly
confirmed thereafter by telecopy or other form of written transmission) or other
similar form of written transmission. Each Lender shall make the amount of such
Lender's Pro Rata Share of such Revolving Credit Advance available to Agent in
same day funds by wire transfer to Agent's account as set forth in Annex H not
later than 3:00 p.m. (New York time) on the requested funding date, in the case
of an Index Rate Loan, and not later than 11:00 a.m. (New York time) on the
requested funding date, in the case of a LIBOR Loan. After receipt of such wire
transfers (or, in the Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested
Revolving Credit Advance to Borrower. All payments by each Lender shall be made
without setoff, counterclaim or deduction of any kind.
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(ii) On the 2nd Business Day of each calendar week or more frequently
at Agent's election (each, a "Settlement Date"), Agent shall advise each Lender
by telephone (promptly confirmed thereafter by telecopy or other form of written
transmission), or telecopy of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each applicable Loan. Provided that each Lender has funded all payments or
Advances required to be made by it and has purchased all participations required
to be purchased by it under this Agreement and the other Loan Documents as of
such Settlement Date, Agent shall pay to each Lender such Lender's Pro Rata
Share of principal, interest and Fees paid by Borrower since the previous
Settlement Date for the benefit of such Lender on the Loans held by it. To the
extent that any Lender (a "Non-Funding Lender") has failed to fund all such
payments and Advances or failed to fund the purchase of all such participations,
Agent shall be entitled to set off the funding short-fall against that
Non-Funding Lender's Pro Rata Share of all payments received from Borrower. Such
payments shall be made by wire transfer to such Lender's account (as specified
by such Lender in Annex H or the applicable Assignment Agreement) not later than
1:00 p.m. (Chicago time) on the next Business Day following each Settlement
Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume that each
Lender will make its Pro Rata Share of each Revolving Credit Advance available
to Agent on each funding date. If such Pro Rata Share is not, in fact, paid to
Agent by such Lender when due, Agent will be entitled to recover such amount on
demand from such Lender without setoff, counterclaim or deduction of any kind.
If any Lender fails to pay the amount of its Pro Rata Share forthwith upon
Agent's demand, Agent shall promptly notify Borrower and Borrower shall
immediately repay such amount to Agent. Nothing in this Section 9.9(b) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Lender or to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Borrower may have against any Lender as a result of any default by
such Lender hereunder. To the extent that Agent advances funds to Borrower on
behalf of any Lender and is not reimbursed therefor on the same Business Day as
such Advance is made, Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Agent from Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
interest, setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by Agent
under this Agreement must be returned to Borrower or paid to any other Person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan Document, Agent will not
be required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
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(d) Non-Funding Lenders. The failure of any Non-Funding Lender to make any
Revolving Credit Advance or any payment required by it hereunder or to purchase
any participation in any Swing Line Loan to be made or purchased by it on the
date specified therefor shall not relieve any other Lender (each such other
Lender, an "Other Lender") of its obligations to make such Advance or purchase
such participation on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make an Advance,
purchase a participation or make any other payment required hereunder.
Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender
shall not have any voting or consent rights under or with respect to any Loan
Document or constitute a "Lender", other than with respect to matters regarding
the agreement or consent of a Lender directly affected thereby under Section
11.2(c)(i)-(iv) and (vii) (initial clause) (or be included in the calculation of
"Requisite Lenders" or "Supermajority Lenders" hereunder) for any voting or
consent rights under or with respect to any Loan Document. At Borrower's
request, Agent or a Person reasonably acceptable to Agent shall have the right
with Agent's consent and in Agent's sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding Lender
agrees that it shall, at Agent's request, sell and assign to Agent or such
Person, all of the Commitments of that Non-Funding Lender for an amount equal to
the principal balance of all Loans held by such Non-Funding Lender and all
accrued interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Dissemination of Information. Agent shall promptly provide Lenders with
any notice of Default or Event of Default received by Agent from, or delivered
by Agent to, any Credit Party, with notice of any Event of Default of which
Agent has actually become aware and with notice of any action taken by Agent
following any Event of Default; provided, that Agent shall not be liable to any
Lender for any failure to do so, except to the extent that such failure is
attributable to Agent's gross negligence, bad faith or willful misconduct. Agent
shall deliver to each Lender, promptly following its receipt thereof, copies of
the financial statements and other written materials described in paragraphs
(a)-(f) of Annex E and in paragraph (a) of Annex F.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
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9.10. Additional Titled Agents.
Borrower, Agent and each Lender acknowledge that, except for rights and
powers, if any, expressly reserved to any of the Administrative Agent or any
other titled agent named on the cover page of this Agreement, other than Agent
(collectively, the "Additional Titled Agents"), and except for obligations,
liabilities, duties and responsibilities, if any, expressly assumed by any
Additional Titled Agent, no Additional Titled Agent, in such capacity, has any
rights, powers, liabilities, duties or responsibilities hereunder or under any
of the Loan Documents. Without limiting the foregoing, no Additional Titled
Agent shall have nor be deemed to have a fiduciary relationship with any Lender.
At any time that any Additional Titled Agent shall have transferred to any other
Person (other than any Affiliates) all of its interests in the Loans and the
Commitments, such Additional Titled Agent shall be deemed to have concurrently
resigned as such Additional Titled Agent.
10. SUCCESSORS AND ASSIGNS
10.1. Successors and Assigns.
This Agreement and the other Loan Documents shall be binding on and shall
inure to the benefit of each Credit Party, Agent, Lenders and their respective
successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent
of Agent and Lenders shall be void. The terms and provisions of this Agreement
are for the purpose of defining the relative rights and obligations of each
Credit Party, Agent and Lenders with respect to the transactions contemplated
hereby and no Person (other than any Indemnified Person) shall be a third party
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
11. MISCELLANEOUS
11.1. Complete Agreement; Modification of Agreement.
The Loan Documents constitute the complete agreement between the parties
with respect to the subject matter thereof and may not be modified, altered or
amended except as set forth in Section 11.2. Any letter of interest, commitment
letter or fee letter (other than the GE Capital Fee Letter), if any, between any
Credit Party and Agent or any Lender or any of their respective Affiliates,
predating this Agreement and relating to a financing of substantially similar
form, purpose or effect shall be superseded by this Agreement.
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11.2. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrower, and by Requisite Lenders,
Supermajority Lenders or all affected Lenders, as applicable. Except as set
forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lender shall require the
written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that (i) increases the percentage
advance rates set forth in the definition of the Borrowing Base, (ii) makes less
restrictive the nondiscretionary criteria for exclusion from Eligible Accounts,
Eligible Unbilled Accounts, Eligible Rental Equipment, Eligible Wholesale
Disposables and Eligible Equipment Disposables set forth in Sections 1.6 and
1.7, (iii) alters, in any respect, the provisions of Section 6.14(iii), or (iv)
permits, directly or indirectly, the voluntary purchase, redemption, defeasance
or prepayment of any Indebtedness described in Section 6.3(a)(iii) at any time
that Borrowing Availability, after giving effect to such event, would equal less
than $10,000,000, shall be effective unless the same shall be in writing and
signed by Agent, Supermajority Lenders and Borrower (it being understood and
agreed that changes to the Borrowing Base expressly provided for in Sections 1.6
and 1.7 do not constitute an amendment, modification, termination, waiver or
consent under this Agreement). No amendment, modification, termination or waiver
of or consent with respect to any provision of this Agreement that releases any
Guarantor from its obligations under any guaranty executed in connection with
the transactions contemplated by this Agreement and the other Loan Documents
(except as otherwise permitted herein or in the other Loan Documents) shall be
effective unless the same shall be in writing and signed by Supermajority
Lenders. No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that waives compliance with the
conditions precedent set forth in Section 2.2 to the making of any Loan or the
incurrence of any Letter of Credit Obligations shall be effective unless the
same shall be in writing and signed by Agent, Requisite Lenders and Borrower.
Notwithstanding anything contained in this Agreement to the contrary, no waiver
or consent with respect to any Default or any Event of Default shall be
effective for purposes of the conditions precedent to the making of Loans or the
incurrence of Letter of Credit Obligations set forth in Section 2.2 unless the
same shall be in writing and signed by Agent, Requisite Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by Agent and each Lender directly affected thereby: (i)
increase the principal amount of any Lender's Commitment (which action shall be
deemed to directly affect all Lenders) or amend or waive any provision of this
Agreement or any other Loan Document requiring pro rata treatment of Lenders;
(ii) reduce the principal of, rate of interest on or Fees payable with respect
to any Loan or Letter of Credit Obligations of any affected Lender; (iii) extend
any scheduled payment date (other than payment dates of mandatory prepayments
under Section 1.3(b)(iii)-(iv)) or final maturity date of the principal amount
of any Loan of any affected Lender; (iv) waive, forgive, defer, extend or
postpone any payment of interest or Fees as to any affected Lender; (v) permit
any assignment by a Credit Party under Section 10.1 or, except as otherwise
permitted herein or in the other Loan Documents, release any Collateral (which
action shall be deemed to directly affect all Lenders); (vi) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans that shall be required for Lenders or any of them to take any action
hereunder; (vii) amend or waive this Section 11.2 or the definitions of the
terms "Requisite Lenders" or "Supermajority Lenders" insofar as such definitions
affect the substance of this Section 11.2; (viii) amend or waive Section 1.7, to
the extent it pertains to items providing for unanimous Lender consent; or (ix)
amend the last sentence of Section 1.11(a). Furthermore, no amendment,
modification, termination or waiver affecting the rights or duties of Agent or
L/C Issuer under this Agreement or any other Loan Document shall be effective
unless in writing and signed by Agent or L/C Issuer, as the case may be, in
addition to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Agent to take
additional Collateral pursuant to any Loan Document. No amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the holder of that Note. No notice to or demand on
any Credit Party in any case shall entitle such Credit Party or any other Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
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(d) If, in connection with any proposed amendment, modification, waiver or
termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clause (ii) below being referred to as a
"Non-Consenting Lender"), or
(ii) requiring the consent of Supermajority Lenders, the consent of
Requisite Lenders is obtained, but the consent of Supermajority Lenders is not
obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower's request,
Agent or a Person reasonably acceptable to Agent shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all
accrued interest and Fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
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(e) Upon payment in full in cash and performance of all of the Obligations
(other than indemnification Obligations), termination of the Commitments and a
release of all claims against Agent and Lenders, and so long as no suits,
actions, proceedings or claims are pending or threatened against any Indemnified
Person asserting any damages, losses or liabilities that are Indemnified
Liabilities, Agent shall deliver to Borrower termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3. Fees and Expenses.
Borrower shall reimburse (i) Agent for all reasonable fees, costs and
expenses (including the reasonable fees and expenses of all of its counsel,
advisors, consultants and auditors) and (ii) Agent (and, with respect to clauses
(c) and (d) below, all Lenders) for all fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel or other advisors (including
environmental and management consultants and appraisers), incurred in connection
with the negotiation and preparation of the Loan Documents and incurred in
connection with:
(a) the forwarding to Borrower or any other Person on behalf of Borrower by
Agent of the proceeds of any Loan (including a wire transfer fee of $25 per wire
transfer);
(b) any amendment, modification or waiver of, consent with respect to, or
termination of, any of the Loan Documents or advice in connection with the
syndication and administration of the Loans made pursuant hereto or its rights
hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Agent, any Lender, Borrower or any other Person and whether as a
party, witness or otherwise) in any way relating to the Collateral, any of the
Loan Documents or any other agreement to be executed or delivered in connection
herewith or therewith, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection with a
case commenced by or against Borrower or any other Person that may be obligated
to Agent by virtue of the Loan Documents; including any such litigation,
contest, dispute, suit, proceeding or action arising in connection with any
work-out or restructuring of the Loans during the pendency of one or more Events
of Default or any bankruptcy or other insolvency proceeding involving any Credit
Party; provided, that in the case of reimbursement of counsel for Lenders other
than Agent, such reimbursement shall be limited to one counsel for all such
Lenders; provided, further, that no Person shall be entitled to reimbursement
under this clause (c) in respect of any litigation, contest, dispute, suit,
proceeding or action to the extent any of the foregoing results from such
Person's gross negligence or willful misconduct;
(d) any attempt to enforce any remedies of Agent against any or all of the
Credit Parties or any other Person that may be obligated to Agent or any Lender
by virtue of any of the Loan Documents, including any such attempt to enforce
any such remedies in the course of any work-out or restructuring of the Loans
during the pendency of one or more Events of Default or during any bankruptcy or
other insolvency proceeding involving any Credit Party; provided, that in the
case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
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(e) any workout or restructuring of the Loans during the pendency of one or
more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other Obligations, (ii)
evaluate, observe or assess any of the Credit Parties or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all reasonable expenses,
costs, charges and other fees incurred by such counsel and others in connection
with or relating to any of the events or actions described in this Section 11.3,
all of which shall be payable, on demand, by Borrower to Agent, the Lenders or
the applicable Lender (as the case may be). Without limiting the generality of
the foregoing, such reasonable expenses, costs, charges and fees may include:
reasonable fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and reasonable
expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services. Borrower hereby agrees
that, solely with respect to the fees, costs and expenses described in the
preceding clauses (c) and (d), the determination as to the reasonableness of any
such fees, costs and expenses shall be made in the sole determination of Agent
or each applicable Lender, and Borrower waives any and all rights to challenge
or contest any such determination; provided, that following payment in full by
Borrower to Agent and Lenders (as applicable) of any and all such amounts,
Borrower shall thereafter have the right to challenge or contest any such
determination.
11.4. No Waiver.
Agent's or any Lender's failure, at any time or times, to require strict
performance by the Credit Parties of any provision of this Agreement or any
other Loan Document shall not waive, affect or diminish any right of Agent or
such Lender thereafter to demand strict compliance and performance herewith or
therewith. Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the
provisions of Section 11.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit Party contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by Agent or any Lender,
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Agent and the applicable required
Lenders, and directed to Borrower specifying such suspension or waiver.
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11.5. Remedies.
Agent's and Lenders' rights and remedies under this Agreement shall be
cumulative and nonexclusive of any other rights and remedies that Agent or any
Lender may have under any other agreement, including the other Loan Documents,
by operation of law or otherwise. Recourse to the Collateral shall not be
required.
11.6. Severability.
Wherever possible, each provision of this Agreement and the other Loan
Documents shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement or any other Loan
Document shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or such other Loan Document.
11.7. Conflict of Terms.
Except as otherwise provided in this Agreement or any of the other Loan
Documents by specific reference to the applicable provisions of this Agreement,
if any provision contained in this Agreement conflicts with any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
11.8. Confidentiality.
Agent and each Lender agree to use commercially reasonable efforts
(equivalent to the efforts Agent or such Lender applies to maintaining the
confidentiality of its own confidential information) to maintain as confidential
all confidential information provided to them by the Credit Parties for a period
of two years following the Termination Date, except that Agent and any Lender
may disclose such information (a) to Persons employed or engaged by or on behalf
of Agent or such Lender; (b) to any bona fide assignee or participant or
potential assignee or participant that has agreed to comply with the covenant
contained in this Section 11.8 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by or on behalf of them as described in clause (a) above);
(c) as required or requested by any Governmental Authority or reasonably
believed by Agent or such Lender to be compelled by any court decree, subpoena
or legal or administrative order or process; (d) as, on the advice of Agent's or
such Lender's counsel, is required by law or any court order; (e) in connection
with the exercise of any right or remedy under the Loan Documents or in
connection with any Litigation to which Agent or such Lender is a party; or (f)
that ceases to be confidential through no fault of Agent or any Lender.
Notwithstanding anything to the contrary set forth herein or in any other
agreement to which the parties hereto are parties or by which they are bound,
the obligations of confidentiality contained herein and therein, as they relate
to the transactions contemplated by the Agreement and the other Loan Documents
(the "Transaction"), shall not apply to the federal tax structure or federal tax
treatment of the Transaction, and each party hereto (and any employee,
representative, or agent of or on behalf of any party hereto) may disclose to
any and all persons, without limitation of any kind, the federal tax structure
and federal tax treatment of the Transaction. The preceding sentence is intended
to cause the Transaction to be treated as not having been offered under
conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any
successor provision) of the Treasury Regulations promulgated under Section 6011
of the Internal Revenue Code of 1986, as amended, and shall be construed in a
manner consistent with such purpose. In addition, each party hereto acknowledges
that it has no proprietary or exclusive rights to the federal tax structure of
the Transaction or any federal tax matter or federal tax idea related to the
Transaction.
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If Agent or any Lender is required to disclose any portion of non-public,
confidential or proprietary information pursuant to either of clauses (c) or (e)
of the preceding paragraph, to the extent practicable and not otherwise
prohibited by law or by any legal, administrative or regulatory order or
process, such entity shall notify Borrower of such disclosure as soon as is
commercially reasonable, and shall reasonably cooperate in any effort of
Borrower to maintain, at Borrower's sole cost and expense, the confidentiality
of such information, including without limitation applying for protective court
orders.
11.9. GOVERNING LAW.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE
LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN XXXX COUNTY, CITY OF CHICAGO,
ILLINOIS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT
AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF XXXX COUNTY; PROVIDED
FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY
OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
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11.10. Notices.
Except as otherwise provided herein, whenever it is provided herein that
any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered: (a) upon the earlier of actual receipt and 3 Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by
telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 11.10); (c) 1 Business
Day after deposit with a reputable overnight courier with all charges prepaid or
(d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or facsimile
number indicated in Annex I or to such other address (or facsimile number) as
may be substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrower or Agent) designated in Annex I to receive copies shall in
no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
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11.11. Section Titles.
The Section titles and Table of Contents contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
11.12. Counterparts.
This Agreement may be executed in any number of separate counterparts, each
of which shall collectively and separately constitute one agreement.
11.13. WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.
11.14. Press Releases and Related Matters.
Each Credit Party executing this Agreement agrees that neither it nor its
Affiliates will in the future issue any press releases or other public
disclosure using the name of GE Capital or its affiliates or referring to this
Agreement or the other Loan Documents without at least 2 Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital before issuing such press release or other public disclosure.
Each Credit Party consents to the publication by Agent or any Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement, subject to Borrower's review and approval of the
content thereof. Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
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11.15. Reinstatement.
This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against Borrower for liquidation or
reorganization, should Borrower become insolvent or make an assignment for the
benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of Borrower's assets, and shall
continue to be effective or to be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
11.16. Advice of Counsel.
Each of the parties represents to each other party hereto that it has
discussed this Agreement and, specifically, the provisions of Sections 11.9 and
11.13, with its counsel.
11.17. No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
BORROWER:
UNIVERSAL HOSPITAL SERVICES, INC.
By /s/ Xxx X. Xxxxxxxxx
Name Xxx X. Xxxxxxxxx
Title Senior Vice President & CFO
GENERAL ELECTRIC CAPITAL CORPORATION, as
Agent and as a Lender
By /s/ Xxxxxx Xxxxxx
Duly Authorized Signatory
Bank of America, N.A., as a Lender
By /s/ Xxxxx X. Xxxxx
Name Xxxxx X. Xxxxx
Title Vice President
LaSalle Business Credit, LLC, as a Lender
By /s/ Xxxxxxx Xxxx
Name Xxxxxxx Xxxx
Title Assistant Vice President
Xxxxx Fargo Foothill, Inc., as a Lender
By /s/ Xxx Xxxxxx
Name Xxx Xxxxxx
Title Senior Vice President
CIT Lending Services Corporation, as a Lender
By /s/ Xxxx X. Xxxxxx XX
Name Xxxx X. Xxxxxx XX
Title Vice President
PNC Bank National Association, as a Lender
By /s/ Xxxxx X. Xxxxxx
Name Xxxxx X. Xxxxxx
Title Vice President
ANNEX A (Recitals)
to
AMENDED AND RESTATED CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings, and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:
"Account Debtor" means any Person who may become obligated to any Credit
Party under, with respect to, or on account of, an Account, Chattel Paper or
General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments), (including
any such obligations that may be characterized as an account or contract right
under the Code), (b) all of each Credit Party's rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Credit
Party's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all rights
to payment due to any Credit Party for property sold, leased, licensed, assigned
or otherwise disposed of, for a policy of insurance issued or to be issued, for
a secondary obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other contract,
arising out of the use of a credit card or charge card, or for services rendered
or to be rendered by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such Credit
Party), (e) all health care insurance receivables and (f) all collateral
security and guaranties of any kind, given by any Account Debtor or any other
Person with respect to any of the foregoing.
"Activation Event" and "Activation Notice" have the meanings ascribed
thereto in Annex C.
"Advance" means any Revolving Credit Advance or Swing Line Advance, as the
context may require.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, ten percent (10%) or more of the Stock having
ordinary voting power in the election of directors of such Person, (b) each
Person that controls, is controlled by or is under common
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control with such Person, (c) each of such Person's officers, directors, joint
venturers and partners and (d) in the case of Borrower, the immediate family
members, spouses and lineal descendants of individuals who are Affiliates of
Borrower. For the purposes of this definition, "control" of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall specifically exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 9.7.
"Agreement" means the Amended and Restated Credit Agreement dated as of May
26, 2005, by and among Borrower, the other Credit Parties party thereto, GE
Capital, as Agent and Lender and the other Lenders from time to time party
thereto, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable L/C Margin" means the per annum fee, from time to time in
effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin, the
Applicable Revolver Index Margin, and the Applicable Revolver LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate margin
from time to time in effect and payable in addition to the Index Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate margin
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in Section 9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. ss.ss.101 et seq.
"Billed Accounts" means any Account with respect to which an invoice has
been sent to the applicable Account Debtor.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrower" shall have the meaning ascribed thereto in the preamble to the
Agreement.
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"Borrowing Availability" means, as of any date of determination, the lesser
of (i) the Maximum Amount and (ii) the Borrowing Base, in each case, less the
sum of (x) aggregate Revolving Loan plus (y) Swing Line Loan then outstanding
plus (z) any Reserves established by Agent in accordance with the provisions of
Section 1.6 and/or Section 1.7.
"Borrowing Base" means, as of any date of determination by Agent, from time
to time, an amount equal to the sum at such time of:
(a) up to eighty-five percent (85%) of the total face amount of Borrower's
Eligible Accounts; and
(b) up to fifty percent (50%) of the total face amount of Borrower's
Eligible Unbilled Accounts, not to exceed, as of any date of determination,
twenty-five percent (25%) of the sum of (x) the total face amount of Borrower's
Eligible Accounts as of such date plus (y) the total face amount of Borrower's
Eligible Unbilled Accounts as of such date; and
(c) the sum of:
(i) up to sixty-five percent (65%) of Borrower's Eligible Rental Equipment
valued on a net book value basis consistent with Borrower's consolidated
month-end balance sheet;
(ii) up to fifty percent (50%) of Borrower's Eligible Wholesale Disposables
valued on a net book value basis consistent with Borrower's consolidated
month-end balance sheet; and
(iii) up to twenty percent (20%) of Borrower's Eligible Equipment
Disposables valued on a net book value basis consistent with Borrower's
consolidated month-end balance sheet;
in each case, less any Reserves established by Agent at such time in accordance
with the provisions of Section 1.6 and/or Section 1.7.
"Borrowing Base Adjustment Limit" means $25,000,000.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by Borrower in the form attached to the Agreement as
Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which banks are required or permitted to be closed in the States of Illinois
and/or New York and in reference to LIBOR Loans shall mean any such day that is
also a LIBOR Business Day.
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"Capital Expenditures" means, with respect to any Person, all expenditures
(by the expenditure of cash or the incurrence of Indebtedness) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto that have a useful life of more
than one year and that are required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Equivalent Investments" means (a) securities with maturities of 360
days or less from the date of acquisition issued or fully guaranteed or insured
by the United States government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of 360 days or less from
the date of acquisition and overnight bank deposits of any Lender or of any
commercial bank having capital and surplus in excess of $500,000,000, (c)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
seven days with respect to securities issued or fully guaranteed or insured by
the United States government, (d) commercial paper of a domestic issuer rated at
least A-1 or the equivalent thereof by Standard and Poor's Ratings Group ("S&P")
or P-1 or the equivalent thereof by Xxxxx'x Investors Service, Inc. ("Moody's")
and in either case maturing within 90 days after the day of acquisition, (e)
securities with maturities of 90 days or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody's, (f) securities with maturities of 90 days or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
"Cash Management Systems" has the meaning ascribed to it in Section 1.8.
"Change of Control" means (i) any event, transaction or occurrence as a
result of which (a) X.X. Childs and Halifax collectively cease to own and
control all of the economic and voting rights associated with ownership of at
least fifty and one-tenth percent
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(50.1%) of the outstanding capital Stock of all classes of Borrower on a fully
diluted basis, or (b) except to the extent resulting from transfers permitted
under Section 6.1, Borrower ceases to own and control all of the economic and
voting rights associated with all of the outstanding capital Stock of any of its
Subsidiaries and (ii) any "Change of Control", "Change in Control" or any
similar definition set forth in the Senior Note Indenture.
"Charges" means all federal, state, county, city, municipal, local, foreign
or other governmental taxes (including taxes owed to the PBGC at the time due
and payable), levies, assessments, charges, liens, claims or encumbrances upon
or relating to (a) the Collateral, (b) the Obligations, (c) the employees,
payroll, income or gross receipts of any Credit Party, (d) any Credit Party's
ownership or use of any properties or other assets, or (e) any other aspect of
any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in the
Code, including electronic chattel paper, now owned or hereafter acquired by any
Credit Party.
"Closing Checklist" means the schedule, including all appendices, exhibits
or schedules thereto, listing certain documents and information to be delivered
in connection with the Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of Illinois; provided, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of Illinois, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security Agreement and the
other Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Agent, on behalf of
itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the Patent Security
Agreements, the Trademark Security Agreement, the Copyright Security Agreement
and all similar agreements entered into guaranteeing payment of, or granting a
Lien upon property as security for payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Annex F.
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"Collection Account" means that certain account of Agent, account number
000-000-00 in the name of Agent at Bankers Trust Company in New York, New York
ABA No. 021 001 033, or such other account as may be specified in writing by
Agent as the "Collection Account".
"Commitment Termination Date" means the earliest of (a) the sixty (60)
month anniversary date of the Restatement Closing Date, (b) the date of
termination of Lenders' obligations to make Advances and to incur Letter of
Credit Obligations or permit existing Loans to remain outstanding pursuant to
Section 8.2(b), and (c) the date of indefeasible prepayment in full by Borrower
of the Loans and the cancellation and return (or stand-by guarantee) of all
Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to Annex B, and the permanent reduction of all Commitments
to zero dollars ($0).
"Commitments" means (a) as to any Lender, the aggregate of such Lender's
Revolving Loan Commitment (including without duplication the Swing Line Lender's
Swing Line Commitment as a subset of its Revolving Loan Commitment) as set forth
on Annex J to the Agreement or in the most recent Assignment Agreement executed
by such Lender and (b) as to all Lenders, the aggregate of all Lenders'
Revolving Loan Commitments (including without duplication the Swing Line
Lender's Swing Line Commitment as a subset of its Revolving Loan Commitment),
which aggregate commitment shall be $125,000,000 on the Restatement Closing
Date, as to each of clauses (a) and (b), as such Commitments may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Contracts" means all "contracts," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.
"Control Letter" means a letter agreement between Agent and (i) the issuer
of uncertificated securities with respect to uncertificated securities in the
name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party or (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant disclaims or subordinates to the Lien of the Agent
any security interest in the applicable financial assets, acknowledges the Lien
of Agent, on behalf of itself and Lenders, on such financial assets, and agrees
to follow the instructions or entitlement orders of Agent without further
consent by the affected Credit Party.
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"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" means, if any, the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Copyrights" means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Credit Parties" means Borrower, and each of its Subsidiaries.
"Default" means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Delivery Items Certificate" means a certificate as to the Delivery Items
attached thereto, executed and delivered on the Restatement Closing Date by
Borrower in favor of Agent and each Lender.
"Deposit Accounts" means all "deposit accounts" as such term is defined in
the Code, now or hereafter held in the name of any Credit Party.
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Disclosure Schedules 1.4 through 6.7 in the Index to the
Agreement.
"Documents" means all "documents," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of America.
"EBITDA" means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period determined in accordance with GAAP, minus (b) the sum of (i) income
tax credits for such period, (ii) interest income for such period, (iii) gain
from extraordinary items for such period, (iv) non-recurring gains (as
determined in accordance with GAAP) for such period, except as otherwise
determined by Agent in its reasonable discretion, (v) any aggregate net
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gain (but not any aggregate net loss) during such period arising from the sale,
exchange or other disposition of capital assets by such Person (including any
fixed assets, whether tangible or intangible, all inventory sold in conjunction
with the disposition of fixed assets and all securities) excluding asset sales
occurring in the ordinary course of business and (vi) any other non-cash gains
for such period that have been added in determining consolidated net income, in
each case to the extent included in the calculation of consolidated net income
of such Person for such period in accordance with GAAP, but without duplication,
plus (c) the sum of (i) any provision for income taxes for such period, (ii)
interest expense for such period as defined by GAAP, (iii) loss from
extraordinary items for such period, (iv) non-recurring loss for such period (as
determined in accordance with GAAP) to the extent approved by Agent in its
reasonable discretion, (v) the amount of non-cash charges (including
depreciation and amortization) for such period, (vi) amortized debt discount for
such period, (vii) third-party expenses incurred during such period in
connection with the transactions contemplated by the Loan Documents, (viii)
expenses during such period in respect of management fees and related expense
reimbursements paid by any Credit Party, to the extent such payments were
permitted when made pursuant to Section 6.14, (ix) expenses during such period
in respect of salary and out-of-pocket expense reimbursements paid to Xxxxx
Xxxxxxxxx, so long as he remains an employee of any Credit Party, in an
aggregate amount not to exceed $200,000 in any Fiscal Year, and (x) the amount
of any deduction to consolidated net income for such period as the result of any
grant to any members of the management of such Person of any Stock, in each case
to the extent included in the calculation of consolidated net income of such
Person for such period in accordance with GAAP, but without duplication. For
purposes of this definition, the following items shall be excluded in
determining consolidated net income of a Person: (1) the income (or deficit) of
any other Person accrued prior to the date it became a Subsidiary of, or was
merged or consolidated into, such Person or any of such Person's Subsidiaries;
(2) the income (or deficit) of any other Person (other than a Subsidiary) in
which such Person has an ownership interest, except to the extent any such
income has actually been received by such Person in the form of cash dividends
or distributions; (3) the undistributed earnings of any Subsidiary of such
Person to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary;
(4) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period; (5) any write-up of any asset; (6) any net gain from the collection of
the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person, (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets, and (9) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary. Determinations of EBITDA in
connection with Permitted Acquisitions shall be determined utilizing the Pro
Forma Basis.
"Eligible Accounts" has the meaning ascribed to it in Section 1.6.
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"Eligible Equipment Disposables" means, as of any date of determination,
all Equipment Disposables of Borrower which conform to the requirements of
Section 1.7 of the Agreement.
"Eligible Rental Equipment" means, as of any date of determination, the
amount of all Rental Equipment of Borrower which (i) is held by Borrower (other
than for sale) or is rented to third Persons in the ordinary course of business
by Borrower or which is the subject of an equipment rental program or similar
equipment outsourcing program, and (ii) conforms to the requirements of Section
1.7 of the Agreement. In any event, Eligible Rental Equipment shall exclude the
net book value of Borrower's "Bazooka Bed" inventory.
"Eligible Unbilled Accounts" has the meaning ascribed to it in Section 1.6.
"Eligible Wholesale Disposables" means, as of any date of determination,
all Wholesale Disposables of Borrower which conform to the requirements of
Section 1.7 of the Agreement.
"Environmental Laws" means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
xx.xx. 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. xx.xx. 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. xx.xx. 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. xx.xx. 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. xx.xx. 2601 et seq.); the Clean Air Act (42 U.S.C. xx.xx.
7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C. xx.xx. 1251 et
seq.); the Occupational Safety and Health Act (29 U.S.C. xx.xx. 651 et seq.);
and the Safe Drinking Water Act (42 U.S.C. xx.xx. 300(f) et seq.), and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or
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presence of a Hazardous Material whether on, at, in, under, from or about or in
the vicinity of any real or personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located and, in any
event, including all such Credit Party's machinery and equipment, including
processing equipment, conveyors, machine tools, data processing and computer
equipment, including embedded Software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and Fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"Equipment Disposables" means repair or replacement parts purchased by
Borrower or any of its Subsidiaries for repair of its Rental Equipment or for
sale to customers of Borrower or any of its Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade or
business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit Party
or ERISA Affiliate to make when due required contributions to a Multiemployer
Plan or Title IV Plan unless such failure is cured within 30 days; (g) any other
event or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the
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imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of Section
4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29 U.S.C.
ss. 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"Fees" means any and all fees payable to Agent or any Lender pursuant to
the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in Annex G.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with Section 3.4 and Annex E.
"Fiscal Month" means any of the monthly accounting periods of Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of Borrower,
ending on March 31, June 30, September 30, and December 31 of each year.
"Fiscal Year" means any of the annual accounting periods of Borrower ending
on December 31 of each year.
"Fixtures" means all "fixtures" as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party.
"Funded Debt" means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one
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year from the date of creation thereof, and specifically including Capital Lease
Obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrower, the Obligations and, without duplication,
Guaranteed Indebtedness consisting of guaranties of Funded Debt of other
Persons.
"GAAP" means generally accepted accounting principles in the United States
of America consistently applied, as such term is further defined in Annex G to
the Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Fee Letter" has the meaning ascribed to it in Section 1.9(a).
"General Intangibles" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, Software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, including embedded Software to
the extent included in "goods" as defined in the Code, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"Guaranteed Indebtedness" means as to any Person, any obligation of such
Person guaranteeing, providing comfort or otherwise supporting any Indebtedness,
lease, dividend, or other obligation ("primary obligation") of any other Person
(the "primary obligor") in any manner, including any obligation or arrangement
of such Person to (a) purchase or repurchase any such primary obligation, (b)
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or (e)
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Indebtedness is
incurred and (y) the maximum amount for which such Person may be liable pursuant
to the terms of the instrument embodying such Guaranteed Indebtedness, or, if
not stated or determinable, the maximum reasonably anticipated liability
(assuming full performance) in respect thereof, as determined by such Person in
good faith, provided that the amount of any Guaranteed Indebtedness shall not,
in any event, exceed the amount which in light of the facts and circumstances,
represents the amount that can reasonably be expected to become an actual or
matured liability in accordance with GAAP.
"Guarantor" means each Person, if any, that executes a guaranty or other
similar agreement in favor of Agent, for itself and the ratable benefit of
Lenders, in connection with the transactions contemplated by the Agreement and
the other Loan Documents.
"Halifax" means Halifax Capital Partners, L.P., a Delaware limited
partnership.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"HIPAA" means the Health Insurance Portability and Accountability Act of
1996, Public Law 104-191.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of
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property payment for which is deferred six months or more, but excluding
obligations to trade creditors incurred in the ordinary course of business that
are unsecured and not overdue by more than six months unless being contested in
good faith, (b) all reimbursement and other obligations with respect to letters
of credit, bankers' acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property) in an
amount equal to the lesser of (A) such indebtedness and (B) if such indebtedness
has not been assumed by such Person and is otherwise non-recourse to such
Person, the fair market value of such property, (e) all Capital Lease
Obligations and the present value (discounted at the Index Rate as in effect on
the Restatement Closing Date) of future rental payments under all synthetic
leases, (f) all obligations of such Person under commodity purchase or option
agreements or other commodity price hedging arrangements, in each case whether
contingent or matured, (g) all obligations of such Person under any foreign
exchange contract, currency swap agreement, interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates,
in each case whether contingent or matured, (h) all Indebtedness referred to
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in property
or other assets (including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Indebtedness, in an amount equal to the lesser of (A) such indebtedness and (B)
if such indebtedness has not been assumed by such Person and is otherwise
non-recourse to such Person, the fair market value of such property, and (i) the
Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section 1.13.
"Indemnified Person" has the meaning ascribed to it in Section 1.13.
"Index Rate" means, for any day, a floating rate equal to the higher of (i)
the rate publicly quoted from time to time by The Wall Street Journal as the
"base rate on corporate loans posted by at least seventy-five percent (75%) of
the nation's 30 largest banks" (or, if The Wall Street Journal ceases quoting a
base rate of the type described, the highest per annum rate of interest
published by the Federal Reserve Board in Federal Reserve statistical release
H.15 (519) entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus 50 basis points per annum.
Each change in any interest rate provided for in the Agreement based upon the
Index Rate shall take effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
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"Instruments" means all "instruments," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, wherever located, and, in
any event, including all certificated securities, all certificates of deposit,
and all promissory notes and other evidences of indebtedness, other than
instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents, Copyrights,
Trademarks, and the goodwill associated with such Trademarks.
"Interest Coverage Ratio" means with respect to any Person for any fiscal
period, the ratio of EBITDA for such period to Interest Expense for such period.
"Interest Expense" means, with respect to any Person for any fiscal period,
cash interest expense of such Person determined in accordance with GAAP for the
relevant period ended on such date, including, interest expense with respect to
any Funded Debt of such Person; provided, that Interest Expense shall exclude
(to the extent otherwise included) the amount of fees and expenses (other than
commitment fees and interest expense with respect to any Funded Debt) to be paid
by Borrower pursuant to this Agreement or the GE Capital Fee Letter in
connection with the closing of this Agreement.
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that
in the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three-month intervals and on the last day of such LIBOR
Period; and provided, further that, in addition to the foregoing, each of (x)
the date upon which all of the Commitments have been terminated and the Loans
have been paid in full and (y) the Commitment Termination Date shall be deemed
to be an "Interest Payment Date" with respect to any interest that has then
accrued under the Agreement.
"Interest Rate Agreement" means any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to hedge the position of Borrower or any
Subsidiary with respect to interest rates.
"Inventory" means all "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and in any
event including inventory, merchandise, goods and other personal property that
are held by or on behalf of any Credit Party for sale or lease or are furnished
or are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded Software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located,
A-15
including (i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Credit Party, including the rights of any Credit Party to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii)
all securities accounts of any Credit Party; (iv) all commodity contracts of any
Credit Party; and (v) all commodity accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service.
"X.X. Childs" means, collectively, X.X. Childs Equity Partners III, L.P., a
Delaware limited partnership, and X.X. Childs Equity Partners, L.P., a Delaware
limited partnership.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the signature pages
of the Agreement, and, if any such Lender shall decide to assign all or any
portion of the Obligations, such term shall include any assignee of such Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations incurred
by Agent and Lenders at the request of Borrower, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the issuance of
Letters of Credit by Agent or another L/C Issuer or the purchase of a
participation as set forth in Annex B with respect to any Letter of Credit. The
amount of such Letter of Credit Obligations shall equal the maximum amount that
may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or performance under a letter of credit, whether or
not such Credit Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
"Letters of Credit" means documentary or standby letters of credit issued
for the account of Borrower by any L/C Issuer, and bankers' acceptances issued
by Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
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"LIBOR Business Day" means a Business Day on which banks in the City of
London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.5(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:
(a) if any LIBOR Period would otherwise end on a day that is not a LIBOR
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end on
the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end 2 LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such LIBOR Period) shall end on the last
LIBOR Business Day of a calendar month;
(d) Borrower shall select LIBOR Periods so as not to require a payment or
prepayment of any LIBOR Loan during a LIBOR Period for such Loan;
(e) Borrower shall select LIBOR Periods so that there shall be no more than
5 separate LIBOR Loans in existence at any one time; and
(f) any "LIBOR Period" in effect on the date hereof under the Original
Credit Agreement shall be deemed to terminate on the Restatement Closing Date,
without giving rise to any LIBOR funding breakage costs described in Section
1.13(b).
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined by
Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the
A-17
first day of such LIBOR Period (unless such date is not a Business Day, in which
event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication) of
the rates (expressed as a decimal fraction) of reserve requirements in effect on
the day that is 2 LIBOR Business Days prior to the beginning of such LIBOR
Period (including basic, supplemental, marginal and emergency reserves under any
regulations of the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Federal Reserve Board that are required to be maintained by
a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Agent and Borrower.
"License" means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, the Notes, the Collateral Documents,
the Master Standby Agreement, the Master Documentary Agreement, and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist executed and delivered to, or in favor of, Agent or any Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
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"Loans" means the Revolving Loan and the Swing Line Loan.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Master Documentary Agreement" means the Master Agreement for Documentary
Letters of Credit dated as of the Original Closing Date between Borrower, as
Applicant, and GE Capital.
"Master Standby Agreement" means the Master Agreement for Standby Letters
of Credit dated as of the Original Closing Date between Borrower, as Applicant,
and GE Capital, as issuer.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition (financial or otherwise) of any Credit
Party, (b) Borrower's ability to pay any of the Loans or any of the other
Obligations in accordance with the terms of the Agreement, (c) the Collateral or
Agent's Liens, on behalf of itself and Lenders, on the Collateral or the
priority of such Liens, or (d) Agent's or any Lender's rights and remedies under
the Agreement and the other Loan Documents.
"Maximum Amount" means, as of any date of determination, an amount equal to
the Revolving Loan Commitment of all Lenders as of that date.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is making,
is obligated to make or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.
"Net Proceeds" means (i) the aggregate cash consideration received by
Borrower or a Subsidiary in connection with any transaction referred to in
Section 1.3(b)(iii) less (ii) the reasonable expenses (including out-of-pocket
expenses) incurred by Borrower or such Subsidiary in connection with such
transaction (including, in the case of any issuance of debt or equity
securities, reasonable underwriters' commissions and fees) and the amount of any
federal and state taxes incurred in connection with such transaction, in each
case as certified to Agent at the time of such transaction.
"Non-Funding Lender" has the meaning ascribed to it in Section 9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes and the Swing Line Notes.
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a).
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"Obligations" means all loans, advances, debts, liabilities and obligations
for the performance of covenants, tasks or duties or for payment of monetary
amounts (whether or not such performance is then required or contingent, or such
amounts are liquidated or determinable) owing by any Credit Party to Agent or
any Lender, and all covenants and duties regarding such amounts, of any kind or
nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under the Agreement or any of the other Loan
Documents. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against any
Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under the Agreement or any of the other Loan Documents.
"Original Closing Date Prior Senior Note Indenture Amendment" means that
certain First Supplemental Indenture, dated as of October 8, 2003, between
Borrower and U.S. Bank National Association (as successor to First Trust
National Association), as trustee.
"Original Closing Date" means October 17, 2003.
"Original Credit Agreement" has the meaning ascribed to it in the recitals
to the Agreement.
"Original Lenders" means the "Lenders" under, and as such term is defined
in, the Original Credit Agreement immediately prior to the effectiveness of this
Agreement.
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means, if any, the Patent Security Agreements
made in favor of Agent, on behalf of itself and Lenders, by each applicable
Credit Party.
"Patents" means all of the following in which any Credit Party now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State, or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Acquisition" has the meaning ascribed to it in Section 6.1(i).
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"Permitted Encumbrances" means the following encumbrances: (a) Liens for
taxes or assessments or other governmental Charges not yet due and payable or
which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $250,000 at any time, so long as such Liens attach only
to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(j); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders; (j) licenses, leases or subleases
granted to other Persons not interfering in any material respect with the
business of Borrower or any of its Subsidiaries; (k) bankers' Liens, rights of
setoff and similar Liens incurred on deposits made in the ordinary course of
business; (l) Liens arising from precautionary UCC financing statements
regarding operating leases; and (m) Liens expressly permitted under clauses (b),
(c) and (d) of Section 6.7 of the Agreement.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Plan" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
seven years on behalf of participants who are or were employed by any Credit
Party or ERISA Affiliate.
"Proceeds" means "proceeds," as such term is defined in the Code, including
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to any Credit Party from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or
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future infringement or dilution of any Copyright, Copyright License, Trademark
or Trademark License, or for injury to the goodwill associated with any
Trademark or Trademark License, (d) any recoveries by any Credit Party against
third parties with respect to any litigation or dispute concerning any of the
Collateral including claims arising out of the loss or nonconformity of,
interference with the use of, defects in, or infringement of rights in, or
damage to, Collateral, (e) all amounts collected on, or distributed on account
of, other Collateral, including dividends, interest, distributions and
Instruments with respect to Investment Property and Stock, and (f) any and all
other amounts, rights to payment or other property acquired upon the sale,
lease, license, exchange or other disposition of Collateral and all rights
arising out of Collateral.
"Pro Forma Basis" means, for purposes of calculating compliance with each
of the financial covenants set forth in Annex G in respect of a proposed
Permitted Acquisition, that such proposed Permitted Acquisition shall be deemed
to have occurred as of the first day of the four fiscal quarter period ending as
of the most recent fiscal quarter end preceding the date of such proposed
Permitted Acquisition with respect to which Agent has received the required
financial information, but solely to the extent that either (i) Agent shall have
provided its express written approval to the financial statements of a Target
the subject of a Permitted Acquisition or (ii) the financial statements of a
Target provided to Agent shall have been audited by independent accountants
reasonably acceptable to Agent. As used herein, "transaction" shall mean any
Permitted Acquisition. In connection with any calculation of the financial
covenants set forth in Annex G, upon giving effect to a Permitted Acquisition on
a Pro Forma Basis:
(A) for purposes of any such calculation in respect of any incurrence or
assumption of Indebtedness in connection with such proposed Permitted
Acquisition, any Indebtedness which is retired in connection with such
incurrence or assumption shall be excluded and deemed to have been
retired as of the first day of the applicable period;
(B) for purposes of any such calculation in respect of any Permitted
Acquisition, (1) any Indebtedness incurred or assumed by any Credit
Party in connection with such transaction (including the Person or
property acquired) and any Indebtedness of the Person or property
acquired which is not retired in connection with such transaction (x)
shall be deemed to have been incurred as of the first day of the
applicable period and (y) if such Indebtedness has a floating or
formula rate, shall have an implied rate of interest for the
applicable period for purposes of this definition determined by
utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination and (2) income
statement items (whether positive or negative) attributable to the
Person or property acquired shall be included beginning as of the
first day of the applicable period.
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"Projections" means Borrower's forecasted consolidated and consolidating:
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, all prepared on a Subsidiary by Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the
historical Financial Statements of the Borrower, together with appropriate
supporting details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to any Lender,
(a) with respect to the Loans, the percentage obtained by dividing (i) the
Revolving Loan Commitment of that Lender by (ii) the aggregate Revolving Loan
Commitments of all Lenders, and (b) with respect to all Loans on and after the
Commitment Termination Date, the percentage obtained by dividing (i) the
aggregate outstanding principal balance of the Loans held by that Lender, by
(ii) the outstanding principal balance of the Loans held by all Lenders.
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender and,
with respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, and (b) any commercial bank, savings and
loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Xxxxx'x at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrower
without the imposition of any withholding or similar taxes; provided, that (i)
no Person or Affiliate of such Person (other than a Person that is already a
Lender) holding Subordinated Debt or Stock issued by any Credit Party shall be a
Qualified Assignee and (ii) at any time no Event of Default described in any of
Sections 8.1(a), 8.1(h) or 8.1(i) is then in existence, no Person that is
engaged in any line of business involving the sale, rental, leasing, management,
servicing or outsourcing of medical equipment, and is identified by Borrower to
Agent as being disqualified as a Qualified Assignee due to being engaged in any
such line of business prior to the consummation of an assignment or sale to such
Person described in Section 9.1(a), shall be a Qualified Assignee.
"Qualified Plan" means a Pension Plan that is intended to be tax-qualified
under Section 401(a) of the IRC.
"Qualified Subordinated Notes" means promissory notes that (i) provide for
no scheduled or other mandatory principal payments or prepayments prior to the
date six months following the date set forth in clause (a) of the defined term
"Commitment Termination Date", (ii) provide for no voluntary principal payment
or prepayment, except (x) in the manner set forth in the proviso to Section
6.18(a) or (y) with the prior written consent of Agent and Requisite Lenders,
(iii) provide for no cash interest payments prior to the date set forth in
clause (i) above and (iv) otherwise qualify as Subordinated Debt.
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"Real Estate" has the meaning ascribed to it in Section 3.6.
"Recapitalization Agreements" mean, collectively, (i) that certain Stock
Purchase Agreement dated as of September 26, 2003 among X.X. Childs Equity
Partners III, L.P., JWC Co-invest III LLC, Halifax, Borrower and certain other
parties named therein, (ii) those certain Repurchase Agreements dated on or
about October 17, 2003 among Borrower and certain Stockholders of Borrower;
(iii) that certain letter agreement dated as of September 26, 2003 between
Borrower and Security Life of Denver Insurance Company, (iv) the Senior Note
Indenture and the Senior Notes, (v) the Original Closing Date Prior Senior Note
Indenture Amendment and (vi) that certain Offer to Purchase and Consent
Solicitation Statement of Borrower dated September 24, 2003.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(b)(iii).
"Release" means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.
"Rental Equipment" means all movable medical equipment owned by Borrower or
any of its Subsidiaries generally consisting of, but not limited to, critical
care equipment, monitoring equipment, newborn care equipment and respiratory
therapy equipment.
"Requisite Lenders" means Lenders having (a) more than fifty percent (50%)
of the Commitments of all Lenders, or (b) if the Commitments have been
terminated, more than fifty percent (50%) of the aggregate outstanding amount of
all Loans (with the Swing Line Loan being attributed to the Lender making such
Loan, to the extent not otherwise participated to the Lenders pursuant to this
Agreement).
"Reserves" means reserves established pursuant to either of Sections 1.6 or
1.7 and such other reserves against Borrowing Availability expressly authorized
by any Loan Document.
"Restatement Closing Date" means May 26, 2005.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with
A-24
respect to, any Subordinated Debt; (d) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire Stock of such Credit Party now or hereafter
outstanding; (e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or sale of, any
shares of such Credit Party's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Credit Party other than
payment of compensation in the ordinary course of business to Stockholders who
are employees of such Person; and (g) any payment of management fees (or other
fees of a similar nature) by such Credit Party to any Stockholder of such Credit
Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a)(i).
"Revolving Loan" means, at any time, the sum of (i) the aggregate amount of
Revolving Credit Advances outstanding to Borrower plus (ii) the aggregate Letter
of Credit Obligations incurred on behalf of Borrower. Unless the context
otherwise requires, references to the outstanding principal balance of the
Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the aggregate
commitment of such Lender to make Revolving Credit Advances or incur Letter of
Credit Obligations as set forth on Annex J to the Agreement or in the most
recent Assignment Agreement executed by such Lender and (b) as to all Lenders,
the aggregate commitment of all Lenders to make Revolving Credit Advances or
incur Letter of Credit Obligations, which aggregate commitment shall be
$125,000,000 on the Restatement Closing Date, as such amount may be adjusted, if
at all, from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section 1.1(a)(ii).
"Secured Funded Debt" means, with respect to any Person, without
duplication, all secured Indebtedness for borrowed money evidenced by notes,
bonds, debentures, or similar evidences of secured Indebtedness that by its
terms matures more than one year from, or is directly or indirectly renewable or
extendible at such Person's option under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of more than one
year from the date of creation thereof, and specifically including Capital Lease
Obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and also
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including, in the case of Borrower, the Obligations and, without duplication,
Guaranteed Indebtedness consisting of guaranties of Secured Funded Debt of other
Persons.
"Security Agreement" means the Security Agreement dated as of the Original
Closing Date entered into by and among Agent, on behalf of itself and Lenders,
and each Credit Party that is a signatory thereto.
"Senior Leverage Ratio" means, with respect to Borrower, on a consolidated
basis, the ratio of (a) Secured Funded Debt as of any date of determination,
other than Subordinated Debt, to (b) EBITDA for the twelve months ending on that
date of determination.
"Senior Note Indenture" means that certain Indenture dated as of October
17, 2003 between Borrower and Xxxxx Fargo Bank Minnesota, National Association,
as trustee.
"Senior Notes" means the 10.125% Senior Notes due November 1, 2011 issued
by Borrower pursuant to the Senior Note Indenture.
"Software" means all "software" as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, other than software embedded in
any category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person on a going
concern basis is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as litigation, guaranties and pension
plan liabilities) at any time shall be computed as the amount that, in light of
all the facts and circumstances existing at the time, represents the amount that
can be reasonably be expected to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other "equity security" (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).
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"Stockholder" means, with respect to any Person, each holder of Stock of
such Person.
"Stockholder's Agreement" means that certain Amended and Restated
Stockholder's Agreement dated as of October 17, 2003 among Borrower and its
Stockholders, as in effect on the Original Closing Date, and as the same may be
further amended, supplemented or otherwise modified from time to time in
accordance with the provisions of Section 6.18.
"Subordinated Debt" means any Indebtedness of any Credit Party subordinated
to the Obligations in a manner and form satisfactory to Agent and Requisite
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of Borrower.
"Supermajority Lenders" means Lenders having (a) sixty-six and two-thirds
percent (66 2/3%) or more of the Revolving Loan Commitments of all Lenders, or
(b) if the Revolving Loan Commitments have been terminated, sixty-six and
two-thirds percent (66 2/3%) or more of the aggregate outstanding amount of the
Revolving Loan (with the Swing Line Loan being attributed to the Lender making
such Loan, to the extent not otherwise participated to the Lenders pursuant to
this Agreement) and Letter of Credit Obligations.
"Swing Line Advance" has the meaning ascribed to it in Section 1.1(b)(i).
"Swing Line Availability" has the meaning ascribed to it in Section
1.1(b)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the commitment
of the Swing Line Lender to make Swing Line Advances as set forth on Annex J to
the Agreement, which commitment constitutes a subfacility of the Revolving Loan
Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital.
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"Swing Line Loan" means, as the context may require, at any time, the
aggregate amount of Swing Line Advances outstanding to Borrower.
"Swing Line Note" has the meaning ascribed to it in Section 1.1(b)(ii).
"Target" has the meaning ascribed to its in Section 6.1(i).
"Taxes" means taxes, levies, imposts, deductions, Charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on or measured
by the net income of Agent or a Lender by the jurisdictions under the laws of
which Agent and Lenders are organized or conduct business or any political
subdivision thereof.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents (other than unasserted contingent indemnification
obligations) have been completely discharged (c) all Letter of Credit
Obligations have been cash collateralized, canceled or backed by standby letters
of credit in accordance with Annex B, and (d) Borrower shall have no further
right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan),
that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Total Leverage Ratio" means, with respect to Borrower, on a consolidated
basis, the ratio of (a) Funded Debt as of any date of determination, to (b)
EBITDA for the twelve months ending on that date of determination.
"Trademark License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Trademark.
"Trademark Security Agreements" means the Trademark Security Agreements
made in favor of Agent, on behalf of Lenders, by each applicable Credit Party.
"Trademarks" means all of the following now owned or hereafter existing or
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
A-28
"Unbilled Account" means any Account with respect to which an invoice has
not been sent to the applicable Account Debtor.
"Unfunded Pension Liability" means, at any time, the aggregate amount, if
any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of five years following a transaction
which might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(i) of ERISA.
"Wholesale Disposables" means Inventory purchased by Borrower or any of its
Subsidiaries for sale to customers of Borrower or any of its Subsidiaries.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
A-29
ANNEX B (Section 1.2)
to
AMENDED AND RESTATED CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement, Agent
and Lenders agree to incur, from time to time prior to the Commitment
Termination Date, upon the request of Borrower and for Borrower's account,
Letter of Credit Obligations by causing Letters of Credit to be issued by GE
Capital or a Subsidiary thereof or a bank or other legally authorized Person
selected by or acceptable to Agent in its sole discretion (each, an "L/C
Issuer") for Borrower's account and guaranteed by Agent; provided, that if the
L/C Issuer is a Lender, then such Letters of Credit shall not be guaranteed by
Agent but rather each Lender shall, subject to the terms and conditions
hereinafter set forth, purchase (or be deemed to have purchased) risk
participations in all such Letters of Credit issued with the written consent of
Agent, as more fully described in paragraph (b)(ii) below. The aggregate amount
of all such Letter of Credit Obligations shall not at any time exceed the least
of (i) $5,000,000 (the "L/C Sublimit") and (ii) the Maximum Amount less the
aggregate outstanding principal balance of the Revolving Credit Advances and the
Swing Line Loan, and (iii) the Borrowing Base less the aggregate outstanding
principal balance of the Revolving Credit Advances and the Swing Line Loan. No
such Letter of Credit shall have an expiry date that is less than 5 Business
Days prior to the Commitment Termination Date or more than one year following
the date of issuance thereof, unless otherwise determined by the Agent, in its
sole discretion, and neither Agent nor Lenders shall be under any obligation to
incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than
the Commitment Termination Date; provided, however, that subject to the
remaining terms of this Agreement, a Letter of Credit may have an expiry date
that is later than 5 Business Days prior to the Commitment Termination Date
(and, subject to the terms hereof, Agent and Lenders shall be obligated to incur
Letter of Credit Obligations in respect thereof, or purchase risk participations
therein, as applicable) so long as Borrower shall have deposited with Agent Cash
Equivalents (as defined below) in an amount equal to one hundred five percent
(105%) of the maximum amount then available to be drawn thereunder and in
accordance with the provisions of paragraph (c) below.
(b) Advances Automatic; Participations.
(i) In the event that Agent or any Lender shall make any payment on or
pursuant to any Letter of Credit Obligation, such payment shall then be deemed
automatically to constitute a Revolving Credit Advance to Borrower under Section
1.1(a) of the Agreement regardless of whether a Default or Event of Default has
occurred and is continuing and notwithstanding Borrower's failure to satisfy the
conditions precedent set forth in Section 2, and each Lender shall be obligated
to pay its Pro Rata Share thereof in accordance with the Agreement upon Agent's
request.
B-1
The failure of any Lender to make available to Agent for Agent's own account its
Pro Rata Share of any such Revolving Credit Advance or payment by Agent under or
in respect of a Letter of Credit shall not relieve any other Lender of its
obligation hereunder to make available to Agent its Pro Rata Share thereof, but
no Lender shall be responsible for the failure of any other Lender to make
available such other Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for Borrower to incur Revolving
Credit Advances as contemplated by paragraph (b)(i) above because of an Event of
Default described in Sections 8.1(h) or (i) or otherwise or if it shall be
illegal or unlawful for any Lender to be deemed to have assumed a ratable share
of the reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is
a Lender, then (A) immediately and without further action whatsoever, each
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation equal to such Lender's Pro Rata Share (based on the Revolving Loan
Commitments) of the Letter of Credit Obligations in respect of all Letters of
Credit then outstanding and (B) thereafter, immediately upon issuance of any
Letter of Credit, each Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation in such Lender's Pro Rata Share (based on
the Revolving Loan Commitments) of the Letter of Credit Obligations with respect
to such Letter of Credit on the date of such issuance. Each Lender shall fund
its participation in all payments or disbursements made under the Letters of
Credit upon Agent's request in the same manner as provided in the Agreement with
respect to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrower is required to provide cash collateral for any Letter of
Credit Obligations pursuant to the Agreement prior to the Commitment Termination
Date, Borrower will pay to Agent for the ratable benefit of itself and Lenders
cash or cash equivalents acceptable to Agent ("Cash Equivalents") in an amount
equal to one hundred five percent (105%) of the maximum amount then available to
be drawn under each applicable Letter of Credit outstanding for the benefit of
Borrower. Such funds or Cash Equivalents shall be held by Agent in a cash
collateral account (the "Cash Collateral Account") maintained at a bank or
financial institution reasonably acceptable to Agent. The Cash Collateral
Account shall be in the name of Borrower and shall be pledged to, and subject to
the control of, Agent, for the benefit of Agent and Lenders, in a manner
reasonably satisfactory to Agent. Borrower hereby pledges and grants to Agent,
on behalf of itself and Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
B-2
(ii) If any Letter of Credit Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Commitment Termination Date,
Borrower shall either (A) provide cash collateral therefor in the manner
described above, or (B) cause all such Letters of Credit and guaranties thereof,
if any, to be canceled and returned, or (C) deliver a stand-by letter (or
letters) of credit in guaranty of such Letter of Credit Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration (plus
30 additional days) as, and in an amount equal to one hundred five percent
(105%) of the aggregate maximum amount then available to be drawn under, the
Letters of Credit to which such outstanding Letter of Credit Obligations relate
and shall be issued by a Person, and shall be subject to such terms and
conditions, as are be satisfactory to Agent in its sole discretion. So long as
no Event of Default is then in existence, as the aggregate maximum amount
available to be drawn under such Letters of Credit is reduced, Agent shall, upon
request of Borrower, deliver to Borrower or permit Borrower to withdraw from the
Cash Collateral Account such amount as shall cause the cash collateral not to
exceed 105% of the maximum amount then available to be drawn under such Letters
of Credit.
(iii) From time to time after funds are deposited in the Cash Collateral
Account by Borrower, whether before or after the Commitment Termination Date,
Agent may apply such funds or Cash Equivalents then held in the Cash Collateral
Account to the payment of any amounts, and in such order as Agent may elect, as
shall be or shall become due and payable by Borrower to Agent and Lenders with
respect to such Letter of Credit Obligations of Borrower and, upon the
satisfaction in full of all Letter of Credit Obligations of Borrower, to any
other Obligations then due and payable.
(iv) Except as provided in clause (ii) above, neither Borrower nor any
Person claiming on behalf of or through Borrower shall have any right to
withdraw any of the funds or Cash Equivalents held in the Cash Collateral
Account, except that upon the termination of all Letter of Credit Obligations
and the payment of all amounts payable by Borrower to Agent and Lenders in
respect thereof, any funds remaining in the Cash Collateral Account shall be
applied to other Obligations then due and owing and upon payment in full of such
Obligations, any remaining amount shall be paid to Borrower or as otherwise
required by law. Interest earned on deposits in the Cash Collateral Account
shall be for the account of Agent.
(d) Fees and Expenses. Borrower agrees to pay to Agent for the benefit of
Lenders, as compensation to such Lenders for Letter of Credit Obligations
incurred hereunder, (i) all costs and expenses incurred by Agent or any Lender
on account of such Letter of Credit Obligations, and (ii) for each month during
which any Letter of Credit Obligation shall remain outstanding, a fee (the
"Letter of Credit Fee") in an amount equal to the Applicable L/C Margin from
time to time in effect multiplied by the maximum amount available from time to
time to be drawn under the applicable Letter of Credit. Such fee shall be paid
to Agent for the benefit of the Lenders in arrears, on the first day of each
month and on the Commitment Termination Date. In addition, Borrower shall pay to
any L/C Issuer, on
B-3
demand, such reasonable fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter of
Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower shall
give Agent at least 2 Business Days' prior written notice requesting the
incurrence of any Letter of Credit Obligation. The notice shall be accompanied
by the form of the Letter of Credit (which shall be acceptable to the L/C
Issuer) and a completed Application for Standby Letter of Credit or Application
and Documentary Letter of Credit or Application for Documentary Letter of Credit
(as applicable). Notwithstanding anything contained herein to the contrary,
Letter of Credit applications by Borrower and approvals by Agent and the L/C
Issuer may be made and transmitted pursuant to electronic codes and security
measures mutually agreed upon and established by and among Borrower, Agent and
the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrower to reimburse Agent and
Lenders for payments made with respect to any Letter of Credit Obligation shall
be absolute, unconditional and irrevocable, without necessity of presentment,
demand, protest or other formalities, and the obligations of each Lender to make
payments to Agent with respect to Letters of Credit shall be unconditional and
irrevocable. Such obligations of Borrower and Lenders shall be paid strictly in
accordance with the terms hereof under all circumstances including the
following:
(i) any lack of validity or enforceability of any Letter of Credit or the
Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, setoff, defense or other right that
Borrower or any of its Affiliates or any Lender may at any time have against a
beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such transferee may be acting), Agent, any Lender, or any
other Person, whether in connection with the Agreement, the Letter of Credit,
the transactions contemplated herein or therein or any unrelated transaction
(including any underlying transaction between Borrower or any of its Affiliates
and the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Agent (except as otherwise expressly provided in paragraph
(g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or guaranty
thereof against presentation of a demand, draft or certificate or other document
that does not comply with the terms of such Letter of Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is similar to any of
the foregoing; or
B-4
(vi) the fact that a Default or an Event of Default has occurred and is
continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the Agreement,
Borrower hereby agrees to pay and to protect, indemnify, and save harmless Agent
and each Lender from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees and allocated costs of internal counsel) that Agent or any Lender may incur
or be subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or guaranty thereof, or (B) the failure of Agent or any
Lender seeking indemnification or of any L/C Issuer to honor a demand for
payment under any Letter of Credit or guaranty thereof as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority, in each case other than to the
extent solely as a result of the gross negligence or willful misconduct of Agent
or such Lender (as finally determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrower, Borrower assumes all
risks of the acts and omissions of, or misuse of any Letter of Credit by
beneficiaries, of any Letter of Credit. In furtherance and not in limitation of
the foregoing, to the fullest extent permitted by law, neither Agent nor any
Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (C) failure of
the beneficiary of any Letter of Credit to comply fully with conditions required
in order to demand payment under such Letter of Credit; provided, that in the
case of any payment by Agent under any Letter of Credit or guaranty thereof,
Agent shall be liable to the extent such payment was made solely as a result of
its gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any applicable
requirements for a demand for payment under such Letter of Credit or guaranty
thereof; (D) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they may be in cipher; (E) errors in interpretation of technical terms;
(F) any loss or delay in the transmission or otherwise of any document required
in order to make a payment under any Letter of Credit or guaranty thereof or of
the proceeds thereof; (G) the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (H) any consequences arising from
causes beyond the control of Agent or any Lender. None of the above shall
affect,
B-5
impair, or prevent the vesting of any of Agent's or any Lender's rights or
powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to expand any
waivers, covenants or indemnities made by Borrower in favor of any L/C Issuer in
any letter of credit application, reimbursement agreement or similar document,
instrument or agreement between Borrower and such L/C Issuer, including an
Application and Agreement For Documentary Letter of Credit, a Master Documentary
Agreement and a Master Standby Agreement entered into with Agent; provided,
that, to the extent of a conflict between the terms of this Annex B and any
Application and Agreement for Documentary Letter of Credit, Master Documentary
Agreement or Master Standby Agreement, the terms of this Annex B shall control.
B-6
ANNEX C (Section 1.8)
to
AMENDED AND RESTATED CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
Borrower shall, and shall cause its Subsidiaries to, establish and maintain
the Cash Management Systems described below:
(a) Borrower may maintain, in its name, one or more accounts (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a bank
reasonably acceptable to Agent into which Agent shall, from time to time,
deposit proceeds of Revolving Credit Advances and Swing Line Advances made to
Borrower pursuant to Section 1.1 for use by Borrower solely in accordance with
the provisions of Section 1.4.
(b) On or before the Restatement Closing Date, each bank where a
Disbursement Account is maintained and all other banks identified in Delivery
Item 3.19 attached to the Delivery Items Certificate (each, a "Relationship
Bank") shall have entered into tri-party deposit account control agreements with
Agent, for the benefit of itself and Lenders, and Borrower and the applicable
Subsidiaries thereof, as applicable, in form and substance reasonably acceptable
to Agent, which shall become operative on or prior to the Restatement Closing
Date. Each such deposit account control agreement shall provide, among other
things, that (i) the bank executing such agreement has no rights of setoff or
recoupment or any other claim against such account, as the case may be, other
than for payment of its service fees and other charges directly related to the
administration of such account and for returned checks or other items of payment
and as may otherwise be agreed to by Agent and (ii) the bank party thereto shall
agree to comply with Agent's instructions directing disposition of funds on
deposit without further consent of Borrower or the applicable Subsidiary (as
applicable). Agent hereby agrees with Borrower that Agent shall not deliver to
any bank described above any notice directing disposition of funds on deposit
(herein an "Activation Notice") unless and until the occurrence and continuance
of an Event of Default. From and after the date Agent has delivered an
Activation Notice to any bank, Borrower shall not, nor shall Borrower cause or
permit any Subsidiary thereof to, accumulate or maintain cash in Disbursement
Accounts or payroll accounts as of any date of determination in excess of checks
outstanding against such accounts as of that date, amounts necessary to meet
minimum balance requirements and additional amounts not to exceed $10,000 in any
such account and $50,000 in all such accounts in the aggregate at any time
outstanding.
(c) So long as no Event of Default has occurred and is continuing, Borrower
may amend Delivery Item 3.19 attached to the Delivery Items Certificate to add
or replace a Relationship Bank or replace any Disbursement Account; provided,
that (i) Agent shall have consented in writing in advance to the opening of such
account with the relevant bank and (ii) prior to the time of the opening of such
account, Borrower or its Subsidiaries, as applicable, and such bank shall have
executed and delivered to Agent a tri-party deposit
C-1
account control agreement, in form and substance described above. Borrower shall
close any of its accounts (and establish replacement accounts in accordance with
the foregoing sentence) promptly and in any event within 30 days following
notice from Agent that the creditworthiness of any bank holding an account is no
longer acceptable in Agent's reasonable judgment, or as promptly as practicable
and in any event within 60 days following notice from Agent that the operating
performance, funds transfer or availability procedures or performance with
respect to accounts of the bank holding such accounts or Agent's liability under
any tri-party deposit account control agreement with such bank is no longer
acceptable in Agent's reasonable judgment.
(d) Following the occurrence of an Event of Default, at the request of
Agent or Requisite Lenders (which request may be made solely during the
continuance of an Event of Default) Borrower shall (i) establish lock boxes
("Lock Boxes") and/or blocked accounts ("Blocked Accounts") at one or more of
the banks set forth in Delivery Item 3.19 attached to the Delivery Items
Certificate, and shall request in writing and otherwise take such reasonable
steps to ensure that all Account Debtors forward payment directly to such Lock
Boxes, (ii) deposit and cause its Subsidiaries to deposit or cause to be
deposited promptly, and in any event no later than the first Business Day after
the date of receipt thereof, all cash, checks, drafts or other similar items of
payment relating to or constituting payments made in respect of any and all
Collateral (whether or not otherwise delivered to a Lock Box) into one or more
Blocked Accounts in Borrower's name or any such Subsidiary's name and at a
Relationship Bank and (iii) deliver to each Relationship Bank instructions,
revocable only upon Agent's express authorization, directing each Relationship
Bank to immediately forward all amounts on deposit to the Collection Account
through daily sweeps from such accounts into the Collection Account.
(e) The Disbursement Accounts, each account maintained with a Relationship
Bank and the Lock Boxes and Blocked Accounts (if any) shall be cash collateral
accounts, with all cash, checks and other similar items of payment in such
accounts securing payment of the Loans and all other Obligations, and in which
Borrower and each Subsidiary thereof shall have granted a Lien to Agent, on
behalf of itself and Lenders, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed
received by Agent in accordance with Section 1.10 and shall be applied (and
allocated) by Agent in accordance with Section 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Borrower shall and shall cause its Affiliates, officers, employees,
agents, directors or other Persons acting for or in concert with Borrower (each
a "Related Person") to (i) hold in trust for Agent, for the benefit of itself
and Lenders, all checks, cash and other items of payment received by Borrower or
any such Related Person, and (ii) within 1 Business Day after receipt by
Borrower or any such Related Person of any checks, cash or other items of
payment, deposit the same into a deposit account subject to a deposit account
C-2
control agreement described herein. Borrower and each Related Person thereof
acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral. All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly
into a deposit account subject to a deposit account control agreement described
herein.
C-3
ANNEX D (Section 2.1(a))
to
AMENDED AND RESTATED CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in
Section 2.1 of the Agreement, pursuant to Section 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Restatement Closing Date (each capitalized term used but not
otherwise defined herein shall have the meaning ascribed thereto in Annex A to
the Agreement):
A. Appendices. All Appendices to the Agreement, in form and substance
satisfactory to Agent.
B. Revolving Notes and Swing Line Notes. Duly executed originals of the
Revolving Note and Swing Line Notes for each applicable Lender, dated the
Closing Date.
C. Reaffirmations. Reaffirmations and amendments to Loan Documents (other
than this Agreement), to the extent requested by Agent.
D. Insurance. Satisfactory evidence that the insurance policies required by
Section 5.4 are in full force and effect, together with appropriate evidence
showing lender loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent (for the benefit of itself
and Lenders) has a valid and perfected first priority security interest in the
Collateral, including (i) such documents duly executed by each Credit Party
(including financing statements under the Code and other applicable documents
under the laws of any jurisdiction with respect to the perfection of Liens) as
Agent may request in order to perfect its security interests in the Collateral
and (ii) copies of Code search reports listing all effective financing
statements that name any Credit Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral, except for
Permitted Encumbrances.
(b) Evidence satisfactory to Agent, including copies, of all UCC-1 and
other financing statements filed in favor of any Credit Party with respect to
each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated securities held
by Borrower, (ii) all securities intermediaries with respect to all securities
accounts and securities entitlements of Borrower, and (iii) all futures
commission agents and
D-1
clearing houses with respect to all commodities contracts and commodities
accounts held by Borrower.
F. Initial Borrowing Base Certificate. Duly executed originals of an
initial Borrowing Base Certificate, dated the Restated Closing Date, reflecting
information concerning Eligible Accounts, Eligible Unbilled Accounts, Eligible
Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment
Disposables as of March 31, 2005.
G. Initial Notice of Revolving Credit Advance. Duly executed originals of a
Notice of Revolving Credit Advance, dated the Restatement Closing Date, with
respect to the initial Revolving Credit Advance to be requested by Borrower on
the Restatement Closing Date.
H. Letter of Direction. Duly executed originals of a letter of direction
from Borrower addressed to Agent, on behalf of itself and Lenders, with respect
to the disbursement on the Restatement Closing Date of the initial Revolving
Credit Advance.
I. Cash Management System; Blocked Account Agreements. Evidence
satisfactory to Agent that, as of the Restatement Closing Date, Cash Management
Systems complying with Annex C to the Agreement have been established and are
currently being maintained in the manner set forth in such Annex C, together
with copies of duly executed deposit account control agreements, reasonably
satisfactory to Agent, with the banks as required by Annex X.
X. Charter and Good Standing. For each Credit Party, such Person's (a)
charter and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where (i) such Credit
Party has its headquarters and (ii) each additional jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification (except, with respect to this clause (ii), for such jurisdictions
where the failure to be in good standing could not reasonably be expected to
have a Material Adverse Effect), each dated a recent date prior to the
Restatement Closing Date and certified by the applicable Secretary of State or
other authorized Governmental Authority.
K. Bylaws and Resolutions. For each Credit Party, (a) such Person's bylaws,
together with all amendments thereto and (b) resolutions of such Person's Board
of Directors, approving and authorizing the execution, delivery and performance
of the Loan Documents to which such Person is a party and the transactions to be
consummated in connection therewith, each certified as of the Restatement
Closing Date by such Person's corporate secretary or an assistant secretary as
being in full force and effect without any modification or amendment.
L. Incumbency Certificates. For each Credit Party, signature and incumbency
certificates of the officers of each such Person executing any of the Loan
Documents,
D-2
certified as of the Restatement Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
M. Opinions of Counsel. Duly executed originals of opinions of Xxxxxx &
Whitney LLP, counsel for the Credit Parties, and Xxx Xxxxxx, General Counsel of
Borrower, together with any local counsel opinions reasonably requested by
Agent, each in form and substance reasonably satisfactory to Agent and its
counsel, dated the Restatement Closing Date, and each accompanied by a letter
addressed to such counsel from the Credit Parties, authorizing and directing
such counsel to address its opinion to Agent, on behalf of Lenders, and to
include in such opinion an express statement to the effect that Agent and
Lenders are authorized to rely on such opinion.
N. Fee Letter. Duly executed originals of the GE Capital Fee Letter.
O. Officer's Certificate. Agent shall have received duly executed originals
of a certificate of the Chief Financial Officer of Borrower, dated the
Restatement Closing Date, stating that, since December 31, 2004 (a) no event or
condition has occurred or is existing which could reasonably be expected to have
a Material Adverse Effect; (b) there has been no material adverse change in the
industry in which Borrower operates; (c) no Litigation has been commenced which,
if successful, could reasonably be expected to have a Material Adverse Effect or
could challenge any of the transactions contemplated by the Agreement and the
other Loan Documents; (d) there have been no Restricted Payments made by any
Credit Party not permitted under the Agreement; and (e) there has been no
material increase in liabilities, liquidated or contingent, and no material
decrease in assets of Borrower or any of its Subsidiaries.
P. Delivery Items Officer's Certificate. Agent shall have received duly
executed originals of a certificate of the Chief Financial Officer of Borrower,
dated the Restatement Closing Date, certifying as to the delivery of information
relating to Projections, bank accounts and material agreements.
Q. Audited Financials; Financial Condition. Agent shall have received the
Financial Statements, Projections and other materials set forth in Section 3.4,
certified by Borrower's Chief Financial Officer, in each case in form and
substance reasonably satisfactory to Agent, and Agent shall be satisfied, in its
sole discretion, with all of the foregoing.
R. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may, in its sole discretion, request.
D-3
ANNEX E (Section 4.1(a))
to
AMENDED AND RESTATED CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS--REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent and
Lenders, as indicated, the following:
(a) Quarterly Financials. To Agent, within 45 days after the end of each
Fiscal Quarter, consolidated and consolidating financial information regarding
Borrower and its Subsidiaries, certified by the Chief Financial Officer of
Borrower, including (i) unaudited balance sheets as of the close of such Fiscal
Quarter and the related statements of income and cash flow for that portion of
the Fiscal Year ending as of the close of such Fiscal Quarter and (ii) unaudited
statements of income and cash flows for such Fiscal Quarter, in each case
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections for such Fiscal
Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments and the absence of footnotes). Such financial information shall be
accompanied by (A) a statement in reasonable detail (each, a "Compliance
Certificate") showing the calculations used in determining compliance with each
of the Financial Covenants that is tested on a quarterly basis, to the extent
then applicable and (B) the certification of the Chief Financial Officer of
Borrower that (i) such financial information presents fairly in accordance with
GAAP (subject to normal year-end adjustments and the absence of footnotes) the
financial position, results of operations and statements of cash flows of
Borrower and its Subsidiaries, on both a consolidated and consolidating basis,
as at the end of such Fiscal Quarter and for that portion of the Fiscal Year
then ended, (ii) any other information presented is true, correct and complete
in all material respects and that there was no Event of Default in existence as
of such time or, if an Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such Event of
Default.
(b) Operating Plan. To Agent, as soon as available, but not later than
March 31 of each year, an annual operating plan for Borrower, on a consolidated
and consolidating basis, approved by the Board of Directors of Borrower, for the
then existing Fiscal Year, which (i) includes a statement of all of the material
assumptions on which such plan is based, (ii) includes monthly balance sheets,
income statements and statements of cash flows for the following year and (iii)
integrates sales, gross profits, operating expenses, operating profit, cash flow
projections and Borrowing Availability projections, all prepared on the same
basis and in similar detail as that on which operating results are reported (and
in the case of cash flow projections, representing management's good faith
estimates of future financial performance based on historical performance), and
including plans for personnel, Capital Expenditures and facilities.
E-1
(c) Annual Audited Financials. To Agent, within 90 days after the end of
each Fiscal Year, audited Financial Statements for Borrower and its Subsidiaries
on a consolidated and (unaudited) consolidating basis, consisting of balance
sheets and statements of income and retained earnings and cash flows, setting
forth in comparative form in each case the figures for the previous Fiscal Year,
which Financial Statements shall be prepared in accordance with GAAP and
certified without qualification, by an independent certified public accounting
firm of national standing or otherwise reasonably acceptable to Agent. Such
Financial Statements shall be accompanied by (i) a statement prepared in
reasonable detail showing the calculations used in determining compliance with
each of the Financial Covenants, to the extent applicable (ii) the annual
letters to such accountants in connection with their audit examination detailing
contingent liabilities and material litigation matters, and (iii) the
certification of the Chief Executive Officer or Chief Financial Officer of
Borrower that all such Financial Statements present fairly in accordance with
GAAP the financial position, results of operations and statements of cash flows
of Borrower and its Subsidiaries on a consolidated and consolidating basis, as
at the end of such Fiscal Year and for the period then ended, and that there was
no Event of Default in existence as of such time or, if an Event of Default has
occurred and is continuing, describing the nature thereof and all efforts
undertaken to cure such Event of Default.
(d) Management Letters. To Agent, within 5 Business Days after receipt
thereof by any Credit Party, copies of all management letters, exception reports
or similar letters or reports received by such Credit Party from its independent
certified public accountants.
(e) Default Notices. To Agent, as soon as practicable, and in any event
within 5 Business Days after an executive officer of Borrower has actual
knowledge of the existence of any Default, Event of Default or other event that
has had a Material Adverse Effect (in each case not previously disclosed to
Agent), telephonic or telecopied notice specifying the nature of such Default or
Event of Default or other event, including the anticipated effect thereof, which
notice, if given telephonically, shall be promptly confirmed in writing on the
next Business Day.
(f) SEC Filings and Press Releases. To Agent, promptly upon their becoming
available, copies of: (i) all Financial Statements, reports, notices and proxy
statements made publicly available by any Credit Party to its security holders;
(ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by any Credit Party with any securities exchange or
with the Securities and Exchange Commission or any governmental or private
regulatory authority; and (iii) all press releases and other statements made
available by any Credit Party to the public concerning material changes or
developments in the business of any such Person.
(g) Subordinated Debt and Equity Notices. To Agent, as soon as practicable,
copies of all material written notices given or received by any Credit Party
with respect to any Subordinated Debt or Stock of such Person, and, within 5
Business Days after
E-2
any Credit Party obtains knowledge of any matured or unmatured event of default
with respect to any Subordinated Debt, notice of such event of default.
(h) Supplemental Schedules. To Agent, supplemental disclosures, if any,
required by Section 5.6.
(i) Litigation. To Agent in writing, promptly upon learning thereof, notice
of any Litigation commenced or threatened against any Credit Party that (i)
seeks damages in excess of $1,000,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any product recall.
(j) Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
(k) Lease Default Notices. To Agent, within 5 Business Days after receipt
thereof, copies of any and all default notices received under or with respect to
any leased location or public warehouse where Collateral is located.
(l) Other Documents. To Agent and Lenders, such other financial and other
information respecting any Credit Party's business or financial condition as
Agent or any Lender shall from time to time reasonably request; provided, that
no Credit Party shall be required to provide Agent or any Lender access to
information, books or records to the extent subject to patient confidentiality
requirements.
E-3
ANNEX F (Section 4.1(b))
to
AMENDED AND RESTATED CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
(a) To Agent, upon its request at any time Borrowing Availability is less
than $3,000,000, and in any event no less frequently than 5 Business Days after
the end of each Fiscal Month (together with a copy of all or any part of the
following reports requested by any Lender in writing after the Restatement
Closing Date), a Borrowing Base Certificate prepared by Borrower as of the last
day of the immediately second preceding Fiscal Month or the date 2 days prior to
the date of any such request, accompanied by such supporting detail and
documentation as shall be reasonably requested by Agent.
(b) To Agent, at the time of delivery of each of the quarterly Financial
Statements delivered pursuant to Annex E, a list of any applications for the
registration of any Patent, Trademark or Copyright filed by any Credit Party
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in the prior Fiscal Quarter;
(c) Borrower, at its own expense, shall deliver to Agent the results of
each physical verification, if any, that Borrower or any of its Subsidiaries may
in their discretion have made, or caused any other Person to have made on their
behalf, of all or any portion of their Inventory (and, if an Event of Default
has occurred and is continuing, Borrower shall, upon the request of Agent,
conduct, and deliver the results of, such physical verifications as Agent may
require);
(d) Borrower, at its own expense, shall deliver to Agent such appraisals of
its assets as Agent may request at any time after the occurrence and during the
continuance of an Event of Default, such appraisals to be conducted by an
appraiser, and in form and substance reasonably satisfactory to Agent; and
(e) Such other reports, statements and reconciliations with respect to the
Borrowing Base, Collateral or Obligations of any or all Credit Parties as Agent
shall from time to time reasonably request, including without limitation a
monthly trial balance with respect to Accounts.
F-1
ANNEX G (Section 6.10)
to
AMENDED AND RESTATED CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) Minimum Interest Coverage Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have at each June 30, September 30, December 31 and
March 31, commencing with June 30, 2005, an Interest Coverage Ratio for the
twelve-month period then ended of not less than 2.0 to 1.0.
(b) Maximum Senior Leverage Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have at each June 30, September 30, December 31 and
March 31, commencing with June 30, 2005, a Senior Leverage Ratio as of such date
and for the twelve-month period then ended of not more than 2.0 to 1.0.
Unless otherwise specifically provided herein, any accounting term used in
the Agreement shall have the meaning customarily given such term in accordance
with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrower, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrower's and its Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Restatement
Closing Date (including capitalization of costs and expenses or payment of
pre-Restatement Closing Date liabilities) shall be treated as expenses in the
period the expenditures are made and deducted as part of
G-1
the calculation of EBITDA in such period. If Agent, Borrower and Requisite
Lenders agree upon the required amendments, then after appropriate amendments
have been executed and the underlying Accounting Change with respect thereto has
been implemented, any reference to GAAP contained in the Agreement or in any
other Loan Document shall, only to the extent of such Accounting Change, refer
to GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrower and Requisite Lenders cannot agree upon
the required amendments within 30 days following the date of implementation of
any Accounting Change, then all Financial Statements delivered and all
calculations of financial covenants and other standards and terms in accordance
with the Agreement and the other Loan Documents shall be prepared, delivered and
made without regard to the underlying Accounting Change. For purposes of Section
8.1, a breach of a Financial Covenant contained in this Annex G shall be deemed
to have occurred as of any date of determination by Agent or as of the last day
of any specified measurement period, regardless of when the Financial Statements
reflecting such breach are delivered to Agent.
G-2
ANNEX H (Section 9.9(a))
to
AMENDED AND RESTATED CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: Bankers Trust Company
New York, New York
ABA #: 021001033
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: CFC Universal Hospital Services
H-1
ANNEX I (Section 11.10)
to
AMENDED AND RESTATED CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx and Xxxx Xxxxx, Account Managers
Telecopier No.: (000) 000-0000 (Shepherd)/(000) 000-0000 (Glaws)
Telephone No.: (000) 000-0000 (Shepherd)/(000) 000-0000 (Glaws)
with copies to:
General Electric Capital Corporation
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel - Commercial Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Borrower, at
Universal Hospital Services, Inc.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-1
with copies to:
Universal Hospital Services, Inc.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxx 00000-0000
Attention: General Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Xxxxxx & Whitney LLP
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-2
ANNEX J (from Annex A - Commitments definition)
to
AMENDED AND RESTATED CREDIT AGREEMENT
Revolving Loan Commitment: Lender(s)
------------------------- ---------
$35,000,000 General Electric Capital Corporation
(plus Swing Line Commitment of $5,000,000)
$22,000,000 Bank of America, N.A.
$15,000,000 CIT Lending Services Corporation
$16,000,000 LaSalle Business Credit, LLC
$20,000,000 PNC Bank, National Association
$17,000,000 Xxxxx Fargo Foothill, Inc.
J-1
ANNEX K (Section 1.18)
to
AMENDED AND RESTATED CREDIT AGREEMENT
Revolving Loan Commitment: Lender(s)
------------------------- ---------
$30,000,000 General Electric Capital Corporation
$15,000,000 Bank of America, N.A.
$22,500,000 PNC Bank, National Association
$17,500,000 LaSalle Business Credit, LLC
$15,000,000 CIT Lending Services Corporation
K-1
