EXECUTION COPY
$260,000,000
CREDIT AGREEMENT
Dated as of October 1, 1996
Among
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.,
as Borrower,
MEDIQ INCORPORATED
and PRN HOLDINGS, INC.,
as Parent Guarantors,
and
THE INITIAL LENDERS NAMED HEREIN,
and
BANQUE NATIONALE DE PARIS,
as Administrative Agent and Initial Issuing Bank,
and
NATIONSBANK, N.A.,
as Documentation Agent
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms........................................ 2
1.02. Computation of Time Periods.................................. 37
1.03. Accounting Terms............................................. 37
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances................................................. 37
2.02. Making the Advances.......................................... 39
2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit..................................................... 40
2.04. Repayment of Advances........................................ 42
2.05. Termination or Reduction of the Commitments.................. 46
2.06. Prepayments.................................................. 47
2.07. Interest..................................................... 51
2.08. Fees......................................................... 52
2.09. Conversion of Advances....................................... 53
2.10. Increased Costs, Etc......................................... 54
2.11. Payments and Computations.................................... 55
2.12. Taxes........................................................ 57
2.13. Sharing of Payments, Etc..................................... 59
2.14. Use of Proceeds.............................................. 60
2.15. Defaulting Lenders........................................... 61
2.16. Release of Funds from the Asset Sale Blocked Account......... 63
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Extension of Credit.......... 64
3.02. Conditions Precedent to Each Borrowing and Issuance.......... 70
3.03. Determinations Under Section 3.01............................ 72
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Section Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower............... 72
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants........................................ 79
5.02. Negative Covenants........................................... 83
5.03. Reporting Requirements....................................... 92
5.04. Financial Covenants.......................................... 97
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default............................................ 101
6.02. Actions in Respect of the Letters of Credit upon Default..... 105
ARTICLE VII
PARENT GUARANTIES
7.01. Guaranty..................................................... 105
7.02. Guaranty Absolute............................................ 106
7.03. Waiver....................................................... 107
7.04. Payments Free and Clear of Taxes, Etc........................ 107
7.05. Continuing Guaranty; Assignments............................. 108
7.06. Subrogation.................................................. 108
ARTICLE VIII
THE AGENTS
8.01. Authorization and Action..................................... 109
8.02. Agents' Reliance, Etc........................................ 110
iii
8.03. BNP, NationsBank and Affiliates.............................. 110
8.04. Lender Party Credit Decision................................. 110
8.05. Indemnification.............................................. 111
8.06. Successor Agents............................................. 112
ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc.............................................. 113
9.02. Notices, Etc................................................. 114
9.03. No Waiver; Remedies.......................................... 114
9.04. Costs and Expenses........................................... 115
9.05. Right of Set-off............................................. 116
9.06. Binding Effect............................................... 117
9.07. Assignments and Participations............................... 117
9.08. Execution in Counterparts.................................... 120
9.09. No Liability of the Issuing Bank............................. 120
9.10. Jurisdiction, Etc............................................ 121
9.11. Governing Law................................................ 122
9.12. Waiver of Jury Trial......................................... 122
Schedule I - Commitments and Applicable Lending Offices
Schedule II - EBITDA Schedule
Schedule III - Discontinued Operations, Joint Ventures, Equity Investments
Schedule IV - Discontinued Subsidiaries
Schedule 2.14(a) - Refinancing Debt
Schedule 3.01(e) - Surviving Debt
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Schedule 3.01(g)(iii) - Subsidiary Guarantors
Schedule 3.01(g)(iv) - Good Standing Certificates
Schedule 3.01(g)(vii)(B) - UCC Filing Jurisdictions
Schedule 3.01(g)(xviii) - Landlord Consents
Schedule 3.01(g)(xix)(1) - Termination Letters
Schedule 3.01(g)(xix)(2) - Existing Debt
Schedule 3.01(g)(xxi) - Local Counsel
Schedule 4.01(a) - Parent Guarantors
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and
Filings
Schedule 4.01(k) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(t) - Environmental Investigations
Schedule 4.01(y) - Open Years
Schedule 4.01(aa) - Tax Disputes
Schedule 4.01(ff) - Owned Real Property
Schedule 4.01(gg) - Investments
Schedule 4.01(hh) - Intellectual Property
Schedule 5.02(a)(iii) - Existing Liens
Schedule 5.02(b)(i)(A) - Parent Guarantor Debt-A
Schedule 5.02(b)(i)(B) - Parent Guarantor Debt-B
Schedule 5.02(b)(ii)(F) - Existing Borrower Debt
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Schedule 6.01(k) - Investor Group
Exhibit A-1 - Form of Term A Note
Exhibit A-2 - Form of Term B Note
Exhibit A-3 - Form of Working Capital Note
Exhibit A-4 - Form of Acquisition Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Mortgage
Exhibit F - Form of Notice of Drawing
Exhibit G - Form of Subsidiary Guaranty
Exhibit H - Form of Borrowing Base Certificate
Exhibit I - Form of Opinion of Counsel to the Loan Parties
Exhibit J - Form of Solvency Opinion
Exhibit K-1 - Form of Borrower Solvency Certificate
Exhibit K-2 - Form of MEDIQ Solvency Certificate
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of October 1, 1996 among MEDIQ/PRN LIFE
SUPPORT SERVICES, INC., a Delaware corporation (the "Borrower"), MEDIQ
INCORPORATED, a Delaware corporation ("MEDIQ"), PRN Holdings, Inc., a Delaware
corporation ("Holdings", and together with MEDIQ, the "Parent Guarantors"), the
banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Lenders (the "Initial Lenders"), Banque
Nationale de Paris ("BNP"), as administrative agent (the "Administrative Agent")
for the Lender Parties (as hereinafter defined), BNP as the initial issuing bank
(the "Initial Issuing Bank"), and NationsBank, N.A. ("NationsBank"), as
documentation agent for the Lender Parties (the "Documentation Agent", and
together with the Administrative Agent and any successors appointed pursuant to
Article VIII hereof, the "Agents").
PRELIMINARY STATEMENTS:
(1) The Borrower and MEDIQ/PRN Life Support Services - I, Inc.,
direct, wholly owned Subsidiaries (as hereinafter defined) of Holdings,
Holdings, a direct, wholly owned Subsidiary of MEDIQ, and MEDIQ have incurred
Debt (as hereinafter defined) pursuant to various indentures and other
agreements, and the Borrower and MEDIQ intend to refinance part of such Debt
(the "Refinancing").
(2) The Borrower has requested that the Lender Parties lend to the
Borrower up to $260,000,000 in order to effect the Refinancing, to pay
transaction fees and expenses in connection with the Refinancing and the other
transactions contemplated hereby, to finance certain permitted acquisitions and
to provide working capital for the Borrower and for other general corporate
purposes permitted by this Agreement.
(3) The Lender Parties have indicated their willingness to agree to
lend such amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition Advance" has the meaning specified in Section 2.01(f).
"Acquisition Borrowing" means a borrowing consisting of simultaneous
Acquisition Advances of the same Type made by the Acquisition Lenders.
"Acquisition Commitment" means, with respect to any Acquisition
Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Acquisition Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set forth
for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 9.07(d) as such Lender's "Acquisition Commitment", as
such amount may be reduced at or prior to such time pursuant to Section
2.05.
"Acquisition Facility" means, at any time, the aggregate amount of
the Acquisition Lenders' Acquisition Commitments at such time.
"Acquisition Facility Sublimit" means, at any time, an amount equal
to $100,000,000 minus the sum of (i) the Acquisition Advances outstanding
at such time, (ii) the value of MEDIQ's common stock used in any
Investment pursuant to Section 5.02(f)(i) at the time of such Investment
and (iii) the amount of Subordinated Notes outstanding at such time.
"Acquisition Lender" means any Lender that has an Acquisition
Commitment.
"Acquisition Note" means a promissory note of the Borrower payable
to the order of any Acquisition Lender, in substantially the form of
Exhibit A-4 hereto, evidencing the indebtedness of the Borrower to such
Lender resulting from the Acquisition Advances made by such Lender.
"Acquisition Reduction Amount" has the meaning specified in Section
2.06(b)(viii).
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
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"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at the Federal
Reserve Bank of New York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA
No. 000000000, for further credit to Account No. 750420-701-03 or such
other account maintained by the Administrative Agent and designated by the
Administrative Agent in a written notice to the Lender Parties and the
Borrower.
"Advance" means a Term A Advance, a Term B Advance, an Acquisition
Advance, a Working Capital Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agents" has the meaning specified in the recital of the parties to
this Agreement.
"Alternative Lender" means any Lender that elects not to be secured
directly or indirectly by any Margin Stock Collateral by notice to the
Administrative Agent to such effect, but shall be in all other respects
and for all other purposes, except where specifically provided otherwise,
a Lender.
"Applicable Lending Office" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a Base
Rate Advance and such Lender Party's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance.
"Applicable Margin" means (a) with respect to Advances outstanding
under the Term A Facility, the Acquisition Facility or the Working Capital
Facility, a
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percentage per annum determined by reference to the Leverage Ratio as set
forth below:
-------------------------------------------------------------------------------
Leverage Ratio Base Rate Advances Eurodollar Rate Advances
-------------------------------------------------------------------------------
Level I
less than or equal to 2.0:1.0 0.25% 1.75%
Level II
greater than 2.0:1.0, but less
than or equal to 2.5:1.0 0.50% 2.00%
Level III
greater than 2.5:1.0, but less
than or equal to 3.0:1.0 0.75% 2.25%
Level IV
greater than 3.0:1.0, but less
than or equal to 3.5:1.0 1.00% 2.50%
Level V
greater than 3.5:1.0 1.25% 2.75%
-------------------------------------------------------------------------------
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and (b) with respect to Advances outstanding under the Term B Facility, a
percentage per annum determined by reference to the Leverage Ratio as set
forth below:
--------------------------------------------------------------------------------
Leverage Ratio Base Rate Advances Eurodollar Rate Advances
--------------------------------------------------------------------------------
Level I
less than or equal to 2.5:1.0 1.25% 2.75%
Level II
greater than 2.5:1.0, but less
than or equal to 3.0:1.0 1.50% 3.00%
Level III
greater than 3.0:1.0 1.75% 3.25%
--------------------------------------------------------------------------------
The Applicable Margin for each Advance shall be determined by reference to
the Leverage Ratio in effect from time to time; provided, however, that
(A) no change in the Applicable Margin shall be effective until three
Business Days after the date on which the Administrative Agent receives
financial statements pursuant to Section 5.03(c) or (d) and a certificate
of the chief financial officer of the Borrower demonstrating such ratio
and (B) if the Borrower has not submitted to the Administrative Agent the
information described in clause (A) of this proviso as and when required
under Section 5.03(c) or (d), as the case may be, the Applicable Margin
shall be at Level V for the Term A Advances, Acquisition Advances and
Working Capital Advances, and at Level III for the Term B Advances, for so
long as such information has not been received by the Administrative
Agent. Until the delivery of financial statements for the year ended
September 30, 1996, the Applicable Margin shall be at Level V for the Term
A Advances, Acquisition Advances and Working Capital Advances, and at
Level III for the Term B Advances. In the event that at least $60,000,000
in aggregate Net Cash Proceeds from Permitted Asset Sales shall not have
been received by the Borrower prior to the Conversion Date, the Applicable
Margin for all Advances shall immediately be increased by 0.50% per annum
until such time as the Borrower receives such amount.
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"Appropriate Lender" means, at any time, with respect to (a) any of
the Term A, Term B, Acquisition or Working Capital Facilities, a Lender
that has a Commitment with respect to such Facility at such time and (b)
the Letter of Credit Facility, (i) the Issuing Bank and (ii) if the other
Working Capital Lenders have made Letter of Credit Advances pursuant to
Section 2.03(c) that are outstanding at such time, each such other Working
Capital Lender.
"Asset Sale Blocked Account" shall have the meaning specified in the
Security Agreement.
"Asset Sale Release Amount" means the aggregate amount of the
Working Capital Advances repaid with funds released from the Asset Sale
Blocked Account pursuant to Section 2.16(B) less the aggregate amount of
any proceeds from Working Capital Advances deposited in the Asset Sale
Blocked Account.
"Asset Sale Threshold Date" means the date on which MEDIQ or its
Subsidiaries shall have completed all Permitted Asset Sales (whether or
not the sale of Health Examinetics is completed) such that the Borrower
shall have received an aggregate of at least $60,000,000 of Net Cash
Proceeds from Permitted Asset Sales.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee and accepted by
the Administrative Agent, in accordance with Section 9.07 and in
substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement
required or permitted under Article V that is entered into by and between
the Borrower and any Lender Party or any Affiliate of any Lender Party.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by BNP in New
York, New York, from time to time, as its prime rate (and such term
shall not be construed to be its best or most favorable rate); and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
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"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Beneficial Ownership" or "Beneficially Own" have the meanings
specified in the Securities Exchange Act of 1934 and Rules 13d-3 and 13d-5
thereunder.
"BNP" has the meaning specified in the recital of parties to this
Agreement.
"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with BNP at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 200877-001-91, or such other account as the Borrower
and the Administrative Agent may from time to time designate as the
"Borrower's Account".
"Borrowing" means a Term A Borrowing, a Term B Borrowing, an
Acquisition Borrowing or a Working Capital Borrowing.
"Borrowing Base Certificate" means a certificate in substantially
the form of Exhibit H hereto, duly certified by the chief financial
officer of the Borrower.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the sum
of, without duplication, (a) all cash expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such period
for equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that have
been or should be, in accordance with GAAP, reflected as additions to
property, plant or equipment on a Consolidated balance sheet of such
Person (other than the use of insurance proceeds for any such expenditure
for the replacement of any item listed in this clause (a)) plus (b) the
aggregate principal amount of all Debt (including Obligations under
Capitalized Leases and Obligations secured by purchase money Liens
permitted under Section 5.02(a)(v)) assumed or incurred in connection with
any such expenditures less (c) the aggregate principal amount of any
Investments permitted under Section 5.02(f)(i) made after the date hereof
that would otherwise qualify as Capital Expenditures.
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"Capitalized Leases" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned
by the Borrower, MEDIQ or any of their Subsidiaries free and clear of all
Liens other than Liens created under the Collateral Documents and having a
maturity of not greater than 180 days from the date of acquisition
thereof: (a) readily marketable direct obligations of the Government of
the United States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government
of the United States, (b) insured certificates of deposit of or time
deposits with any commercial bank that is a Lender Party or a member of
the Federal Reserve System, issues (or the parent of which issues)
commercial paper rated as described in clause (c), is organized under the
laws of the United States or any State thereof and has combined capital
and surplus of at least $1 billion, (c) commercial paper in an aggregate
amount of no more than $5,000,000 per issuer outstanding at any time,
issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade)
by Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade)
by Standard & Poor's Ratings Group or (d) money market or mutual funds
that invest only in Cash Equivalents of the types described in clauses
(a), (b) and (c) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Citibank Account" means the account in the name of the Borrower
maintained with Citibank, N.A. for purposes of funding certain obligations
under the Borrower's health plan.
"Clean-Down Period" means, commencing June 1, 1997, with respect to
any Fiscal Year of the Borrower, any period of 30 consecutive days
selected by the Borrower commencing on any day during the period from the
first day of June of such Fiscal Year to the first day of September of
such Fiscal Year.
"Collateral" means all "Collateral" and "Intellectual Property
Collateral" referred to in the Collateral Documents and all other property
that is or is intended to be subject to any Lien in favor of the
Administrative Agent for the benefit of the Secured Parties.
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"Collateral Documents" means the Security Agreement, the Mortgage,
the landlord consents from the Persons listed on Schedule 3.01(g)(xviii)
and any other document or agreement that creates or purports to create a
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Commitment" means a Term A Commitment, a Term B Commitment, an
Acquisition Commitment, a Working Capital Commitment or a Letter of Credit
Commitment.
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender Party on a
confidential basis, but does not include any such information that is or
becomes generally available to the public or that is or becomes available
to the Administrative Agent or such Lender Party from a source other than
the Borrower, which source to the knowledge of the Administrative Agent or
such Lender Party is not under a duty of confidentiality.
"Congress Account" means the account in the name of the Borrower
maintained with Congress Financial Corporation, in an amount not to exceed
$100,000, maintained for purposes of collateralizing certain indemnity
obligations of Borrower to Congress Financial Corporation pursuant to the
Congress Agreement.
"Congress Agreement" means collectively the Release Agreements and
Cash Collateral Agreement, each dated as of September 30, 1996, between
Borrower, MEDIQ/PRN Life Support Services-I, Inc. and Congress Financial
Corporation.
"Consolidated" refers, with respect to any Person, to the
consolidation of accounts of such Person and its Subsidiaries in
accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion
of Advances of one Type into Advances of the other Type pursuant to
Section 2.09 or 2.10.
"Conversion Date" means the last day of the calendar month in the
month that is 18 months following the date of the Initial Extension of
Credit.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of such
Person.
"Current Liabilities" of any Person means (a) all Debt of such
Person that by its terms is payable on demand or matures within one year
after the date of determination other than Funded Debt and (b) all other
items that in accordance with
10
GAAP would be classified as current liabilities of a company conducting a
business the same as or similar to that of such Person.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of
such Person for the deferred purchase price of property or services (other
than trade payables not overdue by more than 60 days incurred in the
ordinary course of such Person's business), (c) all Obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all Obligations of such Person 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), (e) all Obligations of
such Person as lessee under Capitalized Leases, (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of credit
or similar facilities, (g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any
capital stock of or other ownership or profit interest in such Person or
any other Person or any warrants, rights or options to acquire such
capital stock other than Obligations of such Person in respect of
management profit sharing plans, valued, in the case of Redeemable
Preferred Stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (h) all
Obligations of such Person in respect of Hedge Agreements (other than for
purposes of calculating the financial covenants in Section 5.04), (i) all
Debt of others referred to in clauses (a) through (h) above or clause (j)
below guaranteed directly or indirectly in any manner by such Person, or
in effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to supply funds to or
in any other manner invest in the debtor (including any agreement to pay
for property or services irrespective of whether such property is received
or such services are rendered) or (iv) otherwise to assure a creditor
against loss, and (j) all Debt referred to in clauses (a) through (i)
above of another Person secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by) any Lien
on property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
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"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party
to the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time
which has not been made by such Lender Party or by the Administrative
Agent for the account of such Lender Party pursuant to Section 2.02(d) as
of such time. In the event that a portion of a Defaulted Advance shall be
deemed made pursuant to Section 2.15(a), the remaining portion of such
Defaulted Advance shall be considered a Defaulted Advance originally
required to be made pursuant to Section 2.01 on the same date as the
Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to the Agents or
any other Lender Party hereunder or under any other Loan Document at or
prior to such time which has not been so paid as of such time, including,
without limitation, any amount required to be paid by such Lender Party to
(a) Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a
Letter of Credit Advance made by the Issuing Bank, (b) the Administrative
Agent pursuant to Section 2.02(d) to reimburse the Administrative Agent
for the amount of any Advance made by the Administrative Agent for the
account of such Lender Party, (c) any other Lender Party pursuant to
Section 2.13 to purchase any participation in Advances owing to such other
Lender Party and (d) the Administrative Agent or the Issuing Bank pursuant
to Section 8.05 to reimburse the Administrative Agent or the Issuing Bank
for such Lender Party's ratable share of any amount required to be paid by
the Lender Parties to the Administrative Agent or the Issuing Bank as
provided therein. In the event that a portion of a Defaulted Amount shall
be deemed paid pursuant to Section 2.15(b), the remaining portion of such
Defaulted Amount shall be considered a Defaulted Amount originally
required to be paid hereunder or under any other Loan Document on the same
date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at
such time (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 6.01(f).
"Discontinued Subsidiary" means any of the Subsidiaries listed on
Schedule IV hereto.
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it
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became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the
Borrower and the Administrative Agent.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss) excluding net income
(or net loss) from or arising from any Persons listed on Schedule III, (b)
Interest Expense, (c) income tax expense, (d) depreciation expense, (e)
amortization expense and (f) extraordinary or unusual losses deducted in
calculating net income less extraordinary or unusual gains added in
calculating net income in each case of MEDIQ and its Subsidiaries,
determined in accordance with GAAP for such period; provided, however,
that for MEDIQ and its Subsidiaries, for any Monthly Rolling Period or
Quarterly Rolling Period, as the case may be, ending on or before May 31,
1997, EBITDA, for each month or quarter, as the case may be, ending on or
before June 30, 1996, shall be deemed to be the amount set forth for such
month or quarter on Schedule II.
"Eligible Assignee" means with respect to any Facility: (i) a
Lender; (ii) an Affiliate of a Lender; (iii) a commercial bank organized
under the laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $1,000,000,000; (iv) a savings
and loan association or savings bank organized under the laws of the
United States, or any State thereof, and having a combined capital and
surplus of at least $1,000,000,000; (v) a commercial bank organized under
the laws of any other country that is a member of the OECD or has
concluded special lending arrangements with the International Monetary
Fund associated with its General Arrangements to Borrow or a political
subdivision of any such country, and having a combined capital and surplus
of at least $1,000,000,000, so long as such bank is acting through a
branch or agency located in the United States; (vi) a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having a combined capital and surplus
of at least $500,000,000; and (vii) any other Person approved by the
Administrative Agent and the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that neither any Loan
Party nor any Affiliate of a Loan Party shall qualify as an Eligible
Assignee under this definition.
"Eligible Collateral" means, collectively, Eligible Inventory and
Eligible Receivables.
"Eligible Inventory" means any Inventory owned by the Borrower and
its Ongoing Subsidiaries free and clear of all Liens (other than Permitted
Liens and Liens
13
in favor of the Secured Parties securing the Secured Obligations) other
than the following:
(a) Inventory consisting of "perishable agricultural
commodities" within the meaning of the Perishable Agricultural
Commodities Act of 1930, as amended, and the regulations thereunder,
or on which a Lien has arisen or may arise in favor of agricultural
producers under comparable state or local laws;
(b) Inventory located on leaseholds as to which the lessor has
not entered into a consent and agreement providing the
Administrative Agent with the right to receive notice of default,
the right to repossess such Inventory at any reasonable time
pursuant to such consent and agreement and such other rights as may
be reasonably acceptable to the Administrative Agent;
(c) Inventory that is obsolete, unusable or otherwise
unavailable for sale;
(d) Inventory with respect to which the representations and
warranties set forth in Section 9 of the Security Agreement
applicable to Inventory are not true and correct;
(e) Inventory consisting of promotional, marketing, packaging
or shipping materials and supplies;
(f) Inventory that fails to meet all standards imposed by any
governmental agency, or department or division thereof, having
regulatory authority over such Inventory or its use or sale;
(g) Inventory that is subject to any licensing, patent,
royalty, trademark, trade name or copyright agreement with any third
party from whom the Borrower has received written notice of a
dispute in respect of any such agreement;
(h) Inventory located outside the United States;
(i) Inventory that is not in the possession of or under the
sole control of the Borrower or not in a leased facility in respect
of which the owner has entered into a consent and agreement
providing the Administrative Agent with the right to receive notice
of default, the right to repossess such Inventory at any reasonable
time pursuant to such consent and agreement and such other rights as
may be reasonably acceptable to the Administrative Agent;
14
(j) Inventory consisting of work in progress;
(k) Inventory in respect of which the Security Agreement,
after giving effect to the related filings of financing statements
that have then been made, if any, does not or has ceased to create a
valid and perfected first priority lien or security interest in
favor of the Secured Parties securing the Secured Obligations and as
to which no other Liens exist, other than Permitted Liens; and
(l) Inventory not recorded under a perpetual inventory system
reasonably acceptable to the Administrative Agent.
The value of such Eligible Inventory shall be its book value
determined in accordance with GAAP on a basis consistent with current
practice of the Borrower or in accordance with the "average cost" method
of accounting in accordance with GAAP unless the Administrative Agent
determines, in its reasonable discretion that such Eligible Inventory
shall be valued at a lower value.
"Eligible Receivables" means any Receivables owned by the Borrower
and its Ongoing Subsidiaries free and clear of all Liens (other than
Permitted Liens and Liens in favor of the Secured Parties securing the
Secured Obligations) other than the following:
(a) Receivables that do not arise out of sales of goods or
rendering of services in the ordinary course of the Borrower's
business;
(b) Receivables on terms other than those normal or customary
in the Borrower's business;
(c) Receivables owing from any Person that is an Affiliate of
the Borrower;
(d) Receivables more than 120 days past original invoice date;
(e) Receivables owing from any Person from which an aggregate
amount of more than 50% of the Receivables owing are more than 120
days past original invoice date;
(f) Receivables owing from any Person that has asserted any
claim, demand or liability, by action, suit, counterclaim or other
judicial or arbitral proceeding;
15
(g) Receivables owing from any Person that shall take or be
the subject of any action or proceeding of a type described in
Section 6.01(f);
(h) Receivables (i) owing from any Person that is also a
supplier to or creditor of the Borrower (to the extent such Person
has any right of setoff but only to the extent of such setoff)
unless such Person has waived any right of set-off in a manner
acceptable to the Administrative Agent or (ii) representing any
manufacturer's or supplier's credits, discounts, incentive plans or
similar arrangements entitling the Borrower to discounts on future
purchase therefrom;
(i) Receivables arising out of sales to account debtors
outside the United States;
(j) Receivables arising out of sales on a xxxx-and-hold,
guaranteed sale, sale-or-return, sale on approval or consignment
basis or subject to any right of return, set-off or charge-back;
(k) Receivables owing from an account debtor that is an
agency, department or instrumentality of the United States or any
State thereof; and
(l) Receivables in respect of which the Security Agreement,
after giving effect to the related filings of financing statements
that have then been made, if any, does not or has ceased to create a
valid and perfected first priority lien or security interest in
favor of the Secured Parties securing the Secured Obligations or as
to which any other Lien exists, other than Permitted Liens.
The value of such Eligible Receivables shall be their book value
determined in accordance with GAAP unless the Administrative Agent
determines, in its reasonable discretion, that such Eligible Receivables
shall be valued at a lower value.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from alleged injury
or threat to health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or third party
for damages, contribution, indemnification, cost recovery, compensation or
injunctive relief.
16
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment, health,
safety or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC; or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (without regard to subsection (2) of such Section) are
met with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days;
(b) the application for a minimum funding waiver with respect to a Plan;
(c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of any
Loan Party or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any
ERISA Affiliate from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the conditions for imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
17
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender Party (or, if no such
office is specified, its Domestic Lending Office), or such other office of
such Lender Party as such Lender Party may from time to time specify to
the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the average of
the respective rates per annum posted by each of the principal London
offices of banks posting rates as displayed on the Telerate screen, page
3750 or such other page as may replace such page on such service for the
purpose of displaying the London interbank offered rate of major banks for
deposits in U.S. dollars at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period for deposits in
amounts and durations comparable to such Borrowing and such Interest
Period (and rounded upward to the next whole multiple of 1/16 of 1%) by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means, for any period, the sum of (a)
Consolidated pretax income (or pretax loss) of MEDIQ and its Subsidiaries
for such period less (b) Consolidated income tax expense of MEDIQ and its
Subsidiaries for such period
18
paid in cash plus (c) an amount equal to the aggregate amount of all
noncash charges deducted in arriving at Consolidated pretax income (or
pretax loss) for each such period plus (d) an amount (whether positive or
negative) equal to the change in Consolidated Current Liabilities (only to
the extent not duplicated herein) of MEDIQ and its Ongoing Subsidiaries
during such period less (e) an amount equal to the aggregate amount of all
noncash credits included in arriving at such Consolidated pretax income
(or pretax loss) less (f) an amount (whether positive or negative) equal
to the change in Consolidated Current Assets (excluding cash and Cash
Equivalents, and to the extent not duplicated herein) of MEDIQ and its
Ongoing Subsidiaries during such period less (g) an amount equal to the
amount of all Capital Expenditures of MEDIQ and its Ongoing Subsidiaries
paid in cash during such period to the extent permitted by this Agreement
less (h) an amount equal to the aggregate amount of all regularly
scheduled principal payments of Funded Debt made during such period,
together with any optional prepayments of Term Advances, and, from and
after the Conversion Date, the Acquisition Advances, made during such
period in accordance with Section 2.06(a) less (i) an amount equal to the
aggregate amount of Consolidated pretax income of MEDIQ and its
Subsidiaries resulting from any transaction (other than asset sales in the
ordinary course of business) creating Net Cash Proceeds or Extraordinary
Receipts for such period to the extent included in pretax income of MEDIQ
and its Subsidiaries for such period plus (j) any cash received in respect
of any Obligations secured by purchase money Liens or Obligations under
Capitalized Leases. Notwithstanding anything to the contrary contained
herein, (i) gains or losses from Permitted Asset Sales and (ii) any items
in respect of Discontinued Subsidiaries otherwise included in any clause
of the foregoing sentence of this definition shall not be included in
"Excess Cash Flow".
"Excess Cash Flow Basket" means, at any time, the aggregate amount
of Excess Cash Flow for each prior Fiscal Year not used to make any
mandatory prepayment pursuant to Section 2.06(b)(i) minus (x) the
aggregate amount of any payment or prepayment made from the Excess Cash
Flow Basket pursuant to Sections 5.02(f), 5.02(g) and 5.02(k), and (y) any
payment for Capital Expenditures made pursuant to the third proviso in
5.04(f).
"Excess Cash from Permitted Asset Sales" means, at any time, an
amount equal to the aggregate amount of Net Cash Proceeds from Permitted
Asset Sales not previously applied to prepay Acquisition Advances or
Working Capital Advances pursuant to Section 2.06 prior to such time.
"Existing Debt" means Debt of the Loan Parties (excluding any
Discontinued Subsidiary) and their respective Subsidiaries outstanding
immediately before this Agreement becomes effective.
19
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (excluding proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof) and
indemnity payments less the amount of taxes payable in connection with or
as a result of the receipt of such funds; provided, however, that if the
amount of taxes deducted is greater than the amount actually so paid for
taxes, the amount of such excess shall constitute an Extraordinary
Receipt, provided, further, that an Extraordinary Receipt shall not
include cash receipts received from proceeds of insurance to the extent
that such proceeds in respect of loss or damage to equipment, fixed assets
or real property are applied (or in respect of which expenditures were
previously incurred) to replace or repair the equipment, fixed assets or
real property in respect of which such proceeds were received in
accordance with the terms of the Loan Documents, so long as such
application is made in the ordinary course of business.
"Facility" means the Term A Facility, the Term B Facility, the
Acquisition Facility, the Working Capital Facility or the Letter of Credit
Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period (i) to the rate
published by the Telerate service on page five of its daily report as the
"ASK" rate as of 10:00 A.M. (New York City time) for such day (or, if such
day is not a Business Day, for the immediately preceding Business Day) or
(ii) if the Telerate service shall cease to publish or otherwise shall not
publish such rates for any day that is a Business Day, to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Final Maturity Date" means the earlier of September 30, 2004 and
the date of repayment in full or termination in whole of all of the
Facilities pursuant to Section 2.05 or 6.01.
"Fiscal Year" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on September 30 in any calendar year.
20
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any Rolling Period, the ratio of (a) Consolidated EBITDA for such Person
and its Subsidiaries for such Rolling Period less the sum of (i) Capital
Expenditures (net of sales of rental equipment in the ordinary course of
business) of such Person and its Subsidiaries during such Rolling Period
less any Capital Expenditures made pursuant to the second proviso of
Section 5.04(f) during such Rolling Period and (ii) income taxes of such
Person and its Subsidiaries that have been paid in cash during such
Rolling Period, other than taxes paid with respect to the Permitted Asset
Sales to (b) the sum of (i) Interest Expense of such Person and its
Subsidiaries for such Rolling Period and (ii) regularly scheduled
principal payments of Funded Debt (other than the Subordinated Notes) of
such Person and its Subsidiaries for such Rolling Period; provided,
however, that for any such Rolling Period ending on or before August 31,
1997, the amounts determined in accordance with clauses (b)(i) and (ii) of
this definition included in the calculation of the "Fixed Charge Coverage
Ratio" shall be the actual amounts for the period from and after October
1, 1996 to and including the last date of such Rolling Period which
amounts shall from and after October 1, 1996 each be multiplied by a
fraction (x) the numerator of which is equal to 12 and (y) the denominator
of which is the actual number of calendar months from October 1, 1996 to
and including the last date of such Rolling Period.
"Funded Debt" of any Person means Debt of such Person that by its
terms matures more than one year after the date of creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year after such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
after such date, including, without limitation, all amounts of Funded Debt
of such Person required to be paid or prepaid within one year after the
date of determination; provided, however, that, with respect to the
Borrower, Funded Debt shall not include Debt permitted pursuant to Section
5.02(b)(ii)(G).
"Guaranteed Obligations" has the meaning specified in Section 7.01.
"GAAP" has the meaning specified in Section 1.03.
"Guarantors" means the Parent Guarantors and the Subsidiary
Guarantors.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
21
"Health Examinetics" means Health Examinetics, Inc., a Delaware
corporation, a wholly owned Subsidiary of MEDIQ.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Hedge Bank" means any Lender Party in its capacity as a party to a
Bank Hedge Agreement.
"Holdings Notes" means the promissory notes issued by Holdings to
the order of KCI Therapeutic Services, Inc. dated September 30, 1994.
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Initial Extension of Credit" means the earlier to occur of the
initial Borrowing hereunder and the initial issuance of a Letter of Credit
hereunder.
"Initial Issuing Bank" has the meaning specified in the recital of
parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"InnoServ" means InnoServ Technologies, Inc., a California
corporation.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Interest Coverage Ratio" means, with respect to any Person for any
Rolling Period, the ratio of (a) Consolidated EBITDA of such Person and
its Subsidiaries for such Rolling Period to (b) Interest Expense of such
Person and its Subsidiaries for such Rolling Period; provided, however,
that for any such Rolling Period ending on or before August 31, 1997, the
amounts determined in accordance with clause (b) of this definition
included in the calculation of the "Interest Coverage Ratio" shall be the
actual amounts for the period from and after October 1, 1996 to and
including the last date of such Rolling Period which amounts shall from
and after October 1, 1996 each be multiplied by a fraction (x) the
numerator of which is equal to 12 and (y) the denominator of which is the
actual number of calendar months from the October 1, 1996 to and including
the last date of such Rolling Period.
22
"Interest Expense" means, with respect to any Person for any period,
the amount by which (a) interest expense (including the interest component
on obligations under Capitalized Leases but excluding amortization of
deferred financing fees and expenses to the extent included in interest
expense), whether paid or accrued, on all Debt of such Person and its
Subsidiaries for such period, including, without limitation and without
duplication, (i) interest expense in respect of Debt resulting from
Advances, (ii) interest expense in respect of the Subordinated Notes,
(iii) commissions, discounts and other fees and charges payable in
connection with letters of credit (including, without limitation, any
Letters of Credit) and (iv) any net payment payable in connection with
interest rate Hedge Agreements less any net credits received in connection
with interest rate Hedge Agreements exceeds (b) interest income, whether
paid or accrued, of such Person for such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends
after any principal repayment installment date for such Facility
unless, after giving effect to such selection, the aggregate
principal amount of Base Rate Advances and of Eurodollar Rate
Advances having Interest Periods that end on or prior to such
principal repayment installment date for such Facility shall be at
least equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing shall
be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest
23
Period to occur in the next following calendar month, the last day
of such Interest Period shall occur on the immediately preceding
Business Day;
(d) whenever the first day of any Interest Period occurs on a
day of a calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month; and
(e) prior to the end of the first calendar month immediately
following the date of the Initial Extension of Credit, the Borrower
may select an Interest Period equal to the period from such date to
the end of such calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Inventory" means all Inventory referred to in Section 1(d) of the
Security Agreement.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership
or profit interest, warrants, rights, options, obligations, other
securities or the assets comprising a substantial part or all of the
business of such Person or of an operating division of such Person, any
capital contribution to such Person or any other investment in such
Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clause (i) or (j) of
the definition of "Debt" in respect of such Person.
"Investor Group" shall be those Persons listed on Schedule 6.01(k)
hereto.
"Issuing Bank" means the Initial Issuing Bank and each Eligible
Assignee which is either an Agent or any other Lender as may be approved
by the Borrower (such approval not to be unreasonably withheld) to which a
Letter of Credit Commitment hereunder has been assigned pursuant to
Section 9.07.
"L/C Cash Collateral Account" has the meaning specified in the
Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(c)(ii)(A).
24
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 9.07.
"Letter of Credit" has the meaning specified in Section 2.01(d).
"Letter of Credit Advance" means an advance made by the Issuing Bank
or any Working Capital Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing
Bank at any time, the amount set forth opposite the Issuing Bank's name on
Schedule I hereto under the caption "Letter of Credit Commitment" or, if
the Issuing Bank has entered into an Assignment and Acceptance set forth
for the Issuing Bank in the Register maintained by the Administrative
Agent pursuant to Section 9.07(d) as the Issuing Bank's "Letter of Credit
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to
the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"Leverage Ratio" means, with respect to any Person for any Rolling
Period, the ratio of (a) Funded Debt (other than (i) contingent
obligations of the type described in clause (f) or (h) in the definition
of "Debt" and (ii) Debt permitted under Section 5.02(b)(i)(A)) of such
Person and its Subsidiaries as of the last day of such Rolling Period
minus, in each case as of the last day of such Rolling Period, (i) the
principal amount of the NutraMax Note to the extent secured by the
NutraMax Letter of Credit, so long as such NutraMax Letter of Credit is
issued by a financial institution and on terms and conditions acceptable
to the Administrative Agent and (ii) the amount on deposit in the Asset
Sale Blocked Account to (b) Consolidated EBITDA of such Person and its
Subsidiaries for such Rolling Period, provided, that if any Investment
pursuant to Section 5.02(f)(i) or (vi) shall have occurred, such
Consolidated EBITDA shall include the EBITDA of or attributable to such
Investment for (x) with respect to any Monthly Rolling Period, the 12
months ended on the last day of such Monthly Rolling Period and (y) with
respect to any Quarterly Rolling Period, the four fiscal quarters ended on
the last day of such Quarterly Rolling Period.
25
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the
Notes and any amendment, supplement or modification hereof or thereof and
for all other purposes other than for purposes of the Collateral
Documents, (i) this Agreement, (ii) the Notes, (iii) the Collateral
Documents, (iv) each Letter of Credit Agreement and (v) the Subsidiary
Guaranty and (b) for purposes of the Collateral Documents, (i) this
Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each
Letter of Credit Agreement, (v) the Subsidiary Guaranty, (vi) each Bank
Hedge Agreement, and (vii) each Blocked Account Letter (as defined in the
Security Agreement) in each case as amended or otherwise modified from
time to time.
"Loan Parties" means the Borrower and the Guarantors.
"Loan Value" means:
(a) with respect to Eligible Inventory up to 50% of the value
of the Eligible Inventory consisting of rental equipment for sale in
the ordinary course of business, disposable medical supplies, and
parts for rental equipment; and
(b) with respect to Eligible Receivables up to 80% of the
value of the Eligible Receivables;
provided, however, that the Administrative Agent may, in its reasonable
discretion based on an analysis of changes in the Borrower's operations or
credit and collection experience arising after the date hereof that may
dilute the value of Eligible Collateral revise from time to time the
percentage of the value of any individual item of Eligible Collateral that
shall be used in determining Loan Value; provided further that any
increase in such percentage shall require the approval of the Required
Lenders.
"Margin Stock" has the meaning specified in Regulation U and/or
Regulation G.
"Margin Stock Collateral" means any Collateral which qualifies as
Margin Stock or proceeds thereof.
26
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the Loan Parties and their
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the Loan Parties and their
Subsidiaries taken as a whole, (b) the rights and remedies of the
Administrative Agent or any Lender Party under any Loan Document or
Related Document or (c) the ability of the Borrower or the Loan Parties
and their Subsidiaries taken as a whole to perform their Obligations under
any Loan Document or Related Document to which they are or are to become
parties.
"MEDIQ" has the meaning specified in the recital of parties to this
Agreement.
"MEDIQ Mobile X-Ray" means MEDIQ Mobile X-Ray Services, Inc., a
Delaware corporation, and a wholly owned Subsidiary of MEDIQ.
"Monthly Rolling Period" means with respect to any month the
consecutive 12-month period ending on the last day of such month.
"Mortgage" has the meaning specified in Section 3.01(g)(viii).
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance of any Debt
(excluding any Debt issued by any Discontinued Subsidiary) or capital
stock or other ownership or profit interest, any securities convertible
into or exchangeable for capital stock or other ownership or profit
interest or any warrants, rights, options or other securities to acquire
capital stock or other ownership or profit interest by any Person, or any
Extraordinary Receipt received by or paid to or for the account of any
Person, which
27
shall include the receipt of any cash dividend by MEDIQ or any of its
Subsidiaries other than such dividends permitted under Section 5.02(g),
the aggregate amount of cash received from time to time (whether as
initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction (excluding, without limitation, any cash received in respect
of any Obligations under Capitalized Leases or any Obligations secured by
purchase money Liens included in clause (j) of the definition of "Excess
Cash Flow"), after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees and other similar fees and
commissions, (b) the amount of taxes payable in connection with or as a
result of such transaction and (c) the amount of any Debt secured by a
Lien on such asset that, by the terms of such transaction, is required to
be repaid upon such disposition, in each case to the extent, but only to
the extent, that the amounts so deducted are properly attributable to such
transaction or to the asset that is the subject thereof and are, in the
case of clauses (a) and (c), at the time of receipt of such cash or when
otherwise required by the terms of the particular arrangement or entered
into in connection therewith, actually paid to a Person that is not an
Affiliate of such Person or any Loan Party or any Affiliate of any Loan
Party and, in the case of clause (b), on the earlier of the dates on which
the tax return covering such taxes is filed or required to be filed,
actually paid to a Person that is not an Affiliate of such Person or any
Loan Party or any Affiliate of any Loan Party, provided that if the amount
deducted pursuant to clause (b) above is greater than the amount actually
so paid for taxes, the amount of such excess shall constitute "Net Cash
Proceeds."
"Note" means a Term A Note, a Term B Note, an Acquisition Note or a
Working Capital Note.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"NPL" means the National Priorities List under CERCLA.
"NutraMax" means NutraMax Products, Inc., a Delaware corporation, in
which a Subsidiary of MEDIQ has an equity investment.
"NutraMax Escrow Agreement" means the Agreement dated as of July 30,
1993 between MEDIQ, MEDIQ Investment Services, Inc., a Delaware
corporation, and First Fidelity Bank, as escrow agent.
"NutraMax Letter of Credit" means the letter of credit to be issued
by a financial institution pursuant to the NutraMax Agreement.
28
"NutraMax Agreement" means the Stock Purchase Agreement dated as of
September 18, 1996 among MEDIQ, MEDIQ Investment Services, Inc. and
NutraMax.
"NutraMax Note" means the promissory note issued by NutraMax to
MEDIQ and/or MEDIQ Investment Services, Inc. pursuant to the NutraMax
Agreement.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document, (b) the obligation of any Loan Party to reimburse
any amount in respect of any of the foregoing that any Lender Party, in
its sole discretion, may elect to pay or advance on behalf of such Loan
Party and (c) the obligation to pay the Administrative Agent pursuant to
Section 2.08(c).
"OECD" means the Organization for Economic Cooperation and
Development.
"Ongoing Subsidiary" means any Subsidiary other than a Discontinued
Subsidiary.
"Open Year" has the meaning specified in Section 4.01(y).
"Other Taxes" has the meaning specified in Section 2.12(b).
"Parent Guarantors" has the meaning specified in the recital of
parties to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PCI Services" means PCI Services, Inc., in which a Subsidiary of
MEDIQ has an equity investment.
"Permitted Asset Sales" means the sale by MEDIQ or any of its
Subsidiaries of all of its interest in PCI Services, NutraMax, Health
Examinetics and MEDIQ Mobile X-Ray, or the sale of any non-cash proceeds
received therefrom in accordance
29
with the provisions of Section 5.02(e)(ii), or, in the case of NutraMax,
the sale by MEDIQ or any of its Subsidiaries of all or part of its
interest in NutraMax pursuant to the NutraMax Agreement.
"Permitted Encumbrances" has the meaning specified in the Mortgage.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b) hereof; (b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other similar
Liens arising in the ordinary course of business securing obligations that
(i) are not overdue for a period of more than 30 days and (ii) either
individually or when aggregated with all other Permitted Liens outstanding
on any date of determination, do not materially affect the use or value of
the property to which they relate; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or to
secure public or statutory obligations; and (d) easements, rights of way
and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely
affect the use of such property for its present purposes.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledged Debt" has the meaning specified in Section 1(a)(ii) of the
Security Agreement.
"Pledged Shares" has the meaning specified in Section 1(a)(i) of the
Security Agreement.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Pro Rata Share" of any amount means, with respect to any Working
Capital Lender at any time, the product of such amount times a fraction
the numerator of
30
which is the amount of such Lender's Working Capital Commitment at such
time and the denominator of which is the Working Capital Facility at such
time.
"Quarterly Rolling Period" means with respect to any fiscal quarter
the consecutive four fiscal quarters ending on the last day of such
quarter.
"Recapture Percentage" means, for purposes of Sections 2.06(b) and
5.04(f), with respect to any Fiscal Year of the Borrower and its
Subsidiaries, 75% or, if the Leverage Ratio as at September 30 in any such
Fiscal Year is less than 2.50 to 1.0, 50%.
"Receivables" means all Receivables referred to in Section 1(e) of
the Security Agreement.
"Redeemable" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any such
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely within
the control of the issuer or (b) is redeemable at the option of the
holder.
"Reduction Amount" has the meaning specified in Section 2.06(b)(vi).
"Refinancing" has the meaning specified in the Preliminary
Statements.
"Refinancing Debt" means the Debt identified as such on Schedule
2.14(a), in an aggregate amount not to exceed the amount of such Debt set
forth thereon.
"Register" has the meaning specified in Section 9.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Subordinated Note Documents, the Tax
Sharing Agreements, the 12.125% Note Indenture and the NutraMax Escrow
Agreement.
"Required Lenders" means at any time Lenders owed or holding at
least 51% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, (c) the aggregate unused
Commitments under the Term A, Term B and Acquisition Facilities at such
time and (d) the aggregate Unused Working Capital
31
Commitments at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (A) the aggregate principal
amount of the Advances owing to such Lender (in its capacity as a Lender)
and outstanding at such time, (B) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit issued by such Lender
and outstanding at such time, (C) the aggregate unused Acquisition
Commitments of such Lender at such time and (D) the Unused Working Capital
Commitment of such Lender at such time; provided, further, that for
purposes of (i) Section 6.01, solely with respect to any Event of Default
resulting from any Loan Party's failure to comply with Section 5.02(a),
5.02(e) or 5.02(m), insofar as such failure relates to Margin Stock, and
(ii) Section 9.01, solely with respect to any amendment, waiver or consent
to any departure by any Loan Party from the provisions of Section 5.02(a),
5.02(e) or 5.02(m), insofar as such waiver, amendment or consent relates
to Margin Stock, there shall be excluded from the determination of
Required Lenders at such time (A) the aggregate principal amount of the
Advances owing to all Alternative Lenders (in their capacity as Lenders)
and outstanding at such time, (B) such Alternative Lenders' Pro Rata
Shares of the aggregate Available Amount of all Letters of Credit issued
by such Alternative Lenders and outstanding at such time, (C) the
aggregate unused Acquisition Commitments of such Alternative Lenders at
such time and (D) the Unused Working Capital Commitment of such
Alternative Lenders at such time. For purposes of this definition, the
aggregate principal amount of Letter of Credit Advances owing to the
Issuing Bank and the Available Amount of each Letter of Credit shall be
considered to be owed to the Working Capital Lenders ratably in accordance
with their respective Working Capital Commitments.
"Responsible Officer" means the President, Chief Financial Officer,
or any Senior Vice-President of MEDIQ or the Borrower.
"Rolling Period" means a Monthly Rolling Period or a Quarterly
Rolling Period, as the case may be.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means the Agents, the Lender Parties (other than,
with respect to Margin Stock Collateral, any Alternative Lender) and the
Hedge Banks.
"Security Agreement" has the meaning specified in Section
3.01(g)(vii).
"Senior Debt" means for any Person all Funded Debt of such Person
and its Subsidiaries other than the Subordinated Notes.
32
"Senior Leverage Ratio" means, with respect to any Person for any
Rolling Period, the ratio of (a) Senior Debt (other than (i) contingent
obligations of the type described in clause (f) or (h) in the definition
of "Debt" and (ii) Debt permitted under Section 5.02(b)(i)(A)) of such
Person as of the last day of such Rolling Period to (b) Consolidated
EBITDA of such Person and its Subsidiaries for such Rolling Period,
provided, that if any Investment pursuant to Section 5.02(f)(i) or (vi)
shall have occurred, such Consolidated EBITDA shall include the EBITDA of
or attributable to such Investment for (x) with respect to any Monthly
Rolling Period, the 12 months ended on the last day of such Monthly
Rolling Period and (y) with respect to any Quarterly Rolling Period, the
four fiscal quarters ended on the last day of such Quarterly Rolling
Period.
"7.25% Notes" means the 7.25% convertible subordinated debentures
due 2006 issued by MEDIQ in an original aggregate principal amount of
$75,000,000.
"7.50% Notes" means the 7.50% exchangeable subordinated debentures
due 2003 issued by MEDIQ outstanding in the original aggregate principal
amount of $34,500,000.
"7.25% Note Indenture" means the Indenture dated as of June 1, 1986
between MEDIQ and Mellon Bank, N.A.
"7.50% Note Indenture" means the Indenture dated as of July 30, 1993
between MEDIQ and First Fidelity Bank, N.A.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect
of which any Loan Party or any ERISA Affiliate could have liability under
Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"Solvent" and "Solvency" mean, 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,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person 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 such debts and liabilities
as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small
capital. The
33
amount of contingent liabilities at any time shall be computed as the
amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit issued under
the Letter of Credit Facility, other than a Trade Letter of Credit.
"Subordinated Note Documents" means the 7.25% Note Indenture and the
7.50% Note Indenture, the 7.25% Notes and the 7.50% Notes and all other
agreements, indentures and instruments delivered in connection with the
issuance of such Notes.
"Subordinated Notes" means the 7.25% Notes and the 7.50% Notes.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such partnership, joint venture or limited liability
company or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Subsidiary Guarantors" means the Subsidiaries of MEDIQ listed on
Schedule 3.01(g)(iii) hereto and each other Subsidiary of MEDIQ that shall
be required to execute and deliver a guaranty pursuant to Section 5.01(o).
"Subsidiary Guaranty" has the meaning specified in Section
3.01(g)(ix).
"Supplemental Indenture" means the Supplemental Indenture dated as
of the date hereof, between the Borrower and United Jersey Bank.
"Surviving Debt" has the meaning specified in Section 3.01(e).
"Taxes" has the meaning specified in Section 2.12(a).
"Tax Sharing Agreements" means the (i) Consolidated Group Tax
Agreement dated May 28, 1992, as amended, by and between the Borrower and
MEDIQ, (ii) Tax Indemnification Agreement dated August 31, 1993 by and
between Mental Health Management, Inc. and MEDIQ, (iii) Tax
Allocation/Sharing Agreement dated as of
34
September 20, 1991 by and between PCI Services, Inc. and MEDIQ and (iv)
Consolidated Group Tax Agreement dated September 30, 1994 by and between
Holdings and MEDIQ.
"Term A Advance" has the meaning specified in Section 2.01(a).
"Term A Borrowing" means a borrowing consisting of simultaneous Term
A Advances of the same Type made by the Term A Lenders.
"Term A Commitment" means, with respect to any Term A Lender at any
time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term A Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, the aggregate amount
set forth for Term Lender in the Register maintained by the Administrative
Agent pursuant to Section 9.07(d) as such Lender's "Term A Commitment".
"Term A Facility" means, at any time, the aggregate amount of the
Term A Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A Commitment.
"Term A Note" means a promissory note of the Borrower payable to the
order of any Term A Lender, in substantially the form of Exhibit A-1
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term A Advance made by such Lender.
"Term Advance" means a Term A Advance or a Term B Advance.
"Term B Advance" has the meaning specified in Section 2.01(b).
"Term B Borrowing" means a borrowing consisting of simultaneous Term
B Advances of the same Type made by the Term B Lenders.
"Term B Commitment" means, with respect to any Term B Lender, the
amount set forth opposite such Lender's name on Schedule I hereto under
the caption "Term B Commitment" or, if such Lender has entered into one or
more Assignments or Acceptances, the aggregate amount set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as such Lender's "Term B Commitment".
"Term B Facility" means, at any time, the aggregate amount of the
Term B Lenders' Term B Commitments at such time.
35
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable to the
order of any Term B Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term B Advance made by such Lender.
"Term B Opt-Out Lender" has the meaning specified in Section
2.06(c).
"Term Borrowing" means a Term A Borrowing or a Term B Borrowing.
"Term Commitment" means a Term A Commitment or a Term B
Commitment.
"Term Lender" means a Term A Lender or a Term B Lender.
"Termination Date" means the earlier of September 30, 2002 and the
date of termination in whole of the Letter of Credit Commitments and the
Working Capital Commitments pursuant to Section 2.05 or 6.01.
"Trade Letter of Credit" means any Letter of Credit that is issued
under the Letter of Credit Facility for the benefit of a supplier of
Inventory to the Borrower or any of its Subsidiaries to effect payment for
such Inventory.
"12.125% Note Indenture" means the Indenture dated as of July 6,
1992, between the Borrower and United Jersey Bank as amended as of
September 30, 1994 and as of the date hereof.
"12.125% Notes" means the 12.125% Senior Secured Notes due 1999
issued by the Borrower in an aggregate principal amount of $100,000,000.
"Type" refers to the distinction between Advances bearing interest
at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Acquisition Commitment" means, with respect to any
Acquisition Lender at any time prior to the Conversion Date, such Lender's
Acquisition Commitment at such time minus the aggregate principal amount
of all Acquisition Advances made by such Lender and outstanding at such
time.
"Unused Working Capital Commitment" means, with respect to any
Working Capital Lender at any time, (a) such Lender's Working Capital
Commitment at such time minus (b) the sum of (i) the aggregate principal
amount of all Working Capital
36
Advances and Letter of Credit Advances made by such Lender (in its
capacity as a Lender) and outstanding at such time, plus (ii) such
Lender's Pro Rata Share of (A) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Bank pursuant
to Section 2.03(c) and outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have a liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section
2.01(c).
"Working Capital Borrowing" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the Working
Capital Lenders.
"Working Capital Commitment" means, with respect to any Working
Capital Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption "Working Capital Commitment"
or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d) as such Lender's "Working
Capital Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05.
"Working Capital Facility" means, at any time, the aggregate amount
of the Working Capital Lenders' Working Capital Commitments at such time.
"Working Capital Lender" means any Lender that has a Working Capital
Commitment.
"Working Capital Note" means a promissory note of the Borrower
payable to the order of any Working Capital Lender, in substantially the
form of Exhibit A-3 hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Working Capital Advances made
by such Lender.
37
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Term A Advances. Each Term A
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "Term A Advance") to the Borrower on any Business Day
during the period from the date hereof until October 1, 1996 in an amount not to
exceed such Lender's Term A Commitment at such time. The Term A Borrowing shall
consist of Term A Advances made simultaneously by the Term A Lenders ratably
according to their Term A Commitments. Amounts borrowed under this Section
2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "Term B
Advance") to the Borrower on any Business Day that the Term A Advances shall be
made in an amount not to exceed such Lender's Term B Commitment at such time.
The Term B Borrowing shall consist of Term B Advances made simultaneously by the
Term B Lenders ratably according to their Term B Commitments. Amounts borrowed
under this Section 2.01(b) and repaid or prepaid may not be reborrowed.
(c) The Working Capital Advances. Each Working Capital Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each, a "Working Capital Advance") to the Borrower from time to time
on any Business Day during the period from the date hereof until the Termination
Date in an amount for each such Advance not to exceed such Lender's Unused
Working Capital Commitment at such time minus an amount equal to such Lender's
Pro Rata Share of the Asset Sale Release Amount. Each Working Capital Borrowing
shall be in an aggregate amount of $1,000,000 or an integral multiple of
$500,000 in excess thereof (other than a Borrowing the proceeds of which shall
be used solely to repay or prepay in full outstanding Letter of Credit Advances
made by the Issuing Bank) and shall consist of Working Capital Advances made
38
simultaneously by the Working Capital Lenders ratably according to their Working
Capital Commitments. Within the limits of each Working Capital Lender's Unused
Working Capital Commitment in effect from time to time, the Borrower may borrow
under this Section 2.01(c), prepay pursuant to Section 2.06(a) and reborrow
under this Section 2.01(c).
(d) Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the "Letters of
Credit") for the account of the Borrower from time to time on any Business Day
during the period from the date hereof until 60 days before the Termination Date
(i) in an aggregate Available Amount for all Letters of Credit issued by such
Issuing Bank not to exceed at any time the Issuing Bank's Letter of Credit
Commitment at such time and (ii) in an Available Amount for each such Letter of
Credit not to exceed the lesser of (x) the Letter of Credit Facility at such
time and (y) the Unused Working Capital Commitments of the Working Capital
Lenders at such time. No Letter of Credit shall have an expiration date
(including all rights of the Borrower or the beneficiary to require renewal)
later than the earlier of 60 days before the Termination Date and (A) in the
case of a Standby Letter of Credit, one year after the date of issuance thereof
and (B) in the case of a Trade Letter of Credit, 90 days after the date of
issuance thereof. Within the limits of the Letter of Credit Facility, and
subject to the limits referred to above, the Borrower may request the issuance
of Letters of Credit under this Section 2.01(d), repay any Letter of Credit
Advances resulting from drawings thereunder pursuant to Section 2.03(c) and
request the issuance of additional Letters of Credit under this Section 2.01(d).
(e) Clean-Down. Notwithstanding the provisions of Sections 2.01(c)
and 2.01(d), no Borrowings may be made under Section 2.01(c), and no Letters of
Credit may be issued under Section 2.01(d), during any Clean-Down Period, unless
the sum of the aggregate principal amount of Working Capital Advances and Letter
of Credit Advances plus the aggregate Available Amount of Letters of Credit
outstanding after giving effect to such Borrowing or the issuance of such Letter
of Credit shall not exceed $10,000,000.
(f) The Acquisition Advances. Subject to Section 2.14(b), each
Acquisition Lender severally agrees, on the terms and conditions hereinafter set
forth, to make advances (each, an "Acquisition Advance") to the Borrower from
time to time on any Business Day during the period from the date hereof until
the Conversion Date in an amount for each such Advance not to exceed such
Lender's Unused Acquisition Commitment at such time. Each Acquisition Borrowing
shall be in an aggregate amount of $1,000,000 or an integral multiple of
$500,000 in excess thereof and shall consist of Acquisition Advances made
simultaneously by the Acquisition Lenders ratably according to their Acquisition
Commitments. Prior to the Conversion Date, within the limits of each Acquisition
Lender's Unused Acquisition Commitment in effect from time to time, the Borrower
may borrow under this Section 2.01(f), prepay pursuant to Section 2.06(b)(vii)
and reborrow under this Section 2.01(f).
39
SECTION 2.02. Making the Advances. (a) Except as otherwise provided
in Section 2.03, each Borrowing shall be made on notice, given not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate
Advances, or the first Business Day prior to the date of the proposed Borrowing
in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to
the Administrative Agent, which shall give to each Appropriate Lender prompt
notice thereof by telex or telecopier. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be in writing, or telex or telecopier, in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Facility under which such Borrowing is to be made,
(iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Appropriate Lender
shall, before 11:00 A.M. (New York City time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such Lender and the
other Appropriate Lenders. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower by
crediting the Borrower's Account; provided, however, that, in the case of any
Working Capital Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Letter of Credit
Advances made by the Issuing Bank and by any other Working Capital Lender and
outstanding on the date of such Working Capital Borrowing, plus interest accrued
and unpaid thereon to and as of such date, available to the Issuing Bank and
such other Working Capital Lenders for repayment of such Letter of Credit
Advances.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing hereunder and for the period from the date of such initial
Borrowing to the earlier of (x) three months from such date and (y) the
completion of syndication of the Facilities (as shall be specified by the Agents
in a written notice to the Borrower) or for any Borrowing if the aggregate
amount of such Borrowing is less than $5,000,000 or if the obligation of the
Appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.09 or Section 2.10 and (ii) with respect to Borrowings
consisting of Eurodollar Rate Advances, the Term A Advances, the Term B Advances
and the Working Capital Advances may not be outstanding as part of more than
eight separate Borrowings in the aggregate.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Appropriate
40
Lender against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from
an Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid in respect of principal shall
constitute such Lender's Advance as part of such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank, which shall give to the
Administrative Agent prompt notice thereof by telex or telecopier. Each such
notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be by
telephone, confirmed immediately in writing, or telex or telecopier, specifying
therein the requested (A) date of such issuance (which shall be a Business Day),
(B) Available Amount of such Letter of Credit, (C) expiration date of such
Letter of Credit, (D) name and address of the beneficiary of such Letter of
Credit and (E) form of such Letter of Credit, and shall
41
be accompanied by such application and agreement for letter of credit as the
Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit (a "Letter of Credit Agreement"). If (x) the
requested form of such Letter of Credit is acceptable to the Issuing Bank in its
sole discretion and (y) it has not received notice of objection to such issuance
from Lenders holding at least 66-2/3% of the Working Capital Commitments, the
Issuing Bank will, upon fulfillment of the applicable conditions set forth in
Article III, make such Letter of Credit available to the Borrower at its office
referred to in Section 9.02 or as otherwise agreed with the Borrower in
connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to
the Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (B) to
each Working Capital Lender on the first Business Day of each calendar quarter a
written report summarizing issuance and expiration dates of Letters of Credit
issued during the preceding calendar quarter and drawings during such month
under all Letters of Credit and (C) to the Administrative Agent and each Working
Capital Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft. In the event of any
drawing under a Letter of Credit, the Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Working Capital Lender and the Borrower and each Working Capital Lender shall
purchase from the Issuing Bank, and the Issuing Bank shall sell and assign to
each such Working Capital Lender, such Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such purchase, by making
available for the account of its Applicable Lending Office to the Administrative
Agent for the account of the Issuing Bank, by deposit to the Administrative
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Letter of Credit Advance to be purchased by
such Lender. Promptly after receipt thereof, the Administrative Agent shall
transfer such funds to the Issuing Bank. The Borrower hereby agrees to each such
sale and assignment. Each Working Capital Lender agrees to purchase its Pro Rata
Share of an outstanding Letter of Credit Advance on (i) the Business Day on
which notice of the drawing under the related Letter of Credit is given by the
Issuing Bank, provided such notice is given not later than 1:00 P.M. (New York
City time) on such Business Day or (ii) the first Business Day next succeeding
such demand if such notice is given after such time. Upon any such assignment by
the Issuing Bank to any other Working Capital Lender
42
of a portion of a Letter of Credit Advance, the Issuing Bank represents and
warrants to such other Lender that the Issuing Bank is the legal and beneficial
owner of such interest being assigned by it, free and clear of any liens, but
makes no other representation or warranty and assumes no responsibility with
respect to such Letter of Credit Advance, the Loan Documents or any Loan Party.
If and to the extent that any Working Capital Lender shall not have so made the
amount of such Letter of Credit Advance available to the Administrative Agent,
such Working Capital Lender agrees to pay to the Administrative Agent forthwith
on demand such amount together with interest thereon, for each day from the date
of demand by the Issuing Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for its account or the account
of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by the Issuing Bank shall be reduced by such amount on such
Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Term Advances. The Borrower
shall repay to the Administrative Agent for the ratable account of the Term A
Lenders and Term B Lenders the aggregate outstanding principal amount of the
Term A Advances and Term B Advances, respectively, on the following dates in the
amounts indicated (which amounts shall be reduced as a result of the application
of prepayments in accordance with the order of priority set forth in Section
2.06):
43
Date Amount
---- --------------------------------------
Term A Facility Term B Facility
--------------- ---------------
December 31, 1996 $1,200,000 $250,000
March 31, 1997 $1,200,000 $250,000
June 30, 1997 $1,200,000 $250,000
September 30, 1997 $1,200,000 $250,000
December 31, 1997 $1,200,000 $250,000
March 31, 1998 $1,200,000 $250,000
June 30, 1998 $1,200,000 $250,000
September 30, 1998 $1,200,000 $250,000
December 31, 1998 $1,200,000 $250,000
March 31, 1999 $1,200,000 $250,000
June 30, 1999 $1,200,000 $250,000
September 30, 1999 $1,200,000 $250,000
December 31, 1999 $1,200,000 $250,000
March 31, 2000 $1,200,000 $250,000
June 30, 2000 $1,200,000 $250,000
September 30, 2000 $1,200,000 $250,000
December 31, 2000 $1,200,000 $250,000
March 31, 2001 $1,200,000 $250,000
June 30, 2001 $1,200,000 $250,000
September 30, 2001 $1,200,000 $250,000
December 31, 2001 $2,750,000 $250,000
March 31, 2002 $2,750,000 $250,000
June 30, 2002 $2,750,000 $250,000
September 30, 2002 $2,750,000 $250,000
December 31, 2002 -- $8,500,000
March 31, 2003 -- $8,500,000
June 30, 2003 -- $8,500,000
September 30, 2003 -- $8,500,000
December 31, 2003 -- $15,000,000
March 31, 2004 -- $15,000,000
June 30, 2004 -- $15,000,000
September 30, 2004 -- $15,000,000
provided, however, that the final principal installment of the Term A Facility
and the Term B Facility, respectively, shall in any event and in each case be in
an amount equal to the aggregate principal amount of the Term A Advances and
Term B Advances, respectively then outstanding.
44
(b) Working Capital Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Working Capital Lenders on
the Termination Date the aggregate outstanding principal amount of the Working
Capital Advances then outstanding.
(c) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the account of the Issuing Bank and each other Working
Capital Lender that has made a Letter of Credit Advance on the earlier of the
Termination Date and one Business Day after demand the outstanding principal
amount of each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any
consent to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a 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;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
45
(F) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the
Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
(d) Acquisition Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Acquisition Lenders the
aggregate outstanding principal amount of the Acquisition Advances on the
following dates in the amounts indicated, determined as a percentage of the
aggregate amount of Acquisition Advances outstanding on the Conversion Date
(after giving effect to any prepayments required by Section 2.06(b)(ix) and
which amount shall be reduced as a result of the application of further
prepayments in accordance with the order of priority set forth in the applicable
paragraph of Section 2.06):
Date Amount
---- ------
June 30, 1998 5.0%
September 30, 1998 5.0%
December 31, 1998 5.625%
March 31, 1999 5.625%
June 30, 1999 5.625%
September 30, 1999 5.625%
December 31, 1999 5.625%
March 31, 2000 5.625%
June 30, 2000 5.625%
September 30, 2000 5.625%
December 31, 2000 5.625%
March 31, 2001 5.625%
June, 30, 2001 5.625%
September 30, 2001 5.625%
December 31, 2001 5.625%
March 31, 2002 5.625%
June 30, 2002 5.625%
September 30, 2002 5.625%
provided, however, that the final principal installment of the Acquisition
Facility shall in any event be in an amount equal to the aggregate principal
amount of the Acquisition Advances then outstanding.
46
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part (x) the unused
portions of the Letter of Credit Facility and the Unused Working Capital
Commitments or (y) the Unused Acquisition Commitments; provided, however, that
each partial reduction of a Facility (i) shall be in an aggregate amount of
$1,000,000 or an integral multiple of $500,000 in excess thereof and (ii) shall
be made ratably among the Appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) Mandatory. (i) On the date of the Term A Borrowing, after giving
effect to such Term A Borrowing, and from time to time thereafter upon each
repayment or prepayment of the Term A Advances, the aggregate Term A Commitments
of the Term A Lenders shall be automatically and permanently reduced, on a pro
rata basis, by an amount equal to the amount by which the aggregate Term A
Commitments immediately prior to such reduction exceed the aggregate unpaid
principal amount of the Term A Advances then outstanding.
(ii) On the date of the Term B Borrowing, after giving effect to
such Term B Borrowing, and from time to time thereafter upon each repayment or
prepayment of the Term B Advances, the aggregate Term B Commitments of the Term
B Lenders shall be automatically and permanently reduced, on a pro rata basis,
by an amount equal to the amount by which the aggregate Term B Commitments
immediately prior to such reduction exceed the aggregate unpaid principal amount
of the Term B Advances then outstanding.
(iii) The Working Capital Facility shall be automatically and
permanently reduced on the date on which any prepayment is required to be made
pursuant to Section 2.06(b)(i), (ii) or (ix) by an amount equal to the
applicable Reduction Amount, provided that each such reduction of the Working
Capital Facility shall be made ratably among the Working Capital Lenders in
accordance with their Working Capital Commitments.
(iv) The Letter of Credit Facility shall be automatically and
permanently reduced from time to time on the date of each reduction in the
Working Capital Facility by the amount, if any, by which the amount of the
Letter of Credit Facility exceeds the Working Capital Facility after giving
effect to such reduction of the Working Capital Facility.
(v) Prior to the Conversion Date, the Acquisition Facility shall be
automatically and permanently reduced on the date on which any prepayment is
required to be made pursuant to Section 2.06(b)(i) or (ii) by an amount equal to
the applicable Acquisition Reduction Amount, provided that each such reduction
of the Acquisition Facility shall be made ratably among the Acquisition Lenders
in accordance with their Acquisition Commitments. From and after the Conversion
Date, the Acquisition Commitments of the Acquisition Lenders shall be
automatically and permanently reduced, on a pro rata basis, by
47
an amount equal to the amount by which the aggregate Acquisition Facility
Commitments immediately prior to such reduction exceed the aggregate unpaid
principal amount of the Acquisition Advances then outstanding.
SECTION 2.06. Prepayments. (a) Optional. Except on or prior to the
Conversion Date with respect to Acquisition Advances, the Borrower may, upon at
least one Business Day's notice to the Administrative Agent for Base Rate
Advances and three Business Days' notice to the Administrative Agent for
Eurodollar Rate Advances (received not later than 11:00 A.M. (New York City
time)) stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances comprising part of the
same Borrowing in whole or ratably in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid unless
such prepayment is with respect to a Working Capital Advance which is a Base
Rate Advance; provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount of $1,000,000 or an integral multiple of $500,000 in
excess thereof and (y) if any prepayment of a Eurodollar Rate Advance shall be
made other than on the last day of an Interest Period therefor, the Borrower
shall also pay any amounts owing pursuant to Section 9.04(c). Each such
prepayment of any Term Advances and, after the Conversion Date, Acquisition
Advances shall be applied ratably to the Term A Facility, the Term B Facility
and, after the Conversion Date, to the Acquisition Facility and, in each case,
ratably to the principal installments thereof.
(b) Mandatory. (i) The Borrower shall, no later than the 30th day
following the date on which it delivers the financial statements referred to in
Section 5.03(d) (but in any event within 120 days after the end of each Fiscal
Year), prepay an aggregate principal amount of the Advances comprising part of
the same Borrowings equal to the Recapture Percentage of the amount of Excess
Cash Flow for such Fiscal Year. Prior to the Conversion Date, each such
prepayment of any Advances shall be applied as follows:
first, ratably to the Term A Facility and the Term B Facility and,
in each case, ratably to the principal installments thereof, and
second, to the extent no Term Advances remain outstanding,
permanently to reduce the Acquisition Facility as set forth in clause
(viii) below, and
third, to the extent no Term Advances remain outstanding and the
Acquisition Facility has been fully repaid and permanently reduced in
full, permanently to reduce the Working Capital Facility as set forth in
clause (vi) below.
From and after the Conversion Date, each such prepayment of any Advances shall
be applied as follows:
48
first, ratably to the Term A Facility, the Term B Facility and the
Acquisition Facility, in each case ratably to the principal installments
thereof, and
second, to the extent no Term Advances or Acquisition Advances
remain outstanding, permanently to reduce the Working Capital Facility as
set forth in clause (vi) below.
(ii) The Borrower shall, on the date of receipt of the Net Cash
Proceeds by any Loan Party or any of its Subsidiaries from (A) the sale, lease,
transfer or other disposition of any assets of any Loan Party or any of its
Subsidiaries (other than any Permitted Asset Sale on or prior to the Conversion
Date or any sale, lease, transfer or other disposition of assets permitted by
Section 5.02(e)(i)), (B) the incurrence or issuance by any Loan Party or any of
its Subsidiaries of any Debt (other than Debt incurred or issued pursuant to
Section 5.02(b)), (C) the sale or issuance by any Loan Party or any of its
Subsidiaries of any capital stock or other ownership or profit interest (except
(i) common stock issued by MEDIQ (1) pursuant to Section 5.02(f)(i) or (vi) for
purposes of making Investments under such Sections or (2) in respect of the
7.25% Notes in satisfaction of the terms of the 7.25% Note Indenture, or (ii)
any such sale or issuance in connection with the Permitted Asset Sales), any
securities convertible into or exchangeable for capital stock or other ownership
or profit interest or any warrants, rights or options to acquire capital stock
or other ownership or profit interest (except as permitted by Section 5.02(g))
or (D) any Extraordinary Receipt received by or paid to or for the account of
any Loan Party or any of its Subsidiaries and not otherwise included in clause
(A), (B) or (C) above, prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings equal to the amount of such Net Cash
Proceeds; provided, however, that such prepayment shall not be required so long
as the aggregate amount of such Net Cash Proceeds received by any Loan Party or
any of its Subsidiaries in the period immediately following (x) with respect to
the first such prepayment, the Initial Extension of Credit and (y) with respect
to any prepayment after the first such prepayment, the most recent such
prepayment, shall not exceed $250,000. Prior to the Conversion Date, each such
prepayment shall be applied as follows:
first, ratably to the Term A Facility and the Term B Facility and,
in each case, ratably to the principal installments thereof, and
second, to the extent no Term Advances remain outstanding,
permanently to reduce the Acquisition Facility as set forth in clause
(viii) below, and
third, to the extent no Term Advances remain outstanding and the
Acquisition Facility has been fully repaid and permanently reduced in
full, permanently to reduce the Working Capital Facility as set forth in
clause (vi) below.
49
From and after the Conversion Date, each such prepayment of any Advances shall
be applied as follows:
first, ratably to the Term A Facility, the Term B Facility, and the
Acquisition Facility, in each case ratably to the principal installments
thereof, and
second, to the extent no Term Advances or Acquisition Advances
remain outstanding, permanently to reduce the Working Capital Facility as
set forth in clause (vi) below.
(iii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Working Capital Advances comprising part of the same
Borrowings, and the Letter of Credit Advances equal to the amount by which (A)
the sum of the aggregate principal amount of the Working Capital Advances, the
Letter of Credit Advances then outstanding, the aggregate Available Amount of
all Letters of Credit then outstanding and the Asset Sale Release Amount exceeds
(B) the lesser of the Working Capital Facility and the Loan Value of Eligible
Collateral on such Business Day (as determined based on the most recent
Borrowing Base Certificate delivered to the Lender Parties hereunder).
(iv) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(v) The Borrower shall pay to the Administrative Agent, on the first
day of each Clean-Down Period, an amount equal to the amount by which the
aggregate principal amount of the Working Capital Advances and the Letter of
Credit Advances plus the aggregate Available Amount of Letters of Credit then
outstanding exceeds $10,000,000, to be applied in the same manner as prepayments
are required to be applied pursuant to Section 2.06(b)(vi).
(vi) Prepayments of the Working Capital Facility shall be first
applied to prepay Letter of Credit Advances then outstanding until such Letter
of Credit Advances are paid in full, second applied to prepay Working Capital
Advances then outstanding comprising part of the same Borrowings until such
Working Capital Advances are paid in full and third deposited in the L/C Cash
Collateral Account to cash collateralize 100% of the Available Amount of the
Letters of Credit then outstanding; and, in the case of prepayments of the
Working Capital Facility required pursuant to clause (i) or (ii) above, the
amount remaining (if any) after the prepayment in full of the Working Capital
Advances then outstanding and the 100% cash collateralization of the aggregate
Available Amount of Letters of Credit then outstanding (the sum of such
prepayment amounts, cash collateralization amounts and
50
remaining amount being referred to herein as the "Reduction Amount") may be
retained by the Borrower and the Working Capital Facility shall be permanently
reduced as set forth in Section 2.05(b)(iii). Upon the drawing of any Letter of
Credit for which funds are on deposit in the L/C Cash Collateral Account, such
funds shall be applied to reimburse the Issuing Bank or Working Capital Lenders,
as applicable.
(vii) Prior to the Conversion Date, the Borrower shall, on the date
of receipt of the Net Cash Proceeds by any Loan Party or any of its Subsidiaries
from any Permitted Asset Sale, prepay an aggregate principal amount of the
Acquisition Advances comprising part of the same Acquisition Borrowings equal to
the amount of such Net Cash Proceeds. Each such prepayment shall be applied in
accordance with Section 2.06(b)(viii), but amounts so prepaid may be reborrowed
prior to the Conversion Date in accordance with Section 2.01(f).
(viii) Prior to the Conversion Date, prepayments of the Acquisition
Facility pursuant to Section 2.06(b)(i), (ii) or (vii) shall be applied to
prepay Acquisition Advances then outstanding comprising part of the same
Borrowings until such Acquisition Advances are paid in full and the amount
remaining (if any) after the prepayment in full of the Acquisition Advances then
outstanding (such prepayment amounts (except for any amounts prepaid with Net
Cash Proceeds from Permitted Asset Sales in accordance with Section
2.06(b)(vii)) and the remaining amount being referred to herein as the
"Acquisition Reduction Amount") may be retained by the Borrower and, except for
prepayments required by Section 2.06(b)(vii), the Acquisition Facility shall be
permanently reduced as set forth in Section 2.05(b)(v).
(ix) On the Conversion Date, the Borrower shall prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings equal to
the amount on deposit in the Asset Sale Blocked Account plus the Asset Sale
Release Amount. Each such prepayment shall be applied as follows:
first, to the Acquisition Facility,
second, to the extent no Acquisition Advances remain outstanding,
ratably to the Term A Facility and the Term B Facility, in each case
ratably to the principal installments thereof, and
third, to the extent no Term Advances or Acquisition Advances remain
outstanding, permanently to reduce the Working Capital Facility as set
forth in clause (vi) above.
(x) All prepayments under this subsection (b) shall be made together
with accrued interest to the date of such prepayment on the principal amount
prepaid, together with any amounts owing pursuant to Section 9.04(c).
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(xi) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings equal to
the amount by which the amount on deposit in the Asset Sale Blocked Account
exceeds the aggregate amount of Subordinated Notes outstanding. Each such
prepayment shall be applied as follows:
first, to the Acquisition Facility,
second, to the extent no Acquisition Advances remain outstanding,
ratably to the Term A Facility and the Term B Facility, in each case
ratably to the principal installments thereof, and
third, to the extent no Term Advances or Acquisition Advances remain
outstanding, permanently to reduce the Working Capital Facility as set
forth in clause (vi) above.
(c) Term B Opt-Out. With respect to any prepayment of the Term B
Advances, the Administrative Agent shall ratably pay the Term B Lenders as
required under Section 2.06(a) or (b), unless, with respect to any prepayment
from time to time of the Term B Advances, the Administrative Agent shall have
received written notice from any Term B Lender not later than three Business
Days prior to such prepayment, that such Term B Lender elects not to receive any
prepayments under this Section 2.06 (a "Term B Opt-Out Lender"), which election
shall remain in effect with respect to any subsequent prepayment until the
Administrative Agent shall receive a subsequent written notice from such Term B
Opt-Out Lender cancelling such earlier notice. Any such prepayments which would
have been remitted to a Term B Opt-Out Lender but for its election to not
receive such prepayments, shall be paid ratably to the remaining Lenders as
provided in Sections 2.06(a) and (b); provided, however, that Term B Lenders, on
any date on which the Term A Facility is repaid in full and no Acquisition
Advances are outstanding, shall not be entitled to elect not to receive any
further prepayments.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall
pay interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the sum of (A)
the Base Rate in effect from time to time plus (B) the Applicable Margin
in effect from time to time, payable in arrears quarterly on the last
Business Day of each March, June, September and December during such
periods, on the date of any prepayment thereof to the
52
extent required under Section 2.06(b) and on the Final Maturity Date,
commencing December 31, 1996.
(ii) Eurodollar Rate Advances. During such periods as such Advance
is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (A) the Eurodollar
Rate for such Interest Period for such Advance plus (B) the Applicable
Margin in effect on the first day of such Interest Period, payable in
arrears on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of any Event of Default, the Administrative Agent may, and upon the request of
the Required Lenders shall, require that the Borrower pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above
and (ii) to the fullest extent permitted by law, the amount of any interest, fee
or other amount payable hereunder that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has
accrued pursuant to clause (a)(i) or (a)(ii) above, and, in all other cases, on
Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to
the Administrative Agent for the account of the Lenders a commitment fee on the
average daily portion of each Appropriate Lender's Unused Acquisition Commitment
(prior to the Conversion Date) and on the average daily Unused Working Capital
Commitment of each Appropriate Lender, from the date hereof in the case of each
Initial Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender
until the Termination Date, payable in arrears quarterly on the last Business
Day of each March, June, September and December, commencing December 31, 1996,
and, with respect to Unused Acquisition Commitments, on the Conversion Date or,
with respect to Unused Working Capital Commitments, on the Termination Date, at
the rate of half of 1% per annum on the average daily portion of each
Appropriate Lender's Unused Acquisition Commitment and on the average daily
Unused Working Capital Commitment of each Appropriate Lender; provided, however,
that any commitment fee accrued with respect to any of the Commitments of a
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at
53
such time shall not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall otherwise
have been due and payable by the Borrower prior to such time; and provided
further that no commitment fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Working Capital Lender a
commission, payable in arrears quarterly on the last Business Day of each March,
June, September and December, commencing December 31, 1996, and on the
Termination Date, on such Lender's Pro Rata Share of the average daily aggregate
Available Amount during such quarter of (A) all Standby Letters of Credit
outstanding from time to time and (B) all Trade Letters of Credit then
outstanding, in each case at the rate per annum equal to the Applicable Margin
for Working Capital Advances which are Eurodollar Rate Advances in effect from
time to time.
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and the Issuing Bank shall agree.
(c) Agents' Fees. The Borrower shall pay to each of the Agents for
its own account such fees as may from time to time be agreed between the
Borrower and such Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of Sections 2.07 and
2.10, Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that (w) if any
Conversion of Eurodollar Rate Advances into Base Rate Advances is made other
than on the last day of an Interest Period for such Eurodollar Rate Advances,
the Borrower shall also pay any amounts owing pursuant to Section 9.04(c), (x)
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b), (y) no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(b), and (z) each Conversion of Advances comprising
part of the same Borrowing under any Facility shall be made ratably among the
Appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
54
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $1,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation 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),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances, then the Borrower shall from
time to time, upon demand by such Lender Party (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender Party additional amounts sufficient to compensate such Lender Party
for such increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower by such Lender Party, shall be conclusive and binding
for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters of
Credit (or similar contingent obligations), then, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), the Borrower
shall pay to the Administrative Agent for the account of such Lender Party, from
time to time as specified by such Lender Party, additional amounts sufficient to
compensate such Lender Party in the light of such
55
circumstances, to the extent that such Lender Party reasonably determines such
increase in capital to be allocable to the existence of such Lender Party's
commitment to lend or to issue Letters of Credit hereunder or to the issuance or
maintenance of any Letters of Credit. A certificate as to such amounts submitted
to the Borrower by such Lender Party shall be conclusive and binding for all
purposes, absent manifest error. Each Lender will determine the amount of any
additional compensation requested under this Section 2.10(b) on a basis
consistent with that on which it requests additional compensation from other
similar borrowers with whom it has an agreement similar to the agreement
contained in this Section 2.10(b).
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed more than 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars
to the Administrative Agent at the Administrative Agent's Account in same day
funds. The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by the Borrower is in respect of principal,
interest, commitment fees or any other Obligation then payable hereunder and
56
under the Notes to more than one Lender Party, to such Lender Parties for the
account of their respective Applicable Lending Offices ratably in accordance
with the amounts of such respective Obligations then payable to such Lender
Parties and (ii) if such payment by the Borrower is in respect of any Obligation
then payable hereunder to one Lender Party, to such Lender Party for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 9.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to
the Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent shall elect to
distribute such funds to each Lender Party ratably in accordance with such
Lender Party's proportionate share of the principal amount of all outstanding
Advances and the Available Amount of all Letters of Credit then outstanding, in
repayment or prepayment of such of the outstanding Advances or other Obligations
owed to such Lender Party, and for application to such principal installments,
as the Administrative Agent shall direct.
(c) After an Event of Default, the Borrower hereby authorizes each
Lender Party, if and to the extent payment owed to such Lender Party is not made
when due hereunder or, in the case of a Lender, under the Note held by such
Lender, to charge from time to time against any or all of the Borrower's
accounts with such Lender Party any amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause such
payment to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.
57
(f) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender Party and each Agent,
taxes imposed on its overall net income by the United States and franchise taxes
and net income taxes that are imposed on such Lender Party or such Agent in lieu
of net income taxes by the state or foreign jurisdiction under the laws of which
such Lender Party or such Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender Party, taxes
imposed on its overall net income and franchise taxes imposed on such Lender
Party in lieu of net income taxes by the state or foreign jurisdiction of such
Lender Party's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender Party or any Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.12) such Lender Party or such Agent (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
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(c) The Borrower shall indemnify each Lender Party and each Agent
for and hold it harmless against the full amount of Taxes and Other Taxes, and
for the full amount of taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.12, paid by such Lender Party or such Agent (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender Party or such Agent (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrower through an account or branch outside the United States or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank, as the case may be, and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter if requested in writing by the Borrower
or the Administrative Agent (but only so long thereafter as such Lender Party
remains lawfully able to do so), provide the Administrative Agent and the
Borrower with Internal Revenue Service form 1001 or 4224, or in the case of a
Lender Party that is claiming exemption from United States withholding tax under
Section 871(h) or 881(c) of the Internal Revenue Code with respect to payments
of "portfolio interest" two accurate and complete signed original Forms W-8 and,
if such Lender Party delivers forms W-8, two signed certificates certifying that
such Lender Party is not (i) a "bank" for purposes of Section 881(c) of the
Internal Revenue Code, (ii) is not a 10% shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and (iii) is
not a controlled foreign corporation related to the Borrower (within the meaning
of Section 864(d)(4) of the Internal Revenue Code), as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender Party is exempt from or is entitled to a reduced rate of United States
withholding tax on payments under this Agreement or the Notes. If the form
provided by a Lender Party at the time such Lender Party first becomes a party
to this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender Party provides the appropriate form
certifying that a lesser rate applies,
59
whereupon withholding tax at such lesser rate only shall be considered excluded
from Taxes for periods governed by such form; provided, however, that, if at the
date of the Assignment and Acceptance pursuant to which a Lender Party becomes a
party to this Agreement, the Lender Party assignor was entitled to payments
under subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to above in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender Party reasonably considers to be confidential, the Lender
Party shall give notice thereof to the Borrower and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Lender Party has failed
to provide the Borrower with the appropriate form described in subsection (e)
above (other than if such failure is due to a change in law occurring after the
date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) above), such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) with respect to
Taxes imposed by the United States; provided, however, that should a Lender
Party become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender Party shall
reasonably request to assist such Lender Party to recover such Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess
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payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender
Party, such purchase from each other Lender Party shall be rescinded and such
other Lender Party shall repay to the purchasing Lender Party the purchase price
to the extent of such Lender Party's ratable share (according to the proportion
of (i) the purchase price paid to such Lender Party to (ii) the aggregate
purchase price paid to all Lender Parties) of such recovery together with an
amount equal to such Lender Party's ratable share (according to the proportion
of (i) the amount of such other Lender Party's required repayment to (ii) the
total amount so recovered from the purchasing Lender Party) of any interest or
other amount paid or payable by the purchasing Lender Party in respect of the
total amount so recovered. The Borrower agrees that any Lender Party so
purchasing a participation from another Lender Party pursuant to this Section
2.13 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender Party were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances and
issuances of Letters of Credit shall be available (and the Borrower agrees that
it shall use such proceeds and Letters of Credit) solely as follows:
(a) from Term Advances, to refinance, in part, the Refinancing Debt
and to pay transaction fees and expenses in connection therewith and with
the financing contemplated by the Loan Documents;
(b) from Acquisition Advances:
(i) to refinance, in part, the Refinancing Debt, and to pay
transaction fees and expenses in connection therewith;
(ii) on terms permitted by Section 5.02(k)(i)(y)(B); and
(iii) from and after the Asset Sale Threshold Date and subject
to the Acquisition Facility Sublimit (x) to pay dividends and
repurchase shares of the common stock of MEDIQ to the extent
permitted by Section 5.02(g)(i) and (y), if no repurchase of shares
pursuant to Section 5.02(g)(i) has occurred, to make Investments
permitted by Section 5.02(f)(i); and
(c) from Working Capital Advances, to finance working capital
requirements of the Borrower, to be deposited in the Asset Sale Blocked
Account, to make payments required under Section 5.01(p) and for other
general corporate purposes permitted by this Agreement; provided, however,
that Working Capital Advances may not be used for the purposes for which
Acquisition Advances may be
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used in accordance with Section 2.14(b) except, if any Investment pursuant
to Section 5.02(f)(vi)(x) shall have been made, to the extent of the
amount of such Investment.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the Obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that, on any date, the Borrower shall so set off and
otherwise apply its obligation to make any such payment against the obligation
of such Defaulting Lender to make any such Defaulted Advance on or prior to such
date, the amount so set off and otherwise applied by the Borrower shall
constitute for all purposes of this Agreement and the other Loan Documents an
Advance by such Defaulting Lender made on the date under the Facility pursuant
to which such Defaulted Advance was originally required to have been made
pursuant to Section 2.01. Such Advance shall be a Base Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrower shall
notify the Administrative Agent at any time the Borrower exercises its right of
set-off pursuant to this subsection (a) and shall set forth in such notice (A)
the name of the Defaulting Lender and the Defaulted Advance required to be made
by such Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any portion
of such payment otherwise required to be made by the Borrower to or for the
account of such Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the Borrower pursuant to
this subsection (a), shall be applied by the Administrative Agent as specified
in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so
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applied by the Administrative Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the Administrative
Agent shall be retained by the Administrative Agent or distributed by the
Administrative Agent to such other Lender Parties, ratably in accordance with
the respective portions of such Defaulted Amounts payable at such time to the
Administrative Agent and such other Lender Parties and, if the amount of such
payment made by the Borrower shall at such time be insufficient to pay all
Defaulted Amounts owing at such time to the Administrative Agent and the other
Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount then
owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted Amounts
then owing to such other Lender Parties, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative Agent
or any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower or such other Lender Party shall pay such
amount to the Administrative Agent to be held by the Administrative Agent, to
the fullest extent permitted by applicable law, in escrow or the Administrative
Agent shall, to the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the Administrative Agent in
escrow under this subsection (c) shall be deposited by the Administrative Agent
in an account with BNP, in the name and under the control of the Administrative
Agent, but subject to the provisions of this subsection (c). The terms
applicable to such account, including the rate of interest payable with respect
to the credit balance of such account from time to time, shall be BNP's standard
terms applicable to escrow accounts maintained with it. Any interest credited to
such account from time to time shall be held by the Administrative Agent in
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative Agent
shall, to the fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable by
such Defaulting Lender hereunder and under the other Loan
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Documents to the Administrative Agent or any other Lender Party, as and when
such Advances or amounts are required to be made or paid and, if the amount so
held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the following
order of priority:
(i) first, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to any other Lender Parties for any amount then due and
payable by such Defaulting Lender to such other Lender Parties hereunder,
ratably in accordance with such respective amounts then due and payable to
such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16. Release of Funds from the Asset Sale Blocked Account.
So long as no Default shall have occurred and be continuing, the Administrative
Agent will, upon presentation of a Notice of Drawing by the Borrower to the
Administrative Agent substantially in the form of Exhibit F hereto, pay and
release to the Borrower or at its order and at the request of the Borrower, the
amount, if any, or any portion thereof, on deposit in the Asset Sale Blocked
Account, so long as the Borrower applies such amount (A) in the same manner and
on the same basis as is permitted for Acquisition Advances pursuant to Section
2.14(b), (B) to prepay the Working Capital Facility pursuant to Section 2.06(a)
or (C) or as required pursuant to Section 2.06(b)(ix).
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of Credit.
The obligation of each Lender to make an Advance on the occasion of the Initial
Extension of Credit hereunder is subject to the satisfaction of the following
conditions precedent before or concurrently with the Initial Extension of
Credit:
(a) The Lender Parties shall be satisfied with the corporate and
legal structure and capitalization of the Loan Parties, including the
terms and conditions of the charter, bylaws and each class of capital
stock of the Loan Parties and of each agreement or instrument relating to
such structure or capitalization.
(b) Before giving effect to the transactions contemplated by this
Agreement, there shall have occurred no Material Adverse Change since
September 30, 1995.
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their Subsidiaries pending
or threatened before any court, governmental agency or arbitrator that (i)
could have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement, any Note, any
other Loan Document, any Related Document or the consummation of the
transactions contemplated hereby.
(d) The Lender Parties shall have completed a due diligence
investigation of the Loan Parties (including, without limitation, a field
examination of the quality of the Borrower's current assets and of the
Borrower's management information systems, a fair market value appraisal
of the Borrower's rental equipment from Xxxxxx, Xxxxxx & Co., a review of
the projected tax assumptions of MEDIQ and its Subsidiaries on a
Consolidated basis from Deloitte & Touche LLP and a due diligence report
on customers prepared by Marketing Corporation of America), each in scope,
and with results, satisfactory to the Lender Parties, and nothing shall
have come to the attention of the Lender Parties during the course of such
due diligence investigation to lead them to believe (i) that any written
information, exhibit or report (including, without limitation, any
financial information) furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender Party was or has become misleading,
incorrect or incomplete in any material respect, (ii) that the Loan
Parties would not have good and marketable title to all of their material
assets and (iii) that the transactions contemplated hereby have or will
have a Material Adverse Effect; without limiting the generality of the
foregoing, the Lender Parties shall have been
65
given such access to the management, records, books of account, contracts
and properties of each Loan Party and its Subsidiaries as they shall have
requested.
(e) The Existing Debt, other than the Debt identified on Schedule
3.01(e) (the "Surviving Debt"), shall have been prepaid, redeemed or
defeased in full or otherwise satisfied and extinguished and all such
Surviving Debt shall be on terms and conditions satisfactory to the Lender
Parties.
(f) All accrued fees and expenses of the Agents and the Lender
Parties (including the accrued fees and expenses of counsel to the Agents
and of Saiber, Schlesinger, Satz & Xxxxxxxxx, local counsel to the Lender
Parties) shall have been paid.
(g) The Administrative Agent shall have received on or before the
day of the Initial Extension of Credit the following, each dated such day
(unless otherwise specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving this Agreement, the Notes,
each other Loan Document and each Related Document to which it is or
is to be a party and of the transactions contemplated hereby, and of
all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the
Notes, each other Loan Document and each Related Document and of the
transactions contemplated hereby.
(iii) A copy of a certificate of the Secretary of State of the
jurisdiction of its incorporation, dated reasonably near the date of
the Initial Extension of Credit, in each case listing the charter of
the Borrower, each Parent Guarantor and each Subsidiary Guarantor
and each amendment thereto on file in his office and certifying that
(A) such charter is a true and correct copy thereof, (B) such
amendments are the only amendments to such charter on file in his
office, (C) such Person has paid all franchise taxes to the date of
such certificate and (D) such Person is duly incorporated and in
good standing under the laws of the State of the jurisdiction of its
incorporation.
(iv) A copy of a certificate of the Secretary of State of the
States listed on Schedule 3.01(g)(iv), dated reasonably near the
date of the Initial Extension of Credit, stating that the Borrower
and each Parent Guarantor is
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duly qualified and in good standing as a foreign corporation in such
States and has filed all annual reports required to be filed to the
date of such certificate.
(v) A certificate of each of the Borrower, the Guarantors and
each other Loan Party, signed on behalf of such Person by its
President or Senior Vice-President, Finance, and its Secretary or
Assistant Secretary, dated the date of the Initial Extension of
Credit (the statements made in which certificate shall be true on
and as of the date of the Initial Extension of Credit), certifying
as to (A) the absence of any amendments to the charter of such
Person since the date of the Secretary of State's certificate
referred to in Section 3.01(g)(iii), (B) a true and correct copy of
the bylaws of such Person as in effect on the date of the Initial
Extension of Credit, (C) the due incorporation and good standing of
such Person as a corporation organized under the laws of the
jurisdiction of its incorporation and the absence of any proceeding
for the dissolution or liquidation of such Person, (D) the
completeness and accuracy of the representations and warranties
contained in the Loan Documents as though made on and as of the date
of the Initial Extension of Credit and (E) the absence of any event
occurring and continuing, or resulting from the Initial Extension of
Credit, that constitutes a Default.
(vi) A certificate of the Secretary or Assistant Secretary of
each of the Borrower, the Guarantors and each other Loan Party
certifying the names and true signatures of the officers of such
Persons authorized to sign this Agreement, the Notes, each other
Loan Document and each Related Document to which they are or are to
be parties and the other documents to be delivered hereunder and
thereunder.
(vii) A security agreement in substantially the form of
Exhibit D (together with each other security agreement delivered
pursuant to Section 5.01(m), or 5.01(o), in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms, the "Security Agreement"), duly executed by the
Borrower, each Parent Guarantor and each Ongoing Subsidiary,
together with:
(A) certificates representing the Pledged Shares
referred to therein accompanied by undated stock powers
executed in blank and instruments evidencing the Pledged Debt
referred to therein endorsed in blank,
(B) executed copies of proper financing statements, to
be duly filed on or before the day of the Initial Extension of
Credit under
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the Uniform Commercial Code of the States listed on Schedule
3.01(g)(vii)(B) and all other jurisdictions that the
Administrative Agent may reasonably deem necessary or
desirable in order to perfect and protect the Liens created
under the Collateral Documents, covering the Collateral
described in the Security Agreement,
(C) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing
the financing statements referred to in clause (B) above and
all other effective financing statements filed in the
jurisdictions referred to in clause (B) above that name the
Borrower as debtor, together with copies of such other
financing statements,
(D) evidence of the completion of all other recordings
and filings of or with respect to the Security Agreement that
the Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created thereby,
(E) evidence of the insurance required by the terms of
the Security Agreement,
(F) executed termination statements (Form UCC-3 or a
comparable form), in proper form to be duly filed on the date
of the Initial Extension of Credit under the Uniform
Commercial Code of all jurisdictions that the Administrative
Agent may deem desirable in order to terminate or amend
existing Liens on the Collateral described in the Security
Agreement, except as contemplated under the Security
Agreement,
(G) the Blocked Account Letters referred to in the
Security Agreement, duly executed by each Blocked Account Bank
referred to in the Security Agreement, and
(H) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the liens and security interests
created under the Security Agreement has been taken, including
delivery of Blocked Account Letters in form and substance
satisfactory to the Administrative Agent.
(viii) A mortgage in substantially the form of Exhibit E and
covering the property listed on Schedule 4.01(ff) (together with
each other mortgage delivered pursuant to Section 5.01(m), in each
case as amended, supplemented
68
or otherwise modified from time to time in accordance with their
terms, the "Mortgage"), duly executed by the Borrower or MEDIQ,
together with evidence that the Mortgage has been duly recorded in
all filing or recording offices that the Administrative Agent may
deem desirable and all other action that the Administrative Agent
may deem necessary or desirable including a title search in order to
create valid first and subsisting Liens on the property described in
the Mortgages in favor of the Secured Parties and that all filing
and recording expenses and fees have been paid.
(ix) A guaranty in substantially the form of Exhibit G
(together with each other guaranty delivered pursuant to Section
5.01(o), in each case as amended, supplemented or otherwise modified
from time to time in accordance with its terms, the "Subsidiary
Guaranty"), duly executed by each Subsidiary Guarantor.
(x) Certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance
satisfactory to the Lender Parties, together with all agreements,
instruments and other documents delivered in connection therewith.
(xi) Such financial, business and other information regarding
each Loan Party and its Subsidiaries as the Lender Parties shall
have requested, including, without limitation, information as to
possible contingent liabilities, tax matters, environmental matters,
obligations under Plans, Multiemployer Plans and Welfare Plans,
collective bargaining agreements and other arrangements with
employees, audited Consolidated and unaudited consolidating annual
financial statements (such unaudited consolidating financial
statements certified by the chief financial officer of MEDIQ) of
MEDIQ and its Subsidiaries dated September 30, 1993, September 30,
1994 and September 30, 1995, interim Consolidated and consolidating
financial statements dated June 30, 1996 (such financial statements
certified by the chief financial officer of MEDIQ), and forecasts
prepared by management, in form and substance satisfactory to the
Lender Parties, of balance sheets, income statements and cash flow
statements on a monthly basis for the first two years following the
day of the Initial Extension of Credit and on an annual basis for
each year thereafter until the Final Maturity Date.
(xii) An opinion, in substantially the form of Exhibit J,
attesting to the Solvency of the Borrower and MEDIQ after giving
effect to the Refinancing and the other transactions contemplated
hereby, from Xxxxxx, Xxxxxx & Co.
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(xiii) Certificates, in substantially the form of Exhibits K-1
and K-2, attesting to the Solvency of the Borrower on a Consolidated
basis and MEDIQ on a Consolidated basis both before and after giving
effect to the Refinancing and the other transactions contemplated
hereby, signed on behalf of each of the Borrower and MEDIQ by their
respective chief financial officer, attesting to the solvency of the
Borrower on a Consolidated basis and MEDIQ on a Consolidated basis,
respectively.
(xiv) Environmental assessment reports, in form and substance
satisfactory to the Lender Parties, from Xxxxx Associates, Inc. as
to any hazards, costs or liabilities under Environmental Laws to
which any Loan Party or any of its Subsidiaries may be subject
solely with respect to the real estate located at One MEDIQ Plaza,
Pennsauken, New Jersey, the amount and nature of which and the
Borrower's plans with respect to which shall be acceptable to the
Lender Parties. To the extent either the report or any other
information that may become available to the Lender Parties shall
disclose any hazards, costs or liabilities under Environmental Laws
or otherwise that the Lender Parties deem material, the Lender
Parties shall be satisfied that such hazards, costs or liabilities
were adequately reflected in MEDIQ's financial reserves shown on the
financial statements delivered pursuant to Section 3.01(g)(xi) or
that, to the extent not so reflected, the Borrower has made adequate
provision for such hazards, costs or liabilities.
(xv) A letter, in form and substance satisfactory to the
Administrative Agent, from the Borrower to Deloitte & Touche LLP,
its independent certified public accountants, advising such
accountants that the Administrative Agent and the Lender Parties
have been authorized to exercise all rights of the Borrower to
require such accountants to disclose any and all financial
statements and any other information of any kind that they may have
with respect to the Borrower and its Subsidiaries and directing such
accountants to comply with any reasonable request of the
Administrative Agent or any Lender Party through the Administrative
Agent for such information.
(xvi) Evidence of insurance naming the Administrative Agent as
additional insured and loss payee with such responsible and
reputable insurance companies or associations, and in such amounts
and covering such risks, as is satisfactory to the Lender Parties,
including, without limitation, business interruption insurance,
product liability insurance, and directors and officers insurance.
(xvii) A Borrowing Base Certificate dated as of August 31,
1996.
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(xviii) Landlord consents from the Persons listed in Schedule
3.01(g)(xviii) in form and substance satisfactory to the
Administrative Agent.
(xix) A termination letter from each of the Persons listed on
Schedule 3.01(g)(xix)(1) to the Administrative Agent relating to the
satisfaction and termination of the Existing Debt listed on Schedule
3.01(g)(xix)(2) and the release of all collateral and security
interests relating thereto.
(xx) A favorable opinion of Drinker, Xxxxxx & Xxxxx, counsel
to the Loan Parties, in substantially the form of Exhibit I hereto.
(xxi) A favorable opinion from each of the counsel to the Loan
Parties listed on Schedule 3.01(g)(xxi).
(xxii) A favorable opinion of Shearman & Sterling, counsel for
the Agents, in form and substance satisfactory to the Administrative
Agent.
(xxiii) A favorable opinion of Saiber, Schlesinger, Satz &
Xxxxxxxxx, New Jersey counsel to the Lender Parties.
(xxiv) Federal Reserve Forms U-1 provided for in Regulation U,
as applicable, the statements made in which shall be such as to
permit the transactions contemplated hereby in accordance with
Regulation U; and Federal Reserve Forms G-3 provided for in
Regulation G, as applicable, the statements made in which shall be
such as to permit the transactions contemplated hereby in accordance
with Regulation G.
(h) The Supplemental Indenture shall have become effective.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Appropriate Lender to make an Advance (other than a
Letter of Credit Advance made by an Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c)) on the occasion of each Borrowing (including the
Initial Extension of Credit), and the obligation of each Issuing Bank to issue a
Letter of Credit (including the initial issuance), shall be subject to the
further conditions precedent that on the date of such Borrowing or issuance (a)
the following statements shall be true (and each of the giving of the applicable
Notice of Borrowing, Notice of Issuance and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance such statements are true):
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(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Borrowing or issuance and to the application of the
proceeds therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing or issuance, in which
case as of such specific date;
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default;
(iii) for each Acquisition Advance: (i) at the time of making such
Acquisition Advance the amount on deposit in the Asset Sale Blocked
Account is zero or all amounts on deposit therein are being applied
simultaneously with such Acquisition Advance, (ii) immediately prior to
such Acquisition Advance, the Asset Sale Release Amount is equal to zero
and (iii) if such Acquisition Advance is used for the purposes set forth
in:
(a) Section 2.14(b)(ii), such Advance shall be under the terms
set forth in Section 5.02(k)(i)(y)(B);
(b) Section 2.14(b)(iii)(x), such Advance shall be under the
terms set forth in Section 5.02(g)(i); and
(c) Section 2.14(b)(iii)(y), such Advance shall be under the
terms set forth in Section 5.02(f)(i); and
(iv) for each Working Capital Advance or issuance of any Letter of
Credit, the lesser of the Working Capital Facility or the sum of the Loan
Values of the Eligible Collateral (as determined based on the most recent
Borrowing Base Certificate delivered to the Lender Parties hereunder)
exceeds the aggregate principal amount of the Working Capital Advances
plus Letter of Credit Advances to be outstanding plus the aggregate
Available Amount of all Letters of Credit plus the Asset Sale Release
Amount net of the amount of such Working Capital Advance to be deposited
in the Asset Sale Blocked Account then outstanding after giving effect to
such Advance or issuance, respectively;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as the Administrative Agent or the Required Lenders
through the Administrative Agent may reasonably request.
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SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. Each
Loan Party represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed is not
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority (including, without limitation,
all governmental licenses, permits and other approvals) to own or lease
and operate its properties and to carry on its business as now conducted
and as proposed to be conducted except where the failure to have such
corporate power and authority is not reasonably likely to have a Material
Adverse Effect. All of the outstanding capital stock of the Borrower has
been validly issued, is fully paid and non-assessable and Holdings is
owned by MEDIQ in the amount specified in Schedule 4.01(a) free and clear
of all Liens, except those created under the Loan Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party as of the date hereof (other
than Subsidiaries listed on Schedule IV), showing as of the date hereof
(as to each such Subsidiary) the jurisdiction of its incorporation, the
number of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding
shares of each such class owned (directly or indirectly) by such Loan
Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding
73
capital stock of all of such Subsidiaries, has been validly issued, is
fully paid and non-assessable and is owned by such Loan Party or one or
more of its Subsidiaries free and clear of all Liens, except those created
under the Loan Documents. Each such Subsidiary (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires
it to so qualify or be licensed except where the failure to so qualify or
be licensed is not reasonably likely to have a Material Adverse Effect and
(iii) has all requisite corporate power and authority (including, without
limitation, all governmental licenses, permits and other approvals) to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, except where the failure to
have such corporate power and authority is not reasonably likely to have a
Material Adverse Effect.
(c) The execution, delivery and performance by each Loan Party of
this Agreement, the Notes, each other Loan Document and each Related
Document to which it is or is to be a party, and the consummation of the
Refinancing and the other transactions contemplated hereby and thereby,
are within such Loan Party's corporate powers, have been duly authorized
by all necessary corporate action, and do not (i) contravene such Loan
Party's charter or bylaws, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934 and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award, (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 its
Subsidiaries or any of their properties or (iv) except for the Liens
created under the Loan Documents, 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. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, the violation or breach of which is reasonably
likely to have a Material Adverse Effect.
(d) 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 (i) the due execution, delivery,
recordation, filing or performance by any Loan Party of this Agreement,
the Notes, any other Loan Document or any Related Document to which it is
or is to be a party, or for the consummation of the
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Refinancing or the other transactions contemplated hereby or thereby, (ii)
the grant by any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens
created by the Collateral Documents (including the priority thereof) or
(iv) the exercise by the Administrative Agent or any Lender Party of its
rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d), all of which have been duly obtained, taken, given or made and
are in full force and effect.
(e) This Agreement has been, and each of the Notes, each other Loan
Document and each Related Document when delivered hereunder will have
been, duly executed and delivered by each Loan Party thereto. This
Agreement is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party thereto, enforceable against such
Loan Party in accordance with its terms.
(f) The Consolidated and consolidating balance sheets of MEDIQ and
its Subsidiaries as at September 30, 1993, September 30, 1994 and
September 30, 1995, and the related Consolidated and consolidating
statements of income and Consolidated statements of cash flows of each of
MEDIQ and its Subsidiaries and Holdings and its Subsidiaries for the
fiscal years then ended, accompanied by an opinion of Deloitte & Touche
LLP, independent public accountants, or, as to the consolidating
statements, duly certified by the chief financial officer of MEDIQ, and
the Consolidated and consolidating balance sheets of MEDIQ and its
Subsidiaries as at June 30, 1996, and the related Consolidated and
consolidating statements of income and Consolidated statements of cash
flows of each of MEDIQ and its Subsidiaries and Holdings and its
Subsidiaries for the nine months then ended, duly certified by the chief
financial officers of MEDIQ and Holdings, respectively, in each case
copies of which have been furnished to each Lender Party, fairly present,
subject, in the case of said Consolidated and consolidating balance sheets
as at June 30, 1996, and said Consolidated and consolidating statements of
income and Consolidated statements of cash flows of each of MEDIQ and its
Subsidiaries and Holdings and its Subsidiaries for the nine months then
ended, to year-end audit adjustments, the Consolidated and consolidating
financial condition of MEDIQ and its Subsidiaries as at such dates and the
Consolidated and consolidating results of the operations of MEDIQ and its
Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis,
and since September 30, 1995 there has been no Material Adverse Change.
(g) The Consolidated forecasted balance sheets, income statements
and cash flows statements of MEDIQ and its Subsidiaries delivered to the
Administrative Agent pursuant to Section 3.01(g)(xi) or 5.03 were prepared
in good faith on the basis of the
75
assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts and at the
time of the Initial Extension of Credit, and represented, at both such
times of delivery, MEDIQ's and the Borrower's best estimate of their
future financial performance.
(h) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries, including
any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that (i) is reasonably likely to have a
Material Adverse Effect or (ii) purports to affect the legality, validity
or enforceability of the Refinancing, this Agreement, any Note, any other
Loan Document or any Related Document or the consummation of the
transactions contemplated hereby.
(i) No proceeds of any Advance or drawings under any Letter of
Credit will be used to acquire any equity security of a class that is
registered pursuant to Section 12 of the Securities Exchange Act of 1934,
except in connection with an Investment permitted by Section 5.02(f)(i)
provided that after giving effect to such Investment the Borrower directly
acquires all of the shares of such class of equity security.
(j) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no proceeds of
any Advance (other than Acquisition Advances) or drawings under any Letter
of Credit will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin
Stock.
(k) Set forth on Schedule 4.01(k) hereto is a complete and accurate
list of all Plans, Multiemployer Plans and Welfare Plans in effect as of
the date of this Agreement.
(l) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan.
(m) As of the last annual actuarial valuation date, the Loan Parties
and the ERISA Affiliates are in compliance with the funding requirements
of the Internal Revenue Code and ERISA with respect to each Plan.
(n) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Administrative
Agent, is complete and accurate and fairly presents the funding status of
such Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status.
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(o) Neither any Loan Party nor any ERISA Affiliate has incurred or
is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.
(p) Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(q) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(r) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not
covered by insurance) that is reasonably likely to have a Material Adverse
Effect.
(s) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past claims of
non-compliance with such Environmental Laws and Environmental Permits have
been resolved without ongoing obligations or costs, and no circumstances
exist that could (i) form the basis of an Environmental Action against any
Loan Party or any of its Subsidiaries or any of its properties is
reasonably likely to have a Material Adverse Effect or (ii) cause any such
property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law that is
reasonably likely to have a Material Adverse Effect.
(t) Except as is disclosed on Schedule 4.01(t), and with respect to
properties not owned by any Loan Party to the extent of the actual
knowledge of any Responsible Officer: none of the properties currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries is
listed or proposed for listing on the NPL or on the CERCLIS or any
analogous foreign, state or local list or is adjacent to any such
property; there are no and never have been any underground or aboveground
storage tanks or any surface impoundments, septic tanks, pits, sumps or
lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned or operated by any Loan
Party or any of its Subsidiaries or, to the best of its knowledge, on any
property formerly owned or operated by any
77
Loan Party or any of its Subsidiaries; there is no asbestos or
asbestos-containing material on any property currently owned or operated
by any Loan Party or any of its Subsidiaries; and Hazardous Materials have
not been released, discharged or disposed of on any property currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries;
except, in each case, where the non-compliance with the foregoing is not
reasonably likely to have a Material Adverse Effect.
(u) Neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together with
other potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any governmental
or regulatory authority or the requirements of any Environmental Law; and
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries have been disposed
of in a manner not reasonably expected to result in material liability to
any Loan Party or any of its Subsidiaries.
(v) As of the date hereof, Schedule IV is a true and correct list of
all Discontinued Subsidiaries.
(w) Except as permitted by Section 5.02(a)(iii),(iv),(v) and (vii),
the Collateral Documents create a valid and perfected first priority
security interest in the Collateral securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken. The Loan
Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the liens and security interests created or
permitted under the Loan Documents.
(x) Each Loan Party and each of its Subsidiaries has filed, has
caused to be filed or has been included in all tax returns (Federal,
state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties.
(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and
each of its Subsidiaries for which Federal income tax returns have been
filed and for which the expiration of the applicable statute of
limitations for assessment or collection has not occurred by reason of
extension or otherwise (an "Open Year").
(z) There is no unpaid amount, as of the date hereof, of adjustments
to the Federal income tax liability of each Loan Party and each of its
Subsidiaries proposed
78
by the Internal Revenue Service with respect to Open Years. No issues have
been raised by the Internal Revenue Service in respect of Open Years that,
in the aggregate, are reasonably likely to have a Material Adverse Effect.
(aa) There is no unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each Loan
Party and its Subsidiaries proposed by all state, local and foreign taxing
authorities (other than amounts arising from adjustments to Federal income
tax returns, if any) other than those being contested in good faith and
listed on Schedule 4.01(aa). No issues have been raised by such taxing
authorities that, in the aggregate, are reasonably likely to have a
Material Adverse Effect.
(bb) MEDIQ and its Subsidiaries had, as of September 30, 1995 net
operating loss carryforwards for U.S. Federal income tax purposes in the
amount of $47,972,700 and capital loss carryforwards for U.S. Federal
income tax purposes in the amount of $22,062,300.
(cc) Neither any Loan Party nor any of its Subsidiaries 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, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby, will violate
any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(dd) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(ee) All Existing Debt is listed on Schedule 2.14(a) and Schedule
3.01(e), and set forth on each such Schedule, as of the date hereof, is
the principal amount outstanding thereunder, the maturity date thereof and
the amortization schedule therefor.
(ff) Set forth on Schedule 4.01(ff) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county or
other relevant jurisdiction, state and record owner. Each Loan Party or
such Subsidiary has good, marketable and insurable fee simple title to
such real property, free and clear of all Liens, other than Liens created
or permitted by the Loan Documents.
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(gg) Set forth on Schedule 4.01(gg) hereto is a complete and
accurate list of all Investments held by any Loan Party as of the date
hereof (other than Discontinued Subsidiaries), showing as of the date
hereof the amount, obligor or issuer and maturity, if any, thereof.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of each
Loan Party as of the date hereof (other than Discontinued Subsidiaries),
showing as of the date hereof the jurisdiction in which registered, the
registration number, the date of registration and the expiration date.
(ii) The merger of the Borrower and MEDIQ/PRN Life Support
Services-I, Inc. has taken place, and the Borrower is the surviving
corporation.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, each Loan Party will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property; provided, however,
that no Loan Party or any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim (x) that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, or (y) in respect of which the
Lien resulting therefrom, if any, attaches to its property and becomes
enforceable against its other creditors, to the extent that the aggregate
amount of all such taxes, assessments, charges or claims does not exceed
$250,000.
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(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying
its properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties, except if the failure to
obtain or renew such Environmental Permit is not reasonably likely to have
a Material Adverse Effect; and conduct, and cause each of its Subsidiaries
to conduct, any investigation, study, sampling and testing, and undertake
any cleanup, removal, remedial or other action necessary to remove and
clean up all Hazardous Materials from any of its properties, in accordance
with the requirements of all Environmental Laws, except if the failure to
remove or clean up such Hazardous Materials is not reasonably likely to
have a Material Adverse Effect; provided, however, that no Loan Party or
any of its Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do
so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such
circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which such Loan
Party or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries (excluding any Discontinued Subsidiary
in respect of which the failure to comply with this Section 5.01(e) is not
reasonably likely to have a Material Adverse Effect) to preserve and
maintain, its corporate existence, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises, except if the
failure to preserve and maintain such permits, approvals or licenses is
not reasonably likely to have a Material Adverse Effect; provided,
however, that such Loan Party may consummate any merger or consolidation
permitted under Section 5.02(d).
(f) Visitation Rights. At any reasonable time and from time to time,
upon reasonable prior notice, permit the Administrative Agent or any of
the Lender Parties or any agents or representatives thereof, to examine
and make copies of and abstracts from the records and books of account of,
and visit the properties of, such Loan Party and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of such Loan Party and
any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants.
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(g) Preparation of Environmental Reports. At the request of the
Administrative Agent at the following times: (i) upon the occurrence and
continuance of an Event of Default, (ii) upon the acquisition of real
property by any Loan Party or any of its Subsidiaries and (iii) and no
more than two other times (determined in the discretion of the Required
Lenders) during the term of this Agreement, provide to the Lender Parties
within 90 days after such request, at the expense of the Borrower, a Phase
I environmental site assessment report for any of its or its Subsidiaries'
owned properties described in such request, prepared by an environmental
consulting firm acceptable to the Administrative Agent (and, if based upon
the recommendation of such environmental consulting firm, a Phase II
environmental site assessment report) indicating the presence or absence
of Hazardous Materials and the estimated cost of any compliance, removal
or remedial action in connection with any Hazardous Materials on such
properties; without limiting the generality of the foregoing, if the
Administrative Agent determines at any time that a material risk exists
that any such report will not be provided within the time referred to
above, the Administrative Agent may retain an environmental consulting
firm to prepare such report at the expense of the Borrower, and such Loan
Party hereby grants and agrees to cause any Subsidiary that owns any
property described in such request to grant at the time of such request,
to the Administrative Agent or to any Lender Party who makes such request
through the Administrative Agent, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to
the rights of tenants, to enter onto their respective properties to
undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of such Loan Party and each such Subsidiary in accordance with
generally accepted accounting principles.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are reasonably required in the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and except
for properties that have become obsolete or no longer fit for their
intended purposes.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which such Loan Party or any of its Subsidiaries is a party,
keep such leases in full force and effect and not allow such leases to
lapse or be terminated or any rights to renew such leases to be forfeited
or cancelled, except if the failure to make such payment, perform such
obligations or keep such leases in full force and effect is not reasonably
likely to have a Material Adverse Effect.
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(k) Performance of Related Documents. Perform and observe all of the
terms and provisions of each Related Document to be performed or observed
by it, maintain each such Related Document in full force and effect,
enforce such Related Document in accordance with its terms, take all such
action to such end as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative Agent, make
to each other party to each such Related Document such demands and
requests for information and reports or for action as such Loan Party is
entitled to make under such Related Document.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to such Loan Party or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate.
(m) Covenant to Give Security. In addition to the requirements of
Section 5.01(o), upon the request of the Administrative Agent and at the
expense of the Borrower, (i) within 10 days after such request, furnish to
the Administrative Agent a description of the real and personal properties
of such Loan Party and its Subsidiaries in detail satisfactory to the
Administrative Agent, (ii) within 15 days after such request, duly execute
and deliver to the Administrative Agent mortgages, pledges, assignments
and other security agreements, as specified by and in form and substance
satisfactory to the Administrative Agent, securing payment of all the
Obligations of such Loan Party under the Loan Documents and constituting
Liens on all such properties, (iii) within 30 days after such request,
take whatever action (including, without limitation, the recording of
mortgages, the filing of Uniform Commercial Code financing statements, the
giving of notices and the endorsement of notices on title documents) may
be necessary or advisable in the opinion of the Administrative Agent to
vest in the Administrative Agent (or in any representative of the
Administrative Agent designated by it) valid and subsisting Liens on the
properties purported to be subject to the security agreements delivered
pursuant to this Section 5.01(m), enforceable against all third parties in
accordance with their terms, (iv) within 60 days after such request,
deliver to the Administrative Agent a signed copy of a favorable opinion,
addressed to the Administrative Agent, of counsel for such Loan Party
acceptable to the Administrative Agent as to the matters contained in
clauses (i), (ii) and (iii) above, as to such security agreements being
legal, valid and binding obligations of such Loan Party and its
Subsidiaries enforceable in accordance with their terms and as to such
other matters as the Administrative Agent may reasonably request, (v) at
any time and from time to time promptly execute and deliver any and all
further instruments and documents and take all such other action as the
Administrative Agent may deem desirable in obtaining the full benefits of,
or in preserving the Liens of, such security agreements.
83
(n) Interest Rate Hedging. Enter into prior to November 15, 1996,
and maintain at all times thereafter, interest rate Hedge Agreements with
Persons acceptable to the Administrative Agent, covering a notional amount
of not less than 75% of the Term A and Term B Facilities and providing for
such Persons to make payments thereunder for an initial period of no less
than three years to the extent of increases in interest rates greater than
2.0% above the Eurodollar Rate in effect on the date hereof for an
Interest Period of three months.
(o) Additional Loan Parties. Cause any newly organized or acquired
Subsidiary of the Borrower, any Parent Guarantor, or any of their Ongoing
Subsidiaries (other than any Subsidiary organized or located outside of
the United States) to execute and deliver to the Administrative Agent as
promptly as practicable and in any event within 30 days after the
organization or acquisition of such Subsidiary (i) a security agreement
supplement in the form of Exhibit A to the Security Agreement, (ii) a
guaranty in form and substance satisfactory to the Administrative Agent
and the Lender Parties and (iii) such other documents, agreements,
certificates or instruments as the Administrative Agent may reasonably
request, in each case in form and substance reasonably satisfactory to the
Administrative Agent, and to take all such other actions that may be
necessary or that the Administrative Agent may deem reasonably desirable
in order to perfect and protect any pledge, assignment or security
interest granted by such security agreement (granting a security interest
in the receivables, inventory, deposit accounts, equipment, intellectual
property and other assets of such Subsidiary) of such Subsidiary to the
Administrative Agent for the benefit of the Lender Parties or to enable
the Administrative Agent to exercise and enforce its rights and remedies
thereunder.
(p) Working Capital Advances. If, on the Conversion Date, the amount
on deposit in the Asset Sale Blocked Account is less than the amount
required to be prepaid pursuant to 2.06(b)(ix), the Borrower will either
(i) make a Working Capital Borrowing or (ii) authorize the Administrative
Agent on behalf of the Borrower to obtain a Working Capital Borrowing, in
an amount sufficient to make payment of the amount required to be prepaid
pursuant to Section 2.06(b)(ix), and make such prepayment unless funds are
otherwise available to the Borrower to make such prepayment, and such
prepayment is made with such funds.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, no Loan Party will (provided, however, that
for purposes of this Section 5.02, Loan Party shall not include any Discontinued
Subsidiary, except with respect to Sections 5.02(e), (f) and (j)), at any time:
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(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Ongoing Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, or permit any of
its Ongoing Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement that
names such Loan Party or any of its Ongoing Subsidiaries as debtor, or
sign or suffer to exist, or permit any of its Ongoing Subsidiaries to sign
or suffer to exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any of
its Ongoing Subsidiaries to assign, any accounts or other right to receive
income, excluding, however, from the operation of the foregoing
restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 5.02(a)(iii) hereto, each in an amount and for a duration
not to exceed the amount and duration of such Lien listed on such
Schedule.
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(ii)(C), provided that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(v) purchase money Liens upon or in real property or equipment
acquired or any other property the purchase of which constitutes a
Capital Expenditure or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure the
purchase price of such property or equipment or to secure Debt
incurred solely for the purpose of financing the acquisition of any
such property or equipment to be subject to such Liens, or Liens
existing on any such property or equipment at the time of
acquisition (other than any such Liens created in contemplation of
such acquisition that do not secure the purchase price), or such
Liens placed on such property or equipment within six months of the
time of such acquisition (so long as such transactions are
consistent with past business practices), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount; provided, however, that no such Lien shall extend to or
cover any property other than the property or equipment being
acquired, and no such extension, renewal or replacement shall extend
to or cover any property not theretofore subject to the Lien being
extended, renewed or replaced; so long as
85
the aggregate principal amount of such Liens outstanding at any time
plus the aggregate principal amount of Capitalized Leases permitted
pursuant to Section 5.02(b)(ii)(C) outstanding at any time shall not
exceed $20,000,000;
(vi) the filing of financing statements solely as a
precautionary measure in connection with operating leases permitted
under Section 5.02(c);
(vii) the replacement, extension or renewal of any Lien
permitted by clause (iii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby;
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Ongoing Subsidiaries to create, incur, assume or suffer to exist, any
Debt other than:
(i) in the case of the Parent Guarantors, (A) Debt listed on
Schedule 5.02(b)(i)(A) in an amount for each item of Debt on such
Schedule not to exceed the amount listed for such Debt on such
Schedule and (B) Debt listed on Schedule 5.02(b)(i)(B) in an amount
for each item of Debt on such Schedule not to exceed the amount
listed for such debt on such Schedule, and
(ii) in the case of the Borrower and any of its Ongoing
Subsidiaries,
(A) Debt under the Loan Documents,
(B) Debt in respect of Hedge Agreements designed to
hedge against fluctuations in interest rates or foreign
exchange rates incurred in the ordinary course of business and
consistent with prudent business practice in an aggregate
notional amount not to exceed $100,000,000 for interest rate
Hedge Agreements at any time outstanding,
(C) Capitalized Leases, so long as the aggregate
principal amount of such Capitalized Leases outstanding at any
time plus the aggregate principal amount of Liens permitted
pursuant to Section 5.02(a)(v) outstanding at any time shall
not exceed $20,000,000,
(D) Debt assumed or incurred in connection with Capital
Expenditures secured by Liens permitted by Section 5.02(a)(v),
(E) Unsecured Debt in an aggregate amount not to exceed
$3,000,000,
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(F) Debt set forth on Schedule 5.02 (b)(ii)(F),
(G) The 12.125% Notes, until such time as such 12.125%
Notes shall be fully redeemed or repurchased pursuant to the
12.125% Note Indenture, so long as such 12.125% Notes remain
defeased pursuant to such Indenture, and
(iii) in the case of MEDIQ and any of its Ongoing
Subsidiaries,
(A) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business,
(B) any Guaranty of Obligations under the Loan
Documents,
(C) unsecured Debt (other than for the Borrower and its
Ongoing Subsidiaries) in an aggregate amount not to exceed
$250,000, and
(D) any indemnities (other than given by the Borrower
and its Ongoing Subsidiaries) in connection with Permitted
Asset Sales so long as such indemnities are generally
customary for such transactions, and
(E) any indemnities in connection with amounts owed by
Borrower to Congress Financial Corporation pursuant to the
Congress Agreement;
(iv) in the case of Holdings, any indemnities in connection
with amounts owed by Borrower to Congress Financial Corporation
pursuant to the Congress Agreement.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Ongoing Subsidiaries to create, incur, assume or suffer
to exist, any obligations as lessee (i) for the rental of medical
equipment of any kind in connection with any sale and leaseback
transaction, or (ii) for the rental of other medical equipment of any kind
under leases or agreements to lease, excluding Capitalized Leases, that
would cause such rental expense of MEDIQ and its Subsidiaries, on a
Consolidated basis, to exceed $2,250,000 of expense for any Fiscal Year
plus an amount equal to (1) the rental expense per Fiscal Year of any
Person acquired pursuant to an Investment permitted by Section 5.02(f)(i)
or (vi) at the time of such Investment less (2) the rental expense per
Fiscal Year of such Person in respect of such rentals existing at the time
of such Investment but ceasing to exist thereafter.
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(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Ongoing
Subsidiaries to do so, except that any wholly owned Subsidiary of MEDIQ or
Holdings other than the Borrower may merge into or consolidate with MEDIQ
or any other such Subsidiary other than the Borrower, so long as the
surviving Person is an Ongoing Subsidiary or MEDIQ; provided, however,
that, (A) the Borrower may merge into Holdings, so long as (i) the
Holdings Notes shall no longer be outstanding, and (ii) in the case of any
such merger or consolidation, the Person surviving such merger or
consolidation shall be the Borrower, (B) any wholly-owned Subsidiary of
the Borrower may merge or consolidate with any Person to effect the
acquisition of such Person or its property in a transaction permitted
under Section 5.02(f)(i) or (vi), so long as the Person surviving such
merger or formed by such consolidation is or becomes a wholly-owned
Subsidiary of the Borrower and complies with Section 5.01(o), and (C) the
Borrower may merge into (1) any wholly owned Subsidiary of the Borrower
acquired pursuant to Section 5.02(f)(i) or (vi), or (2) any wholly owned
Subsidiary previously merged or consolidated with any other wholly owned
Subsidiary acquired pursuant to Section 5.02(f)(i) or (vi), so long as the
Person surviving such merger is the Borrower.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets other than in the ordinary course of
business, or grant any option or other right to purchase, lease or
otherwise acquire any assets other than Inventory or rental equipment to
be sold or leased in the ordinary course of its business, except:
(i) in a transaction authorized by subsection (d) of this
Section,
(ii) Permitted Asset Sales; provided that any Net Cash
Proceeds of such Permitted Asset Sales not used to prepay
Acquisition Advances or Working Capital Advances in accordance with
Section 2.06 shall be deposited in the Asset Sale Blocked Account,
and
(iii) sales of all or any part of Discontinued Subsidiaries,
provided, however, that any Permitted Asset Sales shall in any event
be made in accordance with the terms of Section 5.02(e)(ii).
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except, so
long as no Default shall have occurred and be continuing at the time of
any action described below or would result therefrom:
(i) On or prior to the Conversion Date, using proceeds from
Acquisition Advances and/or from the Asset Sale Blocked Account,
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Investments by the Borrower in its wholly owned Ongoing Subsidiaries
organized under the laws of the United States or in the assets
comprising a substantial part or all of the business of any Person
or of an operating division of such Person, provided that:
(1) such Investments shall be in the same lines of business in
which the Borrower is involved on the date hereof,
(2) for the Rolling Period ended as at the end of the most
recent period for which financial statements were required to be
furnished to the Administrative Agent pursuant to Sections 5.03(b),
(c) or (d) and calculated immediately before and after giving effect
to such Investment, the Leverage Ratio shall be not more than 3.50
to 1.0,
(3) the amount of the Acquisition Advances plus the amount of
cash from the Asset Sale Blocked Account used for such an Investment
shall not exceed an amount equal to 5.5 multiplied by the 12 month
trailing EBITDA of such Person,
(4) the aggregate amount of the Acquisition Advances plus the
aggregate amount of cash from the Asset Sale Blocked Account used
for all such Investments plus an amount equal to the aggregate value
of the common stock of MEDIQ used for all such Investments shall not
exceed $100,000,000.
(ii) Investments by MEDIQ, the Borrower and each of their
Ongoing Subsidiaries existing on the date hereof and described on
Schedule 4.01(gg) hereto;
(iii) loans and advances by MEDIQ, the Borrower and each of
their Ongoing Subsidiaries to employees in the ordinary course of
the business of the Borrower as presently conducted in an aggregate
principal amount not to exceed $500,000 at any time outstanding;
(iv) Investments by MEDIQ, the Borrower or their Subsidiaries
in (A) demand deposit accounts maintained in the ordinary course of
business with any Person of the type referred to in clause (i),
(ii), (iii), (iv) or (v) of the definition of "Eligible Assignee",
(B) Cash Equivalents, (C) the Asset Sale Blocked Account and other
accounts maintained pursuant to the Security Agreement and (D) the
Citibank Account;
(v) Investments by the Borrower in Hedge Agreements permitted
under Section 5.02(b)(ii)(B);
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(vi) Investments by the Borrower in its wholly owned Ongoing
Subsidiaries, or in the assets comprising a substantial part or all
of the business of any Person or of an operating division of such
Person, such Subsidiaries or Person organized under the laws of the
United States from and after the Conversion Date, (x) from the
amount of the Excess Cash Flow Basket and (y) in addition, from
MEDIQ common stock, in an aggregate amount not to exceed
$10,000,000;
(vii) Investments by Discontinued Subsidiaries in an aggregate
amount not to exceed $1,000,000;
(viii) Investments by MEDIQ Management Services, Inc. in an
aggregate amount not to exceed $1,000,000; and
(ix) Investments evidenced by promissory notes issued to the
Borrower, in the ordinary course of business, with respect to
amounts due to the Borrower.
(g) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or
any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such or issue or sell any
capital stock or any warrants, rights or options to acquire such capital
stock, or, in the case of MEDIQ or Holdings, permit the Borrower to do any
of the foregoing or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any capital stock of such
Loan Party or any warrants, rights or options to acquire such capital
stock or to issue or sell any capital stock or any warrants, rights or
options to acquire such capital stock, except that so long as no Default
shall have occurred and be continuing at the time of any action described
below or would result therefrom, any Subsidiary of the Borrower may
declare and pay cash dividends to the Borrower, except:
(i) After the period ending on the date twelve months after
the date of the Initial Extension of Credit, the Borrower may pay
cash dividends or advance funds directly or indirectly to MEDIQ to
permit MEDIQ to repurchase the common stock of MEDIQ and to pay cash
dividends, following the Asset Sale Threshold Date, in an aggregate
amount not to exceed $20,000,000 so long as the Leverage Ratio for
the Rolling Period ended as at the end of the most recent period for
which financial statements were required to be furnished to the
Administrative Agent pursuant to Sections 5.03(b), (c) or (d) on a
pro forma basis, giving effect to such repurchase, shall be no
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greater than 3.0 to 1.0, provided that no Investments permitted
under Section 5.02(f)(i) have occurred;
(ii) the Borrower may pay cash dividends or advance funds
directly or indirectly to MEDIQ to permit MEDIQ to repurchase the
common stock of MEDIQ and to pay cash dividends with respect to any
Fiscal Year equal to the lesser of (x) 50% of cumulative net income
for each Fiscal Year in the period beginning October 1, 1996 less an
amount equal to the aggregate amount of cash dividends previously
paid pursuant to this clause (x) during such period or (y) the
amount of the Excess Cash Flow Basket;
(iii) the Borrower may pay or advance up to $1,500,000 in the
aggregate per annum to the Parent Guarantors for operating expenses
in the ordinary course of business;
(iv) any Loan Party may make payments under the Tax Sharing
Agreement;
(v) the Borrower may pay cash dividends or advance funds
directly or indirectly to MEDIQ to permit MEDIQ to prepay its
Subordinated Notes, so long as such prepayment is permitted under
Sections 5.02(k)(i)(y)(B);
(vi) MEDIQ may issue common stock; and
(vii) the Borrower may pay or advance funds directly or
indirectly to MEDIQ to permit MEDIQ to make interest payments on the
Subordinated Notes.
(h) Change in Nature of Business. Make, or permit any of its Ongoing
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(i) Charter Amendments. Amend, or permit any of its Ongoing
Subsidiaries to amend, its certificate of incorporation or bylaws, unless
such change would not have a Material Adverse Effect or does not adversely
affect the rights and remedies of the Administrative Agent or any Lender
Party under any Loan Document or any Related Document.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by generally accepted accounting
principles or (ii) Fiscal Year.
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(k) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase, defease
or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of,
any Debt, other than:
(x) the prepayment of the Advances in accordance with the
terms of this Agreement, and
(y) if before and after giving effect to any such redemption,
purchase, defeasance or other satisfaction no Default has occurred
or would result therefrom,
(A) regularly scheduled or required repayments or
redemptions of Surviving Debt, other than the Subordinated
Notes, and
(B) prior to the Conversion Date, with Acquisition
Advances used in accordance with Section 2.14(b) or amounts on
deposit in the Asset Sale Blocked Account, regularly scheduled
or required prepayments or redemptions, or the redemption,
repurchase, defeasance or other satisfaction of the
Subordinated Notes so long as the Senior Leverage Ratio for
the Rolling Period ended as at the end of the most recent
period for which financial statements were required to be
furnished to the Administrative Agent pursuant to Sections
5.03(b), (c) or (d), on a pro forma basis after giving effect
to such Advance, shall be no greater than 3.75 to 1.0, or
(C) from and after the Conversion Date, the redemption,
repurchase, defeasance or other satisfaction of the
Subordinated Notes with the amount of the Excess Cash Flow
Basket or
(ii) amend, modify or change in any manner any term or condition of
the Subordinated Notes, or permit any of its Subsidiaries to do any of the
foregoing other than to prepay any Debt payable to the Borrower.
(l) Amendment, Etc. of Related Documents. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of
any Related Document or give any consent, waiver or approval thereunder,
waive any default under or any breach of any term or condition of any
Related Document, agree in any manner to any other amendment, modification
or change of any term or condition of any Related Document or take any
other action in connection with any Related Document that would impair the
value of the interest or rights of the Borrower
92
thereunder or that would impair the rights or interests of the
Administrative Agent or any Lender Party, or permit any of its
Subsidiaries to do any of the foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or permit any of
its Ongoing Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Secured
Parties or (ii) in connection with (A) any Surviving Debt, (B) any Debt
secured by purchase money Liens and Capitalized Leases, in each case, to
the extent permitted under Sections 5.02(a)(v) and 5.02(b)(ii)(C),
respectively or (C) Liens on the common stock of InnoServ, Inc. under the
Agreement of Merger and Plan of Reorganization dated as of May 18, 1994,
as amended through the date hereof, among MMI Medical, Inc., MMI
Acquisition Subsidiary, Inc., MEDIQ and MEDIQ Equipment and Maintenance
Services, Inc. or (D) the negative pledge in favor of Summit Bank in
respect of the Borrower's membership interest in MEDIQ PRN/HNE, L.L.C.
(n) Partnerships. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so
other than as permitted by Section 5.02(f)(ii).
(o) Other Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures
contracts or any similar speculative transactions (including, without
limitation, take-or-pay contracts) except for Hedge Agreements permitted
under Section 5.02(b)(ii)(B).
SECTION 5.03. Reporting Requirements. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, MEDIQ or the Borrower will furnish to the
Lender Parties (except for the notice required under Section 5.03(a), which
shall be given to the Administrative Agent):
(a) Default Notice. As soon as possible and in any event within two
Business Days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of a
Responsible Officer setting forth details of such Default and the action
that the Borrower has taken and proposes to take with respect thereto.
(b) Monthly Financials. As soon as available and in any event within
30 days after the end of each month (other than for each month on which a
fiscal quarter is also ending, in which event such financials shall be
delivered within 45 days), commencing September 30, 1996, Consolidated and
consolidating balance
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sheets of MEDIQ and its Subsidiaries as of the end of such month and
Consolidated and consolidating statements of income of MEDIQ and its
Subsidiaries and Consolidated statements of cash flow of each of MEDIQ and
its Subsidiaries and Holdings and its Subsidiaries for the period
commencing at the end of the previous month and ending with the end of
such month and Consolidated and consolidating statements of income of
MEDIQ and its Subsidiaries and Consolidated statements of cash flow of
each of MEDIQ and its Subsidiaries and Holdings and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending
with the end of such month, setting forth in each case in comparative form
the corresponding figures for the corresponding month of the preceding
Fiscal Year and the corresponding figures for the corresponding month of
the current annual forecast, all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the chief financial officers of
MEDIQ and Holdings, respectively, together with (i) a certificate of the
chief financial officer of MEDIQ stating that no Default has occurred and
is continuing or, if a Default has occurred and is continuing, a statement
as to the nature thereof and the action that MEDIQ has taken and proposes
to take with respect thereto, and (ii) in the event of any change from
GAAP in the generally accepted accounting principles used in the
preparation of such financial statements, a statement of reconciliation
conforming such financial statements to GAAP.
(c) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the quarters of each Fiscal Year,
Consolidated and consolidating balance sheets of MEDIQ and its
Subsidiaries as of the end of such quarter and Consolidated and
consolidating statements of income of MEDIQ and its Subsidiaries and a
Consolidated statement of cash flow of each of MEDIQ and its Subsidiaries
and Holdings and its Subsidiaries for the period commencing at the end of
the previous fiscal quarter and ending with the end of such fiscal quarter
and Consolidated and consolidating statements of income of MEDIQ and its
Subsidiaries and Consolidated statements of cash flow of each of MEDIQ and
its Subsidiaries and Holdings and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end
of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding Fiscal
Year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officers of MEDIQ and Holdings,
respectively, as having been prepared in accordance with generally
accepted accounting principles consistent with those applied in the most
recent annual audit, together with (i) a certificate of the chief
financial officer of MEDIQ stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that MEDIQ has taken and proposes to
take with respect thereto, (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by MEDIQ in determining
compliance with the covenants contained in Sections 5.04(a) through (e)
and (iii) in the event of
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any change from GAAP in the generally accepted accounting principles used
in the preparation of such financial statements, a statement of
reconciliation conforming such financial statements to GAAP.
(d) Annual Financials. As soon as available and in any event within
90 days after the end of each Fiscal Year, a copy of the annual audit
report for such year for MEDIQ and its Subsidiaries, including therein a
Consolidated balance sheet of MEDIQ and its Subsidiaries as of the end of
such Fiscal Year and Consolidated statements of income and cash flow of
MEDIQ and its Subsidiaries for such Fiscal Year, all Consolidated balance
sheets and statements of income and cash flow accompanied by an opinion
reasonably acceptable to the Required Lenders of Deloitte & Touche LLP or
other independent public accountants of recognized standing reasonably
acceptable to the Required Lenders and a consolidating balance sheet of
MEDIQ and its Subsidiaries as of the end of such Fiscal Year and a
consolidating statement of income of MEDIQ and its Subsidiaries and a
Consolidated statement of cash flow of Holdings and its Subsidiaries for
such Fiscal Year certified by the chief financial officers of MEDIQ and
Holdings, respectively, together with (i) a schedule prepared by such
officer in form satisfactory to the Administrative Agent of the
computations used by MEDIQ and its Ongoing Subsidiaries in determining, as
of the end of such Fiscal Year, compliance with the covenants contained in
Sections 5.04(a) through (f), (ii) a certificate of the chief financial
officer of MEDIQ stating that no Default has occurred and is continuing
or, if a default has occurred and is continuing, a statement as to the
nature thereof and the action that MEDIQ has taken and proposes to take
with respect thereto and (iii) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such
financial statements to GAAP.
(e) Annual Forecasts. As soon as available and in any event no later
than the end of each Fiscal Year, forecasts prepared by management of
MEDIQ, in form satisfactory to the Administrative Agent, of Consolidated
and consolidating balance sheets and income statements and a Consolidated
cash flow statement on a monthly basis for the Fiscal Year following such
Fiscal Year then ended and on an annual basis for each Fiscal Year
thereafter until the Final Maturity Date.
(f) ERISA Events and ERISA Reports. (i) Promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the chief
financial officer of the Borrower describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has taken and
proposes to take with respect thereto and (ii) on the date any records,
documents or other information must be furnished to the
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PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of
such records, documents and information.
(g) Plan Terminations. Promptly and in any event within two Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any
Plan or to have a trustee appointed to administer any Plan.
(h) Actuarial Reports. Promptly upon receipt thereof by any Loan
Party or any ERISA Affiliate, a copy of the annual actuarial valuation
report of each Plan.
(i) Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Plan.
(j) Multiemployer Plan Notices. Promptly and in any event within
five Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (ii) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (iii) the
amount of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in clause
(i) or (ii).
(k) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(h) or such action,
suit, investigation, litigation or proceeding alleges monetary damages in
excess of $1,000,000.
(l) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports
that any Loan Party or any of its Subsidiaries sends to its stockholders,
and copies of all regular, periodic and special reports, and all
registration statements, that any Loan Party or any of its Subsidiaries
files with the Securities and Exchange Commission or any governmental
authority that may be substituted therefor, or with any national
securities exchange.
(m) Creditor Reports. Promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities
of any Loan Party or of any of its Subsidiaries (including, without
limitation, the holders of the
96
Subordinated Notes) pursuant to the terms of the 7.25% Note Indenture, the
7.50% Note Indenture, the 12.125% Note Indenture or the NutraMax Escrow
Agreement, loan or credit or similar agreement and not otherwise required
to be furnished to the Lender Parties pursuant to any other clause of this
Section 5.03.
(n) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under or pursuant to any Related Document or indenture,
loan or credit or similar agreement regarding or related to any breach or
default by any party thereto or any other event that could materially
impair the value of the interests or the rights of any Loan Party or any
of its Subsidiaries or otherwise have a Material Adverse Effect and copies
of any amendment, modification or waiver of any provision of the NutraMax
Note, the NutraMax Letter of Credit, any Related Agreement or indenture,
loan or credit or similar agreement and, from time to time upon request by
the Administrative Agent, such information and reports regarding the
Related Documents as the Administrative Agent may reasonably request.
(o) Revenue Agent Reports. Within 10 days after receipt, copies of
all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose, determine
or otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which the
Borrower is a member aggregating $250,000 or more.
(p) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
condition or occurrence on any property of any Loan Party or any of its
Subsidiaries that results in a material noncompliance by any Loan Party or
any of its Subsidiaries with any Environmental Law or Environmental Permit
that (i) could be reasonably expected to have a Material Adverse Effect or
(ii) cause any property described in the Mortgage to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(q) Real Property. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report supplementing Schedule
4.01(ff) hereto, including an identification of all owned real property
disposed of by the Loan Parties or any of its Subsidiaries during such
Fiscal Year, a list and description (including the street address, county
or other relevant jurisdiction, state, record owner, book value thereof)
of all real property acquired during such Fiscal Year and a description of
such other changes in the information included in such Schedule as may be
necessary for such Schedule to be accurate and complete.
97
(r) Insurance. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for the Loan
Parties (excluding any Discontinued Subsidiary) and their Ongoing
Subsidiaries and containing such additional information as any Lender
Party (through the Administrative Agent) may reasonably specify.
(s) Borrowing Base Certificate. As soon as available and in any
event within 20 days after the end of each month, a Borrowing Base
Certificate, as at the end of such month, certified by the chief financial
officer of the Borrower.
(t) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
the Administrative Agent or any Lender Party (through the Administrative
Agent) may from time to time reasonably request.
(u) Clean-Down Notice. Within 5 Business Days prior to the
commencement of a Clean-Down Period of the Borrower, a notice from the
chief financial officer of the Borrower setting forth the precise day on
which the Clean-Down Period will begin.
SECTION 5.04. Financial Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, MEDIQ and its Ongoing Subsidiaries will:
(a) Net Worth. Maintain at all times an excess of Consolidated total
assets over Consolidated total liabilities, in each case, of MEDIQ and its
Ongoing Subsidiaries of not less than the amount set forth below for the
period set forth below:
Quarter Ending Amount
-------------- ------
December 31, 1996 $ 6,000,000
March 31, 1997 $ 7,500,000
June 30, 1997 $ 8,500,000
September 30, 1997 $ 9,500,000
December 31, 1997 $10,500,000
March 31, 1998 $13,000,000
June 30, 1998 $15,000,000
September 30, 1998 $16,500,000
December 31, 1998 $18,500,000
March 31, 1999 $22,500,000
June 30, 1999 $25,500,000
September 30, 1999 $27,500,000
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December 31, 1999 $ 31,500,000
March 31, 2000 $ 36,500,000
June 30, 2000 $ 40,500,000
September 30, 2000 $ 44,500,000
December 31, 2000 $ 49,500,000
March 31, 2001 $ 55,500,000
June 30, 2001 $ 58,500,000
September 30, 2001 $ 64,500,000
December 31, 2001 $ 69,500,000
March 31, 2002 $ 76,500,000
June 30, 2002 $ 81,500,000
September 30, 2002 $ 87,500,000
December 31, 2002 $ 91,500,000
March 31, 2003 $ 96,500,000
June 30, 2003 and thereafter $100,000,000
provided that each amount set forth above, and each amount thereafter,
shall be (x) increased by an amount equal to the income from any Permitted
Asset Sale or (y) decreased by the sum of (i) any loss resulting from any
Permitted Asset Sale, net of any tax or other expense on such sale and
(ii) any dividends or stock repurchases otherwise permitted under this
Agreement, commencing on the date immediately following the date of such
sale or such dividend or stock repurchase.
(b) Leverage Ratio. Maintain on a Consolidated basis for itself and
its Ongoing Subsidiaries a Leverage Ratio for each Quarterly Rolling
Period ended as at the end of the quarter (of the Fiscal Year) ending on
the date set forth below of not more than the amount set forth below for
such Quarterly Rolling Period:
Quarterly Rolling Period Ending On Ratio
---------------------------------- -----
December 31, 1996 4.75
March 31, 1997 4.75
June 30, 1997 4.50
September 30, 1997 4.50
December 31, 1997 4.50
March 31, 1998 4.50
June 30, 1998 4.00
September 30, 1998 4.00
December 31, 1998 3.75
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March 31, 1999 3.50
June 30, 1999 3.50
September 30, 1999 3.25
December 31, 1999 3.25
March 31, 2000 3.00
June 30, 2000 3.00
September 30, 2000 2.75
December 31, 2000 2.75
March 31, 2001 2.50
June 30, 2001 2.50
September 30, 2001 2.25
December 31, 2001 2.25
March 31, 2002 2.25
June 30, 2002, and thereafter 2.00
(c) Senior Leverage Ratio. Maintain on a Consolidated basis for
itself and its Ongoing Subsidiaries a Senior Leverage Ratio for each
Quarterly Rolling Period ended as at the end of the quarter (of the Fiscal
Year) ending on the date set forth below of not more than the amount set
forth below for such Quarterly Rolling Period:
Quarterly Rolling Period Ending On Ratio
---------------------------------- -----
December 31, 1996 4.25
March 31, 1997 4.25
June 30, 1997 4.00
September 30, 1997 4.00
December 31, 1997 4.00
March 31, 1998 4.00
June 30, 1998 3.50
September 30, 1998 3.50
December 31, 1998 3.25
March 31, 1999 3.00
June 30, 1999 3.00
September 30, 1999 2.75
December 31, 1999 2.75
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March 31, 2000 2.50
June 30, 2000 2.50
September 30, 2000 2.25
December 31, 2000 2.25
March 31, 2001 2.00
June 30, 2001 2.00
September 30, 2001 1.75
December 31, 2001 1.75
March 31, 2002 1.75
June 30, 2002, and thereafter 1.50
(d) Fixed Charge Coverage Ratio. Maintain on a Consolidated basis
for itself and its Ongoing Subsidiaries a Fixed Charge Coverage Ratio for
each Quarterly Rolling Period ended as at the end of each quarter of each
Fiscal Year (i) ending on or prior to September 30, 2000 of not less than
1.05 or (ii) ending at any time thereafter of not less than 1.10.
(e) Interest Coverage Ratio. Maintain on a Consolidated basis for
itself and its Ongoing Subsidiaries an Interest Coverage Ratio for each
Quarterly Rolling Period ended as at the end of the quarter (of the Fiscal
Year) ending on the date set forth below of not less than the amount set
forth below for such Quarterly Rolling Period:
Quarterly Rolling Period Ending On Ratio
---------------------------------- -----
December 31, 1996 2.00
March 31, 1997 2.25
June 30, 1997 2.25
September 30, 1997 2.25
December 31, 1997 2.25
March 31, 1998 2.50
June 30, 1998 2.50
September 30, 1998 2.50
December 31, 1998 2.75
March 31, 1999 2.75
June 30, 1999 2.75
September 30, 1999 3.00
December 31, 1999 3.00
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March 31, 2000 3.25
June 30, 2000 3.25
September 30, 2000 3.50
December 31, 2000 3.75
March 31, 2001 3.75
June 30, 2001 and thereafter 4.00
(f) Capital Expenditures. Not make, or permit any of its Ongoing
Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures made by MEDIQ and its Ongoing
Subsidiaries in any Fiscal Year to exceed $14,000,000; provided, however,
that if any Investment pursuant to Section 5.02(f)(i) or (vi) shall have
occurred, for each increment of $3,000,000 of EBITDA, as determined at any
time during such Fiscal Year on a historical basis for the twelve month
period ending on the date of such determination, attributable to all such
Investments, the amount specified above shall be increased by an increment
of $1,000,000, so long as such total amount shall not exceed $20,000,000;
provided, further, that if, at the end of any Fiscal Year (the "Prior
Fiscal Year"), the amount specified above for such Fiscal Year exceeds the
amount of Capital Expenditures made by the Borrower during such Fiscal
Year (the amount of such excess being the "Excess Amount"), MEDIQ and its
Ongoing Subsidiaries shall be entitled to make additional Capital
Expenditures in the succeeding Fiscal Year in an amount (such amount being
referred to herein as the "Carryover Amount") equal to the lesser of (i)
the Excess Amount and (ii) 1/3 of the amount specified above for the Prior
Fiscal Year and, provided still further that the amount of Capital
Expenditures during any Fiscal Year may be increased by an amount equal to
100% minus the applicable Recapture Percentage multiplied by the amount of
Excess Cash Flow for the prior Fiscal Year ratably reduced by the sum of
(A) the amount of any payment of dividends pursuant to Section
5.02(g)(ii), (B) the amount of any repurchase of stock pursuant to Section
5.02(g)(ii), (C) the amount of any Investments made pursuant to Section
5.02(f)(vi) and (D) the amount of any refinancing of Subordinated Notes
pursuant to 5.02(k)(i)(y)(B).
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
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(a) the Borrower shall fail to pay any principal of any Advance as
the same becomes due and payable, or the Borrower or any other Loan Party
shall fail to pay any interest on any Advance or make any other payment
under any Loan Document within two Business Days after the same becomes
due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Xxxxxxxx 0.00, 0.00, 0.00(x), (x), (x), (x), (x)
or (n), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 15 days after the
earlier of the date on which (A) a Responsible Officer of the Borrower
becomes aware of such failure or (B) written notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender
Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in
respect of any Debt that is outstanding in a principal or notional amount
of at least $1,000,000 either individually or in the aggregate (but
excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt or otherwise to
cause, or to permit the holder thereof to cause, such Debt to mature; or
any such Debt shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled or required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Loan Party or any of its Subsidiaries
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seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief,
or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith,
either such proceeding shall remain undismissed or unstayed for a period
of 45 days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or any substantial part of its property) shall occur; or any Loan
Party or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$1,000,000 (to the extent not fully paid or discharged) shall be rendered
against any Loan Party or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could have a Material Adverse
Effect, and there shall be any period of 10 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(m) shall for any reason cease to be valid
and binding on or enforceable against any Loan Party to it, or any such
Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(m) shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority lien
on and security interest in the Collateral purported to be covered thereby
except as permitted hereunder; or
(k) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of MEDIQ
(together with any new directors whose election to such Board or whose
nomination for election by the shareholders of MEDIQ was approved by a
vote of at least 66-2/3% of the
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directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of such Board
of Directors then in office; or if at any time any Person or two or more
Persons acting in concert shall acquire Beneficial Ownership of Voting
Stock of MEDIQ representing a percentage of the combined voting power of
all Voting Stock of MEDIQ that exceeds (i) the percentage of the combined
voting power of all Voting Stock of MEDIQ Beneficially Owned by the
Investor Group or any one or more of the members thereof or (ii) 30% of
the outstanding Voting Stock of the Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other
Plans with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and the ERISA Affiliates
related to such ERISA Event) exceeds $1,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined
as of the date of such notification), exceeds $250,000 or requires
payments exceeding $50,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding $50,000; or
(o) there shall occur any Material Adverse Change;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Appropriate Lender to make Advances (other than
Letter of Credit Advances by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c)) and of the Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required Lenders, by
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notice to the Borrower, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Loan Party or any of its
Subsidiaries under the Federal Bankruptcy Code, (x) the obligation of each
Lender to make Advances (other than Letter of Credit Advances by the Issuing
Bank or a Working Capital Lender pursuant to Section 2.03(c)) and of the Issuing
Bank to issue Letters of Credit shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, irrespective of whether it is taking any of the
actions described in Section 6.01 or otherwise, make demand upon the Borrower
to, and forthwith upon such demand the Borrower will, pay to the Administrative
Agent on behalf of the Lender Parties in same day funds at the Administrative
Agent's office designated in such demand, for deposit in the L/C Cash Collateral
Account, an amount equal to the aggregate Available Amount of all Letters of
Credit then outstanding. If at any time the Administrative Agent determines that
any funds held in the L/C Cash Collateral Account are subject to any right or
claim of any Person other than the Administrative Agent and the Lender Parties
or that the total amount of such funds is less than the aggregate Available
Amount of all Letters of Credit, the Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent determines to be free and clear of any such right and
claim.
ARTICLE VII
PARENT GUARANTIES
SECTION 7.01. Guaranty. Each Parent Guarantor hereby unconditionally
and irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of each Loan Party
now or hereafter existing under the Loan Documents, whether for principal,
interest, fees, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Agents or the Lender Parties in
enforcing any rights under this Guaranty. Without limiting the generality of the
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foregoing, each Parent Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any Loan
Party to the Administrative Agent, the Agents or any Lender Party under the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower.
SECTION 7.02. Guaranty Absolute. Each Parent Guarantor guarantees
that the Guaranteed Obligations will be paid strictly in accordance with the
terms of the Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or any other Secured Party with respect
thereto. The Obligations of each Parent Guarantor under this Guaranty are
independent of the Guaranteed Obligations or any other Obligations of any Loan
Party under the Loan Documents, and a separate action or actions may be brought
and prosecuted against any Parent Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against any Loan Party or whether
any Loan Party is joined in any such action or actions. The liability of each
Parent Guarantor under this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and each Parent Guarantor hereby irrevocably
waives any defenses it may now or hereinafter have in any way relating to, any
or all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrower or any
of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations
or any other Obligations of any other Loan Party under the Loan Documents
or any other assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries; or
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(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent or any other Secured Party that
might otherwise constitute a defense available to, or a discharge of, any
Loan Party, any Parent Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any other Secured
Party upon the insolvency, bankruptcy or reorganization of any Loan Party or
otherwise, all as though such payment had not been made.
SECTION 7.03. Waiver. Each Parent Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any
action against any Loan Party or any other Person or any collateral. Each Parent
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Loan Documents and that the
waiver set forth in this Section 7.03 is knowingly made in contemplation of such
benefits.
SECTION 7.04. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments made by each Parent Guarantor hereunder or under the Notes shall be
made, in accordance with Section 2.11, free and clear of and without deduction
for any and all present or future Taxes. If any Parent Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Administrative Agent or any other Secured Party, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent or such other Secured Party (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Parent Guarantor shall make such deductions and
(iii) such Parent Guarantor shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, each Parent Guarantor agrees to pay any present or
future Other Taxes.
(c) Each Parent Guarantor will indemnify the Administrative Agent
and each other Secured Party for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by the Administrative
Agent or such other Secured Party (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising
108
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date the Administrative Agent or such other Secured Party (as the
case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Parent Guarantor will furnish to the Administrative Agent, at its address
referred to in Section 9.02, appropriate evidence of payment thereof. If no
Taxes are payable in respect of any payment hereunder by any Parent Guarantor
through an account or branch outside the United States or on behalf of such
Parent Guarantor by a payor that is not a United States person, such Parent
Guarantor will furnish, or will cause such payor to furnish, to the
Administrative Agent a certificate from each appropriate taxing authority or
authorities, or an opinion of counsel acceptable to the Administrative Agent, in
either case stating that such payment is exempt from or not subject to Taxes.
For purposes of this subsection (d), the terms "United States" and "United
States person" shall have the meaning specified in Section 7701 of the Internal
Revenue Code.
(e) Without prejudice to the survival of any other agreement of any
Parent Guarantor hereunder, the agreements and obligations of such Parent
Guarantor contained in this Section 7.04 shall survive the payment in full of
the Guaranteed Obligations and all other amounts payable under this Guaranty.
SECTION 7.05. Continuing Guaranty; Assignments. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Guaranty and the Termination Date, (b) be binding
upon each Parent Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Administrative Agent and the other Secured
Parties and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations hereunder (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise, in each case as provided in Section 9.07.
SECTION 7.06. Subrogation. The Parent Guarantors will not exercise
any rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Parent Guarantor's Obligations under this Agreement or any
other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent or any other
Secured Party against the Borrower or any other insider guarantor or any
collateral, whether or not such claim, remedy or right arises in equity or under
contract,
109
statute or common law, including, without limitation, the right to take or
receive from the Borrower or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash and the Commitments shall have expired or
terminated. If any amount shall be paid to the Parent Guarantor in violation of
the preceding sentence at any time prior to the later of the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty and the Termination Date, such amount shall be held in trust for the
benefit of the Administrative Agent and the Secured Parties and shall forthwith
be paid to the Administrative Agent to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) the Parent Guarantor shall make payment to
the Administrative Agent or any other Secured Party of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall be paid in full in cash and (iii) the
Termination Date shall have occurred, the Administrative Agent, and the other
Secured Parties will, at the Parent Guarantor's request and expense, execute and
deliver to the Parent Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Parent Guarantor of an interest in the Guaranteed Obligations
resulting from such payment by the Parent Guarantor.
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action. Each Lender Party (in its
capacities as a Lender, the Issuing Bank (if applicable) and a potential Hedge
Bank) hereby appoints and authorizes each Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement and
the other Loan Documents as are delegated to such Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), each
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders (or all the Lenders to the extent required by 9.01) and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this Agreement
or
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applicable law. Each Agent agrees to give to each Lender Party prompt notice of
each notice given to it by the Borrower pursuant to the terms of this Agreement.
SECTION 8.02. Agents' Reliance, Etc. None of the Agents nor any of
their 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 the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each Agent: (a) may treat
the payee of any Note as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the Lender
that is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 9.07; (b) may consult with legal counsel
(including counsel for any Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
Party and shall not be responsible to any Lender Party for any statements,
warranties or representations (whether written or oral) made in or in connection
with the 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 any Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. BNP, NationsBank and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, each of BNP and
NationsBank shall have the same rights and powers under the Loan Documents as
any other Lender Party and may exercise the same as though they were not Agents;
and the term "Lender Party" or "Lenders Parties" shall, unless otherwise
expressly indicated, include BNP in its individual capacity. Each of BNP and
NationsBank and their affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if BNP and NationsBank were not Agents
and without any duty to account therefor to the Lender Parties.
SECTION 8.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent or
any other
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Lender Party and based on the financial statements referred to in Section 4.01
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender Party
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender Party 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.
SECTION 8.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of 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 such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from any Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 9.04, to the extent that such Agent is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes of
this Section 8.05, the Lender Parties' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lender Parties, (b) their respective Pro Rata Shares of the aggregate
Available Amount of all Letters of Credit outstanding at such time, (c) the
aggregate unused portions of their respective Term Commitments at such time and
(d) their respective Unused Working Capital Commitments and Unused Acquisition
Commitments at such time. In the event that any Defaulted Advance shall be owing
by any Defaulting Lender at any time, such Lender Party's Commitment with
respect to the Facility under which such Defaulted Advance was required to have
been made shall be considered to be unused for purposes of this Section 8.05(a)
to the extent of the amount of such Defaulted Advance. The failure of any Lender
Party to reimburse any Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lender Party to such Agent as provided herein
shall not relieve any other Lender Party of its obligation hereunder to
reimburse each Agent for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse any
Agent for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
8.05(a) shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
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(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of 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 the Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents; provided, however, that no Lender
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Issuing Bank's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender Party agrees to reimburse the
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 9.04, to the extent that the Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes of
this Section 8.05(b), the Lender Parties' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(c) the aggregate unused portions of their respective Term Commitments at such
time plus (d) their respective Unused Working Capital Commitments and Unused
Acquisition Commitments at such time. In the event that any Defaulted Advance
shall be owing by any Defaulting Lender at any time, such Lender Party's
Commitment with respect to the Facility under which such Defaulted Advance was
required to have been made shall be considered to be unused for purposes of this
Section 8.05(b) to the extent of the amount of such Defaulted Advance. The
failure of any Lender Party to reimburse the Issuing Bank promptly upon demand
for its ratable share of any amount required to be paid by the Lender Parties to
the Issuing Bank as provided herein shall not relieve any other Lender Party of
its obligation hereunder to reimburse the Issuing Bank for its ratable share of
such amount, but no Lender Party shall be responsible for the failure of any
other Lender Party to reimburse the Issuing Bank for such other Lender Party's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of each
Lender Party contained in this Section 8.05(b) shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the
other Loan Documents.
SECTION 8.06. Successor Agents. Any Agent may resign at any time by
giving written notice thereof to the Lender Parties. Upon any such resignation
or removal, the Required Lenders shall have the right to appoint a successor
Agent, subject to the approval of the Borrower which shall not be unreasonably
withheld or delayed. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation, the retiring Agent may, on
behalf of the Lender Parties, appoint a successor
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Agent, subject to the approval of the Borrower which shall not be unreasonably
withheld or delayed, which shall be a commercial bank organized under the laws
of the United States or of any State thereof and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent and upon the execution and filing or
recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article VIII shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Loan Party therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than any Lender Party that is, at such time, a Defaulting Lender), do any
of the following at any time: (i) waive any of the conditions specified in
Section 3.01 or, in the case of the Initial Extension of Credit, Section 3.02 or
3.03, (ii) change the number of Lenders or the percentage of (x) the
Commitments, (y) the aggregate unpaid principal amount of the Advances or (z)
the aggregate Available Amount of outstanding Letters of Credit, that, in each
case, shall be required for the Lenders or any of them to take any action
hereunder, (iii) release all or substantially all of the Collateral in any
transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on all or substantially all of
the Collateral in any transaction or series of related transactions to secure
any Obligations other than Obligations owing to the Secured Parties under the
Loan Documents or (iv) amend this Section 9.01 and (b) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has a Commitment under the Term A Facility, Term B Facility, the
Acquisition Facility or Working Capital Facility if affected by such amendment,
waiver or consent, (i) increase the Commitments of such Lender or subject such
Lender to any additional obligations,
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(ii) reduce the principal of, or interest on, the Notes held by such Lender or
any fees or other amounts payable hereunder to such Lender, (iii) postpone any
date fixed for any payment of principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender or
(iv) change the order of application of any prepayment set forth in Section 2.06
in any manner that materially affects such Lender; provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Issuing
Bank, in addition to the Lenders required above to take such action, affect the
rights or obligations of the Issuing Bank under this Agreement; and provided
further that no amendment, waiver or consent shall, unless in writing and signed
by any Agent in addition to the Lenders required above to take such action,
affect the rights or duties of such Agent under this Agreement.
SECTION 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
by an overnight courier of nationally recognized standing, if to the Borrower,
at its address at Xxx XXXXX Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention:
Chief Financial Officer and General Counsel, telecopier number (000) 000-0000;
if to any Initial Lender or any Initial Issuing Bank, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other Lender
Party, at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender Party; if to BNP, at its address at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Group,
telecopier number (000) 000-0000; and if to NationsBank, at its address at 0
XxxxxxxXxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000-0000, Attention: Health Care
Finance Group, telecopier number (000) 000-0000 with a copy to NationsBank,
N.A., 000 Xxxxx Xxxxx Xxxxxx, XxxxxxxXxxx Corporate Center, Xxxxxxxxx, XX 00000,
Attention: Health Care Finance Group, telecopier number (000) 000-0000; or, as
to each party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and communications shall,
when mailed, telegraphed, telecopied, telexed or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the overnight courier,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article II, III or VIII shall not be effective until received by the
Administrative Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
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SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all reasonable out-of-pocket costs and expenses of the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of counsel
for the Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all reasonable out-of-pocket costs and
expenses of the Administrative Agents and the Lender Parties in connection with
the enforcement of the Loan Documents, whether in any action, suit or
litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally (including, without limitation, the reasonable fees
and expenses of counsel for the Administrative Agent and each Lender Party with
respect thereto).
(b) The Borrower agrees to indemnify and hold harmless each Agent,
each Lender Party and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and reasonable out-of-pocket
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with (i) the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby (including, without limitation, the Refinancing and any of the other
transactions contemplated hereby) or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
The Borrower also agrees not to assert any claim against any Agent, any Lender
Party or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect,
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consequential or punitive damages arising out of or otherwise relating to the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment pursuant to Section 2.05, a payment or Conversion pursuant to
Section 2.09(b)(i) or 2.10(d), acceleration of the maturity of the Notes
pursuant to Section 6.01 or for any other reason, or by an Eligible Assignee to
a Lender Party other than on the last day of the Interest Period for such
Advance upon an assignment of rights and obligations under this Agreement
pursuant to Section 9.07 as a result of a demand by the Borrower pursuant to
Section 9.07(a), the Borrower shall, upon demand by the Administrative Agent on
behalf of a Lender Party, pay to the Administrative Agent for the account of
such Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance. The calculations of any amounts required to be paid by
the Borrower pursuant to this Section 9.04(c) shall be provided by the
Administrative Agent to the Borrower.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by any Agent or any Lender Party, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
9.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing
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under this Agreement and the Note or Notes (if any) held by such Lender Party,
irrespective of whether such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be unmatured.
Each Lender Party agrees promptly to notify the Borrower after any such set-off
and application; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Lender Party and its respective Affiliates under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender Party and its respective Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and each Agent and when each
Agent shall have been notified by each Initial Lender and the Initial Issuing
Bank that such Initial Lender and the Initial Issuing Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
Agent and each Lender Party and their respective successors and assigns, except
that the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of all of the Lender Parties.
SECTION 9.07. Assignments and Participations. (a) Each Lender may
and, if demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.10 or 2.12) upon at least 10 Business Days' notice to such Lender and
the Administrative Agent, will assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of one or more Facilities, (ii)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000 and shall be in an integral multiple of
$500,000, or, if the aggregate amount of the Commitment of such assigning Lender
is less than $5,000,000, all of such Lender's Commitment, (iii) each such
assignment shall be to an Eligible Assignee, (iv) each such assignment made as a
result of a demand by the Borrower pursuant to this Section 9.07(a) shall be
arranged by the Borrower after consultation with the Administrative Agent and
shall be either an assignment of all of the rights and obligations of the
assigning Lender under this Agreement or an assignment of a portion of such
rights and obligations made concurrently with another such assignment or other
such assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of the demand by the Borrower pursuant to this
Section 9.07(a) unless and until such Lender shall have received one or more
payments from either
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the Borrower or one or more Eligible Assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Advances owing to
such Lender, together with accrued interest thereon to the date of payment of
such principal amount and all other amounts payable to such Lender under this
Agreement, (vi) no such assignments shall be permitted without the consent of
the Administrative Agent until the Administrative Agent shall have notified the
Lender Parties that syndication of the Commitments hereunder has been completed
as determined by the Agents, and (vii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and recordation fee of
$3,000.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender or Issuing Bank, as
the case may be, hereunder and (y) the Lender or Issuing Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
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deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose (but only for
this purpose) solely as the agent of the Borrower, shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lender Parties and the Commitment under each Facility of, and
principal amount of the Advances owing under each Facility to, each Lender Party
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, each Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. In the case of any assignment by a Lender, within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it under a Facility pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder under such Facility, a new Note to the order of the assigning Lender
in an amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit X-0, X-0, X-0 or A-4 hereto, as the case may be.
(f) Each Lender Party may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it) to any
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Person other than any Loan Party or any of its Subsidiaries or Affiliates;
provided, however, that (i) such Lender Party's obligations under this Agreement
(including, without limitation, its Commitments) shall remain unchanged, (ii)
such Lender Party shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender Party shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, each Agent and the other Lender Parties shall continue to deal solely
and directly with such Lender Party in connection with such Lender Party's
rights and obligations under this Agreement and (v) no participant under any
such participation shall have any right to approve any amendment or waiver of
any provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(g) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) including, without
limitation, in favor of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.
SECTION 9.08. Execution in Counterparts. This Agreement 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 one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.09. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith;
121
(b) the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 9.10. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
122
SECTION 9.11. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.12. Waiver of Jury Trial. Each of the Borrower, each Agent
and the Lender Parties irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Advances
or the actions of any Agent or any Lender Party in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC., as Borrower
By /s/ Xxx X. Xxxxxx
------------------------------
Title: Senior Vice President
MEDIQ INCORPORATED, as Parent
Guarantor
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Title: Senior Vice President
PRN HOLDINGS, INC., as Parent
Guarantor
By /s/ Xxx X. Xxxxxx
------------------------------
Title: Senior Vice President
123
BANQUE NATIONALE DE PARIS, as
Administrative Agent
By /s/ Xxxx Xxxxxxxxx
------------------------------
Title: Vice President
By /s/ Xxxxxxx Xxxxxx
------------------------------
Title: AT
NATIONSBANK, N.A., as
Documentation Agent
By /s/ Xxxxxx X. Crabltee
------------------------------
Title: Vice President
Initial Lenders
BANQUE NATIONALE DE PARIS
By /s/ Xxxx Xxxxxxxxx
------------------------------
Title: Vice President
By /s/ Xxxxxxx Xxxxxx
------------------------------
Title: AT
NATIONSBANK, N.A.
By Xxxxxx X. Crabltee
------------------------------
Title: Vice President
124
THE FIRST NATIONAL BANK OF
BOSTON
By /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Title: Vice President
CAISSE NATIONALE DE CREDIT
AGRICOLE
By /s/ S. Well
------------------------------
Title: First Vice President
CREDITANSTALT CORPORATE
FINANCE, INC.
By /s/ Xxxxxxxx X. Xxxxx
------------------------------
Title: Vice President
By /s/ Xxxxx Xxxxxx
------------------------------
Title: Senior Associate
FIRST SOURCE FINANCIAL, LLP
By: First Source Financial, Inc.
as Agent/Manager
By /s/ Xxxx Wabling
------------------------------
Title: Vice President
ING CAPITAL ADVISORS, INC., as
Agent for Bank Syndication Account
By /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------
Title: Vice President and
Portfolio Manager
125
LASALLE NATIONAL BANK
By /s/
------------------------------
Title: First Vice President
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By /s/ Xxxx X. Xxxxx
------------------------------
Title: Managing Director
MELLON BANK, N.A.
By /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------
Title: Vice President
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Title: Authorized Signatory
PILGRIM AMERICA PRIME RATE
TRUST
By /s/ Xxxxxx X. Xxxx
------------------------------
Title: Portfolio Analyst
126
SUMMIT BANK
By /s/ Xxxx X. Xxxxxx
------------------------------
Title: Vice President
USTRUST
By /s/ Xxxxxx X. Macicet
------------------------------
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Title: Senior Vice President -
Portfolio Manager
127
Initial Issuing Bank
BANQUE NATIONALE DE PARIS
By /s/ Xxxx Xxxxxxxxx
------------------------------
Title: Vice President
By /s/ Xxxxxxx Xxxxxx
------------------------------
Title: AT
Page 1 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Banque Nationale de Paris
Working Capital Facility Commitment: $ 3,906,250.00
Term A Facility Commitment: $ 5,468,750.00
Term B Facility Commitment: $ 40,000,000.00
Acquisition Facility Commitment: $ 15,625,000.00
Letter of Credit Commitment: $ 7,500,000.00
Domestic Lending Office:
Banque Nationale de Paris
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxxxx Attn: Xxxxxxxx Xxxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 or 000-0000 Fax: (000) 000-0000
Eurodollar Lending Office:
Banque Nationale de Paris
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxxxx Attn: Xxxxxxxx Xxxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 or 000-0000 Fax: (000) 000-0000
Page 2 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Caisse Nationale de Credit Agricole
Working Capital Facility Commitment: $ 1,562,500.00
Term A Facility Commitment: $ 2,187,500.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 6,250,000.00
Domestic Lending Office:
Credit Operations
Caisse Nationale de Credit Agricole Caisse Nationale de Credit Agricole
000 Xxxxxxx Xxxxxx 00 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxxxxx Fought Attn: Xxxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xxxxxxxx Xxxxxx
Eurodollar Lending Office:
Credit Operations
Caisse Nationale de Credit Agricole Caisse Nationale de Credit Agricole
000 Xxxxxxx Xxxxxx 00 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxxxxx Fought Attn: Xxxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xxxxxxxx Xxxxxx
Page 3 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Creditanstalt Corporate Finance, Inc.
Working Capital Facility Commitment: $ 2,343,750.00
Term A Facility Commitment: $ 3,281,250.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 9,375,000.00
Domestic Lending Office:
Creditanstalt Corporate Finance, Inc.
Two Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Credit Operations
Attn: Xxxxx Xxxxx Attn: Xxxxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx Attn: Xxxxxxxx Xxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Eurodollar Lending Office:
Creditanstalt Corporate Finance, Inc.
Two Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Credit Operations
Attn: Xxxxx Xxxxx Attn: Xxxxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx Attn: Xxxxxxxx Xxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Page 4 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: First Source Financial, LLP
Working Capital Facility Commitment: $ 3,125,000.00
Term A Facility Commitment: $ 4,375,000.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 12,500,000.00
Domestic Lending Office:
First Source Financial Inc.
0000 X. Xxxx Xx.
Xxxxxxx Xxxxxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxxxxxx Attn: Xxxxx Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Eurodollar Lending Office:
First Source Financial Inc.
0000 X. Xxxx Xx.
Xxxxxxx Xxxxxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxxxxxx Attn: Xxxxx Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Page 5 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: ING Capital Advisors, Inc., as Agent for Bank Syndication
Account
Working Capital Facility Commitment: $ 0.00
Term A Facility Commitment: $ 0.00
Term B Facility Commitment: $ 10,000,000.00
Acquisition Facility Commitment: $ 0.00
Domestic Lending Office:
ING Capital Advisors, Inc., as Agent
for Bank Syndication Account
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Credit Operations
Attn: Xxxxxxxx Xxxxxxxx, Vice Pres. & Attn: Xxxxxx Xxxxxxx,
Portfolio Mgr. Asst. Vice President
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Eurodollar Lending Office:
ING Capital Advisors, Inc., as Agent
for Bank Syndication Account
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Credit Operations
Attn: Xxxxxxxx Xxxxxxxx, Vice Pres. & Attn: Xxxxxx Xxxxxxx,
Portfolio Mgr. Asst. Vice President
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Page 6 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: LaSalle National Bank
Working Capital Facility Commitment: $ 2,343,750.00
Term A Facility Commitment: $ 3,281,250.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 9,375,000.00
Domestic Lending Office:
LaSalle National Bank
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxxx Attn: Xxxxx Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Eurodollar Lending Office:
La Salle National Bank
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxxx Attn: Xxxxx Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Page 7 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Massachusetts Mutual Life Insurance Co.
Working Capital Facility Commitment: $ 0.00
Term A Facility Commitment: $ 0.00
Term B Facility Commitment: $ 20,000,000.00
Acquisition Facility Commitment: $ 0.00
Domestic Lending Office:
Mass Mutual
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxx Attn: Xxxxx X. Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Eurodollar Lending Office:
Mass Mutual
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Credit Operations
Attn: Xxxx Xxxxxxx Attn: Xxxxx X. Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Page 8 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Mellon Bank, N.A.
Working Capital Facility Commitment: $ 1,562,500.00
Term A Facility Commitment: $ 2,187,500.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 6,250,000.00
Domestic Lending Office:
Credit Operations
------ ----------
Mellon Bank, X.X. Xxxxxx Bank, N.A.
000 X. Xxxxxxxxxx Xxxx Loan Administration
Xxxxx 000 0X Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000 000 Xxxxxx Xxxxxx
Attn: Xxxx Xxxxxxxx Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000 Attn: Xxxx Xxxxxxx
Fax: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000
Eurodollar Lending Office:
Credit Operations
------ ----------
Mellon Bank, X.X. Xxxxxx Bank, N.A.
000 X. Xxxxxxxxxx Xxxx Loan Administration
Xxxxx 000 0X Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000 000 Xxxxxx Xxxxxx
Attn: Xxxx Xxxxxxxx Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000 Attn: Xxxx Xxxxxxx
Fax: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000
Page 9 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc.
Working Capital Facility Commitment: $ 0.00
Term A Facility Commitment: $ 0.00
Term B Facility Commitment: $ 10,000,000.00
Acquisition Facility Commitment: $ 0.00
Domestic Lending Office:
Credit Operations
Xxxxxxx Xxxxx Senior Floating Rate MLAM Accounting
Fund, Inc. 000 Xxxxxxx Xxxx - 4E
800 Scudders Mill Road - Area 2C Xxxxxxxxxx, XX 00000
Xxxxxxxxxx, XX 00000 Attn: Xxxx Xxxxx
Attn: Xxxx Xxxxxxxx Tel: (000) 000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
Eurodollar Lending Office:
Credit Operations
Xxxxxxx Xxxxx Senior Floating Rate MLAM Accounting
Fund, Inc. 000 Xxxxxxx Xxxx - 4E
800 Scudders Mill Road - Area 2C Xxxxxxxxxx, XX 00000
Xxxxxxxxxx, XX 00000 Attn: Xxxx Xxxxx
Attn: Xxxx Xxxxxxxx Tel: (000) 000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
Page 10 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: NationsBank, N.A.
Working Capital Facility Commitment: $ 3,125,000.00
Term A Facility Commitment: $ 4,375,000.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 12,500,000.00
Domestic Lending Office:
Credit Operations
------ ----------
NationsBank, N.A. Nationsbank, N.A.
NationsBank Plaza TN 000 X. Xxxxx Xxxxxx
0 XxxxxxxXxxx Xxxxx XX0-000-00-00
XX0-000-00-00 Xxxxxxxxx, XX 00000
Xxxxxxxxx, XX 00000-0000 Attn: Xxxxxxxxx Xxxxx
Attn: Xxxxxx Xxxxxxxx Tel: (000) 000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
Eurodollar Lending Office:
Credit Operations
------ ----------
Nationsbank, N.A. Nationsbank, N.A.
NationsBank Plaza TN 000 X. Xxxxx Xxxxxx
0 XxxxxxxXxxx Xxxxx XX0-000-00-00
XX0-000-00-00 Xxxxxxxxx, X.X. 00000
Xxxxxxxxx, XX 00000-0000 Attn: Xxxxxxxxx Xxxxx
Attn: Xxxxxx Xxxxxxxx Tel: (000) 000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
Page 11 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Pilgrim America Prime Rate Trust
Working Capital Facility Commitment: $ 0.00
Term A Facility Commitment: $ 0.00
Term B Facility Commitment: $ 10,000,000.00
Acquisition Facility Commitment: $ 0.00
Domestic Lending Office:
Pilgrim America Prime Rate Trust
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Credit Operations
Attn: Xxxxxxx Xxxxxxxx, Vice President Attn: Xxxxxx Xxxxxx,
Tel: (000) 000-0000 Manager -
Fax: (000) 000-0000 Administration
Tel: (000) 000-0000
Fax: (000) 000-0000
Eurodollar Lending Office:
Pilgrim America Prime Rate Trust
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Credit Operations
Attn: Xxxxxxx Xxxxxxxx, Vice President Attn: Xxxxxx Xxxxxx,
Tel: (000) 000-0000 Manager -
Fax: (000) 000-0000 Administration
Tel: (000) 000-0000
Fax: (000) 000-0000
Page 12 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Summit Bank
Working Capital Facility Commitment: $ 3,125,000.00
Term A Facility Commitment: $ 4,375,000.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 12,500,000.00
Domestic Lending Office:
Credit Operations
Summit Bank Summit Bank
0000 Xxxxxx Xxxx 00 Xxxxxxxxxx Xxxx, 0xx Xx.
Xxxxxx Xxxx, XX 00000 Xxxxxxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx Attn: Ionetta Xxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000 or -3891
Eurodollar Lending Office:
Credit Operations
Summit Bank Summit Bank
0000 Xxxxxx Xxxx 00 Xxxxxxxxxx Xxxx, 0xx Xx.
Xxxxxx Xxxx, XX 00000 Xxxxxxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx Attn: Ionetta Xxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (201) 296-3751or -3891
Page 13 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: The First National Bank of Boston
Working Capital Facility Commitment: $ 1,562,500.00
Term A Facility Commitment: $ 2,187,500.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 6,250,000.00
Domestic Lending Office:
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Credit Operations
Attn: Xxxxxxxx X. Xxxxxx, Vice President Attn: Xxxxxxxx X. Xxxxxx,
Tel: (000) 000-0000 Administrative Officer
Fax: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxx, Director
Tel: (000) 000-0000
Fax: (000) 000-0000
Eurodollar Lending Office:
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Credit Operations
Attn: Xxxxxxxx X. Xxxxxx, Vice President Attn: Xxxxxxxx X. Xxxxxx,
Tel: (000) 000-0000 Administrative Officer
Fax: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxx, Director
Tel: (000) 000-0000
Fax: (000) 000-0000
Page 14 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: USTrust
Working Capital Facility Commitment: $ 2,343,750.00
Term A Facility Commitment: $ 3,281,250.00
Term B Facility Commitment: $ 0.00
Acquisition Facility Commitment: $ 9,375,000.00
Domestic Lending Office:
Credit Operations
USTrust XXXxxxx
00 Xxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, VP Attn: Xxxxx X. Xxxxxx, AVP
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Eurodollar Lending Office:
Credit Operations
USTrust XXXxxxx
00 Xxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, VP Attn: Xxxxx X. Xxxxxx, AVP
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Page 15 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Lender: Xxx Xxxxxx American Capital Prime Rate Income Trust
Working Capital Facility Commitment: $ 0.00
Term A Facility Commitment: $ 0.00
Term B Facility Commitment: $ 10,000,000.00
Acquisition Facility Commitment: $ 0.00
Domestic Lending Office:
Credit Operations
------ ----------
Xxx Xxxxxx American Capital State Street Bank and Trust
One Parkview Plaza Corporate Trust Department
Xxxxxxxx Xxxxxxx, XX 00000 X.X. Xxx 000
Attn: Xxxxxxx Xxxxxxx Xxxxxx, XX 00000
Tel: (000) 000-0000 Attn: Xxxxx Xxxxxx
Fax: (000) 000-0000 or 6741 Tel: (000) 000-0000
Fax: (000) 000-0000 or 5367
Eurodollar Lending Office:
Credit Operations
------ ----------
Xxx Xxxxxx American Capital State Street Bank and Trust
One Parkview Plaza Corporate Trust Department
Xxxxxxxx Xxxxxxx, XX 00000 X.X. Xxx 000
Attn: Xxxxxxx Xxxxxxx Xxxxxx, XX 00000
Tel: (000) 000-0000 Attn: Xxxxx Xxxxxx
Fax: (000) 000-0000 or 6741 Tel: (000) 000-0000
Fax: (000) 000-0000 or 5367
Page 16 of 16
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
TOTAL COMMITMENTS
Total Term B Facility Commitments: $ 100,000,000.00
Total Working Capital Facility Commitments: $ 25,000,000.00
Total Term A Facility Commitments: $ 35,000,000.00
Total Acquisition Facility Commitments: $ 100,000,000.00
--------------
TOTAL COMMITMENTS $ 260,000,000.00
TOTAL LETTER OF CREDIT COMMITMENTS $ 7,500,000.00
================================================================================
SCHEDULE II - EBITDA SCHEDULE
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF EBITDA
MONTHLY
MONTH AMOUNT
----- ------
SEPTEMBER 1995 $4,705,000
OCTOBER 1995 3,961,000
NOVEMBER 1995 4,042,000
DECEMBER 1995 4,977,000
JANUARY 1996 5,458,000
FEBRUARY 1996 6,939,000
MARCH 1996 5,657,000
APRIL 1996 5,025,000
MAY 1996 4,894,000
JUNE 1996 4,738,000
Schedule III
I. Discontinued Operations
MEDIQ Mobile X-Ray Services, Inc.
Health Examinetics, Inc.
Thera-Kinetics Acquisition Corporation
MDTC Haddon, Inc.
MEDIQ Diagnostic Centers Inc.
MEDIQ Diagnostic Centers - I Inc.
MEDIQ Imaging Services, Inc.
American Cardiovascular Imaging Labs, Inc.
Alpha Health Consultants, Inc.
P. I. Corporation
MEDIQ Services, Inc.
MEDIQ Home Therapy Services of Arizona, Inc.
II. Joint Ventures
Borrower's membership interest in MEDIQ PRN/HNE, L.L.C.
(d/b/a SpectraCair)
The interest of MEDIQ Surgical Equipment Services, Inc. in
MEDIQ PRN/SLT, a joint venture
III. Equity Investments
The ownership interests of either MEDIQ Incorporated or MEDIQ
Investment Services, Inc. in the following publicly-traded
corporations: PCI Services, Inc., NutraMax Products, Inc. and
InnoServ Technologies, Inc.
Schedule IV
Discontinued Subsidiaries
MEDIQ Mobile X-Ray Services, Inc.
Health Examinetics, Inc.
Thera-Kinetics Acquisition Corporation
MDTC Haddon, Inc.
MEDIQ Diagnostic Centers Inc.
MEDIQ Diagnostic Centers - I Inc.
MEDIQ Imaging Services, Inc.
American Cardiovascular Imaging Labs, Inc.
Alpha Health Consultants, Inc.
P. I. Corporation
MEDIQ Services, Inc.
MEDIQ Home Therapy Services of Arizona, Inc.
SCHEDULE 2.14(a) - REFINANCING DEBT
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF DEBT TO BE REFINANCED
=======================================================================================================================
PREPAYMENT
PRINCIPAL INTEREST PENALTY TOTAL
-----------------------------------------------------------------------------------------------------------------------
1. MEDIQ Incorporated
-----------------------------------------------------------------------------------------------------------------------
A. Revolving Credit Facility with Summit Bank, $ 13,020,000.00 $ 89,158.85 $ 0.00 $ 13,109,158.85
plus accrued interest
-----------------------------------------------------------------------------------------------------------------------
B. Revolving Credit Facility with First 1,000,000.00 5,500.04 0.00 1,005,500.04
Executive, plus accrued interest
-----------------------------------------------------------------------------------------------------------------------
2. PRN Holdings, Inc.
-----------------------------------------------------------------------------------------------------------------------
A. Subordinated debt Note Agreement (Mass 10,000,000.00 512,500.00 2,000,000.00 12,512,500.00
Mutual, et al), plus accrued interest
and prepayment penalty
-----------------------------------------------------------------------------------------------------------------------
B. Subordinated debt Promissory Notes (KCI 8,750,000.00 504,110.00 0.00 9,254,110.00
Therapeutic Services, Inc.), plus
accrued interest
-----------------------------------------------------------------------------------------------------------------------
C. Mass Mutual warrant to purchase 10% of 0.00 0.00 12,500,000.00 12,500,000.00
Holdings
-----------------------------------------------------------------------------------------------------------------------
3. MEDIQ/PRN Life Support Services - I, Inc.
-----------------------------------------------------------------------------------------------------------------------
A. Loan and Security Agreement (Congress 27,448,031.44 344,523.29 430,000.00 28,222,554.73
Financial), plus accrued interest and
prepayment penalty
-----------------------------------------------------------------------------------------------------------------------
4. MEDIQ/PRN Life Support Services, Inc.
-----------------------------------------------------------------------------------------------------------------------
A. Accounts Financing Agreement (Congress 12,010,292.12 8,436.75 150,000.00 12,168,728.87
Financial), plus accrued interest and
prepayment penalty
-----------------------------------------------------------------------------------------------------------------------
B. Senior Secured Notes, plus accrued interest 98,260,000.00 3,011,600.76 7,736,992.40 109,008,593.16
and redemption premium
-----------------------------------------------------------------------------------------------------------------------
C. Defeasance Amount for all Senior Secured 1,677,939.00 193,288.00 58,728.00 1,929,955.00
--------------- ------------- -------------- ---------------
Notes not redeemed
-----------------------------------------------------------------------------------------------------------------------
TOTAL DEBT TO BE REFINANCED $172,166,262.56 $4,669,117.69 $22,875,720.40 $199,711,100.65
--------------- ------------- -------------- ---------------
=======================================================================================================================
SCHEDULE 3.01(e) - SURVIVING DEBT
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF SURVIVING DEBT
PRINCIPAL
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.: AMOUNT
A. Capital Leases:
GE Capital (Charter-ITT) 540,000
GE Capital (Charter-ITT) 482,000
CIT Group (Copelco) 584,000
Xxxxxx (Amplicon) 486,000
NYNEX 124,000
NYNEX 82,000
NYNEX 1,436,000
NYNEX 267,000
NYNEX 588,000
Medical Equip Fin (Execulease) 294,000
Medical Equip Fin (Execulease) 328,000
Medical Equip Fin (Execulease) 306,000
Sanwa 670,000
Alco Resources 2,000
Bimeco 14,000
-----------
Total 6,203,000
TOTAL SURVIVING DEBT $69,932,000
-----------
SCHEDULE 3.01(e) - SURVIVING DEBT
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF SURVIVING DEBT
PRINCIPAL
AMOUNT
---------
MEDIQ INCORPORATED:
A. Guarantee of certain liabilities of ATS Medical
Services, Inc., a wholly-owned subsidiary
of MEDIQ Mobile X-Ray Services, Inc. to
the United States Government an original
amount of $2,100,000 and a remaining
balance of $1,350,000. 0.00
B. Guarantee of the term loan and the line of
credit, and accrued interest thereon, of
MEDIQ PRN/HNE, LLC (dba SpectraCair).
Amounts available are $6,000,000 and
$1,500,000 for the term loan and the
line of credit, respectively. As of
September 30, 1996, the outstanding
balances on the term loan and the line
of credit are $6,000,000 and $285,000,
respectively. 0.00
C. Guarantee of the capital lease obligations
of MEDIQ PRN/SLT, a joint venture, in the
principal amount of $996,225 as of
September 30, 1996. 0.00
D. Guarantee of certain capital lease obligations
of Health Examinetics, Inc. in the
principal amount of $461,000 as of
September 30, 1996. 0.00
E. 7.50% Exchangeable Subordinated Debentures
due 2003 34,500,000
F. 7.25% Convertible Subordinated Debentures
due 2006 29,229,000
Schedule 3.01(g)(iii)
Subsidiary Guarantors
MEDIQ Investment Services, Inc.
MEDIQ Management Services, Inc.
MEDIQ Surgical Equipment Services, Inc.
Value-Med Products, Inc.
MEDIQ Mobile X-Ray Services, Inc.
Health Examinetics, Inc.
Thera-Kinetics Acquisition Corporation
MDTC Haddon, Inc.
MEDIQ Diagnostic Centers Inc.
MEDIQ Diagnostic Centers - I Inc.
MEDIQ Imaging Services, Inc.
American Cardiovascular Imaging Labs, Inc.
Alpha Health Consultants, Inc.
P. I. Corporation
MEDIQ Services, Inc.
MEDIQ Home Therapy Services of Arizona, Inc.
Schedule 3.01(g)(iv)
Good Standing Certificates
Borrower -- all fifty states and the District of Columbia
PRN Holdings, Inc. -- New Jersey
MEDIQ Incorporated -- New Jersey, Pennsylvania, California
SCHEDULE 3.01(g)(vii)(B)
UCC FILING JURISDICTIONS
DEBTOR STATE JURISDICTION
------------------------------------------------------------
MEDIQ/PRN Life Support Services, Inc.
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000 AL SOS
AK DEPT OF NATL RESOURCE
Fed Tax ID No. 00-0000000 AZ SOS
AR SOS
CA SOS
CO SOS
CT SOS
DE SOS
DC RECORDER OF DEEDS
FL SOS
GA XXXX COUNTY
GA XXXX COUNTY
HI BUREAU OF CONVEYANCE
IA SOS
ID SOS
IL SOS
IN SOS
KS SOS
XX XXXXXXXXX COUNTY
LA UCC DATABASE
LA CADDO PARISH
ME SOS
MA SOC
MA AUBURNDALE CITY
MA XXXXXX CITY
MA WALTHAM CITY
MA WEST SPRINGFIELD TOWN
MD DEPT. OF A & T
MI SOS
MN SOS
MO SOS
MO ST. LOUIS COUNTY
MS SOS
XX XXXXXX COUNTY
MT SOS
NC SOS
NC WAKE COUNTY
ND SOS
NE SOS
NJ SOS
NJ BURLINGTON COUNTY
NJ CAMDEN COUNTY
NJ UNION COUNTY
NM SOS
NV SOS
NH SOS
NY SOS
NY KINGS COUNTY
NY NASSAU COUNTY
NY WESTCHESTER COUNTY
OH SOS
OH CUYAHOGA COUNTY
OH DELAWARE COUNTY
OH FAIRFIELD COUNTY
OH FRANKLIN COUNTY
OH XXXXXXXX COUNTY
OK SOS
OK OKLAHOMA COUNTY
OK TULSA COUNTY
OR SOS
PA SOC
PA ALLEGHENY XXXXXX
PA LANCASTER PROTHO
RI SOS
SC SOS
SD SOS
TN SOS
TX SOS
UT SOS
VT SOS
VA SCC
VA HENRICO COUNTY
VA NEWPORT NEWS CITY
VA RICHMOND CITY
WA DOL
WV SOS
WI SOS
WY SOS
Mediq Investment Services, Inc.
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000 DE SOS
NJ SOS
Fed Tax ID No. 00-0000000 NJ CAMDEN COUNTY
PRN Holdings, Inc.
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000 DE SOS
NJ SOS
Fed Tax ID No. 00-0000000 NJ CAMDEN COUNTY
Mediq Surgical Equipment Services, Inc.
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000 NJ SOS
NJ CAMDEN COUNTY
Fed Tax ID No. 00-0000000
Value-Med Products, Inc.
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000 NJ SOS
NJ CAMDEN COUNTY
Fed Tax ID No. 22-338717
Mediq Management Services, Inc.
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000 NJ SOS
NJ CAMDEN COUNTY
Fed Tax ID No. 00-0000000
MEDIQ Incorporated
One MEDIQ Plaza NJ SOS
Xxxxxxxxxx, XX 00000 NJ CAMDEN COUNTY
Fed Tax ID No. 00-0000000
Schedule 3.01(g)(xviii)
Landlord Consents
Easton Distribution Center -- Premises located at 000 Xxxxx
Xxxxxxxxxx Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000
Schedule 3.01(g)(xix)(1)
Termination Letters
Summit Bank
Summit Bank, as Trustee with respect to the 12.125% Notes
KCI Therapeutic Services, Inc.
First Republic Bank
Congress Financial Corporation
Massachusetts Mutual Life Insurance Company, MassMutual Corporate
Investors, MassMutual Participation Investors and MassMutual
Corporate Value Partners, Ltd.
SCHEDULE 3.01(g)(xix)(2) - EXISTING DEBT
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF EXISTING DEBT
PRINCIPAL
AMOUNT
---------
1. MEDIQ Incorporated
A. Revolving Credit Facility with Summit Bank $ 13,020,000
B. Revolving Credit Facility with First Executive 1,000,000
C. Guarantee of certain liabilities of ATS Medical
Services, Inc., a wholly-owned subsidiary of
MEDIQ Mobile X-Ray Services, Inc. to the
United States Government an original amount
of $2,100,00 and a remaining balance of
$1,350,000. 0
D. Guarantee of the term loan and the line of
credit, and accrued interest thereon, of
MEDIQ PRN/HNE, LLC (dba SpectraCair).
Amounts available are $6,000,000 and
$1,500,000 for the term loan and the line of
credit, respectively. As of September 30,
1996, the outstanding balances on the term
loan and the line of credit are $6,000,000
and $285,000, respectively. 0
E. Guarantee of the capital lease obligations of
MEDIQ PRN/SLT, a joint venture, in the
principal amount of $996,000 as of September
30, 1996. 0
F. Guarantee of certain capital lease obligations of
Health Examinetics, Inc. in the principal
amount of $461,000 as of September 30, 1996. 0
G. 7.50% Exchangeable Subordinated Debentures due
2003 34,500,000
H. 7.25% Convertible Subordinated Debentures due
2006 29,229,000
2. PRN Holdings, Inc.
A. Subordinated debt Note Agreement (Mass Mutual, et
al) 10,000,000
B. Subordinated debt Promissory Notes (KCI
Therapeutic Services, Inc.) par value
$10,000,000 8,750,000
3. MEDIQ/PRN Life Support Services - I, Inc.
A. Loan and Security Agreement (Congress Financial) 27,448,000
4. MEDIQ/PRN Life Support Services, Inc.
A. Accounts Financing Agreement (Congress Financial) 12,010,000
B. Senior Secured Notes 100,000,000
C. Capital Leases:
GE Capital (Charter-ITT) 540,000
GE Capital (Charter-ITT) 482,000
CIT Group (Copelco) 584,000
Xxxxxx (Amplicon) 486,000
NYNEX 124,000
NYNEX 82,000
NYNEX 1,436,000
NYNEX 267,000
NYNEX 588,000
Medical Equip Fin (Execulease) 294,000
Medical Equip Fin (Execulease) 328,000
Medical Equip Fin (Execulease) 306,000
Sanwa 670,000
Alco Resources 2,000
Bimeco 14,000
------------
6,203,000
TOTAL $242,160,000
------------
SCHEDULE 3.01(g)(xxi)
LOCAL COUNSEL
Texas
-----
Xxxxx Xxxxxx, Esq.
XXXXXX AND XXXXX
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
Florida
-------
Xxxxxxx Xxxxxxx, Esq.
XXXXX & XXXXXXX
The Xxxxxxxxx Building
000 Xxxxx Xxxxxx, X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000-0000
California
----------
Xxxxx X. Xxxxxx, Esq.
JEFFER, MANGELS, XXXXXX & MARMARO, L.L.P.
0000 Xxxxxx xx xxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Schedule 4.01(a)
Parent Guarantors
MEDIQ Incorporated owns 1000 shares of the common stock of PRN Holdings, Inc.,
being all of the outstanding shares of capital stock of PRN Holdings, Inc.
Schedule 4.01(b)
Subsidiaries
Shares Shares %
Subsidiary Jurisdiction Authorized Outstanding Owned
---------- ------------ ---------- ----------- -----
PRN Holdings, Inc. Delaware 2,000 1,000 100
MEDIQ/PRN Life Support Delaware 20,000 10,000 100
Services, Inc. 2,000* 0 0
MEDIQ Investment
Services, Inc. Delaware 100 100 100
MEDIQ Management
Services, Inc. Delaware 100 100 100
MEDIQ Surgical Equipment
Services, Inc. Delaware 100 100 100
Value-Med Products,
Inc. Delaware 100 100 100
* Class A Common
Schedule 4.01(d)
Authorizations, etc.
None other than filing and/or recordation of the Mortgage and UCC-1 financing
statements in the appropriate governmental offices.
SCHEDULE 4.01(k) - PLANS, MULTIEMPLOYER PLANS AND WELFARE PLANS
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF PLANS, MULTIEMPLOYER PLANS AND WELFARE PLANS
MEDIQ Incorporated Pension Plan dated July 1, 1979
The MEDIQ Incorporated Employee's Savings Plan dated October 1, 1983
The MEDIQ Life Insurance Plan MEDIQ Incorporated Accident, Sickness
and Disability Plan
The MEDIQ/PRN Employee Health Plan
The MEDIQ/PRN Employee Dental Plan
The MEDIQ/PRN Long-Term Disability Plan
The MEDIQ/PRN Life Insurance Plan
MEDIQ/PRN Section 125 Cafeteria Plan
MEDIQ/PRN Educational Assistance Program
Schedule 4.01(t)
Environmental Investigations
See information disclosed in the Phase I Environmental Site Assessment Report,
regarding the property located at One MEDIQ Plaza and 0000 Xxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx, dated July 22, 1996 issued by Xxxxx Associates, Inc. as
well as materials contained in the subsequent report regarding asbestos
investigation conducted on the same property by Xxxxx Associates, Inc. during
August 1996. The Borrower does not believe that these disclosed investigations
will have a Material Adverse Effect.
Schedule 4.01(y)
Open Years
A waiver of the statute of limitations is in effect until December 31, 1997 for
the consolidated tax returns of MEDIQ and its Subsidiaries for the fiscal years
ended September 30, 1989 through September 30, 1993. The expiration of the
statute of limitations for fiscal years ended September 30, 1994 and September
30, 1995 is June 15, 1998 and June 15, 1999, respectively.
A waiver of the statute of limitations is in effect until December 31, 1997 for
the consolidated tax returns of the Borrower for the fiscal years ended July 31,
1989 through May 31, 1992.
Schedule 4.01(aa)
Tax Disputes
MEDIQ and its Subsidiaries have been assessed $429,068 of additional tax by the
State of California as a result of a California unitary income tax audit for the
fiscal years ended September 30, 1989, 1990, and 1991. MEDIQ has protested
$140,954 of the assessment for various reasons. To date, the state has agreed to
$63,793 of the protested amount. The remaining issues have yet to be addressed
by the state.
Schedule 4.01(ff)
Owned Real Property
One MEDIQ Plaza (also known as 0000 Xxxxxx Xxxxxxx)
Xxxxxxxxxx, Xxx Xxxxxx. Located in Camden County, New Jersey.
As of Closing title will be in MEDIQ/PRN Life Support Services,
Inc.
SCHEDULE 4.01(gg) - INVESTMENTS
MEDIQ INCORPORATED AND SUBSIDIARIES
INVESTMENTS
Following is a list of all Investments of MEDIQ Incorporated and its Ongoing
Subsidiaries, except for Investments in wholly-owned subsidiaries of the Loan
Parties:
A. MEDIQ Incorporated:
1. The Mental Health Management Promissory Note in the
original amount of $11,500,000.
2. The Non-negotiable Subordinated Note from Medifac, Inc.
dated June 27, 1995 in the original amount of
$1,500,000.
3. Note A from Granary Partners, L.P. dated June 27, 1996
in the original amount of $2,500,000.
4. The amounts on deposit with Meridian Bank in the
approximate amount of $340,000.
5. The certificate of deposit with Summit Bank in the
principal amount of $1,000,000.
6. The investment in the common stock of InnoServ
Technologies, Inc. of 2,026,438 shares representing
approximately 40% of the common shares outstanding as
of August 31, 1996.
7. The cash surrender value of certain life insurance policies on
former officers of MEDIQ subject to the borrowings against such
value in a net value of approximately $9,000 as of August 31, 1996.
B. MEDIQ Investment Services, Inc.:
1. The investment in the common stock of PCI Services,
Inc. of 2,875,000 shares representing approximately 46%
of the common shares outstanding as of August 31, 1996.
2. The investment in the common stock of NutraMax
Products, Inc. of 4,037,258 shares representing
approximately 47% of the common shares outstanding as
of August 31, 1996.
C. MEDIQ/PRN Life Support Services, Inc.:
1. Advances to employees of approximately $138,000 as of
August 31, 1996.
2. Outstanding deposits for leases (operating and capital)
and utilities of approximately $413,000 as of
August 31, 1996.
3. The amounts on deposit in the Citibank account of
approximately $64,000 as of August 31, 1996.
4. The investment in MEDIQ PRN/HNE, LLC (dba SpectraCair)
of approximately $1,430,000 as of August 31, 1996.
5. The amounts on deposit in the Congress Account pursuant
to the Congress Agreement.
D. MEDIQ/PRN Life Support Services - I, Inc.
1. The amounts on deposit in the Severance Escrow account
at Frost Bank of approximately $118,000 as of
August 31, 1996.
Schedule 4.01(hh)
Intellectual Property
See attached.
SCHEDULE 4.01(hh)
INTELLECTUAL PROPERTY
U.S. TRADEMARK/SERVICE XXXX REGISTRATIONS/PENDING APPLICATIONS OWNED BY
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
================================================================================
XXXX SERIAL/REGISTRATION NUMBER GOODS/SERVICES
--------------------------------------------------------------------------------
CAMP 74-619,939 Customized Inventory
1,944,054 Control Services, Namely
Equipment Location
Tracking, Providing
Reminders for Equipment and
Preventive Maintenance
Programs and Assistant in
Equipment Manufacturer
Recalls
--------------------------------------------------------------------------------
TELSTAR 74-534,977 Inventory Services in the
Nature of Equipment
Management and Order Entry
System for Hospitals and
Other Medical Institutions
--------------------------------------------------------------------------------
TRACKSTAR 74-512,604 Inventory Control Services,
1,934,805 Namely Equipment Tracking
for Others Via Computer and
Bar Code Technology
--------------------------------------------------------------------------------
MEDIQ/PRN 74-455,341 Rental of Medical
1,952,207 Equipment, Namely Adult
Ventilators; Infant
Ventilators; Portable
Volume Ventilators; Patient
Monitors; Pulse Oximeters
and Other Products
--------------------------------------------------------------------------------
MEDIQ/PRN 73-818,806 Renting of Critical Care
1,642,364 Equipment
================================================================================
U.S. SERVICE XXXX REGISTRATION OWNED BY MEDIQ INCORPORATED
================================================================================
XXXX SERIAL/REGISTRATION NUMBER GOODS/SERVICES
--------------------------------------------------------------------------------
MEDIQ 74-061,359 Maintenance and Repair
1,691,946 Services for Medical
Ventilator and Computerized
Tomography Units (Int. Cl.
42) Retail and Wholesale
Outlet Services for Parts
for the Repair or
Replacement of Durable
Medical Equipment and
Related Supplies for
Hospitals, Nursing Homes
and Individuals
--------------------------------------------------------------------------------
MEDIQ 73-540,734 Providing Mobile Diagnostic
1,391,164 Medical Services to
Hospitals, Nursing Homes
and Physician Offices,
Namely, Computed Tomography
Services, Magnetic
Resonance Imaging Services,
X-Ray Services, Ultrasound
and Breast Imaging
Diagnostic Services
--------------------------------------------------------------------------------
MEDIQ 73-540,732 Managing Hospitals and
1,391,834 Healthcare Facilities for
Others; Cost Containment
and Reimbursement Analysis
Services, ada Data
Processing Services for
Hospitals, and Healthcare
Providers (Int. Cl. 38)
Telecommunications
Consulting Services for
Hospitals and Healthcare
Providers
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MEDIQ 73-540,553 Remanufacturing and Repair
1,391,874 of Medical Life Support
Equipment and Respiratory
Therapy Equipment for
Hospitals and Healthcare
Providers (Int. Cl. 42)
Rental of and Retail Outlet
Services for Medical Life
Support Ventilators,
Incubators and Pediatric
Tents, Air Compressors,
Apnea Fetal Heart and
Oxygen Monitors, Pulmonary
Resuscitation Equipment and
the Like
--------------------------------------------------------------------------------
MEDIQ 73-307,846 Management Consulting
1,255,505 Services for the Health
Care and Health Care
Services Industries
--------------------------------------------------------------------------------
MEDIQ CARE UNITS 73-616,249 Special Medical Care
1,480,121 Services Rendered in Acute
Care Facilities
================================================================================
The following tradenames, used by the Loan Parties, have not been registered
with the United States Patent and Trademark Office, nor has a filing been made
there in connection with these tradenames:
Value-Med: Tradename used by Value-Med Products, Inc.
Criticare Hospital Services: Tradename of the Borrower
registered in the states of Washington and Oregon
MEDIQ Consulting Group: Tradename of MEDIQ Management
Services, Inc. registered in the states of New Jersey
and Pennsylvania
MEDIQ Healthcare Resources: Tradename of MEDIQ Management
Services, Inc. registered in the states of New Jersey
and Pennsylvania
Schedule 5.02(a)(iii)
Existing Liens
(1) Liens during the 124-day defeasance period in connection with the 12.125%
Note Indenture.
(2) Lien on the common stock of Innoserv, owned by MEDIQ or one of its
Subsidiaries, pursuant to the Agreement of Merger and Plan of Reorganization
among MMI Medical, Inc., MMI Acquisition Subsidiary, Inc., MEDIQ and MEDIQ
Equipment and Maintenance Services, Inc., dated May 18, 1994, as amended.
(3) Lien on 2,254,902 shares of the common stock of NutraMax, owned by MEDIQ
Investment Services, Inc., pursuant to the NutraMax Escrow Agreement.
(4) Lien on the cash deposited in the Citibank Account.
(5) Lien on Certificate of Deposit Number 1000063553030, issued by Summit Bank
to MEDIQ, in the original principal amount of $1,000,000 which has been
collaterally assigned to Summit Bank by MEDIQ in connection with MEDIQ's
guarantee of the obligations of MEDIQ PRN/HNE, L.L.C. under a loan agreement
between MEDIQ PRN/HNE, L.L.C. and Summit Bank.
(6) Lien on cash in the approximate amount of $340,000, in account at Meridian
Bank, in connection with open liability and workers compensation claims during
the years May 29, 1988 through May 29, 1990.
(7) Lien on Escrow Account at Frost Bank, in approximate amount of $120,000, in
connection with severance payments owed by KCI Therapeutic Services, Inc. as a
result of acquisition consummated on September 30, 1994.
(8) Lien on cash surrender value of certain life insurance policies with respect
to former officers of MEDIQ to the extent of the corresponding debt.
(9) Subordination Agreement by and among MEDIQ, Medifac, Inc. and Meridian Bank,
dated June 27, 1995 and Subordination Agreement by and among MEDIQ, Granary
Partners, L.P. and Meridian Bank, dated June 27, 1995 in connection with certain
obligations owed by said Medifac, Inc. and Granary Partners, L.P. to MEDIQ.
(10) Lien on the cash deposited in the Congress Account in favor of Congress
Financial Corporation pursuant to the Congress Agreement.
SCHEDULE 5.02(b)(i)(A) - PARENT GUARANTOR DEBT - A
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF PARENT GUARANTOR DEBT - A
AMOUNT
Guarantee of the term loan and the line of credit, and accrued
interest thereon, of MEDIQ PRN/HNE, LLC (dba SpectraCair).
Total amounts available are $6,000,000 and $1,500,000 for
the term loan and the line of credit, respectively. $7,500,000
SCHEDULE 5.02(b)(i)(B) - PARENT GUARANTOR DEBT - B
MEDIQ INCORPORATED AND SUBSIDIARIES
SCHEDULE OF PARENT GUARANTOR DEBT - B
AMOUNT
Guarantee of certain liabilities of ATS Medical
Services, Inc., a wholly-owned subsidiary of
MEDIQ Mobile X-Ray Services, Inc. to the
United States Government. $1,350,000
Guarantee of the capital lease obligations of MEDIQ
PRN/SLT, a joint venture. 996,000
Guarantee of certain capital lease obligations of
Health Examinatics, Inc. 461,000
----------
TOTAL $2,807,000
----------
SCHEDULE 5.02(b)(ii)(F) - EXISTING BORROWER DEBT
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
SCHEDULE OF EXISTING BORROWER DEBT
PRINCIPAL
AMOUNT
Capital Leases:
GE Capital (Charter-ITT) $ 540,000
GE Capital (Charter-ITT) 482,000
CIT Group (Copelco) 584,000
Xxxxxx (Amplicon) 486,000
NYNEX 124,000
NYNEX 82,000
NYNEX 1,436,000
NYNEX 267,000
NYNEX 588,000
Medical Equip Fin (Execulease) 294,000
Medical Equip Fin (Execulease) 328,000
Medical Equip Fin (Execulease) 306,000
Sanwa 670,000
Alco Resources 2,000
Bimeco 14,000
----------
TOTAL $6,203,000
----------
Schedule 6.01(k)
"Investor Group"
Xxxxxx X. Xxxxx, the issue of Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx, and their
spouses, and trusts, corporations, partnerships and other entities controlled by
any of the foregoing or of which such persons are the beneficiaries. Such
persons and entities, as of September 1, 1996, beneficially owned, to the
knowledge of MEDIQ, the following shares of MEDIQ's capital stock:
===========================================================================
Shareholder Common Preferred
---------------------------------------------------------------------------
Xxxxx Trust 3,570,969 3,570,969
---------------------------------------------------------------------------
Xxxxxxx X. Xxxxx 448,655 448,655
---------------------------------------------------------------------------
Xxxxxx Xxxxx 240,489 269,089
---------------------------------------------------------------------------
Xxxxxx Xxxxxx 460,657 460,407
---------------------------------------------------------------------------
Xxxxx X. Xxxxxx 1,150 1,650
===========================================================================
EXHIBIT A-1 TO THE
CREDIT AGREEMENT
FORM OF TERM A NOTE
$_______________ Dated: ___________ __, 199_
FOR VALUE RECEIVED, the undersigned, MEDIQ/PRN LIFE SUPPORT SERVICES, INC.,
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
__________ (the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below) the principal amount of the
Term A Advance (as defined below) owing to the Lender by the Borrower pursuant
to the Credit Agreement dated as of October 1, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"; terms defined
therein being used herein as therein defined) among the Borrower, MEDIQ
Incorporated, a Delaware corporation and PRN Holdings, Inc., a Delaware
corporation, as Parent Guarantors, the Lender and certain other lender parties
party thereto, Banque Nationale de Paris, as Administrative Agent and Initial
Issuing Bank, and NationsBank, N.A., as Documentation Agent, on the dates and in
the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of the
Term A Advance from the date of such Term A Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Banque Nationale de Paris, as Administrative Agent, at the
Administrative Agent's Account, in same day funds. The Term A Advance owing to
the Lender by the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto, which is part of this
Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of a single advance (the "Term A Advance") by the
Lender to the Borrower in an amount not to exceed the U.S. dollar amount first
above mentioned, the indebtedness of the Borrower resulting from such Term A
Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
A-1-2
maturity hereof upon the terms and conditions therein specified. The Obligations
of the Borrower under this Promissory Note, and the Obligations of the other
Loan Parties under the Loan Documents, are secured by the Collateral as provided
in the Loan Documents.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
By ____________________________________
Name:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of Amount of Unpaid
Term A Principal Paid Principal Notation
Date Advance or Prepaid Balance Made By
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EXHIBIT A-2 TO THE
CREDIT AGREEMENT
FORM OF TERM B NOTE
$_____________ Dated: _______ __, 199_
FOR VALUE RECEIVED, the undersigned, MEDIQ/PRN LIFE SUPPORT SERVICES, INC.,
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY [to the order
of] __________(the "Lender") [or its registered assigns] for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to below)
the principal amount of the Term B Advance (as defined below) owing to the
Lender by the Borrower pursuant to the Credit Agreement dated as of October 1,
1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"; terms defined therein being used herein as therein defined)
among the Borrower, MEDIQ Incorporated, a Delaware corporation and PRN Holdings,
Inc., a Delaware corporation, as Parent Guarantors, the Lender and certain other
lender parties party thereto, Banque Nationale de Paris, as Administrative Agent
and Initial Issuing Bank, and NationsBank, N.A., as Documentation Agent, on the
dates and in the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of the
Term B Advance from the date of such Term B Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Banque Nationale de Paris, as Administrative Agent, at the
Administrative Agent's Account, in same day funds. The Term B Advance owing to
the Lender by the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto, which is part of this
Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of a single advance (the "Term B Advance") by the
Lender to the Borrower in an amount not to exceed the U.S. dollar amount first
above mentioned, the indebtedness of the Borrower resulting from such Term B
Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
A-2-2
maturity hereof upon the terms and conditions therein specified. The Obligations
of the Borrower under this Promissory Note, and the Obligations of the other
Loan Parties under the Loan Documents, are secured by the Collateral as provided
in the Loan Documents.
Notwithstanding anything to the contrary contained herein or in the Credit
Agreement, this Note may not be transferred except pursuant to and in accordance
with the registration and other provisions of subsection 9.07(b,d) of the Credit
Agreement.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
By __________________________________
Name:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of Amount of Unpaid
Term B Principal Paid Principal Notation
Date Advance or Prepaid Balance Made By
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EXHIBIT A-3 TO THE
CREDIT AGREEMENT
FORM OF WORKING CAPITAL NOTE
$__________ Dated: ________, 199_
FOR VALUE RECEIVED, the undersigned, MEDIQ/PRN LIFE SUPPORT SERVICES, INC.,
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________ (the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below) the aggregate principal
amount of the Working Capital Advances (as defined below) owing to the Lender by
the Borrower pursuant to the Credit Agreement dated as of October 1, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as therein defined) among
the Borrower, MEDIQ Incorporated, a Delaware corporation and PRN Holdings, Inc.,
a Delaware corporation, as Parent Guarantors, the Lender and certain other
lender parties party thereto, Banque Nationale de Paris, as Administrative Agent
and Initial Issuing Bank, and NationsBank, N.A., as Documentation Agent, on the
Termination Date.
The Borrower promises to pay interest on the unpaid principal amount of
each Working Capital Advance from the date of such Working Capital Advance until
such principal amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Banque Nationale de Paris, as Administrative Agent, at the
[Administrative Agent's Account], in same day funds. Each Working Capital
Advance owing to the Lender by the Borrower and the maturity thereof, and all
payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto, which
is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of advances (the "Working Capital Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Working Capital Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the
A-3-2
terms and conditions therein specified. The Obligations of the Borrower under
this Promissory Note, and the Obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the Loan Documents.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
By __________________________________
Name:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
================================================================================
Amount of
Working Amount of Unpaid
Capital Principal Paid Principal Notation
Date Advance or Prepaid Balance Made By
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EXHIBIT A-4 TO THE
CREDIT AGREEMENT
FORM OF ACQUISITION NOTE
$_______________ Dated: ______ __, 199_
FOR VALUE RECEIVED, the undersigned, MEDIQ/PRN LIFE SUPPORT SERVICES, INC.,
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
______________ (the "Lender") for the account of its Applicable Lending Office
(as defined in the Credit Agreement referred to below) the aggregate principal
amount of the Acquisition Advances (as defined below) owing to the Lender by the
Borrower pursuant to the Credit Agreement dated as of October 1, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as therein defined) among
the Borrower, MEDIQ Incorporated, a Delaware corporation, and PRN Holdings,
Inc., a Delaware corporation, as Parent Guarantors, the Lender and certain other
lender parties party thereto, Banque Nationale de Paris, as Administrative Agent
and Initial Issuing Bank, and NationsBank, N.A., as Documentation Agent, on the
dates and in the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
each Acquisition Advance from the date of such Acquisition Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Banque Nationale de Paris, as Administrative Agent, at the
Administrative Agent's Account, in same day funds. Each Acquisition Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, shall be recorded by the Lender and, prior
to any transfer hereof, endorsed on the grid attached hereto, which is part of
this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of acquisition advances (the "Acquisition Advances")
by the Lender to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Acquisition Advance being
evidenced by this Promissory Note, and (ii) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
A-4-2
terms and conditions therein specified. The Obligations of the Borrower under
this Promissory Note, and the Obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the Loan Documents.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
By _____________________________________
Name:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of Amount of Unpaid
Acquisition Principal Paid Principal Notation
Date Advance or Prepaid Balance Made By
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S&S DRAFT
9/26/96
EXHIBIT B TO THE
CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
Banque Nationale de Paris,
as Administrative Agent under the
Credit Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 [Date]
Attention: Xx. Xxxxxxxx Xxxxxxxx
Ladies and Gentlemen:
The undersigned, MEDIQ/PRN Life Support Services, Inc., a Delaware
corporation (the "Borrower"), refers to the Credit Agreement dated as of October
1, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the Borrower, MEDIQ Incorporated, a Delaware corporation, and
PRN Holdings, Inc., a Delaware corporation, as Parent Guarantors, the lender
parties party thereto (the "Lender Parties"), Banque Nationale de Paris, as
Administrative Agent and Initial Issuing Bank, and NationsBank, N.A., as
Documentation Agent, and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement, that the Borrower hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _________ __, ____.
(ii) The Facility under which the Proposed Borrowing is requested is
the ___________________ Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is $__________.
[(v) The initial Interest Period for each Eurodollar Rate Advance made
as part of the Proposed Borrowing is __________ month[s].]
B-2
The Borrower hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in each Loan Document
are correct on and as of such date, before and after giving effect to such
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date other than any such representations or warranties
that, by their terms, refer to a specific date other than the date of such
Borrowing, in which case as of such specific date;
(B) no event has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom, that
constitutes a Default;
(C) for each Acquisition Advance: (i) at the time of making such
Acquisition Advance the amount on deposit in the Asset Sale Blocked Account
is zero or all amounts on deposit therein are being applied simultaneously
with such Acquisition Advance, (ii) immediately prior to such Acquisition
Advance the Asset Sale Release Amount is equal to zero and (iii) if such
Acquisition Advance is used for the purposes set forth in:
(1) Section 2.14(b)(ii) of the Credit Agreement, subject to the
terms set forth in Section 5.02(k)(i)(y)(B) of the Credit Agreement,
including but not limited to the provision that immediately after
giving effect to each Borrowing consisting of Acquisition Advances the
Senior Leverage Ratio is less than or equal to 3.75 to 1, as
calculated on the attached Schedule I;
(2) Section 2.14(b)(iii)(x) of the Credit Agreement, from and
after the Asset Sale Threshold Date, subject to the terms set forth in
Section 5.02(f)(i) of the Credit Agreement, including but not limited
to the provisions that (x) immediately after giving effect to each
Borrowing consisting of Acquisition Advances the Leverage Ratio is
less than or equal to 3.5 to 1, (y) the requested Acquisition Advances
plus proceeds used from the Asset Sale Blocked Account used for
acquisitions of a Person or assets pursuant to Section 5.02(f)(i) are
less than or equal to 5.5 times the EBITDA for the prior 12 months of
the Person or assets acquired pursuant to Section 5.02(f)(i), and (z)
the aggregate amount Acquisition Advances plus the aggregate amount of
proceeds used from the Asset Sale Blocked Account plus an amount equal
to the aggregate value of the common stock of MEDIQ used for all such
Investments made pursuant to Section 5.02(f)(i) is less than or equal
to $100,000,000, each as calculated on the attached Schedule II;
(3) Section 2.14(b)(iii)(y) of the Credit Agreement, from and
after the Asset Sale Threshold Date, not less than twelve months after
the initial extension of credit, and subject to the terms set forth in
Section 5.02(g)(i) of
B-3
the Credit Agreement, including but not limited to the provisions that
immediately after giving effect to each Borrowing consisting of
Acquisition Advances (x) the Leverage Ratio is less than or equal to
3.0 to 1 and (y) the aggregate amount of acquisition advances and
funds released from the Asset Sale Blocked Account used for dividends
paid or funds advanced directly or indirectly by the Borrower to MEDIQ
to permit MEDIQ to repurchase the common stock of MEDIQ and to pay
dividends does not exceed $20,000,000, each as calculated on the
attached Schedule III; and
(D) for each Working Capital Advance, the sum of the Loan Values of the
Eligible Receivables and Eligible Inventory (as determined based on the most
recent Borrowing Base Certificate delivered to the Lender Parties pursuant to
the Credit Agreement) exceeds the aggregate principal amount of the Working
Capital Advances plus Letter of Credit Advances to be outstanding plus the
aggregate Available Amount of all Letters of Credit then outstanding, after
giving effect to such Advance or issuance, respectively, plus the Asset Sale
Release Amount net of the amount of such Working Capital Advance to be deposited
in the Asset Sale Blocked Account as follows:
(1) Total Working Capital Commitments _____________
(2) Total Borrowing Base Availability from the
most recent Borrowing Base Certificate _____________
(3) Lesser of (1) and (2) _____________
(4) Working Capital Advances Outstanding _____________
(5) Letter of Credit Advances Outstanding _____________
(6) Available Amount of all Letters of
Credit then Outstanding _____________
(7) Total Working Capital Availability
[(3) less (4) less (5) less (6)] _____________
(8) Asset Sale Release Amount
net of the amount of such Working Capital
Advance to be deposited in the Asset Sale
Blocked Account _____________
(9) Working Capital Advance
permitted under Section 2.01(a)
[(7) minus (8)] _____________
B-4
Very truly yours,
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
By ___________________________________
Title:
SCHEDULE I
SECTION 5.02(k)(i)(y)(B)
SENIOR LEVERAGE RATIO CALCULATION
FOR REPAYMENT OF SUBORDINATED NOTES
(1) outstanding Term Loan A Advances ______________
(2) outstanding Term Loan B Advances ______________
(3) outstanding Acquisition Advances ______________
(4) outstanding Working Capital Advances ______________
(5) outstanding Letter of Credit Advances ______________
(6) outstanding amount of other Senior Debt(1) ______________
(7) amount of requested Advance ______________
(8) TOTAL SENIOR DEBT
[sum of (1) through (7)] ______________
(9) Consolidated EBITDA for the Rolling Period
ended as of the most recent period for which
financial statements were required to be furnished
pursuant to Sections 5.03(b), (c) or (d) ______________
(10) SENIOR LEVERAGE RATIO
[(8) divided by (9)] ______________
----------
(1) excluding (i) contingent obligations of the type described in clause (f) or
(h) in the definition of "Debt" and (ii) Debt permitted under Section
5.02(b)(i)(A) (Parent Guarantor Debt-A), as specified in the definition of
"Senior Leverage Ratio".
SCHEDULE II
SECTION 5.02(f)(i)
CALCULATIONS
FOR INVESTMENTS BY THE BORROWER
A. CALCULATION OF LEVERAGE RATIO
(1) outstanding Term Loan A Advances ___________
(2) outstanding Term Loan B Advances ___________
(3) outstanding Acquisition Advances ___________
(4) outstanding Working Capital Advances ___________
(5) outstanding amount of Letter of Credit Advances ___________
(6) outstanding amount of other Funded Debt(1) ___________
(7) amount of requested Advance* ___________
(8) Total Funded Debt
[sum of (1) through (7)] ___________
(9) principal amount of the NutraMax Note
to the extent secured by the NutraMax Letter of Credit ___________
(10) NUMERATOR TOTAL
[(8) minus (9)] ___________
(11) Consolidated EBITDA for the Monthly Rolling Period
ended as of the most recent month for which
financial statements were required to be furnished
pursuant to Sections 5.02(b), (c) or (d) ___________
(12) LEVERAGE RATIO
[(10) divided by (11)] ___________
----------
(1) excluding (i) contingent obligations of the type described in clause (f) or
(h) in the definition of "Debt" and (ii) Debt permitted under Section
5.02(b)(i)(A) (Parent Guarantor Debt-A), as specified in the definition of
"Leverage Ratio".
* For Investments permitted under Section 5.02(f)(i), the amount of the
requested Advance is capped at the Acquisition Facility Sublimit,
calculated as follows:
(a) Acquisition Facility Commitment ___________
(b) Acquisition Advances outstanding ___________
(c) common stock used in Investments pursuant to
Section 5.02(f)(i) ___________
(d) Subordinated Notes outstanding ___________
(e) ACQUISITION FACILITY SUBLIMIT
[(a) minus (b) minus (c) minus (d)] ___________
B. RATIO OF REQUESTED ACQUISITION ADVANCE PLUS PROCEEDS USED
FROM THE ASSET SALE BLOCKED ACCOUNT TO EBITDA FOR PRIOR 12
MONTHS OF THE PERSON OR ASSETS ACQUIRED PURSUANT TO
SECTION 5.02(f)(i) WITH SUCH ADVANCE OR PROCEEDS
(1) amount of requested Acquisition Advance
used for the acquisition of the Person or assets
acquired pursuant to Section 5.02(f)(i) __________
(2) amount of proceeds from the Asset Sale Blocked
Account to be drawn simultaneously with the requested
Acquisition Advance for the acquisition of the Person
or assets pursuant to Section 5.02(f)(i) __________
(3) NUMERATOR TOTAL
[sum of (1) and (2)] __________
(4) EBITDA for the prior 12 months of the Person or assets
acquired pursuant to Section 5.02(f)(i) __________
(5) RATIO [(3) divided by (4)] __________
C. CAP ON AGGREGATE AMOUNT OF INVESTMENTS PURSUANT TO
5.02(f)(i)
(1) aggregate amount of Acquisition Advances used for all
acquisitions of Persons or assets pursuant to Section
5.02(f)(i) (including the requested Acquisition Advance) __________
(2) aggregate amount of proceeds from the Asset Sale
Blocked Account (including proceeds drawn simultaneously
with the requested Acquisition Advance) used for all
acquisitions of Persons or assets pursuant to
Section 5.02(f)(i) __________
(3) aggregate amount of common stock used for all
acquisitions of Persons or assets pursuant to
Section 5.02(f)(i) __________
(4) TOTAL
[sum of (1) through (3)] __________
SCHEDULE III
SECTION 5.02(g)(i)
CALCULATIONS
FOR PAYMENT OF DIVIDENDS OR ADVANCING OF FUNDS BY THE BORROWER
A. CALCULATION OF LEVERAGE RATIO __________
(1) outstanding Term Loan A Advances __________
(2) outstanding Term Loan B Advances __________
(3) outstanding Acquisition Advances __________
(4) outstanding Working Capital Advances __________
(5) outstanding Letter of Credit Advances __________
(6) amount of outstanding other Funded Debt(1) __________
(7) amount of requested Advance* __________
(8) TOTAL FUNDED DEBT
[sum of (1) through (7)] __________
(9) principal amount of the NutraMax Note
to the extent secured by the NutraMax Letter of Credit __________
(10) NUMERATOR TOTAL
[(8) minus (9)] __________
(11) Consolidated EBITDA for the Rolling Period
ended as of the most recent period for which
financial statements were required to be furnished
pursuant to Sections 5.03(b), (c) or (d) __________
(12) LEVERAGE RATIO
[(10) divided by (11)] __________
----------
(1) excluding (i) contingent obligations of the type described in clause (f) or
(h) in the definition of "Debt" and (ii) Debt permitted under Section
5.02(b)(i)(A) (Parent Guarantor Debt-A), as specified in the definition of
"Leverage Ratio".
* For Investments permitted under Section 5.02(g)(i), the amount of the
requested Advance is capped at the Acquisition Facility Sublimit,
calculated as follows:
(a) Acquisition Facility Commitment __________
(b) Acquisition Advances outstanding __________
(c) Subordinated Notes outstanding __________
(d) ACQUISITION FACILITY SUBLIMIT
[(a) minus (b) minus (c)] __________
B. THE AGGREGATE AMOUNT OF ACQUISITION ADVANCES AND
ADVANCES FROM THE ASSET SALE BLOCKED ACCOUNT USED BY THE
BORROWER TO PAY DIVIDENDS OR ADVANCE FUNDS DIRECTLY OR
INDIRECTLY TO MEDIQ TO PERMIT MEDIQ TO REPURCHASE THE
COMMON STOCK OF MEDIQ AND TO PAY CASH DIVIDENDS __________
EXHIBIT C TO THE
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October 1, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") among MEDIQ/PRN LIFE SUPPORT SERVICES, INC., a Delaware corporation
(the "Borrower"),MEDIQ Incorporated, a Delaware corporation and PRN Holdings,
Inc., a Delaware corporation, as Parent Guarantors, the Lender Parties (as
defined in the Credit Agreement), Banque Nationale de Paris, as Administrative
Agent and Initial Issuing Bank, and NationsBank N.A., as Documentation Agent.
Terms defined in the Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the uniform percentage interest specified on Schedule 1 hereto
of all outstanding rights and obligations under the Credit Agreement Facility or
Facilities specified on Schedule 1 hereto. After giving effect to such sale and
assignment, the Assignee's Commitments and the amount of the Advances owing to
the Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, the Loan
Documents or any other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Loan Party or the performance or observance by
any Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Note or
Notes held by the Assignor and requests that the Administrative Agent exchange
such Note or Notes for a new Note or Notes payable to the order of the Assignee
in an amount equal to the Commitments assumed by the Assignee pursuant hereto or
new Notes payable to the order of the Assignee in an amount equal to the
Commitments assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitments retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
C-2
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor or any other Lender Party
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 the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Loan Documents
as are delegated to the Administrative Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the obligations that by
the terms of the Credit Agreement are required to be performed by it as a Lender
Party; and (vi) attaches any U.S. Internal Revenue Service forms required under
Section 2.12 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto, but in no event before
recording.
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender Party thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement (and, if the Assignment
and Acceptance covers all or the remaining portion of the Assignor's rights and
obligations under the Credit Agreement, such Assignor shall cease to be a party
thereto).
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance 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
C-3
one and the same agreement. Delivery of an executed counterpart of Schedule 1 to
this Assignment and Acceptance by telecopier shall be effective as delivery of a
manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
As to each _______ Facility in respect of which an interest is being assigned:
Percentage interest assigned: __________%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of Advances assigned: $__________
Principal amount of Note payable to Assignee: $__________
Principal amount of Note payable to Assignor: $__________
Effective Date (if other than date of acceptance by Agent):
_________ __, ____ (1)
[NAME OF ASSIGNOR], as Assignor
By ___________________________________
Title:
Dated: _________ __, ____
[NAME OF ASSIGNEE], as Assignee
By ___________________________________
Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
----------
(1) This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Administrative Agent.
Schedule I-2
ACCEPTED (2)[AND APPROVED] this
______ day of _________, _____
BANQUE NATIONALE DE PARIS,
as Administrative Agent
By ________________________________
Title:
By ________________________________
Title:
(2)[APPROVED this ___ day of ______, _____
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
By ________________________________
Title:]
----------
(2) Required if the Assignee is an Eligible Assignee solely by reason of clause
(vii) of the definition of Eligible Assignee.
EXHIBIT D TO THE
CREDIT AGREEMENT
FORM OF SECURITY AGREEMENT
Dated October 1, 1996
from
THE PERSONS LISTED ON THE SIGNATURE PAGES HEREOF
as Grantors
to
BANQUE NATIONALE DE PARIS
as Administrative Agent
TABLE OF CONTENTS
Section Page
------- ----
1. Grant of Security.................................................. 2
2. Security for Obligations........................................... 6
3. Grantors Remain Liable............................................. 6
4. Delivery of Security Collateral, Account Collateral, Agreement
Collateral and Receivables......................................... 6
5. Maintaining the L/C Cash Collateral Account and the Asset Sale
Blocked Account ................................................... 7
6. Maintaining the Blocked Accounts................................... 7
7. Investing of Amounts in the L/C Cash Collateral Account and the
Asset Sale Blocked Account......................................... 8
8. Release of Amounts................................................. 9
9. Representations and Warranties..................................... 9
10. Further Assurances................................................. 11
11. As to Equipment and Inventory...................................... 13
12. Insurance.......................................................... 14
13. Place of Perfection; Records; Collection of Receivables............ 15
14. Voting Rights; Dividends; Etc...................................... 16
15. As to the Assigned Agreements...................................... 17
16. Transfers and Other Liens; Additional Shares....................... 18
17. Administrative Agent Appointed Attorney-in-Fact.................... 18
18. Administrative Agent May Perform................................... 19
19. The Administrative Agent's Duties.................................. 19
20. Remedies........................................................... 19
21. Indemnity and Expenses............................................. 21
22. Security Interest Absolute......................................... 21
23. Amendments; Waivers; Etc........................................... 22
24. Addresses for Notices.............................................. 22
25. Continuing Security Interest; Assignments.......................... 23
26. Release and Termination............................................ 23
ii
Section Page
27. The Mortgages...................................................... 24
28. Execution in Counterparts.......................................... 24
29. Governing Law; Terms............................................... 24
Schedule I - Initial Pledged Shares and Initial Pledged Debt
Schedule II - Assigned Agreements
Schedule III - Locations of Equipment and Inventory
Schedule IV - Trade Names
Schedule V - Blocked Accounts and Other Bank Accounts
Exhibit A - Form of Blocked Account Letter
Exhibit B - Form of Consent and Agreement
Exhibit C - Form of Security Agreement Supplement
SECURITY AGREEMENT
SECURITY AGREEMENT dated October 1, 1996 made by the Persons listed on
the signature pages hereof and the Additional Grantors (as defined in Section
23(b)) (such Persons so listed and the Additional Grantors being, collectively,
the "Grantors") to BANQUE NATIONALE DE PARIS ("BNP"), as administrative agent
(the "Administrative Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
PRELIMINARY STATEMENTS.
(1) MEDIQ/PRN Life Support Services, Inc., a Delaware corporation (the
"Borrower"), has entered into a Credit Agreement dated as of October 1, 1996
(said Agreement, as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement"), with BNP, as
Administrative Agent, NationsBank as Documentation Agent and the Lender Parties
party thereto. Capitalized terms used herein and not otherwise defined are used
herein as defined in the Credit Agreement.
(2) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
that each Grantor shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.
(3) Each Grantor is the owner of the shares of stock set forth
opposite such Grantor's name in Part I of Schedule I hereto and issued by the
corporations indicated therein and of the indebtedness set forth opposite such
Grantor's name in Part II of Schedule I hereto and issued by the obligors
indicated therein.
(4) The Borrower has opened a non-interest bearing cash collateral
account (the "Asset Sale Blocked Account") with BNP at its office at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No. 202506-001-48, in the name of the
Borrower but under the sole control and dominion of the Administrative Agent and
subject to the terms of this Agreement.
(5) The Borrower has opened a non-interest bearing cash collateral
account (the "L/C Cash Collateral Account") with BNP at its office at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No. 200875-001-77, in the name of the
Borrower but under the sole control and dominion of the Administrative Agent and
subject to the terms of this Agreement.
(6) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Credit Agreement.
2
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters of Credit under
the Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements with the Borrower from time to time, each Grantor hereby agrees with
the Administrative Agent for the ratable benefit of the Secured Parties as
follows:
SECTION 1. Grant of Security. Each Grantor hereby assigns and pledges
to the Administrative Agent for the ratable benefit of the Secured Parties, and
hereby grants to the Administrative Agent for the ratable benefit of the Secured
Parties a security interest in, the following, in each case, as to each type of
property described below, whether now owned or hereafter acquired by such
Grantor, wherever located and whether now or hereafter existing (the
"Collateral"):
(a) All of the following (the "Security Collateral"):
(i) the shares of stock set forth opposite such Grantor's name in
Part I of Schedule I hereto and issued by the corporations indicated
therein (collectively referred to herein as the "Initial Pledged
Shares", and together with the shares referred to in clause (iii)
below, the "Pledged Shares"), together with the certificates
representing such Initial Pledged Shares and all dividends, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of such Initial Pledged Shares;
(ii) the indebtedness (whether or not evidenced by instruments)
set forth opposite such Grantor's name in Part II of Schedule I hereto
and issued by the obligors indicated therein (collectively referred to
herein as the "Initial Pledged Debt", and together with the
indebtedness referred to in clause (iv) below, the "Pledged Debt") and
the instruments (if any) evidencing such Initial Pledged Debt, all
security therefor and all interest, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
Initial Pledged Debt;
(iii) all additional shares of stock of any issuer of any Initial
Pledged Shares or of any other Loan Party or any Subsidiary of any
Loan Party or of any other Person from time to time acquired by such
Grantor in any manner, and all additional shares of stock of each
other Subsidiary of such Grantor to the extent required pursuant to
Section 5.01(m) of the Credit Agreement, together with the
certificates representing such additional shares and all dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such shares;
3
(iv) all additional indebtedness from time to time owed to such
Grantor by any obligor of the Initial Pledged Debt (whether or not
evidenced by instruments) and the instruments evidencing such
indebtedness (if any), and all additional indebtedness owed to such
Grantor by any other obligor to the extent required pursuant to
Section 5.01(m) of the Credit Agreement, all security therefor and all
interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness; and
(v) within five days after acquiring or organizing any foreign
Subsidiary or joint venture or any domestic joint venture, (A) in the
case of any foreign Subsidiary or joint venture, 66% of the total
outstanding shares or other ownership interests of such Person held by
such Grantor and (B) in the case of any domestic joint venture, 100%
of the shares or other ownership interests of such Person held by such
Grantor;
(b) All of the following (collectively, the "Account Collateral"):
(i) the L/C Cash Collateral Account, all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing the L/C Cash Collateral Account;
(ii) the Asset Sale Blocked Account, all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing the Asset Sale Blocked Account;
(iii) all Blocked Accounts (as hereinafter defined), all funds
held therein and all certificates and instruments, if any, from time
to time representing or evidencing the Blocked Accounts;
(iv) all other deposit accounts of such Grantor, all funds held
therein and all certificates and instruments, if any, from time to
time representing or evidencing such deposit accounts;
(v) all Collateral Investments (as hereinafter defined) from time
to time and all certificates and instruments, if any, from time to
time representing or evidencing the Collateral Investments;
(vi) all notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time hereafter delivered to or
otherwise possessed by the Administrative Agent for or on behalf of
such Grantor,
4
including, without limitation, those delivered to or possessed in
substitution for or in addition to any or all of the then existing
Account Collateral; and
(vii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral;
(c) All of such Grantor's right, title and interest, in and to all
equipment in all of its forms (including, without limitation, (i) all adult
and infant ventilators, portable volume ventilators, adult, infant,
neonatal and fetal monitors, infant apnea monitors, phototherapy units,
pediatric aerosol tents, compressors, infusion and suction pumps and poles,
incubators, infant warmers, pulse oximeters, sequential compression devices
and all other medical equipment of every kind and nature, and (ii) all
machinery, equipment, office machinery, furniture, computers, computer
hardware, automotive equipment, trucks and motor vehicles), wherever
located, all fixtures and all parts thereof and all accessions and
additions thereto, parts and appurtenances thereof, substitutions therefor
and replacements thereof (any and all such equipment, fixtures, accessions,
additions, parts, appurtenances, substitutions and replacements being the
"Equipment");
(d) All of such Grantor's right, title and interest, in and to all
inventory in all of its forms, wherever located (including, but not limited
to, (i) all medical equipment and raw materials and work in process
therefor, finished goods thereof and materials used or consumed in the
manufacture, production or preparation thereof, (ii) goods in which such
Grantor has an interest in mass or a joint or other interest or right of
any kind (including, without limitation, goods in which such Grantor has an
interest or right as consignee) and (iii) goods that are returned to or
repossessed by such Grantor), and all accessions thereto and products
thereof and documents therefor (any and all such inventory, accessions,
products and documents being the "Inventory");
(e) All of such Grantor's right, title and interest, in and to all
accounts, contract rights, chattel paper, instruments, deposit accounts and
general intangibles and all other obligations of any kind, now or hereafter
existing, whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services and whether or not earned by
performance (including, without limitation, any rights with respect to
workers' compensation or other deposits made by such Grantor and any rights
to receive tax refunds or other refunds, reimbursements and payments from
any federal, state or local government or any political subdivision, agency
or instrumentality thereof), and all rights now or hereafter existing in
and to all security agreements, leases and other contracts securing or
otherwise relating to any such accounts, contract rights, chattel paper,
instruments, deposit accounts, general
5
intangibles or obligations (any and all such accounts, contract rights,
chattel paper, instruments, deposit accounts, general intangibles and
obligations, to the extent not referred to in clause (a), (b), (f) or (g)
of this Section 1, being the "Receivables", and any and all such leases,
security agreements and other contracts being the "Related Contracts");
(f) All of such Grantor's right, title and interest in and to each of
the agreements listed on Schedule II hereto, and each Hedge Agreement to
which such Grantor is now or may hereafter become a party, in each case as
such agreements may be amended, supplemented or otherwise modified from
time to time (collectively, the "Assigned Agreements"), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due under or pursuant to the Assigned Agreements, (ii) all rights of
such Grantor to receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Assigned Agreements, (iii) claims of such
Grantor for damages arising out of or for breach of or default under the
Assigned Agreements and (iv) the right of such Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder (all such Collateral being the
"Agreement Collateral");
(g) All general intangibles of such Grantor (other than general
intangibles for moneys due or to become due which are covered by Section
1(e) above, including, without limitation, (i) all partnership, corporate
and other interests in and to any Person (other than any Security
Collateral), (ii) all governmental permits, licenses (and any subsequent
renewals thereof), franchises, registrations, authorizations and approvals
and (iii) all trademarks, trade names, trade styles, trade secrets, service
marks, logos, copyrights, patents, patent applications and all licenses,
license applications, registrations and good will relating to or associated
with any of the foregoing (including, without limitation, all such items
listed on Schedule 4.01(ii));
(h) To the extent not otherwise covered above, all of the Borrower's
right, title and interest in and to any funds or other property under or
pursuant to the 12.125% Indenture, including, without limitation, the
Borrower's right to receive monies or U.S. Government Obligations (as
defined in the 12.125% Indenture) from the Trustee or the Paying Agent
(each such term as defined in the 12.125% Indenture) under or pursuant to
the 12.125% Indenture;
(i) All proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the
types described in clauses (a) through (i) of this Section 1) and, to the
extent not otherwise included, all (i) payments under insurance (whether or
not the Administrative Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or
6
damage to or otherwise with respect to any of the foregoing Collateral, and
(ii) cash; and
(j) With respect to any Alternative Lender, the Collateral shall be
limited to all of the foregoing Collateral except for Margin Stock
Collateral.
SECTION 2. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all Obligations of such Grantor now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, including any extensions, modifications, substitutions,
amendments and renewals thereof, whether for principal (including reimbursement
for amounts drawn under Letters of Credit), interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such Obligations secured hereby being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures, as to each
Grantor, the payment of all amounts that constitute part of the Secured
Obligations of such Grantor and that would be owed by such Grantor to the
Secured Parties under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Grantor.
SECTION 3. Grantors Remain Liable. Anything contained herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) no Secured Party shall have any obligation
or liability under the contracts and agreements included in the Collateral by
reason of this Agreement or any other Loan Document, nor shall any Secured Party
be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Delivery of Security Collateral, Account Collateral,
Agreement Collateral and Receivables. All certificates or instruments
representing or evidencing any Security Collateral, Account Collateral,
Agreement Collateral or Receivables (and, to the extent requested by the
Administrative Agent, representing or evidencing any other Collateral) shall be
delivered to and held by or on behalf of the Administrative Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent; provided,
however, that this Section 4 shall not apply to any certificate of title
representing automotive equipment, trucks and motor vehicles referred to in
Section 1(c). Upon and after an Event of Default, the Administrative Agent shall
have the right, at any time in its discretion and without notice to any Grantor,
to
7
transfer to or to register in the name of the Administrative Agent or any of its
nominees any or all of the Security Collateral and Account Collateral, subject
only to the revocable rights specified in Section 14(a). In addition, upon and
after an Event of Default, the Administrative Agent shall have the right at any
time to exchange certificates or instruments representing or evidencing the
Security Collateral or Account Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 5. Maintaining the L/C Cash Collateral Account and the Asset
Sale Blocked Account. (a) So long as any Advance shall remain unpaid, any Letter
of Credit or Bank Hedge Agreement shall be outstanding or any Lender Party shall
have any Commitment under the Credit Agreement:
(i) The Borrower will maintain the L/C Cash Collateral Account with
BNP.
(ii) It shall be a term and condition of the L/C Cash Collateral
Account, notwithstanding any term or condition to the contrary in any other
agreement relating to the L/C Cash Collateral Account, and except as
otherwise provided by the provisions of Section 20, that no amount
(including interest on Collateral Investments) shall be paid or released to
or for the account of, or withdrawn by or for the account of, the Borrower
or any other Person from the L/C Cash Collateral Account.
(b) All Excess Cash from Permitted Asset Sales shall be promptly deposited
in the Asset Sale Blocked Account. It shall be a term and condition of the Asset
Sale Blocked Account, and except as otherwise provided by the provisions of
Section 8 and Section 20, that no amount (including interest on Collateral
Investments) shall be paid or released to or for the account of, or withdrawn by
or for the account of, the Borrower or any other Person from the Asset Sale
Blocked Account, provided, however, that so long as no Default has occurred and
is continuing, upon the request of the Borrower, such interest shall be released
to the Borrower on the last day of each fiscal quarter.
The L/C Cash Collateral Account and the Asset Sale Blocked Account shall be
subject to such applicable laws, and such applicable regulations of the Board of
Governors of the Federal Reserve System and of any other appropriate banking or
governmental authority, as may now or hereafter be in effect.
SECTION 6. Maintaining the Blocked Accounts. So long as any Advance
shall remain unpaid, any Letter of Credit or Bank Hedge Agreement shall be
outstanding or any Lender Party shall have any Commitment under the Credit
Agreement:
(a) Each Grantor shall, to the extent such Grantor shall have at any
time an aggregate amount on deposit in excess of $250,000, maintain blocked
deposit accounts
8
("Blocked Accounts") only with banks ("Blocked Account Banks") that have
entered into letter agreements in substantially the form of Exhibit A (or
such other form as the Administrative Agent and such Grantor shall agree)
with such Grantor and the Administrative Agent ("Blocked Account Letters").
(b) At the end of each Business Day, the Grantors required to maintain
Blocked Accounts pursuant to the foregoing paragraph shall deposit all cash
in Blocked Accounts; provided, however, that the provisions of this Section
6(b) shall not apply to (i) the Citibank Account and payments required to
be made thereto and (ii) any deposit account held in the name of the
Borrower at PNC Bank for miscellaneous cash receipts and payments thereto
so long as the aggregate amount on deposit in such accounts shall not
exceed $25,000.
(c) Upon any termination of any Blocked Account Letter or other
agreement with respect to the maintenance of a Blocked Account by any
Grantor required to maintain any Blocked Account pursuant to Section 6(a)
or any Blocked Account Bank, such Grantor shall immediately notify all
Obligors that were making payments to such Blocked Account to make all
future payments to another Blocked Account. Following the occurrence and
during the continuance of an Event of Default, such Grantor agrees to
terminate any or all Blocked Accounts and Blocked Account Letters upon
request by the Administrative Agent.
SECTION 7. Investing of Amounts in the L/C Cash Collateral Account and
the Asset Sale Blocked Account. If requested by the Borrower, the Administrative
Agent will, subject to the provisions of Sections 8 and 20, from time to time
(a) invest amounts on deposit in the L/C Cash Collateral Account and the Asset
Sale Blocked Account in such Cash Equivalents in the name of the Administrative
Agent or as to which all action required by Section 10 shall have been taken as
the Borrower may select and the Administrative Agent may approve and (b) invest
interest paid on the Cash Equivalents referred to in clause (a) above, and
reinvest other proceeds of any such Cash Equivalents that may mature or be sold,
in each case in such Cash Equivalents in the name of the Administrative Agent or
as to which all actions required by Section 10 shall have been taken as the
Borrower may select and the Administrative Agent may approve (the Cash
Equivalents referred to in clauses (a) and (b) above being collectively
"Collateral Investments"). Interest and proceeds that are not invested or
reinvested in Collateral Investments as provided above shall be deposited and
held in the L/C Cash Collateral Account or the Asset Sale Blocked Account, as
the case may be; provided, however, that so long as no Default has occurred and
is continuing, upon the request of the Borrower, such interest deposited and
held in the Asset Sale Blocked Account shall be released to the Borrower on the
last day of each fiscal quarter.
9
SECTION 8. Release of Amounts. Any amount on deposit in the Asset Sale
Blocked Account shall be released by the Administrative Agent in accordance with
the terms and conditions set forth in Section 2.16 of the Credit Agreement.
SECTION 9. Representations and Warranties. Each Grantor represents and
warrants as follows:
(a) Such Grantor is the legal and beneficial owner of the Collateral
of such Grantor free and clear of any Lien, claim, option or right of
others, except for the liens and security interests created under this
Agreement or permitted by the Credit Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of
such Collateral (including, without limitation, accounts and general
intangibles relating to the Collateral) or listing such Grantor or any of
its Subsidiaries or any trade name of such Grantor or any of its
Subsidiaries as debtor with respect to Collateral is on file in any
recording office, except such as may have been filed in favor of the
Administrative Agent relating to the Loan Documents or as permitted by
Section 5.02(a) of the Credit Agreement.
(b) The Pledged Shares owned by such Grantor have been duly authorized
and validly issued and are fully paid and non-assessable. The Pledged Debt
held by such Grantor has been duly authorized, authenticated or issued and
delivered, is the legal, valid and binding obligation of the issuers
thereof and is not in default.
(c) The Initial Pledged Shares owned by such Grantor constitute the
percentage of the issued and outstanding shares of stock of the issuers
thereof indicated on Schedule I hereto. The Initial Pledged Debt
constitutes all of the outstanding indebtedness owed to such Grantor for
money borrowed or for the deferred purchase price of property of the
issuers thereof.
(d) On the date hereof and thereafter on the most recent date on which
a revised Schedule III is required to be furnished to the Administrative
Agent pursuant to Section 11(d), all of the Equipment and Inventory of such
Grantor, other than such Equipment and Inventory as has been rented or
leased to such Grantor's customers, is located at the places specified in
Schedule III hereto. The chief place of business and chief executive office
of such Grantor and the office where such Grantor keeps its records
concerning the Receivables, and the original copies of each Assigned
Agreement and all originals of all Related Contracts and all chattel paper,
if any, that evidence Receivables (other than (i) those delivered to the
Administrative Agent and (ii) rental contracts located in the ordinary
course of business at the Borrower's branch offices), are located at the
address set forth on the signature pages hereto beneath such Grantor's
name. Such Grantor has delivered to the Administrative Agent the originals
of all agreements, certificates or instruments representing or
10
evidencing any Collateral and all security therefor and guaranties thereof,
in each case to the extent that the delivery thereof to the Administrative
Agent is required under Section 4 above. None of the Receivables or
Agreement Collateral is evidenced by a promissory note or other instrument
that is required to be delivered to the Administrative Agent hereunder and
has not been so delivered (other than promissory notes issued to the
Borrower with respect to amounts due to the Borrower, in the ordinary
course of business on a basis consistent with current practice).
(e) The Assigned Agreements to which such Grantor is a party, true and
complete copies of which have been furnished to each Lender Party, have
been duly authorized, executed and delivered by all parties thereto, have
not been amended or otherwise modified, are in full force and effect and
are binding upon and enforceable against all parties thereto in accordance
with their terms. There exists no default under any Assigned Agreement to
which such Grantor is a party by any party thereto. Each party to any
Assigned Agreement to which such Grantor is a party (other than such
Grantor) has executed and delivered to such Grantor a consent, in
substantially the form of Exhibit B hereto or otherwise in form and
substance satisfactory to the Administrative Agent, to the assignment of
the Agreement Collateral to the Administrative Agent for the benefit of the
Secured Parties pursuant to this Agreement.
(f) Such Grantor has no Blocked Accounts or other deposit accounts
other than the Blocked Accounts listed on Part I of Schedule V hereto and
the other deposit accounts listed on Part II of Schedule V hereto. Each
Grantor has instructed all existing Obligors to make all payments to a
Blocked Account to the extent required by the terms hereof.
(g) This Agreement, the pledge of the Security Collateral pursuant
hereto and the pledge and assignment of the Account Collateral pursuant
hereto create in favor of the Administrative Agent for the benefit of the
Secured Parties a valid and perfected security interest in the Collateral
of such Grantor, securing the payment of the Secured Obligations of such
Grantor, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken. Such
security interest is subject in priority only to (i) the lien imposed on
the Collateral pursuant to the 12.125% Indenture as in effect on the date
of the Initial Extension of Credit, (ii) the existing lien of Meridian Bank
on the promissory note issued by Medifac, Inc. to MEDIQ, (iii) the existing
lien of Meridian Bank on the promissory note issued by Granary Partners,
L.P. to MEDIQ, and (iv) the prior liens permitted under Section 5.02(a) of
the Credit Agreement. Upon the release of the liens referred to in the
foregoing clauses (i), (ii), (iii) and (iv), such security interest shall
be a first priority security interest.
11
(h) Such Grantor has no trade names except as set forth on Schedule IV
hereto; such trade names were adopted in good faith; and, to the best of
such Grantor's knowledge, there exist no adverse claims against such trade
names as of the Closing Date.
(i) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required (i) for the grant
by such Grantor of the assignment and security interest granted hereby, for
the pledge by such Grantor of any Security Collateral hereunder or for the
execution, delivery or performance of this Agreement by such Grantor, (ii)
for the perfection or maintenance of the pledge, assignment and security
interest created hereunder (including the first priority nature of such
pledge, assignment and security interest, except as otherwise permitted),
except for the filing of financing and continuation statements under the
Uniform Commercial Code, which financing statements have been duly filed,
or (iii) for the exercise by the Administrative Agent of its voting or
other rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of any portion of the Security Collateral
by laws affecting the offering and sale of securities generally.
(j) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(k) Such Grantor has, independently and without reliance upon any
Secured Party and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement, and such Grantor has established adequate means of obtaining
from any other Loan Parties on a continuing basis information pertaining
to, and is now and on a continuing basis will be completely familiar with,
the financial condition, operations, properties and prospects of such other
Loan Parties.
SECTION 10. Further Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver all further instruments and documents, and take all further action, that
such Grantor believes may be necessary or desirable, or that the Administrative
Agent may reasonably request, in order to perfect and protect any pledge,
assignment or security interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) xxxx conspicuously (A) each invoice issued in
connection with the rental or lease of any Equipment or Inventory, from 60 days
after the Initial Extension of Credit, with the following legend: "THIS
EQUIPMENT MAY BE SUBJECT TO A SECURITY INTEREST GRANTED TO BANQUE NATIONALE DE
PARIS AS
12
ADMINISTRATIVE AGENT" and (B) each Assigned Agreement of such Grantor included
in the Collateral, and each of its records pertaining to the Collateral, with a
legend, in form and substance satisfactory to the Administrative Agent,
indicating that such Collateral is subject to the security interest granted
hereby, (ii) if any Collateral shall be evidenced by a promissory note or other
instrument (other than promissory notes permitted pursuant to Section
5.02(f)(ix) of the Credit Agreement), deliver and pledge to the Administrative
Agent for the benefit of the Secured Parties hereunder such note or instrument
duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent,
(iii) deliver and pledge to the Administrative Agent for the benefit of the
Secured Parties hereunder certificates representing the Pledged Shares
accompanied by undated stock powers executed in blank and evidence that all
other action that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the liens and security interests created under this
Agreement has been taken and (iv) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Administrative Agent may
request, in order to perfect and preserve the pledge, assignment and security
interests granted or purported to be granted hereunder.
(b) Each Grantor hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of such
Grantor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) Each Grantor will furnish to the Administrative Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
(d) The Borrower will furnish to the Administrative Agent, at any time
within six months prior to the fifth anniversary of the date hereof, an opinion
of counsel acceptable to the Required Lenders to the effect that all financing
or continuation statements have been filed, and all other action has been taken,
to perfect and validate continuously from the date hereof the pledge, assignment
and security interests granted hereunder (excluding, in the case of perfection,
any Collateral in which a security interest may not be perfected by the filing
of a financing statement under the Uniform Commercial Code of any jurisdiction).
13
SECTION 11. As to Equipment and Inventory. Each Grantor shall:
(a) On the date hereof and thereafter on the most recent date on which
a revised Schedule III is required to be furnished to the Administrative
Agent pursuant to Section 11(d), all of the Equipment and Inventory of such
Grantor, other than such Equipment and Inventory as has been rented or
leased to such Grantor's customers, shall be located at the places
specified in Schedule III hereto or at such other places in jurisdictions
where all action required by Section 10 shall have been taken with respect
to such Equipment and Inventory.
(b) Cause all of its Equipment and Inventory to be maintained and
preserved, as is reasonably required in the conduct of its business, in
good working order and condition, excluding (i) ordinary wear and tear and
(ii) properties that have become obsolete or no longer fit for their
intended purposes, and shall forthwith, or in the case of any loss or
damage to any of such Equipment or Inventory as soon as practicable after
the occurrence thereof, make or cause to be made all repairs, replacements
and other improvements in connection therewith which are necessary or
desirable to such end.
(c) Pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Equipment and
Inventory; provided, however, that such Grantor shall not be required to
pay or discharge any such tax, assessment, charge, levy or claim (x) that
is being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, or (y) in respect of which the
Lien resulting therefrom, if any, attaches to its property and becomes
enforceable against its other creditors, to the extent that the aggregate
amount of all such taxes, assessments, charges or claims does not exceed
$250,000.
(d) Furnish to the Administrative Agent, at the same time as the
quarterly financial statements are required to be furnished to the
Administrative Agent pursuant to Section 5.03(c) of the Credit Agreement,
unless no revisions are required, a revised Schedule III specifying each
place where the Equipment and Inventory of such Grantor is located
excluding such Equipment or Inventory rented or leased to such Grantor's
customers. Such revised Schedule III shall be deemed to replace the then
existing Schedule III and shall be of full force and effect as of the date
of delivery of such Schedule to the Administrative Agent.
(e) In the event that Equipment and/or Inventory of the Grantors with
a book value equal to or greater than 10% of the aggregate book value of
all Equipment and Inventory of the Grantors' is relocated, in one move or
in a series of moves, from one county to another, furnish within five
Business Days after such relocation
14
notice of such relocation to the Administrative Agent (such notice to
include the percentage book value of the relocated Equipment and Inventory
and the old and new locations of such Equipment and Inventory).
(f) For each leased location at which at any time Equipment and
Inventory of the Grantors with a book value equal to or greater than 10% of
the aggregate book value of the Equipment and Inventory is located, use its
good faith efforts to furnish at such time to the Administrative Agent a
landlord access letter or consent on terms and conditions reasonably
acceptable to the Administrative Agent.
SECTION 12. Insurance. (a) Each Grantor shall, at its own expense,
maintain insurance with respect to the Equipment and Inventory in such amounts,
against such risks, in such form and with such insurers, as shall be reasonably
satisfactory to the Administrative Agent from time to time. Each policy for
liability insurance shall provide for all losses to be paid on behalf of the
Administrative Agent and such Grantor as their interests may appear, and each
policy for property damage insurance shall provide for all losses (except for
losses of less than $1,000,000 per occurrence) to be paid directly to the
Administrative Agent, except to the extent permitted to be paid to a Grantor
pursuant to Section 12(b). Each such policy shall in addition (i) name such
Grantor and the Administrative Agent as insured parties thereunder (without any
representation or warranty by or obligation upon the Administrative Agent) as
their interests may appear, (ii) contain the agreement by the insurer that any
loss thereunder shall be payable to the Administrative Agent notwithstanding any
action, inaction or breach of representation or warranty by such Grantor, (iii)
provide that there shall be no recourse against the Administrative Agent for
payment of premiums or other amounts with respect thereto and (iv) provide that
at least 10 days' prior written notice of cancellation or of lapse shall be
given to the Administrative Agent by the insurer. Each Grantor shall, if so
requested by the Administrative Agent, deliver to the Administrative Agent
certificates evidencing such insurance, make the original policies of such
insurance reasonably available for inspection by the Administrative Agent and,
as often as the Administrative Agent may reasonably request, a report of a
reputable insurance broker with respect to such insurance. Further, each Grantor
shall, at the request of the Administrative Agent, duly exercise and deliver
instruments of assignment of such insurance policies to comply with the
requirements of Section 10 and cause the insurers to acknowledge notice of such
assignment.
(b) Reimbursement under any insurance maintained by any Grantor
pursuant to this Section 12 may be paid directly to the Person who shall have
incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when subsection (c) of this Section 12 is not
applicable, such Grantor shall make or cause to be made the necessary repairs to
or replacements of such Equipment or Inventory, and any proceeds of insurance
properly received by or released to such Grantor
15
shall be used by such Grantor, except as otherwise required or permitted
hereunder or by the Credit Agreement to pay or as reimbursement for the cost of
such repairs or replacements.
(c) Upon the occurrence and during the continuance of any Event of
Default, all insurance payments in respect of such Equipment or Inventory shall
be paid to and applied by the Administrative Agent as specified in Section
20(b).
SECTION 13. Place of Perfection; Records; Collection of Receivables.
(a) Each Grantor shall keep its chief place of business and chief executive
office and the office where it keeps its records concerning the Collateral; and
the original copies of the Assigned Agreements of such Grantor, and all
originals of all chattel paper which evidences or constitutes Receivables (other
than rental contracts located in the ordinary course of business at the
Borrower's branch offices), at the location therefor specified in Section 9(d)
or, upon 30 days' prior written notice to the Administrative Agent, at such
other locations in a jurisdiction where all actions required by Section 10 shall
have been taken with respect to the Collateral. Each Grantor will hold and
preserve such records, Assigned Agreements and chattel paper and will permit
representatives of the Administrative Agent at any time during normal business
hours to inspect and make abstracts from such records and chattel paper.
(b) Except as otherwise provided in this subsection (b), such Grantor
shall continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Receivables and Related Contracts. In connection with
such collections, upon and after an Event of Default, such Grantor may take
(and, at the Administrative Agent's direction, shall take) such action as such
Grantor or the Administrative Agent may deem necessary or advisable to enforce
collection of the Receivables and Related Contracts; provided, however, that the
Administrative Agent shall have the right upon the occurrence and during the
continuance of an Event of Default and upon written notice to the Borrower of
its intention to do so, to notify the Obligors under any Receivables or Related
Contracts of the assignment of such Receivables or Related Contracts to the
Administrative Agent and to direct such Obligors to make payment of all amounts
due or to become due to such Grantor thereunder directly to the Administrative
Agent and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Receivables or Related Contracts, and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by such Grantor of the
notice from the Administrative Agent referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including instruments) received by such
Grantor in respect of the Receivables or the Related Contracts shall be received
in trust for the benefit of the Administrative Agent hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Administrative Agent in the same form as so received (with any necessary
indorsement) to be applied as provided by the terms of the Credit Agreement and
(ii) such Grantor shall not adjust, settle or compromise the amount or payment
of any Receivable, release wholly or partly any obligor thereof, or allow any
credit or discount thereon.
16
SECTION 14. Voting Rights; Dividends; Etc. (a) So long as no Default
under Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall
have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Security Collateral of such
Grantor or any part thereof for any purpose not inconsistent with the terms
of this Agreement or the other Loan Documents; provided, however, that no
Grantor shall exercise or refrain from exercising any such right if, in the
Administrative Agent's judgment, such action would have a material adverse
effect on the value of the Security Collateral or any part thereof.
(ii) Each Grantor shall be entitled to receive and retain any and all
dividends and interest paid in respect of the Security Collateral of such
Grantor if and to the extent that the payment thereof is not otherwise
prohibited by the terms of the Loan Documents; provided, however, that any
and all
(A) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security
Collateral,
(B) dividends and other distributions paid or payable in cash in
respect of any Security Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Security
Collateral,
shall be, and shall be forthwith delivered to the Administrative Agent to
hold as, Security Collateral except as otherwise required under the Credit
Agreement and shall, if received by any Grantor, be received in trust for
the benefit of the Administrative Agent, be segregated from the other
property or funds of such Grantor and be forthwith delivered to the
Administrative Agent as Security Collateral in the same form as so received
(with any necessary indorsement).
(iii) The Administrative Agent shall execute and deliver (or cause to
be executed and delivered) to each Grantor all such proxies and other
instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.
17
(b) Upon the occurrence and during the continuance of any Default
under Section 6.01(a) or (f) of the Credit Agreement or Event of Default:
(i) All rights of each Grantor (A) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant to Section 14(a)(i) shall, upon notice to
such Grantor by the Administrative Agent, cease, and (B) to receive the
dividends and interest payments that it would otherwise be authorized to
receive and retain pursuant to Section 14(a)(ii) shall automatically cease,
and all such rights shall thereupon become vested in the Administrative
Agent, which shall thereupon have the sole right to exercise or refrain
from exercising such voting and other consensual rights and to receive and
hold as Security Collateral such dividends and interest payments.
(ii) All dividends and interest payments that are received by any
Grantor contrary to the provisions of paragraph (i) of this Section 14(b)
shall be received in trust for the benefit of the Administrative Agent,
shall be segregated from other funds of such Grantor and shall be forthwith
paid over to the Administrative Agent as Security Collateral in the same
form as so received (with any necessary indorsement).
SECTION 15. As to the Assigned Agreements. (a) Each Grantor shall at
its expense:
(i) perform and observe all the terms and provisions of the Assigned
Agreements to be performed or observed by it, maintain the Assigned
Agreements to which it is a party in full force and effect, enforce the
Assigned Agreements in accordance with the terms thereof and take all such
action to such end as may be requested from time to time by the
Administrative Agent; and
(ii) furnish to the Administrative Agent promptly upon receipt thereof
copies of all notices, requests and other documents received by such
Grantor under or pursuant to the Assigned Agreements to which it is a
party, and from time to time (A) furnish to the Administrative Agent such
information and reports regarding the Assigned Agreements and such other
Collateral of such Grantor as the Administrative Agent may reasonably
request, and (B) upon request of the Administrative Agent make to each
other party to any Assigned Agreement to which it is a party such demands
and requests for information and reports or for action as such Grantor is
entitled to make thereunder.
(b) Each Grantor agrees that it shall perform and observe all of the
terms and provisions of each Assigned Agreement to be performed or observed by
it, maintain each such Assigned Agreement in full force and effect, enforce such
Assigned Agreement in
18
accordance with its terms, take all such action to such end as may be from time
to time requested by the Administrative Agent.
(c) Each Grantor hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Administrative Agent for the
ratable benefit of the Secured Parties of each Assigned Agreement to which it is
a party by any other Grantor hereunder.
SECTION 16. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it shall not (i) sell, assign (by operation of law or
otherwise), lease or otherwise dispose of, or grant any option with respect to,
any of the Collateral of such Grantor (other than sales, assignments, options,
leases and other dispositions permitted under the terms of the Credit Agreement
including, without limitation, Section 5.02(e) of the Credit Agreement) or (ii)
create or suffer to exist any Lien upon or with respect to any of the Collateral
of such Grantor, except for the Liens created under the Collateral Documents or
permitted under the Credit Agreement.
(b) Each Grantor agrees that it shall (i) cause each issuer of the
Pledged Shares owned by such Grantor not to issue any stock or other securities
in addition to or in substitution for the Pledged Shares issued by such issuer,
except to such Grantor, and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional shares of
stock or other securities of each issuer of any Pledged Shares.
SECTION 17. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints for the term that this Agreement is in
effect the Administrative Agent such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Administrative Agent's discretion, to
take any action and to execute any instrument that the Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Administrative Agent pursuant to Section 12,
(b) to ask for, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) or (b) above, and
19
(d) to file any claims or take any action or institute any proceedings
that the Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance with
the terms and conditions of any Assigned Agreement or the rights of the
Administrative Agent with respect to any of the Collateral.
SECTION 18. Administrative Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may, but
without any obligation to do so and without further notice, itself perform, or
cause performance of, such agreement, and the expenses of the Administrative
Agent incurred in connection therewith shall be payable by such Grantor under
Section 21.
SECTION 19. The Administrative Agent's Duties. The powers conferred on
the Administrative Agent hereunder are solely to protect its and the other
Secured Parties' interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Administrative Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Security Collateral,
whether or not the Administrative Agent or any other Secured Party has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Collateral. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property.
SECTION 20. Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
upon default under the New York Uniform Commercial Code as in effect at
such time (the "Code"), whether or not the Code applies to the affected
Collateral, and also may (i) require any Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the
Administrative Agent forthwith, assemble all or part of the Collateral as
directed by the Administrative Agent and make it available to the
Administrative Agent at a place and time to be designated by the
Administrative Agent which is reasonably convenient to both parties; (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Administrative Agent may
deem
20
commercially reasonable; (iii) occupy any premises owned or leased by any
Grantor where the Collateral or any part thereof is assembled or located
for a reasonable period in order to effectuate its rights and remedies
hereunder or under law, without obligation to such Grantor in respect of
such occupation; and (iv) exercise any and all rights and remedies of any
Grantor under or in connection with the Assigned Agreements, the
Receivables and the Related Contracts or otherwise in respect of the
Collateral, including, without limitation, any and all rights of such
Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreements, the Receivables
and the Related Contracts. Each Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice to such Grantor
of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Administrative Agent
may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) Any cash held by the Administrative Agent as Collateral and all
cash proceeds received by the Administrative Agent in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Administrative Agent, be held by
the Administrative Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 21) in whole or in part by the
Administrative Agent for the ratable benefit of the Secured Parties against
all or any part of the Secured Obligations as permitted or required by the
Credit Agreement. Any surplus of such cash or cash proceeds held by the
Administrative Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to the Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
(c) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Administrative Agent and the other
Secured Parties, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Administrative Agent in the same form
as so received (with any necessary indorsement).
(d) The Administrative Agent may, without notice to the Borrower
except as required by law and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Secured Obligations
against the L/C Cash Collateral Account and the Asset Sale Blocked Account
or any part thereof.
21
SECTION 21. Indemnity and Expenses. (a) Each Grantor agrees to defend,
protect, indemnify and hold harmless each Secured Party from and against any and
all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from such Secured Party's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) Each Grantor will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Administrative
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Administrative Agent or any
other Secured Party against such Grantor, or (iv) the failure by such Grantor to
perform or observe any of the provisions hereof.
(c) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Grantors contained in this Section 21 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under any of the other Loan Documents.
SECTION 22. Security Interest Absolute. The obligations of each
Grantor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against such Grantor to
enforce this Agreement, irrespective of whether any action is brought against
the other Grantors or whether the other Grantors are joined in any such action
or actions. All rights of the Administrative Agent and the pledge, assignment
and security interest hereunder, and all obligations of each Grantor hereunder,
shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of any Loan Document, any
Hedge Agreement or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any Loan
Document or any Hedge Agreement, including, without limitation, any
increase in the Secured Obligations resulting from the extension of
additional credit to any Grantor or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or nonperfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
22
(iv) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Borrower or any of its Subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of any Grantor or any of its Subsidiaries; or
(vi) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, such Grantor or a third-party grantor of a
security interest.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made.
SECTION 23. Amendments; Waivers; Etc. (a) No amendment or waiver of
any provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Administrative Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
(b) Upon the execution and delivery by any Person of a security
agreement supplement in substantially the form of Exhibit C hereto (each a
"Security Agreement Supplement"), (i) such Person shall be referred to as an
"Additional Grantor" and shall be and become a Grantor and each reference in
this Agreement to "Grantor" shall also mean and be a reference to such
Additional Grantor, and (ii) the annexes attached to each Security Agreement
Supplement shall be incorporated into and become a part of and supplement
Schedules I, II, III, IV and V hereto, and the Administrative Agent may attach
such annexes as supplements to such Schedules; and each reference to such
Schedules shall mean and be a reference to such Schedules as supplemented
pursuant hereto.
SECTION 24. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and, mailed, telecopied, telegraphed,
telexed or delivered to the Borrower or to the Agent, as the case may be, in
each case addressed to it at its address specified in the Credit Agreement or,
as to either party at such other address as shall be designated by such
23
party in a written notice to each other party complying as to delivery with the
terms of this Section 24. All such notices and other communications shall, when
mailed, telecopied, telegraphed, telexed or cabled, respectively, be effective
when deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
SECTION 25. Continuing Security Interest; Assignments. This Agreement
shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until the latest of the cash payment in full of
the Secured Obligations, the Termination Date and the termination or expiration
of all Bank Hedge Agreements, (b) be binding upon each Grantor, its successors
and assigns and (c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender Party may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes held by it) to any other Person and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender Party herein or otherwise, in each case as
provided in Section 8.07 of the Credit Agreement. No Grantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.
SECTION 26. Release and Termination. (a) Upon any sale, lease,
transfer or other disposition of any item of Collateral (including, without
limitation, as a result of the sale, in accordance with the terms of the Loan
Documents, of the Person that owns such Collateral) in accordance with the terms
of the Loan Documents (other than sales or rentals of Equipment and Inventory in
the ordinary course of business), the Administrative Agent will, at any
Grantor's expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereby; provided,
however, that (i) at the time of such request and such release no Event of
Default shall have occurred and be continuing, (ii) the Borrower shall have
delivered to the Administrative Agent, at least five Business Days prior to the
date of the proposed release, a written request for release describing the item
of Collateral and the terms of the sale, lease, transfer or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a form of release for execution by the Administrative
Agent and a certification by the Borrower to the effect that the transaction is
in compliance with the Loan Documents and as to such other matters as the
Administrative Agent may request and (iii) the proceeds of any such sale, lease,
transfer or other disposition required to be applied in accordance with Section
2.06(b)(ii) of the Credit Agreement shall be paid to, or in accordance with the
instructions of, the Administrative Agent at the closing.
24
(b) With respect to the sale or other disposition of Equipment or
Inventory in the ordinary course of business permitted by the Loan Documents, so
long as at the time of such sale no Event of Default shall have occurred and be
continuing, such sale or other disposition may be made free from the lien of
this Agreement and the other Loan Documents without the necessity of any release
from or consent by the Administrative Agent and no purchaser of any such
property shall be bound to inquire into any question affecting the right of any
Grantor to sell or otherwise dispose of such Equipment or Inventory free from
the lien of this Agreement and the Loan Documents.
(c) In connection with any sale, lease, transfer or other disposition
of all or part of the stock of any Discontinued Subsidiary by any Grantor in
accordance with the terms of the Loan Documents, so long as no Event of Default
shall have occurred and be continuing and the Borrower shall have delivered to
the Administrative Agent, at least five Business Days prior to the date of the
such sale, lease, transfer or other disposition, written notice requesting that
the certificates held by the Administrative Agent evidencing such stock be
delivered to such Grantor, the pledge and assignment of, and security interest
in, such stock granted hereby shall be released and such certificates shall be
released to such Grantor.
(d) Upon the latest of the cash payment in full of the Secured
Obligations, the Termination Date and the termination or expiration of all Bank
Hedge Agreements, the pledge, assignment and security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the Grantors.
Upon any such termination, the Administrative Agent will, at the Borrower's
expense, execute and deliver to the Borrower such documents as the Borrower
shall reasonably request to evidence such termination.
SECTION 27. The Mortgages. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any
Mortgage and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling in the case of fixtures and leases, letting and licenses
of, and contracts and agreements relating to the lease of real property, and the
terms of this Agreement shall be controlling in the case of all other
Collateral.
SECTION 28. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 29. Governing Law; Terms. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, except to
the extent that the validity or perfection of the security interest hereunder,
or remedies hereunder, in
25
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of New York. Unless otherwise defined herein or in the
Credit Agreement, terms used in Article 8 or Article 9 of the Code are used
herein as therein defined.
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
By ________________________________________
Name:
Title:
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
MEDIQ INCORPORATED
By ________________________________________
Name:
Title:
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
26
PRN HOLDINGS, INC.
By ________________________________________
Name:
Title:
Address of Chief Executive Office and for Notices:
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
MEDIQ INVESTMENT SERVICES, INC.
By ________________________________________
Name:
Title:
Address of Chief Executive Office and for Notices:
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
MEDIQ MANAGEMENT SERVICES, INC.
By ________________________________________
Name:
Title:
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
27
MEDIQ SURGICAL EQUIPMENT
SERVICES, INC.
By ________________________________________
Name:
Title:
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
VALUE-MED PRODUCTS, INC.
By ________________________________________
Name:
Title:
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
SCHEDULE 1
Initial Pledged Shares and Initial Pledged Debt
Initial Pledged Shares
Part I
Initial Pledged Debt
Part II
SCHEDULE 2
Assigned Agreements
SCHEDULE 3
Locations of Equipment and Inventory
SCHEDULE 4
Trade Names
SCHEDULE 5
Blocked Accounts and Other Bank Accounts
EXHIBIT A TO THE SECURITY AGREEMENT
FORM OF BLOCKED ACCOUNT LETTER
October 1, 1996
[Blocked Account Bank Address]
Attn: [ ]
[Grantor]
Ladies and Gentlemen:
Reference is made to the deposit accounts listed on the attached
Schedule I into which certain monies, instruments and other properties are
deposited from time to time (the "Accounts") maintained with you by [Grantor], a
________ corporation (the "Company"). Pursuant to a Security Agreement dated as
of October 1, 1996 (the "Security Agreement"), the Company has granted to Banque
Nationale de Paris, as administrative agent (the "Administrative Agent") for the
Secured Parties referred to in the Credit Agreement dated as of October 1, 1996
(the "Credit Agreement") with the Company, a security interest in certain
property of the Company, including, among other things, the following (the
"Account Collateral"): the Accounts, all funds held therein and all certificates
and instruments, if any, from time to time representing or evidencing the
Accounts, all interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account Collateral and all proceeds
of any and all of the foregoing Account Collateral and, to the extent not
otherwise included, all (i) payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Account Collateral and (ii) cash. It is a condition to the
continued maintenance of the Accounts with you that you agree to this letter
agreement.
By signing this letter agreement, you acknowledge notice of the
Security Agreement and confirm to the Administrative Agent that you have
received no notice of any other pledge or assignment of the Accounts. Further,
you hereby agree with the Administrative Agent that:
(a) Notwithstanding anything to the contrary in any other agreement
relating to the Accounts, the Accounts are and will be subject to the terms
and conditions of the Security Agreement, will be maintained solely for the
benefit of the Administrative Agent, will be entitled "Banque Nationale de
Paris, as Administrative
2
Agent, Re: [Grantor]" and will be subject to written instructions only from
an officer of the Administrative Agent.
(b) Upon the written request of the Administrative Agent to you, which
request shall specify that an "Event of Default" under the Credit Agreement
has occurred and is continuing (which writing may be by telex or telecopy
and upon which you may conclusively rely, absent manifest error), you shall
immediately transfer (at the cost and expense of the Company) subject to
your usual deposit terms, all funds then or thereafter deposited in the
Accounts by wire transfer into the Administrative Agent's Account at the
Federal Reserve Bank of New York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, XX, 00000,
ABA No. 000000000, for further credit to Account No. 750420-701-03.
(c) From and after the date that the Administrative Agent shall have
sent to you a written notice (which writing may be by telex or telecopy and
upon which you may conclusively rely, absent manifest error) that an "Event
of Default" under the Credit Agreement has occurred and until the date, if
any, that the Administrative Agent shall have advised you in writing (which
writing may be by telex or telecopy and upon which you may conclusively
rely, absent manifest error) that no Event of Default is continuing, you
shall not honor any withdrawal or transfer from, or any check, draft or
other item of payment on, the Accounts, other than any withdrawal,
transfer, check, draft or other item made in writing by the Administrative
Agent or bearing the written consent of the Administrative Agent, and, to
the extent of collected funds in the Accounts, you shall honor each such
withdrawal, transfer, check, draft or other item made in writing by the
Administrative Agent or bearing the written consent of the Administrative
Agent.
(d) You will follow your usual operating procedures for the handling
of the Accounts, including any remittance received in the Accounts that
contains restrictive endorsements, irregularities (such as a variance
between the written and numerical amounts), undated or postdated items,
missing signatures, incorrect payees, etc.
(e) You shall furnish to the Administrative Agent, promptly upon the
reasonable written request of the Administrative Agent in each instance,
all information regarding the Accounts, to the extent the same is provided
to the Company, for the period of time specified in such written notice,
and the Company hereby authorizes you to furnish same.
(f) You agree that you will not make, and you hereby waive all of your
rights to make, any charge, debit or offset to the Accounts for any reason
whatsoever, and waive any and all liens, whether contractual or provided
under law, which you may have or hereafter acquire on the Accounts or funds
therein, in each case, other than any charge, offset, debit or lien in
respect of your customary service charges relating to the Accounts.
3
(g) All service charges and fees with respect to the Accounts shall be
payable by the Company.
(h) After the giving of notice referred to in paragraphs (b) and (c)
above, the Administrative Agent shall be entitled to exercise any and all
rights of the Company in respect of the Accounts, and the undersigned shall
comply in all respects with such exercise.
This letter agreement shall be binding upon you and your successors
and assigns and shall inure to the benefit of the Administrative Agent, the
other Secured Parties and their successors, transferees and assigns. You may
terminate this letter agreement only upon thirty days' prior written notice to
the Company and the Administrative Agent. Upon such termination you shall close
the Accounts and transfer all funds in the Accounts to the Administrative
Agent's Account specified in paragraph (b) above.
4
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Very truly yours,
[GRANTOR]
By_____________________________________
Name:
Title:
BANQUE NATIONALE DE
PARIS, as Administrative Agent
By_____________________________________
Title:
By_____________________________________
Title:
Acknowledged and agreed to as of
the date first above written:
[BLOCKED ACCOUNT BANK NAME]
By______________________________
Title:
SCHEDULE I TO EXHIBIT A TO THE
SECURITY AGREEMENT
Accounts
EXHIBIT B TO THE SECURITY AGREEMENT
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to the
terms and provisions of, the Security Agreement dated October 1, 1996 (the
"Security Agreement", the terms defined therein being used herein as therein
defined) from MEDIQ/PRN Life Support Services, Inc. (the "Borrower") and certain
other parties thereto (together with the Borrower, the "Grantors") to Banque
Nationale de Paris as agent (the "Administrative Agent") for the Secured Parties
referred to therein, and hereby agrees with the Administrative Agent that:
(a) Upon written notice from the Administrative Agent, the undersigned
will make all payments to be made by it under or in connection with the
__________ Agreement dated _______________, 19__ (the "Assigned Agreement")
between the undersigned and the Borrower in accordance with the
instructions of the Administrative Agent.
(b) All payments referred to in paragraph (a) above shall be made by
the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from the Administrative Agent or any
Lender for any reason any such payment once made.
(c) The Administrative Agent shall be entitled to exercise any and all
rights and remedies of the Borrower under the Assigned Agreement in
accordance with the terms of the Security Agreement, and the undersigned
shall comply in all respects with such exercise.
(d) The undersigned will not, without the prior written consent of the
Administrative Agent, (i) cancel or terminate the Assigned Agreement or
consent to or accept any cancellation or termination thereof, [or] (ii)
amend or otherwise modify the Assigned Agreement [, or (iii) make any
prepayment of amounts to become due under or in connection with the
Assigned Agreement, except as expressly provided therein].
This Consent and Agreement shall be binding upon the undersigned and
its successors and assigns, and shall inure, together with the rights and
remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent, the other Secured Parties and their successors,
transferees and assigns. This Consent and Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.
2
Dated: _______________, ____ [NAME OF OBLIGOR]
By____________________________________
Name:
Title:
EXHIBIT C TO THE SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
Banque Nationale de Paris, as Administrative Agent
under the Credit Agreement
referred to below
[Address]
[Date]
Attention:
Security Agreement dated as of October 1, 1996
made by MEDIQ/PRN Life Support Services, Inc. and
the other Grantors to Banque Nationale de Paris, as Administrative Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Security Agreement (such Security
Agreement, as in effect on the date hereof and as it may hereafter be amended,
modified or otherwise supplemented from time to time, being the "Security
Agreement"). The terms defined in the Security Agreement (or in the Credit
Agreement referred to therein) and not otherwise defined herein are used herein
as therein defined.
The undersigned hereby agrees, as of the date first above written, to
become a Grantor under the Security Agreement as if it were an original party
thereto and agrees that each reference in the Security Agreement to "Grantor"
shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Administrative Agent for
the ratable benefit of the Secured Parties, and hereby grants to the
Administrative Agent for the ratable benefit of the Secured Parties as security
for the Secured Obligations a lien on and security interest in, all of the
right, title and interest of the undersigned, whether now owned or hereafter
acquired, in and to the Collateral owned by the undersigned, including, but not
limited to, the property listed on Annex I hereto. Schedules I, II, III, IV and
V to the Security Agreement are hereby supplemented by Annexes I, II, III, IV
and V hereto, respectively. The undersigned hereby certifies that such Annexes
have been prepared by the undersigned in substantially the form of Schedules I,
II, III, IV and V to the Security Agreement and are accurate and complete as of
the date hereof.
The undersigned hereby makes each representation and warranty set forth in
Section 9 of the Security Agreement (as supplemented by the attached Annexes) to
the same extent as
2
each other Grantor and hereby agrees to be bound as a Grantor by all of the
terms and provisions of the Security Agreement to the same extent as each other
Grantor.
This Security Agreement Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
[NAME OF ADDITIONAL
GRANTOR]
By__________________________________
Name:
Title:
Address of Chief Executive
Office and for Notices:
[Address]
Attention: Chief Financial Officer
EXHIBIT E TO THE
CREDIT AGREEMENT
FORM OF MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF RENTS AND FIXTURE FILING
Dated as of October 1, 1996
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
Mortgagor
to
BANQUE NATIONALE DE PARIS,
as Administrative Agent for the Lender Parties,
as hereinafter defined, Mortgagee
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF RENTS AND FIXTURE FILING
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE
FILING ("Mortgage"), made as of the 30th day of September, 1996, by MEDIQ/PRN
LIFE SUPPORT SERVICES, INC., a Delaware corporation, having its principal office
at Xxx Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000 ("Mortgagor") to BANQUE NATIONALE DE
PARIS, having an office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Mortgagee").
W I T N E S S E T H:
WHEREAS, Mortagor, MEDIQ Incorporated, and PRN Holdings, Inc. have
entered into that certain Credit Agreement, dated as of October 1, 1996 with the
banks, financial institutions and other institutional lenders listed on the
signature pages thereof as the Initial Lenders, Mortgagee, as administrative
agent for the Lender Parties, as defined in the Credit Agreement, and as the
initial issuing bank and Nationsbank, N.A., as documentation agent for the
Lender Parties (said Agreement, as it may hereafter be amended or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined);
and
WHEREAS, pursuant to the Credit Agreement and subject to the terms
and conditions therein set forth, the Lender Parties have agreed to make
Advances to Mortgagor; and
WHEREAS, the aggregate principal amount of Advances outstanding from
time to time under the Credit Agreement may not exceed $260,000,000, excluding
advances made to protect the lien and security of this Mortgage; and
WHEREAS, to evidence such indebtedness Mortgagor has executed and
delivered the Credit Agreement and certain of the Loan Documents; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Mortgagor hereby agrees that to secure the full and final payment
of any and all indebtedness and obligations due and owing or which may hereafter
become due and owing from Mortgagor to Mortgagee (and to the Lender Parties),
whether now existing or hereafter arising, of every nature, type and
description, together with any and all renewals, extensions, substitutions
thereto and modifications thereof and whether absolute or contingent, direct or
indirect, joint or several, matured or unmatured, including without limitation,
all indebtedness and obligations arising at any time and from time to time under
the Credit Agreement and other Loan Documents to be paid with interest thereon
pursuant thereto, Mortgagor hereby gives, grants, bargains, warrants, aliens,
premises, releases, conveys,
2
assigns, transfers, mortgages, hypothecates, deposits, pledges, sets over and
confirms to Mortgagee, ALL that certain real property, including without
limitation all plots, pieces or parcels of land, situate, lying and being in the
Township of Pennsauken, County of Camden, the State of New Jersey (hereinafter
called the "Land"), more particularly bounded and described in SCHEDULE A hereto
annexed and made a part hereof;
TOGETHER, ALSO, with all fixtures, equipment, machinery, chattels,
apparatus and articles of personal property now or hereafter attached to or
located in or upon the Premises (defined below), and used or usable in
connection with any present or future operation or letting of the Premises or
the activities at any time conducted therein and all substitutions and
replacements therefor (hereinafter called "Building Equipment"), including, but
not limited to, furnaces, boilers, oil burners, radiators and piping, coal
stokers, plumbing and bathroom fixtures, refrigeration, air conditioning and
sprinkler systems, wash-tubs, sinks, gas and electric fixtures, stoves, ranges,
awnings, screens, window shades, elevators, motors, dynamos, refrigerators,
kitchen cabinets, incinerators, plants and shrubbery and all other machinery,
vending machines, appliances, fittings, furniture, furnishings and fixtures of
every kind used in the operation of the buildings standing or hereafter erected
on the Premises, together with any and all replacements thereof and additions
thereto, and all right, title and interest of Mortgagor in and to any Building
Equipment which may be subject to any security agreements, as defined in
subdivision (1) (h) of Section 9-105 of the Uniform Commercial Code of the State
of New Jersey (hereinafter called "Security Agreements"), superior in lien to
the lien of this Mortgage; it being understood and agreed that all Building
Equipment is part and parcel of the Premises and appropriated to the use thereof
and, whether affixed or annexed to the Premises or not, shall for the purposes
of this Mortgage, be deemed conclusively to be real estate and mortgaged hereby;
TOGETHER, ALSO, with any and all awards, damages, payments and other
compensation and any and all claims therefor and rights thereto which may result
from taking or injury, including interest thereon, heretofore and hereafter made
to Mortgagor by virtue of the exercise of the power of eminent domain of or any
damage, injury or destruction in any manner caused to the whole or any part of
the Premises or any easement therein, including but not limited to insurance
proceeds, condemnation awards and settlements, any awards for changes of grade
of streets, all of which are hereby assigned to Mortgagee, who is hereby
authorized to collect and receive the proceeds of such items and to give proper
receipts and acquittances therefor, and to apply the same toward the payment of
the mortgage debt, notwithstanding the fact that the amount owing thereon may
not then be due and payable;
TOGETHER, ALSO, with all the estate, right, title, claim or demand
whatsoever of Mortgagor in and to all rents, income, profits and other benefits
to which Mortgagor may now or hereafter be entitled from the property described
above (such granting constituting an absolute and present assignment of such
property, subject to conditional permission of Mortgagor to collect such rents
as provided herein below);
3
TOGETHER, ALSO with the appurtenances, all estate and rights of
Mortgagor in and to the Premises and all right, title and interest, if any, of
Mortgagor, in and to the land lying in the streets, roads or avenues, open or
proposed, in front of or adjoining the Premises and of, in and to any strips or
gores of land adjoining the Premises;
TOGETHER, ALSO with all right, title and interest of Mortgagor in
and to all agreements, contracts, plans and specifications relative to the
construction of the improvements built or to be built on the Land; the sale
including the proceeds thereof, of the Premises; leasing, brokerage, management,
sale and/or operation of the Premises;
TOGETHER, ALSO, with all and singular the tenements, hereditaments
and appurtenances belonging to the Land or any part thereof, and the buildings,
structures, and improvements thereon, or in any way appertaining thereto
(including, but not limited to, all income, rents, issues and profits arising
therefrom), all streets, alleys, passages, ways, watercourses, easements, all
other rights, liberties and privileges of whatsoever kind or character, the
provisions and remainders, and all the estate, right, title, interest, property,
possession, claim and demand whatsoever, as well at law as in equity, of
Mortgagor in and to all the foregoing or any or every part thereof (all Land,
buildings, structures, improvements, fixtures, equipment, machinery, chattels,
goods, apparatus, personal property, Building Equipment, tenements, awards,
damages, payments, compensation, claims, rights, rents, income, profits and
other property interests described and enumerated herein are hereinafter
collectively referred to as the "Premises") .
TO HAVE AND TO HOLD the Premises and other property, privileges,
rights, interests and franchises hereby granted or mortgaged, or intended so to
be, unto Mortgagee, its successors and assigns forever;
PROVIDED, HOWEVER, and these presents are upon the condition, that
if Mortgagor shall fully and finally pay or cause to be paid all of the
Obligations on the abovementioned Loan Documents, at the times and in the manner
therein and herein provided, and shall keep, perform and observe all and
singular the covenants, agreements and provisions in the abovementioned Loan
Documents and in this Mortgage expressed to be kept, performed and observed by
or on the part of Mortgagor, then this Mortgage and the estate and rights hereby
granted shall cease, determine and be void but otherwise shall be and remain in
full force and effect.
All capitalized terms used herein not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
MORTGAGOR'S LIABILITY UNDER THE CREDIT AGREEMENT FOR THE OBLIGATIONS
SHALL NOT EXCEED THE PRINCIPAL AMOUNT OF $260,000,000 THEREOF, PLUS, FROM AND
AFTER THE DEMAND FOR PAYMENT
4
THEREUNDER, INTEREST THEREON AT THE HIGHEST RATE THEN APPLICABLE TO THE
INDEBTEDNESS OF BORROWER TO MORTGAGEE SET FORTH IN THE CREDIT AGREEMENT, PLUS
ANY AND ALL COSTS, EXPENSES AND CHARGES OF COLLECTION THEREUNDER (INCLUDING, BUT
NOT LIMITED TO, ATTORNEYS' FEES AND LEGAL EXPENSES).
AND Mortgagor covenants and agrees with Mortgagee as follows:
1. Payment of Indebtedness. That Mortgagor will pay all indebtedness
as hereinbefore provided and if default shall be made in the payment of the said
indebtedness or in the interest which shall accrue thereon, or of any part of
either, Mortgagee shall have power to sell the Premises, including without
limitation the Building Equipment and other property covered hereby according to
law.
2. Insurance. (a) That Mortgagor will keep the buildings on the
Premises and the Building Equipment insured for the benefit of Mortgagee (i)
against loss by fire, (ii) by means of an extended coverage endorsement, against
loss or damage by windstorm, hail, explosion, riot, riot attending a strike,
civil commotion, aircraft, vehicle and smoke, (iii) against loss of rentals due
to any of the foregoing causes, (iv) against loss by flood if the Premises are
located in an area identified by the Secretary of Housing and Urban Development
as an area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968, as amended, and
(v) when and to the extent required by Mortgagee, against any other risk insured
against by persons operating like properties in the locality of the Premises;
that Mortgagor will assign and deliver to Mortgagee the policies of such
insurance and the proceeds thereof; that Mortgagor will reimburse Mortgagee for
any premiums paid for insurance made by Mortgagee on Mortgagor's default in
taking out such insurance, or in so delivering such policies, together with
interest thereon at the rate per annum specified in Article 4 hereof, and the
same shall be added to the indebtedness secured hereby and be secured by this
Mortgage;
(b) that such insurance shall be provided by policies written in
terms and amounts, and by companies, reasonably satisfactory to Mortgagee, and
losses thereunder shall be payable to Mortgagee pursuant to a standard
non-contributory mortgagee endorsement required by Mortgagee, which endorsement
may only be cancelled or modified upon not less than thirty (30) days prior
written notice to Mortgagee. Mortgagee shall not by the fact of approving,
disapproving, accepting, preventing, obtaining or failing to obtain any
insurance incur any liability for or with respect to the amount of insurance
carried, the form or legal sufficiency of insurance contracts, solvency of
insurance companies, or payment or defense of lawsuits, and Mortgagor hereby
expressly assume full responsibility therefor and all liability, if any, with
respect thereto.
5
(c) that regardless of the types or amounts of insurance required
and approved by Mortgagee Mortgagor will deliver to Mortgagee certificates
evidencing all policies of insurance acquired by Mortgagor to insure against any
loss or damage to the Premises, as additional security for the indebtedness
secured hereby;
(d) that Mortgagee shall be entitled to retain and apply the
proceeds of any insurance, whether against fire or other hazard, to the payment
of the indebtedness secured hereby, or, if Mortgagee, in its sole discretion,
shall so elect, Mortgagee may hold any or all of such proceeds for application
to payment of the cost of restoration;
(e) that not less than fifteen (15) days prior to the expiration
date of each policy furnished by Mortgagor pursuant to this Article, Mortgagor
will deliver to Mortgagee a certificate evidencing a renewal policy or policies
marked "premium paid" or accompanied by other evidence of payment satisfactory
to Mortgagee; and
(f) that in the event of a foreclosure of this Mortgage the
purchaser of the Premises shall succeed to all the rights of Mortgagor,
including any rights to the proceeds of insurance and to unearned premiums, in
and to all policies of insurance certificates for which have been delivered to
Mortgagee pursuant to this Article.
3. Premises and Improvements. That no building or other property now
or hereafter covered by the lien of this Mortgage shall be removed, demolished
or materially altered without the prior written consent of Mortgagee, except
that Mortgagor shall have the right, without such consent, to remove and dispose
of, free from the lien of this Mortgage, such Building Equipment as from time to
time may become worn out or obsolete, provided that simultaneously with or prior
to such removal, any such equipment shall be replaced with other equipment of a
value at least equal to that of the replaced equipment and free from any
security agreement, and by such removal and replacement Mortgagor shall be
deemed to have subjected such Building Equipment to lien of this Mortgage.
4. Mortgagee's Optional Performance. That in the event of any
default in the performance of any of Mortgagor's covenants or agreements herein,
Mortgagee may, at the option of Mortgagee, perform the same and the cost
thereof, with interest at a rate per annum equal to the highest rate then
applicable to the indebtedness of Borrower to Mortgagee set forth in the Credit
Agreement (but not in excess of the maximum rate allowed by law to be charged to
Mortgagor), shall immediately be due from Mortgagor to Mortgagee and secured by
this Mortgage.
5. Taxes, Assessments and Escrows. (a) That Mortgagor will pay all
taxes, assessments, water rates, sewer rents fines, impositions and other claims
and/or charges now or hereafter levied and all charges for utilities with
respect to or against the Premises or any part thereof, and also any and all
license fees or similar charges which may
6
be imposed by the municipality in which the Premises are situated for the use of
walks, chutes, areas and other space beyond the lot line on or abutting the
public sidewalks in front of or adjoining the Premises, together with any
penalties or interest on any of the foregoing (collectively "Impositions"), and
in default thereof Mortgagee may pay the same and Mortgagor will repay the same
with interest thereon at the rate per annum specified in Article 4 hereof and
the same shall be added to the indebtedness secured hereby and be additionally
secured by this Mortgage; that upon request of Mortgagee, Mortgagor will exhibit
to Mortgagee receipts for the payment of all items specified in this Article
within ten (10) days of the date when the same shall become delinquent. If any
law, rule, regulation or ordinance adopted hereafter by any federal, state or
local government, or any department, agency or bureau thereof, imposes a tax on
Mortgagee with respect to the Premises, the value of Mortgagor's equity therein,
the amount of the indebtedness secured hereby, or this Mortgage, Mortgagee shall
have the right at its election from time to time to give Mortgagor sixty (60)
days' written notice to pay such indebtedness secured hereby, whereupon such
indebtedness shall become due, payable and collectible at the expiration of such
period of sixty (60) days, unless prior thereto, lawfully and without violation
of usury or other laws, Mortgagor shall have paid any such tax in full as the
same became due and payable, in which event such notice shall be deemed to have
been rescinded with respect to any right of Mortgagee hereunder arising by
reason of the tax so paid. No prepayment charge or premium shall apply to the
payment of the indebtedness secured hereby pursuant to any such notice, if the
payment is made before the expiration of such period of sixty (60) days.
(b) That Mortgagee will not permit Mortgagor to claim and Mortgagor
will not claim or demand any credit on or make any deduction from any secured
indebtedness hereunder including without limitation any interest or principal
of, on, or with respect to the Notes, by reason of the payment of any taxes
levied or to be levied upon the Premises or any part thereof during the
continuance of the lien of this Mortgage.
(c) That, after an event of default hereunder, Mortgagee may, at its
option to be exercised by twenty (20) days' written notice to Mortgagor, require
that Mortgagor deposit with Mortgagee, on the first day of each and every month,
a sum equal to one-twelfth (1/12) of the annual real estate taxes, assessments,
water rates, sewer rents and other charges specified in this Article 5
(hereinafter collectively referred to as "taxes") plus one-twelfth (1/12) of the
premiums required to keep in force for one year the insurance specified in
Article 2 hereof. If such deposits shall be so required, Mortgagor shall also
deposit with Mortgagee, at least thirty (30) days prior to the due date of each
installment of such taxes and each insurance premium, such additional amount as
may be determined by Mortgagee in order to provide Mortgagee with funds
sufficient to pay such installment or premium. It is the intention of the
parties that, if such deposits shall be so required, Mortgagor shall deposit
with Mortgagee the necessary funds so that Mortgagee, at all times until the
full payment and satisfaction of this Mortgage, shall have on hand sufficient
deposits covering the accrued amounts of such taxes and insurance premiums. The
amount of such taxes and premiums,
7
when unknown, shall be reasonably estimated by Mortgagee; any insufficiency to
pay such charges when due shall be paid by Mortgagor to Mortgagee on demand. If
permitted by law, the said funds shall bear no interest and shall not be deemed
to be trust funds but may be commingled with other funds of Mortgagee and no
interest shall be payable upon any such funds. (The foregoing sentence shall not
apply to any assignee of this Mortgage.) Mortgagee shall have no obligation to
use said funds to pay an installment of taxes prior to the last day on which
payment thereof may be made without penalty or interest or to pay an insurance
premium prior to the due date thereof. If the whole of said principal sum and
interest shall be declared due and payable by Mortgagee pursuant to Article 20
hereof, all such deposits may, at the option of Mortgagee, be applied in
reduction of said principal sum and/or interest, as Mortgagee shall elect. Upon
an assignment of this Mortgage, Mortgagee shall have the right to pay over the
balance of such deposits in its possession to the assignee and Mortgagee shall
thereupon be completely released from all liability with respect to such
deposits and Mortgagor or owner of the Premises shall look solely to the
assignee or transferee in reference thereto. This provision shall apply to every
transfer of such deposited to a new assignee. Upon full payment and satisfaction
of this Mortgage or at any prior time, at the election of Mortgagee, the balance
of the deposits in its possession shall be paid over to the record owner of the
Premises and no other party shall have any right or claim thereto in any event.
Mortgagor agrees, at Mortgagee's request, to make the aforesaid deposits with
such service or financial institution as Mortgagee shall from time to time
designate.
6. Appointment of Receiver and Other Powers. That Mortgagee shall
have the right in case of failure of Mortgagor to perform any of the acts,
covenants, or conditions in this Mortgage or in the Credit Agreement, upon a
complaint filed or any proper action being commenced for the foreclosure of this
Mortgage, to apply for, and Mortgagee shall be entitled as a matter of right
without consideration of the value of the Premises as security for the amounts
due Mortgagee, or of the solvency of any person or persons obligated for the
payment of such amounts, to the appointment by any competent court or tribunal,
without notice to any party, of a receiver of the rents, issues, and profits of
the Premises, with power to lease the Premises, or such part thereof as may not
then be under lease, and with such other powers as may be deemed necessary, who,
after deducting all proper charges and expenses attending the execution of the
trust as receiver, shall apply the residue of the rents and profits to the
payment and satisfaction of the amount remaining secured hereby, or to any
deficiency which may exist after applying the proceeds of any judicially decreed
sale of the Premises to the payment of the amount due, including interest and
the costs of the foreclosure and sale.
7. Estoppel Certificate. That Mortgagor, within five (5) days upon
request in person or within ten (10) days upon request by mail, will furnish a
written statement duly acknowledged of the amount due on this Mortgage and
whether any offsets or defenses exist against the secured mortgage debt.
8
8. Notice. That notice and demand or request shall be made in
accordance with the Credit Agreement.
9. Title and Further Assurances. (a) That Mortgagor warrants that
Mortgagor has good title to the Premises, including without limitation the
Building Equipment and other property covered hereby free and clear of all liens
and encumbrances, except for current real property taxes not yet delinquent and
this Mortgage ("Permitted Encumbrances"), and has full power and lawful
authority to mortgage the same; that Mortgagor shall and will make, execute,
acknowledge and deliver, in due form required by applicable law, all such
further assurances as may at any time hereafter be reasonably required to
effectuate the mortgaging of the Premises and other property covered hereby or
intended so to be, unto Mortgagee, its successors or assigns, for the purpose
aforesaid, and unto all and every person or persons deriving any estate, right,
title or interest therein under this Mortgage; and that Mortgagor will warrant
and defend title to the Premises, including without limitation the Building
Equipment and said other property against all persons whomsoever claiming the
same or any part thereof, including without limitation all persons claiming by,
through or under Mortgagor.
(b) That Mortgagor and shall execute and deliver, from time to time,
such further instruments (including further security agreements and Uniform
Commercial Code financing statements) as may be requested by Mortgagee to
confirm the lien of this Mortgage on any Building Equipment.
(c) That Mortgagor upon request, shall make, execute and deliver any
and all instruments sufficient for the purpose of confirming the assignment to
Mortgagee of awards for the taking by eminent domain of the whole or any part of
the Premises or any easement therein, including any awards for changes of grade
of streets, free, clear and discharged of any encumbrances of any kind or nature
whatsoever.
(d) That Mortgagor shall not further encumber the Premises for debt
and hereby (1) represents as a special inducement to Mortgagee to make the loans
secured hereby that, as of the date hereof, this is a first mortgage and there
are no encumbrances to secure debt junior to this Mortgage and (2) covenants
that there are to be none as of the date when this Mortgage becomes of record
and thereafter will be none, except, in either case, encumbrances having the
prior written consent of Mortgagee.
(e) Mortgagor will promptly perform and observe, or cause to be
performed or observed, all of the terms, covenants and conditions of all
instruments of record affecting the Premises, non-compliance with which may
affect the security of this Mortgage or which may impose any duty or obligation
upon Mortgagor or any other occupant of the Premises or any part thereof, and
Mortgagor shall do or cause to be done all
9
things necessary to preserve intact and unimpaired any and all easements,
appurtenances and other interest and rights in favor of or constituting any
portion of the Premises.
10. Sale by Parcel. That in case of any foreclosure sale, the
Premises, or so much thereof as may be affected by this Mortgage, may be sold in
one or more parcels.
11. Additional Lien. That if any action or proceeding be commenced
(including an action to foreclose this Mortgage or to collect the indebtedness
secured hereby), in which Mortgagee becomes a party or participates, by reason
of being the holder of this Mortgage or the debt secured hereby, all sums paid
by Mortgagee for the expense of so becoming a party or participating (including
reasonable counsel fees and disbursements) shall on notice and demand be paid by
Mortgagor, together with interest thereon at the rate per annum specified in
Article 4 hereof, and shall also be a lien on the Premises, prior to any right
or title to, interest in, or claim upon, the Premises subordinate to the lien of
this Mortgage, and shall be deemed to be additionally secured by this Mortgage
and that in any action or proceeding to foreclose this Mortgage, or to recover
or collect the debt secured hereby, the provisions of law respecting the
recovery of costs, disbursements and allowances shall apply in addition to the
foregoing.
12. Care and Maintenance of Premises. That the Premises and any
buildings on the Premises have not been damaged to any material extent and
Mortgagor will maintain the Premises and the Building Equipment in good
condition and repair, will not commit or suffer any waste thereof or the conduct
of any nuisance or unlawful occupation or business on, or use of, the Premises,
and will comply with, or cause to be complied with, all statutes, ordinances and
requirements of any governmental authority relating to the Premises; that
Mortgagor will promptly repair, restore, replace or rebuild any part of the
Premises or the Building Equipment now or hereafter subject to the lien of this
Mortgage which may be damaged or destroyed by any casualty whatsoever or which
may be affected by any proceeding of the character referred to in Article 13;
and that Mortgagor shall not initiate, join in, or consent to any change in any
private restrictive covenant, zoning ordinance, or other public or private
restrictions, limiting or defining the uses which may be made of the Premises or
any part thereof.
13. Eminent Domain and Condemnation. The proceeds of any award or
claim for damages, direct or consequential, in connection with any condemnation
or other taking of or damage or injury to the Premises, or any part thereof, or
for conveyance in lieu of condemnation, are hereby assigned to and shall be paid
to Mortgagee. In addition, all causes of action, whether accrued before or after
the date of this Mortgage, of all types for damages or injury or affecting the
Premises or any part thereof, including, without limitation, causes of action
arising in tort or contract and causes of action for fraud or concealment of a
material fact, are hereby assigned to Mortgagee as additional security and the
proceeds shall be paid to Mortgagee. Mortgagee may, at its option, appear in and
10
prosecute in its own name, any action or proceedings relating to condemnation or
other taking of or damage or injury to the Premises or any portion thereof. If
Mortgagor at any time suspects or has knowledge of any casualty damages to the
Premises or damage in any other manner, Mortgagor will immediately notify
Mortgagee in writing. Mortgagor may participate in any such proceedings and may
join Mortgagee in adjusting any loss covered by insurance.
That notwithstanding any taking by eminent domain or other
governmental action (of which there are no such pending proceedings) causing
injury to, or decrease in value of, the Premises and creating a right to
compensation therefor, including, without limitation, the change of the grade of
any street, Mortgagor shall continue to be fully liable for all indebtedness or
liability secured hereby.
All compensation, awards, proceeds, damages, claims, insurance
recoveries, rights of action and payments which Mortgagor may receive, or to
which Mortgagor may become entitled with respect to the Premises or any part
thereof, shall be paid over to Mortgagee and shall be applied first toward
reimbursement of all costs and expenses of Mortgagee in connection with recovery
of the same. Thereafter the same need not be applied by Mortgagee in reduction
of principal but may be applied in such proportions and priority as Mortgagee,
in Mortgagee's sole discretion, may elect, to the payment of principal, interest
or other sums secured by this Mortgage and/or to payment to Mortgagor, on such
terms as Mortgagee may specify, for the sole purpose of altering, restoring or
rebuilding any part of the Premises which may have been altered, damaged or
destroyed as a result of any such taking or other action; that if, prior to the
receipt by Mortgagee of such award or compensation, the Premises shall have been
sold on foreclosure of this Mortgage, Mortgagee shall have the right to receive
said award or compensation to the extent of any deficiency found to be due upon
such sale, with legal interest thereon, whether or not a deficiency judgment on
this Mortgage shall have been sought or recovered, together with reasonable
counsel fees and the costs and disbursements incurred by Mortgagee in connection
with the collection of such award or compensation. In the event Mortgagee elects
to permit Mortgagor to repair or restore the Premises following any damage or
injury to the Premises, or any part thereof, then the balance of such
compensation, awards, proceeds, damages, claims, insurance recoveries, rights of
action or payments shall be applied to the reimbursement of Mortgagor for
expenses incurred by it in such repair or restoration of the Premises, subject,
however, to the following conditions:
(i) any such work of repair or restoration shall be of such a
character as not to reduce, or otherwise adversely affect, the value of
the buildings, improvements and fixtures on the Premises immediately
before such damage or injury, nor to diminish the general utility of such
buildings, improvements or fixtures for the purposes the same were used
immediately prior to such damage;
11
(ii) such work of repair or restoration shall be commenced as soon
as reasonably possible after such damage or injury occurs and shall be
completed by Mortgagor forthwith and with due diligence;
(iii) such work of repair or restoration shall be done in accordance
with plans, specifications and drawings submitted to and approved by
Mortgagee;
(iv) any such monies made available for such repair or restoration
shall be disbursed in accordance with standard construction lending
practices approved by Mortgagee or in any other manner approved by
Mortgagee; and
(v) in the event such compensation, awards, proceeds, damages,
claims, insurance recoveries, rights of action or payments are
insufficient to complete such repairs or restoration, Mortgagor shall
provide the balance of the cost of such repairs or restoration. Any
balance of monies held by Mortgagee and remaining after completion of such
repair or restoration shall be applied to the payment or prepayment
(without premium) of the indebtedness or liability secured hereby in such
order as Mortgagee may determine.
In the event Mortgagor does not elect to repair or restore the
Premises following any such damage or injury referred to herein, or if Mortgagor
elects to repair or restore the Premises but fails to comply with any of the
conditions hereinabove set forth, then all such compensation, awards, proceeds,
damages, claims, insurance recoveries, rights of action and payments, which
remain after the reimbursement of all costs and expenses of Mortgagee in
connection with recovery of the same, shall be applied, in the sole and absolute
discretion of Mortgagee and without regard to the adequacy of its security
hereunder, to the payment or prepayment (without premium) of the indebtedness or
liability secured hereby. Any application of such amounts or any portion thereof
to any indebtedness secured hereby shall not be construed to or waive any
default or notice of default hereunder or invalidate any act done pursuant to
any such default or notice.
14. Right to Inspect. That Mortgagee and any persons authorized by
Mortgagee shall have the right to enter and inspect the Premises at all
reasonable times and, prior to an event of default hereunder, upon reasonable
notice; and that if, at any time after default by Mortgagor in the performance
of any of the terms, covenants or provisions of this Mortgage, the management or
maintenance of the Premises shall be determined by Mortgagee to be
unsatisfactory, Mortgagor shall employ, for the duration of such default, as
managing agent of the Premises, such person or firm as from time to time shall
be approved by Mortgagee. That Mortgagee and its designated agents shall have
the right to inspect Mortgagor's books and records with respect to the Premises
at all reasonable times.
12
15. Financial Information. That Mortgagor, in addition to the
financial information required in the Credit Agreement, shall furnish to
Mortgagee as promptly as reasonably possible, such interim financial or other
information with respect to the operation of the Premises and with respect to
Mortgagor as Mortgagee may reasonably request. If Mortgagor shall have leased
all or substantially all of the Premises to another, such statements shall cover
the earnings and expenses in the latest fiscal year of the lessee under such
lease. In the case of such lease, if the lessee shall be an affiliate of
Mortgagor, Mortgagor will also furnish to Mortgagee the lessee's balance sheet
as of the end of the lessee's fiscal year and the lessee's statement of income
and surplus for such fiscal year, all in reasonable detail and stating in
comparative form the figures as of the end of and for the previous fiscal year,
and prepared, audited and reported upon by an independent certified public
accountant or, if permitted by Mortgagee, verified by an authorized financial
officer of the lessee.
16. Assignment of Rents. That Mortgagor hereby assigns to Mortgagee
the rents, issues and profits of the Premises, together with all leases,
licenses and other documents evidencing such rents, issues and profits now or
hereafter in effect and any and all deposits held as security under said leases,
and shall, upon demand, deliver to Mortgagee an executed counterpart of each
such lease or other document. Nothing contained in the foregoing sentence shall
be construed to bind Mortgagee to the performance of any of the covenants,
conditions or provisions contained in any such lease or other document or
otherwise to impose any Paragraph 16 obligation on Mortgagee (including, without
limitation, any liability under the covenant of quiet enjoyment contained in any
lease in the event that any tenant shall have been joined as a party defendant
in any action to foreclose this Mortgage and shall have been barred and
foreclosed thereby of all right, title and interest and equity of redemption in
the Premises), except that Mortgagee shall be accountable for money actually
received pursuant to such assignment. Mortgagor hereby further grant to
Mortgagee the right (i) to enter upon and take possession of the Premises for
the purpose of collecting the said rents, issues and profits, (ii) to dispossess
by the usual summary proceedings any tenant defaulting in the payment thereof to
Mortgagee, (iii) to let the Premises, or any part thereof, and (iv) to apply
said rents, issues and profits, after payment of all necessary charges and
expenses, on account of said indebtedness. Such assignment and grant shall
continue in effect until all indebtedness secured by this Mortgage is fully and
finally paid, the execution of this Mortgage constituting and evidencing the
irrevocable consent of Mortgagor to the entry upon and taking possession of the
Premises by Mortgagee pursuant to such grant, whether foreclosure has been
instituted or not and without applying for a receiver. After an event of default
hereunder, Mortgagor shall be entitled to collect and receive the same until the
occurrence of a default by Mortgagor under any of the covenants, conditions or
agreements contained in this Mortgage. Mortgagor agrees to use said rents,
issues and profits in payment of principal and interest becoming due on this
Mortgage and in payment of taxes, assessments, water rates, sewer rents and
carrying charges becoming due against the Premises. Such rights of Mortgagor to
collect and receive said rents, issues and profits
13
may be revoked by Mortgagee upon any such default by Mortgagor, by giving
written notice of such revocation.
17. Rents and Profits. That, in the event of any default under this
Mortgage, Mortgagor will pay monthly in advance to Mortgagee, on its entry into
possession pursuant to Article 16 hereof, or to any receiver appointed to
collect said rents, issues and profits, the fair and reasonable rental value for
the use and occupation of the Premises or of such part thereof as may be in the
possession of Mortgagor, and upon default in any such payment, will vacate and
surrender possession of the Premises or such part thereof, as the case may be,
to Mortgagee or to such receiver and, in default thereof, may be evicted by
summary proceedings or otherwise.
18. Leases. (a) That Mortgagor has no right or power, as against
Mortgagee without its consent, to cancel, abridge or otherwise modify in any
material respect any of the leases or subleases now or hereafter affecting the
whole or any part of the Premises or any of the terms, provisions or covenants
thereof, or to accept prepayments of installments of rent to become due
thereunder and Mortgagor shall not do so without such consent.
(b) That Mortgagor shall not enter into a lease of all or
substantially all of the Premises, unless (i) such lease shall expressly provide
that the leasehold estate created thereby shall be subject and subordinate to
all mortgages on the Premises and to the leasehold estates of subtenants created
by existing subleases, notwithstanding any clause in any such sublease
purporting to subordinate such sublease and the rights of the subtenant
thereunder to ground or underlying leases, (ii) such lease shall require that
each sublease thereafter made and each renewal of any existing sublease shall
provide that, (A) in the event of the termination of the underlying lease, the
sublease shall not terminate or be terminable by the subtenant, (B) in the event
of any action for the foreclosure of this Mortgage, the sublease shall not
terminate or be terminable by the subtenant by reason of the termination of the
underlying lease unless the subtenant is specifically named and joined in any
such action and unless a judgment is obtained therein against the subtenant and
(C) in the event that the underlying lease is terminated as aforesaid, the
subtenant shall attorn to the lessor under the underlying lease or to the
purchaser at the sale of the Premises on such foreclosure, as the case may be,
and (iii) the lessee in such lease shall agree, and be authorized by Mortgagor,
to direct and require the subtenants and other occupants of space in the
Premises to pay to Mortgagee on its entry into possession pursuant to Article 16
hereof, or to a receiver appointed to collect the rents, issues and profits of
the Premises, the rents payable by them under the terms of their subleases or
occupancy agreements upon being notified by Mortgagee of any default under this
Mortgage and of Mortgagee's entry into possession of the Premises, or of the
appointment of any such receiver, with the same force and with like effect as if
said lease had not been entered into and Mortgagor were entitled to receive the
said space rents directly.
14
19. Lease Assurances. That upon notice and demand, Mortgagor shall,
from time to time, execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered to Mortgagee, in form satisfactory to Mortgagee, one
or more separate assignments (confirmatory of the general assignment provided in
Article 16 hereof) of the lessor's interest in any lease or sublease now or
hereafter affecting the whole or any part of the Premises and which shall also
restrict Mortgagor's right or power, as against Mortgagee, without its consent,
to cancel, abridge or otherwise modify, or accept prepayments of installments of
rent to become due under, any such lease or sublease; that Mortgagor shall pay
to Mortgagee the expenses incurred by Mortgagee in connection with the
preparation and recording of any such instrument; that Mortgagor will (i)
fulfill or perform each and every condition and covenant of each such lease or
sublease to be fulfilled or performed by the lessor thereunder, (ii) give prompt
notice to Mortgagee of any notice of default by the lessor thereunder received
by Mortgagor together with a complete copy of any such notice, and (iii)
enforce, short of termination thereof, the performance or observance of each and
every covenant and condition thereof by the lessee thereunder to be performed or
observed.
20. Default. The following shall constitute events of default
hereunder:
(a) failure in the due and punctual payment of any indebtedness or
performance of any obligations secured hereunder, including any principal
or interest or any other amounts required to be paid or due or to become
due under this Mortgage, the Credit Agreement, or under any other
agreement(s) or instrument(s) now or hereafter securing the indebtedness
which is also secured hereunder; or
(b) non-payment of any tax, water rate, sewer rent, assessment or
for twenty (20) days after the same first becomes due and payable; or if
Mortgagor fails to furnish Mortgagee with receipted tax bills or other
proof of payment of the aforesaid items by no later than thirty (30) days
after the dates on which such items must be paid so as not to constitute a
default hereunder; or
(c) breach, after notice and demand, either in Mortgagor's
responsibility for assigning and delivering the policies of insurance
herein described or referred to, or in reimbursing Mortgagee for premiums
paid on such insurance, as hereinbefore provided; or
(d) the actual or threatened material waste, removal or demolition
of any building or other property on the Premises, except as permitted by
Article 3 after thirty (30) days notice to Mortgagor and its failure to
cure; or
(e) assignment by Mortgagor of the whole or any part of the rents,
issues or profits arising from the Premises to any person without the
written consent of Mortgagee; or
15
(f) if the buildings on the Premises are not maintained in
reasonably good repair in any material respect after thirty (30) days'
notice to Mortgagor and its failure to cure; or
(g) failure to comply in any material respect with any requirement
or order or notice of violation of law or ordinance issued by any
governmental department claiming jurisdiction over the Premises within
thirty (30) days from the issuance thereof; or
(h) if, on application of Mortgagee, two or more fire insurance
companies lawfully doing business in the State of New Jersey refuse to
issue policies insuring the buildings on the Premises; or
(i) if Mortgagor shall fail to make payment of any other sums
required to be paid hereunder within the period required by specific
provision of this Mortgage or, if no such period is so provided, by not
later than ten (10) days after written notice; or
(j) if, without the prior consent of Mortgagee, the Premises or any
interest therein shall be sold, pledged, hypothecated, contracted to be
sold, leased with an option to purchase, conveyed, alienated or otherwise
disposed of or transferred or further encumbered for debt by Mortgagor; or
(k) if a lien for the performance of work or the supply of materials
is filed against the Premises or any portion thereof which shall not be
discharged or bonded within thirty (30) days from the filing thereof; or
(l) if an Event of Default shall occur under the Credit Agreement.
21. Remedies. Upon any default under paragraph 20, without notice or
presentment, each of which are hereby waived by Mortgagor, and without waiving
any rights and/or remedies Mortgagee may now or hereafter have under or in
connection with the Credit Agreement and under or in connection with any other
agreements Mortgagee may now or hereafter have with or concerning Mortgagor,
Mortgagee shall have the right to and may:
(a) declare the entire principal of all indebtedness secured
hereunder then outstanding (if not then due and payable), and all accrued
and unpaid interest thereon, and all other sums connected therewith, to be
due and payable immediately, and upon any such declaration all
indebtedness secured hereunder and said accrued and unpaid interest and
other sums shall become and be immediately due and payable, anything in
any of the Loan Documents or in this Mortgage to the contrary
notwithstanding;
16
(b) personally, or by its agents or attorneys, may enter into and
upon all or any part of the Premises, and each and every part thereof,
with or without force and with or without process of law and may exclude
Mortgagor, its agents and servants wholly therefrom and from having and
holding the same, may use, operate, manage and control the Premises or any
part thereof and all records, documents, leases, books, papers and
accounts of Mortgagor relating thereto and conduct the business thereof,
either personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and likewise, from time to time, at the expense of
Mortgagor, Mortgagee may make all necessary or proper repairs, renewals
and replacements and such useful alterations, additions, betterments and
improvements thereto and thereon as to it may seem advisable; and in every
such case Mortgagor shall, at any time, or times, upon demand of Mortgagee
forthwith surrender possession of the Premises and Mortgagee shall have
the right to manage and operate the Premises and to carry on the business
thereof and exercise all rights and powers of Mortgagor with respect
thereto either in the name of Mortgagor or otherwise as it shall deem
best; and Mortgagee shall be entitled to collect and receive all gross
receipts, earnings, revenues, rents, issues, profits and income of the
Mortgaged Property and every part thereof, all of which shall for all
purposes constitute property of Mortgagee; and after deducting the
expenses of conducting the business thereof and of all maintenance,
repairs, renewals, replacements, alterations, additions, betterments and
improvements and amounts necessary to pay for taxes, assessments,
insurance and prior or other proper charges upon the Premises or any part
thereof, as well as just and reasonable compensation for the services of
Mortgagee and for all attorneys, counsel, agents, clerks, servants and
other employees by it properly engaged and employed, Mortgagee may apply
the monies arising as aforesaid in such manner, in such order and at such
times as Mortgagee shall determine in its discretion to the payment of any
indebtedness secured hereby and the interest thereon, when and as the same
shall become payable and/or to the payment of any other sums required to
be paid by Mortgagor under this Mortgage;
(c) (i) with or without entry, personally or by its agents or
attorneys, insofar as applicable, sell the Premises, including, without
limitation, the Building Equipment or any part thereof to the extent
permitted and pursuant to the procedures provided by law, and all estate,
right, title and interest, claim and demand therein, and right of
redemption thereof, at one or more sales as a single entity or in parcels,
and at such time and place, upon such terms and after such notice thereof
as may be required or permitted by law;
(ii) institute an action of judicial foreclosure on this Mortgage or
institute other proceedings according to law for the foreclosure hereof or
otherwise as may be allowed, at law or in equity, and may prosecute the
same to judgment, execution and sale for the collection of all of the
obligations secured hereby, and all interest with
17
respect thereto, together with all taxes and insurance premiums advanced
by Mortgagee and other sums payable by Mortgagor hereunder, and all fees,
costs and expenses of such proceedings, including reasonable attorneys'
fees and expenses;
(iii) take such steps to protect and enforce its rights, whether by
action, suit or proceeding in equity or at law, for the specific
performance of any covenant, condition or agreement in the Credit
Agreement and/or in this Mortgage or in aid of the execution of any power
herein or therein granted, or for any foreclosure hereunder, or for the
enforcement of any other appropriate legal or equitable remedy or
otherwise as Mortgagee shall elect;
(iv) exercise in respect of the Premises consisting of personal
property or fixtures, or both, all of the rights and remedies available to
a secured party upon default under the applicable provisions of the
Uniform Commercial Code in effect in the State of New Jersey; and
(v) exercise any or all other rights and remedies afforded Mortgagee
under the Loan Documents, or at law or in equity.
(d) (i) Mortgagee may adjourn from time to time any sale by it to be
made under or by virtue of this Mortgage by announcement at the time and
place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law,
Mortgagee, without further notice or publication, may make such sale at
the time and place to which the same shall be so adjourned.
(ii) Upon any sale, it shall not be necessary for Mortgagee or any
public officer acting under execution or order of court to have present or
constructive possession of any of the Premises.
(iii) The recitals contained in any conveyance made by Mortgagee to
any purchaser at any sale made pursuant hereto or under applicable law
shall be full evidence of the matters therein stated, and all
prerequisites to such sale shall be presumed to have been satisfied and
performed.
(iv) To the extent permitted by law, any such sale or sales made
under or by virtue of this Mortgage, or under or by virtue of any judicial
proceedings, shall operate to divest all estate, right, title, interest,
claim and demand whatsoever, either at law or in equity, of Mortgagor in
and to the interest, rights, premises and property sold, and shall be a
perpetual bar, both at law and in equity, against Mortgagor, their
respective successors and assigns, and against any and all persons or
entities claiming
18
the premises and property sold, or any part thereof, from, through or
under Mortgagor and their respective successors or assigns.
(v) The receipt of Mortgagee for the purchase money paid at any such
sale, or the receipt of any other person authorized to receive the same,
shall be sufficient discharge therefor to any purchaser of the property,
or any part thereof, sold as aforesaid, and no such purchaser, or his
representatives, grantees or assigns, after paying such purchase money and
receiving such receipt, shall be bound to see to the application of such
purchase money or any part thereof upon or for any trust or purpose of
this Mortgage, or be liable for misapplication or nonapplication of any
such purchase money, or any part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
(vi) In case the liens or security interests hereunder, or by the
exercise of any other right or power, shall be foreclosed by Mortgagee's
sale or by other judicial action, the purchaser at any such sale shall
receive, as an incident to his ownership, immediate possession of the
property purchased, and if Mortgagor or its respective successors shall
hold possession of said property, or any part thereof, subsequent to
foreclosure, Mortgagor or its respective successors shall be considered as
tenants at sufferance of the purchaser at foreclosure sale, and anyone
occupying the property after demand made for possession thereof shall be
guilty of forcible detainer and shall be subject to eviction and removal,
forcible or otherwise, with or without process of law, and all damages by
reason thereof are hereby expressly waived.
(vii) In the event a foreclosure hereunder shall be commenced by
Mortgagee, Mortgagee may at any time before the sale abandon the suit, and
may then institute suit for the collection of amounts due or to become due
under the Credit Agreement and for the foreclosure of the liens and
security interest hereof. If Mortgagee should institute a suit for the
collection of amounts due or to become due under the Credit Agreement and
for a foreclosure of the liens and security interest hereof, it may at any
time before the entry of a final judgment in said suit dismiss the same
and proceed to sell the Premises, or any part thereof, in accordance with
provisions of this Mortgage.
(viii) Should any default occur hereunder, any reasonable expenses
incurred by Mortgagee in consulting, negotiating, prosecuting, resettling
or settling the claim of Mortgagee, including, without limitation,
reasonable attorneys' fees and disbursements, shall become an additional
obligation of Mortgagor hereunder.
(ix) In the event of any sale made under or by virtue of this
Mortgage the entire principal of, interest on, and all other indebtedness
secured hereunder, if not previously due and payable, immediately
thereupon shall, anything in the Credit
19
Agreement or in this Mortgage to the contrary notwithstanding, become due
and payable.
(x) The purchase money proceeds or avails of any sale made under or
by virtue of this Mortgage, together with any other sums which then may be
held by Mortgagee under this Mortgage, whether under the provisions hereof
or otherwise, shall be applied in accordance with the applicable law and,
to the extent not inconsistent therewith, as follows:
First: To the payment of the reasonable costs and expenses of
such sale, including reasonable compensation to Mortgagee, its
agents and counsel, and of any judicial proceedings wherein the same
may be made, and of all expenses, liabilities and advances made or
incurred by Mortgagee under this Mortgage, including without
limitation any such expenses, liabilities and/or advances to remedy
default by Mortgagor, or to otherwise establish, preserve or enforce
any rights hereunder, together with interest at the rate set forth
in Article 4 on all advances made by Mortgagee and all taxes or
assessments, except any taxes, assessments or other charges subject
to which the Premises shall have been sold.
Second: To the payment of the whole amount then due, owing or
unpaid upon indebtedness secured hereunder in accordance with the
provisions of the Credit Agreement, including, without limitation,
all principal and interest due and to become due under or in
connection with the Credit Agreement, with interest on the unpaid
principal at the rate set forth in Article 4 from and after the
happening of any event of default described in paragraph 20, from
the due date of any such payment of principal until the same is
paid.
Third: To the payment of any other sums required to be paid by
Mortgagor pursuant to any provision of this Mortgage or the Credit
Agreement, all with interest at the rate set forth in Article 4,
from the date such sums were or are required to be paid under this
Mortgage.
Fourth: To the payment of the surplus, if any, to whomsoever
may be lawfully entitled to receive the same.
(xi) Upon any sale made under or by virtue of this Mortgage, by
virtue of judicial proceedings or of a judgment or decree of foreclosure
and sale, Mortgagee may bid for and acquire the Premises or any part
thereof and in lieu of paying cash therefor, and upon compliance with the
terms of said sale, may hold, retain and dispose of such property without
further accountability therefor. Mortgagee may also make settlement for
the purchase price by crediting upon the indebtedness of
20
Mortgagor secured by this Mortgage the net sales price after deducting
therefrom the expense of the sale and the costs of the action and any
other sums which Mortgagee is authorized to deduct under this Mortgage.
22. Non-Waiver by Mortgagee. That any failure by Mortgagee to insist
upon the strict performance by Mortgagor of any of the terms and provisions
hereof shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor; that
neither Mortgagor nor any other person now or hereafter obligated for the
payment of the whole or any part of the sums now or hereafter secured by this
Mortgage shall be relieved of such obligation by reason of the failure of
Mortgagee to comply with any request of Mortgagor, or of any other person so
obligated, to take action to foreclose this Mortgage or otherwise enforce any of
the provisions of this Mortgage or any obligations secured by this Mortgage, or
by reason of the release, regardless of consideration, of the whole or any part
of the security held for the indebtedness secured by this Mortgage, or by reason
of any agreement or stipulation between any subsequent owner or owners of the
Premises and Mortgagee extending the time of payment or modifying the terms of
any indebtedness secured hereunder or this Mortgage without first having
obtained the consent of Mortgagor or such other person, and in the latter event,
Mortgagor and all such other persons shall continue liable to make such payments
according to the terms of any such agreement of extension or modification unless
expressly released and discharged in writing by Mortgagee; that, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Premises, Mortgagee may release the
obligation of anyone at any time liable for any of the indebtedness secured by
this Mortgage or any part of the security held for the indebtedness without, as
to the security or the remainder thereof, in any way impairing or affecting the
lien hereof or the priority thereof over any subordinate encumbrance; and that
Mortgagee may resort for the payment of the indebtedness secured hereby to any
other security therefor held by Mortgagee in such order and manner as Mortgagee
may elect.
23. Taxation of Mortgagee or Indebtedness. That if at any time the
United States of America, any state thereof or any department, agency, bureau or
governmental subdivision thereof, having jurisdiction, shall require revenue
stamps to be affixed to any indebtedness secured hereunder, or other tax paid on
or in connection therewith, Mortgagor will pay the same with any interest or
penalties imposed in connection therewith.
24. Building Equipment, Fixtures and Personal Property. That
Mortgagor shall execute any and all such documents, including Financing
Statements pursuant to the Uniform Commercial Code of the State of New Jersey as
Mortgagee may request, to preserve and maintain the priority of the lien created
hereby on property which may be deemed personal property or fixtures, and
Mortgagor shall pay to Mortgagee on demand any
21
expenses incurred by Mortgagee in connection with the preparation, execution and
filing of any such documents. Mortgagor hereby authorizes and empowers Mortgagee
to execute and file, on Mortgagor's behalf, all Financing Statements, and
refilings and continuations thereof as Mortgagee deems necessary or advisable to
create, preserve and protect the lien granted to Mortgagee herein. When and if
Mortgagor and Mortgagee shall respectively become Debtor and Secured Party in
any Uniform Commercial Code Financing Statement affecting Building Equipment or
other property referred to or described herein, this Mortgage shall be deemed
the Security Agreement as defined in said Uniform Commercial Code and the
remedies for any violation of the covenants, terms and conditions of the
agreements herein contained shall be (i) as prescribed herein, (ii) by general
law or (iii) as to such part of the security which is also reflected in said
Financing Statement, by the specific statutory consequences now or hereafter
enacted and specified in said Uniform Commercial Code, all at Mortgagee's sole
election. The filing of such a Financing Statement in the records normally
having to do with personal property shall never be construed as in any way
derogating from or impairing this declaration and hereby stated intention of the
parties hereto, that all items of Building Equipment and other property used in
connection with the production of income from the Premises (furniture only
excepted) or adapted for use therein or which are described or reflected in this
Mortgage are, and at all times and for all purposes and in all proceedings, both
legal and equitable, shall be, regarded as part of the real estate irrespective
of whether or not (i) any such item is physically attached to the improvement,
serial numbers are used for the better identification of certain equipment items
capable of being thus identified in a recital contained herein or in any list
filed with Mortgagee or (iii) any such item is referred to or reflected in any
such Financing Statement so filed at any time. Similarly, the mention in any
such Financing Statement of (1) the rights in or the proceeds of any fire and/or
hazard insurance policy, (2) any award in eminent domain proceedings for a
taking or for loss of value or (3) the debtor's interest as lessor in any
present or future lease or rights to income growing out of the use or occupancy
of the Premises, whether pursuant to a lease or otherwise, shall never be
construed as in any way altering any of the rights of Mortgagee as determined by
this instrument or impugning the priority of Mortgagee's lien granted hereby or
by any other recorded document, but such mention in the Financing Statement is
declared to be for the protection of Mortgagee in the event any court or judge
shall at any time hold with respect to (1), (2) or (3) that notice of
Mortgagee's priority of interest, to be effective against a particular class of
persons, including but not limited to the Federal government and any
subdivisions or entity of the Federal government, must be filed in the Uniform
Commercial Code records.
25. Certain Waivers. That Mortgagor will not at any time insist
upon, or plead, or in any manner whatever claim or take any benefit or advantage
of any stay or extension or moratorium law, any exemption from execution or sale
of the Premises or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance of
this Mortgage, nor claim, take or insist upon any benefit or advantage of any
law now or hereafter in force providing for the valuation or
22
appraisal of the Premises or any part thereof, prior to any sale or sales
thereof which may be made pursuant to any provision herein, or pursuant to the
decree, judgment or order of any court of competent jurisdiction; nor, after any
such sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to redeem the property so sold or any part thereof and
Mortgagor hereby expressly waives all benefit or advantage of any such law or
laws and covenants not to hinder, delay or impede the execution of any power
herein granted or delegated to Mortgagee, but to suffer and permit the execution
of every power as though no such law or laws had been made or enacted.
Mortgagor, for itself and all who may claim under it, waives, to the extent that
it lawfully may, all right to have the Premises marshaled upon any foreclosure
hereof.
26. Environmental Matters. (a) Definitions for this Section:
(i) "Environmental Laws" means and includes any federal, state or
local law, statute, regulation, charter, fire rule, code or ordinance,
concerning environmental, health or safety matters all as presently in
effect and as the same may hereafter be amended, including, without
limitation, the Industrial Site Recovery Act, as amended, N.J.S.A. 13:lK-6
et seq. ("ISRA"), the Spill Compensation and Control Act, as amended,
N.J.S.A. 58:10-23.11 et seq. (the "Spill Act"), the Federal Safe Drinking
Water Act, as amended, 42 U.S.C.A. ss.300F et seq. ("FSDWA"), the
Comprehensive Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C.A. ss.9601 et seq. ("CERCLA"), the New Jersey
Underground Storage of Hazardous Substances Act, as amended, N.J.S.A.
58:10A-21 et seq. ("USTA"), the Resource Conservation and Recovery Act, as
amended, 42 U.S.C.A. ss.6901 et seq ("RCRA"), the Federal Water Pollution
Control Act, as amended, 33 U.S.C.A. ss.1251 et seq. ("FWPCA") and the
Federal Clean Air Act, as amended, 42 U.S.C.A. ss.7401 et seq. ("FCAA"),
and the Federal Toxic Substances Control Act, as amended, 15 U.S.C.A.
ss.2601 et seq. ("FTSCA") and any rule, regulation, binding
interpretation, binding policy, permit, order, directive, court order or
consent decree issued pursuant to any of the following activities: (A) the
emission, discharge, release or spilling of any substance into the air,
surface water, groundwater, soil or substrata, (B) the manufacturing,
processing, sale, generation, treatment, storage, disposal,
transportation, labeling or other management of any waste, Hazardous
Substance, Hazardous Waste, Pollutant or Contaminant as those terms are
hereinafter defined, or (C) any activity which involves any Hazardous
Substance, as that term is hereinafter defined.
(ii) "Hazardous Substances" means and includes any material or
substance that, whether by its nature or use, is subject to regulation
under any Environmental Laws.
(iii) "Premises" means the mortgaged premises.
23
(iv) "Release" means releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing
or dumping.
(v) "Notice" means any summons, citation, directive, order, claim,
litigation, investigation, proceeding, judgment, letter or other
communication, written or oral, actual or threatened, from the New Jersey
Department of Environmental Protection ("NJDEP"), the United States
Environmental Protection Agency ("USEPA") or other federal, state or local
agency or authority, or any other entity or any individual, concerning any
intentional or unintentional act or omission which has resulted or which
may result in the Release of Hazardous Substances into the waters or onto
the lands of the State of New Jersey, or into water outside the
jurisdiction of the State of New Jersey or into the environment from or on
the Premises, and shall include the imposition of any lien on the
Premises, pursuant to Environmental Laws, or any violation of any
Environmental Law or any knowledge, after due inquiry and investigation,
of any facts which could give rise to any of the above.
(b) Mortgagor warrants and represents to Mortgagee as follows,
knowing that Mortgagee is relying on in entering into this these representations
and warranties, Mortgage:
(i) To the best of Mortgagor's knowledge, after diligent inquiry and
investigation, no lien has been attached to any revenues or any real or
personal property owned by Mortgagor and located in the State of New
Jersey, including, but not limited to the Premises, in connection with any
Environmental Law.
(ii) Mortgagor has received no Notice.
(iii) In connection with the purchase of the Premises, and any other
ISRA-triggering transaction entered into by Mortgagor on or after January
1, 1984, (A) there has been obtained from NJDEP a letter certifying that
the transaction was not subject to the provisions of ISRA, or (B)
Mortgagor required that the party triggering ISRA comply with the
provisions of ISRA to the extent applicable to such transaction, and the
party did comply therewith, or (C) no interruption of Mortgagor's
business, or any portion thereof, will result from any ISRA-related issues
and/or by reason of or in connection with any ISRA compliance activities.
(iv) To the best of Mortgagor's knowledge, after diligent inquiry
and investigation, the Premises are in full compliance with all provisions
of Environmental Laws.
(v) Neither Mortgagor nor any other person or party (including prior
owner(s) or current or prior tenants) has caused or permitted the Premises
to be used
24
to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process Hazardous Substances, or other
hazardous, dangerous, toxic substances, or solid waste, has not caused or
permitted and has no knowledge of the Release of any Hazardous Substances
on or off-site of the Premises except in accordance with all Environmental
Laws.
(c) Mortgagor hereby covenants and agrees with Mortgagee as follows:
(i) If Mortgagor is presently an owner or operator of a "Major
Facility" in the State of New Jersey, or if Mortgagor ever becomes such an
owner or operator, then Mortgagor shall furnish to the NJEP all the
information required by N.J.S.A. 58:10-23.11d.
(ii) Mortgagor shall not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part, a Release of
a Hazardous Substance into waters of the State of New Jersey or onto the
lands from which it might flow or drain into said waters, or into waters
outside the jurisdiction of the State of New Jersey, where damage may
result to the lands, waters, fish, shellfish, wildlife, biota, air and
other resources owned, managed, held in trust or otherwise controlled by
the State of New Jersey, unless said Release is pursuant to and in
compliance with the conditions of a permit issued by the appropriate
federal and state governmental authorities.
(iii) So long as Mortgagor shall own or operate any real property
located in the State of New Jersey, which is used as a "Major Facility,"
Mortgagor shall duly file or cause to be duly filed with the Director of
the Division of Taxation in the New Jersey Department of the Treasury, a
tax report or return and shall pay or make provision for the payment of
all taxes due therewith, all in accordance with and pursuant to N.J.S.A.
58:10-23.11h.
(iv) In the event that there shall be filed a lien against the
Premises by NJDEP and/or USEPA, then Mortgagor shall, within thirty (30)
days after the date that Mortgagor is given notice that the lien has been
placed against the Premises or within such shorter period of time in the
event that the State of New Jersey has commenced steps to cause the
Premises to be sold pursuant to the lien, either (A) pay the claim and
remove the lien from the Premises, or (B) furnish a bond satisfactory to
Mortgagee in the amount of the claim out of which the lien arises or a
cash deposit in the amount of the claim out of which the lien arises or
other security reasonably satisfactory to Mortgagee in an amount
sufficient to discharge the claim out of which the lien arises.
25
(v) If Mortgagor receives any notice of (i) the happening of any
event involving the use, spill, discharge or cleanup of any Hazardous
Substances, any toxic substance or waste or any oil or pesticides on or
about the Premises (a "Hazardous Discharge") or (ii) any complaint, order,
citation or notice with regard to air emissions, water discharges, noise
emissions or any other environmental, health or safety matter affecting
Mortgagor or the Premises (an "Environmental Complaint") from any person
or entity, including, without limitation the NJDEP, then Mortgagor will
give immediate oral and written notice of same to Mortgagee.
(vi) Mortgagor agrees that, as landlord, it shall use its best
efforts to include the language stated below in all non-residential leases
(which shall include renegotiations of existing leases) of all or any
portion of the Premises that it enters into:
"ARTICLE ____: ENVIRONMENTAL OBLIGATIONS OF TENANT"
" -.1 Use of Hazardous Substances. Tenant agrees not to use any
Hazardous Substances at the demised premises unless it has first taken all
necessary steps to obtain any necessary permits governing the use, storage and
disposal of such substances and has made adequate arrangements to use, store and
dispose of such substances safely.
" -.2 Notices. If Tenant receives any notice of the happening of any
event involving the use, spill, discharge or cleanup of any Hazardous Substance,
and toxic substance or waste, or any oil or pesticide on or about the demised
premises or into the sewer, septic system or waste treatment system servicing
the demised premises (any such event is hereinafter referred to as a "Hazardous
Discharge") or of any complaint, order, citation, or notice with regard to air
emissions, water discharges, noise emissions or any other environmental, health
or safety matter affecting Tenant (an "Environmental Complaint") from any person
or entity, including, without limitation, the Department of Environmental
Protection of New Jersey ("DEP") and the United States Environmental Protection
Agency ("EPA"), then Tenant shall give immediate oral and written notice of same
to Landlord and Landlord's mortgagee, detailing all relevant facts and
circumstances.
" -.3 Landlord's Option. (a) Without limiting the foregoing,
Landlord shall have the right, but not the obligation, to exercise any of its
rights as provided in this Lease or to enter onto the Premises or to take such
actions as it deems necessary or advisable to clean up, remove, resolve or
minimize the impact of or otherwise deal with any Hazardous Discharge or
Environmental Complaint upon its receipt of any notice from any person or
entity, including, without limitation, the DEP and the EPA, asserting the
happening of a Hazardous Discharge or an Environmental Complaint on or
pertaining to the demised premises. All costs and expenses incurred by Landlord
in the exercise of any such rights
26
shall be deemed to be additional rent hereunder and shall be payable by Tenant
to Landlord upon demand.
" -.4 Insurance. To the extent available at reasonable rates, Tenant
shall at all times during the term of this Lease maintain in full force and
effect environmental impairment insurance satisfactory to Landlord and
Landlord's mortgagee as to carrier, amount, coverage and all other aspects.
" -.5 Default. The occurrence of any of the following events shall
constitute an Event of Default under this Lease:
"(a) If Tenant does not give Landlord notice of a Hazardous
Discharge or an Environmental Complaint on or pertaining to the demised
premises (which may be given in any oral or written form, provided same is
followed with all due dispatch by written notice given by certified mail,
return receipt requested) within three (3) business days of the time
Tenant first receives notice of such Hazardous Discharge or Environmental
Complaint; or
"(b) If the DEP, EPA, or any other local, state or federal agency
asserts or creates a lien upon any or all of the demised premises by
reason of the occurrence of a Hazardous Discharge or an Environmental
Complaint or otherwise; or
"(c) If the DEP, EPA or any other local, state or federal agency
asserts a claim against the Tenant, the demised premises or Landlord for
damages or cleanup costs related to a Hazardous Discharge or an
Environmental Complaint on or pertaining to the demised premises;
provided, however, such claim shall not constitute a default if, within
five (5) days of the occurrence giving rise to the claim:
"(i) Tenant can prove to Landlord's satisfaction that Tenant
has commenced and is diligently pursuing either: (x) cure or
correction of the event which constitutes the basis for the claim,
and continues diligently to pursue such cure or correction to
completion, or (y) proceedings for an injunction, a restraining
order or other appropriate emergent relief preventing such agency or
agencies from asserting such claim, which relief is granted within
ten (10) days of the occurrence giving rise to the claim and the
emergent relief is not thereafter dissolved or reversed on appeal;
and
"(ii) In either of the foregoing events, Tenant has posted a
bond, letter of credit or other security satisfactory in form,
substance and amount to Landlord and the agency or entity asserting
the claim to secure the proper and complete cure or correction of
the event which constitutes the basis for the claim.
27
" -.6 Indemnification. Tenant hereby agrees to defend, indemnify and
hold Landlord and Landlord's mortgagee, their agents, employees and contractors
harmless from and against any and all claims, losses, liabilities, damages and
expenses (including, without limitation, consequential damages, cleanup costs
and reasonable attorney's fees arising by reason of any of the aforesaid or any
action against Tenant under this indemnity) arising directly or indirectly from,
out of or by reason of any Hazardous Discharge or Environmental Complaint or
ISRA occurring either (i) during or attributable to the period of this Lease and
any other period of possession of the demised premises by Tenant or (ii) by
reason of or attributable to Tenant's operations.
" -.7 ISRA Compliance. (a) If Tenant's operations on the Premises
now or hereafter constitute an "Industrial Establishment" subject to the
requirements of the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1k-6 et
seq., and the regulations pertaining thereto, N.J.A.C. 26B-1.1 et seq., as same
may be amended from time to time ("ISRA"), then prior to the expiration or
sooner termination of this Lease and upon any and every condemnation, assignment
or sublease (if permitted), change in ownership or control of Tenant or any
other closure or transfer by, Landlord or Tenant covered by ISRA, Tenant shall
comply with all requirements of ISRA pertaining to an Industrial Establishment
closing or transferring operations, at its sole cost and expense, to the
satisfaction of the DEPE and Landlord. Without limiting the foregoing, Tenant's
obligations shall include (i) the proper filing of the Initial Notice to the
DEPE required by ISPA, (ii) the performance to DEPE's and Landlord's
satisfaction of all air, soil, ground water and surface water sampling and tests
required by ISRA, and (iii) either (x) obtaining an approved "Negative
Declaration" from the DEPE, without qualification, or (y) obtaining a
non-qualified final DEPE approval of the complete implementation of all
necessary cleanups and post cleanup sampling pursuant to an approved final
Cleanup Plan for the Premises, accomplished to Landlord's reasonable
satisfaction. Tenant shall immediately provide Landlord with copies of all
correspondence, reports, test results, notices, orders, findings, declarations
and other materials pertinent to Tenant's compliance and DEPE's requirements
under ISRA, as any of same are issued or received by Tenant from time to time.
"(b) In no event shall any remedial action work plan or any
remediation required to be conducted by Tenant under ISRA, the Spill Act or any
other state or federal law involve or permit engineering or institutional
controls, on, under or about the demised premises, or any part thereof,
including without limitation, capping, a notice of contamination recorded on the
land records, any use or excess restriction or the posting of signs and in all
respects, all remedial remediation shall meet then current residential
standards.
"(c) In the event that Landlord has reason to believe that there has
been a Hazardous Discharge on or about the demised premises, then
notwithstanding that Tenant is not obligated to comply with subparagraph
____.5(a) above for any reason, including without
28
limitation because Tenant is not an "Industrial Establishment," then at least
thirty (30) but not more than sixty (60) days prior to the expiration or sooner
termination of this Lease, Tenant shall:
"(i) prepare a detailed air, soil, ground water and surface water
sampling plan for the demised premises in form and substance satisfactory
to the Landlord;
"(ii) implement the landlord-approved sampling plan;
"(iii) submit the results of the sampling plan to the Landlord; and
"(iv) after the Landlord's review of the results of the sampling
plan, comply with Landlord's requirements for additional testing and/or
cleanup and site detoxification of any and all toxic or hazardous wastes
or substances identified by reason of the sampling plan, or conduct
additional testing, including, without limitation, any of Landlord's
requirements corresponding to those which the DEP could require under ISRA
if same applied to Tenant and/or the demised premises. All costs
associated with Tenant's compliance with this Article, including, without
limitation, Landlord's costs in reviewing the sampling plan and test
results and developing a plan for and monitoring the cleanup and site
detoxification, shall be additional rent to be paid by Tenant to Landlord
upon demand. Upon completion of the cleanup and site detoxification to
Landlord's satisfaction expressed in writing, Tenant's obligations under
this subparagraph ____.5(b) shall cease.
" -.8 Performance by Landlord. In the event of Tenant's failure to
comply in full with this Article, Landlord may, at its option, perform any or
all of Tenant's obligations as aforesaid and all costs and expenses incurred by
Landlord in exercise of this right shall be deemed to be additional rent payable
on demand.
" -.9 General. This Article shall survive the expiration or
termination of the Lease."
(d) With regard to CERCLA and the Spill Act, Mortgagor agrees that
if NJDEP and/or USEPA shall serve upon Mortgagor a directive to remove or
arrange for the removal of any "Hazardous Substances" on the Premises, the
repayment of the indebtedness secured by this Mortgage may, at Mortgagee's
election, be accelerated, in the event that Mortgagor shall not comply with the
directive within thirty (30) days from its date or such other period as
described therein, to the satisfaction of NJDEP and/or USEPA, as applicable;
provided, however, that if Mortgagor shall furnish a bond, cash or other
security reasonably satisfactory to Mortgagee in an amount sufficient to pay the
costs of taking the actions required by said directive, then the debt shall not
be accelerated.
29
(e) Mortgagor agrees to comply promptly with all applicable laws,
rules regulations and orders including, without limitation, Environmental Laws,
and to immediately notify Mortgagee, in writing, of (i) the discovery,
discharge, or release of any Hazardous Substances for which Mortgagor is in any
way responsible under CERCLA or the Spill Act or any similar federal or state
statute; or (ii) the use or proposed use of the Premises as a "Major Facility".
(f) Mortgagor agrees to indemnify, defend and hold harmless
Mortgagee, its agents, employees and contractors against any penalties,
obligations, damages, actions, judgments, suits, claims, disbursements, losses
or liabilities, costs or expenses of any kind (including, without limitation,
reasonable attorneys' fees and disbursements) which the Indemnitees may sustain
as a result of or on account of (1) any lien imposed upon the Premises pursuant
to CERCLA or the Spill Act or any amendments thereto; or (2) any other
Environmental Law governing Mortgagor or the Premises; or (3) the presence of
asbestoscontaining materials at the Premises; or (4) the past, present or future
operations of Mortgagor or any of Mortgagor's subsidiaries or any of its or
their predecessors in interest. The provisions of this paragraph shall survive
any transfer of the Premises, including a transfer after a foreclosure of this
Mortgage, and delivery of the deed effecting such transfer, or a satisfaction,
discharge, release or termination of this Mortgage; and shall apply
notwithstanding any negligent or contributory conduct by or on the part of
Mortgagee, its agents, employees, contractors, third parties or other parties.
(g) In the event that there has been, or Mortgagee reasonably
believes that there has been, a Release of a Hazardous Substance at the
Premises, Mortgagor shall promptly arrange for an environmental audit and tests,
as set forth in subparagraph (j) below, of such representative soil, air and/or
water samples of the Premises as Mortgagee may require. Mortgagor agrees that
the repayment of the indebtedness secured hereby may, at Mortgagee's election,
be accelerated if Mortgagee shall have determined that, based on such soil, air
and/or water samples, there exists a violation under any applicable
Environmental Law and Mortgagor shall not, within thirty (30) days (or a shorter
period of time if Mortgagee or its counsel shall determine, in their sole
discretion, that such shorter period is necessary to comply with any applicable
law, rule or regulation) of notice from Mortgagee that such violation exists,
have remedied such violation.
(h) At the option of Mortgagee, it shall constitute an Event of
Default if the effect of any Environmental Law that is modified or enacted after
the date hereof is to materially increase the liability that may be imposed on
Mortgagee as a result of any violation of an Environmental Law by Mortgagor or
in respect of the Premises.
(i) In addition to the rights of Mortgagee set forth above, all
costs and expenses incurred by Mortgagee pursuant to the terms of this Section
shall be paid by Mortgagor to Mortgagee upon demand, with interest at the rate
set forth in Article 4 hereof
30
or at the maximum interest rate which Mortgagor may by law pay, whichever is
lower, for the period after notice from Mortgagee that such cost or expense was
incurred to the date of payment to Mortgagee. All such costs and expenses
incurred by Mortgagee pursuant to the terms of this Section, with interest,
shall be deemed to be secured by this Mortgage.
(j) Mortgagee may require that Mortgagor, at Mortgagor's expense,
from time to time promptly cause such audits, tests and procedures as Mortgagee
deems appropriate to be conducted, by such professionals and otherwise in a
manner satisfactory to Mortgagee, for the purpose of ensuring compliance with
all Environmental Laws. The results of such audits, tests and procedures shall
be promptly submitted to Mortgagee in writing and certified as true and complete
by such professionals. Such audits, tests and procedures shall be commenced
promptly after not less than ten (10) days notice from Mortgagee.
27. No Merger. In the event the holder of this Mortgage shall
acquire the fee title to the Premises or any part thereof or a leasehold
interest, or any other interest in the Premises, or any part thereof, by
foreclosure or otherwise, Mortgagor agrees that the title to the Premises or
such leasehold or any other interest in the Premises or any part thereof, shall
not merge with the interests conveyed and mortgaged hereunder as a result of
such acquisition or for any other reason, but shall remain separate and distinct
states for all purposes; provided, however, that in such event the holder of
this Mortgage may, at its option, elect to merge such interests.
28. Joint and Several Liability. That if Mortgagor consists of more
than one party, such parties shall be jointly and severally liable under any and
all obligations, covenants and agreements of Mortgagor contained herein.
29. Rights Cumulative. That the rights of Mortgagee arising under
the clauses and covenants contained in this Mortgage shall be separate, distinct
and cumulative and none of them shall be in exclusion of the others; that no act
of Mortgagee shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision, anything herein or
otherwise to the contrary notwithstanding.
30. Construction. That wherever used in this Mortgage, unless the
context clearly indicates a contrary intent or unless otherwise specifically
provided herein, the word "lease" shall mean "tenancy, subtenancy, lease or
sublease", the word "Mortgagor" shall mean "Mortgagor and any subsequent owner
or owners of the Premises" and shall be construed as if it read "Mortgagors"
whenever the sense of any agreement or instrument secured hereunder so requires,
the word "Mortgagee" shall mean "Mortgagee or any subsequent holder or holders
of this Mortgage", the word "person" shall mean "an individual, corporation,
partnership or unincorporated association", and the word "Premises" shall mean
any, all or either of the parcels described in SCHEDULE A hereto, together with
31
all Building Equipment, condemnation awards and any other rights or property
interests at any time made subject to the lien of this Mortgage by the terms
hereof. To the extent there is any inconsistency between the terms of this
Mortgage and the terms of the Credit Agreement, except for the remedy provisions
hereunder, the terms thereof shall govern.
31. No Oral Modification. That this Mortgage cannot be changed or
terminated orally.
32. No Impairment. That Mortgagor: shall keep this Mortgage a valid
mortgage lien upon the Premises; shall not at any time create or allow to accrue
or exist any debt, lien or charge which would be prior to or on a parity with
the lien of this Mortgage upon any part of the Premises; and shall not cause or
permit the lien of this Mortgage to be diminished or impaired in any way.
33. Fees and Expenses. That Mortgagor shall pay all fees and charges
incurred in the procuring and making of the loans secured by this Mortgage,
including, without limitation, the reasonable fees and disbursements of
Mortgagee's attorneys, charges for appraisals, fees and expenses relating to
examination of title, title insurance premiums, surveys and mortgage recording
documents, transfer or other similar taxes and revenue stamps, and in default
thereof Mortgagee may pay the same and Mortgagor will repay the same with
interest thereon at the rate per annum specified in Article 4 hereof and the
same shall be added to the indebtedness secured hereby and be secured by this
Mortgage.
34. Governing Law. This Mortgage shall, in all respects, be
governed, construed, applied and enforced in accordance with the laws of the
State of New Jersey.
35. Severability. In case any one or more of the covenants,
agreements, terms or provisions contained in this Mortgage and Security
Agreement or related documents shall be invalid, illegal or unenforceable in any
respect, the validity of the remaining covenants, agreements, terms or
provisions contained herein and in the related documents shall be in no way
affected, prejudiced or disturbed thereby.
36. Binding Effect. The covenants contained in this Mortgage shall
run with the land and bind Mortgagor, the heirs, personal representatives,
successors and assigns of Mortgagor and all subsequent encumbrances, tenants and
subtenants of the Premises and shall enure to the benefit of Mortgagee and their
respective successors and assigns.
37. Headings. The headings of this Mortgage are for the convenience
of reference only and are not to be considered a part hereof, and shall not
limit or expand or otherwise affect any of the terms hereof.
32
BOTH MORTGAGOR AND MORTGAGEE HEREBY IRREVOCABLY WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS INSTRUMENT, INCLUDING, BUT NOT LIMITED TO, ALL TORT
ACTIONS.
IN WITNESS WHEREOF, this Mortgage has been duly executed by
Mortgagor the day and year first above written.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
BY:__________________________
ACKNOWLEDGMENT
STATE OF _________ )
) ss.:
COUNTY OF _______ )
I CERTIFY that on September __, 1996, ____________ personally came
before me and this person acknowledged under oath, to my satisfaction that:
(a) this person signed, sealed and delivered the attached document
as ______________ of MEDIQ/PRN Life Support Services, Inc. the corporation named
in this document; and
(b) this document was signed and made by the corporation as its
voluntary act and deed by virtue of authority from its Board of Directors.
________________________________
Notary Public
SCHEDULE A
DESCRIPTION OF MORTGAGED PREMISES
Schedule A
Legal Description
All the real property located in the Township of Pennsauken, County of Camden,
State of New Jersey and more particularly described as follows:
Tract #1
BEGINNING at a point in the Northeasterly line of Suckle Highway (60 feet wide)
said point being distant 834.59 feet measured South 24 degrees 41 minutes 20
seconds East along the Northeasterly line of said Suckle Highway from the
Southeasterly line of National Highway (60 feet wide): and running thence
1. North 65 degrees 18 minutes 40 seconds East a distance of 550.00
feet to a point; thence
2. South 24 degrees 41 minutes 20 seconds East a distance of 395.99
feet to a point corner to lands of Pacific Coast Realty Corporation
of Delaware; thence
3. along same South 65 degrees 18 minutes 40 seconds West a distance of
550.00 feet to a point in the Northeasterly line of said Suckle
Highway; thence
4. along same North 24 degrees 41 minutes 20 seconds West a distance of
396.00 feet, to the point or place of BEGINNING.
Tract #2
BEGINNING at a point in the Northeasterly line of Suckle Highway (60.00 feet
wide) said point being distant 1255.59 feet measured South 24 degrees 41 minutes
20 seconds East along the Northeasterly line of said Suckle Highway from the
intersection of same with the Southwesterly line of National Highway (60.00 feet
wide), said beginning point also being corner to lands of Pacific Coast Realty
Corporation of Delaware: and running thence
1. along said lands North 65 degrees 18 minutes 40 seconds East a
distance of 330.00 feet to a point corner to same; thence
2
2. still along said lands South 24 degrees 41 minutes 20 seconds East a
distance of 60.00 feet to a point in same; thence
3. South 65 degrees 18 minutes 40 seconds West a distance of 330.00
feet to a point in the Northeasterly line of said Suckle Highway;
thence
4. along said highway North 24 degrees 41 minutes 20 seconds West a
distance of 60.00 feet, to the point or place of BEGINNING.
Tract #3
BEGINNING at a point in the Northeasterly line of Suckle Highway (60 feet wide)
said point being distant 1315.59 feet measured South 24 degrees 41 minutes 20
seconds East along the Northeasterly line of said Suckle Highway from the
intersection of same with the Southeasterly line of National Highway (60.00 feet
wide): and running thence
1. North 65 degrees 18 minutes 40 seconds East a distance of 330.00
feet to a point in line of lands of Pacific Coast Realty Corporation
of Delaware; thence
2. along same South 24 degrees 41 minutes 40 seconds East a distance of
309.81 feet to a point in the Northwesterly line of New Jersey State
Highway Route No. 130 (93.00 feet wide); thence
3. along same South 65 degrees 18 minutes 40 seconds West a distance of
169.00 feet to a point corner to same; thence
4. North 24 degrees 41 minutes 20 seconds West measured along the
Northeasterly line of said State Highway a distance of 2.50 feet to
a point of curve; thence
5. in a general Westerly direction curving to the right with a radius
of 190.00 feet an arc distance of 166.36 feet to a point of compound
curve in the curved Northeasterly line of said Xxxxx Xx. 000; thence
6. in a general Northwesterly direction curving to the right with a
radius of 65.00 feet an arc distance of 45.15 to a point of tangency
in the Northeasterly line of said Suckle Highway; thence
7. along same North 24 degrees 41 minutes 20 seconds West a distance of
197.37 feet, to the point or place of BEGINNING.
3
Together with a 25 foot wide easement for ingress and egress lying between
Tracts #1 and #2 for so long as the Tracts south and north of the 25 foot
easement are in common ownership as set forth and reserved in Deed Book 2907,
Page 82.
Being described in accordance with a survey made by Xxxxxx X. Xxxxxx P.L.S.
dated September 20, 1994 except for the beginning point distances from the
Southeasterly line of National Highway (60 feet wide) which were not indicated
on the survey.
FOR INFORMATION ONLY: Being known as Xxx 0X, 0XX, 0XXX Xxxxx 251 as shown
on the tax assessment map of the Township of Pennsauken.
S&S DRAFT
9/30/96
EXHIBIT F TO THE
CREDIT AGREEMENT
FORM OF NOTICE OF DRAWING
FROM THE ASSET SALE BLOCKED ACCOUNT
Banque Nationale de Paris,
as Administrative Agent under the
Credit Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 [Date]
Attention: Xx. Xxxxxxxx Xxxxxxxx
Ladies and Gentlemen:
The undersigned, MEDIQ/PRN Life Support Services, Inc., a Delaware
corporation (the "Borrower"), refers to the Credit Agreement dated as of October
1, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the Borrower, MEDIQ Incorporated, a Delaware corporation, and
PRN Holdings, Inc., a Delaware corporation, as Parent Guarantors, the lender
parties party thereto (the "Lender Parties"), Banque Nationale de Paris, as
Administrative Agent and Initial Issuing Bank, and NationsBank, N.A., as
Documentation Agent, and hereby gives you notice, irrevocably, pursuant to
Section 2.16 of the Credit Agreement, that the Borrower hereby requests
permission to release funds on deposit in the Asset Sale Blocked Account, and in
that connection sets forth below the information relating to such release (the
"Proposed Release") as required by Section 2.16 of the Credit Agreement:
(i) The Business Day of the Proposed Release is _________ __, ____.
(ii) The aggregate amount of the Proposed Release is $__________.
The Borrower hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Release:
(A) no event has occurred and is continuing, or would result from
such Release or from the application of the proceeds therefrom, that
constitutes a Default;
(B) for each release from the Asset Sale Blocked Account, if such
Release is used for the purposes set forth in:
F-2
(1) Section 2.16(A) of the Credit Agreement, subject to the
terms set forth in Section 2.14(b) of the Credit Agreement, provided
however, that if such release is used for the purposes set forth in:
(a) Section 2.14(b)(ii) of the Credit Agreement, subject to
the terms of Section 5.02(k)(i)(y)(B), including but not
limited to the provision that immediately after giving effect
to each release of funds from the Asset Sale Blocked Account
the Senior Leverage Ratio is less than or equal to 3.75 to 1,
as calculated on the attached Schedule I;
(b) Section 2.14(b)(iii)(x) of the Credit Agreement, from and
after the Asset Sale Threshold Date, subject to the terms set
forth in Section 5.02(f)(i) of the Credit Agreement, including
but not limited to the provisions that (x) immediately after
giving effect to each release of funds from the Asset Sale
Blocked Account, the Leverage Ratio is less than or equal to
3.5 to 1, (y) any requested Acquisition Advances plus proceeds
released from the Asset Sale Blocked Account used for
acquisitions of a Person or assets pursuant to Section
5.02(f)(i) is less than or equal to 5.5 times the EBITDA for
the prior 12 months of the Person or assets acquired pursuant
to Section 5.02(f)(i), and (z) the aggregate amount any
Acquisition Advances plus the aggregate amount of proceeds
used from the Asset Sale Blocked Account plus an amount equal
to the aggregate value of the common stock of MEDIQ used for
all such Investments made pursuant to Section 5.02(f)(i) is
less than or equal to $100,000,000, each as calculated on the
attached Schedule II;
(c) Section 2.14(b)(iii)(y) of the Credit Agreement, from and
after the Asset Sale Threshold Date and not less than twelve
months after the Initial Extension of Credit, subject to the
terms set forth in Section 5.02(g)(i) of the Credit Agreement,
including but not limited to the provisions that immediately
after giving effect to each release of funds from the Asset
Sale Blocked Account (x) the Leverage Ratio is less than or
equal to 3.0 to 1 and (y) the aggregate amount of funds
released from the Asset Sale Blocked Account plus Acquisition
Advances used for dividends paid or funds advanced directly or
indirectly by the Borrower to MEDIQ to permit MEDIQ to
repurchase the common stock of MEDIQ and to pay dividends does
not exceed $20,000,000, each as calculated on the attached
Schedule III;
(2) Section 2.16(B) of the Credit Agreement, for the purposes
set forth in and pursuant to the terms of Section 2.06(a) of the
Credit Agreement; and
F-3
(3) Section 2.16(C) of the Credit Agreement, for the purposes
set forth in and pursuant to the terms of Section 2.06(b)(ix) of the
Credit Agreement.
Very truly yours,
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
By_____________________________
Title:
SCHEDULE I
SECTION 5.02(k)(i)(y)(B)
SENIOR LEVERAGE RATIO CALCULATION
FOR REPAYMENT OF SUBORDINATED NOTES
(1) outstanding Term Loan A Advances _____________
(2) outstanding Term Loan B Advances _____________
(3) outstanding Acquisition Advances _____________
(4) outstanding Working Capital Advances _____________
(5) outstanding Letter of Credit Advances _____________
(6) outstanding amount of other Senior Debt(1) _____________
(7) TOTAL SENIOR DEBT _____________
[sum of (1) through (6)]
(8) Consolidated EBITDA for the Rolling Period _____________
ended as of the most recent period for which
financial statements were required to be
furnished pursuant to Sections 5.03(b), (c)
or (d)
(9) SENIOR LEVERAGE RATIO _____________
[(7) divided by (8)]
--------
(1) excluding (i) contingent obligations of the type described in clause (f)
or (h) in the definition of "Debt" and (ii) Debt permitted under Section
5.02(b)(i)(A) (Parent Guarantor Debt-A), as specified in the definition of
"Senior Leverage Ratio".
SCHEDULE II
SECTION 5.02(f)(i)
CALCULATIONS
FOR INVESTMENTS BY THE BORROWER
A. CALCULATION OF LEVERAGE RATIO
(1) outstanding Term Loan A Advance _____________
(2) outstanding Term Loan B Advances _____________
(3) outstanding Acquisition Advances _____________
(4) outstanding Working Capital Advances _____________
(5) outstanding amount of Letter of Credit Advances _____________
(6) outstanding amount of other Funded Debt(1)
-----------
(7) Total Funded Debt
[sum of (1) through (6)]
(8) Amount on deposit in the Asset Sale Blocked Account
(after the Proposed Release of funds)
(9) principal amount of the NutraMax Note
to the extent secured by the NutraMax Letter of Credit
(10) NUMERATOR TOTAL
[(7) minus (8) minus (9)] _____________
(11) Consolidated EBITDA for the Monthly Rolling Period
ended as of the most recent month for which
financial statements were required to be furnished
pursuant to Sections 5.02(b), (c) or (d) _____________
(12) LEVERAGE RATIO
[(10) divided by (11)] _____________
--------
1 excluding (i) contingent obligations of the type described in clause (f)
or (h) in the definition of "Debt" and (ii) Debt permitted under Section
5.02(b)(i)(A) (Parent Guarantor Debt-A), as specified in the definition of
"Leverage Ratio".
B. For Investments permitted under Section 5.02(f)(i), the amount of the
Proposed Release is capped at the Acquisition Facility Sublimit,
calculated as follows:
(a) Acquisition Facility Commitment _____________
(b) Acquisition Advances outstanding _____________
(c) common stock used in Investments pursuant to
Section 5.02(f)(i) _____________
(d) Subordinated Notes outstanding _____________
(e) ACQUISITION FACILITY SUBLIMIT
[(a) minus (b) minus (c) minus (d)] _____________
C. RATIO OF ANY ACQUISITION ADVANCE PLUS PROPOSED RELEASE
FROM THE ASSET SALE BLOCKED ACCOUNT TO EBITDA FOR PRIOR 12
MONTHS OF THE PERSON OR ASSETS ACQUIRED PURSUANT TO
SECTION 5.02(f)(i) WITH SUCH ADVANCE OR PROCEEDS _____________
(1) amount of any requested Acquisition Advance
made simultaneously with the Proposed
Release of funds from the Asset Sale Blocked
Account used for the acquisition of the
Person or assets acquired pursuant to
Section 5.02(f)(i) _____________
(2) amount of Proposed Release from the Asset
Sale Blocked Account for the acquisition of
the Person or assets pursuant to Section
5.02(f)(i) _____________
(3) NUMERATOR TOTAL
[sum of (1) and (2)] _____________
(4) EBITDA for the prior 12 months of the Person or assets
acquired pursuant to Section 5.02(f)(i) _____________
(5) RATIO [(3) divided by (4)] _____________
D. CAP ON AGGREGATE AMOUNT OF INVESTMENTS PURSUANT TO
5.02(f)(i) _____________
(1) aggregate amount of Acquisition Advances
(including Advances drawn simultaneously with the
Proposed Release of funds) used for all
acquisitions of Persons or assets pursuant to
Section 5.02(f)(i) _____________
(2) aggregate amount of proceeds from the Asset Sale
Blocked Account used for all acquisitions of
Persons or assets pursuant to Section 5.02(f)(i) _____________
(3) aggregate amount of common stock used for all
acquisitions of Persons or assets pursuant to
Section 5.02(f)(i) _____________
(4) TOTAL
[sum of (1) through (3)] _____________
SCHEDULE III
SECTION 5.02(g)(i)
CALCULATIONS
FOR PAYMENT OF DIVIDENDS OR ADVANCING OF FUNDS BY THE BORROWER
A. CALCULATION OF LEVERAGE RATIO
(1) outstanding Term Loan A Advances _____________
(2) outstanding Term Loan B Advances _____________
(3) outstanding Acquisition Advances _____________
(4) outstanding Working Capital Advances _____________
(5) outstanding Letter of Credit Advances _____________
(6) amount of outstanding other Funded Debt(1) _____________
(7) TOTAL FUNDED DEBT _____________
[sum of (1) through (6)]
(8) principal amount of the NutraMax Note
to the extent secured by the NutraMax Letter of Credit _____________
(9) Amount on deposit in the Asset Sale Blocked Account
(after the Proposed Release of funds) _____________
(10) NUMERATOR TOTAL
[(7) minus (8) minus (9)] _____________
(11) Consolidated EBITDA for the Rolling Period
ended as of the most recent period for which
financial statements were required to be
furnished pursuant to Sections 5.03(b), (c)
or (d) _____________
(12) LEVERAGE RATIO
[(10) divided by (11)] _____________
--------
(1) excluding (i) contingent obligations of the type described in clause (f)
or (h) in the definition of "Debt" and (ii) Debt permitted under Section
5.02(b)(i)(A) (Parent Guarantor Debt-A), as specified in the definition of
"Leverage Ratio".
B. For Investments permitted under Section
5.02(g)(i), the amount of the Proposed Release is
capped at the Acquisition Facility Sublimit,
calculated as follows:
(a) Acquisition Facility Commitment _____________
(b) Acquisition Advances outstanding _____________
(c) common stock used in Investments pursuant to
Section 5.02(f)(i) _____________
(d) Subordinated Notes outstanding _____________
(e) ACQUISITION FACILITY SUBLIMIT
[(a) minus (b) minus (c) minus (d)] _____________
C. THE AGGREGATE AMOUNT OF PROCEEDS FROM THE ASSET SALE
BLOCKED ACCOUNT PLUS ACQUISITION ADVANCES USED BY THE
BORROWER TO PAY DIVIDENDS OR ADVANCE FUNDS DIRECTLY OR
INDIRECTLY TO MEDIQ TO PERMIT MEDIQ TO REPURCHASE THE
COMMON STOCK OF MEDIQ AND TO PAY CASH DIVIDENDS
EXHIBIT G TO THE
CREDIT AGREEMENT
FORM OF SUBSIDIARY GUARANTY
Dated October 1, 1996
From
THE PARTIES LISTED ON THE SIGNATURE PAGES HEREOF
as SUBSIDIARY GUARANTORS,
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
Section Page
T A B L E O F C O N T E N T S
Section Page
1. Subsidiary Guaranty; Limitation of Liability ............................. 1
2. Subsidiary Guaranty Absolute ............................................. 2
3. Waiver ................................................................... 3
4. Subrogation .............................................................. 4
5. Payments Free and Clear of Taxes, Etc .................................... 4
6. Representations and Warranties............................................ 5
7. Covenants ................................................................ 7
8. Amendments, Etc .......................................................... 7
9. Notices, Etc ............................................................. 8
10. No Waiver; Remedies ...................................................... 8
11. Right of Set-off ......................................................... 9
12. Indemnification .......................................................... 9
13. Continuing Subsidiary Guaranty; Assignments under the Credit Agreement ... 9
14. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. ..................10
SUBSIDIARY GUARANTY
Subsidiary Guaranty dated October 1, 1996 made by the parties listed
on the signature pages hereof (each such party, a "Subsidiary Guarantor"), in
favor of the Secured Parties (as defined in the Credit Agreement referred to
below).
PRELIMINARY STATEMENT. The Lender Parties, Banque Nationale de
Paris, as Administrative Agent and as Initial Issuing Bank, and NationsBank
N.A., as Documentation Agent, are parties to a Credit Agreement dated as of
October 1, 1996 (said Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with MEDIQ/PRN Life Support Services, Inc., a Delaware corporation (the
"Borrower"), MEDIQ Incorporated, a Delaware corporation ("MEDIQ") and PRN
Holdings, Inc., a Delaware corporation ("Holdings", and, together with MEDIQ,
the "Parent Guarantors"). Each Subsidiary Guarantor may receive a portion of the
proceeds of the Advances under the Credit Agreement and will derive substantial
direct and indirect benefit from the transactions contemplated by the Credit
Agreement. It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry by the Hedge Banks into Bank Hedge Agreements with the Borrower
from time to time that each Subsidiary Guarantor shall have executed and
delivered this Subsidiary Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters of Credit under
the Credit Agreement, each Subsidiary Guarantor, jointly and severally with each
other Subsidiary Guarantor, hereby agrees as follows:
Section 1. Subsidiary Guaranty; Limitation of Liability. (a) Each
Subsidiary Guarantor hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of each other Loan Party now or
hereafter existing under the Loan Documents, whether for principal, interest,
fees, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all reasonable expenses (including
counsel fees and expenses) incurred by the Administrative Agent or any other
Secured Party in enforcing any rights under this Subsidiary Guaranty or any
other Loan Document. Without limiting the generality of the foregoing, each
Subsidiary Guarantor's liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by any other Loan Party to
the Administrative Agent or any other Secured Party under the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such Loan Party.
(b) (i) Each Subsidiary Guarantor and by its acceptance of this
Subsidiary Guaranty, the Administrative Agent and each other Secured
Party, hereby
2
confirms that it is the intention of all such parties that this Subsidiary
Guaranty not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to this Subsidiary Guaranty. To effectuate the foregoing
intention, the Administrative Agent, the other Secured Parties and the
Subsidiary Guarantors hereby irrevocably agree that the Obligations of
each Subsidiary Guarantor under this Subsidiary Guaranty shall not exceed
the greater of (A) the net benefit realized by such Subsidiary Guarantor
from the proceeds of the Advances made from time to time by the Borrower
to such Subsidiary Guarantor or any subsidiary of such Subsidiary
Guarantor and (B) the maximum amount that will, after giving effect to
such maximum amount and all other contingent and fixed liabilities of such
Subsidiary Guarantor that are relevant under such laws, and after giving
effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Subsidiary Guarantor in respect
of the Obligations of such other Subsidiary Guarantor under this
Subsidiary Guaranty, result in the Obligations of such Subsidiary
Guarantor under this Subsidiary Guaranty not constituting a fraudulent
transfer or conveyance. For purposes hereof, "Bankruptcy Law" means Title
11, U.S. Code, or any similar Federal or state law for the relief of
debtors.
(ii) Each Subsidiary Guarantor agrees that in the event any payment
shall be required to be made to the Secured Parties under this Subsidiary
Guaranty or any other guaranty, such Subsidiary Guarantor will contribute,
to the maximum extent permitted by law, such amounts to each other
Subsidiary Guarantor and each other guarantor so as to maximize the
aggregate amount paid to the Secured Parties under the Loan Documents.
Section 2. Subsidiary Guaranty Absolute. Each Subsidiary Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Administrative Agent or any other Secured Party with respect
thereto. The Obligations of each Subsidiary Guarantor under this Subsidiary
Guaranty are independent of the Guaranteed Obligations or any other Obligations
of any other Loan Party under the Loan Documents, and a separate action or
actions may be brought and prosecuted against such Subsidiary Guarantor to
enforce this Subsidiary Guaranty, irrespective of whether any action is brought
against the Borrower or any other Loan Party or whether the Borrower or any
other Loan Party is joined in any such action or actions. The liability of each
Subsidiary Guarantor under this Subsidiary Guaranty shall be irrevocable,
absolute and unconditional irrespective of, and each Subsidiary Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any or all of the following:
3
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or any
of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations
or any other Obligations of any other Loan Party under the Loan Documents
or any other assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries; or
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent or any other Secured Party that
might otherwise constitute a defense available to, or a discharge of, the
Borrower, any Subsidiary Guarantor or any other guarantor or surety.
This Subsidiary Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Secured Party or any other Person
upon the insolvency, bankruptcy or reorganization of the Borrower or any other
Loan Party or otherwise, all as though such payment had not been made.
Section 3. Waiver. (a) Each Subsidiary Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Subsidiary Guaranty and any
requirement that the Administrative Agent, or any other Secured Party protect,
secure, perfect or insure any Lien or any property subject thereto or exhaust
any right or take any action against any Loan Party or any other Person or any
collateral. Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by the
4
Loan Documents and that the waiver set forth in this Section 3 is knowingly made
in contemplation of such benefits.
Section 4. Subrogation. No Subsidiary Guarantor will exercise any
rights that it may now or hereafter acquire against the Borrower or any other
insider guarantor that arise from the existence, payment, performance or
enforcement of such Subsidiary Guarantor's Obligations under this Subsidiary
Guaranty or any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Administrative Agent or any
other Secured Party against the Borrower or any other insider guarantor or any
collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Borrower or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Obligations and all other amounts payable under this Subsidiary
Guaranty shall have been paid in full in cash and the Commitments shall have
expired or terminated. If any amount shall be paid to any Subsidiary Guarantor
in violation of the preceding sentence at any time prior to the later of the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Subsidiary Guaranty and the Termination Date, such amount
shall be held in trust for the benefit of the Administrative Agent and the other
Secured Parties and shall forthwith be paid to the Administrative Agent to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Subsidiary Guaranty, whether matured or unmatured, in accordance with
the terms of the Loan Documents, or to be held as collateral for any Guaranteed
Obligations or other amounts payable under this Subsidiary Guaranty thereafter
arising. If (i) any Subsidiary Guarantor shall make payment to the
Administrative Agent or any other Secured Party of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Subsidiary Guaranty shall be paid in full in cash and
(iii) the Termination Date shall have occurred, the Administrative Agent and the
other Secured Parties will, at such Subsidiary Guarantor's request and expense,
execute and deliver to such Subsidiary Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Subsidiary Guarantor of an interest in the
Guaranteed Obligations resulting from such payment by such Subsidiary Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments by any Subsidiary Guarantor hereunder shall be made, in accordance with
Section 2.11 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes. If any Subsidiary Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Administrative Agent or any other Secured Party, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
5
payable under this Section) the Administrative Agent or such other Secured Party
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Subsidiary Guarantor shall make such
deductions and (iii) such Subsidiary Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, each Subsidiary Guarantor agrees to pay any present
or future Other Taxes.
(c) Each Subsidiary Guarantor shall indemnify the Administrative
Agent and each other Secured Party for and hold it harmless against the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section)
paid by the Administrative Agent or such other Secured Party (as the case may
be) and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date the Administrative Agent or such other
Secured Party (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, such
Subsidiary Guarantor shall furnish to the Administrative Agent, at its address
referred to in Section 9.02 of the Credit Agreement, the original or a certified
copy of a receipt evidencing such payment. If no Taxes are payable in respect of
any payment hereunder by any Subsidiary Guarantor through an account or branch
outside the United States or by or on behalf of such Subsidiary Guarantor by a
payor that is not a United States person, such Subsidiary Guarantor shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, a
certificate from each appropriate taxing authority or authorities, or an opinion
of counsel acceptable to the Administrative Agent, in either case stating that
such payment is exempt from or not subject to Taxes. For purposes of this
subsection (d) and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Without prejudice to the survival of any other agreement of any
Subsidiary Guarantor hereunder, the agreements and obligations of each
Subsidiary Guarantor contained in this Section 5 shall survive the payment in
full of the Guaranteed Obligations and all other amounts payable under this
Subsidiary Guaranty.
Section 6. Representations and Warranties. Each Subsidiary Guarantor
hereby represents and warrants as follows:
(a) Such Subsidiary Guarantor (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its incorporation, (ii) is duly qualified and in good standing as a
foreign corporation in each other
6
jurisdiction in which it owns or leases property or in which the conduct
of its business requires it to so qualify or be licensed except where the
failure to so qualify or be licensed is not reasonably likely to have a
Material Adverse Effect and (iii) has all requisite corporate power and
authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its properties
and to carry on its business as now conducted and as proposed to be
conducted. All of the outstanding Capital Stock of such Subsidiary
Guarantor has been validly issued, is fully paid and non-assessable and
each Subsidiary Guarantor is owned by a Loan Party, free and clear of all
Liens, except those created under the Loan Documents.
(b) The execution, delivery and performance by such Subsidiary
Guarantor of this Subsidiary Guaranty are within such Subsidiary
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Subsidiary Guarantor's
charter or bylaws, (ii) violate any law (including, without limitation,
the Securities Exchange Act of 1934 and the Racketeer Influences and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any loan agreement,
contract, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting such Subsidiary Guarantor, any of its Subsidiaries
or any of its or their properties or (iv) except for the Liens created
under the Loan Documents, result in or require the creation or imposition
of any Lien upon or with respect to any of the properties of such
Subsidiary Guarantor or any of its Subsidiaries. Neither such Subsidiary
Guarantor nor any of its Subsidiaries is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination
or award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or
breach of which is reasonably likely to have a Material Adverse Effect.
(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 (i) the due execution, delivery,
recordation, filing or performance by such Subsidiary Guarantor of this
Subsidiary Guaranty or any other Loan Document to which such Subsidiary
Guarantor is a party and (ii) the exercise by the Administrative Agent or
any Secured Party of its rights under this Subsidiary Guaranty or any
other Loan Document to which such Subsidiary Guarantor is a party.
(d) There is no action, suit, investigation, litigation or
proceeding affecting such Subsidiary Guarantor, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be
7
reasonably likely to have a Material Adverse Effect or (ii) purports to
affect the legality, validity or enforceability of this Subsidiary
Guaranty or any other Loan Document to which such Subsidiary Guarantor is
a party.
(e) This Subsidiary Guaranty and each other Loan Document to which
it is a party has been duly executed and delivered by such Subsidiary
Guarantor. Each of this Subsidiary Guaranty and each other Loan Document
to which it is a party is the legal, valid and binding obligation of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms.
(f) There are no conditions precedent to the effectiveness of this
Subsidiary Guaranty that have not been satisfied or waived.
(g) Such Subsidiary Guarantor has, independently and without
reliance upon the Administrative Agent or any Lender Party and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Subsidiary Guaranty, and
such Subsidiary Guarantor has established adequate means of obtaining from
any other Loan Parties on a continuing basis information pertaining to,
and is now and on a continuing basis will be completely familiar with, the
financial condition, operations, properties and prospects of such other
Loan Parties.
Section 7. Covenants. Each Subsidiary Guarantor covenants and agrees
that, so long as any part of the Guaranteed Obligations shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment, such Subsidiary Guarantor will at all times perform or observe, and
will cause each of its Subsidiaries to perform or observe, all of the terms,
covenants and agreements that the Loan Documents state that the Borrower is to
cause such Subsidiary Guarantor or such Subsidiaries to perform or observe.
Section 8. Amendments, Etc. (a) No amendment or waiver of any
provision of this Subsidiary Guaranty and no consent to any departure by any
Subsidiary Guarantor therefrom shall in any event be effective unless the same
shall be in writing and signed by the Administrative Agent and the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall, unless in writing and signed by all of
the Secured Parties, (i) reduce or limit the liability of such Subsidiary
Guarantor hereunder or release any Subsidiary Guarantor hereunder, (ii) postpone
any date fixed for payment hereunder or (iii) amend this Section 8.
(b) (i) With the consent of the Required Lenders or (ii) upon the
merger, consolidation, sale or liquidation of any Guarantor in accordance
with the terms of the
8
Credit Agreement, the Administrative Agent will, at such Guarantor's
expense, execute and deliver to such Guarantor such documents as such
Guarantor shall reasonably request to evidence the release of such
Guarantor from its obligations under this Guaranty; provided, however, as
to clause (ii) above, that (x) at the time of such request and such
release no Default shall have occurred and be continuing, (y) such
Guarantor shall have delivered to the Administrative Agent, at least five
Business Days prior to the date of the proposed release (or such shorter
period of time as may be acceptable to the Administrative Agent), a
written request for release identifying such Guarantor and, if the
Subsidiary Guarantor is an Ongoing Subsidiary only, the terms of the sale,
liquidation, merger or consolidation in reasonable detail, including, in
the case of a sale, the price thereof and any expenses in connection
therewith, together, in all cases, with a form of release for execution by
the Administrative Agent and a certification by MEDIQ to the effect that
the sale, liquidation, merger or consolidation, as the case may be, is in
compliance with the terms of the Credit Agreement and as to such other
matters as the Administrative Agent may reasonably request and (z) in the
case of a sale, any proceeds of any such sale required to be applied to
the prepayment of Advances or reduction of Commitments in accordance with
the terms of the Credit Agreement shall be so applied; provided further as
to any merger or consolidation in which the surviving corporation thereof
is a Subsidiary of MEDIQ, such surviving corporation shall have assumed in
a form satisfactory to the Administrative Agent the Guaranteed Obligations
of such Guarantor.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to it, if to any Subsidiary Guarantor, to the address set forth below such
Subsidiary Guarantor's signature on the signature pages hereof, if to the
Administrative Agent, the Documentation Agent or any Lender Party, at its
address specified in the Credit Agreement, or as to any party at such other
address as shall be designated by such party in a written notice to each other
party. All such notices and other communications shall, when mailed,
telegraphed, telecopied, telexed or sent by courier, be effective when deposited
in the mails, delivered to the telegraph company, transmitted by telecopier,
confirmed by telex answerback or delivered to the overnight courier,
respectively. Delivery by telecopier of an executed counterpart of any amendment
or waiver of any provision of this Subsidiary Guaranty shall be effective as
delivery of a manually executed counterpart thereof.
Section 10. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any
9
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Lender Party and each of its
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of any Subsidiary Guarantor
against any and all of the Obligations of such Subsidiary Guarantor now or
hereafter existing under this Subsidiary Guaranty, irrespective of whether such
Lender Party shall have made any demand under this Subsidiary Guaranty and
although such Obligations may be unmatured. Each Lender Party agrees promptly to
notify such Subsidiary Guarantor after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender Party and
its respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender Party and its respective Affiliates may have.
Section 12. Indemnification. Without limitation on any other
Obligations of any Subsidiary Guarantor or remedies of the Secured Parties under
this Subsidiary Guaranty, each Subsidiary Guarantor shall, to the fullest extent
permitted by law, indemnify, defend and save and hold harmless each Secured
Party from and against, and shall pay on demand, any and all losses,
liabilities, damages, costs, expenses and charges (including the fees and
disbursements of such Secured Party's legal counsel) suffered or incurred by
such Secured Party as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms.
Section 13. Continuing Subsidiary Guaranty; Assignments under the
Credit Agreement. This Subsidiary Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the later of the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Subsidiary Guaranty and the Termination Date, (b) be binding upon each
Subsidiary Guarantor, its successors and assigns and (c) inure to the benefit of
and be enforceable by the Administrative Agent and the other Secured Parties and
their successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), any Secured Party may assign or otherwise transfer all
or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes held by it) to any other Person, and
such other Person shall thereupon become vested with all the
10
benefits in respect thereof granted to such Secured Party herein or otherwise,
in each case as and to the extent provided in Section 9.07 of the Credit
Agreement. No Subsidiary Guarantor shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Secured Parties.
Section 14. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) This Subsidiary Guaranty shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) Each Subsidiary Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Subsidiary Guaranty or any of the
other Loan Documents to which it is or is to be a party, or for recognition or
enforcement of any judgment, and each Subsidiary Guarantor hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. Each Subsidiary Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Subsidiary Guaranty shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Subsidiary Guaranty or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) Each Subsidiary Guarantor irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Subsidiary Guaranty or
any of the other Loan Documents to which it is or is to be a party in any New
York State or federal court. Each Subsidiary Guarantor hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each Subsidiary Guarantor hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the transactions contemplated thereby or the actions of the
Administrative Agent or any other Secured Party in the negotiation,
administration, performance or enforcement thereof.
11
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
Subsidiary Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
MEDIQ INVESTMENT SERVICES, INC.
By ________________________
Name:
Title:
MEDIQ MANAGEMENT SERVICES, INC.
By _________________________
Name:
Title:
MEDIQ SURGICAL EQUIPMENT
SERVICES, INC.
By _________________________
Name:
Title:
VALUE-MED PRODUCTS, INC.
By _________________________
Name:
Title:
MEDIQ MOBILE X-RAY SERVICES, INC.
By _________________________
Name:
Title:
12
HEALTH EXAMINETICS, INC.
By _________________________
Name:
Title:
THERA-KINETICS ACQUISITION
CORPORATION
By _________________________
Name:
Title:
MDTC HADDON, INC.
By _________________________
Name:
Title:
MEDIQ DIAGNOSTIC CENTERS INC.
By _________________________
Name:
Title:
MEDIQ DIAGNOSTIC CENTERS-I INC.
By _________________________
Name:
Title:
MEDIQ IMAGING SERVICES, INC.
By _________________________
Name:
Title:
13
AMERICAN CARDIOVASCULAR
IMAGING LABS, INC.
By _________________________
Name:
Title:
ALPHA HEALTH CONSULTANTS, INC.
By _________________________
Name:
Title:
P. I. CORPORATION
By _________________________
Name:
Title:
MEDIQ SERVICES, INC.
By _________________________
Name:
Title:
MEDIQ HOME THERAPY SERVICES OF
ARIZONA, INC.
By __________________________
Name:
Title:
EXHIBIT H TO THE
CREDIT AGREEMENT
BORROWING BASE CERTIFICATE
To: Banque Nationale de Paris
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxxxxx
Telecopy: (000) 000-0000
MEDIQ/PRN Life Support Services, Inc.
Date: ___________________
(1) Inventory Net Availability
[Total from Schedule I] $__________
(2) Accounts Receivable Net Availability
[Total from Schedule II] $__________
(3) Total Borrowing Base Availability
[1 plus 2] $__________
(4) Working Capital Facility $__________
(5) The lesser of (3) and (4) $__________
(6) Working Capital Advances Outstanding $__________
(7) Aggregate Principal Amount of
Letter of Credit Advances Outstanding $__________
(8) Total Available Amount of all
Letters of Credit Outstanding
a. Standby Letters of Credit $__________
b. Trade Letters of Credit $__________
c. Total Letters of Credit [(a) + (b)] $__________
2
(9) Total Working Capital Availability
[(5) less (6) less (7) less (8)] $__________
This report is submitted pursuant to the Credit Agreement dated as
of September 30, 1996 among MEDIQ/PRN Life Support Services, Inc., a Delaware
corporation (the "Borrower"), MEDIQ Incorporated, a Delaware corporation, PRN
Holdings, Inc., a Delaware corporation, the lender parties (the "Lender
Parties") that are, or may from time to time become, party thereto, Banque
Nationale de Paris, as administrative agent (the "Administrative Agent") and as
initial issuing bank, and NationsBank, N.A., as documentation agent. All of the
current accounts referred to in this report (the "Accounts") have been assigned
to the Administrative Agent and the Administrative Agent has been granted a
security interest in the Accounts pursuant to the Loan Documents. Unless
otherwise indicated, capitalized terms used herein have the meanings ascribed to
them in the Credit Agreement.
The undersigned hereby certifies that (i) the amounts and the
representations set forth above are true and correct in all material respects,
(ii) the calculations determined herein are determined in accordance with the
Credit Agreement and (iii) except as noted, none of the Accounts referred to in
this report falls within the ineligible or prohibited categories as noted in the
Credit Agreement. We further confirm the above mentioned assignment and grant of
security interest in the Accounts to the Administrative Agent.
MEDIQ/PRN LIFE SUPPORT
SERVICES, INC.
Date: ___________________ By:__________________________
Name:
Title:
SCHEDULE I
MEDIQ/PRN Life Support Services, Inc.
Inventory Net Availability
(a) Gross Inventory _______________
Less: Ineligible Inventory
(b) Inventory consisting of "perishable agricultural
commodities" within the meaning of the
Perishable Agricultural Commodities Act of 1930,
as amended, and the regulations thereunder, or
on which a Lien has arisen or may arise in favor
of agricultural producers under comparable state
or local laws _______________
(c) Inventory located on leaseholds as to which the
lessor has not entered into a consent and
agreement providing the Administrative Agent
with the right to receive notice of default, the
right to repossess such Inventory at any reasonable
time pursuant to such consent and agreement
and such other rights as may be reasonably acceptable
to the Administrative Agent _______________
(d) Inventory that is obsolete, unusable or
otherwise unavailable for sale _______________
(e) Inventory with respect to which the
representations and warranties set forth in
Section 8 of the Security Agreement applicable
to Inventory are not true and correct _______________
(f) Inventory consisting of promotional, marketing,
packaging or shipping materials and supplies _______________
(g) Inventory that fails to meet all standards
imposed by any governmental agency, or
department or division thereof, having
regulatory authority over such Inventory or its
use or sale _______________
(h) Inventory that is subject to any licensing,
patent, royalty, trademark, trade name or
copyright agreement with any third party from
whom the
4
Borrower has received written notice of a dispute
in respect of any such agreement _______________
(i) Inventory located outside the United States _______________
(j) Inventory that is not in the possession of or
under the sole control of the Borrower or not in
a Leased facility in respect of which the owner
has entered into a consent and agreement
providing the Administrative Agent with the
right to receive notice of default, the right to
repossess such Inventory at any reasonable time
pursuant to such consent and agreement and such
other rights as may be reasonably acceptable to
the Administrative Agent _______________
(k) Inventory consisting of work in progress _______________
(l) Inventory in respect of which the Security
Agreement, after giving effect to the related
filings of financing statements that have then
been made, if any, does not or has ceased to
create a valid and perfected first priority lien
or security interest in favor of the Secured
Parties securing the Secured Obligations and as
to which no other Liens exist, other than
Permitted Liens _______________
(m) Inventory not recorded under a perpetual
inventory system reasonably acceptable to the
Administrative Agent _______________
(n) Total Ineligible Inventory
[sum of (b) through (m)] _______________
(o) Total Eligible Inventory
[(a) less (n)] _______________
Net Inventory Availability at 50% of
Eligible Inventory [(o) multiplied by 50%] ===============
5
SCHEDULE II
MEDIQ/PRN Life Support Services, Inc.
Accounts Receivable Net Availability
(a) Gross Receivables _______________
Less: Ineligible Receivables
(b) Receivables that do not arise out of sales of
goods or rendering of services in the ordinary
course of business _______________
(c) Receivables on terms other than those normal or
customary in the Borrower's business _______________
(d) Receivables owing from Affiliates of the
Borrower _______________
(e) Receivables more than 120 days past the invoice
date _______________
(f) Receivables owing from any Person for whom an
aggregate amount of more than 50% of Receivables
owing from such Person are more than 120 days
past the original invoice date _______________
(g) Receivables owing from any Person that has
asserted any claim, demand or liability, by
action, suit, counterclaim or other judicial or
arbitral proceeding _______________
(h) Receivables owing from any Person that shall
take or is the subject of any action or
proceeding of a type described in Section
6.01(f) _______________
(i) Receivables (i) owing from any supplier to or
creditor of the Borrower (to the extent such
Person has any right of setoff but only to the
extent of such setoff) unless such Person has
waived any right of setoff in a manner
acceptable to the Administrative Agent or (ii)
representing any manufacturer's or supplier's
credits, discounts, incentive plans or similar
arrangements entitling the
Borrower or its Subsidiaries to discounts on
future purchases therefrom _______________
(j) Receivables arising out of sales to account
debtors outside of the United States _______________
(k) Receivables arising out of sales on a
xxxx-and-hold, guaranteed sale, sale-or-return,
sale on approval or consignment basis or subject
to any right of return, set-off or charge-back _______________
(l) Receivables owing from an account debtor that is
an agency, department or instrumentality of the
United States or any State thereof _______________
(m) Receivables in respect of which the Security
Agreement, after giving effect to the related
filings of financing statements that have then
been made, if any, does not or has ceased to
create a valid and perfected first priority lien
or security interest in favor of the Agent for
the benefit of the Secured Parties securing the
Secured Obligations as to which no other Liens
exist, other than Permitted Liens _______________
(n) Total Ineligible Receivables
[(sum of (b) through (m)] _______________
(o) Eligible Receivables [(a) less (n)] _______________
Net Availability at 80% of
Eligible Receivables [(o) multiplied by 80%] _______________
EXHIBIT J TO THE
CREDIT AGREEMENT
FORM OF SOLVENCY CERTIFICATE
OF MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
I, Xxx X. Xxxxxx, Senior Vice President and Chief Financial Officer
of MEDIQ/PRN Life Support Services, Inc., a Delaware corporation (the
"Borrower"), hereby certify that I am the Senior Vice President and Chief
Financial Officer of the Borrower, that I am familiar with its properties,
businesses, assets, finances and operations and that I am duly authorized to
execute this Solvency Certificate on behalf of the Borrower, which is being
delivered pursuant to Section 3.01(g)(xiii) of the Credit Agreement dated as of
October 1, 1996 (as it may be hereafter amended, supplemented or otherwise
modified from time to time in accordance with its terms, the "Credit Agreement")
among the Borrower, MEDIQ Incorporated, a Delaware corporation, and PRN
Holdings, Inc., a Delaware corporation, as Parent Guarantors, the lender parties
from time to time party thereto (the "Lender Parties"), Banque Nationale de
Paris, as administrative agent (the "Administrative Agent") for the Lender
Parties and as initial issuing bank, and NationsBank, N.A. as documentation
agent (the "Documentation Agent" and, together with the Administrative Agent,
the "Agents") for the Lender Parties. Unless otherwise defined herein,
capitalized terms defined in the Credit Agreement are used herein as therein
defined.
I further certify that I am familiar with the properties, businesses
and assets of the Borrower and have carefully reviewed the Loan Documents, the
Related Documents and the contents of this Solvency Certificate and, in
connection herewith, have made such investigation and inquiries as I deem
necessary and prudent therefor. I further certify, as the Senior Vice President
and Chief Financial Officer of the Borrower, that the financial information and
assumptions which underlie and form the basis for the representations made in
this Solvency Certificate were reasonable when made and were made in good faith
and continue to be reasonable as of the date hereof.
To secure, among other things, the payment of the Borrower's
Obligations under the Loan Documents, the Borrower has granted a security
interest in certain Collateral, now owned or hereafter acquired by it, pursuant
to the Collateral Documents.
The Borrower understands that the Agents and the Lender Parties are
relying on the truth and accuracy of this Solvency Certificate in connection
with the transactions contemplated by the Loan Documents.
I do hereby further certify, as the Senior Vice President and Chief
Financial Officer of the Borrower, that:
2
1. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the fair value of any and all property
of the Borrower is greater than the total amount of liabilities (including
contingent, subordinated, absolute, fixed, matured or unmatured and liquidated
or unliquidated liabilities) of the Borrower.
2. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the present fair saleable value of the
assets of the Borrower exceeds the amount that will be required to pay the
probable liabilities of the Borrower on its debts as they become absolute and
matured.
3. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the Borrower is not engaged in
business or in a transaction, and is not about to engage in business or in a
transaction, for which its capital would constitute unreasonably small capital
(after giving due consideration to the prevailing practice in the industry in
which it is engaged).
4. The Borrower does not intend or believe that it will incur debts
and liabilities that will be beyond its ability to pay as such debts or
liabilities mature.
5. The Borrower does not intend, in consummating the transactions
contemplated by the Credit Agreement, the other Loan Documents, or the Related
Documents, to hinder, delay or defraud either present or future creditors or any
other Person to which the Borrower is or will become, on or after the date
hereof, indebted.
6. In reaching the conclusions set forth in this Solvency
Certificate, I have considered, on behalf of the Borrower, among other things:
(a) the cash and other assets of the Borrower reflected in the
Financial Statements of the Borrower;
(b) all contingent liabilities of the Borrower including, without
limitation, any claims arising out of pending or threatened litigation
against the Borrower, and in so doing, the Borrower has computed the
amount of such liabilities as the amount that, in light of all the facts
and circumstances existing on the date hereof, represents the amount that
can reasonably be expected to become an actual or matured liability (the
"Contingent Liabilities");
3
(c) all obligations and liabilities of the Borrower, whether matured
or unmatured, liquidated or unliquidated, disputed or undisputed, secured
or unsecured, subordinated, absolute, fixed or contingent (other than
Contingent Liabilities);
(d) historical and anticipated growth in sales volume of the
Borrower and income stream generated by the Borrower as reflected in,
among other things, the cash flow statements delivered as part of the
Financial Statements;
(e) the customary terms and trade payables of the Borrower;
(f) the amount of the credit extended by and to customers of the
Borrower;
(g) the amortization requirements of the Credit Agreement and the
Related Documents, the anticipated interest payable on the Advances and
fees payable under the Credit Agreement;
(h) the level of capital customarily maintained by the Borrower and
other entities engaged in the same or similar business as the business of
the Borrower; and
(i) the environmental assessment reports delivered pursuant to
Section 3.01(g)(xiv) of the Credit Agreement.
Delivery of an executed counterpart of a signature page to this
Solvency Certificate by telecopier shall be effective as delivery of a manually
executed counterpart of this Solvency Certificate.
I have given this Solvency Certificate (a) solely in my capacity as
an officer of the Borrower and not individually and (b) on the understanding,
and subject to the condition, that I will have no personal liability on account
of having given this Solvency Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
behalf of the Borrower this 1st day of October, 1996.
By __________________________________
Name: Xxx X. Xxxxxx
Title: Senior Vice Presient and
Chief Financial Officer
EXHIBIT K-1 TO THE
CREDIT AGREEMENT
FORM OF SOLVENCY CERTIFICATE
OF MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
I, Xxx X. Xxxxxx, Senior Vice President and Chief Financial Officer
of MEDIQ/PRN Life Support Services, Inc., a Delaware corporation (the
"Borrower"), hereby certify that I am the Senior Vice President and Chief
Financial Officer of the Borrower, that I am familiar with its properties,
businesses, assets, finances and operations and that I am duly authorized to
execute this Solvency Certificate on behalf of the Borrower, which is being
delivered pursuant to Section 3.01(g)(xiii) of the Credit Agreement dated as of
October 1, 1996 (as it may be hereafter amended, supplemented or otherwise
modified from time to time in accordance with its terms, the "Credit Agreement")
among the Borrower, MEDIQ Incorporated, a Delaware corporation, and PRN
Holdings, Inc., a Delaware corporation, as Parent Guarantors, the lender parties
from time to time party thereto (the "Lender Parties"), Banque Nationale de
Paris, as administrative agent (the "Administrative Agent") for the Lender
Parties and as initial issuing bank, and NationsBank, N.A. as documentation
agent (the "Documentation Agent" and, together with the Administrative Agent,
the "Agents") for the Lender Parties. Unless otherwise defined herein,
capitalized terms defined in the Credit Agreement are used herein as therein
defined.
I further certify that I am familiar with the properties, businesses
and assets of the Borrower and have carefully reviewed the Loan Documents, the
Related Documents and the contents of this Solvency Certificate and, in
connection herewith, have made such investigation and inquiries as I deem
necessary and prudent therefor. I further certify, as the Senior Vice President
and Chief Financial Officer of the Borrower, that the financial information and
assumptions which underlie and form the basis for the representations made in
this Solvency Certificate were reasonable when made and were made in good faith
and continue to be reasonable as of the date hereof.
To secure, among other things, the payment of the Borrower's
Obligations under the Loan Documents, the Borrower has granted a security
interest in certain Collateral, now owned or hereafter acquired by it, pursuant
to the Collateral Documents.
The Borrower understands that the Agents and the Lender Parties are
relying on the truth and accuracy of this Solvency Certificate in connection
with the transactions contemplated by the Loan Documents.
I do hereby further certify, as the Senior Vice President and Chief
Financial Officer of the Borrower, that:
2
1. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the fair value of any and all property
of the Borrower is greater than the total amount of liabilities (including
contingent, subordinated, absolute, fixed, matured or unmatured and liquidated
or unliquidated liabilities) of the Borrower.
2. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the present fair saleable value of the
assets of the Borrower exceeds the amount that will be required to pay the
probable liabilities of the Borrower on its debts as they become absolute and
matured.
3. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the Borrower is not engaged in
business or in a transaction, and is not about to engage in business or in a
transaction, for which its capital would constitute unreasonably small capital
(after giving due consideration to the prevailing practice in the industry in
which it is engaged).
4. The Borrower does not intend or believe that it will incur debts
and liabilities that will be beyond its ability to pay as such debts or
liabilities mature.
5. The Borrower does not intend, in consummating the transactions
contemplated by the Credit Agreement, the other Loan Documents, or the Related
Documents, to hinder, delay or defraud either present or future creditors or any
other Person to which the Borrower is or will become, on or after the date
hereof, indebted.
6. In reaching the conclusions set forth in this Solvency
Certificate, I have considered, on behalf of the Borrower, among other things:
(a) the cash and other assets of the Borrower reflected in the
Financial Statements of the Borrower;
(b) all contingent liabilities of the Borrower including, without
limitation, any claims arising out of pending or threatened litigation
against the Borrower, and in so doing, the Borrower has computed the
amount of such liabilities as the amount that, in light of all the facts
and circumstances existing on the date hereof, represents the amount that
can reasonably be expected to become an actual or matured liability (the
"Contingent Liabilities");
3
(c) all obligations and liabilities of the Borrower, whether matured
or unmatured, liquidated or unliquidated, disputed or undisputed, secured
or unsecured, subordinated, absolute, fixed or contingent (other than
Contingent Liabilities);
(d) historical and anticipated growth in sales volume of the
Borrower and income stream generated by the Borrower as reflected in,
among other things, the cash flow statements delivered as part of the
Financial Statements;
(e) the customary terms and trade payables of the Borrower;
(f) the amount of the credit extended by and to customers of the
Borrower;
(g) the amortization requirements of the Credit Agreement and the
Related Documents, the anticipated interest payable on the Advances and
fees payable under the Credit Agreement;
(h) the level of capital customarily maintained by the Borrower and
other entities engaged in the same or similar business as the business of
the Borrower; and
(i) the environmental assessment reports delivered pursuant to
Section 3.01(g)(xiv) of the Credit Agreement.
Delivery of an executed counterpart of a signature page to this
Solvency Certificate by telecopier shall be effective as delivery of a manually
executed counterpart of this Solvency Certificate.
I have given this Solvency Certificate (a) solely in my capacity as
an officer of the Borrower and not individually and (b) on the understanding,
and subject to the condition, that I will have no personal liability on account
of having given this Solvency Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
behalf of the Borrower this 1st day of October, 1996.
By:_____________________________________
Name: Xxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT K-2 TO
THE CREDIT
AGREEMENT
FORM OF SOLVENCY CERTIFICATE
OF MEDIQ INCORPORATED
I, Xxxxxxx X. Xxxxxxx, Chief Financial Officer of MEDIQ
Incorporated, a Delaware corporation ("MEDIQ"), hereby certify that I am the
Chief Financial Officer of MEDIQ, that I am familiar with the properties,
businesses, assets, finances and operations of MEDIQ and its Subsidiaries
(collectively, the "Company"), and that I am duly authorized to execute this
Solvency Certificate on behalf of MEDIQ, which is being delivered pursuant to
Section 3.01(g)(xiii) of the Credit Agreement dated as of October 1, 1996 (as it
may be hereafter amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "Credit Agreement") among MEDIQ/PRN Life
Support Services, Inc., a Delaware corporation (the "Borrower"), MEDIQ and PRN
Holdings, Inc., a Delaware corporation, as Parent Guarantors, the lender parties
from time to time party thereto (the "Lender Parties"), Banque Nationale de
Paris, as administrative agent (the "Administrative Agent") for the Lender
Parties and as initial issuing bank, and NationsBank, N.A. as documentation
agent (the "Documentation Agent" and, together with the Administrative Agent,
the "Agents") for the Lender Parties. Unless otherwise defined herein,
capitalized terms defined in the Credit Agreement are used herein as therein
defined.
I further certify that I am familiar with the properties, businesses
and assets of the Company and have carefully reviewed the Loan Documents, the
Related Documents and the contents of this Solvency Certificate and, in
connection herewith, have made such investigation and inquiries as I deem
necessary and prudent therefor. I further certify, as the Senior Vice President
and Chief Financial Officer of MEDIQ, that the financial information and
assumptions which underlie and form the basis for the representations made in
this Solvency Certificate were reasonable when made and were made in good faith
and continue to be reasonable as of the date hereof.
To secure, among other things, the payment of the Company's
Obligations under the Loan Documents, the Company has granted a security
interest in certain Collateral, now owned or hereafter acquired by it, pursuant
to the Collateral Documents.
The Company understands that the Agents and the Lender Parties are
relying on the truth and accuracy of this Solvency Certificate in connection
with the transactions contemplated by the Loan Documents.
I do hereby further certify, as the Senior Vice President and Chief
Financial Officer of MEDIQ, that:
2
1. Attached hereto as Annex A are the projected consolidated
financial statements of the Company on a monthly basis for the first two years
following the day of the Initial Extension of Credit and on an annual basis for
each year thereafter until the Final Maturity Date (the "Projected Financial
Statements") prepared by management in good faith. The Projected Financial
Statements fairly present the best estimate of the future financial performance
of the Company and are reasonable in light of the business conditions existing
on the date hereof, although actual results during the periods covered by the
Projected Financial Statements may differ materially from the projected results
stated therein.
2. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the fair value of any and all property
of the Company is greater than the total amount of liabilities (including
contingent, subordinated, absolute, fixed, matured or unmatured and liquidated
or unliquidated liabilities) of the Company.
3. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the present fair saleable value of the
assets of the Company exceeds the amount that will be required to pay the
probable liabilities of the Company on debts as they become absolute and
matured.
4. On the date hereof, both before and after giving effect to the
consummation of the transactions contemplated by the Credit Agreement, the other
Loan Documents and the Related Documents, the Company is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which the capital of the Company would constitute unreasonably
small capital (after giving due consideration to the prevailing practice in the
industry in which the Company is engaged).
5. The Company does not intend or believe that it will incur debts
and liabilities that will be beyond its ability to pay as such debts or
liabilities mature.
6. The Company does not intend, in consummating the transactions
contemplated by the Credit Agreement, the other Loan Documents, or the Related
Documents, to hinder, delay or defraud either present or future creditors or any
other Person to which the Company is or will become, on or after the date
hereof, indebted.
7. In reaching the conclusions set forth in this Solvency
Certificate, I have considered, on behalf of the Company, among other things:
(a) the cash and other assets of the Company;
3
(b) all contingent liabilities of the Company including, without
limitation, any claims arising out of pending or threatened litigation
against the Company, and in so doing, the Company has computed the amount
of such liabilities as the amount that, in light of all the facts and
circumstances existing on the date hereof, represents the amount that can
reasonably be expected to become an actual or matured liability (the
"Contingent Liabilities");
(c) all obligations and liabilities of the Company, whether matured
or unmatured, liquidated or unliquidated, disputed or undisputed, secured
or unsecured, subordinated, absolute, fixed or contingent (other than
Contingent Liabilities);
(d) historical and anticipated growth in sales volume of the Company
and income stream generated by the Company as reflected in, among other
things, the cash flow statements delivered as part of the Projected
Financial Statements;
(e) the customary terms and trade payables of the Company;
(f) the amount of the credit extended by and to customers of the
Company;
(g) the amortization requirements of the Credit Agreement and the
Related Documents, the anticipated interest payable on the Advances and
fees payable under the Credit Agreement;
(h) the level of capital customarily maintained by the Company and
other entities engaged in the same or similar business as the business of
the Company;
(i) the environmental assessment reports delivered pursuant to
Section 3.01(g)(xiv) of the Credit Agreement; and
(j) the Projected Financial Statements.
Delivery of an executed counterpart of a signature page to this
Solvency Certificate by telecopier shall be effective as delivery of a manually
executed counterpart of this Solvency Certificate.
I have given this Solvency Certificate (a) solely in my capacity as
an officer of MEDIQ and not individually and (b) on the understanding, and
subject to the condition, that I will have no personal liability on account of
having given this Solvency Certificate.
4
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
behalf of the Company this 30th day of September, 1996.
By ____________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
