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Exhibit 10.7.1
FIRST AMENDMENT TO THREE-YEAR CREDIT AGREEMENT
This FIRST AMENDMENT TO THREE-YEAR CREDIT AGREEMENT (this
"Amendment"), dated as of June 20, 2000, is by and among LINCARE HOLDINGS INC.,
a Delaware corporation (the "Borrower"), each of the Borrower's Subsidiaries
(individually a "Guarantor" and collectively the "Guarantors"; together with
the Borrower, individually a "Credit Party", and collectively the "Credit
Parties"), the Required Lenders signatory hereto and BANK OF AMERICA, N. A., as
Agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Credit Parties, the Lenders and the Agent have entered
into that certain Three-Year Credit Agreement dated as of August 23, 1999 (the
"Existing Credit Agreement");
WHEREAS, the Borrower has requested, and the Lenders have agreed, to
amend certain provisions of the Existing Credit Agreement as more fully set
forth below.
NOW, THEREFORE, in consideration of the agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
PART I
DEFINITIONS
SUBPART 1.1 Certain Definitions. Unless otherwise defined herein
or the context otherwise requires, the following terms used in this Amendment,
including its preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit
Agreement as amended hereby.
"Amendment No. 1 Effective Date" is defined in Subpart 4.1.
SUBPART 1.2 Other Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the meanings provided in the Existing Credit
Agreement.
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PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part 2.
SUBPART 2.1 Amendments to Section 1.1. Section 1.1 of the
Existing Credit Agreement is hereby amended in the following respects:
(a) The definition of "Change of Control" is hereby
amended in its entirety to read as follows:
"Change of Control" means the occurrence of any of
the following events: (i) any Person or two or more Persons
acting in concert (other than Persons owning 30% or more of
the Voting Stock of the Borrower on the Closing Date) shall
have acquired beneficial ownership, directly or indirectly,
of, or shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of,
control over, Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing
30% or more of the combined voting power of all Voting Stock
of the Borrower, (ii) any Person or two or more Persons
acting in concert (other than Persons owning 30% or more of
the Voting Stock of the Borrower on the Closing Date) has the
ability directly or indirectly, to elect a majority of the
board of directors of the Borrower, (iii) during any period
of up to 12 consecutive months, commencing on the Closing
Date, individuals who at the beginning of such 12-month
period were directors of the Borrower shall cease for any
reason (other than the death, disability or retirement of an
officer of the Borrower that is serving as a director at such
time so long as another officer of the Borrower replaces such
Person as a director) to constitute a majority of the board
of directors of the Borrower; provided, however to the extent
there exist vacancies on the Board of Directors as of the
Closing Date or if after the Closing Date, the existing Board
of Directors increases the number of directors on the Board
of Directors by an amount not more than three, the
individuals named to fill such vacancies, if selected by a
majority of directors sitting as of the Closing Date, shall
be deemed for purposes of this clause (iii) to have been
appointed prior to the Closing Date or (iv) the occurrence of
a "Change of Control" under the Senior Note Purchase
Agreements, the Senior Notes, or other documents evidencing
the Senior Notes.
(b) The definition of "Permitted Acquisition" is hereby
amended in its entirety to read as follows:
"Permitted Acquisition" means an Acquisition by the
Borrower or any Subsidiary of the Borrower for the fair
market value of the Capital Stock or Property acquired,
provided that (i) the Capital Stock or Property acquired in
such
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Acquisition relates to a line of business similar to the
business of the Borrower or any of its Subsidiaries, (ii) in
the case of an Acquisition of Capital Stock of another
Person, (A) the board of directors (or other comparable
governing body) of such other Person shall have duly approved
such Acquisition and (B) such Person shall become a
wholly-owned direct or indirect Subsidiary of the Borrower,
(iii) the representations and warranties made by the Credit
Parties in any Credit Document shall be true and correct in
all material respects at and as if made as of the date of
such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate
to an earlier date and no Default or Event of Default exists
as of the date of such Acquisition (after giving effect
thereto) and (iv)(A) if the aggregate consideration for such
Acquisition, exceeds $25,000,000 but is less than
$35,000,000, the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon
giving effect to the Acquisition on a Pro Forma Basis, the
Borrower will be in compliance with all of the financial
covenants set forth in Section 7.11 or (B) if the aggregate
consideration (including cash and non-cash consideration and
any assumption of Indebtedness) for such Acquisition exceeds
$35,000,000 or if any such Acquisition would cause the
aggregate consideration for all Acquisitions in any fiscal
year to exceed $150,000,000, the Borrower shall have received
the approval of the Required Lenders, which approval shall be
given in the Required Lenders' sole discretion; provided,
however, that with respect to clause (B) above for fiscal
year 2000 only, if the aggregate consideration (including
cash and non-cash consideration and any assumption of
Indebtedness) for any Acquisition consummated after the
consummation of the United Medical Acquisition exceeds
$35,000,000 or if any such additional Acquisition would cause
the aggregate consideration for all Acquisitions consummated
after the consummation of the United Medical Acquisition to
exceed $50,000,000, the Borrower shall have received the
approval of the Required Lenders.
(c) The definition of "Pledge Agreement" is hereby
amended in its entirety to read as follows:
"Pledge Agreement" means (i) prior to the first date
on which the Borrower has issued any Senior Notes, the pledge
agreement dated as of the Closing Date in the form of Exhibit
1.1(a), as amended, modified, restated or supplemented from
time to time and (ii) thereafter, the "New Pledge Agreement"
described in Subpart 3.2(b) of Amendment No. 1, as amended,
modified, restated or supplemented from time to time.
(d) The following new definitions are added to
Section 1.1 of the Existing Credit Agreement in appropriate
alphabetical order:
"Amendment No. 1" means that certain First Amendment
to Three-Year Credit Agreement dated as of June 20, 2000 by
and among the Borrower, the Guarantors, the Required Lenders
signatory hereto and the Agent.
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"Intercreditor Agreement" means an intercreditor
agreement dated as of a date on or before July 31, 2000 and
in form and substance reasonably satisfactory to the Agent,
defining the relationship between the Agent and the Lenders,
on the one hand, and the Noteholders, on the other hand, with
respect to the relative rights and priorities with respect to
the Pledged Collateral and providing for the sharing of any
amounts recovered pursuant to the obligations of the
Guarantors under Section 4 and the guaranties of the Senior
Notes permitted under Section 8.1(j).
"Senior Note Purchase Agreements" means a collective
reference to note purchase agreements, dated as of a date on
or before July 31, 2000 and in form and substance reasonably
satisfactory to the Agent, among the Borrower and each of the
Senior Noteholders.
"Senior Noteholders" means a collective reference to
the holders from time to time of the Senior Notes and "Senior
Noteholder" means any one of them.
"Senior Notes" means a collective reference to
senior notes in an aggregate principal amount of up to
$150,000,000, and in form and substance reasonably
satisfactory to the Agent, to be issued by the Borrower on or
before July 31, 2000 pursuant to the Senior Note Purchase
Agreements, as such Senior Notes may be amended, modified,
restated or supplemented and in effect from time to time in
accordance with the terms thereof. The Senior Notes shall
rank pari passu with the Credit Party Obligations in priority
of payment and shall be secured by a lien on the Pledged
Collateral ranking pari passu with the lien of the Agent
therein.
"United Medical Acquisition" means the Acquisition
by the Borrower, on or prior to June 30, 2000, of
substantially all of the assets of United Medical, Inc., an
Arkansas corporation, for aggregate consideration of
approximately $123,000,000.
SUBPART 2.2 Amendments to Section 8.1. Clauses (h) and (i) of
Section 8.1 of the Existing Credit Agreement are hereby amended in their
entireties to read as follows and the following new clauses (j) and (k) are
added to such Section immediately thereafter:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to
contract, create, incur, assume or permit to exist any Indebtedness,
except:
****************
(h) Indebtedness owing by one Credit Party to
another Credit Party;
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(i) other Indebtedness hereafter incurred by
the Borrower not exceeding $10,000,000 in aggregate principal
amount at any time outstanding;
(j) Indebtedness of the Borrower arising under
the Senior Note Purchase Agreements and the Senior Notes in
an aggregate principal amount of up to $150,000,000; provided
that (i) the final maturity date of such Senior Notes occurs
after the Maturity Date and (ii) such Senior Note Purchase
Agreements and Senior Notes do not contain terms and
conditions which, when taken as a whole, are more restrictive
that the terms and conditions of the Credit Agreement; and
(k) Guaranty Obligations of any Guarantor with
respect to the Indebtedness of the Borrower permitted under
Section 8.1(j).
SUBPART 2.3 Amendments to Section 8.11. Section 8.11 of the
Existing Credit Agreement is hereby amended in its entirety to read as follows:
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party to,
directly or indirectly, create or otherwise cause or suffer to exist
or become effective any encumbrance or restriction on the ability of
any such Person to (a) pay dividends or make any other distributions
to any Credit Party on its Capital Stock or with respect to any other
interest or participation in, or measured by, its profits, (b) pay any
Indebtedness or other obligation owed to any Credit Party, (c) make
loans or advances to any Credit Party, (d) sell, lease or transfer any
of its properties or assets to any Credit Party, (e) grant a lien on
its properties or assets whether now owned or hereafter acquired or
(f) act as a Guarantor and pledge its assets pursuant to the Credit
Documents or any renewals, refinancings, exchanges, refundings or
extension thereof, except (in respect of any of the matters referred
to in clauses (a)-(d) above) for such encumbrances or restrictions
existing under or by reason of (i) this Credit Agreement and the other
Credit Documents, (ii) the Senior Note Purchase Agreements and the
Senior Notes or (iii) applicable law.
SUBPART 2.4 Amendments to Section 8.14. Section 8.14 of the
Existing Credit Agreement is hereby amended in its entirety to read as follows:
8.14 NO FURTHER NEGATIVE PLEDGES.
Except (a) pursuant to this Credit Agreement and the other
Credit Documents, (b) pursuant to the Senior Note Purchase Agreements
and the Senior Notes and (c) pursuant to any document or instrument
governing Indebtedness incurred pursuant to Section 8.1(c), provided
that any such restriction contained therein relates only to the asset
or assets constructed or acquired in connection therewith, the Credit
Parties will not permit any Consolidated Party to enter into, assume
or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties
or assets, whether now owned or hereafter acquired, or requiring the
grant of any security for such obligation if security is given for
some other obligation.
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PART III
CONSENT, AUTHORIZATION, ETC.
SUBPART 3.1 United Medical Acquisition. The Required Lenders
hereby consent to the United Medical Acquisition.
SUBPART 3.2 Execution of Intercreditor Agreement and Restated
Pledge Agreement; Indemnification of Collateral Agent.
(a) The Required Lenders hereby authorize and direct the
Agent, on behalf of the Lenders, at such time as any Senior Notes
shall be issued by the Borrower, to execute and deliver (i) the
Intercreditor Agreement and (ii) a pledge agreement (the "New Pledge
Agreement") amending and restating the Pledge Agreement for the
purpose of providing that the Pledged Collateral shall be held by Bank
of America as a collateral agent for the ratable benefit of the
Lenders and the Senior Noteholders (in such capacity, the "Collateral
Agent").
(b) The Credit Parties agree that, at such time as the
Intercreditor Agreement and the New Pledge Agreement shall have become
effective:
(i) to pay to the Collateral Agent all of its
out-of-pocket expenses in connection with the preparation,
execution and delivery of the Intercreditor Agreement and the
New Pledge Agreement and the transactions contemplated
thereby, including but not limited to the reasonable charges
and disbursements of counsel;
(ii) to pay to the Collateral Agent from time to
time reasonable compensation for all services rendered by it
under the Intercreditor Agreement and the New Pledge
Agreement;
(iii) to reimburse the Collateral Agent upon its
request for all reasonable expenses, disbursements and
advances incurred or made by the Collateral Agent in
accordance with any provision of the Intercreditor Agreement
or the New Pledge Agreement (including the reasonable
compensation and the expenses and disbursements of its agents
and counsel); and
(iv) to indemnify the Collateral Agent for, and
to hold it harmless against, any loss, liability or expense
incurred without gross negligence or willful misconduct on
the part of the Collateral Agent, arising out of or in
connection with the Intercreditor Agreement or the New Pledge
Agreement or any action taken or omitted by it thereunder or
in connection therewith, including, but not limited to, the
costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of
any of its powers or duties hereunder, and any loss,
liability, expense or claim arising out of its possession,
management, control, use or operation of the Pledged
Collateral.
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(c) At such time as the Intercreditor Agreement and the
New Pledge Agreement shall have become effective, the Lenders shall be
required to indemnify the Collateral Agent (to the extent not
reimbursed by the Credit Parties), ratably with the Senior
Noteholders, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Collateral Agent, without
gross negligence or willful misconduct on the part of the Collateral
Agent, arising out of the actions of the Collateral Agent under the
Intercreditor Agreement or the New Pledge Agreement or the
transactions contemplated thereby or the enforcement of any of the
terms thereof. The Lenders shall be subrogated to the rights of the
Collateral Agent with respect to all amounts paid by it pursuant to
this clause (b), and all such amounts shall constitute Credit Party
Obligations.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1 Amendment No. 1 Effective Date. This Amendment shall
be and become effective as of June 20, 2000 (the "Amendment No. 1 Effective
Date") when all of the conditions set forth in this Part 4 shall have been
satisfied, and thereafter this Amendment shall be known, and may be referred
to, as "Amendment No. 1."
SUBPART 4.2 Execution of Counterparts of Amendment. The Agent
shall have received counterparts of this Amendment, which collectively shall
have been duly executed on behalf of each of the Borrower, the Guarantors and
the Lenders.
SUBPART 4.3 Other Items. The Agent shall have received such
other documents, agreements or information which may be reasonably requested by
the Agent.
PART V
MISCELLANEOUS
SUBPART 5.1 Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Lenders that, after giving effect
to this Amendment, (a) no Default or Event of Default exists under the Credit
Agreement or any of the other Credit Documents and (b) the representations and
warranties set forth in Section 6 of the Existing Credit Agreement are, subject
to the limitations set forth therein, true and correct in all material respects
as of the date hereof (except for those which expressly relate to an earlier
date).
SUBPART 5.2 Reaffirmation of Credit Party Obligations. Each
Credit Party hereby ratifies the Credit Agreement and acknowledges and
reaffirms (a) that it is bound by all terms of the Credit Agreement applicable
to it and (b) that it is responsible for the observance and full performance of
its respective Credit Party Obligations.
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SUBPART 5.3 Cross-References. References in this Amendment to
any Part or Subpart are, unless otherwise specified, to such Part or Subpart of
this Amendment.
SUBPART 5.4 Instrument Pursuant to Existing Credit Agreement.
This Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered and applied in accordance with the terms and provisions
of the Existing Credit Agreement.
SUBPART 5.5 References in Other Credit Documents. At such time
as this Amendment No. 1 shall become effective pursuant to the terms of Subpart
4.1, all references in the Credit Documents to the "Credit Agreement" shall be
deemed to refer to the Credit Agreement as amended by this Amendment No. 1.
SUBPART 5.6 Counterparts/Telecopy. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement. Delivery of executed counterparts of the Amendment by
telecopy shall be effective as an original and shall constitute a
representation that an original shall be delivered.
SUBPART 5.7 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
SUBPART 5.8 Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SUBPART 5.9 General. Except as amended hereby, the Existing
Credit Agreement and all other Credit Documents shall continue in full force
and effect.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
BORROWER: LINCARE HOLDINGS INC.,
a Delaware corporation
By:
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Name:
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Title:
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GUARANTORS: LINCARE INC.,
a Delaware corporation
By:
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Name:
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Title:
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LINCARE PROCUREMENT INC.,
a Delaware corporation
By:
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Name:
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Title:
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LINCARE ASSET MANAGEMENT LP,
a Nevada limited partnership
BY: LINCARE HOLDINGS INC., A
DELAWARE CORPORATION, ITS GENERAL
PARTNER
By:
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Name:
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Title:
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LINCARE OF NEW YORK INC.,
a New York corporation
By:
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Name:
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Title:
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LINCARE PHARMACY SERVICES INC.,
a Delaware corporation
By:
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Name:
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Title:
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LINCARE LICENSING INC.,
a Delaware corporation
By:
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Name:
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Title:
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CONVACARE SERVICES INC.,
an Indiana corporation
By:
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Name:
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Title:
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LINCARE TRAVEL INC.,
a Delaware corporation
By:
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Name:
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Title:
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LENDERS: BANK OF AMERICA, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:
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Name:
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Title:
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BANKATLANTIC
By:
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Name:
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Title:
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BANK LEUMI LE - ISRAEL B.M.,
MIAMI AGENCY
By:
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Name:
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Title:
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COMERICA BANK
By:
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Name:
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Title:
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BANKERS TRUST COMPANY
By:
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Name:
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Title:
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FLEET NATIONAL BANK
By:
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Name:
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Title:
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THE FUJI BANK, LIMITED
By:
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Name:
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Title:
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THE INDUSTRIAL BANK OF JAPAN
LIMITED
By:
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Name:
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Title:
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MICHIGAN NATIONAL BANK
By:
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Name:
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Title:
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SCOTIABANC INC.
By:
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Name:
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Title:
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CREDIT LYONNAIS NEW YORK BRANCH
By:
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Name:
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Title:
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U.S. BANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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