Exhibit 10.1
WAIVER AGREEMENT
THIS WAIVER AGREEMENT (this "Agreement"), dated as of August 8, 2005, is
entered into among CURATIVE HEALTH SERVICES, INC., a Minnesota corporation
formerly known as Curative Holding Co. ("Holdings"), ▇▇▇▇▇▇▇▇.▇▇▇, INC., a
Delaware corporation ("eBioCare"), HEMOPHILIA ACCESS, INC., a Tennessee
corporation ("Hemophilia Access"), APEX THERAPEUTIC CARE, INC., a California
corporation ("Apex"), CHS SERVICES, INC., a Delaware corporation ("CHS"),
CURATIVE HEALTH SERVICES OF NEW YORK, INC., a New York corporation ("CHSNY"),
OPTIMAL CARE PLUS, INC., a Delaware corporation ("Optimal Care"), INFINITY
INFUSION, LLC, a Delaware limited liability company ("Infinity"), INFINITY
INFUSION II, LLC, a Delaware limited liability company ("Infinity II"), INFINITY
INFUSION CARE, LTD., a Texas limited partnership ("Infinity Infusion"), MEDCARE,
INC., a Delaware corporation ("Medcare"), CURATIVE PHARMACY SERVICES, INC., a
Delaware corporation ("CPS"), CURATIVE HEALTH SERVICES CO., a Minnesota
corporation formerly known as Curative Health Services, Inc. ("CHSC"), CRITICAL
CARE SYSTEMS, INC., a Delaware corporation ("CCS") (Holdings, eBioCare,
Hemophilia Access, Apex, CHS, CHSNY, Optimal Care, Infinity, Infinity II,
Infinity Infusion, Medcare, CPS, CHSC and CCS are sometimes collectively
referred to herein as the "Borrowers" and individually as a "Borrower"),
CURATIVE HEALTH SERVICES III CO., a Minnesota corporation, and GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation ("GE Capital"), as Agent and Lender.
W I T N E S S E T H:
WHEREAS, the Borrowers and GE Capital are parties to that certain Amended
and Restated Credit Agreement, dated April 23, 2004, as amended by (i) that
certain First Amendment to Amended and Restated Credit Agreement and Collateral
Documents dated as of May 3, 2004, (ii) that certain Second Amendment to Amended
and Restated Credit Agreement dated as of June 30, 2004, (iii) that certain
Third Amendment to Amended and Restated Credit Agreement dated as of October 20,
2004 and (iv) that certain Fourth Amendment to Amended and Restated Credit
Agreement dated as of December 31, 2004 (as so amended, the "Credit Agreement";
capitalized terms used but not defined in this Agreement have the meanings given
in the Credit Agreement), whereby the Lenders have made available a revolving
credit facility and other financial accommodations to the Borrowers, subject to
the terms and conditions contained in the Credit Agreement;
WHEREAS, certain Events of Default have occurred under the Credit
Agreement prior to the date hereof, specifically (a) the failure of the
Borrowers to limit the Total Leverage Ratio to 10.75:1.00 or less as required
pursuant to Section 7.15 of the Credit Agreement for the Fiscal Quarter ended
June 30, 2005 and (b) the failure of the Borrowers to limit the Senior Secured
Leverage Ratio to 1.50:1.00 or less as required pursuant to Section 7.16 of the
Credit Agreement for the Fiscal Quarter ended June 30, 2005 (collectively, the
"Specified Defaults");
WHEREAS, the Borrowers have requested that Agent and Lenders waive the
Specified Defaults;
WHEREAS, the Borrower Representative has informed GE Capital that the
Borrowers believe that they will fail to comply with the Total Leverage Ratio
covenant in Section 7.15 of the Credit Agreement for each of the Fiscal Quarters
ended March 31, 2006 and June 30, 2006 (collectively, the "Potential Specified
Defaults"), and Borrowers have requested that the Lenders grant a limited waiver
for non-compliance with the Total Leverage Ratio covenant for these fiscal
periods;
WHEREAS, subject to the terms and conditions specified herein, Agent and
Lenders are willing to waive the Specified Defaults and the Potential Specified
Defaults.
NOW, THEREFORE, in consideration of the foregoing, the respective
agreements, warranties and covenants contained herein, for $10 and other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. ACKNOWLEDGMENTS AND AGREEMENTS
1.1 Acknowledgment of Obligations. Each of the Borrowers hereby
acknowledges, confirms and agrees that as of the close of business on August 5,
2005, the Borrowers are indebted to Lenders in respect of the Revolving Loan in
the aggregate principal amount of $27,260,201 and in respect of the aggregate
Letter of Credit Obligations in the amount of $225,000. All such Obligations,
together with interest accrued and accruing thereon, and fees, costs, expenses
and other charges now or hereafter payable by the Borrowers to Lenders, are
unconditionally owing by the Borrowers to Lenders, without offset, defense or
counterclaim of any kind, nature or description whatsoever.
1.2 Acknowledgment of Liens. Each Borrower hereby acknowledges, confirms
and agrees that Agent has and shall continue to have valid, enforceable and
perfected first-priority liens upon and security interests in the Collateral
granted to Agent for the benefit of the Lenders pursuant to the Loan Documents
or otherwise granted to or held by Agent for the benefit of the Lenders.
1.3 Binding Effect of Documents. Each Borrower hereby acknowledges,
confirms and agrees that: (a) each of the Loan Documents has been duly executed
and delivered to the Agent and the Lenders by each Borrower that is intended to
be a party thereto, and each is in full force and effect as of the date hereof,
(b) the agreements and obligations of each Borrower contained in such Loan
Documents and in this Agreement constitute the legal, valid and binding
obligations of such Borrower, enforceable against it in accordance with their
respective terms, and no Borrower has any valid defense to the enforcement of
such obligations, and (c) the Agent and the Lenders are and shall be entitled to
the rights, remedies and benefits provided for in the Loan Documents and
applicable law.
1.4 Acknowledgment of Defaults. Each Borrower hereby acknowledges and
agrees that (a) the Specified Defaults have occurred and, prior to the
effectiveness of this Agreement, are continuing and constitute Events of Default
which entitle the Agent and the Lenders to
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exercise their rights and remedies under the Loan Documents, applicable law or
otherwise, (b) Agent and the Lenders have the presently exercisable right to
cease funding and declare the Obligations to be immediately due and payable
under the terms of the Loan Documents and (c) the Potential Specified Defaults
constitute "Defaults" under the Credit Agreement and Agent and the Lenders have
the presently exercisable right to cease funding, impose the Default Rate and to
exercise certain other rights as provided in the Loan Documents.
SECTION 2. WAIVER
2.1 Waiver of Specified Defaults. In reliance upon the representations,
warranties and covenants of the Borrowers contained in this Agreement, and
subject to the terms and conditions of this Agreement and any documents or
instruments executed or delivered in connection herewith, the Agent and the
Lenders hereby waive the Specified Defaults solely for the fiscal quarter ending
June 30, 2005.
2.2 Temporary Waiver of Potential Specified Defaults. In reliance upon the
representations, warranties and covenants of the Borrowers contained in this
Agreement, and subject to the terms and conditions of this Agreement and any
documents or instruments executed or delivered in connection herewith, the Agent
and the Lenders hereby waive the Potential Specified Defaults solely during the
fiscal quarters ending March 31, 2006 and June 30, 2006, provided that the
Borrowers hereby covenant and agree that they shall not permit the Total
Leverage Ratio as of the last day of the Fiscal Quarter ending March 31, 2006
and June 30, 2006 to exceed 10.00:1.00. Notwithstanding anything herein or in
the Credit Agreement or any other Loan Document to the contrary, if the Total
Leverage Ratio exceeds 10.00:1.00 as of the last day of any of the Fiscal
Quarters ending March 31, 2006 and June 30, 2006, such event shall constitute an
immediate Event of Default.
2.3 No Other Waivers; Reservation of Rights.
(a) Neither the Agent nor any other Lender has waived, or is by this
Agreement waiving, (i) any Default or Event of Default which may be continuing
on the date hereof (other than the Specified Defaults and the potential
Specified Defaults, in each case to the extent expressly set forth herein) or
(ii) any Default or Event of Default which may hereafter arise (whether similar
to the Specified Defaults , Potential Specified Defaults or otherwise),
including, without limitation, any failure by the Borrowers to comply with
Section 7.15 or Section 7.16 of the Credit Agreement for any Fiscal Quarter
ended prior to or after June 30, 2005 (specifically excluding the Potential
Specified Defaults).
(b) The Agent and the Lenders reserve the right, in their
discretion, to exercise any or all of their rights and remedies under the Credit
Agreement and the other Loan Documents as a result of any Default or Event of
Default (other than the Specified Defaults and the Potential Specified Defaults,
in each case to the extent expressly set forth herein) which may be continuing
on the date hereof or any Default or Event of Default (other than the Specified
Defaults and the Potential Specified Defaults, in each case to the extent
expressly set forth herein) which may occur after the date hereof, and nothing
in this Agreement, and no delay on the part of the Agent or any Lender in
exercising any such right or remedy, shall be construed as a waiver of any such
right or remedy.
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SECTION 3. CONDITIONS TO EFFECTIVENESS
3.1 This Agreement shall become effective on the date upon which the
conditions specified below have been satisfied:
(a) Agent and Lenders shall have received an original of this
Agreement and the Confirmation of Guaranty, duly authorized, executed and
delivered by each of the Borrowers and the Guarantor, respectively.
(b) With respect to the Potential Specified Defaults, the conditions
set forth in Section 2.2 herein shall have been satisfied.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Each Borrower hereby further represents and warrants with and to Agent
and Lenders that after giving effect to the waivers in Section 2 hereof, the
Borrowers hereby represent and warrant that each of the representations and
warranties contained in the Loan Documents is true and correct on and as of the
date hereof, except for any representation and warranty that relates by its
terms only to a specified date (in which case, it shall be true on and as of
such date).
SECTION 5. COVENANTS.
5.1 In order to induce the Agent and the Lenders to enter into and grant
the waiver set forth in Section 2.1 and the limited waivers set forth in Section
2.2 hereof, the Borrowers hereby covenant and agree with Agent and the Lenders
as follows:
(a) The Borrowers shall enter into an amendment to the Credit
Agreement on or before 12:00 p.m. (New York time) on December 30, ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ levels for the Total Leverage Ratio for the Fiscal Quarters
ending March 31, 2006 and June 30, 2006, which amendment must be in form and
substance satisfactory to Agent and the Required Lenders;
(b) If the Borrowers have failed for any reason whatsoever to timely
enter into an amendment to the Credit Agreement satisfactory to Agent and
Lenders of the type described in the immediately preceding paragraph (a), then
(i) all Loans and other outstanding Obligations shall bear interest at the
Default Rate from and at all times after December 30, 2005 (regardless of
whether a Default or an Event of Default then exists) and (ii) the Borrowers
shall pay a waiver fee (the "Waiver Fee") to the Agent for the ratable benefit
of the Lenders on or before 5:00 p.m. (New York time) on December 30, 2005 in an
amount equal to the product of 0.25% multiplied by the greater of (x) the
aggregate principal amount of all Loans outstanding on December 30, 2005, and
(y) the aggregate amount of the Commitments as of December 30, 2005; and
(c) The Borrowers agree that the Waiver Fee (i) is non-refundable
and shall be deemed fully earned on the date of this Agreement, but is not
payable except as provided in
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Section 5.1(b) above of this Agreement, and (ii) is intended to as an inducement
and as compensation to the Agent and Lenders for the temporary waiver described
in Section 2.2 above.
SECTION 6. PROVISIONS OF GENERAL APPLICATION
6.1 Effect of this Agreement. Except as modified pursuant hereto, no other
changes or modifications to the Loan Documents are intended or implied and in
all other respects the Loan Documents are hereby specifically ratified, restated
and confirmed by all parties hereto as of the effective date hereof. To the
extent of conflict between the terms of this Agreement and the other Loan
Documents, the terms of this Agreement shall control. The Credit Agreement and
this Agreement shall be read and construed as one agreement.
6.2 Costs and Expenses. The Borrowers hereby agree that they shall
reimburse the Agent on demand for all costs and expenses (including, without
limitation, attorney's fees) incurred by such parties in connection with the
negotiation, documentation and consummation of this Agreement and any other
document executed in connection herewith and therewith.
6.3 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
6.4 Survival of Representations and Warranties. All representations and
warranties made in this Agreement or any other document furnished in connection
with this Agreement shall survive the execution and delivery of this Agreement
and the other documents, and no investigation by Agent or any Lender or any
closing shall affect the representations and warranties or the right of Agent
and Lenders to rely upon them.
6.5 Release.
(a) Each Credit Party, on behalf of itself and its successors, assigns,
and other legal representatives, hereby absolutely, unconditionally and
irrevocably releases, remises and forever discharges GE Capital, Agent and
Lenders, and their successors and assigns, and their present and former
shareholders, affiliates, subsidiaries, divisions, predecessors, directors,
officers, attorneys, employees, agents and other representatives (GE Capital,
Agent, each Lender and all such other Persons being hereinafter referred to
collectively as the "Releasees" and individually as a "Releasee"), of and from
all demands, actions, causes of action, suits, controversies, sums of money,
accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set off, demands and liabilities whatsoever
(individually, a "Claim" and collectively, "Claims") of every name and nature,
known or unknown, suspected or unsuspected, both at law and in equity, which
such Credit Party or any of its successors, assigns, or other legal
representatives may now or hereafter own, hold, have or claim to have against
the Releasees or any of them for, upon, or by reason of any circumstance,
action, cause or thing whatsoever which arises at any time on or prior to the
date that this Agreement is executed by all parties, including, without
limitation, for or on account of, or in relation to, or in any way in connection
with the Credit Agreement or any of the other Loan Documents or transactions
thereunder or related thereto and which arise at any time on or prior to the
date that this Agreement is executed by all parties.
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(b) Each Credit Party understands, acknowledges and agrees that its
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the provisions of
such release.
(c) Each Credit Party agrees that no fact, event, circumstance, evidence
or transaction which could now be asserted or which may hereafter be discovered
shall affect in any manner the final, absolute and unconditional nature of the
release set forth above.
6.6 Covenant Not to ▇▇▇. Each Credit Party, on behalf of itself and its
successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably, covenants and agrees with and in favor of each
Releasee that it will not ▇▇▇ (at law, in equity, in any regulatory proceeding
or otherwise) any Releasee on the basis of any Claim released, remised and
discharged by such Credit Party pursuant to Section 6.5 above. If any Credit
Party or any of their respective successors, assigns or other legal
representations violates the foregoing covenant, each Credit Party, for
themselves and their successors, assigns and legal representatives, jointly and
severally agree to pay, in addition to such other damages as any Releasee may
sustain as a result of such violation, all attorneys' fees and costs incurred by
any Releasee as a result of such violation.
6.7 Severability. Any provision of this Agreement held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Agreement.
6.8 Reviewed by Attorneys. Each Borrower represents and warrants to Agent
and Lenders that it (a) understands fully the terms of this Agreement and the
consequences of the execution and delivery of this Agreement, (b) has been
afforded an opportunity to have this Agreement reviewed by, and to discuss this
Agreement and document executed in connection herewith with, such attorneys and
other persons as such Borrower may wish, and (c) has entered into this Agreement
and executed and delivered all documents in connection herewith of its own free
will and accord and without threat, duress or other coercion of any kind by any
Person. The parties hereto acknowledge and agree that neither this Agreement nor
the other documents executed pursuant hereto shall be construed more favorably
in favor of one than the other based upon which party drafted the same, it being
acknowledged that all parties hereto contributed substantially to the
negotiation and preparation of this Agreement and the other documents executed
pursuant hereto or in connection herewith.
6.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO
BE PERFORMED ENTIRELY WITHIN SAID STATE.
6.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be deemed to constitute but one original and
shall be binding upon all parties, their successors and permitted assigns.
Delivery of an executed signature page hereof by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
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IN WITNESS WHEREOF, this Waiver Agreement is executed and delivered as of the
day and year first above written.
LENDER AND AGENT:
GENERAL ELECTRIC CAPITAL CORPORATION
By:_________________________________
Name:_______________________________
Title: Its Duly Authorized Signatory
[BORROWERS' SIGNATURES CONTINUE ON NEXT PAGE]
BORROWERS:
CURATIVE HEALTH SERVICES, INC.,
a Minnesota corporation formerly known as
Curative Holding Co.
By:
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Name:
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Title:
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Date:
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▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
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Name:
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Title:
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Date:
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HEMOPHILIA ACCESS, INC.
By:
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Name:
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Title:
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Date:
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APEX THERAPEUTIC CARE, INC.
By:
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Name:
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Title:
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Date:
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CHS SERVICES, INC.
By:
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Name:
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Title:
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Date:
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CURATIVE HEALTH SERVICES OF NEW YORK, INC.
By:
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Name:
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Title:
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Date:
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OPTIMAL CARE PLUS, INC.
By:
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Name:
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Title:
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Date:
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INFINITY INFUSION, LLC
By: Curative Health Services Co., its Sole
Member
By:
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Name:
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Title:
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Date:
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INFINITY INFUSION II, LLC
By: Curative Health Services Co., its Sole
Member
By:
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Name:
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Title:
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Date:
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INFINITY INFUSION CARE, LTD.
By: Infinity Infusion II, LLC, its Sole
General Partner
By: Curative Health Services Co., the Sole
Member of Infinity Infusion II, LLC
By:
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Name:
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Title:
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Date:
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MEDCARE, INC.
By:
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Name:
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Title:
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Date:
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CURATIVE PHARMACY SERVICES, INC.
By:
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Name:
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Title:
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Date:
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CURATIVE HEALTH SERVICES CO.,
a Minnesota corporation formerly known as
Curative Health Services, Inc.
By:
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Name:
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Title:
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Date:
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CRITICAL CARE SYSTEMS, INC.
By:
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Name:
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Title:
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Date:
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GUARANTORS:
CURATIVE HEALTH SERVICES III CO.
By:
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Name:
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Title:
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Date:
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GENERAL ELECTRIC CAPITAL CORPORATION, as
Lender and Agent
By:
Name: ______________________________
Its Duly Authorized Signatory
Date:
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CONFIRMATION OF GUARANTY
The undersigned Guarantor hereby (a) acknowledges, consents and agrees to
the terms of the foregoing Waiver Agreement (the "Agreement") including, without
limitation, the release and covenant not to ▇▇▇ in Sections 6.5 and 6.6 of the
Agreement, and (b) agrees and confirms that its obligations under the Guaranty
Agreement to which it is a party will continue in full force and effect and
extend to all Obligations under and as defined in the Amended and Restated
Credit Agreement as amended and modified by (i) that certain First Amendment to
Amended and Restated Credit Agreement and Collateral Documents dated as of May
3, 2004, (ii) that certain Second Amendment to Amended and Restated Credit
Agreement dated as of June 30, 2004, (iii) that certain Third Amendment to
Amended and Restated Credit Agreement dated as of October 20, 2004 and (iv) that
certain Fourth Amendment to Amended and Restated Credit Agreement dated as of
December 31, 2004.
As of this 8th day of August, 2005.
CURATIVE HEALTH SERVICES III CO.
By:
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Name:
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Title:
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Date:
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