EXHIBIT 10.20
Execution Copy
CREDIT AGREEMENT
among
UNIVERSAL HOSPITAL SERVICES, INC.,
Borrower,
The Several Lenders
from Time to Time Parties Hereto,
KEY CORPORATE CAPITAL INC.,
as Collateral Agent,
▇▇▇▇▇▇ FINANCIAL, INC.,
as Syndication Agent
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
Dated as of October 25, 1999
CIBC WORLD MARKETS CORP.,
as Lead Arranger and Book Manager
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.....................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................20
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS...............................................21
2.1 Revolving Credit Commitments...................................................................21
2.2 Revolving Credit Notes.........................................................................21
2.3 Procedure for Revolving Credit Borrowing.......................................................22
2.4 Commitment Fee.................................................................................22
2.5 Termination or Reduction of Revolving Credit Commitments.......................................22
SECTION 3. LETTERS OF CREDIT..............................................................................23
3.1 L/C Commitment.................................................................................23
3.2 Procedure for Issuance of Letters of Credit....................................................23
3.3 Fees, Commissions and Other Charges............................................................24
3.4 L/C Participations.............................................................................24
3.5 Reimbursement Obligations of the Borrower......................................................25
3.6 Obligations Absolute...........................................................................26
3.7 Letter of Credit Payments......................................................................26
3.8 Application....................................................................................27
SECTION 4. SWING LINE LOANS...............................................................................27
4.1 Swing Line Commitment..........................................................................27
4.2 Swing Line Note................................................................................27
4.3 Refunded Swing Line Loans......................................................................27
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS.........................................................29
5.1 Interest Rates and Payment Dates...............................................................29
5.2 Conversion and Continuation Options............................................................29
5.3 Minimum Amounts and Maximum Number of Tranches.................................................30
5.4 Optional Prepayments...........................................................................30
5.5 Mandatory Prepayments..........................................................................30
5.6 Computation of Interest and Fees...............................................................32
5.7 Inability to Determine Interest Rate...........................................................32
5.8 Pro Rata Treatment and Payments................................................................33
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5.9 Illegality.....................................................................................34
5.10 Requirements of Law............................................................................34
5.11 Taxes..........................................................................................35
5.12 Indemnity......................................................................................37
5.13 Lending Offices; Change of Lending Office......................................................37
5.14 Defaulting Lender..............................................................................38
5.15 Replacement of Certain Lenders.................................................................39
SECTION 6. REPRESENTATIONS AND WARRANTIES.................................................................39
6.1 Financial Condition............................................................................39
6.2 No Change......................................................................................40
6.3 Existence; Compliance with Law.................................................................41
6.4 Power; Authorization; Enforceable Obligations..................................................41
6.5 No Legal Bar...................................................................................41
6.6 No Material Litigation.........................................................................42
6.7 No Default.....................................................................................42
6.8 Ownership of Property; Liens...................................................................42
6.9 Intellectual Property..........................................................................42
6.10 No Burdensome Restrictions.....................................................................42
6.11 Taxes..........................................................................................42
6.12 Federal Regulations............................................................................43
6.13 ERISA..........................................................................................43
6.14 Investment Company Act; Other Regulations......................................................43
6.15 Subsidiaries; Stockholders.....................................................................43
6.16 Security Documents.............................................................................44
6.17 Accuracy and Completeness of Information.......................................................44
6.18 Labor Relations................................................................................45
6.19 Insurance......................................................................................45
6.20 Solvency.......................................................................................45
6.21 Purpose of Loans...............................................................................46
6.22 Environmental Matters..........................................................................46
6.23 Year 2000 Compliance...........................................................................47
6.24 Senior Notes Documents; Subordinated Notes.....................................................47
6.25 Concerning Regulatory Matters..................................................................47
SECTION 7. CONDITIONS PRECEDENT...........................................................................48
7.1 Conditions to Initial Revolving Credit Loans...................................................48
7.2 Conditions to Each Loan........................................................................51
SECTION 8. AFFIRMATIVE COVENANTS..........................................................................52
8.1 Financial Statements...........................................................................52
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8.2 Certificates; Other Information................................................................53
8.3 Payment of Obligations.........................................................................54
8.4 Conduct of Business and Maintenance of Existence...............................................54
8.5 Maintenance of Property; Insurance.............................................................54
8.6 Inspection of Property; Books and Records; Discussions.........................................54
8.7 Notices........................................................................................55
8.8 Environmental Laws.............................................................................56
8.9 Changes to Advance Rates, Standards of Eligibility and Reserves................................56
8.10 Periodic Audit of Accounts Receivable and Inventory............................................56
8.11 Additional Collateral; Additional Guarantors...................................................57
8.12 Year 2000 Covenants............................................................................58
8.13 Landlord Estoppel Agreements...................................................................59
SECTION 9. NEGATIVE COVENANTS.............................................................................59
9.1 Financial Condition Covenants..................................................................59
9.2 Limitation on Indebtedness.....................................................................60
9.3 Limitation on Liens............................................................................61
9.4 Limitation on Guarantee Obligations............................................................63
9.5 Limitation on Fundamental Changes..............................................................64
9.6 Limitation on Sale of Assets...................................................................64
9.7 Limitation on Dividends........................................................................65
9.8 Limitation on Capital Expenditures.............................................................66
9.9 Limitation on Investments, Loans and Advances..................................................66
9.10 Limitation on Optional Payments and Modifications of Agreements................................67
9.11 Limitation on Transactions with Affiliates.....................................................68
9.12 Limitation on Sales and Leasebacks.............................................................68
9.13 Limitation on Changes in Fiscal Year...........................................................68
9.14 Limitation on Negative Pledge Clauses..........................................................68
9.15 Limitation on Lines of Business................................................................69
9.16 Governing Documents............................................................................69
9.17 Limitation on Subsidiary Formation.............................................................69
9.18 Limitation on Securities Issuances.............................................................69
SECTION 10. EVENTS OF DEFAULT..............................................................................69
SECTION 11. THE AGENTS.....................................................................................73
11.1 Appointment....................................................................................73
11.2 Delegation of Duties...........................................................................73
11.3 Exculpatory Provisions.........................................................................73
11.4 Reliance by Agents.............................................................................74
11.5 Notice of Default..............................................................................74
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11.6 Non-Reliance on Agent and Other Lenders........................................................74
11.7 Indemnification................................................................................75
11.8 Agent in Its Individual Capacity...............................................................75
11.9 Successor Agent................................................................................76
11.10 Arranger, Bookrunner and Syndication Agent.....................................................76
SECTION 12. MISCELLANEOUS..................................................................................76
12.1 Amendments and Waivers.........................................................................76
12.2 Notices........................................................................................77
12.3 No Waiver; Cumulative Remedies.................................................................77
12.4 Survival of Representations and Warranties.....................................................78
12.5 Payment of Expenses and Taxes..................................................................78
12.6 Successors and Assigns; Participations and Assignments.........................................78
12.7 Adjustments; Set-off...........................................................................81
12.8 Counterparts...................................................................................81
12.9 Severability...................................................................................81
12.10 Integration....................................................................................82
12.11 GOVERNING LAW..................................................................................82
12.12 Submission To Jurisdiction; Waivers............................................................82
12.13 Acknowledgements...............................................................................82
12.14 WAIVERS OF JURY TRIAL..........................................................................83
12.15 Confidentiality................................................................................83
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Schedules
---------
Schedule 1 Lenders, Commitments and Lending Offices
Schedule 6.4 Governmental Consent
Schedule 6.6 Litigation
Schedule 6.15 Subsidiaries
Schedule 6.16 Filing Jurisdictions
Schedule 6.19 Insurance
Schedule 6.22 Environmental Matters
Schedule 6.25 Governmental Investigations and Audits
Schedule 9.2 Existing Indebtedness
Schedule 9.3 Existing Liens
Schedule 9.4 Existing Guarantee Obligations
Schedule 9.8 Existing Investments
Exhibits
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Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Swing Line Note
Exhibit A-3 Form of Borrowing Request
Exhibit A-4 Form of Conversion Notice
Exhibit A-5 Form of Prepayment Notice
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Guarantee
Exhibit D Form of Pledge Agreement
Exhibit E Form of Security Agreement
Exhibit F Form of Non-Bank Status Certificate
Exhibit G Form of Secretary's Certificate
Exhibit H Form of Opinion of ▇▇▇▇▇▇ & Whitney, LLP
Exhibit I Form of Assignment and Acceptance
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of October 25, 1999, among UNIVERSAL
HOSPITAL SERVICES, INC., a Minnesota corporation (the "Borrower"), the lenders
from time to time parties to this Agreement (the "Lenders"), KEY CORPORATE
CAPITAL INC., as collateral agent for the Lenders hereunder (in such capacity,
the "Collateral Agent"), ▇▇▇▇▇▇ FINANCIAL, INC., as syndication agent for the
Lenders hereunder (in such capacity, the "Syndication Agent") and CANADIAN
IMPERIAL BANK OF COMMERCE ("CIBC"), as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent").
RECITALS
The Borrower has requested that the Lenders make available to the
Borrower revolving credit loans, and that the Issuing Lender issue for the
benefit of the Borrower letters of credit, in an aggregate principal and/or face
amount at any one time outstanding not to exceed $77,500,000, the proceeds of
which would be used among other things, to refinance existing debt of the
Borrower (including, without limitation, to refinance and replace the Existing
Credit Agreement (as defined below)), to finance the cash portion of the
acquisition of Vital Choice Medical Systems, to pay fees and expenses incurred
in connection herewith and therewith and to finance the working capital
requirements of the Borrower and its subsidiaries in the ordinary course of
business and for other general corporate purposes. The Lenders are willing to
make such credit available to the Borrower, but only on these terms, and subject
to the conditions, set forth in this Agreement.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Acquired Entity or Business": as defined in the proviso to the
definition of Consolidated Net Income.
"Administrative Agent": CIBC, in its capacity as the Administrative
Agent for the Lenders under this Agreement and the other Loan Documents.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person (including, with its correlative meanings, "controlled by"
and "under common control with") means the power, directly or indirectly, either
to (a) vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Agents": collectively, the Administrative Agent and the Collateral
Agent.
"Aggregate Outstanding RC Extensions of Credit": as to any Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Credit Loans made by such Lender then outstanding, (b) such
Lender's Revolving Credit Commitment Percentage of the L/C Obligations then
outstanding and (c) such Lender's Revolving Credit Commitment Percentage of all
Swing Line Loans then outstanding; provided, however, that for purposes of
calculating Available RC Commitment solely for purposes of Section 2.4, the
amount referred to in clause (c) above shall be deemed to be zero.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Advance Rate": for any period set forth in the table below
with respect to any property described in such table, the percentage set forth
under the relevant column heading for such property opposite such period in the
table below (or such other percentage as the Administrative Agent shall
determine in accordance with Section 8.9):
Eligible
Eligible Depreciated
Rental Equipment Wholesale Equipment
Period Equipment Amount Disposables Disposables
------ --------- ----------- ----------- -----------
The date hereof through October 31, 2000 60% 25% 50% 50%
November 1, 2000 through October 31, 2001 60% 15% 50% 40%
November 1, 2001 through October 31, 2002 60% 5% 50% 30%
November 1, 2002 through October 31, 2003 55% 0% 50% 20%
November 1, 2003 through Revolving 50% 0% 50% 10%
Credit Termination Date
"Applicable Lending Office": for each Lender and for each Type of
Revolving Credit Loan, the lending office of such Lender designated for such
Type of Revolving Credit Loan on Schedule 1 hereto (or any other lending office
from time to time notified to the Administrative Agent by such Lender) as the
office at which its Revolving Credit Loans of such Type are to be made and
maintained.
"Applicable Margin": (a) for any Revolving Credit Loan of any Type
or any Swing Line Loan, at any time the Leverage Ratio then in effect
(determined as set forth in clause (b) below) is within any of the ranges set
forth below, the rate per annum set forth under the relevant column heading
opposite the applicable range below:
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Base Rate Loans
(including Swing Line Eurodollar
Leverage Ratio Loans) Loans
-------------------------- ---------------------------- -------------------
Greater than or equal to 1.75% 3.00%
4.00 to 1
-------------------------- ---------------------------- -------------------
Less than 4.00 but 1.50% 2.75%
greater than or equal to
3.50 to 1
-------------------------- ---------------------------- -------------------
Less than 3.50 but 1.25% 2.50%
greater than or equal to
3.00 to 1
-------------------------- ---------------------------- -------------------
Less than 3.00 to 1 1.00% 2.25%
-------------------------- ---------------------------- -------------------
(b) Changes in the Applicable Margin resulting from changes in the
Leverage Ratio shall become effective on the date (the "Adjustment Date") on
which financial statements are received by the Administrative Agent pursuant to
Section 8.1(c) (but in any event not later than the 30th day after the end of
each calendar month) and shall remain in effect until the next change to be
effected pursuant to this paragraph. If any financial statements referred to
above are not delivered within the time periods specified above, then, until
such financial statements are delivered the Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than 4.00 to 1. Each determination of
the Leverage Ratio pursuant to this definition shall be made with respect to the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements. For the period from the
Closing Date to the first date on which financial statements for the calendar
month ended April 30, 2000 are required to be delivered pursuant to Section
8.1(c) hereof, the Leverage Ratio for purposes of this definition shall be
deemed to be greater than 4.00 to 1.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Arranger": CIBC World Markets Corp., in its capacity as lead arranger
and book manager.
"Assignee": as defined in Section 12.6(c).
"Assignment and Acceptance": as defined in Section 12.6(c).
"Available RC Commitment": as to any Lender at any time, an amount
equal to the excess, if any, of (a) the amount of such Lender's Revolving Credit
Commitment at such time over (b) the Aggregate Outstanding RC Extensions of
Credit by such Lender at such time.
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"Base Rate": for any day, the rate per annum (rounded upward, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate of
interest publicly announced by CIBC in New York, New York from time to time as
its base rate (the base rate not being intended to be the lowest rate of
interest charged by CIBC in connection with extensions of credit to debtors).
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Borrower": as defined in the heading to this Agreement.
"Borrowing Base": at any time, the sum of (a) 85% (or such other
percentage as the Administrative Agent shall determine in accordance with
Section 8.9) of the then Eligible Receivables; (b) the Applicable Advance Rate
at such time of the then Eligible Rental Equipment; (c) the Applicable Advance
Rate at such time of Eligible Depreciated Equipment Amount; (d) the Applicable
Advance Rate at such time of Eligible Wholesale Disposables; and (e) the
Applicable Advance Rate at such time of Eligible Equipment Disposables. The
Borrowing Base in effect at any time shall be the Borrowing Base as shown on the
Borrowing Base Certificate most recently delivered by the Borrower pursuant to
this Agreement; provided, however, that if the Borrower shall fail to deliver a
Borrowing Base Certificate when required pursuant to Section 8.2(c), then, at
the election of the Administrative Agent, the Borrowing Base in effect shall be
zero until such Borrowing Base Certificate is delivered; and provided, further,
however, that (i) the aggregate amount of the Borrowing Base at any time
attributable to Eligible Depreciated Equipment may not exceed $5,000,000 and
(ii) the aggregate amount of the Borrowing Base at any time attributable to
Eligible Wholesale Disposables and Eligible Equipment Disposables may not exceed
$5,000,000.
"Borrowing Base Certificate": a certificate, substantially in the form
of Exhibit B, with appropriate insertions, showing the Borrowing Base as of the
date set forth therein, and executed on behalf of the Borrower by a duly
authorized officer thereof.
"Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.3 or 4.1 as a date on which the Borrower has requested that Loans be
made by the Lenders hereunder a Letter of Credit be issued by the Issuing
Lender.
"Business": as defined in Section 6.22.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, and, if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or a Conversion of or into, or an Interest Period
for, a Eurodollar Loan or a notice by the Borrower with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period, which is also a
day on which dealings in Dollar deposits are carried out in the London interbank
market.
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"Capital Expenditures": for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including in
all events all amounts expended or capitalized under Financing Leases by the
Borrower and its Subsidiaries during that period) that, in conformity with GAAP,
are or are required to be included in the property, plant or equipment reflected
in the consolidated balance sheet of the Borrower and its Subsidiaries,
excluding (i) Capital Expenditures made 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 the purchase price of
all or substantially all of the assets of any Person, or any product line or
division of a Person, or 100% of the Capital Stock of a Person, which
acquisition is permitted under this Agreement or consented to by the Required
Lenders.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
similar ownership interests in a Person (other than a corporation) and any and
all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (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.
"CIBC": Canadian Imperial Bank of Commerce.
"Closing Date": the date on which the conditions precedent set forth in
Section 7.1 shall be satisfied or waived.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
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"Collateral": all property and interests in property of the Loan
Parties, now owned or hereinafter acquired, upon which a Lien is purported to be
created by any Security Document.
"Collateral Agent": as defined in the heading to this Agreement.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated Current Assets": at a particular date, all amounts which
would, in conformity with GAAP, be included under current assets on a
consolidated balance sheet of the Borrower and its Subsidiaries as at such date;
provided, however, that such amounts shall not include (a) any amounts for any
Indebtedness owing by an Affiliate of the Borrower, unless such Indebtedness
arose in connection with the sale of goods or other property in the ordinary
course of business and would otherwise constitute current assets in conformity
with GAAP, (b) any shares of stock issued by an Affiliate of the Borrower, or
(c) the cash surrender value of any life insurance policy.
"Consolidated Current Liabilities": at a particular date, all amounts
which would, in conformity with GAAP, be included under current liabilities on a
consolidated balance sheet of the Borrower and its Subsidiaries as at such date.
"Consolidated EBIT": for any period, Consolidated Net Income for such
period before Consolidated Interest Expense and provision for taxes for such
period taking into account the tax effect associated with any adjustments made
to Consolidated Net Income pursuant to clauses (i) through (vii) inclusive of
the proviso to the definition of Consolidated Net Income.
"Consolidated EBITDA": for any period, Consolidated EBIT for such
period, adjusted by adding thereto the amount of all amortization of intangibles
and depreciation, and all expenses incurred by the Loan Parties pursuant to
Section 8.10, that were deducted in arriving at Consolidated EBIT for such
period and the amount of any management or similar fee paid to ▇.▇. Childs
during such period pursuant to the Management Fee Agreement or otherwise.
"Consolidated Fixed Charges": for any period, the sum of (i) the
amounts deducted for the cash portion of Consolidated Interest Expense in
determining Consolidated Net Income for such period, (ii) the amount of
scheduled payments of principal of Indebtedness during such period, (iii) all
amounts of Capital Expenditures made during such period (other than Capital
Expenditures in respect of Financing Leases to the extent the same are included
in clauses (i) or (ii) of this definition and other than Specified Capital
Expenditures for each fiscal quarter of the Borrower during such period) and
(iv) the amount of cash income taxes paid during such period.
"Consolidated Indebtedness": at any time, the aggregate Indebtedness of
the Borrower and its consolidated Subsidiaries at such time determined on a
consolidated basis in accordance with GAAP.
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"Consolidated Interest Expense": for any period, the amount which, in
conformity with GAAP, would be set forth opposite the caption "interest expense"
or any like caption (including without limitation, imputed interest included in
payments under Financing Leases) net of any cash interest income on a
consolidated income statement of the Borrower and the Subsidiaries for such
period excluding the amortization of any original issue discount.
"Consolidated Net Income": for any period, the net income (or loss) of
the Borrower and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP, provided that
there shall be excluded (i) the income (or loss) of any Person (other than
Subsidiaries of the Borrower) in which any other Person (other than the Borrower
or any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the Borrower or any
of its Subsidiaries by such Person during such period, (ii) the income of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iii) compensation expense resulting from the
issuance of Capital Stock, stock options or stock appreciation rights issued to
employees, including officers, of the Borrower or any Subsidiary of the
Borrower, or the exercise of such options or rights, in each case to the extent
the obligation (if any) associated therewith is not expected to be settled by
the payment of cash by the Borrower or any Affiliate of the Borrower, (iv) any
extraordinary gains or losses (as determined in conformity with GAAP), (v) any
non-recurring gains or losses (as determined in conformity with GAAP), (vi) any
gains or losses from sales of assets, other than from sales of leases, inventory
or Rental Equipment sold in the ordinary course of business, and (vii)
compensation expense resulting from the repurchase of Capital Stock, options and
rights described in clause (iii) of this definition of Consolidated Net Income,
provided that for purposes of Section 9.1(a) only, there shall be included (to
the extent not already included) in determining Consolidated Net Income for any
period the net income (or loss) of any Person, business, property or asset
acquired during such period and not subsequently sold or otherwise disposed of
by the Borrower or one of its Subsidiaries during such period (each such Person,
business, property or asset acquired and not subsequently disposed of during
such period, an "Acquired Entity or Business"), in each cased based on the
actual net income (or loss) of such Acquired Entity or Business for the entire
period (including the portion thereof occurring prior to such acquisition) but
adjusted for the identifiable pro forma cost savings for such period that are
directly attributable to the acquisition of such Acquired Entity or Business
(which pro forma adjustments shall be made on a basis consistent with Regulation
S-X under the Securities Act).
"Continue", "Continuation" and "Continued": the continuation of a
Eurodollar Loan from one Interest Period to the next Interest Period.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
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"Convert", Conversion" and "Converted": a conversion of Base Rate Loans
into Eurodollar Loans, of Eurodollar Loans into Base Rate Loans, which may be
accompanied by the transfer by a Lender (at its sole discretion) of a Revolving
Credit Loan from one Applicable Lending Office to another.
"Credit Exposure": as to any Lender at any time, its Revolving Credit
Commitment (or, if the Revolving Credit Commitments shall have expired or been
terminated, the sum of (i) the aggregate unpaid principal amount of its
Revolving Credit Loans and (ii) its Revolving Credit Commitment Percentage of
the aggregate outstanding L/C Obligations).
"Credit Exposure Percentage": as to any Lender at any time, the
fraction (expressed as a percentage), the numerator of which is the Credit
Exposure of such Lender at such time and the denominator of which is the
aggregate Credit Exposures of all of the Lenders at such time.
"Default": any of the events specified in Section 10, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Defaulting Lender": at any time, any Lender that, at such time (a) has
failed to make a Revolving Credit Loan required pursuant to the terms of this
Agreement, including the funding of any participation in accordance with the
terms of this Agreement, (b) has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of this
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy, receivership or insolvency proceeding, or to a receiver, trustee or
similar official.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary other than a Foreign Subsidiary.
"Eligible Depreciated Equipment": at any time, all Rental Equipment of
the Borrower and the Guarantors which (i) is held by the Borrower or any
Guarantor (other than for sale) or is rented to third Persons in the ordinary
course of business by the Borrower or any Guarantor or which is the subject of
an equipment rental program or similar equipment outsourcing program, (ii)
conforms to the representations and warranties contained in the Security
Agreement, (iii) the net book value of which at such time is zero and (iv) at
all times, continues to be acceptable to the Collateral Agent in its
commercially reasonable judgment. In any event, Eligible Depreciated Equipment
shall exclude the Borrower's and the Guarantors' "Bazooka Bed" inventory.
"Eligible Depreciated Equipment Amount": at any time, the aggregate
rental revenue attributable to Eligible Depreciated Equipment during the most
recently ended twelve month period (less any reserves required by the
Administrative Agent pursuant to Section 8.9).
"Eligible Equipment Disposables": at any time, all Equipment
Disposables of the Borrower and the Guarantors which (i) conform to the
representations and warranties contained
-8-
in the Security Agreement, and (ii) at all times, continue to be acceptable to
the Collateral Agent in its commercially reasonable judgment.
"Eligible Receivables": the total face amount of the receivables of the
Borrower and the Guarantors arising from the rental of Rental Equipment by the
Borrower or any Guarantor in the ordinary course of business so long as such
receivables conform to the representations and warranties contained in the
Security Agreement (including, without limitation, that the Collateral Agent
shall have and maintain a first priority perfected security interest in all such
receivables) and at all times continue to be acceptable to the Collateral Agent
in its reasonable judgment less any returns, discounts, claims, credit and
allowances of any nature (whether issued, owing, granted or outstanding) and
less reserves for chargebacks, deferred revenue, contras and any other matter
which affects the creditworthiness of account debtors owing the receivables and
excluding (i) receivables from the rental of Rental Equipment or the sale of
Inventory to any Affiliate, (ii) all receivables which are not due by their
terms or have not been paid in full within 90 days of the invoice date thereof
(and all other receivables due from any account debtor whose receivables are
past due if 50% or more of such account debtor's receivables are so past due) or
which have been disputed or made subject to setoff (to the extent thereof),
(iii) all receivables from any party subject to any bankruptcy, receivership,
insolvency or like proceedings by the account debtor, (iv) receivables owing by
account debtors outside the United States and Canada, (v) receivables arising
out of a sale, lease or rental for which no invoice has been provided to the
account debtor and (vi) receivables due from an account debtor whose receivables
constitute 15% or more of all receivables of the Borrower and the Guarantors
unless supported or secured by insurance acceptable to the Administrative Agent
or an irrevocable letter of credit in form and substance acceptable to the
Administrative Agent, issued by financial institution satisfactory to the
Administrative Agent and duly pledged to the Collateral Agent (together with
sufficient documentation to permit direct draws by the Collateral Agent).
"Eligible Rental Equipment": the amount (valued as provided in the
second succeeding sentence) of all Rental Equipment of the Borrower and the
Guarantors which (i) is held by the Borrower or any Guarantor (other than for
sale) or is rented to third Persons in the ordinary course of business by the
Borrower or any Guarantor or which is the subject of an equipment rental program
or similar equipment outsourcing program, (ii) conforms to the representations
and warranties contained in the Security Agreement and (iii) at all times,
continues to be acceptable to the Collateral Agent in its commercially
reasonable judgment. In any event, Eligible Rental Equipment shall (i) exclude
the net book value of the Borrower's and the Guarantors' "Bazooka Bed"
inventory, (ii) exclude any Rental Equipment included in the definition of
Eligible Depreciated Equipment and (iii) account for reserves for Rental
Equipment that is unrentable, obsolete or slow moving. In determining the amount
to be so included, such Rental Equipment shall be valued on a net book value
basis consistent with the Borrower's consolidated month-end balance sheet, less
any reserves required by the Administrative Agent pursuant to Section 8.9.
"Eligible Wholesale Disposables": at any time, all Wholesale
Disposables of the Borrower and the Guarantors which (i) conform to the
representations and warranties contained
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in the Security Agreement, and (ii) at all times, continue to be acceptable to
the Collateral Agent in its commercially reasonable judgment.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"Equipment Disposables": repair or replacement parts purchased by the
Borrower or a Subsidiary for repair of its Rental Equipment or for sale to
customers of the Borrower or a Subsidiary.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
corresponding rate appearing at page 3750 of the Dow ▇▇▇▇▇ Telerate Service at
or about 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period, or if such rate no longer so appears, the rate per annum
at which CIBC is offered Dollar deposits at or about 10:00 a.m., local time, two
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations in respect of its Eurodollar Loans are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its Eurodollar
Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Revolving Credit Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward if necessary to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
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"Event of Default": any of the events specified in Section 10; provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Existing Banks": the lenders parties to the Existing Credit Agreement.
"Existing Credit Agreement": the Credit Agreement, dated as of February
25, 1998, among the Borrower, the lending institutions parties thereto, and
Bankers Trust Company, as administrative agent, as amended, supplemented or
otherwise modified prior to the Closing Date.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.
"Fee Letter": the collective reference to the Fee Letter, dated as of
September 16, 1999, between CIBC and the Borrower and the Collateral Agent Fee
Letter dated as of October 25, 1999, among the Collateral Agent and the
Borrower, as each may be amended, supplemented or otherwise modified from time
to time.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Subsidiary": each Subsidiary which is organized under the laws
of a jurisdiction other than the United States, a State of the United States or
the District of Columbia.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"Governing Documents": as to any Person, its articles or certificate of
incorporation and by-laws, its partnership agreement, its certificate of
formation and operating agreement, and/or the other organizational or governing
documents of such Person.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee": the Guarantee, substantially in the form of Exhibit C, to
be executed and delivered by any Subsidiaries pursuant to Section 8.11(b)
hereof, as the same may be amended, supplemented or otherwise modified from time
to time.
-11-
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to 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 or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a correlative meaning. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith, provided that the amount of any Guarantee Obligation 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": any Person delivering a Guarantee pursuant to this
Agreement.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money (whether by loan or the issuance
and sale of debt securities) or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of letters of credit, acceptances
or similar instruments issued or created for the account of such Person and (e)
all liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment
thereof, in an amount equal to the lesser of (i) such liabilities and (ii) if
such obligations have not been assumed and are otherwise non-recourse to such
Person, the fair market value of such property.
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"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in Section 6.9.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period longer than
three months, (i) each day which is three months, or a whole multiple thereof,
after the first day of such Interest Period, and (ii) the last day of such
Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or Conversion
date, as the case may be, with respect to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the Borrower in its notice
of borrowing or notice of Conversion, as the case may be, given with respect
thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on
the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date shall end on the Revolving Credit
Termination Date or such date of final payment, as the case may be;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last 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 Interest Period) shall end on the last Business Day
of a calendar month; and
(4)the Borrower shall select Interest Periods so as not to
require a payment
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or prepayment of any Eurodollar Loan during an Interest Period for such
Loan.
"Interest Rate Agreement": 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 the Borrower or any
Subsidiary with respect to interest rates.
"Inventory": all of the Borrower's and the Guarantors' now owned and
existing and hereafter arising or acquired inventory, wherever located and
whether in the possession of Borrower of any Guarantor or any other Person,
including, without limitation, (a) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in the
Borrower's and the Guarantors' business and (b) all goods, wares and
merchandise, finished or unfinished, held for sale or lease or furnished or to
be furnished under contracts of services, in all cases, excluding the Rental
Equipment.
"Issuing Lender": CIBC, in its capacity as issuer of any Letter of
Credit.
"▇.▇. Childs": ▇.▇. Childs Associates, L.P., a Delaware limited
partnership.
"L/C Commitment": $1,000,000.
"L/C Fee Payment Date": the last Business Day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn amount of the then outstanding Letters of Credit and (b)
the aggregate amount of drawings under Letters of Credit which have not then
been reimbursed.
"L/C Participants": the collective reference to all the Lenders other
than the Issuing Lender.
"Lenders": as defined in the heading hereto, which shall include in any
event the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Leverage Ratio": as of any day, the ratio of (a) Consolidated
Indebtedness of the Borrower as of such day to (b) Consolidated EBITDA of the
Borrower for the period of four consecutive fiscal quarters ended on or most
recently prior to such day.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing), and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing.
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"Loan": any Revolving Credit Loan or Swing Line Loan.
"Loan Documents": this Agreement, the Notes, and the Security
Documents.
"Loan Parties": the Borrower, and each Subsidiary of the Borrower which
is a party to a Loan Document.
"Management Fee Agreement": the Management Agreement, dated as of
February 25, 1998, made by the Borrower and ▇.▇.
Childs.
"Management Holder": as such term is defined in the Stockholders'
Agreement.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries in excess of $100,000 for remedial costs, compliance
costs, compensatory damages, punitive damages, fines, penalties or any
combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds": (i) the aggregate cash consideration received by the
Borrower or a Subsidiary in connection with any transaction referred to in
Section 5.5(c) less (ii) the expenses (including out-of-pocket expenses)
incurred by the Borrower or such Subsidiary in connection with such transaction
(including, in the case of any issuance of debt or equity securities,
underwriters' commissions and fees) and the amount of any federal and state
taxes incurred in connection with such transaction, in each case as certified by
a Responsible Officer to the Administrative Agent at the time of such
transaction.
"Non-Bank Status Certificate": as defined in Section 5.11(b)(i)(B).
"Non-Excluded Taxes": as defined in Section 5.11.
"Notes": collectively, the Revolving Credit Notes and the Swing Line
Note.
"Obligations": the unpaid principal amount of, and interest (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition
-15-
interest is allowed in such proceeding) on the Loans, all reimbursement
obligations in respect of Letters of Credit and all other obligations and
liabilities of the Loan Parties to the Administrative Agent and the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which arise under, or out of or in connection
with this Agreement, the Notes, the Guarantee, the Security Documents and any
other Loan Documents and any other document made, delivered or given in
connection therewith or herewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by a Loan Party pursuant to
the terms of the Loan Documents) or otherwise.
"Participant": as defined in Section 12.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": the acquisition by the Borrower or a
Subsidiary of all or substantially all of the assets of any Person (or all or
substantially all of the assets of a product line or division of any Person) or
100% of the Capital Stock of any Person, so long as (i) no Default or Event of
Default then exists and is continuing or would result therefrom, (ii) each of
the representations and warranties contained in Section 6 shall be true and
correct in all material respects both before and after giving effect to such
acquisition, (iii) any Lien or Indebtedness assumed or issued in connection with
such acquisition otherwise permitted under Section 9.2 or 9.3, as applicable,
(iv) the value of all consideration paid in connection therewith (including
Indebtedness assumed or incurred) (x) for each Permitted Acquisition shall not
exceed $2,000,000 and (y) for all of the Permitted Acquisitions of the Borrower
and its Subsidiaries over the term of this Agreement shall not exceed in the
aggregate $8,000,000, (v) the Borrower shall be in pro forma compliance
(determined on a basis consistent with Regulation S-X under the Securities Act)
with all financial covenants in this Agreement before and after giving effect to
such Permitted Acquisitions and (vi) after giving effect to such acquisition,
the aggregate Available RC Commitments of the Lenders shall be not less than
$7,500,000.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement": the Pledge Agreement, substantially in the form of
Exhibit D, to be executed and delivered by the Borrower or any Subsidiary
pursuant to Section 8.11, in form and substance reasonably satisfactory to the
Administrative Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
-16-
"Properties": as defined in Section 6.22.
"Public Offering": a widely distributed sale of common stock pursuant
to an underwritten (on a firm commitment basis) public offering pursuant to an
effective registration statement filed with the SEC pursuant to the Securities
Act which yields at least $20,000,000 of net cash proceeds to the Borrower.
"Refunded Swing Line Loans": as defined in Section 4.3.
"Reimbursement Obligation": the obligation of the Borrower to reimburse
the Issuing Bank pursuant to Section 3.5(a) for amounts drawn under a Letter of
Credit.
"Register": as defined in Section 12.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Rental Equipment": all moveable medical equipment of the Borrower and
the Guarantors generally consisting of, but not limited to, critical care
equipment, monitoring equipment, newborn care equipment and respiratory therapy
equipment.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Replaced Lender": as defined in Section 5.15.
"Replacement Lender": as defined in Section 5.15.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under Sections .21, .22, .23, .26, .27 or .28 of PBGC Reg. ss. 4043.
"Request for Borrowing": as defined in Section 2.3 hereof.
"Required Lenders": at any time, Lenders (subject to the provisions of
Section 5.14(a)) the Credit Exposure Percentages of which aggregate at least
51%.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or Governing Documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer and the president of
the Borrower or, with respect to financial matters, the chief financial officer
of the Borrower.
"Restricted Payments": as such term is defined in Section 9.7.
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"Revolving Credit Commitment": as to any Lender, the obligation of such
Lender to make Revolving Credit Loans to the Borrower pursuant to Section 2.1
and/or to issue or participate in Letters of Credit issued on behalf of the
Borrower hereunder in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender's name on Schedule 1
under the caption "Revolving Credit Commitment" or in an Assignment and
Acceptance, as such amount may be reduced from time to time in accordance with
the provisions of this Agreement.
"Revolving Credit Commitment Percentage": as to any Lender at any time,
the percentage which such Lender's Revolving Credit Commitment then constitutes
of the aggregate Revolving Credit Commitments (or, at any time after the
Revolving Credit Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Revolving Credit Loans
then outstanding constitutes of the aggregate principal amount of the Revolving
Credit Loans then outstanding).
"Revolving Credit Commitment Period": the period from and including the
date hereof to but not including the Revolving Credit Termination Date or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
"Revolving Credit Loans": as defined in Section 2.1.
"Revolving Credit Note": as defined in Section 2.2.
"Revolving Credit Termination Date": October 31, 2004.
"SEC": the United States Securities and Exchange Commission.
"Securities Act": the Securities Act of 1933, as amended.
"Security Agreement": the Security Agreement to be executed and
delivered by the Loan Parties, substantially in the form of Exhibit E, as the
same may be amended, supplemented or otherwise modified from time to time.
"Security Documents": the collective reference to any Pledge Agreement,
the Security Agreement and all other security documents hereafter delivered to
the Administrative Agent granting a Lien on any asset or assets of any Person to
secure any of the Obligations or to secure any guarantee of any such
Obligations.
"Senior Notes": the 10-1/4% Senior Notes due 2008, Series A and the
10-1/4% Senior Notes due 2008, Series B of the Borrower issued pursuant to the
Senior Notes Indenture, as amended, supplemented or otherwise modified in
accordance with the terms of Section 9.10.
"Senior Notes Change of Control": a "Change of Control" under, and as
defined in, the Senior Notes Indenture.
"Senior Notes Documents": each of the Senior Notes, the Senior Notes
Indenture and all securities purchase agreements and other documents and
agreements related thereto, as in
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effect on the date hereof and after giving effect to any changes, amendments or
supplements thereto permitted under the terms of Section 9.10.
"Senior Notes Indenture": the Indenture, dated as of February 25, 1998,
between the Borrower and First Trust National Association, as trustee, as
amended, supplemented or otherwise modified in accordance with the terms of
Section 9.10.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Specified Capital Expenditures": for any fiscal quarter of the
Borrower ended on or prior to December 31, 2001, 50% of the aggregate amount of
Capital Expenditures made by the Borrower and its Subsidiaries during such
fiscal quarter, and for each other fiscal quarter of the Borrower, $0.
"Stockholders Agreement": the Stockholders' Agreement dated as of
February 25, 1998, by and among the Borrower and the stockholders of the
Borrower party thereto as in effect on February 25, 1998, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms of Section 9.10.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Swing Line Commitment": $2,000,000.
"Swing Line Lender": CIBC, Inc., in its capacity as lender of Swing
Line Loans hereunder.
"Swing Line Loans": as defined in Section 4.1.
"Swing Line Note": as defined in Section 4.2.
"Syndication Agent": as defined in the caption to this Agreement.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Revolving Credit Loans shall
originally have been made on the same day).
"Transferee": as defined in Section 12.6(f).
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"Type": as to any Revolving Credit Loan, its nature as a Base Rate Loan
or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"Vital Choice": Vital Choice Medical Systems, Inc., a California
corporation.
"Vital Choice Acquisition": the acquisition by the Borrower of all of
the issued and outstanding Capital Stock of Vital Choice, pursuant to the Vital
Choice Acquisition Documents.
"Vital Choice Acquisition Agreement": the Stock Purchase Agreement,
dated on or about October 25, 1999, among the Borrower and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as shareholders of Vital Choice, as
amended, supplemented or otherwise modified as permitted under Section 9.10.
"Vital Choice Acquisition Documents": the Vital Choice Acquisition
Agreement, the Escrow Agreement to be executed and delivered pursuant to the
Vital Choice Acquisition Agreement, each of the Stock Purchase Agreements to be
entered into between the Borrower and the shareholders of Vital Choice,
substantially in the form of Exhibit B to the Vital Choice Acquisition
Agreement, and the Confidentiality/Nondisclosure Agreements to be executed by
the shareholders of Vital Choice pursuant to the Vital Choice Acquisition
Agreement.
"Voting Stock": with respect to any corporation, the outstanding stock
of all classes (or equivalent interests) which ordinarily, in the absence of
contingencies, entitles holders thereof to vote for the election of directors
(or Persons performing similar functions) of such corporation, even though the
right so to vote has been suspended by the happening of such a contingency.
"Wholesale Disposables": Inventory purchased by the Borrower or a
Subsidiary for sale to customers of the Borrower or a Subsidiary.
"Year 2000 Problem": the risk that computer applications owned or
licensed and used by the Borrower and its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to, and any date on or after, December 31, 1999.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in any
Revolving Credit Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Revolving Credit Notes, and any
certificate or
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other document made or delivered pursuant hereto, accounting terms
relating to the Borrower and its Subsidiaries not defined in Section
1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments.
(a) Subject to the terms and conditions hereof, each Lender
severally agrees to make revolving credit loans ("Revolving Credit
Loans") to the Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the lesser of (i) the amount of such Lender's
Revolving Credit Commitment then in effect and (ii) such Lender's
Revolving Credit Commitment Percentage of the Borrowing Base then in
effect. During the Revolving Credit Commitment Period the Borrower may
use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans, or (iii) a combination thereof,
as determined by the Borrower and notified to the Administrative Agent
in accordance with Sections 2.3 and 5.2, provided that no Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Revolving Credit Termination Date.
2.2 Revolving Credit Notes. The Revolving Credit Loans made by each
Lender shall be evidenced by a promissory note of the Borrower, substantially in
the form of Exhibit A-1 with appropriate insertions as to payee, date and
principal amount (as the same may be amended, supplemented or otherwise modified
from time to time, a "Revolving Credit Note"), payable to the order of such
Lender and evidencing the obligation of the Borrower to pay a principal amount
equal to the lesser of (a) the amount of the Revolving Credit Commitment of such
Lender and (b) the aggregate unpaid principal amount of all Revolving Credit
Loans made by such Lender. Each Lender is hereby authorized to record the date,
Type and amount of each Revolving Credit Loan made or Converted by such Lender,
the date and amount of each payment or prepayment of principal thereof, and, in
the case of Eurodollar Loans, the Interest Period with respect thereto, on the
schedule annexed to and constituting a part of its Revolving Credit Note, and
any such recordation shall constitute prima facie evidence of the accuracy of
the information so recorded. Each Revolving
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Credit Note shall (x) be dated the Closing Date, (y) be stated to mature on the
Revolving Credit Termination Date and (z) bear interest on the unpaid principal
amount thereof from time to time outstanding at the applicable interest rate per
annum determined as provided in Section 5.1. Interest on each Revolving Credit
Note shall be payable on the dates specified in Section 5.1(d).
2.3 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day in an aggregate principal amount not exceeding the
lesser of (A) the aggregate Available RC Commitments then in effect and (B) the
Borrowing Base then in effect, provided, that the Borrower shall give the
Administrative Agent irrevocable notice either in a written notice,
substantially in the form of Exhibit A-3, appropriately completed, or by
telephonic notice promptly confirmed by such a written notice in such form and
appropriately completed, and accompanied by the calculation referred to in
Section 7.2(a) (which notice must be received by the Administrative Agent prior
to 12:00 noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Credit
Loans are to be initially Eurodollar Loans, or (b) on the requested Borrowing
Date, otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base
Rate Loans, or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Eurodollar Loans, the respective amounts of each such Type of
Revolving Credit Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Revolving Credit Commitments shall be in an
amount equal to (x) in the case of Base Rate Loans, $250,000 or a whole multiple
of $100,000 in excess thereof (or, if the then Available RC Commitments are less
than $250,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$500,000 or a whole multiple of $100,000 in excess thereof. Upon receipt of any
such notice from the Borrower, the Administrative Agent shall promptly notify
each Lender thereof. Each Lender will make the amount of its pro rata share of
each borrowing available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in Section 12.2
prior to 2:00 p.m., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower as directed by the Borrower prior to
such time with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
2.4 Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and
including the first day of the Revolving Credit Commitment Period to, but not
including, the Revolving Credit Termination Date, computed at the rate of 0.50%
per annum on the average daily amount of the Available RC Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on the last day of each March, June, September and December and on the Revolving
Credit Termination Date or such earlier date as the Revolving Credit Commitments
shall terminate as provided herein, commencing on the first of such dates to
occur after the date hereof.
2.5 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than five Business Days' notice to
the Administrative Agent, to terminate or reduce the Revolving Credit
Commitments; provided, that no such termination or
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reduction shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof,
the Aggregate Outstanding RC Extensions of Credit would exceed the Revolving
Credit Commitments then in effect. Any such reduction shall be in an amount
equal to $1,000,000 or a whole multiple thereof and shall reduce permanently the
Revolving Credit Commitments then in effect.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue letters of credit ("Letters of Credit") for the account of the
Borrower on any Business Day during the Revolving Credit Commitment Period in
such form as may be approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (1) the L/C Obligations would exceed
the L/C Commitment or (2) the aggregate Available RC Commitments would be less
than zero.
(b) Each Letter of Credit shall:
(1)be denominated in Dollars and shall be a standby letter of
credit issued to support obligations of the Borrower, contingent or
otherwise, in respect of insurance obligations, to ▇▇▇▇▇▇▇'▇
compensation board or similar Governmental Authority for ▇▇▇▇▇▇▇'▇
compensation liabilities of the Borrower, and for such other purposes
as may be approved by the Issuing Lender and the Administrative Agent
(such consent not to be unreasonably withheld); and
(2)expire no later than 364 days from the date of issuance
(subject to renewal). As to each Letter of Credit which is outstanding
as of the Revolving Credit Termination Date, no further renewal of any
such Letter of Credit shall occur, and the Borrower shall provide
either (A) cash collateral in an amount satisfactory to the Issuing
Lender or (B) one or more irrevocable letters of credit in form and
substance, and issued by a bank, satisfactory to the Issuing Lender
pursuant to which the Issuing Lender is entitled to recover the maximum
amount at any time payable under each outstanding Letter of Credit,
plus all costs and fees then or thereafter payable with respect to such
Letter of Credit under the terms of this Agreement.
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the
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Issuing Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may request. Upon receipt of any Application,
the Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, a letter of credit commission
with respect to each Letter of Credit, computed for the period from the date of
such payment to the date upon which the next such payment is due hereunder at a
per annum rate equal to the Applicable Margin for Revolving Credit Loan which
are Eurodollar Loans then in effect, calculated on the basis of the actual days
elapsed over a 360-day year, of the aggregate amount available to be drawn under
such Letter of Credit on the date on which such fee is calculated and shall be
payable to the L/C Participants and the Issuing Lender to be shared ratably
among them in accordance with their respective Revolving Credit Commitment
Percentages. Such commissions shall be payable in arrears on each L/C Fee
Payment Date to occur after the issuance of each Letter of Credit and shall be
nonrefundable. Additionally, the Borrower shall pay to the Administrative Agent,
solely for the account of the Issuing Lender, a fronting fee of one-quarter of
one percent (.25%) per annum of the aggregate amount available to be drawn under
each Letter of Credit, but in no event shall the aggregate fronting fee in
respect of any Letter of Credit be less than 0.125% of the face amount of any
such Letter of Credit. Such fronting fee shall be nonrefundable and shall be
payable in arrears on each L/C Fee Payment Date to occur after the issuance of
each Letter of Credit until such Letter of Credit is fully drawn, expires or is
returned to the Issuing Lender.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
3.4 L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the
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Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk, an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights under each Letter of Credit issued hereunder and the
amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Credit Commitment Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (1) such amount, times (2) the daily average Federal
funds rate, as quoted by the Issuing Lender, during the period from and
including the date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (3) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to Section 3.4(a) is not in fact made available to the
Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to Base Rate Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 Reimbursement Obligations of the Borrower.
(a) The Borrower agrees to reimburse the Issuing Lender on each date on
which the Issuing Lender notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender or, if
later, on each date on which such draft is paid by the Issuing Lender for the
amount of (1) such draft so paid and (2) any taxes and any reasonable fees,
charges or other costs or expenses incurred by the Issuing Lender at its address
for notices specified herein in lawful money of the United States of America and
in immediately available funds.
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(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this Section from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding Base Rate Loans which were
then overdue.
(c) Each drawing under any Letter of Credit shall constitute a request
by the Borrower to the Administrative Agent for a borrowing pursuant to Section
2.3 of Base Rate Loans in the amount of such drawing. The Borrowing Date with
respect to such borrowing shall be the date of such drawing.
3.6 Obligations Absolute.
(a) The Borrower's obligations under this Section 3 shall be absolute
and unconditional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment which the Borrower may have or have
had against the Issuing Lender or any beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Lender that the Issuing
Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 3.5(a) shall not be affected by, among other things,
(1) the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, or (2) any dispute between or among the Borrower and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit may be
transferred or (3) any claims whatsoever of the Borrower against any beneficiary
of such Letter of Credit or any such transferee.
(c) The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Lender's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
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3.8 Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. SWING LINE LOANS
4.1 Swing Line Commitment. Subject to the terms and conditions hereof,
the Swing Line Lender agrees to make swing line loans (individually, a "Swing
Line Loan"; collectively, the "Swing Line Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding not to exceed the Swing Line Commitment;
provided that no such Swing Line Loan shall be made if, after giving effect
thereto, (i) the Available RC Commitment of the Swing Line Lender would be less
than zero or (ii) the Aggregate Outstanding RC Extensions of Credit of all of
the Lenders would exceed the Borrowing Base. Amounts borrowed by the Borrower
under this Section 4.1 may be repaid and reborrowed, up to but excluding the
Revolving Credit Termination Date. All Swing Line Loans shall be made as Base
Rate Loans and shall not be entitled to be converted into Eurodollar Loans. The
Borrower shall give the Swing Line Lender irrevocable notice, accompanied by the
calculation referred to in Section 7.2(a) (which notice must be received by the
Swing Line Lender prior to 1:00 p.m., New York City time) on the requested
Borrowing Date specifying the amount of each requested Swing Line Loan, which
shall be in an aggregate minimum amount of $100,000 or a whole multiple thereof.
The proceeds of each Swing Line Loan will be made available by the Swing Line
Lender to the Borrower by crediting the account of the Borrowers as directed by
the Borrower prior to such time with such proceeds. The proceeds of Swing Line
Loans may be used solely for the working capital purposes of the Borrower in the
ordinary course of business.
4.2 Swing Line Note. The Swing Line Loans shall be evidenced by a
promissory note of the Borrower substantially in the form of Exhibit A-2, with
appropriate insertions (as the same may be amended, supplemented or otherwise
modified from time to time, the "Swing Line Note"), payable to the order of the
Swing Line Lender and representing the obligation of the Borrowers, jointly and
severally, to pay the aggregate unpaid principal amount of the Swing Line Loans,
with interest thereon as prescribed in Section 5.1. The Swing Line Lender is
hereby authorized to record the Borrowing Date, the amount of each Swing Line
Loan and the date and amount of each payment or prepayment of principal thereof,
on the schedule annexed to and constituting a part of the Swing Line Note and,
in the absence of manifest error, any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded, provided, that
the failure of the Swing Line Lender to make such recordation (or any error in
such recordation) shall not affect the obligations of the Borrowers hereunder or
under such Note. The Swing Line Note shall (a) be dated the Closing Date, (b) be
stated to mature on the Revolving Credit Termination Date and (c) bear interest
for the period from the date thereof on the unpaid principal amount thereof from
time to time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, Section 5.1.
4.3 Refunded Swing Line Loans. (a) The Swing Line Lender at any time in
its sole and absolute discretion may, on behalf of the Borrowers (which hereby
irrevocably direct the
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Swing Line Lender to act on their behalf), request each Lender, including the
Swing Line Lender, to make a Revolving Credit Loan in an amount equal to such
Lender's Revolving Credit Commitment Percentage of the amount of the Swing Line
Loans (the "Refunded Swing Line Loans") outstanding on the date such notice is
given. Unless any of the events described in paragraph (f) of Section 10 shall
have occurred (in which event the procedures of clause (b) of this Section 4.3
shall apply), each Lender shall make the proceeds of its Revolving Credit Loan
available to the Swing Line Lender for the account of the Swing Line Lender at
the Applicable Lending Office for Base Rate Loans of the Swing Line Lender prior
to 2:00 p.m. (New York City time) in funds immediately available on the Business
Day next succeeding the date such notice is given. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Refunded Swing
Line Loans.
(b) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (a) of this Section 4.3 one of the events described in paragraph (f)
of Section 10 shall have occurred, each Lender will, on the date such Revolving
Credit Loan was to have been made, purchase an undivided participating interest
in the Refunded Swing Line Loan in an amount equal to its Revolving Credit
Commitment Percentage of such Refunded Swing Line Loan. Each Lender will
immediately transfer to the Swing Line Lender, in immediately available funds,
the amount of its participation and upon receipt thereof the Swing Line Lender
will deliver to such Lender a Swing Line Loan participation certificate, in a
form specified by the Swing Line Lender, dated the date of receipt of such funds
and in such amount.
(c) Whenever, at any time after the Swing Line Lender has received from
any Lender such Lender's participating interest in a Refunded Swing Line Loan,
the Swing Line Lender receives any payment on account of such Swing Line Loan,
the Swing Line Lender will distribute to such Lender its participating interest
in such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded) in like funds as received; provided, however, that in
the event that such payment received by the Swing Line Lender is required to be
returned, such Lender will return to the Swing Line Lender any portion thereof
previously distributed by the Swing Line Lender to it in like funds as such
payment is required to be returned by the Swing Line Lender.
(d) Each Lender's obligation to make the Revolving Credit Loans
referred to in Section 4.3(a) and to purchase participating interests pursuant
to Section 4.3(b) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Swing Line Lender, the Borrower, or any other Person for any reason
whatsoever, (ii) such requested Revolving Credit Loan being in an amount less
than the minimum amount specified in Section 2.3, (iii) the occurrence or
continuance of an Event of Default, (iv) any failure to satisfy any condition
precedent to extensions of credit set forth in Section 7, (v) any adverse change
in the condition (financial or otherwise) of the Borrower or any other Loan
Party, (vi) any breach of this Agreement by the Borrowers, any other Loan Party
or any other Lender, or (vii) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
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SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS
5.1 Interest Rates and Payment Dates.
(a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Revolving Credit Loans and any
such overdue interest, commitment fee or other amount shall bear interest at a
rate per annum which is (x) in the case of principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% or (y) in the case of any such overdue interest, commitment fee
or other amount, the rate described in paragraph (b) of this Section plus 2%, in
each case from the date of such non-payment until such overdue principal,
interest, commitment fee or other amount is paid in full (as well after as
before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided, that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on written demand.
5.2 Conversion and Continuation Options.
(a) The Borrower may elect from time to time to Convert Eurodollar
Loans to Base Rate Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election (which notice shall be
substantially in the form of Exhibit A-4), provided that any such Conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to Convert Base Rate
Loans to Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election. Any such notice of
Conversion to Eurodollar Loans shall specify the length of the initial Interest
Period or Interest Periods therefor. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof. All or any part
of outstanding Eurodollar Loans and Base Rate Loans may be Converted as provided
herein; provided, that (i) no Revolving Credit Loan may be Converted into a
Eurodollar Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined that such a
Conversion is not appropriate, (ii) any such Conversion may only be made if,
after giving effect thereto, Section 5.3 shall not have been contravened, and
(iii) no Revolving Credit Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the Revolving Credit Termination Date.
(b) Any Eurodollar Loans may be Continued as such upon the expiration
of the
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then current Interest Period with respect thereto by the Borrower giving notice
to the Administrative Agent (which notice shall be substantially in the form of
Exhibit A-4), in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1.1, of the length of the next Interest Period to
be applicable to such Revolving Credit Loans; provided, that no Eurodollar Loan
may be Continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a Continuation is not appropriate, (ii) if, after giving
effect thereto, Section 5.3 would be contravened or (iii) after the date that is
one month prior to the Revolving Credit Termination Date; provided, further,
that if the Borrower shall fail to give such notice or if such Continuation is
not permitted such Revolving Credit Loans shall be automatically converted to
Base Rate Loans on the last day of such then expiring Interest Period.
5.3 Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Revolving Credit Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections so that, after giving effect thereto, the aggregate
principal amount of the Revolving Credit Loans comprising each Eurodollar
Tranche shall be equal to $500,000 or a whole multiple of $100,000 in excess
thereof. No more than 8 Tranches shall be outstanding at any one time.
5.4 Optional Prepayments. The Borrower may on the last day of any
Interest Period with respect thereto, in the case of Eurodollar Loans, or at any
time and from time to time, in the case of Base Rate Loans, prepay the Loans, in
whole or in part, without premium or penalty, upon at least three (3) Business
Days' irrevocable notice to the Administrative Agent, in the case of Revolving
Credit Loans which are Eurodollar Loans, or upon notice not later than 1:00 p.m.
on the day of prepayment, in the case of Swing Line Loans or Revolving Credit
Loans which are Base Rate Loans (which notice shall in any such case be
substantially in the form of Exhibit A-5), specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, Base Rate Loans or
a combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Administrative Agent shall promptly
notify each Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein, together
with any amounts payable pursuant to Section 5.12. Partial prepayments pursuant
to this Section shall be in an aggregate principal amount of $500,000, in the
case of Revolving Credit Loans, or $100,000 in the case of Swing Line Loans, or
a whole multiple of $100,000 in excess thereof (or, (x) in the case of Revolving
Credit Loans, if the remaining aggregate outstanding balance of Revolving Credit
Loans is then less than $500,000, such lesser amount, and (y) in the case of
Swing Line Loans, if the remaining aggregate outstanding balance of Swing Line
Loans is then less than $100,000, such lesser amount).
5.5 Mandatory Prepayments.
(a) Subject to Section 5.12, if on any date on which a Borrowing Base
Certificate is delivered pursuant to Section 8.2(c), the Aggregate Outstanding
Extensions of Credit exceeds the Borrowing Base, the Borrower shall prepay the
Revolving Credit Loans and/or cash collateralize or replace Letters of Credit in
an amount equal to the amount of such excess no later than the Business Day
immediately following the date of delivery of such
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Borrowing Base Certificate.
(b) Subject to Section 5.12, if on any date the Aggregate Outstanding
Extensions of Credit exceeds the Revolving Credit Commitments, the Borrower
shall immediately prepay the Revolving Credit Loans and/or cash collateralize or
replace Letters of Credit in an amount equal to the amount of such excess.
(c) Unless the Lenders having Credit Exposure Percentages aggregating
at least 66 2/3% otherwise agree, the Borrower shall prepay the Revolving Credit
Loans and reduce the Revolving Credit Commitments in an amount equal to (i) 100%
of the Net Proceeds of any sale or issuance of debt securities, and 75% of the
Net Proceeds of any sale or issuance of any equity securities, in either case by
the 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, its limited partners or the limited partners of its
Affiliates, any equity investment made by any officer or employee of the
Borrower pursuant to the Shareholder Agreement or any stock option plan, and any
equity investment made by the selling parties in connection with a Permitted
Acquisition, (ii) 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 clause (d) of this Section 5.5,
insurance proceeds paid as a result of any destruction, casualty or taking of
any property of the Borrower or any Subsidiary), not made in the ordinary course
of business, by the Borrower or any Subsidiary of the Borrower, (iii) 100% of
the Net Proceeds from the termination of any pension plans of the Borrower or
any Subsidiary, in any such case no later than three Business Days following
receipt by the Borrower or such Subsidiary of such proceeds, together with
accrued interest to such date on the amount prepaid; provided that no such
prepayment shall be required pursuant to subclause (ii) of this Section 5.5(c)
with respect to up to $2,000,000 of such Net Proceeds received by the Borrower
and its Subsidiaries during any fiscal year of the Borrower so long as (x) the
Borrower shall have notified the Administrative Agent in writing of such receipt
of such Net Proceeds, the amount thereof and that the Borrower or such
Subsidiary intends to reinvest such Net Proceeds in Inventory or other property
useful in the business of the 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 the Borrower shall have so notified the
Administrative 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, the Borrower shall immediately give the Administrative Agent notice
thereof and prepay the Revolving Credit Loans and reduce the Revolving Credit
Commitments in an amount equal to such amount of Net Proceeds which were not
reinvested. Amounts prepaid pursuant to this Section 5.5(c) shall be applied to
the reduction of the Revolving Credit Commitments and the prepayment of the
Revolving Credit Loans and/or to cash collateralize or replace Letters of
Credit. Nothing in this Section 5.5(c) shall be construed to derogate any
restriction or limitation contained in any Loan Document imposed on any
transaction of the types described in this Section 5.5(c), including without
limitation the restrictions set forth in Sections 9.2, 9.5 and 9.6 hereof.
(d) Net Proceeds received by the Borrower or any Subsidiary as proceeds
of
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condemnation or insurance upon any destruction, casualty or taking with respect
to any property of the Borrower or any Subsidiary need not be applied as set
forth in Section 5.5(c) to the extent that such Net Proceeds are applied to the
repair, rebuilding or replacement of the property which was the subject of such
destruction, casualty or taking within 180 days after the receipt of such Net
Proceeds. If required by the Administrative Agent, such Net Proceeds shall be
held in a special collateral account, subject to the sole dominion and control
of the Administrative Agent and in a manner reasonably satisfactory to the
Administrative Agent, as additional Collateral for the Obligations and the
Guarantees, until such time as it is to be applied to such repair, rebuilding or
replacement.
5.6 Computation of Interest and Fees.
(a) Commitment fees and, whenever it is calculated on the
basis of the Base Rate, interest shall be calculated on the basis of a
365- (or 366-, as the case may be) day year for the actual days
elapsed; and, otherwise, interest shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of
each determination of a Eurodollar Rate. Any change in the interest
rate on a Revolving Credit Loan resulting from a change in the Base
Rate or the Eurocurrency Reserve Requirements, shall become effective
as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify
the Borrower and the Lenders of the effective date and the amount of
each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the
request of the Borrower, deliver to the Borrower a written statement
showing the quotations used by the Administrative Agent in determining
any interest rate pursuant to Section 5.1(a) or (c).
5.7 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Revolving Credit Loans
during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice (confirmed in
writing) thereof to the Borrower and the Lenders as soon as practicable
thereafter describing therein, in reasonable detail, the circumstance giving
rise to such notice. If such notice is given (x) any Eurodollar Loans
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requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (y) any Revolving Credit Loans that were to have been Converted
on the first day of such Interest Period to Eurodollar Loans shall be Converted
to or Continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
shall be Converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans shall be made or Continued as such, nor shall the
Borrower have the right to Convert Loans to Eurodollar Loans.
5.8 Pro Rata Treatment and Payments.
(a) Each borrowing by the Borrower from the Lenders hereunder,
each payment by the Borrower on account of any commitment fee hereunder
and any reduction of the Revolving Credit Commitments of the Lenders
shall be made pro rata according to the respective Revolving Credit
Commitment Percentages of the Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on
the Revolving Credit Loans shall be made pro rata according to the
respective outstanding principal amounts of the Revolving Credit Loans,
as applicable, then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account
of principal, interest, fees or otherwise, shall be made without
set-off or counterclaim and shall be made prior to 1:00 p.m., New York
City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified
in Section 12.2, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment 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. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment
into another calendar month in which event such payment shall be made
on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its Revolving Credit Commitment
Percentage of such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average
Federal Funds Effective Rate for the period until such Lender makes
such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section shall be conclusive in
the absence of manifest error. If such Lender's Revolving Credit
Commitment Percentage, as applicable,
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of such borrowing is not made available to the Administrative Agent by
such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to Base Rate Loans
hereunder, on demand, from the Borrower.
5.9 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, Continue Eurodollar Loans as such and
Convert Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and (b)
such Lender's Revolving Credit Loans then outstanding as Eurodollar Loans, if
any, shall be Converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Revolving Credit
Loans or within such earlier period as required by law. If any such Conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 5.12.
5.10 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Revolving Credit Note or any
Eurodollar Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 5.11 and changes in the rate of tax on the overall
net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, Converting into,
Continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable, provided that
the Borrower shall not be obligated to pay (A) any such amount or amounts unless
such Lender shall have notified the Borrower in writing that it is entitled to,
or intends to seek, compensation
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pursuant to this Section and (B) any such amount or amounts which are
attributable to any period of time occurring more than 180 days prior to the
date of receipt by the Borrower of the notice provided for in the preceding
clause (A).
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction, provided that the Borrower shall not be obligated to pay (i) any such
amount or amounts unless such Lender shall have notified the Borrower in writing
that it is entitled to, or intends to seek, compensation pursuant to this
Section and (ii) any such amount or amounts which are attributable to any period
of time occurring more than 180 days prior to the date of receipt by the
Borrower of the notice provided for in the preceding clause (i).
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Revolving Credit Loans and all other amounts payable
hereunder.
5.11 Taxes.
(a) All payments made by the Borrower under this Agreement and any
Revolving Credit Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Revolving Credit Note). If any
such non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any
Revolving Credit Note, the amounts so payable to the Administrative Agent or
such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender
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(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement,
provided, however, that the Borrower shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of the United
States of America or a state thereof if such Lender fails to comply with the
requirements of clause (b) of this Section or until such Lender has delivered
the forms and certificates, if any, required by such clause (b). Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section shall
survive the termination of this Agreement and the payment of the Revolving
Credit Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) (A) if such Lender is a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, deliver to the Borrower and the
Administrative Agent (x) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, and (y) an Internal Revenue Service Form W-8
or W-9, or successor applicable form, as the case may be, or (B) if
such Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form
1001 or 4224, deliver (x) a certificate substantially in the form of
Exhibit F (a "Non-Bank Status Certificate") and (y) two completed and
signed copies of Internal Revenue Service Form W-8 or successor
applicable form;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or
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withholding of any United States federal income taxes, (ii) in the case of a
Non-Bank Status Certificate, that it is not a "bank" as such term is defined in
Section 881(c)(3)(A) of the Code, and (iii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup withholding tax.
Each Person that shall become a Lender or a Participant pursuant to Section 12.6
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms and statements required pursuant to this Section, provided that
in the case of a Participant such Participant shall furnish all such required
forms and statements to the Lender from which the related participation shall
have been purchased. Each Lender that is not incorporated under the laws of the
United States of America or a state thereof or the District of Columbia shall
deliver to the Borrower and the Administrative Agent, with respect to tax
liabilities imposed by any Governmental Authority other than the United States,
similar forms, if applicable and if available (or the information that would be
contained in similar forms if such forms were available).
5.12 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, Conversion into or Continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, Converted or Continued, for the period from the date of such
prepayment or of such failure to borrow, Convert or Continue to the last day of
such Interest Period (or, in the case of a failure to borrow, Convert or
Continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Revolving
Credit Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Bank on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. This covenant shall survive the termination of
this Agreement and the payment of the Revolving Credit Loans and all other
amounts payable hereunder.
5.13 Lending Offices; Change of Lending Office.
(a) Revolving Credit Loans of each Type made by any Lender shall be
made and maintained at such Lender's Applicable Lending Office for Revolving
Credit Loans of such Type.
(b) Each Lender agrees that if it makes any demand for payment under
Section 5.10 or 5.11(a), or if any adoption or change of the type described in
Section 5.9 shall occur with respect to it, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under Section 5.10 or 5.11(a), or would eliminate or reduce the effect of any
adoption or change described in Section 5.9.
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5.14 Defaulting Lender. (a) In addition to the rights and remedies that
may be available to the Administrative Agent or the Borrower under this
Agreement or applicable law, if at any time a Lender is a Defaulting Lender such
Defaulting Lender's right to participate in the administration of the Revolving
Credit Loans, this Agreement and the other Loan Documents, including without
limitation, any right to vote in respect of, to consent to or to direct any
action or inaction of the Administrative Agent or to be taken into account in
the calculation of the Required Lenders, shall be suspended during the pendency
of such failure or refusal. If a Lender is a Defaulting Lender because it has
failed to make timely payment to the Administrative Agent of any amount required
to be paid to the Administrative Agent hereunder (without giving effect to any
notice or cure periods), in addition to other rights and remedies which the
Administrative Agent or the Borrower may have under the immediately preceding
provisions or otherwise, the Administrative Agent shall be entitled (i) to
collect interest from such Defaulting Lender on such delinquent payment for the
period from the date on which the payment was due until the date on which the
payment is made at the Federal Funds Effective Rate, (ii) to withhold or setoff
and to apply in satisfaction or the defaulted payment and any related interest,
any amount otherwise payable to such Defaulting Lender under this Agreement or
any other Loan Document until such defaulted payment and related interest has
been paid in full and such default no longer exists and (iii) to bring an action
or suit against such Defaulting Lender in a court of competent jurisdiction to
recover the defaulted amount and any related interest. Any amount received by
the Administrative Agent in respect of a Defaulting Lender's Revolving Credit
Loans shall not be paid to such Defaulting Lender and shall be held uninvested
by the Administrative Agent and either applied against the purchase price of
such Revolving Credit Loans under the subsection (b) of this Section 5.14 or
paid to such Defaulting Lender upon the default of such Defaulting Lender being
cured.
(b) Any Lender who is not a Defaulting Lender shall have the right, but
not the obligation, in its commercially reasonable judgment, to acquire all of a
Defaulting Lender's Revolving Credit Commitment. If more than one Lender
exercises such right, each such Lender shall have the right to acquire such
proportion of such Defaulting Lender's Revolving Credit Commitment on a pro rata
basis. Upon any such purchase, the Defaulting Lender's interest in the Revolving
Credit Loans and its rights hereunder (but not its liability in respect thereof
or under the Loan Documents or this Agreement to the extent the same related to
the period prior to the effective date of the purchase) shall terminate on the
date of purchase, and the Defaulting Lender shall promptly execute all documents
reasonably requested to surrender and transfer such interest to the purchaser
thereof subject to and in accordance with the requirements set forth in Section
12.6, including payment of the fees described in Section 12.6 and execution and
delivery of an Assignment and Acceptance. The purchase price for the Revolving
Credit Commitment of a Defaulting Lender shall be equal to the amount of the
principal balance of the Loans outstanding and owed by the Borrower to the
Defaulting Lender. The purchaser shall pay to the Defaulting Lender in
immediately available funds on the date of such purchase the principal of and
accrued and unpaid interest and fees on the Loans made by such Defaulting Lender
hereunder (it being understood that such accrued and unpaid interest and fees
may be paid pro rata to the purchasing Lender and the Defaulting Lender by the
Administrative Agent at a subsequent date upon receipt of payment of such
amounts from the Borrower). Prior to payment of such purchase price to a
Defaulting Lender, the Administrative Agent shall apply against such purchase
price any amounts retained by the Administrative Agent pursuant to the last
sentence of the immediately preceding subsection (a) of
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this Section 5.14. The Defaulting Lender shall be entitled to receive amounts
owed to it by the Borrower under the Loan Documents which accrued prior to the
date of the default by the Defaulting Lender, to the extent the same are
received by the Administrative Agent from or on behalf of the Borrower. There
shall be no recourse against any Lender or the Administrative Agent for the
payment of such sums except to the extent of the receipt of payments from any
other party or in respect of the Loans.
5.15 Replacement of Certain Lenders. If any Lender shall become
affected by any of the changes or events described in Section 5.7, 5.9, 5.10 or
5.11 (any such Lender being hereinafter referred to as a "Replaced Lender") and
shall petition the Borrower for any increased cost or amounts thereunder (which
request has not been withdrawn by such Lender), then in any such case, and so
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower may, upon at least five (5) Business Days' notice to the
Administrative Agent and such Replaced Lender, designate a replacement lender (a
"Replacement Lender") acceptable to the Administrative Agent in its commercially
reasonable judgment, to which such Replaced Lender shall, subject to its receipt
(unless a later date for the remittance thereof shall be agreed upon by the
Borrower and the Replaced Lender) of all amounts due and owing to such Replaced
Lender under Section 5.7, 5.9, 5.10 or 5.11 assign all (but not less than all)
of its rights, obligations, Loans and Revolving Credit Commitment pursuant to an
Assignment Acceptance; provided, that all amounts owed to such Replaced Lender
by the Borrower (except liabilities which by the terms hereof survive the
payment in full of the Revolving Credit Loans and termination of this Agreement)
shall be paid in full as of the date of such assignment. Upon any assignment by
any Lender pursuant to this Section becoming effective, the Replacement Lender
shall thereupon be deemed to be a "Lender" for all purposes of this Agreement
and such Replaced Lender shall thereupon cease to be a "Lender" for all purposes
of this Agreement and shall have no further rights or obligations hereunder
(other than pursuant to Sections 5.7, 5.9, 5.10, 5.11 and 12.5 while such
Replaced Lender was a Lender).
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Revolving Credit Loans, the Borrower hereby represents
and warrants to the Administrative Agent and each Lender that:
6.1 Financial Condition.
(a) The consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at December 31, 1998 and the related consolidated statements of
income and of cash flows for the fiscal year ended on such date, reported on by
PricewaterhouseCoopers LLP, copies of which have heretofore been furnished to
each Lender, are complete and correct in all material respects and present
fairly in all material respects the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the fiscal
year then ended. The unaudited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at June 30, 1999 and the related unaudited
consolidated statements of income and of cash flows for the six-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been
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furnished to the Administrative Agent, are complete and correct in all material
respects and present fairly in all material respects the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the six-month period then ended (subject to normal year-end audit
adjustments and the absence of footnotes). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein; subject, in the case of unaudited financial
statements, to year-end adjustments and the absence of footnotes). Neither the
Borrower nor any of its consolidated Subsidiaries had, at the date of the most
recent balance sheet referred to above, any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other financial
derivative, which is not reflected in the foregoing statements or in the notes
thereto. During the period from December 31, 1998 to and including the date
hereof there has been no sale, transfer or other disposition by the Borrower or
any of its consolidated Subsidiaries of any material part of its business or
property and, other than the Vital Choice Acquisition, no purchase or other
acquisition of any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated financial condition of
the Borrower and its consolidated Subsidiaries at December 31, 1998.
(b) The pro forma consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at June 30, 1999, certified by a Responsible
Officer of the Borrower (the "Pro Forma Balance Sheet"), a copy of which has
been provided to the Administrative Agent and each Lender, is the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
adjusted to give effect (as if such events had occurred on such date) to (i) the
refinancing of the loans outstanding under the Existing Credit Agreement, (ii)
the making of the Revolving Credit Loans to be made on the Closing Date and in
connection with the consummation of the Vital Choice Acquisition, (iii) the
application of the proceeds of the foregoing in accordance with the terms of the
Loan Documents and the Vital Choice Acquisition Documents, (iv) the consummation
of the Vital Choice Acquisition and (v) the payment of all fees and expenses
related to the foregoing transactions, as estimated in good faith as of the date
of the Pro Forma Balance Sheet. The Pro Forma Balance Sheet, together with the
notes thereto, presents fairly, on a pro forma basis, the consolidated financial
position of the Borrower and its Subsidiaries as at June 30, 1999, assuming that
the events specified in the preceding sentence had actually occurred on such
date.
(c) The operating forecast and cash flow projections of the Borrower
and its consolidated Subsidiaries, copies of which have heretofore been
furnished to the Lenders, have been prepared in good faith under the direction
of a Responsible Officer of the Borrower, and in accordance with GAAP except
that such forecast and projections do not include footnotes and other
disclosures which may be required pursuant to GAAP, and contain projections as
to tax accruals. The Borrower has no reason to believe that as of the date of
delivery thereof such operating forecast and cash flow projections are
materially incorrect or misleading in any material respect, or omit to state any
material fact which would render them misleading in any material respect.
6.2 No Change. (a) Since December 31, 1998, there has been no
development
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or event which has had or could reasonably be expected to have a Material
Adverse Effect, and (b) during the period from December 31, 1998 to and
including the date hereof no cash dividends or other cash distributions have
been declared, paid or made upon the Capital Stock of the Borrower nor has any
of the Capital Stock of the Borrower been redeemed, retired, purchased or
otherwise acquired for value by the Borrower or any of its Subsidiaries, other
than 5,210 shares of the Capital Stock of the Borrower redeemed and repurchased
from an employee of the Borrower on or about October 1, 1999 for a consideration
of $8,075.50.
6.3 Existence; Compliance with Law. Each of the Borrower and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and the failure to do so would reasonably be expected to have a Material Adverse
Effect, and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations. The Borrower has the
corporate power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and to borrow hereunder and has taken
all necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement and any Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which the
Borrower is a party other than those set forth on Schedule 6.4 thereto, all of
which have been obtained or made and remain in full force and effect. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower and each Loan Document to
which any other Loan Party will be a party will be duly executed and delivered
on behalf of such Loan Party. This Agreement constitutes, and each other Loan
Document to which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. Each Loan Document to which any
other Loan Party is a party, if any, when executed and delivered will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
6.5 No Legal Bar. The execution, delivery and performance of the Loan
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Documents to which the Borrower or any other Loan Party is a party, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of the Borrower or of any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation (other than Liens created
by the Security Documents in favor of the Administrative Agent).
6.6 No Material Litigation. Except as set forth on Schedule 6.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby, or (b)
which could reasonably be expected to have a Material Adverse Effect.
6.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 9.3.
6.9 Intellectual Property. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of
any valid basis for any such claim. The use of such Intellectual Property by the
Borrower and its Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
6.10 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
6.11 Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity
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with GAAP have been provided on the books of the Borrower or its Subsidiaries,
as the case may be); no tax Lien has been filed, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
6.12 Federal Regulations. No part of the proceeds of any Revolving
Credit Loans will be used for "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect, or for any purpose which violates, or which would be
inconsistent with, the provisions of the regulations of such Board of Governors.
If requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G-3 or FR Form U-1
referred to in said Regulation U.
6.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits.
6.14 Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
6.15 Subsidiaries; Stockholders. Part A of Schedule 6.15 sets forth the
name of each direct or indirect Subsidiary of the Borrower as of the Closing
Date, its form of organization, its jurisdiction of organization, the total
number of issued and outstanding shares or other interests of Capital Stock
thereof, the classes and number of issued and outstanding shares or other
interests of Capital Stock of each such class, the name of each holder of
Capital Stock thereof and the number
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of shares or other interests of such Capital Stock held by each such holder and
the percentage of all outstanding shares or other interests of such class of
Capital Stock held by such holders. Part B of Schedule 6.15 sets forth, as the
Closing Date, the Borrower's form of organization, its jurisdiction of
organization, the total number of issued and outstanding shares or other
interests of Capital Stock thereof, the classes and number of issued and
outstanding shares or other interests of Capital Stock of each such class, the
name of each record holder and, to the extent known by the Borrower, beneficial
holder of Capital Stock thereof and the number of shares or other interests of
such Capital Stock held by each such holder and the percentage of all
outstanding shares or other interests of such class of Capital Stock held by
such holders.
6.16 Security Documents.
(a) The provisions of each Security Document are effective to create in
favor of the Collateral Agent for the ratable benefit of the Lenders a legal,
valid and enforceable security interest in all right, title and interest of the
Loan Party party thereto in the "Collateral" described therein, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(b) (i) When financing statements have been filed in the offices in the
jurisdictions listed in Schedule 6.16, and any other filings required to be made
after the Closing Date pursuant to Section 8.11, the security interests granted
under the Security Agreement shall constitute a fully perfected first Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the "Collateral" described therein, which can be perfected by such filing.
(ii) When certificates representing the Pledged Stock (as defined in a
Pledge Agreement) are delivered to the Collateral Agent, together with stock
powers endorsed in blank by a duly authorized officer of the pledgors thereof,
such Pledge Agreement shall constitute a fully perfected first Lien on, and
security interest in, all right, title and interest of the pledgors parties
thereto in the "Collateral" described therein.
6.17 Accuracy and Completeness of Information.
(a) All factual information, reports and other papers and data with
respect to the Loan Parties (other than projections) furnished in writing, and
all factual statements and representations made in writing, to the
Administrative Agent or the Lenders by a Loan Party, or on behalf of a Loan
Party, were, at the time the same were so furnished or made, when taken together
with all such other factual information, reports and other papers and data
previously so furnished and all such other factual statements and
representations previously so made, complete and correct in all material
respects, to the extent necessary to give the Administrative Agent and the
Lenders true and accurate knowledge of the subject matter thereof in all
material respects, and did not, as of the date so furnished or made, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements contained therein not misleading in light of the
circumstances in which the same were made.
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(b) All projections with respect to the Loan Parties furnished by or on
behalf of a Loan Party to the Administrative Agent or the Lenders were prepared
and presented in good faith by or on behalf of such Loan Party. No fact is known
to a Loan Party which materially and adversely affects or in the future is
reasonably likely (so far as such Loan Party can reasonably foresee) to have a
Material Adverse Effect which has not been set forth in the financial statements
referred to in Section 6.1 or in such information, reports, papers and data or
otherwise disclosed in writing to the Administrative Agent or the Lenders prior
to the Closing Date.
6.18 Labor Relations. No Loan Party is engaged in any unfair labor
practice which could reasonably be expected to have a Material Adverse Effect.
There is (a) no unfair labor practice compliant pending or, to the best
knowledge of each Loan Party and each of the Subsidiaries, threatened against a
Loan Party before the National Labor Relations Board which could reasonably be
expected to have a Material Adverse Effect and no grievance or arbitration
proceeding arising out of or under a collective bargaining agreement is so
pending or threatened; (b) no strike, labor dispute, slowdown or stoppage
pending or, to the best knowledge of each Loan Party, threatened against a Loan
Party; and (c) to Borrower's knowledge, no union representation question
existing with respect to the employees of a Loan Party and no union organizing
activities are taking place with respect to any thereof.
6.19 Insurance. Each Loan Party has, with respect to its properties and
business, insurance covering the risks, in the amounts, with the deductible or
other retention amounts, and with the carriers, listed on Schedule 6.19, which
insurance meets the requirements of Section 8.5 hereof and Section 5(m) of the
Security Agreement.
6.20 Solvency. After giving effect to the consummation of the
refinancing and to the incurrence of all Indebtedness and obligations being
incurred on or prior to such date in connection herewith and therewith and after
giving effect to the making of each Revolving Credit Loan and the issuance of
each Letter of Credit, (i) the amount of the "present fair saleable value" of
the assets of the Borrower as a going concern and of the Borrower and its
Subsidiaries, taken as a whole as a going concern, will, as of such date, exceed
the amount of all "liabilities of the Borrower as a going concern and of the
Borrower and its Subsidiaries, taken as a whole as a going concern, contingent
or otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing determinations of
the insolvency of debtors, (ii) the present fair saleable value of the assets of
the Borrower as a going concern and of the Borrower and its Subsidiaries, taken
as a whole as a going concern, will, as of such date, be greater than the amount
that will be required to pay the liabilities of the Borrower and of the Borrower
and its Subsidiaries, taken as a whole, on their respective debts as such debts
become absolute and matured, (iii) neither the Borrower nor the Borrower and its
Subsidiaries, taken as a whole, will have, as of such date, an unreasonably
small amount of capital with which to conduct their respective businesses, and
(iv) each of the Borrower and the Borrower and its Subsidiaries, taken as a
whole, will be able to pay their respective debts as they mature. For purposes
of this Section 5.20, "debt" means "liability on a claim", "claim" means any (x)
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured, and (y) right to an
equitable remedy for breach of
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performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured
or unmatured, disputed, undisputed, secured or unsecured.
6.21 Purpose of Loans. The proceeds of the Loans shall be used by the
Borrower to refinance existing Indebtedness, to finance the cash portion of the
Vital Choice Acquisition, for working capital purposes in the ordinary course of
business and for other general corporate purposes.
6.22 Environmental Matters. Except as set forth on Schedule 6.22, to
the best knowledge of the Borrower:
(a) The facilities and properties owned or operated by any
Loan Party (the "Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or
(ii) could reasonably be expected to give rise to liability under, any
Environmental Law except in either case insofar as such violation or
liability, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Environmental Amount.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with
all applicable Environmental Laws, and there is no contamination at,
under or about the Properties or violation of any Environmental Law
with respect to the Properties or the business operated by the Borrower
or any of its Subsidiaries (the "Business") which could materially
interfere with the continued operation of the Properties or materially
impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Properties
or the Business, nor does the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened
except insofar as such notice or threatened notice, or any aggregation
thereof, does not involve a matter or matters that is or are reasonably
likely to result in the payment of a Material Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could reasonably be expected to give rise
to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Properties in violation of, or in a manner
that could reasonably be expected to give rise to liability under, any
applicable Environmental Law except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material
Environmental Amount.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which
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the Borrower or any Subsidiary is or will be named as a party with
respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties
or the Business except insofar as such proceeding, action, decree,
order or other requirement, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Adverse
Amount.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any
Subsidiary in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that
could reasonably give rise to liability under Environmental Laws except
insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Environmental Amount.
6.23 Year 2000 Compliance. Any material reprogramming required to
permit the proper functioning, in and following the year 2000, of (i) the
Borrower's and its Subsidiaries' material computer systems and (ii) material
equipment containing embedded microchips (including material systems and
equipment supplied by others in which the Borrower's or its Subsidiaries'
systems interface) and the testing of all such systems and equipment, as so
reprogrammed, will be completed no later than November 30, 1999. The cost to the
Borrower and its Subsidiaries of such reprogramming and testing and of the
reasonably foreseeable consequences of the Year 2000 Problem to the Borrower and
its Subsidiaries (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) is not reasonably expected to result in
an Event of Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Borrower and its Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Borrower and its
Subsidiaries each to conduct its respective businesses without Material Adverse
Effect.
6.24 Senior Notes Documents; Subordinated Notes. From and after the
satisfaction of the conditions set forth in Section 6.1, (b) this Agreement
shall at all times constitute the "Credit Agreement" as defined in the Senior
Notes Indenture, and the Loans, Letters of Credit and all other Obligations
constitute and shall at all times constitute "Permitted Indebtedness" as defined
in the Senior Notes Indenture or shall otherwise be permitted under Section 4.12
of the Senior Notes Indenture, and (c) the Loans, Letters of Credit and all
other obligations shall at all times constitute "Senior Bank Debt" under any of
the subordinated notes referred to in Section 9.2(h).
6.25 Concerning Regulatory Matters. (a) Each of the Borrower and its
Subsidiaries is, and for the last three years has been, in compliance in all
material respects with all applicable laws, regulations, rules, and guidelines
of federal, state and local governments and all agencies thereof which affect
the business of providing rental moveable medical equipment and related
businesses, including, but not limited to, any fraud and abuse laws,
anti-kickback laws,
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applicable federal or state acts, rules, regulations and guidelines respecting
equal employment opportunity, employee and public health and safety, the filing
of false claims or statements or unacceptable practices and regulations
governing biohazard risk and the control and disposal of biological and medical
wastes (but excluding Environmental Laws, which are covered by Section 6.22),
except to the extent that the failure to be so in compliance with such laws,
regulations, rules, and guidelines could not reasonably be expected in the
aggregate to have a Material Adverse Effect.
(b) Each of the Borrower and its consolidated Subsidiaries holds all
necessary permits, licenses, certifications and other authorizations of foreign,
federal, state and local governmental agencies required for the conduct of its
business (or any part thereof), such permits, licenses, certifications and/or
other authorizations have not been terminated, suspended or revoked, and there
are presently no termination, suspension or revocation proceedings, actual,
pending, or threatened, in respect thereof.
(c) Except as set forth on Schedule 6.25, neither the Borrower nor any
of its consolidated Subsidiaries is, and for the last three years has not been,
the subject of any current, pending or, to the Borrower's knowledge, threatened
investigations, audits, consent decrees, settlements, or other extraordinary
examinations or reviews by any federal or state agency or other government or
administrative office, including, but not limited to, state departments of
health, social services, transportation, insurance, or any other state agency
involved in the regulation of moveable medical equipment.
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Initial Revolving Credit Loans. The agreement of each
Lender to make the initial Loan requested to be made by it and the agreement of
the Issuing Lender to issue the initial Letter of Credit hereunder is subject to
the satisfaction, immediately prior to or concurrently with the making of such
Loan on the Closing Date, of the following conditions precedent, unless waived
by the Lenders existing as of the Closing Date:
(a) Loan Documents. The Administrative Agent shall have
received:
(i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, with a counterpart for each Lender;
(ii) for the account of each Lender, a Revolving Credit Note
of the Borrower conforming to the requirements hereof and executed by a
duly authorized officer of the Borrower;
(iii) for the account of the Swing Line Lender, the Swing Line
Note, conforming to the requirements hereof and executed and delivered
by a duly authorized officer of the Borrower; and
(iv) the Security Agreement, executed and delivered by a duly
authorized officer of each party thereto, with a counterpart or a
conformed copy
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for each Lender.
(b) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower, of the Existing Credit
Agreement and related documents, and documents relating to all other
existing Indebtedness to be refinanced, the Stockholders' Agreement,
the Vital Choice Acquisition Agreement and the other Vital Choice
Acquisition Documents, and such other documents or instruments as may
be reasonably requested by the Administrative Agent, including, without
limitation, a copy of any other debt instrument, security agreement or
other material contract to which the Borrower, or its Subsidiaries may
be a party.
(c) Concurrent Transactions. All amounts owing to the Existing
Banks under the Existing Credit Agreement and the other financing
documents related thereto shall have been, or shall be concurrently
with the making of the initial Revolving Credit Loans, repaid in full,
and any Liens created pursuant thereto shall have been or shall,
concurrently with the making of the initial Revolving Credit Loans,
released, and all documents relating to such Indebtedness shall
terminate and be of no further force and effect upon such repayment; in
each case pursuant to such payout letters, Lien releases, termination
statements, mortgage satisfactions and other documents as the
Administrative Agent may require, each of which shall be in form and
substance satisfactory to the Administrative Agent.
(d) Secretary's Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of
each Loan Party existing as of the Closing Date, dated the Closing
Date, substantially in the form of Exhibit G, with appropriate
insertions and attachments, satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of such Loan Party.
(e) Borrowing Base Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a Borrowing Base
Certificate showing the Borrowing Base as of September 30, 1999, with
appropriate insertions and dated the Closing Date, satisfactory in form
and substance to the Administrative Agent, executed by the President or
any Vice President of the Borrower.
(f) Corporate Proceedings of the Loan Parties. The
Administrative Agent shall have received, with a counterpart for each
Lender, a copy of the resolutions, in form and substance satisfactory
to the Administrative Agent, of the Board of Directors of each Loan
Party existing as of the Closing Date authorizing (i) the execution,
delivery and performance of this Agreement and the other Loan Documents
to which it is a party, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the Liens created pursuant to the Security
Documents, certified by the Secretary or an Assistant Secretary of such
Loan Party as of the Closing Date, which certificate shall be in form
and substance satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended, modified,
revoked or rescinded.
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(g) Incumbency Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of
each Loan Party existing as of the Closing Date, dated the Closing
Date, as to the incumbency and signature of the officers of such Loan
Party executing any Loan Document satisfactory in form and substance to
the Administrative Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of such Loan
Party.
(h) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies
of the articles of incorporation and by-laws of each Loan Party
existing as of the Closing Date, certified as of the Closing Date as
complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Loan Party.
(i) Good Standing Certificates. The Administrative Agent shall
have received, with a copy for each Lender, certificates dated as of a
recent date from the Secretary of State or other appropriate authority,
evidencing the good standing of each Loan Party existing as of the
Closing Date (i) in the jurisdiction of its organization and (ii) in
each other jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires it to qualify as a
foreign Person except, as to this subclause (ii), where the failure to
so qualify could not have a Material Adverse Effect.
(j) Consents, Licenses and Approvals. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate
of a Responsible Officer of the Borrower (i) attaching copies of all
consents, authorizations and filings referred to in Section 6.4, and
(ii) stating that such consents, licenses and filings are in full force
and effect, and each such consent, authorization and filing shall be in
form and substance satisfactory to the Administrative Agent.
(k) Fees and Expenses. The Administrative Agent shall have
received the fees and expenses to be received on the Closing Date
referred to in Section 12.5 and the Fee Letter.
(l) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the executed legal
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Loan Parties existing
as of the Closing Date, substantially in the form of Exhibit H. Such
legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(m) Actions to Perfect Liens. The Administrative Agent shall
have received evidence in form and substance satisfactory to it that
all filings, recordings, registrations and other actions, including,
without limitation, the filing of, or receipt by the Administrative
Agent of in form acceptable for filing, duly executed financing
statements on form UCC-1, necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created by the
Security Documents shall have been completed (or provision acceptable
to the Administrative Agent shall have been made for such completion).
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(n) Lien Searches. The Administrative Agent shall have
received the results of a recent search by a Person satisfactory to the
Administrative Agent, of the Uniform Commercial Code, judgment and tax
lien filings which may have been filed with respect to personal
property of each Loan Party existing as of the Closing Date, and the
results of such search shall be satisfactory to the Administrative
Agent.
(o) Insurance. The Administrative Agent shall have received
evidence in form and substance satisfactory to it that all of the
requirements of Section 8.5 hereof and Section 5(m) of the Security
Agreement shall have been satisfied.
(p) Landlord Estoppel Agreements. The Administrative Agent
shall have received any landlord estoppel agreements with respect to
leased real property of the Loan Parties which have been obtained by
the Borrower pursuant to Section 8.13 as of the Closing Date.
(q) Maximum Leverage. The Leverage Ratio as of the Closing
Date shall have been not greater than 5.0 to 1, and the Administrative
Agent shall have received evidence satisfactory to it thereof.
7.2 Conditions to Each Loan. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan) and the agreement of the Issuing Lender to issue any Letter of
Credit (including, without limitation, its initial Letter of Credit) is subject
to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and the other Loan
Parties in or pursuant to the Loan Documents shall be true and correct
in all material respects on and as of such date as if made on and as of
such date except for representations and warranties (i) which by their
terms are only made as of specific earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date, and (ii) for which
exceptions thereto which have been disclosed in writing to the
Administrative Agent and the Lenders and which have been approved in
writing by the Administrative Agent. The Borrower shall deliver to the
Administrative Agent, with each notice of borrowing or request for the
issuance of a Letter of Credit hereunder, a calculation in reasonable
detail showing the basis for the satisfaction of the condition set
forth in this Section 7.2(a) with respect to the representation in
Section 6.24.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Revolving Credit Loans requested to be made on such date.
(c) Borrowing Base. The Administrative Agent shall have timely
received a Borrowing Base Certificate for the most recent period for
which such Borrowing Base Certificate is required to be delivered, in
accordance with Section 8.2(c).
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(d) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received
such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
Each borrowing by the Borrower and each issuance of a Letter of Credit hereunder
shall constitute a representation and warranty by the Borrower as of the date
thereof that the conditions contained in this Section 7.2 have been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Revolving Credit
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document, other than
indemnification obligations which survive the termination of this Agreement or
any other Loan Document, the Borrower shall and (except in the case of delivery
of financial information, reports and notices) shall cause each of its
Subsidiaries to:
8.1 Financial Statements. Furnish to the Administrative Agent and the
Collateral Agent:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by PricewaterhouseCoopers LLP or other independent
certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each case
in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of
footnotes); and
(c) as soon as available, but in any event not later than 30
days after the end of each calendar month, the unaudited consolidated
and consolidating balance sheet of the
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Borrower and its consolidated Subsidiaries as at the end of such month
and the related unaudited consolidated and consolidating statements of
income and retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such month and the portion of the fiscal
year through the end of such month, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of
footnotes);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein). The Administration Agent shall promptly provide copies
of such financial statements to the Lenders.
8.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 8.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default resulting from any
failure to comply with Section 9, except as specified in such
certificate (it being expressly understood that nothing in this Section
8.2(a) shall be deemed to require such certified public accountants to
make any further examination or perform additional procedures not
otherwise required to audit such financial statements);
(b) concurrently with the delivery of the financial statements
referred to in Sections 8.1(a), (b) and (c), a certificate of a
Responsible Officer (i) stating that, to the best of such Officer's
knowledge, the Borrower during such period has observed or performed
all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to
be observed, performed or satisfied by it, and that such Officer has
obtained no knowledge of any Default or Event of Default which has not
been cured or waived except as specified in such certificate and (ii)
showing in detail the calculations supporting such Officer's
certification of the Borrower's compliance with the requirements of
Section 9.1(a) through 9.1(c);
(c) within fifteen Business Days following the end of each
fiscal month, a Borrowing Base Certificate showing the Borrowing Base
as of the last day of such month, certified as complete and correct by
a Responsible Officer;
(d) not later than thirty days after the commencement of each
fiscal year of the Borrower, a copy of the projections by the Borrower
of the operating budget and cash flow budget of the Borrower and its
Subsidiaries for the succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the effect
that such projections have been prepared on the basis of sound
financial planning practice and that such Officer has no reason to
believe they are incorrect or misleading in any material respect;
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(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to its
stockholders, and within five days after the same are filed, copies of
all financial statements and reports which the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(f) during the month of October in each calendar year, a
report of a reputable insurance broker with respect to the insurance
maintained by the Borrower and its Subsidiaries in accordance with
Section 8.5 of this Agreement and Section 5(m) of the Security
Agreement and such supplemental reports as the Administrative Agent may
from time to time request; and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
8.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be, or where the failure to so
satisfy such obligations could not reasonably be expected to have a Material
Adverse Effect.
8.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to Section 9.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
8.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business, which insurance shall name the Administrative Agent
as lender loss payee, in the case of property or casualty insurance, and as an
additional insured, in the case of liability insurance; and furnish to each
Lender, upon written request, full information as to the insurance carried.
8.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all material
dealings and transactions in relation to its business and activities; and upon
reasonable prior notice to the chief financial officer of the Borrower permit
representatives of any Lender to visit and inspect any of its properties and
examine
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and make abstracts from any of its books and records at any reasonable time
during regular business hours and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with officers and employees of the Borrower
and its Subsidiaries and with its independent certified public accountants.
8.7 Notices. Promptly, and in any event within three Business Days
after the date on which an officer of the Borrower has or should have had
knowledge thereof (other than under clause (f) of this Section 8.7 as to which
the 30-day period described therein shall apply), give notice to the
Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default which
has not been previously waived or cured;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which the amount involved is $1,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought;
(d) of the acquisition by the Borrower or any Guarantor party
to the Security Agreement or which has otherwise granted security
interests on its property pursuant to Section 8.11 of any property or
interest in property (including, without limitation, real property),
that is not subject to a perfected Lien in favor of the Administrative
Agent pursuant to and to the extent required by the Security Documents;
(e) of the occurrence of any transaction or occurrence
referred to in Section 5.5(c), and the receipt of any Net Proceeds or
any insurance proceeds as a result thereof in excess of $50,000
(whether or not such Net Proceeds or proceeds are then required to be
applied to the repayment of Loans and reduction of Revolving Credit
Commitments as specified in Section 5.5(c));
(f) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan; and
(g) any development or event which could reasonably be
expected to have a
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Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto.
8.8 Environmental Laws.
(a) Comply with, and ensure compliance by all tenants and subtenants,
if any, with, all applicable Environmental Laws and obtain and comply with and
maintain, and ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws.
8.9 Changes to Advance Rates, Standards of Eligibility and Reserves.
The Administrative Agent shall be entitled to (a) reduce the advance rates,
increase the standards of eligibility and establish or increase any reserves
under this Agreement on thirty days' prior written notice to the Borrower in the
event that the most recent audit of accounts receivable and/or inventory of the
Borrower and its Subsidiaries conducted pursuant to Section 8.10 was, in the
commercially reasonable judgment of the Administrative Agent, materially and
adversely different from historical performance, and (b) with the prior written
consent of the Lenders, increase the advance rates, reduce the standards of
eligibility and reduce any reserves under this Agreement, in each case in its
commercially reasonable judgment.
8.10 Periodic Audit of Accounts Receivable and Inventory. (a) The
Administrative Agent or the Collateral Agent shall be entitled to perform a
periodic due diligence inspection, test and review of the accounts receivable
and Inventory of the Borrower and its Subsidiaries beginning on a mutually
convenient Business Day twice during each calendar year (but not more frequently
than once during any six month period) and shall in each case be reasonably
satisfied in all material respects with the results thereof; provided however,
if the Administrative Agent or the Collateral Agent in its commercially
reasonable judgment is not satisfied that the results of any due diligence
inspection, test, and review performed pursuant to this Section 8.10 establish
that the Borrower's most recent determination of the Borrowing Base was made in
compliance with the applicable provisions of this Agreement, the Administrative
Agent and the Collateral Agent shall be entitled to perform additional due
diligence inspections, tests and reviews of such inventory and accounts
receivable on mutually convenient Business Days during the succeeding
twelve-month period until the Administrative Agent or the Collateral Agent, as
applicable, shall be so satisfied; and provided further, that upon the
occurrence and during the continuation of an Event of Default, the
Administrative Agent and the Collateral Agent shall be entitled to perform such
additional due diligence inspections, tests and review of such accounts
receivable as any Lender shall deem necessary or advisable.
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(b) The Agents confirm that the Borrower has heretofore furnished to
the Agents a current complete appraisal analysis of the Rental Equipment of the
Borrower and its Subsidiaries conducted by a Person and on a valuation basis
acceptable to the Administrative Agent (an "Appraisal Analysis"). Borrower shall
furnish to the Administrative Agent, the Collateral Agent and each Lender
promptly, upon the request of the Administrative Agent or the Collateral Agent,
which request shall be made in the commercially reasonable judgment of the
Administrative Agent or the Collateral Agent, as applicable (but unless provided
herein, no more frequently than annually) an update (an "Appraisal Update") on a
desk top basis of the prior Appraisal Analysis, which update shall be conducted
by a third party acceptable to the Borrower and the Administrative Agent or the
Collateral Agent, as applicable, and on a valuation basis reasonably acceptable
to the Administrative Agent or the Collateral Agent, as applicable, provided
that, if (i) a Default or Event of Default has occurred and is continuing or
(ii) the Administrative Agent or the Collateral Agent, as applicable, has
determined in its reasonable discretion that there may have been a materially
negative change, since the later of (x) the date of the Appraisal Analysis and
(y) the date of the most recent Appraisal Update conducted on a physical
inspection basis, in the orderly liquidation value or quality of the Rental
Equipment of the Borrower and the Guarantors, the Administrative Agent and the
Collateral Agent shall be permitted, at any time, to request an update on a
desktop basis and/or an update on a physical inspection basis of the Appraisal
Analysis, which update(s), in each case, shall be conducted by a third party
acceptable to the Borrower and the Administrative Agent or the Collateral Agent,
as applicable, and on a valuation basis which is (A) reasonably acceptable to
the Administrative Agent or the Collateral Agent, as applicable, and (B) not
less favorable to the Borrower than the valuation basis upon which the Appraisal
Analysis first delivered to the Administrative Agent or the Collateral Agent, as
applicable, was conducted.
8.11 Additional Collateral; Additional Guarantors.
(a) In the event that the Borrower or any Subsidiary acquires any
property or interest in property (including, without limitation, real property)
other than property made subject to a Lien permitted under Section 9.3(g), that
is not subject to a perfected Lien in favor of the Collateral Agent pursuant to
the Security Documents, the Borrower shall, and shall cause Subsidiary to, take
such action (including, without limitation, the preparation and filing of
mortgages or deeds of trust in form and substance satisfactory to the Collateral
Agent) as the Collateral Agent shall reasonably request in order to create
and/or perfect a Lien in favor of the Collateral Agent on such property.
(b) In the event that the Borrower is permitted to acquire or form any
Subsidiary, such Subsidiary shall execute a guarantee and a security agreement,
or supplements to the Guarantee and the Security Agreement, and the Borrower
and/or any Subsidiary which is a holder of any Capital Stock of such Subsidiary
shall execute such pledge agreements or supplements to the Pledge Agreement,
each in form and substance satisfactory to the Administrative Agent and the
Collateral Agent, and shall take such other action as shall be necessary or
advisable (including, without limitation, the execution of financing statements
on form UCC-1) in order to perfect the Liens granted by such Subsidiary in favor
of the Collateral
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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 Collateral Agent for the
benefit of the Lenders, provided that no such action shall be required after the
formation of a Subsidiary which is used in connection with Permitted Acquisition
prior to the later of the date of the consummation of such Permitted Acquisition
and fifteen calendar days following such formation. Such Subsidiary shall
thereupon become a Guarantor for all purposes under the Loan Documents,
including, without limitation, Section 8.11(a) of this Agreement. The
Administrative Agent and the Collateral Agent shall be entitled to receive legal
opinions of one or more counsel to the Borrower and such Subsidiary addressing
such matters as the Administrative Agent, the Collateral Agent or their counsel
may reasonably request, including, without limitation, the enforceability of the
guaranty and the security agreement to which such Subsidiary becomes a party and
the pledge of the Capital Stock of such Subsidiary, and the creation, validity
and perfection of the Liens so granted by such Subsidiary and the Borrower
and/or other Subsidiaries to the Collateral Agent for the benefit of the
Lenders. The Borrower shall, in addition, provide to the Administrative Agent
and the Collateral Agent with respect to such new or additional subsidiary the
information described in the first sentence of Section 6.15, in the form of a
written schedule or a supplement to Schedule 6.15.
(c) Notwithstanding the provisions of this Section to the contrary if,
following a change in the relevant sections of the Code or the regulations,
rules, rulings, notices or other official pronouncements issued or promulgated
thereunder, counsel for the Borrower reasonably acceptable to the Administrative
Agent does not within 30 days after a request from the Administrative Agent, the
Collateral Agent or the Required Lenders deliver evidence, in form and substance
mutually satisfactory to the Administrative Agent, the Collateral Agent and the
Borrower, with respect to any Foreign Subsidiary of the Borrower which has not
already had 100% of its stock pledged pursuant to a Pledge Agreement that (i) a
pledge of 66-2/3% or more of the total combined voting power of all classes of
Capital Stock of such Foreign Subsidiary entitled to vote, and (ii) the entering
into by such Foreign Subsidiary of a Guarantee, in any such case could
reasonably be expected to cause (I) the undistributed earnings of such Foreign
Subsidiary as determined for federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States parent for federal
income tax purposes or (II) other material adverse federal income tax
consequences to the Loan Parties, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding Capital Stock owned by any Loan Party and not
theretofore pledged pursuant to a Pledge Agreement shall be pledged pursuant to
a Pledge Agreement and in the case of a failure to deliver the evidence
described in clause (ii) above, such Foreign Subsidiary shall execute and
deliver (x) a Guarantee (or another guaranty in substantially similar form if
needed), guaranteeing the Obligations, (y) a Pledge Agreement, and (z) the
Security Agreement (or another security agreement in substantially similar form
if needed) securing such Foreign Subsidiary's obligations under the Guarantee,
in each case to the extent that the entering into the Guarantee and Pledge
Agreement is permitted by the laws of the respective foreign jurisdiction and
with all documents delivered pursuant to this Section to be in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent.
8.12 Year 2000 Covenants. (a) Take all necessary action to (i)
materially comply with the provisions of Section 6.24 hereof and (ii) test all
of its material systems and equipment supplied by others or with which the
Borrower's systems interface on or prior to November 30, 1999 to verify the
absence of a Year 2000 Problem, and (b) from time to time, at the written
request of the
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Administrative Agent, provide to the Administrative Agent such updated
information or documentation as is requested regarding the status of their
efforts to address the Year 2000 Problem.
8.13 Landlord Estoppel Agreements. Use its commercially reasonable
efforts for the period commencing on the date hereof and ending 60 days
following the Closing Date to obtain executed landlord estoppel agreements with
respect to each parcel of real property leased by any Loan Party as of the
Closing Date, such agreements to be in form and substance satisfactory to the
Administrative Agent.
SECTION 9. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the Revolving Credit
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document other than
indemnification obligations which survive the termination of this Agreement or
any other Loan Document, the Borrower shall not, and (except with respect to
Section 9.1) shall not permit any of its Subsidiaries to, directly or
indirectly:
9.1 Financial Condition Covenants.
(a) Leverage Ratio. Permit the Leverage Ratio as of the last
day of any fiscal quarter of the Borrower ended during any period set
forth in the table below to be greater than the ratio set forth
opposite such period below:
-----------------------------------------------------------------
Period Ratio
-------------------------------------------------- --------------
Closing Date through March 31, 2000 5.00 to 1
-------------------------------------------------- --------------
April 1, 2000 through September 30, 2000 4.75 to 1
-------------------------------------------------- --------------
October 1, 2000 through December 31, 2001 4.50 to 1
-------------------------------------------------- --------------
January 1, 2002 through December 31, 2002 4.25 to 1
-------------------------------------------------- --------------
January 1, 2003 through June 30, 2003 4.00 to 1
-------------------------------------------------- --------------
July 1, 2003 through June 30, 2004 3.75 to 1
-------------------------------------------------- --------------
July 1, 2004 and thereafter 3.50 to 1
-----------------------------------------------------------------
(b) Interest Coverage. Permit the ratio of (i) Consolidated
EBITDA for any period of four consecutive fiscal quarters of the
Borrower ended as of the last day of each fiscal quarter ended on or
about the date set forth in the table below to (ii) Consolidated
Interest Expense for such four-quarter period to be less than the ratio
set forth opposite such fiscal quarter in the table below:
-----------------------------------------------------------------
Fiscal Quarter Ended Ratio
-------------------------------------------- --------------------
December 31, 1999 2.00 to 1
-------------------------------------------- --------------------
March 31, 2000 2.00 to 1
-----------------------------------------------------------------
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-----------------------------------------------------------------
Fiscal Quarter Ended Ratio
-------------------------------------------- --------------------
June 30, 2000 2.00 to 1
-------------------------------------------- --------------------
September 30, 2000 2.00 to 1
-------------------------------------------- --------------------
December 31, 2000 2.00 to 1
-------------------------------------------- --------------------
March 31, 2001 2.00 to 1
-------------------------------------------- --------------------
June 30, 2001 2.00 to 1
-------------------------------------------- --------------------
September 30, 2001 2.00 to 1
-------------------------------------------- --------------------
December 31, 2001 2.00 to 1
-------------------------------------------- --------------------
March 31, 2002 2.25 to 1
-------------------------------------------- --------------------
June 30, 2002 2.25 to 1
-------------------------------------------- --------------------
September 30, 2002 2.25 to 1
-------------------------------------------- --------------------
December 31, 2002 2.25 to 1
-------------------------------------------- --------------------
March 31, 2003 2.50 to 1
-------------------------------------------- --------------------
June 30, 2003 2.50 to 1
-------------------------------------------- --------------------
September 30, 2003 2.50 to 1
-------------------------------------------- --------------------
December 31, 2003 2.50 to 1
-------------------------------------------- --------------------
March 31, 2004 2.75 to 1
-------------------------------------------- --------------------
June 30, 2004 2.75 to 1
-------------------------------------------- --------------------
September 30, 2004 2.75 to 1
-------------------------------------------- --------------------
December 31, 2004 and each fiscal quarter
ended thereafter 2.75 to 1
-----------------------------------------------------------------
(c) Fixed Charge Coverage. Permit, as of the last day of any
fiscal quarter of the Borrower, the ratio of (i) Consolidated EBITDA
for the period of four consecutive fiscal quarters of the Borrower
ended on such day to (ii) Consolidated Fixed Charges for such
four-quarter period to be less than 1.00 to 1.
9.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement and the
other Loan Documents;
(b) Indebtedness of the Borrower to any Subsidiary which is a
Guarantor, or of any such Subsidiary to the Borrower or any other
Guarantor;
(c) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance the acquisition of fixed or capital assets (whether
pursuant to a loan, a Financing Lease or otherwise) in an aggregate
principal amount not exceeding as to the Borrower and its Subsidiaries
$10,000,000 at any time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 9.2, and
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any extension, refinancing or renewal thereof which does not include an
increase in the principal amount thereof, or an increase in the fees or
the rate of interest payable with respect thereto and is otherwise on
substantially the same terms as the Indebtedness so extended,
refinanced or renewed;
(e) Indebtedness of a corporation which becomes a Subsidiary
after the date hereof, provided that (i) such Indebtedness existed at
the time such corporation became a Subsidiary and was not created in
anticipation thereof and (ii) immediately after giving effect to the
acquisition of such corporation by any Loan Party or any Subsidiary
thereof no Default or Event of Default shall have occurred and be
continuing;
(f) Guarantee Obligations of the Borrower or any Subsidiary
with respect to Indebtedness and lease obligations of the Borrower or
any Subsidiary otherwise permitted under this Agreement;
(g) Indebtedness of the Borrower under the Senior Notes in an
aggregate principal amount of $135,000,000 and any subsequent
extension, renewal, or refinancing thereof which does not include an
increase in the principal amount thereof, or an increase in the fees or
the rate of interest payable with respect thereto, and is otherwise on
substantially the same terms as the Senior Notes Documents as in effect
on the date hereof;
(h) up to $5,000,000 of Indebtedness of the Borrower
outstanding at any time under pay-in-kind subordinated notes issued to
Management Holders pursuant to Section 2.3(f) of the Stockholders
Agreement;
(i) Indebtedness under Interest Rate Agreements relating to
Indebtedness otherwise permitted under this Section 9.2 entered into
for bona fide hedging purposes; and
(j) additional Indebtedness of the Borrower not exceeding
$4,000,000 in aggregate principal amount at any one time outstanding.
9.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves (in conformity with
GAAP) have been established;
(b) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law which were incurred in the
ordinary course of business, such as carriers', warehousemen's, and
mechanics' Liens, statutory landlord's Liens, and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business
of the Borrower or any such Subsidiary or (y) which
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are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the
other Loan Documents;
(d) Liens existing on the date hereof to the extent listed,
and the property subject thereto described, on Schedule 9.3 and any
subsequent extensions or renewals thereof which does not include an
increase in the principal amount secured thereby or in the property
subject thereto;
(e) Liens arising from judgments, decrees or attachments (or
securing appeal bonds with respect thereto) in circumstances not
constituting an Event of Default under Section 10(h), so long as no
cash or property (other than proceeds of insurance payable by reason of
such judgments, decrees or attachments) is deposited or delivered to
secure any respective judgment or award, or any appeal bond in respect
thereof, the fair market value of which exceeds $1,000,000;
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety bonds (other than appeal bonds), bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money);
(g) licenses, leases or subleases granted to other Persons not
interfering in any material respect with the business of the Borrower
or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) bankers' Liens, rights of setoff and similar Liens
incurred on deposits made in the ordinary course of business;
(j)Liens arising from precautionary UCC financing statements
regarding operating leases;
(k) purchase money Liens securing payables arising from the
purchase by the Borrower or any of its Subsidiaries of any equipment or
goods in the normal course of business, provided that such payables
shall not constitute Indebtedness;
(l) any interest or title of a lessor under any lease;
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(m) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Financing Leases or purchase money Liens to the
extent such Financing Leases or the Indebtedness secured by such
purchase money Liens are permitted by Section 9.2(c), provided that (x)
such Liens only serve to secure the payment of Indebtedness arising
under such Financing Leases or such purchase money Indebtedness and (y)
the Liens encumbering the assets giving rise to such Financing Leases
or securing such purchase money Indebtedness do not encumber any other
assets of the Borrower or any Subsidiary of the Borrower;
(n) Liens placed upon equipment or machinery used in the
ordinary course of business of the Borrower or any of its Subsidiaries
at the time of the acquisition thereof by the Borrower or any such
Subsidiary or within 90 days thereafter to secure Indebtedness incurred
to pay all or a portion of the purchase price thereof or to secure
Indebtedness incurred solely for the purpose of financing the
acquisition of any such equipment or machinery or extensions, renewals
or replacements of any of the foregoing for the same or a lesser
amount, provided that (x) such Indebtedness is permitted by Section
9.2(c) and (y) in all events, the Lien encumbering the equipment or
machinery so acquired does not encumber any other asset of the Borrower
or such Subsidiary;
(o) so long as the Indebtedness secured by such Liens is
permitted under Section 9.2, Liens on the assets of a Subsidiary (and
of the Borrower as successor to such Subsidiary, to the extent such
Subsidiary is merged into the Borrower in accordance with Section
9.5(a)) if such Liens existed at the time such Subsidiary was acquired
by the Borrower or a Subsidiary, provided that such Liens were not
created in anticipation thereof, and such Liens do not encumber
additional property after such Subsidiary is acquired or increase the
principal amount secured thereby after such Subsidiary is acquired; and
(p) Liens securing Indebtedness not in excess of $1,000,000 at
any time outstanding.
9.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 9.4 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;
(b) Guarantee Obligations in respect of the undrawn portion of
the face amount of letters of credit issued for the account of the
Borrower or any Subsidiary in an aggregate amount not to exceed
$2,000,000 at any one time outstanding for the Borrower and its
Subsidiaries; and
(c) any Guarantee.
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9.5 Limitation on Fundamental Changes. Except as otherwise permitted
under Sections 9.6, 9.8 and 9.9 enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
one or more wholly owned Subsidiaries of the Borrower (provided that
the wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation); and
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other wholly owned
Subsidiary of the Borrower.
9.5 Limitation on Sale of Assets. 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 Subsidiary, issue or sell any shares
of such Subsidiary's Capital Stock to any Person other than the Borrower or any
wholly owned Subsidiary, except:
(a) 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) seller indebtedness
evidenced by promissory notes, provided that the Net Proceeds of each
such transaction actually received in cash by the Borrower or a
Subsidiary are applied to the prepayment of the Loans to the extent
required under Section 5.5(c);
(b) other sales or dispositions of assets for proceeds
consisting solely of not less than (A) 75% cash and (B) seller
indebtedness evidenced by promissory notes, provided that the Net
Proceeds of each such transaction actually received in cash by the
Borrower or a Subsidiary are applied to the prepayment of the Loans to
the extent required under Section 5.5(c), and the aggregate book value
of all assets so sold in any period of twelve consecutive months shall
not exceed $2,000,000;
(c) the Borrower and its Subsidiaries may effect sales,
leases, transfers or other dispositions of leases, equipment, Inventory
of the Borrower and its Subsidiaries in the ordinary course of
business;
(d) the lease by the 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 Financing Lease not otherwise
permitted by Section 9.2);
(e) the investments, acquisitions and transfers or
dispositions of properties permitted pursuant to Section 9.9;
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(f) the Borrower and its Subsidiaries may consummate
sale-leaseback transactions so long as (i) each such sale-leaseback
transaction is an arms-length transaction, (ii) the aggregate
consideration received by the Borrower and its Subsidiaries in
connection with all such sale-leaseback transactions does not exceed
$5,000,000 in any fiscal year of the Borrower and (iii) such
sale-leaseback transaction is permitted under the terms of the Senior
Notes Indenture;
(g) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(h) as permitted by Section 9.5(b);
(i) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Domestic Subsidiary; and
(j) dispositions of property to the Borrower or to any
Domestic Subsidiary.
To the extent the Required Lenders (or, if required pursuant to Section 12.1,
all of the Lenders) waive the provisions of this Section 9.6 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 9.6, such Collateral (unless
sold to the Borrower or a Subsidiary of the Borrower) shall be sold or otherwise
disposed of free and clear of the Liens created by the Security Documents, and
the Administrative Agent and Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
9.7 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of the Borrower or
in Capital Stock of the Borrower of the same class and series as that
on which such dividends are payable) on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any
warrants or options to purchase any such Stock, whether now or
hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or
in obligations of the Borrower or any Subsidiary (such declarations,
payments, setting apart, purchases, redemptions, defeasances,
retirements, acquisitions and distributions being herein called
"Restricted Payments"), except:
(a) so long as no Event of Default has occurred and is
continuing, payments by the Borrower to ▇.▇. Childs for management
services pursuant to the Management Fee Agreement as permitted under
Section 9.11;
(b) any Subsidiary of the Borrower may pay cash dividends to
the Borrower or to a wholly-owned Subsidiary of the Borrower;
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(c) so long as no Default or Event of Default has occurred and
is continuing or would result therefrom, (i) the Borrower may
repurchase shares of Common Stock from Management Holders so long as
the sole consideration paid by the Borrower and its Subsidiaries in
connection with such repurchases is the issuance of the subordinated
notes described in Section 9.2(h), and (ii) the Borrower may pay
interest on such subordinated notes, provided that the sum of all such
interest payments under this clause (c) together with the amount of all
repurchases permitted under clause (d) below, shall not exceed $500,000
in any given year; and
(d) so long as no Event of Default has occurred and is
continuing or would result therefrom, the Borrower may redeem or
repurchase for cash, at fair value, the Capital Stock of the Borrower
(or options to purchase capital stock) from any employee of the
Borrower upon the death, disability, retirement or other termination of
such employee, provided, that all such repurchases under this clause
(d) together with all interest payments under clause (c) above, shall
not exceed $500,000 in any given year.
9.8 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any Capital
Expenditure provided that the Borrower and its Subsidiaries may make Capital
Expenditures during each fiscal period set forth below (taken as one accounting
period) so long as the aggregate amount of Capital Expenditures made under this
Section 9.8 does not exceed for any period set forth below the amount set forth
opposite such period:
Period Amount
------ ------
Fiscal quarter ending December 31, 1999 $13,000,000
Fiscal year ending December 31, 2000 $42,500,000
Fiscal year ending December 31, 2001 $42,500,000
Fiscal year ending December 31, 2002 $42,500,000
Fiscal year ending December 31, 2003 $42,500,000
January 1, 2004 through the Revolving Credit $42,500,000
Termination Date
In the event that the maximum amount which is permitted to be expended in
respect of Capital Expenditures during any fiscal period set forth in this
Section (without giving effect to this paragraph) is not fully expended during
such fiscal period, the maximum amount which may be expended during the
immediately succeeding fiscal period set forth in this Section shall be
increased by such unutilized amount (the "Carryover Amount"), provided that such
increase shall not exceed $5,000,000 in any such fiscal period, provided further
that any such Carryover Amount, if not utilized in such immediately succeeding
fiscal period shall not be carried forward to subsequent fiscal periods (it
being understood that during each fiscal period set forth in this Section, the
Capital Expenditures made or incurred shall be applied first to the Capital
Expenditure limit set forth for such fiscal period in this Section and
thereafter to the Carryover Amount from the prior fiscal period).
9.9 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other
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securities of or any assets constituting a business unit of, or make any other
investment in, any Person, except :
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) the Vital Choice Acquisition;
(d) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and
its Subsidiaries not to exceed $500,000 at any one time outstanding;
(e) loans and advances in the ordinary course of business to
employees in connection with the purchase or retention of shares of
Capital Stock by such officers in an aggregate principal amount not to
exceed $250,000 at any time outstanding shall be permitted;
(f) investments by the Borrower in any Domestic Subsidiary,
and investments by any Subsidiary in the Borrower and in a Domestic
Subsidiary;
(g) the investments held by the Borrower on the Closing Date
and described on Schedule 9.8, provided that any additional investments
made with respect thereto shall be permitted only if independently
justified under the other provisions of this Section;
(h) the intercompany Indebtedness described in Section 9.2;
(i) the 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;
(j) the Borrower may hold any promissory notes acquired in
connection with the dispositions of assets permitted under Section
9.6(a) or (b);
(k) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents;
(l) the Borrower and its Subsidiaries may make additional
Investments in an aggregate amount not to exceed $2,000,000; and
(m) Permitted Acquisitions.
9.10 Limitation on Optional Payments and Modifications of Agreements.
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(a) Make any optional payment on or redemption or purchase of any Indebtedness
(other than the Loans), (b) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of any Indebtedness (other
than any such amendment, modification or change which would extend the maturity
or reduce the amount of any payment of principal thereof or which would reduce
the rate or extend the date for payment of interest thereon), or (c) amend,
modify or change, or consent or agree to any amendment, modification or change
to any of the Vital Choice Acquisition Documents, the Stockholders Agreement,
any of the Senior Notes Documents or the Management Fee Agreement, other than
modifications to the Vital Choice Acquisition Documents or the Stockholders
Agreement (except Section 2.3 thereof) which are neither material nor reasonably
likely in any manner to be in any way adverse to the interest of the Lenders.
9.11 Limitation on Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, 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 the Borrower or a Subsidiary other
than on terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm's length transaction with a Person other than an Affiliate
of the Borrower or a Subsidiary; provided that the foregoing restrictions shall
not apply to (i) advances to officers or employees of the Borrower and its
Subsidiaries to the extent permitted by Section 8.9, (ii) Restricted Payments
permitted under Section 8.7, (iii) transactions between the 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 the Borrower and of its Subsidiaries, (v) the
Stockholders Agreement and (vi) so long as no Default or Event of Default has
occurred or is continuing or would result therefrom, the payment of management
fees to ▇.▇. Childs and/or its Affiliates in an aggregate amount not to exceed
$300,000 in any fiscal year of the Borrower plus the reimbursements of
reasonable out-of-pocket fees and expenses.
9.12 Limitation on Sales and Leasebacks. Except as permitted under
Section 9.6, enter into any arrangement with any Person providing for the
leasing by the Borrower or any Subsidiary of real or personal property which has
been or is to be sold or transferred by the Borrower or such Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Borrower or such Subsidiary.
9.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than December 31.
9.14 Limitation on Negative Pledge Clauses. Enter into with any Person
any agreement which prohibits or limits the ability of the Borrower or any of
its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
except:
(a) this Agreement and the other Loans Documents;
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(b) any industrial revenue bonds, purchase money mortgages or
Financing Leases permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the assets
financed thereby);
(c) the Senior Notes Documents;
(d) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(e) any restriction or encumbrance with respect to a
Subsidiary of the Borrower imposed pursuant to an agreement which has
been entered into for the sale or disposition of a or substantially all
of the capital stock or assets of such Subsidiary, so long as such sale
or disposition is permitted under this Agreement;
(f) assets subject to contracts for sale thereof permitted in
accordance with Section 9.6; and
(g) Liens permitted under Section 9.3 and any documents or
instruments governing the terms of any Indebtedness or other
obligations secured by any such Liens, provided that such prohibitions
or restrictions apply only to the assets subject to such Liens.
9.15 Limitation on Lines of Business. Not, and not permit any of the
Subsidiaries to, materially alter the character of the business of the Borrower
and its Subsidiaries from that conducted on the Closing Date (after giving
effect to the consummation of the Vital Choice Acquisition) or conduct such
business in a manner which is not consistent with past practice.
9.16 Governing Documents. Amend its articles of incorporation (except
to increase the number of authorized shares of common stock), partnership
agreement or other Governing Documents, without the prior written consent of the
Administrative Agent, which shall not be unreasonably withheld or delayed.
9.17 Limitation on Subsidiary Formation. Form any Subsidiary unless all
requirements of Section 8.11 shall have been satisfied within the time period
set forth therein or, if no such time period is set forth, immediately upon the
formation of such Subsidiary.
9.18 Limitation on Securities Issuances. Permit any Subsidiary to issue
any shares of Capital Stock that are not "certificated securities" (as defined
in ss. 8-102 of the Uniform Commercial Code as in effect in the State of New
York on the date hereof) and are not pledged to the Administrative Agent
pursuant to the Pledge Agreement as required under Section 8.11.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Revolving Credit Loan
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when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to pay any interest on any Revolving Credit Loan,
or any other amount payable hereunder or under the other Loan Documents
or the Fee Letter, within five days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document
or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with
this Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed
made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 8.11(b)
and (c), Section 9, Section 5 of the Pledge Agreement, and Section 5 of
the Security Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after whichever of the
following dates is the earliest: (i) the date the Borrower gives notice
of such failure to the Administrative Agent, (ii) the date the Borrower
should have given notice of such failure to the Administrative Agent
pursuant to Section 8.7, and (iii) the date the Administrative Agent
gives notice of such failure to the Borrower; or
(e) (i) Any event occurs which constitutes an "Event of
Default" under the Senior Notes Indenture or which would constitute an
"Event of Default" under the Senior Notes Indenture whether or not the
same has been waived in accordance with the Senior Notes Documents; or
(ii) the Borrower or any of its Subsidiaries shall (A) default in any
payment of principal of or interest of any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, beyond the period
of grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created, if the aggregate amount of the Indebtedness and/or Guarantee
Obligations in respect of which such default or defaults shall have
occurred is at least $5,000,000; or (B) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or Administrative Agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable; or
(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
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have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Borrower or
any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower
or any of its Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $1,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full
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force and effect, or the Borrower or any other Loan Party which is a
party to any of the Security Documents shall so assert or (ii) the Lien
created by any of the Security Documents shall cease to be enforceable
and of the same effect and priority purported to be created thereby
other than as a result of the action or inaction of the Agents or any
Lender; or
(j) Any Guarantee shall cease, for any reason, to be in full
force and effect or any Guarantor shall so assert; or
(k) (i) prior to a Public Offering (w) ▇.▇. Childs and its
Affiliates shall cease to own, beneficially and of record (not taking
into account any securities exercisable, convertible or exchangeable
for or into such Voting Stock which are owned by ▇.▇. Childs and its
Affiliates), Voting Stock representing more than 50% of the Borrower's
Voting Stock on a fully-diluted basis assuming the exercise of all
securities exercisable, convertible or exchangeable for or into such
Voting Stock, (x) ▇.▇. Childs and its Affiliates shall cease to have
the right to elect a majority of the members of the Board of Directors
of the Borrower or (y) for any reason whatsoever, any "Person" or
"group" (as such terms are defined in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
more than 35% of the outstanding Voting Stock of the Borrower, (ii)
after a Public Offering, (x) ▇.▇. Childs and its Affiliates shall cease
to own, beneficially and of record (not taking into account any
securities exercisable, convertible or exchangeable for or into such
Voting Stock which are owned by ▇.▇. Childs and its Affiliates), Voting
Stock worth more than 35% of the Borrower's Voting Stock on a
fully-diluted basis assuming the exercise of all securities
exercisable, convertible or exchangeable for or into such Voting Stock
or (y) for any reason whatsoever, any "Person" or "group" (as such
terms are defined in Sections 13(d) and 14(d) of the Exchange Act) is
or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than
30% of the outstanding Voting Securities of the Borrower and (iii) the
occurrence of a Senior Note Change of Control;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Revolving Credit Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement shall immediately become due and payable, and
(B) if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by written notice to the Borrower declare the
Revolving Credit Commitments to be terminated forthwith, whereupon the Revolving
Credit Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by written notice to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit have presented the documents required
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thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender and the L/C Participants, a security interest in such cash
collateral to secure all obligations of the Borrower under this Agreement and
the other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the Notes. After all
such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the Revolving Credit Notes shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower. The Borrower shall execute and deliver to the Administrative
Agent, for the account of the Issuing Lender and the L/C Participants, such
further documents and instruments as the Administrative Agent may reasonably
request to evidence the creation and perfection of the within security interest
in such cash collateral account.
SECTION 11. THE AGENTS
11.1 Appointment. Each Lender hereby irrevocably designates and
appoints Canadian Imperial Bank of Commerce as the Administrative Agent of such
Lender under this Agreement and the other Loan Documents, and appoints Key
Corporate Capital Inc. as the Collateral Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent and the Collateral Agent, in such respective
capacities, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent or Collateral
Agent, as applicable by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent and the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent or Collateral Agent, as applicable.
11.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Neither Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
11.3 Exculpatory Provisions. Neither Agent nor any of its officers,
directors,
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employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Borrower or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by such Agent under
or in connection with, this Agreement or any other Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or for any failure of the Borrower to
perform its obligations hereunder or thereunder. Neither Agent shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower.
11.4 Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower or any other Loan Party),
independent accountants and other experts selected by such Agent. Each Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
11.5 Notice of Default. Neither Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Agents shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Agents shall have received such directions,
each Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither Agent nor any of its officers, directors, employees,
agents,
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attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by either Agent hereinafter taken, including any review of the
affairs of the Borrower or any other Loan Party, shall be deemed to constitute
any representation or warranty by either Agent to any Lender. Each Lender
represents to the Agents that it has, independently and without reliance upon
either Agent or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon either
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 analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or under the other Loan Documents, neither Agent
shall have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower or any
other Loan Party which may come into the possession of either Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
11.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Credit Exposure Percentages in effect on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent in any way relating to
or arising out of, the Revolving Credit Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from such Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.
11.8 Agent in Its Individual Capacity. Each Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower and the other Loan Parties as though such Agent were
not the Administrative Agent or Collateral Agent, as applicable, hereunder and
under the other Loan Documents. With respect to the Loans made by it, each Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Agent, and the terms "Lender" and "Lenders" shall include each Agent in its
individual capacity.
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11.9 Successor Agent. Either Agent may resign as Administrative Agent
or Collateral Agent, as applicable, upon 30 days' notice to the Lenders. If an
Agent shall resign as Administrative Agent or Collateral Agent, as applicable,
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor Agent for the Lenders, which
successor Agent shall be approved by the Borrower, whereupon such successor
Agent shall succeed to the rights, powers and duties of the Agent it replaces,
and the term "Administrative Agent" or "Collateral Agent," as applicable, shall
mean such successor Agent effective upon such appointment and approval, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Loans. After any retiring
Agent's resignation as Agent, the provisions of this Section 11 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent or Collateral Agent, as applicable, under this Agreement
and the other Loan Documents.
11.10 Arranger, Bookrunner and Syndication Agent. The Arranger,
Bookrunner and Syndication Agent shall have no obligations or duties under the
Credit Agreement or the other Loan Documents.
SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 12.1. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or of any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the aggregate amount or extend the expiration date
of any Lender's Revolving Credit Commitment, in each case without the consent of
each Lender affected thereby, or (ii) amend, modify or waive any provision of
this Section 12.1 or reduce the percentage specified in the definition of
Required Lenders, or amend any provision of the Loan Documents which by its
terms specifies an approval, consent, or vote of all of the Lenders, or consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents or release all or
substantially all of the Collateral, or release all or substantially all of the
Guarantors from their obligations under the Guarantees, in each case without the
written consent of all the Lenders (subject to the provisions of Section 5.14),
or (iii) amend, modify or waive any provision of Section 11 without the written
consent of the then Administrative Agent and Collateral Agent. Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the Lenders and shall be binding upon the Borrower, the Lenders, the Agents
and all
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future holders of the Revolving Credit Loans. In the case of any waiver, the
Borrower, the Lenders and the Agents shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon.
12.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, [three] days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been electronically confirmed,
addressed as follows in the case of the Borrower, the Administrative Agent and
the Collateral Agent, and as set forth in Schedule 1 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrower: Universal Hospital Services, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Administrative Agent: Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇ / Agency
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Collateral Agent: Key Corporate Capital Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.3, 2.5, 4.1, 5.2, 5.4 or 5.8(b) shall not
be effective until received.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
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12.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Revolving Credit Loans hereunder.
12.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent, the Collateral Agent and the Arranger for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of counsel to the Collateral Agent and the
Administrative Agent, (b) to pay or reimburse each Lender, the Administrative
Agent, the Collateral Agent and the Arranger for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent and the Collateral Agent, (c) to pay,
indemnify, and hold each Lender, the Administrative Agent, the Collateral Agent
and the Arranger harmless from, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender, the Administrative Agent, the
Collateral Agent and the Arranger, and their respective officers, directors,
employees, agents and attorneys harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower, any of its Subsidiaries, the Parent or any of the
Properties (all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder to
the Administrative Agent, the Collateral Agent, the Arranger or any Lender with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Administrative Agent, the Collateral Agent, the
Arranger or any such Lender or (ii) legal proceedings commenced against the
Administrative Agent, the Collateral Agent, the Arranger or any such Lender by
any security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
The agreements in this Section shall survive repayment of the Revolving Credit
Loans and all other amounts payable hereunder.
12.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the
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Borrower, the Lenders, the Administrative Agent, the Collateral Agent and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any
Revolving Credit Loan owing to such Lender, any Revolving Credit Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Revolving Credit Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. The Borrower agrees that if amounts outstanding under this Agreement
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence and during the continuance of an Event of Default,
each Participant shall, to the maximum extent permitted by applicable law, be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 12.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 5.10, 5.11, and 5.12 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 5.11, such Participant shall have
complied with the requirements of said Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Administrative Agent and the Borrower (which shall not be unreasonably
withheld), to an additional bank or financial institution ("an Assignee") all or
any part of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit I, with appropriate completions (an "Assignment and Acceptance"),
executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register, provided that, in the case of any such
assignment to an additional bank or financial institution (unless otherwise
consented to by the Borrower and the Administrative Agent) the sum of the
aggregate principal amount of the Revolving Credit Loans, the aggregate amount
of the L/C Obligations and the aggregate amount of the Available RC Commitments
being assigned shall be not less than $5,000,000. Upon such execution, delivery,
acceptance and recording, from and after the effective
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date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with Revolving Credit Commitments as set forth therein, and (y) the assigning
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto).
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in
Section 12.2 a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Revolving Credit Commitments of, and
principal amounts of the Revolving Credit Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative
Agent and the Lenders may (and, in the case of any Revolving Credit
Loan or other obligation hereunder not evidenced by a Revolving Credit
Note, shall) treat each Person whose name is recorded in the Register
as the owner of a Revolving Credit Loan or other obligation hereunder
as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any
assignment of any Revolving Credit Loan or other obligation hereunder
not evidenced by a Revolving Credit Note shall be effective only upon
appropriate entries with respect thereto being made in the Register.
The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the
Administrative Agent) together with payment to the Administrative Agent
of a registration and processing fee of $3,500, the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii)
on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective
Transferee, subject to the provisions of Section 12.15, any and all
financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by
or on behalf of the Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments
of Revolving Credit Loans and Revolving Credit Notes relate only to
absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Revolving Credit Loan or
Revolving Credit Note to any
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Federal Reserve Bank in accordance with applicable law.
12.7 Adjustments; Set-off.
(a) If any Lender (a "benefited Lender") shall at any time
receive any payment of all or part of its Revolving Credit Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 9(f), or otherwise),
in a greater proportion than any such payment to or collateral received
by any other Lender, if any, in respect of such other Lender's
Revolving Credit Loans, or interest thereon, such benefited Lender
shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Revolving Credit Loan, or
shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Revolving
Credit Loan may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as
if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice
to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity,
by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for
the credit or the account of the Borrower. Each Lender agrees promptly
to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
12.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission of signature pages hereto), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
12.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such
-81-
provision in any other jurisdiction.
12.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
12.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
12.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 11.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
12.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
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(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Borrower and the other Loan Parties,
on one hand, and Administrative Agent and Lenders, on the other hand,
in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
12.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
12.15 Confidentiality. Each Lender agrees to keep confidential any
written or oral information (a) provided to it by or on behalf of the Borrower
or any of its Subsidiaries pursuant to or in connection with this Agreement or
(b) obtained by such Lender based on a review of the books and records of the
Borrower or any of its Subsidiaries; provided that nothing herein shall prevent
any Lender from disclosing any such information (i) to the Administrative Agent
or any other Lender, (ii) to any Transferee which receives such information
having been made aware of the confidential nature thereof and having agreed in
writing to be bound by the terms of this Section 12.5, (iii) to its employees,
directors, Administrative Agents, attorneys, accountants and other professional
advisors, (iv) upon the request or demand of any examiner or other Governmental
Authority having jurisdiction over such Lender, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (vi) which has been publicly disclosed other
than in breach of this Agreement, or (vii) in connection with the exercise of
any remedy hereunder.
[Signature Pages Follow]
-83-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
UNIVERSAL HOSPITAL SERVICES, INC.
By: _____________________________
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: _____________________________
Title:
KEY CORPORATE CAPITAL INC.,
as Collateral Agent
By: _____________________________
Title:
▇▇▇▇▇▇ FINANCIAL, INC., as Syndication
Agent
By: _____________________________
Title:
CIBC INC.
By: _____________________________
Title:
FLEET LEVERAGED LOAN PORTFOLIO
By: _____________________________
Title:
NATIONAL BANK OF CANADA
By: _____________________________
Title:
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: _____________________________
Title:
Schedule 1
LENDERS, COMMITMENTS AND APPLICABLE LENDING OFFICES
Lender and Lending Offices Revolving Credit Commitment
------------------------------------------------- ------------------------------
CIBC Inc. $17,500,000
---------
Applicable Lending Offices:
Base Rate Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------- ------------------------------
Fleet National Bank $10,000,000
-------------------
Applicable Lending Offices:
Base Rate Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ So
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------- ------------------------------
▇▇▇▇▇▇ Financial, Inc. $17,500,000
----------------------
Applicable Lending Offices:
Base Rate Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------- ------------------------------
------------------------------------------------- ------------------------------
Key Corporate Capital Inc. $12,500,000
--------------------------
Applicable Lending Offices:
Base Rate Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇-▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------- ------------------------------
National Bank of Canada $10,000,000
-----------------------
Applicable Lending Offices:
Base Rate Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: 312-558-6461
------------------------------------------------- ------------------------------
Transamerica Business Credit Corporation $10,000,000
----------------------------------------
Applicable Lending Offices:
Base Rate Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇ ▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------- ------------------------------
Total: $77,500,000
------------------------------------------------- ------------------------------
EXHIBIT F
CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of October
25, 1999, among Universal Hospital Services, Inc., the lenders parties thereto,
Canadian Imperial Bank of Commerce, as administrative agent, ▇▇▇▇▇▇ Financial,
Inc., as syndication agent and Key Corporate Capital Inc., as collateral agent
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Pursuant to the provisions of Section 5.11(b)(i)(B) of the
Credit Agreement, the undersigned hereby certifies that it is not a "bank" as
such term is defined in Section 881(c)(3)(A) of the Internal Revenue Code of
1986, as amended.
[NAME OF LENDER]
By: _____________________________
Title:
Date: ______________________, ____
Schedule 6.4
GOVERNMENTAL CONSENT
None.
Schedule 6.6
LITIGATION
None.
Schedule 6.15
SUBSIDIARIES
PART A - SUBSIDIARIES
None.
PART B - BORROWER
Universal Hospital Services, Inc. (the "Company") is a Minnesota corporation.
The authorized capital stock of the Company consists of 50,000,000 shares of
Common Stock, par value $.01 per share and 10,000,000 shares of Preferred Stock,
par value $.01 per share, 25,000 shares of which are designated Series A 12%
Cumulative Convertible Accruing Pay-In-Kind Preferred Stock (the "Series A
Preferred Stock") and 25,000 shares of which are designated Series B 13%
Cumulative Accruing Pay-In-Kind Preferred Stock (the "Series B Preferred
Stock"). As of October 25, 1999, 16,023,450 shares of Common Stock and 6,246
shares of the Series B Preferred Stock were issued and outstanding and 5,000,000
shares of Common Stock were reserved for issuance pursuant to the Company's
employee stock option plan. No shares of the Series A Preferred Stock are issued
and outstanding. Except for a Warrant dated as of December 18, 1998 for the
purchase of 350,000 shares of the Company's Common Stock, the Company has no
other equity securities or securities containing any equity features authorized,
issued or outstanding.
Schedule 6.16
FILING JURISDICTIONS
Alabama Secretary of State
Alaska Secretary of State
Arizona Secretary of State
Arkansas Secretary of State
Arkansa County, Arkansas
▇▇▇▇▇▇ County, Arkansas
▇▇▇▇▇ County, Arkansas
▇▇▇▇▇▇▇ County, Arkansas
▇▇▇▇▇▇ County, Arkansas
▇▇▇▇▇▇▇▇▇ County, Arkansas
Garland County, Arkansas
Independence County, Arkansas
Jefferson County, Arkansas
▇▇▇▇▇▇▇ County, Arkansas
Mississippi County, Arkansas
▇▇▇▇▇▇▇▇ County, Arkansas
▇▇▇▇ County, Arkansas
Pulaski County, Arkansas
Sebastian County, Arkansas
▇▇▇▇▇▇ County, Arkansas
St. ▇▇▇▇▇▇▇ County, Arkansas
Washington County, Arkansas
California Secretary of State
Colorado Secretary of State
Connecticut Secretary of State
Delaware Secretary of State
District of Columbia
Florida Secretary of State
▇▇▇▇▇▇ County, Georgia (No State level filing)
Hawaii Secretary of State
Idaho Secretary of State
Illinois Secretary of State
Indiana Secretary of State
▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇ County, Indiana
Clinton County, Indiana
Daviess County, Indiana
De ▇▇▇▇ County, Indiana
Decatur County, Indiana
Delaware County, Indiana
▇▇▇▇▇▇ County, Indiana
Elkhart County, Indiana
Fayette County, Indiana
▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇ County, Indiana
Grant County, Indiana
▇▇▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇ County, Indiana
Jasper County, Indiana
▇▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇▇ County, Indiana
▇▇▇▇ County, Indiana
Kosciusko County, Indiana
La Porte County, Indiana
Lake County, Indiana
Lawrence County, Indiana
Madison County, Indiana
▇▇▇▇▇▇ County, Indiana
Monroe County, Indiana
▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇ County, Indiana
Perry County, Indiana
▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇ County, Indiana
▇▇▇▇▇▇ County, Indiana
Rush County, Indiana
▇▇▇▇▇ County, Indiana
St. ▇▇▇▇▇▇ County, Indiana
Tippecanoe County, Indiana
▇▇▇▇▇▇ County, Indiana
Vanderburgh County, Indiana
Vigo County, Indiana
Wabash County, Indiana
▇▇▇▇▇ County, Indiana
White County, Indiana
Iowa Secretary of State
Kansas Secretary of State
Kentucky Secretary of State
▇▇▇▇ County, Kentucky
▇▇▇▇▇ County, Kentucky
▇▇▇▇ County, Kentucky
▇▇▇▇▇ County, Kentucky
Breckinridge County, Kentucky
▇▇▇▇▇▇▇▇ County, Kentucky
▇▇▇▇▇▇▇▇ County, Kentucky
▇▇▇▇▇▇▇ County, Kentucky
Christian County, Kentucky
Daviess County, Kentucky
Fayette County, Kentucky
▇▇▇▇▇▇ County, Kentucky
▇▇▇▇▇▇ County, Kentucky
Jefferson County, Kentucky
Kenton County, Kentucky
Laurel County, Kentucky
▇▇▇ County, Kentucky
Madison County, Kentucky
▇▇▇▇▇▇▇▇▇ County, Kentucky
Monroe County, Kentucky
Muhlenberg County, Kentucky
▇▇▇▇▇▇ County, Kentucky
St. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana (No State level filing)
Maine Secretary of State
Maryland Secretary of State
Massachusetts Secretary of State
Agawam Town Clerk, Massachusetts
Arlington Town Clerk, Massachusetts
Attleboro Town Clerk, Massachusetts
Auburndale Town Clerk, Massachusetts
Ayer Town Clerk, Massachusetts
Billerica Town Clerk, Massachusetts
Beverly Town Clerk, Massachusetts
Boston Town Clerk, Massachusetts
Braintree Town Clerk, Massachusetts
Brighton Town Clerk, Massachusetts
Brockton Town Clerk, Massachusetts
Burlington Town Clerk, Massachusetts
Cambridge Town Clerk, Massachusetts
Canton Town Clerk, Massachusetts
Chelsea Town Clerk, Massachusetts
Danvers Town Clerk, Massachusetts
Dedham Town Clerk, Massachusetts
Dorchester Town Clerk, Massachusetts
Falls River Town Clerk, Massachusetts
Falmouth Town Clerk, Massachusetts
Framingham Town Clerk, Massachusetts
Haverhill Town Clerk, Massachusetts
Jamaica Plain Town Clerk, Massachusetts
Lawrence Town Clerk, Massachusetts
Leominster Town Clerk, Massachusetts
Lowell Town Clerk, Massachusetts
Lynn Town Clerk, Massachusetts
Marlborough Town Clerk, Massachusetts
Melrose Town Clerk, Massachusetts
Methuen Town Clerk, Massachusetts
Milton Town Clerk, Massachusetts
Natick Town Clerk, Massachusetts
Needham Town Clerk, Massachusetts
New Bedford Town Clerk, Massachusetts
Newburyport Town Clerk, Massachusetts
▇▇▇▇▇▇ Town Clerk, Massachusetts
North Billerica Town Clerk, Massachusetts
North Chelmsford Town Clerk, Massachusetts
Northampton Town Clerk, Massachusetts
▇▇▇▇▇▇▇ Town Clerk, Massachusetts
Peabody Town Clerk, Massachusetts
Plymouth Town Clerk, Massachusetts
Reading Town Clerk, Massachusetts
Roslindale Town Clerk, Massachusetts
Salem Town Clerk, Massachusetts
Saugus Town Clerk, Massachusetts
Stoughton Town Clerk, Massachusetts
Taunton Town Clerk, Massachusetts
Waltham Town Clerk, Massachusetts
Wareham Town Clerk, Massachusetts
Webster Town Clerk, Massachusetts
West Boylston Town Clerk, Massachusetts
Westborough Town Clerk, Massachusetts
Westfield Town Clerk, Massachusetts
Weymouth Town Clerk, Massachusetts
Winchester Town Clerk, Massachusetts
Woburn Town Clerk, Massachusetts
Worcester Town Clerk, Massachusetts
Michigan Secretary of State
Minnesota Secretary of State
Mississippi Secretary of State
Clay County, Mississippi
De ▇▇▇▇ County, Mississippi
▇▇▇▇▇▇▇ County, Mississippi
▇▇▇▇▇▇▇▇ County, Mississippi
▇▇▇▇▇ County, Mississippi
Lauderdale County, Mississippi
Lincoln County, Mississippi
▇▇▇▇▇▇▇ County, Mississippi
▇▇▇▇▇▇▇▇▇▇ County, Mississippi
Pearl River County, Mississippi
▇▇▇▇▇▇ County, Mississippi
▇▇▇▇▇▇▇ County, Mississippi
Missouri Secretary of State
▇▇▇▇▇ County, Missouri
▇▇▇▇▇ County, Missouri
▇▇▇▇▇▇ County, Missouri
▇▇▇▇▇ County, Missouri
▇▇▇▇▇▇▇▇ County, Missouri
▇▇▇▇▇▇ County, Missouri
Callaway County, Missouri
Camden County, Missouri
Cape Girardeau County, Missouri
Cass County, Missouri
Chariton County, Missouri
Clay County, Missouri County, Missouri
Clinton County, Missouri County, Missouri
▇▇▇▇ County, Missouri
Franklin County, Missouri
▇▇▇▇▇▇ County County, Missouri
▇▇▇▇▇ County, Missouri
▇▇▇▇▇▇▇ County, Missouri
Jefferson County, Missouri
Jasper County, Missouri
▇▇▇▇▇▇▇ County, Missouri
Lafayette County, Missouri
Lincoln County, Missouri
▇▇▇▇▇▇▇▇▇▇ County, Missouri
▇▇▇▇▇▇ County, Missouri
Moniteau County, Missouri
Pemiscot County, Missouri
Perry County, Missouri
▇▇▇▇▇▇ County, Missouri
▇▇▇▇▇▇ County, Missouri
Platte County, Missouri
Pulaski County, Missouri
Ray County, Missouri
Saint ▇▇▇▇▇▇▇ County, Missouri
Saint Francois County, Missouri
Saint ▇▇▇▇▇▇▇▇▇ County, Missouri
Saline County, Missouri
St. Louis County, Missouri
▇▇▇▇▇▇ County, Missouri
▇▇▇▇▇▇▇ County, Missouri
Montana Secretary of State
Nebraska Secretary of State
Nevada Secretary of State
New Hampshire Secretary of State
▇▇▇▇▇▇▇ County, New Hampshire
Grafton County, New Hampshire
Hillsborough County, New Hampshire
Merrimack County, New Hampshire
Rockingham County, New Hampshire
Strafford County, New Hampshire
New Jersey Secretary of State
New Mexico Secretary of State
New York Secretary of State
Albany County, New York
Allegheny County, New York
Bronx County, New York
▇▇▇▇▇▇ County, New York
Cattaraugus County, New York
Chautauqua County, New York
Chemung County, New York
Cortland County, New York
Erie County, New York
Genesee County, New York
Jefferson County, New York
Kings County, New York
▇▇▇▇▇▇▇▇▇▇ County, New York
Madison County, New York
Monroe County, New York
Nassau County, New York Oneida County, New York
Onondaga County, New York
Ontario County, New York
Orange County, New York
Orleans County, New York
Oswego County, New York
▇▇▇▇▇▇ County, New York
Queens County, New York
Rensselaer County, New York
Richmond County, New York
Rockland County, New York
Saratoga County, New York
Steuben County, New York
Suffolk County, New York
▇▇▇▇▇▇▇▇ County, New York
▇▇▇▇▇▇ County, New York
▇▇▇▇▇ County, New York
Westchester County, New York
Wyoming County, New York
▇▇▇▇▇ County, New York
New York City Register/New York County, New York
North Carolina Secretary of State
Alamance County, North Carolina
Alexander County, North Carolina
Alleghany County, North Carolina
Ashe County, North Carolina
Beaufort County, North Carolina
▇▇▇▇▇▇ County, North Carolina
Brunswick County, North Carolina
Buncombe County, North Carolina
Cabarrus County, North Carolina
Cartaret County, North Carolina
Catawba County, North Carolina
Chowan County, North Carolina
Cleveland County, North Carolina
Columbus County, North Carolina
Craven County, North Carolina
Cumberland County, North Carolina
Davidson County, North Carolina
Durham County, North Carolina
Edgecombe County, North Carolina
Forsyth County, North Carolina
Franklin County, North Carolina
Gaston County, North Carolina
Guilford County, North Carolina
Henderson County, North Carolina
Iredell County, North Carolina
Johnston County, North Carolina
Lenoir County, North Carolina
Lincoln County, North Carolina
Mecklenberg County, North Carolina
Moore County, North Carolina
Nash County, North Carolina
New Hanover County, North Carolina
Orange County, North Carolina
Pender County, North Carolina
Person County, North Carolina
Pitt County, North Carolina
Polk County, North Carolina
Randolph County, North Carolina
Robeson County, North Carolina
Rockingham County, North Carolina
Rowan County, North Carolina
Rutherford County, North Carolina
Scotland County, North Carolina
Stanly County, North Carolina
Surry County, North Carolina
Transylvania County, North Carolina
Union County, North Carolina
Vance County, North Carolina
Wake County, North Carolina
Washington County, North Carolina
Watauga County, North Carolina
Wayne County, North Carolina
Wilkes County, North Carolina
Wilson County, North Carolina
North Dakota Secretary of State
Ohio Secretary of State
▇▇▇▇▇ County, Ohio
Ashtabula County, Ohio
Belmont County, Ohio
▇▇▇▇▇ County, Ohio
▇▇▇▇▇▇ County, Ohio
▇▇▇▇▇ County, Ohio
Clermont County, Ohio
Columbiana County, Ohio
Coshocton County, Ohio
▇▇▇▇▇▇▇▇ County, Ohio
Cuyahoga County, Ohio
Darke County, Ohio
Defiance County, Ohio
Delaware County, Ohio
Erie County, Ohio
Fairfield County, Ohio
Franklin County, Ohio
Gallia County, Ohio
Geanga County, Ohio
▇▇▇▇▇▇ County, Ohio
▇▇▇▇▇▇▇▇ County, Ohio
▇▇▇▇▇▇ County, Ohio
Highland County, Ohio
Hocking County, Ohio
▇▇▇▇▇▇▇ County, Ohio
Jefferson County, Ohio
Lake County, Ohio
▇▇▇▇▇ County, Ohio
Lorain County, Ohio
▇▇▇▇▇ County, Ohio
Madison County, Ohio
Mahoning County, Ohio
▇▇▇▇▇▇ County, Ohio
Mercier County, Ohio
Miami County, Ohio
▇▇▇▇▇▇▇▇▇▇ County, Ohio
Muskingam County, Ohio
Noble County, Ohio
Pickaway County, Ohio
Pike County, Ohio
Portage County, Ohio
▇▇▇▇▇▇ County, Ohio
Richland County, Ohio
▇▇▇▇ County, Ohio
Scioto County, Ohio
Seneca County, Ohio
Shelby County, Ohio
▇▇▇▇▇ County, Ohio
Summit County, Ohio
Trumbull County, Ohio
Union County, Ohio
▇▇▇▇▇▇ County, Ohio
▇▇▇▇▇ County, Ohio
Cuyahoga County, Ohio
Franklin County, Ohio
▇▇▇▇▇▇▇▇ County, Ohio
Oklahoma County, Oklahoma
Oregon Secretary of State
Pennsylvania Secretary of State
Allegheny County, Pennsylvania
▇▇▇▇▇▇▇▇▇ County, Pennsylvania
Beaver County, Pennsylvania
Berks County, Pennsylvania
▇▇▇▇▇ County, Pennsylvania
Bucks County, Pennsylvania
▇▇▇▇▇▇ County, Pennsylvania
Cambria County, Pennsylvania
Centre County, Pennsylvania
▇▇▇▇▇▇▇ County, Pennsylvania
Cumberland County, Pennsylvania
Dauphin County, Pennsylvania
Delaware County, Pennsylvania
Erie County, Pennsylvania
Fayette County, Pennsylvania
Indiana County, Pennsylvania
Lackawanna County, Pennsylvania
Lancaster County, Pennsylvania
▇▇▇▇▇▇▇▇ County, Pennsylvania
Lehigh County, Pennsylvania
Luzerne County, Pennsylvania
Lycoming County, Pennsylvania
▇▇▇▇▇▇ County, Pennsylvania
Montgomery County, Pennsylvania
Monroe County, Pennsylvania
Perry County, Pennsylvania
Philadelphia County, Pennsylvania
Somerset County, Pennsylvania
Washington County, Pennsylvania
▇▇▇▇▇▇▇▇▇▇▇▇ County, Pennsylvania
York County, Pennsylvania
Rhode Island Secretary of State
South Carolina Secretary of State
South Dakota Secretary of State
Tennessee Secretary of State
Texas Secretary of State
Utah Secretary of State
Vermont Secretary of State
Virginia Secretary of State
Alexandria County, Virginia
Arlington County, Virginia
Augusta County, Virginia
Charlottesville County, Virginia
Chesapeake County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ County, Virginia
Emporia County, Virginia
Falls Church County, Virginia
Fairfax County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ County, Virginia
Fredericksburg County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ County, Virginia
Halifax County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ County, Virginia
Harrisburg County, Virginia
Harrisonburg County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ City County, Virginia
Loudoun County, Virginia
Lynchburg County, Virginia
Manassas County, Virginia
Martinsville County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ County, Virginia
Nansemond County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ News County, Virginia
Nohoway County, Virginia
Northhampton County, Virginia
Northumberland County, Virginia
Petersburg County, Virginia
Poquoson County, Virginia
Portsmouth County, Virginia
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ County, Virginia
Richmond County, Virginia
Roanoke County, Virginia
Shenandoah County, Virginia
Suffolk County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ County, Virginia
Virginia Beach County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ County, Virginia
Williamsburg County, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ County, Virginia
York County, Virginia
Independent City of Richmond, Virginia
Washington Secretary of State
West Virginia Secretary of State
Berkeley County, West Virginia
Brooke County, West Virginia
Cabell County, West Virginia
Greenbrier County, West Virginia
Harrison County, West Virginia
Kanawha County, West Virginia
Marshall County, West Virginia
Mercer County, West Virginia
Monongalia County, West Virginia
Wisconsin Secretary of State
Wyoming Secretary of State
▇▇▇▇▇▇▇▇ County, Wyoming
Schedule 6.19
INSURANCE
See Attached.
Schedule 6.22
ENVIRONMENTAL MATTERS
None.
Schedule 6.25
GOVERNMENTAL INVESTIGATIONS
----------------------------------------------------------------------------------------------------------------------
Investigating Party Type Period Investigated Name of Investigated Status
Party
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Internal Revenue Federal Income Tax 1996 (UHS) Open
Service
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
State of Illinois Sales and Use Tax 1996-1997 (HCI) Open
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
State of Missouri Income Tax 1996-1997 (HCI) Open
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
State of Louisiana Income (UHS) Completed 1998
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
State of Illinois Sales and Use Tax 1/94 to 12/96 (UHS) Completed 1997
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
State of Washington Sales and Use Tax 1/93 to 9/96 (UHS) Completed 1996
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
State of Missouri Sales and Use Tax 4/94 to 6/97 (UHS) Completed 1997
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
State of Virginia Sales and Use Tax 4/94 to 3/97 (UHS) Completed 1997
----------------------------------------------------------------------------------------------------------------------
In the ordinary course of business, the Company processes self-audits for state
income tax on a routine basis.
Schedule 9.2
EXISTING INDEBTEDNESS
According to GAAP as of September 30, 1999
10.25% Senior Notes, due 2008 $130,112,395
Capital Lease Obligation, due 2004 $ 1,292,547
Schedule 9.3
EXISTING LIENS
Jurisdiction: Minnesota Secretary of State
-------------------------------------------
Secured Party: Huntleigh Healthcare Inc.
File Number: 2058463
Filing Date: 8/4/98
Secured Party: Targa Financial, Inc.
Assignee: Norwest Equipment Finance, Inc.
File Number: 2064611
Filing Date: 8/28/98
Secured Party: ALARIS Medical Systems, Inc.
File Number: 2145064
Filing Date: 7/7/99
Secured Party: BMX MEDICAL, INC.
Assignee: ▇▇▇▇ ▇. ▇▇▇▇▇▇
File Number: 2161307
Filing Date: 9/10/99
Jurisdiction: Ohio Secretary of State
--------------------------------------
Secured Party: ALARIS Medical Systems, Inc.
File Number: 2145064
Filing Date: 7/7/99
Jurisdiction: Franklin County, Ohio
------------------------------------
Secured Party: ALARIS Medical Systems, Inc.
File Number: 2145064
Filing Date: 7/7/99
Schedule 9.4
EXISTING GUARANTEE OBLIGATIONS
None.
Schedule 9.8
EXISTING INVESTMENTS
None.