AMENDMENT NO. 1 TO THE
CREDIT AGREEMENT
Dated as of January 24, 1997
AMENDMENT NO. 1 TO THE CREDIT AGREEMENT, among MEDIQ/PRN LIFE
SUPPORT SERVICES, INC., a Delaware corporation (the "Borrower"), MEDIQ
INCORPORATED, a Delaware corporation ("MEDIQ"), PRN HOLDINGS, INC., a Delaware
corporation (together with MEDIQ, the "Parent Guarantors"), the banks, financial
institutions and other institutional lenders parties to the Credit Agreement
referred to below (collectively, the "Lenders") and Banque Nationale de Paris as
administrative agent (the "Administrative Agent") for the Lenders and
NationsBank N.A., as documentation agent (the "Documentation Agent").
PRELIMINARY STATEMENTS:
(1) The Borrower, the Parent Guarantors, the Lenders, the
Administrative Agent and the Documentation Agent have entered into a Credit
Agreement dated as of October 1, 1996 (the "Credit Agreement"). Capitalized
terms not otherwise defined in this Amendment have the same meanings as
specified in the Credit Agreement.
(2) The Borrower seeks to acquire Universal Hospital Services,
Inc., a Minnesota corporation ("UHS"), (the "UHS Acquisition") and, in order to
finance, together with advances under the existing Facilities, such acquisition,
has requested that certain Lenders (the "Affected Lenders" or the "Incremental
Term B Lenders") increase their Commitments under the Term B Facility (the
"Incremental Term B Commitments") and the Working Capital Facility, and amend
certain provisions of the Credit Agreement in order to provide such financing
and for certain other purposes.
(3) The Required Lenders and the Affected Lenders are, on the
terms and conditions stated below, willing to grant the request of the Borrower
and the Borrower and such Lenders have agreed to amend the Credit Agreement as
hereinafter set forth.
SECTION 1. Amendments to the Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 2(a) hereof, hereby amended as
follows:
(a) Section 1.01 is amended by inserting therein the
following definitions in appropriate alphabetical order:
"'BERS' means Biomedical Equipment Rental and Sales,
Inc., a Subsidiary of UHS.
"'UHS' means Universal Hospital Services, Inc., a
Minnesota corporation.
"'UHS Acquisition' means the acquisition of the common
stock of UHS by the Borrower or any of the Borrower's
Ongoing Subsidiaries, as permitted under this Agreement."
"'UHS Acquisition Closing Date' means any Business Day
on which the UHS Acquisition occurs."
(b) The definition of "Acquisition Facility Sublimit" in
Section 1.01 is amended by deleting clause (iii) thereof and
substituting therefor the following:
"(iii) the excess of the aggregate amount of Subordinated
Notes outstanding at such time over the principal amount of
the NutraMax Note to the extent secured by the NutraMax Letter
of Credit multiplied by 66%."
(c) The definition of "Borrower's Account" is amended by
deleting therefrom the account number "200877-001-91" and
substituting therefor the account number "202330-001-77".
(d) The definition of "EBITDA" is amended by inserting
immediately before the proviso thereto the following:
"and (g) all one-time expenses of the Borrower and its
Affiliates incurred in connection with the UHS Acquisition for
severance expenses, lease related expenses and facility
closure expenses".
(e) The definition of "Leverage Ratio" is amended (i) by
inserting in the seventh line thereof, immediately preceding the
words ", so long as", the phrase "multiplied by 66%", and (ii) by
adding at the end thereof the following: ",except with respect to
the UHS Acquisition, in which case the 12-month trailing EBITDA of
UHS shall be adjusted for the EBITDA of BERS included in such
calculation for the period of time that said EBITDA of BERS is not
actually reflected in the aforesaid EBITDA of UHS, in which case
such EBITDA of UHS shall be the pro forma EBITDA of UHS and BERS
for such period."
(f) The definition of "Senior Leverage Ratio" is amended by
adding at the end thereof the following: ",except with respect to
the UHS Acquisition, in which case the 12-month trailing EBITDA of
UHS shall be adjusted for the EBITDA of BERS included in such
calculation for the period of time that said EBITDA of BERS is not
actually reflected in the aforesaid EBITDA of UHS, in which case
such EBITDA of UHS shall be the pro forma EBITDA of UHS and BERS
for such period."
(g) The definition of "Term B Borrowing" is amended by adding
at the end thereof the following:
"and Incremental Term B Advances made on the UHS Acquisition
Closing Date."
(h) Section 2.01(b) is amended by (i) inserting "(i)"
immediately after the heading "The Term B Advances" and (ii)
adding a new clause (ii) at the end thereof to read as follows:
"(ii) Each Incremental Term B Lender severally
agrees, on the terms and conditions hereinafter set forth, to
make a single advance to the Borrower on the UHS Acquisition
Closing Date in an amount not to exceed such Incremental Term
B Lender's Incremental Term B Commitment as set forth in
Schedule I hereto (each such advance being an "Incremental
Term B Advance"). Such Term B Borrowing shall consist of
Incremental Term B Advances made simultaneously by the
Incremental Term B Lenders ratably according to their
Incremental Term B Commitments. Amounts borrowed under this
Section 2.01(b)(ii) and repaid or prepaid may not be
reborrowed."
(i) The table contained in Section 2.04(a) is amended by (i)
deleting each figure "8,500,000" therein and substituting for each
such figure the figure "13,000,000" and (ii) deleting each figure
"15,000,000" therein and substituting for each such figure the
figure "21,750,000".
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(j) Section 2.14(a) is amended by adding at the end thereof
the following:
"and, on the UHS Acquisition Closing Date, an aggregate amount
of up to $45,000,000 of Incremental Term B Advances to finance
a portion of the UHS Acquisition".
(k) Section 2.14(c) is amended by inserting therein,
immediately after "Section 5.01(p)", the following:
", to provide up to $5,000,000 of the financing for the UHS
Acquisition".
(l) Section 4.01(i) is amended by inserting therein,
immediately after "provided that", the following:
", other than with respect to the UHS Acquisition as permitted
under Section 5.02(f)(i),".
(m) Section 5.01(n) is amended by substituting for the date
"November 15, 1996" the phrase "the date that is 45 days following
the UHS Acquisition Closing Date" and by adding after the phrase
"the Term B Facilities " the parenthetical "(including the
Incremental Term B Advances)".
(n) Section 5.02(b)(ii)(B) is amended by deleting therein the
figure "$100,000,000" and substituting therefor the figure
"$140,000,000".
(o) Section 5.02(b)(ii) is amended by adding at the end
thereof a new subsection (H) to read as follows:
"intercompany Debt owed to the Borrower in connection with the
UHS Acquisition, so long as such Debt is evidenced by an
intercompany note in form and substance satisfactory to the
Administrative Agent, and".
(p) Section 5.02(f)(i) is amended (i) by inserting in the
second line thereof, immediately following "Acquisition Advances",
the following ", Working Capital Advances, Incremental Term B
Advances" and (ii) by inserting therein, immediately before
"provided that", the following:
"or constituting the purchase of at least 90% of the common
stock of UHS in a transaction approved by the Board of
Directors of UHS so long as UHS becomes a wholly owned
Subsidiary of the Borrower on the UHS Acquisition Closing Date
in a transaction approved by the Board of Directors of UHS or
constituting the payment of consideration for the merger of
UHS and the Borrower or a wholly owned Subsidiary of the
Borrower,"
(q) Section 5.02(f)(i)(2) is amended by adding at the end
thereof the following:
"except with respect to the UHS Acquisition, in which case
such Leverage Ratio shall not be more than 3.75 to 1.0".
(r) Section 5.02(f)(i)(3) is amended by adding at the end
thereof the following:
"except with respect to the UHS Acquisition, in which case
such amount shall not exceed 6.5 multiplied by the 12-month
trailing EBITDA of UHS (adjusted for the EBITDA of BERS
included in such calculation for the period of time
that said EBITDA of BERS is not actually reflected in the
aforesaid EBITDA of UHS, in which case such EBITDA of UHS
shall be the pro forma EBITDA of UHS and BERS for such
period)".
(s) Section 5.02(f)(i)(4) is amended by (i) deleting therefrom
the following:
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"shall not exceed $100,000,000"
and (ii) adding at the end thereof the following:
"plus the aggregate amount of Advances made by the Lenders and
used for all such Investments outstanding at any time on and
after the UHS Acquisition Closing Date shall not exceed
$140,000,000."
(t) Section 5.04(f) is amended by inserting in the eighth line
thereof immediately after the word "Investments" the following: ",
except with respect to the UHS Acquisition, in which case the
12-month trailing EBITDA of UHS shall be adjusted for the EBITDA
of BERS included in such calculation for the period of time that
said EBITDA of BERS is not actually reflected in the aforesaid
EBITDA of UHS, in which case such EBITDA of UHS shall be the pro
forma EBITDA of UHS and BERS for such period."
(u) Schedule 1 is supplemented by adding with respect to the
Working Capital Commitment of each of BNP and NationsBank,
$2,500,000, and adding Incremental Term B Commitments for each of
BNP and NationsBank, in the amount of $22,500,000.
SECTION 2. Conditions of Effectiveness. (a) This Amendment
shall become effective as of the date first above written when, and only when,
the Administrative Agent shall have received (x) counterparts of this Amendment
executed by the Borrower, the Required Lenders and each Affected Lender, or, as
to any of the Lenders, advice satisfactory to the Administrative Agent that such
Lender has executed this Amendment and (y) for the ratable account of the
Lenders, 1/10% of the sum of the Term A Advances, the Term B Advances, the
Acquisition Commitments and the Working Capital Commitments as such Advances and
Commitments shall be outstanding immediately prior to the effectiveness of this
Amendment (i.e. $260,000). The effectiveness of this Amendment is conditioned
upon the accuracy of the factual matters described herein. This Amendment is
subject to the provisions of Section 9.01 of the Credit Agreement.
(b) This Amendment shall be null and void and of no effect if,
on or before April 23, 1997 (or such later date before July 15, 1997 as the
Affected Lenders may consent to in writing), the following conditions shall not
have been satisfied:
(1) The Administrative Agent shall not have additionally
received all of the following documents, each such document
(unless otherwise specified) dated the date of receipt thereof by
the Administrative Agent (unless otherwise specified) and in
sufficient copies for each Lender, in form and substance
satisfactory to the Administrative Agent (unless otherwise
specified):
(i) Certified copies of (x) the resolutions of the
Board of Directors of (A) the Borrower approving this
Amendment, the Collateral Documents, amendments or
supplements thereto contemplated hereby and the matters
contemplated hereby and thereby and (B) each other Loan
Party evidencing approval of the Consent, the Collateral
Documents, amendments or supplements thereto contemplated
hereby and the matters contemplated hereby and thereby and
(y) all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to
this Amendment, the Consent, the Collateral Documents,
amendments or supplements thereto contemplated hereby and
the matters contemplated hereby and thereby;
(ii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party
certifying the names and true signatures of the officers of
the Borrower and such other Loan Party authorized to sign
this Amendment, the Consent, the Collateral Documents,
amendments or supplements thereto contemplated hereby to any
of which they are or are to be a party and the other
documents to be delivered hereunder and thereunder;
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(iii) Counterparts of a consent with respect to this
Amendment No. 1, in form satisfactory to the Administrative
Agent, executed by each of the Loan Parties (other than the
Borrower);
(iv) A favorable opinion of Drinker, Xxxxxx & Xxxxx,
counsel for the Loan Parties, as to such matters as the
Administrative Agent may reasonably request;
(v) A certificate signed by a duly authorized officer
of the Borrower stating that:
(x) The representations and warranties contained in
the Loan Documents as amended hereby, Section 3 hereof,
and in each of the Collateral Documents and amendments
and supplements thereto delivered pursuant to this
Section 2 are correct on and as of the date of such
certificate as though made on and as of such date other
than any such representations or warranties that, by
their terms, refer to a date other than the date of such
certificate; and
(y) No event has occurred and is continuing that
constitutes a Default; and
(vi) Notes payable to the order of the Affected
Lenders; and
(2) Each of the following conditions shall have
been satisfied:
(i) The Borrower and any additional Loan
Party, as appropriate, shall have delivered all such
documents, agreements, certificates or instruments as
shall be required or as the Administrative Agent
shall have requested pursuant to Section 5.01(o);
(ii) All governmental and third party
consents and approvals necessary in connection with
the UHS Acquisition shall have been obtained and
remain in effect, and all applicable waiting periods
shall have expired without any action being taken by
any competent authority, and no law or regulation
shall be applicable which, in the case of any of the
foregoing, restrains, prevents or imposes materially
adverse conditions upon the rights of any Loan Party
to transfer or otherwise dispose of shares of UHS
acquired in the tender offer, if applicable, the
exercise by any transferee of any Loan Party of all
ownership rights with respect to the shares of UHS
stock acquired in connection with any such tender
offer or otherwise owned by any Loan Party, or the
consummation of a merger if not completed prior to
the UHS Acquisition Closing Date;
(iii) All Advances made by the Lender
Parties shall be in compliance with Regulations G, T,
U and X of the Board of Governors of the Federal
Reserve System; and
(iv) The Borrower shall have retained
Xxxxxx, Xxxxxx & Co. to prepare and deliver a letter
attesting to the Solvency of the Borrower after
giving effect to the acquisition of UHS.
SECTION 3. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
indicated in the recital of the parties to this Amendment.
(b) The execution, delivery and performance by each Loan Party
of this Amendment and the Loan Documents, as amended hereby, to which
it is or is to be a party, and the consummation of the transactions
contemplated hereby, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate
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action and do not (i) contravene each such Loan Party's charter or
by-laws, (ii) violate any law (including, without limitation, the
Securities Exchange Act of 1934, as amended, and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule or regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal
Reserve System), or any order, writ, judgment, injunction, decree,
determination or award, binding on or affecting any Loan Party or any
of its Subsidiaries or any of their properties, (iii) conflict with or
result in the breach of, or constitute a default under, any contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of their
Subsidiaries or any of their properties or (iv) except for the Liens
created under the Collateral Documents, as amended hereby, or any
amendments or supplements thereto contemplated hereby, result in or
require the creation or imposition of any Lien upon or with respect to
any of the properties of any Loan Party or any of its Subsidiaries.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery,
recordation, filing or performance by any Loan Party of this Amendment,
any of the Collateral Documents or any amendments or supplements
thereto contemplated hereby to which each such Loan Party is or is to
be a party, or any of the Loan Documents, as amended hereby, to which
it is or is to be a party except for such approvals as shall have been
obtained by the UHS Acquisition Closing Date.
(d) This Amendment and each of the Collateral Documents and
amendments and supplements thereto contemplated hereby to which each
Loan Party is a party have been duly executed and delivered by each
such Loan Party. This Amendment and each of the other Loan Documents,
as amended hereby, to which each Loan Party is a party are, and each of
the other Collateral Documents and amendments and supplements thereto
contemplated hereby to which each such Loan Party is or is to be a
party, when delivered hereunder, will be, legal, valid and binding
obligations of each such Loan Party, enforceable against each such Loan
Party in accordance with their respective terms, including as to each
entity that shall become a Loan Party on the UHS Acquisition Closing
Date, as to each such Loan Party on the UHS Acquisition Closing Date.
(e) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their Subsidiaries
(including, without limitation, any Environmental Action) pending or
threatened before any court, governmental agency or arbitrator that (i)
would be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of this
Amendment, the Collateral Documents, any amendments or supplements
thereto contemplated hereby or any of the other Loan Documents, as
amended hereby, or the consummation of any of the transactions
contemplated hereby.
6
(f) As of the UHS Acquisition Closing Date, the Collateral
Documents and amendments or supplements thereto consisting of security
agreements or mortgages to which any Loan Party is or is to be a party,
when delivered hereunder, will create valid and perfected first
priority liens and security interests in and to the Collateral covered
thereby, securing the payment of the Secured Obligations (in each case,
as defined in such Collateral Documents or amendment or supplement
thereto); and the execution, delivery and performance of this
Amendment, each of the Collateral Documents and any amendments or
supplements thereto contemplated hereby do not adversely affect the
Liens created under any of the Collateral Documents.
SECTION 4. Reference to and Effect on the Loan Documents. (a)
On and after the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the Notes and each of
the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement, as amended by this Amendment.
(b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall
continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described
therein do and shall continue to secure the payment of all Obligations
of the Loan Parties under the Loan Documents, in each case as amended
by this Amendment.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender or the Agent under
any of the Loan Documents, nor constitute a waiver of any provision of
any of the Loan Documents.
(d) Except as otherwise provided in this Amendment, from and
after the UHS Acquisition Closing Date, all references to (i) Term B
Lenders shall include the Incremental Term B Lenders, (ii) Term B
Advances shall include all Term B Advances made by the Incremental Term
B Lenders and (iii) Term B Commitments shall mean the Incremental Term
B Commitments of the Incremental Term B Lenders hereunder.
SECTION 5. Costs, Expenses. The Borrower agrees to pay on demand all
costs and expenses of the Agent in connection with the preparation, execution,
delivery and administration, modification and amendment of this Amendment, and
the other instruments and documents to be delivered hereunder (including,
without limitation, the reasonable fees and expenses of counsel for the Agent)
in accordance with the terms of Section 9.04 of the Credit Agreement.
SECTION 6. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
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SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
By /s/
----------------------------------
Title:
BANQUE NATIONALE DE PARIS, as
Administrative Agent and as Lender
By /s/
-----------------------------------
Title:
By /s/
-----------------------------------
Title:
NATIONSBANK, N.A., as
Documentation Agent and as Lender
By /s/
----------------------------------=
Title:
8
THE FIRST NATIONAL BANK OF BOSTON
By /s/
------------------------------------
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/
-----------------------------------
Title:
CREDITANSTALT CORPORATE FINANCE, INC.
By /s/
-----------------------------------
Title:
By /s/
-----------------------------------
Title:
FIRST SOURCE FINANCIAL, LLP
By: First Source Financial, Inc.
as Agent/Manager
By /s/
-----------------------------------
Title:
METROPOLITAN LIFE INSURANCE COMPANY
By /s/
------------------------------------
Title:
9
LASALLE NATIONAL BANK
By /s/
-----------------------------------
Title:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By /s/
-----------------------------------
Title:
MELLON BANK, N.A.
By /s/
-----------------------------------
Title:
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By /s/
-----------------------------------
Title:
PILGRIM AMERICA PRIME RATE TRUST
By /s/
-----------------------------------
Title:
SUMMIT BANK
By /s/
-----------------------------------
Title:
10
USTRUST
By /s/
-----------------------------------
Title:
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/
-----------------------------------
Title:
RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS B.V.
By its Managing Director, ABN
TRUSTCOMPANY (NEDERLAND) B.V.
By /s/
-----------------------------------
Title:
By /s/
-----------------------------------
Title:
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By /s/
-----------------------------------
Title:
SENIOR DEBT PORTFOLIO
By Boston Management and Research, as
Investment Advisor
By /s/
-----------------------------------
Title:
11
CERES FINANCE LTD.
By /s/
-----------------------------------
Title:
CAPTIVA FINANCE LTD.
By /s/
-----------------------------------
Title:
AMARA-1 FINANCE LTD.
By /s/
-----------------------------------
Title:
AMARA-2 FINANCE LTD.
By /s/
-----------------------------------
Title:
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By /s/
-----------------------------------
Title:
12
