EXHIBIT 10.21
================================================================================
CREDIT AGREEMENT
Dated as of October 17, 2003
among
UNIVERSAL HOSPITAL SERVICES, INC.,
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent, Administrative Agent, Collateral Agent and Lender
PNC BANK, NATIONAL ASSOCIATION,
as Documentation Agent
GECC CAPITAL MARKETS GROUP, INC.,
as Co-Lead Arranger
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS, L.P.,
as Syndication Agent and Co-Lead Arranger
================================================================================
TABLE OF CONTENTS
Page
----
1. AMOUNT AND TERMS OF CREDIT.............................................................................. 1
1.1. Credit Facilities.............................................................................. 1
1.2. Letters of Credit.............................................................................. 4
1.3. Prepayments.................................................................................... 4
1.4. Use of Proceeds................................................................................ 7
1.5. Interest and Applicable Margins................................................................ 7
1.6. Eligible Accounts.............................................................................. 10
1.7. Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment
Disposables.................................................................................... 12
1.8. Cash Management Systems........................................................................ 14
1.9. Fees........................................................................................... 14
1.10. Receipt of Payments............................................................................ 14
1.11. Application and Allocation of Payments......................................................... 15
1.12. Loan Account and Accounting.................................................................... 15
1.13. Indemnity...................................................................................... 16
1.14. Access......................................................................................... 17
1.15. Taxes. 18
1.16. Capital Adequacy; Increased Costs; Illegality.................................................. 19
1.17. Single Loan.................................................................................... 21
2. CONDITIONS PRECEDENT.................................................................................... 21
2.1. Conditions to the Initial Loans................................................................ 21
2.2. Further Conditions to Each Loan................................................................ 22
3. REPRESENTATIONS AND WARRANTIES.......................................................................... 23
3.1. Corporate Existence; Compliance with Law....................................................... 23
3.2. Executive Offices, Collateral Locations, FEIN.................................................. 24
3.3. Corporate Power, Authorization, Enforceable Obligations........................................ 24
3.4. Financial Statements and Projections........................................................... 24
3.5. Material Adverse Effect........................................................................ 25
3.6. Ownership of Property; Liens................................................................... 26
3.7. Labor Matters.................................................................................. 26
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness...................... 27
3.9. Government Regulation.......................................................................... 27
3.10. Margin Regulations............................................................................. 27
3.11. Taxes. 28
3.12. ERISA.......................................................................................... 28
3.13. No Litigation.................................................................................. 29
3.14. Brokers........................................................................................ 29
3.15. Intellectual Property.......................................................................... 30
3.16. Full Disclosure................................................................................ 30
-i-
3.17. Environmental Matters.......................................................................... 30
3.18. Insurance...................................................................................... 31
3.19. Deposit and Disbursement Accounts.............................................................. 31
3.20. Government Contracts........................................................................... 31
3.21. Customer and Trade Relations................................................................... 32
3.22. Agreements and Other Documents................................................................. 32
3.23. Solvency....................................................................................... 32
3.24. Recapitalization Agreements.................................................................... 32
3.25. Senior Notes................................................................................... 33
3.26. HIPAA Compliance............................................................................... 33
4. FINANCIAL STATEMENTS AND INFORMATION.................................................................... 34
4.1. Reports and Notices............................................................................ 34
4.2. Communication with Accountants................................................................. 34
5. AFFIRMATIVE COVENANTS................................................................................... 34
5.1. Maintenance of Existence and Conduct of Business............................................... 34
5.2. Payment of Charges............................................................................. 35
5.3. Books and Records.............................................................................. 35
5.4. Insurance; Damage to or Destruction of Collateral.............................................. 35
5.5. Compliance with Laws........................................................................... 37
5.6. Supplemental Disclosure........................................................................ 37
5.7. Intellectual Property.......................................................................... 38
5.8. Environmental Matters.......................................................................... 38
5.9. Landlords' Agreements, Bailee Letters and Real Estate Purchases................................ 38
5.10. Further Assurances............................................................................. 39
6. NEGATIVE COVENANTS...................................................................................... 39
6.1. Mergers, Subsidiaries, Etc..................................................................... 40
6.2. Investments; Loans and Advances................................................................ 42
6.3. Indebtedness................................................................................... 43
6.4. Affiliate Transactions......................................................................... 45
6.5. Capital Structure and Business................................................................. 45
6.6. Guaranteed Indebtedness........................................................................ 45
6.7. Liens.......................................................................................... 46
6.8. Sale of Stock and Assets....................................................................... 46
6.9. ERISA.......................................................................................... 48
6.10. Financial Covenants............................................................................ 48
6.11. Hazardous Materials............................................................................ 48
6.12. Sale-Leasebacks................................................................................ 48
6.13. Cancellation of Indebtedness................................................................... 48
6.14. Restricted Payments............................................................................ 48
6.15. Change of Corporate Name or Location; Change of Fiscal Year.................................... 49
6.16. No Impairment of Intercompany Transfers........................................................ 49
6.17. No Speculative Transactions.................................................................... 50
6.18. Changes Relating to Subordinated Debt and Certain Agreements................................... 50
-ii-
7. TERM.................................................................................................... 50
7.1. Termination.................................................................................... 50
7.2. Survival of Obligations Upon Termination of Financing Arrangements............................. 51
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.................................................................. 51
8.1. Events of Default.............................................................................. 51
8.2. Remedies....................................................................................... 53
8.3. Waivers by Credit Parties...................................................................... 54
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT..................................................... 54
9.1. Assignment and Participations.................................................................. 54
9.2. Appointment of Agent........................................................................... 57
9.3. Agent's Reliance, Etc.......................................................................... 58
9.4. GE Capital and Affiliates...................................................................... 58
9.5. Lender Credit Decision......................................................................... 59
9.6. Indemnification................................................................................ 59
9.7. Successor Agent................................................................................ 60
9.8. Setoff and Sharing of Payments................................................................. 60
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in Concert....................... 61
9.10. Additional Titled Agents....................................................................... 63
10. SUCCESSORS AND ASSIGNS.................................................................................. 64
10.1. Successors and Assigns......................................................................... 64
11. MISCELLANEOUS........................................................................................... 64
11.1. Complete Agreement; Modification of Agreement.................................................. 64
11.2. Amendments and Waivers......................................................................... 64
11.3. Fees and Expenses.............................................................................. 66
11.4. No Waiver...................................................................................... 68
11.5. Remedies....................................................................................... 68
11.6. Severability................................................................................... 68
11.7. Conflict of Terms.............................................................................. 69
11.8. Confidentiality................................................................................ 69
11.9. GOVERNING LAW.................................................................................. 70
11.10. Notices........................................................................................ 71
11.11. Section Titles................................................................................. 71
11.12. Counterparts................................................................................... 71
11.13. WAIVER OF JURY TRIAL........................................................................... 71
11.14. Press Releases and Related Matters............................................................. 72
11.15. Reinstatement.................................................................................. 72
11.16. Advice of Counsel.............................................................................. 72
11.17. No Strict Construction......................................................................... 73
-iii-
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) - Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Application for Standby Letter of Credit
Exhibit B-2 - Application for Documentary Letter of Credit
Exhibit B-3 - Application and Agreement for Documentary Letter of Credit
Disclosure Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4(a) - Sources and Uses as of Closing Date; Funds Flow
Memorandum as of the Closing Date
Disclosure Schedule 1.4(b) - Sources and Uses for the Recapitalization
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices; Collateral Locations; FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Pro Forma
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.14 - Brokers
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
-iv-
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.21 - Customer and Trade Relations
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.2 - Permitted Investments
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.6 - Guaranteed Indebtedness
Disclosure Schedule 6.7 - Existing Liens
-v-
This CREDIT AGREEMENT, dated as of October 17, 2003 among UNIVERSAL
HOSPITAL SERVICES, INC., a Delaware corporation ("Borrower"); the other Credit
Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (in its individual capacity, "GE Capital"), for itself, as Lender,
and as Agent for Lenders, and the other Lenders signatory hereto from time to
time.
RECITALS
WHEREAS, Borrower has requested that Lenders extend revolving credit
facilities to Borrower of up to One Hundred Million Dollars ($100,000,000) in
the aggregate for the purposes of funding a portion of the consideration due and
owing on the date hereof under the Recapitalization Agreements, refinancing
certain indebtedness of Borrower, and providing (a) working capital financing
for Borrower, (b) funds for other general corporate purposes of Borrower and (c)
funds for other purposes permitted hereunder, including without limitation the
consummation of Capital Expenditures and Permitted Acquisitions; and for these
purposes, Lenders are willing to make certain loans and other extensions of
credit to Borrower of up to such amount upon the terms and conditions set forth
herein; and
WHEREAS, Borrower has agreed to secure all of its obligations under the
Loan Documents by granting to Agent, for the benefit of Agent and Lenders, a
security interest in and lien upon all of its existing and after-acquired
personal and real property; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1. Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each
Lender agrees to make available to Borrower from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each, a "Revolving
Credit Advance"). The Pro Rata Share of the Revolving Loan of any Lender shall
not at any time exceed its separate Revolving Loan Commitment. The obligations
of each Lender hereunder shall be several and not joint. Until the Commitment
Termination Date, Borrower may borrow, repay and reborrow under this
Section 1.1(a); provided, that the amount of any Revolving Credit Advance to be
made at any time shall not exceed Borrowing Availability at such time. Borrowing
Availability may be reduced by Reserves imposed by Agent in accordance with the
provisions of Sections 1.6 and 1.7, as applicable. Each Revolving Credit Advance
shall be made on notice by Borrower to one of the representatives of Agent
identified in Schedule 1.1 at the address specified therein. Any such notice
must be given no later than (1) 11:00 a.m. (Chicago time) on the Business Day of
the proposed Revolving Credit Advance, in the case of an Index Rate Loan, or (2)
11:00 a.m. (Chicago time) on the date which is 3 Business Days prior to the
proposed Revolving Credit Advance, in the case of a LIBOR Loan. Each such notice
(a "Notice of Revolving Credit Advance") must be given in writing (by telecopy
or overnight courier) substantially in the form of Exhibit 1.1(a)(i), and shall
include the information required in such Exhibit and such other information as
may be reasonably required by Agent. If Borrower desires to have the Revolving
Credit Advances bear interest by reference to a LIBOR Rate, Borrower must comply
with Section 1.5(e).
(ii) Except as provided in Section 1.12, Borrower shall
execute and deliver to each Lender a note to evidence the Revolving Loan
Commitment of that Lender. Each note shall be in the principal amount of the
Revolving Loan Commitment of the applicable Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(a)(ii) (each a "Revolving Note" and,
collectively, the "Revolving Notes"). Each Revolving Note shall represent the
obligation of the Borrower to pay the amount of the applicable Lender's
Revolving Loan Commitment or, if less, such Lender's Pro Rata Share of the
aggregate unpaid principal amount of all Revolving Credit Advances to Borrower
together with interest thereon as prescribed in Section 1.5. Subject to the
provisions of Annex B with respect to Letters of Credit, the entire unpaid
balance of the aggregate Revolving Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date.
(iii) Notwithstanding anything to the contrary set forth in
this Agreement or in any other Loan Document, Borrower hereby covenants and
agrees that the aggregate amount of Revolving Credit Advances made on the
Closing Date plus the aggregate amount of Revolving Credit Advances made
following the Closing Date to satisfy, in full or in part, amounts owing in
connection with the Recapitalization shall not exceed Thirty Million Dollars
($30,000,000).
(b) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon Agent's
receipt of any Notice of Revolving Credit Advance. Subject to the terms and
conditions hereof, the Swing Line Lender may, in its discretion, make available
from time to time until the Commitment Termination Date advances (each, a "Swing
Line Advance") in accordance with any such notice. The provisions of this
Section 1.1(c) shall not relieve Lenders of their obligations to make Revolving
Credit Advances under Section 1.1(a); provided, that if the Swing Line Lender
makes a Swing Line Advance pursuant to any such notice, such Swing Line Advance
shall be in lieu of any Revolving Credit Advance that otherwise may be made
-2-
by Lenders pursuant to such notice. The aggregate amount of Swing Line Advances
outstanding shall not exceed at any time the lesser of (A) the Swing Line
Commitment and (B) the lesser of the Maximum Amount and the Borrowing Base, in
each case, less the outstanding balance of the Revolving Loan at such time
("Swing Line Availability"). Moreover, the Swing Line Loan outstanding to
Borrower shall not exceed at any time the Borrowing Base less the Revolving Loan
outstanding to Borrower. Until the Commitment Termination Date, Borrower may
from time to time borrow, repay and reborrow under this Section 1.1(b). Each
Swing Line Advance shall be made pursuant to a Notice of Revolving Credit
Advance delivered to Agent by Borrower in accordance with Section 1.1(a). Any
such notice must be given no later than 11:00 a.m. (Chicago time) on the
Business Day of the proposed Swing Line Advance. Unless the Swing Line Lender
has received at least 1 Business Day's prior written notice from Requisite
Lenders instructing it not to make a Swing Line Advance, the Swing Line Lender
shall, notwithstanding the failure of any condition precedent set forth in
Section 2.2, be entitled to fund that Swing Line Advance, and to have each
Lender make Revolving Credit Advances in accordance with Section 1.1(b)(iii) or
purchase participating interests in accordance with Section 1.1(b)(iv).
Notwithstanding any other provision of this Agreement or the other Loan
Documents, the Swing Line Loan shall constitute an Index Rate Loan. Borrower
shall repay the aggregate outstanding principal amount of the Swing Line Loan
within 3 Business Days after demand therefor by Agent.
(ii) Borrower shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Each note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(b)(ii) (each a "Swing Line Note" and, collectively, the "Swing Line Notes").
Each Swing Line Note shall represent the obligation of Borrower to pay the
amount of the Swing Line Commitment or, if less, the aggregate unpaid principal
amount of all Swing Line Advances made to Borrower together with interest
thereon as prescribed in Section 1.5. The entire unpaid balance of the Swing
Line Loan and all other noncontingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from time to
time in its sole and absolute discretion, but not less frequently than weekly,
shall on behalf of Borrower (and Borrower hereby irrevocably authorizes the
Swing Line Lender to so act on its behalf) request each Lender (including the
Swing Line Lender) to make a Revolving Credit Advance to Borrower (which shall
be an Index Rate Loan) in an amount equal to that Lender's Pro Rata Share of the
principal amount of Borrower's Swing Line Loan (the "Refunded Swing Line Loan")
outstanding on the date such notice is given. Unless any of the events described
in Sections 8.1(h) or 8.1(i) has occurred (in which event the procedures of
Section 1.1(b)(iv) shall apply) and regardless of whether the conditions
precedent set forth in this Agreement to the making of a Revolving Credit
Advance are then satisfied, each Lender shall disburse directly to Agent, its
Pro Rata Share of a Revolving Credit Advance on behalf of the Swing Line Lender
prior to 2:00 p.m. (Chicago time) in immediately available funds on the Business
Day next succeeding the date that notice is given. The proceeds of those
Revolving
-3-
Credit Advances shall be immediately paid to the Swing Line Lender and applied
to repay the Refunded Swing Line Loan.
(iv) If, prior to refunding a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(b)(iii), one of the events
described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of Section 1.1(b)(v) below, each Lender shall, on the date such
Revolving Credit Advance was to have been made, purchase from the Swing Line
Lender an undivided participation interest in the Swing Line Loan in an amount
equal to its Pro Rata Share of such Swing Line Loan. Upon request, each Lender
shall promptly transfer to the Swing Line Lender, in immediately available
funds, the amount of its participation interest.
(v) Each Lender's obligation to make Revolving Credit
Advances in accordance with Section 1.1(b)(iii) and to purchase participation
interests in accordance with Section 1.1(b)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right that such Lender may
have against the Swing Line Lender, Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
If any Lender does not make available to Agent or the Swing Line Lender, as
applicable, the amount required pursuant to Sections 1.1(b)(iii) or 1.1(b)(iv),
as the case may be, the Swing Line Lender shall be entitled to recover such
amount on demand from such Lender, together with interest thereon for each day
from the date of non-payment until such amount is paid in full at the Federal
Funds Rate for the first 2 Business Days and at the Index Rate thereafter.
(c) Reliance on Notices. Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
to be genuine. Agent may assume that each Person executing and delivering any
notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the contrary.
1.2. Letters of Credit.
Subject to and in accordance with the terms and conditions contained
herein and in Annex B, Borrower shall have the right to request, and Lenders
agree to incur, or purchase participations in, Letter of Credit Obligations in
respect of Borrower.
1.3. Prepayments.
(a) Voluntary Prepayments. Borrower may at any time, and from time
to time, prepay all or any portion of the Revolving Loan. Further, Borrower may
at any time on at least five (5) days' prior written notice to Agent terminate
the Revolving Loan Commitment; provided, that upon such termination, all Loans
and other Obligations shall be
-4-
immediately due and payable in full and all Letter of Credit Obligations shall
be cash collateralized or otherwise satisfied in accordance with Annex B. Any
such voluntary prepayment and any such termination of the Revolving Loan
Commitment must be accompanied by the payment of any LIBOR funding breakage
costs in accordance with Section 1.13(b). Upon any such termination of the
Revolving Loan Commitment, Borrower's right to request Revolving Credit
Advances, or request that Letter of Credit Obligations be incurred on its
behalf, or request Swing Line Advances, shall simultaneously be terminated.
(b) Mandatory Prepayments.
(i) If on any date on which a Borrowing Base Certificate
is delivered pursuant to Annex F, the aggregate outstanding balance of the
Revolving Loan and the Swing Line Loan exceeds the Borrowing Base, Borrower
shall, no later than the Business Day immediately following the date of delivery
of such Borrowing Base Certificate, prepay the Revolving Credit Advances and/or
cash collateralize (in a manner consistent with the requirements of Annex B) or
replace Letters of Credit in an amount equal to the amount of such excess.
(ii) If on any date the aggregate outstanding balance of
the Revolving Loan and the Swing Line Loan exceeds the Maximum Amount, Borrower
shall, within one Business Day of such occurrence, prepay the Revolving Credit
Advances and/or cash collateralize (in a manner consistent with the requirements
of Annex B) or replace Letters of Credit in an amount equal to the amount of
such excess.
(iii) Borrower shall prepay the Revolving Credit Advances
in an amount equal to (i) one hundred percent (100%) of the Net Proceeds of any
sale or issuance of debt securities, and seventy-five percent (75%) of the Net
Proceeds of any sale or issuance of any equity securities, in either case by
Borrower or any Subsidiary, whether in a public offering, a private placement or
otherwise, but excluding any equity investment made by ▇.▇. Childs or its
Affiliates or Halifax or its Affiliates, any of their applicable limited
partners or the limited partners of their applicable Affiliates, any equity
investment made by any officer, director, consultant or employee of or to
Borrower pursuant to the Stockholder's Agreement, any stock option plan or
otherwise, and any Stock issued to the owners of a Target in connection with a
Permitted Acquisition, (ii) one hundred percent (100%) of the Net Proceeds of
any sale, lease, assignment, exchange or other disposition for cash of any asset
or group of assets (including, without limitation, but subject to Section
5.4(c), insurance proceeds paid as a result of any destruction, casualty or
taking of any property of Borrower or any Subsidiary), not made in the ordinary
course of business, by Borrower or any Subsidiary of Borrower, and (iii) one
hundred percent (100%) of the Net Proceeds from the termination of any pension
plans of Borrower or any Subsidiary, in any such case no later than 3 Business
Days following receipt by Borrower or such Subsidiary of such proceeds, together
with accrued interest to such date on the amount prepaid; provided that except
as otherwise provided in Section 5.4(c), no such prepayment shall be required
pursuant to subclause (ii) of this Section 1.3(b)(iii) with respect to up to
$2,000,000 of such Net Proceeds received by Borrower and its Subsidiaries during
any Fiscal Year of Borrower so long as (x) Borrower
-5-
shall have notified the Agent in writing of such receipt of such Net Proceeds,
the amount thereof and that Borrower or such Subsidiary intends to reinvest such
Net Proceeds in Inventory or other property useful in the business of Borrower
and its Subsidiaries within 180 days following such receipt, and (y) such Net
Proceeds are so reinvested during such 180-day period. To the extent that
Borrower shall have so notified Agent that it intended to so reinvest any such
Net Proceeds and such Net Proceeds were not so reinvested within 180 days
following receipt thereof, Borrower shall immediately give Agent notice thereof
and prepay the Revolving Credit Advances in an amount equal to such amount of
Net Proceeds which were not reinvested. Any such prepayment shall be applied in
accordance with Section 1.3(c). Notwithstanding anything herein to the contrary,
no prepayment shall be required with respect to (i) the proceeds of Indebtedness
permitted under Section 6.3, (ii) the proceeds of the Recapitalization, and
(iii) the proceeds of the Senior Notes.
(iv) If on any date that is 270 days following the receipt
by Borrower or any of its Subsidiaries of any "Net Proceeds" from any "Asset
Sale" (as such terms, solely for purposes of this clause (iv), are defined in
the Senior Note Indenture) there shall exist "Excess Proceeds" (as such term,
solely for purposes of this clause (iv), is defined in the Senior Note
Indenture) in excess of $10,000,000 (such excess amount being the "Specified
Payment Amount"), then Borrower shall, within 5 Business Days of such date,
prepay Revolving Credit Advances by an amount equal to the Specified Payment
Amount. Any such payment shall be applied in accordance with Section 1.3(c).
(c) Application of Certain Mandatory Prepayments. Any prepayments
made by Borrower pursuant to Section 1.3(b)(iii) above, and any prepayments from
insurance or condemnation proceeds in accordance with Section 5.4(c), shall be
applied as follows: first, to Fees and reimbursable expenses of Agent then due
and payable pursuant to any of the Loan Documents; second, to interest then due
and payable on the Swing Line Loan; third, to the principal balance of the Swing
Line Loan until the same has been repaid in full; fourth, to interest then due
and payable on Revolving Credit Advances; fifth, to the principal balance of
Revolving Credit Advances until the same has been paid in full; and sixth, to
any Letter of Credit Obligations of Borrower to provide cash collateral therefor
in the manner set forth in Annex B, until all such Letter of Credit Obligations
have been fully cash collateralized in the manner set forth in Annex B. Neither
the Revolving Loan Commitment nor the Swing Line Commitment shall be permanently
reduced by the amount of any such prepayments. Any prepayments made by Borrower
pursuant to Section 1.3(b)(iv) above shall be applied to the principal balance
of outstanding Revolving Credit Advances and as a concurrent and permanent
reduction of the Revolving Loan Commitment, pro rata among all Lenders.
(d) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
-6-
1.4. Use of Proceeds.
Borrower shall utilize the proceeds of the Revolving Loan and
the Swing Line Advances solely for the Recapitalization and the Refinancing (and
to pay any related transaction expenses), and to provide funds (a) for
Borrower's working capital, (b) for other general corporate purposes and (c) for
other purposes permitted under this Agreement, including without limitation the
consummation of Capital Expenditures and Permitted Acquisitions. Disclosure
Schedule 1.4(a) contains a description of Borrower's sources and uses of funds
as of the Closing Date, including Loans and Letter of Credit Obligations to be
made or incurred on that date, and a funds flow memorandum detailing how funds
from each source are to be transferred to particular uses. Disclosure Schedule
1.4(b) contains a projected description of Borrower's sources and uses of funds
for the consummation of the Recapitalization, including Loans (not to exceed the
amount set forth in Section 1.1(a)(iii)) and Letter of Credit Obligations
expected to be made or incurred in connection with the Recapitalization.
1.5. Interest and Applicable Margins.
(a) Borrower shall pay interest to Agent, for the ratable
benefit of Lenders in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at the following
rates: (i) with respect to the Revolving Credit Advances, the Index Rate plus
the Applicable Revolver Index Margin per annum or, at the election of Borrower,
the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum,
based on the aggregate Revolving Credit Advances outstanding from time to time;
and (ii) with respect to the Swing Line Loan, the Index Rate plus the Applicable
Revolver Index Margin per annum.
As of the Closing Date, the Applicable Margins are as follows:
Applicable Revolver Index Margin 1.75%
Applicable Revolver LIBOR Margin 3.00%
Applicable L/C Margin 3.00%
The Applicable Margins shall be adjusted (up or down) prospectively on a
quarterly basis as determined by Borrower's consolidated financial performance,
commencing with the first day of the first calendar month that occurs more than
5 days after delivery of Borrower's quarterly Financial Statements to Lenders
for the Fiscal Quarter ending September 30, 2003. Adjustments in Applicable
Margins shall be determined by reference to the following grids:
-7-
If Total Leverage Level of
Ratio is: Applicable Margins:
-------- ------------------
> or =4.75 to 1.0 Level I
> or =4.00 to 1.0, but Level II
<4.75 to 1.0
<4.00 to 1.0 Level III
Applicable Margins
------------------
Level I Level II Level III
------- -------- ---------
Applicable Revolver Index Margin 2.00% 1.75% 1.50%
Applicable Revolver LIBOR Margin 3.25% 3.00% 2.75%
Applicable L/C Margin 3.25% 3.00% 2.75%
All adjustments in the Applicable Margins after September 30,
2003 shall be implemented quarterly on a prospective basis, for each calendar
month commencing at least 5 days after the date of delivery to Lenders of the
quarterly unaudited or annual audited (as applicable) Financial Statements
evidencing the need for an adjustment. Concurrently with the delivery of those
Financial Statements, Borrower shall deliver to Agent and Lenders a certificate,
signed by its chief financial officer, setting forth in reasonable detail the
basis for the continuance of, or any change in, the Applicable Margins. Failure
to timely deliver such Financial Statements shall, in addition to any other
remedy provided for in this Agreement, result in an increase in the Applicable
Margins to the highest level set forth in the foregoing grid, until the first
day of the first calendar month following the delivery of those Financial
Statements demonstrating that such an increase is not required. If a Default or
Event of Default has occurred and is continuing at the time any reduction in the
Applicable Margins is to be implemented, that reduction shall be deferred until
the first day of the first calendar month following the date on which such
Default or Event of Default is waived or cured.
(b) If any payment on any Loan becomes due and payable on
a day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum
basis and interest shall be made by Agent on the basis of a 360-day year, in
each case for the actual number of days occurring in the period for which such
interest and Fees are payable. The Index Rate is a floating rate determined for
each day. Each determination by Agent of an interest rate and Fees hereunder
shall be final, binding and conclusive on Borrower, absent manifest error.
(d) So long as an Event of Default has occurred and is
continuing under any of Sections 8.1(a), (h) or (i), at the election of Agent
(or upon the written request of Requisite Lenders), the interest rates
applicable to the Loans and the Letter of Credit Fees
-8-
shall be increased by two percentage points (2%) per annum above the rates of
interest or the rate of such Fees otherwise applicable hereunder ("Default
Rate"), and all outstanding Obligations shall bear interest at the Default Rate
applicable to such Obligations. Interest and Letter of Credit Fees at the
Default Rate shall accrue from the initial date of such Event of Default until
that Event of Default is cured or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in
Section 2.2, Borrower shall have the option to (i) request that any Revolving
Credit Advance be made as a LIBOR Loan, (ii) convert at any time all or any part
of outstanding Loans (other than the Swing Line Loan) from Index Rate Loans to
LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to
payment of LIBOR breakage costs in accordance with Section 1.13(b) if such
conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan (other than the Swing
Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period
and the succeeding LIBOR Period of that continued Loan shall commence on the
first day after the last day of the LIBOR Period of the Loan to be continued.
Any Loan or group of Loans having the same proposed LIBOR Period to be made or
continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of such amount. Any such
election must be made by 11:00 a.m. (Chicago time) on the 3rd Business Day prior
to (1) the date of any proposed Advance which is to bear interest at the LIBOR
Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be
continued as such, or (3) the date on which Borrower wishes to convert any Index
Rate Loan to a LIBOR Loan for a LIBOR Period designated by Borrower in such
election. If no election is received with respect to a LIBOR Loan by 11:00 a.m.
(Chicago time) on the 3rd Business Day prior to the end of the LIBOR Period with
respect thereto (or if a Default or an Event of Default has occurred and is
continuing or if the additional conditions precedent set forth in Section 2.2
shall not have been satisfied), that LIBOR Loan shall be converted to an Index
Rate Loan at the end of its LIBOR Period. Borrower must make such election by
notice to Agent in writing, by telecopy or overnight courier. In the case of any
conversion or continuation, such election must be made pursuant to a written
notice (a "Notice of Conversion/Continuation") in the form of Exhibit 1.5(e). No
Loan may be made as or converted into a LIBOR Loan until the earlier of (i) 45
days after the Closing Date or (ii) completion of primary syndication as
determined by Agent.
(f) Notwithstanding anything to the contrary set forth in
this Section 1.5, if a court of competent jurisdiction determines in a final
order that the rate of interest payable hereunder exceeds the highest rate of
interest permissible under law (the "Maximum Lawful Rate"), then so long as the
Maximum Lawful Rate would be so exceeded, the rate of interest payable hereunder
shall be equal to the Maximum Lawful Rate; provided, however, that if at any
time thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
-9-
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in Section 1.11 and thereafter shall refund any excess to Borrower or as a court
of competent jurisdiction may otherwise order.
1.6. Eligible Accounts.
All of the Accounts owned by Borrower and its Subsidiaries and
reflected in the most recent Borrowing Base Certificate delivered by Borrower to
Agent shall be "Eligible Accounts" for purposes of this Agreement, except any
Account to which any of the exclusionary criteria set forth below applies. Agent
shall have the right to (i) establish, modify or eliminate Reserves against
Eligible Accounts from time to time and (ii) adjust from time to time any of the
criteria set forth below, establish new criteria and adjust advance rates with
respect to Eligible Accounts, in each case on not less than 30 days prior
written notice to Borrower in the event that any audit of Accounts conducted by
or at the request of Agent is, in the commercially reasonable judgment of Agent,
materially and adversely different from historical performance. Any exercise of
rights by Agent pursuant to the immediately preceding sentence shall be subject
to the approval of Supermajority Lenders in the case of adjustments, new
criteria, changes in advance rates or the elimination of Reserves which have the
effect of making more credit available. Eligible Accounts shall not include any
Account of Borrower or any of its Subsidiaries:
(a) that does not arise from the sale or rental of goods
or the performance of services by Borrower or any of its Subsidiaries in the
ordinary course of its business;
(b) (i) upon which Borrower's or any Subsidiary's right
to receive payment is not absolute or is contingent upon the fulfillment of any
condition whatsoever or (ii) as to which Borrower or any Subsidiary is not
legally able to bring suit or otherwise enforce its remedies against the Account
Debtor through judicial process or (iii) to the extent that both (x) the Account
represents a progress billing consisting of an invoice for goods sold or used or
services rendered pursuant to a contract under which the Account Debtor's
obligation to pay that invoice is subject to Borrower's or any Subsidiary's
completion of further performance under such contract or is subject to the
equitable lien of a surety bond issuer and (y) the aggregate face amount of all
Accounts described in this clause (iii) exceeds $500,000;
-10-
(c) to the extent that any defense, counterclaim, setoff
or dispute has been asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered to the applicable Account Debtor;
(e) with respect to which an invoice, reasonably
acceptable to Agent in form and substance, has not been sent to the applicable
Account Debtor;
(f) that (i) is not owned by Borrower or any Subsidiary
or (ii) is subject to any right, claim, security interest or other interest of
any other Person, other than Liens in favor of Agent, on behalf of itself and
Lenders;
(g) that arises from a sale or rental to any director,
officer, other employee or Affiliate of any Credit Party, or to any entity that
has any common officer or director with any Credit Party (it being understood
and agreed that sales to any portfolio companies of ▇.▇. Childs and Halifax
shall not be excluded from the category of Eligible Accounts solely by operation
of this clause (g));
(h) to the extent that both (x) the Account is the
obligation of an Account Debtor that is the United States government, or any
department, agency or instrumentality thereof, unless Agent, in its sole
discretion, has agreed to the contrary in writing and Borrower or a Subsidiary,
if necessary or desirable, has complied with respect to such obligation with the
Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of
all Accounts described in this clause (h) exceed $1,000,000;
(i) that is the obligation of an Account Debtor located
in a foreign country other than Canada unless payment thereof is assured by a
letter of credit assigned and delivered to Agent, reasonably satisfactory to
Agent as to form, amount and issuer;
(j) to the extent Borrower or any Subsidiary is liable
for goods sold or services rendered by the applicable Account Debtor to Borrower
or any Subsidiary but only to the extent of the potential offset;
(k) that arises with respect to goods that are delivered
on a ▇▇▇▇-and-hold, cash-on-delivery basis or placed on consignment, guaranteed
sale or other terms by reason of which the payment by the Account Debtor is or
may be conditional;
(l) that is in default, as established upon the
occurrence of any of the following:
(i) the Account is not paid within 90 days
following its original invoice date;
-11-
(ii) the Account Debtor obligated upon such
Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii) a petition is filed by or against any
Account Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if fifty
percent (50%) or more of the Dollar amount of all Accounts owing by that Account
Debtor are ineligible under the other criteria set forth in this Section 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself
and Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties
in the Loan Documents are untrue;
(p) to the extent such Account is evidenced by a
judgment, Instrument or Chattel Paper;
(q) to the extent that such Account, together with all
other Accounts owing by such Account Debtor and its Affiliates as of any date of
determination exceed ten percent (10%) of all Eligible Accounts; or
(r) that is otherwise unacceptable to Agent in its
reasonable credit judgment.
1.7. Eligible Rental Equipment, Eligible Wholesale
Disposables and Eligible Equipment Disposables.
All of the Rental Equipment, Wholesale Disposables and
Equipment Disposables owned by Borrower or any of its Subsidiaries and reflected
in the most recent Borrowing Base Certificate delivered by Borrower to Agent
shall be "Eligible Rental Equipment", "Eligible Wholesale Disposables" and
"Eligible Equipment Disposables" for purposes of this Agreement, respectively,
except any Inventory or Equipment (as applicable) to which any of the
exclusionary criteria set forth below applies. Agent shall have the right to (i)
establish, modify or eliminate Reserves against Eligible Rental Equipment,
Eligible Wholesale Disposables and Eligible Equipment Disposables from time to
time, and (ii) adjust from time to time any of the criteria set forth below,
establish new criteria and adjust advance rates with respect to Eligible Rental
Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables, in
each case on not less then 30 days prior written notice to Borrower in the event
that any audit of Borrower's or any of its Subsidiaries' Rental Equipment,
Wholesale Disposables and/or Equipment Disposables is, in the commercially
reasonable judgment of Agent, materially and adversely different from historical
performance. Any exercise of rights by Agent pursuant to the immediately
preceding
-12-
sentence shall be subject to the approval of (i) Supermajority Lenders in the
case of adjustments, new criteria, changes in advance rates or the elimination
of Reserves which have the effect of making more credit available and (ii) all
Lenders in the case of adjustments, new criteria, changes in advance rates or
the elimination of Reserves, the effect of which is to make credit available to
Borrower in respect of Rental Equipment, Wholesale Disposables and Equipment
Disposables in excess of eighty-five percent (85%) of the orderly liquidation
value of such assets as reflected in the audit of such assets most recently
conducted by or at the request of Agent. Eligible Rental Equipment, Eligible
Wholesale Disposables and Eligible Equipment Disposables shall not include any
Inventory or Equipment of Borrower or any of its Subsidiaries that:
(a) is not owned by Borrower or a Subsidiary free and
clear of all Liens and rights of any other Person (including the rights of a
purchaser that has made progress payments and the rights of a surety that has
issued a bond to assure Borrower's or any Subsidiary's performance with respect
to any Inventory, but excluding the rights of any customer under a customer
contract entered into by Borrower in the ordinary course of business and
consistent with past practices), except the Liens in favor of Agent, on behalf
of itself and Lenders, and Permitted Encumbrances in favor of landlords and
bailees to the extent permitted in Section 5.9 hereof (subject to Reserves
established by Agent in accordance with Section 5.9 hereof);
(b) (i) is stored at a leased location, unless (x) a
reasonably satisfactory landlord waiver has been delivered to Agent, (y)
Reserves reasonably satisfactory to Agent have been established with respect
thereto or (z) Borrower shall have complied with the provisions of Section 5.9
with respect to the delivery of landlord agreements or (ii) is stored with a
bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
letter has been received by Agent and Reserves reasonably satisfactory to Agent
have been established with respect thereto;
(c) is placed on consignment;
(d) is covered by a negotiable document of title, unless
such document has been delivered to Agent with all necessary endorsements, free
and clear of all Liens except those in favor of Agent and Lenders;
(e) is unrentable, obsolete, or slow-moving;
(f) consists of display items or packing or shipping
materials, manufacturing supplies or work-in-process Inventory;
(g) is not of a type held for sale or rent in the
ordinary course of Borrower's or any Subsidiary's business;
(h) is not subject to a first priority lien in favor of
Agent on behalf of itself and Lenders, subject to Permitted Encumbrances;
-13-
(i) breaches any of the representations or warranties
pertaining to Inventory set forth in the Loan Documents;
(j) consists of Hazardous Materials;
(k) is not covered by casualty insurance reasonably
acceptable to Agent; or
(l) is otherwise unacceptable to Agent in its reasonable
credit judgment.
1.8. Cash Management Systems.
On or prior to the Closing Date, Borrower will establish and
will maintain until the Termination Date, the cash management systems described
in Annex C (the "Cash Management Systems").
1.9. Fees.
(a) Borrower shall pay to GE Capital, individually, the
Fees specified in that certain fee letter dated as of September 19, 2003 between
Borrower and GE Capital (the "GE Capital Fee Letter"), at the times specified
for payment therein.
(b) As additional compensation for the Lenders, Borrower
shall pay to Agent, for the ratable benefit of Lenders, in arrears, on the first
Business Day of each month prior to the Commitment Termination Date and on the
Commitment Termination Date, a Fee for Borrower's non-use of available funds in
an amount equal to three-fourths of one percent (0.75%) (the "Applicable ULF
Margin") per annum (calculated on the basis of a 360 day year for actual days
elapsed) multiplied by the difference between (x) the Maximum Amount (as it may
be reduced from time to time) and (y) the average for the period of the daily
closing balances of the aggregate Revolving Loan and the Swing Line Loan
outstanding during the period for which such Fee is due; provided, that if the
average daily balance of the Revolving Loans and Swing Line Loans in any month
equals or exceeds fifty percent (50%) of the Maximum Amount during such month,
the Applicable ULF Margin for such month shall be one-half of one percent
(0.50%).
(c) Borrower shall pay to Agent, for the ratable benefit
of Lenders, the Letter of Credit Fee as provided in Annex B.
1.10. Receipt of Payments.
Borrower shall make each payment under this Agreement not
later than 2:00 p.m. (New York time) on the day when due in immediately
available funds in Dollars to the Collection Account. For purposes of computing
interest and Fees and determining Borrowing Availability as of any date, all
payments shall be deemed received on the Business Day on which immediately
available funds therefor are received in the Collection Account prior to 2:00
p.m. New York time. Payments received after 2:00 p.m. New York time on any
-14-
Business Day or on a day that is not a Business Day shall be deemed to have been
received on the following Business Day.
1.11. Application and Allocation of Payments.
(a) So long as no Default or Event of Default has
occurred and is continuing, (i) payments consisting of proceeds of Accounts
received in the ordinary course of business shall be applied, first, to the
Swing Line Loan and, second, the Revolving Loan; (ii) payments matching specific
scheduled payments then due shall be applied to those scheduled payments; (iii)
voluntary prepayments shall be applied as determined by Borrower, subject to the
provisions of Section 1.3(a); and (iv) mandatory prepayments shall be applied as
set forth in Sections 1.3(c). All payments and prepayments applied to a
particular Loan shall be applied ratably to the portion thereof held by each
Lender as determined by its Pro Rata Share. As to any other payment, and as to
all payments made when a Default or Event of Default has occurred and is
continuing or following the Commitment Termination Date, Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of Borrower, and Borrower hereby irrevocably agrees
that Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records. In
the absence of a specific determination by Agent with respect thereto (with the
concurrence of Requisite Lenders), payments shall be applied to amounts then due
and payable in the following order: (1) to Fees and Agent's expenses
reimbursable hereunder; (2) to interest on the Swing Line Loan; (3) to principal
payments on the Swing Line Loan; (4) to interest on the other Loans, ratably in
proportion to the interest accrued as to each Loan; (5) to principal payments on
the other Loans and to provide cash collateral for Letter of Credit Obligations
in the manner described in Annex B, ratably to the aggregate, combined principal
balance of the other Loans and outstanding Letter of Credit Obligations; and (6)
to all other Obligations, including expenses of Lenders to the extent
reimbursable under Section 11.3.
(b) Agent is authorized to, and at its sole election may,
upon written notice to Borrower, charge to the Revolving Loan balance on behalf
of Borrower and cause to be paid all Fees, expenses, Charges, costs (including
insurance premiums in accordance with Section 5.4(a)) and interest and
principal, other than principal of the Revolving Loan, owing by Borrower under
this Agreement or any of the other Loan Documents if and to the extent Borrower
fails to pay promptly any such amounts as and when due, even if the amount of
such charges would exceed Borrowing Availability at such time or would cause the
balance of the Revolving Loan and the Swing Line Loan to Borrower to exceed the
Borrowing Base after giving effect to such charges. At Agent's option and to the
extent permitted by law, any charges so made shall constitute part of the
Revolving Loan hereunder.
1.12. Loan Account and Accounting.
Agent shall maintain a loan account (the "Loan Account") on
its books to record: all Advances, all payments made by Borrower, and all other
debits and credits as
-15-
provided in this Agreement with respect to the Loans or any other Obligations.
All entries in the Loan Account shall be made in accordance with Agent's
customary accounting practices as in effect from time to time. The balance in
the Loan Account, as recorded on Agent's most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Agent and Lenders by Borrower; provided, that any failure to so
record or any error in so recording shall not limit or otherwise affect
Borrower's duty to pay the Obligations. Agent shall render to Borrower a monthly
accounting of transactions with respect to the Loans setting forth the balance
of the Loan Account for the immediately preceding month. Unless Borrower
notifies Agent in writing of any objection to any such accounting (specifically
describing the basis for such objection), within 30 days after the date thereof,
each and every such accounting shall (absent manifest error) be deemed final,
binding and conclusive on Borrower in all respects as to all matters reflected
therein. Only those items expressly objected to in such notice shall be deemed
to be disputed by Borrower. Notwithstanding any provision herein contained to
the contrary, any Lender may elect (which election may be revoked) to dispense
with the issuance of Notes to that Lender and may rely on the Loan Account as
evidence of the amount of Obligations from time to time owing to it.
1.13. Indemnity.
(a) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) that may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, "Indemnified Liabilities"); provided, that no such
Credit Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person's gross negligence or
willful misconduct. Without limitation of the rights to indemnification
specified herein, each Indemnified Person hereby agrees to provide Borrower with
commercially reasonable notice of (i) any suit, action, proceeding, claim,
damage, loss, liability or expense which, in the determination of such
Indemnified Person, could reasonably be likely to result in a claim or demand
for indemnification in accordance with the provisions of this Section 1.13(a) by
such Indemnified Person and (ii) any settlement or judicial or administrative
determination of any matter described in the preceding clause (i). NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON
-16-
OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR
INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN
DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on
the terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii)
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing
of, or shall request a termination of, any borrowing of, conversion into or
continuation of, LIBOR Loans after Borrower has given notice requesting the same
in accordance herewith; or (iv) Borrower shall fail to make any prepayment of a
LIBOR Loan after Borrower has given a notice thereof in accordance herewith,
then Borrower shall indemnify and hold harmless each Lender from and against all
losses, costs and expenses resulting from or arising from any of the foregoing.
Such indemnification shall include any loss (including loss of margin) or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate deposits from which such funds were obtained. For the
purpose of calculating amounts payable to a Lender under this subsection, each
Lender shall be deemed to have actually funded its relevant LIBOR Loan through
the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of that LIBOR Loan and having a maturity comparable to the
relevant LIBOR Period; provided, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this subsection. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written calculation
of all amounts payable pursuant to this Section 1.13(b), and such calculation
shall be binding on the parties hereto unless Borrower shall object in writing
within 10 Business Days of receipt thereof, specifying the basis for such
objection in detail.
1.14. Access.
Each Credit Party that is a party hereto shall, during normal
business hours, from time to time upon 5 Business Days' prior notice as
frequently as Agent reasonably determines to be appropriate: (a) provide Agent
and any of its officers, employees and agents access to its properties,
facilities, advisors and employees (including officers) of each Credit Party and
to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, excluding any such records that are subject to patient confidentiality
requirements, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory, Equipment and other Collateral of any
-17-
Credit Party; provided, that activities described in this sentence
(collectively, the "Audits and Inspections") shall be limited to no more than
two per calendar year absent the occurrence of an Event of Default; provided,
further, that so long as no Event of Default has then occurred, the second Audit
and Inspection conducted in any calendar year shall be at Agent's expense. If an
Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by Agent, each such Credit
Party shall provide such access to Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default has
occurred and is continuing, Borrower shall provide Agent and each Lender with
access to its suppliers and customers. Each Credit Party shall make available to
Agent and its counsel, as quickly as is possible under the circumstances,
originals or copies of all books and records that Agent may reasonably request.
Each Credit Party shall deliver any document or instrument necessary for Agent,
as it may from time to time reasonably request, to obtain records from any
service bureau or other Person that maintains records for such Credit Party, and
shall maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Credit Party. Agent will give Lenders at
least 5 days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Agent's representatives on
regularly scheduled audits at no charge to Borrower.
1.15. Taxes.
(a) Any and all payments by Borrower hereunder (including
any payments made pursuant to Section 12) or under the Notes shall be made, in
accordance with this Section 1.15, free and clear of and without deduction for
any and all present or future Taxes. If Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder (including any
sum payable pursuant to Section 12) or under the Notes, (i) the sum payable
shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 1.15) Agent or Lenders, as applicable, receive an amount
equal to the sum they would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within 30 days after the date of any payment of Taxes, Borrower
shall furnish to Agent or the applicable Lender the original or a certified copy
of a receipt evidencing payment thereof. Agent and Lenders shall not be
obligated to return or refund any amounts received pursuant to this Section.
(b) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and, within 10 days of demand therefor, pay
Agent and each Lender for the full amount of Taxes (including any Taxes imposed
by any jurisdiction on amounts payable under this Section 1.15) paid by Agent or
such Lender, as appropriate, and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which payments
to be made under this Agreement or
-18-
under the Notes are exempt from United States withholding tax under an
applicable statute or tax treaty shall provide to Borrower and Agent a properly
completed and executed IRS Form W-8ECI or Form W-8BEN or other applicable form,
certificate or document prescribed by the IRS or the United States certifying as
to such Foreign Lender's entitlement to such exemption (a "Certificate of
Exemption"). Any foreign Person that seeks to become a Lender under this
Agreement shall provide a Certificate of Exemption to Borrower and Agent prior
to becoming a Lender hereunder. No foreign Person may become a Lender hereunder
if such Person fails to deliver a Certificate of Exemption in advance of
becoming a Lender.
1.16. Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrower
shall from time to time upon written demand by such Lender (with a copy of such
demand to Agent) pay to Agent, for the account of such Lender, additional
amounts sufficient to compensate such Lender for such reduction; provided, that
Borrower shall not be obligated to pay any such amount or amounts which are
attributable to any period of time occurring more than 120 days prior to the
date of receipt by Borrower of such written demand; provided, further, that such
Lender shall disclose to Borrower the calculations of the amount necessary to
compensate for any shortfall in the rate of return. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower and to Agent shall, absent manifest error,
be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any
change in any law or regulation (or any change in the interpretation thereof) or
(ii) the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon written demand by such Lender (with a
copy of such demand to Agent), pay to Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost;
provided, that Borrower shall not be obligated to pay any such amount or amounts
which are attributable to any period of time occurring more than 120 days prior
to the date of receipt by Borrower of such written demand; provided, further,
that such Lender shall disclose to Borrower the calculations of the amount
necessary to compensate for such increased cost. A certificate as to the amount
of such increased cost, submitted to Borrower and to Agent by such Lender, shall
be conclusive and binding on Borrower for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of
any circumstances
-19-
referred to above which would result in any such increased cost, the affected
Lender shall, to the extent not inconsistent with such Lender's internal
policies of general application, use reasonable commercial efforts to minimize
costs and expenses incurred by it and payable to it by Borrower pursuant to this
Section 1.16(b).
(c) Notwithstanding anything to the contrary contained
herein, if the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender to agree to make or to make or to continue to fund or maintain any LIBOR
Loan, then, unless that Lender is able to make or to continue to fund or to
maintain such LIBOR Loan at another branch or office of that Lender without, in
that Lender's opinion, adversely affecting it or its Loans or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to
Borrower through Agent, (i) the obligation of such Lender to agree to make or to
make or to continue to fund or maintain LIBOR Loans shall terminate and (ii)
Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing to
such Lender, together with interest accrued thereon, unless Borrower, within 5
Business Days after the delivery of such notice and demand, converts all LIBOR
Loans into Index Rate Loans.
(d) Within 15 days after receipt by Borrower of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Sections 1.15(a), 1.16(a)
or 1.16(b), Borrower may, at its option, notify Agent and such Affected Lender
of its intention to replace the Affected Lender. So long as no Default or Event
of Default has occurred and is continuing, Borrower, with the consent of Agent,
may obtain, at Borrower's expense, a replacement Lender ("Replacement Lender")
for the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent. If Borrower obtains a Replacement Lender within 90 days
following notice of their intention to do so, the Affected Lender must sell and
assign its Loans and Commitments to such Replacement Lender for an amount equal
to the principal balance of all Loans held by the Affected Lender and all
accrued interest and Fees with respect thereto through the date of such sale;
provided, that Borrower shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment. Notwithstanding the
foregoing, Borrower shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional
amounts within 15 days following its receipt of Borrower's notice of intention
to replace such Affected Lender. Furthermore, if Borrower gives a notice of
intention to replace and does not so replace such Affected Lender within 90 days
thereafter, Borrower's rights under this Section 1.16(d) shall terminate and
Borrower shall promptly pay all increased costs or additional amounts demanded
by such Affected Lender pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).
-20-
1.17. Single Loan.
All Loans to Borrower and all of the other Obligations arising
under this Agreement and the other Loan Documents shall constitute one general
obligation of Borrower secured, until the Termination Date, by all of the
Collateral.
2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans.
No Lender shall be obligated to make any Loan or incur any
Letter of Credit Obligations on the Closing Date, or to take, fulfill, or
perform any other action hereunder, until the following conditions have been
satisfied or provided for in a manner satisfactory to Agent, or waived in
writing by Agent and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrower, Agent and Lenders; and Agent shall have received such documents,
instruments, agreements and legal opinions as Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including all those listed in the Closing Checklist attached
hereto as Annex D, each in form and substance reasonably satisfactory to Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction
of Outstanding L/Cs. (i) Agent shall have received fully executed originals of
pay-off letters reasonably satisfactory to Agent confirming that all of the
Prior Lender Obligations will be repaid in full from the proceeds of the initial
Revolving Credit Advance and all Liens upon any of the property of Borrower or
any of its Subsidiaries in favor of Prior Lender shall be terminated by Prior
Lender immediately upon such payment; and (ii) all letters of credit issued or
guaranteed by Prior Lender shall have been cash collateralized, supported by a
guaranty of Agent or supported by a Letter of Credit issued pursuant to Annex B,
as mutually agreed upon by Agent, Borrower and Prior Lender.
(c) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons including all requisite Governmental Authorities (but
excluding consents and approvals of the Persons identified in Part 3.2(c) of the
agreement identified in clause (i) of the defined term "Recapitalization
Agreements", to the extent such Persons are identified as having consent and/or
approval rights in such Part), to the execution, delivery and performance of
this Agreement and the other Loan Documents and the consummation of the Related
Transactions or (ii) an officer's certificate in form and substance reasonably
satisfactory to Agent affirming that no such consents or approvals are required.
(d) Opening Availability. The Eligible Accounts, Eligible
Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment
Disposables supporting the initial Revolving Credit Advance and the initial
Letter of Credit Obligations incurred and the amount of the Reserves to be
established on the Closing Date shall be sufficient, as
-21-
determined by Agent, to provide Borrower with Borrowing Availability, after
giving effect to the initial Revolving Credit Advance, the incurrence of any
initial Letter of Credit Obligations and the consummation of the Related
Transactions to be consummated on the Closing Date (on a pro forma basis, with
trade payables being paid currently, and expenses and liabilities being paid in
the ordinary course of business and without acceleration of sales) of at least
$25,000,000.
(e) Payment of Fees. Borrower shall have paid the Fees
required to be paid on the Closing Date in the respective amounts specified in
Section 1.9 (including the Fees specified in the GE Capital Fee Letter), and
shall have reimbursed Agent for all fees, costs and expenses of closing
presented as of the Closing Date.
(f) Capital Structure; Other Indebtedness. The capital
structure of each Credit Party and the terms and conditions of all Indebtedness
of each Credit Party shall be acceptable to Agent in its sole discretion (it
being understood that the execution and delivery of this Agreement by Agent
shall conclusively evidence Agent's acceptance thereof).
(g) Due Diligence. Agent shall have completed its
business and legal due diligence, including a roll forward of its previous
Collateral audit, with results reasonably satisfactory to Agent (it being
understood that the execution and delivery of this Agreement by Agent shall
conclusively evidence Agent's completion of, and satisfaction with, such due
diligence).
(h) Consummation of Related Transactions. Agent shall
have received fully executed copies of the Recapitalization Agreements and each
of the other Related Transactions Documents, each of which shall be in form and
substance reasonably satisfactory to Agent and its counsel. The Recapitalization
and the other Related Transactions shall have been consummated in accordance
with the terms of the Recapitalization Agreements and the other Related
Transactions Documents.
2.2. Further Conditions to Each Loan.
Except as otherwise expressly provided herein, no Lender shall
be obligated to fund any Advance, convert or continue any Loan as a LIBOR Loan
or incur any Letter of Credit Obligation, if, as of the date thereof:
(a) any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect in any
material respect as of such date, except to the extent that such representation
or warranty expressly relates to an earlier date and except for changes therein
expressly permitted or consented to or expressly contemplated by this Agreement
and Agent or Requisite Lenders have determined not to make such Advance, convert
or continue any Loan as LIBOR Loan or incur such Letter of Credit Obligation as
a result of the fact that such warranty or representation is untrue or incorrect
in any material respect;
-22-
(b) any event or circumstance having a Material Adverse
Effect has occurred since the date hereof as determined by the Requisite Lenders
and Agent or Requisite Lenders have determined not to make such Advance, convert
or continue any Loan as a LIBOR Loan or incur such Letter of Credit Obligation
as a result of the fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligation), and Agent or Requisite Lenders shall have
determined not to make any Advance, convert or continue any Loan as a LIBOR Loan
or incur any Letter of Credit Obligation as a result of that Default or Event of
Default; or
(d) after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligations), the outstanding principal amount of the
aggregate Revolving Loan would exceed the lesser of the Borrowing Base and the
Maximum Amount, in each case, less the then outstanding principal amount of the
Swing Line Loan.
The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrower that the conditions
in this Section 2.2 (other that any such conditions that are subject to Agent's
and/or Lenders' sole determination or control) have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of Agent's Liens, on
behalf of itself and Lenders, pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of
Credit Obligations, the Credit Parties executing this Agreement, jointly and
severally, make the following representations and warranties to Agent and each
Lender with respect to all Credit Parties, each and all of which shall survive
the execution and delivery of this Agreement.
3.1. Corporate Existence; Compliance with Law.
Each Credit Party (a) is a corporation, limited liability
company or limited partnership duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation or
organization set forth in Disclosure Schedule 3.1; (b) is duly qualified to
conduct business and is in good standing in each other jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect; (c) has the requisite power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease and to
conduct its business as now, heretofore and proposed to be conducted; (d)
subject to specific representations regarding Environmental Laws, has all
material licenses, permits, consents or approvals from or by, and has made all
material filings with, and has given all material notices to, all Governmental
Authorities having
-23-
jurisdiction, to the extent required for the ownership, operation and conduct of
its business; (e) is in compliance with its charter and bylaws or partnership or
operating agreement, as applicable; and (f) subject to specific representations
set forth herein regarding ERISA, Environmental Laws, healthcare, tax and other
laws, is in compliance with all applicable provisions of law, except where the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
3.2. Executive Offices, Collateral Locations, FEIN.
As of the Closing Date, the current location of each Credit
Party's chief executive office and the warehouses and premises at which any
Collateral is located are set forth in Disclosure Schedule 3.2, and none of such
locations has changed within the twelve months preceding the Closing Date. In
addition, Disclosure Schedule 3.2 lists the federal employer identification
number of each Credit Party.
3.3. Corporate Power, Authorization, Enforceable
Obligations.
The execution, delivery and performance by each Credit Party
of the Loan Documents to which it is a party and the creation of all Liens
provided for therein: (a) are within such Person's power; (b) have been duly
authorized by all necessary corporate, limited liability company or limited
partnership action; (c) do not contravene any provision of such Person's
charter, bylaws or partnership or operating agreement as applicable; (d) do not
violate any law or regulation, or any order or decree of any court or
Governmental Authority; (e) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (f) do not result in the
creation or imposition of any Lien upon any of the property of such Person other
than those in favor of Agent, on behalf of itself and Lenders, pursuant to the
Loan Documents; and (g) do not require the consent or approval of any
Governmental Authority or any other Person, except those referred to in Section
2.1(c), all of which will have been duly obtained, made or complied with prior
to the Closing Date. Each of the Loan Documents shall be duly executed and
delivered by each Credit Party that is a party thereto and each such Loan
Document shall constitute a legal, valid and binding obligation of such Credit
Party enforceable against it in accordance with its terms, except as
enforceability may be limited by (i) bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3.4. Financial Statements and Projections.
Except for the Projections, all Financial Statements
concerning Borrower and its Subsidiaries that are referred to below have been
prepared in accordance with GAAP consistently applied throughout the periods
covered (except as disclosed therein and except, with respect to unaudited
Financial Statements, for the absence of footnotes and normal year-
-24-
end audit adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the results
of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial
Statements attached hereto as Disclosure Schedule 3.4(a) have been delivered on
the date hereof:
(i) The audited balance sheet at December 31,
2002 and the related statement of income and cash flows of Borrower for the
Fiscal Year then ended, certified by PriceWaterhouseCoopers LLC.
(ii) The unaudited balance sheet at August 31,
2003 and the related statement of income and cash flows of Borrower for the
eight calendar months then ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof
and attached hereto as Disclosure Schedule 3.4(b) was prepared by Borrower
giving pro forma effect to the Related Transactions, was based on the unaudited
balance sheet of Borrower dated August 31, 2003, and was prepared in accordance
with GAAP, with only such adjustments thereto as would be required in accordance
with GAAP.
(c) Projections. The Projections delivered on the date
hereof and attached hereto as Disclosure Schedule 3.4(c) have been prepared by
Borrower in light of the past operations of its business, and reflect
projections for the five year period beginning on the Closing Date on a
year-by-year basis. The Projections are based upon estimates and assumptions
stated therein, all of which Borrower believes to be reasonable and fair in
light of current conditions and current facts known to Borrower and, as of the
Closing Date, reflect Borrower's good faith and reasonable estimates of the
future financial performance of Borrower and of the other information projected
therein for the period set forth therein.
3.5. Material Adverse Effect.
Between December 31, 2002 and the Closing Date: (a) no Credit
Party has incurred any obligations, contingent or noncontingent liabilities,
liabilities for Charges, long-term leases or unusual forward or long-term
commitments that are not reflected in the Pro Forma and that, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (b)
no contract, lease or other agreement or instrument has been entered into by any
Credit Party or has become binding upon any Credit Party's assets and no law or
regulation applicable to any Credit Party has been adopted that has had or could
reasonably be expected to have a Material Adverse Effect, and (c) no Credit
Party is in default and to the best of Borrower's knowledge no third party is in
default under any material contract, lease or other agreement or instrument,
that alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Between December 31, 2002 and the Closing Date no event has
occurred, that alone or together with other events, could reasonably be expected
to have a Material Adverse Effect.
-25-
3.6. Ownership of Property; Liens.
As of the Closing Date, the real estate ("Real Estate") listed
in Disclosure Schedule 3.6 constitutes all of the real property owned, leased,
subleased, or used by any Credit Party. Each Credit Party owns good and
marketable fee simple title to all of its owned Real Estate, and valid and
marketable leasehold interests in all of its leased Real Estate, all as
described on Disclosure Schedule 3.6, and copies of all such leases or a summary
of terms thereof reasonably satisfactory to Agent have been delivered to Agent.
Disclosure Schedule 3.6 further describes any Real Estate with respect to which
any Credit Party is a lessor, sublessor or assignor as of the Closing Date. Each
Credit Party also has good and marketable title to, or valid leasehold interests
in, all of its personal property and assets. As of the Closing Date, none of the
properties and assets of any Credit Party are subject to any Liens other than
Permitted Encumbrances, and there are no facts, circumstances or conditions
known to any Credit Party that may result in any Liens (including Liens arising
under Environmental Laws) other than Permitted Encumbrances. Each Credit Party
has received all deeds, assignments, waivers, consents, nondisturbance and
attornment or similar agreements, bills of sale and other documents, and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Credit Party's right, title and interest in and to all
such Real Estate and other properties and assets. Disclosure Schedule 3.6 also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Closing Date, no
portion of any Credit Party's Real Estate has suffered any material damage by
fire or other casualty loss that has not heretofore been repaired and restored
in all material respects to its original condition or otherwise remedied. As of
the Closing Date, all material permits required to have been issued or
appropriate to enable the Real Estate to be lawfully occupied and used for
substantially all of the purposes for which it is currently occupied and used
have been lawfully issued and are in full force and effect.
3.7. Labor Matters.
As of the Closing Date (a) no strikes or other material labor
disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) hours worked by and payment made to employees of each
Credit Party comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) except as set
forth in Disclosure Schedule 3.7, no Credit Party is a party to or bound by any
collective bargaining agreement, management agreement, consulting agreement,
employment agreement, bonus, restricted stock, stock option, or stock
appreciation plan or agreement or any similar plan, agreement or arrangement
(and true and complete copies of any agreements described on Disclosure Schedule
3.7 have been delivered to Agent); (e) there is no organizing activity involving
any Credit Party pending or, to any Credit Party's knowledge, threatened by any
labor union or group of employees; (f) there are no representation proceedings
pending or, to any Credit Party's knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of any Credit
Party has made a pending demand for
-26-
recognition; and (g) except as set forth in Disclosure Schedule 3.7, there are
no material complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
3.8. Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Indebtedness.
Except as set forth in Disclosure Schedule 3.8, as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. As of the Closing Date, all of the issued and outstanding Stock of each
Credit Party is owned by each of the Stockholders and in the amounts set forth
in Disclosure Schedule 3.8. Except as set forth in Disclosure Schedule 3.8,
there are no outstanding rights to purchase, options, warrants or similar rights
or agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) in an outstanding principal or commitment amount in excess of
$200,000 is described in Section 6.3 (including Disclosure Schedule 6.3).
3.9. Government Regulation.
No Credit Party is an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940. No
Credit Party is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, or any other federal or state statute that
restricts or limits its ability to incur Indebtedness or to perform its
obligations hereunder. The making of the Loans by Lenders to Borrower, the
incurrence of the Letter of Credit Obligations on behalf of Borrower, the
application of the proceeds thereof and repayment thereof and the consummation
of the Related Transactions will not violate any provision of any such statute
or any rule, regulation or order issued by the Securities and Exchange
Commission.
3.10. Margin Regulations.
No Credit Party is engaged, nor will it engage, principally or
as one of its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" as such terms are
defined in Regulation U of the Federal Reserve Board as now and from time to
time hereafter in effect (such securities being referred to herein as "Margin
Stock"). No Credit Party owns any Margin Stock, and none of the proceeds of the
Loans or other extensions of credit under this Agreement will be used, directly
or indirectly, for the purpose of purchasing or carrying any Margin Stock, for
the purpose of reducing or retiring any Indebtedness that was originally
incurred to purchase or
-27-
carry any Margin Stock or for any other purpose that might cause any of the
Loans or other extensions of credit under this Agreement to be considered a
"purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. No Credit Party will take or permit to be taken any action that
might cause any Loan Document to violate any regulation of the Federal Reserve
Board.
3.11. Taxes.
All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party
have been filed with the appropriate Governmental Authority and all Charges have
been paid prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding Charges or other amounts
being contested in accordance with Section 5.2(b). Proper and accurate amounts
have been withheld by each Credit Party from its respective employees for all
periods in material compliance with all applicable federal, state, local and
foreign laws and such withholdings have been timely paid to the respective
Governmental Authorities. Disclosure Schedule 3.11 sets forth as of the Closing
Date those taxable years for which any Credit Party's tax returns are currently
being audited by the IRS or any other applicable Governmental Authority, and any
assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding. Except as described in Disclosure Schedule
3.11, no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties and their respective predecessors are liable for any
Charges: (a) under any agreement (including any tax sharing agreements) or (b)
to each Credit Party's knowledge, as a transferee. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
could reasonably be expected to have a Material Adverse Effect.
3.12. ERISA.
(a) Disclosure Schedule 3.12 lists, in each case as of
the Closing Date, (i) all ERISA Affiliates and (ii) all Plans and separately
identifies all Pension Plans, including Title IV Plans, Multiemployer Plans,
ESOPs and Welfare Plans, including all Retiree Welfare Plans. Copies of all such
listed Plans, together with a copy of the latest IRS/DOL 5500-series form for
each such Plan, have been delivered to Agent. Except with respect to
Multiemployer Plans, as of the Closing Date each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in material
compliance with the applicable provisions of ERISA and the IRC, including the
timely filing of all reports required under the IRC or ERISA, including the
statement required by 29 CFR Section 2520.104-23. Neither any Credit Party nor
ERISA Affiliate has failed to make any contribution or pay any amount due as
required by either
-28-
Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan.
Neither any Credit Party nor ERISA Affiliate has engaged in a "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC, in
connection with any Plan, that would subject any Credit Party to a material tax
on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of
the IRC.
(b) Except as set forth in Disclosure Schedule 3.12: (i)
no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or
event described in Section 4062(e) of ERISA with respect to any Title IV Plan
has occurred or is reasonably expected to occur; (iii) there are no pending, or
to the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan of any
Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041(b)(1) of ERISA, nor
has any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at
any time within the last five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time); (vi) except in the case of any ESOP, Stock of all Credit Parties and
their ERISA Affiliates makes up, in the aggregate, no more than ten percent
(10%) of fair market value of the assets of any Plan measured on the basis of
fair market value as of the latest valuation date of any Plan; and (vii) no
liability under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or an equivalent rating by another nationally recognized
rating agency.
3.13. No Litigation.
No action, claim, lawsuit, demand, investigation or proceeding
is now pending or, to the knowledge of any Credit Party, threatened against any
Credit Party, before any Governmental Authority or before any arbitrator or
panel of arbitrators (collectively, "Litigation"), (a) that challenges any
Credit Party's right or power to enter into or perform any of its obligations
under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) that
has a reasonable risk of being determined adversely to any Credit Party and
that, if so determined, could be reasonably be expected to have a Material
Adverse Effect. Except as set forth on Disclosure Schedule 3.13, as of the
Closing Date there is no Litigation pending or, to any Credit Party's knowledge,
threatened, that seeks damages in excess of $1,000,000 or injunctive relief
against, or alleges criminal misconduct of, any Credit Party.
3.14. Brokers.
Except as set forth on Disclosure Schedule 3.14, no broker or
finder brought about the obtaining, making or closing of the Loans or the
Related Transactions, and no
-29-
Credit Party or Affiliate thereof has any obligation to any Person in respect of
any finder's or brokerage fees in connection therewith.
3.15. Intellectual Property.
As of the Closing Date, each Credit Party owns or has rights
to use all Intellectual Property necessary to continue to conduct its business
as now or heretofore conducted by it or proposed to be conducted by it, and each
Patent, Trademark, Copyright and License is listed, together with application or
registration numbers, as applicable, in Disclosure Schedule 3.15. Each Credit
Party conducts its business and affairs without infringement of or interference
with any Intellectual Property of any other Person in any material respect.
Except as set forth in Disclosure Schedule 3.15, no Credit Party is aware of any
infringement claim by any other Person with respect to any Intellectual
Property, which infringement could reasonably be expected to have a Material
Adverse Effect.
3.16. Full Disclosure.
No information contained in this Agreement, any of the other
Loan Documents, any Projections, Financial Statements or Collateral Reports or
other written reports from time to time delivered hereunder or any written
statement furnished by or on behalf of any Credit Party to Agent or any Lender
pursuant to the terms of this Agreement contains or will contain any untrue
statement of a material fact or, when taken as a whole, omits or will omit to
state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
The Liens granted to Agent, on behalf of itself and Lenders, pursuant to the
Collateral Documents will at all times be fully perfected first priority Liens
in and to the Collateral described therein, subject, as to priority, only to
Permitted Encumbrances.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule 3.17, as
of the Closing Date: (i) to the knowledge of Borrower, the Real Estate is free
of contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and
that would not result in Environmental Liabilities that could reasonably be
expected to exceed $500,000; (ii) no Credit Party has caused or suffered to
occur any Release of Hazardous Materials on, at, in, under, above, to, from or
about any of its Real Estate; (iii) the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance that would
not result in Environmental Liabilities which could reasonably be expected to
exceed $500,000; (iv) the Credit Parties have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as proposed
to be conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities that could
reasonably be expected to exceed $500,000, and all such Environmental Permits
are valid, uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts,
-30-
circumstances or conditions, including any Releases of Hazardous Materials, that
are likely to result in any Environmental Liabilities of such Credit Party which
could reasonably be expected to exceed $500,000, and no Credit Party has
permitted any current or former tenant or occupant of the Real Estate to engage
in any such operations; (vi) there is no Litigation arising under or related to
any Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $500,000 or injunctive
relief against, or that alleges criminal misconduct by, any Credit Party; (vii)
as of the Closing Date, no notice has been received by any Credit Party
identifying it as a "potentially responsible party" or requesting information
under CERCLA or analogous state statutes, and to the knowledge of the Credit
Parties, there are no facts, circumstances or conditions that may result in any
Credit Party being identified as a "potentially responsible party" under CERCLA
or analogous state statutes; and (viii) as of the Closing Date, the Credit
Parties have provided to Agent copies of all existing environmental reports,
reviews and audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or any Credit Party's affairs, and (ii) does not have the capacity
through the provisions of the Loan Documents or otherwise to influence any
Credit Party's conduct with respect to the ownership, operation or management of
any of its Real Estate or compliance with Environmental Laws or Environmental
Permits.
3.18. Insurance.
Disclosure Schedule 3.18 lists all insurance policies of any
nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the terms of each such policy.
3.19. Deposit and Disbursement Accounts.
Disclosure Schedule 3.19 lists all banks and other financial
institutions at which any Credit Party maintains deposit or other accounts as of
the Closing Date, including any Disbursement Accounts, and such Schedule
correctly identifies the name, address and telephone number of each depository,
the name in which the account is held, a description of the purpose of the
account, and the complete account number therefor.
3.20. Government Contracts.
Except as set forth in Disclosure Schedule 3.20, as of the
Closing Date, no Credit Party is a party to any contract or agreement with any
Governmental Authority and no Credit Party's Accounts are subject to the Federal
Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local
law.
-31-
3.21. Customer and Trade Relations.
Except as set forth in Disclosure Schedule 3.21, as of the
Closing Date, there exists no actual or, to the knowledge of any Credit Party,
threatened termination or cancellation of, or any material adverse modification
or change in the business relationship of any Credit Party with any customer or
group of customers whose purchases during the preceding twelve months caused
them to be ranked among the ten largest customers of such Credit Party; or the
business relationship of any Credit Party with any supplier material to its
operations.
3.22. Agreements and Other Documents.
As of the Closing Date, each Credit Party has provided to
Agent or its counsel, on behalf of Lenders, accurate and complete copies of all
of the following agreements or documents to which it is subject and each of
which is listed in Disclosure Schedule 3.22: equipment supply and maintenance
contracts, giving rise to rental and/or service income in excess of $1,000,000
per annum; supply agreements and purchase agreements not terminable by such
Credit Party within 60 days following written notice issued by such Credit Party
and involving transactions in excess of $1,000,000 per annum; leases of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $1,000,000 per annum; licenses and
permits held by the Credit Parties, the absence of which could be reasonably
likely to have a Material Adverse Effect; instruments and documents evidencing
any Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto; and instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Credit Party.
3.23. Solvency.
Both before and after giving effect to (a) the Loans and
Letter of Credit Obligations to be made or incurred on the Closing Date or such
other date as Loans and Letter of Credit Obligations requested hereunder are
made or incurred, (b) the disbursement of the proceeds of such Loans pursuant to
the instructions of Borrower; (c) the Recapitalization, the Refinancing and the
consummation of the other Related Transactions to be consummated on the Closing
Date; and (d) the payment and accrual of all transaction costs in connection
with the foregoing, each Credit Party is and will be Solvent.
3.24. Recapitalization Agreements.
As of the Closing Date, Borrower has delivered to Agent
complete and correct copies of the Recapitalization Agreements (including all
schedules, exhibits, amendments, supplements, modifications, assignments and all
other documents delivered pursuant thereto or in connection therewith). No
Credit Party and no other Person party thereto is in default in the performance
or compliance with any provisions thereof. Each of the Recapitalization
Agreements complies with, and, except for the completion of the repurchase by
Borrower of the Prior Senior Notes and the redemption by Borrower of certain
equity interests of
-32-
Borrower, in each in accordance with the applicable Recapitalization Agreements,
the Recapitalization has been consummated in accordance with, all applicable
laws. Each of the Recapitalization Agreements is in full force and effect as of
the Closing Date and has not been terminated, rescinded or withdrawn. All
requisite approvals by Governmental Authorities having jurisdiction over any
Credit Party and other Persons referenced therein with respect to the
transactions contemplated by the Recapitalization Agreements have been obtained,
and no such approvals impose any conditions to the consummation of the
transactions contemplated by the Recapitalization Agreements or to the conduct
by any Credit Party of its business thereafter. To the best of each Credit
Party's knowledge, none of the representations or warranties in any of the
Recapitalization Agreements made by any Person not a Credit Party contains any
untrue statement of a material fact or, when taken as a whole, omits any fact
necessary to make the statements therein not misleading. Each of the
representations and warranties given by each applicable Credit Party in each of
the Recapitalization Agreements is true and correct in all material respects in
light of the circumstances under which they were made. Notwithstanding anything
contained in any of the Recapitalization Agreements to the contrary, such
representations and warranties of the Credit Parties are incorporated into this
Agreement by this Section 3.24 and shall, solely for purposes of this Agreement
and the benefit of Agent and Lenders, survive the consummation of the
Recapitalization.
3.25. Senior Notes.
As of the Closing Date, Borrower has delivered to Agent a
complete and correct copy of (i) the Senior Note Indenture (including all
schedules, exhibits, amendments, supplements, modifications, assignments and all
other documents delivered pursuant thereto or in connection therewith) and (ii)
the Prior Senior Note Indenture. Borrower has the corporate power and authority
to (x) incur the Indebtedness evidenced by the Senior Notes, the Prior Senior
Notes, the Senior Note Indenture and the Prior Senior Note Indenture and (y)
enter into the Closing Date Prior Senior Note Indenture Amendment.
3.26. HIPAA Compliance.
To the extent that and for so long as (i) Borrower is a
"covered entity" as defined in 45 C.F.R. Section 160.103, (ii) Borrower and/or
its business and operations are subject to or covered by the HIPAA
Administrative Requirements codified at 45 C.F.R. Parts 160 & 162 (the
"Transactions Rule") and/or the HIPAA Security and Privacy Requirements codified
at 45 C.F.R. Parts 160 & 164 (the "Privacy and Security Rules"), and/or (iii)
Borrower sponsors any "group health plans" as defined in 45 C.F.R. Section
160.103, Borrower has: (x) completed, or will complete on or before any
applicable compliance date, thorough and detailed surveys, audits, inventories,
reviews, analyses and/or assessments, including risk assessments, (collectively
"Assessments") of all areas of its business and operations subject to HIPAA
and/or that could be adversely affected by the failure of Borrower to be HIPAA
Compliant (as defined below) to the extent these Assessments are appropriate or
required for Borrower to be HIPAA Compliant; (y) developed, or will develop on
or before any applicable compliance date, a detailed plan and time line for
becoming HIPAA Compliant (a
-33-
"HIPAA Compliance Plan"); and (z) implemented, or will implement on or before
any applicable compliance date, those provisions of its HIPAA Compliance Plan
necessary to ensure that Borrower is HIPAA Compliant. For purposes of this
Agreement, "HIPAA Compliant" shall mean that Borrower (1) is, or on or before
any applicable compliance date will be, in full compliance with any and all of
the applicable requirements of HIPAA, including all requirements of the
Transactions Rule and the Privacy and Security Rules and (2) is not subject to,
and could not reasonably be expected to become subject to, any civil or criminal
penalty or any investigation, claim or process that could reasonably be expected
to have a Material Adverse Effect.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices.
(a) Each Credit Party executing this Agreement hereby
agrees that from and after the Closing Date and until the Termination Date, it
shall deliver to Agent or to Agent and Lenders, as required, the Financial
Statements, notices, Projections and other information at the times, to the
Persons and in the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby
agrees that, from and after the Closing Date and until the Termination Date, it
shall deliver to Agent, as required, the various Collateral Reports (including
Borrowing Base Certificates in the form of Exhibit 4.1(b)) at the times, to the
Persons and in the manner set forth in Annex F.
4.2. Communication with Accountants.
Each Credit Party executing this Agreement authorizes (a)
Agent, at Agent's expense so long as no Event of Default has occurred and is
continuing, and (b) so long as an Event of Default has occurred and is
continuing, each Lender, to communicate directly with its independent certified
public accountants, including PriceWaterhouseCoopers LLC, and authorizes and, at
Agent's request, shall instruct those accountants and advisors to disclose and
make available to Agent and each Lender any and all Financial Statements and
other supporting financial documents, schedules and information relating to any
Credit Party (including copies of any issued management letters) with respect to
the business, financial condition and other affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1. Maintenance of Existence and Conduct of Business.
Each Credit Party shall: do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and its rights and franchises; continue to conduct its business substantially as
now conducted or as otherwise permitted hereunder;
-34-
at all times maintain, preserve and protect all of its assets and properties
used or useful in the conduct of its business, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and transact business
only in such corporate and trade names as are set forth in Disclosure Schedule
5.1.
5.2. Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall
pay and discharge or cause to be paid and discharged promptly all Charges
payable by it, including (i) Charges imposed upon it, its income and profits, or
any of its property (real, personal or mixed) and all Charges with respect to
tax, social security and unemployment withholding with respect to its employees,
(ii) lawful claims for labor, materials, supplies and services or otherwise, and
(iii) all storage or rental charges payable to warehousemen or bailees, in each
case, before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges, Taxes or claims
described in Section 5.2(a); provided, that (i) adequate reserves with respect
to such contest are maintained on the books of such Credit Party, in accordance
with GAAP; (ii) no Lien shall be imposed to secure payment of such Charges
(other than payments to warehousemen and/or bailees) that is superior to any of
the Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met; and (v) Agent has not advised Borrower in writing that Agent believes that
nonpayment or nondischarge thereof could reasonably be expected to have or
result in a Material Adverse Effect.
5.3. Books and Records.
Each Credit Party shall keep adequate books and records with
respect to its business activities in which proper entries, reflecting all
financial transactions, are made in accordance with GAAP and on a basis
consistent with the Financial Statements attached as Disclosure Schedule 3.4(a).
5.4. Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and
expense, maintain the policies of insurance described on Disclosure Schedule
3.18 as in effect on the date hereof or
-35-
otherwise in form and amounts and with deductibles as is customary for similarly
situated businesses and with insurers reasonably acceptable to Agent. Agent and
the Lenders confirm that the form, amounts and insurers described on Disclosure
Schedule 3.18 are acceptable as of the Closing Date, and shall continue to be
acceptable to Agent until not less than 30 days' prior written notice by Agent
to Borrower to the contrary. Such policies of insurance (or the loss payable and
additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide 30 days prior written notice to
Agent in the event of any non-renewal, cancellation or amendment of any such
insurance policy. If any Credit Party at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required above, or to pay
all premiums relating thereto, Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Agent shall not be deemed to have waived any Default or
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto, shall
be payable on demand by Borrower to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Agent reserves the right at any time (but not to be
exercised more than once per Fiscal Year) upon (i) any material change in any
Credit Party's risk profile (including any change in the product mix maintained
by any Credit Party or any laws affecting the potential liability of such Credit
Party), as determined by Agent in its commercially reasonable judgment, and (ii)
not less than 30 days' prior written notice to Borrower, to require additional
forms and limits of insurance to, in Agent's commercially reasonable judgment,
adequately protect both Agent's and Lender's interests in all or any portion of
the Collateral and to ensure that each Credit Party is protected by insurance in
amounts and with coverage customary for its industry. If reasonably requested by
Agent, each Credit Party shall deliver to Agent from time to time a report of a
reputable insurance broker, reasonably satisfactory to Agent, with respect to
its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as lender loss payee or mortgagee (as the case may be), and (ii) all
general liability and other liability policies naming Agent, on behalf of itself
and Lenders, as additional insured. Each Credit Party irrevocably makes,
constitutes and appoints Agent (and all officers, employees or agents designated
by Agent), so long as any Event of Default has occurred and is continuing or the
anticipated insurance proceeds exceed $1,000,000, as such Credit Party's true
and lawful agent and attorney-in-fact for the purpose of making, settling and
adjusting claims under such "All Risk" policies of insurance, endorsing the name
of such Credit Party on any check or other item of payment for the proceeds of
such "All Risk" policies of insurance and for making all determinations and
decisions with respect to such "All Risk" policies of insurance. Agent shall
have no duty to exercise any rights or powers granted to it pursuant to the
foregoing power-of-attorney. Borrower shall promptly notify Agent of any loss,
damage, or destruction to the Collateral in
-36-
the amount of $500,000 or more, whether or not covered by insurance. After
deducting from such proceeds the expenses, if any, incurred by Agent in the
collection or handling thereof, Agent may, at its option, apply such proceeds to
the reduction of the Obligations in accordance with Section 1.3(c); or permit or
require the applicable Credit Party to use such money, or any part thereof, to
replace, repair, restore or rebuild the Collateral in a diligent and expeditious
manner with materials and workmanship of substantially the same quality as
existed before the loss, damage or destruction. Notwithstanding the foregoing,
if the casualty giving rise to such insurance proceeds could not reasonably be
expected to have a Material Adverse Effect and such insurance proceeds do not
exceed $1,000,000 in the aggregate, Agent shall permit the applicable Credit
Party to replace, restore, repair or rebuild the property; provided, that if
such Credit Party shall not have completed or entered into binding agreements to
complete such replacement, restoration, repair or rebuilding within 180 days of
such casualty, Agent may apply such insurance proceeds to the Obligations in
accordance with Section 1.3(c). All insurance proceeds that are to be made
available to Borrower to replace, repair, restore or rebuild the Collateral
shall be applied by Agent to reduce the outstanding principal balance of the
Revolving Loan (which application shall not result in a permanent reduction of
the Revolving Loan Commitment) and upon such application, Agent may establish a
Reserve against the Borrowing Base in an amount equal to the amount of such
proceeds so applied. Thereafter, such funds shall be made available to Borrower
to provide funds to replace, repair, restore or rebuild the Collateral as
follows: (i) Borrower shall request a Revolving Credit Advance be made to
Borrower in the amount requested to be released; (ii) so long as the conditions
set forth in Section 2.2 have been met, Lenders shall make such Revolving Credit
Advance; and (iii) in the case of insurance proceeds applied against the
Revolving Loan, the Reserve established with respect to such insurance proceeds
shall be reduced by the amount of such Revolving Credit Advance. To the extent
not used to replace, repair, restore or rebuild the Collateral, such insurance
proceeds shall be applied in accordance with Section 1.3(c).
5.5. Compliance with Laws.
Each Credit Party shall comply with all federal, state, local
and foreign laws and regulations applicable to it, including those relating to
healthcare matters, ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6. Supplemental Disclosure.
From time to time as may be reasonably requested by Agent
(which request will not be made more frequently than once each year absent the
occurrence and continuance of a Default or an Event of Default), the Credit
Parties shall supplement each Disclosure Schedule hereto, or any representation
herein or in any other Loan Document, with respect to any matter hereafter
arising that, if existing or occurring at the date of this Agreement, would have
been required to be set forth or described in such Disclosure Schedule or as an
exception to such representation or that is necessary to correct any information
in such
-37-
Disclosure Schedule or representation which has been rendered inaccurate
thereby (and, in the case of any supplements to any Disclosure Schedule, such
Disclosure Schedule shall be appropriately marked to show the changes made
therein); provided, that (a) no such supplement to any such Disclosure Schedule
or representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
the Closing Date, have been consented to in writing by Agent and Requisite
Lenders or are expressly stated to be made as of an earlier date.
5.7. Intellectual Property.
Each Credit Party will conduct its business and affairs
without infringement of or interference with any Intellectual Property of any
other Person in any material respect.
5.8. Environmental Matters.
Each Credit Party shall and shall cause each Person within its
control to: (a) conduct its operations and keep and maintain its Real Estate in
compliance with all Environmental Laws and Environmental Permits other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions that are appropriate or necessary to maintain the value and
marketability of the Real Estate or to otherwise comply with Environmental Laws
and Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify Agent
promptly after such Credit Party becomes aware of any violation of Environmental
Laws or Environmental Permits or any Release on, at, in, under, above, to, from
or about any Real Estate that is reasonably likely to result in Environmental
Liabilities in excess of $500,000; and (d) promptly forward to Agent a copy of
any order, notice, request for information or any communication or report
received by such Credit Party in connection with any such violation or Release
or any other matter relating to any Environmental Laws or Environmental Permits
that could reasonably be expected to result in Environmental Liabilities in
excess of $500,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
connection with any such violation, Release or other matter.
5.9. Landlords' Agreements, Bailee Letters and Real Estate
Purchases.
Each Credit Party shall use commercially reasonable efforts
for a period ending 60 days following the Closing Date (and, in addition
thereto, in connection with the execution of any new, replacement or extension
lease agreement or bailment arrangement) to obtain a landlord's agreement or
bailee letter, as applicable, from the lessor of each leased property or bailee
with respect to any warehouse, processor or converter facility, which
-38-
agreement or letter shall (i) contain a waiver or subordination of all Liens or
claims that the landlord or bailee may assert against the Collateral at that
location, (ii) include, as an exhibit thereto, a copy of the lease or bailment
agreement applicable thereto, and (iii) otherwise be reasonably satisfactory in
form and substance to Agent. If, at any time, Agent has not received landlord
agreements and bailee letters, in form and content described above, covering not
less than fifty percent (50%) of the Credit Parties' Rental Equipment, Wholesale
Disposables and Equipment Disposables located at all leased facilities and held
by all bailees, then Agent shall have the right to establish such Reserves as
may be established by Agent in its reasonable credit judgment. During the
continuance of an Event of Default, no additional real property or warehouse
space shall be leased by any Credit Party and no Inventory shall be shipped to a
processor or converter under arrangements established after the occurrence and
during the continuance of such Event of Default without the prior written
consent of Agent (which consent, in Agent's discretion, may be conditioned upon
the exclusion from the Borrowing Base of Collateral at that location or the
establishment of Reserves acceptable to Agent) or, unless and until a reasonably
satisfactory landlord agreement or bailee letter, as appropriate, shall first
have been obtained with respect to such location. Each Credit Party shall timely
and fully pay and perform its obligations under all leases and other agreements
with respect to each leased location or public warehouse where any Collateral is
or may be located, except where such Credit Party contests the amounts in good
faith, subject to the terms of the proviso set forth in Section 5.2(b). To the
extent otherwise permitted hereunder, if any Credit Party proposes to acquire a
fee ownership interest in Real Estate after the Closing Date, it shall first
provide to Agent a mortgage or deed of trust granting Agent a first priority
Lien on such Real Estate, together with environmental audits, mortgage title
insurance commitment, real property survey, local counsel opinion(s), and, if
required by Agent, supplemental casualty insurance and flood insurance, and such
other documents, instruments or agreements reasonably requested by Agent, in
each case, in form and substance reasonably satisfactory to Agent.
5.10. Further Assurances.
Each Credit Party executing this Agreement agrees that it
shall and shall cause each other Credit Party to, at such Credit Party's expense
and upon request of Agent, duly execute and deliver, or cause to be duly
executed and delivered, to Agent such further instruments and do and cause to be
done such further acts as may be necessary or proper in the reasonable opinion
of Agent to carry out more effectively the provisions and purposes of this
Agreement or any other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
until the Termination Date:
-39-
6.1. Mergers, Subsidiaries, Etc.
Except as otherwise permitted under Sections 6.2 or 6.8, no
Credit Party shall directly or indirectly, by operation of law or otherwise, (a)
form or acquire any Subsidiary, or (b) merge with, consolidate with, acquire all
or substantially all of the assets or Stock of, or otherwise combine with or
acquire, any Person. Notwithstanding the foregoing:
(i) Borrower may acquire all or substantially
all of the assets or all of the Stock of any Person (the "Target") (in each
case, a "Permitted Acquisition") with the consent of Requisite Lenders or
without consent of Agent or Requisite Lenders, but subject to the satisfaction
of each of the following conditions:
(A) Agent shall receive reasonable
(and, in any event, not less than 14 days') prior written
notice of the expected consummation date of such proposed
Permitted Acquisition, which notice shall include a reasonably
detailed description of such proposed Permitted Acquisition;
(B) such Permitted Acquisition shall
only involve assets located in the United States and
comprising a business, or those assets of a business, of the
type engaged in by Borrower as of the Closing Date and other
businesses that, in the good faith judgment of the board of
directors of Borrower, are reasonably related, ancillary or
complimentary thereto, or reasonable extensions thereof,
including without limitation the leasing of medical equipment,
and which businesses would not subject Agent or any Lender to
regulatory or third party approvals in connection with the
exercise of its rights and remedies under this Agreement or
any other Loan Documents other than approvals applicable to
the exercise of such rights and remedies with respect to
Borrower prior to such Permitted Acquisition;
(C) such Permitted Acquisition shall be
consensual and shall have been approved by the Target's board
of directors (or comparable governing body);
(D) no additional Indebtedness,
Guaranteed Indebtedness, contingent obligations or other
liabilities shall be incurred, assumed or shall otherwise be
reflected on a consolidated balance sheet of Borrower and
Target after giving effect to such Permitted Acquisition,
except (x) Indebtedness otherwise permitted under Section 6.3,
(y) Guaranteed Indebtedness otherwise permitted under Section
6.6 and (z) ordinary course trade payables and accrued
expenses of the Target;
(E) the sum of all amounts payable in
connection with any single Permitted Acquisition (including
all transaction costs and all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection
therewith or otherwise reflected in a consolidated balance
sheet of Borrower and Target) shall not exceed $5,000,000, and
the sum of such
-40-
amounts for all Permitted Acquisitions in any Fiscal Year
shall not exceed $15,000,000;
(F) the business and assets acquired in
such Permitted Acquisition shall be free and clear of all
Liens (other than Permitted Encumbrances);
(G) Concurrently with delivery of the
notice referred to in clause (A) above, Borrower shall have
delivered to Agent, in form and substance reasonably
satisfactory to Agent:
(x) a pro forma consolidated balance
sheet, income statement and cash flow statement of Borrower and its
Subsidiaries utilizing the Pro Forma Basis (the "Acquisition Pro
Forma"), based on recent financial statements, which shall be complete
and shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of Borrower
and its Subsidiaries in accordance with GAAP consistently applied, but
taking into account such Permitted Acquisition and the funding of all
Loans in connection therewith, and such Acquisition Pro Forma shall
reflect that (i) Borrowing Availability after giving effect to such
Permitted Acquisition shall not be less than $10,000,000, and (ii) on a
pro forma basis, no Event of Default has occurred and is continuing or
would result after giving effect to such Permitted Acquisition and the
Credit Parties would have been in compliance with the Financial
Covenants for the four quarter period reflected in the Compliance
Certificate most recently delivered to Agent pursuant to Annex E prior
to the consummation of such Permitted Acquisition (after giving effect
to such Permitted Acquisition and all Loans funded in connection
therewith as if made on the first day of such period); and
(y) a certificate of the chief
financial officer of Borrower to the effect that: (i) Borrower will be
Solvent upon the consummation of the Permitted Acquisition; and (ii)
the Acquisition Pro Forma fairly presents the financial condition of
Borrower (on a consolidated basis) as of the date thereof after giving
effect to the Permitted Acquisition;
(H) on or prior to the date of
consummation of such Permitted Acquisition, Agent shall have
received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement and related
agreements and instruments, and all opinions, certificates,
lien search results and other documents reasonably requested
by Agent; and
(I) at the time of such Permitted
Acquisition and after giving effect thereto, no Default or
Event of Default has occurred and is continuing;
(ii) any Subsidiary of Borrower may be
merged or consolidated with or into Borrower (provided that Borrower shall be
the continuing or surviving corporation) or
-41-
with or into any one or more wholly-owned Subsidiaries of Borrower (provided
that the wholly-owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation); and
(iii) Borrower or any wholly-owned Subsidiary may
form one or more wholly-owned Subsidiaries, either to facilitate the
consummation of Permitted Acquisitions or for other lawful business purposes.
Without limitation of the other provisions of this Section 6.1, no Credit Party
shall acquire or form any Subsidiary unless, (i) such Subsidiary is organized
under the laws of a State of the United States and (ii) within 10 days of such
formation or acquisition, such Subsidiary shall execute a guarantee and a
security agreement in favor of the Agent for the benefit of the Lenders, and the
Borrower and/or any Subsidiary which is a holder of any capital Stock of such
Subsidiary shall execute such pledge agreements, each in form and substance
reasonably satisfactory to the Agent, and shall take such other action as shall
be necessary or advisable (including, without limitation, authorizing the filing
of financing statements on form UCC-1) in order to perfect the Liens granted by
such Subsidiary in favor of the Agent for the benefit of the Lenders and to
effect and perfect the pledge of all of the capital Stock of such Subsidiary in
favor of the Agent for the benefit of the Lenders. Until such time that the
provisions of this paragraph shall have been complied with respect to any
Subsidiary, (i) none of the Accounts, Inventory and Equipment of such Subsidiary
shall be deemed to be Eligible Accounts, Eligible Rental Equipment, Eligible
Wholesale Disposables or Eligible Equipment Disposables, as applicable and (ii)
the financial performance of such Subsidiary shall be disregarded for purposes
of calculating EBITDA over any applicable measurement period.
6.2. Investments; Loans and Advances.
Except as otherwise expressly permitted by this Section 6, no
Credit Party shall make or permit to exist any investment in, or make, accrue or
permit to exist loans or advances of, or commitments to advance money to, any
Person, through the direct or indirect lending of money, holding of securities
or otherwise, except:
(i) extensions of trade credit in the ordinary
course of business;
(ii) investments in Cash Equivalent Investments;
(iii) loans and advances to officers and employees
of Borrower or its Subsidiaries for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate amount for Borrower
and its Subsidiaries not to exceed $1,000,000 at any one time outstanding;
(iv) investments by the Borrower in any
Subsidiary, and investments by any Subsidiary in another Subsidiary;
-42-
(v) the investments held by Borrower on the
Closing Date and described on Disclosure Schedule 6.2, provided that any
additional investments made with respect thereto shall be permitted only if
independently justified under the other provisions of this Section 6.2;
(vi) intercompany Indebtedness permitted by
Section 6.3;
(vii) Borrower and its Subsidiaries may acquire
and own investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of and other disputes with, customers and suppliers
arising in the ordinary course of business;
(viii) Borrower may hold any promissory notes
acquired in connection with the dispositions of assets permitted under Section
6.8(ii) or (iii);
(ix) Permitted Acquisitions; and
(x) additional Investments of Borrower and its
Subsidiaries not exceeding $1,000,000 at any time outstanding.
6.3. Indebtedness.
(a) No Credit Party shall create, incur, assume or permit
to exist any Indebtedness, except (without duplication):
(i) Indebtedness secured by purchase money
security interests and Capital Leases permitted in Section 6.7(c);
(ii) the Loans and the other Obligations;
(iii) Indebtedness outstanding in an aggregate
amount not to exceed $275,000,000 on the Closing Date and in an aggregate amount
not to exceed $300,000,000 at any time thereafter, in each case issued pursuant
to the Senior Note Indenture;
(iv) Indebtedness evidenced by the Prior Senior
Note Indenture and the Prior Senior Notes; provided, that all such Indebtedness,
together with all accrued and unpaid interest thereon and all fees and expenses
with respect thereto, shall be prepaid and paid in full no later than December
31, 2003, and Borrower shall deliver to Agent, promptly following such
prepayment and payment, evidence of the defeasance of the Prior Senior Notes and
the Prior Senior Note Indenture;
(v) unfunded pension fund and other employee
benefit plan obligations and liabilities to the extent they are permitted to
remain unfunded under applicable law;
(vi) existing Indebtedness described in
Disclosure Schedule 6.3 and extensions and refinancings thereof or amendments or
modifications thereto that do not have
-43-
the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and that are otherwise on
terms and conditions no less favorable to any Credit Party, Agent or any Lender
than the terms of the Indebtedness being extended, refinanced, amended or
modified;
(vii) Indebtedness of Borrower to any Subsidiary
that is a Guarantor, or of any such Subsidiary to Borrower or any other
Guarantor;
(viii) Indebtedness to be repaid in connection with
the Recapitalization or the Refinancing which by the terms of the Related
Transactions Documents is not payable or required to be paid as of the Closing
Date; provided, that (i) all Prior Lender Obligations shall be paid in full as
of the Closing Date and (ii) all other Indebtedness described in this clause
(ix) shall be repaid in accordance with the terms of the applicable Related
Transactions Documents;
(ix) Indebtedness under Interest Rate Agreements
relating to Indebtedness otherwise permitted under this Section 6.3 entered into
for bona fide and non-speculative hedging purposes;
(x) Indebtedness owing to the sellers of a
Target (or to the Target, in the case of asset sales) arising in connection with
a Permitted Acquisition in an aggregate principal amount with respect to all
such Indebtedness not to exceed $10,000,000 at any time outstanding; provided,
that the terms of such Indebtedness shall provide for (w) no cash payment of
principal or interest following the occurrence and during the continuance of an
Event of Default, (x) not less than 180 days' prior written notice to Agent by
the holder or holders of any such Indebtedness prior to the exercise of any
enforcement remedies thereunder, including, without limitation, the acceleration
of all or any portion of such Indebtedness, (y) no scheduled or other mandatory
principal payments or prepayments prior to the date six months following the
date set forth in clause (a) of the defined term "Commitment Termination Date"
and (z) provide for no voluntary principal payment or prepayment, absent the
written consent of Agent and Requisite Lenders;
(xi) Subordinated Debt of Borrower to ▇.▇. Childs
or Halifax evidenced by Qualified Subordinated Notes; and
(xii) additional Indebtedness of Borrower and its
Subsidiaries not exceeding $4,000,000 in aggregate principal amount at any time
outstanding.
(b) No Credit Party shall, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal of, premium, if
any, interest or other amount payable in respect of any Indebtedness described
in any of Sections 6.3(a)(iii) and Section 6.3(a)(x).
(c) Notwithstanding anything to the contrary in the
preceding clauses (a) and (b), no Credit Party shall create, incur, assume or
permit to exist any Indebtedness (other than the Obligations) under any "Credit
Facilities", as such term is defined in the Senior Note Indenture.
-44-
6.4. Affiliate Transactions.
No Credit Party shall enter into any transaction or series of
transactions after the Closing Date whether or not in the ordinary course of
business, with any Affiliate of any Credit Party other than on terms and
conditions that are no less favorable to such Credit Party as would be
obtainable by such Credit Party at the time in a comparable arm's length
transaction with a Person other than an Affiliate of any Credit Party; provided
that the foregoing restrictions shall not apply to (i) advances to officers or
employees of Borrower and its Subsidiaries to the extent otherwise expressly
permitted pursuant to Section 6.2, (ii) Restricted Payments to the extent
otherwise expressly permitted pursuant to Section 6.12, (iii) transactions
between Borrower and its Subsidiaries to the extent otherwise expressly
permitted under this Agreement, (iv) employment arrangements (including
arrangements made with respect to bonuses) entered into in the ordinary course
of business with members of the board of directors and officers of Borrower and
of its Subsidiaries, (v) the Stockholder's Agreement and (vi) the payment of
management fees to the extent otherwise expressly permitted pursuant to Section
6.14.
6.5. Capital Structure and Business.
No Credit Party shall (a) make any changes in any of its
business objectives, purposes or operations that could in any way adversely
affect the repayment of the Loans or any of the other Obligations or could
reasonably be expected to have or result in a Material Adverse Effect, (b) make
any change in its capital structure as described in Disclosure Schedule 3.8,
including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock; provided, that Borrower may issue or sell shares of its
common Stock as consideration in connection with Permitted Acquisitions (so long
as no Change of Control occurs after giving effect thereto), and may further
issue or sell shares of its common Stock for cash so long as (i) the proceeds
thereof are applied in prepayment of the Obligations as required by Section
1.3(b)(iii), and (ii) no Change of Control occurs after giving effect thereto,
or (c) amend its charter or bylaws in a manner that would adversely affect Agent
or Lenders or such Credit Party's duty or ability to repay the Obligations. No
Credit Party shall engage in any business other than the businesses currently
engaged in by it and other businesses that, in the good faith judgment of the
board of directors of Borrower, are reasonably related, ancillary or
complimentary thereto, or reasonable extensions thereof, including, without
limitation, the leasing of medical equipment.
6.6. Guaranteed Indebtedness.
No Credit Party shall create, incur, assume or permit to exist
any Guaranteed Indebtedness except:
(i) by endorsement of instruments or items of
payment for deposit to the general account of any Credit Party;
-45-
(ii) for Guaranteed Indebtedness incurred for the
benefit of any other Credit Party if the primary obligation is expressly
permitted by this Agreement;
(iii) Guaranteed Indebtedness in existence on the
Closing Date and listed on Disclosure Schedule 6.6 and any subsequent
affirmation, extension or renewal thereof which does not include an increase in
the principal amount guaranteed thereunder, or an increase in the fees or the
rate of interest guaranteed with respect thereto;
(iv) any guaranty or other similar agreement in
favor of Agent, for itself and the ratable benefit of Lenders, in connection
with the transactions contemplated by the Agreement and the other Loan
Documents; and
(v) any unsecured guaranty or other similar
agreement in favor of the holders of the Senior Notes, to the extent such
guaranty or other agreement is required pursuant to the terms of the Senior Note
Indenture.
6.7. Liens.
No Credit Party shall create, incur, assume or permit to exist
any Lien on or with respect to its Accounts or any of its other properties or
assets (whether now owned or hereafter acquired) except for (a) Permitted
Encumbrances; (b) Liens in existence on the date hereof and summarized on
Disclosure Schedule 6.7 securing the Indebtedness described on Disclosure
Schedule 6.3 and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided, that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; (c) Liens created prior to or following the date
hereof by conditional sale or other title retention agreements (including
Capital Leases) or in connection with purchase money Indebtedness with respect
to Equipment (exclusive of Equipment held for rent or sale) and Fixtures
acquired by any Credit Party in the ordinary course of business, involving the
incurrence of an aggregate amount of purchase money Indebtedness and Capital
Lease Obligations of not more than $10,000,000 outstanding at any one time for
all such Liens (provided that such Liens attach only to the assets subject to
such purchase money debt and such Indebtedness is incurred within 20 days
following such purchase and does not exceed one hundred percent (100%) of the
purchase price of the subject assets) and (d) other Liens securing Indebtedness
not in excess of $500,000 at any time outstanding. In addition, no Credit Party
shall become a party to any agreement, note, indenture or instrument, or take
any other action, that would prohibit the creation of a Lien on any of its
properties or other assets in favor of Agent, on behalf of itself and Lenders,
as additional collateral for the Obligations, except operating leases, Capital
Leases or Licenses which prohibit Liens upon the assets that are subject
thereto.
6.8. Sale of Stock and Assets.
No Credit Party shall convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any
-46-
Subsidiary, issue or sell any shares of such Subsidiary's capital Stock to any
Person other than Borrower or any wholly-owned Subsidiary, except:
(i) The sale, lease or other disposition of
Inventory, Equipment and leases in the ordinary course of business (consistent
with past practice, in the case of sales of leases), other than obsolete or worn
out property;
(ii) the sale or other disposition of obsolete or
worn out property in the ordinary course of business for proceeds consisting
solely of not less than (A) 75% cash and (B) Indebtedness evidenced by
promissory notes;
(iii) other sales or dispositions of assets not
described in the preceding clauses (i) and (ii) for proceeds consisting solely
of not less than (A) 75% cash and (B) Indebtedness evidenced by promissory
notes; provided, that the aggregate book value of all assets so sold in any
Fiscal Year shall not exceed $5,000,000;
(iv) the lease by Borrower and its Subsidiaries
(as lessee) and license of real or personal property in the ordinary course of
business (so long as such lease is not a Capital Lease not otherwise permitted
by Section 6.3);
(v) the investments, acquisitions and transfers
or dispositions of properties permitted pursuant to Section 6.2;
(vi) the sale or discount without recourse of
accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(vii) as permitted by either of Sections 6.1 and
6.12;
(viii) the sales, transfer, conveyance or other
disposition of Real Estate by a Credit Party;
(ix) the sale or issuance of any Subsidiary's
capital Stock to the Borrower or any wholly-owned Subsidiary; and
(x) dispositions of property to Borrower or to
any wholly-owned Subsidiary.
To the extent Requisite Lenders (or, if required pursuant to Section 11.2, all
of the Lenders) waive the provisions of this Section 6.8 with respect to the
sale or other disposition of any Collateral, or any Collateral is sold or
otherwise disposed of as permitted by this Section 6.8, such Collateral (unless
sold to another Credit Party) shall be sold or otherwise disposed of free and
clear of the Liens created by the Security Agreement, and the Agent shall be
authorized to take any actions deemed appropriate in order to effect the
foregoing. Nothing set forth in this Section 6.8 shall be construed to modify in
any respect Borrower's prepayment obligations set forth in Section 1.3.
-47-
6.9. ERISA.
No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10. Financial Covenants.
Borrower shall not breach or fail to comply with any of the
Financial Covenants.
6.11. Hazardous Materials.
No Credit Party shall cause or permit a Release of any
Hazardous Material on, at, in, under, above, to, from or about any of the Real
Estate where such Release would (a) violate in any material respect, or form the
basis for any Environmental Liabilities under, any Environmental Laws or
Environmental Permits or (b) otherwise materially adversely impact the value or
marketability of any of the Real Estate or any of the Collateral.
6.12. Sale-Leasebacks.
No Credit Party shall engage in any sale-leaseback, synthetic
lease or similar transaction involving any of its assets; provided, however,
that the Credit Parties may consummate sale-leaseback, synthetic lease and
similar transactions so long as (i) each such sale-leaseback, synthetic lease
and each such similar transaction is an arms-length transaction, and (ii) the
aggregate consideration received by the Credit Parties in connection with the
disposition of Eligible Rental Equipment, Eligible Wholesale Disposables and
Eligible Equipment Disposables pursuant to this Section 6.12 does not exceed
$3,000,000.
6.13. Cancellation of Indebtedness.
No Credit Party shall cancel any claim or debt owing to it,
except for reasonable consideration negotiated on an arm's length basis and in
the ordinary course of its business consistent with past practices.
6.14. Restricted Payments.
No Credit Party shall make any Restricted Payment, except:
(i) dividends and distributions by Subsidiaries
of Borrower paid to Borrower;
(ii) employee loans and advances permitted under
Section 6.2;
(iii) so long as no Event of Default has occurred
and is continuing or would result after giving effect thereto, in each case
solely with respect to any of
-48-
Sections 8.1(a), 8.1(b) (solely as it pertains to Annex G), 8.1(h) and 8.1(i),
payments of management fees in an aggregate amount not to exceed $750,000 (plus
the reimbursement of reasonable out-of-pocket expenses) in any Fiscal Year
pursuant to (a) that certain Management Agreement dated as of February 25, 1998
by and between ▇.▇. Childs Associates, L.P., a Delaware limited partnership, and
Borrower, as amended by that certain Amendment to Management Agreement dated as
of October 17, 2003 and (b) that certain Management Agreement dated as of
October 17, 2003 by and between Halifax GenPar, L.P., a Delaware limited
partnership, and Borrower, as in existence on the Closing Date;
(iv) so long as no Event of Default has occurred
and is continuing or would result after giving effect thereto, the redemption or
repurchase for cash, at fair value, of the Stock of Borrower (or options to
purchase capital stock) from any employee of Borrower upon the death,
disability, retirement or other termination of such employee, provided, that all
such repurchases under this clause (iv) shall not exceed $1,000,000 in any given
year;
(v) Restricted Payments made in connection with
the Recapitalization and in accordance with the terms of the applicable Related
Transactions Documents; and
(vi) Restricted Payments in the form of, or with
respect to, Qualified Subordinated Notes issued to ▇.▇. Childs or Halifax, to
the extent permitted to be issued pursuant to Section 6.3.
6.15. Change of Corporate Name or Location; Change of
Fiscal Year.
No Credit Party shall (a) change its name as it appears in
official filings in the state of its incorporation or other organization, (b)
change its chief executive office, principal place of business, corporate
offices or warehouses or locations at which Collateral is held or stored, or the
location of its records concerning the Collateral, (c) change the type of entity
that it is, (d) change its organization identification number, if any, issued by
its state of incorporation or other organization, or (e) change its state of
incorporation or organization, in each case without at least 30 days prior
written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States. No Credit Party shall permit
its Fiscal Year to end on a date other than December 31.
6.16. No Impairment of Intercompany Transfers.
No Credit Party shall directly or indirectly enter into or
become bound by any agreement, instrument, indenture or other obligation (other
than this Agreement, the other Loan Documents and the Senior Note Indenture)
that could directly or indirectly restrict, prohibit or require the consent of
any Person with respect to the payment of dividends or
-49-
distributions or the making or repayment of intercompany loans by a Subsidiary
of Borrower to Borrower.
6.17. No Speculative Transactions.
No Credit Party shall engage in any transaction involving
commodity options, futures contracts or similar transactions, except solely to
hedge against fluctuations in the prices of commodities owned or purchased by it
and the values of foreign currencies receivable or payable by it and interest
swaps, caps or collars.
6.18. Changes Relating to Subordinated Debt and Certain
Agreements.
(a) No Credit Party shall change or amend the terms of
any Subordinated Debt (or any indenture or agreement in connection therewith) if
the effect of such amendment is to: (a) increase the interest rate on such
Subordinated Debt, to the extent such interest is payable in cash; (b) change
the dates upon which payments of principal or interest are due on such
Subordinated Debt other than to extend such dates; (c) change any default or
event of default other than to delete or make less restrictive any default
provision therein, or add any covenant with respect to such Subordinated Debt;
(d) change the redemption or prepayment provisions of such Subordinated Debt
other than to extend the dates therefor or to reduce the premiums payable in
connection therewith; (e) grant any security or collateral to secure payment of
such Subordinated Debt; or (f) change or amend any other term if such change or
amendment would materially increase the obligations of the Credit Party
thereunder or confer additional material rights on the holder of such
Subordinated Debt in a manner adverse to any Credit Party, Agent or any Lender;
provided, that any Subordinated Debt owed to ▇.▇. Childs or Halifax may be paid
and discharged at any time by issuance of Borrower's common Stock.
(b) No Credit Party shall change or amend the terms of
either the Senior Note Indenture or the Prior Senior Note Indenture.
(c) Subject to the provisions of the preceding clause
(b), no Credit Party shall change or amend any of (i) any Recapitalization
Agreement, (ii) the Stockholder's Agreement, or (iii) any of the management
agreements described in Section 6.14, except for such changes or amendments
which are neither material nor reasonably likely in any manner to be in any way
materially adverse to the interests of the Lenders; provided, that Borrower
promptly provide Agent with copies of any such amendments or modifications.
7. TERM
7.1. Termination.
The financing arrangements contemplated hereby shall be in
effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
-50-
7.2. Survival of Obligations Upon Termination of Financing
Arrangements.
Except as otherwise expressly provided for in the Loan
Documents, no termination or cancellation (regardless of cause or procedure) of
any financing arrangement under this Agreement shall in any way affect or impair
the obligations, duties and liabilities of the Credit Parties or the rights of
Agent and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that the
provisions of Section 11, the payment obligations under Sections 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1. Events of Default.
The occurrence of any one or more of the following events
(regardless of the reason therefor) shall constitute an "Event of Default"
hereunder:
(a) Borrower (i) fails to make any payment of principal
of the Loans when due and payable, (ii) fails to make any payment of interest
on, or Fees owing in respect of, the Loans or any of the other Obligations when
due and payable, and the same shall remain unremedied for 5 days or more, or
(iii) fails to pay or reimburse Agent or Lenders for any expense reimbursable
hereunder or under any other Loan Document within 10 days following Agent's
demand for such reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep
or observe any of the provisions of Sections 1.4, 1.8, 5.4(a) or 6, or any of
the provisions set forth in Annexes C or G, respectively.
(c) Borrower fails or neglects to perform, keep or
observe any of the provisions of Section 4 or any provisions set forth in
Annexes E or F, respectively, and the same shall remain unremedied for 5 days or
more.
(d) Any Credit Party fails or neglects to perform, keep
or observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this Section 8.1) and the same shall remain unremedied for 30 days or more.
-51-
(e) A default or breach occurs under any other agreement,
document or instrument to which any Credit Party is a party that is not cured
within any applicable grace period therefor, and such default or breach (i)
involves the failure to make any payment when due in respect of any Indebtedness
or Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $5,000,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $5,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case, regardless of whether such default or breach is waived,
or such right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect (other than inadvertent,
immaterial errors in any Borrowing Base Certificate), or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base Certificate)
made or delivered to Agent or any Lender by any Credit Party is untrue or
incorrect in any material respect as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value
of $1,000,000 or more are attached, seized, levied upon or subjected to a writ
or distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for 60 days or more.
(h) A case or proceeding is commenced against any Credit
Party seeking a decree or order in respect of such Credit Party (i) under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Credit Party, and such case or
proceeding shall remain undismissed or unstayed for 90 days or more or a decree
or order granting the relief sought in such case or proceeding shall be entered
by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief
under the Bankruptcy Code, or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) consents to or fails to contest in a
timely and appropriate manner the institution of proceedings thereunder or the
filing of any such petition or the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for such Credit Party or for any substantial part of any such Credit
Party's assets, (iii) makes an assignment for the benefit of creditors, (iv)
takes any action in furtherance of any of the foregoing; or (v) admits in
writing its inability to, or is generally unable to, pay its debts as such debts
become due.
-52-
(j) A final judgment or judgments for the payment of
money in excess of $1,000,000 in the aggregate not fully covered by insurance at
any time are outstanding against one or more of the Credit Parties and the same
are not, within 60 days after the entry thereof, discharged or execution thereof
stayed or bonded pending appeal, or such judgments are not discharged prior to
the expiration of any such stay.
(k) Any material provision of any Loan Document for any
reason ceases to be valid, binding and enforceable in accordance with its terms
(or any Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any Lien created under any Loan Document ceases to be a valid and perfected
first priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any default or breach by Borrower occurs and is
continuing (after the expiration of any applicable grace period therein) under
either the Senior Note Indenture or the Prior Senior Note Indenture, or either
the Senior Note Indenture or the Prior Senior Note Indenture shall be terminated
for any reason, other than in connection with the full payment and defeasance of
all Indebtedness arising in connection therewith.
8.2. Remedies.
(a) If any Default or Event of Default has occurred and
is continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, suspend the Revolving Loan facility with respect to
additional Advances and/or the incurrence of additional Letter of Credit
Obligations, whereupon any additional Advances and additional Letter of Credit
Obligations shall be made or incurred in Agent's sole discretion (or in the sole
discretion of the Requisite Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Event of Default has occurred and is continuing under any of Sections 8.1(a),
(h) or (i), Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and the Letter of Credit Fees to the Default
Rate.
(b) If any Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice: (i) terminate the Revolving Loan facility with respect
to further Advances or the incurrence of further Letter of Credit Obligations;
(ii) declare all or any portion of the Obligations, including all or any portion
of any Loan to be forthwith due and payable, and require that the Letter of
Credit Obligations be cash collateralized as provided in Annex B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower and each other Credit Party; or (iii) exercise any
rights and remedies provided to Agent under the Loan
-53-
Documents or at law or equity, including all remedies provided under the Code;
provided, that upon the occurrence of an Event of Default specified in Sections
8.1(h) or (i), the Revolving Loan facility shall be immediately terminated and
all of the Obligations, including the aggregate Revolving Loan, shall become
immediately due and payable without declaration, notice or demand by any Person.
8.3. Waivers by Credit Parties.
Except as otherwise provided for in this Agreement or by
applicable law, each Credit Party waives (including for purposes of Section 12):
(a) presentment, demand and protest and notice of presentment, dishonor, notice
of intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which any Credit Party may in
any way be liable, and hereby ratifies and confirms whatever Agent may do in
this regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender
may make an assignment to a Qualified Assignee of, or sell participations in, at
any time or times, the Loan Documents, Loans, Letter of Credit Obligations and
any Commitment or any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder. Any
assignment by a Lender shall: (i) require the consent of Agent (which consent
shall not be unreasonably withheld or delayed with respect to a Qualified
Assignee) and, so long as no Event of Default has occurred and is then
continuing, Borrower (which consent shall not be unreasonably withheld or
delayed; provided, that any assignment to Black Diamond Capital Management or
any of its Affiliates shall require the consent of Borrower so long as no Event
of Default pursuant to Sections 8.1(a)(i), 8.1(a)(ii), 8.1(h) or 8.1(i) has
occurred and is then continuing), and the execution of an assignment agreement
(an "Assignment Agreement") substantially in the form attached hereto as Exhibit
9.1(a) and otherwise in form and substance reasonably satisfactory to, and
acknowledged by, Agent; (ii) be conditioned on such assignee Lender representing
to the assigning Lender and Agent that it is purchasing the applicable Loans to
be assigned to it for its own account, for investment purposes and not with a
view to the distribution thereof; (iii) after giving effect to any such partial
assignment, the assignee Lender shall have Commitments in an amount at least
equal to $5,000,000 and the assigning Lender shall have retained Commitments in
an amount at least equal to $2,500,000; and (iv) include a payment to Agent of
an assignment fee of $3,500. In the case of an assignment by a Lender under this
Section 9.1, the assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as all
-54-
other Lenders hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof and/or Loans, other rights, obligations or interests assigned from and
after the date of such assignment. Borrower hereby acknowledges and agrees that
any assignment shall give rise to a direct obligation of Borrower to the
assignee and that the assignee shall be considered to be a "Lender". In all
instances, each Lender's liability to make Loans hereunder shall be several and
not joint and shall be limited to such Lender's Pro Rata Share of the applicable
Commitment. In the event Agent or any Lender assigns or otherwise transfers all
or any part of the Obligations, Agent or any such Lender shall so notify
Borrower and Borrower shall, upon the request of Agent or such Lender, execute
new Notes in exchange for the Notes, if any, being assigned. Notwithstanding the
foregoing provisions of this Section 9.1(a), (a) any Lender may at any time
pledge the Obligations held by it and such Lender's rights under this Agreement
and the other Loan Documents to a Federal Reserve Bank, and any Lender that is
an investment fund may assign the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to another investment
fund managed by the same investment advisor; provided, that no such pledge to a
Federal Reserve Bank shall release such Lender from such Lender's obligations
hereunder or under any other Loan Document; and (b) in the case of an assignment
to a Qualified Assignee which is, immediately prior to such assignment, an
Affiliate of the assigning Lender, such assignment shall be effective between
such Lender and its Affiliate immediately without compliance with the conditions
for assignment under this Section 9.1(a), but shall not be effective with
respect to Borrower, Agent, L/C Issuer or any Lender, and each of Borrower,
Agent, L/C Issuer and each Lender shall be entitled to deal solely with such
assigning Lender under any such assignment, in each case until the conditions
for assignment under this Section 9.1(a) have been complied with. Agent hereby
agrees to provide Borrower with commercially reasonable prior written notice of
any assignment or sale contemplated by this Section 9.1(a), the consummation of
which does not require consent of Borrower.
(b) Any participation by a Lender of all or any part of
its Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.13,
1.15, 1.16 and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence, neither Borrower nor any other Credit Party shall have any
obligation or duty to any participant. Neither Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any
-55-
participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no
Lender shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall
assist any Lender permitted to sell assignments or participations under this
Section 9.1 as reasonably required to enable the assigning or selling Lender to
effect any such assignment or participation, including the execution and
delivery of any and all agreements, notes and other documents and instruments as
shall be requested and, if requested by Agent, the preparation of informational
materials for, and the participation of management in meetings with, potential
assignees or participants. Each Credit Party executing this Agreement shall
certify the correctness, completeness and accuracy of all descriptions of the
Credit Parties and their respective affairs contained in any selling materials
provided by them and all other information provided by them and included in such
materials, except that any Projections delivered by Borrower shall only be
certified by Borrower as having been prepared by Borrower in compliance with the
representations contained in Section 3.4(c).
(e) Any Lender may furnish any information concerning
Credit Parties in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants); provided,
that such Lender shall obtain from assignees or participants written
confidentiality covenants substantially equivalent to those contained in Section
11.8.
(f) So long as no Event of Default has occurred and is
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 1.16(a),
increased costs under Section 1.16(b), an inability to fund LIBOR Loans under
Section 1.16(c), or withholding taxes in accordance with Section 1.15(a).
(g) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender"), may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing by the Granting Lender to
Agent and Borrower, the option to provide to Borrower all or any part of any
Loans that such Granting Lender would otherwise be obligated to make to Borrower
pursuant to this Agreement; provided, that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for
-56-
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). Any SPC may (i) with notice
to, but without the prior written consent of, Borrower and Agent and without
paying any processing fee therefor assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by Borrower and Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This Section 9.1(g)
may not be amended without the prior written consent of each Granting Lender,
all or any of whose Loans are being funded by an SPC at the time of such
amendment. For the avoidance of doubt, the Granting Lender shall for all
purposes, including without limitation, the approval of any amendment or waiver
of any provision of any Loan Document or the obligation to pay any amount
otherwise payable by the Granting Lender under the Loan Documents, continue to
be the Lender of record hereunder.
9.2. Appointment of Agent.
GE Capital is hereby appointed to act on behalf of all Lenders
as Agent under this Agreement and the other Loan Documents. The provisions of
this Section 9.2 are solely for the benefit of Agent and Lenders and no Credit
Party nor any other Person shall have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person. Agent shall have no duties or responsibilities except
for those expressly set forth in this Agreement and the other Loan Documents.
The duties of Agent shall be mechanical and administrative in nature and Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Except as expressly set forth in this Agreement and the other Loan Documents,
Agent shall not have any duty to disclose, and shall not be liable for failure
to disclose, any information relating to any Credit Party or any of their
respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence, bad faith or willful misconduct.
If Agent shall request instructions from Requisite Lenders,
Supermajority Lenders or all affected Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from Requisite
Lenders, Supermajority Lenders or all affected Lenders, as the case may be, and
Agent shall not incur liability to any Person by reason of so refraining.
-57-
Agent shall be fully justified in failing or refusing to take any action
hereunder or under any other Loan Document (a) if such action would, in the
opinion of Agent, be contrary to law or the terms of this Agreement or any other
Loan Document, (b) if such action would, in the opinion of Agent, expose Agent
to Environmental Liabilities or (c) if Agent shall not first be indemnified to
its satisfaction against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of Requisite
Lenders, Supermajority Lenders or all affected Lenders, as applicable.
9.3. Agent's Reliance, Etc.
Neither Agent nor any of its Affiliates nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Loan Documents, except for damages caused by its or
their own gross negligence, bad faith or willful misconduct. Without limiting
the generality of the foregoing, Agent: (a) may treat the payee of any Note as
the holder thereof until Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form reasonably satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4. GE Capital and Affiliates.
With respect to its Commitments hereunder, GE Capital (or any
successor Agent, as the case may be) shall have the same rights and powers under
this Agreement and the other Loan Documents as any other Lender and may exercise
the same as though it were not Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include GE Capital (or such successor
Agent, as the case may be) in its individual capacity. GE Capital (or any
successor Agent, as the case may be) and its Affiliates may lend money to,
invest in, and generally engage in any kind of business with, any Credit Party,
any of their
-58-
Affiliates and any Person who may do business with or own securities of any
Credit Party or any such Affiliate, all as if GE Capital (or such successor
Agent, as the case may be) were not Agent and without any duty to account
therefor to Lenders. GE Capital (or any successor Agent, as the case may be) and
its Affiliates may accept fees and other consideration from any Credit Party for
services in connection with this Agreement or otherwise without having to
account for the same to Lenders. Each Lender acknowledges the potential conflict
of interest between GE Capital (or any successor Agent, as the case may be) as a
Lender holding disproportionate interests in the Loans, and GE Capital (or such
successor Agent, as the case may be) as Agent.
9.5. Lender Credit Decision.
Each Lender acknowledges that it has, independently and
without reliance upon Agent or any other Lender and based on the Financial
Statements referred to in Section 3.4(a) and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6. Indemnification.
Lenders agree to indemnify Agent (to the extent not reimbursed
by Credit Parties and without limiting the obligations of Borrower hereunder),
ratably according to their respective Pro Rata Shares, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against Agent in any way relating to
or arising out of this Agreement or any other Loan Document or any action taken
or omitted to be taken by Agent in connection therewith; provided, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence, bad faith or willful misconduct.
Without limiting the foregoing, each Lender agrees to reimburse Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable counsel fees) incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Loan Document, to the extent that Agent is not reimbursed for such
expenses by Credit Parties.
-59-
9.7. Successor Agent.
Agent may resign at any time by giving not less than 30 days'
prior written notice thereof to Lenders and Borrower. Upon any such resignation,
the Requisite Lenders shall have the right to appoint a successor Agent, which
successor Agent, absent the occurrence and continuance of an Event of Default,
shall be acceptable to Borrower, such acceptance not to be unreasonably withheld
or delayed. If no successor Agent shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within 30 days after the
resigning Agent's giving notice of resignation, then the resigning Agent may, on
behalf of Lenders, appoint a successor Agent, which shall be a Lender, if a
Lender is willing to accept such appointment, or otherwise shall be a commercial
bank or financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $300,000,000. If no successor Agent has
been appointed pursuant to the foregoing, within 30 days after the date such
notice of resignation was given by the resigning Agent, such resignation shall
become effective and the Requisite Lenders shall thereafter perform all the
duties of Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor Agent as provided above. Any successor Agent appointed by
Requisite Lenders hereunder shall be subject to the approval of Borrower, such
approval not to be unreasonably withheld or delayed; provided, that such
approval shall not be required if a Default or an Event of Default has occurred
and is continuing. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was acting
as Agent under this Agreement and the other Loan Documents.
9.8. Setoff and Sharing of Payments.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default and subject to
Section 9.9(f), each Lender is hereby authorized at any time or from time to
time, to offset and to appropriate and to apply any and all balances held by it
at any of its offices for the account of Borrower or any Guarantor (regardless
of whether such balances are then due to Borrower or any Guarantor) and any
other properties or assets at any time held or owing by that Lender or that
holder to or for the credit or for the account of Borrower or any Guarantor
against and on account of any of the Obligations that are not paid when due.
Each Lender agrees to promptly notify Borrower and Agent of any such setoff made
by such Lender; provided, that the failure to give such notice shall not affect
the validity of such set-off. Any Lender exercising a right of setoff or
otherwise receiving any
-60-
payment on account of the Obligations in excess of its Pro Rata Share thereof
shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender entitled thereto or holder
in accordance with their respective Pro Rata Shares (other than offset rights
exercised by any Lender with respect to Sections 1.13, 1.15 or 1.16). Each
Lender's obligation under this Section 9.8 shall be in addition to and not in
limitation of its obligations to purchase a participation in an amount equal to
its Pro Rata Share of the Swing Line Loans under Section 1.1. Each Credit Party
that is Borrower or a Guarantor agrees, to the fullest extent permitted by law,
that (a) any Lender may exercise its right to offset with respect to amounts in
excess of its Pro Rata Share of the Obligations and may sell participations in
such amounts so offset to other Lenders and holders and (b) any Lender so
purchasing a participation in the Loans made or other Obligations held by other
Lenders or holders may exercise all rights of offset, bankers' lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender or holder were a direct holder of the Loans and the other
Obligations in the amount of such participation. Notwithstanding the foregoing,
if all or any portion of the offset amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of offset, the
purchase of participations by that Lender shall be rescinded and the purchase
price restored without interest.
9.9. Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert.
(a) Advances; Payments.
(i) Lenders shall refund or participate in the
Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c). If
the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Lenders, promptly after receipt of a
Notice of Revolving Credit Advance and in any event prior to 1:00 p.m. (New York
time) on the date such Notice of Revolving Advance is received, by telecopy,
telephone (promptly confirmed thereafter by telecopy or other form of written
transmission) or other similar form of written transmission. Each Lender shall
make the amount of such Lender's Pro Rata Share of such Revolving Credit Advance
available to Agent in same day funds by wire transfer to Agent's account as set
forth in Annex H not later than 3:00 p.m. (New York time) on the requested
funding date, in the case of an Index Rate Loan, and not later than 11:00 a.m.
(New York time) on the requested funding date, in the case of a LIBOR Loan.
After receipt of such wire transfers (or, in the Agent's sole discretion, before
receipt of such wire transfers), subject to the terms hereof, Agent shall make
the requested Revolving Credit Advance to Borrower. All payments by each Lender
shall be made without setoff, counterclaim or deduction of any kind.
(ii) On the 2nd Business Day of each calendar
week or more frequently at Agent's election (each, a "Settlement Date"), Agent
shall advise each Lender by telephone (promptly confirmed thereafter by telecopy
or other form of written transmission), or telecopy of the amount of such
Lender's Pro Rata Share of principal, interest and Fees paid
-61-
for the benefit of Lenders with respect to each applicable Loan. Provided that
each Lender has funded all payments or Advances required to be made by it and
has purchased all participations required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date, Agent shall
pay to each Lender such Lender's Pro Rata Share of principal, interest and Fees
paid by Borrower since the previous Settlement Date for the benefit of such
Lender on the Loans held by it. To the extent that any Lender (a "Non-Funding
Lender") has failed to fund all such payments and Advances or failed to fund the
purchase of all such participations, Agent shall be entitled to set off the
funding short-fall against that Non-Funding Lender's Pro Rata Share of all
payments received from Borrower. Such payments shall be made by wire transfer to
such Lender's account (as specified by such Lender in Annex H or the applicable
Assignment Agreement) not later than 1:00 p.m. (Chicago time) on the next
Business Day following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may
assume that each Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Lender when due, Agent will be entitled to
recover such amount on demand from such Lender without setoff, counterclaim or
deduction of any kind. If any Lender fails to pay the amount of its Pro Rata
Share forthwith upon Agent's demand, Agent shall promptly notify Borrower and
Borrower shall immediately repay such amount to Agent. Nothing in this Section
9.9(b) or elsewhere in this Agreement or the other Loan Documents shall be
deemed to require Agent to advance funds on behalf of any Lender or to relieve
any Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Borrower may have against any Lender as a result of
any default by such Lender hereunder. To the extent that Agent advances funds to
Borrower on behalf of any Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, Agent shall be entitled to retain for its
account all interest accrued on such Advance until reimbursed by the applicable
Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Agent from Borrower and such related payment is not received
by Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any
amount received by Agent under this Agreement must be returned to Borrower or
paid to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
-62-
(d) Non-Funding Lenders. The failure of any Non-Funding
Lender to make any Revolving Credit Advance or any payment required by it
hereunder or to purchase any participation in any Swing Line Loan to be made or
purchased by it on the date specified therefor shall not relieve any other
Lender (each such other Lender, an "Other Lender") of its obligations to make
such Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender
to make an Advance, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender", other than with respect
to matters regarding the agreement or consent of a Lender directly affected
thereby under Section 11.2(c)(i)-(iv) and (vii) (initial clause) (or be included
in the calculation of "Requisite Lenders" or "Supermajority Lenders" hereunder)
for any voting or consent rights under or with respect to any Loan Document. At
Borrower's request, Agent or a Person reasonably acceptable to Agent shall have
the right with Agent's consent and in Agent's sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding Lender
agrees that it shall, at Agent's request, sell and assign to Agent or such
Person, all of the Commitments of that Non-Funding Lender for an amount equal to
the principal balance of all Loans held by such Non-Funding Lender and all
accrued interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Dissemination of Information. Agent shall use
reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by Agent from, or delivered by Agent to, any Credit Party, with
notice of any Event of Default of which Agent has actually become aware and with
notice of any action taken by Agent following any Event of Default; provided,
that Agent shall not be liable to any Lender for any failure to do so, except to
the extent that such failure is attributable to Agent's gross negligence, bad
faith or willful misconduct. Agent shall deliver to each Lender, promptly
following its receipt thereof, copies of the financial statements and other
written materials described in paragraphs (a)-(g) of Annex E and in paragraph
(a) of Annex F.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent or Requisite Lenders.
9.10. Additional Titled Agents.
Borrower, Agent and each Lender acknowledge that, except for
rights and powers, if any, expressly reserved to any of the Administrative
Agent, the Syndication Agent, any Co-Lead Arranger or any other titled agent
named on the cover page of this Agreement, other than Agent (collectively, the
"Additional Titled Agents"), and except for obligations,
-63-
liabilities, duties and responsibilities, if any, expressly assumed by any
Additional Titled Agent, no Additional Titled Agent, in such capacity, has any
rights, powers, liabilities, duties or responsibilities hereunder or under any
of the Loan Documents. Without limiting the foregoing, no Additional Titled
Agent shall have nor be deemed to have a fiduciary relationship with any Lender.
At any time that any Additional Titled Agent shall have transferred to any other
Person (other than any Affiliates) all of its interests in the Loans and the
Commitments, such Additional Titled Agent shall be deemed to have concurrently
resigned as such Additional Titled Agent. No successor or replacement Additional
Titled Agent shall be designated or elected to serve upon the resignation by any
Person of its role as an Additional Titled Agent.
10. SUCCESSORS AND ASSIGNS
10.1. Successors and Assigns.
This Agreement and the other Loan Documents shall be binding
on and shall inure to the benefit of each Credit Party, Agent, Lenders and their
respective successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent
of Agent and Lenders shall be void. The terms and provisions of this Agreement
are for the purpose of defining the relative rights and obligations of each
Credit Party, Agent and Lenders with respect to the transactions contemplated
hereby and no Person (other than any Indemnified Person) shall be a third party
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
11. MISCELLANEOUS
11.1. Complete Agreement; Modification of Agreement.
The Loan Documents constitute the complete agreement between
the parties with respect to the subject matter thereof and may not be modified,
altered or amended except as set forth in Section 11.2. Any letter of interest,
commitment letter or fee letter (other than the GE Capital Fee Letter), if any,
between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Credit Party therefrom, shall in
-64-
any event be effective unless the same shall be in writing and signed by Agent
and Borrower, and by Requisite Lenders, Supermajority Lenders or all affected
Lenders, as applicable. Except as set forth in clauses (b) and (c) below, all
such amendments, modifications, terminations or waivers requiring the consent of
any Lender shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of
or consent with respect to any provision of this Agreement that (i) increases
the percentage advance rates set forth in the definition of the Borrowing Base,
(ii) makes less restrictive the nondiscretionary criteria for exclusion from
Eligible Accounts, Eligible Rental Equipment, Eligible Wholesale Disposables and
Eligible Equipment Disposables set forth in Sections 1.6 and 1.7, (iii) alters,
in any respect, the provisions of Section 6.14(iii), or (iv) permits, directly
or indirectly, the voluntary purchase, redemption, defeasance or prepayment of
any Indebtedness described in Section 6.3(a)(iii) at any time that Borrowing
Availability, after giving effect to such event, would equal less than
$10,000,000, shall be effective unless the same shall be in writing and signed
by Agent, Supermajority Lenders and Borrower. No amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement that waives compliance with the conditions precedent set forth in
Section 2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed by
Agent, Requisite Lenders and Borrower. Notwithstanding anything contained in
this Agreement to the contrary, no waiver or consent with respect to any Default
or any Event of Default shall be effective for purposes of the conditions
precedent to the making of Loans or the incurrence of Letter of Credit
Obligations set forth in Section 2.2 unless the same shall be in writing and
signed by Agent, Requisite Lenders and Borrower.
(c) No amendment, modification, termination or waiver
shall, unless in writing and signed by Agent and each Lender directly affected
thereby: (i) increase the principal amount of any Lender's Commitment (which
action shall be deemed to directly affect all Lenders) or amend or waive any
provision of this Agreement or any other Loan Document requiring pro rata
treatment of Lenders; (ii) reduce the principal of, rate of interest on or Fees
payable with respect to any Loan or Letter of Credit Obligations of any affected
Lender; (iii) extend any scheduled payment date (other than payment dates of
mandatory prepayments under Section 1.3(b)(iii)-(iv)) or final maturity date of
the principal amount of any Loan of any affected Lender; (iv) waive, forgive,
defer, extend or postpone any payment of interest or Fees as to any affected
Lender; (v) permit any assignment by a Credit Party under Section 10.1 or,
except as otherwise permitted herein or in the other Loan Documents, release any
Collateral; (vi) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans that shall be required for Lenders or any
of them to take any action hereunder; (vii) amend or waive this Section 11.2 or
the definitions of the terms "Requisite Lenders" or "Supermajority Lenders"
insofar as such definitions affect the substance of this Section 11.2; and
(viii) amend or waive Section 1.7, to the extent it pertains to items providing
for unanimous Lender consent. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer
under this Agreement or any other Loan Document shall be effective unless in
writing and
-65-
signed by Agent or L/C Issuer, as the case may be, in addition to Lenders
required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in any
case shall entitle such Credit Party or any other Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 11.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected
Lenders, the consent of Requisite Lenders is obtained, but the consent of other
Lenders whose consent is required is not obtained (any such Lender whose consent
is not obtained as described in this clause (i) and in clause (ii) below being
referred to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Supermajority
Lenders, the consent of Requisite Lenders is obtained, but the consent of
Supermajority Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower's request,
Agent or a Person reasonably acceptable to Agent shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all
accrued interest and Fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Upon payment in full in cash and performance of all
of the Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrower termination statements,
mortgage releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3. Fees and Expenses.
Borrower shall reimburse (i) Agent for all reasonable fees,
costs and expenses (including the reasonable fees and expenses of all of its
counsel, advisors, consultants and auditors) and (ii) Agent (and, with respect
to clauses (c) and (d) below, all Lenders) for all fees, costs and expenses,
including the reasonable fees, costs and expenses of counsel or
-66-
other advisors (including environmental and management consultants and
appraisers), incurred in connection with the negotiation and preparation of the
Loan Documents and incurred in connection with:
(a) the forwarding to Borrower or any other Person on
behalf of Borrower by Agent of the proceeds of any Loan (including a wire
transfer fee of $25 per wire transfer);
(b) any amendment, modification or waiver of, consent
with respect to, or termination of, any of the Loan Documents or Related
Transactions Documents or advice in connection with the syndication and
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, Borrower or any other Person
and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against Borrower or any other
Person that may be obligated to Agent by virtue of the Loan Documents; including
any such litigation, contest, dispute, suit, proceeding or action arising in
connection with any work-out or restructuring of the Loans during the pendency
of one or more Events of Default; provided, that in the case of reimbursement of
counsel for Lenders other than Agent, such reimbursement shall be limited to one
counsel for all such Lenders; provided, further, that no Person shall be
entitled to reimbursement under this clause (c) in respect of any litigation,
contest, dispute, suit, proceeding or action to the extent any of the foregoing
results from such Person's gross negligence or willful misconduct;
(d) any attempt to enforce any remedies of Agent against
any or all of the Credit Parties or any other Person that may be obligated to
Agent or any Lender by virtue of any of the Loan Documents, including any such
attempt to enforce any such remedies in the course of any work-out or
restructuring of the Loans during the pendency of one or more Events of Default;
provided, that in the case of reimbursement of counsel for Lenders other than
Agent, such reimbursement shall be limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the
pendency of one or more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all reasonable expenses,
costs, charges and other fees incurred by such
-67-
counsel and others in connection with or relating to any of the events or
actions described in this Section 11.3, all of which shall be payable, on
demand, by Borrower to Agent, the Lenders or the applicable Lender (as the case
may be). Without limiting the generality of the foregoing, such reasonable
expenses, costs, charges and fees may include: reasonable fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and reasonable expenses for travel,
lodging and food paid or incurred in connection with the performance of such
legal or other advisory services. Borrower hereby agrees that, solely with
respect to the fees, costs and expenses described in the preceding clauses (c)
and (d), the determination as to the reasonableness of any such fees, costs and
expenses shall be made in the sole determination of Agent or each applicable
Lender, and Borrower waives any and all rights to challenge or contest any such
determination; provided, that following payment in full by Borrower to Agent and
Lenders (as applicable) of any and all such amounts, Borrower shall thereafter
have the right to challenge or contest any such determination.
11.4. No Waiver.
Agent's or any Lender's failure, at any time or times, to
require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders, and directed to Borrower specifying
such suspension or waiver.
11.5. Remedies.
Agent's and Lenders' rights and remedies under this Agreement
shall be cumulative and nonexclusive of any other rights and remedies that Agent
or any Lender may have under any other agreement, including the other Loan
Documents, by operation of law or otherwise. Recourse to the Collateral shall
not be required.
11.6. Severability.
Wherever possible, each provision of this Agreement and the
other Loan Documents shall be interpreted in such a manner as to be effective
and valid under applicable law, but if any provision of this Agreement or any
other Loan Document shall be prohibited
-68-
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement or such other
Loan Document.
11.7. Conflict of Terms.
Except as otherwise provided in this Agreement or any of the
other Loan Documents by specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement conflicts with any
provision in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
11.8. Confidentiality.
Agent and each Lender agree to use commercially reasonable
efforts (equivalent to the efforts Agent or such Lender applies to maintaining
the confidentiality of its own confidential information) to maintain as
confidential all confidential information provided to them by the Credit Parties
for a period of two years following the Termination Date, except that Agent and
any Lender may disclose such information (a) to Persons employed or engaged by
or on behalf of Agent or such Lender; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 11.8 (and any such bona fide assignee or
participant or potential assignee or participant may disclose such information
to Persons employed or engaged by or on behalf of them as described in clause
(a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent's or such Lender's counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) that ceases to
be confidential through no fault of Agent or any Lender. Notwithstanding
anything to the contrary set forth herein or in any other agreement to which the
parties hereto are parties or by which they are bound, the obligations of
confidentiality contained herein and therein, as they relate to the transactions
contemplated by the Agreement and the other Loan Documents (the "Transaction"),
shall not apply to the federal tax structure or federal tax treatment of the
Transaction, and each party hereto (and any employee, representative, or agent
of or on behalf of any party hereto) may disclose to any and all persons,
without limitation of any kind, the federal tax structure and federal tax
treatment of the Transaction. The preceding sentence is intended to cause the
Transaction to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose. In addition, each party hereto acknowledges that
it has no proprietary or exclusive rights to the federal tax structure of the
Transaction or any federal tax matter or federal tax idea related to the
Transaction.
If Agent or any Lender is required to disclose any portion of
non-public, confidential or proprietary information pursuant to either of
clauses (c) or (e) of the
-69-
preceding paragraph, to the extent practicable and not otherwise prohibited by
law or by any legal, administrative or regulatory order or process, such entity
shall notify Borrower of such disclosure as soon as is commercially reasonable,
and shall reasonably cooperate in any effort of Borrower to maintain, at
Borrower's sole cost and expense, the confidentiality of such information,
including without limitation applying for protective court orders.
11.9. GOVERNING LAW.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN
DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN ▇▇▇▇ COUNTY,
CITY OF CHICAGO, ILLINOIS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
▇▇▇▇ COUNTY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH
-70-
CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE UNITED
STATES MAILS, PROPER POSTAGE PREPAID.
11.10. Notices.
Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered: (a) upon the earlier of actual receipt and 3 Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by
telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 11.10); (c) 1 Business
Day after deposit with a reputable overnight courier with all charges prepaid or
(d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or facsimile
number indicated in Annex I or to such other address (or facsimile number) as
may be substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrower or Agent) designated in Annex I to receive copies shall in
no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
11.11. Section Titles.
The Section titles and Table of Contents contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
11.12. Counterparts.
This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.
11.13. WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
-71-
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14. Press Releases and Related Matters.
Each Credit Party executing this Agreement agrees that neither
it nor its Affiliates will in the future issue any press releases or other
public disclosure using the name of GE Capital or its affiliates or referring to
this Agreement, the other Loan Documents or the Related Transactions Documents
without at least 2 Business Days' prior notice to GE Capital and without the
prior written consent of GE Capital unless (and only to the extent that) such
Credit Party or Affiliate is required to do so under law and then, in any event,
such Credit Party or Affiliate will consult with GE Capital before issuing such
press release or other public disclosure. Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement,
subject to Borrower's review and approval of the content thereof. Agent reserves
the right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.
11.15. Reinstatement.
This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Borrower for
liquidation or reorganization, should Borrower become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of Borrower's assets, and
shall continue to be effective or to be reinstated, as the case may be, if at
any time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
11.16. Advice of Counsel.
Each of the parties represents to each other party hereto that
it has discussed this Agreement and, specifically, the provisions of Sections
11.9 and 11.13, with its counsel.
-72-
11.17. No Strict Construction.
The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
-73-
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first written above.
BORROWER:
UNIVERSAL HOSPITAL SERVICES, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------
Name ▇▇▇▇ ▇. ▇▇▇▇▇
Title Senior Vice President and
Chief Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and as a Lender
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
Duly Authorized Signatory
FLEET NATIONAL BANK, as a Lender
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Title Vice President
PNC BANK, NATIONAL ASSOCIATION, as a
Lender
By /s/ ▇▇▇ ▇▇▇▇▇▇
--------------
Its Vice President
CIT LENDING SERVICES CORPORATION, as
a Lender
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------
Title Vice President
LASALLE BUSINESS CREDIT, LLC, as a Lender
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
Title Vice President/Senior Counsel
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have
(unless otherwise provided elsewhere in the Loan Documents) the following
respective meanings, and all references to Sections, Exhibits, Schedules or
Annexes in the following definitions shall refer to Sections, Exhibits,
Schedules or Annexes of or to the Agreement:
"Account Debtor" means any Person who may become obligated to
any Credit Party under, with respect to, or on account of, an Account, Chattel
Paper or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in
Annex G.
"Accounts" means all "accounts," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all health care insurance receivables and (f) all
collateral security and guaranties of any kind, given by any Account Debtor or
any other Person with respect to any of the foregoing.
"Activation Event" and "Activation Notice" have the meanings
ascribed thereto in Annex C.
"Advance" means any Revolving Credit Advance or Swing Line
Advance, as the context may require.
"Affiliate" means, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, ten percent (10%) or more of the Stock
having ordinary voting power in the election of directors of such Person, (b)
each Person that controls, is controlled by or is under common
A-1
control with such Person, (c) each of such Person's officers, directors, joint
venturers and partners and (d) in the case of Borrower, the immediate family
members, spouses and lineal descendants of individuals who are Affiliates of
Borrower. For the purposes of this definition, "control" of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall specifically exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders
or its successor appointed pursuant to Section 9.7.
"Agreement" means the Credit Agreement dated as of October 17,
2003, by and among Borrower, the other Credit Parties party thereto, GE Capital,
as Agent and Lender and the other Lenders from time to time party thereto, as
the same may be amended, supplemented, restated or otherwise modified from time
to time.
"Appendices" has the meaning ascribed to it in the recitals to
the Agreement.
"Applicable L/C Margin" means the per annum fee, from time to
time in effect, payable with respect to outstanding Letter of Credit Obligations
as determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C
Margin, the Applicable Revolver Index Margin, and the Applicable Revolver LIBOR
Margin.
"Applicable Revolver Index Margin" means the per annum
interest rate margin from time to time in effect and payable in addition to the
Index Rate applicable to the Revolving Loan, as determined by reference to
Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum
interest rate margin from time to time in effect and payable in addition to the
LIBOR Rate applicable to the Revolving Loan, as determined by reference to
Section 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in
Section 9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the
United States Code, 11 U.S.C. Sections 101 et seq.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrower" shall have the meaning ascribed thereto in the
preamble to the Agreement.
"Borrowing Availability" means, as of any date of
determination, the lesser of (i) the Maximum Amount and (ii) the Borrowing Base,
in each case, less the sum of the aggregate Revolving Loan and Swing Line Loan
then outstanding.
A-2
"Borrowing Base" means, as of any date of determination by
Agent, from time to time, an amount equal to the sum at such time of:
(a) up to eighty-five percent (85%) of the total face
amount of Borrower's Eligible Accounts; and
(b) the sum of:
(i) up to fifty-five percent (55%) of Borrower's
Eligible Rental Equipment valued on a net book value basis consistent with
Borrower's consolidated month-end balance sheet;
(ii) up to fifty percent (50%) of Borrower's
Eligible Wholesale Disposables valued on a net book value basis consistent with
Borrower's consolidated month-end balance sheet; and
(iii) up to twenty percent (20%) of Borrower's
Eligible Equipment Disposables valued on a net book value basis consistent with
Borrower's consolidated month-end balance sheet;
in each case, less any Reserves established by Agent at such time in accordance
with the terms and provisions of the Agreement.
"Borrowing Base Certificate" means a certificate to be
executed and delivered from time to time by Borrower in the form attached to the
Agreement as Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the States of
Illinois and/or New York and in reference to LIBOR Loans shall mean any such day
that is also a LIBOR Business Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto that have a useful life of
more than one year and that are required to be capitalized under GAAP, excluding
(i) any such expenditures made within the applicable time periods set forth in
Section 1.3 or Section 5.4(c), as applicable, with the Net Proceeds obtained
from the disposition of property, plant and equipment and (ii) to the extent
otherwise deemed capital expenditures, expenditures made as part of Permitted
Acquisitions.
"Capital Lease" means, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person.
A-3
"Capital Lease Obligation" means, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it
Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Equivalent Investments" means (a) securities with
maturities of 360 days or less from the date of acquisition issued or fully
guaranteed or insured by the United States government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of 360 days
or less from the date of acquisition and overnight bank deposits of any Lender
or of any commercial bank having capital and surplus in excess of $500,000,000,
(c) repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not more
than seven days with respect to securities issued or fully guaranteed or insured
by the United States government, (d) commercial paper of a domestic issuer rated
at least A-1 or the equivalent thereof by Standard and Poor's Ratings Group
("S&P") or P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") and in either case maturing within 90 days after the day of
acquisition, (e) securities with maturities of 90 days or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's, (f) securities with maturities of 90 days or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Cash Management Systems" has the meaning ascribed to it in
Section 1.8.
"Change of Control" means (i) any event, transaction or
occurrence as a result of which (a) ▇.▇. Childs and Halifax collectively cease
to own and control all of the economic and voting rights associated with
ownership of at least fifty and one-tenth percent (50.1%) of the outstanding
capital Stock of all classes of Borrower on a fully diluted basis, or (b) except
to the extent resulting from transfers permitted under Section 6.1, Borrower
ceases to own and control all of the economic and voting rights associated with
all of the outstanding capital Stock of any of its Subsidiaries and (ii) any
"Change of Control", "Change in Control" or any similar definition set forth in
each of the Prior Senior Note indenture and the Senior Note Indenture.
"Charges" means all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the
A-4
Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of any Credit Party, (d) any Credit Party's ownership or use of any
properties or other assets, or (e) any other aspect of any Credit Party's
business.
"Chattel Paper" means any "chattel paper," as such term is
defined in the Code, including electronic chattel paper, now owned or hereafter
acquired by any Credit Party.
"Closing Checklist" means the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Annex D.
"Closing Date" means October 17, 2003.
"Closing Date Prior Senior Note Indenture Amendment" means
that certain First Supplemental Indenture, dated as of October 8, 2003, between
Borrower and U.S. Bank National Association (as successor to First Trust
National Association), as trustee.
"Code" means the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of Illinois; provided, that
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of Illinois, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security
Agreement and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the
Patent Security Agreement, the Trademark Security Agreement, the Copyright
Security Agreement and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the
Obligations.
"Collateral Reports" means the reports with respect to the
Collateral referred to in Annex F.
"Collection Account" means that certain account of Agent,
account number ▇▇▇-▇▇▇-▇▇ in the name of Agent at Bankers Trust Company in New
York, New York ABA
A-5
No. 021 001 033, or such other account as may be specified in writing by Agent
as the "Collection Account.".
"Commitment Termination Date" means the earliest of (a) the
sixty (60) month anniversary date of the Closing Date, (b) the date of
termination of Lenders' obligations to make Advances and to incur Letter of
Credit Obligations or permit existing Loans to remain outstanding pursuant to
Section 8.2(b), and (c) the date of indefeasible prepayment in full by Borrower
of the Loans and the cancellation and return (or stand-by guarantee) of all
Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to Annex B, and the permanent reduction of all Commitments
to zero dollars ($0).
"Commitments" means (a) as to any Lender, the aggregate of
such Lender's Revolving Loan Commitment (including without duplication the Swing
Line Lender's Swing Line Commitment as a subset of its Revolving Loan
Commitment) as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Revolving Loan Commitments (including without
duplication the Swing Line Lender's Swing Line Commitment as a subset of its
Revolving Loan Commitment), which aggregate commitment shall be $100,000,000 on
the Closing Date, as to each of clauses (a) and (b), as such Commitments may be
reduced, amortized or adjusted from time to time in accordance with the
Agreement.
"Compliance Certificate" has the meaning ascribed to it in
Annex E.
"Contracts" means all "contracts," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement between Agent and
(i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of any Credit Party or (iii) a futures commission merchant or clearing house, as
applicable, with respect to commodity accounts and commodity contracts held by
any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant disclaims or subordinates to the
Lien of the Agent any security interest in the applicable financial assets,
acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Agent without further consent by the affected Credit Party.
"Copyright License" means any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
A-6
"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.
"Credit Parties" means Borrower, and each of its Subsidiaries.
"Default" means any event that, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section
1.5(d).
"Deposit Accounts" means all "deposit accounts" as such term
is defined in the Code, now or hereafter held in the name of any Credit Party.
"Disbursement Accounts" has the meaning ascribed to it in
Annex C.
"Disclosure Schedules" means the Schedules prepared by
Borrower and denominated as Disclosure Schedules 1.4 through 6.7 in the Index to
the Agreement.
"Documents" means all "documents," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"EBITDA" means, with respect to any Person for any fiscal
period, without duplication, an amount equal to (a) consolidated net income of
such Person for such period determined in accordance with GAAP, minus (b) the
sum of (i) income tax credits for such period, (ii) interest income for such
period, (iii) gain from extraordinary items for such period, (iv) non-recurring
gains (as determined in accordance with GAAP) for such period, except as
otherwise determined by Agent in its reasonable discretion, (v) any aggregate
net gain (but not any aggregate net loss) during such period arising from the
sale, exchange or other disposition of capital assets by such Person (including
any fixed assets, whether tangible or intangible, all inventory sold in
conjunction with the disposition of fixed assets and all securities) excluding
asset sales occurring in the ordinary course of business and (vi) any other
non-cash gains for such period that have been added in determining consolidated
net income, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication, plus (c) the sum of (i) any provision for income taxes
for such period, (ii) interest expense for such period as defined by GAAP, (iii)
loss from extraordinary items
A-7
for such period, (iv) non-recurring loss for such period (as determined in
accordance with GAAP) to the extent approved by Agent in its reasonable
discretion, (v) the amount of non-cash charges (including depreciation and
amortization) for such period, (vi) amortized debt discount for such period,
(vii) expenses incurred during such period in connection with the Related
Transactions, to the extent disclosed in writing to Agent on or prior to the
Closing Date, (viii) expenses during such period in respect of management fees
and related expense reimbursements paid by any Credit Party, to the extent such
payments were permitted when made pursuant to Section 6.14, and do not exceed
$620,000 in the aggregate for any Fiscal Year with respect to all Credit Parties
and (ix) the amount of any deduction to consolidated net income for such period
as the result of any grant to any members of the management of such Person of
any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication. For purposes of this definition, the following items
shall be excluded in determining consolidated net income of a Person: (1) the
income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (2) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form of
cash dividends or distributions; (3) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary. Determinations of
EBITDA in connection with Permitted Acquisitions shall be determined utilizing
the Pro Forma Basis.
"Eligible Accounts" has the meaning ascribed to it in Section
1.6.
"Eligible Equipment Disposables" means, as of any date of
determination, all Equipment Disposables of Borrower which (i) conform to the
requirements of Section 1.7 of the Agreement, and (ii) at all times continue to
be acceptable to the Agent in its commercially reasonable judgment.
"Eligible Rental Equipment" means, as of any date of
determination, the amount of all Rental Equipment of Borrower which (i) is held
by Borrower (other than for sale) or is rented to third Persons in the ordinary
course of business by Borrower or which is the subject of an equipment rental
program or similar equipment outsourcing program, (ii) conforms to the
requirements of Section 1.7 of the Agreement and (iii) at all times
A-8
continues to be acceptable to the Agent in its commercially reasonable judgment.
In any event, Eligible Rental Equipment shall (i) exclude the net book value of
Borrower's "Bazooka Bed" inventory, and (ii) account for reserves for Rental
Equipment that is unrentable, obsolete or slow moving.
"Eligible Wholesale Disposables" means, as of any date of
determination, all Wholesale Disposables of Borrower which (i) conform to the
requirements of Section 1.7 of the Agreement, and (ii) at all times continue to
be acceptable to the Agent in its commercially reasonable judgment.
"Environmental Laws" means all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42
U.S.C. Sections 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. Sections 1251 et seq.); the Occupational Safety and Health Act (29
U.S.C. Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C.
Sections 300(f) et seq.), and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person,
all liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
A-9
"Equipment" means all "equipment," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located
and, in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded Software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and Fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"Equipment Disposables" means repair or replacement parts
purchased by Borrower or any of its Subsidiaries for repair of its Rental
Equipment or for sale to customers of Borrower or any of its Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any
trade or business (whether or not incorporated) that, together with such Credit
Party, are treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
A-10
"ESOP" means a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section
8.1.
"Fair Labor Standards Act" means the Fair Labor Standards Act,
29 U.S.C. Section 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal
to the weighted average of the rates on overnight Federal funds transactions
among members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth
in Annex G.
"Financial Statements" means the consolidated and
consolidating income statements, statements of cash flows and balance sheets of
Borrower delivered in accordance with Section 3.4 and Annex E.
"Fiscal Month" means any of the monthly accounting periods of
Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods
of Borrower, ending on March 31, June 30, September 30, and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of
Borrower ending on December 31 of each year.
"Fixtures" means all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party.
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness that by its terms matures more
than one year from, or is directly or indirectly renewable or extendible at such
Person's option under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one year from the
date of creation thereof, and specifically including Capital Lease Obligations,
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrower, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
A-11
"GAAP" means generally accepted accounting principles in the
United States of America consistently applied, as such term is further defined
in Annex G to the Agreement.
"GE Capital" means General Electric Capital Corporation, a
Delaware corporation.
"GE Capital Fee Letter" means that certain letter, dated as of
September 19, 2003, between GE Capital and Borrower with respect to certain Fees
to be paid from time to time by Borrower to GE Capital.
"General Intangibles" means all "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, Software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
Software to the extent included in "goods" as defined in the Code, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" means as to any Person, any
obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation ("primary
obligation") of any other Person (the "primary
A-12
obligor") in any manner, including any obligation or arrangement of such Person
to (a) purchase or repurchase any such primary obligation, (b) advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, (d) protect the
beneficiary of such arrangement from loss (other than product warranties given
in the ordinary course of business) or (e) indemnify the owner of such primary
obligation against loss in respect thereof. The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranteed Indebtedness is incurred and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof, as determined by such Person in good faith,
provided that the amount of any Guaranteed Indebtedness shall not, in any event,
exceed the amount which in light of the facts and circumstances, represents the
amount that can reasonably be expected to become an actual or matured liability
in accordance with GAAP.
"Guarantor" means each Person, if any, that executes a
guaranty or other similar agreement in favor of Agent, for itself and the
ratable benefit of Lenders, in connection with the transactions contemplated by
the Agreement and the other Loan Documents.
"Halifax" means Halifax Capital Partners, L.P., a Delaware
limited partnership.
"Hazardous Material" means any substance, material or waste
that is regulated by, or forms the basis of liability now or hereafter under,
any Environmental Laws, including any material or substance that is (a) defined
as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, or (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred six months or
more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than six months
unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title
A-13
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property) in an
amount equal to the lesser of (A) such indebtedness and (B) if such indebtedness
has not been assumed by such Person and is otherwise non-recourse to such
Person, the fair market value of such property, (e) all Capital Lease
Obligations and the present value (discounted at the Index Rate as in effect on
the Closing Date) of future rental payments under all synthetic leases, (f) all
obligations of such Person under commodity purchase or option agreements or
other commodity price hedging arrangements, in each case whether contingent or
matured, (g) all obligations of such Person under any foreign exchange contract,
currency swap agreement, interest rate swap, cap or collar agreement or other
similar agreement or arrangement designed to alter the risks of that Person
arising from fluctuations in currency values or interest rates, in each case
whether contingent or matured, (h) all Indebtedness referred to above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property or other assets
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness, in
an amount equal to the lesser of (A) such indebtedness and (B) if such
indebtedness has not been assumed by such Person and is otherwise non-recourse
to such Person, the fair market value of such property, and (i) the Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in
Section 1.13.
"Indemnified Person" has the meaning ascribed to in Section
1.13.
"Index Rate" means, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans posted by at least seventy-five
percent (75%) of the nation's 30 largest banks" (or, if The Wall Street Journal
ceases quoting a base rate of the type described, the highest per annum rate of
interest published by the Federal Reserve Board in Federal Reserve statistical
release H.15 (519) entitled "Selected Interest Rates" as the Bank prime loan
rate or its equivalent), and (ii) the Federal Funds Rate plus 50 basis points
per annum. Each change in any interest rate provided for in the Agreement based
upon the Index Rate shall take effect at the time of such change in the Index
Rate.
"Index Rate Loan" means a Loan or portion thereof bearing
interest by reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, wherever
located, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
A-14
"Interest Coverage Ratio" means with respect to any Person for
any fiscal period, the ratio of EBITDA for such period to Interest Expense for
such period.
"Interest Expense" means, with respect to any Person for any
fiscal period, cash interest expense of such Person determined in accordance
with GAAP for the relevant period ended on such date, including, interest
expense with respect to any Funded Debt of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan,
the first Business Day of each month to occur while such Loan is outstanding,
and (b) as to any LIBOR Loan, the last day of the applicable LIBOR Period;
provided, that in the case of any LIBOR Period greater than three months in
duration, interest shall be payable at three-month intervals and on the last day
of such LIBOR Period; and provided, further that, in addition to the foregoing,
each of (x) the date upon which all of the Commitments have been terminated and
the Loans have been paid in full and (y) the Commitment Termination Date shall
be deemed to be an "Interest Payment Date" with respect to any interest that has
then accrued under the Agreement.
"Interest Rate Agreement" means any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to hedge the position of
Borrower or any Subsidiary with respect to interest rates.
"Inventory" means all "inventory," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and in any event including inventory, merchandise, goods and other personal
property that are held by or on behalf of any Credit Party for sale or lease or
are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process, finished goods, returned goods, or
materials or supplies of any kind, nature or description used or consumed or to
be used or consumed in such Credit Party's business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded Software.
"Investment Property" means all "investment property" as such
term is defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all
regulations promulgated thereunder.
A-15
"IRS" means the Internal Revenue Service.
"▇.▇. Childs" means, collectively, ▇.▇. Childs Equity Partners
III, L.P., a Delaware limited partnership, and ▇.▇. Childs Equity Partners,
L.P., a Delaware limited partnership.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the
signature pages of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include any assignee of
such Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex
B.
"Letter of Credit Obligations" means all outstanding
obligations incurred by Agent and Lenders at the request of Borrower, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by Agent or another L/C Issuer or the purchase
of a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"Letter-of-Credit Rights" means "letter-of-credit rights" as
such term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including rights to payment or performance under a letter of credit,
whether or not such Credit Party, as beneficiary, has demanded or is entitled to
demand payment or performance.
"Letters of Credit" means documentary or standby letters of
credit issued for the account of Borrower by any L/C Issuer, and bankers'
acceptances issued by Borrower, for which Agent and Lenders have incurred Letter
of Credit Obligations.
"LIBOR Business Day" means a Business Day on which banks in
the City of London are generally open for interbank or foreign exchange
transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each
period commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.5(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:
A-16
(a) if any LIBOR Period would otherwise end on a day that
is not a LIBOR Business Day, such LIBOR Period shall be extended to the
next succeeding LIBOR Business Day unless the result of such extension
would be to carry such LIBOR Period into another calendar month in
which event such LIBOR Period shall end on the immediately preceding
LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond
the Commitment Termination Date shall end 2 LIBOR Business Days prior
to such date;
(c) any LIBOR Period that begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
LIBOR Period) shall end on the last LIBOR Business Day of a calendar
month;
(d) Borrower shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period
for such Loan; and
(e) Borrower shall select LIBOR Periods so that there
shall be no more than 5 separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States
Dollars for the applicable LIBOR Period that appears on Telerate Page
3750 as of 11:00 a.m. (London time), on the second full LIBOR Business
Day next preceding the first day of such LIBOR Period (unless such date
is not a Business Day, in which event the next succeeding Business Day
will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but
without duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on the day that is 2 LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in
effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board
that are required to be maintained by a member bank of the Federal
Reserve System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Agent and Borrower.
A-17
"License" means any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, the Notes, the
Collateral Documents, the Master Standby Agreement, the Master Documentary
Agreement, and all other agreements, instruments, documents and certificates
identified in the Closing Checklist executed and delivered to, or in favor of,
Agent or any Lenders and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in
connection with the Agreement or the transactions contemplated thereby. Any
reference in the Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to the
Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.
"Loans" means the Revolving Loan and the Swing Line Loan.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit dated as of the Closing Date between Borrower, as
Applicant, and GE Capital.
"Master Standby Agreement" means the Master Agreement for
Standby Letters of Credit dated as of the Closing Date between Borrower, as
Applicant, and GE Capital, as issuer.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations or condition (financial or otherwise) of
any Credit Party, (b) Borrower's ability to pay any of the Loans or any of the
other Obligations in accordance with the terms of the Agreement, (c) the
Collateral or Agent's Liens, on behalf of itself and Lenders, on the
A-18
Collateral or the priority of such Liens, or (d) Agent's or any Lender's rights
and remedies under the Agreement and the other Loan Documents.
"Maximum Amount" means, as of any date of determination, an
amount equal to the Revolving Loan Commitment of all Lenders as of that date.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate
is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Proceeds" means (i) the aggregate cash consideration
received by Borrower or a Subsidiary in connection with any transaction referred
to in Section 1.3(b)(iii) less (ii) the reasonable expenses (including
out-of-pocket expenses) incurred by Borrower or such Subsidiary in connection
with such transaction (including, in the case of any issuance of debt or equity
securities, reasonable underwriters' commissions and fees) and the amount of any
federal and state taxes incurred in connection with such transaction, in each
case as certified to Agent at the time of such transaction.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes and the Swing
Line Notes.
"Notice of Conversion/Continuation" has the meaning ascribed
to it in Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed
to it in Section 1.1(a).
"Obligations" means all loans, advances, debts, liabilities
and obligations for the performance of covenants, tasks or duties or for payment
of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.
"Patent License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right with respect
to any invention on which a Patent is in existence.
A-19
"Patent Security Agreements" means the Patent Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Patents" means all of the following in which any Credit Party
now holds or hereafter acquires any interest: (a) all letters patent of the
United States or of any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of
ERISA.
"Permitted Acquisition" has the meaning ascribed to it in
Section 6.1(i).
"Permitted Encumbrances" means the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet due and
payable or which are being contested in accordance with Section 5.2(b); (b)
pledges or deposits of money securing statutory obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $250,000 at any time, so long as such Liens attach only
to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(j); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders; (j) licenses, leases or subleases
granted to other Persons not interfering in any material respect with the
business of Borrower or any of its Subsidiaries; (k) bankers' Liens, rights of
setoff and similar Liens incurred on deposits made in the ordinary course of
business; (l) Liens arising from precautionary UCC financing statements
regarding operating leases; and (m) Liens expressly permitted under clauses (b),
(c) and (d) of Section 6.7 of the Agreement.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state,
A-20
county, city, municipal, local, foreign, or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Plan" means, at any time, an "employee benefit plan", as
defined in Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to or has
maintained, contributed to or had an obligation to contribute to at any time
within the past seven years on behalf of participants who are or were employed
by any Credit Party or ERISA Affiliate.
"Prior Lender" means collectively, each holder of all or any
portion of the Prior Lender Obligations.
"Prior Lender Obligations" means the indebtedness arising
under that certain Credit Agreement dated as of October 25, 1999 among Borrower,
Key Corporate Capital, Inc., as Collateral Agent, ▇▇▇▇▇▇ Financial, Inc., as
Syndication Agent and Canadian Imperial Board of Commerce, as Administrative
Agent, as amended.
"Prior Senior Note Indenture" means that certain Indenture,
dated as of February 25, 1998, between Borrower and First Trust National
Association, as trustee, as amended or otherwise modified through and including
the Closing Date (including without limitation pursuant to the Closing Date
Prior Senior Note Indenture Amendment).
"Prior Senior Notes" means those certain 10-1/4% Senior Notes
due 2008, Series A and those certain 10-1/4% Senior Notes due 2008, Series B of
Borrower issued pursuant to the Prior Senior Note Indenture, as amended or
otherwise modified through and including the Closing Date.
"Proceeds" means "proceeds," as such term is defined in the
Code, including (a) any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and Stock, and (f) any and all other amounts, rights to payment or
other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
A-21
"Pro Forma" means the unaudited consolidated balance sheet of
Borrower as of June 30, 2003 after giving pro forma effect to the Related
Transactions.
"Pro Forma Basis" means, for purposes of calculating
compliance with each of the financial covenants set forth in Annex G in respect
of a proposed Permitted Acquisition, that such proposed Permitted Acquisition
shall be deemed to have occurred as of the first day of the four fiscal quarter
period ending as of the most recent fiscal quarter end preceding the date of
such proposed Permitted Acquisition with respect to which Agent has received the
required financial information, but solely to the extent that either (i) Agent
shall have provided its express written approval to the financial statements of
a Target the subject of a Permitted Acquisition or (ii) the financial statements
of a Target provided to Agent shall have been audited by independent accountants
reasonably acceptable to Agent. As used herein, "transaction" shall mean any
Permitted Acquisition. In connection with any calculation of the financial
covenants set forth in Annex G, upon giving effect to a Permitted Acquisition on
a Pro Forma Basis:
(A) for purposes of any such calculation in respect of any
incurrence or assumption of Indebtedness in connection with
such proposed Permitted Acquisition, any Indebtedness which is
retired in connection with such incurrence or assumption shall
be excluded and deemed to have been retired as of the first
day of the applicable period;
(B) for purposes of any such calculation in respect of any
Permitted Acquisition, (1) any Indebtedness incurred or
assumed by any Credit Party in connection with such
transaction (including the Person or property acquired) and
any Indebtedness of the Person or property acquired which is
not retired in connection with such transaction (x) shall be
deemed to have been incurred as of the first day of the
applicable period and (y) if such Indebtedness has a floating
or formula rate, shall have an implied rate of interest for
the applicable period for purposes of this definition
determined by utilizing the rate which is or would be in
effect with respect to such Indebtedness as at the relevant
date of determination and (2) income statement items (whether
positive or negative) attributable to the Person or property
acquired shall be included beginning as of the first day of
the applicable period.
"Projections" means Borrower's forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, all prepared on a Subsidiary by
Subsidiary or division-by-division basis, if applicable, and otherwise
consistent with the historical Financial Statements of the Borrower, together
with appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to
any Lender, (a) with respect to the Loans, the percentage obtained by dividing
(i) the Revolving Loan
A-22
Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments of
all Lenders, and (b) with respect to all Loans on and after the Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Loans held by that Lender, by (ii) the
outstanding principal balance of the Loans held by all Lenders.
"Qualified Assignee" means (a) any Lender, any Affiliate of
any Lender and, with respect to any Lender that is an investment fund that
invests in commercial loans, any other investment fund that invests in
commercial loans and that is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor, and (b) any
commercial bank, savings and loan association or savings bank or any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act of 1933) which extends credit or buys loans as one of its
businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of
BBB or higher from S&P and a rating of Baa2 or higher from ▇▇▇▇▇'▇ at the date
that it becomes a Lender and which, through its applicable lending office, is
capable of lending to Borrower without the imposition of any withholding or
similar taxes; provided, that (i) no Person determined by Agent to be acting in
the capacity of a vulture fund or distressed debt purchaser shall be a Qualified
Assignee, (ii) no Person or Affiliate of such Person (other than a Person that
is already a Lender) holding Subordinated Debt or Stock issued by any Credit
Party shall be a Qualified Assignee and (iii) at any time no Event of Default
described in any of Sections 8.1(a), 8.1(h) or 8.1(i) is then in existence, no
Person that is engaged in any line of business involving the sale, rental,
leasing, management, servicing or outsourcing of medical equipment, and is
identified by Borrower to Agent as being disqualified as a Qualified Assignee
due to being engaged in any such line of business prior to the consummation of
an assignment or sale to such Person described in Section 9.1(a), shall be a
Qualified Assignee.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Subordinated Notes" means promissory notes that (i)
provide for no scheduled or other mandatory principal payments or prepayments
prior to the date six months following the date set forth in clause (a) of the
defined term "Commitment Termination Date", (ii) provide for no voluntary
principal payment or prepayment, except (x) in the manner set forth in the
proviso to Section 6.18(a) or (y) with the prior written consent of Agent and
Requisite Lenders, (iii) provide for no cash interest payments prior to the date
set forth in clause (i) above and (iv) otherwise qualify as Subordinated Debt.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Recapitalization" means the transactions contemplated by the
Recapitalization Agreements.
A-23
"Recapitalization Agreements" mean, collectively, (i) that
certain Stock Purchase Agreement dated as of September 26, 2003 among ▇.▇.
Childs Equity Partners III, L.P., JWC Co-invest III LLC, Halifax, Borrower and
certain other parties named therein, (ii) those certain Repurchase Agreements
dated on or about October 17, 2003 among Borrower and certain Stockholders of
Borrower; (iii) that certain letter agreement dated as of September 26, 2003
between Borrower and Security Life of Denver Insurance Company, (iv) the Senior
Note Indenture and the Senior Notes, (v) the Closing Date Prior Senior Note
Indenture Amendment and (vi) that certain Offer to Purchase and Consent
Solicitation Statement of Borrower dated September 24, 2003.
"Refinancing" means the repayment in full by Borrower of the
Prior Lender Obligations on the Closing Date.
"Refunded Swing Line Loan" has the meaning ascribed to it in
Section 1.1(b)(iii).
"Related Transactions" means the initial borrowing (if any)
under the Revolving Loan on the Closing Date, the Recapitalization, the
Refinancing, the issuance of the Senior Notes, the execution and delivery of the
Closing Date Prior Senior Note Indenture Amendment, the payment of all fees,
costs and expenses associated with all of the foregoing and the execution and
delivery of all of the Related Transactions Documents.
"Related Transactions Documents" means the Loan Documents, the
Recapitalization Agreements and all other agreements or instruments executed in
connection with the Related Transactions.
"Release" means any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"Rental Equipment" means all movable medical equipment owned
by Borrower or any of its Subsidiaries generally consisting of, but not limited
to, critical care equipment, monitoring equipment, newborn care equipment and
respiratory therapy equipment.
"Requisite Lenders" means Lenders having (a) more than fifty
percent (50%) of the Commitments of all Lenders, or (b) if the Commitments have
been terminated, more than fifty percent (50%) of the aggregate outstanding
amount of all Loans.
"Reserves" means reserves established pursuant to either of
Sections 1.6 or 1.7 and such other reserves against Borrowing Availability
expressly authorized by any Loan Document.
A-24
"Restricted Payment" means, with respect to any Credit Party
(a) the declaration or payment of any dividend or the incurrence of any
liability to make any other payment or distribution of cash or other property or
assets in respect of Stock; (b) any payment on account of the purchase,
redemption, defeasance, sinking fund or other retirement of such Credit Party's
Stock or any other payment or distribution made in respect thereof, either
directly or indirectly; (c) any payment or prepayment of principal of, premium,
if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment
and any claim for rescission with respect to, any Subordinated Debt; (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire Stock
of such Credit Party now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Credit Party's Stock or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder of
such Credit Party other than payment of compensation in the ordinary course of
business to Stockholders who are employees of such Person; and (g) any payment
of management fees (or other fees of a similar nature) by such Credit Party to
any Stockholder of such Credit Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a)(i).
"Revolving Loan" means, at any time, the sum of (i) the
aggregate amount of Revolving Credit Advances outstanding to Borrower plus (ii)
the aggregate Letter of Credit Obligations incurred on behalf of Borrower.
Unless the context otherwise requires, references to the outstanding principal
balance of the Revolving Loan shall include the outstanding balance of Letter of
Credit Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances or incur
Letter of Credit Obligations as set forth on Annex J to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances or incur Letter of Credit Obligations, which aggregate commitment shall
be $100,000,000 on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section
1.1(a)(ii).
A-25
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Senior Note Indenture" means that certain Indenture dated as
of October 17, 2003 between Borrower and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as trustee.
"Senior Notes" means those certain 10.125% Senior Notes due
November 1, 2011 issued by Borrower pursuant to the Senior Note Indenture in an
aggregate original principal amount of $260,000,000 pursuant to the Senior Note
Indenture.
"Software" means all "software" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person; (b) the present fair salable value of the assets of such Person
on a going concern basis is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured; (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (d) such Person is not engaged in a business
or transaction, and is not about to engage in a business or transaction, for
which such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as litigation, guaranties and pension
plan liabilities) at any time shall be computed as the amount that, in light of
all the facts and circumstances existing at the time, represents the amount that
can be reasonably be expected to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or
limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder
of Stock of such Person.
"Stockholder's Agreement" means that certain Amended and
Restated Stockholder's Agreement dated as of October 17, 2003 among Borrower and
its Stockholders, as in effect on the Closing Date, and as the same may be
further amended, supplemented or otherwise modified from time to time in
accordance with the provisions of Section 6.18.
A-26
"Subordinated Debt" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Requisite Lenders in their sole discretion, as to right and time of payment and
as to any other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of Borrower.
"Supermajority Lenders" means Lenders having (a) sixty-six and
two-thirds percent (66 2/3%) or more of the Revolving Loan Commitments of all
Lenders, or (b) if the Revolving Loan Commitments have been terminated,
sixty-six and two-thirds percent (66 2/3%) or more of the aggregate outstanding
amount of the Revolving Loan (with the Swing Line Loan being attributed to the
Lender making such Loan) and Letter of Credit Obligations.
"Swing Line Advance" has the meaning ascribed to it in Section
1.1(b)(i).
"Swing Line Availability" has the meaning ascribed to it in
Section 1.1(b)(i).
"Swing Line Commitment" means, as to the Swing Line Lender,
the commitment of the Swing Line Lender to make Swing Line Advances as set forth
on Annex J to the Agreement, which commitment constitutes a subfacility of the
Revolving Loan Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means, as the context may require, at any
time, the aggregate amount of Swing Line Advances outstanding to Borrower.
"Swing Line Note" has the meaning ascribed to it in Section
1.1(b)(ii).
"Target" has the meaning ascribed to its in Section 6.1(i).
A-27
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"Termination Date" means the date on which (a) the Loans have
been indefeasibly repaid in full, (b) all other Obligations under the Agreement
and the other Loan Documents (other than unasserted contingent indemnification
obligations) have been completely discharged (c) all Letter of Credit
Obligations have been cash collateralized, canceled or backed by standby letters
of credit in accordance with Annex B, and (d) Borrower shall have no further
right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a
Multiemployer Plan), that is covered by Title IV of ERISA, and that any Credit
Party or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
"Total Leverage Ratio" means, with respect to Borrower, on a
consolidated basis, the ratio of (a) Funded Debt as of any date of
determination, to (b) EBITDA for the twelve months ending on that date of
determination.
"Trademark License" means rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right to use
any Trademark.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA,
A-28
the liabilities (whether or not accrued) that could be avoided by any Credit
Party or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(i) of
ERISA.
"Wholesale Disposables" means Inventory purchased by Borrower
or any of its Subsidiaries for sale to customers of Borrower or any of its
Subsidiaries.
Rules of construction with respect to accounting terms used in
the Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; the word "or" is not exclusive; references to Persons include their
respective successors and assigns (to the extent and only to the extent
permitted by the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations. Whenever any provision in any Loan
Document refers to the knowledge (or an analogous phrase) of any Credit Party,
such words are intended to signify that such Credit Party has actual knowledge
or awareness of a particular fact or circumstance or that such Credit Party, if
it had exercised reasonable diligence, would have known or been aware of such
fact or circumstance.
A-29
ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the
Agreement, Agent and Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of Borrower and for Borrower's
account, Letter of Credit Obligations by causing Letters of Credit to be issued
by GE Capital or a Subsidiary thereof or a bank or other legally authorized
Person selected by or acceptable to Agent in its sole discretion (each, an "L/C
Issuer") for Borrower's account and guaranteed by Agent; provided, that if the
L/C Issuer is a Lender, then such Letters of Credit shall not be guaranteed by
Agent but rather each Lender shall, subject to the terms and conditions
hereinafter set forth, purchase (or be deemed to have purchased) risk
participations in all such Letters of Credit issued with the written consent of
Agent, as more fully described in paragraph (b)(ii) below. The aggregate amount
of all such Letter of Credit Obligations shall not at any time exceed the least
of (i) $5,000,000 (the "L/C Sublimit") and (ii) the Maximum Amount less the
aggregate outstanding principal balance of the Revolving Credit Advances and the
Swing Line Loan, and (iii) the Borrowing Base less the aggregate outstanding
principal balance of the Revolving Credit Advances and the Swing Line Loan. No
such Letter of Credit shall have an expiry date that is less than 5 Business
Days prior to the Commitment Termination Date or more than one year following
the date of issuance thereof, unless otherwise determined by the Agent, in its
sole discretion, and neither Agent nor Lenders shall be under any obligation to
incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than
the Commitment Termination Date; provided, however, that subject to the
remaining terms of this Agreement, a Letter of Credit may have an expiry date
that is later than 5 Business Days prior to the Commitment Termination Date
(and, subject to the terms hereof, Agent and Lenders shall be obligated to incur
Letter of Credit Obligations in respect thereof, or purchase risk participations
therein, as applicable) so long as Borrower shall have deposited with Agent Cash
Equivalents (as defined below) in an amount equal to one hundred five percent
(105%) of the maximum amount then available to be drawn thereunder and in
accordance with the provisions of paragraph (c) below.
(b) Advances Automatic; Participations.
(i) In the event that Agent or any Lender shall make any
payment on or pursuant to any Letter of Credit Obligation, such payment
shall then be deemed automatically to constitute a Revolving Credit
Advance to Borrower under Section 1.1(a) of the Agreement regardless of
whether a Default or Event of Default has occurred and is continuing
and notwithstanding Borrower's failure to satisfy the conditions
precedent set forth in Section 2, and each Lender shall be obligated to
pay its Pro Rata Share thereof in accordance with the Agreement upon
Agent's request.
B-1
The failure of any Lender to make available to Agent for Agent's own
account its Pro Rata Share of any such Revolving Credit Advance or
payment by Agent under or in respect of a Letter of Credit shall not
relieve any other Lender of its obligation hereunder to make available
to Agent its Pro Rata Share thereof, but no Lender shall be responsible
for the failure of any other Lender to make available such other
Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for Borrower to
incur Revolving Credit Advances as contemplated by paragraph (b)(i)
above because of an Event of Default described in Sections 8.1(h) or
(i) or otherwise or if it shall be illegal or unlawful for any Lender
to be deemed to have assumed a ratable share of the reimbursement
obligations owed to an L/C Issuer, or if the L/C Issuer is a Lender,
then (A) immediately and without further action whatsoever, each Lender
shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest
and participation equal to such Lender's Pro Rata Share (based on the
Revolving Loan Commitments) of the Letter of Credit Obligations in
respect of all Letters of Credit then outstanding and (B) thereafter,
immediately upon issuance of any Letter of Credit, each Lender shall be
deemed to have irrevocably and unconditionally purchased from Agent (or
such L/C Issuer, as the case may be) an undivided interest and
participation in such Lender's Pro Rata Share (based on the Revolving
Loan Commitments) of the Letter of Credit Obligations with respect to
such Letter of Credit on the date of such issuance. Each Lender shall
fund its participation in all payments or disbursements made under the
Letters of Credit upon Agent's request in the same manner as provided
in the Agreement with respect to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrower is required to provide cash collateral
for any Letter of Credit Obligations pursuant to the Agreement prior to
the Commitment Termination Date, Borrower will pay to Agent for the
ratable benefit of itself and Lenders cash or cash equivalents
acceptable to Agent ("Cash Equivalents") in an amount equal to one
hundred five percent (105%) of the maximum amount then available to be
drawn under each applicable Letter of Credit outstanding for the
benefit of Borrower. Such funds or Cash Equivalents shall be held by
Agent in a cash collateral account (the "Cash Collateral Account")
maintained at a bank or financial institution reasonably acceptable to
Agent. The Cash Collateral Account shall be in the name of Borrower and
shall be pledged to, and subject to the control of, Agent, for the
benefit of Agent and Lenders, in a manner reasonably satisfactory to
Agent. Borrower hereby pledges and grants to Agent, on behalf of itself
and Lenders, a security interest in all such funds and Cash Equivalents
held in the Cash Collateral Account from time to time and all proceeds
thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not
then due. The Agreement, including this Annex B, shall constitute a
security agreement under applicable law.
B-2
(ii) If any Letter of Credit Obligations, whether or not
then due and payable, shall for any reason be outstanding on the
Commitment Termination Date, Borrower shall either (A) provide cash
collateral therefor in the manner described above, or (B) cause all
such Letters of Credit and guaranties thereof, if any, to be canceled
and returned, or (C) deliver a stand-by letter (or letters) of credit
in guaranty of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like tenor and duration (plus 30
additional days) as, and in an amount equal to one hundred five percent
(105%) of the aggregate maximum amount then available to be drawn
under, the Letters of Credit to which such outstanding Letter of Credit
Obligations relate and shall be issued by a Person, and shall be
subject to such terms and conditions, as are be satisfactory to Agent
in its sole discretion. So long as no Event of Default is then in
existence, as the aggregate maximum amount available to be drawn under
such Letters of Credit is reduced, Agent shall, upon request of
Borrower, deliver to Borrower or permit Borrower to withdraw from the
Cash Collateral Account such amount as shall cause the cash collateral
not to exceed 105% of the maximum amount then available to be drawn
under such Letters of Credit.
(iii) From time to time after funds are deposited in the
Cash Collateral Account by Borrower, whether before or after the
Commitment Termination Date, Agent may apply such funds or Cash
Equivalents then held in the Cash Collateral Account to the payment of
any amounts, and in such order as Agent may elect, as shall be or shall
become due and payable by Borrower to Agent and Lenders with respect to
such Letter of Credit Obligations of Borrower and, upon the
satisfaction in full of all Letter of Credit Obligations of Borrower,
to any other Obligations then due and payable.
(iv) Except as provided in clause (ii) above, neither
Borrower nor any Person claiming on behalf of or through Borrower shall
have any right to withdraw any of the funds or Cash Equivalents held in
the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by
Borrower to Agent and Lenders in respect thereof, any funds remaining
in the Cash Collateral Account shall be applied to other Obligations
then due and owing and upon payment in full of such Obligations, any
remaining amount shall be paid to Borrower or as otherwise required by
law. Interest earned on deposits in the Cash Collateral Account shall
be for the account of Agent.
(d) Fees and Expenses. Borrower agrees to pay to Agent
for the benefit of Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (ii) for each
month during which any Letter of Credit Obligation shall remain outstanding, a
fee (the "Letter of Credit Fee") in an amount equal to the Applicable L/C Margin
from time to time in effect multiplied by the maximum amount available from time
to time to be drawn under the applicable Letter of Credit. Such fee shall be
paid to Agent for the benefit of the Lenders in arrears, on the first day of
each month and on the Commitment Termination Date. In addition, Borrower shall
pay to any L/C Issuer, on
B-3
demand, such reasonable fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter of
Credit is issued.
(e) Request for Incurrence of Letter of Credit
Obligations. Borrower shall give Agent at least 2 Business Days' prior written
notice requesting the incurrence of any Letter of Credit Obligation. The notice
shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the L/C Issuer) and a completed Application for Standby Letter of
Credit or Application and Documentary Letter of Credit or Application for
Documentary Letter of Credit (as applicable). Notwithstanding anything contained
herein to the contrary, Letter of Credit applications by Borrower and approvals
by Agent and the L/C Issuer may be made and transmitted pursuant to electronic
codes and security measures mutually agreed upon and established by and among
Borrower, Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrower to
reimburse Agent and Lenders for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
obligations of each Lender to make payments to Agent with respect to Letters of
Credit shall be unconditional and irrevocable. Such obligations of Borrower and
Lenders shall be paid strictly in accordance with the terms hereof under all
circumstances including the following:
(i) any lack of validity or enforceability of any Letter
of Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, setoff, defense or other
right that Borrower or any of its Affiliates or any Lender may at any
time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in connection
with the Agreement, the Letter of Credit, the transactions contemplated
herein or therein or any unrelated transaction (including any
underlying transaction between Borrower or any of its Affiliates and
the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly
provided in paragraph (g)(ii)(C) below) or any L/C Issuer under any
Letter of Credit or guaranty thereof against presentation of a demand,
draft or certificate or other document that does not comply with the
terms of such Letter of Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is
similar to any of the foregoing; or
B-4
(vi) the fact that a Default or an Event of Default has
occurred and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided
in the Agreement, Borrower hereby agrees to pay and to protect,
indemnify, and save harmless Agent and each Lender from and against any
and all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable attorneys' fees and allocated costs
of internal counsel) that Agent or any Lender may incur or be subject
to as a consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or guaranty thereof, or (B) the failure of Agent or
any Lender seeking indemnification or of any L/C Issuer to honor a
demand for payment under any Letter of Credit or guaranty thereof as a
result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental
Authority, in each case other than to the extent solely as a result of
the gross negligence or willful misconduct of Agent or such Lender (as
finally determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrower,
Borrower assumes all risks of the acts and omissions of, or misuse of
any Letter of Credit by beneficiaries, of any Letter of Credit. In
furtherance and not in limitation of the foregoing, to the fullest
extent permitted by law, neither Agent nor any Lender shall be
responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (C) failure of the
beneficiary of any Letter of Credit to comply fully with conditions
required in order to demand payment under such Letter of Credit;
provided, that in the case of any payment by Agent under any Letter of
Credit or guaranty thereof, Agent shall be liable to the extent such
payment was made solely as a result of its gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction)
in determining that the demand for payment under such Letter of Credit
or guaranty thereof complies on its face with any applicable
requirements for a demand for payment under such Letter of Credit or
guaranty thereof; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they may be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a
payment under any Letter of Credit or guaranty thereof or of the
proceeds thereof; (G) the credit of the proceeds of any drawing under
any Letter of Credit or guaranty thereof; and (H) any consequences
arising from causes beyond the control of Agent or any Lender. None of
the above shall affect,
B-5
impair, or prevent the vesting of any of Agent's or any Lender's rights
or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by Borrower in favor
of any L/C Issuer in any letter of credit application, reimbursement
agreement or similar document, instrument or agreement between Borrower
and such L/C Issuer, including an Application and Agreement For
Documentary Letter of Credit, a Master Documentary Agreement and a
Master Standby Agreement entered into with Agent; provided, that, to
the extent of a conflict between the terms of this Annex B and any
Application and Agreement for Documentary Letter of Credit, Master
Documentary Agreement or Master Standby Agreement, the terms of this
Annex B shall control.
B-6
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
Borrower shall, and shall cause its Subsidiaries to, establish and
maintain the Cash Management Systems described below:
(a) Borrower may maintain, in its name, one or more accounts (each
a "Disbursement Account" and collectively, the "Disbursement Accounts") at a
bank reasonably acceptable to Agent into which Agent shall, from time to time,
deposit proceeds of Revolving Credit Advances and Swing Line Advances made to
Borrower pursuant to Section 1.1 for use by Borrower solely in accordance with
the provisions of Section 1.4.
(b) On or before the Closing Date, each bank where a Disbursement
Account is maintained and all other banks identified in Disclosure Schedule 3.19
(each, a "Relationship Bank") shall have entered into tri-party deposit account
control agreements with Agent, for the benefit of itself and Lenders, and
Borrower and the applicable Subsidiaries thereof, as applicable, in form and
substance reasonably acceptable to Agent, which shall become operative on or
prior to the Closing Date. Each such deposit account control agreement shall
provide, among other things, that (i) the bank executing such agreement has no
rights of setoff or recoupment or any other claim against such account, as the
case may be, other than for payment of its service fees and other charges
directly related to the administration of such account and for returned checks
or other items of payment and as may otherwise be agreed to by Agent and (ii)
the bank party thereto shall agree to comply with Agent's instructions directing
disposition of funds on deposit without further consent of Borrower or the
applicable Subsidiary (as applicable). Agent hereby agrees with Borrower that
Agent shall not deliver to any bank described above any notice directing
disposition of funds on deposit (herein an "Activation Notice") unless and until
the occurrence and continuance of an Event of Default. From and after the date
Agent has delivered an Activation Notice to any bank, Borrower shall not, nor
shall Borrower cause or permit any Subsidiary thereof to, accumulate or maintain
cash in Disbursement Accounts or payroll accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date, amounts necessary to meet minimum balance requirements and additional
amounts not to exceed $10,000 in any such account and $50,000 in all such
accounts in the aggregate at any time outstanding.
(c) So long as no Event of Default has occurred and is continuing,
Borrower may amend Disclosure Schedule 3.19 to add or replace a Relationship
Bank or replace any Disbursement Account; provided, that (i) Agent shall have
consented in writing in advance to the opening of such account with the relevant
bank and (ii) prior to the time of the opening of such account, Borrower or its
Subsidiaries, as applicable, and such bank shall have executed and delivered to
Agent a tri-party deposit account control agreement, in form and substance
described above. Borrower shall close any of its accounts (and establish
C-1
replacement accounts in accordance with the foregoing sentence) promptly and in
any event within 30 days following notice from Agent that the creditworthiness
of any bank holding an account is no longer acceptable in Agent's reasonable
judgment, or as promptly as practicable and in any event within 60 days
following notice from Agent that the operating performance, funds transfer or
availability procedures or performance with respect to accounts of the bank
holding such accounts or Agent's liability under any tri-party deposit account
control agreement with such bank is no longer acceptable in Agent's reasonable
judgment.
(d) Following the occurrence of an Event of Default, at the
request of Agent or Requisite Lenders (which request may be made solely during
the continuance of an Event of Default) Borrower shall (i) establish lock boxes
("Lock Boxes") and/or blocked accounts ("Blocked Accounts") at one or more of
the banks set forth in Disclosure Schedule 3.19, and shall request in writing
and otherwise take such reasonable steps to ensure that all Account Debtors
forward payment directly to such Lock Boxes, (ii) deposit and cause its
Subsidiaries to deposit or cause to be deposited promptly, and in any event no
later than the first Business Day after the date of receipt thereof, all cash,
checks, drafts or other similar items of payment relating to or constituting
payments made in respect of any and all Collateral (whether or not otherwise
delivered to a Lock Box) into one or more Blocked Accounts in Borrower's name or
any such Subsidiary's name and at a Relationship Bank and (iii) deliver to each
Relationship Bank instructions, revocable only upon Agent's express
authorization, directing each Relationship Bank to immediately forward all
amounts on deposit to the Collection Account through daily sweeps from such
accounts into the Collection Account.
(e) The Disbursement Accounts, each account maintained with a
Relationship Bank and the Lock Boxes and Blocked Accounts (if any) shall be cash
collateral accounts, with all cash, checks and other similar items of payment in
such accounts securing payment of the Loans and all other Obligations, and in
which Borrower and each Subsidiary thereof shall have granted a Lien to Agent,
on behalf of itself and Lenders, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with Section 1.10 and shall be applied
(and allocated) by Agent in accordance with Section 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Borrower shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with
Borrower (each a "Related Person") to (i) hold in trust for Agent, for the
benefit of itself and Lenders, all checks, cash and other items of payment
received by Borrower or any such Related Person (other than cash proceeds of the
Recapitalization held by Borrower to consummate certain payments to be made by
Borrower with respect to the Recapitalization), and (ii) within 1 Business Day
after receipt by Borrower or any such Related Person of any checks, cash or
other items of payment (other than cash proceeds of the Recapitalization),
deposit the same into a deposit
C-2
account subject to a deposit account control agreement described herein.
Borrower and each Related Person thereof acknowledges and agrees that all cash,
checks or other items of payment constituting proceeds of Collateral are part of
the Collateral. All proceeds of the sale or other disposition of any Collateral,
shall be deposited directly into a deposit account subject to a deposit account
control agreement described herein.
C-3
ANNEX D (SECTION 2.1(a))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions
described in Section 2.1 of the Agreement, pursuant to Section 2.1(a), the
following items must be received by Agent in form and substance satisfactory to
Agent on or prior to the Closing Date (each capitalized term used but not
otherwise defined herein shall have the meaning ascribed thereto in Annex A to
the Agreement):
A. Appendices. All Appendices to the Agreement, in form and
substance satisfactory to Agent.
B. Revolving Notes and Swing Line Notes. Duly executed originals
of the Revolving Note and Swing Line Notes for each applicable Lender, dated the
Closing Date.
C. Security Agreement. Duly executed originals of the Security
Agreement, dated the Closing Date, and all instruments, documents and agreements
executed pursuant thereto.
D. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing lender loss payable and/or additional insured clauses or
endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent (for the
benefit of itself and Lenders) has a valid and perfected first priority
security interest in the Collateral, including (i) such documents duly
executed by each Credit Party (including financing statements under the
Code and other applicable documents under the laws of any jurisdiction
with respect to the perfection of Liens) as Agent may request in order
to perfect its security interests in the Collateral and (ii) copies of
Code search reports listing all effective financing statements that
name any Credit Party as debtor, together with copies of such financing
statements, none of which shall cover the Collateral, except for those
relating to the Prior Lender Obligations (all of which shall be
terminated on the Closing Date) and Permitted Encumbrances.
(b) Evidence satisfactory to Agent, including copies, of
all UCC-1 and other financing statements filed in favor of any Credit
Party with respect to each location, if any, at which Inventory may be
consigned.
D-1
(c) Control Letters from (i) all issuers of
uncertificated securities held by Borrower, (ii) all securities
intermediaries with respect to all securities accounts and securities
entitlements of Borrower, and (iii) all futures commission agents and
clearing houses with respect to all commodities contracts and
commodities accounts held by Borrower.
F. Payoff Letters; Termination Statements. Copy of a duly
executed payoff letter, in form and substance reasonably satisfactory to Agent,
executed by the "Agent" under the Prior Lender loan documents evidencing
repayment in full of all Prior Lender Obligations, together with (a) duly
authorized UCC-3 or other appropriate termination statements, in form and
substance satisfactory to Agent, releasing all liens of Prior Lender upon any of
the personal property of each Credit Party, and (b) termination of all blocked
account agreements, bank agency agreements or other similar agreements or
arrangements in favor of Prior Lender or relating to the Prior Lender
Obligations.
G. Intellectual Property Security Agreements. Duly executed
originals of Trademark Security Agreements, Copyright Security Agreements and
Patent Security Agreements, each dated the Closing Date and signed by each
Credit Party which owns Trademarks, Copyrights and/or Patents, as applicable,
all in form and substance reasonably satisfactory to Agent, together with all
instruments, documents and agreements executed pursuant thereto.
H. Initial Borrowing Base Certificate. Duly executed originals of
an initial Borrowing Base Certificate, dated the Closing Date, reflecting
information concerning Eligible Accounts, Eligible Rental Equipment, Eligible
Wholesale Disposables and Eligible Equipment Disposables as of September 30,
2003.
I. Initial Notice of Revolving Credit Advance. Duly executed
originals of a Notice of Revolving Credit Advance, dated the Closing Date, with
respect to the initial Revolving Credit Advance to be requested by Borrower on
the Closing Date.
J. Letter of Direction. Duly executed originals of a letter of
direction from Borrower addressed to Agent, on behalf of itself and Lenders,
with respect to the disbursement on the Closing Date of the initial Revolving
Credit Advance.
K. Cash Management System; Blocked Account Agreements. Evidence
satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with Annex C to the Agreement have been established and are currently
being maintained in the manner set forth in such Annex C, together with copies
of duly executed deposit account control agreements, reasonably satisfactory to
Agent, with the banks as required by Annex C.
L. Charter and Good Standing. For each Credit Party, such
Person's (a) charter and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of incorporation and (c)
good standing certificates (including verification of tax status) and
certificates of qualification to conduct business in each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, each
D-2
dated a recent date prior to the Closing Date and certified by the applicable
Secretary of State or other authorized Governmental Authority.
M. Bylaws and Resolutions. For each Credit Party, (a) such
Person's bylaws, together with all amendments thereto and (b) resolutions of
such Person's Board of Directors, approving and authorizing the execution,
delivery and performance of the Loan Documents to which such Person is a party
and the transactions to be consummated in connection therewith, each certified
as of the Closing Date by such Person's corporate secretary or an assistant
secretary as being in full force and effect without any modification or
amendment.
N. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
O. Opinions of Counsel. Duly executed originals of opinions of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Credit Parties, together with any local
counsel opinions reasonably requested by Agent, each in form and substance
reasonably satisfactory to Agent and its counsel, dated the Closing Date, and
each accompanied by a letter addressed to such counsel from the Credit Parties,
authorizing and directing such counsel to address its opinion to Agent, on
behalf of Lenders, and to include in such opinion an express statement to the
effect that Agent and Lenders are authorized to rely on such opinion.
P. Accountants' Letters. A letter from the Credit Parties to
their independent auditors authorizing the independent certified public
accountants of the Credit Parties to communicate with Agent and Lenders in
accordance with Section 4.2.
Q. Fee Letter. Duly executed originals of the GE Capital Fee
Letter.
R. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the Chief Financial Officer of Borrower, dated the
Closing Date, stating that, since December 31, 2002 (a) no event or condition
has occurred or is existing which could reasonably be expected to have a
Material Adverse Effect; (b) there has been no material adverse change in the
industry in which Borrower operates; (c) no Litigation has been commenced which,
if successful, could reasonably be expected to have a Material Adverse Effect or
could challenge any of the transactions contemplated by the Agreement and the
other Loan Documents; (d) there have been no Restricted Payments made by any
Credit Party not permitted under the Agreement; and (e) there has been no
material increase in liabilities, liquidated or contingent, and no material
decrease in assets of Borrower or any of its Subsidiaries.
S. Environmental Reports. Agent shall have received Phase I
Environmental Site Assessment Reports, consistent with American Society for
Testing and Materials (ASTM) Standard E 1527-94 and applicable state
requirements, on all of the Real Estate owned by Borrower, dated or brought down
to date no more than six months prior to the Closing Date, prepared by
environmental engineers reasonably satisfactory to Agent, all in form and
D-3
substance reasonably satisfactory to Agent, in its sole discretion; and Agent
shall have further received such environmental review and audit reports,
including Phase II reports, with respect to the Real Estate owned by Borrower as
Agent shall have requested, and Agent shall be satisfied, in its sole
discretion, with the contents of all such environmental reports. Agent shall
have received letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
T. Appraisals. Agent shall have received appraisals as to all
Equipment, each of which shall be in form and substance reasonably satisfactory
to Agent.
U. Audited Financials; Financial Condition. Agent shall have
received the Financial Statements, Projections and other materials set forth in
Section 3.4, certified by Borrower's Chief Financial Officer, in each case in
form and substance reasonably satisfactory to Agent, and Agent shall be
satisfied, in its sole discretion, with all of the foregoing. Agent shall have
further received a certificate of the Chief Executive Officer and/or the Chief
Financial Officer of Borrower, based on such Pro Forma and Projections, to the
effect that (a) Borrower will be Solvent upon the consummation of the
transactions contemplated herein; (b) the Pro Forma fairly presents the
financial condition of Borrower as of the date thereof after giving effect to
the transactions contemplated by the Loan Documents; (c) the Projections are
based upon estimates and assumptions stated therein, all of which Borrower
believes to be reasonable and fair in light of current conditions and current
facts known to Borrower and, as of the Closing Date, reflect Borrower's good
faith and reasonable estimates of its future financial performance and of the
other information projected therein for the period set forth therein; and (d)
containing such other statements with respect to the solvency of Borrower and
matters related thereto as Agent shall request.
V. Master Standby Agreement. A Master Agreement for Standby
Letters of Credit among Borrower and GE Capital.
W. Master Documentary Agreement. A Master Agreement for
Documentary Letters of Credit among Borrower and GE Capital.
X. Other Documents. Such other certificates, documents and
agreements respecting any Credit Party as Agent may, in its sole discretion,
request.
D-4
ANNEX E (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS--REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent
and Lenders, as indicated, the following:
(a) Monthly Financials. To Agent, within 30 days after the end of
each Fiscal Month, financial information regarding Borrower and its
Subsidiaries, certified by the Chief Financial Officer of Borrower, consisting
of consolidated and consolidating (i) unaudited balance sheets as of the close
of such Fiscal Month and the related statements of income and cash flows for
that portion of the Fiscal Year ending as of the close of such Fiscal Month; and
(ii) unaudited statements of income and cash flows for such Fiscal Month,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections for such Fiscal
Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments and the absence of footnotes). Such financial information shall be
accompanied by the certification of the Chief Financial Officer of Borrower that
(i) such financial information presents fairly in accordance with GAAP (subject
to normal year-end adjustments and the absence of footnotes) the financial
position and results of operations of Borrower and its Subsidiaries, on a
consolidated and consolidating basis, in each case as at the end of such Fiscal
Month and for that portion of the Fiscal Year then ended and (ii) any other
information presented is true, correct and complete in all material respects and
that there was no Event of Default in existence as of such time or, if an Event
of Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Event of Default.
(b) Quarterly Financials. To Agent, within 45 days after the end
of each Fiscal Quarter, consolidated and consolidating financial information
regarding Borrower and its Subsidiaries, certified by the Chief Financial
Officer of Borrower, including (i) unaudited balance sheets as of the close of
such Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and
(ii) unaudited statements of income and cash flows for such Fiscal Quarter, in
each case setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections for such
Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments and the absence of footnotes). Such financial information shall be
accompanied by (A) a statement in reasonable detail (each, a "Compliance
Certificate" showing the calculations used in determining compliance with each
of the Financial Covenants that is tested on a quarterly basis and (B) the
certification of the Chief Financial Officer of Borrower that (i) such financial
information presents fairly in accordance with GAAP (subject to normal year-end
adjustments and the absence of footnotes) the financial position, results of
operations and statements of cash flows of Borrower and its Subsidiaries, on
both a consolidated and consolidating basis, as at the end of
E-1
such Fiscal Quarter and for that portion of the Fiscal Year then ended, (ii) any
other information presented is true, correct and complete in all material
respects and that there was no Event of Default in existence as of such time or,
if an Event of Default has occurred and is continuing, describing the nature
thereof and all efforts undertaken to cure such Event of Default. In addition,
Borrower shall deliver to Agent and Lenders, within 45 days after the end of
each Fiscal Quarter, a management discussion and analysis that includes a
comparison to budget for that Fiscal Quarter and a comparison of performance for
that Fiscal Quarter to the corresponding period in the prior year.
(c) Operating Plan. To Agent, as soon as available, but not later
than 30 days after the end of each Fiscal Year, an annual operating plan for
Borrower, on a consolidated and consolidating basis, approved by the Board of
Directors of Borrower, for the following Fiscal Year, which (i) includes a
statement of all of the material assumptions on which such plan is based, (ii)
includes monthly balance sheets, income statements and statements of cash flows
for the following year and (iii) integrates sales, gross profits, operating
expenses, operating profit, cash flow projections and Borrowing Availability
projections, all prepared on the same basis and in similar detail as that on
which operating results are reported (and in the case of cash flow projections,
representing management's good faith estimates of future financial performance
based on historical performance), and including plans for personnel, Capital
Expenditures and facilities.
(d) Annual Audited Financials. To Agent, within 90 days after the
end of each Fiscal Year, audited Financial Statements for Borrower and its
Subsidiaries on a consolidated and (unaudited) consolidating basis, consisting
of balance sheets and statements of income and retained earnings and cash flows,
setting forth in comparative form in each case the figures for the previous
Fiscal Year, which Financial Statements shall be prepared in accordance with
GAAP and certified without qualification, by an independent certified public
accounting firm of national standing or otherwise reasonably acceptable to
Agent. Such Financial Statements shall be accompanied by (i) a statement
prepared in reasonable detail showing the calculations used in determining
compliance with each of the Financial Covenants, (ii) the annual letters to such
accountants in connection with their audit examination detailing contingent
liabilities and material litigation matters, and (iii) the certification of the
Chief Executive Officer or Chief Financial Officer of Borrower that all such
Financial Statements present fairly in accordance with GAAP the financial
position, results of operations and statements of cash flows of Borrower and its
Subsidiaries on a consolidated and consolidating basis, as at the end of such
Fiscal Year and for the period then ended, and that there was no Event of
Default in existence as of such time or, if an Event of Default has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Event of Default.
(e) Management Letters. To Agent, within 5 Business Days after
receipt thereof by any Credit Party, copies of all management letters, exception
reports or similar letters or reports received by such Credit Party from its
independent certified public accountants.
E-2
(f) Default Notices. To Agent, as soon as practicable, and in any
event within 5 Business Days after an executive officer of Borrower has actual
knowledge of the existence of any Default, Event of Default or other event that
has had a Material Adverse Effect (in each case not previously disclosed to
Agent), telephonic or telecopied notice specifying the nature of such Default or
Event of Default or other event, including the anticipated effect thereof, which
notice, if given telephonically, shall be promptly confirmed in writing on the
next Business Day.
(g) SEC Filings and Press Releases. To Agent, promptly upon their
becoming available, copies of: (i) all Financial Statements, reports, notices
and proxy statements made publicly available by any Credit Party to its security
holders; (ii) all regular and periodic reports and all registration statements
and prospectuses, if any, filed by any Credit Party with any securities exchange
or with the Securities and Exchange Commission or any governmental or private
regulatory authority; and (iii) all press releases and other statements made
available by any Credit Party to the public concerning material changes or
developments in the business of any such Person.
(h) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person, and,
within 5 Business Days after any Credit Party obtains knowledge of any matured
or unmatured event of default with respect to any Subordinated Debt, notice of
such event of default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if
any, required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against any Credit
Party that (i) seeks damages in excess of $1,000,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or ERISA Affiliate in connection with any
Plan, (iv) alleges criminal misconduct by any Credit Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities or (vi) involves any product recall.
(k) Insurance Notices. To Agent, disclosure of losses or
casualties required by Section 5.4.
(l) Lease Default Notices. To Agent, within 5 Business Days after
receipt thereof, copies of any and all default notices received under or with
respect to any leased location or public warehouse where Collateral is located.
(m) Other Documents. To Agent and Lenders, such other financial
and other information respecting any Credit Party's business or financial
condition as Agent or any Lender shall from time to time reasonably request.
E-3
ANNEX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
(a) To Agent, upon its request at any time Borrowing Availability
is less than $3,000,000, and in any event no less frequently than 5 Business
Days after the end of each Fiscal Month (together with a copy of all or any part
of the following reports requested by any Lender in writing after the Closing
Date), each of the following reports, each of which shall be prepared by
Borrower as of the last day of the immediately preceding Fiscal Month or the
date 2 days prior to the date of any such request:
(i) a Borrowing Base Certificate, accompanied by such supporting
detail and documentation as shall be reasonably requested by Agent; and
(ii) a monthly trial balance showing Accounts outstanding aged from
invoice date as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days and 91
days or more, accompanied by such supporting detail and documentation as
shall be reasonably requested by Agent.
(b) To Agent, at the time of delivery of each of the quarterly
Financial Statements delivered pursuant to Annex E, a list of any applications
for the registration of any Patent, Trademark or Copyright filed by any Credit
Party with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in the prior Fiscal Quarter;
(c) Borrower, at its own expense, shall deliver to Agent the
results of each physical verification, if any, that Borrower or any of its
Subsidiaries may in their discretion have made, or caused any other Person to
have made on their behalf, of all or any portion of their Inventory (and, if an
Event of Default has occurred and is continuing, Borrower shall, upon the
request of Agent, conduct, and deliver the results of, such physical
verifications as Agent may require);
(d) Borrower, at its own expense, shall deliver to Agent such
appraisals of its assets as Agent may request at any time after the occurrence
and during the continuance of an Event of Default, such appraisals to be
conducted by an appraiser, and in form and substance reasonably satisfactory to
Agent; and
(e) Such other reports, statements and reconciliations with
respect to the Borrowing Base, Collateral or Obligations of any or all Credit
Parties as Agent shall from time to time reasonably request.
F-1
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Maximum Capital Expenditures. Borrower and its
Subsidiaries on a consolidated basis shall not make Capital Expenditures during
the following periods that exceed in the aggregate the amounts set forth
opposite each of such periods:
Maximum Capital
Period Expenditures per Period
------ -----------------------
Fiscal Year ending December 31, 2003 $ 42,500,000
Fiscal Year ending December 31, 2004 $ 53,500,000
Fiscal Year ending December 31, 2005 $ 62,000,000
Fiscal Year ending December 31, 2006 $ 74,000,000
Fiscal Year ending December 31, 2007 $ 86,000,000
Fiscal Year ending December 31, 2008 $100,000,000
and each Fiscal Year thereafter
; provided, however, that the amount of permitted Capital Expenditures
referenced above will be increased in any period by the positive amount equal to
the lesser of (i) one hundred percent (100%) of the amount of permitted Capital
Expenditures for the immediately prior period (not to exceed $10,000,000), and
(ii) the amount (if any), equal to the difference obtained by taking the Capital
Expenditures limit specified above for the immediately prior period minus the
actual amount of any Capital Expenditures expended during such prior period (the
"Carry Over Amount"), and for purposes of measuring compliance herewith, the
Carry Over Amount shall be deemed to be the last amount spent on Capital
Expenditures in that succeeding year.
(b) Minimum Interest Coverage Ratio. Borrower and its
Subsidiaries shall have on a consolidated basis at each date set forth below, an
Interest Coverage Ratio for the twelve-month period then ended of not less than
the following:
Twelve Month Period Ending Minimum Interest Coverage Ratio
-------------------------- -------------------------------
December 31, 2003 2.00 to 1.0
March 31, 2004 2.00 to 1.0
G-1
June 30, 2004 2.00 to 1.0
September 30, 2004 2.00 to 1.0
December 31, 2004 2.15 to 1.0
March 31, 2005 2.15 to 1.0
June 30, 2005 2.15 to 1.0
September 30, 2005 2.15 to 1.0
December 31, 2005 2.25 to 1.0
March 31, 2006 2.25 to 1.0
June 30, 2006 2.25 to 1.0
September 30, 2006 2.25 to 1.0
December 31, 2006 2.50 to 1.0
March 31, 2007 2.50 to 1.0
June 30, 2007 2.50 to 1.0
September 30, 2007 2.50 to 1.0
December 31, 2007 and each March 31, June 30, September
30, and December 31 thereafter 2.75 to 1.0
(c) Maximum Total Leverage Ratio. Borrower and its
Subsidiaries on a consolidated basis shall have, at each date set forth below, a
Total Leverage Ratio as of such date and for the twelve-month period then ended
of not more than the following:
Twelve Month Period Ending Minimum Interest Coverage Ratio
-------------------------- -------------------------------
December 31, 2003 4.75 to 1.0
March 31, 2004 4.75 to 1.0
June 30, 2004 4.75 to 1.0
September 30, 2004 4.75 to 1.0
December 31, 2004 4.60 to 1.0
March 31, 2005 4.60 to 1.0
June 30, 2005 4.60 to 1.0
September 30, 2005 4.60 to 1.0
December 31, 2005 4.35 to 1.0
March 31, 2006 4.35 to 1.0
June 30, 2006 4.35 to 1.0
September 30, 2006 4.35 to 1.0
December 31, 2006 4.00 to 1.0
March 31, 2007 4.00 to 1.0
June 30, 2007 4.00 to 1.0
September 30, 2007 4.00 to 1.0
December 31, 2007 and each March 31, June 30, September
30, and December 31 thereafter 3.75 to 1.0
G-2
Unless otherwise specifically provided herein, any accounting
term used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrower, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrower's and its Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the calculation of EBITDA in such period. If Agent,
Borrower and Requisite Lenders agree upon the required amendments, then after
appropriate amendments have been executed and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change. If Agent, Borrower and Requisite
Lenders cannot agree upon the required amendments within 30 days following the
date of implementation of any Accounting Change, then all Financial Statements
delivered and all calculations of financial covenants and other standards and
terms in accordance with the Agreement and the other Loan Documents shall be
prepared, delivered and made without regard to the underlying Accounting Change.
For purposes of Section 8.1, a breach of a Financial Covenant contained in this
Annex G shall be deemed to have occurred as of any date of determination by
Agent or as of the last day of any specified measurement period, regardless of
when the Financial Statements reflecting such breach are delivered to Agent.
G-3
ANNEX H (SECTION 9.9(a))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: Bankers Trust Company
New York, New York
ABA #: 021001033
Account #: ▇▇▇▇▇▇▇▇
Account Name: GECC/CAF Depository
Reference: CFC Universal Hospital Services
H-1
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Account Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
General Electric Capital Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Counsel - Commercial Finance
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If to Borrower, at
Universal Hospital Services, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
I-1
with copies to:
▇▇▇▇▇▇ & Whitney LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
I-2
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Revolving Loan Commitment: Lender(s)
------------------------- ---------
$30,000,000 General Electric Capital Corporation
(plus Swing Line Commitment of $5,000,000)
$15,000,000 Fleet National Bank
$22,500,000 PNC Bank, National Association
$17,500,000 LaSalle Business Credit, LLC
$15,000,000 CIT Lending Services Corporation
J-1
EXHIBIT 1.1(A)(I)
TO
CREDIT AGREEMENT
FORM OF NOTICE OF REVOLVING CREDIT ADVANCE
Reference is made to that certain Credit Agreement dated as of
__________ __, 2003 by and among the undersigned ("Borrower"), General Electric
Capital Corporation, as agent and as a Lender, the Credit Parties signatory
thereto and the Lenders from time to time party thereto (including all annexes,
exhibits or schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"). Capitalized terms
used herein without definition are so used as defined in the Credit Agreement.
Borrower hereby gives irrevocable notice, pursuant to Section
1.1(a)(i) of the Credit Agreement, of its request for a Revolving Credit Advance
in the aggregate amount of [$___________] to be made on [____________, ____].
Borrower hereby (i) represents and warrants that all of the
conditions contained in Section 2.2 of the Credit Agreement have been satisfied
on and as of the date hereof, and will continue to be satisfied on and as of the
date of the Advances requested hereby, before and after giving effect thereto;
and (ii) reaffirms the continuance of Agent's Liens, on behalf of itself and
Lenders, pursuant to the Collateral Documents.
IN WITNESS WHEREOF, Borrower has caused this Notice of Revolving
Credit Advance to be executed and delivered by its duly authorized officer as of
the date first set forth above.
UNIVERSAL HOSPITAL SERVICES, INC.
By________________________________________
Its_______________________________________
EXHIBIT 1.1(A)(II)
TO
CREDIT AGREEMENT
FORM OF REVOLVING NOTE
Chicago, Illinois
[$100,000,000] October ___, 2003
FOR VALUE RECEIVED, the undersigned, UNIVERSAL HOSPITAL SERVICES,
INC., a Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the order
of _______________________ ("Lender"), at the offices of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, as Agent for Lenders ("Agent"), at
its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
place as Agent may designate from time to time in writing, in lawful money of
the United States of America and in immediately available funds, the amount of
[ONE HUNDRED MILLION DOLLARS AND 00/100 CENTS ($100,000,000)] or, if less, the
aggregate unpaid amount of all Revolving Credit Advances made to the undersigned
under the "Credit Agreement" (as hereinafter defined). All capitalized terms
used but not otherwise defined herein have the meanings given to them in the
Credit Agreement or in Annex A thereto.
This Revolving Note is one of the Revolving Notes issued pursuant to
that certain Credit Agreement of even date herewith by and among Borrower, the
other Persons named therein as Credit Parties, Agent, Lender and the other
Persons signatory thereto from time to time as Lenders (including all annexes,
exhibits and schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), and is entitled to
the benefit and security of the Credit Agreement, the Security Agreement and all
of the other Loan Documents referred to therein. Reference is hereby made to the
Credit Agreement for a statement of all of the terms and conditions under which
the Loans evidenced hereby are made and are to be repaid. The date and amount of
each Revolving Credit Advance made by Lenders to Borrower, the rates of interest
applicable thereto and each payment made on account of the principal thereof,
shall be recorded by Agent on its books; provided that the failure of Agent to
make any such recordation shall not affect the obligations of Borrower to make a
payment when due of any amount owing under the Credit Agreement or this Note in
respect of the Revolving Credit Advances made by Lender to Borrower.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement.
If any payment on this Revolving Note becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
Upon and after the occurrence of any Event of Default, this
Revolving Note may, as provided in the Credit Agreement, and without demand,
notice or legal process of any kind, except as otherwise required under the
Credit Agreement, be declared, and immediately shall become, due and payable.
Time is of the essence of this Revolving Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by Borrower,
except as otherwise required under the Credit Agreement.
Except as provided in the Credit Agreement, this Revolving Note may
not be assigned by Lender to any Person.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.
UNIVERSAL HOSPITAL SERVICES, INC.
By________________________________________
Title_____________________________________
EXHIBIT 1.1(B)(II)
TO
CREDIT AGREEMENT
FORM OF SWING LINE NOTE
Chicago, Illinois
$5,000,000 October __, 2003
FOR VALUE RECEIVED, the undersigned, UNIVERSAL HOPSITAL SERVICES,
INC., a Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the order
of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("Swing Line
Lender") at the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as Agent (in such capacity, the "Agent") at the Agent's address at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place as Agent may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of FIVE MILLION DOLLARS
AND NO CENTS ($5,000,000) or, if less, the aggregate unpaid amount of all Swing
Line Advances made to the undersigned under the "Credit Agreement" (as
hereinafter defined). All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement or in Annex A
thereto.
This Swing Line Note is issued pursuant to that certain Credit
Agreement of even date herewith by and among Borrower, the other Persons named
therein as Credit Parties, Agent, Swing Line Lender and the other Persons
signatory thereto from time to time as Lenders (including all annexes, exhibits
and schedules thereto and as from time to time amended, restated, supplemented
or otherwise modified, the "Credit Agreement"), and is entitled to the benefit
and security of the Credit Agreement, the Security Agreement and all of the
other Loan Documents. Reference is hereby made to the Credit Agreement for a
statement of all of the terms and conditions under which the Loans evidenced
hereby are made and are to be repaid. The date and amount of each Swing Line
Advance made by Swing Line Lender to Borrower, the rate of interest applicable
thereto and each payment made on account of the principal thereof, shall be
recorded by Agent on its books; provided that the failure of Agent to make any
such recordation shall not affect the obligations of Borrower to make a payment
when due of any amount owing under the Credit Agreement or this Swing Line Note
in respect of the Swing Line Advances made by Swing Line Lender to Borrower.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement.
If any payment on this Swing Line Note becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
Upon and after the occurrence of any Event of Default, this Swing
Line Note may, as provided in the Credit Agreement, and without demand, notice
or legal process of any kind, except as otherwise required under the Credit
Agreement, be declared, and immediately shall become, due and payable.
Time is of the essence of this Swing Line Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by Borrower,
except as otherwise required under the Credit Agreement.
THIS SWING LINE NOTE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
UNIVERSAL HOSPITAL SERVICES, INC.
By________________________________________
Title_____________________________________
EXHIBIT 1.5(E)
TO
CREDIT AGREEMENT
FORM OF NOTICE OF CONVERSION/CONTINUATION
Reference is made to that certain Credit Agreement dated as of
__________, 2003 by and among the undersigned ("Borrower"), the other Persons
named therein as Credit Parties, General Electric Capital Corporation ("Agent")
and the Lenders from time to time signatory thereto (including all annexes,
exhibits or schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"). Capitalized terms
used herein without definition are so used as defined in the Credit Agreement.
Borrower hereby gives irrevocable notice, pursuant to Section 1.5(e)
of the Credit Agreement, of its request to:
(a) on [ date ] convert $[________]of the aggregate outstanding
principal amount of the Revolving Loan, bearing interest at the [________] Rate,
into a Revolving Loan [AND, IN THE CASE OF A LIBOR LOAN, HAVING A LIBOR PERIOD
OF [_____] MONTH(S)];
[(B) ON [ DATE ] CONTINUE $[________]OF THE AGGREGATE OUTSTANDING
PRINCIPAL AMOUNT OF THE REVOLVING LOAN, BEARING INTEREST AT THE LIBOR RATE, AS A
LIBOR LOAN HAVING A LIBOR PERIOD OF [_____] MONTH(S)].
Borrower hereby (i) represents and warrants that all of the
conditions contained in Section 2.2 of the Credit Agreement have been satisfied
on and as of the date hereof, and will continue to be satisfied on and as of the
date of the conversion/continuation requested hereby, before and after giving
effect thereto; and (ii) reaffirms the continuance of Agent's Liens, on behalf
of itself and Lenders, pursuant to the Collateral Documents.
IN WITNESS WHEREOF, Borrower has caused this Notice of
Conversion/Continuation to be executed and delivered by its duly authorized
officer as of the date first set forth above.
UNIVERSAL HOSPITAL SERVICES, INC.
By________________________________________
Title_____________________________________
EXHIBIT 4.1(B)
TO
CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
[See attached]
FORM OF BORROWING BASE CERTIFICATE
AS OF _______________
Pursuant to Annex F (Section 4.1(b)) of the Credit Agreement, dated
as of ________________ (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among UNIVERSAL HOSPITAL SERVICES,
INC. (the "Borrower"), the lenders from time to time parties thereto (the
"Lenders"), GENERAL ELECTRIC CAPITAL CORPORATION, as a lender and as agent
("Agent"), the undersigned officer hereby certifies on behalf of the Borrower to
Agent and the Lenders, as follows:
1. The Borrowing Base (as defined in the Credit Agreement) as of
__________________________ was: $_____________
Calculated as follows: Date: __________ For Month Ending: _____________
Borrowings $_____________
Letter of Credit $_____________
$
==============
ACCOUNTS RECEIVABLE
Total Outstanding Accounts $_______________
Less Any Account
(a) that does not arise from the sale
or rental of goods or the
performance of services by Borrower
or any of its Subsidiaries in the
ordinary course of its business
$_______________
(b) (i) upon which Borrower's or any
Subsidiary's right to receive
payment is not absolute or is
contingent upon the fulfillment of
any condition whatsoever or (ii) as
to which Borrower or any Subsidiary
is not legally able to bring suit
or otherwise enforce its remedies
against the Account Debtor through
judicial process or (iii) to the
extent that both (x) the Account
represents a progress billing
consisting of an invoice for goods
sold or used or services rendered
pursuant to a contract under which
the Account Debtor's obligation to
pay that invoice is subject to
Borrower's or any Subsidiary's
completion of further performance
under such contract or is subject
to the equitable lien of a surety
bond issuer and (y) the aggregate
face $_______________
amount of all Accounts described in
this clause (iii) exceeds $500,000
(c) to the extent that any defense,
counterclaim, setoff or dispute has
been asserted as to such Account $_______________
(d) that is not a true and correct
statement of bona fide indebtedness
incurred in the amount of the
Account for merchandise sold to or
services rendered to the applicable
Account Debtor $_______________
(e) with respect to which an invoice,
reasonably acceptable to Agent in
form and substance, has not been
sent to the applicable Account
Debtor $_______________
(f) that (i) is not owned by Borrower
or any Subsidiary or (ii) is
subject to any right, claim,
security interest or other interest
of any other Person, other than
Liens in favor of Agent, on behalf
of itself and Lenders $_______________
(g) that arises from a sale to any
director, officer, other employee
or Affiliate of any Credit Party,
or to any entity that has any
common officer or director with any
Credit Party (it being understood
and agreed that sales to any
portfolio companies of ▇.▇. Childs
and Halifax shall not be excluded
from the category of Eligible
Accounts solely by operation of
this clause (g)); $_______________
(h) to the extent that both (x) the
Account is the obligation of an
Account Debtor that is the United
States government, or any
department, agency or
instrumentality thereof, unless
Agent, in its sole discretion, has
agreed to the contrary in writing
and Borrower or a Subsidiary, if
necessary or desirable, has
complied with respect to such
obligation with the Federal
Assignment of Claims Act of 1940,
and (y) the aggregate face amount
of all Accounts described in this
clause (h) exceed $1,000,000 $_______________
(i) that is the obligation of an
Account Debtor located in a foreign
country other than $_______________
Canada unless payment thereof is
assured by a letter of credit
assigned and delivered to Agent,
reasonably satisfactory to Agent
as to form, amount and issuer
(j) to the extent Borrower or any
Subsidiary is liable for goods sold
or services rendered by the
applicable Account Debtor to
Borrower or any Subsidiary but only
to the extent of the potential
offset $_______________
(k) that arises with respect to goods
that are delivered on a
▇▇▇▇-and-hold, cash-on-delivery
basis or placed on consignment,
guaranteed sale or other terms by
reason of which the payment by the
Account Debtor is or may be
conditional $_________________
(l) that is in default as established
upon the occurrence of any of the
following:
(1) the Account is not paid within 90
days following its original invoice
date;
(2) the Account Debtor obligated upon
such Account suspends business,
makes a general assignment for the
benefit of creditors or fails to
pay its debts generally as they
come due; or
(3) a petition is filed by or against
any Account Debtor obligated upon
such Account under any bankruptcy
law or any other federal, state or
foreign (including any provincial)
receivership, insolvency relief or
other law or laws for the relief of
debtors $_________________
(m) that is the obligation of an
Account Debtor if fifty percent
(50%) or more of the Dollar amount
of all Accounts owing by that
Account Debtor are ineligible under
the other criteria set forth in
this Borrowing Base Certificate $_________________
(n) as to which Agent's Lien thereon,
on behalf $_________________
of itself and Lenders, is
not a first priority perfected
Lien;
(o) as to which any of the
representations or warranties in
the Loan Documents are untrue $_________________
(p) to the extent such Account is
evidenced by a judgment, Instrument
or Chattel Paper $_________________
(q) to the extent that such Account,
together with all other Accounts
owing by such Account Debtor and
its Affiliates as of any date of
determination exceed ten percent
(10%) of all Eligible Accounts $_________________
Total ineligible Accounts: $_________________
Net Eligible Accounts $_________________
Multiplied by rate of advance: 85% $
=================
RENTAL EQUIPMENT
Total Rental Equipment $_________________
Less any Rental Equipment
(a) that is not owned by Borrower or a
Subsidiary free and clear of all
Liens and rights of any other
Person (including the rights of a
purchaser that has made progress
payments and the rights of a surety
that has issued a bond to assure
Borrower's or any Subsidiary's
performance with respect to any
Inventory, but excluding the rights
of any customer under a customer
contract entered into by Borrower
in the ordinary course of business
and consistent with past
practices), except the Liens in
favor of Agent, on behalf of itself
and Lenders, and Permitted
Encumbrances in favor of landlords
and bailees to the extent permitted
in Section 5.9 of the Credit
Agreement (subject to Reserves
established by Agent in accordance
with Section 5.9 of the Credit Agreement) $_________________
(b) that (i) is stored at a leased
location, unless (x) a reasonably
satisfactory landlord $_________________
waiver has been delivered to Agent
or (y) Borrower shall have complied with
the provisions of Section 5.9 of
the Credit Agreement with respect
to the delivery of landlord
agreements or (ii) is stored with a
bailee or warehouseman unless a
reasonably satisfactory,
acknowledged bailee letter has been
received by Agent and Reserves
reasonably satisfactory to Agent
have been established with respect
thereto
(c) that is placed on consignment $_________________
(d) that is covered by a negotiable
document of title, unless such
document has been delivered to
Agent with all necessary
endorsements, free and clear of all
Liens except those in favor of
Agent and Lenders $_________________
(e) that is unrentable, obsolete, or
slow-moving $_________________
(f) that consists of display items or
packing or shipping materials,
manufacturing supplies or
work-in-process Inventory $_________________
(g) that is not of a type held for sale
or rent in the ordinary course of
Borrower's or any Subsidiary's
business $_________________
(h) that is not subject to a first
priority lien in favor of Agent on
behalf of itself and Lenders,
subject to Permitted Encumbrances $_________________
(i) that breaches any of the
representations or warranties
pertaining to Inventory set forth
in the Loan Documents $_________________
(j) that consists of Hazardous
Materials $_________________
(k) that is not covered by casualty
insurance $_________________
Total ineligible Rental Equipment: $_________________
Net Eligible Rental Equipment: $_________________
Multiplied by Applicable Advance Rate 55% $
=================
ELIGIBLE WHOLESALE DISPOSABLES
Total Wholesale Disposables $_________________
Less any Wholesale Disposable
(a) that is not owned by Borrower or a
Subsidiary free and clear of all
Liens and rights of any other
Person (including the rights of a
purchaser that has made progress
payments and the rights of a surety
that has issued a bond to assure
Borrower's or any Subsidiary's
performance with respect to any
Inventory, but excluding the rights
of any customer under a customer
contract entered into by Borrower
in the ordinary course of business
and consistent with past
practices), except the Liens in
favor of Agent, on behalf of itself
and Lenders, and Permitted
Encumbrances in favor of landlords
and bailees to the extent permitted
in Section 5.9 of the Credit
Agreement (subject to Reserves
established by Agent in accordance
with Section 5.9 of the Credit
Agreement) $_________________
(b) that (i) is stored at a leased
location, unless (x) a reasonably
satisfactory landlord waiver has
been delivered to Agent and (y)
Borrower shall have complied with
the provisions of Section 5.9 with
respect to the delivery of landlord
agreements or (ii) is stored with a
bailee or warehouseman unless a
reasonably satisfactory,
acknowledged bailee letter has been
received by Agent and Reserves
reasonably satisfactory to Agent
have been established with respect
thereto $_________________
(c) that is placed on consignment $_________________
(d) that is covered by a negotiable
document of title, unless such
document has been delivered to
Agent with all necessary
endorsements, free and clear of all
Liens except those in favor of
Agent and Lenders $_________________
(e) that is unrentable, obsolete, or
slow-moving $_________________
(f) that consists of display items or
packing or shipping materials,
manufacturing supplies $_________________
or work-in-process Inventory
(g) that is not of a type held for sale
or rent in the ordinary course of
Borrower's or any Subsidiary's
business $_________________
(h) that is not subject to a first
priority lien in favor of Agent on
behalf of itself and Lenders,
subject to Permitted Encumbrances $_________________
(i) that breaches any of the
representations or warranties
pertaining to Inventory set forth
in the Loan Documents $_________________
(j) that consists of Hazardous
Materials $_________________
(k) that is not covered by casualty
insurance $_________________
Total Ineligible Wholesale Disposables: $_________________
Net Eligible Wholesale Disposables: $_________________
Multiplied by Applicable Advance Rate 50% $
=================
EQUIPMENT DISPOSABLES
Total Equipment Disposables $_________________
Less any Equipment Disposable
(a) that is not owned by Borrower or a
Subsidiary free and clear of all
Liens and rights of any other
Person (including the rights of a
purchaser that has made progress
payments and the rights of a surety
that has issued a bond to assure
Borrower's or any Subsidiary's
performance with respect to any
Inventory, but excluding the rights
of any customer under a customer
contract entered into by Borrower
in the ordinary course of business
and consistent with past
practices), except the Liens in
favor of Agent, on behalf of itself
and Lenders, and Permitted
Encumbrances in favor of landlords
and bailees to the extent permitted
in Section 5.9 of the Credit
Agreement (subject to Reserves
established by Agent in accordance
with Section 5.9 of the Credit
Agreement) $_________________
(b) that (i) is stored at a leased
location, unless $_________________
(x) a reasonably
satisfactory landlord waiver has
been delivered to Agent or (y)
Borrower shall have complied with
the provisions of Section 5.9 with
respect to the delivery of landlord
agreements or (ii) is stored with a
bailee or warehouseman unless a
reasonably satisfactory,
acknowledged bailee letter has been
received by Agent and Reserves
reasonably satisfactory to Agent
have been established with respect
thereto
(c) that is placed on consignment $_________________
(d) that is covered by a negotiable
document of title, unless such
document has been delivered to
Agent with all necessary
endorsements, free and clear of all
Liens except those in favor of
Agent and Lenders $_________________
(e) that is unrentable, obsolete, or
slow-moving $_________________
(f) that consists of display items or
packing or shipping materials,
manufacturing supplies or
work-in-process Inventory $_________________
(g) that is not of a type held for sale
or rent in the ordinary course of
Borrower's or any Subsidiary's
business $_________________
(h) that is not subject to a first
priority lien in favor of Agent on
behalf of itself and Lenders,
subject to Permitted Encumbrances $_________________
(i) that breaches any of the
representations or warranties
pertaining to Inventory set forth
in the Loan Documents $_________________
(j) that consists of Hazardous
Materials $_________________
(k) that is not covered by casualty
insurance $_________________
Total ineligible Wholesale Disposables: $_________________
Net Eligible Wholesale Disposables: $_________________
Multiplied by Applicable Advance Rate 20% $
=================
2. I hereby certify that the information shown above has been calculated in
accordance with the applicable provisions of the Credit Agreement, and this
Certificate is complete and correct to the best of my knowledge and belief.
3. Unless otherwise defined herein, terms defined in the Credit Agreement are
used herein with such defined meanings.
Date: UNIVERSAL HOSPITAL SERVICES, INC.
By:
-----------------------------------------
Name:
Title:
EXHIBIT 9.1(A)
TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement") is made as of
___________ __, ____ by and between __________________________________
("Assignor Lender") and ________________________ ("Assignee Lender") and
acknowledged and consented to by GENERAL ELECTRIC CAPITAL CORPORATION, as agent
("Agent"). All capitalized terms used in this Agreement and not otherwise
defined herein will have the respective meanings set forth in the Credit
Agreement as hereinafter defined.
RECITALS:
WHEREAS, UNIVERSAL HOSPITAL SERVICES, INC., a Delaware corporation
("Borrower"), Agent, Assignor Lender and other Persons signatory thereto as
Lenders have entered into that certain Credit Agreement dated as of
______________, __, 2003 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") pursuant to which Assignor
Lender has agreed to make certain Loans to, and incur certain Letter of Credit
Obligations for, Borrower;
WHEREAS, Assignor Lender desires to assign to Assignee Lender [ALL/A
PORTION] of its interest in the Loans (as described below), the Letter of Credit
Obligations and the Collateral and to delegate to Assignee Lender [ALL/A
PORTION] of its Commitments and other duties with respect to such Loans, Letter
of Credit Obligations and Collateral;
WHEREAS, Assignee Lender desires to become a Lender under the Credit
Agreement and to accept such assignment and delegation from Assignor Lender; and
WHEREAS, Assignee Lender desires to appoint Agent to serve as Agent
for Assignee Lender under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions, and covenants herein contained, Assignor Lender and Assignee Lender
agree as follows:
1. ASSIGNMENT, DELEGATION, AND ACCEPTANCE
1.1. Assignment. Assignor Lender hereby transfers and assigns to
Assignee Lender, without recourse and without representations or warranties of
any kind (except as set forth in Section 3.2), [ALL/SUCH PERCENTAGE] of Assignor
Lender's right, title, and interest in the Revolving Loan, Letter of Credit
Obligations, Loan Documents and Collateral as will
result in Assignee Lender having as of the Effective Date (as hereinafter
defined) a Pro Rata Share thereof, as follows:
Assignee Lender's Loans Principal Amount Pro Rata Share
----------------------- ---------------- --------------
Revolving Loan $____________ ____%
1.2. Delegation. Assignor Lender hereby irrevocably assigns and
delegates to Assignee Lender [ALL/A PORTION] of its Commitments and its other
duties and obligations as a Lender under the Loan Documents equivalent to
[100%/___%] of Assignor Lender's Revolving Loan Commitment.
1.3. Acceptance by Assignee Lender. By its execution of this Agreement,
Assignee Lender irrevocably purchases, assumes and accepts such assignment and
delegation and agrees to be a Lender with respect to the delegated interest
under the Loan Documents and to be bound by the terms and conditions thereof. By
its execution of this Agreement, Assignor Lender agrees, to the extent provided
herein, to relinquish its rights and be released from its obligations and duties
under the Credit Agreement.
1.4. Effective Date. Such assignment and delegation by Assignor Lender
and acceptance by Assignee Lender will be effective and Assignee Lender will
become a Lender under the Loan Documents as of [THE DATE OF THIS AGREEMENT]
("Effective Date") and upon payment of the Assigned Amount and the Assignment
Fee (as each term is defined below). [INTEREST AND FEES ACCRUED PRIOR TO THE
EFFECTIVE DATE ARE FOR THE ACCOUNT OF ASSIGNOR LENDER, AND INTEREST AND FEES
ACCRUED FROM AND AFTER THE EFFECTIVE DATE ARE FOR THE ACCOUNT OF ASSIGNEE
LENDER.]
2. INITIAL PAYMENT AND DELIVERY OF NOTES
2.1. Payment of the Assigned Amount. Assignee Lender will pay to
Assignor Lender, in immediately available funds, not later than 12:00 noon
(Chicago time) on the Effective Date, an amount equal to its Pro Rata Share of
the then outstanding principal amount of the Loans as set forth above in Section
1.1 [TOGETHER WITH ACCRUED INTEREST, FEES AND OTHER AMOUNTS AS SET FORTH ON
SCHEDULE 2.1] (the "Assigned Amount").
2.2. Payment of Assignment Fee. [ASSIGNOR LENDER AND/OR ASSIGNEE
LENDER] will pay to Agent, for its own account in immediately available funds,
not later than 12:00 noon (Chicago time) on the Effective Date, the assignment
fee in the amount of $3,500 (the "Assignment Fee") as required pursuant to
Section 9.1(a) of the Credit Agreement.
2.3. Execution and Delivery of Notes. Following payment of the Assigned
Amount and the Assignment Fee, Assignor Lender will deliver to Agent the Notes
previously delivered to Assignor Lender for redelivery to Borrower and Agent
will obtain from Borrower for delivery to Assignor Lender and Assignee Lender,
new executed Notes evidencing Assignee Lender's and Assignor Lender's respective
Pro Rata Shares in the Loans after giving effect to the assignment described in
Section 1. Each new Note will be issued in
the aggregate maximum principal amount of the Commitment of the Lender to whom
such Note is issued.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. Assignee Lender's Representations, Warranties and Covenants.
Assignee Lender hereby represents, warrants, and covenants the following to
Assignor Lender and Agent:
(a) This Agreement is a legal, valid, and binding agreement of
Assignee Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its
duties and obligations under this Agreement and the Loan Documents will
not require any registration with, notice to, or consent or approval by
any Governmental Authority;
(c) Assignee Lender is familiar with transactions of the kind
and scope reflected in the Loan Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation
and appraisal of the financial condition and affairs of each Credit
Party, has conducted its own evaluation of the Loans and Letter of
Credit Obligations, the Loan Documents and each Credit Party's
creditworthiness, has made its decision to become a Lender to Borrower
under the Credit Agreement independently and without reliance upon
Assignor Lender or Agent, and will continue to do so;
(e) Assignee Lender is entering into this Agreement in the
ordinary course of its business, and is acquiring its interest in the
Loans and Letter of Credit Obligations for its own account and not with
a view to or for sale in connection with any subsequent distribution;
provided, however, that at all times the distribution of Assignee
Lender's property shall, subject to the terms of the Credit Agreement,
be and remain within its control;
(f) No future assignment or participation granted by Assignee
Lender pursuant to Section 9.1 of the Credit Agreement will require
Assignor Lender, Agent, or Borrower to file any registration statement
with the Securities and Exchange Commission or to apply to qualify
under the blue sky laws of any state;
(g) Assignee Lender has no loans to, written or oral
agreements with, or equity or other ownership interest in any Credit
Party;
(h) Assignee Lender will not enter into any written or oral
agreement with, or acquire any equity or other ownership interest in,
any Credit Party without the prior written consent of Agent; and
(i) As of the Effective Date, Assignee Lender (i) is entitled
to receive payments of principal and interest in respect of the
Obligations without deduction for or on account of any taxes imposed by
the United States of America or any political subdivision thereof [,
(II) IS NOT SUBJECT TO CAPITAL ADEQUACY OR SIMILAR REQUIREMENTS UNDER
SECTION 1.16(A) OF THE CREDIT AGREEMENT, (III) DOES NOT REQUIRE THE
PAYMENT OF ANY INCREASED COSTS UNDER SECTION 1.16(B) OF THE CREDIT
AGREEMENT, AND (IV) IS NOT UNABLE TO FUND LIBOR LOANS UNDER SECTION
1.16(C) OF THE CREDIT AGREEMENT, ] and Assignee Lender will indemnify
Agent from and against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, or expenses that result
from Assignee Lender's failure to fulfill its obligations under the
terms of Section 1.15(c) of the Credit Agreement or from any other
inaccuracy in the foregoing.
3.2. Assignor Lender's Representations, Warranties and Covenants.
Assignor Lender hereby represents, warrants and covenants the following to
Assignee Lender:
(a) Assignor Lender is the legal and beneficial owner of the
Assigned Amount;
(b) This Agreement is a legal, valid and binding agreement of
Assignor Lender, enforceable according to its terms;
(c) The execution and performance by Assignor Lender of its
duties and obligations under this Agreement and the Loan Documents will
not require any registration with, notice to or consent or approval by
any Governmental Authority;
(d) Assignor Lender has full power and authority, and has
taken all action necessary to execute and deliver this Agreement and to
fulfill the obligations hereunder and to consummate the transactions
contemplated hereby;
(e) Assignor Lender is the legal and beneficial owner of the
interests being assigned hereby, free and clear of any adverse claim,
lien, encumbrance, security interest, restriction on transfer, purchase
option, call or similar right of a third party; and
(f) This Assignment by Assignor Lender to Assignee Lender
complies, in all material respects, with the terms of the Loan
Documents.
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2) nor
Agent makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents or
any other document or instrument furnished pursuant thereto or the Loans, Letter
of Credit Obligations or other Obligations, (b) the creation, validity,
genuineness, enforceability, sufficiency, value or collectibility of any of
them, (c) the amount, value or existence of the Collateral, (d) the perfection
or priority of any Lien upon the Collateral, or (e) the financial condition of
any Credit Party or other obligor or the performance or observance by any Credit
Party of its obligations under any of the Loan Documents. Neither Assignor
Lender nor Agent has or will have any duty, either initially or on a continuing
basis, to make any investigation, evaluation, appraisal of, or any
responsibility or liability with respect to the accuracy or completeness of, any
information provided to Assignee Lender which has been provided to Assignor
Lender or Agent by any Credit Party. Nothing in this Agreement or in the Loan
Documents shall impose upon the Assignor Lender or Agent any fiduciary
relationship in respect of the Assignee Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of Agent or Assignor Lender in the
exercise of any power, right, or privilege hereunder or under any Loan Document
will impair such power, right, or privilege or be construed to be a waiver of
any default or acquiescence therein. No single or partial exercise of any such
power, right, or privilege will preclude further exercise thereof or of any
other right, power, or privilege. All rights and remedies existing under this
Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision
of this Agreement will be effective without the written concurrence of Assignor
Lender, Agent and Assignee Lender.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law. In
the event any provision of this Agreement is or is held to be invalid, illegal,
or unenforceable under applicable law, such provision will be ineffective only
to the extent of such invalidity, illegality, or
unenforceability, without invalidating the remainder of such provision or the
remaining provisions of the Agreement. In addition, in the event any provision
of or obligation under this Agreement is or is held to be invalid, illegal, or
unenforceable in any jurisdiction, the validity, legality, and enforceability of
the remaining provisions or obligations in any other jurisdictions will not in
any way be affected or impaired thereby.
9. SECTION TITLES
Section and Subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument.
[signature page follows]
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
ASSIGNEE LENDER: ASSIGNOR LENDER:
By:________________________________ By:__________________________________
Title:_____________________________ Title:_______________________________
Notice Address: Notice Address:
___________________________________ _____________________________________
___________________________________ _____________________________________
___________________________________ _____________________________________
ACKNOWLEDGED AND CONSENTED TO:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:________________________________
Title:_____________________________
[ACKNOWLEDGED AND CONSENTED TO:
UNIVERSAL HOSPITAL SERVICES, INC.
By:________________________________
Title:_____________________________
SCHEDULE 2.1
Assignor Lender's Loans
Principal Amount
Revolving Loan $___________________
Accrued Interest $___________________
Unused Line Fee $___________________
Other + or- $___________________
Total $
===================
All determined as of the Effective Date.
EXHIBIT B-1
TO
CREDIT AGREEMENT
FORM OF APPLICATION FOR STANDBY LETTER OF CREDIT
Date [GE CAPITAL LOGO]
L/C No.
(Bank Use Only)
The undersigned Applicant hereby requests General Electric Capital Corporation
("GE Capital") to issue and transmit by:
[ ] Teletransmission [ ] Mail [ ] Overnight Courier
[ ] Other, Explain _______________________________________
the Standby Letter of Credit (the "Credit") substantially as set forth below. In
issuing the Credit, GE Capital is expressly authorized to make such changes from
the terms hereinbelow set forth as GE Capital, in its sole discretion, may deem
advisable.
Applicant Advising Bank: First Union National Bank
(Full Name and Address) ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Standby Letters of Credit
Beneficiary Currency and Amount in Figures:
(Full Name and Address) Currency and Amount in Words:
Expiration Date
* SPECIAL INSTRUCTIONS
Is EVERGREEN language required?
[ ] Yes [ ] No
If yes, what is the number of days
notification required for customary
non-renewal notice?
[ ] Thirty days [ ] Sixty Days
[ ] Ninety days [ ] Other
Charges: GE Capital's charges are for our account, all other charges are to be
paid by beneficiary.
Credit to be available to payment against Beneficiary's draft(s) at sight drawn
on GE Capital or its correspondent at GE Capital's option accompanied by the
following documents:
[ ] Statement, purportedly signed by the Beneficiary, reading as follows
(please state below exact wording to appear on the statement):
[ ] Other Documents
[ ] Special Conditions
[ ] Issue substantially in form of attached specimen. (Specimen must also be
signed by applicant)
Complete only when the Beneficiary (Foreign Bank, or other Financial
Institution) is to issue its undertaking based on this Credit.
[ ] Request Beneficiary to issue and deliver their (specify the type of
undertaking) _________________________ in favor of _______________________
______________________ for an amount not exceeding the amount specified
above, effective immediately relative to (specify contract number or other
pertinent reference) _____________________________________________________
__________________________________________________________________________
to expire on ________________________. (This date must be at least 15 days
prior to the expiry date indicated above). It is understood that if the
Credit is issued in favor of any bank or other financial or commercial
entity which has issued or is to issue an undertaking on behalf of the
Applicant of the Credit in connection with the Credit, the Applicant
hereby agrees to remain liable under the Master Agreement and this
Application in respect of the Credit (even after its expiry date) until GE
Capital is released by such bank or entity.
Each Applicant signing below affirms that it has fully read and agrees to this
Application. IN CONSIDERATION OF GE CAPITAL'S ISSUANCE OF THE CREDIT, THE
APPLICANT AGREES TO BE BOUND BY THE MASTER AGREEMENT FOR STANDBY LETTERS OF
CREDIT BETWEEN APPLICANT AND GE CAPITAL (THE "MASTER AGREEMENT"), THE TERMS OF
WHICH ARE INCORPORATED BY REFERENCE. All actions to be taken by GE Capital
hereunder or in connection with any Credit may be taken by First Union National
Bank or another bank designated by GE Capital as GE Capital's agent.
(Note: If a bank, trust company, or other financial institution signs as
Applicant for its customer, or if two Applicants jointly apply, both parties
should sign below). Documents may be forwarded to you by the Beneficiary, or the
negotiating bank, in one mail. You may forward documents to us or our
customhouse broker, if specified below, in one mail. We understand and agree
that this Credit will be subject to the International Standby Practices,
International Chamber of Commerce Publication No. 590 ("ISP98").
_________________________________ _________________________________
(Print or type name of Applicant) (Print or type name of Applicant)
_________________________________ _________________________________
(Address) (Address)
_________________________________ _________________________________
_________________________________ _________________________________
Authorized Signature (Title) Authorized Signature (Title)
_________________________________ _________________________________
Authorized Signature (Title) Authorized Signature (Title)
Customer Contact
GE CAPITAL USE ONLY
(NOTE: Application will NOT be processed if this section is not complete.)
Approved:________________ City:___________________ Date:_______________
_________________________ Telephone: _____________
(Print name and title)
EXHIBIT B-2
TO
CREDIT AGREEMENT
APPLICATION FOR DOCUMENTARY LETTER OF CREDIT
[GE CAPITAL LOGO]
DATE _________
Dear Sir/Madam:
The undersigned hereby requests General Electric Capital Corporation ("GE
CAPITAL") to arrange for GE Capital Trade Services, Ltd. (the "Issuer"), to open
the irrevocable Letter of Credit via:
[ ] Air Mail [ ] Short Teletransmission [ ] Full Teletransmission
(Details by Air Mail) (Operative Transmission)
In Favor of ___________________________ (Beneficiary) at _______________________
___________________________ (address) For Account of ___________________________
(Applicant) at _________________________________________________ (address) up to
an aggregate amount of _________________________________________________________
available by draft at _____________________________ for [ ] 100% [ ]_____% of
the invoice value, drawn at the Issuer's option, on the Issuer or its
correspondent, and presented not later than ____________________________________
(credit expiration date)
DOCUMENTS REQUIRED AS INDICATED BY "X"
[ ] Commercial Invoice __________________________________________________
[ ] U.S. Special Customs Form #5515 _____________________________________
[ ] Insurance Policy/Certificate/Address ________________________________
_____________________________________________________________________
[ ] Packing List ________________________________________________________
[ ] Certificate of Origin _______________________________________________
[ ] Certificate of Fumigation ___________________________________________
[ ] Other Documents _____________________________________________________
[ ] Air Way ▇▇▇▇ consigned to ___________________________________________
[ ] Full set clean on board ocean Bills of Lading issued or endorsed to
the order of First Union National Bank
[ ] marked "Freight [ ] Collect [ ] Prepaid"
Latest Shipping Date _______________________________________________
Notify _________________________________________________________________________
Evidencing shipment of _________________________________________________________
(PLEASE MENTION COMMODITY ONLY, OMITTING DETAILS ON
PRICE, GRADE, QUALITY, ETC.)
From __________________________________ To __________________________________
Partial shipments [ ] are [ ] are not permitted.
Transhipments [ ] are [ ] are not permitted.
Indicate shipping terms: (FOB, C&F, CIF) ______________________________________
Container shipments [ ] are [ ] are not permitted.
The negotiating bank, if any, is to be authorized to forward all documents in
one registered airmail.
Documents must be presented for payment, acceptance or negotiation within
____________ days after the date of issuance of the ▇▇▇▇ of Lading or other
shipping documents.
All banking charges outside USA are for account of
[ ] Beneficiary [ ] Applicant
Applicant Telephone No. __________________________________
Charge Account No. _______________________________________
The Master Agreement for Documentary Letters of Credit dated as of
________________, 2003 between Applicant and GE Capital is incorporated herein
by reference.
Insurance to be effected by the undersigned if "Insurance Policy/Certificate"
box is not checked.
SPECIAL INSTRUCTIONS:
______________________________________ ______________________________________
Name of Applicant Authorized Signature and Title Date
Approved by:
______________________________________ ______________________________________
GE Capital Unit and Region Official Signature and Title Date
EXHIBIT B-3
TO
CREDIT AGREEMENT
APPLICATION AND AGREEMENT FOR DOCUMENTARY LETTER OF CREDIT
[GE CAPITAL LOGO]
DATE _________
Dear Sir/Madam:
The undersigned hereby requests General Electric Capital Corporation ("GE
CAPITAL") to arrange for GE Capital Trade Services, Ltd. (the "Issuer"), to open
(as the undersigned's agent) the irrevocable Letter of Credit via:
[ ] Air Mail [ ] Short Teletransmission [ ] Full Teletransmission
(Details by Air Mail) (Operative Transmission)
In Favor of ___________________________ (Beneficiary) at _______________________
______________________________________________________ (address) For Account of
___________________________ (Applicant) at _____________________________________
_____________________ (address) up to an aggregate amount of ___________________
________________________________________________________________________________
available by draft at _____________________________ for [ ] 100% [ ]_____% of
the invoice value, drawn at the Issuer's option, on the Issuer or its
correspondent, and presented not later than ____________________________________
(credit expiration date)
DOCUMENTS REQUIRED AS INDICATED BY "X"
[ ] Commercial Invoice _________________________________________________
[ ] U.S. Special Customs Form #5515 ____________________________________
[ ] Insurance Policy/Certificate/Address _______________________________
____________________________________________________________________
[ ] Packing List _______________________________________________________
[ ] Certificate of Origin ______________________________________________
[ ] Certificate of Fumigation __________________________________________
[ ] Other Documents ____________________________________________________
[ ] Air Way ▇▇▇▇ consigned to __________________________________________
[ ] Full set clean on board ocean Bills of Lading issued or endorsed to
the order of First Union National Bank
[ ] marked "Freight [ ] Collect [ ] Prepaid"
Latest Shipping Date _______________________________________________
Notify _________________________________________________________________________
Evidencing shipment of _________________________________________________________
(PLEASE MENTION COMMODITY ONLY, OMITTING DETAILS ON PRICE,
GRADE, QUALITY, ETC.)
From ___________________________________ To ____________________________________
Partial shipments [ ] are [ ] are not permitted.
Transhipments [ ] are [ ] are not permitted.
Indicate shipping terms: (FOB, C&F, CIF) ______________________________________
Container shipments [ ] are [ ] are not permitted.
The negotiating bank, if any, is to be authorized to forward all documents in
one registered airmail.
Documents must be presented for payment, acceptance or negotiation within
____________ days after the date of issuance of the ▇▇▇▇ of Lading or other
shipping documents.
All banking charges outside USA are for account of
[ ] Beneficiary [ ] Applicant
Applicant Telephone No. __________________________________
Charge Account No. _______________________________________
[GE CAPITAL LOGO]
THE TERMS, CONDITIONS AND COVENANTS ON THE REVERSE SIDE HAVE BEEN READ AND ARE A
PART HEREOF.
Insurance to be effected by the undersigned if "Insurance Policy/Certificate"
box is not checked.
SPECIAL INSTRUCTIONS:
______________________________________ ______________________________________
Name of Applicant Authorized Signature and Title Date
Approved by:
______________________________________ ______________________________________
GE Capital Unit and Region Official Signature and Title Date
In consideration of the Issuer issuing its Documentary Letter of Credit
("Credit"), substantially according to the foregoing instructions, the Applicant
intending to be legally bound, agrees as follows:
1. To pay to GE Capital on demand: (i) each amount drawn under the Credit
in Dollars or in the event that drafts under the Credit are payable in a
currency other than U.S. dollars, the dollar equivalent of each amount so drawn;
(ii) interest on each amount (or the dollar equivalent thereof) so drawn for
each day from the date of payment of the relevant draft to and including the
date of payment in full of such amount by Applicant to GE Capital, at the rate
per annum specified in the Credit Agreement (defined below); and (iii) any and
all commissions and charges of, and any and all costs and expenses incurred by,
GE Capital, the Issuer and each of their correspondents in relation to the
Credit and all drafts thereunder.
2. To secure the payment and performance of all Obligations, the Applicant
hereby grants to GE Capital, for its benefit and the benefit of Lenders, an
absolute security interest in and unqualified right to the possession and
disposal of all property shipped under or in connection with the Credit, whether
released to the Applicant under security agreements or otherwise, and also in
and to all shipping documents, documents of title, or drafts drawn under the
Credit and in and to all other property owned by the Applicant, in or coming
into GE Capital's possessions or custody, and in any deposit balances now or
hereafter held by GE Capital for the Applicant's account, together with the
proceeds of each and all of the foregoing, until such time as all the
obligations and liabilities of the Applicant to GE Capital now or hereafter
incurred have been fully paid and discharged. This grant is in addition to all
grants under the Loan Documents. Subject to the terms of the Credit Agreement,
the undersigned agrees to make such cash deposits with GE Capital as GE Capital
may require to further secure the undersigned's Obligations. GE Capital is
subrogated to all claims of Applicant and Beneficiary arising with respect to
the Credit.
3. To promptly examine the copy of the Credit (and any amendments thereof)
sent to Applicant, as well as all other instruments and documents delivered to
Applicant from time to time in connection with the Credit, and, in the event
Applicant has any claim of non-compliance with the instructions or of any
discrepancy or other irregularity, Applicant will immediately notify GE Capital
thereof in writing, and Applicant will conclusively be deemed to have waived any
such claim against GE Capital, Issuer and their agents and subcontractors unless
such immediate notice is given as aforesaid. Neither Issuer, GE Capital nor any
of their agents and subcontractors shall be responsible for, and neither
Issuer's and GE Capital's powers and rights hereunder nor Applicant's
Obligations shall be affected by: (i) any act or omission pursuant to
Applicant's instructions; (ii) any other act or omission of Issuer, GE Capital
or their agents and subcontractors or their respective agents or employees other
than any such arising from its or their gross negligence or wilful misconduct;
(iii) the validity, accuracy or genuineness of drafts, documents or required
statements, even if such drafts, documents or statements should in fact prove to
be in any or all respects invalid, inaccurate, fraudulent or forged (and
notwithstanding that Applicant shall have notified Issuer or GE Capital
thereof); (iv) failure of any draft to bear any reference or adequate reference
to the Credit; (v) errors, omissions, interruptions or delays in transmission of
delivery of any messages however sent and whether or not in code or otherwise;
(vi) any act, default, omission, insolvency or failure in business of any other
person (including any agent or subcontractor) or any consequences arising from
causes beyond Issuer's or GE Capital's control; or (vii) any acts or omissions
of any Beneficiary of the Credit or transferee of the Credit, if transferable;
(viii) any act or omission of GE Capital or Issuer required or permitted under
any (1) law or practice to which a Credit is subject, (2) applicable order,
ruling or decree of any court, arbitrator or governmental agency, or (3)
published statement or interpretation on a matter of law or practice; (ix) honor
or other recognition of a presentation or demand that includes forged or
fraudulent documents or that is otherwise affected by the fraudulent or illegal
conduct of the Beneficiary or other person (excluding GE Capital's and Issuer's
employees), or (x) dishonor of any presentation that does not strictly comply
with the terms of the applicable Credit or that is fraudulent, forged or
otherwise not entitled to be honored. GE Capital may appoint any of its other
subsidiaries as "Issuer" at any time and any Issuer may assign all or any
portion of its rights under this Agreement or the Credit, including without
limitation any reimbursement obligation owing to it to any subsidiary of GE
Capital, in each case without prior notice to Applicant.
4. GE Capital, acting through the Issuer may at any time and from time to
time, in its discretion, by agreement with one or more other applicants: (a)
further finance or refinance any transaction under the Credit; (b) renew, extend
or change the time of payment or the manner, place or terms of payment of any of
the Obligations; (c) settle or compromise any of the Obligations or subordinate
the payment thereof to the payment of any other debts of or claims against any
Applicant which may at the time be due or owing to the Issuer; or (d) release
any Applicant or any guarantor or any Collateral, or modify the terms under
which such Collateral is held, or forego any right of setoff, or modify or amend
in any way this Agreement or the Credit, or give any waiver of consent under
this Agreement; all in such manner and on such terms as Issuer may deem proper
and without notice or further assent from such Applicant. In any such event,
such Applicant shall remain bound by this Agreement after giving effect to such
event, and the Obligations under this Agreement shall be continuing obligations
in respect of any transaction so financed or refinanced and, in either case, if
the Obligations are contingent, may be treated by GE Capital as due and payable
for their maximum face amount.
5. If Issuer is now or hereafter becomes subject to any reserve, special
deposit or similar requirement against assets of, deposits with, or for the
account of, or credit extended by, Issuer, or any other condition is imposed
upon Issuer which imposes a cost upon Issuer, and the result, in the
determination of Issuer is to increase the cost to Issuer of maintaining the
Credit or paying or funding the payment of any draft thereunder, or to reduce
the amount of any sum received or receivable, directly or indirectly, by Issuer
hereunder, Applicant will pay to Issuer upon demand such amounts required to
compensate Issuer for such increased cost or reduction. In making the
determinations contemplated hereunder, Issuer may make such estimates,
assumptions, allocations and the like which Issuer in good faith determines to
be appropriate, but Issuer's selection thereof, and Issuer's determinations
based thereon, shall be final and binding and conclusive upon Applicant.
6. If the Applicant obtains possession of goods, if any, covered by the
Credit, prior to the Issuer's receipt of documents, then all discrepancies and
other irregularities of said documents are deemed waived by Applicant, and
Issuer is authorized to pay any drafts drawn or purporting to be drawn upon the
Credit.
7. Applicant shall indemnify and hold GE Capital and Issuer harmless from
and against all claims, liabilities, losses, costs and expenses, including
attorneys' fees and disbursements, incurred or suffered by GE Capital and/or
Issuer in connection with the Credit.
8. The Applicant shall procure or cause the beneficiaries of the Credit to
procure promptly any necessary import and export or other licenses for import or
export or shipping of any goods referred to in or pursuant to the Credit and to
comply and to cause the beneficiaries to comply with all foreign and domestic
governmental regulations in regard to the shipment and warehousing of such goods
or otherwise relating to or affecting the Credit, including governmental
regulations pertaining to transactions involving designated foreign countries or
their nationals, and to furnish such certificates in that respect as GE Capital
may at
any time require, and to keep such goods adequately covered by insurance in
amounts, with carriers and for such risks as shall be satisfactory to GE
Capital, and to cause GE Capital's interest to be endorsed thereon, and to
furnish GE Capital on demand with evidence thereof. Should the insurance upon
said goods for any reason be unsatisfactory to GE Capital, GE Capital may, at
its expense, obtain insurance satisfactory to it.
9. No delay by GE Capital or Issuer in exercising any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right preclude other or further exercises thereof or the exercise of any
other right. No waiver or amendment of any provision hereof shall be enforceable
against GE Capital or Issuer unless in writing and signed by an officer of GE
Capital, and unless it expressly refers to the provision affected, any such
waiver shall be limited solely to the specific event waived. All rights granted
GE Capital or Issuer hereunder shall be cumulative and shall be supplementary of
and in addition to those granted or available to GE Capital or Issuer under
applicable law and nothing herein shall be construed as limiting any such other
right.
10. Notwithstanding any provision to the contrary herein, GE Capital
reserves the right to decline any instruction provided if, in its discretion, GE
Capital determines that the carrying out of such instruction contravenes GE
Capital's customary procedures or policy or any applicable law, rule or
regulation.
11 (a) This Agreement shall be governed by and interpreted and enforced
in accordance with the laws of the State of Illinois, and GE Capital and Issuer
shall have the rights and remedies of a secured party under applicable law,
including but not limited to the Uniform Commercial Code of Illinois.
(b) Applicant agrees that all actions and proceedings relating
directly or indirectly to this Agreement shall be litigated only in courts
located within the State of Illinois or elsewhere as GE Capital may select and
that such courts are convenient forums therefor and submits to the personal
jurisdiction of such courts.
(c) Applicant waives personal service of process upon it and
consents that any such service of process may be made by certified or registered
mail, return receipt requested, directed to Applicant at its address last
specified for notices hereunder, and service so made shall be deemed completed
two (2) days after the same shall have been so mailed.
(d) Applicant waives the right to a trial by jury in any action or
proceeding between it and GE Capital or the Issuer and waives the right to
assert in any action or proceeding with regard to this Agreement or any of the
Obligations any offsets or counterclaims which it may have.
(e) The Credit and this Agreement shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision) International
Chamber of Commerce Publication No. 500, the terms of which are incorporated
herein.
12. Applicant hereby acknowledges that Issuer is a third party beneficiary
under this Agreement and may enforce its rights under this Agreement directly
against the Applicant as if Issuer were named herein as a party. This Agreement
is entered into pursuant to a Credit Agreement or factoring arrangement in which
GE Capital or a subsidiary thereof is a lender or factor or an agent for lenders
or factors and Applicant or a corporate affiliate of Applicant is a borrower or
seller of accounts (the "Credit Agreement"). Unless otherwise defined herein,
all capitalized terms herein shall have the meanings ascribed to them in the
Credit Agreement. This Agreement is a "Loan Document" as such term is defined in
the Credit Agreement, and is subject to the remedies referred to in the Loan
Documents upon the occurrence of an Event of Default.
Schedule 1.1
to
Credit Agreement
AGENT'S REPRESENTATIVES
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Disclosure Schedule 1.4
to
Credit Agreement
SOURCES AND USES: FUNDS FLOW MEMORANDUM
(See Attached)
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
October 17, 2003
▇▇▇▇ ▇▇▇▇▇▇▇
US Bancorp Center
BC-MN-H03P
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
RE: UHS Transaction - Wire Authorization
Dear ▇▇▇▇:
Please execute the following nine wires in accordance with the attached
instructions:
1 Depository Trust Company $ 111,171,067.36
2 CIBC, NY Agency 70,353,039.66
3 Security Life of Denver 14,244,850.00
4 ▇▇▇▇▇▇▇▇ & Worcester LLP 33,543.00
5 ▇▇▇▇ ▇▇▇▇▇▇▇ LLP 715,000.00
6 Halifax GenPar, L.P. 564,575.00
7 GECC/CAF Depository 2,506,021.13
8 PricewaterhouseCoopers LLP 9,000.00
9 Goldberg, Kohn, Bell, Black, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Ltd 150,000.00
-----------------
$ 199,747,096.15
-----------------
________________________________________________________________________________
Signatures may be for internal purposes only:
Universal Hospital Services, Inc.
By: ______________________________ By: ______________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Corporate Controller Title: In-house counsel
▇.▇. Childs Associates, Inc.
By: ______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
UNIVERSAL HOSPITAL SERVICES INC.
FUNDS FLOW
CLOSING DATE - 10/17/03
Dollars Shares
-------------- ----------------
INFLOWS:
Equity:
JW Childs Equity Partners III, LP 34,262,469.00 2,855,206
JWC Co-Invest III LLC 737,531.00 61,461
-------------- ----------------
subtotal 35,000,000.00 2,916,667
Halifax 20,000,000.00 1,666,667
Management (▇▇▇▇ ▇▇▇▇▇▇▇▇▇, CEO) 750,000.00 62,500
Bondholders (a) 252,200,000.00 n/a
-------------- ----------------
total 307,950,000.00 4,645,834
============== ================
OUTFLOWS:
Repay senior notes (b) 111,171,067.36
Repay existing debt (c) 70,353,039.66
Proceeds held in UHS account (d) 88,376,800.00
Repay preferred stock (one shareholder: ING) (e) 14,244,850.00
Fees & Expenses (paid at closing) (f) 3,978,139.13
Cash to the balance sheet (g) 19,826,103.85
--------------
total 307,950,000.00
==============
Control
LEGEND:
(a) Senior Note proceeds (net amount wired from Goldman):
Gross proceeds 260,000,000.00
Less, financing fee ($260MM face value x 3.00%) (7,800,000.00)
--------------
252,200,000.00
==============
(b) Repay existing Senior Notes (total amount wired to DTC c/▇ ▇▇▇▇▇▇▇): Interest data:
Principal* 104,450,000.00 Coupon 10.25%
Interest (10.25% coupon) 1,368,004.86 Last Coupon Date 9/1/2003
Penalties (5.125%) 5,353,062.50 Settlement Date 10/17/2003
-------------- Days 46
111,171,067.36 (360 day year)
==============
* Portion of the total $135 million bond issue tendered pre-closing;
the balance of the issue will be called at closing (see (g))
(c) Payoff existing debt (one wire to CIBC, as agent)
Principal 70,300,000.00
Interest/fees 53,039.66
--------------
70,353,039.66
==============
(d) Proceeds held in UHS account:
To redeem common stock 69,965,844.00
To redeem options 18,410,956.00
--------------
88,376,800.00
==============
(e) Repay preferred stock to ING:
Issue value 6,246,000.00
Cumulative preferred stock dividend* 5,061,300.00
Warrant proceeds 2,937,550.00
--------------
14,244,850.00
==============
* per ING & UHS; recalculated by JWC
(f) See details attached.
(g) Cash remaining at closing, plus additional post-closing borrowings under the revolver, will be
used to pay the following estimated expenses post-closing:
Sources:
Cash remaining at initial close 19,826,103.85
Additional revolver draw 15,941,724.71
--------------
35,767,828.56
==============
Uses:
Transaction expenses:
▇▇▇▇▇'▇ and S&P 325,000.00
PWC - Minneapolis 200,000.00
Option withholding taxes (via UHS payroll) 122,000.00
▇▇▇▇▇ (printing) 250,000.00
▇▇▇▇▇▇▇'▇ out-of-pocket expenses (M&A) 130,000.00
▇▇▇▇▇▇▇'▇ advisory fee (M&A) 500,000.00
Goldman legal expenses 15,073.00
▇▇▇▇▇▇ (Halifax counsel) 40,000.00
▇▇▇▇▇▇ & Whitney 500,000.00
Other 909,000.00
--------------
2,991,073.00
--------------
Bonds called at closing: Interest data:
Principal 30,550,000.00 Coupon 10.25%
Interest 661,068.06 Last Coupon Date 9/1/2003
Penalties (5.125% of principal) 1,565,687.50 Settlement Date 11/17/2003
--------------
32,776,755.56 Days 76
--------------
total 35,767,828.56 (360 day year)
==============
- check
UNIVERSAL HOSPITAL SERVICES INC.
FUNDS FLOW
CLOSING DATE - 10/17/03
FEES/EXPENSES:
AMOUNT PAYEE DESCRIPTION
------ ----- -----------
33,543.00 (a) ▇▇▇▇▇▇▇▇ & Worcester JWC counsel
715,000.00 (b) ▇▇▇▇ ▇▇▇▇▇▇▇ JWC counsel
564,575.00 (c) Halifax Equity sponsor
2,506,021.13 (d) GE Senior debt provider; no amount drawn at closing
9,000.00 PwC Boston JWC accountants
150,000.00 (e) ▇▇▇▇▇▇▇▇ ▇▇▇▇ GE counsel
------------
3,978,139.13
============
LEGEND:
(a) 32,894.00 Fee
649.00 Out-of-pocket expenses
------------
33,543.00
============
(b) 715,000.00 Fee*
(c) 400,000.00 Halifax transaction fee
29,175.00 Halifax out-of-pocket expenses
- ▇▇▇▇▇▇ (Halifax counsel will be paid post closing)
116,400.00 E&Y (Halifax accounting due diligence)
14,000.00 CoreFacts (Halifax management due diligence)
5,000.00 Aon (Halifax insurance due diligence)
------------
564,575.00
============
(d) 2,375,000.00 GE's financing fee ($100MM line x 2.375%)
75,000.00 Annual admin fee
42,486.32 Field exam
1,430.00 Environmental
975.00 Insurance
11,129.81 Other out-of-pocket expenses
------------
2,506,021.13
============
(e) 150,000.00 Payment authorized by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ @ GE
* Progress payments; final settlement to be made post-closing upon receipt &
approval of invoices.
Bank: US Bank
Bank address: Saint ▇▇▇▇, MN
ABA #: ##
A/C name: Universal Hospital Services Operating Account
A/C #: ##
Value date: 10/17/03
CLOSING DATE FUNDS FLOW
INBOUND WIRES
1) From JW Childs Equity Partners III, LP.:
Amount: 34,177,000.00
2) From JW Childs Advisors III L.P.:
Amount: 823,000.00
3) From Halifax:
Amount: 20,000,000.00
4) From UHS Management:
Amount: 750,000.00
5) From Goldman:
Amount: 252,200,000.00
TOTAL RECEIPTS: 307,950,000.00
OUTBOUND WIRES
1) To DTC c/o Goldman Sachs:
Amount: 111,171,067.36
Bank: Chase Manhattan Bank
Bank address: New York, NY
ABA #: ##
A/C name: Depository Trust Company
A/C #: Reorg Deposit Acct # ##
Ref: Attn: ▇▇▇▇ ▇▇▇▇▇▇▇; CUSIP 91359LAF6AC3
2) To CIBC:
Amount: 70,353,039.66
Bank: Bank of New York
Bank address: New York, NY
ABA #: ##
A/C name: CIBC, NY Agency
A/C #: ##
Ref: FFC: Agented Loans; a/c# ##; attn Agency Services;
ref UHS
3) To ING:
Amount: 14,244,850.00
Bank: Bank of New York
Bank address: New York, NY
ABA #: ##
A/C name: Security Life of Denver
A/C #: ##
Ref: IOC 565; UHS
4) To ▇▇▇▇▇▇▇▇ & Worcester:
Amount: 33,543.00
Bank: Fleet Bank
Bank address: Boston, MA
ABA #: ##
A/C name: ▇▇▇▇▇▇▇▇ & Worcester LLP
A/C #: ##
Ref: apply to ▇▇▇▇ No.714,259
5) To ▇▇▇▇ ▇▇▇▇▇▇▇:
Amount: 715,000.00
Bank: Citibank
Bank address: New York, NY
ABA #: ##
A/C name: ▇▇▇▇ ▇▇▇▇▇▇▇ LLP
A/C #: ##
Ref: Client/Matter no. ##; Attn: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
6) To Halifax:
Amount: 564,575.00
Bank: Wachovia Bank
Bank address: Charlotte, NC
ABA #: ##
A/C name: Halifax GenPar, L.P.
A/C #: ##
Ref: UHS
7) To GE:
Amount: 2,506,021.13
Bank: Bankers Trust Company
Bank address: New York, NY
ABA #: ▇▇▇▇▇▇▇▇▇
A/C name: GECC/CAF Depository
A/C #: 50232854
Ref: CFC Universal Hospital Services
8) To PwC:
Amount: 9,000.00
Bank: Citibank, N.A.
Bank address: New York, NY
ABA #: ##
A/C name: PricewaterhouseCoopers LLP
A/C #: ##
Ref: JW Childs/UHS; Attn: ▇▇▇▇ ▇▇▇▇▇▇
9) To ▇▇▇▇▇▇▇▇ ▇▇▇▇
Amount: 150,000.00
Bank: LaSalle Bank N.A.
Bank address: Chicago, IL
ABA #: ##
A/C name: Goldberg, Kohn, Bell, Black, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Ltd
A/C #: ##
Ref: GECC/UHS-4866.115; Attn: ▇▇▇▇ ▇▇▇▇▇
TOTAL DISBURSEMENTS: 199,747,096.15
held at UHS 88,376,800.00
cash to BS 19,826,103.85
307,950,000.00
Control: 0.00
1 Depository Trust Company $ 111,171,067.36
2 CIBC, NY Agency 70,353,039.66
3 Security Life of Denver 14,244,850.00
4 ▇▇▇▇▇▇▇▇ & Worcester LLP 33,543.00
5 ▇▇▇▇ ▇▇▇▇▇▇▇ LLP 715,000.00
6 Halifax GenPar, L.P. 564,575.00
7 GECC/CAF Depository 2,506,021.13
8 PricewaterhouseCoopers LLP 9,000.00
9 Goldberg, Kohn, Bell, Black, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Ltd 150,000.00
-----------------
$ 199,747,096.15
=================
USE OF PROCEEDS
We are using the proceeds from the safe of the notes, together with the
proceeds from our new senior secured credit facility and the new equity
investment, to finance the recapitalization.
Assuming the recapitalization had occurred on June 30, 2003, the
following table presents a summary of our estimated anticipated sources and uses
of funds relating to the recapitalization, assuming the maximum number of equity
securities contemplated to be repurchased in the recapitalization as described
under "Offering Circular Summary -- The Recapitalization -- Repurchase of
Outstanding Equity Securities" is repurchased:
AMOUNT
-------------
(IN MILLIONS)
SOURCES OF FUNDS:
New equity investment ................................. $ 55.8
New senior secured credit facility(1) ................. 27.5
Notes offered hereby .................................. 250.0
-------------
Total sources ......................................... $ 333.3
=============
AMOUNT
-------------
(IN MILLIONS)
USES OF FUNDS:
Repayment of:
Existing revolving credit facility .................... $ 70.0
Outstanding notes(2) .................................. 135.0
Repurchase of(3):
Outstanding common stock .............................. 70.0
Outstanding options ................................... 18.5
Outstanding series B preferred stock .................. 10.9
Outstanding warrants .................................. 2.9
Fees and expenses ..................................... 26.0
-------------
Total uses ............................................ $ 333.3
=============
------------------
(1) Our new senior secured credit facility will provide us with up to $100
million in available revolving borrowings, subject to borrowing base
availability, although we estimate that we will only borrow $24.3
million of such amount at the closing of this offering.
(2) Excludes payment of the redemption premium and interest on our
outstanding senior notes of $11.8 million, which is included under
"fees and expenses."
(3) None of the holders of such equity securities is obligated to sell all
or any portion of its equity securities to us in connection with the
recapitalization or otherwise, other than those with whom we have
entered into agreements. The holder of our series B preferred stock and
warrants entered into an agreement with us on September 26, 2003,
pursuant to which such holder agreed to sell our outstanding shares of
series B preferred stock and warrants to us conditioned upon the
consummation of the recapitalization. ▇▇. ▇▇▇▇▇▇▇▇▇ has committed to
sell to us 676,282 shares of common stock and options exercisable into
468,440 shares of common stock, constituting 9.6% of our outstanding
shares of common stock in the aggregate. In addition, JWC Fund I has
committed to sell
to us the maximum number of shares of our common stock it is permitted
to sell to us, based on the net proceeds available from the
recapitalization we will use to repurchase our equity securities.
Assuming the proceeds of the recapitalization are received and used as
described in this offering circular under the caption "Offering
Circular Summary -- The Recapitalization -- Repurchase of Outstanding
Equity Securities," we expect to repurchase 4,290,371 shares of common
stock from JWC Fund I, constituting 37.6% of our outstanding shares of
common stock. In addition, we have entered into agreements with certain
members of management and former employees who hold unvested options
with vesting provisions related to a return on investment for our
original 1998 investors, pursuant to which they have committed to sell
those options to us for aggregate consideration of $1.0 million. Our
obligation to repurchase the equity securities described above is
conditioned upon the consummation of the other transactions
constituting the recapitalization. The closing of our repurchase of our
common stock and options exercisable for shares of our common stock
will occur shortly after the closing of this offering.
EXISTING REVOLVING CREDIT FACILITY
In October 1999, we entered into a $77.5 million revolving credit
facility. In October 2001, we expanded that revolving credit facility to $87.5
million. Interest on loans outstanding under our existing revolving credit
facility is payable at a rate per annum, selected at our option, equal to the
base rate margin (which is the banks' base rate plus 1.25%) or the adjusted
Eurodollar rate margin (which is the adjusted Eurodollar rate plus 2.50%). Our
existing revolving credit facility matures on October 31, 2004. In addition to
borrowings under our existing revolving credit facility used for working capital
purposes in the past year, we borrowed $1.6 million to finance the purchase
price for our acquisition of AME Medical.
OUTSTANDING SENIOR NOTES
In February 1998 and January.1999, we Issued $135 million aggregate
principal amount of 10 1/4% senior notes due 2008. Our outstanding senior notes
bear interest at a rate of 10 1/4% per annum from February 25, 1998 or March 1,
1999, depending on the date of issuance, until maturity. Interest is payable
semi-annually. Our outstanding senior notes mature on March 1, 2008.
Disclosure Schedule 3.1
to
Credit Agreement
TYPE OF ENTITY: STATE OF ORGANIZATION
Universal Hospital Services, Inc. is a corporation organized under the laws of
the State of Delaware.
Disclosure Schedule 3.2
to
Credit Agreement
EXECUTIVE OFFICES; COLLATERAL LOCATIONS; FEIN
Chief Executive Office: ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Collateral Locations: See Disclosure Schedule 3.6 to Credit Agreement,
"Real Estate and Leases" for real property owned and
leased by Universal Hospital Services, Inc.
FEIN: ▇▇-▇▇▇▇▇▇▇
Disclosure Schedule 3.4(a)
to
Credit Agreement
FINANCIAL STATEMENTS
(See Attached)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Universal Hospital Services, Inc.:
In our opinion, the accompanying balance sheets and the related statements of
operations, shareholders' (deficiency) equity and other comprehensive loss and
cash flows present fairly, in all material respects, the financial position of
Universal Hospital Services, Inc. (the Company) at December 31, 2002 and 2001,
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 2 to the financial statements, the Company adopted
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" on January 1, 2002.
PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
February 14, 2003
UNIVERSAL HOSPITAL SERVICES, INC.
BALANCE SHEETS
AT DECEMBER 31, 2002 AND 2001
2002 2001
-------------- --------------
ASSETS
Current assets:
Accounts receivable, less allowance for doubtful accounts of $1,800,000 and
$2,000,000 at December 31, 2002 and 2001,
respectively $ 29,806,992 $ 30,573,422
Inventories 2,982,972 2,761,982
Deferred income taxes 3,062,000 2,370,000
Other current assets 1,699,840 1,120,282
-------------- --------------
Total current assets 37,551,804 36,825,686
Property and equipment, net:
Movable medical equipment, net 118,408,936 111,964,787
Property and office equipment, net 5,746,428 5,932,737
-------------- --------------
Total property and equipment, net 124,155,364 117,897,524
Intangible assets:
Goodwill 35,608,043 35,608,043
Other, primarily deferred financing costs, net 3,947,445 5,179,240
Other intangibles, net 873,231 703,313
-------------- --------------
Total assets $ 202,135,887 $ 196,213,806
============== ==============
LIABILITIES AND SHAREHOLDERS' (DEFICIENCY) EQUITY
Current liabilities:
Current portion of long-term debt $ 251,646 $ 312,690
Accounts payable 11,077,984 14,389,831
Accrued compensation and pension 7,059,704 6,930,591
Accrued interest 4,961,808 4,794,946
Other accrued expenses 1,697,389 1,803,611
Book overdrafts 2,711,792 490,504
-------------- --------------
Total current liabilities 27,760,323 28,722,173
Long-term debt, less current portion 200,554,969 204,127,858
Deferred compensation and pension 4,869,522 3,141,035
Deferred income taxes 3,062,000 2,370,000
Series B, 13% Cumulative Accruing Pay-In-Kind Stock, $0.01 par value; 25,000
shares authorized, 6,246 shares issued and outstanding at December 31, 2002
and 2001, net of unamortized discount, including accrued stock dividends 9,672,000 8,386,368
Common stock subject to put 11,575,549 3,762,971
Commitments and contingencies (Note 8)
Shareholders' (deficiency) equity:
Common Stock, $0.01 par value; 35,000,000 shares authorized, 11,394,320 and
11,275,050 shares issued and outstanding at December 31, 2002 and 2001,
respectively 113,943 112,751
Additional paid-in capital 6,875,476 1,091,956
Accumulated deficit (59,958,653) (54,524,078)
Deferred compensation (657,527) (977,228)
Accumulated other comprehensive loss (1,731,715)
-------------- --------------
Total shareholders' (deficiency) equity (55,358,476) (54,296,599)
-------------- --------------
Total liabilities and shareholders' (deficiency) equity $ 202,135,887 $ 196,213,806
============== ==============
The accompanying notes are an integral part of the financial statements.
UNIVERSAL HOSPITAL SERVICES, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
2002 2001 2000
-------------- -------------- --------------
Revenues:
Equipment outsourcing $ 130,723,914 $ 110,937,132 $ 94,028,335
Sales of supplies and equipment, and services 23,042,357 14,697,548 11,976,803
-------------- -------------- --------------
Total revenues 153,766,271 125,634,680 106,005,138
-------------- -------------- --------------
Costs of equipment outsourcing and sales:
Cost of equipment outsourcing 39,271,136 33,576,432 26,092,014
Movable medical equipment depreciation 29,457,577 26,440,809 22,386,842
Cost of supplies and equipment sales 13,880,170 7,854,589 8,146,805
-------------- -------------- --------------
Total costs of equipment outsourcing and sales 82,608,883 67,871,830 56,625,661
-------------- -------------- --------------
Gross profit 71,157,388 57,762,850 49,379,477
-------------- -------------- --------------
Selling, general and administrative:
Stock compensation and severance expense 10,098,654 1,552,795
Terminated initial public offering expenses 1,240,826
Other selling, general and administrative 43,053,125 38,837,502 33,868,262
-------------- -------------- --------------
Total selling, general and administrative 53,151,779 41,631,123 33,868,262
-------------- -------------- --------------
Operating income 18,005,609 16,131,727 15,511,215
Interest expense 18,126,447 19,634,806 20,747,230
-------------- -------------- --------------
Loss before income taxes (120,838) (3,503,079) (5,236,015)
Provision (benefit) for income taxes 97,000 55,850 (158,000)
-------------- -------------- --------------
Net loss $ (217,838) $ (3,558,929) $ (5,078,015)
============== ============== ==============
The accompanying notes are an integral part of the financial statements.
UNIVERSAL HOSPITAL SERVICES, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
2002 2001 2000
-------------- -------------- --------------
Cash flows from operating activities:
Net loss $ (217,838) $ (3,558,929) $ (5,078,015)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 31,519,634 28,165,258 23,868,755
Amortization of goodwill 2,730,502 2,715,769
Amortization of deferred financing costs and 1,256,012 1,082,894 1,077,085
other intangibles
Accretion of bond discount 529,412 529,409 529,412
Provision for doubtful accounts 867,387 1,655,919 1,249,053
Noncash stock-based compensation 9,403,941 1,406,755
Loss on sales of equipment 948,732 118,254 568,857
Deferred income taxes (263,000)
Changes in operating assets and liabilities, net of
impact of acquisitions:
Accounts receivable (94,729) (3,069,172) (1,227,705)
Inventories and other operating assets (844,227) 799,935 759,729
Accounts payable and accrued expenses (3,182,809) 1,835,282 3,977,496
-------------- -------------- --------------
Net cash provided by operating activities 40,185,515 31,696,107 28,177,436
-------------- -------------- --------------
Cash flows from investing activities:
Rental equipment purchases (37,730,695) (32,817,727) (30,972,302)
Property and office equipment purchases (2,132,529) (1,855,957) (1,714,465)
Proceeds from disposition of rental equipment 1,107,780 1,244,401 1,103,072
Acquisition (7,788,009)
Other (200,364) (294,146) 79,515
-------------- -------------- --------------
Net cash used in investing activities (38,955,808) (41,511,438) (31,504,180)
-------------- -------------- --------------
Cash flows from financing activities:
Proceeds under loan agreements 59,875,000 65,450,000 47,800,000
Payments under loan agreements (63,907,942) (55,358,480) (42,520,253)
Proceeds from issuance of common stock 593,565 94,000 148,085
Repurchase of common stock (11,619) (6,620) (55,005)
Payment of deferred financing costs (393,381)
Change in book overdraft 2,221,289 29,812 (2,046,083)
-------------- -------------- --------------
Net cash (used in) provided by financing activities (1,229,707) 9,815,331 3,326,744
-------------- -------------- --------------
Net change in cash and cash equivalents -- -- --
Cash and cash equivalents at beginning of period -- -- --
-------------- -------------- --------------
Cash and cash equivalents at end of.period $ -- $ -- $ --
============== ============== ==============
Supplemental cash flow information:
Interest paid $ 17,430,000 $ 19,753,000 $ 19,589,000
============== ============== ==============
Income taxes paid (received) $ 97,000 (67,000) (64,000)
============== ============== ==============
The accompanying notes are an integral part of the financial statements.
UNIVERSAL HOSPITAL SERVICES, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
August 31,
2003
--------------
ASSETS
Current assets:
Cash $ 0
Receivables:
Accounts receivable, net 31,589,572
Sales-type leases, net 12,172
Inventories 3,550,910
Prepaid expenses 1,751,539
Deferred Income taxes 2,763,000
--------------
Total current assets 39,667,193
PROPERTY AND EQUIPMENT:
Movable medical equipment, net 117,697,071
Property and office equipment, net 6,004,100
--------------
Total property and equipment, net 123,701,171
LONG-TERM ASSETS:
Goodwill 35,608,043
Other, primarily deferred financing 3,505,597
Other, intangible assets 2,087,681
--------------
TOTAL ASSETS $ 204,569,685
==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 7,732,225
Accrued compensation and pension 6,688,181
Accrued expenses 9,994,893
Current portion capitalized lease obligation 272,789
Bank overdrafts 1,552,905
--------------
Total current liabilities 26,240,993
Accrued compensation and pension 4,353,427
Due to Parent 0
Deferred income taxes 5,259,000
Capitalized lease obligation, less current installments
(1043-434-1) 391,983
Long-term debt 197,535,924
Commitments and contingencies
Preferred Stock 10,631,144
Common stock subject to put 12,249,726
SHAREHOLDERS' EQUITY:
Common Stock 114,132
Additional paid-in capital 6,242,730
Retained earnings (56,202,077)
Comprehensive Pensions Loss (1,731,715)
Deferred Compensation (515,582)
--------------
Total shareholders' equity (deficiency) (52,092,512)
--------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) $ 204,569,685
==============
0
UNIVERSAL HOSPITAL SERVICES, INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
ONE MONTH ENDED AUGUST 31, EIGHT MONTHS ENDED AUGUST 31,
--------------------------------- ---------------------------------
2003 2002 2003 2002
-------------- -------------- -------------- --------------
Revenues:
Outsourcing revenue $ 11,255,611 $ 10,639,793 $ 92,759,372 $ 86,577,529
Sales of supplies and equipment and other 1,135,943 1,000,510 10,064,298 8,013,960
Services 1,298,567 1,013,493 9,396,613 7,169,515
-------------- -------------- -------------- --------------
Total revenues 13,690,121 12,653,796 112,220,283 101,761,004
Costs of outsourcing and sales:
Cost of outsourcing and service 4,230,275 3,960,094 33,430,441 29,599,904
Movable medical equipment depreciation 2,662,830 2,373,677 21,077,711 19,097,883
Cost of supplies and equipment sales 785,898 673,630 6,827,471 5,677,277
-------------- -------------- -------------- --------------
Total cost of outsourcing and sales 7,679,003 7,007,401 61,335,623 54,375,064
-------------- -------------- -------------- --------------
Gross profit 6,011,118 5,646,395 50,884,660 47,385,940
Selling, general and administrative 3,932,230 3,646,788 31,431,475 28,729,394
-------------- -------------- -------------- --------------
Operating income 2,078,888 1,999,607 19,453,185 18,656,556
Interest expense 1,454,538 1,515,292 11,594,466 12,163,019
-------------- -------------- -------------- --------------
Income before income taxes 624,350 484,315 7,858,719 6,493,537
Provision for income taxes 249,000 192,000 3,143,000 2,589,200
-------------- -------------- -------------- --------------
Net income $ 375,350 $ 292,315 $ 4,715,719 $ 3,904,337
============== ============== ============== ==============
ADDITIONAL INFORMATION
EBITDA $ 5,029,384 $ 4,647,272 $ 42,904,105 $ 39,967,636
============== ============== ============== ==============
EBITDA as a percentage of total revenue 36.7% 36.7% 38.2% 39.3%
============== ============== ============== ==============
Adjusted EBITDA $ 5,054,587 $ 4,686,559 $ 43,113,035 $ 40,186,948
============== ============== ============== ==============
Adjusted EBITDA as a percentage of total revenue 36.9% 37.0% 38.4% 39.5%
============== ============== ============== ==============
UNIVERSAL HOSPITAL SERVICES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
EIGHT MONTHS ENDED AUGUST 31,
----------------------------------
2003 2002
-------------- --------------
Cash flows from operating activities:
Net income $ 4,715,719 $ 3,904,337
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 22,528,636 20,473,121
Amortization 922,390 837,958
Accretion of bond discount 352,941 352,941
Provision for doubtful accounts 455,948 659,235
Non-cash stock-based compensation 141,945 213,134
Loss on sales/disposal of equipment 218,740 465,018
Deferred income taxes 2,496,000 1,097,000
Changes in operating assets and liabilities:
Accounts receivable (2,249,447) 673,039
Inventories and other operating assets (646,404) (1,115,481)
Accounts payable and accrued expenses 2,316,138 1,012,505
-------------- --------------
Net cash provided by operating activities 31,252,606 28,572,807
-------------- --------------
Cash flows from investing activities:
Movable medical equipment purchases (24,744,094) (23,723,907)
Property and office equipment purchases (1,684,234) (1,515,783)
Proceeds from disposition of movable medical equipment 1,212,123 594,740
Other (1,691,563) (438,882)
-------------- --------------
Net cash used in investing activities (26,907,768) (25,083,832)
-------------- --------------
Cash flows from financing activities:
Proceeds under loan agreements 39,400,000 37,825,000
Payments under loan agreements (42,622,889) (42,128,687)
Repurchase of common stock 0 (11,618)
Payment of deferred financing cost (4,680) 0
Payment of deferred offering cost 0 94000
Proceeds from issuance of common stock, net of offering costs 41,618 587,437
Change in book overdraft (1,158,887) 144,893
-------------- --------------
Net cash used in financing activities (4,344,838) (3,488,975)
-------------- --------------
Net change in cash and cash equivalents -- --
Cash and cash equivalents at beginning of period -- --
-------------- --------------
Cash and cash equivalents at end of period $ -- $ --
============== ==============
Supplemental cash flow information:
Interest paid $ 9,047,000 $ 9,270,000
============== ==============
Income taxes paid $ 213,000 $ 44,000
============== ==============
Movable medical equipment purchases in accounts payable $ 2,785,000 $ 2,288,000
============== ==============
Disclosure Schedule 3.4(b)
to
Credit Agreement
PRO FORMA
(See Attached)
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
The summary historical and unaudited pro forma financial data presented
below are derived from our audited financial statements for the fiscal years
ended December 31, 2000, 2001 and 2002, and our unaudited financial statements
for the six-month periods ended June 30, 2002 and 2003. The summary historical
financial data for the six-month periods ended June 30, 2002 and 2003 are
derived from our unaudited interim financial statements which, in the opinion of
management, including all normal, recurring adjustments necessary to state
fairly the data included therein in accordance with GAAP for interim financial
information. The summary pro forma historical financial data for the
twelve-month period ended June 30, 2003 are derived from our unaudited interim
financial statements and our audited financial statements. Interim results are
not necessarily indicative of the results to be expected for the entire fiscal
year. The unaudited pro forma financial data set forth below give effect to the
completion of the recapitalization, including the offering of the notes, as
described in "Use of Proceeds." The unaudited pro forma financial data are not
necessarily indicative of our financial position or results of operations that
might have occurred had the transactions they give effect to been completed as
of the dates indicated and do not purport to represent what our financial
position or results of operations might be for any future period or date. In
connection with the recapitalization as described under "--The
Recapitalization," we estimate that we will record a charge in the fourth
quarter of 2003 totaling approximately $28.6 million, including $13.5 million of
cash stock compensation and $15.1 million on the early retirement of debt and
related fees and expenses. For additional information see "Capitalization,"
"Selected Historical Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our audited financial
statements and unaudited financial statements included elsewhere herein.
SIX MONTHS ENDED TWELVE MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30, JUNE 30, 2003
---------------------------------- --------------------- ----------------------
PRO
2000 2001 2002 2002 2003 ACTUAL FORMA(6)
---------- ---------- --------- --------- --------- ---------- ----------
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Revenues:
Medical equipment outsourcing........ $ 94,028 $ 110,937 $ 130,724 $ 65,300 $ 70,042 $ 135,466 $ 135,466
Sales of supplies and equipment,
and other.......................... 10.744 11,280 11,864 6,093 7,650 13,421 13,421
Service.............................. 1,233 3,418 11,178 5,252 6,848 12,774 12,774
---------- ---------- --------- --------- --------- ---------- ----------
Total revenues..................... 106,005 125,635 153,766 76,645 84,540 161,661 161,661
---------- ---------- --------- --------- --------- ---------- ----------
Cost of medical equipment outsourcing,
sales and service:...................
Cost of medical equipment
outsourcing and service............ 26,092 33,576 44,910 21,903 24,762 42,130 42,130
Movable medical equipment
depreciation....................... 22,387 26,441 29,458 14,236 15,799 31,021 31,021
Cost of supplies and equipment
sales.............................. 8,147 7,855 8,241 4,319 5,214 14,775 14,775
---------- ---------- --------- --------- --------- ---------- ----------
Total costs of medical
equipment outsourcing, sales
and service..................... 56,626 67,872 82,609 40,458 45,775 87,926 87,926
---------- ---------- --------- --------- --------- ---------- ----------
Gross profit............................ $ 49,379 $ 57,763 $ 71,157 $ 36,187 $ 38,765 $ 73,735 $ 73,735
---------- ---------- --------- --------- --------- ---------- ----------
SIX MONTHS ENDED TWELVE MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30, JUNE 30, 2003
---------------------------------- --------------------- ----------------------
PRO
2000 2001 2002 2002 2003 ACTUAL FORMA(6)
---------- ---------- --------- --------- --------- ---------- --------
(DOLLARS IN THOUSANDS)
Selling, general and administrative:
Stock, compensation and severance
expenses........................... $ -- $ 1,553 $ 10,099 $ -- $ -- $ 10,099 $ 23,613
Terminated initial public
offering expenses.................. -- 1,241 -- -- -- -- --
Recapitalization expense............. -- -- -- -- -- -- 560
Other selling, general and
administrative..................... 33,868 38,837 43,053 21,382 23,507 45,177 44,097
---------- ---------- --------- --------- --------- ---------- ----------
Total selling, general and
administrative.................. 33,868 41,631 53,152 21,382 23,507 55,276 68,270
Operating Income........................ 15,511 16,132 18,005 14,805 15,258 18,459 5,465
Interest expense........................ 20,747 19,635 18,126 9,123 8,680 17,684 29,761
Loss on early retirement of debt........ -- -- -- -- -- -- 14,547
---------- ---------- --------- --------- --------- ---------- ----------
(Loss) income before income taxes....... (5,236) (3,503) (121) 5,682 6,578 775 (38,843)
Income tax, (benefit) expense........... (158) 56 97 2,252 2,631 476 246
---------- ---------- --------- --------- --------- ---------- ----------
Net (loss) income....................... $ (5,078) $ (3,559) $ (218) $ 3,430 $ 3,947 $ 299 $ (39,089)
========== ========== ========= ========= ========= ========== ==========
OTHER FINANCIAL DATA:
Net cash provided by operating
activities........................... $ 28,177 $ 31,696 $ 40,186 $ 18,698 $ 20,695 * *
Net cash used in investing activities... (31,504) (41,511) (38,956) (18,470) (19,610) * *
Net cash provided (used in) by
financing activities................. $ 3,327 $ 9,815 $ (1,230) $ (228) $ (1,085) * *
Ratio of earnings to fixed charges(1) -- -- 1,0x 1.6x 1.7x 1.0x --
Depreciation and amortization........... $ 27,662 $ 31,978 $ 32,775 $ 15,906 $ 17,597 $ 34,466 $ 33,387
Capital expenditures.................... 31,158 40,680 37,788 16,264 17,190 38,714 *
Pro forma cash interest expense(2)...... -- -- -- -- -- -- 28,012
EBITDA(3)(4)............................ 43,173 48,110 50,781 30,710 32,855 59,926 24,305
Adjusted EBITDA(4)(5)................... $ 43,873 $ 51,196 $ 61,193 $ 30,869 $ 33,012 $ 63,336 $ 63,336
Total debt to adjusted EBITDA(4)........ 4.4x 4.0x 3.3x * * 3.2x 4.4x
Adjusted EBITDA to interest
expense(4)........................... 2.1x 2.6x 3.4x * * 3.6x 2.1x
OTHER OPERATING DATA:
Movable medical equipment (units at
end of period)....................... 109,000 127,000 138,000 134,000 143,000 * *
Offices (at end of period).............. 60 62 65 62 67 * *
Number of hospital customers (at end
of period)........................... 2,545 2,625 2,770 2,695 2,800 * *
Total number of customers (at end of
period).............................. 5,275 5,570 5,880 5,700 5,900 * *
AS OF DECEMBER 31, AS OF JUNE 30, 2003
---------------------------------- ------------------------
2000 2001 2002 ACTUAL PRO FORMA(6)
----------- ---------- ---------- --------- ------------
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA
Working capital(5)...................... $ 9,833 $ 8,416 $ 10,043 $ 17,156 $ 22,010
Total assets............................ 180,070 196,214 202,136 205,873 214,807
Total debt.............................. 193,607 204,441 200,806 202,899 278,276
Stockholders' deficiency................ (47,319) (54,297) (55,358) (52,669) (91,617)
----------------------
Not meaningful.
(1) For the purpose of determining the ratio of earnings to fixed charges,
earnings consist of income before income taxes and fixed charges. Fixed
charges consist of interest expense, which includes the amortization of
deferred debt issuance costs. For 1999, 2000 and 2001, fixed charges
exceeded earnings by $5.9 million, $5.2 million and $3.5 million,
respectively. For the twelve months ended June 30, 2003, on a pro forma
basis, fixed charges would have exceeded earnings by $38.8 million.
(2) Pro forma cash interest expense is defined as interest expense less
amortization of debt issuance costs.
(3) EBITDA is defined as earnings before interest expense, income taxes,
depreciation and amortization. Management understands that some
industry analysts and investors consider EBITDA as a supplementary
non-GAAP financial measure useful in analyzing the operating
performance of a company and its ability to service debt. EBITDA,
however, is not a measure of financial performance under GAAP and
should not be considered as an alternative to, or more meaningful than,
net income as a measure of operating performance or to cash flows from
operating, investing or financing activities or as a measure of
liquidity. Since EBITDA is not a measure determined in accordance with
GAAP and is thus susceptible to varying interpretations and
calculations, EBITDA, as presented, may not be comparable to other
similarly titled measures of other companies. EBITDA does not represent
an amount of funds that is available for management's discretionary
use. See note 4 for a reconciliation of cash flow from operations to
EBITDA and adjusted EBITDA.
(4) Adjusted EBITDA refers to our EBITDA, adjusted to exclude the impact of
the items described below. We believe that adjustment for these items
is also recognized by the industry in which we operate as relevant in
computing adjusted EBITDA as a supplementary non-GAAP financial measure
widely used by financial analysts and others in our industry to
meaningfully evaluate a company's future operating performance and
ability to comply with its applicable debt covenants, which in our case
would include certain financial covenants under our existing revolving
credit facility, our new senior secured credit facility, our
outstanding senior notes and the notes offered hereby. We also use
adjusted EBITDA to measure and pay annual management bonuses and to
determine the vesting of options.
In addition, in evaluating adjusted EBITDA, you should be aware that in
the future, we may incur expenses similar to the adjustments in this
presentation. Our presentation of adjusted EBITDA should not be
construed as an inference that our future results will be unaffected by
unusual or non-recurring items.
Disclosure Schedule 3.4(c)
to
Credit Agreement
PROJECTIONS
(See Attached)
## [three pages omitted]
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
Disclosure Schedule 3.6
to
Credit Agreement
REAL ESTATE AND LEASES
REAL PROPERTY OWNED BY UNIVERSAL HOSPITAL SERVICES, INC.
1. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
UNIVERSAL HOSPITAL SERVICES
REAL PROPERTY LEASES
2. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
3. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
4. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ & ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
5. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇ & ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
6. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Suites 301 & 302
Tucson, Arizona
7. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇, & ▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
8. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ & 180; ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
9. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Number 106
Pasadena, California
10. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇, ▇▇, & ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
11. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Suites 101-103, 104
Fresno, California
12. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
13. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
14. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
15. ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
16. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
17. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
18. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
19. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
20. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Suites 106 & 107
Ft. Lauderdale, Florida
21. ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
22. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇
23. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
24. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
25. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
26. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ & ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
27. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
28. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Number ▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
29. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
30. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
31. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇
Wixom, Michigan
32. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
33. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
34. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
35. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
36. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
37. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
38. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
39. ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
40. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
41. 2417 & ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇
42. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
43. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
44. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
45. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
46. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
47. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
48. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
49. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇
50. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
51. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇
52. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
53. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Number ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
54. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
55. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Number 110
Sioux Falls, South Dakota
56. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Number ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
57. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
58. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
59. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
60. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
61. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
62. ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
63. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
64. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
65. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇ & ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
66. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
67. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ - ▇ & ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
68. W226 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Number B-1
Waukesha, Wisconsin
69. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
70. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇
Disclosure Schedule 3.7
to
Credit Agreement
LABOR MATTERS
The Borrower sponsors, and is the sole participating employer with
respect to, the following Plans:
NAME OF PLAN PLAN TYPE
----------------------------------------------------------------------------------------------
Universal Hospital Services, Inc. Employees' Profit Incentive Plan
Sharing Plan
Universal Hospital Services, Inc. Executive Incentive Plan
Incentive Plan
UHS Annual Incentive Plans (All Others) Incentive Plans
1998 Stock Option Plan Stock Option Plan
Employment Agreements with the following Executives: Individual Employment Agreements
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Agreements with the following departed employees: Individual Severance Agreements
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Borrower is party to the following management agreements:
Management Agreement dated as of October 17, 2003 by and between Halifax GenPar,
L.P. and Universal Hospital Services, Inc.
Management Agreement dated as of February 25, 1998 by and between ▇.▇. Childs
Associates, L.P. and Universal Hospital Services, Inc., as amended by that
certain Amendment to Management Agreement dated as of October 17, 2003.
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
The following employment-related proceedings are pending, or threatened against
the Company or its properties or assets:
1. ▇▇▇▇▇ ▇▇▇▇▇ v. Universal Hospital Services, Inc.: ▇▇▇▇▇ ▇▇▇▇▇ brought
an employment discrimination claim against the Company with the Maryland
Commission on Human Relations, which is still under investigation. ▇▇▇▇▇ also
brought an employment discrimination action against the Company in the Maryland
District Court. The action was transferred to federal court and is still
pending. ##
2. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ v. Universal Hospital Services, Inc.: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
brought an employment discrimination claim against the Company through the EEOC,
and was granted the right to ▇▇▇ the Company based upon the fact that the EEOC
had not completed its investigation within applicable time limitations. ▇▇▇▇▇▇
brought an employment discrimination action in Virginia District Court and the
action is still pending. ##
3. ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
Disclosure Schedule 3.8
to
Credit Agreement
VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK
I. Affiliates: Halifax Capital Partners, L.P.
J.W. Childs Equity Partners, L.P.
J.W. Childs Equity Partners III, L.P.
Subsidiaries: None.
II. Outstanding Stock: The outstanding shares of common stock, as of
the date of the Agreement, are set forth on the
attached Schedule 1 to Disclosure Schedule 3.8.
Pursuant to an Information Memorandum of the
Company dated September 29, 2003, the Company is
offering to repurchase for cash an aggregate of
approximately $91 million, but not less than $70
million, worth of its outstanding common stock,
$0.01 par value per share and outstanding options
and warrants to purchase such stock.
III. Options, Warrants, etc.
a. The Company has outstanding options to purchase a total of
3,151,756 shares of its common stock under its 1998 Stock Option Plan
as of the date of the Stock Purchase Agreement. The name of each
optionholder and the number of shares represented by each option grant
is set forth on attached Schedule 2 to Disclosure Schedule 3.8, dated
as of the date of the Stock Purchase Agreement. Pursuant to an
Information Memorandum of the Company dated September 29, 2003, the
Company is offering to repurchase for cash an aggregate of
approximately $91 million, but not less than $70 million, worth of its
outstanding common stock, $0.01 par value per share and outstanding
options and warrants to purchase such stock.
b. On December 18, 1998, the Company issued to ReliaStar
Financial Corp. ("Reliastar") a warrant (the "Warrant") to purchase
245,000 shares of the Company's common stock at an exercise price of
$.01 per share. The Warrant was issued in connection with the Preferred
Stock and Warrant Purchase Agreement, dated as of December 18, 1998,
between the Company and Reliastar. The Warrant was subsequently
transferred by Reliastar to Security Life of Denver Insurance Company,
an affiliate of Reliastar. Pursuant to an Information Memorandum of the
Company dated September 29, 2003, the Company is offering to repurchase
outstanding options and warrants to purchase its common stock. Under
the letter agreement dated September 26, 2003 between the Company and
Security Life of Denver Insurance Company, Security Life of Denver
Insurance Company agreed that the Company will repurchase the Warrant
concurrently with the closing of the Credit Agreement.
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
c. The Preferred Stock and Warrant Purchase Agreement between
Universal Hospital Services, Inc. and ReliaStar Financial Corp. dated
December 18, 1998, pursuant to which the Company has 6,246 shares of
its Series B 13% Cumulative Accruing Pay-In-Kind Preferred Stock
("Series B Preferred Stock") issued and outstanding, and the letter
dated September 26, 2003, pursuant to which the Company has agreed to
declare a dividend of additional shares of Series B Preferred Stock as
described in paragraph 2 of such letter. All of the Series B Preferred
Stock is being repurchased concurrently with the closing of the Credit
Agreement pursuant to a letter agreement dated September 26, 2003
between the Company and Security Life of Denver Insurance Company.
d. The severance agreements with each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ provide for the
continued exercisability of their respective options to purchase common
stock of the Company. Pursuant to an Information Memorandum of the
Company dated September 29, 2003, the Company is offering to repurchase
outstanding options and warrants to purchase its common stock.
e. Under the Stock Purchase Agreement dated as of September 26,
2003, as amended by Amendment No. 1 to Stock Purchase Agreement to be
executed concurrently with the closing of the Credit Agreement, by and
between the Company, ▇.▇. Childs Equity Partners III, L.P., JWC Fund
III Co-invest LLC, Halifax Capital Partners, L.P., and the Management
Holders who have executed and delivered a Joinder Agreement to the
Stock Purchase Agreement, the Company will issue 4,645,833.33 shares of
common stock, and may issue after the closing of the Credit Agreement,
an additional 33,000 shares of common stock.
f. As contemplated or required by the Stock Purchase Agreement,
as amended by the Amendment No. 1 to Stock Purchase Agreement, the
Company intends to enter into a new stock option plan and intends to
enter into a new Employment Agreement with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ concurrently
with the closing of the Credit Agreement. The Company has obtained
written agreements from ▇▇. ▇▇▇▇▇▇▇▇▇ and holders of "super achiever"
options to sell their shares and options in connection with the
Recapitalization. In connection with the Recapitalization, the Company
will grant an additional 20,000 stock options to ▇▇. ▇▇▇▇▇▇▇▇▇.
Concurrently with the closing of the Credit Agreement, the Company will
grant ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 6,000 stock options and execute an amended and
restated Stockholders' Agreement with ▇.▇. Childs Equity Partners III,
L.P., ▇.▇. Childs Equity Partners, L.P., Halifax Capital Partners,
L.P., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
SCHEDULE 1 TO
DISCLOSURE SCHEDULE 3.8
NAME TOTAL # OF SHARES
-------------------------------------------------------------
▇.▇. Childs Equity Partners, L.P. ##
-------------------------------------------------------------
JWC-UHS Co-Invest LLC ##
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
##*
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
-------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ ##
-------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ##
-------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
## ##
-------------------------------------------------------------
JWC Fund III Co-invest LLC ##
-------------------------------------------------------------
Halifax Capital Partners, L.P. ##
-------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
-------------------------------------------------------------
-----------
* JWC-UHS Co-Invest LLC holds the stockholder's stock for the benefit
of the stockholder
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
SCHEDULE 2 TO
SCHEDULE 3.8 TO
CREDIT AGREEMENT
OUTSTANDING SHARES OF COMMON STOCK
(see attached)
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
SCHEDULE 2 TO DISCLOSURE SCHEDULE 3.8 AND
SCHEDULE 1 TO DISCLOSURE SCHEDULE 3.22
1998 STOCK OPTION PLAN
EMPLOYEE NAME GRANT DATE EXPIRATION ISSUED EXERCISED FORFEITED EXPIRED OUTSTANDING VESTED NONVESTED
------------- ---------- ---------- ------------ --------- --------- ------- ------------ ------------ ------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ 06/09/1992 06/09/2002 7,000.00 7,000.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 06/09/1992 06/09/2002 7,000.00 7,000.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 06/09/1992 06/09/2002 5,250.00 5,250.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 06/09/1992 06/09/2002 2,100.00 2,100.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 06/09/1992 06/09/2002 2,100.00 2,100.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 06/09/1992 06/09/2002 7,000.00 7,000.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 06/09/1992 06/09/2002 7,000.00 7,000.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 06/09/1992 06/09/2002 35,000.00 35,000.00 0.00 0.00 0.00 0.00 0.00
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ 06/09/1992 06/09/2002 2,100.00 0.00 2,100.00 0.00 0.00 0.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/20/1993 01/20/2008 14,000.00 0.00 0.00 0.00 14,000.00 14,000.00 0.00
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 01/20/1993 01/20/2008 70,000.00 0.00 0.00 0.00 70,000.00 70,000.00 0.00
▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/20/1994 01/20/2004 7,700.00 0.00 0.00 0.00 7,700.00 7,700.00 0.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/20/1994 01/20/2004 7,700.00 0.00 0.00 0.00 7,700.00 7,700.00 0.00
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/20/1994 01/20/2004 7,700.00 0.00 0.00 0.00 7,700.00 7,700.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/20/1994 01/20/2004 24,500.00 0.00 0.00 0.00 24,500.00 24,500.00 0.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/20/1994 01/20/2004 8,169.00 0.00 0.00 0.00 8,169.00 8,169.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/20/1994 01/20/2004 7,700.00 0.00 0.00 0.00 7,700.00 7,700.00 0.00
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 01/20/1994 01/20/2004 87,500.00 0.00 0.00 0.00 87,500.00 87,500.00 0.00
▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/20/1995 01/20/2005 13,769.00 0.00 0.00 0.00 13,769.00 13,769.00 0.00
## ## ## ## ## ## ## ## ## ##
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/20/1995 01/20/2005 13,769.00 0.00 0.00 0.00 13,769.00 13,769.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/20/1995 01/20/2005 21,910.00 0.00 0.00 0.00 21,910.00 21,910.00 0.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/20/1995 01/20/2005 14,609.00 0.00 0.00 0.00 14,609.00 14,609.00 0.00
## ## ## ## ## ## ## ## ## ##
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 01/20/1995 01/20/2005 78,400.00 0.00 0.00 0.00 78,400.00 78,400.00 0.00
▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/19/1996 01/19/2006 19,740.00 0.00 0.00 0.00 19,740.00 19,740.00 0.00
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/19/1996 01/19/2006 19,740.00 0.00 0.00 0.00 19,740.00 19,740.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/19/1996 01/19/2006 21,000.00 0.00 0.00 0.00 21,000.00 21,000.00 0.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/19/1996 01/19/2006 21,000.00 0.00 0.00 0.00 21,000.00 21,000.00 0.00
## ## ## ## ## ## ## ## ## ##
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 01/19/1996 01/19/2006 75,180.00 0.00 0.00 0.00 75,180.00 75,180.00 0.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 09/20/1996 09/20/2006 35,000.00 0.00 0.00 0.00 35,000.00 35,000.00 0.00
--------------------------------------------------------------------------------------
710,654.00 72,450.00 2,100.00 0.00 636,104.00 636,104.00 0.00
▇▇▇▇▇ ▇. ▇▇▇▇▇ 03/17/1998 03/17/2008 55,635.30 0.00 0.00 0.00 55,635.30 0.00 55,635.30
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 03/17/1998 03/17/2008 55,635.30 0.00 22,254.00 0.00 33,381.30 0.00 33,381.30
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 03/17/1998 03/17/2008 55,635.30 0.00 0.00 0.00 55,635.30 0.00 55,635.30
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 03/17/1998 03/17/2008 55,635.30 0.00 0.00 0.00 55,635.30 0.00 55,635.30
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 03/17/1998 03/17/2008 111,270.60 0.00 0.00 0.00 111,270.60 0.00 111,270.60
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 03/17/1998 03/17/2008 55,635.30 0.00 0.00 0.00 55,635.30 0.00 55,635.30
▇▇▇▇ ▇. ▇▇▇▇▇ 11/06/2000 11/06/2010 35,000.00 0.00 0.00 0.00 35,000.00 0.00 35,000.00
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
▇▇▇▇▇ ▇. ▇▇▇▇▇ 03/17/1998 03/17/2008 78,701.00 0.00 0.00 0.00 78,701.00 77,375.68 1,325.32
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 03/17/1998 03/17/2008 78,701.00 0.00 49,204.00 0.00 29,497.00 29,497.00 0.00
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 03/17/1998 03/17/2008 78,701.00 0.00 0.00 0.00 78,701.00 77,375.68 1,325.32
## ## ## ## ## ## ## ## ## ##
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 03/17/1998 03/17/2008 78,701.00 0.00 0.00 0.00 78,701.00 77,375.68 1,325.32
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 03/17/1998 03/17/2008 78,701.00 0.00 0.00 0.00 78,701.00 77,375.68 1,325.32
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
▇▇▇▇ ▇▇▇▇▇▇ 03/31/1998 03/31/2008 62,960.80 0.00 0.00 0.00 62,960.80 62,330.56 630.24
▇▇▇▇ ▇▇▇▇▇▇ 03/31/1998 03/31/2008 62,960.80 0.00 0.00 0.00 62,960.80 62,330.56 630.24
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 03/17/1998 03/17/2008 157,360.00 0.00 0.00 0.00 157,360.00 154,710.06 2,649.94
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
▇▇▇▇ ▇. ▇▇▇▇▇ 03/31/1999 03/31/2009 78,701.00 0.00 0.00 0.00 78,701.00 46,732.65 31,968.35
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 07/01/1999 03/31/2010 7,000.00 0.00 0.00 0.00 7,000.00 7,000.00 0.00
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 06/25/2002 06/25/2012 45,455.00 0.00 0.00 0.00 45,455.00 45,455.00 0.00
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 06/25/2002 06/25/2012 325,000.00 0.00 0.00 0.00 325,000.00 40,625.00 284,375.00
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
## ## ## ## ## ## ## ## ## ##
--------------------------------------------------------------------------------------
2,870,010.30 22,654.58 331,703.42 0.00 2,515,652.30 1,163,856.37 1,351,795.93
--------------------------------------------------------------------------------------
3,580,664.30 95,104.58 333,803.42 0.00 3,151,756.30 1,799,960.37 1,351,795.93
======================================================================================
average $
per share
## Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
Disclosure Schedule 3.11
to
Credit Agreement
TAX MATTERS
##
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933.
SCHEDULE 2 TO PART 3.3
Name Total# of Shares
-------------------------------------- ----------------
▇.▇. Childs Equity Partners, L.P. ##
JWC-UHS Co-Invest LLC ##
##*
##*
##*
##*
▇▇▇▇▇▇ ▇. ▇▇▇▇▇*
##*
##*
##*
##*
##*
##*
##*
##*
##*
▇▇▇▇▇▇ ▇. ▇▇▇*
##*
##*
##*
## ##
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
## ##
## ##
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ##
----
BOARD OF DIRECTORS SUBTOTAL ##
▇▇▇▇ ▇. ▇▇▇▇▇ ##
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ##
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ##
----
SENIOR EXECUTIVE SUBTOTAL ##
* JWC-UHS Co-Invest LLC holds the stockholder's stock for the benefit of
the stockholder.
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
## ##
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ##
▇▇▇▇▇ ▇▇▇▇▇ ##
▇▇▇▇ ▇. ▇▇▇▇▇▇ ##
## ##
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ##
---
EXECUTIVE SUBTOTAL ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
## ##
---
REMAINING SHAREHOLDER SUBTOTAL ##
---
GRAND TOTAL ##
===
general ledger tie multiplied by 100 ##
Difference ##
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
Disclosure Schedule 3.12
to
Credit Agreement
ERISA PLANS
The Company sponsors, and is the sole participating employer with
respect to, the following Plans:
NAME OF PLAN PLAN TYPE
------------ ---------
UNIVERSAL HOSPITAL SERVICES, INC. EMPLOYEES' PENSION Defined Benefit Pension Plan
PLAN
UNIVERSAL HOSPITAL SERVICES, INC. EMPLOYEES' LONG-TERM 401(k) Profit Sharing Plan
SAVINGS PLAN
UNIVERSAL HOSPITAL SERVICES, INC. EMPLOYEES' MEDICAL Medical Plan
BENEFIT PLAN
UNIVERSAL HOSPITAL SERVICES, INC. DENTAL BENEFIT PLAN Dental Plan
UNIVERSAL HOSPITAL SERVICES, INC. EMPLOYEES' Disability Plan
SHORT-TERM DISABILITY PLAN
UNIVERSAL HOSPITAL SERVICES, INC. EMPLOYEES' LONG-TERM Disability Plan
DISABILITY PLAN
UNIVERSAL HOSPITAL SERVICES, INC. GROUP LIFE INSURANCE Life Insurance Plan
PLAN
UNIVERSAL HOSPITAL SERVICES, INC. FLEXIBLE BENEFITS Medical Spending Account Dependent Care
PLAN Spending Account Premium Conversion Plan
UNIVERSAL HOSPITAL SERVICES, INC. TUITION Tuition Reimbursement Plan
REIMBURSEMENT PLAN
UNIVERSAL HOSPITAL SERVICES, INC. EMPLOYEE ASSISTANCE Employee Assistance Plan
PROGRAM
UHS EXECUTIVE SEVERANCE PLAN Severance Plan
VACATION, HOLIDAY, PERSONAL AND SICKNESS BENEFITS Vacation, Personal Time, Sickness Program
GROUP UNIVERSAL LIFE INSURANCE Life Insurance Program
The Company maintains a qualified defined benefit pension plan,
entitled the "Universal Hospital Services, Inc. Employees' Pension Plan" (the
"Pension Plan"). The Pension Plan is subject to both Title IV of ERISA and
Section 412 of the IRC. The Pension Plan was frozen
effective December 31, 2002, so that any service with the Company or any changes
in compensation of an employee after that date are not considered in determining
the employee's benefit under the Pension Plan, except that such service is
considered in determining the extent to which an employee vests in his/her
benefit under the Pension Plan, the employee's entitlement to an early
retirement subsidy under the Pension Plan, and the employee's entitlement to
certain enhanced death benefits under the Pension Plan.
The Pension Plan is underfunded by $4,870,000 due to investment
experience losses over the last several years. The Company has made all
required contributions to the Pension Plan. The Company is scheduled to make
contributions to the Pension Plan over the next five years, and has already
made its contributions for 2003.
Disclosure Schedule 3.13
to
Credit Agreement
LITIGATION
1. ▇▇▇▇ v. Automotive Rentals, Inc., et al.: This is a personal injury
litigation matter. A suit has been filed and a ##. The action is pending in ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. ##.
2. ▇▇▇▇▇ ▇▇▇▇▇ v. Universal Hospital Services, Inc.: ▇▇▇▇▇ ▇▇▇▇▇ brought
an employment discrimination claim against the Company with the Maryland
Commission on Human Relations, which is still under investigation. ▇▇▇▇▇ also
brought an employment discrimination action against the Company in the Maryland
District Court, and the action was transferred to federal court and is still
pending. ##
3. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ v. Universal Hospital Services, Inc.: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
bought an employment discrimination claim against the Company through the EEOC,
and was granted the right to ▇▇▇ the Company based upon the fact that the EEOC
had not completed its investigation within applicable time limitations. ▇▇▇▇▇▇
brought an employment discrimination action in Virginia District Court and the
action is still pending. ##
4. ##
5. ##
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
Disclosure Schedule 3.14
to
Credit Agreement
BROKERS
Letter Agreement dated as of February 24, 2003 between the Company and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. Under such Letter Agreement, ▇▇▇▇▇▇▇ Sachs & Co. may claim
that it is entitled to a fee with respect to the Contemplated Transactions (as
defined in the Stock Purchase Agreement).
Disclosure Schedule 3.15
to
Credit Agreement
INTELLECTUAL PROPERTY
TRADEMARKS
SERIAL OR COUNTRY OR STATE
▇▇▇▇ REGISTRATION NO. ISSUE OR FILE DATE WHERE REGISTERED
--------------------------------------------------------------------------------------------------------
Universal Hospital
Services, Inc. 1,183,312 December 22, 1981 USA
--------------------------------------------------------------------------------------------------------
UHS 1,185,243 January 5, 1982 USA
--------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 1,383,764 February 18, 1985 USA
--------------------------------------------------------------------------------------------------------
UHS (service ▇▇▇▇) 4317 March 2, 1972 Minnesota
--------------------------------------------------------------------------------------------------------
UHS 5587800 October 24, 1996 North Dakota
--------------------------------------------------------------------------------------------------------
UHS S7336 February 5, 1987 Georgia
--------------------------------------------------------------------------------------------------------
UHS S9277 October 23, 1986 Missouri
--------------------------------------------------------------------------------------------------------
TRADEMARK LICENSES
Universal Hospital Services has been granted a non-exclusive, limited and
revocable license to use the following trademarks pursuant to a Rental Agreement
dated as of October 25, 2001 by and between Universal Hospital Services, Inc.
and Huntleigh Healthcare, Inc.:
Huntleigh FP5000(TM)
Flowtron(R) DVT
Flowtron(R) Excel
Autoexcel(TM)
DFS(R) 2
Alpha RELIEF(TM)
AlphaActive(R)
Universal Hospital Services may have been granted an unlimited use license to
use the AIMS/CS trademark pursuant to a license agreement with Phoenix Data,
Inc., sometime in the early 1990s. No further information is available at this
time.
PATENTS
None.
PATENT LICENSES
None.
COPYRIGHTS
None.
COPYRIGHT LICENSES
None.
INFRINGEMENT CLAIMS ON ANY OF THE ABOVE
None.
Disclosure Schedule 3.17
to
Credit Agreement
HAZARDOUS MATERIALS
The Company has received a Phase I Environmental Report dated June 3,
2003, respecting the real property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, indicating a potential for the presence of asbestos.
Disclosure Schedule 3.18
to
Credit Agreement
INSURANCE
The Company maintains the following insurance policies with respect to
its properties, assets and operations:
1. Property Insurance, Layer 2: Allianz Insurance Company, policy
number ##;
2. Boiler & Machinery: Zurich North America, policy number ##;
3. Excess Liability: National Union Fire Insurance Company of
Pittsburgh, policy number ##;
4. Excess Liability: St. ▇▇▇▇ Co., policy number ##;
5. Excess Liability: American Guarantee & Liability Ins. Co.,
policy number ##;
6. Commercial Automobile: AIG, policy number ##;
7. Directors & Officers/Employment Practices: Federal Insurance
Co. (Chubb), policy number ##;
8. Executive Risk: Federal Insurance Company (Chubb), policy
number ##;
9. Commercial General Liability - Products: Medmarc Casualty
Insurance Company, policy number ##;
10. Commercial General Liability - Premises: Lexington, Policy
number ##;
11. Property Insurance, Lawyer 1: Lexington, policy number ##;
12. Workers Compensation Insurance: Zurich-American Insurance
Group, policy numbers ##.
Policy number ## is for All States, excluding Wisconsin and
the State of Massachusetts, and the Stop Gap coverage.##
Policy number ## covers the States of Wisconsin and
Massachusetts, and also has the Stop Gap coverage for the
monopolistic States that UHS is in. ##
(See attached binder copies for summaries of each policy
excluding the workers' comp policies summarized above)
## [31 pages omitted]
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
Disclosure Schedule 3.19
to
Credit Agreement
DEPOSIT AND DISBURSEMENT ACCOUNTS
ACCOUNT HOLDER NAME OF DEPOSIT LOCATION OF DEPOSIT
DEPOSIT ACCOUNT NAME ACCOUNT BANK ACCOUNT BANK
-----------------------------------------------------------------------------------------------------------------
Main account: Universal Hosp Service U.S. Bank National U.S. Bank
## Operating Acct Association ▇.▇. ▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------------------
Payroll account: Universal Hosp Service U.S. Bank National U.S. Bank
## Payroll Acct Association ▇.▇. ▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------------------
Controlled Disbursements Universal Hospital Plaza U.S. Bank National U.S. Bank
account: Controlled Disbursement Association ▇.▇. ▇▇▇ ▇▇▇▇
## ▇▇▇▇ ▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------------------
Closing Account: Universal Hospital U.S. Bank National U.S. Bank
## Services Closing Account Association ▇.▇. ▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------------------
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
Disclosure Schedule 3.20
to
Credit Agreement
GOVERNMENT CONTRACTS
Federal Supply Service Contract V797P-3217K, among the Company and the V.A.,
dated March 30, 1995
Universal Hospital Services, Inc. contracts with several hospitals or long term
care facilities owned by governments, states or municipalities.
Disclosure Schedule 3.21
to
Credit Agreement
CUSTOMER AND TRADE RELATIONS
##
## Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request,
with the Securities and Exchange Commission pursuant to Rule 406 of the
Securities Act of 1933.
Disclosure Schedule 3.22
to
Credit Agreement
MATERIAL AGREEMENTS
The Company has the following Contracts involving performance of
services or delivery of goods or materials by the Company reasonably expected by
the Company to involve payments in an annual amount in excess of $1,000,000:
Asset Management Partnership Program agreement between The
Regional Medical Center of Memphis and Universal Hospital
Services, Inc., dated April 1, 1999 and amendments or addenda
thereto
Asset Management Partnership Program Agreement between North
Memorial Health Care and Universal Hospital Services, Inc.,
dated March 1, 1997 and amendments or addenda thereto
Asset Management Agreement between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Medical
Center and Universal Hospital Services, Inc. dated February 1,
1999 and amendments or addenda
Asset Management Partnership Program Agreement between ▇▇▇▇▇▇
Jacksonville Medical Center and Universal Hospital Services,
Inc. and amendments or addenda thereto
Asset Management Partnership Program Agreement between St.
Mary's Hospital Medical Center and Universal Hospital
Services, Inc. dated July 1, 2000 and amendments or addenda
thereto
Fairview Health Services and UHS Agreement dated January 1,
2002 and amendments or addenda thereto
Asset Management Partnership Program Agreement between Allina
Health Systems and Universal Hospital Services, Inc. dated
September 10, 1997
Agreement for Durable Medical Equipment Rentals between
Memorial Health Services and Universal Hospital Services, Inc.
dated ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇ Management Partnership Program Agreement between Bon
Secours Richmond Health System, Inc. and Universal Hospital
Services, Inc., dated May 8, 2001 and all amendments and
addenda thereto
Rental Agreement between Huntleigh Healthcare, Inc and
Universal Hospital Services, Inc., dated October 25, 2001
Premier Purchasing Partners, L.P. Group Purchasing Agreement
dated December 1, 2001
Capital Equipment Supply Agreement between Novation LLC and
Universal Hospital Services, Inc., dated January 6, 2003.
Asset Management Partnership Program Agreement between
Universal Hospital Services, Inc. and Good Samaritan Hospital
dated July 21, 2003
The Company has the following Contracts involving performance of
services or delivery of goods and materials to the Company that may involve
payments an annual amount or value in excess of $1,000,000:
Indenture dated as of February 25, 1998 between Universal
Hospital Services, Inc. and U.S. Bank National Association (as
successor to First Trust National Association), as amended by
First Supplemental Indenture dated as of October 8, 2003 to
Indenture dated as of February 25, 1998 between Universal
Hospital Services, Inc. and U.S. Bank National Association (as
successor to First Trust National Association)
▇▇▇▇▇▇ Healthcare Corporation Equipment Lease Agreement dated
April 1, 1998
Health Services Network Access and Administration Agreement
between PreferredOne Administrative Services, Inc. and
Universal Hospital Services, Inc. dated July 1, 2002
Sales and Pricing Agreement by and between Nellcor Puritan
▇▇▇▇▇▇▇ Inc., a division of Tyco Healthcare Group LP and
Universal Hospital Services, Inc. dated February 7, 2003
Informational Services Agreement between Schwab Institutional
and Universal Hospital Services, Inc., re: Employees'
Long-Term Savings Plan, Account No. 082-UHS dated July 24,
1996
Fleet Management Services Agreement between Automotive
Rentals, Inc. and Universal Hospital Services, Inc., dated May
12, 1992 and amendments thereto
WellsOne Commercial Card Agreement between ▇▇▇▇▇ Fargo Bank NA
and Universal Hospital Services, Inc. dated December 2000 and
amendments or revisions thereto
▇▇▇▇▇ Fargo Bank Minnesota Institutional Trust & Custody
Master Trust Agreement dated November 6, 2002
Universal Hospital Services, Inc./▇▇▇▇▇▇ Laboratories Inc.
▇▇▇▇ Device Installment Contract dated September 4, 2002 and
amendments thereto
Universal Hospital Services, Inc. and UPS Consolidated dated
November 6, 2002
Purchase Agreement between Deltec, Inc. and Universal Hospital
Services, Inc. dated October 4, 2001
Agreement between Universal Hospital Services, Inc. and Tri-
Anim Health Services Inc. dated March 20, 1999 and amendments
thereto
Bird Products Corporation Rental Distributor Agreement with
Universal Hospital Services, Inc. dated July 1, 2002
Sprint PCS Advantage Agreement for Business dated April 11,
2002 between Sprint and Universal Hospital Services, Inc.
Cananwill, Inc. Commercial Insurance Premium Finance and
Security Agreement dated June 13, 2003
First Insurance Funding Corp. Premium Finance Agreement dated
June 1, 2003
American Home Assurance Company, Business Auto insurance
policy dated June 1, 2003
The following licenses and permits are held by the Company, the absence
of which could be reasonably likely to have a Material Adverse Effect.
a. State of Connecticut Wholesaler of Drugs, Cosmetics and
Medical Devises license;
b. Commonwealth of Kentucky Wholesaler Permit;
c. State of Missouri Wholesale Drug Distributor license;
d. State of North Dakota Wholesale Drug Distributor license;
e. State of Ohio Wholesale Distributor of Dangerous Drug license;
f. State of Oklahoma Wholesaler permit;
g. Commonwealth of Pennsylvania Medical Device Distributor
license;
h. State of Tennessee Wholesaler/Distributor license;
i. State of Texas Medical Device Distributor license;
j. Commonwealth of Virginia Warehouser license;
Some licensure regulations and statutes in additional states may apply
to the Company's activities. Although the Company's failure to possess such
licenses in these states for the Company's existing operations may subject the
company to certain monetary fines, the Company does not believe the extent of
such fines, in the aggregate, will be material to the Company's liquidity,
financial condition or results of operation. The Company has not received any
notification of violation of any state of jurisdiction's licensure or permit
laws or regulations.
The Company is party to the following instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of Company:
a. The Company has outstanding options to purchase a total of 3,151,756
shares of its common stock under its 1998 Stock Option Plan as of the date of
the Stock Purchase Agreement. The name of each optionholder and the number of
shares represented by each option grant is set forth on attached Schedule 1 to
Disclosure Schedule 3.22, dated as of the date of the Stock Purchase Agreement.
Pursuant to an Information Memorandum of the Company dated September 29, 2003,
the Company is offering to repurchase outstanding options and warrants to
purchase its common stock.
b. On December 18, 1998, the Company issued to ReliaStar Financial Corp.
("Reliastar") a warrant (the "Warrant") to purchase 245,000 shares of the
Company's common stock at an exercise price of $.01 per share. The Warrant was
issued in connection with the Preferred Stock and Warrant Purchase Agreement,
dated as of December 18, 1998, between the Company and Reliastar. The Warrant
was subsequently transferred by Reliastar to Security Life of Denver Insurance
Company, an affiliate of Reliastar. Pursuant to an Information Memorandum of the
Company dated September 29, 2003, the Company is offering to repurchase
outstanding options and warrants to purchase its common stock. Under the letter
agreement dated September 26, 2003 between the Company and Security Life of
Denver Insurance Company, Security Life of Denver Insurance Company agreed that
the Company will repurchase the Warrant concurrently with the closing of the
Credit Agreement.
c. The Preferred Stock and Warrant Purchase Agreement between Universal
Hospital Services, Inc. and ReliaStar Financial Corp. dated December 18, 1998,
pursuant to which the Company has 6,246 shares of its Series B 13% Cumulative
Accruing Pay-In-Kind Preferred Stock ("Series B Preferred Stock") issued and
outstanding, and the letter dated September 26, 2003, pursuant to which the
Company has agreed to declare a dividend of additional shares of Series B
Preferred Stock as described in paragraph 2 of such letter. All of the Series B
Preferred Stock is being repurchased concurrently with the closing of the Credit
Agreement pursuant to a letter agreement dated September 26, 2003 between the
Company and Security Life of Denver Insurance Company.
d. The severance agreements with each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ provide for the continued
exercisability of their respective options to purchase common stock of the
Company. Pursuant to an Information Memorandum of the Company dated September
29, 2003, the Company is offering to repurchase outstanding options and warrants
to purchase its common stock.
e. Under the Stock Purchase Agreement dated as of September 26, 2003, as
amended by Amendment No. 1 to Stock Purchase Agreement to be executed
concurrently with the closing of the Credit Agreement, by and between the
Company, ▇.▇. Childs Equity Partners III, L.P., JWC Fund III Co-invest LLC,
Halifax Capital Partners, L.P., and the Management Holders who have executed and
delivered a Joinder Agreement to the Stock Purchase Agreement, the Company
will issue 4,645,833.33 shares of common stock, and may issue after the closing
of the Credit Agreement, an additional 33,000 shares of common stock.
f. As contemplated or required by the Stock Purchase Agreement, as amended
by the Amendment No. 1 to Stock Purchase Agreement, the Company intends to enter
into a new stock option plan and intends to enter into a new Employment
Agreement with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ concurrently with the closing of the Credit
Agreement. The Company has obtained written agreements from ▇▇. ▇▇▇▇▇▇▇▇▇ and
holders of "super achiever" options to sell their shares and options in
connection with the Recapitalization. In connection with the Recapitalization,
the Company will grant an additional 20,000 stock options to ▇▇. ▇▇▇▇▇▇▇▇▇.
Concurrently with the closing of the Credit Agreement, the Company will grant
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 6,000 stock options and execute an amended and restated
Stockholders' Agreement with ▇.▇. Childs Equity Partners III, L.P., ▇.▇. Childs
Equity Partners, L.P., Halifax Capital Partners, L.P., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.
Disclosure Schedule 5.1
to
Credit Agreement
TRADE NAMES
- Universal Hospital Services, Inc.
- Universal Hospital Services
- UHS
Disclosure Schedule 6.2
to
Credit Agreement
PERMITTED INVESTMENTS
None.
Disclosure Schedule 6.3
to
Credit Agreement
INDEBTEDNESS
None.
Disclosure Schedule 6.6
to
Credit Agreement
GUARANTEED INDEBTEDNESS
None.
Disclosure Schedule 6.7
to
Credit Agreement
EXISTING LIENS
The Company has granted First Insurance Funding Corporation pursuant to the
Premium Finance Agreement dated June 1, 2003 a security interest in the
policies, including all returned premiums, dividend payments and loss payments
which reduce unearned premiums, subject to any mortgagee or loss payee's
interest.
The Company has granted Cananwill, Inc. pursuant to the Commercial Insurance
Premium Finance and Security Agreement dated June 13, 2003 a security interest
in all sums payable to the Company with respect to the policies as security for
payment of the agreement.