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EXHIBIT 10.37
FIFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this
"Amendment") dated as of April 15, 1998 is made among APRIA HEALTHCARE GROUP
INC., a corporation organized and existing under the laws of the State of
Delaware ("Apria") and the Subsidiaries of Apria identified on the signature
pages of this Amendment and any Subsidiary of Apria that, subject to Section
9.13 of the Credit Agreement, shall have executed a Joinder Agreement (Apria and
such Subsidiaries are referred to individually as a "Borrower" and,
collectively, as the "Borrowers"), each of the financial institutions listed on
Schedule I to the Credit Agreement or that, pursuant to Section 13.4 of the
Credit Agreement, shall become a "Bank" thereunder (individually, a "Bank" and,
collectively, the "Banks"), NATIONSBANK OF TEXAS, N.A., as the Syndication
Agent, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as the
Administrative and Collateral Agent.
RECITALS
I. The Borrowers, the Banks, the Syndication Agent and the
Administrative and Collateral Agent are parties to the Credit Agreement dated as
of August 9, 1996, as amended by the First Amendment to Credit Agreement dated
as of April 22, 1997 (the "First Amendment"), the Second Amendment to Credit
Amendment dated as of August 8, 1997 (the "Second Amendment"), the Third
Amendment to Credit Agreement and Waiver (the "Third Amendment"), dated as of
January 30, 1998, and the Fourth Amendment to Credit Agreement and Waiver (the
"Fourth Amendment"), dated as of March 13, 1998 (as so amended, the "Credit
Agreement"), pursuant to which the Banks extended certain credit to the
Borrowers.
II. The Borrowers previously provided notice to the
Administrative and Collateral Agent and the Banks pursuant to Section 9.1(e) of
the Credit Agreement that (a) a Default has occurred and is continuing under the
Credit Agreement as a result of the termination of the JLL/CIBC Investment and
(b) certain Events of Default have occurred and are continuing under the Credit
Agreement as a result of the Borrowers' breach of the provisions of Sections
10.9, 10.10 and 10.11 of the Credit Agreement due to the 0000 Xxxxxx Xxxxxxx
Charges and Reserves (collectively, the "Existing Defaults").
III. The Borrowers and the Banks, at the Borrower's request,
entered into the Third Amendment pursuant to which the Banks agreed during the
Waiver Period (as defined in Section 6.1 of the Third Amendment) to (a)
temporarily waive, for limited
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purposes, the Events of Default existing as a result of the breach of Sections
10.9 and 10.10 of the Credit Agreement and (b) continue to permit limited
Borrowings under the Credit Agreement and allow the Borrowers to maintain Loans
as Eurodollar Loans during the Waiver Period.
IV. The Borrowers and the Banks, at the Borrower's request,
entered into the Fourth Amendment pursuant to which (a) the Banks agreed to
extend the Waiver Period until June 30, 1998 (and expand it to cover the Default
existing as a result of the breach of Section 10.11) and to continue to permit
limited Borrowings under the Credit Agreement and allow the Borrowers to
maintain Loans as Eurodollar Loans during the Waiver Period and (b) the
Borrowers agreed to grant to the Administrative and Collateral Agent, for the
benefit of the Banks, a security interest in all of their personal property
assets to secure the Obligations.
V. The Borrowers have requested that the Banks agree to
permanently waive the Existing Defaults (the "Permanent Waiver").
VI. The Borrowers have agreed in consideration of the Permanent
Waiver to restructure certain provisions of the Credit Agreement.
VII. The Banks are willing to accommodate the requests of the
Borrowers on the terms and conditions specified in this Amendment.
AGREEMENT
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Amendment agree as follows:
1. Amendment to Recitals. The Recitals to the Credit Agreement
are hereby amended by deleting the amount "$450,000,000" on the third line of
the first Recital and replacing it with the amount "$400,000,000".
2. Amendment to Section 1.1.
(a) The definitions of "Abbey Merger", "CIBC", "JLL", "JLL/CIBC
Investment", "Merger Costs", "Stock Purchase Agreement", "Stockholder
Agreement", "Vitas Merger" and "1996 Charges and Reserves" are hereby deleted in
their entirety from
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Section 1.1 of the Credit Agreement.
(b) The definition of "Applicable Margin" in Section 1.1 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"Applicable Margin" shall mean, 2.25% with respect
to all Eurodollar Loans, .75 % with respect to all Base Rate
Loans and .50% with respect to the Revolving Loan Commitment Fee.
(c) The term "Authorized Company Employees" is hereby amended by
deleting the word "Company" in such term.
(d) The definition of "Calculation Period" is hereby amended in
its entirety to read as follows:
"Calculation Period" shall have the meaning
provided in Section 9.13(a)(iii).
(e) The definition of "Consolidated EBITDA" in Section 1.1 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"Consolidated EBITDA" shall mean, for the
four-quarter period preceding any date of determination, the sum
of Consolidated Net Income (before consolidated interest income,
Consolidated Interest Expense and provisions for taxes, and
extraordinary gains or losses or gains or losses from sales of
assets other than inventory or Rental Equipment sold in the
Ordinary Course of Business) for such period, plus (a) (to the
extent deducted in arriving at Consolidated Net Income for such
period) (i) the amount of amortization of intangibles, (ii)
depreciation, (iii) the 1997 Charges and Reserves and the 0000
Xxxxxx Xxxxxxx Charges and Reserves, plus (b) the EBITDA
allocable to any Permitted Acquired Business acquired in such
period for such period, minus (c) the EBITDA allocable to any
assets, capital stock, division or business group divested by
Apria or any of its Consolidated Subsidiaries in such period;
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provided that with respect to clauses (b) and (c), such EBITDA
shall only be added or subtracted, as applicable, for the period
commencing at the beginning of such four-quarter period through
the date of such acquisition or divestiture.
(f) The definition of "Final Maturity Date" is hereby amended in
its entirety to read as follows:
"Final Maturity Date" shall mean August 9, 2001.
(g) The definition of "Management Agreements" is hereby amended
by replacing the reference to "Section 6.5" contained in such definition with
"Section 6.6".
(h) The definition of "Maximum Swingline Amount" is hereby
amended by replacing the amount "$15,000,000" contained in such section with the
amount "$5,000,000".
(i) The definition of "Permitted Acquisition" in Section 1.1 of
the Credit Agreement is hereby amended by deleting the proviso at the end of
such definition.
(j) The definition of "Total Revolving Loan Commitment" in
Section 1.1 of the Credit Agreement is hereby amended in its entirety to read as
follows:
"Total Revolving Loan Commitment" shall mean, at
any time, the sum of the Revolving Loan Commitments of each of
the Banks. The principal amount of the Total Revolving Loan
Commitment as of April 15, 1998 shall be $400,000,000.
(k) The following new definitions are added to Section 1.1 in
their respective correct alphabetical order:
"Additional Permitted Subordinated Indebtedness"
shall mean up to $150,000,000 of other Indebtedness having a
maturity of not less than five years and no scheduled
amortization and containing other terms, including subordination
provisions, acceptable to the Agents.
"Equity Issuance" shall mean (a) any issuance or
sale by Apria or by any of its Subsidiaries after April 15, 1998
of (i) any capital stock, (ii) any warrants or options
exercisable in respect of capital stock
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(other than any warrants or options issued to directors,
officers, employees of Apria or to consultants and other parties
providing services to Apria or of any of its Subsidiaries and any
capital stock of Apria issued upon the exercise of such warrants)
or (iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the
issuing or selling Person or (b), without duplication of clause
(a) above, the receipt by Apria or by any of its Subsidiaries
after April 15, 1998 of any capital contribution (whether or not
evidenced by any equity security issued by the recipient of such
contribution); provided that the term "Equity Issuance" shall not
include (x) any such issuance or sale of capital stock by any
Subsidiary of Apria to Apria or to any Wholly Owned Subsidiary of
Apria, (y) any capital contribution by Apria or by any Wholly
Owned Subsidiary of Apria to any Wholly Owned Subsidiary of Apria
or (z) an issuance or sale of capital stock which issuance or
sale constitutes the consideration paid by Apria or any of its
Subsidiaries for any entity or assets acquired in a Permitted
Transaction.
"Net Available Proceeds" shall mean (a) Net Sale
Proceeds (exclusive of the sales of assets in the Ordinary Course
of Business or sales of assets, the aggregate fair market value
of which is not in excess of $100,000) and (b) in the case of any
Equity Issuance or issuance of Additional Permitted Subordinated
Indebtedness, the aggregate amount of all cash received by Apria
and its Subsidiaries in respect of such Equity Issuance or
issuance of Additional Permitted Subordinated Indebtedness, as
applicable, net of reasonable expenses incurred by Apria and its
Subsidiaries in connection with such Equity Issuance or issuance
of Additional Permitted Subordinated Indebtedness, as applicable.
"1997 Fourth Quarter Charges and Reserves" shall
mean the reserves, charges and adjustments made or taken by Apria
in the fourth quarter of its 1997 fiscal year in the
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aggregate amount of approximately $216,000,000, of which
approximately $134,000,000 is associated with goodwill.
3. Amendment to Section 2.8(a). Section 2.8(a) of the Credit
Agreement is hereby amended in its entirety to read as follows:
2.8 (a) The Borrowers agree to pay interest in
respect of the unpaid principal amount of each Base Rate Loan
from the date of the Borrowing thereof until the maturity thereof
(whether by acceleration or otherwise) at a rate per annum which
shall at all times be equal to the Base Rate in effect from time
to time plus the Applicable Margin.
4. Amendment to Section 2.12. Section 2.12 of the Credit
Agreement is hereby deleted in its entirety and shall be replaced with the word
"Reserved."
5. Amendment to Section 2.13. Section 2.13 of the Credit
Agreement is hereby amended by deleting the phrase "(i) an extension of the
Final Maturity Date requested in accordance with Section 2.12, but Banks holding
at least 75% of the Total Revolving Loan Commitments having consented to such an
extension or (ii)" set forth on lines eight through eleven of such section.
6. Amendment to Section 3.1(c). Section 3.1(c) of the Credit
Agreement is hereby amended by replacing the amount "$50,000,000" contained in
the sixth line of such section with the amount "$15,000,000".
7. Amendment to Section 4.3. Section 4.3 of the Credit Agreement
is hereby amended by (i) deleting the parenthetical phrase in the third line of
paragraph (b) and (ii) adding the following new paragraphs (c), (d) and (e):
(c) In addition to any other mandatory commitment
reductions pursuant to this Section 4.3, the Total Revolving Loan
Commitment shall be reduced to the following amounts on the
following dates:
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Date Commitment
---- ----------
December 31, 1998 $385,000,000
December 31, 1999 $350,000,000
December 31, 2000 $300,000,000
In the event that the sum of the aggregate outstanding principal
amount of the Revolving Loans, Swingline Loans and Letter of
Credit Outstandings exceeds the reduced Total Revolving Loan
Commitment, the Borrowers shall prepay the principal of the Loans
in accordance with Section 5.2(a)(A) hereof.
(d) In addition to any other mandatory commitment
reductions pursuant to this Section 4.3, the Total Revolving Loan
Commitment shall be reduced by an amount equal to 100% of any Net
Available Proceeds contemporaneously with the required repayment
of the Loans with such Net Available Proceeds in accordance with
Section 5.2(a)(A) hereof.
(e) Upon any reduction in the Total Revolving Loan
Commitment, the Revolving Loan Commitment of each Bank shall be
reduced on a pro rata basis.
8. Amendment to Section 7. Section 7 of the Credit Agreement is
hereby amended by adding the following new section to the end of such section:
7.5 Certificate of Chief Financial Officer;
Opinion of Counsel. Prior to the making of each Loan or the
issuance of any Letter of Credit, the Administrative and
Collateral Agent shall have received either (i) a certificate
from the Chief Financial Officer of Apria that Apria is entitled
under Section 4.12(b) of the Indenture to incur Indebtedness in
the amount to be borrowed or (ii) an opinion of outside counsel
to the Borrower addressed to the Administrative and Collateral
Agent and each of the Banks and acceptable in form and substance
to the Agents, that the incurrence of such additional
Indebtedness is otherwise
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permitted under the Indenture.
9. Amendment to Section 8.10. Section 8.10 of the Credit
Agreement is hereby amended by deleting the phrase "other than, upon the
consummation of the Vitas Merger, the stock ownership plan of Vitas Healthcare
Corporation" beginning on the fifth line of such section and ending on the sixth
line of such section.
10. Amendment to Section 9.1. Section 9.1 of the Credit Agreement
is hereby amended by renumbering the final paragraph of such section (which
paragraph was added pursuant to the Fourth Amendment) as paragraph "(i)", rather
than paragraph "(e)", as referenced in the Fourth Amendment.
11. Amendment to Section 9.4. Section 9.4 of the Credit Agreement
is hereby amended by deleting the proviso at the end of such section.
12. Amendment to Section 9.13(a). Section 9.13(a) of the Credit
Agreement is hereby amended in its entirety to read as follows:
(a) So long as no Default or Event of Default has
occurred and is continuing or would result therefrom and Apria
has given the Agents and the Banks at least ten days' prior
notice thereof, Apria may from time to time after January 1, 1998
(x) effect Subsidiary Reorganizations and (y), subject to the
remaining provisions of this Section 9.13 and the requirements
contained in the definition of Permitted Acquisition or Permitted
Investment, as the case may be, Apria may from time to time after
January 1, 1998, effect Permitted Transactions; provided that:
(i) with respect to all Permitted
Transactions (other than Subsidiary
Reorganizations) in any one fiscal year, the sum
(without duplication) of (I) cash paid by Apria in
connection with such Permitted Transactions, (II)
the Fair Market Value of Apria Common Stock issued
in connection with such Permitted Transactions and
(III) the amount (determined by using the face
amount of the debt or the amount payable at
maturity, whichever is greater) of all
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Permitted Debt incurred, assumed or acquired in
all such Permitted Transactions, shall not exceed
$15,000,000 in such fiscal year;
(ii) with respect to all Permitted
Transactions (other than Subsidiary
Reorganizations), the aggregate amount (determined
by using the face amount of the debt or the amount
payable at maturity, whichever is greater) of
Permitted Debt incurred, assumed or acquired in
connection with all Permitted Transactions shall
not exceed $30,000,000;
(iii) with respect to each
Permitted Acquisition, the EBITDA of the Permitted
Acquired Business for the period of four
consecutive fiscal quarters (taken as one
accounting period) last ended prior to the date of
such Permitted Acquisition (the "Calculation
Period") on a pro forma basis shall be greater
than zero; and
(iv) with respect to each Permitted
Transaction (other than Subsidiary
Reorganizations), (I) no Event of Default is in
existence at the proposed time of the consummation
of such Permitted Transaction or would exist after
giving effect thereto and (II) Apria shall have
given the Administrative and Collateral Agent and
the Banks at least ten days' prior notice of such
Permitted Transaction; provided, however, that in
the event the aggregate consideration of such
Permitted Transaction (calculated pursuant to
Section 9.13(a)(i)) (i) is less than $5,000,000,
Apria shall only be required to provide the notice
referred to above promptly upon completion of such
Permitted Transaction, rather than in advance
thereof, and (ii) is less than $250,000, Apria
shall not be required to provide the notice
referred to above.
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13. Amendment to Section 9.13(c). Section 9.13(c) of the Credit
Agreement is hereby amended in its entirety to read as follows:
(c) Within five (5) Business Days following each
such respective Permitted Acquisition, Apria shall cause each
Material Subsidiary which is formed to effect such Permitted
Acquisition, or is acquired pursuant to a Permitted Acquisition,
to execute and deliver a Joinder Agreement and the Guaranty (by
an amendment thereto pursuant to which it becomes a party
thereto) or a substantially similar guaranty, in either case with
the documentation to be in form and substance satisfactory to,
the Administrative and Collateral Agent; provided that in the
case of foreign Subsidiaries, such joinder shall require the
consent of the Administrative and Collateral Agent.
14. Amendment to Section 9.13(d). Section 9.13(d) of the Credit
Agreement is hereby amended by replacing clauses (w) and (z) of such section
with the following:
(w) recalculations are made by Apria of compliance
with the covenants contained in Sections 10.9 through 10.11,
inclusive, for the period of four consecutive fiscal quarters
most recently ended prior to the date of such Permitted
Transaction, on a pro forma basis as if the respective Permitted
Transaction had occurred on the first day of such period, and
shall show that all such covenants would have been complied with
if the Permitted Transaction had occurred on the first day of
such period and in the case of such Permitted Transaction
(calculated pursuant to Section 9.13(a)(i)) is in excess of
$5,000,000, such recalculations shall be subject to the
reasonable satisfaction of the Administrative and Collateral
Agent prior to the consummation of such Permitted Acquisition;
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(z) prior to the consummation of the respective
Permitted Transaction, Apria shall furnish the Administrative and
Collateral Agent and the Banks with an officer's certificate
executed by the chief financial officer of Apria, certifying to
the best of his or her knowledge as to compliance with the
requirements of preceding clauses (w), (x) and (y) and Section
9.13(a), and containing the pro forma calculations required by
preceding clause (w) in the case of a Permitted Transaction where
the aggregate consideration of such Permitted Transaction
(calculated pursuant to Section 9.13(a)(i) is in excess of
$5,000,000.
15. Amendment to Section 10.3. Section 10.3 of the Credit
Agreement is hereby amended in its entirety to read as follows:
Apria will not, nor permit any of its Subsidiaries to, declare or
pay any Dividends except that any Subsidiary of Apria may pay
Dividends to Apria or any Wholly-Owned Subsidiary of Apria.
16. Amendment to Section 10.5(h). Section 10.5(h) of the Credit
Agreement is hereby amended in its entirety to read as follows:
(h) (i) Indebtedness of Apria in respect of
Additional Permitted Subordinated Indebtedness; provided that
notwithstanding anything to the contrary contained in Section 5.2
of the Credit Agreement, 100% of the Net Available Proceeds from
any incurrence of Additional Permitted Subordinated Indebtedness
shall be applied as a mandatory repayment of principal of the
then outstanding Loans pursuant to Section 5.2(a)(B) and shall
reduce the Total Revolving Loan Commitment in accordance with the
provisions of Section 4.3(d) and (ii) the Senior Subordinated
Notes and any refinancing of the Senior Subordinated Notes having
a maturity of not less than five years and no scheduled
amortization and containing other terms, including subordination
provisions, acceptable to the Agents;
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17. Amendment to Section 10.7. Section 10.7 of the Credit
Agreement is hereby amended by adding the word "and" immediately prior to clause
(ii) of the first sentence of such section and deleting the following clause
three of the first sentence of such section: "and (iii) severance payments
required to be made by Apria in connection with the Abbey Merger or the Vitas
Merger shall be permitted".
18. Amendment to Section 10.9. Section 10.9 of the Credit
Agreement is hereby amended in its entirety to read as follows:
Apria will not permit the Fixed Charge Coverage Ratio as of the
end of any fiscal quarter set forth below to be less than the
corresponding ratio set forth below opposite such date:
Fiscal Quarter End Ratio
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March 31, 1998 2.10 to 1
June 30, 1998 1.75 to 1
September 30, 1998 1.60 to 1
December 31, 1998 1.50 to 1
March 31, 1999 1.50 to 1
Thereafter 1.75 to 1
; provided that, solely for the purpose of determining compliance
with this Section 10.9, the calculation of the Fixed Charge Ratio
shall be made without giving effect to the 1997 Charges and
Reserves and the 0000 Xxxxxx Xxxxxxx Charges and Reserves.
19. Amendment to Section 10.10. Section 10.10 of the Credit
Agreement is hereby amended in its entirety to read as follows:
Apria will not permit its Consolidated Net Worth at the end of
any fiscal quarter (commencing with the fiscal quarter ending on
March 31, 1998) to be less than (a) an amount equal to 60% of its
Consolidated Net Worth as of December 31, 1997, plus (b) an
amount equal to 50% of Consolidated
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Net Income (in excess of zero) for each fiscal quarter commencing
with the fiscal quarter ending March 31, 1998, which amount shall
be added to Consolidated Net Worth as of the last day of each
such fiscal quarter, plus (c) 100% of the Net Available Proceeds
of any Equity Issuances.
20. Amendment to Section 10.11. Section 10.11 of the Credit
Agreement is hereby amended in its entirety to read as follows:
Apria will not permit the Consolidated Funded Indebtedness to
Consolidated EBITDA Ratio at the end of any fiscal quarter set
forth below to be greater than the corresponding ratio set forth
below, opposite such date:
Fiscal Quarter End Ratio
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March 31, 1998 3.00 to 1
June 30, 1998 3.25 to 1
September 30, 1998 3.75 to 1
December 31, 1998 3.75 to 1
March 31, 1999 3.50 to 1
June 30, 1999 3.50 to 1
Thereafter 3.25 to 1
; provided that, solely for the purpose of determining compliance
with this Section 10.11 the calculation of the Consolidated
Funded Indebtedness to Consolidated EBITDA Ratio shall be made
without giving effect to the 1997 Charges and Reserves and the
0000 Xxxxxx Xxxxxxx Charges and Reserves.
21. Amendment to Section 10.12(i). Section 10.12(i) of the Credit
Agreement is hereby amended in its entirety to read as follows:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment of or redemption (including
pursuant to any change of control provision)
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or acquisition for value of (including, without limitation, by
way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due) (i) any
Additional Permitted Subordinated Indebtedness, (ii) any Existing
Indebtedness the aggregate amount outstanding of which exceeded
$100,000 on the Effective Date (including, without limitation,
the Senior Subordinated Notes; provided, however, that so long as
no Default or Event of Default shall have occurred and be
continuing or would result therefrom, Apria may refinance the
Senior Subordinated Notes in their entirety pursuant to Section
10.5(h)) and (iii) any Indebtedness incurred to refinance the
Senior Subordinated Notes;
22. Amendment to Section 11.11. Section 11.11 of the Credit
Agreement is hereby amended by deleting such section in its entirety.
23. Amendment to Section 12.9. Section 12.9 of the Credit
Agreement is hereby amended by deleting the following parenthetical beginning on
the fifth line of such section and ending on the eighth line of such section:
(which successor agent shall be subject to the consent of the
Borrowers, which consent shall not unreasonably be withheld;
provided that during the existence of an Event of Default, such
consent shall not be required)
24. Amendment to Section 13.4(b). Section 13.4(b) of the Credit
Agreement is hereby amended by (a) substituting the amount "$5,000,000" for the
amount "$15,000,000" on the seventh line of such section and (b) replacing
clause (iii) of such section with the following:
(iii) the consent of the Administrative and Collateral Agent and
the Issuing Bank shall be required in connection with any
assignment (such consent not to be unreasonably withheld);
25. Amendment to Schedule I. Schedule I to the Credit Agreement
is hereby deleted in its entirety and replaced with Attachment A to this
Amendment.
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26. Amendment to Schedule XII. Schedule XII to the Credit
Agreement is hereby deleted in its entirety and shall be replaced with the
phrase "Intentionally Left Blank".
27. Amendment to Exhibit G. Exhibit G to the Credit Agreement is
hereby amended by replacing "Attachment No. 1 to Compliance Certificate" with
Attachment B to this Amendment.
28. Permanent Waiver Relating to Existing Defaults. Upon the
satisfaction of the conditions set forth in Section 31 of this Amendment, the
Administrative and Collateral Agent and the Banks agree that they shall have
permanently waived the Existing Defaults, upon which waiver the Existing
Defaults shall not constitute Defaults or Events of Default under the Credit
Agreement. The foregoing waiver shall not limit or otherwise affect any rights
that the Banks may have with respect to any other existing or future Default or
Event of Default by the Borrowers and the Borrowers shall be bound to perform
all their Obligations under the Credit Agreement, as amended by this Amendment.
29. Amendment Fees. If the Required Banks consent to this
Amendment, the Borrowers shall pay to the Administrative and Collateral Agent
for distribution to each Bank that consents to (i) this Amendment on or prior to
5:00 p.m. Pacific time on April 13, 1998 and (ii) the form of documentation of
this Amendment and the First Amendment to the Security Agreement on or prior to
twelve noon Pacific time on April 16, 1998, an amendment fee equal to .10% of
such Bank's Revolving Loan Commitment amount as in effect subsequent to the
reductions set forth in this Amendment. The amendment fee shall be deemed earned
when paid.
30. Representations. Each of the Borrowers represents and
warrants to the Banks that (a) it has the corporate or partnership power to
execute, deliver and perform the terms and provisions of this Amendment and has
taken all necessary corporate or partnership action to authorize the execution,
delivery and performance by it of this Amendment and (b) upon the effectiveness
of this Amendment, no Default or Event of Default shall have occurred and be
continuing under the Credit Agreement. Each of Apria and its Material
Subsidiaries has duly executed and delivered this Amendment and this Amendment
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
31. (a) Conditions Precedent. The effectiveness of
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this Amendment is subject to the following:
(i) the receipt by the Administrative and Collateral Agent of the
consent of the Required Banks;
(ii) the receipt by the Administrative and Collateral Agent of
the duly executed First Amendment to Security Agreement;
(iii) the receipt by the Administrative and Collateral Agent of
an opinion of Borrower's counsel in a form satisfactory to the Agents;
(iv) the receipt by the Administrative and Collateral Agent of
duly executed UCC-1 financing statements and any relevant recording taxes, as
reasonably estimated by Apria, with respect to each jurisdiction in which
Collateral (as defined in the Security Agreement) is located;
(v) the receipt by the Administrative and Collateral Agent of
this Amendment, duly executed and delivered by each of the Borrowers; and
(vi) the payment of the fees set forth in Section 29 of this
Amendment; and
(vii) an officer's certificate of Apria to the effect that except
with respect to the occurrence of the Existing Defaults, no Default or Event of
Default has occurred or is continuing under the Credit Agreement and that each
of the representations and warranties contained in Section 8 of the Credit
Agreement are true and correct in all material respects as of the date of this
Amendment with references to the Agreement being references to the Agreement as
amended by this Amendment.
(b) Conditions Subsequent. As promptly as practicable, but
in no event later than thirty (30) days from the date of this Amendment the
Borrowers shall deliver to the Administrative and Collateral Agent an opinion of
outside counsel with respect to the perfection of the Administrative and
Collateral Agent's security interest (for the benefit of the Banks) in the
Collateral.
32. Reference to and Effect on the Credit Agreement, Notes and
Guaranty.
(a) Except as specifically amended by this Amendment, the
Credit Agreement shall remain in full force and effect and is hereby ratified
and confirmed.
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(b) This Amendment shall be construed as one with the
Credit Agreement and the Credit Agreement shall, where the context requires, be
read and construed throughout so as to incorporate this Amendment.
(c) All documents executed in connection with the Credit
Agreement, including, but not limited to, the Notes and the Guaranty shall
remain in full force and effect and are hereby ratified and confirmed with
respect to the Credit Agreement, as amended hereby.
33. Entire Agreement. This Amendment, together with the Credit
Agreement and the other documents referred to in, or executed in connection
with, the Credit Agreement supersedes all prior agreements and understandings,
written or oral, among the parties with respect to the subject matter of this
Amendment.
34. Expenses. The Borrowers shall reimburse the Agents on demand
for all reasonable costs, expenses and charges (including, without limitation,
reasonable fees and charges of legal counsel and other consultants for the
Agents) incurred by the Agents in connection with the preparation, performance
or enforcement of this Amendment.
35. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of its parties and their respective successors and
permitted assigns.
36. Severability. Any provision of this Amendment that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Amendment and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
37. Captions. The captions and section headings appearing in this
Amendment are included solely for convenience of reference and are not intended
to affect the interpretation of any provision of this Amendment.
38. Counterparts. This Amendment may be executed in any number of
counterparts all of which when taken together shall constitute one and the same
instrument and any of the parties to this Amendment may execute this Amendment
by signing any such counterpart; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all
signatures are physically attached to the same document.
-17-
18
39. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA.
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19
IN WITNESS WHEREOF, the parties to this Amendment have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
APRIA HEALTHCARE GROUP INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIA NUMBER TWO, INC.
APRIA HEALTHCARE OF NEW YORK STATE, INC.
By:
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Administrative and Collateral Agent
By:
-----------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Vice President
20
ATTACHMENT A
COMMITMENTS
Pro Rata
Bank Commitment Share
---- ----------------- ----------
Bank of America
National Trust and
Savings Association $ 45,000,000.00 11.250%
---------------
NationsBank of Texas, N.A. $ 37,500,000.00 9.375%
---------------
ABN AMRO Bank N.V.,
Los Angeles International
Branch $ 12,500,000.00 3.125%
---------------
The Bank of New York $ 17,500,000.00 4.375%
---------------
The Bank of Nova Scotia $ 30,000,000.00 7.500%
---------------
Banque Nationale de Paris $ 25,000,000.00 6.250%
---------------
Banque Paribas $ 22,500,000.00 5.625%
---------------
Credit Lyonnais,
New York Branch $ 17,500,000.00 4.375%
---------------
Deutsche Bank AG,
New York Branch and/or
Cayman Islands Branch $ 10,000,000.00 2.500%
---------------
The First National Bank
of Chicago $ 12,500,000.00 3.125%
---------------
First Union National
Bank $ 12,500,000.00 3.125%
---------------
The Fuji Bank Limited,
Los Angeles Agency $ 7,500,000.00 1.875%
---------------
The Industrial Bank of
Japan, Ltd.,
Los Angeles Agency $ 17,500,000.00 4.375%
---------------
The Long-Term Credit $ 27,500,000.00 6.875%
---------------
Bank of Japan, Ltd.
Mellon Bank, N.A. $ 12,500,000.00 3.125%
---------------
The Mitsubishi Trust $ 7,500,000.00 1.875%
---------------
21
Pro Rata
Bank Commitment Share
---- ----------------- ----------
and Banking Corporation
The Sakura Bank Limited $ 7,500,000.00 1.875%
---------------
The Sanwa Bank Limited $ 7,500,000.00 1.875%
---------------
The Sumitomo Bank Limited $ 7,500,000.00 1.875%
---------------
Xxxxxxx Xxxxxxxx (Xxxxx), $ 22,500,000.00 5.625%
---------------
Inc.
Union Bank of California, $ 22,500,000.00 5.625%
---------------
X.X.
Xxxxx Fargo Bank, N.A. $ 17,500,000.00 4.375%
=============== ========
TOTAL $ 400,000,000.00 100.000%
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22
ATTACHMENT B
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
APRIA HEALTHCARE GROUP INC.
COVENANT COMPUTATIONS
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION REPORTING FORMAT
________ __, 19__
SECTION 10.8 CAPITAL EXPENDITURES
(trailing four quarters calculation)
CAPITAL EXPENDITURES:
Expenditures for Fixed or Capital Assets
and Rental Equipment
----------
PLUS: Capital Lease Obligations
----------
PLUS: Investments permitted pursuant
to Section 10.6(viii)
----------
MINUS: Expenditures made in connection
with Permitted Transactions made
in compliance with Section 9.13
----------
TOTAL CAPITAL EXPENDITURES: (a)
----------
CONSOLIDATED NET REVENUE: (b)
----------
CAPITAL EXPENDITURES AS % REVENUE (a)/(b) %
----------
CAPITAL EXPENDITURES CANNOT EXCEED: %
----------
VARIANCE - Favorable (Unfavorable) %
----------
23
SECTION 10.9 FIXED CHARGE COVERAGE RATIO
(trailing four quarters calculation)
CONSOLIDATED EBITDA:
Consolidated Net Income (before consolidated interest income, Consolidated
Interest Expense, provisions for taxes, and exclusive of extraordinary gains or
losses or gains and losses from sales of assets other than inventory or Rental
Equipment sold in the Ordinary Course of Business)
PLUS: Amortization
----------
PLUS: Depreciation
----------
PLUS: 1997 Charges and Reserves
----------
PLUS: 0000 Xxxxxx Xxxxxxx Charges and Reserves
----------
PLUS: EBITDA allocable to Permitted
Acquired Businesses (added only
for the period commencing at the
beginning of the four-quarter period
through the date of the acquisition)
----------
MINUS: EBITDA allocable to divestitures
(subtracted only for the period
commencing at the beginning of
the four-quarter period through
the date of the divestiture)
----------
TOTAL CONSOLIDATED EBITDA:
----------
PLUS: CONSOLIDATED RENT EXPENSE
----------
MINUS: TAXES PAID IN CASH
----------
TOTAL: Consolidated EBITDA +
Consolidated Rent Expense
- Taxes paid in cash (a)
----------
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24
FIXED CHARGES:
Consolidated Interest Expense and
amortization of debt discounts in
respect of all Indebtedness
----------
PLUS: Aggregate principal amount of all
scheduled payments of Indebtedness
(including principal portion of rentals
under Capitalized Lease Obligations)
----------
PLUS: Consolidated Rent Expense
----------
TOTAL FIXED CHARGES: (b)
----------
FIXED CHARGE COVERAGE RATIO (a)/(b)
----------
FIXED CHARGE COVERAGE RATIO
CANNOT BE LESS THAN:
VARIANCE - Favorable (Unfavorable)
----------
SECTION 10.10 MINIMUM CONSOLIDATED NET WORTH
Consolidated Net Worth as of
December 31, 1997
----------
Aggregate Consolidated Net Income (in excess of zero in each quarter) for all
the quarters since December 31, 1997 to the quarter ended ____ _, 19_
----------
60% of Consolidated Net Worth for
as of December 31, 1997
----------
PLUS: 50% of aggregate Consolidated Net Income (in excess
of zero) for all quarters since December 31, 1997 to the
quarter ended ________ __, 19__
----------
PLUS: 100% of aggregate Net Available Proceeds
received during all quarters since
December 31, 1997 to the quarter
ended ________ __, 19__
----------
MINIMUM CONSOLIDATED NET WORTH
----------
CONSOLIDATED NET WORTH
----------
VARIANCE - Favorable (Unfavorable)
----------
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25
SECTION 10.11 CONSOLIDATED FUNDED INDEBTEDNESS TO CONSOLIDATED EBITDA
(trailing four quarters calculation)
Consolidated Funded Indebtedness (a)
----------
Consolidated EBITDA (b)
----------
CONSOLIDATED FUNDED INDEBTEDNESS
TO CONSOLIDATED EBITDA (a)/(b)
----------
RATIO CANNOT EXCEED:
----------
VARIANCE - Favorable (Unfavorable)
----------
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