Schedule 13E-3/A
Securities and Exchange Commission
Washington, D.C. 20549
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934
and Rule 13e-3
(ss. 240.13e-3) thereunder)
Amendment No. 4
(Final Amendment)
Universal Hospital Services, Inc.
---------------------------------
(Name of the Issuer)
J.W. Childs Equity Partners, L.P.,
Universal Hospital Services, Inc. and David E. Dovenberg
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(Name of Person(s) Filing Statement)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
91359L109
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(CUSIP Number of Class of Securities)
Mr. Steven G. Segal Mr. David E. Dovenberg
J.W. Childs Equity Partners, L.P. Universal Hospital Services, Inc.
One Federal Street 1250 Northland Plaza
21st Floor 3800 West 80th Street
Boston, Massachusetts 02110 Bloomington, Minnesota 55431-4442
(617) 753-1100 (612) 893-3200
with copies to:
Louis A. Goodman Elizabeth C. Hinck
Skadden, Arps, Slate, Meagher & Flom LLP Dorsey & Whitney LLP
One Beacon Street Pillsbury Center South
31st Floor 220 South Sixth Street
Boston, Massachusetts 02108-3194 Minneapolis, Minnesota 55402-1498
(617) 573-4800 (612) 340-2600
David B. Miller
Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota
55431-3901
(612) 336-3000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C or Rule
13e-3(c) under the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities
Act of 1933.
c. [ ] A tender offer. d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [ ]
Transaction The filing fee is calculated Amount of filing fee
valuation* pursuant to Section 13(e)(3) $17,854
$89,271,646.50 of the Securities and Exchange
Act of 1934
*Set forth the amount on which the filing fee is calculated and
state how it was determined.
[X ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $17,854
Form or Registration No.: Schedule 14A
Filing Party: Universal Hospital Services, Inc.
Date Filed: December 15, 1997
INTRODUCTION
This Amendment No. 4 to the Rule 13e-3 Transaction Statement on
Schedule 13E-3 originally filed with the Securities and Exchange Commission
(the "Commission") on December 15, 1997 (as amended through the date
hereof, the "Statement") is filed by Universal Hospital Services, Inc., a
Minnesota corporation (the "Company"), on its own behalf and as the
surviving corporation (the "Surviving Corporation") of the merger of UHS
Acquisition Corp., a Minnesota corporation ("Merger Sub"), with and into
the Company (the "Merger"), by J.W. Childs Equity Partners, L.P., a
Delaware limited partnership ("Childs"), and by David E. Dovenberg, an
individual resident of the State of Minnesota, to amend the Statement and
to report the results of the transaction to which the Statement relates.
All information set forth below should be read in connection
with the information contained or incorporated by reference in the
Statement as previously amended. Unless otherwise indicated, capitalized
terms used and not defined herein have the respective meanings ascribed
thereto in the Company's Proxy Statement dated January 26, 1998 relating to
the special meeting of the shareholders of the Company held on February 25,
1998, a copy of which is attached as Exhibit (d) to the Statement (the
"Proxy Statement").
On February 25, 1998, a recapitalization of the Company was
effected through the Merger (the Merger, together with the financings and
related transactions described below, the "Recapitalization"). In
connection with the Recapitalization: (i) shares of common stock, par value
$.01 per share, of the Company ("Common Stock") and options to purchase
shares of Common Stock outstanding immediately prior to the Effective Time
(as defined herein) (other than (a) shares as to which dissenters' rights
were perfected as described in the Proxy Statement, (b) any shares owned
directly or indirectly by Childs or (c) shares and options held by certain
Management Investors (as defined herein) who agreed that such shares and
options would remain outstanding) were converted into the right to receive
cash in the aggregate amount of approximately $84.7 million (net of
aggregate option exercise price) pursuant to the terms of the Merger
Agreement dated as of November 25, 1997 by and among Childs, Merger Sub and
the Company; (ii) the Company repaid outstanding borrowings of
approximately $38.8 million (including interest and prepayment penalties)
under existing loan agreements; (iii) the Company paid estimated fees and
expenses of $8.6 million related to the Recapitalization; and (iv) the
Company has agreed to pay approximately $3.3 million in severance payments
to certain non-continuing members of management. In order to finance the
Recapitalization, the Company: (i) received an equity contribution of
approximately $21.3 million in cash from the Childs Investors (as defined
herein) and certain Management Investors; (ii) issued $100.0 million in
aggregate principal amount of Notes (as defined herein); and (iii) borrowed
approximately $11.3 million under the Revolving Credit Facility (as defined
herein) and expects to borrow approximately an additional $3.3 million to
make the above mentioned severance payments. In addition, the Management
Investors retained approximately 186,776 shares in the Company having a
total value of approximately $2.9 million based upon the Merger
Consideration (including 170,787 shares retained by Mr. Dovenberg and his
spouse having a total value of approximately $2.6 million based upon the
Merger Consideration).
Immediately prior to the Effective Time, the Childs Investors
contributed an aggregate of approximately $20.7 million by wire transfer to
Merger Sub in exchange for approximately 1,338,527 shares of common stock,
par value $.01 per share, of Merger Sub ("Merger Sub Common Stock"). In
addition, in connection with the Recapitalization, certain Management
Investors purchased, upon the terms and subject to certain conditions
contained in Investment Representation and Stock Subscription Agreements by
and between the Surviving Corporation and each of certain Management
Investors dated February 25, 1998 ("Stock Subscription Agreements"),
approximately 37,143 shares of common stock, par value $.01 per share, of
the Surviving Corporation ("Surviving Corporation Common Stock") for an
aggregate purchase price of approximately $576,000. The Management
Investors also "rolled over" approximately 101,522 existing options to
purchase Common Stock (including 49,449 options to purchase Common Stock
held by Mr. Dovenberg) into options to purchase shares of Surviving
Corporation Common Stock. Following the Recapitalization, the Childs
Investors and the Management Investors held securities representing
approximately 80.4% and 19.6%, respectively, of the Surviving Corporation
Common Stock on a fully diluted basis. As used herein "Childs Investors"
shall mean Childs and certain related investors and affiliates, and
"Management Investors" shall mean certain members of the Company's
management team who agreed to purchase shares of Surviving Corporation
Common Stock and/or to allow their existing shares of Common Stock and
options to purchase shares of Common Stock to remain outstanding and "roll
over" into shares of Surviving Corporation Common Stock and options to
purchase shares of Surviving Corporation Common Stock, as the case may be
(the "Management Placement").
Pursuant to the Merger Agreement, at the effective time of the
Merger (the "Effective Time"), (a) each share of Merger Sub Common Stock
issued and outstanding immediately prior to the Effective Time was
automatically converted into and became one validly issued, fully paid and
nonassessable share of Surviving Corporation Common Stock, and the separate
existence of Merger Sub ceased and (b) each share of Common Stock, issued
and outstanding immediately prior to the Effective Time, together with the
associated preferred stock purchase rights (other than (i) shares as to
which dissenters' rights were perfected as described in the Proxy
Statement, (ii) any shares owned directly or indirectly by Childs or (iii)
shares held by certain Management Investors who agreed that such shares
would remain outstanding), was automatically converted into the right to
receive $15.50 in cash.
Upon consummation of the Merger, the Common Stock ceased to be
qualified for inclusion on the Nasdaq National Market and became eligible
for termination of registration pursuant to Rule 12(g)(4) of the Exchange
Act.
Item 1. Issuer and Class of Security Subject to the Transaction.
Item 1 of the Statement is hereby amended and supplemented as
follows:
(b) On February 25, 1998, the Board of Directors of the
Surviving Corporation declared a dividend of nine shares of Surviving
Corporation Common Stock for each share of Surviving Corporation Common
Stock then outstanding (the "Stock Dividend") to be effected immediately
following the closing of the purchase and sale of Surviving Corporation
Common Stock pursuant to the Management Placement (the "Stock Dividend
Effective Time"). After the Effective Time and immediately following the
Stock Dividend Effective Time there were approximately 15.6 million shares
of Common Stock outstanding held by approximately 60 holders of record.
(c) As a result of the Merger, the Common Stock ceased to be
qualified for inclusion on the Nasdaq National Market and became eligible
for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act.
Item 5. Plans or Proposals of the Issuer or Affiliate.
Item 5 of the Statement is hereby amended and supplemented as
follows:
(a) The Merger was consummated by the filing of the Articles of
Merger with the Secretary of State of the State of Minnesota on
February 25, 1998.
(c) At the Effective Time, the existing members of the Board of
Directors of Merger Sub became the Board of Directors of the Surviving
Corporation. In addition, immediately subsequent to the Effective Time, the
Board of Directors of the Surviving Corporation resolved (i) to fix the
number of directors constituting the Board of Directors of the Surviving
Corporation at four and (ii) to appoint David E. Dovenberg and Jerry D.
Horn as Directors of the Surviving Corporation to fill the two vacancies
created by the amendment described above.
(d) The Introduction and Item 6 of this Amendment No. 4 to the
Statement are hereby incorporated herein by reference in their entirety.
(f) On February 25, 1998, after the closing of the Merger, a
Certificate and Notice of Termination of Registration under Section 12(g)
of the Exchange Act on Form 15 was filed by the Company with the
Commission.
Item 6. Source and Amounts of Funds or Other Consideration.
Item 6 of the Statement is hereby amended and supplemented as
follows:
(a), (c) and (d) The Introduction of this Amendment No. 4 to
the Statement is hereby incorporated herein by reference in its entirety.
On February 23, 1998, the commitment letter entered into by and between
Childs, on behalf of the Surviving Corporation, and Bankers Trust Company
on January 22, 1998 was amended (the "Commitment Letter Amendment") to
increase the amount of the senior secured revolving credit facility (the
"Revolving Credit Facility") from $25 million to $30 million. A copy of the
Commitment Letter Amendment is attached hereto as Exhibit (a)(5) and is
hereby incorporated herein by reference in its entirety.
On February 25, 1998, pursuant to the terms of a credit
agreement dated as of February 25, 1998 by and between the Surviving
Corporation and Bankers Trust Company (the "Revolving Credit Agreement"),
the Surviving Corporation borrowed approximately $11.3 million under the
Revolving Credit Facility. A copy of the Revolving Credit Agreement
(including exhibits thereto) is attached hereto as Exhibit (a)(6), and is
hereby incorporated herein by reference in its entirety.
On February 25, 1998, the Surviving Corporation issued $100.0
million aggregate principal amount of its 10 1/4% Senior Notes due 2008
(the "Notes"). The Notes were issued under an indenture (the "Indenture")
dated as of February 25, 1998 by and between the Surviving Corporation and
First Trust National Association as Trustee. On February 25, 1998, pursuant
to the terms of the Purchase Agreement dated as of February 23, 1998 (the
"Purchase Agreement") by and between Merger Sub and BT Alex. Brown
Incorporated (the "Initial Purchaser"), the Surviving Corporation, sold to
the Initial Purchaser, and the Initial Purchaser purchased from the
Surviving Corporation all of the Notes. Copies of the Purchase Agreement
and the Indenture are attached hereto as Exhibit (a)(7) and Exhibit (a)(8),
respectively, and are hereby incorporated herein by reference in their
entirety.
In addition, on February 25, 1998, the Surviving Corporation
and the Initial Purchaser entered into a Registration Rights Agreement
dated as of February 25, 1998 (the "Registration Rights Agreement"). A copy
of the Registration Rights Agreement is attached hereto as Exhibit (a)(9)
and is hereby incorporated herein by reference in its entirety.
Item 10. Interest in Securities of the Issuer.
Item 10 of the Statement is hereby amended and supplemented
as follows:
(a), (b) The Introduction to this Amendment No. 4 to the
Statement is hereby incorporated herein by reference in its entirety.
Item 11. Contracts, Arrangements of Understandings with Respect to the
Issuer's Securities.
Item 11 of the Statement is hereby amended and supplemented as
follows:
In connection with the Recapitalization the following
agreements were entered into:
Pursuant to the Dovenberg Support/Voting Agreement
(incorporated herein by reference to Appendix E to the Proxy Statement), on
February 25, 1998, David E. Dovenberg and the Surviving Corporation entered
into a pledge agreement (the "Dovenberg Pledge Agreement"), pursuant to
which David E. Dovenberg pledged certain shares of Surviving Corporation
Common Stock to secure the repayment of monies loaned to him by the
Surviving Corporation. A copy of the Dovenberg Pledge Agreement is attached
hereto as Exhibit (c)(10) and is hereby incorporated herein by reference in
its entirety.
Also, pursuant to certain Investment Representation and "Roll
Over" Subscription Agreements by and among Childs, Merger Sub and each of
certain Management Investors dated February 25, 1998 ("'Roll Over'
Subscription Agreements"), such Management Investors agreed to "roll over"
their then existing shares of Common Stock and options to purchase shares
of Common Stock into the shares of Surviving Corporation Common Stock and
options to purchase Surviving Corporation Common Stock, respectively, upon
the terms and subject to the conditions contained therein. A form of "Roll
Over" Subscription Agreement, substantially in the form entered into by and
among Childs, Merger Sub and each of certain Management Investors, is
attached hereto as Exhibit (c)(11) and is hereby incorporated herein by
reference in its entirety. In addition, Childs and Merger Sub entered into
the following "Roll Over" Subscription Agreements which differed slightly
from the form of "Roll Over" Subscription Agreements attached hereto as
Exhibit (c)(11): (i) an agreement with Robert H. Braun pursuant to which
Mr. Braun agreed to "roll over" shares of Common Stock then held by him but
elected to receive the Option Consideration (as defined in the Proxy
Statement) in the Merger for options to purchase shares of Common Stock
then held by him (the "Braun 'Roll Over' Subscription Agreement"); and (ii)
an agreement with Timothy P. Lynch pursuant to which Mr. Lynch agreed to
"roll over" a portion of the shares of Common Stock and all options to
purchase Common Stock then held by him (the "Lynch 'Roll Over' Subscription
Agreement"). Copies of the Braun "Roll Over" Subscription Agreement and the
Lynch "Roll Over" Subscription Agreement are attached hereto as Exhibit
(c)(12) and Exhibit (c)(13), respectively, and are hereby incorporated
herein by reference in their entirety.
Also, pursuant to certain Stock Subscription Agreements,
certain Management Investors agreed to purchase, upon the terms and subject
to the conditions contained therein, an aggregate of approximately 37,143
shares of Common Stock for cash in the approximate aggregate amount of
$490,616 and/or for promissory notes in the approximate aggregate amount of
$85,100. A form of Stock Subscription Agreement, substantially in the form
entered into by and between the Surviving Corporation and each of such
Management Investors, is attached hereto as Exhibit (c)(14) and is hereby
incorporated herein by reference in its entirety. In addition, a form of
Pledge Agreement entered into by and between the Surviving Corporation and
each of Gerald L. Brandt and Gary L. Preston, pursuant to the terms of the
Stock Subscription Agreement entered into by and between the Surviving
Corporation and each of Messrs. Brandt and Preston, is attached as Annex II
to Exhibit (c)(14), and is hereby incorporated herein by reference in its
entirety.
In addition, on February 25, 1998, the Surviving Corporation,
each of the Management Investors and each of the Childs Investors entered
into a Stockholders' Agreement (the "Stockholders' Agreement") pursuant to
which the Management Investors and the Childs Investors agreed to, among
other things, certain restrictions on their ability to dispose of shares of
Common Stock. A form of Stockholders' Agreement, substantially in the form
entered into by each of the Management Investors and each of the Childs
Investors, is attached hereto as Exhibit (c)(15) and is hereby incorporated
herein by reference in its entirety.
Item 17. Material to be Filed as Exhibits.
Item 17 of the Statement is hereby amended and supplemented as
follows:
(a)............................ Exhibit (a)(5). Amendment dated as of
February 23, 1998 to the commitment
letter entered into by and between Childs
and Bankers Trust Company on January 22,
1998 (filed herewith)
Exhibit (a)(6). Credit Agreement dated as
of February 25, 1998 by and between the
Surviving Corporation and Bankers Trust
Company (filed herewith)
Exhibit (a)(7). Purchase Agreement dated
as of February 23, 1998 by and between
Merger Sub and the Initial Purchaser
(filed herewith)
Exhibit (a)(8). Indenture dated as of
February 25, 1998 by and between the
Surviving Corporation and First Trust
National Association (filed herewith)
Exhibit (a)(9). Registration Rights
Agreement dated February 25, 1998 by and
between the Surviving Corporation and the
Initial Purchaser (filed herewith)
(c) ........................... Exhibit (c)(10). Pledge Agreement dated
as of February 25, 1998 by and between
the Surviving Corporation and David E.
Dovenberg
Exhibit (c)(11). Form of "Roll Over"
Subscription Agreement, dated as of
February 25, 1998 by and among Childs,
Merger Sub and certain Management
Investors (filed herewith)
Exhibit (c)(12). "Roll Over" Subscription
Agreement dated as of February 25, 1998
by and among Childs, Merger Sub and
Robert H. Braun (filed herewith)
Exhibit (c)(13). "Roll Over" Subscription
Agreement dated as of February 25, 1998
by and among Childs, Merger Sub and
Timothy P. Lynch (filed herewith)
Exhibit (c)(14). Form of Stock
Subscription Agreement dated as of
February 25, 1998 by and between the
Surviving Corporation and certain
Management Investors (filed herewith)
Exhibit (c)(15). Form of Stockholders'
Agreement dated as of February 25, 1998
by and among the Surviving Corporation,
each of the Management Investors and each
of the Childs Investors (filed herewith)
SIGNATURES
After due inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: March 9, 1998
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. Childs Advisors, L.P.
General Partner
By: J.W. Childs Associates, L.P.
General Partner
By: J.W. Childs Associates, Inc.
General Partner
By: /s/ Steven G. Segal
-----------------------------------
Name: Steven G. Segal
Title: Vice President
UNIVERSAL HOSPITAL SERVICES, INC.
By: /s/ Edward D. Yun
-------------------------------------
Name: Edward D. Yun
Title: Vice President and Secretary
/s/ David E. Dovenberg
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David E. Dovenberg
EXHIBIT INDEX
Sequentially
Exhibit No. Numbered Page
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(a)(5) Amendment dated as of February
23, 1998 to the commitment letter
entered into by and between
Childs and Bankers Trust Company
on January 22, 1998 (filed
herewith)
(a)(6) Credit Agreement dated as of
February 25, 1998 by and between
the Surviving Corporation and
Bankers Trust Company (filed
herewith)
(a)(7) Purchase Agreement dated as of
February 23, 1998 by and between
Merger Sub and the Initial
Purchaser (filed herewith)
(a)(8) Indenture dated as of February
25, 1998 by and between the
Surviving Corporation and First
Trust National Association (filed
herewith)
(a)(9) Registration Rights Agreement
dated February 25, 1998 by and
between the Surviving Corporation
and the Initial Purchaser (filed
herewith)
(c)(10) Pledge Agreement dated as of
February 25, 1998 by and between
the Surviving Corporation and
David E. Dovenberg
(c)(11) Form of "Roll Over" Subscription
Agreement dated as of February
25, 1998 by and among Childs,
Merger Sub and certain Management
Investors (filed herewith)
(c)(12) "Roll Over" Subscription
Agreement dated as of February
25, 1998 by and among Childs,
Merger Sub and Robert H. Braun
(filed herewith)
(c)(13) "Roll Over" Subscription
Agreement dated as of February
25, 1998 by and among Childs,
Merger Sub and Timothy P. Lynch
(filed herewith)
(c)(14) Form of Stock Subscription
Agreement dated as of February
25, 1998 by and between the
Surviving Corporation and certain
Management Investors (filed
herewith)
(c)(15) Form of Stockholders' Agreement
dated as of February 25, 1998 by
and among the Surviving
Corporation, each of the
Management Investors and each of
the Childs Investors (filed
herewith)
Exhibit (a)(5)
BANKERS TRUST COMPANY
130 LIBERTY STREET
NEW YORK, NEW YORK 10006
February 23, 1998
J.W. Childs Equity Partners, L.P.
1 Federal Street
21st Floor
Boston, MA 02110
Attention: Steven G. Segal
re: Senior Secured Financing / Amendment to Financing Letter
Dear Steve:
Reference is hereby made to our letter agreement to you dated as of
January 22, 1998 (the "Financing Letter") concerning the financing of the
proposed Recapitalization and related transactions described therein.
Terms used in the Financing Letter shall have the same meaning when used in
this amendment to the Financing Letter (this "Amendment").
Each of the parties hereto agrees to amend the Financing Letter by:
(i) deleting the second reference to"$25 million" appearing on
page 2 of the Financing Letter and inserting the text "$30 million" in
lieu thereof; and
(ii) deleting the text "$25 million" appearing on page 1 of
Exhibit A to the Financing Letter and inserting the text "$30 million"
in lieu thereof.
This Amendment and the rights and obligations of the parties hereto
shall be governed by, and construed in accordance with, the laws of the
State of New York.
This Amendment shall be effective when each party hereto shall have
signed a written counterpart hereof and shall have delivered the same to
Bankers Trust Company.
This Amendment shall not be amended or modified except in writing
signed by the parties hereto.
This Amendment may be executed in one or more counterparts, each of
which shall be an original, but all of which shall constitute but one and
the same instrument.
BANKERS TRUST COMPANY
By /s/ David J. Bill
---------------------------
Title: Vice President
Confirmed and Agreed, this
23rd day of February, 1998.
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. Childs Advisors, L.P.,
its General Partner
By: J.W. Childs Associates, L.P.,
its General Partner
By: J.W. Childs Associates, Inc.,
its General Partner
By:_________________________________
Title:
Exhibit (a)(6)
CREDIT AGREEMENT
among
UNIVERSAL HOSPITAL SERVICES, INC.
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
As Administrative Agent
------------------------------------
Dated as of February 25, 1998
------------------------------------
$30,000,000
CREDIT AGREEMENT, dated as of February 25, 1998, among
UNIVERSAL HOSPITAL SERVICES, INC., a Minnesota corporation (the
"Borrower"), the lending institutions from time to time party hereto (each
a "Bank", and collectively, the "Banks") and BANKERS TRUST COMPANY, as
administrative agent (the "Administrative Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are
used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the credit
facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees to make, at any
time and from time to time on and after the Effective Date and prior to the
Maturity Date, a revolving loan or revolving loans (each a "Revolving
Loan", and collectively, the "Revolving Loans") to the Borrower, which
Revolving Loans (i) except as otherwise specifically provided in Section
1.10(b), may, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that
all Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, be of the same Type, (ii) may be
repaid and reborrowed in accordance with the provisions hereof, (iii) shall
not exceed for any Bank at any time outstanding that aggregate principal
amount which, when combined with the aggregate outstanding principal amount
of all other Revolving Loans of such Bank and with such Bank's Adjusted RC
Percentage, if any, of the sum of (I) the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (II) the outstanding principal amount of
Swingline Loans (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals (1) if such Bank is a
Non-Defaulting Bank, the Adjusted Revolving Commitment, if any, of such
Bank at such time and (2) if such Bank is a Defaulting Bank, the Revolving
Commitment, if any, of such Bank at such time and (iv) shall not exceed for
all Banks at any time that aggregate principal amount which, when added to
the sum of (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (II) the outstanding principal amount of
Swingline Loans (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals the lesser of (A) the
Adjusted Total Revolving Loan Commitment (after giving effect to any
reductions to the Adjusted Total Revolving Loan Commitment on such date)
and (B) the Borrowing Base at such time.
(b) Subject to and upon the terms and conditions set forth
herein, the Swingline Bank, in its individual capacity, agrees to make at
any time and from time to time on and after the Effective Date and prior to
the Swingline Expiry Date, a revolving loan or revolving loans to the
Borrower (each a "Swingline Loan," and, collectively, the "Swingline
Loans"), which Swingline Loans (i) shall be made and maintained as Base
Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed in aggregate principal amount at
any time outstanding, when combined with the aggregate principal amount of
all Revolving Loans made by Non-Defaulting Banks then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Swingline Loans) at such time, an amount equal to
the Adjusted Total Revolving Commitment then in effect (after giving effect
to any reductions to the Adjusted Total Revolving Commitment on such date),
(iv) shall not exceed at any time that aggregate principal amount which,
when added to the sum of (I) the aggregate amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Swingline Loans) at such time and (II) the aggregate
principal amount of Revolving Loans made by Non-Defaulting Banks then
outstanding, equals the Borrowing Base at such time and (v) shall not
exceed in aggregate principal amount at any time outstanding the Maximum
Swingline Amount. The Swingline Bank will not make a Swingline Loan after
it has received written notice from the Required Banks that one or more of
the applicable conditions to Credit Events specified in Section 5B are not
then satisfied.
(c) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that its outstanding Swingline Loans
shall be funded with a Borrowing of Revolving Loans (provided that each
such notice shall be deemed to have been automatically given upon the
occurrence of an Event of Default under Section 9.05 or upon the exercise
of any of the remedies provided in the last paragraph of Section 9), in
which case a Borrowing of Revolving Loans constituting Base Rate Loans
(each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day from all Banks pro rata based on each
Bank's Adjusted RC Percentage, and the proceeds thereof shall be applied
directly to repay the Swingline Bank for such outstanding Swingline Loans.
Each Bank hereby irrevocably agrees to make Base Rate Loans upon one
Business Day's notice pursuant to each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the date
specified in writing by the Swingline Bank notwithstanding (i) that the
amount of the Mandatory Borrowing may not comply with the Minimum Borrowing
Amount otherwise required hereunder, (ii) whether any conditions specified
in Section 5B are then satisfied, (iii) whether a Default or an Event of
Default has occurred and is continuing, (iv) the date of such Mandatory
Borrowing and (v) any reduction in the Total Revolving Commitment or the
Adjusted Total Revolving Commitment after any such Swingline Loans were
made. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation,
as a result of the commencement of a proceeding under the Bankruptcy Code
in respect of the Borrower), each Bank (other than the Swingline Bank)
hereby agrees that it shall forthwith purchase from the Swingline Bank
(without recourse or warranty) such assignment of the outstanding Swingline
Loans as shall be necessary to cause the Banks to share in such Swingline
Loans ratably based upon their respective Adjusted RC Percentages, provided
that (x) all interest payable on the Swingline Loans shall be for the
account of the Swingline Bank until the date as of which the respective
participation is required to be purchased and, to the extent attributable
to the purchased participation, shall be payable to the participant from
and after such date and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Bank shall be
required to pay the Swingline Bank interest on the principal amount of
participation purchased for each day from and including the day upon which
the Mandatory Borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the overnight Federal Funds Rate
for the first three days and at the rate otherwise applicable to Revolving
Loans maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing of Revolving Loans shall not be less than the
Minimum Borrowing Amount and, if greater, shall be in integral multiples of
$100,000. The aggregate principal amount of each Borrowing of Swingline
Loans shall not be less than $100,000, and, if greater, shall be in
integral multiples of $50,000. More than one Borrowing may be incurred on
any day, provided that at no time shall there be outstanding more than
eight Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Borrowings of Revolving Loans
(excluding Borrowings of Revolving Loans incurred pursuant to a Mandatory
Borrowing) shall be made upon prior written notice (or telephonic notice
promptly confirmed in writing) from the Borrower to the Administrative
Agent which notice shall be given to the Administrative Agent at its Notice
Office no later than 1:00 P.M. (New York time), (x) in the case of any
proposed Borrowing of Base Rate Loans, on the date such proposed Borrowing
is requested to be incurred and (y) in the case of any proposed Borrowing
of Eurodollar Loans, on the third Business Day prior to the date such
proposed Borrowing is requested to be incurred. Each such notice (each a
"Notice of Borrowing") shall be in the form of Exhibit A and shall be
irrevocable and shall specify (i) the aggregate principal amount of the
Revolving Loans to be made pursuant to such Borrowing, (ii) the date of
Borrowing (which shall be a Business Day) and (iii) whether the respective
Borrowing shall consist of Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially applicable thereto.
The Administrative Agent shall promptly give each Bank written notice (or
telephonic notice on that day promptly confirmed in writing) of each
proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters covered by the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to incur a Borrowing of
Swingline Loans hereunder, the Borrower shall give the Swingline Bank,
prior to 1:00 P.M. (New York time) on the day such Swingline Loan is to be
made, written notice (or telephonic notice promptly confirmed in writing)
of each Swingline Loan to be made hereunder. Each such notice shall be
irrevocable and shall specify in each case (x) the date of such Borrowing
(which shall be a Business Day) and (y) the aggregate principal amount of
the Swingline Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(c), with the Borrower irrevocably agreeing, by
its incurrence of any Swingline Loan, to the making of Mandatory Borrowings
as set forth in such Section 1.01(c).
1.04 Disbursement of Funds. (a) No later than 1:00 P.M.
(New York time) on the date specified in each Notice of Borrowing, each
Bank will make available its pro rata share of each Borrowing requested to
be made on such date in the manner provided below, provided that the full
amount of all Swingline Loans shall be made available by the Swingline Bank
no later than 3:00 P.M. (New York time) on the date so requested. All such
amounts shall be made available to the Administrative Agent in U.S. dollars
and immediately available funds at the Payment Office and the
Administrative Agent promptly will make available to the Borrower by
depositing to its account at the Payment Office the aggregate of the
amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified by any Bank prior to the date of Borrowing that
such Bank does not intend to make available to the Administrative Agent its
portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Bank and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover on demand
from such Bank or, in the event that such Bank does not pay such
corresponding amount forthwith upon the Administration Agent's demand
therefor, from the Borrower, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate
per annum equal to (x) if paid by such Bank, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Section 1.08, for the respective
Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by
such Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made to it by each Bank shall be evidenced
(i) if Revolving Loans, by a promissory note duly executed and delivered by
the Borrower substantially in the form of Exhibit B-1 with blanks
appropriately completed in conformity herewith (each a "Revolving Note",
and collectively, the "Revolving Notes") and (ii) if Swingline Loans, by a
promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-2 with blanks appropriately completed in
conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Bank with a Revolving
Commitment shall (i) be executed by the Borrower, (ii) be payable to the
order of such Bank and be dated the Effective Date, (iii) be in a stated
principal amount equal to the Revolving Commitment of such Bank and be
payable in the principal amount of the Revolving Loans evidenced thereby,
(iv) mature on the Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01 and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(c) The Swingline Note issued to the Swingline Bank shall (i)
be executed by the Borrower, (ii) be payable to the order of the Swingline
Bank and be dated the Effective Date, (iii) be in a stated principal amount
equal to the Maximum Swingline Amount and be payable in the principal
amount of Swingline Loans evidenced thereby, (iv) mature on the Swingline
Expiry Date, (v) bear interest as provided in Section 1.08 in respect of
the Base Rate Loans evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01 and mandatory repayment as provided
in Section 4.02 and (vii) be entitled to the benefits of this Agreement and
the other Credit Documents.
(d) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will, prior to
any transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make
any such notation (or any error in such notation) shall not affect the
Borrower's obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert
on any Business Day all or a portion at least equal to the Minimum
Borrowing Amount of the outstanding principal amount of Revolving Loans
made pursuant to one or more Borrowings of one or more Types of Revolving
Loans into a Borrowing of another Type of Revolving Loan, provided that (i)
except as otherwise specifically provided in Section 1.10(b), Eurodollar
Loans may be converted into Base Rate Loans only on the last day of an
Interest Period applicable thereto and no partial conversion of a single
Borrowing of Eurodollar Loans shall reduce the outstanding principal amount
of the Eurodollar Loans made pursuant to such Borrowing to less than the
Minimum Borrowing Amount, (ii) Base Rate Loans may not be converted into
Eurodollar Loans if a Default pursuant to Section 9.01 or 9.05 or an Event
of Default is in existence on the date of such conversion and (iii)
Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be
limited in number as provided in Section 1.02. Each such conversion shall
be effected by the Borrower giving the Administrative Agent at its Notice
Office, prior to 11:00 A.M. (New York time), at least three Business Days'
(or two Business Days', in the case of a conversion into Base Rate Loans)
prior written notice (or telephonic notice promptly confirmed in writing)
(each a "Notice of Conversion") specifying the Revolving Loans to be so
converted, the Type of Revolving Loans to be converted into and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Bank
prompt notice of any such proposed conversion affecting any of its
Revolving Loans. Swingline Loans may not be converted pursuant to this
Section 1.06.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis
of their Revolving Commitments provided that Revolving Loans made pursuant
to a Mandatory Borrowing shall be made by the Banks pro rata on the basis
of their Adjusted Revolving Commitments. It is understood that no Bank
shall be responsible for any default by any other Bank in its obligation to
make Revolving Loans hereunder and that each Bank shall be obligated to
make the Revolving Loans provided to be made by it hereunder, regardless of
the failure of any other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which
shall at all times be the Applicable Margin for Base Rate Loans plus the
Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at
all times be the Applicable Margin for Eurodollar Loans plus the Eurodollar
Rate for such Interest Period.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount
payable hereunder shall bear interest at a rate per annum equal to the
greater of (x) the Base Rate in effect from time to time plus the sum of
(i) 2% and (ii) the Applicable Margin for Base Rate Loans and (y) the rate
which is 2% in excess of the rate borne by such Loans. Interest which
accrues under this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including
the date of any Borrowing to but excluding the date of any repayment
thereof and shall be payable (i) in respect of each Base Rate Loan,
quarterly in arrears on each Quarterly Payment Date, (ii) in respect of
each Eurodollar Loan, on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months,
on each date occurring at three month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, on any prepayment or
conversion (other than the prepayment and conversion of Revolving Loans
that are maintained as Base Rate Loans) (on the amount prepaid or
converted), at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest
rate for any Borrowing of Eurodollar Loans for any Interest Period, shall
promptly notify the Borrower and the Banks thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the
initial Interest Period applicable thereto) or prior to 11:00 A.M. (New
York time) on the third Business Day prior to the expiration of an Interest
Period applicable to a Borrowing of Eurodollar Loans (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect by
giving the Administrative Agent written notice thereof (or telephonic
notice promptly confirmed in writing) the Interest Period applicable to
such Borrowing, which Interest Period shall, at the option of the Borrower,
be a one, two, three or six month period, or, to the extent available to
each Bank with a Revolving Commitment, a nine or twelve month period.
Notwithstanding anything to the contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any
Borrowing of Eurodollar Loans shall commence on the date of such
Borrowing (including the date of any conversion from a Borrowing of
Base Rate Loans) and each Interest Period occurring thereafter in
respect of such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(iii) if any Interest Period begins on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day, provided that if
any Interest Period would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(v) no Interest Period shall extend beyond
the Maturity Date; and
(vi) no Interest Period may be elected at
any time when a Default pursuant to Section 9.01 or 9.05 or an Event
of Default is then in existence.
(b) If upon the expiration of any Interest Period, the Borrower
has failed to (or may not) elect a new Interest Period to be applicable to
the respective Borrowing of Eurodollar Loans as provided above, the
Borrower shall be deemed to have elected to convert such Borrowing into a
Borrowing of Base Rate Loans effective as of the expiration date of such
current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
(x) in the case of clause (i) below, the Administrative Agent or (y) in the
case of clauses (ii) and (iii) below, any Bank shall have determined (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for
any Interest Period that, by reason of any
changes arising after the Effective Date affecting the interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for
in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall
incur increased costs or reductions in the amounts received or
receivable hereunder with respect to any Eurodollar Loans because of
(x) any change since the Effective Date in any applicable law,
governmental rule, regulation, guideline, request or order (whether
or not having the force of law) or in the interpretation or
administration thereof and including the introduction of any new law
or governmental rule, regulation, guideline, request or order (such
as, for example, but not limited to, (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on
the Notes or any other amounts payable hereunder (except for changes
in the rate of tax on, or determined by reference to, the net income
or profits of such Bank pursuant to the laws of the jurisdiction in
which it is organized or in which its principal office or applicable
lending office is located or any subdivision thereof or therein) or
(B) a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included
in the computation of the Eurodollar Rate) and/or (y) other
circumstances occurring after the Effective Date affecting such Bank,
the interbank Eurodollar market or the position of such Bank in such
market; or
(iii) at any time after the Effective
Date, that the making or continuance of any Eurodollar Loan has
become (x) unlawful by compliance by such Bank in good faith with any
law, governmental rule, regulation, guideline, request or order
(whether or not having the force of law) or (y) impracticable as a
result of a contingency occurring after the Effective Date which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the
case of clause (i) above) shall promptly give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of
such determination (which notice the Administrative Agent shall promptly
transmit to each of the other Banks). Thereafter (x) in the case of clause
(i) above, Eurodollar Loans shall no longer be available until such time as
the Administrative Agent notifies the Borrower and the Banks that the
circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by
the Borrower with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating,
interest or otherwise as such Bank in its reasonable discretion shall
determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts receivable hereunder (a written notice as to
the additional amounts owed to such Bank, showing the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take
one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected pursuant to Section
1.10(a)(iii), the Borrower shall) either (i) if the affected Eurodollar
Loan is then being made pursuant to a Borrowing, cancel said Borrowing by
giving the Administrative Agent telephonic notice (confirmed promptly in
writing) thereof on the same date that the Borrower was notified by a Bank
pursuant to Section 1.10(a)(ii) or (iii), or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days'
notice to the Administrative Agent, require the affected Bank to convert
each such Eurodollar Loan into a Base Rate Loan, provided that if more than
one Bank is so affected at any time, then all affected Banks must be
treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that the adoption or
effectiveness after the Effective Date of any applicable law, rule or
regulation regarding capital adequacy, or any change after the Effective
Date therein, or any change after the Effective Date in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank (or any corporation controlling such
Bank) with any such request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's (or such controlling corporation's) capital
or assets as a consequence of its commitments or obligations hereunder to a
level below that which such Bank (or such controlling corporation) could
have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Bank's (or such controlling corporation's)
policies with respect to capital adequacy), then from time to time, within
15 days after written demand by such Bank (with a copy to the
Administrative Agent and accompanied by the notice described in the last
sentence of this Section 1.10(c)), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or such
controlling corporation) for such reduction. Each Bank, upon determining in
good faith that any additional amounts will be payable pursuant to this
Section 1.10(c), will give prompt written notice thereof to the Borrower,
which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional
amounts pursuant to this Section 1.10(c) upon the subsequent receipt of
such notice.
1.11 Compensation; Breakage. (a) The Borrower shall compensate
each Bank, upon its written request (which request shall set forth the
basis for requesting such compensation), for all losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Bank to fund its Eurodollar Loans but excluding in
any event the loss of anticipated profits) which such Bank may sustain: (i)
if for any reason (other than a default by such Bank or the Administrative
Agent) a Borrowing of Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any prepayment, repayment or conversion of any of its Eurodollar
Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans
is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (x) any other default by the Borrower
to repay its Eurodollar Loans when required by the terms of this Agreement
or (y) an election by the Borrower made pursuant to Section 1.10(b).
(b) The Borrower shall compensate BTCo, upon its written
request (which request shall set forth the basis for requesting such
compensation), for all losses, expenses and liabilities incurred prior to
the Syndication Date (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits
or other funds required by BTCo to fund its Eurodollar Loans but excluding
in any event the loss of anticipated profits) which BTCo may sustain by way
of any prepayment, repayment or conversion of any of its Eurodollar Loans
occurring on a date which is not the last day of an Interest Period
applicable thereto in connection with the primary syndication of the credit
facility provided for in this Agreement.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii), 1.10(c), 2.06 or 4.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for
any Revolving Loans or Letters of Credit, as the case may be, affected by
such event, provided that such designation is made on such terms that such
Bank and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event
giving rise to the operation of any such Section. Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Borrower or the
right of any Bank provided in Section 1.10, 2.06 or 4.04.
1.13 Replacement of Banks. (x) Upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to any Bank which
results in such Bank charging to the Borrower increased costs in excess of
those being generally charged by the other Banks or becoming incapable of
making Eurodollar Loans, (y) if any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Revolving Loans or to fund
Unpaid Drawings and/or (z) in the case of a refusal by a Bank to consent to
a proposed change, waiver, discharge or termination with respect to this
Agreement which has been approved by the Required Banks as provided in
Section 12.12(b), the Borrower shall have the right, if no Default pursuant
to Section 9.01 or 9.05 or Event of Default then exists, to replace such
Bank (the "Replaced Bank") with one or more other Eligible Transferees
reasonably acceptable to the Administrative Agent, none of whom shall
constitute a Defaulting Bank at the time of such replacement (collectively,
the "Replacement Bank"), provided that (i) at the time of any replacement
pursuant to this Section 1.13, the Replacement Bank shall enter into one or
more Assignment Agreements pursuant to Section 12.04(b) (and with all fees
payable pursuant to said Section 12.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire the entire
Revolving Commitment and all outstanding Revolving Loans of, and
participations in Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect thereof
an amount equal to the sum of (I) an amount equal to the principal of, and
all accrued interest on, all outstanding Revolving Loans of the Replaced
Bank, (II) an amount equal to all Unpaid Drawings that have been funded by
(and not reimbursed to) such Replaced Bank, together with all then unpaid
interest with respect thereto at such time and (III) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01, (y) the Letter of Credit Issuer an amount equal to such
Replaced Bank's Adjusted RC Percentage (for this purpose, determined as if
the adjustment described in clause (ii) of the succeeding sentence had been
made with respect to such Replaced Bank) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Bank and (z) the Swingline Bank an
amount equal to such Replaced Bank's Adjusted RC Percentage (for this
purpose, determined as if the adjustment described in clause (ii) of the
succeeding sentence had been made with respect to such Replaced Bank) of
any Mandatory Borrowing to the extent such amount was not theretofore
funded by such Replaced Bank, and (ii) all obligations of the Borrower
owing to the Replaced Bank (other than those specifically described in
clause (i) above in respect of which the assignment purchase price has
been, or is concurrently being, paid) shall be paid in full to such
Replaced Bank concurrently with such replacement. Upon the execution of the
respective Assignment Agreement(s), the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note or Notes executed
by the Borrower, (A) the Replacement Bank shall become a Bank hereunder and
the Replaced Bank shall cease to constitute a Bank hereunder, except with
respect to indemnification provisions applicable to the Replaced Bank under
this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 11.06 and 12.01), which shall survive as to such Replaced Bank and
except that no such replacement shall prejudice any rights which the
Borrower may have against such Replaced Bank as a result of any default by
such Replaced Bank under this Agreement and (B) in the case of a
replacement of a Defaulting Bank, the Adjusted RC Percentage of the Banks
shall be automatically adjusted at such time to give effect to such
replacement (and to give effect to the replacement of a Defaulting Bank
with one or more Non-Defaulting Banks).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request a Letter of Credit
Issuer at any time and from time to time on or after the Effective Date and
prior to the 30th day prior to the Maturity Date to issue a letter of
credit for the account of the Borrower and in support of (x) trade
obligations of the Borrower and/or its Subsidiaries, which shall be payable
at sight (each such letter of credit, a "Trade Letter of Credit" and,
collectively, the "Trade Letters of Credit") and/or (y), on a standby
basis, L/C Supportable Obligations (each such letter of credit, a "Standby
Letter of Credit" and, collectively, the "Standby Letters of Credit," and
together with the Trade Letters of Credit, the "Letters of Credit"), and
subject to and upon the terms and conditions set forth herein such Letter
of Credit Issuer agrees to issue from time to time, irrevocable Letters of
Credit in such form as may be approved by such Letter of Credit Issuer and
the Administrative Agent. Notwithstanding the foregoing, no Letter of
Credit Issuer shall be under any obligation to issue any Letter of Credit
if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to
enjoin or restrain such Letter of Credit Issuer from issuing such
Letter of Credit or any requirement of law applicable to such Letter
of Credit Issuer or any request or directive (whether or not having
the force of law) from any governmental authority with jurisdiction
over such Letter of Credit Issuer shall prohibit, or request that
such Letter of Credit Issuer refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall
impose upon such Letter of Credit Issuer with respect to such Letter
of Credit any restriction or reserve or capital requirement (for
which such Letter of Credit Issuer is not otherwise compensated) not
in effect on the date hereof, or any unreimbursed loss, cost or
expense which was not applicable, in effect or known to such Letter
of Credit Issuer as of the date hereof and which such Letter of
Credit Issuer in good faith deems material to it; or
(ii) such Letter of Credit Issuer shall have received
notice from the Borrower or the Required Banks prior to
the issuance of such Letter of Credit of the type described in clause
(v) of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of
Credit shall be issued, the Stated Amount of which, when added to
the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter
of Credit) at such time, would exceed either (x) $5,000,000 or (y) when
added to the aggregate principal amount of all Revolving Loans made by
Non-Defaulting Banks and Swingline Loans then outstanding, the lesser of
(I) the Adjusted Total Revolving Commitment at such time and (II) the
Borrowing Base at such time; (ii) (x) each Standby Letter of Credit shall
have an expiry date occurring not later than one year after the date of
issuance of such Letter of Credit (although any Standby Letter of Credit
may be extendible (whether automatically or otherwise) for successive
periods of up to 12 months, but not beyond the Business Day occurring five
Business Days prior to the Maturity Date), on terms acceptable to the
respective Letter of Credit Issuer and in no event shall any Standby Letter
of Credit have an expiry date occurring later than the Business Day
occurring five Business Days prior to the Maturity Date and (y) each Trade
Letter of Credit shall have an expiry date occurring no later than the
earlier of (a) 180 days after the issuance thereof or (b) 30 days prior to
the Maturity Date; (iii) each Letter of Credit shall be denominated in U.S.
dollars; (iv) each Letter of Credit shall be payable only on a sight basis;
and (v) no Letter of Credit Issuer shall issue any Letter of Credit after
it has received written notice from the Borrower that a Default or an Event
of Default exists until such time as the Letter of Credit Issuer shall have
received written notice of (x) rescission of such notice from the party or
parties originally delivering the same or (y) waiver of such Default or
Event of Default by the Required Banks.
2.02 Minimum Stated Amount. The initial Stated Amount of each
Letter of Credit shall be not less than $10,000 or such lesser amount
acceptable to the respective Letter of Credit Issuer.
2.03 Letter of Credit Requests; Notices of Issuance; Reports.
(a) Whenever the Borrower desires that a Letter of Credit be issued, the
Borrower shall give the Administrative Agent and the respective Letter of
Credit Issuer a written request (including by way of telecopier) in the
form of Exhibit C prior to 1:00 P.M. (New York time) at least one Business
Day (or such shorter period as may be acceptable to such Letter of Credit
Issuer) prior to the proposed date (which shall be a Business Day) of
issuance (each a "Letter of Credit Request"), which Letter of Credit
Request shall include any other documents that such Letter of Credit Issuer
customarily requires in connection therewith.
(b) The respective Letter of Credit Issuer shall, promptly
after each issuance of a Standby Letter of Credit by it, give the
Administrative Agent, each Bank and the Borrower written notice of the
issuance of such Standby Letter of Credit, accompanied by a copy of the
Standby Letter of Credit or Standby Letters of Credit issued by it.
(c) In the event that the Letter of Credit Issuer is other than
the Administrative Agent, such Letter of Credit Issuer will send by
facsimile transmission to the Administrative Agent, promptly on the first
Business Day of each week, its daily maximum amount available to be drawn
under the Letters of Credit issued by such Letter of Credit Issuer for the
previous week. The Administrative Agent shall deliver to each Bank upon
each calendar month end, and upon each Letter of Credit Fee payment, a
report setting forth the daily maximum amount available to be drawn for all
Letter of Credit Issuers during such period.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Letter of Credit Issuer,
by making payment to the Administrative Agent at the Payment Office (which
funds the Administrative Agent shall promptly forward to such Letter of
Credit Issuer), for any payment or disbursement made by such Letter of
Credit Issuer under any Letter of Credit issued by it (each such amount so
paid or disbursed until reimbursed, an "Unpaid Drawing") immediately after,
and in any event on the date on which, the Borrower is notified by such
Letter of Credit Issuer of such payment or disbursement with interest on
the amount so paid or disbursed by such Letter of Credit Issuer, to the
extent not reimbursed prior to 1:00 P.M. (New York time) on the date of
such payment or disbursement, from and including the date paid or disbursed
to but not including the date such Letter of Credit Issuer is reimbursed
therefor at a rate per annum which shall be the Applicable Margin for Base
Rate Loans then in effect plus the Base Rate as in effect from time to time
(plus an additional 2% per annum if not reimbursed (whether through the
proceeds of Revolving Loans or otherwise) by the third Business Day after
the date of such notice of payment or disbursement), such interest to be
payable on demand. Each Letter of Credit Issuer shall provide the Borrower
prompt notice of any payment or disbursement made by it under any Letter of
Credit issued by it, although the failure of, or delay in, giving any such
notice shall not release or diminish the obligations of the Borrower under
this Section 2.04 (a) or under any other Section of this Agreement.
(b) The Borrower's obligation under this Section 2.04 to
reimburse the respective Letter of Credit Issuer with respect to Unpaid
Drawings (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrower may have or
have had against such Letter of Credit Issuer, the Administrative Agent or
any Bank, including, without limitation, any defense based upon the failure
of any payment under a Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of such payment; provided, however, that the
Borrower shall not be obligated to reimburse any Letter of Credit Issuer
for any wrongful payment made by such Letter of Credit Issuer under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence (as determined by a court of competent
jurisdiction) on the part of such Letter of Credit Issuer.
2.05 Letter of Credit Participations. (a) Immediately upon the
issuance by any Letter of Credit Issuer of a Letter of Credit, such Letter
of Credit Issuer shall be deemed to have sold and transferred to each other
Bank, and each such Bank (each a "Participant") shall be deemed irrevocably
and unconditionally to have purchased and received from such Letter of
Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Bank's Adjusted RC Percentage, in such
Letter of Credit, each substitute letter of credit, each payment made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto (although the Letter of Credit Fee shall be payable
directly to the Administrative Agent for the account of the Banks as
provided in Section 3.01(b) and the Participants shall have no right to
receive any portion of any Facing Fees) and any security therefor or
guaranty pertaining thereto. Upon any change in the Revolving Commitments
or Adjusted RC Percentages of the Banks pursuant to Section 12.04(b) or
upon a Bank Default, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this Section 2.05 to
reflect the new Adjusted RC Percentages of the assigning and assignee Bank
or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
the respective Letter of Credit Issuer shall not have any obligation
relative to the Participants other than to determine that any documents
required to be delivered under such Letter of Credit have been delivered
and that they substantially comply on their face with the requirements of
such Letter of Credit. Any action taken or omitted to be taken by any
Letter of Credit Issuer under or in connection with any Letter of Credit if
taken or omitted in the absence of gross negligence or willful misconduct
(as determined by a court of competent jurisdiction) shall not create for
such Letter of Credit Issuer any resulting liability.
(c) In the event that the respective Letter of Credit Issuer
makes any payment under any Letter of Credit and the Borrower shall not
have reimbursed such amount in full to such Letter of Credit Issuer
pursuant to Section 2.04(a), such Letter of Credit Issuer shall promptly
notify the Administrative Agent, and the Administrative Agent shall
promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to the Administrative Agent for the
account of such Letter of Credit Issuer, the amount of such Participant's
Adjusted RC Percentage of such payment in U.S. dollars and in same day
funds; provided, however, that no Participant shall be obligated to pay to
the Administrative Agent its Adjusted RC Percentage of such unreimbursed
amount for any wrongful payment made by such Letter of Credit Issuer under
a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence (as determined by a court of competent
jurisdiction) on the part of such Letter of Credit Issuer. If the
Administrative Agent so notifies any Participant required to fund an Unpaid
Drawing under a Letter of Credit prior to 11:00 A.M. (New York time) on any
Business Day, such Participant shall make available to the Administrative
Agent for the account of the respective Letter of Credit Issuer (which
funds the Administrative Agent shall promptly forward to the Letter of
Credit Issuer) such Participant's Adjusted RC Percentage of the amount of
such payment on such Business Day in same day funds. If and to the extent
such Participant shall not have so made its Adjusted RC Percentage of the
amount of such Unpaid Drawing available to the Administrative Agent for the
account of such Letter of Credit Issuer, such Participant agrees to pay to
the Administrative Agent for the account of such Letter of Credit Issuer,
forthwith on demand such amount, together with interest thereon, for each
day from such date until the date such amount is paid to the Administrative
Agent for the account of such Letter of Credit Issuer at the overnight
Federal Funds Effective Rate. The failure of any Participant to make
available to the Administrative Agent for the account of the respective
Letter of Credit Issuer its Adjusted RC Percentage of any Unpaid Drawing
under any Letter of Credit shall not relieve any other Participant of its
obligation hereunder to make available to the Administrative Agent for the
account of the respective Letter of Credit Issuer its Adjusted RC
Percentage of any payment under any Letter of Credit on the date required,
as specified above, but no Participant shall be responsible for the failure
of any other Participant to make available to the Administrative Agent for
the account of such Letter of Credit Issuer such other Participant's
Adjusted RC Percentage of any such payment.
(d) Whenever the respective Letter of Credit Issuer receives a
payment of a reimbursement obligation as to which the Administrative Agent
has received for the account of such Letter of Credit Issuer any payments
from the Participants pursuant to clause (c) above, such Letter of Credit
Issuer shall pay to the Administrative Agent and the Administrative Agent
shall promptly pay to each Participant which has paid its Adjusted RC
Percentage thereof, in U.S. dollars and in same day funds, an amount equal
to such Participant's Adjusted RC Percentage of the principal amount
thereof and interest thereon accruing at the overnight Federal Funds
Effective Rate after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Letter of Credit
Issuer with respect to Letters of Credit shall be irrevocable and not
subject to counterclaim, set-off or other defense or any other
qualification or exception whatsoever (provided that no Participant shall
be required to make payments resulting from the gross negligence or willful
misconduct (as determined by a court of competent jurisdiction) of such
Letter of Credit Issuer and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of
this Agreement or any of the other Credit Documents;
(ii) the existence of any claim, set-off,
defense or other right which the Borrower or any of it Subsidiaries
may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Administrative Agent,
the respective Letter of Credit Issuer, any Bank or other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower or any of
its Subsidiaries and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or other
document presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of
Default.
(f) To the extent the respective Letter of Credit Issuer is not
indemnified for same by the Borrower, the Participants will reimburse and
indemnify the Letter of Credit Issuer, in proportion to their respective
Adjusted RC Percentages, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed
on, asserted against or incurred by such Letter of Credit Issuer in
performing its respective duties in any way relating to or arising out of
its issuance of Letters of Credit; provided that no Participant shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct (as determined by
a court of competent jurisdiction) of such Letter of Credit Issuer.
2.06 Increased Costs. If at any time after the Effective Date,
the adoption or effectiveness of any applicable law, rule or regulation, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
the respective Letter of Credit Issuer or any Bank with any request or
directive (whether or not having the force of law) by any such authority,
central bank or comparable agency shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against Letters of Credit issued by such Letter of Credit Issuer or such
Bank's participation therein, or (ii) shall impose on such Letter of Credit
Issuer or any Bank any other conditions affecting this Agreement, any
Letter of Credit or such Bank's participation therein; and the result of
any of the foregoing is to increase the cost to such Letter of Credit
Issuer or such Bank of issuing, maintaining or participating in any Letter
of Credit, or to reduce the amount of any sum received or receivable by
such Letter of Credit Issuer or such Bank hereunder (other than any
increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Borrower by such Letter of Credit Issuer
or such Bank (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Bank to the Administrative Agent), the Borrower shall pay to
such Letter of Credit Issuer or such Bank such additional amount or amounts
as will compensate such Letter of Credit Issuer or such Bank for such
increased cost or reduction. A certificate submitted to the Borrower by the
respective Letter of Credit Issuer or such Bank, as the case may be (a copy
of which certificate shall be sent by such Letter of Credit Issuer or such
Bank to the Administrative Agent), setting forth the basis for the
determination of such additional amount or amounts necessary to compensate
such Letter of Credit Issuer or such Bank as aforesaid shall be conclusive
and binding on the Borrower absent manifest error, although the failure to
deliver any such certificate shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
2.06 upon the subsequent receipt thereof.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
Agent a commitment commission ("Commitment Commission") for the account of
each Non-Defaulting Bank with a Revolving Commitment for the period from
and including the Effective Date to, but not including, the date the Total
Revolving Commitment has been terminated, computed at a rate for each day
equal to 1/2 of 1% per annum on the daily average of such Bank's Unutilized
Revolving Commitment. Such Commitment Commission shall be due and payable
in arrears on each Quarterly Payment Date and on the date upon which the
Total Revolving Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Non-Defaulting Bank pro rata on the basis of its
Adjusted RC Percentage, a fee in respect of each Letter of Credit (the
"Letter of Credit Fee") in an amount equal to the Applicable Margin for
Eurodollar Loans then in effect on the daily Stated Amount of such Letter
of Credit. Accrued Letter of Credit Fees shall be due and payable quarterly
in arrears on each Quarterly Payment Date and on the date upon which the
Total Revolving Commitment is terminated.
(c) The Borrower agrees to pay to the Administrative Agent for
the account of each Letter of Credit Issuer a fee in respect of each Letter
of Credit (the "Facing Fee") issued by such Letter of Credit Issuer
computed at the rate equal to (A) in the case of Trade Letters of Credit,
1/4 of 1% per annum on the daily Stated Amount of such Trade Letter of
Credit, provided, that in any event, the minimum amount of the Facing Fee
payable for each Trade Letter of Credit shall be $100 and (B) in the case
of Standby Letters of Credit, 1/4 of 1% per annum on the daily Stated
Amount of such Standby Letter of Credit, provided, that in any event, the
minimum amount of the Facing Fee payable in any 12-month period for each
Standby Letter of Credit shall be $500. Accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon
the first day on or after the termination of the Total Revolving Commitment
upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay directly to the respective
Letter of Credit Issuer upon each issuance of, payment under, and/or
amendment of, a Letter of Credit issued by such Letter of Credit Issuer
such amount as shall at the time of such issuance, payment or amendment be
the administrative charge and reasonable expenses which such Letter of
Credit Issuer is customarily charging for issuances of, payments under or
amendments of, letters of credit issued by it.
(e) The Borrower agrees to pay to the Administrative Agent such
other fees as agreed to between the Borrower and the Administrative Agent,
when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the
Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Revolving Commitment, provided that
(x) any such termination shall apply to proportionately and permanently
reduce the Revolving Commitment of each Bank, (y) no such reduction shall
reduce any Non-Defaulting Bank's Revolving Commitment to an amount that is
less than the sum of (I) the outstanding Revolving Loans of such Bank plus
(II) such Bank's Adjusted RC Percentage of outstanding Swingline Loans and
of Letter of Credit Outstandings and (z) any partial reduction pursuant to
this Section 3.02 shall be in integral multiples of $500,000.
3.03 Mandatory Reduction of Commitments. (a) The Total
Revolving Commitment (and the Revolving Commitment of each Bank) shall
terminate on April 30, 1998 unless the Effective Date has occurred on or
before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Commitment (and the
Revolving Commitment of each Bank) shall terminate on the earlier of (x)
the Maturity Date and (y) unless the Required Banks otherwise agree in
writing, the date on which any Change of Control occurs.
(c) Each reduction to the Total Revolving Commitment pursuant
to this Section 3.03 shall be applied proportionately to reduce the
Revolving Loan Commitment of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part, without premium or penalty, from time
to time on the following terms and conditions: (i) the Borrower shall give
the Administrative Agent at the Payment Office written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
the Loans, whether such Loans are Revolving Loans or Swingline Loans, the
amount of such prepayment and (in the case of Eurodollar Loans) the
specific Borrowing or Borrowings pursuant to which made, which notice shall
be given by the Borrower (x) prior to 11:00 A.M. on the date of such
prepayment (in the case of Base Rate Loans) and (y) at least three Business
Days prior to the date of such prepayment (in the case of Eurodollar
Loans), which notice shall promptly be transmitted by the Administrative
Agent to each of the Banks; (ii) (x) each partial prepayment of any
Borrowing of Revolving Loans shall be in integral multiples of $250,000 and
(y) each partial prepayment of any Borrowing of Swingline Loans shall be in
integral multiples of $100,000, provided that no partial prepayment of
Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of Revolving Loans outstanding pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount; (iii) at the time of
any prepayment of Eurodollar Loans pursuant to this Section 4.01 on any
date other than the last day of the Interest Period applicable thereto, the
Borrower shall pay the amounts required pursuant to Section 1.11 and (iv)
each prepayment in respect of any Revolving Loans made pursuant to a
Borrowing shall be applied pro rata among such Revolving Loans, provided
that at the Borrower's election in connection with any prepayment of
Revolving Loans pursuant to this Section 4.01, such prepayment shall not be
applied to any Revolving Loans of a Defaulting Bank.
4.02 Mandatory Prepayments. (a) (i) If on any date the sum of
the aggregate outstanding principal amount of Revolving Loans made by
Non-Defaulting Banks, Swingline Loans and the Letter of Credit Outstandings
exceeds the Adjusted Total Revolving Commitment as then in effect, the
Borrower shall repay on such date the principal of Swingline Loans, and if
no Swingline Loans are or remain outstanding, Revolving Loans of
Non-Defaulting Banks, in an aggregate amount equal to such excess. If,
after giving effect to the repayment of all outstanding Swingline Loans and
Revolving Loans of Non-Defaulting Banks, the aggregate amount of Letter of
Credit Outstandings exceeds the Adjusted Total Revolving Commitment, the
Borrower shall pay to the Administrative Agent on such date an amount in
cash and/or Cash Equivalents equal to such excess (up to the aggregate
amount of the Letter of Credit Outstandings at such time) and the
Administrative Agent shall hold such payment as security for the
obligations of the Borrower hereunder pursuant to a cash collateral
agreement to be entered into in form and substance satisfactory to the
Administrative Agent (which shall permit certain investments in Cash
Equivalents satisfactory to the Administrative Agent, until the proceeds
are applied to the obligations so secured).
(ii) If on any date the aggregate outstanding principal amount
of the Revolving Loans made by a Defaulting Bank exceeds the Revolving
Commitment of such Defaulting Bank, the Borrower shall repay on such date
principal of Revolving Loans of such Defaulting Bank in an amount equal to
such excess.
(iii) If any Borrowing Base Certificate shall disclose the
existence of a Borrowing Base Deficiency, the Borrower shall on the date of
delivery thereof in accordance with Section 7.01(h) repay the principal of
the Swingline Loans outstanding in an aggregate amount equal to the
Borrowing Base Deficiency and, to the extent such Swingline Loans have been
repaid in full and, to the extent such Borrowing Base Deficiency continues
to exist after such repayment, the Borrower shall repay the principal of
the Revolving Loans of Non-Defaulting Banks outstanding in an aggregate
amount equal to such Borrowing Base Deficiency. To the extent the Borrowing
Base Deficiency exceeds the outstanding principal amount of Swingline Loans
and Revolving Loans of Non-Defaulting Banks, the Borrower shall pay to the
Administrative Agent at the Payment Office on such date an amount of cash
or Cash Equivalents equal to such excess to be held as security for all
Obligations of the Borrower hereunder in a cash collateral account
established and maintained by the Administrative Agent pursuant to a cash
collateral agreement in form and substance satisfactory to the
Administrative Agent (which shall permit certain investments in Cash
Equivalents satisfactory to the Administrative Agent until the proceeds are
applied to the Obligations so secured).
(iv) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all then outstanding Swingline Loans shall
be repaid in full on the Swingline Expiry Date, (ii) all then outstanding
Revolving Loans shall be repaid in full on the Maturity Date and (iii)
unless the Required Banks otherwise agree in writing, all then outstanding
Loans shall be repaid in full on the date on which a Change of Control
occurs.
(b) With respect to each prepayment of Revolving Loans required
by Section 4.02(a), the Borrower may designate the Types of Revolving Loans
which are to be prepaid and the specific Borrowing or Borrowings pursuant
to which made, provided that (i) Eurodollar Loans may so be designated for
prepayment pursuant to this Section 4.02 only on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans with
Interest Periods ending on such date of required prepayment and all Base
Rate Loans have been paid in full; (ii) if any prepayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding
Revolving Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount, such Borrowing shall be immediately converted
into Base Rate Loans; (iii) each prepayment of any Revolving Loans made by
Non-Defaulting Banks pursuant to a Borrowing shall be applied pro rata
among such Revolving Loans; and (iv) each prepayment of any Revolving Loans
made by Defaulting Banks pursuant to a Borrowing shall be applied pro rata
among such Revolving Loans. In the absence of a designation by the Borrower
as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Section
1.11. Notwithstanding the foregoing provisions of this Section 4.02(b), if
at any time a mandatory or voluntary prepayment of Revolving Loans pursuant
to Sections 4.01 or 4.02(a) above would result, after giving effect to the
procedures set forth above, in the Borrower incurring breakage costs under
Section 1.11 as a result of Eurodollar Loans being prepaid other than on
the last day of an Interest Period applicable thereto (the "Affected
Eurodollar Loans"), then the Borrower may in its sole discretion initially
deposit a portion (up to 100%) of the amounts that otherwise would have
been paid in respect of the Affected Eurodollar Loans with the
Administrative Agent (which deposit must be equal in amount to the amount
of the Affected Eurodollar Loans not immediately prepaid) to be held in an
interest bearing account as security for the obligations of the Borrower
hereunder pursuant to a cash collateral arrangement satisfactory to the
Administrative Agent and shall provide for investments satisfactory to the
Administrative Agent, with such cash collateral to be directly applied upon
the first occurrence (or occurrences) thereafter of the last day of an
Interest Period applicable to the relevant Revolving Loans that are
Eurodollar Loans (or such earlier date or dates as shall be requested by
the Borrower), to repay an aggregate principal amount of such Revolving
Loans equal to the Affected Eurodollar Loans not initially prepaid pursuant
to this sentence. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, all amounts deposited as cash collateral
pursuant to the immediately preceding sentence shall be held for the sole
benefit of the Banks whose Revolving Loans would otherwise have been
immediately prepaid with the amounts deposited and upon the taking of any
action by the Administrative Agent or the Banks pursuant to the remedial
provisions of Section 9, any amounts held as cash collateral pursuant to
this Section 4.02(b) shall, subject to the requirements of applicable law,
be immediately applied to repay Revolving Loans.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement shall be
made to the Administrative Agent for the ratable (based on their respective
pro rata shares) account of the Banks entitled thereto (which funds the
Administrative Agent shall promptly forward to such Banks), not later than
1:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of
America at the Payment Office, it being understood that written notice by
the Borrower to the Administrative Agent to make a payment from the funds
in the Borrower's account at the Payment Office shall constitute the making
of such payment to the extent of such funds held in such account. Any
payments under this Agreement which are made later than 1:00 P.M. (New York
time) shall be deemed to have been made on the next succeeding Business
Day. Whenever any payment to be made hereunder shall be stated to be due on
a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or
other defense. Except as provided in Section 4.04(b), all such payments
will be made free and clear of, and without deduction or withholding for,
any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in
the second succeeding sentence, any tax imposed on or measured by the net
income or net profits of a Bank pursuant to the laws of the jurisdiction in
which it is organized or managed and controlled or the jurisdiction in
which the principal office or applicable lending office of such Bank is
located or any subdivision thereof or therein) and all interest, penalties
or similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred
to collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts, if any, as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction
for or on account of any Taxes, will not be less than the amount provided
for herein or in such Note. If any amounts are payable in respect of Taxes
pursuant to the preceding sentence, the Borrower agrees to reimburse each
Bank, upon the written request of such Bank, for taxes imposed on or
measured by the net income or net profits of such Bank pursuant to the laws
of the jurisdiction in which the principal office or applicable lending
office of such Bank is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which the
principal office or applicable lending office of such Bank is located and
for any withholding of taxes as such Bank shall determine are payable by,
or withheld from, such Bank in respect of such amounts so paid to or on
behalf of such Bank pursuant to the preceding sentence and in respect of
any amounts paid to or on behalf of such Bank pursuant to this sentence.
The Borrower will furnish to the Administrative Agent within 45 days after
the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower.
The Borrower agrees to indemnify and hold harmless each Bank, and reimburse
such Bank upon written request, for the amount of any Taxes so levied or
imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Effective Date, or
in the case of a Bank that is an assignee or transferee of an interest
under this Agreement pursuant to Section 1.13 or 12.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Bank's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Bank 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 pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit D (any such
certificate, a "Section 4.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8 (or
successor form) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition,
each Bank agrees that from time to time after the Effective Date, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the
Borrower and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001, or
Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and
such other forms as may be required in order to confirm or establish the
entitlement of such Bank to a continued exemption from or reduction in
United States withholding tax with respect to payments under this Agreement
and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or
Certificate, in which case such Bank shall not be required to deliver any
such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to
Section 12.04(b) and the immediately succeeding sentence, (x) the Borrower
shall be entitled, to the extent it is required to do so by law, to deduct
or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from
interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to
the extent that such Bank has not provided to the Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such
Bank is not a U.S. Person (defined as provided above) and has not provided
to the Borrower the Internal Revenue Service Forms required to be provided
to the Borrower pursuant to this Section 4.04(b) or (II) in the case of a
payment, other than interest, to a Bank described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and
except as set forth in Section 12.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted
or withheld by it as described in the immediately preceding sentence as a
result of any changes that are effective after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order,
or in the interpretation thereof, relating to the deducting or withholding
of such Taxes, provided such Bank shall provide to the Borrower and the
Administrative Agent, upon the request of the Borrower, any reasonably
available applicable IRS tax form (reasonably similar in its level of
detail to IRS Form 1001 or Form 4224 or a Section 4.04(b)(ii) Certificate)
necessary or appropriate for the exemption or reduction in the rate of such
U.S. federal withholding tax.
SECTION 5A. Conditions Precedent to the Effective Date. The
occurrence of the Effective Date pursuant to Section 12.10 is subject to
the satisfaction of the following conditions:
5A.01 Execution of Agreement. On or prior to the Effective
Date, (i) this Agreement shall have been executed and delivered as provided
in Section 12.10 and (ii) there shall have been delivered to the
Administrative Agent for the account of each Bank the appropriate Revolving
Note and to the Swingline Bank, the Swingline Note, in each case, executed
by the Borrower, and in the amount, maturity and as otherwise provided
herein.
5A.02 Officer's Certificate. On the Effective Date, the
Administrative Agent shall have received a certificate dated such date
signed by the President or any Vice President of the Borrower stating that
all of the applicable conditions set forth in Sections 5A.06, 5A.07, 5A.08,
5A.09, 5A.10, 5A.11, 5A.19 and 5A.20 and 5B.02 exist or have been satisfied
as of such date.
5A.03 Opinions of Counsel. On the Effective Date, the
Administrative Agent shall have received (i) an opinion, addressed to the
Administrative Agent and each of the Banks and dated the Effective Date,
from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the
Borrower, which opinion shall cover the matters contained in Exhibit E and
(ii) opinions of local counsel in form, scope and substance satisfactory to
the Administrative Agent.
5A.04 Corporate Proceedings. (a) On the Effective Date, the
Administrative Agent shall have received from each Credit Party a
certificate, dated the Effective Date, signed by the President or any Vice
President of such Credit Party, in each case in the form of Exhibit F with
appropriate insertions and deletions, together with copies of the articles
or certificate of incorporation, the by-laws and/or other organizational
documents (as appropriate) of each such Credit Party and the resolutions of
each such Credit Party referred to in such certificate and all of the
foregoing shall be in form and substance satisfactory to the Administrative
Agent.
(b) On the Effective Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Documents shall be
satisfactory in form and substance to the Administrative Agent (except as
otherwise specifically provided herein), and the Administrative Agent shall
have received all information and copies of all certificates, documents and
papers, including good standing certificates and any other records of
corporate proceedings and governmental approvals, if any, which the
Administrative Agent may have reasonably requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.
5A.05 Plans; Shareholders' Agreements; Management Agreement;
Employment Agreements; Existing Indebtedness Agreements; Affiliate
Contracts. On or prior to the Effective Date, there shall have been
delivered to the Banks copies, certified as true and correct by an
appropriate officer of the Borrower of:
(a) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information),
and for each Plan that is a "single-employer plan," as defined in
Section 4001(a)(15) of ERISA, the most recently prepared actuarial
valuation therefor) and any other "employee benefit plans," as
defined in Section 3(3) of ERISA, and any other material agreements,
plans or arrangements, with or for the benefit of current or former
employees of the Borrower or any Subsidiary of the Borrower or any
ERISA Affiliate (provided that the foregoing shall apply in the case
of any multiemployer plan, as defined in Section 4001(a)(3) of ERISA,
only to the extent that any document described therein is in the
possession of the Borrower or any Subsidiary of the Borrower or any
ERISA Affiliate or reasonably available thereto from the sponsor or
trustee of any such plan);
(b) each agreement entered into by the Borrower and/or any
Subsidiary of the Borrower (after giving effect to the Transaction)
governing the terms and relative rights of such entity's capital
stock, and each agreement entered into by equityholders of any such
entity with respect to their equity interests therein (collectively,
the "Shareholders' Agreements");
(c) the Management Agreement;
(d) each material employment agreement entered into by the
Borrower and/or any Subsidiary of the Borrower (collectively the
"Employment Agreements");
(e) each agreement evidencing or relating to material
Indebtedness of the Borrower and/or any Subsidiary of the Borrower
that is to remain outstanding after the Effective Date (collectively,
the "Existing Indebtedness Agreements"); and
(f) each contract, agreement or understanding entered into
between the Borrower and/or any of its Subsidiaries on the one hand,
and any of its Affiliates on the other hand (collectively, the
"Affiliate Contracts");
all of which Plans, Shareholders' Agreements, Management Agreement,
Employment Agreements, Existing Indebtedness Agreements and Affiliate
Contracts shall be in form and substance satisfactory to the Administrative
Agent.
5A.06 Material Adverse Change, etc. (a) On the Effective Date,
there shall not have occurred since September 30, 1997 any change, event,
loss or development in the business of the Borrower and/or any of its
Subsidiaries (including the incurrence of any liability of any nature,
whether accrued, contingent or otherwise) that, taken together with other
changes, events, losses or developments with respect to such business, has
had or would be reasonably expected to have a "materially adverse effect"
on the Borrower and its Subsidiaries taken as a whole. Solely for purposes
of this Section 5A.06, "materially adverse effect" shall mean any effect,
change or event which is not disclosed on Schedule 5.8 to the
Recapitalization Agreement that individually or in the aggregate, when
taken together with all similar effects, (i) is or is reasonably likely to
be material and adverse to the assets, liabilities, condition (financial or
otherwise), results of operations, cash flows or business of the Borrower
and its Subsidiaries taken as a whole, or (ii) does or is reasonably likely
to impair materially the ability of the Borrower or any Subsidiary
Guarantor to perform its obligations under the Credit Documents or
otherwise to threaten materially or to impede materially the consummation
of the Recapitalization, the Refinancing and/or any other transaction
contemplated by the Documents.
(b) During the period from November 25, 1997 through the
Effective Date, the Borrower and its Subsidiaries shall have operated their
respective businesses in the ordinary course and shall not have sold any
substantial part thereof.
5A.07 Litigation. (a) On the Effective Date, there shall be no
actions, suits or proceedings by any entity (private or governmental) which
is pending or threatened (a) with respect to this Agreement or any other
Document or the transactions contemplated hereby or thereby (including,
without limitation, the Transaction) or (b) which the Administrative Agent
or the Required Banks shall reasonably determine is reasonably likely to
(i) have a materially adverse effect on the Transaction or on the business,
operations, property, assets, liabilities, condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole or (ii)
have a material adverse effect on the rights or remedies of the Banks or
the Administrative Agent hereunder or under any other Credit Document or on
the ability of any Credit Party to perform its respective obligations to
them hereunder or under any other Credit Document.
(b) On the Effective Date there shall not exist any judgment,
order, injunction or other restraint prohibiting or imposing materially
adverse conditions upon, or materially delaying the consummation of the
Recapitalization or the other transactions contemplated by the Documents.
5A.08 Approvals. Other than as set forth on Schedule XII, on or
prior to the Effective Date, all necessary governmental (domestic and
foreign), regulatory and third party approvals and/or consents in
connection with the Transaction and the other transactions contemplated by
this Agreement and the other Documents and otherwise referred to herein or
therein shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains or prevents such transactions or
imposes, in the reasonable judgment of the Required Banks or the
Administrative Agent, materially adverse conditions upon the consummation
of such transactions. Any state anti-takeover law regulating the
Recapitalization shall have been complied with or shall have been
reasonably determined by the Administrative Agent and the Required Banks to
be invalid or inapplicable to the Recapitalization.
5A.09 Consummation of the Recapitalization. (a) Except for
changes which are reasonably acceptable to the Administrative Agent and the
Required Banks, the Recapitalization Agreement shall be in the form
delivered to the Administrative Agent and the Banks prior to the Effective
Date. The Recapitalization Documents (and the transactions contemplated
thereby) shall have been duly approved by the boards of directors and, if
required by applicable law, the stockholders of the parties thereto, and
all Recapitalization Documents shall have been duly executed and delivered
by the parties thereto and shall be in full force and effect. Each of the
conditions precedent to the obligation of the parties to consummate the
Recapitalization as set forth in the Recapitalization Agreement shall have
been satisfied to the satisfaction of the Administrative Agent and the
Required Banks, or waived with the consent of the Administrative Agent and
the Required Banks and the Recapitalization shall have been consummated in
accordance with the Recapitalization Documents (without giving effect to
any amendment or modification of the Recapitalization Agreement or waiver
with respect thereto unless consented to by the Administrative Agent and
the Required Banks) and all applicable laws, rules and regulations.
(b) On or prior to the Effective Date the aggregate amount of
cash necessary to effectuate the Recapitalization shall have been reduced
by approximately $2,600,000 in connection with the exercise price of
outstanding options.
5A.10 Consummation of the Equity Financing. On or prior to the
Effective Date, (i) the Borrower shall have received at least $25,000,000
in common equity financing (the "Equity Financing"), (ii) as part of the
Equity Financing, the Borrower shall have received net cash proceeds (the
"Equity Financing Cash Proceeds") of at least $20,000,000 from the issuance
of Common Stock to J.W. Childs, its affiliates and other investors
reasonably satisfactory to the Administrative Agent (with (x) retained
shares of Common Stock, (y) the value of retained options held by members
of senior management of the Borrower and (z) shares of Common Stock
purchased by members of management of the Borrower with the proceeds of up
to $100,000 of loans made by the Borrower to such members of senior
management representing the remainder of the Equity Financing), (ii) the
Administrative Agent and the Banks shall have received copies of all
agreements governing, or relating to, the Equity Financing (the "Equity
Financing Documents") certified as true and correct by an Authorized
Officer of the Borrower and such Equity Financing Documents shall be in
full force and effect and (iii) all terms and conditions of the Equity
Financing and the Equity Financing Documents shall be reasonably
satisfactory to the Administrative Agent and the Required Banks. The Equity
Financing shall have occurred in accordance with the terms and conditions
of the Equity Financing Documents (without giving effect to any amendment,
modification or waiver with respect thereto unless consented to by the
Administrative Agent and the Required Bank) and all applicable law. The
Borrower shall have utilized the Equity Financing Cash Proceeds to finance,
in part, the Recapitalization as well as to pay fees and expenses in
connection with the Transaction and the Administrative Agent and the Banks
shall have received a certificate of an Authorized Officer of the Borrower
to such effect setting forth in reasonable detail the uses of such
proceeds.
5A.11 Senior Notes. On or prior to the Effective Date, (i) the
Borrower shall have issued the Senior Notes and shall have received gross
cash proceeds therefrom in an aggregate amount of at least $100,000,000,
(ii) the Administrative Agent and the Banks shall have received copies of
the Senior Notes Documents certified as true and correct by an Authorized
Officer of the Borrower and (iii) the Senior Notes Documents shall be in
full force and effect and the terms and conditions thereof (including,
without limitation, subordination provisions, amortization, maturities,
interest rates, covenants, defaults, securities, remedies, mandatory
repayments and offers to purchase, sinking fund provisions) shall be
reasonably satisfactory to the Administrative Agent and the Required Banks.
The Borrower shall have utilized the net cash proceeds received from the
issuance of the Senior Notes to make the payments described under the "Use
of Proceeds" section of the offering memorandum relating to the Senior
Notes. The issuance of the Senior Notes shall have occurred in accordance
with the terms and conditions of the Senior Notes Documents (without giving
effect to any amendment, modification or waiver with respect thereto unless
consented to by the Administrative Agent and the Required Banks) and all
applicable law.
5A.12 Corporate, Capital, Ownership Structure. On the Effective
Date (after giving effect to the Transaction) the corporate, capital and
ownership structure (including, without limitation, the terms of any
capital stock, options, warrants or other securities issued or to be issued
by the Borrower on the Effective Date and all agreements and organizational
documents related thereto) and management of the Borrower and its
Subsidiaries shall be reasonably satisfactory to the Administrative Agent
and the Required Banks.
5A.13 Fees. On or prior to the Effective Date, the Borrower
shall have paid to the Administrative Agent and the Banks all Fees and
expenses (including, without limitation, reasonable fees and expenses of
counsel and all expenses related to the equipment appraisals required
pursuant to this Agreement) agreed upon by such parties to be paid on or
prior to such date.
5A.14 Subsidiary Guaranty. On the Effective Date, each
Subsidiary Guarantor, if any, shall have duly authorized, executed and
delivered a guaranty in the form of Exhibit G (as modified, amended or
supplemented from time to time in accordance with the terms hereof and
thereof, the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be
in full force and effect.
5A.15 Security Documents. (a) On the Effective Date, the
Borrower and each Subsidiary Guarantor shall have (i) duly authorized,
executed and delivered a Pledge Agreement in the form of Exhibit H (as
modified, amended or supplemented from time to time in accordance with the
terms hereof and thereof, the "Pledge Agreement"), (ii) executed and
delivered to the Collateral Agent all Financing Statements (Form UCC-1) in
appropriate form for filing under the UCC of each jurisdiction as may be
necessary to perfect the pledge of all Pledged Securities and (iii)
delivered to the Collateral Agent, as pledgee thereunder, all of the
certificates representing the Pledged Securities referred to therein and
owned by such Credit Party on the Effective Date, endorsed in blank (in the
case of promissory notes) or accompanied by executed and undated stock
powers or other appropriate instruments of transfer (in the case of capital
stock or other equity interests), and the Pledge Agreement shall be in full
force and effect.
(b) On the Effective Date, the Borrower and each Subsidiary
Guarantor shall have duly authorized, executed and delivered a Security
Agreement in the form of Exhibit I (as modified, supplemented or amended
from time to time in accordance with the terms hereof and thereof, the
"Security Agreement") covering all of such Credit Party's present and
future Security Agreement Collateral, in each case together with:
(i) executed Financing Statements (Form
UCC-1) in appropriate form for filing under the UCC of each
jurisdiction as may be necessary to perfect the security interests
purported to be created by the Security Agreement;
(ii) certified copies of Requests for
Information or Copies (Form UCC-11), or equivalent reports, each of
recent date listing all effective financing statements that name each
Credit Party as debtor and that are filed in the jurisdictions
referred to in clause (i) above or in Section 5A.15(a)(ii) above,
together with copies of such other financing statements that name any
Credit Party as debtor (none of which shall cover the Collateral
except (x) those with respect to which appropriate termination
statements executed by the secured lender thereunder have been
delivered to the Administrative Agent and (y) to the extent
evidencing Permitted Liens);
(iii) evidence of the completion of (or
evidence of the making of arrangements satisfactory to the
Administrative Agent for the completion of) all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by
the Security Agreement (including, without limitation, filings and
registrations with respect to copyrights, patents and trademarks);
and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken; and the Security Agreement shall be in full
force and effect.
5A.16 Mortgages. On the Effective Date, the Borrower will, and
will cause each of its Subsidiaries to, deliver to the Collateral Agent (i)
fully executed counterparts of deeds of trust, mortgages and similar
documents in each case in form and substance satisfactory to the Collateral
Agent (each a "Mortgage" and, collectively, the "Mortgages") covering all
of the Mortgaged Properties, and counterparts of such Mortgages shall have
been duly recorded in all places to the extent necessary or, in the
judgment of the Collateral Agent, desirable, effectively to create a valid
and enforceable first priority mortgage Lien, subject only to Permitted
Encumbrances, on each such Mortgaged Property in favor of the Collateral
Agent (or such other trustee as may be required or desirable under local
law) for the benefit of the Banks, (ii) mortgage title insurance policies
issued by title insurers reasonably satisfactory to the Collateral Agent
(the "Mortgage Policies") in amounts reasonably satisfactory to the
Collateral Agent and assuring the Collateral Agent that the Mortgages in
respect of the Mortgaged Properties are valid and enforceable first
priority mortgage Liens on the respective Mortgaged Properties free and
clear of all defects and encumbrances except Permitted Encumbrances, and
such Mortgage Policies shall be in form and substance reasonably
satisfactory to the Collateral Agent and shall include an endorsement for
mechanic liens and for any other matter that the Collateral Agent in its
discretion may reasonably request and (iii) such opinions of counsel as the
Collateral Agent may reasonably request in connection with such Mortgages,
which opinions of counsel shall be in form and substance satisfactory to
the Collateral Agent.
5A.17 Solvency. On the Effective Date, the Borrower shall have
delivered to the Administrative Agent a solvency certificate in the form of
Exhibit J, addressed to the Administrative Agent and each of the Banks and
dated the Effective Date, from the chief executive officer or chief
financial officer of the Borrower.
5A.18 Insurance Coverage. On the Effective Date, the
Administrative Agent shall have received (i) evidence of insurance in
amount and scope reasonably satisfactory to the Administrative Agent and
otherwise complying with the requirements of Section 7.03 for the business
and properties of the Borrower and its Subsidiaries, (ii) and endorsements
in form and substance satisfactory to the Administrative Agent and (iii) a
summary of insurance coverage complying with the requirements of Section
7.03.
5A.19 Refinancing. (a) On the Effective Date, and after giving
effect to the Loans incurred on the Effective Date, the Refinancing, the
Recapitalization and the other transactions contemplated by the Documents,
neither the Borrower nor any of its Subsidiaries shall have any
Indebtedness or preferred stock outstanding except for such Loans and the
Existing Indebtedness. All of the Existing Indebtedness shall remain
outstanding after the transactions contemplated by this Agreement and the
other Documents without any defaults or events of default existing
thereunder or arising as a result of the transactions contemplated by this
Agreement and the other Documents. The amount, terms and conditions, and
the documentation for all Existing Indebtedness, shall be reasonably
satisfactory to the Administrative Agent and the Required Banks.
(b) (i) On the Effective Date, the commitments under each
Refinanced Agreement shall have been terminated, all loans thereunder shall
have been repaid in full, together with interest thereon (including,
without limitation, any prepayment premium), all letters of credit issued
thereunder shall have been terminated, and all other amounts owing pursuant
to each Refinanced Agreement shall have been repaid in full, and the
Administrative Agent shall have received evidence in form, scope and
substance satisfactory to the Administrative Agent that the matters set
forth in this Section 5A.19 have been satisfied at such time.
(ii) On the Effective Date, the creditors under each Refinanced
Agreement shall have terminated and released all applicable Liens on the
capital stock of, and assets owned by, the Borrower and its Subsidiaries.
(c) The Administrative Agent shall have received copies of all
documents executed in connection with the Refinancing and the release of
the Liens pursuant thereto (the "Debt Termination Documents"), all of which
shall be in form and substance satisfactory to the Administrative Agent.
5A.20 No Default Under Material Agreements. On the Effective
Date and after giving effect to the transactions contemplated by the
Documents, there shall be no conflict with, or default under, any material
agreement of the Borrower and its Subsidiaries (including, without
limitation, the Senior Notes Indenture and the other Senior Notes
Documents). For purposes of this Section 5A.20, "material agreement" shall
refer to each material contract involving annual revenues in excess of
$1,000,000 and each material license of the Borrower.
5A.21 Projections. On or prior to the Effective Date, there
shall have been delivered to the Administrative Agent detailed projected
financial statements of the Borrower certified by the chief financial
officer of the Borrower for the period from January 1, 1998 to December 31,
2003 (the "Projections"), which Projections (x) shall reflect the
forecasted income statements, balance sheets and cash flow (including all
relevant assumptions in connection therewith) of the Borrower after giving
affect to the Transaction and the related financing thereof and the other
transactions contemplated hereby and (y) shall be reasonably satisfactory
in form and substance to the Administrative Agent.
5A.22 Equipment Appraisal. On or prior to Effective Date, the
Administrative Agent and the each Bank shall have received, and the
Administrative Agent and the Required Banks shall be satisfied with the
form, substance and results of, a current complete appraisal analysis of
the rental equipment of the Borrower and its Subsidiaries conducted by
Daley-Hodkin Appraisal Corporation on a valuation basis acceptable to the
Administrative Agent (the "Appraisal Analysis"). The Appraisal Analysis
shall support unutilized availability on the Effective Date which is
satisfactory to the Administrative Agent.
5A.23 Initial Borrowing Base Certificate. On or prior to the
Effective Date, the Borrower shall have delivered to the Administrative
Agent and to each Bank its initial Borrowing Base Certificate meeting the
requirements of Section 7.01(h).
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Borrower to the
Administrative Agent and each of the Banks that all of the applicable
conditions specified above exist as of that time. All of the certificates,
legal opinions and other documents and papers referred to in this Section
5A, unless otherwise specified, shall be delivered to the Administrative
Agent at its Notice Office for the account of each of the Banks and, except
for the Notes, in sufficient counterparts or copies for each of the Banks
and shall be satisfactory in form and substance to the Administrative
Agent.
SECTION 5B. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Loans (including Loans made on the
Effective Date) and the obligation of each Issuing Bank to issue Letters of
Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
5B.01 Effective Date. The Effective Date shall have occurred.
5B.02 No Default; Representations and Warranties. At the time
of each Credit Event and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents in effect at
such time shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and
as of such dates, except to the extent that such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties will be true and correct in all material
respects as of such earlier date.
5B.03 Notice of Borrowing; Letter of Credit Request. (a) Prior
to the making of each Revolving Loan, the Administrative Agent shall have
received a Notice of Borrowing meeting the requirements of Section 1.03(a).
Prior to the making of any Swingline Loan, the Swingline Bank shall have
received the notice required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
respective Letter of Credit Issuer shall have received a Letter of Credit
Request meeting the requirements of Section 2.03(a).
SECTION 6. Representations, Warranties and Agreements. In order
to induce the Banks to enter into this Agreement and to make the Loans and
issue and/or participate in Letters of Credit provided for herein, the
Borrower makes the following representations and warranties to, and
agreements with, the Banks, in each case after giving effect to the
Transaction and any other transactions contemplated by the Documents, all
of which shall survive the execution and delivery of this Agreement and the
making of the Loans and the issuance and/or participation in Letters of
Credit (with the making of each Credit Event thereafter being deemed to
constitute a representation and warranty that the matters specified in this
Section 6 are true and correct in all material respects on and as of the
date of each such Credit Event unless such representation and warranty
expressly indicates that it is being made as of any specific date, in which
case such representation and warranty shall be true and correct in all
material respects as of such specific date):
6.01 Corporate Status. The Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in
good standing under the laws of the jurisdiction of its organization and
has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and (ii) has duly qualified
and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified and where the failure
to be so qualified could reasonably be expected to have a Material Adverse
Effect.
6.02 Power and Authority. Each Credit Party has the corporate
power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance of the Documents to which it is a party. Each Credit Party has
duly executed and delivered each Document to which it is a party and each
such Document constitutes the legal, valid and binding obligation of such
Person enforceable in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party nor
compliance by it with the terms and provisions thereof, nor the
consummation of the transactions contemplated therein, (i) will contravene
any applicable provision of any law, statute, rule, regulation, order,
writ, injunction or decree of any court or governmental instrumentality,
(ii) other than as set forth on Schedule XII, will conflict or be
inconsistent with, or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property
or assets of the Borrower or any of its Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust, agreement or other instrument
to which the Borrower or any of its Subsidiaries is a party or by which it
or any of its material property or assets are bound or to which it may be
subject or (iii) will violate any provision of the certificate of
incorporation or by-laws (or equivalent organizational documents) of the
Borrower or any of its Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings
pending or threatened with respect to the Borrower or any of its
Subsidiaries (i) that are likely to have a materially adverse effect on the
business, operations, property, assets, liabilities, condition (financial
or otherwise) of the Borrower and its Subsidiaries taken as a whole or (ii)
that could reasonably be expected to have a material adverse effect on (a)
the rights or remedies of the Banks or on the ability of any Credit Party
to perform its obligations to them hereunder and/or under the other Credit
Documents to which it is a party or (b) the ability to consummate the
Transaction.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
all Revolving Loans and the proceeds of all Swingline Loans shall be
utilized (i) on the Effective Date to effect the Refinancing, provided that
no more than $3,000,000 of such proceeds shall be utilized on such date to
repay indebtedness incurred after September 30, 1997 and prior to the
Effective Date, (ii) on the Effective Date to pay fees and expenses
relating to the Transaction, (iii) to make up to $3,300,000 of severance
and pension related payments in connection with the Recapitalization and
(iv) for the ongoing general corporate, working capital and equipment
purchase requirements of the Borrower and its Subsidiaries. Notwithstanding
anything to the contrary, no more than $9,000,000 of proceeds of Revolving
Loans and/or Swingline Loans shall be utilized for any purpose on the
Effective Date.
(b) Neither the making of any Loan hereunder, nor the use of
the proceeds thereof, nor the occurrence of any other Credit Event, nor the
incurrence of any other Indebtedness will violate or be inconsistent with
the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System and no part of any Credit Event (or the proceeds
thereof) will be used to purchase or carry any Margin Stock or to extend
credit for the purpose of purchasing or carrying any Margin Stock. At no
time shall the value (as determined in accordance with Regulation U) of
Margin Stock owned by the Borrower and its Subsidiaries exceed 25% of the
value (as determined in accordance with Section 221.2(g)(2) of Regulation
U) of the assets of the Borrower and its Subsidiaries taken as a whole.
6.06 Requisite Approvals. Except for filings and recordings in
connection with the Security Documents that have been or will be made, and
other than as set forth on Schedule XII, no material order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by (other than those that have otherwise
been obtained or made on or prior to the Effective Date and which remain in
full force and effect on the Effective Date), any foreign or domestic
governmental or public body or authority, or any subdivision thereof, or
any third Person, is required to authorize or is required in connection
with (i) the execution, delivery and performance of any Document or (ii)
the legality, validity, binding effect or enforceability of any Document.
6.07 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
6.08 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on
behalf of the Borrower or any of its Subsidiaries in writing to the
Administrative Agent or any Bank (including, without limitation, all
information contained in the Credit Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any
transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any
Credit Party in writing to the Administrative Agent or any Bank will be
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided. There is no fact known to the Borrower which
would be reasonably likely to have a Material Adverse Effect which has not
been disclosed herein or in such other documents, certificates and
statements furnished in writing to the Banks for use in connection with the
transactions contemplated hereby.
6.10 Financial Condition; Financial Statements. (a) On and as
of the Effective Date, on a pro forma basis after giving effect to the
Transaction and to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by each Credit Party in connection therewith,
(x) the sum of the assets, at a fair valuation, of the Borrower and its
Subsidiaries taken as a whole will exceed its debts, (y) the Borrower and
its Subsidiaries taken as a whole will not have incurred or intended to, or
believe that they will, incur debts beyond their ability to pay such debts
as such debts mature and (z) the Borrower and its Subsidiaries taken as a
whole will not have unreasonably small capital with which to conduct its
business. For purposes of this Section 6.10 (a), "debt" means any liability
on a claim, and "claim" means (i) 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; or (ii) right to an equitable remedy for breach of performance
if such breach gives rise to a payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(b) (i) The consolidated balance sheet of the Borrower as of
December 31, 1996 and the related consolidated statements of income,
shareholders' equity and cash flows of the Borrower for the fiscal year
ended as of said date, which has been audited by Coopers & Lybrand L.L.P.,
independent certified public accountants, who delivered an unqualified
audit opinion in respect therewith, (ii) the unaudited draft consolidated
balance sheet of the Borrower as of September 30, 1997 and the related
consolidated statements of income, shareholders' equity and cash flows of
the Borrower for the fiscal year ended as of said date and (iii) the pro
forma balance sheet of the Borrower as of September 30, 1997, copies of
which have heretofore been furnished to each Bank, present fairly the
financial position of the Borrower as of the dates of said statements and
the results for the periods covered thereby (or, in the case of the
aforesaid pro forma balance sheet, presents a good faith estimate of the
pro forma financial condition of the Borrower (after giving effect to the
Transaction and the related financing thereof) at the date thereof) in
accordance with GAAP (except, in the case of the aforesaid pro forma
balance sheet, to the extent provided therein), except to the extent
provided in the notes to said financial statements and, in the case of the
aforesaid pro forma balance sheet, subject to normal year end adjustments.
All such financial statements (other than the aforesaid pro forma balance
sheet) have been prepared in accordance with GAAP consistently applied
except to the extent provided in the notes to said financial statements.
(c) Since September 30, 1997, and after giving effect to the
Transaction and any other transactions contemplated by the Documents,
nothing has occurred that has had or could reasonably be expected to have a
Material Adverse Effect.
(d) The Projections and pro forma financial information
contained in such materials are based on good faith estimates and
assumptions believed by such Persons to be reasonable at the time made. On
the Effective Date, the Borrower believed that the Projections were
reasonable.
(e) Except as reflected in the financial statements and the
notes thereto described in Section 6.10(b), there were as of the Effective
Date no liabilities or obligations with respect to the Borrower or any of
its Subsidiaries of a nature (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in
aggregate, could reasonably be expected to be material to the Borrower and
its Subsidiaries taken as a whole. As of the Effective Date neither the
Borrower or any of its Subsidiaries knows of any basis for the assertion
against the Borrower or any of its Subsidiaries of any liability or
obligation of any nature whatsoever that is not fully disclosed (x) in the
financial statements described in Section 6.10(b) or (y) in the schedules
to the Recapitalization Agreement and/or this Agreement which, either
individually or in the aggregate, could reasonably be expected to be
material to the Borrower and its Subsidiaries taken as a whole.
6.11 Security Interests. On and after the Effective Date, each
of the Security Documents create, as security for the Obligations purported
to be secured thereby, a valid and enforceable (and, upon the filing of the
Form UCC-1 Financing Statements delivered pursuant to Section 5A.15(b)(i),
perfected) security interest in and Lien on all of the Collateral subject
thereto, superior to and prior to the rights of all third Persons and
subject to no other Liens (except (x) to the extent expressly set forth in
the Security Documents, (y) that the Collateral may be subject to the
security interests evidenced by Permitted Liens relating thereto and (z)
that the Mortgaged Properties also may be subject to Permitted Encumbrances
relating thereto), in favor of the Collateral Agent for the benefit of the
Secured Creditors. No filings or recordings are required in order to
perfect the security interests created under any Security Document except
for filings or recordings required in connection with any such Security
Document which shall have been made on or prior to the execution and
delivery thereof (or are the subject of arrangements, satisfactory to the
Administrative Agent, for filing on or promptly after the date of the
execution and delivery thereof).
6.12 Representations and Warranties in the Documents. All
representations and warranties of the Credit Parties and, to the best
knowledge of the Borrower, of all other Persons party thereto, set forth in
the Credit Documents, the Recapitalization Agreement and the Senior Notes
Documents were true and correct in all material respects as of the time
such representations and warranties were made and shall be true and correct
in all material respects as of the Effective Date as if such
representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date.
6.13 Consummation of Transaction. As of the Effective Date, the
Transaction shall have been consummated in accordance with the terms and
conditions of the Transaction Documents and all applicable laws. All
applicable waiting periods with respect thereto have or, prior to the time
when required, will have, expired without, in all such cases, any action
being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the consummation of the
Transaction. As of the Effective Date, there does not exist any judgment,
order, or injunction prohibiting the consummation of the Transaction, or
the making of the Loans or the issuance of Letters of Credit or the
performance by any Credit Party of its respective obligations under the
Documents.
6.14 Tax Returns and Payments. Each of the Borrower and each of
its Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and
has paid, or properly accrued in accordance with GAAP, all material taxes
and assessments payable by it which have become due, other than those not
yet delinquent and those contested in good faith and for which adequate
reserves have been established in accordance with GAAP. The Borrower and
each of its Subsidiaries have paid, or have provided adequate reserves (in
the good faith judgment of the management of the Borrower) for the payment
of, all federal, state and foreign income taxes applicable for all prior
fiscal years and for the current fiscal year to the date hereof. There is
no material action, suit, proceeding, investigation, audit or claim now
pending or, to the best knowledge of the Borrower, threatened by any
authority regarding any taxes relating to the Borrower or any of its
Subsidiaries. Neither the Borrower nor any of its Subsidiaries has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of the Borrower or any of its Subsidiaries, or is aware
of any circumstances that could cause the taxable years or other taxable
periods of the Borrower or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations.
6.15 Compliance with ERISA. (a) Schedule III sets forth a list
of each Plan; each Plan (and each related trust, insurance contract or
fund) is in substantial compliance with its terms and with all applicable
laws, including without limitation, ERISA and the Code; each Plan (and each
related trust, if any) which is intended to be qualified under Section
401(a) of the Code, has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections
401(a) and 501(a) of the Code; no Reportable Event has occurred; to the
best knowledge of the Borrower, no Plan which is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization;
no Plan has an Unfunded Current Liability; no Plan which is subject to
Section 412 of the Code or Section 302 of ERISA has an accumulated funding
deficiency, within the meaning of such sections of the Code or ERISA or has
applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of
the Code or Section 303 or 304 of ERISA; all contributions required to be
made with respect to a Plan have been timely made; neither the Borrower,
nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred any
material liability (including any indirect, contingent or secondary
liability) to or on account of a Plan pursuant to Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or, to the best knowledge of the
Borrower, expects to incur any such liability under any of the foregoing
sections with respect to any Plan; no condition exists which presents a
material risk to the Borrower or any Subsidiary of the Borrower or any
ERISA Affiliate of incurring a liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; no proceedings
have been instituted to terminate or appoint a trustee to administer any
Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine
claims for benefits) is pending, or, to the best knowledge of the Borrower,
expected or threatened; using actuarial assumptions and computation methods
consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates
to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of
the close of the most recent fiscal year of each such Plan ended prior to
the date of the most recent Credit Event, would not exceed $500,000; each
group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) which covers or has covered employees or former
employees of the Borrower, any Subsidiary of the Borrower, or any ERISA
Affiliate has at all times been operated in compliance with the provisions
of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code
except to the extent that any failure to so comply would not result in a
material liability to the Borrower or any subsidiary of the Borrower or any
ERISA Affiliate; no material lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate exists or, to the best knowledge of the Borrower, is likely to
arise on account of any Plan; and the Borrower and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
any Plan the obligations with respect to which could reasonably be expected
to have a material adverse effect on the ability of the Borrower to perform
its obligations under this Agreement.
(b) No Plan is a Foreign Pension Plan.
6.16 Subsidiaries; Subsidiary Restrictions. (a) Schedule IV
lists each Subsidiary of the Borrower (and the direct and indirect
ownership interest of the Borrower therein), in each case existing on the
Effective Date.
(b) There are no restrictions on the Borrower or any of its
Subsidiaries which prohibit or otherwise restrict the transfer of cash or
other assets from any Subsidiary of the Borrower to the Borrower, other
than prohibitions or restrictions existing under or by reason of (i) this
Agreement and the other Credit Documents, (ii) applicable law, (iii)
customary non-assignment provisions entered into in the ordinary course of
business and consistent with past practices, (iv) 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
all or substantially all of the capital stock or assets of such Subsidiary,
so long as such sale or disposition is permitted under this Agreement and
(v) any documents or instruments governing the terms of any Indebtedness or
other obligations secured by Permitted Liens, provided that such
prohibitions or restrictions apply only to the assets subject to such
Permitted Liens.
6.17 Patents, etc. The Borrower and each of its Subsidiaries
have obtained all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from material restrictions,
that are necessary for the operation of their businesses taken as a whole
as presently conducted.
6.18 Pollution and Other Regulations. (A) (a) Each of the
Borrower and each of its Subsidiaries is in compliance with all applicable
Environmental Laws governing its business for which failure to comply is
likely to have a Material Adverse Effect, and neither the Borrower nor any
of its Subsidiaries is liable for any penalties, fines or forfeitures for
failure to comply with any of the foregoing in the manner set forth above,
(b) all licenses, permits, registrations or approvals required for the
business of the Borrower and each of its Subsidiaries, as conducted as of
the Effective Date, under any Environmental Law have been secured or
applied for and each of the Borrower and each of its Subsidiaries is in
substantial compliance therewith, except such licenses, permits,
registrations or approvals the failure to secure or to comply with is not
likely to have a Material Adverse Effect, (c) neither the Borrower nor any
of its Subsidiaries is in any respect in noncompliance with, breach of or
default under any applicable writ, order, judgment, injunction, or decree
relating to Environmental Law to which the Borrower or such Subsidiary is a
party and which would affect the ability of the Borrower or such Subsidiary
to conduct its business, and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would constitute
noncompliance, breach of or default thereunder, except in each such case,
such noncompliance, breaches or defaults as are not likely, in the
aggregate, to have a Material Adverse Effect, (d) there are as of the
Effective Date no Environmental Claims pending or, to the best knowledge of
the Borrower, threatened, against the Borrower or any of its Subsidiaries,
which (a) question the validity, term or entitlement of the Borrower or any
of its Subsidiaries for any permit, license, order or registration required
for the operation of any facility which the Borrower or any of its
Subsidiaries currently operates or (b) wherein an unfavorable decision,
ruling or finding would be reasonably likely to have a Material Adverse
Effect, (e) there are no facts, circumstances, conditions or occurrences
regarding the business or operations of the Borrower or any of its
Subsidiaries, or any Real Property at any time owned or operated by the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
any property adjacent to any such Real Property that could reasonably be
expected (i) to form the basis of an Environmental Claim against the
Borrower, any of its Subsidiaries or any currently owned or operated Real
Property of the Borrower or any of its Subsidiaries, or (ii) (a) to cause
any such Real Property currently owned or operated to be subject to any
restrictions on the occupancy or use of such Real Property under any
Environmental Law or (b) to cause any such owned Real Property to be
subject to any restrictions on the ownership or transferability of such
owned Real Property under any Environmental Law, except in each such case,
such Environmental Claims or restrictions that individually or in the
aggregate are not reasonably likely to have a Material Adverse Effect.
(B) Hazardous Materials have not at any time been (i)
generated, used, treated or stored on, or transported to or from, any Real
Property at any time owned or operated by the Borrower or any of its
Subsidiaries or (ii) released on any such Real Property, in each case where
such occurrence or event individually or in the aggregate is reasonably
likely to have a Material Adverse Effect.
6.19 Properties. The Borrower and each of its Subsidiaries have
good title to all material properties owned by them, free and clear of all
Liens, other than (i) as referred to in the consolidated balance sheet
referred to in Section 6.10(b) or in the notes thereto or (ii) Permitted
Liens. Schedule V contains a true and complete list of each Real Property
owned or leased by the Borrower or any of its Subsidiaries on the Effective
Date and the type of interest therein held by the Borrower or the
respective Subsidiary.
6.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably
be expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any Subsidiary of the
Borrower or to the Borrower's knowledge, threatened against any of them,
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is
so pending against the Borrower or any Subsidiary of the Borrower or, to
the Borrower's knowledge, threatened against any of them, (ii) no strike,
labor dispute, work slowdown or stoppage pending against the Borrower or
any Subsidiary of the Borrower or, to the Borrower's knowledge, threatened
against any of them and (iii) no union representation petition existing
with respect to the employees of the Borrower or any Subsidiary of the
Borrower and no union organizing activities are taking place, except with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate, such as is not reasonably likely to have
a Material Adverse Effect.
6.21 Existing Indebtedness. Schedule VI sets forth a true and
complete list of all Indebtedness of the Borrower and each of its
Subsidiaries as of the Effective Date and which is to remain outstanding
after giving effect to the Transaction (excluding the Loans and the Letters
of Credit, the "Existing Indebtedness"), in each case showing the aggregate
principal amount thereof and the name of the respective borrower (or
issuer) and any other entity which directly or indirectly guaranteed such
debt.
6.22 Capitalization. On the Effective Date and after giving
effect to the Transaction and the other transactions contemplated by the
Documents, the authorized capital stock of the Borrower shall consist of
(i) 25,000,000 shares of Common Stock, of which 15,624,464.406 shares shall
be issued and outstanding, (ii) 100,000 shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of which no shares
shall be issued and outstanding and (iii) 4,900,000 shares of undesignated
preferred stock, par value $.01 per share, of which no shares shall be
issued and outstanding.. All such outstanding shares have been duly and
validly issued, are fully paid and nonassessable and are free of preemptive
rights. Except for such shares of Common Stock and any employee stock
options issued pursuant to the Borrower's employee stock option plan which
are exercisable solely for the future issuance of Common Stock to the
holders thereof, there are no shares of capital stock or other equity
securities of the Borrower outstanding, including, without limitation,
securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options for
the purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character
relating to, its capital stock.
6.23 Senior Notes. As of the Effective Date, the Senior Notes
have been duly authorized, issued and delivered in accordance with
applicable law and the offering memorandum relating thereto, and such
offering memorandum, as of the date of its issue, does not contain any
untrue statement of a material fact nor omit to state a material fact
necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
SECTION 7. Affirmative Covenants. The Borrower covenants and
agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Revolving Commitments have terminated,
no Letters of Credit or Notes are outstanding and the Loans and Unpaid
Drawings, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each
Bank:
(a) Annual Financial Statements. Within 90 days after the close
of each fiscal year of the Borrower, the consolidated balance sheet
of the Borrower and its Subsidiaries, as at the end of such fiscal
year and the related consolidated statements of income, shareholders'
equity and cash flows for such fiscal year, in each case setting
forth comparative consolidated figures for the preceding fiscal year
and in each case examined by independent certified public accountants
of recognized national standing whose opinion shall not be qualified
as to the scope of audit or as to the status of the Borrower or any
of its Subsidiaries as a going concern, together with a certificate
of such accounting firm stating that in the course of its regular
audit of the business of the Borrower, which audit was conducted in
accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any Default or Event of
Default pursuant to Section 8.05, 8.10, 8.11 or 8.12 which has
occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as available and in
any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries, as
at the end of such quarterly accounting period and the related
consolidated statements of income and cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period, and in
each case setting forth comparative consolidated figures for the
related periods in the prior fiscal year, and comparative budgeted
figures for such quarterly accounting period, all of which shall be
certified by the chief financial officer or controller of the
Borrower, subject to changes resulting from audit and normal year-end
audit adjustments.
(c) Monthly Reports. As soon as practicable, and in any event
within 30 days after the end of each monthly accounting period of
each fiscal year of the Borrower (other than the last monthly
accounting period in each fiscal quarter and fiscal year of the
Borrower), monthly reports in a form reasonably satisfactory to the
Administrative Agent, which shall include the consolidated balance
sheet of the Borrower and its Subsidiaries, as at the end of such
monthly accounting period, and the related consolidated statements of
income and cash flows for such monthly accounting period, setting
forth comparative figures for the corresponding monthly accounting
period of the previous year and comparative budgeted figures for such
monthly accounting period.
(d) Budgets; etc. Not more than 30 days after the commencement
of each fiscal year of the Borrower, a budget of the Borrower and its
Subsidiaries in reasonable detail for each of the twelve months of
such fiscal year. In addition, the Borrower will furnish to each
Bank, together with each delivery of consolidated financial
statements pursuant to Sections 7.01(a), (b) and (c), a comparison of
the current year to date financial results against the budgets
required to be submitted pursuant to this clause (d).
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(a), (b) and (c), a
certificate of the chief financial officer, controller or other
Authorized Officer of the Borrower to the effect that no Default or
Event of Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which certificate,
in the case of a certificate delivered together with financial
statements delivered pursuant to (x) Sections 7.01(a) and (b), shall
set forth the calculations required to establish whether the Borrower
and its Subsidiaries were in compliance with the provisions of
Sections 8.04, 8.05, 8.10, 8.11 and 8.12 as at the end of such fiscal
quarter or year, as the case may be and (y) Section 7.01(b), shall
set forth the calculation of the Leverage Ratio, together with the
calculations required to establish such ratio.
(f) Notice of Default or Litigation. Promptly, and in any event
within three Business Days after the Borrower obtains knowledge
thereof, notice of (x) the occurrence of any event which constitutes
a Default or an Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action the
Borrower proposes to take with respect thereto or (y) the
commencement of or any significant development in any litigation or
governmental proceeding pending against the Borrower or any of its
Subsidiaries which is likely to have a Material Adverse Effect or is
likely to have a material adverse effect on the ability of the
Borrower or any other Credit Party to perform its obligations
hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of
each final report or "management letter" submitted to the Borrower by
its independent accountants in connection with any annual, interim or
special audit made by it of the books of the Borrower.
(h) Borrowing Base Certificates. (i) On or prior to the
Effective Date and (ii) thereafter, not later than 12:00 Noon (New
York time) on the fifteenth Business Day after each fiscal month-end,
a borrowing base certificate of the Borrower in the form of Exhibit K
(each a "Borrowing Base Certificate") with respect to the Eligible
Receivables and Eligible Equipment of the Borrower which shall be
executed and certified by the chief financial officer of the Borrower
and shall set forth the Borrowing Base as of (x) in the case of
clause (i), the Effective Date (after giving effect to the
Transaction) and (y) in the case of clause (ii), the last day of the
immediately preceding fiscal month.
(i) Environmental Matters. Promptly after obtaining knowledge
of any of the following, written notice of:
(i) any pending or threatened Environmental Claim against
he Borrower or any of its Subsidiaries or any Real Property
owned, operated or leased by the Borrower or any of its
Subsidiaries which, if successful, could reasonably be expected
to have a Material Adverse Effect;
(ii) any condition or occurrence that (x) results in
material noncompliance by the Borrower or any of its
Subsidiaries with any applicable Environmental Law, or (y)
could reasonably be anticipated to form the basis of a material
Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property owned, operated or leased by
the Borrower or any of its Subsidiaries with respect to, in the
case of both clauses (x) and (y) above, (A) any Mortgaged
Property or (B) to the extent such noncompliance or
Environmental Claim is material to the Borrower or to any other
Credit Party, any other Real Property;
(iii) any condition or occurrence on any Real Property
owned, operated or leased by the Borrower or any of its
Subsidiaries that could reasonably be anticipated to cause such
Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by the Borrower or
its Subsidiary, as the case may be, of its interest in such
Real Property under any Environmental Law in the event such
restrictions apply with respect to a Mortgaged Property or, to
the extent such restrictions are material to the Borrower or
any other Credit Party, with respect to any other Real
Property; and
(iv) the taking of any material removal or remedial
action in response to the actual or alleged presence of any
Hazardous Material on any Real Property owned, operated or
leased by the Borrower or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of
the claim, investigation, condition, occurrence or removal or
remedial action and the Borrower's response thereto. In addition, the
Borrower agrees to provide the Banks with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all material communications with any person
relating to Environmental Claims, and such detailed reports of any
Environmental Claim as may reasonably be requested by the
Administrative Agent or the Required Banks.
(j) Senior Notes. Promptly after the same are sent, copies of
all financial statements and reports which the Borrower or any of its
Subsidiaries sends to holders of the Senior Notes (to the extent not
otherwise delivered to the Banks pursuant to this Section 7.01) and
promptly after the same are filed, copies of all financial statements
and regular, periodical or special reports which the Borrower of any
of its Subsidiaries may make to, or file with, the SEC.
(k) Appraisal Updates Promptly, upon the request of the
Administrative Agent, which request shall be made in the commercially
reasonable judgment of the Administrative Agent (but unless provided
herein, no more frequently than annually), an update (an "Appraisal
Update") on a desk top basis of the Appraisal Analysis, which update
shall be conducted by a third party acceptable to the Borrower and
the Administrative Agent and on a valuation basis reasonably
acceptable to the Administrative Agent, provided that, if (i) a
Default or Event of Default has occurred and is continuing or (ii)
the Administrative Agent 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 Subsidiary Guarantors, the
Administrative 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 and on a valuation basis which is (A) reasonably
acceptable to the Administrative Agent and (B) not less favorable to
the Borrower than the valuation basis upon which the Appraisal
Analysis delivered pursuant to Section 5A.22 was conducted.
(l) Other Information. From time to time, such other
information or documents (financial or otherwise) as the
Administrative Agent on its own behalf or on behalf of the Required
Banks may reasonably request from time to time.
7.02 Books, Records and Inspections; Bank Meetings. (a) The
Borrower will, and will cause each of its Subsidiaries to, permit, upon
reasonable notice to the chief financial officer, controller or any other
Authorized Officer of the Borrower, (x) officers and designated
representatives of the Administrative Agent or the Required Banks to visit
and inspect during regular business hours any of the properties or assets
of the Borrower or any of its Subsidiaries in whomsoever's possession, and
to examine the books of account of the Borrower or any of its Subsidiaries
and discuss the affairs, finances and accounts of the Borrower or of any of
its Subsidiaries with, and be advised as to the same by, its and their
officers and independent accountants, all at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or the
Required Banks may desire and (y) not more than once per year (and at any
time during the occurrence of a Default or an Event of Default) the
Administrative Agent, or a third party designated by the Administrative
Agent, to conduct, at the Borrower's expense, an audit of the accounts
receivable of the Borrower and its Subsidiaries at such times as the
Administrative Agent shall reasonably require.
(b) At the request of the Administrative Agent, the Borrower
shall within 120 days after the close of each fiscal year of the Borrower
hold a meeting at a time and place selected by the Borrower and acceptable
to the Administrative Agent with all of the Banks at which meeting shall be
reviewed the financial results of the previous fiscal year and the
financial condition of the Borrower and its Subsidiaries and the budgets
presented for the current fiscal year of the Borrower and its Subsidiaries.
7.03 Maintenance of Insurance. Schedule VII sets forth a true
and complete listing of all insurance maintained by the Borrower and each
of its Subsidiaries as of the Effective Date. At any time that insurance at
such levels and covering such risks and liabilities described in Schedule
VII is not being maintained by the Borrower and its Subsidiaries, the
Borrower will notify the Administrative Agent and each of the Banks in
writing thereof and, if thereafter notified by the Administrative Agent to
do so, the Borrower will, and will cause each of its Subsidiaries to,
obtain insurance at levels and covering such risks and liabilities at least
equal to those set forth on Schedule VII to the extent then generally
available, or otherwise as are acceptable to the Administrative Agent. The
Borrower will, and will cause each of its Subsidiaries to, furnish on the
Effective Date and annually thereafter to the Administrative Agent, upon
its request, a summary of the insurance carried together with certificates
of insurance and other evidence of such insurance naming (x) the Collateral
Agent, for the benefit of each Bank, as loss payee with respect to all
casualty coverages and containing other customary loss payable provisions
and (y) the Collateral Agent for the benefit of each Bank, as additional
insured for all general liability coverages.
7.04 Payment of Taxes. The Borrower will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the
date on which penalties attach thereto, and all lawful claims which, if
unpaid, might become a Lien not otherwise permitted pursuant to Section
8.03(a) or charge upon any properties of the Borrower or any of its
Subsidiaries, provided that neither the Borrower nor any Subsidiary of the
Borrower shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if
it has maintained adequate reserves with respect thereto in accordance with
GAAP.
7.05 Corporate Franchises. The Borrower will do, and will cause
each of its Subsidiaries to do, or cause to be done, all things necessary
to preserve and keep in full force and effect its existence, material
rights and authority, provided that any transaction permitted by Section
8.02 will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes
(including, without limitation, all applicable Environmental Laws),
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property except for such non-compliances
which, individually or in the aggregate, would not have a Material Adverse
Effect or would not have a material adverse effect on the ability of any
Credit Party to perform its obligations under any Credit Document to which
it is party.
7.07 ERISA. As soon as possible and, in any event, within 10
Business Days after the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to each of the Banks a certificate of
the chief financial officer of the Borrower setting forth the full details
as to such occurrence and the action, if any, which the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with
or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that the Borrower has
previously delivered to the Banks a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62,
.63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is, to the
best knowledge of the Borrower, reasonably expected to occur with respect
to such Plan within the following 30 days; that an accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302 of
ERISA has been incurred or an application may be or has been made for a
waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period
under Section 412 of the Code or Section 303 or 304 of ERISA, with respect
to a Plan; that any contribution required to be made with respect to a Plan
has not been timely made except to the extent that any failure to make
timely contributions would not be reasonably expected to result in a
material liability to the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate; that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has
an Unfunded Current Liability; that proceedings may reasonably be expected
to or have been instituted to terminate or appoint a trustee to administer
a Plan which is subject to Title IV of ERISA; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the Borrower, any Subsidiary of the Borrower
or any ERISA Affiliate will or, to the best knowledge of the Borrower, may
reasonably be expected to incur any material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l)
of ERISA or with respect to a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of
the Code; or that the Borrower or any Subsidiary of the Borrower may
reasonably be expected to incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(l) of ERISA) that
provides benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or any Plan. The Borrower will
deliver to each of the Banks, upon request, a complete copy of the most
recent annual report (on Internal Revenue Service Form 5500-series) of each
Plan (including, to the extent required, the related financial and
actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of
annual reports and any records, documents or other information required to
be furnished to the PBGC, and any material notices received by the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with
respect to a Plan shall be delivered to the Banks no later than 10 Business
Days after the date such report has been filed with the Internal Revenue
Service or such records, documents and/or information has been furnished to
the PBGC or such notice has been received by the Borrower, the Subsidiary
or the ERISA Affiliate, as applicable.
7.08 Maintenance of Properties; Good Repair. The Borrower will,
and will cause each of its Subsidiaries to, ensure that its properties and
equipment used or useful in its business in whomsoever's possession they
may be, are kept in good repair, working order and condition, normal wear
and tear excepted, and, subject to Section 8.05, that from time to time
there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary
for companies in similar businesses.
7.09 Compliance with Environmental Laws. (a) The Borrower and
each of its Subsidiaries: (i) will comply in all material respects, and
will cause each of its Subsidiaries to comply in all material respects,
with all Environmental Laws applicable to the operation of their business
and the ownership of use of any Real Property; (ii) will pay, and will
cause each of its Subsidiaries to pay, all costs and expenses incurred in
such compliance; (iii) will keep or cause to be kept all Real Properties
owned, operated or leased by the Borrower or any of its Subsidiaries free
and clear of any material Liens imposed pursuant to such Environmental
Laws; and (iv) neither the Borrower nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous
Materials on any Real Property, or transport or permit the transportation
of Hazardous Materials to or from any such Real Property except in
compliance with applicable law. If the Borrower or any of its Subsidiaries,
or any tenant or occupant of any Real Property, causes or permits any
intentional or unintentional act or omission resulting in the material
presence or release of any Hazardous Material (except in compliance with
applicable Environmental Laws), the Borrower agrees to undertake, and/or to
cause any of its Subsidiaries to undertake, and/or to use its best efforts
to cause any such tenants or occupants to undertake, at their sole expense,
any clean up, removal, remedial or other action required pursuant to
Environmental Laws to remove and clean up any Hazardous Materials from any
Real Property provided that neither the Borrower nor any of its
Subsidiaries shall be required to comply with any such order or directive
which is being contested in good faith and by proper proceedings so long as
it has maintained adequate reserves with respect to such compliance to the
extent required in accordance with GAAP.
(b) At the written request of the Administrative Agent upon the
occurrence and during the continuance of an Event of Default relating to
(x) the failure of any representation, warranty or statement contained in
Section 6.18 to be true and correct or (y) any violation of this Section
7.09 or any event for which the Borrower is required to give the
Administrative Agent notice under Section 7.01(i), the Borrower will
provide, at the Borrower's sole cost and expense, an environmental site
assessment report concerning any Real Property the subject of such notice,
prepared by an environmental consulting firm approved by the Administrative
Agent indicating the presence or absence of Hazardous Materials and the
potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property. If the Borrower fails to provide
the same 45 days after such request was made, the Administrative Agent may
order the same, and the Borrower shall grant and hereby grants to the
Administrative Agent and its agents access to such Real Property and
specifically grants the Administrative Agent an irrevocable non-exclusive
license, subject to the rights of tenants, to undertake such an assessment,
all at the Borrower's expense.
7.10 End of Fiscal Years; Fiscal Quarters. The Borrower will,
for financial reporting and tax purposes, cause (i) each of its, and each
of its Subsidiaries' fiscal years to end on December 31 of each year and
(ii) each of its, and each of its Subsidiaries' fiscal quarters to end on
March 31, June 30, September 30 and December 31 of each year.
7.11 Use of Proceeds. All proceeds of the Loans shall be used
as provided in Section 6.05.
7.12 Additional Security; Further Assurances. (a) The Borrower
will, and will cause each of its Subsidiaries to, grant to the Collateral
Agent security interests and mortgages (each an "Additional Mortgage") in
such owned Real Property of the Borrower and its Subsidiaries acquired
after the Effective Date as may be requested from time to time by the
Administrative Agent. Such Additional Mortgages shall be granted pursuant
to documentation reasonably satisfactory in form and substance to the
Administrative Agent and shall constitute valid and enforceable Liens
superior to and prior to the rights of all third Persons and subject to no
other Liens except as are permitted by Section 8.03. The Additional
Mortgages or instruments related thereto shall be duly recorded or filed in
such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Collateral Agent
required to be granted pursuant to the Additional Mortgages and all taxes,
fees and other charges payable in connection therewith shall have been paid
in full by the Borrower.
(b) The Borrower will, and will cause each of its Subsidiaries
to, at the expense of the Borrower, make, execute, endorse, acknowledge,
file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, continuations, amendments, transfer endorsements,
powers of attorney, certificates, real property surveys, reports and other
assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent
may reasonably require. Furthermore, the Borrower will cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance
and other related documents as may be reasonably requested by the
Administrative Agent to assure themselves that this Section 7.12 has been
complied with.
(c) The Borrower agrees that each action required by clauses
(a) and (b) above in this Section 7.12 shall be completed as soon as
possible, but in no event later than 60 days after such action is requested
to be taken by the Administrative Agent, provided that in no event shall
the Borrower be required to take any action, other than using its
reasonable commercial efforts without any material expenditure, to obtain
consents from third parties with respect to its compliance with such
clauses (a) and (b).
(d) In the event that the Administrative Agent or the Required
Banks at any time after the Effective Date determine in its or their good
faith discretion that real estate appraisals satisfying the requirements of
FIRREA (any such appraisal a "Required Appraisal") are or were required to
be obtained, or should be obtained, in connection with the Mortgaged
Properties, then, within 120 days after receiving written notice thereof
from the Administrative Agent or the Required Banks, as the case may be,
such Required Appraisal shall be delivered, at the expense of the Borrower,
to the Administrative Agent which Required Appraisal, and the respective
appraiser, shall be satisfactory to the Administrative Agent.
7.13 Foreign Subsidiary Guaranty, etc. 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 or
the Required Banks deliver evidence, in form and substance mutually
satisfactory to the Administrative 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 the 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 guaranty in substantially the
form of the Subsidiary Guaranty, 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 Credit 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 Credit Party
and not theretofore pledged pursuant to the Pledge Agreement shall be
pledged to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the 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) the Subsidiary Guaranty (or another guaranty in
substantially similar form if needed), guaranteeing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Agreement,
(y) the Pledge Agreement (or another pledge agreement in substantially
similar form if needed) securing such Foreign Subsidiary's obligations
under the Subsidiary Guaranty and (z) the Security Agreement (or another
security agreement in substantially similar form if needed) securing such
Foreign Subsidiary's obligations under the Subsidiary Guaranty, in each
case to the extent that the entering into the Subsidiary Guaranty and
Pledge Agreement is permitted by the laws of the respective foreign
jurisdiction and with all documents delivered pursuant to this Section 7.13
to be in form and substance reasonably satisfactory to the Administrative
Agent.
7.14 Post-Closing Mortgage Obligation. In the event that the
Borrower shall not have sold or otherwise disposed of its Real Property
located at 2438 27th Avenue South, Minneapolis, Minnesota on or prior to
the 180th day following the Effective Date, the Borrower shall, upon the
request of the Administrative Agent, grant to the Collateral Agent a
mortgage in such Real Property in accordance with the requirements of
Section 7.12 (as such requirements would apply to an Additional Mortgage of
Real Property acquired after the Effective Date).
SECTION 8. Negative Covenants. The Borrower covenants and
agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated, no
Letters of Credit or Notes are outstanding and the Loans and Unpaid
Drawings, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full:
8.01 Changes in Business. The Borrower will not, and will not
permit any of its Subsidiaries to, materially alter the character of the
business of the Borrower and its Subsidiaries from that conducted on the
Effective Date (after giving effect to the consummation of the Transaction)
or conduct such business in a manner which is not consistent with past
practice.
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.
The Borrower will not, and will not permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs, or enter into any transaction of
merger or consolidation, or sell or otherwise dispose of all or any part of
its property or assets (including, without limitation, capital stock or
other securities of, or equity interests in, another Person), or enter into
any partnerships, joint ventures or sale-leaseback transactions, or
purchase, lease or otherwise acquire all or any part of the property or
assets of any Person (other than leases, purchases or other acquisitions of
materials and equipment in the ordinary course of business), or agree to do
any of the foregoing at any future time, except that the following shall be
permitted:
(a) any Wholly-Owned Subsidiary of the Borrower may be merged
or consolidated with or into the Borrower or a Subsidiary Guarantor
that is a Wholly-Owned Subsidiary of the Borrower (so long as the
Borrower or such Subsidiary Guarantor, as the case may be, is the
surviving corporation), or all or any part of the business,
properties or assets of any Wholly-Owned Subsidiary of the Borrower
may be conveyed, leased, sold or transferred to the Borrower or any
Subsidiary Guarantor that is a Wholly-Owned Subsidiary of the
Borrower;
(b) Capital Expenditures to the extent within the limitations
set forth in Section 8.05;
(c) the investments, acquisitions and transfers or dispositions
of properties permitted pursuant to Section 8.06;
(d) the Borrower and its Subsidiaries may lease (as lessee) and
license real or personal property in the ordinary course of business
(so long as such lease does not create a Capitalized Lease Obligation
not otherwise permitted by Section 8.04(c));
(e) so long as there exists no Default under Section 9.01 or
9.05 or Event of Default (both before and after giving effect to such
disposition), the Borrower and its Subsidiaries may effect sales,
transfers or other dispositions of equipment of the Borrower and its
Subsidiaries in the ordinary course of business;
(f) other sales or dispositions of assets, provided that (x)
the aggregate Net Sale Proceeds received from all such sales and
dispositions shall not exceed $1,000,000 in any fiscal year of the
Borrower and (y) each such sale shall be in an amount at least equal
to the fair market value thereof (as determined in good faith by the
Borrower) and for proceeds consisting solely of not less than (A) 75%
cash and (B) seller indebtedness evidenced by promissory notes, which
promissory notes shall be pledged and delivered to the Collateral
Agent pursuant to the Pledge Agreement; provided further, that the
sale or disposition of the capital stock of (i) any Subsidiary
Guarantor shall be prohibited and (ii) any other Subsidiary of the
Borrower shall be prohibited unless it is for all of the outstanding
capital stock of such Subsidiary owned by the Borrower and its
Subsidiaries;
(g) any Subsidiary of the Borrower (including any Subsidiary
Guarantor so long as the assets of such Subsidiary Guarantor are
transferred pursuant to Section 8.02(i)) may be liquidated into the
Borrower or a Subsidiary Guarantor that is a Wholly-Owned Subsidiary
of the Borrower;
(h) the Borrower and each of its Subsidiaries may lease
equipment in the ordinary course of business;
(i) any Subsidiary of the Borrower may transfer assets to the
Borrower or to a Subsidiary Guarantor that is a Wholly-Owned
Subsidiary of the Borrower so long as the security interests granted
to the Collateral Agent pursuant to the Security Documents in the
assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior
to such transfer);
(j) the Borrower and its Subsidiaries may consummate
sale-leaseback transactions so long as (i) no Default pursuant to
Section 9.01 or 9.05 or Event of Default then exists or would result
therefrom, (ii) each such sale-leaseback transaction is an
arms-length transaction, (iii) the aggregate consideration received
by the Borrower and its Subsidiaries in connection with all such
sale-leaseback transactions does not exceed $2,500,000 in any fiscal
year of the Borrower and (iv) such sale-leaseback transaction is
permitted under the terms of the Senior Notes Indenture; and
(k) the Borrower and its Subsidiaries may enter into joint
marketing arrangements with suppliers (including joint ventures
resulting therefrom).
To the extent the Required Banks waive the provisions of this Section 8.02
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
8.02, 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.
8.03 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any such Subsidiary whether now
owned or hereafter acquired, or sell any such property or assets subject to
an understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to the Borrower or any of its Subsidiaries) or assign any right to
receive income, or file or permit the filing of (other than with respect to
Permitted Liens) any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute; provided that
the provisions of this Section 8.03 shall not prevent the creation,
incurrence, assumption or existence of the following (with such Liens
described below being herein referred to as "Permitted Liens"):
(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 the good
faith judgment of the management of the Borrower) 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 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
Credit Documents;
(d) Liens existing on the Effective Date to the extent listed,
and the property subject thereto described, on Schedule VIII without
giving effect to any subsequent extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments (or
securing of appeal bonds with respect thereto) in circumstances not
constituting an Event of Default under Section 9.09, 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) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) 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;
(k) any interest or title of a lessor under any lease permitted
by this Agreement;
(l) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Capital Leases to the extent such Capitalized
Lease Obligations are permitted by Section 8.04(c), provided that (x)
such Liens only serve to secure the payment of Indebtedness arising
under such Capitalized Lease Obligations and (y) the Liens
encumbering the assets giving rise to such Capital Leases do not
encumber any other assets of the Borrower or any Subsidiary of the
Borrower;
(m) 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 8.04(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;
(n) Permitted Encumbrances;
(o) so long as the Indebtedness secured by such Liens is
permitted under Section 8.04, Liens on the assets of a Subsidiary of
the Borrower if such Liens existed at the time such Subsidiary was
first acquired by the Borrower; and
(p) Liens securing Indebtedness not in excess of $500,000 at any
time outstanding.
8.04 Indebtedness. The Borrower
will not, and will not permit any of its Subsidiaries to, contract, create,
incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Indebtedness owing by (i) any Subsidiary Guarantor to
another Subsidiary Guarantor or to the Borrower, (ii) any Subsidiary
of the Borrower that is not a Subsidiary Guarantor to another
Subsidiary of the Borrower that is not a Subsidiary Guarantor and
(iii) the Borrower to any Subsidiary Guarantor;
(c) Capitalized Lease Obligations of the Borrower and its
Subsidiaries incurred by the Borrower or any of its Subsidiaries
(including any Capitalized Lease Obligations incurred in connection
with any joint marketing arrangements with suppliers which are
permitted pursuant to Section 8.02(k)) after the Effective Date and
Indebtedness incurred pursuant to purchase money mortgages permitted
by Sections 8.03(l) and (m), provided that the aggregate amount of
Indebtedness incurred pursuant to this clause (c) shall not exceed
$10,000,000 at any time outstanding;
(d) Existing Indebtedness without giving effect to any
subsequent extension, renewal or refinancing thereof;
(e) Indebtedness under Interest Rate Agreements relating to
Indebtedness otherwise permitted under this Section 8.04;
(f) Contingent Obligations of the Borrower or any Subsidiary
Guarantor with respect to Indebtedness and lease obligations of the
Borrower or any Subsidiary Guarantor otherwise permitted under this
Agreement;
(g) Indebtedness of the Borrower under the Senior Notes in an
aggregate principal amount of $100,000,000 without giving effect to
any subsequent extensions, renewals, or refinancings thereof;
(h) up to $5,000,000 of Indebtedness of the Borrower
outstanding at any time under subordinated notes issued to Management
Holders pursuant to Section 2.3(f) of the Stockholders Agreement as
in effect on the date of this Agreement; and
(i) Additional Indebtedness of the Borrower and its
Subsidiaries not to exceed an aggregate outstanding principal amount
of $2,500,000 at any time.
No provisions of the foregoing shall permit any Subsidiary of the Borrower
to guaranty amounts owing in connection with the Senior Notes.
8.05 Capital Expenditures. (a) The Borrower will not, and will
not permit any of its Subsidiaries to, make Capital Expenditures, 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
8.05(a) does not exceed for any period set forth below the amount set forth
opposite such period:
Period Amount
Effective Date through December 31, 1998 $23,000,000
Fiscal Year ending December 31, 1999 $25,500,000
Fiscal Year ending December 31, 2000 $24,500,000
Fiscal Year ending December 31, 2001 $28,500,000
Fiscal Year ending December 31, 2002 $33,000,000
January 1, 2003 through the Maturity Date $ 6,500,000
(b) 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 Section 8.05(a) (without giving effect to this clause (b)) is not
fully expended during such fiscal period, the maximum amount which may be
expended during the immediately succeeding fiscal period set forth in
Section 8.05(a) shall be increased by such unutilized amount (the
"Carryover Amount"), provided that such increase shall not exceed
$4,000,000 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 Section 8.05(a) the
Capital Expenditures made or incurred shall be applied first to the Capital
Expenditure limit set forth for such fiscal period in Section 8.05(a) and
thereafter to the Carryover Amount from the prior fiscal period.
8.06 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly,
lend money or credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, or make
any capital contribution to, any Person or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or
hold cash or Cash Equivalents (each of the foregoing, an "Investment" and,
collectively, the "Investments") except:
(a) the Borrower and its Subsidiaries may hold the Investments
held by them on the Effective Date and described on Schedule IX,
provided that any additional Investments made with respect thereto
shall be permitted only if independently justified under the other
provisions of this Section 8.06;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms;
(c) the intercompany Indebtedness described in Section 8.04(b)
shall be permitted;
(d) loans and advances in the ordinary course of business to
employees (including, without limitation, loans to officers of the
Borrower in connection with the purchase or retention of shares of
Common Stock by such officers in connection with the
Recapitalization) in an aggregate principal amount not to exceed
$500,000 (determined without regard to any write-downs or write-offs
of such loans and advances) at any time outstanding shall be
permitted;
(e) 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;
(f) Interest Rate Agreements permitted by Section 8.04(e) shall
be permitted;
(g) the Borrower may hold any promissory notes acquired in
accordance with Section 8.02(f);
(h) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents;
(i) the Borrower may make investments in its Wholly-Owned
Subsidiaries that are Subsidiary Guarantors and such Subsidiary
Guarantors may make investments in their respective Wholly-Owned
Subsidiaries which are Subsidiary Guarantors; and
(j) the Borrower and its Subsidiaries may make additional
Investments in an aggregate amount not to exceed $2,000,000.
8.07 Prepayments of Indebtedness, etc. The Borrower will not,
and will not permit any of its Subsidiaries to, (x) make (or give any
notice in respect thereof) any voluntary or optional payment or prepayment
or redemption or acquisition for value of (including, without limitation,
by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due) or exchange or
refinancing of the Senior Notes or any Existing Indebtedness, (y) amend,
modify or change the Senior Notes Documents or any Existing Indebtedness
Agreement (other than in a manner which is neither material nor reasonably
likely to be in any way adverse to the interests of the Banks) or (z)
amend, modify or change in any manner materially adverse to the interests
of the Banks, the Certificate or Articles of Incorporation (including,
without limitation, by the filing of any additional certificate of
designation) or By-Laws of the Borrower or any of its Subsidiaries, the
terms of any of its capital stock or any agreement entered into by the
Borrower with respect to its capital stock, or enter into any new agreement
in any manner materially adverse to the interests of the Banks with respect
to the capital stock of the Borrower.
8.08 Dividends, etc. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in capital stock of such Person) or return any
capital to its stockholders or authorize or make any other distribution,
payment or delivery of property or cash to its stockholders as such, or
redeem, retire, purchase or otherwise acquire, directly or indirectly, for
a consideration, any shares of any class of its capital stock now or
hereafter outstanding (or any warrants for or options or stock appreciation
or similar rights in respect of any of such shares), or set aside any funds
for any of the foregoing purposes, or permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of
the capital stock of the Borrower or any other Subsidiary, as the case may
be, now or hereafter outstanding (or any options or warrants or stock
appreciation or similar rights issued by such Person with respect to its
capital stock) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay cash dividends to
the Borrower or to a Wholly-Owned Subsidiary of the Borrower which is
a Subsidiary Guarantor;
(ii) so long as no Default or Event of Default has occurred and
is continuing or would result therefrom, (x) 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 8.04(h) and (y) the Borrower may pay
interest on such subordinated notes, provided that the sum of all
such interest payments under this clause (ii) together with the
amount of all repurchases permitted under clause (iii) below, shall
not exceed $500,000 in any given year; and
(iii) so long as no Default pursuant to Section 9.01 or 9.05 or
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 (iii) together
with all interest payments under clause (ii) above, shall not exceed
$500,000 in any given year.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist any
encumbrance or restriction which prohibits or otherwise restricts (A) the
ability of any Subsidiary of the Borrower to (a) pay dividends or make
other distributions or pay any Indebtedness owed to the Borrower or any
other Subsidiary of the Borrower, (b) make loans or advances to the
Borrower or any other Subsidiary of the Borrower, (c) transfer any of its
properties or assets to the Borrower or any other Subsidiary of the
Borrower or (B) the ability of the Borrower or any other Subsidiary of the
Borrower to create, incur, assume or suffer to exist any Lien upon its
property or assets to secure the Obligations, other than prohibitions or
restrictions existing under or by reason of:
(i) this Agreement and the other Credit Documents;
(ii) the Senior Notes Documents;
(iii) applicable law;
(iv) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(v) 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 all or substantially all
of the capital stock or assets of such Subsidiary, so long as such
sale or disposition is permitted under this Agreement; and
(vi) Liens permitted under Section 8.03 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.
8.09 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 Effective Date whether or not in the
ordinary course of business, with any Affiliate 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;
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 8.06(d), (ii) Dividends permitted under Section 8.08,
(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 as in effect on the Effective Date 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 $240,000 in any fiscal year
of the Borrower plus the reimbursement of reasonable out-of-pocket fees and
expenses.
8.10 Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio for any Test Period ending on a date set forth
below to be less than the ratio set forth opposite such date:
Date Ratio
June 30, 1998 2.00:1.00
September 30, 1998 2.00:1.00
December 31, 1998 2.00:1.00
March 31, 1999 2.05:1.00
June 30, 1999 2.05:1.00
September 30, 1999 2.05:1.00
December 31, 1999 2.10:1.00
March 31, 2000 2.10:1.00
June 30, 2000 2.15:1.00
September 30, 2000 2.15:1.00
December 31, 2000 2.15:1.00
March 31, 2001 2.20:1.00
June 30, 2001 2.25:1.00
September 30, 2001 2.25:1.00
December 31, 2001 2.30:1.00
March 31, 2002 2.35:1.00
June 30, 2002 2.35:1.00
September 30, 2002 2.40:1.00
December 31, 2002 2.40:1.00
8.11 Fixed Charge Coverage Ratio. The Borrower will not permit
the Fixed Charge Coverage Ratio for any Test Period ending on a date set
forth below to be less than the ratio set forth opposite date:
Date Ratio
June 30, 1998 1.15:1.00
September 30, 1998 1.15:1.00
December 31, 1998 1.15:1.00
March 31, 1999 1.15:1.00
June 30, 1999 1.15:1.00
September 30, 1999 1.15:1.00
December 31, 1999 1.15:1.00
March 31, 2000 1.20:1.00
June 30, 2000 1.20:1.00
September 30, 2000 1.30:1.00
December 31, 2000 1.30:1.00
March 31, 2001 1.35:1.00
June 30, 2001 1.35:1.00
September 30, 2001 1.35:1.00
December 31, 2001 1.35:1.00
March 31, 2002 1.40:1.00
June 30, 2002 1.40:1.00
September 30, 2002 1.40:1.00
December 31, 2002 1.40:1.00
8.12 Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time during a period set forth below to be greater than the
ratio set forth opposite such period below:
Period Ratio
Fiscal quarter ending
June 30, 1998 5.35:1.00
Fiscal quarterending
September 30, 1998 5.35:1.00
Fiscal quarter ending
December 31, 1998 5.35:1.00
Fiscal quarter ending
March 31, 1999 5.25:1.00
Fiscal quarter ending
June, 30, 1999 5.25:1.00
Fiscal quarter ending
September 30, 1999 5.25:1.00
Fiscal quarter ending
December 31, 1999 5.25:1.00
Fiscal quarter ending
March 31, 2000 5.10:1.00
Fiscal quarter ending
June 30, 2000 5.10:1.00
Fiscal quarter ending
September 30, 2000 5.10:1.00
Fiscal quarter ending
December 31, 2000 5.10:1.00
Fiscal quarter ending
March 31, 2001 4.90:1.00
Fiscal quarter ending
June 30, 2001 4.90:1.00
Fiscal quarter ending
September 30, 2001 4.90:1.00
Fiscal quarter ending
December 31, 2001 4.90:1.00
Fiscal quarter ending
March 31, 2002 4.75:1.00
Fiscal quarter ending
June 30, 2002 4.75:1.00
Fiscal quarter ending
September 30, 2002 4.75:1.00
Fiscal quarter ending
December 31, 2002 4.60:1.00
January 1, 2003 through
the Maturity Date 4.60:1.00
8.13 Limitation on Issuance of Capital Stock. The Borrower will
not permit any of its Subsidiaries to issue any capital stock (including by
way of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock, except to the Borrower and
except (i) for transfers and replacements of then outstanding shares of
capital stock, (ii) for stock splits, stock dividends and issuances which
do not decrease the percentage ownership of the Borrower or any of its
Subsidiaries in any class of the capital stock of such Subsidiary, (iii) to
qualify directors to the extent required by applicable law or (iv) for
issuances by newly created or acquired Subsidiaries in accordance with the
terms of this Agreement.
8.14 Limitation on Creation of Subsidiaries. The Borrower shall
not, and shall not permit any of its Subsidiaries to, establish, create or
acquire any additional Subsidiaries without the prior written consent of
the Required Banks, provided that the Borrower and its Wholly-Owned
Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries so long as (i) at least 10 Business Days' prior written notice
thereof (or such lesser notice as is acceptable to the Administrative
Agent) is given to the Administrative Agent, (ii) such new Subsidiaries
shall execute and deliver such guarantees and security documents as the
Administrative Agent and/or the Required Banks shall request (including
documents substantially similar to or amendments to each of the Pledge
Agreement and the Security Agreement), and in such forms as shall be
satisfactory to them, (iii) the holders of the capital stock of such new
Subsidiaries shall execute and deliver additional pledge agreements, in
form and substance satisfactory to the Administrative Agent and (iv) such
new Subsidiaries shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in
Section 5A as such new Subsidiaries would have had to deliver if such new
Subsidiaries were Credit Parties on the Effective Date.
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default
shall continue for three or more Business Days, in the payment when due of
any Unpaid Drawing, any interest on the Loans or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document
or in any statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove to be untrue in any material respect
on the date as of which made or deemed made; or
9.03 Covenants. The Borrower or any of its Subsidiaries shall
(a) default in the due performance or observance by it of any term,
covenant or agreement contained in Sections 7.01(f), 7.12 or 8, or (b)
default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in Section 9.01, 9.02 or clause (a)
of this Section 9.03) contained in this Agreement and such default shall
continue unremedied for a period of at least 30 days after notice to the
defaulting party by the Administrative Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) The Borrower or any of
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if
any, applicable thereto or (ii) default in the observance or performance of
any agreement or condition relating to any such Indebtedness 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 a trustee or agent on behalf of such holder or
holders) to cause, any such Indebtedness to become due prior to its stated
maturity or (b) any such Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to
the stated maturity thereof, provided that it shall not constitute an Event
of Default pursuant to this Section 9.04 unless the aggregate amount of all
Indebtedness referred to in clauses (a) and (b) above exceeds $1,000,000 at
any one time; or
9.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Subsidiaries and the petition
is not controverted within 10 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of the Borrower or any of its Subsidiaries; or the
Borrower or any of its Subsidiaries commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or any of its
Subsidiaries; or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of
60 days; or the Borrower or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; the Borrower or any of its Subsidiaries
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Borrower or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Borrower or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section
412 of the Code or Section 302 of ERISA or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412
of the Code or Section 303 or 304 of ERISA, a Reportable Event shall have
occurred, a contributing sponsor (as defined in Section 4001(a)(13) of
ERISA) of a Plan subject to Title IV of ERISA shall be subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof) and an event described in subsection
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall
be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall
have had or is likely to have a trustee appointed to administer such Plan,
any Plan which is subject to Title IV of ERISA is, shall have been or is
likely to be terminated or to be the subject of termination proceedings
under ERISA, any Plan shall have an Unfunded Current Liability, a
contribution required to be made with respect to a Plan has not been timely
made, the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on
account of a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or the
Borrower or any of its Subsidiaries has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or Plans; and (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in
the opinion of the Required Banks, has had, or could reasonably be expected
to have, a Material Adverse Effect; or
9.07 Security Documents. Any Security Document shall cease to
be in full force and effect or, except as expressly set forth in the
Security Agreement, shall cease to give the Collateral Agent any perfected
Lien encumbering Collateral, or shall cease to give the Collateral Agent
any rights, powers and privileges purported to be created thereby in favor
of the Collateral Agent or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to any such Security Document and such
default shall continue unremedied for a period of 30 days after notice to
the Borrower by the Administrative Agent, the Collateral Agent of the
Required Banks; or
9.08 Subsidiary Guaranty. The Subsidiary Guaranty or any
provision thereof shall cease to be in full force or effect, or any
Subsidiary Guarantor or any Person acting by or on behalf of any Subsidiary
Guarantor shall deny or disaffirm in writing such guarantor's obligations
under such Subsidiary Guaranty or any Subsidiary Guarantor shall default in
the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to the Subsidiary Guaranty and
such default shall continue unremedied for a period of 30 days after notice
to the Borrower by the Administrative Agent or the Required Banks; or
9.09 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a
liability of $1,000,000 in the aggregate for all such judgments and decrees
for the Borrower and its Subsidiaries (in each case, not paid or to the
extent not covered by insurance) and any such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal within
90 days from the entry thereof; or
9.10 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Banks, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights
of the Administrative Agent or any Bank to enforce its claims against the
Borrower, except as otherwise specifically provided for in this Agreement
(provided that, if an Event of Default specified in Section 9.05 shall
occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in
clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Revolving Commitment terminated,
whereupon the Revolving Commitment of each Bank shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all Obligations owing
hereunder (including Unpaid Drawings) and thereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; (iii) enforce, as Collateral Agent (or direct the Collateral
Agent to enforce), any or all of the Liens and security interests created
pursuant to the Security Documents; (iv) terminate any Letter of Credit
which may be terminated in accordance with its terms; (v) direct the
Borrower to pay (and the Borrower hereby agrees upon receipt of such
notice, or upon the occurrence of any Event of Default specified in Section
9.05 in respect of the Borrower, it will pay) to the Collateral Agent at
the Payment Office such additional amounts of cash, to be held as security
for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding equal to the aggregate Stated Amount of all Letters
of Credit then outstanding; and (vi) apply any cash collateral held
pursuant to this Agreement to repay the Obligations.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular:
"Acquired Entity or Business" shall have the meaning provided
in the definition of Consolidated Net Income.
"Additional Mortgage" shall have the meaning provided in Section
7.12(a).
"Adjusted RC Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank such Bank's Revolving Percentage and (y) at a
time when a Bank Default exists (i) for each Bank that is a Defaulting
Bank, zero and (ii) for each Bank that is a Non-Defaulting Bank, the
percentage determined by dividing such Bank's Revolving Commitment at such
time by the Adjusted Total Revolving Commitment at such time, it being
understood that all references herein to Revolving Commitments and the
Adjusted Total Revolving Commitment at a time when the Total Revolving
Commitment or Adjusted Total Revolving Commitment, as the case may be, has
been terminated shall be references to the Revolving Commitments or
Adjusted Total Revolving Commitment, as the case may be, in effect
immediately prior to such termination, provided that (A) no Bank's Adjusted
RC Percentage shall change upon the occurrence of a Bank Default from that
in effect immediately prior to such Bank Default if, after giving effect to
such Bank Default and any repayment of Revolving Loans and Swingline Loans
at such time pursuant to Section 4.02(a) or otherwise, the sum of (i) the
aggregate outstanding principal amount of Revolving Loans of all
Non-Defaulting Banks plus (ii) the aggregate outstanding principal amount
of Swingline Loans plus (iii) the Letter of Credit Outstandings, exceeds
the Adjusted Total Revolving Commitment, (B) the changes to the Adjusted RC
Percentage that would have become effective upon the occurrence of a Bank
Default but that did not become effective as a result of the preceding
clause (A) shall become effective on the first date after the occurrence of
the relevant Bank Default on which the sum of (i) the aggregate outstanding
principal amount of the Revolving Loans of all Non-Defaulting Banks plus
(ii) the aggregate outstanding principal amount of the Swingline Loans plus
(iii) the Letter of Credit Outstandings is equal to or less than the
Adjusted Total Revolving Commitment and (C) if (i) a Non-Defaulting Bank's
Adjusted RC Percentage is changed pursuant to the preceding clause (B) and
(ii) any repayment of such Bank's Revolving Loans, or of Unpaid Drawings
with respect to Letters of Credit or of Swingline Loans, that were made
during the period commencing after the date of the relevant Bank Default
and ending on the date of such change to its Adjusted RC Percentage must be
returned to any Borrower as a preferential or similar payment in any
bankruptcy or similar proceeding of such Borrower, then the change to such
Non-Defaulting Bank's Adjusted RC Percentage effected pursuant to said
clause (B) shall be reduced to that positive change, if any, as would have
been made to its Adjusted RC Percentage if (x) such repayments had not been
made and (y) the maximum change to its Adjusted RC Percentage would have
resulted, in the sum of the outstanding principal of Revolving Loans made
by such Bank plus such Bank's new Adjusted RC Percentage of the outstanding
principal amount of Swingline Loans and of Letter of Credit Outstandings
equaling such Bank's Revolving Commitment at such time.
"Adjusted Revolving Commitment" for each Non-Defaulting Bank
shall mean at any time the product of such Bank's Adjusted RC Percentage
and the Adjusted Total Revolving Commitment.
"Adjusted Total Revolving Commitment" shall mean at any time
the Total Revolving Commitment less the aggregate Revolving Commitments of
all Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affected Eurodollar Loans" shall have the meaning provided in
Section 4.02(b).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to,
all directors and officers of such Person), controlled by, or under direct
or indirect common control with such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
such corporation, whether through the ownership of voting securities, by
contract or otherwise.
"Affiliate Contracts" shall have the meaning provided in Section
5A.05(f).
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time modified, amended and/or supplemented.
"Applicable Margin" shall mean (A) for the period from the
Effective Date through but not including the first Start Date described
below, (x) 1.00% for Base Rate Loans and (y) 2.25% for Eurodollar Loans and
(B) from and after each day of delivery of any certificate delivered in
accordance with the following sentence (each a "Start Date") to and
including the applicable End Date described below, a percentage per annum
based on the then-existing Leverage Ratio as set forth below:
Base Rate Eurodollar
Leverage Ratio Loans Loans
Greater than 4.50:1.00 1.25% 2.50%
Less than or equal to
4.50:1.00 and greater
than 4.00:1.00 1.00% 2.25%
Less than or equal to
4.00:1.00 and greater
than 3.50:1.00 0.75% 2.00%
Less than or equal to
3.50:1.00 and greater
than 3:00:1.00 0.50% 1.75%
Less than or equal to
3.00:1.00 0.25% 1.50%
The Leverage Ratio, for purposes of calculating the Applicable
Margin, shall be determined based on the delivery of a certificate of the
Borrower to the Administrative Agent (with a copy to be sent by the
Administrative Agent to each Bank), certified by an Authorized Officer of
the Borrower within 45 days after the last day of any fiscal quarter of the
Borrower (commencing with its fiscal quarter ending September 30, 1998),
which certificate shall set forth the calculation of the Leverage Ratio for
the Test Period ended immediately prior to the relevant Start Date and the
Applicable Margin which shall be thereafter applicable (until same is
changed or ceases to apply in accordance with the following sentences). The
Applicable Margin so determined shall apply, except as set forth in the
succeeding sentence, from the Start Date to the earlier of (x) the date on
which the next certificate is delivered to the Administrative Agent and (y)
the date which is 45 days following the last day of the fiscal quarter in
which the previous Start Date occurred (the "End Date"), at which time, if
no certificate has been delivered to the Administrative Agent indicating an
entitlement to an Applicable Margin other than in the case of Base Rate
Loans, 1.00%, and in the case of Eurodollar Loans, 2.25% (and thus
commencing a new Start Date), the Applicable Margin shall be, in the case
of Base Rate Loans, 1.00%, and, in the case of Eurodollar Loans, 2.25%.
Notwithstanding anything to the contrary contained above in this
definition, the Applicable Margin shall be, in the case of Base Rate Loans,
1.00% and, in the case of Eurodollar Loans, 2.25% at all times during which
there shall exist a Default under Section 9.01 or 9.05 or an Event of
Default.
"Appraisal Analysis" shall have the meaning provided in Section
5A.22.
"Appraisal Update" shall have the meaning provided in Section
7.01(k).
"Assignment Agreement" shall have the meaning provided in Section
12.04(b).
"Authorized Officer" shall mean any senior officer of the
Borrower designated as such in writing to the Administrative Agent by the
Borrower in each case to the extent acceptable to the Administrative Agent.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any incurrence of
Loans (including pursuant to a Mandatory Borrowing) or to fund its portion
of any unreimbursed payment under Section 2.05(c) or (ii) a Bank having
notified the Administrative Agent and/or the Borrower that it does not
intend to comply with its obligations under Section 1.01 or under Section
2.05(c).
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (i) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate and (ii)
the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the incurrence of (i) Swingline Loans by
the Borrower from the Swingline Bank on a given date or (ii) one Type of
Revolving Loan by the Borrower from all of the Banks having Revolving
Commitments on a pro rata basis on a given date (or resulting from
conversions on a given date), having in the case of Eurodollar Loans the
same Interest Period; provided that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered part of any related Borrowing of
Eurodollar Loans.
"Borrowing Base" shall mean as at any date on which the amount
thereof is being determined, an amount equal to the sum of (x) up to 85% of
Eligible Receivables and (y) up to 50% of Eligible Rental Equipment, each
as determined from the Borrowing Base Certificate most recently delivered
pursuant to Section 7.01(h), provided, that the Administrative Agent shall
be entitled, in each case in the exercise of its reasonable discretion, at
any time after the Effective Date, to (i) establish, eliminate, increase or
decrease reserves against Eligible Rental Equipment and/or (ii) impose
additional restrictions (or eliminate the same) with respect to the
standard set forth in the definition of Eligible Rental Equipment if, in
the reasonable discretion of the Administrative Agent, the results of any
Appraisal Update reveal a materially adverse change in the orderly
liquidation value of the Rental Equipment of the Borrower and the
Subsidiary Guarantors.
"Borrowing Base Certificate" shall have the meaning provided in
Section 7.01(h).
"Borrowing Base Deficiency" shall mean, at any time, the
amount, if any, by which the sum of (x) the aggregate principal amounts of
then outstanding Revolving Loans and Swingline Loans and (y) the aggregate
amount of Letter of Credit Outstandings at such time exceeds the Borrowing
Base then in effect.
"BTCo" shall mean Bankers Trust Company.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any
day which shall be in the City of New York a legal holiday or a day on
which banking institutions are authorized by law or other governmental
actions to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (i) and which is
also a day for trading by and between banks in U.S. dollar deposits in the
interbank Eurodollar market.
"Capital Expenditures" shall mean, 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 Capital 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.
"Capital Lease" as applied to any Person shall mean any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Borrower or any of its Subsidiaries in each
case taken at the amount thereof accounted for as liabilities in accordance
with GAAP.
"Carryover Amount" shall have the meaning provided in Section
8.05(b).
"Cash Equivalents" shall mean (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii)
U.S. dollar denominated time deposits, certificates of deposit and bankers'
acceptances of (x) any Bank, (y) any domestic commercial bank of recognized
standing having capital and surplus in excess of $250,000,000 or (z) any
bank (or the parent company of such bank) whose short-term commercial paper
rating from Standard & Poor's Ratings Services ("S&P") is at least A-2 or
the equivalent thereof or from Moody's Investors Service, Inc. ("Moody's")
is at least P-2 or the equivalent thereof (any such bank, an "Approved
Bank"), in each case with maturities of not more than six months from the
date of acquisition, (iii) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications specified
in clause (ii) above, (iv) commercial paper issued by any Bank or Approved
Bank or by the parent company of any Bank or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company with
a short-term commercial paper rating of at least A-2 or the equivalent
thereof by S&P or at least P-2 or the equivalent thereof by Moody's (any
such company, an "Approved Company"), or guaranteed by any industrial
company with a long term unsecured debt rating of at least A or A2, or the
equivalent of each thereof, from S&P or Moody's, as the case may be, and in
each case maturing within six months after the date of acquisition and (v)
investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (i) through (iv)
above.
"Cash Taxes" for any period shall mean all Taxes paid in cash
during such period by the Borrower and its Subsidiaries, provided, that for
the Test Period (i) ended June 30, 1998, Cash Taxes shall be deemed to be
the product of (x) the Cash Taxes for the fiscal quarter of the Borrower
ended June 30, 1998 and (y) 4, (ii) ended September 30, 1998, Cash Taxes
shall be deemed to be the product of (x) the Cash Taxes for the two
consecutive fiscal quarters of the Borrower ended September 30, 1998 and
(y) 2 and (iii) ended December 31, 1998, Cash Taxes shall be deemed to be
the product of (x) the Cash Taxes for the three consecutive fiscal quarters
of the Borrower ended December 31, 1998 and (y) 4/3.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et
seq.
"Change of Control" shall mean (i) prior to a Public Offering
(w) J.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 J.W. 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) J.W. 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 Securities of the Borrower, (ii) after a Public
Offering, (x) J.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 J.W. Childs and its Affiliates), Voting Stock
representing 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.
"Childs" shall mean J.W. Childs Associates, L.P., a Delaware
limited partnership.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each
of the Security Documents.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Banks pursuant to the Security Documents.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Common Stock" shall mean the common stock of the Borrower, par
value $.01 per share.
"Consolidated EBIT" shall mean, 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 provisio to the definition of
Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period, adjusted by adding thereto the amount of all
amortization of intangibles and depreciation 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
Agreement or otherwise. For purposes of determining compliance with
Sections 8.10, 8.11 and 8.12, Consolidated EBITDA for each monthly
accounting period from July 1997 through February 1998 shall be deemed to
be as set forth on Schedule XI.
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate amount of all Indebtedness of the Borrower and
its Subsidiaries on a consolidated basis determined in conformity with
GAAP.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to Capital Leases in
accordance with GAAP) of the Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries, including, without limitation, all
capitalized interest, but excluding (x) all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements and (y)
Transaction Expenses, and net of cash interest income, provided, that for
the Test Period (i) ended June 30, 1998, Consolidated Interest Expense
shall be deemed to be the product of (x) the Consolidated Interest Expense
for the fiscal quarter of the Borrower ended June 30, 1998 and (y) 4, (ii)
ended September 30, 1998, Consolidated Interest Expense shall be deemed to
be the product of (x) the Consolidated Interest Expense for the two
consecutive fiscal quarters of the Borrower ended September 30, 1998 and
(y) 2 and (iii) ended December 31, 1998, Consolidated Interest Expense
shall be deemed to be the product of (x) the Consolidated Interest Expense
for the three consecutive fiscal quarters of the Borrower ended December
31, 1998 and (y) 4/3.
"Consolidated Net Income" shall mean, 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 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 8.12, 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 case
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).
"Consolidated Net Indebtedness" shall mean, at any date of
determination, an amount equal to the amount of Consolidated Indebtedness
at such time less the amount of cash and Cash Equivalents held by the
Borrower and its Subsidiaries at such time.
"Contingent Obligations" shall mean, as to any Person, any
obligation of such Person guaranteeing or intending to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) 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 (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect
thereof, provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, each of the
Notes, each of the Security Documents, the Subsidiary Guaranty and any
other documents executed in connection herewith or therewith.
"Credit Event" shall mean and include the making of a Loan or
the issuance of a Letter of Credit.
"Credit Party" shall mean the Borrower and each of the Subsidiary
Guarantors.
"Debt Termination Documents" shall have the meaning provided in
Section 5A.19(c).
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividends" shall have the meaning provided in Section 8.08.
"Documents" shall mean, collectively, (a) the Credit Documents
and (b) the Transaction Documents.
"Domestic Subsidiary" shall have the meaning provided in the
definition of Subsidiary Guarantor.
"Effective Date" shall have the meaning provided in Section
12.10.
"Eligible Receivables" shall mean the total face amount of the
receivables of the Borrower and the Subsidiary Guarantors arising from the
rental of Rental Equipment by the Borrower or any Subsidiary Guarantor in
the ordinary course of business or the sale of Inventory by the Borrower or
any Subsidiary 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 180 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 set-off (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 Subsidiary 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" shall mean all Rental Equipment of
the Borrower and the Subsidiary Guarantors which (i) is held by the
Borrower or any Subsidiary Guarantor (other than for sale) or is rented to
third Persons in the ordinary course of business by the Borrower or any
Subsidiary 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 reasonable discretion. In any event, Eligible Rental Equipment shall
(i) exclude the net book value of the Borrower's "Bazooka Bed" inventory
and (ii) account for reserves for Rental Equipment that is unrentable,
obsolete, slow moving or under repair. 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 the proviso
contained in the definition of Borrowing Base.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined by
Regulation D of the Securities Act of 1933, as amended).
"Employment Agreements" shall have the meaning provided in
Section 5A.05(d).
"End Date" shall have the meaning provided in the definition of
Applicable Margin.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, administrative investigations
or proceedings relating in any way to any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law (hereafter,
"Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, rule of
common law or written and binding policy or guide, now or hereafter in
effect and in each case as amended, and any final and applicable judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the
environment, health, safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15
U.S.C. ss. 7401 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the
Sa Drinking Water Act, 42 U.S.C. ss. 3808 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. ss. 2701 et seq.; and any applicable state and local or
foreign counterparts or equivalents.
"Equity Financing" shall have the meaning provided in Section
5A.10.
"Equity Financing Documents" shall have the meaning provided in
Section 5A.10.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with the Borrower or a Subsidiary of the
Borrower would be deemed to be a "single employer" (i) within the meaning
of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the
Borrower or a Subsidiary of the Borrower being or having been a general
partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (i) the offered quotation to first-class
banks in the New York interbank Eurodollar market by the Administrative
Agent for dollar deposits of amounts in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan of the Administrative
Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period divided
(and rounded upward to the next whole multiple of 1/32 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including without limitation any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" shall have the meaning provided in
Section 6.21.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5A.05(e).
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of recognized
standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"FIRREA" shall mean Financial Institution Reform, Recovery and
Enforcement Act of 1989, as amended.
"Fixed Charge Coverage Ratio" for any period shall mean the
ratio of (x) Consolidated EBITDA minus Cash Taxes for such period minus the
greater of (i) Maintenance Capital Expenditures for such period or (ii) the
product of (A) 0.50 and Capital Expenditures for such period to (y) Fixed
Charges for such period.
"Fixed Charges" for any period shall mean the sum of (i)
Consolidated Interest Expense for such period and (ii) the aggregate
principal amount of all scheduled payments of Indebtedness (excluding
repayment of Revolving Loans not accompanied by a permanent reduction to
the Total Revolving Commitment) required to be made during such period.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the
Borrower or any one or more of its Subsidiaries primarily for the benefit
of employees of the Borrower or such Subsidiaries residing outside the
United States of America, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall have the meaning provided in the
definition of Subsidiary Guarantor.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect on the date of this Agreement; it
being understood and agreed that determinations in accordance with GAAP for
purposes of Section 8, including defined terms as used therein, are subject
(to the extent provided therein) to Section 12.07(a).
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, transformers or other
equipment that contained, electric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous
substances," "hazardous waste," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar meaning
and regulatory effect, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority.
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the
face amount of all letters of credit issued for the account of such Person
and, without duplication, all drafts drawn thereunder, (iv) all
Indebtedness of a second Person secured by any Lien on any property owned
by such first Person, whether or not such indebtedness has been assumed,
(v) all Capitalized Lease Obligations of such Person, (vi) all obligations
of such Person to pay a specified purchase price for goods or services
whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vii) all net obligations of such Person under Interest Rate
Agreements and (viii) all Contingent Obligations of such Person (other than
Contingent Obligations arising from the guaranty by such Person of the
obligations of the Borrower and/or its Subsidiaries to the extent such
guaranteed obligations do not constitute Indebtedness), provided that
Indebtedness shall not include trade payables, deferred revenue, taxes and
accrued expenses, in each case arising in the ordinary course of business.
"Interest Coverage Ratio" shall mean, for any Test Period, the
ratio of (i) Consolidated EBITDA for such Test Period to (ii) Consolidated
Interest Expense for such Test Period.
"Interest Period" with respect to any Eurodollar Loan shall
mean the interest period applicable thereto, as determined pursuant to
Section 1.09.
"Interest Rate Agreement" shall mean 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" shall mean all of the Borrower's and the Subsidiary
Guarantors' now owned and existing and hereafter arising or acquired
inventory, wherever located and whether in the possession of Borrower or
any Subsidiary 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 Subsidiary 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.
"Investment" shall have the meaning provided in Section 8.06.
"J.W. Childs" shall mean J.W. Childs Equity Partners, L.P., a
Delaware limited partnership.
"L/C Supportable Obligations" shall mean and include
obligations of the Borrower or its Subsidiaries incurred in the ordinary
course of business (including, without limitation, pursuant to lease
obligations in respect of real property leased by the Borrower or any of
its Subsidiaries) and such other obligations of the Borrower or any of its
Subsidiaries as are reasonably acceptable to the Administrative Agent and
the Letter of Credit Issuer and otherwise permitted to exist pursuant to
the terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title
and interest of such Person as lessee or licensee in, to and under leases
or licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo and any Bank which at
the request of the Borrower and with the consent of the Administrative
Agent agrees, in such Bank's sole discretion, to become a Letter of Credit
Issuer for the purpose of issuing Letters of Credit pursuant to Section 2.
The sole Letter of Credit Issuer on the Effective Date is BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all
outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid
Drawings in respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of (i)
Consolidated Net Indebtedness at such time to (ii) Consolidated EBITDA for
the Test Period most recently ended (taken as one accounting period).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement or any lease in the nature thereof).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Maintenance Capital Expenditures", with respect to any Test
Period ending on a date set forth below, shall mean the amount set forth
opposite such date:
Date Maintenance Capital Expenditures
June 30, 1998 $10,800,000
September 30, 1998 $ 9,700,000
December 31, 1998 $ 8,600,000
March 31, 1999 $ 8,800,000
June 30, 1999 $ 9,000,000
September 30, 1999 $ 9,200,000
December 31, 1999 $ 9,400,000
March 31, 2000 $ 9,000,000
June 30, 2000 $ 8,600,000
September 30, 2000 $ 8,200,000
December 31, 2000 $ 7,800,000
March 31, 2001 $ 8,100,000
June 30, 2001 $ 8,500,000
September 30, 2001 $ 8,800,000
December 31, 2001 $ 9,200,000
March 31, 2002 $10,200,000
June 30, 2002 $11,300,000
September 30, 2002 $12,400,000
December 31, 2002 $13,400,000
"Management Agreement" shall mean the management agreement
dated the date hereof between the Borrower and Childs.
"Management Holder" shall have the meaning provided in the
Stockholders Agreement as in effect on the date hereof.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, property, assets, liabilities, operations, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole, after giving effect to the Transaction and any other
transactions contemplated by the Documents.
"Maturity Date" shall mean February 25, 2003.
"Maximum Swingline Amount" shall mean $500,000.
"Minimum Borrowing Amount" shall mean $250,000.
"Mortgage" shall have the meaning provided in Section 5A.16(i),
provided that after the execution and delivery thereof, the mortgage
delivered pursuant to Section 7.13 and each Additional Mortgage shall also
constitute Mortgages.
"Mortgage Policies" shall have the meaning provided in Section
5A.16(ii).
"Mortgaged Properties" shall mean each of the Real Properties
listed on Schedule V hereto and designated as a "Mortgaged Property"
thereon.
"Net Sale Proceeds" shall mean, for any asset sale, the gross
cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and
when received) received from such asset sale, net of the reasonable costs
of such sale (including fees and commissions, payments of unassumed
liabilities relating to the assets sold and required payments of any
Indebtedness which is secured by the respective assets which were sold),
and the incremental taxes paid or payable as a result of such asset sale.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Note" shall mean and include each Revolving Note and the
Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at 130 Liberty Street, New York, New York or such other
office as the Administrative Agent may designate to the Borrower from time
to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time
existing, owing to the Administrative Agent, the Collateral Agent or any
Bank pursuant to the terms of this Agreement or any other Credit Document.
"Participant" shall have the meaning provided in Section 2.05(a).
"Payment Office" shall mean the office of the Administrative
Agent located at 130 Liberty Street, New York, New York or such other
office as the Administrative Agent may designate to the Borrower from time
to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Encumbrances" shall mean, with respect to any Real
Property subject to a Mortgage or an Additional Mortgage, such exceptions
to title as are set forth in the title insurance policy or title commitment
delivered with respect thereto, all of which exceptions must be reasonably
acceptable to the Administrative Agent.
"Permitted Liens" shall have the meaning provided in Section 8.03.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or other
enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower, a Subsidiary of the Borrower or
an ERISA Affiliate, and each such plan for the five-year period immediately
following the latest date on which the Borrower, a Subsidiary of the
Borrower, or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5A.15(a).
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate
is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. BTCo may make commercial loans or
other loans at rates of interest at, above or below the Prime Lending Rate.
"Projections" shall have the meaning set forth in Section 5A.21.
"Public Offering" shall mean 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 of 1933, as amended, which yields at
least $20,000,000 of net cash proceeds to the Borrower.
"Quarterly Payment Date" shall mean the last Business Day of
each March, June, September and December occurring after the Effective
Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all of the right,
title and interest of such Person in and to land, improvements and
fixtures, including Leaseholds.
"Recapitalization" shall mean the recapitalization of the
Borrower pursuant to and in accordance with the terms and conditions of the
Recapitalization Documents.
"Recapitalization Agreement" shall mean the Agreement and Plan
of Merger dated November 25, 1997, by and among the Borrower, J.W. Childs,
and UHS Acquisition Corp., a Minnesota corporation.
"Recapitalization Documents" shall mean the Recapitalization
Agreement and all other documents required to be entered into or delivered
pursuant to the terms and conditions of the Recapitalization Agreement.
"Refinanced Agreements" shall mean those agreements listed on
Schedule X and all instruments, documents and agreements relating thereto,
in all cases as in effect on the Effective Date.
"Refinancing" shall mean the termination of the commitments
under each Refinanced Agreement and the repayment of all loans outstanding
thereunder.
"Register" shall have the meaning provided in Section 12.16.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof establishing reserve
requirements.
"Regulation G, T, U and X" shall mean Regulations G, T, U and X
of the Board of Governors of the Federal Reserve System as from time to
time in effect and any successor to all or a portion thereof establishing
margin requirements.
"Rental Equipment" shall mean all moveable medical equipment of
the Borrower and the Subsidiary Guarantors generally consisting of, but not
limited to, critical care equipment, monitoring equipment, newborn care
equipment and respiratory therapy equipment (but excluding Inventory).
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of
ERISA other than those events as to which the 30-day notice period is
waived under subsection .22, .23, .25, .27, or .28 of PBGC Regulation
Section 4043.
"Required Appraisal" shall have the meaning set forth in Section
7.12(d).
"Required Banks" shall mean Non-Defaulting Banks whose
outstanding Revolving Commitments (or, if after the Total Revolving
Commitment has been terminated, outstanding Revolving Loans and Adjusted RC
Percentage of outstanding Swingline Loans and Letter of Credit
Outstandings) constitute greater than 50% of the Adjusted Total Revolving
Commitment (or, if after the Total Revolving Commitment has been
terminated, the total outstanding Revolving Loans of Non-Defaulting Banks
and the aggregate Adjusted RC Percentages of all Non-Defaulting Banks of
the total outstanding Swingline Loans and Letter of Credit Outstandings at
such time).
"Revolving Commitment" shall mean, with respect to each Bank,
the amount set forth opposite such Bank's name in Schedule I directly below
the column entitled "Revolving Commitment", (x) as the same may be reduced
from time to time pursuant to Sections 3.02, 3.03 and/or 9 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant
to Section 12.04.
"Revolving Loan" shall have the meaning provided in Section
1.01(a).
"Revolving Note" shall have the meaning provided in Section
1.05(a)(i).
"Revolving Percentage" shall mean at any time for each Bank
with a Revolving Commitment, the percentage obtained by dividing such
Bank's Revolving Commitment by the Total Revolving Commitment, provided
that if the Total Revolving Commitment has been terminated, the Revolving
Percentage of each Bank shall be determined by dividing such Bank's
Revolving Commitment immediately prior to such termination by the Total
Revolving Commitment immediately prior to such termination.
"SEC" shall mean the Securities and Exchange Commission and/or
any successor thereto.
"Secured Creditors" shall have the meaning assigned to that
term in each of the Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreement" shall have the meaning provided in Section
5A.15(b).
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the
Security Agreement, each Mortgage and each Additional Mortgage, if any.
"Senior Notes" mean the unsecured senior notes, issued by the
Borrower, as in effect on the Effective Date and after giving effect to any
changes, amendments or supplements thereto (and shall include any unsecured
senior notes into which the Senior Notes are exchanged pursuant to the
Senior Notes Documents).
"Senior Notes Change of Control" shall mean a "Change of
Control" under, and as defined in, the Senior Notes Indenture.
"Senior Notes Documents" shall mean and include each of the
Senior Notes, the Senior Notes Indenture and all securities purchase
agreements and other documents and agreements related thereto, as in effect
on the Effective Date and after giving effect to any changes, amendments or
supplements thereto.
"Senior Notes Indenture" shall mean the indenture dated on or
about the Effective Date, between the Borrower and a trustee satisfactory
to the Administrative Agent, as in effect on the Effective Date and after
giving effect to any changes, amendments or supplements thereto.
"Shareholders' Agreements" shall have the meaning provided in
Section 5A.05(b).
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Start Date" shall have the meaning provided in the definition
of Applicable Margin.
"Stated Amount" of each Letter of Credit shall mean the maximum
amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Stockholders Agreement" shall mean the Stockholders' Agreement
dated as of February 25, 1998 by and among the Borrower and the
stockholders of the Borrower party thereto.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the time
stock of any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries and (ii)
any partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries, has more than a 50%
equity interest at the time. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
"Subsidiary Guarantors" shall mean each Subsidiary of the
Borrower organized under the laws of the United States or any State or
territory thereof (each a "Domestic Subsidiary") and, to the extent
provided in Section 7.13, each Wholly-Owned Subsidiary of the Borrower
which is not a Domestic Subsidiary (each a "Foreign Subsidiary").
"Subsidiary Guaranty" shall have the meaning provided in Section
5A.14.
"Swingline Bank" shall mean BTCo.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(b).
"Swingline Note" shall have the meaning provided in Section
1.05(a)(ii).
"Syndication Date" shall mean the earlier of (i) the 90th day
after the Effective Date and (ii) that date upon which the Administrative
Agent determines (and notifies the Borrower) that the primary syndication
(and resultant addition of Persons as Banks pursuant to Section 12.04(b))
has been completed.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean the four consecutive fiscal quarters
of the Borrower then last ended (in each case taken as one accounting
period), provided, any calculation of Consolidated Interest Expense and/or
Cash Taxes required in determining compliance with Section 8.10 or 8.11
will be made in accordance with the last sentence contained in the
definition of Consolidated Interest Expense or Cash Taxes, as the case may
be.
"Total Revolving Commitment" shall mean the sum of the
Revolving Commitments of each of the Banks.
"Total Unutilized Revolving Commitment" shall mean, at any
time, (i) the Total Revolving Commitment at such time less (ii) the sum of
the aggregate principal amount of all Revolving Loans and Swingline Loans
outstanding at such time plus the Letter of Credit Outstandings at such
time.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Transaction" shall mean, collectively, (i) the Refinancing,
(ii) the Recapitalization, (iii) the Equity Financing, (iv) the issuance of
the Senior Notes on the Effective Date and (v) the incurrence of Loans on
the Effective Date.
"Transaction Documents" shall mean, collectively, (i) the
Recapitalization Documents, (ii) the Debt Termination Documents, (iii) the
Equity Financing Documents, (iv) the Senior Notes Documents and (v) all
other documents and agreements (other than the Credit Documents) entered
into in connection with the Transaction.
"Transaction Expenses" shall mean all fees and expenses
incurred in connection with and arising out of the Transaction and the
transactions contemplated thereby and hereby, including, without
limitation, attorney's fees, accountants' fees, placement agents' fees,
discounts and commissions and brokerage, and consultant fees. Transaction
Expenses shall include the amortization of any such fees and expenses that
are capitalized and not classified as an expense on the date incurred.
"Type" shall mean any type of Revolving Loan determined with
respect to the interest option applicable thereto, i.e., a Base Rate Loan
or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code, as in effect from
time to time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount,
if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year,
determined in accordance with actuarial assumptions at such time consistent
with Statement of Financial Accounting Standards No. 87, exceeds the market
value of the assets allocable thereto.
"Unpaid Drawing" shall have the meaning provided in Section
2.04(a).
"Unutilized Revolving Commitment" for any Bank with a Revolving
Commitment at any time shall mean the excess of (i) the Revolving
Commitment of such Bank over (ii) the sum of (x) the aggregate outstanding
principal amount of Revolving Loans made by such Bank plus (y) an amount
equal to such Bank's Adjusted RC Percentage of the Letter of Credit
Outstandings at such time.
"Voting Stock" shall mean, 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.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100%
equity interest at such time.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
SECTION 11. The Administrative Agent.
11.01 Appointment. The Banks hereby designate Bankers Trust
Company as Administrative Agent (for purposes of this Section 11, the term
"Administrative Agent" shall include BTCo in its capacity as Collateral
Agent pursuant to the Security Documents) to act as specified herein and in
the other Credit Documents. Each Bank hereby irrevocably authorizes, and
each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. The Administrative Agent may perform
any of its duties hereunder or under the other Credit Documents by or
through its respective officers, directors, agents, employees or
affiliates.
11.02 Nature of Duties. The Administrative Agent shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and the Security Documents. Neither the Administrative Agent nor
any of its respective officers, directors, agents, employees or affiliates
shall be liable for any action taken or omitted by it or them hereunder or
under any other Credit Document or in connection herewith or therewith,
unless caused by its or their gross negligence or willful misconduct (as
determined by a court of competent jurisdiction). The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any
other Credit Document a fiduciary relationship in respect of any Bank or
the holder of any Note; and nothing in this Agreement or any other Credit
Document, expressed or implied, is intended to or shall be so construed as
to impose upon the Administrative Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein
or therein.
11.03 Lack of Reliance on the Administrative Agent.
Independently and without reliance upon the Administrative Agent, each Bank
and the holder of each Note, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Borrower and its Subsidiaries in
connection with the making and the continuance of the Loans and the taking
or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and its Subsidiaries and,
except as expressly provided in this Agreement, the Administrative Agent
shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times
thereafter. The Administrative Agent shall not be responsible to any Bank
or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or
other writing delivered in connection herewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other
Credit Document or the financial condition of the Borrower and its
Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of
the Borrower and its Subsidiaries or the existence or possible existence of
any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks
with respect to any act or action (including failure to act) in connection
with this Agreement or any other Credit Document, the Administrative Agent
shall be entitled to refrain from such act or taking such action unless and
until the Administrative Agent shall have received instructions from the
Required Banks; and the Administrative Agent shall not incur liability to
any Person by reason of so refraining. Without limiting the foregoing,
neither any Bank nor the holder of any Note shall have any right of action
whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting hereunder or under
any other Credit Document in accordance with the instructions of the
Required Banks.
11.05 Reliance. The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed
to be the proper Person, and, with respect to all legal matters pertaining
to this Agreement and any other Credit Document and its duties hereunder
and thereunder, upon advice of counsel selected by the Administrative Agent
(which may be counsel for the Borrower).
11.06 Indemnification. To the extent the Administrative Agent
is not reimbursed and indemnified by the Borrower or the Subsidiary
Guarantors, the Banks will reimburse and indemnify the Administrative
Agent, in proportion to their respective "percentages" as used in
determining the Required Banks, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed
on, asserted against or incurred by the Administrative Agent in performing
its respective duties hereunder or under any other Credit Document, in any
way relating to or arising out of this Agreement or any other Credit
Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct (as determined by a court of
competent jurisdiction).
11.07 The Administrative Agent in Its Individual Capacity. With
respect to its obligation to make Loans under this Agreement, the
Administrative Agent shall have the rights and powers specified herein for
a "Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required
Banks," "holders of Notes" or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with any Credit Party or any Affiliate of any Credit Party as if
it were not performing the duties specified herein, and may accept fees and
other consideration from the Borrower or any other Credit Party for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof,
as the case may be, shall have been filed with the Administrative Agent.
Any request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is the holder of any Note
shall be conclusive and binding on any subsequent holder, transferee,
assignee or indorsee, as the case may be, of such Note or of any Note or
Notes issued in exchange therefor.
11.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions
and duties hereunder and/or under the other Credit Documents at any time by
giving 30 Business Days' prior written notice to the Borrower and the
Banks. Such resignation shall take effect upon the appointment of a
successor Administrative Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Administrative Agent hereunder or thereunder who
shall be a commercial bank or trust company reasonably acceptable to the
Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 30 Business Day period, the Administrative Agent,
with the consent of the Borrower (which consent shall not be unreasonably
withheld), shall then appoint a successor Administrative Agent who shall
serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Banks appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 30th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any,
as the Banks appoint a successor Administrative Agent as provided above.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay
all reasonable out-of-pocket costs and expenses of the Administrative Agent
in connection with the negotiation, preparation, execution and delivery of
the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of White & Case) and of
the Administrative Agent and each of the Banks in connection with the
enforcement of the Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent and one counsel (or
in-house counsel) for each of the Banks); (ii) pay and hold each of the
Banks harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save each of
the Banks harmless from and against any and all liabilities with respect to
or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify each Bank
(including in its capacity as the Administrative Agent or a Letter of
Credit Issuer), its officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them (whether
asserted by the Borrower or otherwise) as a result of, or arising out of,
or in any way related to, or by reason of, (a) any investigation,
litigation or other proceeding (whether or not any Bank is a party thereto)
related to the entering into and/or performance of any Credit Document or
the use of the proceeds of any Loans hereunder or the Recapitalization or
the consummation of any other transactions contemplated in any Credit
Document or other Document, including, without limitation, the reasonable
fees and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct (as determined by a
court of competent jurisdiction) of the Person to be indemnified) or (b)
the actual or alleged presence of Hazardous Materials in the air, surface
water, groundwater, surface or subsurface of any Real Property owned or at
any time operated by the Borrower or any of its Subsidiaries, the
generation, storage, transportation or disposal of Hazardous Materials at
any location whether or not owned or operated by the Borrower or any of its
Subsidiaries, the non-compliance of any Real Property owned or at any time
operated by the Borrower or any of its Subsidiaries with federal, state and
local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any such Real Property, or any Environmental
Claim asserted against the Borrower, any of its Subsidiaries, or any such
Real Property, including, in each case, without limitation, the reasonable
fees and disbursements of counsel and other consultants incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct (as
determined by a court of competent jurisdiction) of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Administrative Agent or any Bank set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible
under applicable law.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, if an Event of Default then exists, each
Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing
by such Bank (including without limitation by branches and agencies of such
Bank wherever located) to or for the credit or the account of any Credit
Party against and on account of the Obligations and liabilities of such
Credit Party to such Bank under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in
Obligations of such Credit Party purchased by such Bank pursuant to Section
12.06(b), and all other claims of any nature or description arising out of
or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and
although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
12.03 Notices. (a) Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall
be in writing (including telegraphic, telex, telecopier or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered, if to a Credit Party, at the address specified opposite its
signature below or in the other relevant Credit Documents, as the case may
be, if to the Administrative Agent, at its Notice Office; if to any Bank,
at its address specified for such Bank on Schedule II; or, at such other
address as shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier,
and shall be effective when received.
(b) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent or the Swingline Bank (in the case of a
Borrowing of Swingline Loans) or any Letter of Credit Issuer, as the case
may be, may prior to receipt of written confirmation act without liability
upon the basis of such telephonic notice, believed by the Administrative
Agent or the Swingline Bank or such Letter of Credit Issuer in good faith
to be from an Authorized Officer of the Borrower. In each such case, the
Borrower hereby waives the right to dispute the Administrative Agent's or
the Swingline Bank's or such Letter of Credit Issuer's record of the terms
of such telephonic notice.
12.04 Assignments; Participations; etc. (a) This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, provided that the
Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of each of the Banks. Each Bank
may at any time grant participations in any of its rights hereunder or
under any of the Notes to another financial institution, provided that in
the case of any such participation, the participant shall not have any
rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to
be those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower
hereunder shall be determined as if such Bank had not sold such
participation, except that the participant shall be entitled to the
benefits of Sections 1.10, 2.06 and 4.04 to the extent that such Bank would
be entitled to such benefits if the participation had not been entered into
or sold, and, provided further, that no Bank shall transfer, grant or
assign any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Loan or Note or Letter of Credit (unless
such Letter of Credit is not extended beyond the Maturity Date) in which
such participant is participating, or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of
the applicability of any post-default increase in interest rates), or
reduce the principal amount thereof (it being understood that any amendment
or modification to the financial definitions in this Agreement shall not
constitute a reduction in the rate of interest for purposes of this clause
(i)), or increase such participant's participating interest in any
Revolving Commitment over the amount thereof then in effect (it being
understood that (x) a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Revolving Commitment, or a mandatory
prepayment, shall not constitute a change in the terms of such
participation and (y) an increase in any Revolving Commitment or Revolving
Loan shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof), (ii)
release all or substantially all of the Collateral which support the
Revolving Loans in which such participant is participating (except as
expressly permitted in any Credit Document) or (iii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.
(b) Notwithstanding the foregoing, (x) any Bank may assign all
or a portion of its Revolving Commitment and its rights and obligations
hereunder to (i) an Affiliate of such Bank or to one or more other Banks or
(ii) in the case of any Bank that is a fund that invests in bank loans, any
other fund that invests in bank loans and is managed by the same investment
advisor of such Bank or by an Affiliate of such investment advisor or (y)
with the consent of the Administrative Agent and the Borrower (which
consents shall not be unreasonably withheld), any Bank may assign all or a
portion of its Revolving Commitment and its rights and obligations
hereunder to one or more Eligible Transferees (treating any fund that
invests in bank loans and any other fund that invests in bank loans and is
managed by the same investment advisor of such fund or by an Affiliate of
such investment advisor as a single Eligible Transferee). No assignment
pursuant to the immediately preceding sentence shall, to the extent such
assignment represents an assignment to an institution other than one or
more Banks hereunder or an Affiliate of any Bank, be in an aggregate amount
less than $5,000,000 unless the entire Commitment and outstanding Revolving
Loans of the assigning Bank is so assigned. If any Bank so sells or assigns
all or a part of its rights hereunder or under the Notes, any reference in
this Agreement or the Notes to such assigning Bank shall thereafter refer
to such Bank and to the respective assignee to the extent of their
respective interests and the respective assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights,
benefits and obligations as it would if it were such assigning Bank. Each
assignment pursuant to this Section 12.04(b) shall be effected by the
assigning Bank and the assignee Bank executing an Assignment Agreement (the
"Assignment Agreement") substantially in the form of Exhibit L
(appropriately completed). In the event of (and at the time of) any such
assignment (other than an assignment to one or more Banks or an Affiliate
of a Bank), either the assigning or the assignee Bank shall pay to the
Administrative Agent a nonrefundable assignment fee of $3,500, and at the
time of any assignment pursuant to this Section 12.04(b), (i) Schedule I
shall be deemed to be amended to reflect the Revolving Commitment of the
respective assignee (which shall result in a direct reduction to the
Revolving Commitment of the assigning Bank) and of the other Banks, and
(ii) if any such assignment occurs after the Effective Date, the Borrower
will issue new Notes to the respective assignee and to the assigning Bank
in conformity with the requirements of Section 1.05. No transfer or
assignment under this Section 12.04(b) will be effective until recorded by
the Administrative Agent on the Register pursuant to Section 12.16. To the
extent of any assignment pursuant to this Section 12.04(b), the assigning
Bank shall be relieved of its obligations hereunder with respect to its
assigned Revolving Commitments. At the time of each assignment pursuant to
this Section 12.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to the Borrower and the Administrative Agent
the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the
extent that an assignment of all or any portion of a Bank's Revolving
Commitment and related outstanding Obligations pursuant to Section 1.13 or
this Section 12.04(b) would, at the time of such assignment, result in
increased costs under Section 1.10, 1.11, 2.06 or 4.04 which exceed those
being charged, if any, by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such excess
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes giving
rise to such increased costs after the date of the respective assignment).
Each Bank and the Borrower agree to execute such documents (including,
without limitation, amendments to this Agreement and the other Credit
Documents) as shall be necessary to effect the foregoing.
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Notes or Loans to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Administrative Agent, any Bank which is a fund may
pledge all or any portion of its Loans and Notes to its trustee in support
of its obligations to its trustee.
(d) Notwithstanding any other provisions of this Section 12.04,
no transfer or assignment of the interests or obligations of any Bank
hereunder or any grant of participation therein shall be permitted if such
transfer, assignment or grant would require the Borrower to file a
registration statement with the SEC or to qualify the Loans under the "Blue
Sky" laws of any State.
(e) Each Bank initially party to this Agreement hereby
represents, and each Person that became a Bank pursuant to an assignment
permitted by this Section 12 will, upon its becoming party to this
Agreement, represent that it is an Eligible Transferee which makes or
invests in loans in the ordinary course of its business and that it will
make, invest in or acquire Revolving Loans for its own account in the
ordinary course of such business, provided that subject to the preceding
clauses (a) and (b), the disposition of any promissory notes or other
evidences of or interests in Indebtedness held by such Bank shall at all
times be within its exclusive control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank in exercising any right,
power or privilege hereunder or under any other Credit Document and no
course of dealing between any Credit Party and the Administrative Agent or
any Bank shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Banks to any other or further
action in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of any
Credit Party in respect of any Obligations of such Credit Party hereunder,
it shall distribute such payment to the Banks (other than any Bank that has
expressly waived its right to receive its pro rata share thereof) pro rata
based upon their respective shares, if any, of the Obligations with respect
to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise) which is applicable to the payment of the
principal of, or interest on, the Revolving Loans or Fees, of a sum which
with respect to the related sum or sums received by other Banks is in a
greater proportion than the total of such Obligation then owed and due to
such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from
the other Banks an interest in the Obligations of the respective Credit
Party to such Banks in such amount as shall result in a proportional
participation by all of the Banks in such amount, provided that if all or
any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 12.06(a) and (b) shall be subject
to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to
Defaulting Banks.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in
writing by the Borrower to the Banks), provided that (x) except as
otherwise specifically provided herein, all computations determining
compliance with Section 8, including definitions used therein shall utilize
accounting principles and policies in effect at the time of the preparation
of, and in conformity with those used to prepare, the September 30, 1997
historical financial statements of the Borrower delivered to the Banks as
described in Section 6.10(b) but shall not give effect to purchase
accounting adjustments arising in connection with the Recapitalization, to
the extent required or permitted by APB 16 and APB 17 and their
interpretations and (y) if at any time the computations determining
compliance with Section 8, including definitions used therein utilize
accounting principles different from those utilized in the financial
statements furnished to the Banks, such financial statements shall be
accompanied by reconciliation work-sheets.
(b) All computations of interest, Commitment Commission and
Fees hereunder shall be made on the actual number of days elapsed over a
year of 365 days (except, in the case of interest payable on Eurodollar
Loans which shall be made on the actual number of days elapsed over a year
of 360 days), in each case including the first day, but excluding the last
day, occurring in the period for which such interest, Commitment Commission
or Fees are payable.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT
PARTY TO THIS AGREEMENT HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH COURTS LACK JURISDICTION OVER SUCH CREDIT PARTY, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID
COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH CREDIT PARTY. EACH
CREDIT PARTY TO THIS AGREEMENT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO EACH CREDIT PARTY LOCATED OUTSIDE NEW YORK CITY
AND BY HAND DELIVERY TO EACH CREDIT PARTY LOCATED WITHIN NEW YORK CITY, AT
ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 12.03, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH CREDIT PARTY TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION
OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY BANK TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(B) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall
be lodged with the Borrower and the Administrative Agent.
12.10 Effectiveness. The Agreement shall become effective on
the date (the "Effective Date") on which (i) the Borrower, the
Administrative Agent and each of the Banks shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have
delivered the same to the Administrative Agent at the Notice Office or, in
the case of the Banks, shall have given to the Administrative Agent
telephonic (confirmed in writing, written or telex notice (actually
received) at such office that the same has been signed and mailed to it and
(ii) the conditions set forth in Section 5A are met to the satisfaction of
the Administrative Agent and the Required Banks. Unless the Administrative
Agent has received actual notice from any Bank that the conditions
contained in Section 5A have not been met to its satisfaction, upon the
satisfaction of the condition described in clause (i) of the immediately
preceding sentence and upon the Administrative Agent's good faith
determination that the conditions described in clause (ii) of the
immediately preceding sentence have been met, then the Effective Date shall
have been deemed to have occurred, regardless of any subsequent
determination that one or more of the conditions thereto had not been met
(although the occurrence of the Effective Date shall not release the
Borrower from any liability for failure to satisfy one or more of the
applicable conditions contained in Section 5A). The Administrative Agent
will give the Borrower and each Bank prompt written notice of the
occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the Borrower and the Required Banks,
provided that no such change, waiver, discharge or termination shall,
without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby in the case of the following
clause(i)), (i) extend the Maturity Date, as the case may be, or reduce the
rate or extend the time of payment of interest (other than as a result of
waiving the applicability of any post-default increase in interest rates)
or Fees thereon, or reduce the principal amount thereof (it being
understood that any amendment or modification to the financial definitions
in this Agreement shall not constitute a reduction in the rate of interest
for purposes of this clause (i)), (ii) release all or substantially all of
the Collateral (in each case except as expressly provided in the Credit
Documents), (iii) amend, modify or waive any provision of this Section
12.12(a), (iv) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the
same basis as Revolving Commitments are included on the Effective Date) or
(v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement; provided further, that no such
change, waiver, discharge or termination shall (v) increase the Commitments
of any Bank over the amount thereof then in effect without the consent of
such Bank (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Revolving Commitment shall not constitute an
increase of the Revolving Commitment of any Bank, and that an increase in
the available portion of any Revolving Commitment of any Bank shall not
constitute an increase in the Revolving Commitment of such Bank), (w)
without the consent of each Letter of Credit Issuer, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect
to Letters of Credit, (x) without the consent of the Administrative Agent,
amend, modify or waive any provision of Section 11 as the same applies to
the Administrative Agent or any other provision as same relates to the
rights or obligations of the Administrative Agent, (y) without the consent
of the Collateral Agent, amend, modify or waive any provision relating to
the rights or obligations of the Collateral Agent or (z) without the
consent of the Swingline Bank, alter its rights or obligations with respect
to Swingline Loans.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (a)(i) through (v), inclusive, of this Section
12.12, the consent of the Required Banks is obtained but the consent of one
or more of the other Banks whose consent is required is not obtained, then
the Borrower shall have the right to replace each such non-consenting Bank
or Banks (so long as all non-consenting Banks are so replaced) with one or
more Replacement Banks pursuant to Section 1.13 so long as at the time of
such replacement, each such Replacement Bank consents to the proposed
change, waiver, discharge or termination, provided that the Borrower shall
not have the right to replace a Bank solely as a result of the exercise of
such Bank's rights (and the withholding of any required consent by such
Bank) pursuant to the second proviso of Section 12.12(a).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.06, 4.04, 11.06 or 12.01 shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Bank, provided that the Borrower shall not be responsible
for costs arising under Section 1.10, 2.06 or 4.04 resulting from any such
transfer (other than a transfer pursuant to Section 1.12) to the extent not
otherwise applicable to such Bank prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, the Banks
shall hold all non-public information obtained pursuant to the requirements
of this Agreement which has been identified as such by the Borrower in
accordance with its customary procedure for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by any
bona fide actual or potential transferee or participant in connection with
the contemplated transfer of any Loans or participation therein or an
Affiliate of such Bank (including attorneys, legal advisors and consultants
of such Bank) (so long as such transferee, participant or Affiliate agrees
to be bound by the provisions of this Section 12.15) or as required or
requested by any governmental agency or representative thereof or pursuant
to legal process, provided that, unless specifically prohibited by
applicable law or court order, each Bank shall notify the Borrower of any
request by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information, and
provided further that in no event shall any Bank be obligated or required
to return any materials furnished by the Borrower or any Subsidiary.
12.16 Register. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes
of this Section 12.16, to maintain a register (the "Register") on which it
will record the Revolving Commitments from time to time of each of the
Banks, the Loans made by each of the Banks and each repayment in respect of
the principal amount of the Loans of each Bank. Failure to make any such
recordation, or any error in such recordation shall not affect the
Borrower's obligations in respect of such Revolving Loans. With respect to
any Bank, the transfer of the Revolving Commitments of such Bank and the
rights to the principal of, and interest on, any Revolving Loan made
pursuant to such Revolving Commitments shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent
with respect to ownership of such Revolving Commitments and Revolving Loans
and prior to such recordation all amounts owing to the transferor with
respect to such Revolving Commitments and Revolving Loans shall remain
owing to the transferor. The registration of assignment or transfer of all
or part of any Revolving Commitments and Revolving Loans shall be recorded
by the Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment
Agreement pursuant to Section 12.04(b). Coincident with the delivery of
such an Assignment Agreement to the Administrative Agent for acceptance and
registration of assignment or transfer of all or part of a Revolving Loan,
or as soon thereafter as practicable, the assigning or transferor Bank
shall surrender the Revolving Note evidencing such Revolving Loan, and
thereupon one or more new Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Bank and/or the new Bank.
The Borrower agrees to indemnify the Administrative Agent from and against
any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, assorted against or incurred by the Administrative
Agent in performing its duties under this Section 12.16.
12.17 Limitation on Additional Amounts, etc. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11 or 2.06 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated
to pay an amount under the respective Section within 180 days after the
later of (x) the date the Bank incurs the respective increased costs,
Taxes, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital or (y) the date such Bank has
actual knowledge of its incurrence of the respective increased costs,
Taxes, loss, expense or liability, reductions in amounts received or
receivable or reduction in return on capital, then such Bank shall only be
entitled to be compensated for such amount by the Borrower pursuant to said
Section 1.10, 1.11 or 2.06, as the case may be, to the extent the costs,
Taxes, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs one year prior to such Bank giving notice to
the Borrower that it is obligated to pay the respective amounts pursuant to
said Section 1.10, 1.11 or 2.06, as the case may be. This Section 12.17
shall have no applicability to any Section of this Agreement other than
said Sections 1.10, 1.11 and 2.06.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the
date first above written.
Address: UNIVERSAL HOSPITAL SERVICES, INC.
1250 Northland Plaza
3800 West 80th Street
Bloomington, MN 55431-4442
Telephone: (612) 893-3255 By /s/ David E. Dovenberg
Facsimile: (612) 893-3237 --------------------------
Attention: Jerry Brandt, Name: David E. Dovenberg
Chief Financial Officer Title: President and CEO
with a copy to:
J.W. Childs Equity Partners, L.P. BANKERS TRUST COMPANY,
One Federal Street, 21st Floor Individually and as
Administrative Agent
Boston, MA 02110
Telephone: (617) 753-1100
Facsimile: (617) 753-1101
Attention: Steven G. Segal, By /s/ David J. Bell
Managing Director --------------------------
Name: David J. Bell
Title: Vice President
SCHEDULE I
COMMITMENTS
Revolving
Bank Commitment
Bankers Trust Company $30,000,000
Total: $30,000,000
SCHEDULE II
BANK ADDRESSES
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: David Bell
Telephone: (212) 250-9048
Facsimile: (212) 250-7218
Schedule III
Plans
Name Type
Universal Hospital Defined Benefit Pension Plan
Services, Inc. Employees'
Pension Plan
Universal Hospital 401(k) Profit Sharing Plan
Services, Inc. Employees'
Lomg-Term Savings Plan
Universal Hospital Supplemental Pension Plan
Services, Inc. Supplemental
Pension Plan*
UHS Executive Benefit Benefit Restoration Plan
Restoration Plan*
* Executive Programs
Schedule IV
Subsidiaries
None
Schedule V
Real Property
I. Mortgaged Properties
None
II. Properties Leased
Location Address
Phoenix, AZ 4620 E. Elmwood Street
Los Angeles, CA 1440 S. State College Boulevard
Pasadena, CA 236 West Mountain Street
Sacramento, CA 4620 Northgate Boulevard
San Diego, CA 9853 Pacific Heights Boulevard
San Francisco, CA 1151 Triton Drive
Denver, CO 109 Inverness Drive East
Ft. Lauderdale, FL 5410 NW 33rd Avenue
Jacksonville, FL 8940 Western Way
Tampa, FL 3925 Coconut Palm Drive
Atlanta, GA 20 Mansell Court
Iowa City, IA 2415 Heinz Road
Chicago, IL 650 West Grand Avenue
Rockford, IL 5271 Zenith Parkway
Indianapolis, IN 7301 Georgetown Road
Kansas City, KS 8295 Melrose Drive
Wichita, KS 3450 North Rock Road
New Orleans, LA 115 James Drive West
Boston, MA 267 Boston Road
Baltimore, MD 7180 Columbia Gateway Drive
Detroit, MI 28003 Center Oaks Court
Marquette, MI 2680 U.S. 41 West, #1
Bloomington, MN 3800 West 80th Street
Bloomington, MN 9555 James Avenue South
Duluth, MN 4625 Airpark Boulevard
Minneapolis, MN 2727 26th Avenue South
St. Louis, MO 13519 Lakefront Drive
Charlotte, NC 5104 North I85 Service Road
Raleigh, NC 5820 Triangle Drive
Bismarck, ND 535 Airport Road
Fargo, ND 3002 Fiechtner Drive
Omaha, NE 2417 & 2443 South 156 Circle
New York, NY 140H Commerce Way
Rochester, NY 535 Summit Point Drive
Cincinnati, OH 4480 Lake Forest Drive
Cleveland, OH 24331 Miles Road
Portland, OR 7877 S.W. Cirrus Drive
Philadelphia, PA 520 Fellowship Road
Pittsburgh, PA 500 Bursca Drive
Sioux Falls, SD 1914 South Sycamore Avenue
Knoxville, TN 6701 Baum Drive
Memphis, TN 3975 Vantech Drive
Arlington, TX 2201 Brookhollow Plaza Drive
Houston, TX 6721 Portwest Drive
San Antonio, TX 1701 Grandstand Drive
Richmond, VA 8137 Staples Mill Road
Seattle, WA 12648 Interurban Avenue South
Madison, WI 2601 Crossroads Drive
Milwaukee, WI W226 N767 Eastmound Drive
INSURANCE DIGEST
POLICY YEAR 1997-98
This report has been prepared so that key personnel might be better
informed regarding the types of insurance being carried by UHS. The
obligation of the insurance companies' to pay claims arise from the terms
and conditions of the insurance policy, not from the summary information
presented herein.
Information contained in this report is to be considered confidential.
TABLE OF CONTENTS
Property............................................................1
Fiduciary...........................................................2
Fidelity............................................................3
Automobile..........................................................4
Workers' Compensation/Employer Liability............................5
General Liability...................................................6
Excess Liability....................................................7
Premium Summary.....................................................8
- -------------------------------------------------------------------------------
Type of Policy: Property
- -------------------------------------------------------------------------------
Form: Blanket by type of Property
Includes: real property, personal property,
improvements/betterments, and
rental equipment at UHS site
Limits: $5,000,000 Any owned or occupied location
6,000,000 Rental equipment on premises of
renter
2,000,000 Ordinance Coverage
1,000,000 Unscheduled Locations
1,000,000 Newly Acquired Locations
250,000 Property in Transit
409,000 Additional Expense per location
4,000,000 Flood
4,000,000 Earthquake (except CA)
2,000,000 Earthquake (CA)
1,000,000 Errors and Omissions
1,100,000 EDP and hardware
Deductible: $ 30,000 Equipment on rental
25,000 Flood
25,000 Earthquake - All States except
California
25,000 Water Backup
10,000 All over occurrences
10,000 EDP Coverages
1,000 Equipment in transit
Named Insured: Universal Hospital Services, Inc.
Insurance Company: Liberty Mutual Insurance Company
Policy Term: March 1, 1997 - March 1, 1998
Policy Number MC2-K4P-408021-067
Rates: .051
Annual Premium: $51,236
Insurance Broker Liberty Mutual Insurance Company
1660 South Highway 100
Minneapolis, MN 55416
(612) 546-7550
- -------------------------------------------------------------------------------
Type of Policy: Fiduciary
- -------------------------------------------------------------------------------
Form: Comprehensive
Limits: $3,000,000 Annual Aggregate
Defense: $3,000,000 Annual Aggregate; defense costs
included
Deductible: $ 0 non-indemnifiable loss
$250 indemnifiable loss
Named Insured: Universal Hospital Services, Inc. (UHS)
UHS Employees' Pension Plan
UHS Employees' Thrift and Savings Plan
UHS Employees' Medical Benefit Plan
UHS Flexible Benefit Plan
UHS Health Care Spending Account
UHS Dependant Care Spending Account
UHS Employee Stock Purchase Plan and any
Employee Benefit Plan, Benefit Program or
Insured Plan sponsored or maintained by
the Insured
Exclusions:
Insurance Company: Federal Insurance Company
Policy Term: March 1, 1997 - March 1, 1998
Policy Number: 8137 75 19 C
Annual Premium: $2,048
Insurance Broker: Helmsman Insurance Agency
55 W. Pierce
Itasca, IL 60143
(630) 250-7100
- -------------------------------------------------------------------------------
Type of Policy: Fidelity
- -------------------------------------------------------------------------------
Form: Comprehensive Dishonesty, Disappearance and
Destruction
Limits: $1,000,000 Forgery or Alteration
1,000,000 Employee Dishonesty
1,000,000 Computer Fraud
Special Extensions: Welfare and Pension Plan Rider
Computer Fraud Endorsement
Deductible: $1,000 Dishonesty
1,000 Computer Fraud
0 Forgery or Alteration
Named Insured: Universal Hospital Services, Inc.
UHS Employee's Pension Plan
UHS Employee's Dental Plan
UHS Employee's Long Term Savings Plan
UHS Employee's Life Insurance Plan
UHS Employee's Flexible Benefits Plan
UHS Employee's Short Term Disability Plan
UHS Employee's Long Term Disability Plan
UHS Employee's Medical Benefit Plan
Insurance Company: National Union Fire Insurance Company
Policy Term: March 1, 1996 - March 1, 1999
Policy Number: 482-73-78
Annual Premium: $6,726-three year prepaid premium
Insurance Broker Helmsman Insurance Agency
55 W. Pierce
Itasca, IL 60143
(630) 250-7100
- -------------------------------------------------------------------------------
Type of Policy: Automobile
- -------------------------------------------------------------------------------
Form: Comprehensive
Special Extensions: Fleet Automatic for liability and physical
damage
Hired (short term rentals) - physical damage
and liability
Non-owned autos - liability only
Broad form Drive Other Car coverage
Limits: $1,000,000 Bodily injury and property damage
Broad form Drive Other Car coverage
Statutory Limits - Personal Injury Protection
$ 5,000 Medical Payments
1,000,000 Uninsured/Underinsured Motorist
coverage
Comprehensive - Actual Value
Collision - Actual Value
Deductible: $ 1,000 Collision
500 Comprehensive
Named Insured: Universal Hospital Services, Inc.
Insurance Company: Liberty Mutual Fire Insurance Company
Policy Term: March 1, 1997 - March 1, 1998
Policy Number: AS7-141-408021-137
Annual Premium: $108,675 (575/vehicle) (flat charge)
2,000 hired physical damage (flat)
Broker: Liberty Mutual Insurance Company
1660 South Highway 100
Minneapolis, MN 55416
(612) 546-7550
- -------------------------------------------------------------------------------
Type of Policy: Worker's Compensation
- -------------------------------------------------------------------------------
Form: Worker's Compensation/Employer Liability
Special Extensions: Other States Endorsement
Foreign Coverage
Repatriation and Endemic Diseases Coverage
Stop Gap - Monopolistic States
Voluntary Compensation Endorsement
U.S. Longshoremen & Harbor Workers Act
Limits: Worker's Compensation: Statutory
Employer's Liability:
$500,000 each accident
500,000 each employee
500,000 policy limit
Experience Modification: .83
Named Insured: Universal Hospital Services, Inc.
Insurance Company: Liberty Mutual Insurance Company
Policy Term: March 1, 1997 - March 1, 1998
Policy Number: WC7-141-408021-017
Annual Premium: $ 95,675
Auditable
Broker: Liberty Mutual Insurance Company
1660 South Highway 100
Minneapolis, MN 55416
(612) 546-7550
- -------------------------------------------------------------------------------
Type of Policy: General Liability
- -------------------------------------------------------------------------------
Form: Commercial
Policy Territory: Worldwide - except suit occurring in Cuba,
Cambodia, Iran, Laos, Libya, North Korea,
Vietnam, and Iraq must be brought outside
such country(s)
Special Extensions: 1) Contractual Liability
2) Additionally Insured - Vendors
3) Additionally Insured - Lessors of
Premises
4) Cancellation Provisions
5) Clinical Testing
Special Exclusions: 1) Patent Infringement
2) Punitive Damages
3) Unfair Employment Practices
4) Pollution/Hazardous Waste
5) Broad Form Nuclear Energy Liability
Limits: $5,000,000 General Aggregate
5,000,000 Products - Completed Operations,
Aggregate
5,000,000 Personal & Advertising
5,000,000 Each Occurrence
200,000 Fire Damage
10,000 Medical Expense
Retention: $100,000/occurrence
500,000/aggregate
Retroactive Date: June 1, 1986
Named Insured: Universal Hospital Services, Inc.
Insurance Company Medmarc Casualty Insurance Company
Policy Term: March 1, 1997 - March 1, 1998
Policy Number: 97MN020002
Annual Premium: $154,301
$116,786 minimum
Rate: Rental - 2.63/1000 rentals
Sales - 1.54/1000 sales
Broker: Hamilton Resources, Inc.
400 Legato Road
Suite 800
Fairfax, VA 22033
- -------------------------------------------------------------------------------
Type of Policy: Excess Liability
- -------------------------------------------------------------------------------
Form: Comprehensive
Special Extensions: None
Special Exclusions: Asbestos Exclusion
Pollution Exclusion
Wrongful Termination, Harassment,
Discrimination
Exclusion
Limits: $5,000,000 General Aggregate
5,000,000 Each Occurrence
5,000,000 Products-Completed Operations
Aggregate
Self-Insured Retention: $10,000
Retroactive Date: January 1, 1986
Named Insured: Universal Hospital Services, Inc.
Insurance Company: National Union Fire Insurance Company of
Pittsburgh, Pennsylvania
Policy Term: March 1, 1997 - March 1, 1998
Policy Number: BE-932-32-50
Annual Premium: $65,000
Rate: flat
Broker: Marsh & McLennan, Inc.
1620 L Street N.W.
Suite 600
Washington, D.C. 20036
(202) 828-7900
PREMIUM SUMMARY
Property 51,236
Fiduciary 2,048
Fidelity prepaid
Automobile 108,675
Workers' Compensation/Employer Liability 95,675
General Liability 154,301
Excess Liability 65,000
-------
Total 476,935
Schedule VI
Existing Indebtedness
Amount Owed Creditor
$495, 342.30 Baxter
P.O. Box 70564
Albuquerque, NM
$134,392.38 Abbot Laboratories
Stone Mountain, GA
Schedule VII
<TABLE>
<CAPTION>
Insurance
Type of Policy Form Insurance Company Policy Term
<S> <C> <C> <C>
Property Blanket by type of Property Liberty Mutual Insurance 3/1/97-3/1/98
Company
Fiduciary Comprehensive Federal Insurance Company 3/1/97-3/1/98
Fidelity Comprehensive Dishonesty, National Union Fire
Disappearance and Destru- Insurance Company 3/1/96-3/1/99
ction
Automobile Comprehensive Liberty Mutual Fire 3/1/97-3/1/98
Insurance Company
Worker's Worker's Compensation/ Liberty Mutual Insurance 3/1/97-3/1/98
Compensation Employer Liability Company
General Commercial Medmarc Casualty Insurance 3/1/97-3/1/98
Liability Company
Excess Comprehensive National Union Fire 3/1/97-3/1/98
Liability Insurance Company of
Pittsburgh,
Pennsylvania
Directors Directors and Officers National Union Fire 10/28/97-10/28/98
and Officers Liability Insurance Company of
Liability Pittsburgh, Pennsylvania
</TABLE>
Please see also attached Insurance Digest for a comprehensive summary.
Schedule VIII
Existing Liens
None
Schedule IX
Existing Investments
Lender Borrower Amount Maturity
Universal Hospital Gerald Brandt $20,000 2/25/08
Services, Inc.
Universal Hospital David Dovenberg $98,000 2/25/08
Services, Inc.
Universal Hospital Gary Preston $65,100 4/25/98
Services, Inc.
Schedule X
Refinanced Agreements
1. Amended and Restated Credit Agreement, dated as of June 30, 1996,
between the Borrower and First Bank National Association, as amended on
February 28, 1997.
2. Note Purchase and Private Shelf Agreement, dated as of July 24, 1996,
between the Borrower and the Prudential Insurance Company of America, as
amended on September 19, 1996 and February 20, 1997.
3. Note Purchase Agreement, dated as of November 24, 1992, among the
Borrower, Reliastar Life Insurance Company, formerly known as Northwestern
National Life Insurance Company, Northern Life Insurance Company and
Reliastar Life Insurance Company of New York, formerly known as North
Atlantic Life Insurance Company of America, as amended on December 15,
1993, February 15, 1995, June 30, 1996 and February 21, 1997.
4. Note Purchase Agreement, dated as of March 1, 1995, between the
Borrower and Northern Life Insurance Company, as amended on June 30, 1996
and February 21, 1997.
SCHEDULE XI
CONSOLIDATED EBITDA
Monthly Accounting Period Consolidated EBITDA
July 1997 $ 2,201,356
August 1997 $ 2,122,930
September 1997 $ 2,074,537
October 1997 $ 2,133,061
November 1997 $ 2,048,690
December 1997 $ 2,328,566
January 1998 $ 2,295,205 (estimated)
February 1998 $ 2,143,131 (estimated)
Schedule XII
The consummation of the Recapitalization may result in a
violation of certain change of control and/or non-assignability provisions
contained in the Management Partnership Program Agreement between the
Borrower and Alline Health Systems.
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit......................................1
1.01 Commitments.....................................................1
1.02 Minimum Borrowing Amounts, etc..................................3
1.03 Notice of Borrowing.............................................3
1.04 Disbursement of Funds...........................................4
1.05 Notes...........................................................4
1.06 Conversions.....................................................5
1.07 Pro Rata Borrowings.............................................5
1.08 Interest........................................................6
1.09 Interest Periods................................................6
1.10 Increased Costs, Illegality, etc................................7
1.11 Compensation; Breakage..........................................9
1.12 Change of Lending Office.......................................10
1.13 Replacement of Banks...........................................10
SECTION 2. Letters of Credit..............................................11
2.01 Letters of Credit..............................................11
2.02 Minimum Stated Amount..........................................12
2.03 Letter of Credit Requests; Notices of Issuance; Reports........12
2.04 Agreement to Repay Letter of Credit Drawings...................13
2.05 Letter of Credit Participations................................13
2.06 Increased Costs................................................16
SECTION 3. Fees; Commitments..............................................16
3.01 Fees...........................................................16
3.02 Voluntary Reduction of Commitments.............................17
3.03 Mandatory Reduction of Commitments.............................17
SECTION 4. Payments.......................................................18
4.01 Voluntary Prepayments..........................................18
4.02 Mandatory Prepayments..........................................18
4.03 Method and Place of Payment....................................20
4.04 Net Payments...................................................20
SECTION 5A. Conditions Precedent to the Effective Date..................22
5A.01 Execution of Agreement.........................................22
5A.02 Officer's Certificate..........................................22
5A.03 Opinions of Counsel............ ...............................22
5A.04 Corporate Proceedings........... ..............................23
5A.05 Plans; Shareholders Agreements; Management Agreement;
Employment Agreements; Existing Indebtedness Agreements;
Affiliate Contracts............................................23
5A.06 Material Adverse Change, etc...................................24
5A.07 Litigation.....................................................24
5A.08 Approvals......................................................25
5A.09 Consummation of the Recapitalization...........................25
5A.10 Consummation of the Equity Financing...........................25
5A.11 Senior Notes...................................................26
5A.12 Corporate, Capital, Ownership Structure........................26
5A.13 Fees...........................................................26
5A.14 Subsidiary Guaranty............................................26
5A.15 Security Documents.............................................26
5A.16 Mortgages......................................................27
5A.17 Solvency.......................................................28
5A.18 Insurance Coverage.............................................28
5A.19 Refinancing....................................................28
5A.20 No Default Under Material Agreements...........................29
5A.21 Projections....................................................29
5A.22 Equipment Appraisal............................................29
5A.23 Initial Borrowing Base Certificate.............................29
SECTION 5B. Conditions Precedent to All Credit Events......................30
5B.01 Effective Date.................................................30
5B.02 No Default; Representations and Warranties.....................30
5B.03 Notice of Borrowing; Letter of Credit Request..................30
SECTION 6.Representations, Warranties and Agreements.......................30
6.01 Corporate Status...............................................30
6.02 Power and Authority.............................................31
6.03 No Violation....................................................31
6.04 Litigation......................................................31
6.05 Use of Proceeds; Margin Regulations.............................31
6.06 Requisite Approvals.............................................32
6.07 Investment Company Act..........................................32
6.08 Public Utility Holding Company Act.............................32
6.09 True and Complete Disclosure....................................32
6.10 Financial Condition; Financial Statements.......................32
6.11 Security Interests..............................................34
6.12 Representations and Warranties in the Documents.................34
6.13 Consummation of Transaction.....................................34
6.14 Tax Returns and Payments........................................34
6.15 Compliance with ERISA...........................................35
6.16 Subsidiaries; Subsidiary Restrictions...........................36
6.17 Patents, etc....................................................36
6.18 Pollution and Other Regulations.................................36
6.19 Properties......................................................37
6.20 Labor Relations.................................................37
6.21 Existing Indebtedness...........................................38
6.22 Capitalization..................................................38
6.23 Senior Notes....................................................38
SECTION 7. Affirmative Covenants..........................................38
7.01 Information Covenants...........................................38
7.02 Books, Records and Inspections; Bank Meetings...................42
7.03 Maintenance of Insurance........................................42
7.04 Payment of Taxes................................................42
7.05 Corporate Franchises............................................43
7.06 Compliance with Statutes, etc...................................43
7.07 ERISA...........................................................43
7.08 Maintenance of Properties; Good Repair..........................44
7.09 Compliance with Environmental Laws..............................44
7.10 End of Fiscal Years; Fiscal Quarters............................45
7.11 Use of Proceeds.................................................45
7.12 Additional Security; Further Assurances.........................45
7.13 Foreign Subsidiary Guaranty, etc..............................46
7.14 Post-Closing Mortgage Obligation..............................47
SECTION 8. Negative Covenants.............................................47
8.01 Changes in Business.............................................47
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc..........47
8.03 Liens...........................................................49
8.04 Indebtedness....................................................51
8.05 Capital Expenditures............................................52
8.06 Advances, Investments and Loans.................................52
8.07 Prepayments of Indebtedness, etc................................53
8.08 Dividends, etc..................................................53
8.09 Transactions with Affiliates....................................55
8.10 Interest Coverage Ratio.........................................55
8.11 Fixed Charge Coverage Ratio.....................................56
8.12 Leverage Ratio.................................................56
8.13 Limitation on Issuance of Capital Stock.........................57
8.14 Limitation on Creation of Subsidiaries..........................57
SECTION 9. Events of Default..............................................57
9.01 Payments........................................................57
9.02 Representations, etc............................................58
9.03 Covenants.......................................................58
9.04 Default Under Other Agreements..................................58
9.05 Bankruptcy, etc.................................................58
9.06 ERISA...........................................................59
9.07 Security Documents..............................................59
9.08 Subsidiary Guaranty.............................................59
9.09 Judgments.......................................................60
9.10 Change of Control...............................................60
SECTION 10. Definitions...................................................60
SECTION 11. The Administrative Agent......................................81
11.01 Appointment.....................................................81
11.02 Nature of Duties................................................81
11.03 Lack of Reliance on the Administrative Agent....................82
11.04 Certain Rights of the Administrative Agent......................82
11.05 Reliance........................................................82
11.06 Indemnification.................................................83
11.07 The Administrative Agent in Its Individual Capacity.............83
11.08 Holders.........................................................83
11.09 Resignation by the Administrative Agent.........................83
SECTION 12. Miscellaneous.................................................84
12.01 Payment of Expenses, etc........................................84
12.02 Right of Setoff.................................................85
12.03 Notices.........................................................85
12.04 Assignments; Participations; etc................................86
12.05 No Waiver; Remedies Cumulative..................................88
12.06 Payments Pro Rata...............................................88
12.07 Calculations; Computations......................................89
SECTION 12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL .......................................89
12.09 Counterparts....................................................90
12.10 Effectiveness...................................................90
12.11 Headings Descriptive............................................91
12.12 Amendment or Waiver.............................................91
12.13 Survival........................................................92
12.14 Domicile of Loans...............................................92
12.15 Confidentiality.................................................92
12.16 Register......................................................92
12.17 Limitation on Additional Amounts, etc...........................93
SCHEDULE I -- Commitments
SCHEDULE II -- Bank Addresses
SCHEDULE III -- Plans
SCHEDULE IV -- Subsidiaries
SCHEDULE V -- Real Property
SCHEDULE VI -- Existing Indebtedness
SCHEDULE VII -- Insurance
SCHEDULE VIII -- Existing Liens
SCHEDULE IX -- Existing Investments
SCHEDULE X -- Refinanced Agreements
SCHEDULE XI -- Consolidated EBITDA
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of Revolving Note
EXHIBIT B-2 -- Form of Swingline Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT E -- Form of Opinion of Skadden,
Arps, Slate, Meagher & Flom LLP
EXHIBIT F -- Form of Officer's Certificate
EXHIBIT G -- Form of Subsidiary Guaranty
EXHIBIT H -- Form of Pledge Agreement
EXHIBIT I -- Form of Security Agreement
EXHIBIT J -- Form of Solvency Certificate
EXHIBIT K -- Form of Borrowing Base Certificate
EXHIBIT L -- Form of Assignment Agreement
Exhibit A
FORM OF NOTICE OF BORROWING
[Date]
Bankers Trust Company, as Administrative
Agent for the Banks party to the
Credit Agreement referred to below
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: David Bell
Ladies and Gentlemen:
The undersigned, Universal Hospital Services, Inc. (the
"Borrower"), refers to the Credit Agreement, dated as of February 25, 1998
(as amended, modified or supplemented from time to time, the "Credit
Agreement", the capitalized terms defined therein being used herein as
therein defined), among the Borrower, the lending institutions from time to
time party thereto (the "Banks") and you, as Administrative Agent and,
pursuant to Section 1.03(a) of the Credit Agreement, hereby gives you
irrevocable notice that the undersigned hereby requests a Borrowing under
the Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 1.03(a) of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
$______.
(ii) The Business Day of the Proposed Borrowing is [insert
date].1
(iii) The Revolving Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans].
[(iv) The initial Interest Period for the Proposed Borrowing is
_____ month(s).]2
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and correct
in all material respects, both before and after giving effect to the Proposed
Borrowing and to the application of the proceeds thereof, as though made on
such date, unless stated to relate to a 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
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
UNIVERSAL HOSPITAL SERVICES, INC.
By:______________________________
Name:
Title:
________________________
1 Shall be a Business Day, which is, in the case of Eurodollar Loans, at
least three Business Days after the date hereof.
2 To be included for a Proposed Borrowing of Eurodollar Loans.
EXHIBIT B-1
FORM OF REVOLVING NOTE
$_________ New York, New York
February __, 1998
FOR VALUE RECEIVED, UNIVERSAL HOSPITAL SERVICES, INC.,
a Minnesota corporation (the "Borrower"), hereby promises to pay to the
order of _______________________ (the "Bank"), in lawful money of the
United States of America in immediately available funds, at the office of
Bankers Trust Company (the "Administrative Agent") located at One Bankers
Trust Plaza, 130 Liberty Street, New York, New York 10006, on the
Maturity Date (as defined in the Agreement referred to below), the
principal sum of _________________ DOLLARS ($_________) or, if less, the
then unpaid principal amount of all Revolving Loans (as defined in the
Agreement referred to below) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the
unpaid principal amount hereof in like money at said office from the date
hereof until paid at the rates and at the times provided in Section 1.08
of the Agreement.
This Note is one of the Revolving Notes referred to in
the Credit Agreement, dated as of February 25, 1998, among the Borrower,
the lending institutions from time to time party thereto (including the
Bank) and Bankers Trust Company, as Administrative Agent (as from time to
time in effect, the "Agreement"), and is entitled to the benefits thereof
and of the other Credit Documents (as defined in the Agreement). This
Note is secured by the Security Documents (as defined in the Agreement)
and is entitled to the benefits of the Subsidiary Guaranty (as defined in
the Agreement). As provided in the Agreement, this Note is subject to
voluntary prepayment and mandatory repayment prior to the Maturity Date,
in whole or in part.
In case an Event of Default (as defined in the
Agreement) shall occur and be continuing, the principal of and accrued
interest on this Note may be declared to be due and payable in the manner
and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest
or notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
UNIVERSAL HOSPITAL SERVICES, INC.
By__________________________________
Name:
Title:
EXHIBIT B-2
FORM OF SWINGLINE NOTE
$________ New York, New York
February __, 1998
FOR VALUE RECEIVED, UNIVERSAL HOSPITAL SERVICES, INC.,
a Minnesota corporation (the "Borrower"), hereby promises to pay to the
order of BANKERS TRUST COMPANY (the "Bank"), in lawful money of the
United States of America in immediately available funds, at the office of
Bankers Trust Company (the "Administrative Agent") located at One Bankers
Trust Plaza, New York, New York 10006, on the Swingline Expiry Date (as
defined in the Agreement referred to below), the principal sum of FIVE
HUNDRED THOUSAND DOLLARS ($500,000) or, if less, the unpaid principal
amount of all Swingline Loans (as defined in the Agreement referred to
below) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the
unpaid principal amount hereof in like money at said office from the date
hereof until paid at the rates and at the times provided in Section 1.08
of the Agreement.
This Note is the Swingline Note referred to in the
Credit Agreement, dated as of February 25, 1998, among the Borrower, the
lending institutions from time to time party thereto (including the Bank)
and Bankers Trust Company, as Administrative Agent (as from time to time
in effect, the "Agreement") and is entitled to the benefits thereof and
of the other Credit Documents (as defined in the Agreement). This Note is
secured by the Security Documents (as defined in the Agreement) and is
entitled to the benefits of the Subsidiary Guaranty (as defined in the
Agreement). As provided in the Agreement, this Note is subject to
voluntary prepayment and mandatory repayment prior to the Swingline
Expiry Date, in whole or in part.
In case an Event of Default (as defined in the
Agreement) shall occur and be continuing, the principal of and accrued
interest on this Note may be declared to be due and payable in the manner
and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest
or notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
UNIVERSAL HOSPITAL SERVICES, INC.
By____________________________________
Name:
Title:
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
No.___1 Dated ___________2
Bankers Trust Company, as
Administrative Agent under the
Credit Agreement referred to below
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: David Bell
[Name and Address of the respective
Letter of Credit Issuer]
Attention: ___________3
Ladies and Gentlemen:
The undersigned, Universal Hospital Services, Inc.,
(the "Borrower"), refers to the Credit Agreement, dated as of February
25, 1998 (as amended, modified or supplemented from time to time, the
"Credit Agreement", the capitalized terms defined therein being used
herein as therein defined), among the Borrower, the lending institutions
from time to time party thereto (the "Banks") and Bankers Trust Company,
as Administrative Agent.
The undersigned hereby requests that [insert name of
Letter of Credit Issuer], as Letter of Credit Issuer, issue a [Standby]
[Trade] Letter of Credit on _______________ (the "Date of Issuance") in
the aggregate amount of $_______.
The beneficiary of the requested [Standby] [Trade]
Letter of Credit will be __________,4 and such [Standby] [Trade] Letter
of Credit will be in support of ______________5 and will have a stated
expiry date of ____________.6
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the Date of
Issuance:
(A) the representations and warranties contained in the
Credit Agreement and in the other Credit Documents are and will be true
and correct in all material respects, both before and after giving effect
to the issuance of the [Standby] [Trade] Letter of Credit requested
hereby, as though made on the Date of Issuance, unless stated to relate
to a 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
(B) no Default or Event of Default has occurred and is
continuing, or would result after giving effect to the issuance of the
[Standby] [Trade] Letter of Credit requested hereby.
Copies of all documentation with respect to the
supported transaction are attached hereto.
UNIVERSAL HOSPITAL SERVICES, INC.
By: _____________________________
Name:
Title:
- ------------------------
1 Letter of Credit Request number.
2 Prior to 1:00 P.M. (New York time) at least one Business Day prior to
the proposed Date of Issuance (or such shorter period as may be
acceptable to the respective Letter of Credit Issuer) and at least 30
days prior to the Maturity Date.
3 In the case of BTCo as Letter of Credit Issuer, attention for Standby
Letters of Credit should be directed to the "Commercial Loan Standby LC
Unit" and attention for Trade Letters of Credit should be directed to
"GIS LC Operations".
4 Insert name and address of beneficiary.
5 Insert description of the supported obligations including the name of
agreement and/or the commercial transaction to which this Letter of
Credit Request relates.
6 Insert last date upon which drafts may be presented (which may not be
later than (i) in the case of Standby Letters of Credit, twelve months
after the Date of Issuance or beyond the Business Day occurring five
Business Days prior to the Maturity Date or (ii) in the case of Trade
Letters of Credit, 180 days after the Date of Issuance or beyond the 30th
day preceding the Maturity Date).
EXHIBIT D
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated
as of February 25, 1998, among Universal Hospital Services, Inc., various
lenders from time to time party thereto and Bankers Trust Company, as
Administrative Agent (as amended, modified or supplemented from time to
time, the "Credit Agreement"). Pursuant to the provisions of Section
4.04(b)(ii) of the Credit Agreement, the undersigned hereby certifies
that it is not a "bank" as such term is used in Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By___________________________
Title:
Date: _________ ___, ____
EXHIBIT E
February 25, 1998
Bankers Trust Company,
as Administrative Agent
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Each Lending Institution named
on Schedule I hereto (the "Lenders")
Re: Universal Hospital Services, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Universal Hospital Services,
Inc., a Minnesota corporation (the "Borrower"), in connection with the
preparation, execution and delivery of the Credit Agreement, dated as of
February 25, 1998 (the "Credit Agreement"), among the Borrower, the lending
institutions from time to time party thereto (the "Banks"), and Bankers
Trust Company, as administrative agent (in such capacity, the
"Administrative Agent"). Capitalized terms used but not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement. This opinion is being delivered to you pursuant to Section 5A.03
of the Credit Agreement.
For purposes of this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of the
following records, documents or instruments:
(a) the Credit Agreement;
(b) the Notes;
(c) the Security Agreement;
(d) the Pledge Agreement;
(e) an unfiled, but signed copy of a financing statement naming
Universal Hospital Services, Inc. as debtor and Bankers
Trust Company, as Collateral Agent, as secured party, which
we understand will be filed within ten (10) days of the
transfer of the security interest in the office of the
Secretary of State of the State of New York (such filing
office, the "Filing Office" and such financing statement,
the "Financing Statement");
(f) certified copies of resolutions adopted by unanimous written
consent of the Board of Directors of the Borrower relating
to the transactions contemplated by the Credit Agreement;
and
(g) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
The documents listed in clauses (a) - (d) above are referred to
herein collectively as the "Loan Documents." The documents listed in
clauses (c) - (d) above are referred to herein collectively as the
"Collateral Documents."
In rendering our opinions, we have assumed (a) the genuineness of
all signatures, the legal capacity of all natural persons, the authority of
all persons signing each of the documents on behalf of the parties thereto,
the conformity to authentic original documents of all documents submitted
to us as copies and the authenticity of all documents submitted to us as
originals, (b) as to all parties, the due authorization, execution and
delivery of all documents, (c) the validity and enforceability of all
documents against all parties other than the Borrower and (d) that each
Person which is a party to the Loan Documents has full power, authority and
legal right, under its charter and other governing documents and laws
applicable to it, and is in good standing in all relevant jurisdictions, to
perform its respective obligations under the Loan Documents. We have
examined originals, or copies identified to our satisfaction, of such
corporate records of the Borrower, and certificates of public officials and
of officers of the Borrower and other documents as we have deemed relevant
or proper as a basis for the opinions expressed below. We have also relied
on a certificate of an officer of the Borrower as to certain factual
matters, and a copy of such certificate has been delivered to you (the
"Officer's Certificate"). As to any facts material to this opinion which we
did not independently establish or verify, we have relied upon statements
and representations of the Borrower and their respective officers and other
representatives and of public officials.
Unless otherwise indicated, references to the "UCC" shall mean
the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
In rendering our opinions expressed below, we express no opinion
herein (i) as to the applicability or effect of any fraudulent transfer or
similar law on the opinions expressed below, the Loan Documents or any
transactions contemplated thereby, or (ii) whether obligations owing to a
Bank under an Interest Rate Agreement will be entitled to the benefits of
the security interests under the Collateral Documents to the extent such
Bank becomes a Bank under the Credit Agreement subsequent to the date
hereof.
In rendering the opinions expressed below, we have assumed,
without any independent investigation or verification of any kind, that:
(a) The Borrower has been duly incorporated and is
validly existing and in good standing under the laws of Minnesota and has
requisite power and authority to execute, deliver and perform its
obligations under the Loan Documents. The execution, delivery and
performance by the Borrower of the Loan Documents has been duly authorized
by all necessary corporate action on the part of the Borrower and such
documents have been duly executed and delivered by the Borrower.
(b) None of (i) the execution and delivery by the
Borrower of the Loan Documents or (ii) the grant of the security interests
by the Borrower provided for in the Collateral Documents or (iii) the
performance of the terms of the Loan Documents by the Borrower (A)(x) will
conflict with or result in a breach or violation of any of the provisions
of the Certificate of Incorporation or By-laws of the Borrower or (y) other
than with respect to Applicable Contracts as provided in numbered paragraph
2 below, will (or, with notice or lapse of time or both, will) violate,
conflict with or constitute a default under, or result in the termination
of, or accelerate the performance required by, or result in there being
declared void, voidable or without further binding effect any of the
provisions of, any note, deed of trust, license, franchise, permit,
agreement or other instrument or obligation to which the Borrower is a
party, or by which the Borrower or any of its properties may be bound or
affected, or (B) will result in the creation of any lien or security
interest upon any of the properties or assets of the Borrower under any
agreement referred to in clause (A)(y) of this paragraph other than as
contemplated by the Collateral Documents and except with respect to the
Applicable Contracts as provided in numbered paragraph 2 below.
(c) Except as expressly set forth with respect to the
Governmental Approvals referred to in paragraph 4 hereof, no authorization,
consent or other approval of, notice to or filing with any court,
governmental authority or regulatory body is required to authorize or is
required in connection with the execution, delivery or performance by the
Borrower of any Loan Document or the transactions contemplated thereby.
We understand that you have received and are relying upon the
opinion of Dorsey & Whitney with respect to certain of the foregoing
matters. We express no opinion with respect to the effect on the opinions
set forth herein of any limitations, assumptions or qualifications
contained in such opinion.
We express no opinion as to the effect on the opinions expressed
herein of (i) the compliance or noncompliance of the Administrative Agent,
the Banks or any other Bank Creditor (as such term is defined in the
Collateral Documents; such term being used herein as therein defined) with
any state, federal or other laws or regulations applicable to them or (ii)
the legal or regulatory status or nature of the business of the
Administrative Agent, the Banks or any other Bank Creditor.
In addition, for purposes of this opinion, (i) the term
"Applicable Contracts" means those agreements, instruments or licenses set
forth on Schedule II hereto, which have been identified to us as
agreements, instruments or licenses which are material to the business or
financial condition of the Borrower; (ii) the term "Applicable Laws" means
those laws, rules and regulations of the State of New York and of the
United States of America (including, without limitation, Regulations G, U
and X of the Board of Governors of the Federal Reserve System) which, in
our experience, are normally applicable to transactions of the type
provided for in the Loan Documents but without our having made any special
investigation concerning any other law, rule or regulation; (iii) the term
"Applicable Orders" means those orders or decrees of Governmental
Authorities set forth on Schedule III hereto which have been identified to
us by the Borrower as being all of the orders, judgments or decrees against
the Borrower or which are otherwise applicable to the Borrower and/or its
properties or assets; (iv) the term "Governmental Approval" means any
consent, approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority pursuant to
Applicable Laws; and (v) the term "Governmental Authority" means any New
York or federal executive, legislative, judicial, administrative or
regulatory body.
We express no opinion as to the laws of any jurisdiction other
than (i) the laws of the State of New York and (ii) to the extent referred
to herein, the federal laws of the United States of America.
Based upon the foregoing and subject to the limitations,
exceptions, assumptions and qualifications set forth herein, we are of the
opinion that:
1. Each of the Loan Documents constitutes the valid and binding
obligation of the Borrower enforceable against the Borrower in accordance
with its respective terms, except that (i) enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity
or at law), (ii) certain of the remedial provisions, including waivers,
with respect to the exercise of remedies against the collateral contained
in the Collateral Documents may be unenforceable in whole or in part, but
the inclusion of such provisions does not affect the validity of each of
the Collateral Documents, each taken as a whole, and each of the Collateral
Documents, each taken as a whole, together with applicable law, contains
adequate provisions for the practical realization of the benefits of the
security created thereby (subject to clause (i) of this sentence and the
other qualifications set forth herein), and (iii) enforcement of the
Security Agreement may be subject to the terms of instruments, leases,
contracts or other agreements between the Borrower and the other parties to
such agreements, the rights of such other parties and any claims or
defenses of such other parties against the Borrower arising under or
outside such agreements. We express no opinion, however, as to (a) the
enforceability of any rights to indemnification or contribution provided
for in the Loan Documents to the extent any such rights are violative of
federal or state laws, rules or regulations (including, without limitation,
any federal or state securities law, rule or regulation) or public policy,
(b) the enforceability of those provisions of the Loan Documents which
purport to grant to participants of the Banks rights to set-off with
respect to participations purchased by such participants, or (c) any
provision with respect to governing law to the extent that it purports to
affect the choice of law governing perfection and the effect of perfection
and non-perfection of the security interests.
2. The execution and delivery by the Borrower of each of the
Loan Documents and the performance by the Borrower of its obligations under
each of the Loan Documents, each in accordance with its terms will not (i)
violate, conflict with or constitute a default under, or result in the
termination of, or accelerate the performance required by, or result in
there being declared void, voidable or without further binding effect, any
Applicable Contracts or any provision of any Applicable Contract or (ii)
cause or require the creation of any security interest or lien (other than
the liens granted under or created by the Loan Documents) upon any of the
properties or assets of the Borrower pursuant to any Applicable Contracts.
We do not express any opinion, however, as to whether the execution,
delivery or performance by the Borrower of the Loan Documents will
constitute a violation of or a default under any covenant, restriction or
provision with respect to financial ratios or tests or any aspect of the
financial condition or results of operations of the Borrower.
3. Neither the execution and delivery by the Borrower of the
Loan Documents nor performance by the Borrower of its obligations
thereunder will contravene any provision of any Applicable Law or
Applicable Order.
4. No Governmental Approval (which has not been obtained or
taken and is not in full force and effect) is required to authorize or is
required in connection with the execution, delivery or performance of any
of the Loan Documents by the Borrower, except the filing of financing
statements in the appropriate filing offices.
5. The Borrower is not required to register under the
Investment Company Act of 1940, as amended.
6. The Borrower is not a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
7. Assuming the proceeds of the Loans are used solely for the
purposes set forth in and in accordance with the provisions of the Credit
Agreement, neither the making of the Loans, the application of the proceeds
thereof nor the pledge of the collateral under the Collateral Documents
violates Regulation G, U, or X of the Board of Governors of the Federal
Reserve System under the Securities Exchange Act of 1934, as amended.
8. The provisions of the Security Agreement are effective to
create, in favor of the Collateral Agent for the benefit of the Bank
Creditors (as such term is defined therein) to secure the Obligations (as
defined in the Security Agreement), a valid security interest in the
Borrower's rights in that portion of the Collateral described therein which
is subject to Article 9 of the UCC (the "Article 9 Collateral").
9. The Financing Statement is in appropriate form for
filing in the Filing Office. With respect to that portion of the Article 9
Collateral as to which the filing of a financing statement is a permissible
method of perfection (the "UCC Filing Collateral"), the security interest
in favor of the Collateral Agent for the benefit of the Bank Creditors in
that portion of the UCC Filing Collateral which is described in the
Financing Statement will be perfected upon filing of the Financing
Statement in the Filing Office.
Our opinions in paragraphs 9 and 10 are subject to the following
additional assumptions and qualifications:
(a) we have assumed that the Borrower owns, or with respect to
after-acquired property will own, the Collateral, and we express no opinion
as to the nature or extent of the Borrower's rights in, or title to, any of
the Collateral and we note that with respect to any after-acquired
property, the security interest will not attach until the Borrower acquires
ownership thereof;
(b) our opinion with respect to the interest of the Collateral
Agent for the benefit of the Bank Creditors is limited to Article 9 of the
UCC, and such opinion does not address (i) laws of jurisdictions other than
New York, and of New York except for Article 9 of the UCC; (ii) collateral
of a type not subject to Article 9 of the UCC and (iii) under Section 9-
103, what law governs perfection of the security interests granted in the
collateral covered by this opinion;
(c) we call to your attention that under the UCC, events
occurring subsequent to the date hereof may affect any security interest
subject to the UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-402 with
respect to changes in name, structure and corporate identity; Section 9-103
with respect to changes in the location of the collateral and the location
of a debtor; Section 9-316 with respect to subordination agreements;
Section 9-403 with respect to continuation statements; and Sections 9-307,
9-308 and 9-309 with respect to subsequent purchasers of the collateral.
In addition, actions taken by a secured party (e.g., releasing or assigning
the security interest, delivering possession of the collateral to a debtor
or another person and voluntarily subordinating a security interest) may
affect any security interest subject to the UCC;
(d) we express no opinion with respect to the priority of the
security interest of the Collateral Agent for the benefit of the Bank
Creditors in any of the Collateral;
(e) in the case of any instrument, chattel paper, account or
general intangible which is itself secured by other property, we express no
opinion with respect to the rights of the Collateral Agent for the benefit
of the Bank Creditors in and to such underlying property;
(f) in the case of chattel paper, accounts or general
intangibles, we call to your attention that the security interest of the
Collateral Agent for the benefit of the Bank Creditors may be subject to
the rights of account debtors, claims and defenses of account debtors and
the terms of agreements with account debtors;
(g) we express no opinion with respect to the security interest
of the Collateral Agent for the benefit of the Bank Creditors in any of the
following types of property (i) any option or similar obligation issued by
a clearing corporation to its participants; (ii) any commodity contract;
(iii) an ownership interest evidenced by certificates of stock or other
instruments and a leasehold evidenced by a proprietary lease, or either of
the foregoing, from a corporation or partnership formed for the purpose of
cooperative ownership of real estate; (iv) any interest in a trust,
partnership or limited liability company or (v) property of a type
constituting financial assets not subject to Article 9 of the UCC;
(h) in the case of goods, we express no opinion regarding the
security interest of the Collateral Agent for the benefit of the Bank
Creditors in any goods which are (i) an accession to, or commingled or
processed with other goods to the extent that the security interest of the
Collateral Agent is limited by Section 9-314 or 9-315 of the UCC or (ii)
subject to a certificate of title or a document of title;
(i) we express no opinion regarding the security interest of the
Collateral Agent for the benefit of the Bank Creditors in any items which
are subject to a statute, regulation or treaty of the United States of
America which provides for a national or international registration or a
national or international certificate of title for the perfection of a
security interest therein or which specifies a place of filing different
from the place specified in the UCC for filing to perfect such security
interest;
(j) we express no opinion regarding the security interest of the
Collateral Agent for the benefit of the Bank Creditors in any of the
Collateral consisting of claims against any government or governmental
agency (including without limitation the United States of America or any
state thereof or any agency or department of the United States of America
or any state thereof);
(k) we have assumed that (i) the Borrower has a place of
business in more than one county in the State of New York and (ii) the
Collateral is and will be located in more than one county in the State of
New York;
(l) we express no opinion with respect to the security interest
in any of the Collateral consisting of goods which are or are to become
fixtures, equipment used in farming operations, or farm products, or
accounts or general intangibles arising from or relating to the sale of
farm products by a farmer, consumer goods, crops growing or to be grown,
timber to be cut or minerals or the like (including oil and gas) or
accounts subject to subsection 5 of Section 9-103 of the UCC; and
(m) we express no opinion regarding the security interest of the
Collateral Agent in any copyrights, patents, trademarks, service marks or
other intellectual property, the proceeds thereof or any rights (including
accounts or general intangibles) with respect to the lease, license or use
thereof.
This opinion is being furnished only to the addressees named
above in connection with the Credit Agreement and is solely for their
benefit and is not to be relied upon by any other Person or used for any
other purpose without our prior written consent; provided that any Person
that becomes a Bank pursuant to the transfer provisions of the Credit
Agreement may rely on this opinion as if it were addressed to such person
and delivered on the date hereof.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher
& Flom LLP
Schedule I
LENDERS
Bankers Trust Company
Schedule II
Applicable Contracts
1. The Equipment Lease Agreement between Universal Hospital Services,
Inc., as Lessee, and Baxter Healthcare Corporation, as Lessor, dated
as of December 31, 1996.
2. The Lease Agreement between Universal Hospital Services, Inc., as
successor to Biomedical Equipment Rental and Sales, Inc., as Lessee,
and Abbot Laboratories as Lessor, dated as of November 1, 1990, as
amended on June 25, 1991, April 5, 1993, July 7, 1994 and January 1,
1996.
3. The Indenture, dated as of February 25, 1998, between Universal
Hospital Services, Inc. and First Trust National Association, as
Trustee.
4. The Purchase Agreement, dated as of February 23, 1998, between
Universal Hospital Services, Inc., as Issuer, and BT Alex. Brown
Incorporated, as Initial Purchaser.
Schedule III
Applicable Orders
None
Exhibit F
[NAME OF CREDIT PARTY]
Officer's Certificate
I, the undersigned, [President/Vice President] of [NAME
OF CREDIT PARTY], a corporation organized and existing under the laws of
the State of __________ (the "Company"), do hereby certify that:
1. This Certificate is furnished pursuant to Section
5A.03 of the Credit Agreement, dated as of February 25, 1998, among
[Universal Hospital Services, Inc.] [the Company] (the "Borrower"), the
various lending institutions party thereto from time to time and Bankers
Trust Company, as Administrative Agent (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit
Agreement.
2. The following named individuals are elected officers
of the Company, each holds the office of the Company set forth opposite
his name and has held such office since __________, 19__.1 The signature
written opposite the name and title of each such officer is his correct
signature.
Name2 Office Signature
--------------- --------------- ---------------
--------------- --------------- ---------------
--------------- --------------- ---------------
3. Attached hereto as Exhibit A is a certified copy of
the Certificate of Incorporation of the Company as filed in the Office of
the Secretary of State of the State of __________ on __________, 19__,
together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct
copy of the By-Laws of the Company which were duly adopted, are in full
force and effect on the date hereof, and have been in effect since
__________, 19__.
5. Attached hereto as Exhibit C is a true and correct
copy of resolutions which were duly adopted on __________, 19__ [by
unanimous written consent of the Board of Directors of the Company] [by a
meeting of the Board of Directors of the Company at which a quorum was
present and acting throughout], and said resolutions have not been
rescinded, amended or modified. Except as attached hereto as Exhibit C,
no resolutions have been adopted by the Board of Directors of the Company
which deal with the execution, delivery or performance of any of the
Credit Documents or any other Documents to which the Company is party.
[6. Attached hereto as Exhibit D are true and correct
copies of all Plans and all other items described in Section 5A.06(a) of
the Credit Agreement.
7. Attached hereto as Exhibit E are true and correct
copies of all Shareholders' Agreements.
8. Attached hereto as Exhibit F is a true and correct
copy of the Management Agreement.
9. Attached hereto as Exhibit G are true and correct
copies of all Employment Agreements.
10. Attached hereto as Exhibit H are true and correct
copies of all Existing Indebtedness Agreements.
11. Attached hereto as Exhibit I are true and correct
copies of all Affiliate Contracts.
12. Attached hereto as Exhibit J are true and correct
copies of the Equity Financing Documents.
13. Attached hereto as Exhibit K are true and correct
copies of the Senior Notes Documents.
14. Attached hereto as Exhibit L are true and correct
copies of the Recapitalization Documents.
15. On the date hereof, all of the conditions in
Sections 5A.06, 5A.07, 5A.08, 5A.09, 5A.10, 5A.11, 5A.19, and 5A.20 and
5B.02 of the Credit Agreement have been satisfied.]3
6[16]. On the date hereof, the representations and
warranties contained in the Credit Agreement and in the other Credit
Documents are true and correct in all material respects, both before and
after giving effect to each Credit Event to occur on the date hereof and
the application of the proceeds thereof (it being understood and agreed
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date).
7[17]. On the date hereof, no Default or Event of
Default has occurred and is continuing or would result from the Credit
Events to occur on the date hereof or from the application of the
proceeds thereof.
8[18]. There is no proceeding for the dissolution or
liquidation of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this
25th day of February, 1998.
[NAME OF CREDIT PARTY]
By:_________________________
Name:
Title:
[NAME OF CREDIT PARTY]
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify that:
1. [Name of Person making above certifications] is the
duly elected and qualified [President/Vice President] of the Company and
the signature above is [his] [her] genuine signature.
2. The certifications made by [name of Person making
above certifications] in Items 2, 3, 4, 5 and 8[18] above are true and
correct.
IN WITNESS WHEREOF, I have hereunto set my hand this
25th day of February, 1998.
By:____________________________
Name:
Title:
- ------------------------
1 Insert a date prior to the time of any corporate action relating to
the Credit Agreement or any other Credit Document.
2 Include name, office and signature of each officer who will sign
any Credit Document, including the officer who will sign the
certification at the end of this Certificate.
3 Insert only in the Officer's Certificate of the Borrower
Exhibit G
FORM OF SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY, dated as of February 25, 1998 (as
amended, modified or supplemented from time to time, this "Guaranty"),
made by each of the undersigned guarantors (each a "Guarantor" and,
together with any other entity that becomes a party hereto pursuant to
Section 24 hereof, the "Guarantors"). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as
defined below) shall have their respective meanings as set forth therein.
W I T N E S S E T H :
WHEREAS, Universal Hospital Services, Inc. (the
"Borrower"), the lending institutions from time to time party thereto
(the "Banks") and Bankers Trust Company, as Administrative Agent
(together with any successor Administrative Agent, the "Administrative
Agent"), have entered into a Credit Agreement, dated as of February 25,
1998 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans and the issuance of, and
participation in, Letters of Credit as contemplated therein (the Banks,
the Collateral Agent and the Administrative Agent are herein called the
"Bank Creditors");
WHEREAS, the Borrower may from time to time be party to
one or more Interest Rate Agreements with any Bank or any affiliate of
any Bank (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any
reason, together with such Bank's or affiliate's successors and
subsequent assigns, if any, collectively, the "Interest Rate Creditors",
and together with the Bank Creditors, the "Secured Creditors");
WHEREAS, each Guarantor is a Subsidiary of the
Borrower;
WHEREAS, it is a condition to the making of Loans and
the issuance of, and participation in, Letters of Credit under the Credit
Agreement that each Guarantor shall have executed and delivered this
Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the
extensions of credit to the Borrower under the Credit Agreement and the
entering into of Interest Rate Agreements and, accordingly, desires to
execute this Guaranty in order to satisfy the condition described in the
preceding paragraph.
NOW, THEREFORE, in consideration of the foregoing and
other benefits accruing to each Guarantor, the receipt and sufficiency of
which are hereby acknowledged, each Guarantor hereby makes the following
representations and warranties to the Secured Creditors and hereby
covenants and agrees with each Secured Creditor as follows:
1. Each Guarantor irrevocably, absolutely and
unconditionally, and jointly and severally guarantees:
(i) to the Bank Creditors, the full and prompt payment
when due (whether at the stated maturity, by acceleration or
otherwise) of (a) the principal of and interest on the Notes
issued by, and the Loans made to, the Borrower under the Credit
Agreement, (b) all reimbursement obligations and Unpaid Drawings
with respect to Letters of Credit issued under the Credit
Agreement and (c) all other obligations (including obligations
which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities owing by the
Borrower to the Bank Creditors under the Credit Agreement and
the other Credit Documents (including, without limitation,
indemnities, Fees and interest thereon) now existing or
hereafter incurred under, arising out of or in connection with
the Credit Agreement or any other Credit Document and the due
performance and compliance by the Borrower with all of the terms
of the Credit Agreement and the other Credit Documents (all such
principal, interest, indemnities, Fees, liabilities and
obligations, the "Credit Document Obligations"); and
(ii) to the Interest Rate Creditors, the full and
prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower under any Interest Rate Agreement, whether
now in existence or hereafter arising, and the due performance
and compliance by the Borrower with all terms, conditions and
agreements contained therein (all such obligations and
liabilities, the "Interest Rate Obligations", and together with
the Credit Document Obligations, are herein called the
"Guaranteed Obligations").
Each Guarantor understands, agrees and confirms that the Secured
Creditors may enforce this Guaranty up to the full amount of the
Guaranteed Obligations against each Guarantor without proceeding against
the Borrower, any other Guarantor or any security for the Guaranteed
Obligations, or under any other guaranty covering all or a portion of the
Guaranteed Obligations. All payments by each Guarantor under this
Guaranty shall be made on the same basis as payments by the Borrower are
made under Sections 4.03 and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
and unconditionally, absolutely and irrevocably, guarantees the payment
of any and all Guaranteed Obligations upon the occurrence in respect of
the Borrower of any of the events specified in Section 9.05 of the Credit
Agreement, and unconditionally and irrevocably promises to pay such
Guaranteed Obligations to the Secured Creditors, or order, on demand in
such event.
3. Each Guarantor hereby waives notice of acceptance of
this Guaranty and notice of any liability to which it may apply, and
waives promptness, diligence, presentment, demand of payment, protest,
notice of dishonor or nonpayment of any such liabilities, suit or taking
of other action by the Administrative Agent or any other Secured Creditor
against, and any other notice to, any party liable thereon (including
each Guarantor or any other guarantor of the Borrower).
4. Any Secured Creditor may (except as shall be
required by applicable statute and cannot be waived) at any time and from
time to time without the consent of, or notice to, each Guarantor,
without incurring responsibility to each Guarantor, without impairing or
releasing the obligations of each Guarantor hereunder, upon or without
any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew or alter,
any of the Guaranteed Obligations, any security therefor, or any
liability incurred directly or indirectly in respect thereof,
and the guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;
(ii) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(iii) exercise or refrain from exercising any rights
against the Borrower, any other guarantor or others or otherwise
act or refrain from acting;
(iv) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether
due or not) of the Borrower to creditors of the Borrower;
(v) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of the Borrower to the
Secured Creditors regardless of what liabilities of the Borrower
remain unpaid;
(vi) consent to or waive any breach of, or any act,
omission or default under, any of the Credit Documents, the
Interest Rate Agreements or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement
any of the Credit Documents, the Interest Rate Agreements or any
of such other instruments or agreements; and/or
(vii) act or fail to act in any manner referred to in
this Guaranty which may deprive such Guarantor of its right to
subrogation against the Borrower to recover full indemnity for
any payments made pursuant to this Guaranty.
5. No invalidity, irregularity or unenforceability of
all or any part of the Guaranteed Obligations or of any security therefor
shall affect, impair or be a defense to this Guaranty, and this Guaranty
shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which
might constitute a legal or equitable discharge of a surety or guarantor
except payment in full of the Guaranteed Obligations.
6. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall
be conclusively presumed to have been created in reliance hereon. No
failure or delay on the part of any Secured Creditor in exercising any
right, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or
remedies which any Secured Creditor would otherwise have. No notice to or
demand on each Guarantor in any case shall entitle each Guarantor to any
other further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any Secured Creditor to any other or
further action in any circumstances without notice or demand. It is not
necessary for any Secured Creditor to inquire into the capacity or powers
of the Borrower or any of its Subsidiaries or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of
such powers shall be guaranteed hereunder.
7. Any indebtedness of the Borrower now or hereafter
held by each Guarantor is hereby subordinated to the indebtedness of the
Borrower to the Secured Creditors; and such indebtedness of the Borrower
to each Guarantor, if the Administrative Agent, after an Event of Default
has occurred and is continuing, so requests, shall be collected, enforced
and received by each Guarantor as trustee for the Secured Creditors and
be paid over to the Secured Creditors on account of the indebtedness of
the Borrower to the Secured Creditors, but without affecting or impairing
in any manner the liability of each Guarantor under the other provisions
of this Guaranty. Prior to the transfer by each Guarantor of any note or
negotiable instrument evidencing any indebtedness of the Borrower to each
Guarantor, each Guarantor shall mark such note or negotiable instrument
with a legend that the same is subject to this subordination. Without
limiting the generality of the foregoing, each Guarantor hereby agrees
with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code
or otherwise) until all Guaranteed Obligations have been irrevocably paid
in full in cash.
8. (a) Each Guarantor hereby waives any right (except
as shall be required by applicable statute and cannot be waived) to
require the Secured Creditors to: (i) proceed against the Borrower, any
other Guarantor, any other guarantor of the Borrower or any other party;
(ii) proceed against or exhaust any security held from the Borrower, any
other Guarantor, any other guarantor of the Borrower or any other party;
or (iii) pursue any other remedy in the Secured Creditors' power
whatsoever. Each Guarantor waives any (to the fullest extent permitted by
applicable law) defense based on or arising out of any defense of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any
other party other than payment in full of the Guaranteed Obligations,
including, without limitation, any defense based on or arising out of the
disability of the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than
payment in full of the Guaranteed Obligations. The Secured Creditors may,
at their election, foreclose on any security held by the Administrative
Agent, the Collateral Agent or the other Security Creditors by one or
more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Secured Creditors may have against the Borrower or any other party, or
any security, without affecting or impairing in any way the liability of
each Guarantor hereunder except to the extent the Guaranteed Obligations
have been paid in full. Each Guarantor waives any defense arising out of
any such election by the Administrative Agent, the Collateral Agent and
the Secured Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of each Guarantor against the Borrower or any other party or any
security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices
of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature,
scope and extent of the risks which each Guarantor assumes and incurs
hereunder, and agrees that the Secured Creditors shall have no duty to
advise each Guarantor of information known to them regarding such
circumstances or risks.
9. If and to the extent that each Guarantor makes any
payment to any Secured Creditor or to any other Person pursuant to or in
respect of this Guaranty, any claim which each Guarantor may have against
the Borrower by reason thereof shall be subject and subordinate to the
prior payment in full of the Guaranteed Obligations to each Secured
Creditor. Prior to the transfer by any Guarantor of any note or
negotiable instrument evidencing any indebtedness of the Borrower to such
Guarantor, such Guarantor shall mark such note or negotiable instrument
with a legend that the same is subject to this subordination.
10. Each Guarantor hereby jointly and severally agrees
to pay all reasonable out-of-pocket costs and expenses (including,
without limitation, the reasonable fees and disbursement of counsel) of
each Secured Creditor in connection with the enforcement of this Guaranty
and of the Administrative Agent in connection with any amendment, waiver
or consent relating hereto.
11. This Guaranty shall be binding upon each Guarantor
and its successors and assigns and shall inure to the benefit of the
Secured Creditors and their successors and assigns to the extent
permitted under the Credit Agreement.
12. Neither this Guaranty nor any provision hereof may
be changed, waived, discharged or terminated except with the written
consent of the Required Banks (or to the extent required by Section 12.12
of the Credit Agreement, with the written consent of each Bank) and each
Guarantor directly affected thereby.
13. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents has been made available
to its principal executive officers and such officers are familiar with
the contents thereof.
14. In addition to any rights now or hereafter granted
under applicable law (including, without limitation, Section 151 of the
New York Debtor and Creditor Law) and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event
of Default (such term to mean and include any "Event of Default" as
defined in the Credit Agreement), each Secured Creditor is hereby
authorized, to the extent not prohibited by applicable law, at any time
or from time to time, without notice to each Guarantor or to any other
Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any
other indebtedness at any time held or owing by such Secured Creditor to
or for the credit or the account of each Guarantor, against and on
account of the obligations and liabilities of each Guarantor to such
Secured Creditor under this Guaranty, irrespective of whether or not such
Secured Creditor shall have made any demand hereunder and although said
obligations, liabilities, deposits or claims, or any of them, shall be
contingent or unmatured. Each Secured Creditor agrees to promptly notify
each Guarantor after any such set off and application, provided, however,
that the failure to give such notice shall not affect the validity of
such set off and application.
15. All notices, requests, demands or other
communications provided for hereunder made in writing (including telexed
or telecopier communication) shall be deemed to have been duly given or
made when delivered to the Person to which such notice, request, demand
or other communication is required or permitted to be given or made under
this Guaranty, addressed to such party at (i) in the case of any Bank
Creditor, as provided in the Credit Agreement, (ii) in the case of each
Guarantor, at its address set forth opposite its signature below and
(iii) in the case of any Interest Rate Creditor, at such address as such
Interest Rate Creditor shall have specified in writing to each Guarantor;
or in any case at such other address as any of the Persons listed above
may hereafter notify the others in writing.
16. If claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid
Secured Creditors repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such Secured Creditor or any of its property or (ii)
any settlement or compromise of any such claim effected by such Secured
Creditor with any such claimant (including the Borrower), then and in
such event each Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon each Guarantor,
notwithstanding any revocation hereof or other instrument evidencing any
liability of the Borrower, and each Guarantor shall be and remain liable
to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received
by any such Secured Creditor.
17. The liability of each Guarantor hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by such
Guarantor, any other Guarantor, any other guarantor or by any other
party, and the liability of each Guarantor hereunder shall not be
affected or impaired by (a) any direction as to application of payment by
the Borrower or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations of the Borrower, (c) any payment
on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by
the Borrower or (e) any payment made to any Secured Creditor on the
Guaranteed Obligations which any Secured Creditor repays the Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Guarantor waives
any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding.
18. The obligations of each Guarantor hereunder are
independent of the obligations of any other Guarantor, any other
guarantor or the Borrower, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is
brought against any other Guarantor, any other guarantor or the Borrower
and whether or not any other Guarantor, any other guarantor of the
Borrower or the Borrower be joined in any such action or actions. Each
Guarantor waives, to the fullest extent permitted by law, the benefit of
any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance
which operates to toll any statute of limitations as to the Borrower
shall operate to toll the statute of limitations as to each Guarantor.
19. Each Guarantor covenants and agrees that on and
after the date hereof and until the termination of the Total Revolving
Commitment and all Interest Rate Agreements and when no Note or Letter of
Credit remains outstanding (other than Letters of Credit which have been
supported in a manner satisfactory to the respective Letter of Credit
Issuer in its sole and absolute discretion) and all Guaranteed
Obligations have been paid in full, such Guarantor shall take, or will
refrain from taking, as the case may be, all actions that are necessary
to be taken or not taken so that no violation of any provision, covenant
or agreement contained in Section 7 or 8 of the Credit Agreement, and so
that no Default or Event of Default, is caused by the actions of such
Guarantor or any of its Subsidiaries.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Guaranty may be brought
in the courts of the State of New York or of the United States of America
for the Southern District of New York, and, by execution and delivery of
this Guaranty, each Guarantor hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each Guarantor hereby further
irrevocably waives any claim that any such courts lack jurisdiction over
such Guarantor, and agrees not to plead or claim, in any legal action or
proceeding with respect to this Guaranty or any other Credit Document to
which such Guarantor is a party brought in any of the aforesaid courts,
that any such court lacks jurisdiction over such Guarantor. Each
Guarantor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to each Guarantor at its address set forth opposite its
signature below, such service to become effective 30 days after such
mailing. Each Guarantor hereby irrevocably waives any objection to such
service of process and further irrevocably waives and agrees not to plead
or claim in any action or proceeding commenced hereunder or under any
other Credit Document to which such Guarantor is a party that service of
process was in any way invalid or ineffective. Nothing herein shall
affect the right of any of the Secured Creditors to serve process in any
other manner permitted by law or to commence legal proceedings or
otherwise proceed against each Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Guaranty or any other Credit Document brought in the
courts referred to in clause (a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
21. In the event that all of the capital stock of one
or more Guarantors is sold or otherwise disposed of or liquidated in
compliance with the requirements of Section 8.02 of the Credit Agreement
(or such sale or other disposition or liquidation has been approved in
writing by the Required Banks (or all Banks if required by Section 12.12
of the Credit Agreement)) and the proceeds of such sale, disposition or
liquidation are applied in accordance with the provisions of the Credit
Agreement, to the extent applicable, such Guarantor shall be released
from this Guaranty and this Guaranty shall, as to each such Guarantor or
Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of one or more Persons that own,
directly or indirectly, all of the capital stock or partnership interests
of any Guarantor shall be deemed to be a sale of such Guarantor for the
purposes of this Section 21).
22. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto
shall be lodged with the Borrower and the Administrative Agent.
23. All payments made by any Guarantor hereunder will
be made without setoff, counterclaim or other defense.
24. It is understood and agreed that any Subsidiary of
the Borrower that is required to execute a counterpart of this Guaranty
pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to
the Administrative Agent.
25. The Secured Creditors agree that this Guaranty may
be enforced only by the action of the Administrative Agent or the
Collateral Agent, in each case acting upon the instructions of the
Required Banks (or, after the date on which all Credit Document
Obligations have been paid in full, the holders of at least a majority of
the outstanding Interest Rate Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to
enforce this Guaranty or to realize upon the security to be granted by
the Security Documents, it being understood and agreed that such rights
and remedies may be exercised by the Administrative Agent or the
Collateral Agent or the holders of at least a majority of the outstanding
Interest Rate Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Guaranty and the Security
Documents.
26. Each Guarantor hereby confirms that it is its
intention that this Guaranty not constitute a fraudulent transfer or
conveyance for purposes of any bankruptcy, insolvency or similar law, the
Uniform Fraudulent Conveyance Act or any similar Federal, state of
foreign law. To effectuate the foregoing intention, each Guarantor hereby
irrevocably agrees that, notwithstanding anything to the contrary
contained herein, the Guaranteed Obligations shall be limited to the
maximum amount as will, after giving effect to such maximum amount and
all other (contingent or otherwise) liabilities of such Guarantor that
are relevant under such laws, result in the Guaranteed Obligations of
such Guarantor in respect of such maximum amount not constituting a
fraudulent transfer or conveyance.
27. By accepting the benefits of this Guaranty, each
Secured Creditor acknowledges and agrees that its rights under this
Guaranty shall be as set forth in this Guaranty.
* * * *
IN WITNESS WHEREOF, each Guarantor has caused this
Guaranty to be executed and delivered as of the date first above written.
Addresses:
[Name of Subsidiary Guarantor] [NAME OF SUBSIDIARY GUARANTOR]
[Address of Subsidiary Guarantor]
Attention:
Tel: By ___________________________
Fax: Title:
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent
By____________________________
Title:
Exhibit H
FORM OF PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified or supplemented
from time to time, this "Agreement"), dated as of February 25, 1998, made
by each of the undersigned pledgors (each a "Pledgor" and, together with
any other entity that becomes a pledgor hereunder pursuant to Section 23
hereof, the "Pledgors") to BANKERS TRUST COMPANY, as Collateral Agent
(the "Pledgee"), for the benefit of the Secured Creditors (as defined
below). Except as otherwise defined herein, capitalized terms used herein
and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, Universal Hospital Services, Inc. (the
"Borrower"), the lenders from time to time party thereto (the "Banks")
and Bankers Trust Company, as Administrative Agent (together with any
successor Administrative Agent, the "Administrative Agent"), have entered
into a Credit Agreement, dated as of February 25, 1998 (as amended,
modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of Loans to, and the issuance of, and
participation in, Letters of Credit as contemplated therein (the Banks,
the Administrative Agent and the Pledgee are herein called the "Bank
Creditors");
WHEREAS, the Borrower may from time to time be party to
one or more Interest Rate Agreements with any Bank or any affiliate of
any Bank (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any
reason, together with such Bank's or affiliate's successors and
subsequent assigns, if any, collectively, the "Interest Rate Creditors",
and together with the Bank Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiary Guaranty, each
Subsidiary Guarantor has jointly and severally guarantied to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;
WHEREAS, it is a condition precedent to the making of
Loans and the issuance of, and participation in, Letters of Credit under
the Credit Agreement that each Pledgor shall have executed and delivered
to the Pledgee this Agreement; and
WHEREAS, each Pledgor desires to enter into this
Agreement in order to satisfy the condition described in the preceding
paragraph;
NOW, THEREFORE, in consideration of the foregoing and
other benefits accruing to each Pledgor, the receipt and sufficiency of
which are hereby acknowledged, each Pledgor hereby makes the following
representations and warranties to the Pledgee for the benefit of the
Secured Creditors and hereby covenants and agrees with the Pledgee for
the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by
each Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at
stated maturity, by acceleration or otherwise) of all
obligations (including, without limitation, obligations which,
but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness
(including, without limitation, indemnities, Fees and interest)
of such Pledgor to the Bank Creditors, whether now existing or
hereafter incurred under, arising out of, or in connection with
the Credit Agreement and the other Credit Documents to which
such Pledgor is a party (including, in the case of each
Subsidiary Guarantor, all such obligations and indebtedness of
such Subsidiary Guarantor under the Subsidiary Guaranty) and the
due performance and compliance by such Pledgor with all of the
terms, conditions and agreements contained in the Credit
Agreement and such other Credit Documents (all such obligations,
liabilities and indebtedness under this clause (i), except to
the extent consisting of obligations, liabilities or
indebtedness with respect to Interest Rate Agreements, being
herein collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of all
obligations, liabilities and indebtedness owing by such Pledgor
to the Interest Rate Creditors now existing or hereafter
incurred under, arising out of or in connection with (including
by reason of such Pledgor's guaranty under the Subsidiary
Guaranty), any Interest Rate Agreement, whether such Interest
Rate Agreement is now in existence or hereafter arising, and the
due performance and compliance by such Pledgor with all of the
terms, conditions and agreements contained therein (all such
obligations and liabilities described in this clause (ii) being
herein collectively called the "Interest Rate Obligations");
(iii)any and all sums advanced by the Pledgee in order
to preserve the Collateral (as hereinafter defined) or preserve
its security interest in the Collateral;
(iv) in the event of any proceeding for the collection
or enforcement of any indebtedness, obligations, or liabilities
of such Pledgor referred to in clauses (i), (ii) and (iii)
above, after an Event of Default (which term shall mean and
include any Event of Default under, and as defined in, the
Credit Agreement or any payment default by the Borrower under
any Interest Rate Agreement and shall, in any event, include,
without limitation, any payment default on any of the
Obligations (as hereinafter defined)) shall have occurred and be
continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of
or realizing on the Collateral, or of any exercise by the
Pledgee of its rights hereunder, together with reasonable
attorneys' fees and court costs; and
(v) all amounts paid by any Secured Creditor as to
which such Secured Creditor has the right to reimbursement under
Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses
(i) through (v) of this Section 1 being herein collectively called the
"Obligations", it being acknowledged and agreed that the "Obligations"
shall include extensions of credit of the types described above, whether
outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
2. DEFINITION OF STOCK, NOTES, PARTNERSHIP INTERESTS,
MEMBERSHIP INTERESTS, SECURITIES, ETC. (a) As used herein: (i) the term
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any Subsidiary of any Pledgor at any time owned by any Pledgor
and all certificates and instruments evidencing the same; (ii) the term
"Notes" shall mean all promissory notes from time to time issued to the
Pledgor by any of its Subsidiaries; (iii) the term "Partnership Interest"
shall mean the entire partnership interest whether general and/or limited
at any time owned by any Pledgor in any Subsidiary of such Pledgor (each
such partnership, a "Pledged Partnership"); (iv) the term "Membership
Interest" shall mean the entire limited liability company membership
interest at any time owned by any Pledgor in any Subsidiary of such
Pledgor (each such limited liability company, a "Pledged LLC", and
together with any Pledged Partnership, each, a "Pledged Entity"); (v) the
term "Securities" shall mean all of the Stock, Notes, Partnership
Interests and Membership Interests; and (vi) the term "Collateral" shall
mean all Securities, together with all proceeds thereof, including any
securities and moneys received and at any time held by the Pledgee
hereunder. Except as provided in the last sentence of this Section 2, no
Pledgor shall be required to pledge hereunder (and the terms Stock,
Partnership Interests, Membership Interests, Securities and Collateral
shall not include) more than 65% of the total combined voting power of
all classes of capital stock or other equity interests of any Foreign
Subsidiary of any Pledgor. Each Pledgor represents and warrants, that on
the date hereof, (A) the Stock held by such Pledgor consists of the
number and type of shares of the stock of the corporations as described
in Annex A hereto for such Pledgor, (B) such Stock constitutes that
percentage of the issued and outstanding capital stock of the issuing
corporation as is set forth in Annex A hereto, (C) the Notes held by such
Pledgor consist of the promissory notes described in Annex B hereto for
such Pledgor, (D) such Pledgor is the holder of record and sole
beneficial owner of the Stock and the Notes held by such Pledgor and
there exists no options or preemptive or similar rights in respect of the
Stock, (E) the Membership Interests held by such Pledgor constitute that
percentage of the entire limited liability company interests of the
respective Pledged LLC as is set forth on Annex C hereto, (F) the
Partnership Interests held by such Pledgor constitute that percentage of
the entire partnership interest of the respective Pledged Partnership as
is set forth on Annex D hereto for such Pledgor and (G) on the date
hereof, such Pledgor owns or possesses no other Securities. In the
circumstances and to the extent provided in Section 7.13 of the Credit
Agreement, the 65% limitation set forth above in this Section 2 and in
Section 3.2 hereof shall no longer be applicable and such Pledgor shall
duly pledge and deliver to the Pledgee such of the Securities not
therefore required to be pledged hereunder.
(b) All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock;" all Notes at
any time pledged or required to be pledged hereunder are hereinafter
called the "Pledged Notes;" all Partnership Interests at any time pledged
or required to be pledged hereunder are hereinafter called the "Pledged
Partnership Interests;" all Membership Interests at any time pledged or
required to be pledged hereunder are hereinafter called the "Pledged
Membership Interests;" all Pledged Stock, Pledged Notes, Pledged
Partnership Interests and Pledged Membership Interests together are
hereinafter called the "Pledged Securities".
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. (a) To secure the Obligations of such
Pledgor and for the purposes set forth in Section 1 hereof, each Pledgor
hereby (i) grants to the Pledgee a first priority continuing security
interest in all of the Collateral owned by such Pledgor, (ii) pledges and
deposits as security with the Pledgee, the Securities owned by such
Pledgor on the date hereof, and delivers to the Pledgee certificates or
instruments therefor (in the case of certificated Securities), duly
endorsed in blank by such Pledgor in the case of Notes and accompanied by
undated stock or other powers duly executed in blank by such Pledgor (and
accompanied by any transfer tax stamps required in connection with the
pledge of such Securities) in the case of other certificated Securities
or such other instruments of transfer as are reasonably acceptable to the
Pledgee, (iii) assigns, transfers, hypothecates, mortgages, charges and
sets over to the Pledgee all of such Pledgor's right, title and interest
in and to such Securities (and in and to all certificates or instruments
evidencing such Securities), to be held by the Pledgee upon the terms and
conditions set forth in this Agreement and (iv) transfers and assigns to
the Pledgee all of such Pledgor's (x) Partnership Interests and all of
such Pledgor's right, title and interest in each Pledged Partnership and
(y) Membership Interests and all of such Pledgor's right, title and
interest in each Pledged LLC, in each case including, without limitation:
(i) all of the capital thereof and its interest in all
profits, income, surplus, losses, Partnership Assets (as defined
below), LLC Assets (as defined below) and other distributions to
which such Pledgor shall at any time be entitled in respect of
any such Collateral;
(ii) all other payments due or to become due to such
Pledgor in respect of any such Collateral, whether under any
partnership agreement, limited liability company agreement or
otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if
any, under any partnership agreement, limited liability company
agreement or other agreement or at law or otherwise in respect
of any such Collateral;
(iv) all present and future claims, if any, of such
Pledgor against any Pledged Partnership or any Pledged LLC for
moneys loaned or advanced, for services rendered or otherwise;
(v) all of such Pledgor's rights under any partnership
agreement, limited liability company agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to any Partnership
Interest or Membership Interest, including any power, if any, to
terminate, cancel or modify any general or limited partnership
agreement or any limited liability company agreement, to execute
any instruments and to take any and all other action on behalf
of and in the name of such Pledgor in respect of such
Partnership Interest or Membership Interest and any Pledged
Entity to make determinations, to exercise any election
(including, but not limited to, election of remedies) or option
or to give or receive any notice, consent, amendment, waiver or
approval, together with full power and authority to demand,
receive, enforce, collect, or receipt for any of the foregoing
or for any Partnership Asset (as defined below) or LLC Asset (as
defined below), to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action
in connection with any of the foregoing;
(vi) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
distributions, rights and other property at any time and from
time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all thereof; and
(vii) to the extent not otherwise included, all
proceeds of any or all of the foregoing.
(b) As used herein, the term "Partnership Assets" and
"LLC Assets" shall mean, respectively, all assets, whether tangible or
intangible and whether real, personal or mixed (including, without
limitation, all partnership and limited liability company capital and
interests in other partnerships and limited liability companies), at any
time owned by any Pledged Partnership or Pledged LLC or represented by
any Partnership Interest or Membership Interest.
3.2. Subsequently Acquired Securities. If any Pledgor
shall acquire (by purchase, stock dividend, distribution or otherwise)
any additional Securities at any time or from time to time after the date
hereof, such Pledgor will promptly thereafter pledge and deposit such
Securities (or certificates or instruments representing such Securities)
as security with the Pledgee and deliver to the Pledgee certificates or
instruments therefor, duly endorsed in blank, in the case of Notes, and
accompanied by undated stock or other powers duly executed in blank by
such Pledgor or such other instruments of transfer as are reasonably
acceptable to the Pledgee, in the case of other Securities, and will
promptly thereafter deliver to the Pledgee a certificate executed by a
principal executive officer of such Pledgor describing such Securities
and certifying that the same has been duly pledged with the Pledgee
hereunder. No Pledgor shall be required at any time to pledge hereunder
any Securities which represents more than 65% of the total combined
voting power of all classes of capital stock or other equity interests of
any Foreign Subsidiary entitled to vote except to the extent provided in
the last sentence of Section 2(a) of this Agreement.
3.3. Uncertificated Securities and Partnership
Interests. Notwithstanding anything to the contrary contained in Sections
3.1 and 3.2 hereof, if any Securities (whether now owned or hereafter
acquired) are uncertificated securities, the relevant Pledgor shall
promptly notify the Pledgee thereof, and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable
law (including, without limitation, under Sections 8-313 and 8-321 or
Sections 8-106 (Revised), 8-301 (Revised) and 9-115 (Revised) of the
Uniform Commercial Code, as applicable). Each Pledgor further agrees to
take such actions as the Pledgee deems necessary or desirable to effect
the foregoing and to permit the Pledgee to exercise any of its rights and
remedies hereunder, and agrees to provide an opinion of counsel
reasonably satisfactory to the Pledgee with respect to any such pledge of
uncertificated Securities promptly upon the request of the Pledgee.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The
Pledgee shall have the right to appoint one or more sub-agents for the
purpose of retaining physical possession of the Pledged Securities, which
may be held (in the discretion of the Pledgee) in the name of the
relevant Pledgor, endorsed or assigned in blank or in favor of the
Pledgee or any nominee or nominees of the Pledgee or a sub-agent
appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and
until there shall have occurred and be continuing an Event of Default,
each Pledgor shall be entitled to exercise any and all voting, consent,
administration, management and other rights and remedies pertaining to
the Pledged Securities owned by it, and to give consents, waivers or
ratifications in respect thereof; provided, that no vote shall be cast or
any consent, waiver or ratification given or any action taken or omitted
to be taken which would violate or be inconsistent with any of the terms
of this Agreement, the Credit Agreement, any other Credit Document or any
Interest Rate Agreement (collectively, the "Secured Debt Agreements"), or
which would have the effect of impairing the value of the Collateral or
any part thereof or the position or interests of the Pledgee or any other
Secured Creditor in the Collateral. All such rights of each Pledgor to
vote and to give consents, waivers and ratifications shall cease in case
an Event of Default has occurred and is continuing, and Section 7 hereof
shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until
there shall have occurred and be continuing an Event of Default, (i) all
cash dividends and distributions payable in respect of the Pledged Stock
and all payments in respect of the Pledged Notes shall be paid to the
respective Pledgor and (ii) all cash distributions and other amounts
payable in respect of the Pledged Partnership Interests and Pledged
Membership Interests shall be paid to the respective Pledgor. The Pledgee
shall be entitled to receive directly, and to retain as part of the
Collateral:
(i) all other or additional stock or other securities
or property (other than cash) paid or distributed by way of
dividend, distribution or otherwise in respect of the
Collateral;
(ii) all other or additional stock or other securities
or property paid or distributed in respect of the Collateral by
way of merger, consolidation, conveyance of assets, liquidation,
exchange of stock, stock-split, spin-off, split-up,
reclassification, combination of shares or similar
rearrangement; and
(iii) all other property (other than cash) paid or
distributed by way of dividend or distribution in respect of the
Collateral.
Nothing contained in this Section 6 shall limit or restrict in any way
the Pledgee's right to receive proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. All dividends,
distributions, proceeds or other payments which are received by any
Pledgor contrary to the provisions of this Section 6 and Section 7 hereof
shall be received in trust for the benefit of the Pledgee, shall be
segregated from other property or funds of such Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so
received (with any necessary endorsement).
7. REMEDIES IN CASE OF DEFAULT OR EVENT OF DEFAULT. If
there shall have occurred and be continuing an Event of Default, then and
in every such case, the Pledgee shall be entitled to exercise all of the
rights, powers and remedies (whether vested in it by this Agreement, any
other Secured Debt Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee
shall be entitled to exercise all the rights and remedies of a secured
party under the Uniform Commercial Code and also shall be entitled,
without limitation, to exercise the following rights, which each Pledgor
hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 hereof to the
respective Pledgor;
(b) to transfer all or any part of the Collateral into
the Pledgee's name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be
accelerated in accordance with its terms, and take any other
lawful action to collect upon any Pledged Note (including,
without limitation, to make any demand for payment thereon);
(d) to vote all or any part of the Pledged Securities
(whether or not transferred into the name of the Pledgee) and
give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto as though it
were the outright owner thereof (each Pledgor hereby irrevocably
constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of
substitution to do so); and
(e) at any time and from time to time to sell, assign
and deliver, or grant options to purchase, all or any part of
the Collateral, or any interest therein, at any public or
private sale, without demand of performance, advertisement or
notice of intention to sell or of the time or place of sale or
adjournment thereof or to redeem or otherwise (all of which are
hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any
assumption of credit risk, and for such price or prices and on
such terms as the Pledgee in its absolute discretion may
determine, provided that at least 10 days' written notice of the
time and place of any such sale shall be given to the respective
Pledgor. The Pledgee shall not be obligated to make any such
sale of Collateral regardless of whether any such notice of sale
has theretofore been given. Each Pledgor hereby waives and
releases to the fullest extent permitted by law any right or
equity of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of the Secured Creditors
may bid for and purchase all or any part of the Collateral so
sold free from any such right or equity of redemption. Neither
the Pledgee nor any other Secured Creditor shall be liable for
failure to collect or realize upon any or all of the Collateral
or for any delay in so doing nor shall any of them be under any
obligation to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right,
power and remedy of the Pledgee provided for in this Agreement or in any
other Secured Debt Agreement, or now or hereafter existing at law or in
equity or by statute shall be cumulative and concurrent and shall be in
addition to every other such right, power or remedy. The exercise or
beginning of the exercise by the Pledgee or any other Secured Creditor of
any one or more of the rights, powers or remedies provided for in this
Agreement or any other Secured Debt Agreement or now or hereafter
existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other
Secured Creditor of all such other rights, powers or remedies, and no
failure or delay on the part of the Pledgee or any other Secured Creditor
to exercise any such right, power or remedy shall operate as a waiver
thereof. No notice to or demand on any Pledgor in any case shall entitle
it to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Pledgee
or any other Secured Creditor to any other or further action in any
circumstances without notice or demand. The Secured Creditors agree that
this Agreement may be enforced only by the action of the Administrative
Agent or the Pledgee, in each case acting upon the instructions of the
Required Banks (or, after the date on which all Credit Document
Obligations have been paid in full, the holders of at least the majority
of the outstanding Interest Rate Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to
enforce this Agreement or to realize upon the security to be granted
hereby, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the Pledgee or the holders of
at least a majority of the outstanding Interest Rate Obligations, as the
case may be, for the benefit of the Secured Creditors upon the terms of
this Agreement.
9. APPLICATION OF PROCEEDS. All moneys and other
proceeds collected by the Pledgee upon any sale or other disposition of
the Collateral pursuant to the terms of this Agreement, together with all
other moneys and other proceeds received by the Pledgee hereunder, shall
be applied to the payment of the Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the
Collateral by the Pledgee hereunder (whether by virtue of the power of
sale herein granted, pursuant to judicial process or otherwise), the
receipt of the Pledgee or the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so
sold, and such purchaser or purchasers shall not be obligated to see to
the application of any part of the purchase money paid over to the
Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally
agrees (i) to indemnify and hold harmless the Pledgee and each other
Secured Creditor and their respective successors, assigns, employees,
officers, affiliates, agents and servants (individually an "Indemnitee,"
and collectively the "Indemnitees") from and against any and all claims,
demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and (ii) to reimburse each
Indemnitee for all costs and expenses, including reasonable attorneys'
fees, in each case arising out of or resulting from this Agreement or the
exercise by any Indemnitee of any right or remedy granted to it hereunder
or under any other Secured Debt Agreement (but excluding any claims,
demands, losses, judgments and liabilities or expenses to the extent
incurred by reason of gross negligence or willful misconduct of such
Indemnitee). In no event shall any Indemnitee be liable, in the absence
of gross negligence or willful misconduct on its part, for any matter or
thing in connection with this Agreement other than to account for monies
actually received by it in accordance with the terms hereof. If and to
the extent that the obligations of any Pledgor under this Section 11 are
unenforceable for any reason, such Pledgor hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law. The indemnity obligations of
each Pledgor contained in this Section 11 shall continue in full force
and effect notwithstanding the full payment of all the Notes issued under
the Credit Agreement, the termination of all Interest Rate Agreements and
Letters of Credit and the payment of all other Obligations and
notwithstanding the discharge thereof.
12. PLEDGEE NOT BOUND. (a) Nothing herein shall be
construed to make the Pledgee or any other Secured Creditor liable as a
general partner or limited partner of any Pledged Partnership or as a
member of any Pledged LLC and the Pledgee or any other Secured Creditor
by virtue of this Agreement or otherwise (except as referred to in the
following sentence) shall not have any of the duties, obligations or
liabilities of a general partner or limited partner of any Pledged
Partnership or of a member of any Pledged LLC. The parties hereto
expressly agree that, unless the Pledgee shall become the absolute owner
of a Pledged Partnership Interest or a Pledged Membership Interest
pursuant hereto, this Agreement shall not be construed as creating a
partnership or joint venture among the Pledgee, any other Secured
Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of
paragraph (a) of this Section, the Pledgee, by accepting this Agreement,
did not intend to become a general partner or limited partner of any
Pledged Partnership or of a member of any Pledged LLC or otherwise be
deemed to be a co-venturer with respect to any Pledgor or any Pledged
Partnership or any Pledged LLC either before or after an Event of Default
shall have occurred. The Pledgee shall have only those powers set forth
herein and shall assume none of the duties, obligations or liabilities of
a general partner or limited partner of any Pledged Partnership or of a
member of any Pledged LLC or of any Pledgor.
(c) The Pledgee shall not be obligated to perform or
discharge any obligation of any Pledgor as a result of the collateral
assignment hereby effected.
(d) The acceptance by the Pledgee of this Agreement,
with all the rights, powers, privileges and authority so created, shall
not at any time or in any event obligate the Pledgee to appear in or
defend any action or proceeding relating to the Collateral to which it is
not a party, or to take any action hereunder or thereunder, or to expend
any money or incur any expenses or perform or discharge any obligation,
duty or liability under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each
Pledgor agrees that it will join with the Pledgee in executing and, at
such Pledgor's own expense, file and refile under the Uniform Commercial
Code or other applicable law such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem
necessary or appropriate and wherever required or permitted by law in
order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements
and amendments thereto relative to all or any part of the Collateral
without the signature of such Pledgor where permitted by law, and agrees
to do such further acts and things and to execute and deliver to the
Pledgee such additional conveyances, assignments, agreements and
instruments as the Pledgee may reasonably require or deem necessary to
carry into effect the purposes of this Agreement or to further assure and
confirm unto the Pledgee its rights, powers and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such
Pledgor's attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor or otherwise, to act from
time to time solely after the occurrence and during the continuance of an
Event of Default in the Pledgee's discretion to take any action and to
execute any instrument which the Pledgee may deem necessary or advisable
to accomplish the purposes of this Agreement.
14. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will
hold in accordance with this Agreement all items of the Collateral at any
time received under this Agreement. It is expressly understood and agreed
by each Secured Creditor that by accepting the benefits of this Agreement
each such Secured Creditor acknowledges and agrees that the obligations
of the Pledgee as holder of the Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement,
are only those expressly set forth in this Agreement. The Pledgee shall
act hereunder on the terms and conditions set forth herein and in Section
11 of the Credit Agreement.
15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage,
pledge or otherwise encumber any of the Collateral or any interest
therein (except as may be permitted in accordance with the terms of the
Credit Agreement).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGORS. Each Pledgor represents, warrants and covenants that (i) it is
the legal, record and beneficial owner of and has good and marketable
title to all Pledged Securities pledged by it hereunder, subject to no
Lien (except the Lien created by this Agreement); (ii) it has full power,
authority and legal right to pledge all the Pledged Securities pledged by
it pursuant to this Agreement; (iii) this Agreement has been duly
authorized, executed and delivered by such Pledgor and constitutes a
legal, valid and binding obligation of such Pledgor enforceable in
accordance with its terms except to the extent that the enforceability
hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law); (iv) except as have been
obtained by the Pledgors as of the date hereof and which remain in full
force and effect on the date hereof, no consent of any other party
(including, without limitation, any stockholder, member, partner or
creditor of such Pledgor or any of its Subsidiaries or any Pledged
Entity) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration
with, any governmental authority is required to be obtained by such
Pledgor in connection with the execution, delivery or performance of this
Agreement, the validity or enforceability of this Agreement, the
perfection or enforceability of the Pledgee's security interest in the
Collateral or, except for compliance with or as may be required by
applicable securities laws, the exercise by the Pledgee of any of its
rights or remedies provided herein; (v) the execution, delivery and
performance of this Agreement by such Pledgor will not violate any
provision of any applicable law or regulation or of any order, judgment,
writ, award or decree of any court, arbitrator or governmental authority,
domestic or foreign, applicable to such Pledgor, or of the certificate or
articles of incorporation or by-laws (or equivalent organizational
documents) of such Pledgor or of any securities issued by such Pledgor or
any of its Subsidiaries, or of any mortgage, indenture, lease, deed of
trust, loan agreement, credit agreement or other material contract,
agreement or instrument or undertaking to which such Pledgor or any of
its Subsidiaries is a party or which purports to be binding upon such
Pledgor or any of its Subsidiaries or upon any of their respective assets
and will not result in the creation or imposition of (or the obligation
to create or impose) any lien or encumbrance on any of the assets of such
Pledgor or any of its Subsidiaries except as contemplated by this
Agreement; (vi) all the shares of Stock have been duly and validly
issued, are fully paid and non-assessable and are subject to no options
to purchase or similar rights; (vii) each of the Pledged Notes
constitutes, or when executed by the obligor thereof will constitute, the
legal, valid and binding obligation of such obligor, enforceable in
accordance with its terms except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law); (viii) the pledge, assignment
and delivery to the Pledgee of the Securities (other than uncertificated
securities) pursuant to this Agreement creates a valid and perfected
first priority Lien in the Securities, and the proceeds thereof, subject
to no other Lien or to any agreement purporting to grant to any third
party a Lien on the property or assets of the Pledgor which would include
the Securities; (ix) each Pledged Partnership Interest and Pledged
Membership Interest has been validly acquired and is fully paid for (to
the extent applicable) and is duly and validly pledged hereunder; (x)
each general or limited partnership agreement and limited liability
company agreement delivered to the Pledgee in respect of any Pledged
Entity is an original signed counterpart (or a copy thereof) of the
complete and entire such agreement in effect on the date hereof; (xi)
each partnership agreement and limited liability company agreement in
respect of any Pledged Entity is the legal, valid and binding obligation
of each Pledgor, and to each Pledgor's knowledge, the other parties
thereto, enforceable in accordance with its terms and, together with this
Agreement, contains the entire agreement between the Pledgors relating to
the subject matter thereof; (xii) no Pledgor is in default in the payment
of any portion of any mandatory capital contribution, if any, required to
be made under any general or limited partnership agreement or limited
liability company agreement in respect of any Pledged Entity to which
such Pledgor is a party, and no Pledgor is in violation of any other
material provisions of any such partnership agreement or limited
liability company agreement to which such Pledgor is a party, or
otherwise in default or violation thereunder; (xiii) no Pledged
Partnership Interest or Pledged Membership Interest is subject to any
defense, offset or counterclaim, nor have any of the foregoing been
asserted or alleged against such Pledgor by any Person with respect
thereto; (xiv) the pledge and assignment of the Pledged Partnership
Interests and Pledged Membership Interests pursuant to this Agreement,
together with the relevant filings or recordings under the Uniform
Commercial Code (which filings and recordings have been or will be made),
creates a valid, perfected and continuing first priority security
interest in such Partnership Interests and Membership Interests and the
proceeds thereof, subject to no prior lien or encumbrance or to any
agreement purporting to grant to any third party a lien or encumbrance on
the property or assets of such Pledgor which would include the
Collateral; (xv) there are no currently effective financing statements
under the Uniform Commercial Code covering any property which is now or
hereafter may be included in the Collateral and such Pledgor will not,
without the prior written consent of the Pledgee, execute and, until the
Termination Date (as hereinafter defined), there will not ever be on file
in any public office any enforceable financing statement or statements
covering any or all of the Collateral, except financing statements filed
or to be filed in favor of the Pledgee as secured party; (xvi) each
Pledgor shall give the Pledgee prompt notice of any written claim it
receives relating to the Collateral; (xvii) each Pledgor shall deliver to
the Pledgee a copy of each other demand, notice or document received by
it which may adversely affect the Pledgee's interest in the Collateral
promptly upon, but in any event within 10 days after, such Pledgor's
receipt thereof; (xviii) no Pledgor shall withdraw as a partner of any
Pledged Partnership or member of any Pledged LLC, or file or pursue or
take any action which may, directly or indirectly, cause a dissolution or
liquidation of or with respect to any Pledged Entity or seek a partition
of any property of any Pledged Entity, except as permitted by the Credit
Agreement; (xix) a notice in the form set forth in Annex E attached
hereto and by this reference made a part hereof (such notice the "Pledge
Notice"), appropriately completed, notifying each Pledged Entity of the
existence of this Agreement and a certified copy of this Agreement have
been delivered by each Pledgor to the relevant Pledged Entity, and each
such Pledgor has received and delivered to the Collateral Agent an
acknowledgment in the form set forth in Annex F attached hereto (such
acknowledgment, the "Pledge Acknowledgment"), duly executed by the
relevant Pledged Entity; (xx) the chief executive office and principal
place of business of such Pledgor and the sole location where the records
of such Pledgor with respect to any Pledged Partnership Interests and
Pledged Membership Interests are kept are located at the address set
forth for such Pledgor on Annex G hereto, and such Pledgor shall not move
its chief executive office, principal place of business, or location of
records unless (x) it shall have given to the Pledgee no less than 30
days prior written notice of its intention to do so clearly describing
such new location and providing such other information in connection
therewith as the Pledgee may reasonably request and (y) with respect to
such new location, it shall have taken all action, reasonably
satisfactory to the Pledgee, to maintain the security interest of the
Pledgee in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect; (xxi) such Pledgor shall
not change its legal name as set forth on the signature pages hereto or
assume or operate in any jurisdiction under any trade, fictitious or
other name unless (x) it shall have given to the Pledgee no less than 30
days prior written notice of its intention to do so clearly describing
such new name and the jurisdictions in which such new name shall be used
and providing such other information in connection therewith as the
Pledgee may reasonably request and (y) with respect to such new name, it
shall have taken all action, reasonably satisfactory to the Pledgee, to
maintain the security interest of the Pledgee in the Collateral intended
to be granted hereby at all times fully perfected and in full force and
effect; and (xxii) all filings, registrations and recordings necessary or
appropriate to create, preserve, protect and perfect the security
interest granted by such Pledgor to the Pledgee hereby in respect of the
Collateral have been, or promptly will be, accomplished and the security
interest granted to the Pledgee pursuant to this Agreement in and to the
Collateral constitutes a perfected security interest therein prior to the
rights of all other Persons therein and subject to no other Liens and is
entitled to all the rights, priorities and benefits afforded by the
Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction to perfect security interests. Each Pledgor covenants and
agrees that it will defend the Pledgee's right, title and security
interest in and to the Collateral against the claims and demands of all
persons whomsoever; and such Pledgor covenants and agrees that it will
have like title to and right to pledge any other property at any time
hereafter pledged to the Pledgee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of the
Pledgee and the other Secured Creditors.
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The
obligations of each Pledgor under this Agreement shall be absolute and
unconditional and shall remain in full force and effect without regard
to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever,
including, without limitation: (i) any renewal, extension, amendment or
modification of or addition or supplement to or deletion from any Secured
Debt Agreement or any other instrument or agreement referred to therein,
or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of
any such agreement or instrument including, without limitation, this
Agreement; (iii) any furnishing of any additional security to the Pledgee
or its assignee or any acceptance thereof or any release of any security
by the Pledgee or its assignee; (iv) any limitation on any party's
liability or obligations under any such instrument or agreement or any
invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof; or (v) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any Pledgor or any
Subsidiary of any Pledgor, or any action taken with respect to this
Agreement by any trustee or receiver, or by any court, in any such
proceeding, whether or not such Pledgor shall have notice or knowledge of
any of the foregoing.
18. TERMINATION; RELEASE. (a) After the Termination
Date (as defined below), this Agreement and the security interest created
hereby shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 11 hereof shall survive any
such termination), and the Pledgee, at the request and expense of any
Pledgor, will execute and deliver to such Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement, together with any moneys at the time
held by the Pledgee or any of its sub-agents hereunder. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Revolving Commitment and all Interest Rate Agreements have been
terminated, no Note under the Credit Agreement is outstanding (and all
Loans have been repaid in full), all Letters of Credit have been
terminated and all Obligations then owing have been paid in full.
(b) In the event that any part of the Collateral is
sold in connection with a sale permitted by Section 8.02 of the Credit
Agreement (other than a sale to any Pledgor or any Subsidiary thereof) or
is otherwise released at the direction of the Required Banks (or all
Banks if required by Section 12.12 of the Credit Agreement) and the
proceeds of such sale or sales or from such release are applied in
accordance with the provisions of the Credit Agreement, to the extent
required to be so applied, the Pledgee, at the request and expense of any
Pledgor, will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the
Collateral (and releases therefor) as is then being (or has been) so sold
or released and has not theretofore been released pursuant to this
Agreement.
(c) At any time that a Pledgor desires that the Pledgee
assign, transfer and deliver Collateral (and releases therefor) as
provided in Section 18(a) or (b) hereof, it shall deliver to the Pledgee
a certificate signed by the principal executive officer of such Pledgor
stating that the release of the respective Collateral is permitted
pursuant to such Section 18(a) or (b).
(d) The Pledgee shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with this Section 18.
19. NOTICES, ETC. All such notices and communications
hereunder shall be sent or delivered by mail, telecopy or overnight
courier service and all such notices and communications shall, when
mailed, telecopied or sent by overnight courier, be effective when
delivered by overnight courier, or sent by telecopier or three Business
Days following deposit in the mail with proper postage, when mailed,
except that notices and communications to the Pledgee shall not be
effective until received by the Pledgee. All notices and other
communications shall be in writing and addressed as follows:
(a) if to any Pledgor, at:
Universal Hospital Services, Inc.
1250 Northland Plaza
3800 West 80th Street
Bloomington, MN 55431-4442
Attention: Gerry Brandt, Chief Financial Officer
Tel: (612) 893-3255
Fax: (612) 893-3237
(b) if to the Pledgee, at:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: David Bell
Telephone No.: (212) 250-9048
Telecopier No.: (212) 250-7218;
(c) if to any Bank Creditor, either (x) to the
Administrative Agent, at the address of the Administrative Agent
specified in the Credit Agreement or (y) at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(d) if to any Interest Rate Creditor at such address as
such Interest Rate Creditor shall have specified in writing to the
Pledgors and the Pledgee; or at such other address as shall have been
furnished in writing by any Person described above to the party required
to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions
of this Agreement may be changed, waived, modified or varied in any
manner whatsoever unless in writing duly signed by each Pledgor directly
affected thereby and the Pledgee (with the written consent of either (x)
the Required Banks (or all of the Banks to the extent required by Section
12.12 of the Credit Agreement) at all times prior to the time on which
all Credit Document Obligations have been paid in full or (y) the holders
of at least a majority of the outstanding Interest Rate Obligations at
all times after the time on which all Credit Document Obligations have
been paid in full); provided, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class (as defined
below) of Secured Creditors (and not all Secured Creditors in a like or
similar manner) shall also require the written consent of the Requisite
Creditors (as defined below) of such affected Class. For the purpose of
this Agreement, the term "Class" shall mean each class of Secured
Creditors, i.e., whether (i) the Bank Creditors as holders of the Credit
Document Obligations or (ii) the Interest Rate Creditors as the holders
of the Interest Rate Obligations. For the purpose of this Agreement, the
term "Requisite Creditors" of any Class shall mean each of (i) with
respect to the Credit Document Obligations, the Required Banks and (ii)
with respect to the Interest Rate Obligations, the holders of at least a
majority of all obligations outstanding from time to time under the
Interest Rate Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns and shall
inure to the benefit of and be enforceable by each of the parties hereto
and its successors and assigns, provided that no Pledgor may assign any
of its rights or obligations under this Agreement without the prior
consent of the Collateral Agent. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE
OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may
be executed in any number of counterparts, each of which shall be an
original, but all of which shall constitute one instrument. In the event
that any provision of this Agreement shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the
other provisions of this Agreement which shall remain binding on all
parties hereto.
22. RECOURSE. This Agreement is made with full recourse
to the Pledgors and pursuant to and upon all the representations,
warranties, covenants and agreements on the part of the Pledgors
contained herein and in the other Secured Debt Agreements and otherwise
in writing in connection herewith or therewith.
23. ADDITIONAL PLEDGORS. It is understood and agreed
that any Subsidiary of the Borrower that is required to execute a
counterpart of this Agreement after the date hereof pursuant to the
Credit Agreement shall automatically become a Pledgor hereunder by
executing a counterpart hereof and delivering the same to the Pledgee.
24. PLEDGE NOTICES; PLEDGE ACKNOWLEDGMENTS.
Notwithstanding anything to the contrary contained herein or in the
Credit Agreement, each Pledgor hereby covenants and agrees that with
respect to any Pledged Partnership Interest and/or Pledged Membership
Interest pledged by it hereunder, such Pledgor will deliver to the
respective Pledged Partnerships and Pledged LLCs (with copies to the
Pledgee) a Pledge Notice (appropriately completed) and such Pledgor will
deliver to the Pledgee a Pledge Acknowledgment signed by the respective
Pledged Partnerships and/or Pledged LLCs, (x) in the case of any Pledged
Partnership Interests or Pledged Membership Interests required to be
pledged hereunder on the date hereof, on or before the date hereof and
(y) in all other cases, within 10 days following the date on which any
such Pledged Partnership Interests and/or Pledged Membership Interests
are pledged hereunder.
25. SECURED CREDITORS ACKNOWLEDGMENT. By accepting the
benefits of this Agreement, each Secured Creditor acknowledges and agrees
(i) that the rights and obligations of the Pledgee shall be as set forth
in Section 11 of the Credit Agreement and (ii) that its rights under this
Agreement shall be as set forth in this Agreement. Notwithstanding
anything to the contrary contained in this Agreement or the Credit
Agreement, this Section 25, and the duties and obligations of the Pledgee
set forth in this Section 25, may not be amended or modified without the
consent of the Pledgee.
* * * *
IN WITNESS WHEREOF, each Pledgor and the Pledgee have
caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.
UNIVERSAL HOSPITAL SERVICES, INC.,
as a Pledgor
By__________________________________
Title:
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Pledgee and Collateral Agent
By__________________________
Title:
Annex A
TO
PLEDGE AGREEMENT
LIST OF STOCK
Percentage of
Outstanding
Name of Issuing Certificate Type of Number of Shares of
Corporation Number Shares Shares Capital Stock
-None-
ANNEX B
to
PLEDGE AGREEMENT
LIST OF NOTES
Obligor Principal Amount Maturity Date
- None -
ANNEX C
to
PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
- None -
ANNEX D
to
PLEDGE AGREEMENT
MEMBERSHIP INTERESTS
Limited Liability Company Ownership Percentage
- None -
Annex E
to
PLEDGE AGREEMENT
FORM OF PLEDGE NOTICE
[Letterhead of Pledgor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Pledge
Agreement (a true and correct copy of which is attached hereto), dated as
of February 25, 1998 (as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Pledge Agreement"),
between [NAME OF PLEDGOR] (the "Pledgor"), the other pledgors from time
to time party thereto and Bankers Trust Company (the "Pledgee") on behalf
of the Secured Creditors described therein, the Pledgor has pledged and
assigned to the Pledgee for the benefit of the Secured Creditors, and
granted to the Pledgee for the benefit of the Secured Creditors a
continuing security interest in, all right, title and interest of the
Pledgor, whether now existing or hereafter arising or acquired, as a
[[limited partner] [general partner]] [member] in [NAME OF PLEDGED
ENTITY] (the ["Partnership"] ["LLC"]), and in, to and under the [TITLE OF
APPLICABLE AGREEMENT] (the "[Partnership] [LLC] Agreement"), including,
without limitation:
(i) all the capital of the [Partnership] [LLC] and the
Pledgor's interest in all profits, income, surplus, losses,
[Partnership] [LLC] Assets and other distributions to which the
Pledgor shall at any time be entitled in respect of such
[Partnership] [Membership] Interest;
(ii) all other payments due or to become due to the
Pledgor in respect of such [partnership] [limited liability
company] interest, whether under the [Partnership] [LLC]
Agreement or otherwise, whether as contractual obligations,
damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if
any, under the [Partnership] [LLC] Agreement or at law or
otherwise in respect of such [Partnership] [Membership]
Interest;
(iv) all present and future claims, if any, of the
Pledgor against the [Partnership] [LLC] for moneys loaned or
advanced, for services rendered or otherwise;
(v) all of the Pledgor's rights under the [Partnership]
[LLC] Agreement or at law to exercise and enforce every right,
power, remedy, authority, option and privilege of the Pledgor
relating to the [Partnership] [Membership] Interest, including
any power to terminate, cancel or modify the [Partnership] [LLC]
Agreement, to execute any instruments and to take any and all
other action on behalf of and in the name of the Pledgor in
respect of the [Partnership] [Membership] Interest and the
[Partnership] [LLC], to make determinations, to exercise any
election (including, but not limited, election of remedies) or
option or to give or receive any notice, consent, amendment,
waiver or approval, together with full power and authority to
demand, receive, enforce, collect or receipt for any of the
foregoing, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action
in connection with any of the foregoing;
(vi) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof; and
(vii) to the extent not otherwise included, all
proceeds of any or all of the foregoing.
Pursuant to the Pledge Agreement, the [Partnership]
[LLC] is hereby authorized and directed to register the Pledgor's pledge
to the Pledgee on behalf of the Secured Creditors of the interest of the
Pledgor on the [Partnership's] [LLC's] books.
The Pledgor hereby requests the [Partnership] [LLC] to
indicate the [Partnership's] [LLC's] acceptance of this Notice and
consent to and confirmation of its terms and provisions by signing a copy
hereof where indicated on the attached page and returning the same to the
Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By_________________________________
Name:
Title:
ANNEX F
to
PLEDGE AGREEMENT
FORM OF PLEDGE ACKNOWLEDGMENT
[NAME OF PLEDGED ENTITY] (the ["Partnership"] ["LLC"])
hereby acknowledges receipt of a copy of the assignment by [NAME OF
PLEDGOR] ("Pledgor") of its interest under the [TITLE OF APPLICABLE
AGREEMENT] (the "[Partnership] [LLC] Agreement") pursuant to the terms of
the Pledge Agreement, dated as of February 25, 1998 (as amended, modified
or supplemented from time to time in accordance with the terms thereof,
the "Pledge Agreement"), among the Pledgor, the other pledgors from time
to time party thereto, and Bankers Trust Company (the "Pledgee") on
behalf of the Secured Creditors described therein. The undersigned hereby
further confirms the registration of the Pledgor's pledge of its interest
to the Pledgee on behalf of the Secured Creditors on the [Partnership's]
[LLC's] books.
Dated: ______________ __, ____
[NAME OF PLEDGED ENTITY]
By____________________________
Name:
Title:
ANNEX G
to
PLEDGE AGREEMENT
SCHEDULE OF OFFICE LOCATIONS
Address County/State
EXHIBIT I
FORM OF SECURITY AGREEMENT
among
UNIVERSAL HOSPITAL SERVICES, INC.,
CERTAIN OF ITS SUBSIDIARIES
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of February 25, 1998
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of February 25, 1998,
among UNIVERSAL HOSPITAL SERVICES, INC. (the "Borrower"), the Subsidiary
Guarantors listed on the signature pages hereto and each other Subsidiary
of the Borrower that becomes an assignor hereunder pursuant to Section
10.11 of this Agreement (each an "Assignor", and collectively, the
"Assignors") and BANKERS TRUST COMPANY, as Collateral Agent (together
with any successor Collateral Agent, the "Collateral Agent") for the
benefit of the Secured Creditors (as defined below). Capitalized terms
used herein shall have the meanings specified in Article IX or, if not
defined therein, such terms shall have the meanings specified in the
Credit Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, the Borrower, the lending institutions from
time to time party thereto (the "Banks"), and Bankers Trust Company, as
Administrative Agent (together with any successor Administrative Agent,
the "Administrative Agent"), have entered into a Credit Agreement, dated
as of February 25, 1998 (as amended, modified or supplemented from time
to time, the "Credit Agreement"), providing for the making of Loans and
the issuance of, and participation in, Letters of Credit as contemplated
therein (the Banks, the Administrative Agent and the Collateral Agent are
hereinafter called the "Bank Creditors");
WHEREAS, the Borrower may from time to time be party to
one or more Interest Rate Agreements with any Bank or any affiliate of
any Bank (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any
reason, together with such Bank's or affiliate's successors and
subsequent assigns, if any, collectively the "Interest Rate Creditors",
and together with the Bank Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiary Guaranty, each
Assignor (other than the Borrower) has jointly and severally guaranteed
to the Secured Creditors the payment when due of all Guaranteed
Obligations (as defined in the Subsidiary Guaranty);
WHEREAS, it is a condition precedent to the making of
Loans and the issuance of, and participation in, Letters of Credit under
the Credit Agreement that each Assignor shall have executed and delivered
to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this
Agreement to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits
accruing to each Assignor, the receipt and sufficiency of which are
hereby acknowledged, each Assignor hereby makes the following
representations and warranties to the Collateral Agent and hereby
covenants and agrees with the Collateral Agent as follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) As security for
the prompt and complete payment and performance when due of all of the
Obligations, each Assignor does hereby sell, assign and transfer unto the
Collateral Agent, and does hereby grant to the Collateral Agent for the
benefit of the Secured Creditors a continuing security interest of first
priority in, all of the right, title and interest of such Assignor in, to
and under all of the following, whether now existing or hereafter from
time to time acquired: (i) each and every Receivable, (ii) all Contracts
(other than Excluded Contracts except to the extent provided in the
definition thereof), together with all Contract Rights arising
thereunder, (iii) all Inventory, (iv) all Equipment, (v) all Marks,
together with the registrations and right to all renewals thereof, and
the goodwill of the business of such Assignor symbolized by the Marks,
(vi) the Cash Collateral Account established for such Assignor and all
monies, securities, Financial Assets, Investment Property and instruments
deposited in or credited to or required to be deposited in or credited to
such Cash Collateral Account, (vii) all Patents and Copyrights and all
reissues, renewals or extensions thereof, (viii) all computer programs of
such Assignor and all intellectual property rights therein (to the extent
not constituting Excluded Contracts) and all other proprietary
information of such Assignor, including, but not limited to, Trade
Secrets Rights, (ix) all insurance policies, (x) all other Goods, General
Intangibles, Chattel Paper, Documents and Instruments (other than the
Pledged Securities), and (xi) all Proceeds and products of any and all of
the foregoing (all of the above collectively, the "Collateral").
(b) The security interest of the Collateral Agent under
this Agreement extends to all Collateral of the kind which is the subject
of this Agreement which each Assignor may acquire at any time during the
continuation of this Agreement.
1.2 Power of Attorney. Each Assignor hereby constitutes
and appoints the Collateral Agent its true and lawful attorney,
irrevocably, with full power after the occurrence of and during the
continuance of an Event of Default (in the name of such Assignor or
otherwise) to act, require, demand, receive, compound and give
acquittance for any and all monies and claims for monies due or to become
due to such Assignor under or arising out of the Collateral, to endorse
any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable in the premises,
which appointment as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and
delivery of this Agreement, as follows:
2.1 Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and
perfect the security interest granted by each Assignor to the Collateral
Agent hereby in respect of the Collateral have been accomplished and the
security interest granted to the Collateral Agent pursuant to this
Agreement in and to the Collateral constitutes a perfected security
interest therein superior and prior to the rights of all other Persons
therein and subject to no other Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the
Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction to perfected security interests.
2.2 No Liens. Each Assignor is, and as to Collateral
acquired by it from time to time after the date hereof such Assignor will
be, the owner of all Collateral free from any Lien, security interest,
encumbrance or other right, title or interest of any Person (other than
Permitted Liens), and such Assignor shall defend the Collateral against
all claims and demands of all Persons at any time claiming the same or
any interest therein adverse to the Collateral Agent.
2.3 Other Financing Statements. As of the date hereof,
there is no financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to
cover any interest of any kind in the Collateral (other than financing
statements filed in respect of Permitted Liens and those for which
termination statements have been delivered to the Collateral Agent on the
Effective Date), and so long as the Total Revolving Commitment has not
been terminated or any Note remains unpaid or any Letter of Credit
remains outstanding or any of the Obligations remain unpaid or any
Interest Rate Agreement or Letter of Credit remains in effect, such
Assignor will not execute or authorize to be filed in any public office
any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to
the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by such
Assignor or in respect of Permitted Liens.
2.4 Chief Executive Office; Records. The chief
executive office of each Assignor is located at the address or addresses
indicated on Annex A hereto. Such Assignor will not move its chief
executive office except to such new location as such Assignor may
establish in accordance with the last sentence of this Section 2.4. The
originals of all documents evidencing all Receivables and Contract Rights
of such Assignor and the only original books of account and records of
such Assignor relating thereto are, and will continue to be, kept at such
chief executive office and/or one or more of the other locations shown on
Annex A hereto, or at such new locations as such Assignor may establish
in accordance with the last sentence of this Section 2.4. All Receivables
and Contract Rights of such Assignor are, and will continue to be,
maintained at, and controlled and directed (including, without
limitation, for general accounting purposes) from, the office locations
described above, or such new locations as such Assignor may establish in
accordance with the last sentence of this Section 2.4. Such Assignor
shall not establish new locations for such offices until (i) it shall
have given to the Collateral Agent not less than 30 days' prior written
notice of its intention so to do, clearly describing such new location
and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new
location, it shall have taken all action, satisfactory to the Collateral
Agent, to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and
in full force and effect, and (iii) at the reasonable request of the
Collateral Agent, it shall have furnished an opinion of counsel
reasonably acceptable to the Collateral Agent to the effect that all
financing statements and amendments or supplements thereto have been
filed in the appropriate filing office or offices, and all other actions
(including, without limitation, the payment of all filing fees and taxes,
if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the
security interest granted hereby.
2.5 Location of Inventory and Equipment. All Inventory
and Equipment held on the date hereof by each Assignor is located at one
of the locations shown on Annex B hereto. Each Assignor agrees that all
Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to or from) any one of the locations
shown on Annex B hereto, or such new location as such Assignor may
establish in accordance with the last sentence of this Section 2.5. Such
Assignor may establish a new location for Inventory and Equipment only if
(i) with respect to such new location, it shall have taken all action to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full
force and effect, in all cases, after due investigation and (ii) at the
reasonable request of the Collateral Agent, it shall have furnished an
opinion of counsel reasonably acceptable to the Collateral Agent to the
effect that all financing statements and amendments or supplements
thereto have been filed in the appropriate filing office or offices, and
all other actions (including, without limitation, the payment of all
filing fees and taxes, if any, payable in connection with such filings)
have been taken, in order to perfect (and maintain the perfection and
priority of) the security interest granted hereby.
2.6 Trade Names; Change of Name. Each Assignor does not
have or operate in any jurisdiction under, or in the preceding 5 years
has not had or has not operated in any jurisdiction under, any trade
names, fictitious names or other names (including, without limitation,
any names of divisions or operations) except its legal name and such
other trade, fictitious or other names as are listed on Annex C hereto.
Such Assignor has only operated under each name set forth on Annex C
hereto in the jurisdiction or jurisdictions set forth opposite each such
name on such Annex C. Such Assignor shall not change its legal name or
assume or operate on any jurisdiction under any trade, fictitious or
other name except those names listed on Annex C hereto in the
jurisdictions listed with respect to such names and new names (including,
without limitation, any names of divisions or operations) and/or
jurisdictions established in accordance with the last sentence of this
Section 2.6. Such Assignor shall not assume or operate in any
jurisdiction under any new trade, fictitious or other name or operate
under any existing name in any additional jurisdiction until (i) it shall
have given to the Collateral Agent not less than 30 days' prior written
notice of its intention so to do, clearly describing such new name and/or
jurisdiction and, in the case of a new name, the jurisdictions in which
such new name shall be used and providing such other information in
connection therewith as the Collateral Agent may reasonably request, (ii)
with respect to such new name and/or new jurisdiction, it shall have
taken all action to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect, and (iii) at the reasonable
request of the Collateral Agent, it shall have furnished an opinion of
counsel reasonably acceptable to the Collateral Agent to the effect that
all financing statements and amendments or supplements thereto have been
filed in the appropriate filing office or offices, and all other actions
(including, without limitation, the payment of all filing fees and taxes,
if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the
security interest granted hereby.
2.7 Recourse. This Agreement is made with full recourse
to each Assignor and pursuant to and upon all the warranties,
representations, covenants, and agreements on the part of such Assignor
contained herein, in the other Credit Documents, in the Interest Rate
Agreements and otherwise in writing in connection herewith or therewith.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1 Additional Representations and Warranties. As of
the time when each of its Receivables arises, each Assignor shall be
deemed to have represented and warranted that each such Receivable, and
all records, papers and documents relating thereto (if any) (i) will
represent the genuine, legal, valid and binding obligation of the account
debtor evidencing indebtedness unpaid and owed by the respective account
debtor arising out of the performance of labor or services or the sale,
lease or rental and delivery of the merchandise listed therein, or both,
(ii) will be the only original writings evidencing and embodying such
obligation of the account debtor named therein (other than copies created
for general accounting purposes), (iii) will evidence true and valid
obligations, enforceable in accordance with their respective terms and
(iv) will be in compliance and will conform in all material respects with
all applicable federal, state and local laws and applicable laws of any
relevant foreign jurisdiction.
3.2 Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate and complete records of its
Receivables and Contracts, including, without limitation, the originals
of all documentation (including each Contract) with respect thereto,
records of all payments received, all credits granted thereon, all
merchandise returned and all other dealings therewith, and such Assignor
will make the same available to the Collateral Agent for inspection, at
such Assignor's own cost and expense, at any and all reasonable times
upon demand during normal business hours. If requested by the Collateral
Agent while an Event of Default is in existence, such Assignor shall, at
its own cost and expense, deliver all tangible evidence of its
Receivables and Contract Rights (including, without limitation, copies of
all documents evidencing the Receivables and all Contracts, such copies
to be certified as true and complete by an Authorized Officer of such
Assignor) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be
retained by such Assignor). If the Collateral Agent so directs while an
Event of Default is in existence, such Assignor shall legend, in form and
manner reasonably satisfactory to the Collateral Agent, the Receivables
and Contracts, as well as books, records and documents of such Assignor
evidencing or pertaining to the Receivables with an appropriate reference
to the fact that the Receivables and Contracts have been assigned to the
Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3 Modification of Terms; etc. No Assignor shall
rescind or cancel any indebtedness evidenced by any Receivable or under
any Contract, or modify any term thereof or make any adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or
sell any Receivable or Contract, or interest therein, without the prior
written consent of the Collateral Agent, except (i) as permitted by
Section 3.4 hereof and (ii) so long as no Event of Default is then in
existence, and absent prior written consent of the Collateral Agent, such
Assignor may modify, make adjustments with respect to, settle claims with
respect to, extend or renew any Contracts in the ordinary course of
business. Each Assignor will duly fulfill all obligations on its part to
be fulfilled under or in connection with the Receivables and Contracts
and will do nothing to impair the rights of the Collateral Agent in the
Receivables or Contracts.
3.4 Collection. Each Assignor shall endeavor to cause
to be collected from the account debtor named in each of its Receivables
or obligor under any Contract, as and when due (including, without
limitation, amounts which are delinquent, such amounts to be collected in
accordance with generally accepted lawful collection procedures) any and
all amounts owing under or on account of such Receivable or Contract, and
apply forthwith upon receipt thereof all such amounts as are so collected
to the outstanding balance of such Receivable or under such Contract,
except that, so long as no Event of Default has occurred and is
continuing, any Assignor may allow in the ordinary course of business as
adjustments to amounts owing under its Receivables and Contracts (i) an
extension or renewal of the time or times of payment, or settlement for
less than the total unpaid balance, which such Assignor finds appropriate
in accordance with its sound business judgment and (ii) a refund or
credit due as a result of returned or damaged merchandise or improperly
performed services. The costs and expenses (including, without
limitation, attorneys' fees) of collection, whether incurred by an
Assignor or the Collateral Agent, shall be borne by such Assignor.
3.5 Direction to Account Debtors; etc. Upon the
occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, to the extent permitted by
applicable law, such Assignor agrees (x) to cause all payments on account
of the Receivables to be made directly to the Cash Collateral Account,
(y) that the Collateral Agent may, at its option, directly notify the
obligors with respect to any Receivables to make payments with respect
thereto as provided in preceding clause (x) and (z) that the Collateral
Agent may enforce collection of any such Receivables and may adjust,
settle or compromise the amount of payment thereof. The Collateral Agent
may apply any or all amounts then in, or thereafter deposited in, the
Cash Collateral Account in the manner provided in Section 7.4 of this
Agreement. The costs and expenses (including attorneys' fees) of
collection, whether incurred by any Assignor or the Collateral Agent,
shall be borne by such Assignor.
3.6 Instruments. If any Assignor owns or acquires any
Instrument with a face value in excess of $500,000, such Assignor will
within 10 Business Days notify the Collateral Agent thereof, and upon
request by the Collateral Agent promptly deliver such Instrument to the
Collateral Agent appropriately endorsed to the order of the Collateral
Agent as further security hereunder.
3.7 Further Actions. Each Assignor will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such further steps relating to its
Receivables, Contracts, Instruments and other property or rights covered
by the security interest hereby granted, as the Collateral Agent may
reasonably require to give effect to the purposes of this Agreement.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1 Additional Representations and Warranties. Each
Assignor represents and warrants that it is the true and lawful owner of,
or otherwise has the right to use, the Marks listed on Annex D hereto and
that said listed Marks constitute all the marks registered in the United
States Patent and Trademark Office that such Assignor now owns or uses in
connection with its business. Each Assignor represents and warrants that
it owns, is licensed to use or otherwise has the right to use all Marks
that it uses. Each Assignor further warrants that it has no knowledge of
any third party claim that any aspect of such Assignor's present or
contemplated business operations infringes or will infringe any
trademark, service mark or trade name. Each Assignor represents and
warrants that it is the beneficial and record owner of all trademark
registrations and applications listed on Annex D hereto for such Assignor
and that said registrations are valid and subsisting, and that such
Assignor is not aware of any third-party claim that any of said
registrations is invalid or unenforceable, or is not aware that there is
any reason that any of said applications will not pass to registration.
4.2 Licenses and Assignments. Each Assignor hereby
agrees not to divest itself of any right under a Mark other than in the
ordinary course of business absent prior written approval of the
Collateral Agent.
4.3 Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name
and address of, and to furnish such pertinent information that may be
available with respect to, any party who such Assignor believes to be
infringing or diluting or otherwise violating any of such Assignor's
rights in and to any Mark, or with respect to any party claiming that
such Assignor's use of any Mark violates any property right of that third
party. Each Assignor further agrees, unless otherwise directed by the
Collateral Agent, diligently to prosecute any Person infringing any Mark.
4.4 Preservation of Marks. Each Assignor agrees to use
its material Marks in interstate commerce during the time in which this
Agreement is in effect, sufficiently to preserve such Marks (and any
registrations thereto) as trademarks or service marks registered under
the laws of the United States.
4.5 Maintenance of Registration. Each Assignor shall,
at its own expense, diligently process all documents required by the
Trademark Act of 1946, 15 U.S.C. ss.ss. 1051 et seq. to maintain
trademark registrations, including, but not limited to, affidavits of use
and applications for renewals of registration in the United States Patent
and Trademark Office, for all of its registered Marks pursuant to 15
U.S.C. ss.ss. 1058(a), 1059 and 1065, and shall pay all fees and
disbursements in connection therewith, and shall not abandon any such
filing of affidavit of use or any such application of renewal prior to
the exhaustion of all administrative and judicial remedies without prior
written consent of the Collateral Agent. Each Assignor agrees to notify
the Collateral Agent three months prior to the dates on which the
affidavits of use or the application for renewal registration are due
with respect to any registered Mark that the affidavits of use or the
renewal is being processed or abandoned as the case may be.
4.6 Future Registered Marks. If any Mark registration
issues hereafter to any Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office,
within 30 days of receipt of such certificate, such Assignor shall
deliver to the Collateral Agent a copy of such certificate, and an
assignment for security in such Mark, to the Collateral Agent and at the
expense of such Assignor, confirming the assignment for security in such
Mark to the Collateral Agent hereunder, the form of such security to be
substantially the same as the form hereof or in such other form as may be
reasonably satisfactory to the Collateral Agent.
4.7 Remedies. (a) If an Event of Default shall occur
and be continuing, the Collateral Agent may, by written notice to the
relevant Assignor, take any or all of the following actions: (i) declare
the entire right, title and interest of such Assignor in and to each of
the Marks, together with all trademark rights and rights of protection to
the same, vested, in which event such rights, title and interest shall
immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors pursuant to the assignment of security interest in trademarks
in the form of Annex G hereto, executed by such Assignor and filed on the
date hereof, pursuant to which all of such Assignor's rights, title and
interest in and to the Marks are assigned to the Collateral Agent for the
benefit of the Secured Creditors; (ii) take and use or sell the Marks and
the goodwill of such Assignor's business symbolized by the Marks and the
right to carry on the business and use the assets of such Assignor in
connection with which the Marks have been used; and (iii) direct such
Assignor to refrain, in which event such Assignor shall refrain, from
using the Marks in any manner whatsoever, directly or indirectly, and, if
requested by the Collateral Agent, change such Assignor's corporate name
to eliminate therefrom any use of any Mark and execute such other and
further documents that the Collateral Agent may request to further
confirm this and to transfer ownership of the Marks and registrations and
any pending trademark application in the United States Patent and
Trademark Office to the Collateral Agent.
(b) Each Assignor hereby grants to the Collateral Agent
an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by
the United States Patent and Trademark Office in order to effect an
absolute assignment of all right, title and interest in and to each Mark
and associated goodwill, and record the same.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS
5.1 Additional Representations and Warranties. Each
Assignor represents and warrants that it is the true and lawful owner of,
or otherwise has the right to use, all rights in (i) all trade secrets
and proprietary information necessary to operate the business of such
Assignor (the "Trade Secret Rights"), (ii) the Patents listed on Annex E
hereto and (iii) the Copyrights listed on Annex F hereto, that said
Patents constitute all the United States patents and applications for
patents that such Assignor now owns or is licensed to use and that said
Copyrights constitute all the United States registered copyrights that
such Assignor now owns or is licensed to use. Each Assignor represents
and warrants that it owns or is licensed to use all Patents and
Copyrights that it now owns or uses. Each Assignor further represents and
warrants that it has no knowledge of any third party claim that any
aspect of such Assignor's present or contemplated business operations
infringe or will infringe any patent or any copyright or misappropriates
any trade secret or proprietary information.
5.2 Licenses and Assignments. Each Assignor hereby
agrees not to divest itself of Trade Secret Rights or any right under a
Patent or Copyright other than in the ordinary course of business absent
prior written approval of the Collateral Agent.
5.3 Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all
pertinent information available to such Assignor with respect to any
infringement, contributing infringement or active inducement to infringe
any of such Assignor's rights in any Patent or Copyright, or with respect
to any claim that practice of any Patent or Copyright violates any
property right of a third party or with respect to any misappropriation
of any Trade Secret Rights or any claim that the practice of a Trade
Secret Right violates any property right of a third party. Each Assignor
further agrees, absent direction of the Collateral Agent to the contrary,
diligently to prosecute any Person infringing any Patent or Copyright or
misappropriating any Trade Secret Right.
5.4 Maintenance of Patents. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required
pursuant to 35 U.S.C. ss. 41 to maintain in force rights under each
Patent.
5.5 Prosecution of Patent Application. Other than with
respect to immaterial Patents which are not essential to the business of
the Borrower and its Subsidiaries, at its own expense, each Assignor
shall diligently prosecute all applications for United States patents
listed on Annex E hereto, and shall not abandon any such application
prior to exhaustion of all administrative and judicial remedies, absent
prior written consent of the Collateral Agent.
5.6 Other Patents and Copyrights. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a
Copyright, or acquisition of a registered Copyright, or of filing of an
application for a United States Patent or Copyright, the relevant
Assignor shall deliver to the Collateral Agent a copy of said Copyright
or certificate or registration of, or application therefor, said Patents,
as the case may be, with an assignment for security as to such Patent or
Copyright, as the case may be, to the Collateral Agent and at the expense
of such Assignor, confirming the assignment for security, the form of
such assignment for security to be substantially the same as the form
hereof or in such other form as may be reasonably satisfactory to the
Collateral Agent.
5.7 Remedies. (a) If an Event of Default shall occur
and be continuing, the Collateral Agent may by written notice to the
relevant Assignor take any or all of the following actions: (i) declare
the entire right, title and interest of such Assignor in each of the
Patents and Copyrights vested, in which event such right, title and
interest shall immediately vest in the Collateral Agent for the benefit
of the Secured Creditors, pursuant to the assignment of security interest
in Patents in the form of Annex H hereto, and the assignment of security
interest in Copyrights in the form of Annex I hereto, in each case,
executed by such Assignor and filed on the date hereof, pursuant to which
all of such Assignor's right, title, and interest to such Patents and
Copyrights are assigned to the Collateral Agent for the benefit of the
Secured Creditors; (ii) take and practice or sell the Patents and
Copyrights; (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from practicing the Patents and Copyrights
directly or indirectly, and such Assignor shall execute such other and
further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the
Collateral Agent for the benefit of the Secured Creditors.
(b) Each Assignor hereby grants to the Collateral Agent
an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by
the United States Patent and Trademark Office in order to effect an
absolute assignment of all right, title and interest in and to each
Patent, and record the same.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1 Protection of Collateral Agent's Security. Each
Assignor will do nothing (except as otherwise expressly permitted herein)
to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in
favor of the Collateral Agent, at its own expense, to the extent required
by the Credit Agreement; all policies or certificates with respect to
such insurance shall be endorsed to the Collateral Agent's satisfaction
for the benefit of the Collateral Agent (including, without limitation,
by naming the Collateral Agent as loss payee). If any Assignor shall fail
to insure such Inventory and Equipment to the extent required by the
Credit Agreement, or if any Assignor shall fail to so endorse and deposit
all policies or certificates with respect thereto, the Collateral Agent
shall have the right (but shall be under no obligation) to procure such
insurance and such Assignor agrees to reimburse the Collateral Agent for
all costs and expenses of procuring such insurance. The Collateral Agent
may apply any proceeds of such insurance required after an Event of
Default in accordance with Section 7.4 hereof or in accordance with the
Credit Agreement. Each Assignor assumes all liability and responsibility
in connection with the Collateral acquired by it and the liability of
such Assignor to pay its Obligations shall in no way be affected or
diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to
such Assignor.
6.2 Warehouse Receipts Non-negotiable. Each Assignor
agrees that if any warehouse receipt or receipt in the nature of a
warehouse receipt is issued with respect to any of its Inventory, such
warehouse receipt or receipt in the nature thereof shall not be
"negotiable" (as such term is used in Section 7-104 of the Uniform
Commercial Code as in effect in any relevant jurisdiction or under other
relevant law).
6.3 Further Actions. Each Assignor will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such lists, descriptions and
designations of its Collateral, warehouse receipts, receipts in the
nature of warehouse receipts, bills of lading, documents of title,
vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such
further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral
Agent deems reasonably appropriate or advisable to perfect, preserve or
protect its security interest in the Collateral.
6.4 Financing Statements. Each Assignor agrees to sign
and deliver to the Collateral Agent such financing statements, in form
acceptable to the Collateral Agent, as the Collateral Agent may from time
to time request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first
priority perfected security interest in the Collateral as provided herein
and the other rights and security contemplated hereby all in accordance
with the Uniform Commercial Code as enacted in any and all relevant
jurisdictions or any other relevant law. Each Assignor will pay any
applicable filing fees and related expenses. Each Assignor authorizes the
Collateral Agent to file any such financing statements without the
signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1 Remedies; Obtaining the Collateral Upon Default.
Each Assignor agrees that, if any Event of Default shall have occurred
and be continuing, then and in every such case, subject to any mandatory
requirements of applicable law then in effect, the Collateral Agent, in
addition to any rights now or hereafter existing under applicable law,
shall have all rights as a secured creditor under the Uniform Commercial
Code in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately
take possession of the Collateral or any part thereof, from such
Assignor or any other Person who then has possession of any part
thereof with or without notice or process of law, and for that
purpose may enter upon such Assignor's premises where any of the
Collateral is located and remove the same and use in connection
with such removal any and all services, supplies, aids and other
facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation,
the Receivables and the Contracts) constituting the Collateral
to make any payment required by the terms of such instrument or
agreement directly to the Collateral Agent and may exercise any
and all remedies of such Assignor in respect of such collateral;
(iii) withdraw all moneys, securities and other
instruments in the Cash Collateral Account for application to
the Obligations in accordance with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate, or direct
such Assignor to sell, assign or otherwise liquidate, any or all
of the Collateral or any part thereof in accordance with Section
7.2 hereof, and take possession of the proceeds of any such sale
or liquidation;
(v) take possession of the Collateral or any part
thereof, by directing such Assignor in writing to deliver the
same to the Collateral Agent at any place or places designated
by the Collateral Agent, in which event such Assignor shall at
its own expense:
(A) forthwith cause the same to be moved to
the place or places so designated by the Collateral
Agent and there delivered to the Collateral Agent,
(B) store and keep any Collateral so delivered
to the Collateral Agent at such place or places pending
further action by the Collateral Agent as provided in
Section 7.2 hereof, and
(C) while the Collateral shall be so stored
and kept, provide such guards and maintenance services
as shall be necessary to protect the same and to
preserve and maintain them in good condition; and
(vi) license or sublicense whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in
the Collateral for such term and on such conditions and in such
manner as the Collateral Agent shall in its sole judgment
determine;
it being understood that such Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly,
upon application to a court of equity having jurisdiction, the Collateral
Agent shall be entitled to a decree requiring specific performance by
such Assignor of said obligation. The Secured Creditors agree that this
Agreement may be enforced only by the action of the Administrative Agent
or the Collateral Agent, in each case acting upon the instructions of the
Required Banks (or, after the date on which all Credit Agreement
Obligations have been paid in full, the holders of at least the majority
of the outstanding Interest Rate Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to
enforce this Agreement or to realize upon the security to be granted
hereby, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the Collateral Agent or the
holders of at least a majority of the outstanding Interest Rate
Obligations, as the case may be, for the benefit of the Secured Creditors
upon the terms of this Agreement.
7.2 Remedies; Disposition of the Collateral. Upon the
occurrence and continuance of an Event of Default, any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1
hereof and any other Collateral whether or not so repossessed by the
Collateral Agent, may be sold, assigned, leased or otherwise disposed of
under one or more contracts or as an entirety, and without the necessity
of gathering at the place of sale the property to be sold, and in general
in such manner, at such time or times, at such place or places and on
such terms as the Collateral Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable.
Any of the Collateral may be sold, leased or otherwise disposed of, in
the condition in which the same existed when taken by the Collateral
Agent or after any overhaul or repair (at the expense of the relevant
Assignor) which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other
private proceedings permitted by such requirements shall be made upon not
less than ten (10) days' written notice to the relevant Assignor
specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be
subject, for the ten (10) days after receipt of such notice, to the right
of the relevant Assignor or any nominee of such Assignor to acquire the
Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any
such disposition which shall be a public sale permitted by such
requirements shall be made upon not less than ten (10) days' written
notice to the relevant Assignor specifying the time and place of such
sale and, in the absence of applicable requirements of law, shall be by
public auction (which may, at the Collateral Agent's option, be subject
to reserve), after publication of notice of such auction not less than 10
days prior thereto in two newspapers in general circulation in the City
of New York. To the extent permitted by any such requirement of law, the
Collateral Agent on behalf of the Secured Creditors may bid for and
become the purchaser of the Collateral or any item thereof, offered for
sale in accordance with this Section 7.2 without accountability (other
than with respect to the payment of the purchase price with respect
thereto) to the relevant Assignor. If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make
disposition of the Collateral within a period of time which does not
permit the giving of notice to the relevant Assignor as hereinabove
specified, the Collateral Agent need give such Assignor only such notice
of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law. Each Assignor agrees to do or
cause to be done all such other acts and things as may be reasonably
necessary to make such sale or sales of all or any portion of the
Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrations or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such
sale or sales, all at such Assignor's expense.
7.3 Waiver of Claims. Except as otherwise provided in
this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE
COLLATERAL AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S
DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY
AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES
AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
such Assignor hereby further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the Collateral
Agent's gross negligence or willful misconduct;
(ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the
enforcement of the Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in
force under any applicable law in order to prevent or delay the
enforcement of this Agreement or the absolute sale of the
Collateral or any portion thereof, and each Assignor, for itself
and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such
laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the
relevant Assignor therein and thereto, and shall be a perpetual bar both
at law and in equity against such Assignor and against any and all
Persons claiming or attempting to claim the Collateral so sold, optioned
or realized upon, or any part thereof, from, through and under such
Assignor.
7.4 Application of Proceeds. (a) All moneys collected
by the Collateral Agent (or, to the extent the Mortgages or Additional
Mortgages require proceeds of collateral under such Security Documents to
be applied in accordance with the provisions of this Agreement, the
Mortgagee under such Mortgage or Additional Mortgage) upon any sale or
other disposition of the Collateral, together with all other moneys
received by the Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing to
the Collateral Agent of the type described in clauses (iii) and
(iv) of the definition of "Obligation" contained in Article IX
hereof;
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount
equal to the outstanding Primary Obligations shall be paid to
the Secured Creditors as provided in Section 7.4(e) hereof, with
each Secured Creditor receiving an amount equal to such
outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full all such Primary Obligations, its
Pro Rata Share of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an
amount equal to the outstanding Secondary Obligations shall be
paid to the Secured Creditors as provided in Section 7.4(e)
hereof, with each Secured Creditor receiving an amount equal to
its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its
Pro Rata Share of the amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement
pursuant to Section 10.9(a) hereof, to the relevant Assignor or
to whomever may be lawfully entitled to receive such surplus.
(b) For purposes of this Agreement, (x) "Pro Rata
Share" shall mean, when calculating a Secured Creditor's portion of any
distribution or amount, that amount (expressed as a percentage) equal to
a fraction the numerator of which is the then unpaid amount of such
Secured Creditor's Primary Obligations or Secondary Obligations, as the
case may be, and the denominator of which is the then outstanding amount
of all Primary Obligations or Secondary Obligations, as the case may be,
(y) "Primary Obligations" shall mean (i) in the case of the Credit
Agreement Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings (together with all interest accrued thereon), and the
aggregate Stated Amounts of all Letters of Credit issued (or deemed
issued) under the Credit Agreement, and all Fees and (ii) in the case of
the Interest Rate Obligations, all amounts due under the Interest Rate
Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z)
"Secondary Obligations" shall mean all Obligations other than (i) Primary
Obligations and (ii) those referred to in Section 7.4(a)(i).
(c) When payments to the Secured Creditors are based
upon their respective Pro Rata Shares, the amounts received by such
Secured Creditors hereunder shall be applied (for purposes of making
determinations under this Section 7.4 only) (i) first, to their Primary
Obligations and (ii) second, to their Secondary Obligations. If any
payment to any Secured Creditor of its Pro Rata Share of any distribution
would result in overpayment to such Secured Creditor, such excess amount
shall instead be distributed in respect of the unpaid Primary Obligations
or Secondary Obligations, as the case may be, of the other Secured
Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to
receive an amount equal to such excess amount multiplied by a fraction
the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the
denominator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of all Secured Creditors entitled to
such distribution.
(d) Each of the Secured Creditors agrees and
acknowledges that if the Bank Creditors are to receive a distribution on
account of undrawn amounts with respect to Letters of Credit issued (or
deemed issued) under the Credit Agreement (which shall only occur after
all outstanding Loans and Unpaid Drawings with respect to such Letters of
Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the
equal and ratable benefit of the Bank Creditors, as cash security for the
repayment of Obligations owing to the Bank Creditors as such. If any
amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit,
and after the application of all such cash security to the repayment of
all Obligations owing to the Bank Creditors after giving effect to the
termination of all such Letters of Credit, if there remains any excess
cash, such excess cash shall be returned by the Administrative Agent to
the Collateral Agent for distribution in accordance with Section 7.4(a)
hereof.
(e) Except as set forth in Section 7.4(d) hereof, all
payments required to be made hereunder shall be made (x) if to the Bank
Creditors, to the Administrative Agent under the Credit Agreement for the
account of the Bank Creditors and (y) if to the Interest Rate Creditors,
to the trustee paying agent or other similar representative (each a
"Representative") for the Interest Rate Creditors or in the absence of
such a representative, directly to the Interest Rate Creditors.
(f) For purposes of applying payments received in
accordance with this Section 7.4, the Collateral Agent shall be entitled
to rely upon (i) the Administrative Agent under the Credit Agreement and
the Secured Creditors agree (or shall agree) to provide upon request of
the Collateral Agent a statement of the outstanding Primary Obligations
and Secondary Obligations owed to the Bank Creditors or the Interest Rate
Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Interest Rate
Creditor) to the contrary, the Administrative Agent and each
Representative, in furnishing information pursuant to the preceding
sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that no Secondary Obligations are outstanding. Unless
it has actual knowledge (including by way of written notice from an
Interest Rate Creditor) to the contrary, the Collateral Agent, or acting
hereunder, shall be entitled to assume that no Interest Rate Agreements
are in existence.
(g) (i) It is understood that the Assignors shall
remain jointly and severally liable to the extent of any deficiency
between the amount of the proceeds of the Collateral and the amount of
the sum referred to in clause (a) of this Section 7.4 with respect to the
relevant Assignor.
7.5 Remedies Cumulative. Each and every right, power
and remedy hereby specifically given to the Collateral Agent shall be in
addition to every other right, power and remedy specifically given under
this Agreement, any Interest Rate Agreement or the other Credit Documents
or now or hereafter existing at law or in equity, or by statute and each
and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously
and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of exercise of one shall not
be deemed a waiver of the right to exercise of any other or others. No
delay or omission of the Collateral Agent in the exercise of any such
right, power or remedy and no renewal or extension of any of the
Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an
acquiescence therein. In the event that the Collateral Agent shall bring
any suit to enforce any of its rights hereunder and shall be entitled to
judgment, then in such suit the Collateral Agent may recover reasonable
expenses, including attorneys' fees, and the amounts thereof shall be
included in such judgment.
7.6 Discontinuance of Proceedings. In case the
Collateral Agent shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement by foreclosure, sale, entry
or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Collateral Agent, then and in every such case the relevant Assignor, the
Collateral Agent and each holder of any of the Obligations shall be
restored to their former positions and rights hereunder with respect to
the Collateral subject to the security interest created under this
Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1 Indemnity. (a) Each Assignor jointly and severally
agrees to indemnify, reimburse and hold the Collateral Agent, each other
Secured Creditor and their respective successors, assigns, employees,
officers, affiliates, agents and servants (hereinafter in this Section
8.1 referred to individually as "Indemnitee," and collectively as
"Indemnitees") harmless from any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, suits, judgments
and any and all costs and expenses (including reasonable attorneys' fees
and expenses) (for the purposes of this Section 8.1 the foregoing are
collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, or in any other way
connected with the enforcement of any of the terms of, or the
preservation of any rights hereunder, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition,
sale, return or other disposition, or use of the Collateral (including,
without limitation, latent or other defects, whether or not
discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation,
claims arising or imposed under the doctrine of strict liability, or for
or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that no
Indemnitee shall be indemnified pursuant to this Section 8.1(a) for
losses, damages or liabilities to the extent caused by the gross
negligence or willful misconduct of such Indemnitee. Each Assignor agrees
that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, loss, damage, penalty, claim, demand, action,
judgment or suit, such Assignor shall assume full responsibility for the
defense thereof.
(b) Without limiting the application of Section 8.1(a)
hereof, each Assignor jointly and severally agrees to pay, or reimburse
the Collateral Agent for (if the Collateral Agent shall have incurred
fees, costs or expenses because such Assignor shall have failed to comply
with its obligations under this Agreement or any Credit Document), any
and all fees, costs and expenses of whatever kind or nature incurred in
connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices,
payment or discharge of any taxes or Liens upon or in respect of the
Collateral, premiums for insurance with respect to the Collateral and all
other fees, costs and expenses in connection with protecting, maintaining
or preserving the Collateral and the Collateral Agent's interest therein,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating
to the Collateral.
(c) Without limiting the application of Section 8.1(a)
or (b), each Assignor agrees to pay, indemnify and hold each Indemnitee
harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by such Assignor in this Agreement, any
Interest Rate Agreement, any other Credit Document or in any writing
contemplated by or made or delivered by or on behalf of such Assignor
pursuant to or in connection with this Agreement, any Interest Rate
Agreement or any other Credit Document.
(d) If and to the extent that the obligations of any
Assignor under this Section 8.1 are unenforceable for any reason, such
Assignor hereby agrees to make the maximum contribution to the payment
and satisfaction of such obligations which is permissible under
applicable law.
8.2 Indemnity Obligations Secured by Collateral;
Survival. Any amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement shall constitute Obligations secured by
the Collateral until such time as the Collateral is released in
accordance with Section 10.9. The indemnity obligations of each Assignor
contained in this Article VIII shall continue in full force and effect
notwithstanding the full payment of all the Notes issued under the Credit
Agreement, the termination of the Interest Rate Agreements and the
payment of all of the other Obligations and notwithstanding the discharge
thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein
specified unless the context otherwise requires. Such definitions shall
be equally applicable to the singular and plural forms of the terms
defined.
"Agreement" shall mean this Security Agreement as the
same may be modified, supplemented or amended from time to time in
accordance with its terms.
"Assignor" shall have the meaning specified in the
first paragraph of this Agreement.
"Bank Creditor" shall have the meaning provided in the
first WHEREAS clause of this Agreement.
"Business Day" means any day excluding Saturday, Sunday
and any day which shall be in the City of New York a legal holiday or a
day on which banking institutions are authorized by law to close.
"Cash Collateral Account" shall mean a non-interest
bearing cash collateral account maintained with, and in the sole dominion
and control of, the Collateral Agent for the benefit of the Secured
Creditors.
"Chattel Paper" shall have the meaning assigned that
term under the Uniform Commercial Code as in effect on the date hereof in
the State of New York or under other relevant law.
"Class" shall have the meaning provided in Section 10.2
hereof.
"Collateral" shall have the meaning provided in Section
1.1(a).
"Collateral Agent" shall have the meaning specified in
the first paragraph of this Agreement.
"Contract Rights" shall mean all rights of an Assignor
(including, without limitation, all rights to payment) under each
Contract.
"Contracts" shall mean all contracts between an
Assignor and one or more additional parties.
"Copyrights" shall mean any United States copyright to
which an Assignor now or hereafter has title, including any registration
of any copyright in the United States Copyright Office as well as any
application for a United States copyright registration now or hereafter
made by an Assignor.
"Credit Agreement" shall have the meaning provided in
the first WHEREAS clause of this Agreement.
"Credit Agreement Obligations" shall have the meaning
provided in the definition of "Obligations" in this Article IX.
"Documents" shall have the meaning assigned that term
under the Uniform Commercial Code as in effect on the date hereof in the
State of New York or under other relevant law.
"Equipment" shall mean any "equipment," as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in
the State of New York or under other relevant law, now or hereafter owned
by any Assignor and, in any event, shall include, but shall not be
limited to, all machinery, equipment, furnishings, movable trade fixtures
and vehicles now or hereafter owned by any Assignor and any and all
additions, substitutions and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default
under, and as defined in, the Credit Agreement or any payment default by
the Borrower under any Interest Rate Agreement.
"Excluded Contracts" shall mean one or more Contracts
which by their terms would be breached by the grant of the security
interests created therein pursuant to the terms of this Agreement (it
being understood and agreed, however, that notwithstanding the foregoing,
all rights to payment for money due or to become due pursuant to any
Excluded Contract shall be subject to the security interests created
pursuant to this Agreement).
"Financial Asset" shall have the meaning assigned that
term under the Uniform Commercial Code as in effect on the date hereof in
the State of New York or under other relevant law.
"General Intangibles" shall have the meaning assigned
that term under the Uniform Commercial Code as in effect on the date
hereof in the State of New York or under other relevant law.
"Goods" shall have the meaning assigned that term under
the Uniform Commercial Code as in effect on the date hereof in the State
of New York or under other relevant law.
"Indemnitee" shall have the meaning provided in Section
8.1 hereof.
"Instrument" shall have the meaning assigned that term
under the Uniform Commercial Code as in effect on the date hereof in the
State of New York or under other relevant law.
"Interest Rate Creditors" shall have the meaning
provided in the second WHEREAS clause of this Agreement.
"Interest Rate Obligations" shall have the meaning
provided in the definition of "Obligations" in this Article IX.
"Inventory" shall mean merchandise, inventory and
goods, and all additions, substitutions and replacements thereof,
wherever located, together with all goods, supplies, incidentals,
packaging materials, labels, materials and any other items used or usable
in manufacturing, processing, packaging or shipping same; in all stages
of production -- from raw materials through work-in-process to finished
goods -- and all products and proceeds of whatever sort and wherever
located and any portion thereof which may be returned, rejected,
reclaimed or repossessed by the Collateral Agent from an Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in
the State of New York or under other relevant law, now or hereafter owned
by an Assignor.
"Investment Property" shall have the meaning assigned
that term under the Uniform Commercial Code as in effect on the date
hereof in the State of New York or under other relevant law.
"Liens" shall mean any security interest, mortgage,
pledge, lien, claim, charge, encumbrance, title retention agreement,
lessor's interest in a financing lease or analogous instrument, in, of,
or on an Assignor's property.
"Marks" shall mean any trademarks and service marks now
held or hereafter acquired by an Assignor, including any registration of
or application for any trademarks or service marks in the United States
Patent and Trademark Office, as well as any unregistered trademarks and
service marks used by an Assignor in the United States and any trade
dress including logos and/or designs used by an Assignor in the United
States.
"Obligations" shall mean (i) the full and prompt
payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations (including, without limitation, obligations
which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due), liabilities and indebtedness (including, without
limitation, indemnities, Fees and interest) of each Assignor, now
existing or hereafter incurred under, arising out of or in connection
with any Credit Document to which such Assignor is a party and the due
performance and compliance by such Assignor with the terms, conditions
and agreements contained in each such Credit Document (all such
obligations, liabilities and indebtedness under this clause (i), except
to the extent consisting of obligations, liabilities or indebtedness with
respect to Interest Rate Agreements, being herein collectively called the
"Credit Agreement Obligations"); (ii) the full and prompt payment when
due (whether at the stated maturity by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due),
liabilities and indebtedness of each Assignor, now existing or hereafter
incurred under, arising out of or in connection with any Interest Rate
Agreement whether such Interest Rate Agreement is now in existence or
hereafter arising, and the due performance and compliance by such
Assignor with all of the terms, conditions and agreements contained
therein (all such obligations, indebtedness and indebtedness under this
clause (ii) being herein collectively called the "Interest Rate
Obligations"); (iii) any and all sums advanced by the Collateral Agent in
order to preserve the Collateral or preserve its security interest in the
Collateral; (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of each
Assignor referred to in clauses (i), (ii) and (iii), after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable
attorneys' fees and court costs; and (v) all amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement
under Section 8.1 of this Agreement.
"Patents" shall mean any United States patent to which
an Assignor now or hereafter has title, including any divisions,
continuations, reissues, reexaminations, extensions and renewals thereof,
as well as any application for a United States patent now or hereafter
made by an Assignor.
"Pledged Securities" shall have the meaning provided
that term in the Pledge Agreement.
"Primary Obligations" shall have the meaning provided
in Section 7.4(b) hereof.
"Proceeds" shall have the meaning assigned that term
under the Uniform Commercial Code as in effect in the State of New York
on the date hereof or under other relevant law and, in any event, shall
include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Collateral
Agent or any Assignor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or
due and payable to an Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any governmental authority (or any person
acting under color of governmental authority) and (iii) any and all other
amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Pro Rata Share" shall have the meaning provided in
Section 7.4(b) hereof.
"Receivables" shall mean any "account" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in
the State of New York or under other relevant law, now or hereafter owned
by an Assignor and, in any event, shall include, but shall not be limited
to, all of such Assignor's rights to payment for equipment or goods sold
or leased or rented or services performed by such Assignor, whether now
in existence or arising from time to time hereafter, including, without
limitation, rights evidenced by an account, note, contract, security
agreement, chattel paper, or other evidence of indebtedness or security,
together with (a) all security pledged, assigned, hypothecated or granted
to or held by such Assignor to secure the foregoing, (b) all of such
Assignor's right, title and interest in and to any goods, the sale of
which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of
attorney for the execution of any evidence of indebtedness or security or
other writing in connection therewith, (e) all books, records, ledger
cards, and invoices relating thereto, (f) all notices to other creditors
or secured parties, and certificates from filing or other registration
officers, (g) all credit information, reports and memoranda relating
thereto, and (h) all other writings related in any way to the foregoing.
"Representative" shall have the meaning provided in
Section 7.4(e) hereof.
"Requisite Creditors" shall have the meaning provided
in Section 10.2 hereof.
"Secondary Obligations" shall have the meaning provided
in Section 7.4(b) hereof.
"Secured Creditors" shall have the meaning provided in
the second WHEREAS clause of this Agreement.
"Trade Secret Rights" shall have the meaning provided
in Section 5.1 of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the
respective parties hereto shall be deemed to have been duly given or made
when delivered to the party to which such notice, request, demand or
other communication is required or permitted to be given or made under
this Agreement, addressed to such party at its address set forth opposite
its signature below, or at such other address as any of the parties
hereto may hereafter notify the others in writing.
10.2 Waiver; Amendment. (a) None of the terms and
conditions of this Agreement may be changed, waived, modified or varied
in any manner whatsoever unless in writing duly signed by each Assignor
directly affected thereby and the Collateral Agent (with the consent of
the Required Banks or, to the extent required by Section 12.12 of the
Credit Agreement, all of the Banks), provided, however that no such
change, waiver, modification or variance shall be made to Section 7.4
hereof or this Section 10.2(a) without the consent of each Secured
Creditor adversely affected thereby, provided further that any change,
waiver, modification or variance affecting the rights and benefits of a
single Class of Secured Creditors (and not all Secured Creditors in a
like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of Secured Creditors. For the purpose
of this Agreement, the term "Class" shall mean each class of Secured
Creditors, i.e., whether (x) the Bank Creditors as holders of the Credit
Agreement Obligations or (y) the Interest Rate Creditors as holders of
the Interest Rate Obligations. For the purpose of this Agreement, the
term "Requisite Creditors" of any Class shall mean each of (x) with
respect to the Credit Agreement Obligations, the Required Banks and (y)
with respect to the Interest Rate Obligations, the holders of Interest
Rate Obligations which constitute holders of a majority of all
obligations outstanding from time to time under the Interest Rate
Agreements.
(b) No delay on the part of the Collateral Agent in
exercising any of its rights, remedies, powers and privileges hereunder
or partial or single exercise thereof, shall constitute a waiver thereof.
No notice to or demand on any Assignor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances
or constitute a waiver of any of the rights of the Collateral Agent to
any other or further action in any circumstances without notice or
demand.
10.3 Obligations Absolute. The obligations of each
Assignor hereunder shall remain in full force and effect without regard
to, and shall not be impaired by, (a) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or
the like of any Assignor; (b) any exercise or non-exercise, or any waiver
of, any right, remedy, power or privilege under or in respect of this
Agreement or any other Credit Document or any Interest Rate Agreement; or
(c) any amendment to or modification of any Credit Document or any
Interest Rate Agreement or any security for any of the Obligations;
whether or not any Assignor shall have notice or knowledge of any of the
foregoing. The rights and remedies of the Collateral Agent herein
provided are cumulative and not exclusive of any rights or remedies which
the Collateral Agent would otherwise have.
10.4 Successors and Assigns. This Agreement shall be
binding upon each Assignor and its successors and assigns and shall inure
to the benefit of the Collateral Agent (for the benefit of the Secured
Creditors) and its permitted successors and assigns, provided that no
Assignor may transfer or assign any or all of its rights or obligations
hereunder without the written consent of the Collateral Agent. All
agreements, statements, representations and warranties made by such
Assignor herein or in any certificate or other instrument delivered by
each Assignor or on its behalf under this Agreement shall be considered
to have been relied upon by the Secured Creditors and shall survive the
execution and delivery of this Agreement and the other Credit Documents
regardless of any investigation made by the Secured Creditors on their
behalf.
10.5 Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of
this Agreement.
10.6 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 provision in any other
jurisdiction.
10.7 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.8 Assignor's Duties. It is expressly agreed,
notwithstanding anything herein contained to the contrary, that each
Assignor shall remain liable to perform all of the obligations, if any,
assumed by it with respect to the Collateral and the Collateral Agent
shall not have any obligations or liabilities with respect to any
Collateral by reason of or arising out of this Agreement, nor shall the
Collateral Agent be required or obligated in any manner to perform or
fulfill any of the obligations of any Assignor under or with respect to
any Collateral.
10.9 Termination; Release. (a) After the termination of
the Total Revolving Commitment and each Interest Rate Agreement, when no
Note or Letter of Credit is outstanding and when all Loans and other
Obligations have been paid in full, this Agreement shall terminate, and
the Collateral Agent, at the request and expense of the relevant
Assignor, will execute and deliver to such Assignor a proper instrument
or instruments (including Uniform Commercial Code termination statements
on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Collateral Agent and as has
not theretofore been sold or otherwise applied or released pursuant to
this Agreement.
(b) So long as no payment default on any of the
Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of
the Assignors, release any or all of the Collateral, provided that (x)
such release is permitted by the terms of the Credit Agreement (it being
agreed for such purposes that a release will be deemed "permitted by the
terms of the Credit Agreement" if the proposed transaction is permitted
by Section 8.02 of the Credit Agreement) or otherwise has been approved
in writing by the Required Banks or, to the extent required by Section
12.12 of the Credit Agreement, all of the Banks and (y) the proceeds of
such Collateral are applied as required pursuant to the Credit Agreement
or any consent or waiver with respect thereto.
(c) At any time that the relevant Assignor desires that
the Collateral Agent take any action to give effect to any release of
Collateral pursuant to the foregoing Section 10.9(a) or (b), it shall
deliver to the Collateral Agent a certificate signed by an authorized
officer stating that the release of the respective Collateral is
permitted pursuant to Section 10.9(a) or (b). In the event that any part
of the Collateral is released as provided in the preceding paragraph (b),
the Collateral Agent, at the request and expense of such Assignor, will
duly assign, transfer and deliver to such Assignor or its designee
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or otherwise disposed
of and as may be in the possession of the Collateral Agent and has not
theretofore been released pursuant to this Agreement. The Collateral
Agent shall have no liability whatsoever to any Secured Creditor as the
result of any release of Collateral by it as permitted by this Section
10.9. Upon any release of Collateral pursuant to Section 10.9(a) or (b),
none of the Secured Creditors shall have any continuing right or interest
in such Collateral, or the proceeds thereof.
10.10 Collateral Agent. By accepting the benefits of
this Agreement, each Secured Creditor acknowledges and agrees that the
rights and obligations of the Collateral Agent shall be as set forth in
Section 11 of the Credit Agreement. Notwithstanding anything to the
contrary contained in Section 10.2 of this Agreement or Section 12.12 of
the Credit Agreement, this Section 10.10, and the duties and obligations
of the Collateral Agent set forth in this Section 10.10, may not be
amended or modified without the consent of the Collateral Agent.
10.11 Additional Assignors. It is understood and agreed
that any Subsidiary of the Borrower that is required to execute a
counterpart of this Agreement after the date hereof pursuant to the
Credit Agreement shall automatically become an Assignor hereunder by
executing a counterpart hereof and delivering the same to the Collateral
Agent.
10.12 Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall
be an original, but all of which shall together constitute one and the
same instrument. A set of counterparts executed by all the parties hereto
shall be lodged with the Borrower and the Collateral Agent.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers
as of the date first above written.
Addresses:
1250 Northland Plaza UNIVERSAL HOSPITAL SERVICES, INC.,
3800 West 80th Street as an Assignor
Bloomington, MN 55431-4442
Attention: Gerry Brandt,
Chief Executive Officer By_______________________________
Tel: (612) 893-3255 Title:
Fax: (612) 893-3237
Accepted and Agreed to:
Bankers Trust Company BANKERS TRUST COMPANY,
130 Liberty Street as Collateral Agent
New York, New York 10006
Attention: David Bell
Tel: (212) 250-9048 By________________________
Fax: (212) 250-7218 Title:
Annex A
TO
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE
OFFICES AND RECORD LOCATIONS
Address County/State
Annex B
TO
SECURITY AGREEMENT
SCHEDULE OF EQUIPMENT
AND INVENTORY LOCATIONS
Address County/State
Annex C
TO
SECURITY AGREEMENT
LIST OF TRADE AND FICTITIOUS NAMES
Name Jurisdiction Where Used
ANNEX D
TO
SECURITY AGREEMENT
SCHEDULE OF MARKS
Trademark Name TM Number Type of TM Issue Date Expiration Date
-------------- --------- --------- ---------- ---------------
Annex E
TO
SECURITY AGREEMENT
SCHEDULE OF PATENTS AND APPLICATIONS
U.S. Patent No. Description Issue Date Expiration Date
Annex F
TO
SECURITY AGREEMENT
LIST OF COPYRIGHTS AND APPLICATIONS
REGISTRATION NUMBERS PUBLICATION DATE COPYRIGHT TITLE
ANNEX G
TO
SECURITY AGREEMENT
FORM OF GRANT OF SECURITY
INTEREST IN TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, ________________________, a
________ corporation (the "Grantor") with principal offices at
_________________________, hereby grants to Bankers Trust Company, as
Collateral Agent (the "Grantee") with principal offices at One Bankers
Trust Plaza, 130 Liberty Street, New York, New York 10006, a security
interest in (i) all of the Grantor's right, title and interest in and to
the trademarks, trademark registrations and trademark applications (the
"Marks") set forth on Schedule A attached hereto, in each case together
with (ii) all Proceeds (as such term is defined in the Security Agreement
referred to below) of the Marks, (iii) all causes of action arising prior
to or after the date hereof for infringement of any of the Marks or
unfair competition regarding the same, and (iv) the goodwill of the
business with which the Marks are associated.
THIS GRANT, effective as of _________, ____, is made to
secure the satisfactory performance and payment of all the Obligations of
the Grantor, as such term is defined in the Security Agreement among the
Grantor, the other assignors from time to time party thereto and the
Grantee, dated as of February 25, 1998 (as amended from time to time, the
"Security Agreement"). Upon the occurrence of the termination of the
Security Agreement pursuant to the terms thereof, the Grantee shall, upon
such satisfaction, execute, acknowledge, and deliver to the Grantor an
instrument in writing releasing the security interest in the Marks
acquired under this Grant.
This Grant has been granted in conjunction with the
security interest granted to the Grantee under the Security Agreement.
The rights and remedies of the Grantee with respect to the security
interest granted herein are without prejudice to, and are in addition to,
those set forth in the Security Agreement, all of the terms and
provisions of which are incorporated herein by reference. In the event
that any provisions of this Grant are deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall
govern.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the ____ day of ________, ____.
[NAME OF GRANTOR]
as Grantor,
By_________________________
Title:
BANKERS TRUST COMPANY,
as Collateral Agent and as Grantee
By__________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________, ____, before me
personally came _________________ who, being by me duly sworn, did state
as follows: that [s]he is the [title of signatory] of [Name of Grantor],
that [s]he is authorized to execute the foregoing Grant on behalf of said
corporation and that [s]he did so by authority of the Board of Directors
of said corporation.
-------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________, ____, before me
personally came _________________ who, being by me duly sworn, did state
as follows: that [s]he is the [title of signatory] of BANKERS TRUST
COMPANY, that [s]he is authorized to execute the foregoing Grant on
behalf of said company and that [s]he did so by authority of said
company.
-------------------------
Notary Public
SCHEDULE A
Trademarks and Trademark Applications
Owned By [Name of Grantor]
Trademark Name TM Number Type of TM. Issue Date Expiration Date
- -------------- --------- ---------- ---------- ---------------
ANNEX H
TO
SECURITY AGREEMENT
GRANT OF SECURITY INTEREST
IN PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, ______________, a
___________ corporation, (the "Grantor") with principal offices at
_______________________________, hereby grants to Bankers Trust Company,
as Collateral Agent (the "Grantee") with principal offices at One Bankers
Trust Plaza, 130 Liberty Street, New York, New York 10006, a security
interest in (i) all of the Grantor's right, title and interest in and to
the patents and patent applications (the "Patents") set forth on Schedule
A attached hereto, in each case together with (ii) all Proceeds (as such
term is defined in the Security Agreement referred to below) of the
Patents and (iii) all causes of action arising prior to or after the date
hereof for infringement of any of the Patents or unfair competition
regarding the same.
THIS GRANT, effective as of ________, ____, is made to
secure the satisfactory performance and payment of all the Obligations of
the Grantor, as such term is defined in the Security Agreement among
Grantor, the other assignors from time to time party thereto and the
Grantee, dated as of February 25, 1998 (as amended from time to time, the
"Security Agreement"). Upon the occurrence of the termination of the
Security Agreement pursuant to the terms thereof, the Grantee shall, upon
such satisfaction, execute, acknowledge, and deliver to the Grantor an
instrument in writing releasing the security interest in the Patents
acquired under this Grant.
This Grant has been granted in conjunction with the
security interest granted to the Grantee under the Security Agreement.
The rights and remedies of the Grantee with respect to the security
interest granted herein are without prejudice to, and are in addition to
those set forth in, the Security Agreement, all of the terms and
provisions of which are incorporated herein by reference. In the event
that any provisions of this Grant are deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall
govern.
IN WITNESS WHEREOF, the undersigned have executed this
Grant as of the __ day of ___________, ____.
[NAME OF GRANTOR],
as Grantor
By_________________________
Title:
BANKERS TRUST COMPANY,
as Collateral Agent and as Grantee
By__________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _____________, ____, before me
personally came _________________ who, being by me duly sworn, did state
as follows: that [s]he is the [title of signatory] of
____________________, that [s]he is authorized to execute the foregoing
Grant on behalf of said corporation and that [s]he did so by authority of
the Board of Directors of said corporation.
-------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ___________, ____, before me
personally came _________________ who, being by me duly sworn, did state
as follows: that [s]he is the [title of signatory] of BANKERS TRUST
COMPANY, that [s]he is authorized to execute the foregoing Grant on
behalf of said company and that [s]he did so by authority of said
company.
-------------------------
Notary Public
Schedule A
Patents and Patent Applications
Owned By [Name of Grantor]
U.S. Patent No. Description Issue Date Expiration Date
ANNEX I
TO
SECURITY AGREEMENT
FORM OF GRANT OF SECURITY
INTEREST IN COPYRIGHTS
WHEREAS, _______________, a _______________ corporation
(the "Grantor"), having its chief executive office at , is the owner of
all right, title and interest in and to the United States copyrights and
associated United States copyright registrations and applications for
registration set forth in Schedule A attached hereto;
WHEREAS, BANKERS TRUST COMPANY, as Collateral Agent,
having its principal offices at One Bankers Trust Plaza, 130 Liberty
Street, New York, New York 10006 (the "Grantee"), desires to acquire a
security interest in said copyrights and copyright registrations and
applications therefor; and
WHEREAS, the Grantor is willing to grant to the Grantee
a security interest in and lien upon the copyrights and copyright
registrations and applications therefor described above.
NOW, THEREFORE, for good and valuable consideration,
the receipt of which is hereby acknowledged, and subject to the terms and
conditions of the Security Agreement, dated as of February 25, 1998, made
by the Grantor, the other assignors from time to time party thereto and
the Grantee (as amended from time to time, the "Security Agreement"), the
Grantor hereby grants to the Grantee a security interest in the
copyrights and copyright registrations and applications therefor set
forth in Schedule A attached hereto.
This Grant has been granted in conjunction with the
security interest granted to the Grantee under the Security Agreement.
The rights and remedies of the Grantee with respect to the security
interest granted herein are without prejudice to, and are in addition to,
those set forth in the Security Agreement, all of the terms and
provisions of which are incorporated herein by reference. In the event
that any provisions of this Grant are deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall
govern.
IN WITNESS WHEREOF, the undersigned have executed this
Grant as of the _____ day of _________, _____.
[NAME OF GRANTOR],
as Assignor
By__________________________
Title:
BANKERS TRUST COMPANY,
as Collateral Agent and as Grantee
By__________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ______ day of _________, _____ before me
personally came _______________, who being duly sworn, did depose and say
that [s]he is the [title of signatory] of [Name of Grantor], that [s]he
is authorized to execute the foregoing Grant on behalf of said
corporation and that [s]he did so by authority of the Board of Directors
of said corporation.
-------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _____________, ____, before me
personally came _________________ who, being by me duly sworn, did state
as follows: that [s]he is the [title of signatory] of BANKERS TRUST
COMPANY, that [s]he is authorized to execute the foregoing Grant on
behalf of said company and that [s]he did so by authority of said
company.
-------------------------
Notary Public
SCHEDULE A
U.S. Copyrights and Copyright Applications
of [Name of Grantor]
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
TABLE OF CONTENTS
Page
ARTICLE I SECURITY INTERESTS............................................2
1.1 Grant of Security Interests...................................2
1.2 Power of Attorney.............................................2
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIESAND COVENANTS.............3
2.1 Necessary Filings.............................................3
2.2 No Liens......................................................3
2.3 Other Financing Statements....................................3
2.4 Chief Executive Office; Records...............................3
2.5 Location of Inventory and Equipment...........................4
2.6 Trade Names; Change of Name...................................4
2.7 Recourse......................................................5
ARTICLE III SPECIAL PROVISIONS CONCERNINGRECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS................................5
3.1 Additional Representations and Warranties.....................5
3.2 Maintenance of Records........................................5
3.3 Modification of Terms; etc....................................6
3.4 Collection....................................................6
3.5 Direction to Account Debtors; etc.............................6
3.6 Instruments...................................................7
3.7 Further Actions...............................................7
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS....................7
4.1 Additional Representations and Warranties.....................7
4.2 Licenses and Assignments......................................7
4.3 Infringements.................................................7
4.4 Preservation of Marks.........................................8
4.5 Maintenance of Registration...................................8
4.6 Future Registered Marks.......................................8
4.7 Remedies......................................................8
ARTICLE V SPECIAL PROVISIONS CONCERNINGPATENTS AND COPYRIGHTS..........9
5.1 Additional Representations and Warranties.....................9
5.2 Licenses and Assignments......................................9
5.3 Infringements.................................................9
5.4 Maintenance of Patents........................................9
5.5 Prosecution of Patent Application............................10
5.6 Other Patents and Copyrights.................................10
5.7 Remedies.....................................................10
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL.......................11
6.1 Protection of Collateral Agent's Security....................11
6.2 Warehouse Receipts Non-negotiable............................11
6.3 Further Actions..............................................11
6.4 Financing Statements.........................................11
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT...............12
7.1 Remedies; Obtaining the Collateral Upon Default..............12
7.2 Remedies; Disposition of the Collateral......................13
7.3 Waiver of Claims.............................................14
7.4 Application of Proceeds......................................15
7.5 Remedies Cumulative..........................................17
7.6 Discontinuance of Proceedings................................17
ARTICLE VIII INDEMNITY ...............................................18
8.1 Indemnity....................................................18
8.2 Indemnity Obligations Secured by Collateral; Survival........19
ARTICLE IX DEFINITIONS .............................................. 19
ARTICLE X MISCELLANEOUS ........................................... 24
10.1 Notices.....................................................24
10.2 Waiver; Amendment...........................................24
10.3 Obligations Absolute........................................24
10.4 Successors and Assigns......................................25
10.5 Headings Descriptive........................................25
10.6 Severability................................................25
10.7 Governing Law...............................................25
10.8 Assignor's Duties...........................................25
10.9 Termination; Release........................................26
10.10 Collateral Agent............................................26
10.11 Additional Assignors........................................26
10.12 Counterparts................................................27
ANNEX A Schedule of Chief Executive Offices and Record Locations
ANNEX B Schedule of Equipment and Inventory Locations
ANNEX C List of Trade and Fictitious Names
ANNEX D List of Trademarks and Applications
ANNEX E List of Patents and Applications
ANNEX F List of Copyrights and Applications
ANNEX G Form of Grant of Security Interest in Trademarks
ANNEX H Form of Grant of Security Interest in Patents
ANNEX I Form of Grant of Security Interest in Copyrights
Exhibit J
FORM OF OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, the [Chief Executive Officer]
[Chief Financial Officer] of Universal Hospital Services, Inc., a
Minnesota corporation (the "Borrower"), do hereby certify on behalf of
the Borrower that:
1. This Certificate is furnished to the Administrative
Agent and each of the Banks pursuant to Section 5.18 of the Credit
Agreement, dated as of February 25, 1998, among the Borrower, the various
lenders from time to time party thereto (the "Banks") and Bankers Trust
Company, as Administrative Agent (such Credit Agreement, as in effect on
the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit
Agreement.
2. For purposes of this Certificate, the terms below
shall have the following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of
each of the Borrower on a stand-alone basis and the
Borrower and its Subsidiaries taken as a whole would
change hands between a willing buyer and a willing
seller, within a commercially reasonable period of
time, each having reasonable knowledge of the relevant
facts, with neither being under any compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent
willing seller from an independent willing buyer if the
assets of each of the Borrower on a stand-alone basis
and the Borrower and its Subsidiaries taken as a whole
are sold with reasonable promptness under normal
selling conditions in a current market.
(c) "New Financing"
The Indebtedness incurred or to be incurred by the
Borrower and its Subsidiaries under the Credit
Documents (assuming the full utilization by the
Borrower of the Total Revolving Commitment under the
Credit Agreement) and the Senior Notes Documents and
all other financings contemplated by the Documents, in
each case after giving effect to the Transaction.
(d) "Stated Liabilities"
The recorded liabilities (including contingent
liabilities that would be recorded in accordance with
generally accepted accounting principles ("GAAP")) of
each of the Borrower on a stand-alone basis and the
Borrower and its Subsidiaries taken as a whole as of
the date hereof after giving effect to the consummation
of the Transaction, determined in accordance with GAAP
consistently applied, together with the amount of all
Obligations.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably
likely to result from pending litigation, asserted
claims and assessments, guaranties, uninsured risks and
other contingent liabilities of each of the Borrower on
a stand-alone basis and the Borrower and its
Subsidiaries taken as a whole after giving effect to
the Transaction (exclusive of such contingent
liabilities to the extent reflected in Stated
Liabilities).
(f) "Will be able to pay their respective Stated
Liabilities and Identified Contingent Liabilities as
they mature or otherwise become due and payable"
Each of the Borrower on a stand-alone basis and the
Borrower and its Subsidiaries taken as a whole will
have sufficient assets and cash flow to pay their
respective Stated Liabilities and Identified Contingent
Liabilities as those liabilities mature or otherwise
become due and payable.
(g) "Does not have Unreasonably Small Capital"
Each of the Borrower on a stand-alone basis and the
Borrower and its Subsidiaries taken as a whole, after
consummation of the Transaction and all Indebtedness
(including the Loans and the indebtedness evidenced by
the Senior Notes) being incurred or assumed and Liens
created by the Borrower and its Subsidiaries in
connection therewith, is a going concern and has
sufficient capital to ensure that it will continue to
be a going concern for such period and to remain a
going concern.
3. For purposes of this Certificate, I, or other
officers or employees of the Borrower under my direction and supervision,
have performed the following procedures as of and for the periods set
forth below.
(a) I have reviewed the financial statements (including the
pro forma financial statements) and the Projections.
(b) I have made inquiries of certain officials of the
Borrower and its Subsidiaries who have responsibility
for financial and accounting matters regarding the
existence and amount of Identified Contingent
Liabilities associated with the business of the
Borrower and its Subsidiaries.
(c) I have knowledge of and have reviewed to my
satisfaction the Credit Documents, the Senior Notes
Documents and the Recapitalization Documents, and the
respective schedules and exhibits thereto.
(d) With respect to Identified Contingent Liabilities, I:
(1) inquired of certain officials of the Borrower
and its Subsidiaries who have responsibility for
legal, financial and accounting matters as to
the existence and estimated liability with
respect to all contingent liabilities associated
with the business of the Borrower and its
Subsidiaries; and
(2) confirmed with officers of the Borrower and its
Subsidiaries that, to the best of such officers'
knowledge, (i) all appropriate items were
included in Stated Liabilities or Identified
Contingent Liabilities and that (ii) the amounts
relating thereto were the maximum estimated
amount of liabilities reasonably likely to
result therefrom as of the date hereof.
(e) I have made inquiries of certain officers of the
Borrower and its Subsidiaries who have responsibility
for financial reporting and accounting matters
regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause
either of the Borrower on stand-alone basis or the
Borrower and its Subsidiaries taken as a whole, after
giving effect to the consummation of the Transaction
and the related financing transactions (including the
making of Loans under the Credit Agreement and the
issuance of the Senior Notes), to (i) have assets with
a Fair Value or Present Fair Salable Value that are
less than Stated Liabilities and Identified Contingent
Liabilities; (ii) have Unreasonably Small Capital; or
(iii) not be able to pay its Stated Liabilities and
Identified Contingent Liabilities as they mature or
otherwise become due and payable.
4. Based on and subject to the foregoing, I hereby
certify on behalf of the Borrower that, after giving effect to the
consummation of the Transaction and the related financing transactions
(including the making of Loans under the Credit Agreement and the
issuance of the Senior Notes), it is my opinion that (i) the Fair Value
and Present Fair Salable Value of the assets of each of the Borrower on a
stand-alone basis and the Borrower and its Subsidiaries taken as a whole
exceed their respective Stated Liabilities and Identified Contingent
Liabilities; (ii) each of the Borrower on a stand-alone basis and the
Borrower and its Subsidiaries taken as a whole Does not have Unreasonably
Small Capital; and (iii) each of the Borrower on a stand-alone basis and
the Borrower and its Subsidiaries taken as a whole Will be able to pay
their respective Stated Liabilities and Identified Contingent Liabilities
as they mature or otherwise become due and payable.
IN WITNESS WHEREOF, I have hereto set my hand this 25th
day of February, 1998 on behalf of Borrower.
UNIVERSAL HOSPITAL SERVICES, INC.
By:__________________________
Name:
Title: Chief [Executive] [Financial] Officer
Exhibit K
BORROWING BASE CERTIFICATE AS OF [DATE]
To: The Banks party to the Credit Agreement, dated as of February
25, 1998, among Universal Hospital Services, Inc. (the
"Borrower"), the financial institutions from time to time party
thereto (the "Banks") and Bankers Trust Company, as
Administrative Agent (the "Credit Agreement").1
Amount in
U.S. Dollars
1. Accounts Receivable
Total face amount of all receivables $___________
of the Borrower and the Subsidiary
Guarantors arising from the rental of
Rental Equipment by the Borrower or
any Subsidiary Guarantor in the
ordinary course of business so long
as such receivables conform to the
representations and warranties
contained in the Security Agreement
(including, without limitation, that
the Collateral Agent shall have and
maintain a first priority perfected
security interest in all such
receivables);
Less:
(a) Receivables which the ($________)
Collateral Agent has
identified to the Borrower as
not being acceptable to the
Collateral Agent in its
reasonable judgment;
(b) Returns, discounts, claims, ($________)
credit and allowances of any
nature (whether issued, owing,
granted or outstanding);
(c) Reserves for chargebacks, ($________)
deferred revenue, contras and
any other matter which affects
the creditworthiness of
account debtors owing the
receivables;
(d) Receivables from the rental of ($________)
Rental Equipment or the sale
of Inventory to any Affiliate;
(e) Receivables which are not due ($________)
by their terms or have not
been paid in full within 180
days of the invoice date
therefor (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
set-off (to the extent
thereof);
(f) Receivables from any party ($________)
subject to any bankruptcy,
receivership, insolvency or
like proceedings by the
account debtor;
(g) Receivables owing by account ($________)
debtors outside the United
States and Canada;
(h) Receivables arising out of a ($________)
sale, lease or rental for
which no invoice has been
provided to the account
debtor; and
(i) Receivables due from an ($________)
account debtor whose
receivables constitute 15% or
more of all receivables of the
Borrower and the Subsidiary
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).
2. Eligible Receivables $___________
(Net Amount of No. 1)
3. 85% of Eligible Receivables $___________
4. Rental Equipment
All Rental Equipment of the Borrower $___________
and the Subsidiary Guarantors which is
held by the Borrower or any Subsidiary
Guarantor (other than for sale) or is
rented to third Persons in the
ordinary course of business by the
Borrower or any Subsidiary Guarantor
or which is the subject of an
equipment rental program or similar
equipment outsourcing program, and
which conforms to the representations
and warranties contained in the
Security Agreement (valued on a net
book value basis consistent with the
Borrower's consolidated month-end
balance sheet).
Less:
(a) Rental Equipment which the ($_______)
Collateral Agent has
identified to the Borrower as
not being acceptable to the
Collateral Agent in its
reasonable judgment;
(b) The net book value of the ($_______)
Borrower's "Bazooka Bed"
inventory;
(c) Reserves for Rental Equipment ($_______)
that is unrentable, obsolete,
slow moving or under repair;
and
(d) Any additional reserves ($_______)
required by the Administrative
Agent (and identified to the
Borrower as so required) in
the exercise of its reasonable
discretion pursuant to the
proviso contained in the
definition of Borrowing Base
contained in the Credit
Agreement.
5. Eligible Rental Equipment $________
(Net Amount of No. 4)
6. 50% of Eligible Rental Equipment $________
7. Borrowing Base $________
(Sum of No. 3 and No. 6)
8. Total of Revolving Loans, Swingline Loans and Letter of Credit $________
Outstandings
9. Borrowing Base Surplus (Deficiency) $________
(No. 7 minus No. 8)
The undersigned hereby certifies that all of the information provided
above is true and correct as of the date first above written.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her
hand this 25th day of February, 1998.
UNIVERSAL HOSPITAL SERVICES, INC.
By:_______________________________
Name:
Title: Chief Financial Officer
- ------------------------
1 All capitalized terms used herein shall have the meaning provided
therefor in the Credit Agreement.
Exhibit L
FORM OF ASSIGNMENT AGREEMENT
DATE: ________, ____
Reference is made to the Credit Agreement described in Item 2 of
Annex I attached hereto (as such Credit Agreement may hereafter be
amended, modified or supplemented from time to time, the "Credit
Agreement"). Unless defined in Annex I attached hereto, terms defined in
the Credit Agreement are used herein as therein defined. ________ (the
"Assignor") and ______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof which
represents the percentage interest specified in Item 4 of Annex I
attached hereto (the "Assigned Share") of all of Assignor's outstanding
rights and obligations under the Credit Agreement indicated in Item 4 of
such Annex I, including, without limitation, all rights and obligations
with respect to the Assigned Share of the Assignor's outstanding
Revolving Commitment and of the Revolving Loans, Swingline Loans and
Letters of Credit related thereto.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any liens or security interests;
(ii) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or
in connection with the Credit Agreement or the other Credit Documents or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or the other Credit
Documents or any other instrument or document furnished pursuant thereto;
and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
any of its Subsidiaries or the performance or observance by the Borrower
or any of its Subsidiaries of any of its obligations under the Credit
Agreement or the other Credit Documents or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly
authorized to enter into and perform the terms of this Assignment
Agreement; (ii) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment Agreement; (iii) agrees that
it will, independently and without reliance upon the Administrative
Agent, the Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Administrative Agent and the
Collateral Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement and the other Credit
Documents as are delegated to the Administrative Agent and the Collateral
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto [;] [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Bank[; and
(v) to the extent legally entitled to do so, attaches the forms described
in Section 12.04(b) of the Credit Agreement.1
4. Following the execution of this Assignment Agreement by the
Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. The effective
date of this Assignment Agreement shall be the date of the execution
hereof by the Assignor and the Assignee, the consent hereof by the
Administrative Agent (which consent will not be unreasonably withheld),
the recordation by the Administrative Agent of the assignment effected
hereby in the Register and the receipt by the Administrative Agent of the
nonrefundable assignment fee referred to in Section 12.04(b) of the
Credit Agreement, unless another effective date is specified in Item 5 of
Annex I attached hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment Agreement, have the rights and obligations of a Bank
thereunder and under the other Credit Documents and (ii) the Assignor
shall, to the extent provided in this Assignment Agreement, relinquish
its rights and be released from its obligations under the Credit
Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee
shall be entitled to (x) all interest on the Assigned Share of the
Revolving Loans at the rates specified in Item 6 of Annex I attached
hereto, (y) all Commitment Commission (if applicable) on the Assigned
Share of the Revolving Commitment at the rate specified in Item 7 of
Annex I attached hereto, and (z) all Letter of Credit Fees (if
applicable) on the Assignee's participation in all Letters of Credit at
the rate specified in Item 8 of Annex I attached hereto, which, in each
case, accrue on and after the Settlement Date, such interest and, if
applicable, Commitment Commission and Letter of Credit Fees, to be paid
by the Administrative Agent directly to the Assignee. It is further
agreed that all payments of principal made by the Borrower on the
Assigned Share of the Revolving Loans which occur on and after the
Settlement Date will be paid directly by the Administrative Agent to the
Assignee. Upon the Settlement Date, the Assignee shall pay to the
Assignor an amount specified by the Assignor in writing which represents
the Assigned Share of the principal amount of the Revolving Loans made by
the Assignor pursuant to the Credit Agreement which are outstanding on
the Settlement Date, net of any closing costs, and which are being
assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for
periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY,
as Administrative Agent
By____________________________
Title:
Annex I
ANNEX FOR ASSIGNMENT AGREEMENT
1. The Borrower: Universal Hospital Services, Inc.
2. Name and Date of Credit Credit Agreement, dated as of
Agreement: February 25, 1998, among
Universal Hospital Services,
Inc., the Banks from time to
time party thereto and
Bankers Trust Company, as
Administrative Agent.
3. Date of Assignment _________ ___, ______
Agreement:
4. Amounts (as of date
of item #3 above): Revolving Commitment
a. Aggregate Amount for
all Banks $___________
Assigned Share
---------%
Amount of
Assigned Share $___________
5. Settlement Date: _________ ___, ______
6. Rate of Interest to the As set forth in Section 1.08
Assignee: of the Credit Agreement
(unless otherwise agreed to
by the Assignor and the
Assignee).2
7. Commitment Commission As set forth in Section
3.01(a) of the Credit
Agreement (unless otherwise
agreed to by the Assignor and
the Assignee).3
8. Letter of Credit Fees: As set forth in Section
3.01(b) of the Credit
Agreement(unless otherwise
agreed to by the Assignor and
the Assignee).4
9. Notices:
ASSIGNOR:
===================
===================
Attention:
Telephone No.:
Facsimile No.:
ASSIGNEE:
===================
===================
Attention
Telephone No.:
Facsimile No.:
10. Payment Instructions:
ASSIGNOR:
===================
===================
ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
===================
===================
ABA No.:
Account No.:
Reference:
Attention:
- ------------------------
1 If the Assignee is organized under the laws of a jurisdiction
outside the United States.
2 The Borrower and the Administrative Agent shall direct the entire
amount of interest payable under the Credit Agreement to the
Assignee at the rate set forth in Section 1.08 of the Credit
Agreement, with the Assignor and Assignee effecting any agreed upon
sharing of interest through payments by the Assignee to the
Assignor.
3 The Borrower and the Administrative Agent shall direct the entire
amount of the Commitment Commission payable under the Credit
Agreement to the Assignee at the rate set forth in Section 3.01(a)
of the Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of Commitment Commission through
payment by the Assignee to the Assignor.
4 The Borrower and the Administrative Agent shall direct the entire amount
of the Letter of Credit Fees payable under the Credit Agreement to the
Assignee at the rate set forth in Section 3.01(b) of the Credit Agreement,
with the Assignor and the Assignee effecting any agreed upon sharing of
the Letter of Credit Fees through payment by the Assignee to the
Assignor.
UNIVERSAL HOSPITAL SERVICES, INC. Exhibit (a)(7)
--------------
$100,000,000
10 1/4% Senior Notes due 2008
PURCHASE AGREEMENT
------------------
February 23, 1998
BT ALEX. BROWN INCORPORATED
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
UHS Acquisition Corp., a newly-formed Minnesota
corporation ("Acquisition Corp.") controlled by J.W. Childs
Equity Partners, L.P. ("Childs"), hereby confirms its agreement
with you (the "Initial Purchaser"), as set forth below.
1. The Notes. Subject to the terms and conditions
herein contained, Universal Hospital Services, Inc., a
Minnesota corporation, in its capacity as the surviving
corporation of the Merger (as defined below) (the "Company")
proposes to issue and sell (the "Offering") to the Initial
Purchaser $100,000,000 aggregate principal amount of its 10
1/4% Senior Notes due 2008 (the "Notes"). The Notes are to be
issued under an indenture (the "Indenture") to be dated as of
February 25, 1998 by and between the Company, and First Trust
National Association, as Trustee (the "Trustee").
The Notes are being issued and sold in connection
with the recapitalization of the Company (the
"Recapitalization"), which is being effected through the merger
(the "Merger") of Acquisition Corp. with and into the Company
pursuant to an Agreement and Plan of Merger dated as of
November 25, 1997 (the "Merger Agreement"). In connection with
the Recapitalization (assuming it was consummated as of
September 30, 1997): (i) the Company's existing shareholders
(other than certain members of the Company's management (the
"Management Investors")) will receive, in consideration for the
cancellation of approximately 5.3 million shares of the
Company's common stock and options to purchase approximately
344,000 shares of the common stock held by such shareholders,
cash in the aggregate amount of approximately $84.9 million
(net of aggregate option exercise price), or $15.50 per share;
(ii) the Company will repay substantially all of its
outstanding borrowings of approximately $32.8 million under
existing loan agreements; (iii) the Company will pay estimated
fees and expenses of $11.5 million related to the
Recapitalization; and (iv) the Company will pay approximately
$3.3 million in severance pay to certain non-continuing members
of management. In order to finance the Recapitalization, the
Company will: (i) issue the Notes; (ii) receive an equity
contribution of approximately $21.5 million in cash from Childs
and affiliates and the Management Investors; and (iii) borrow
approximately $11.0 million under a $30.0 million revolving
credit facility to be entered into between the Company and
Bankers Trust Company, as agent for the lenders thereunder (the
"Credit Agreement").
The Notes will be offered and sold to the Initial
Purchaser without being registered under the Securities Act of
1933, as amended (the "Act"), in reliance on exemptions
therefrom.
In connection with the sale of the Notes, the Company
has prepared a preliminary offering memorandum dated
January 27, 1998 (the "Preliminary Memorandum") and a final
offering memorandum dated February 23, 1998 (the "Final
Memorandum"; the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a "Memorandum")
each setting forth or including a description of the terms of
the Notes, the terms of the Offering, the other aspects of the
Recapitalization and the transactions contemplated hereby and
thereby, a description of the Company and any material
developments relating to the Company occurring after the date
of the most recent historical financial statements included
therein.
Acquisition Corp. understands that the Initial
Purchaser proposes to make an offering of the Notes only on the
terms and in the manner set forth in the Final Memorandum and
Section 8 hereof as soon as the Initial Purchaser deems
advisable after this Agreement has been executed and delivered,
to persons in the United States whom the Initial Purchaser
reasonably believes to be qualified institutional buyers
("Qualified Institutional Buyers" or "QIBs") as defined in Rule
144A under the Act, as such rule may be amended from time to
time ("Rule 144A") and outside the United States to certain
persons in reliance on Regulation S under the Act.
The Initial Purchaser and its direct and indirect
transferees of the Notes will be entitled to the benefits of
the Registration Rights Agreement, substantially in the form
attached hereto as Exhibit A (the "Registration Rights
Agreement"), to be dated the Closing Date (as defined in
Section 3 below), pursuant to which the Company has agreed,
among other things, to file a registration statement (the
"Registration Statement") with the Securities and Exchange
Commission (the "Commission") registering the Notes or the
Exchange Notes (as defined in the Registration Rights
Agreement) under the Act.
2. Representations and Warranties. Acquisition
Corp. represents and warrants to and agrees with the Initial
Purchaser that:
(a) Neither the Preliminary Memorandum as of the
date thereof nor the Final Memorandum nor any amendment or
supplement thereto as of the date thereof and at all times
subsequent thereto up to the Closing Date contained or
contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading,
except that the representations and warranties set forth
in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with
information relating to the Initial Purchaser furnished to
the Company in writing by the Initial Purchaser expressly
for use in the Preliminary Memorandum, the Final
Memorandum or any amendment or supplement thereto.
(b) As of the Closing Date and after giving effect
to the Recapitalization, the Company will have the
authorized, issued and outstanding capitalization set
forth in the Final Memorandum; all of the outstanding
shares of capital stock of the Company have been, and as
of the Closing Date will be, duly authorized and validly
issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights;
except as set forth or contemplated in the Final
Memorandum, all of the outstanding shares of capital stock
of the Company will be free and clear of all liens,
encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act and
the securities or "Blue Sky" laws of certain
jurisdictions, those permitted under the Stockholders
Agreement (as defined in the Final Memorandum) or liens or
encumbrances created in connection with the equity
investment by the Management Investors) or voting; except
as set forth in the Final Memorandum, there are no
(i) options, warrants or other rights to purchase from the
Company, (ii) agreements or other obligations of the
Company to issue or (iii) other rights to convert any
obligation into, or exchange any securities for, shares of
capital stock of or ownership interests in the Company
outstanding. The Company does not own, directly or
indirectly, any shares of capital stock or any other
equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other
entity. No holder of securities of the Company is
entitled to have such securities registered under a
registration statement filed by the Company pursuant to
the Registration Rights Agreement.
(c) The Company has been duly incorporated, is
validly existing and is in good standing as a corporation
under the laws of Minnesota, with all requisite corporate
power and authority to own its properties and conduct its
business as now conducted and as described in the Final
Memorandum; the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a
material adverse effect on the general affairs,
management, business, condition (financial or otherwise)
or results of operations of the Company (any such event, a
"Material Adverse Effect").
(d) The Company has all requisite corporate power
and authority to execute, deliver and perform each of its
obligations under the Notes, the Exchange Notes and the
Private Exchange Notes (as defined in the Registration
Rights Agreement). As of the Closing Date, the Notes, the
Exchange Notes and the Private Exchange Notes will have
each been duly and validly authorized by the Company and,
when executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture
and, in the case of the Notes, when delivered to and paid
for by the Initial Purchaser in accordance with the terms
of this Agreement, and, in the case of the Exchange Notes
and the Private Exchange Notes, when delivered in exchange
for Notes pursuant to the terms of the Exchange Offer (as
defined in the Registration Rights Agreement), will have
been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
respective terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and
(ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be
brought.
(e) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Indenture. As of the Closing Date,
the Indenture will have been duly and validly authorized
by the Company and, when executed and delivered by the
Company (assuming the due authorization, execution and
delivery by the Trustee), will constitute a valid and
legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except
that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any
proceeding therefor may be brought.
(f) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement. As
of the Closing Date, the Registration Rights Agreement
will have been duly and validly authorized by the Company
and, when executed and delivered by the Company, will
constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with
its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and
(ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be
brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities
laws and public policy considerations.
(g) Acquisition Corp. has all requisite corporate
power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the
transactions contemplated hereby have been duly and
validly authorized, executed and delivered by Acquisition
Corp.
(h) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Assumption Agreement dated the
Closing Date whereby the Company will assume the rights,
duties and obligations of Acquisition Corp. under this
Agreement (the "Assumption Agreement"). As of the Closing
Date, the Assumption Agreement will constitute a valid and
legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except
that (A) the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any
proceeding therefor may be brought and (B) any rights to
indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy
considerations.
(i) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Merger Agreement. The Merger
Agreement has been duly and validly authorized by the
Company and constitutes a valid and legally binding
agreement of the Company enforceable against the Company
in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
The Company has no reasonable basis to believe that the
transactions contemplated by the Merger Agreement will not
be consummated in accordance with the terms of such
Agreement.
(j) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Credit Agreement. As of the Closing
Date, the Credit Agreement will have been duly and validly
authorized by the Company and, when executed and delivered
by the Company, will constitute a valid and legally
binding agreement of the Company enforceable against the
Company in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(k) No consent, approval, authorization or order of
any court, governmental agency or body or third party is
required for the issuance and sale by the Company of the
Notes to the Initial Purchaser or the consummation by the
Company of the transactions contemplated hereby, except
such as have been obtained and such as may be required
under state securities or "Blue Sky" laws in connection
with the purchase and resale of the Notes by the Initial
Purchaser. The Company is not (i) in violation of its
certificate of incorporation or bylaws (or similar
organizational document), (ii) in breach or violation of
any statute, judgment, decree, order, rule or regulation
applicable to it or any of its properties or assets,
except for any such breach or violation that would not,
individually or in the aggregate, have a Material Adverse
Effect, or (iii) in breach of or default under (nor has
any event occurred that, with notice or passage of time or
both, would constitute a default under) or in violation of
any of the terms or provisions of any indenture, mortgage,
deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or
other agreement or instrument to which it is a party or to
which it or its properties or assets is subject
(collectively, "Contracts"), except for any such breach,
default, violation or event that would not, individually
or in the aggregate, have a Material Adverse Effect.
(l) The execution, delivery and performance by the
Company of this Agreement, the Indenture, the Registration
Rights Agreement, the Assumption Agreement, the Credit
Agreement, the Merger Agreement and the consummation by
the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and
sale of the Notes to the Initial Purchaser) will not
conflict with or constitute or result in a breach of or a
default under (or an event that with notice or passage of
time or both would constitute a default under) or
violation of any of (i) the terms or provisions of any
Contract, except for any such conflict, breach, violation,
default or event that would not, individually or in the
aggregate, have a Material Adverse Effect, (ii) the
certificate of incorporation or bylaws of the Company or
(iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of
the representations and warranties of the Initial
Purchaser in Section 8 hereof) any statute, judgment,
decree, order, rule or regulation applicable to the
Company or any of its properties or assets, except for any
such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse
Effect.
(m) The audited financial statements of the Company
included in the Final Memorandum present fairly in all
material respects the financial position, results of
operations and cash flows of the Company at the dates and
for the periods to which they relate and have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected
historical financial and statistical data in the Final
Memorandum present fairly in all material respects the
information shown therein and the summary and selected
financial data have been prepared and compiled on a basis
consistent with the audited financial statements included
therein, except as otherwise stated therein. Coopers &
Lybrand LLP (the "Independent Accountants") is an
independent public accounting firm within the meaning of
the Act and the rules and regulations promulgated
thereunder.
(n) The pro forma financial statements (including
the notes thereto) and, to the extent applicable, the
other pro forma financial information included in the
Final Memorandum (i) comply as to form in all material
respects with the applicable requirements of Regulation S-
X promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (ii) have been prepared
in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and
(iii) have been properly computed on the bases described
therein; the assumptions used in the preparation of the
pro forma financial data and other pro forma financial
information included in the Final Memorandum are
reasonable and the adjustments used therein are
appropriate to give effect to the transactions or
circumstances referred to therein.
(o) There is not pending or, to the best knowledge
of the Company, threatened any action, suit, proceeding,
inquiry or investigation to which the Company is a party,
or to which the property or assets of the Company are
subject, before or brought by any court, arbitrator or
governmental agency or body that, if determined adversely
to the Company, would, individually or in the aggregate,
have a Material Adverse Effect or that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge
the issuance or sale of the Notes to be sold hereunder or
the consummation of the other transactions described in
the Final Memorandum.
(p) The Company owns or possesses adequate licenses
or other rights to use all patents, trademarks, service
marks, trade names, copyrights and know-how necessary to
conduct the businesses now or proposed to be operated by
it as described in the Final Memorandum, and the Company
has not received any notice of infringement of or conflict
with (or knows of any such infringement of or conflict
with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names,
copyrights or know-how that, if such assertion of
infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse
Effect.
(q) Except where the same would not, individually or
in the aggregate, have a Material Adverse Effect: (i) the
Company possesses all licenses, permits, certificates,
consents, orders, approvals and other authorizations from,
and has made all declarations and filings with, all
federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other
tribunals, presently required or necessary to own or
lease, as the case may be, and to operate its properties
and to carry on its businesses as now or proposed to be
conducted as set forth in the Final Memorandum
("Permits"); (ii) the Company has fulfilled and performed
all of its obligations with respect to such Permits and no
event has occurred that allows, or after notice or lapse
of time alone would allow, revocation or termination
thereof or results in any other material impairment of the
rights of the holder of any such Permit; and (iii) the
Company has not received any notice of any proceeding
relating to revocation or modification of any such Permit,
except as described in the Final Memorandum.
(r) Since the date of the most recent financial
statements appearing in the Final Memorandum, except as
described therein, (i) the Company has not incurred any
liabilities or obligations, direct or contingent, or
entered into or agreed to enter into any transactions or
contracts (written or oral) not in the ordinary course of
business, which liabilities, obligations, transactions or
contracts would, individually or in the aggregate, be
material to the general affairs, management, business,
condition (financial or otherwise) or results of
operations of the Company, (ii) the Company has not
purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock (other than
pursuant to the Company's 1992 Employee Stock Purchase
Plan) and (iii) there shall not have been any change in
the capital stock or long-term indebtedness of the
Company.
(s) The Company has filed all necessary federal,
state and foreign income and franchise tax returns, except
where the failure to so file such returns would not,
individually or in the aggregate, have a Material Adverse
Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies that the Company is contesting
in good faith and for which the Company has provided
adequate reserves, there is no tax deficiency that has
been asserted against the Company that would have,
individually or in the aggregate, a Material Adverse
Effect.
(t) The statistical and market-related data included
in the Final Memorandum are based on or derived from
sources that the Company believes to be reliable and
accurate.
(u) Neither the Company nor any agent acting on its
behalf has taken or will take any action that might cause
this Agreement or the sale of the Notes to violate
Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System, in each case as in effect, or as
the same may hereafter be in effect, on the Closing Date.
(v) The Company has good and marketable title to all
real property and good title to all personal property
described in the Final Memorandum as being owned by it and
good and marketable title to a leasehold estate in the
real and personal property described in the Final
Memorandum as being leased by it free and clear of all
liens, charges, encumbrances or restrictions, except as
described in the Final Memorandum or to the extent the
failure to have such title or the existence of such liens,
charges, encumbrances or restrictions would not,
individually or in the aggregate, have a Material Adverse
Effect. All leases, contracts and agreements to which the
Company is a party or by which the Company is bound are
valid and enforceable against the Company, are to the
knowledge of the Company valid and enforceable against the
other party or parties thereto except that the enforcement
of such leases, contracts and agreements may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any
proceeding therefor may be brought and are in full force
and effect with only such exceptions as would not,
individually or in the aggregate, have a Material Adverse
Effect.
(w) There are no legal or governmental proceedings
involving or affecting the Company or any of its
properties or assets that would be required to be
described in a prospectus pursuant to the Act that are not
described in the Final Memorandum, nor are there any
material contracts or other documents that would be
required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum.
(x) Except as would not, individually or in the
aggregate, have a Material Adverse Effect (A) the Company
is in compliance with and not subject to liability under
applicable Environmental Laws (as defined below), (B) the
Company has made all filings and provided all notices
required under any applicable Environmental Law, and has
and is in compliance with all Permits required under any
applicable Environmental Laws and each of them is in full
force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or
demand letter or request for information pending or, to
the knowledge of the Company, threatened against the
Company under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the
Company, (E) the Company has not received notice that it
has been identified as a potentially responsible party
under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended
("CERCLA") or any comparable state law, (F) no property or
facility of the Company is (i) listed or proposed for
listing on the National Priorities List under CERCLA or
(ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List
promulgated pursuant to CERCLA or on any comparable list
maintained by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws"
means the common law and all applicable federal, state and
local laws or regulations, codes, orders, decrees,
judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of
public or employee health and safety or the environment,
including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of
hazardous materials, into the environment (including,
without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of
hazardous materials and (iii) underground and above ground
storage tanks, and related piping, and emissions,
discharges, releases or threatened releases therefrom.
(y) To the knowledge of the Company, there is no
strike, labor dispute, slowdown or work stoppage with the
employees of the Company that is pending or threatened.
(z) The Company carries insurance in such amounts
and covering such risks as is adequate in the reasonable
judgment of the Company for the conduct of its business
and the value of its properties.
(aa) The Company does not have any liability for any
prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to
any pension, profit sharing or other plan that is subject
to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company makes or ever has
made a contribution and in which any employee of the
Company is or has ever been a participant. With respect
to such plans, the Company is in compliance in all
material respects with all applicable provisions of ERISA.
(bb) The Company (i) makes and keeps accurate books
and records and (ii) maintains internal accounting
controls that provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary
to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its
bank accounts is permitted only in accordance with
management's authorization and (D) the reported
accountability for its assets is compared with existing
assets at reasonable intervals.
(cc) Immediately after the sale of the Notes pursuant
hereto, the Company will not be an "investment company" or
"promoter" or "principal underwriter" for an "investment
company," as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and
regulations thereunder.
(dd) No holder of securities of the Company will be
entitled to have such securities registered under the
registration statements required to be filed by the
Company pursuant to the Registration Rights Agreement
other than as expressly permitted thereby.
(ee) Immediately after the consummation of the
Recapitalization, the fair value and present fair saleable
value of the assets of the Company (on a going concern
basis) will exceed the sum of its stated liabilities and
identified contingent liabilities; the Company is not, nor
will the Company be, after giving effect to the execution,
delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby and
thereby, (a) left with unreasonably small capital with
which to carry on its business as it is proposed to be
conducted, (b) unable to pay its debts (contingent or
otherwise) as they mature or (c) otherwise insolvent.
(ff) Neither the Company nor any of its Affiliates
(as defined in Rule 501(b) of Regulation D under the Act)
has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in
respect of, any "security" (as defined in the Act) that is
or could be integrated with the sale of the Notes in a
manner that would require the registration under the Act
of the Notes or (ii) engaged in any form of general
solicitation or general advertising (as those terms are
used in Regulation D under the Act) in connection with the
offering of the Notes or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
Assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 8 hereof,
it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchaser in the
manner contemplated by this Agreement to register any of
the Notes under the Act or to qualify the Indenture under
the TIA.
(gg) No securities of the Company are of the same
class (within the meaning of Rule 144A) as the Notes and
listed on a national securities exchange registered under
Section 6 of the Exchange Act, or quoted in a U.S.
automated inter-dealer quotation system.
(hh) The Company has not taken, nor will the Company
take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Notes.
3. Purchase, Sale and Delivery of the Notes. On
the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and
conditions herein set forth, Acquisition Corp. shall cause the
Company to issue and sell to the Initial Purchaser and the
Initial Purchaser agrees to purchase from the Company, the
Notes at 97% of their principal amount. One or more
certificates in definitive form for the Notes that the Initial
Purchaser has agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or
names as the Initial Purchaser requests upon notice to the
Company at least 36 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company to the Initial
Purchaser, against payment by or on behalf of the Initial
Purchaser of the purchase price therefor by wire transfer (in
immediately available funds), to such account or accounts as
the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing
Date. Such delivery of and payment for the Notes shall be made
at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York at 9:00 A.M., New York time on February 25,
1998, or at such other place, time or date as the Initial
Purchaser, on the one hand, and Acquisition Corp., on the other
hand, may agree upon, such time and date of delivery against
payment being herein referred to as the "Closing Date."
Acquisition Corp. shall cause the Company to make such
certificate or certificates for the Notes available for
checking and packaging by the Initial Purchaser at the offices
of BT Alex. Brown Incorporated in New York, New York, or at
such other place as the Initial Purchaser may designate, at
least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchaser. The Initial
Purchaser proposes to make an offering of the Notes at the
price and upon the terms set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into and as
in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Company. Acquisition Corp.
covenants and agrees with the Initial Purchaser that:
(a) The Company will not amend or supplement the
Final Memorandum or any amendment or supplement thereto of
which the Initial Purchaser shall not previously have been
advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as
to which the Initial Purchaser shall not have given its
consent, which consent shall not be unreasonably withheld.
The Company will promptly, upon the reasonable request of
the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be
necessary or advisable in connection with the resale of
the Notes by the Initial Purchaser.
(b) The Company will cooperate with the Initial
Purchaser in arranging for the qualification of the Notes
for offering and sale under the securities or "Blue Sky"
laws of such jurisdictions as the Initial Purchaser may
designate and will continue such qualifications in effect
for as long as may be necessary to complete the resale of
the Notes; provided, however, that in connection
therewith, the Company shall not be required to qualify as
a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself
to taxation in excess of a nominal dollar amount in any
such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchaser of the Notes or the
Private Exchange Notes, any event occurs or information
becomes known as a result of which the Final Memorandum as
then amended or supplemented would include any untrue
statement of a material fact, or omit to state a material
fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at
any time to amend or supplement the Final Memorandum to
comply with applicable law, the Company will promptly
notify the Initial Purchaser thereof and will prepare, at
the expense of the Company, an amendment or supplement to
the Final Memorandum that corrects such statement or
omission or effects such compliance.
(d) The Company will, without charge, until the
completion of the distribution by the Initial Purchaser of
the Notes, provide to the Initial Purchaser and to counsel
for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum or any
amendment or supplement thereto as the Initial Purchaser
may reasonably request.
(e) The Company will apply the net proceeds from the
sale of the Notes as set forth under "Use of Proceeds" in
the Final Memorandum.
(f) For so long as the Notes remain outstanding, or
during the period ending three years from the date hereof,
whichever is shorter, the Company will furnish to the
Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the
Company to the Trustee, or the holders of the Notes and,
as soon as available, copies of any reports or financial
statements furnished to or filed by the Company with the
Commission or any national securities exchange on which
any class of securities of the Company may be listed.
(g) Neither the Company nor any of its Affiliates
will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as
defined in the Act) that could be integrated with the sale
of the Notes in a manner that would require the
registration under the Act of the Notes.
(h) The Company will not engage in any form of
general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in
connection with the offering of the Notes or in any manner
involving a public offering within the meaning of Section
4(2) of the Act.
(i) For so long as any of the Notes remain
outstanding, the Company will make available, upon
request, to any seller of such Notes the information
specified in Rule 144A(d)(4) under the Act, unless the
Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(j) The Company will use its reasonable best efforts
to (i) permit the Notes to be designated PORTAL securities
in accordance with the rules and regulations adopted by
the NASD relating to trading in the Private Offerings,
Resales and Trading through Automated Linkages market (the
"Portal Market") and (ii) permit the Notes to be eligible
for clearance and settlement through The Depository Trust
Company.
(k) In connection with Notes offered and sold in an
off shore transaction (as defined in Regulation S) the
Company will not register any transfer of such Notes not
made in accordance with the provisions of Regulation S and
will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Notes in the
form of definitive securities.
6. Expenses. Acquisition Corp. agrees to pay all
costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this
Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing,
word processing or other production of documents with respect
to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum
and any amendment or supplement thereto and any "Blue Sky"
memoranda, (ii) all arrangements relating to the delivery to
the Initial Purchaser of copies of the foregoing documents,
(iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the
Company, (iv) preparation (including printing), issuance and
delivery to the Initial Purchaser of the Notes, (v) the
qualification of the Notes under state securities and "Blue
Sky" laws, including filing fees and reasonable fees and
disbursements of counsel for the Initial Purchaser relating
thereto, (vi) expenses in connection with any meetings with
prospective investors in the Notes, (vii) fees and expenses of
the Trustee including reasonable fees and expenses of counsel,
(viii) all expenses and listing fees incurred in connection
with the application for quotation of the Notes on the PORTAL
Market and (ix) any fees charged by investment rating agencies
for the rating of the Notes. If the sale of the Notes provided
for herein is not consummated because any condition to the
obligations of the Initial Purchaser set forth in Section 7
hereof is not satisfied, because this Agreement is terminated
or because of any failure, refusal or inability on the part of
Acquisition Corp. to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder
(other than solely by reason of a default by the Initial
Purchaser of its obligations hereunder after all conditions
hereunder have been satisfied in accordance herewith),
Acquisition Corp. agrees to promptly reimburse the Initial
Purchaser upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of Cahill Gordon & Reindel,
counsel for the Initial Purchaser) that shall have been
incurred by the Initial Purchaser in connection with the
proposed purchase and sale of the Notes. Acquisition Corp.
shall not, in any event, be liable to the Initial Purchaser for
the loss of anticipated profits from the transactions covered
by this Agreement.
7. Conditions of the Initial Purchaser's
Obligations. The obligation of the Initial Purchaser to
purchase and pay for the Notes shall, in its sole discretion,
be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall
have received the opinion, dated as of the Closing Date
and addressed to the Initial Purchaser, of Skadden, Arps,
Slate, Meagher & Flom LLP, counsel for the Company, in
form and substance satisfactory to counsel for the Initial
Purchaser, to the effect that:
(i) Assuming the due authorization, execution
and delivery of the Indenture by the Company and the
Trustee, the Indenture will constitute the valid and
legally binding agreement of the Company, enforceable
against the Company in accordance with its terms,
except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and
(ii) general principles of equity.
(ii) The Notes are in the form contemplated by
the Indenture. Assuming that the Notes have been
duly authorized, executed and delivered by the
Company and paid for by the Initial Purchaser in
accordance with the terms of this Agreement (assuming
the due authorization, execution and delivery of the
Indenture by the Trustee and due authentication and
delivery of the Notes by the Trustee in accordance
with the Indenture), the Notes will constitute the
valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture, and
enforceable against the Company in accordance with
their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity.
(iii) When the Exchange Notes and the Private
Exchange Notes have been duly executed and delivered
by the Company in accordance with the terms of the
Registration Rights Agreement and the Indenture
(assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due
authentication and delivery of the Exchange Notes and
the Private Exchange Notes by the Trustee in
accordance with the Indenture), the Exchange Notes
and the Private Exchange Notes will constitute the
valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture, and
enforceable against the Company in accordance with
their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity.
(iv) Assuming the due authorization, execution
and delivery of the Registration Rights Agreement by
the Company and the Initial Purchaser, the
Registration Rights Agreement will constitute the
valid and legally binding agreement of the Company,
enforceable against the Company in accordance with
its terms, except that (A) the enforcement thereof
may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and
(B) any rights to indemnity or contribution
thereunder may be limited by federal and state
securities laws and public policy considerations.
(v) Assuming the due authorization, execution
and delivery of the Assumption Agreement by the
Company, the Assumption Agreement will constitute the
valid and legally binding agreement of the Company
enforceable against the Company in accordance with
its terms, except that (A) the enforcement thereof
may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and
(B) any rights to indemnity or contribution
thereunder may be limited by federal and state
securities laws and public policy considerations.
(vi) The Indenture, the Notes, the Exchange
Notes, the Registration Rights Agreement, the Credit
Agreement and the Merger Agreement conform in all
material respects to the descriptions thereof
contained in the Final Memorandum.
(vii) The statements in the Final Memorandum
under the caption "Certain Relationships and Related
Transactions," insofar as they are descriptions of
certain provisions of contracts or agreements, fairly
summarize such provisions in all material respects.
(viii) The execution and delivery of this
Agreement, the Indenture, the Registration Rights
Agreement, the Assumption Agreement and the Credit
Agreement and the consummation of the transactions
contemplated hereby, thereby and under the Merger
Agreement (including, without limitation, the
issuance and sale of the Notes to the Initial
Purchaser) will not conflict with or constitute or
result in a breach or a default under (or an event
that with notice or passage of time or both would
constitute a default under) or violation of any of
(i) the terms or provisions of any Applicable
Contracts (as defined), except for any such conflict,
breach, violation, default or event that would not,
individually or in the aggregate, have a Material
Adverse Effect or (ii) (assuming compliance with all
applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 8
hereof) any Applicable Laws (as defined).
"Applicable Contracts" mean those contracts set forth
on Schedule 1 to this Agreement. "Applicable Laws"
means the laws of the State of New York and the laws
of the United States of America, in each case, that,
in such counsel's experience, are normally applicable
to transactions of the type provided for herein (it
being understood that such counsel has made no
special investigation with respect to any other
laws), but excluding securities or blue sky laws of
any jurisdiction, anti-fraud laws of any
jurisdiction, rules and regulations of the National
Association of Securities Dealers, Inc. and the Trust
Indenture Act of 1939, as amended. Such counsel need
not express any opinion, however, as to whether the
execution or delivery by the Company of the Notes,
this Agreement, the Indenture, the Registration
Rights Agreement, the Credit Agreement or the
Assumption Agreement, or the performance by the
Company of its obligations thereunder or under the
Merger Agreement, will constitute a violation of or a
default under any covenant, restriction or provision
with respect to financial ratios or tests or any
aspect of the financial condition or results of
operations of the Company.
(ix) No consent, approval, authorization or
order of any Governmental Authority (as defined) is
required for the issuance and sale by the Company of
the Notes to the Initial Purchaser or the other
transactions contemplated hereby, except such as may
be required under Blue Sky laws, as to which such
counsel need express no opinion, and those that have
previously been obtained. "Governmental Authority"
means any New York or federal executive, legislative,
judicial, administrative or regulatory body with
authority to administer Applicable Laws.
(x) The Company is not, nor immediately after
the sale of the Notes to be sold hereunder and the
application of the proceeds from such sale (as
described in the Final Memorandum under the caption
"Use of Proceeds") will it be, an "investment
company" as such term is defined in the Investment
Company Act of 1940, as amended.
(xi) No registration under the Act of the Notes
is required in connection with the sale of the Notes
to the Initial Purchaser as contemplated by this
Agreement and the Final Memorandum or in connection
with the initial resale of the Notes by the Initial
Purchaser in accordance with Section 8 of this
Agreement, and prior to the commencement of the
Exchange Offer (as defined in the Registration Rights
Agreement) or the effectiveness of the Shelf
Registration Statement (as defined in the
Registration Rights Agreement), the Indenture is not
required to be qualified under the TIA, in each case
assuming (i) that the purchasers who buy such Notes
in the initial resale thereof are QIBs or are
purchasing the Notes in offshore transactions in
reliance on Regulation S, (ii) the accuracy of the
Initial Purchaser's representations in Section 8 and
those of the Company contained in paragraphs (g),
(h), (i) and (k) of Section 5 and (iii) the due
performance by the Initial Purchaser of the
agreements set forth in Section 8 hereof.
(xii) Neither the consummation of the
transactions contemplated by this Agreement nor the
sale, issuance, execution or delivery of the Notes
will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
At the time the foregoing opinion is delivered,
Skadden, Arps, Slate, Meagher & Flom LLP shall
additionally state that it has participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants for
the Company, representatives of the Initial Purchaser and
counsel for the Initial Purchaser, at which conferences
the contents of the Final Memorandum and related matters
were discussed, and, although it has not independently
verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness
of the statements contained in the Final Memorandum
(except to the extent specified in subsection 7(a)(vi) and
(vii)) no facts have come to its attention that lead it to
believe that the Final Memorandum, on the date thereof or
at the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under
which they were made, not misleading (it being understood
that such firm need express no opinion with respect to the
financial statements and related notes thereto and the
other financial, statistical and accounting data included
in the Final Memorandum). The opinion of Skadden, Arps,
Slate, Meagher & Flom LLP described in this Section shall
be rendered to the Initial Purchaser at the request of the
Company and shall so state therein.
References to the Final Memorandum in this
subsection (a) shall include any amendment or supplement
thereto prepared in accordance with the provisions of this
Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchaser shall
have received the opinion dated as of the Closing Date and
addressed to the Initial Purchaser, of Dorsey & Whitney
LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Initial Purchaser, to the
effect that:
(i) The Company is duly incorporated, validly
existing and in good standing under the laws of
Minnesota and has the corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Final
Memorandum.
(ii) The Company has an authorized capital
stock consisting of 25,000,000 shares of common
stock, $.01 par value; all of the outstanding shares
of capital stock of the Company have been duly
authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any
preemptive or similar rights pursuant to the
Company's restated articles of incorporation, bylaws
or Minnesota law.
(iii) The Company has the corporate power and
authority to execute, deliver and perform its
obligations under the Indenture, the Notes, the
Exchange Notes and the Private Exchange Notes; the
Indenture has been duly and validly authorized,
executed and delivered by the Company.
(iv) The Notes have each been duly and validly
authorized, executed and delivered by the Company.
(v) The Exchange Notes and the Private
Exchange Notes have been duly and validly authorized
by the Company.
(vi) The Company has the corporate power and
authority to execute, deliver and perform its
obligations under the Registration Rights Agreement;
the Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the
Company.
(vii) The Company has the corporate power and
authority to execute, deliver and perform its
obligations under the Assumption Agreement; the
Assumption Agreement has been duly and validly
authorized by the Company. The Assumption Agreement
has been duly executed and delivered by the Company.
(viii) Acquisition Corp. has the corporate power
and authority to execute, deliver and perform its
obligations under this Agreement; this Agreement has
been duly and validly authorized by Acquisition Corp.
This Agreement has been duly executed and delivered
by Acquisition Corp.
(ix) The execution and delivery of this
Agreement by Acquisition Corp., and the performance
by Acquisition Corp. of its obligations hereunder do
not violate or cause a breach of the restated
articles of incorporation or bylaws of Acquisition
Corp.
(x) The execution and delivery of the
Indenture, the Registration Rights Agreement, the
Assumption Agreement and the Credit Agreement by the
Company, and the performance by the Company of its
obligations thereunder do not violate or cause a
breach of the restated articles of incorporation or
bylaws of the Company.
(c) On the Closing Date, the Initial Purchaser shall
have received the opinion, in form and substance
satisfactory to the Initial Purchaser, dated as of the
Closing Date and addressed to the Initial Purchaser, of
Cahill Gordon & Reindel, counsel for the Initial
Purchaser, with respect to certain legal matters relating
to this Agreement and such other related matters as the
Initial Purchaser may reasonably require. In rendering
such opinion, Cahill Gordon & Reindel shall have received
and may rely upon such certificates and other documents
and information as it may reasonably request to pass upon
such matters.
(d) The Initial Purchaser shall have received from
Coopers & Lybrand LLP, the Company's independent
accountants, a "comfort letter" or letters dated the date
hereof and the Closing Date, in form and substance
satisfactory to counsel for the Initial Purchaser.
(e) The representations and warranties of
Acquisition Corp. contained in this Agreement shall be
true and correct on and as of the date hereof and on and
as of the Closing Date as if made on and as of the Closing
Date; the statements of the Company's officers made
pursuant to any certificate delivered in accordance with
the provisions hereof shall be true and correct on and as
of the date made and on and as of the Closing Date;
Acquisition Corp. shall have performed all covenants and
agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the
Closing Date; and, except as described in the Final
Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of
the most recent financial statements in such Final
Memorandum, there shall have been no event or development
that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
(f) The sale of the Notes hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
(g) Subsequent to the date of the most recent
financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date
hereof), the conduct of the business and operations of the
Company shall not have been interfered with by strike,
fire, flood, hurricane, accident or other calamity
(whether or not insured) or by any court or governmental
action, order or decree, and, except as otherwise stated
therein, the properties of the Company shall not have
sustained any loss or damage (whether or not insured) as a
result of any such occurrence, except any such
interference, loss or damage that would not, individually
or in the aggregate, have a Material Adverse Effect.
(h) The Initial Purchaser shall have received a
certificate of the Company, dated the Closing Date, signed
on behalf of the Company by its Chairman of the Board,
President or any Vice President and the Chief Financial
Officer, to the effect that:
(i) The representations and warranties of
Acquisition Corp. contained in this Agreement are
true and correct as of the date hereof and as of the
Closing Date, and Acquisition Corp. has performed all
covenants and agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at
or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof
or since the date of the most recent financial
statements in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date
hereof), no event or events have occurred, no
information has become known nor does any condition
exist that, individually or in the aggregate, would
have a Material Adverse Effect; and
(iii) The sale of the Notes hereunder has not
been enjoined (temporarily or permanently).
(i) The Initial Purchaser shall have received a true
and correct copy of the Credit Agreement, together with
all related documents, instruments and agreements and all
schedules, exhibits, appendices and attachments thereto;
there have been no material amendments, alterations,
modifications or waivers of any of the provisions of the
Credit Agreement dated the Closing Date, and there shall
have been no material amendments, alterations,
modifications or waivers of any provisions of the Credit
Agreement; there exists as of the date hereof and on and
as of the Closing Date (after giving effect to the
transactions contemplated by this Agreement and the
application of the proceeds received by the Company from
the sale of the Notes) no condition that would constitute
a Default or an Event of Default (each as defined in the
Credit Agreement) under the Credit Agreement.
(j) The Initial Purchaser shall have received a true
and correct copy of the Merger Agreement, together with
all related documents, instruments and agreements and all
schedules, exhibits, appendices and attachments thereto;
there have been no material amendments, alterations,
modifications or waivers of any of the provisions of the
Merger Agreement dated the Closing Date.
(k) On the Closing Date, the Initial Purchaser shall
have received the Registration Rights Agreement and the
Assumption Agreement executed by the Company and such
agreements shall be in full force and effect at all times
from and after the Closing Date.
(l) The Company shall have received, as equity, at
least $21.0 million from Childs and related investors and
affiliates and the Management Investors.
(m) The certificate of merger with respect to the
Merger shall have been filed with the Secretary of State
of Minnesota and shall have become effective.
On or before the Closing Date, the Initial Purchaser
and counsel for the Initial Purchaser shall have received such
further documents, opinions, certificates, letters and
schedules or instruments relating to the business, corporate,
legal and financial affairs of the Company as they shall have
heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters,
schedules or instruments delivered pursuant to this Agreement
will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Initial
Purchaser and counsel for the Initial Purchaser. Acquisition
Corp. shall cause the Company to furnish to the Initial
Purchaser such conformed copies of such documents, opinions,
certificates, letters, schedules and instruments in such
quantities as the Initial Purchaser shall reasonably request.
8. Offering of Notes; Restrictions on Transfer.
(a) The Initial Purchaser represents and warrants that it is a
QIB. The Initial Purchaser agrees with the Company that (i) it
has not and will not solicit offers for, or offer or sell, the
Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Act; and (ii) it has and will
solicit offers for the Notes only from, and will offer the
Notes only to (A) in the case of offers inside the United
States, persons whom the Initial Purchaser reasonably believes
to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to
the Initial Purchaser that each such account is a QIB to whom
notice has been given that such sale or delivery is being made
in reliance on Rule 144A, and, in each case, in transactions
under Rule 144A and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign
purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than
an estate or trust)); provided, however, that, in the case of
this clause (B), in purchasing such Notes such persons are
deemed to have represented and agreed as provided under the
caption "Transfer Restrictions" contained in the Final
Memorandum.
(b) The Initial Purchaser represents and warrants
with respect to offers and sales outside the United States that
(i) it has and will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers,
sells or delivers Notes or has in its possession or distributes
any Memorandum or any such other material, in all cases at its
own expense; (ii) the Notes have not been and will not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with
Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act; (iii) it has offered the
Notes and will offer and sell the Notes (A) as part of its
distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S and,
accordingly, neither it nor any persons acting on its behalf
have engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Notes,
and any such persons have complied and will comply with the
offering restrictions requirement of Regulation S; and (iv) it
agrees that, at or prior to confirmation of sales of the Notes,
it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that
purchases Notes from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Notes covered hereby have not been
registered under the United States Securities Act
of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to,
or for the account or benefit of, U.S. persons
(i) as part of the distribution of the Notes at
any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and
the closing date of the offering, except in
either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act.
Terms used above have the meaning given to them
in Regulation S."
Terms used in this Section 8 and not defined in this
Agreement have the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) Acquisi-
tion Corp. agrees to indemnify and hold harmless the Initial
Purchaser, and each person, if any, who controls the Initial
Purchaser or its affiliates within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which the Initial Purchaser
or such controlling person may become subject under the Act,
the Exchange Act or otherwise, insofar as any such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue
statement of any material fact contained in any Memorandum
or any amendment or supplement thereto; or
(ii) the omission or alleged omission to state, in
any Memorandum or any amendment or supplement thereto, a
material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and will reimburse, as incurred, the Initial Purchaser and each
such controlling person for any legal or other expenses
reasonably incurred by the Initial Purchaser or such
controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection
with any such loss, claim, damage, liability or action;
provided, however, that Acquisition Corp. will not be liable
(i) in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged
omission made in any Memorandum or any amendment or supplement
thereto in reliance upon and in conformity with written
information concerning the Initial Purchaser furnished to the
Company by the Initial Purchaser specifically for use therein
or (ii) in any such case with respect to the Preliminary
Memorandum, to the extent that any such loss, claim, damage or
liability arises solely from the fact that the Initial
Purchaser sold Notes to a person to whom there was not sent or
given a copy of the Final Memorandum (as amended or
supplemented) at or prior to the written confirmation of such
sale if the Company shall have previously furnished copies
thereof to the Initial Purchaser in accordance with Section
5(d) hereof and the Final Memorandum (as amended and
supplemented) would have corrected any such untrue statement or
omission. This indemnity agreement will be in addition to any
liability that Acquisition Corp. may otherwise have to the
indemnified parties. Acquisition Corp. shall not be liable
under this Section 9 for any settlement of any claim or action
effected without its prior written consent, which shall not be
unreasonably withheld. The Initial Purchaser shall not,
without the prior written consent of the Company, effect any
settlement or compromise of any pending or threatened
proceeding in respect of which the Company is or could have
been a party, or indemnity could have been sought hereunder by
the Company, unless such settlement (A) includes an
unconditional written release of the Company, in form and
substance reasonably satisfactory to the Company, from all
liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an
admission of fault, culpability or failure to act by or on
behalf of the Company.
(b) The Initial Purchaser agrees to indemnify and
hold harmless Acquisition Corp. and its directors, officers and
each person, if any, who controls Acquisition Corp. within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which
Acquisition Corp. or any such director, officer or controlling
person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in any Memorandum or any
amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to
be stated in any Memorandum or any amendment or supplement
thereto, or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial
Purchaser, furnished to the Company by the Initial Purchaser
specifically for use therein; and subject to the limitation set
forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by
Acquisition Corp. or any such director, officer or controlling
person in connection with investigating or defending against or
appearing as a third party witness in connection with any such
loss, claim, damage, liability or action in respect thereof.
This indemnity agreement will be in addition to any liability
that the Initial Purchaser may otherwise have to the
indemnified parties. The Initial Purchaser shall not be liable
under this Section 9 for any settlement of any claim or action
effected without its consent, which shall not be unreasonably
withheld. Acquisition Corp. shall not, without the prior
written consent of the Initial Purchaser, effect any settlement
or compromise of any pending or threatened proceeding in
respect of which the Initial Purchaser is or could have been a
party, or indemnity could have been sought hereunder by the
Initial Purchaser, unless such settlement (A) includes an
unconditional written release of the Initial Purchaser, in form
and substance reasonably satisfactory to the Initial Purchaser,
from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an
admission of fault, culpability or failure to act by or on
behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party
under this Section 9 of notice of the commencement of any
action for which such indemnified party is entitled to
indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the
indemnifying party of the commencement thereof in writing; but
the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above
unless and to the extent such failure results in the forfeiture
by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided,
however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the
defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party
shall have been advised by counsel that in such counsel's
reasonable opinion there may be one or more legal defenses
available to it and/or other indemnified parties that are
different from or additional to those available to the
indemnifying party, or (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after receipt by the indemnifying party of
notice of the institution of such action, then, in each such
case, the indemnifying party shall not have the right to direct
the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the
right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action,
the indemnifying party will not be liable to such indemnified
party under this Section 9 for any legal or other expenses,
other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the
defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the
immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate
counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or
circumstances, designated by the Initial Purchaser in the case
of paragraph (a) of this Section 9 or Acquisition Corp. in the
case of paragraph (b) of this Section 9, representing the
indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions)
or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense
of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying
party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party
(which consent shall not be unreasonably withheld), unless such
indemnified party waived in writing its rights under this
Section 9, in which case the indemnified party may effect such
a settlement without such consent.
(d) In circumstances in which the indemnity
agreement provided for in the preceding paragraphs of this
Section 9 is unavailable to, or insufficient to hold harmless,
an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other from the
Offering or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by
Acquisition Corp. on the one hand and the Initial Purchaser on
the other shall be deemed to be in the same proportion as the
total proceeds from the Offering (before deducting expenses)
received by the Company bear to the total discounts and
commissions received by the Initial Purchaser. The relative
fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on
the one hand, or the Initial Purchaser on the other, the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable
considerations appropriate in the circumstances. Acquisition
Corp. and the Initial Purchaser agree that it would not be
equitable if the amount of such contribution were determined by
pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable
considerations referred to in the first sentence of this
paragraph (d). Notwithstanding any other provision of this
paragraph (d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls the Initial
Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to
contribution as the Initial Purchaser, and each director and
officer of Acquisition Corp. and each person, if any, who
controls Acquisition Corp. within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as Acquisition Corp.
10. Survival Clause. The respective
representations, warranties, agreements, covenants, indemnities
and other statements of the Company and its officers and the
Initial Purchaser set forth in this Agreement or made by or on
behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by
or on behalf of the Company or any of its officers or
directors, the Initial Purchaser or any controlling person
referred to in Section 9 hereof and (ii) delivery of and
payment for the Notes. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6, 9 and
15 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be
terminated in the sole discretion of the Initial Purchaser by
notice to Acquisition Corp. given prior to the Closing Date in
the event that Acquisition Corp. shall have failed, refused or
been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder
at or prior thereto or, if at or prior to the Closing Date:
(i) the Company shall have sustained any loss or
interference with respect to its business or properties
from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike,
labor dispute, slowdown or work stoppage or any legal or
governmental proceeding, which loss or interference, in
the sole judgment of the Initial Purchaser, has had or has
a Material Adverse Effect, or there shall have been, in
the sole judgment of the Initial Purchaser, any event or
development that, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse
Effect (including, without limitation, a change in control
of the Company), except in each case as described in the
Final Memorandum (exclusive of any amendment or supplement
thereto);
(ii) trading in securities of the Company or in
securities generally on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market
shall have been suspended or minimum or maximum prices
shall have been established on any such exchange or
market;
(iii) a banking moratorium shall have been declared
by New York or United States authorities;
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and
any foreign power, or (B) an outbreak or escalation of any
other insurrection or armed conflict involving the United
States or any other national or international calamity or
emergency or (C) any material change in the financial
markets of the United States which, in the case of (A),
(B) or (C) above and in the sole judgment of the Initial
Purchaser, makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Notes as
contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been
downgraded or placed on any "watch list" for possible
downgrading by any nationally recognized statistical
rating organization.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other
party except as provided in Section 10 hereof.
(c) Unless the parties hereto mutually agree
otherwise, this Agreement shall terminate automatically in the
event that the Merger is not consummated on the Closing Date,
except as provided in Section 10 hereof.
12. Information Supplied by the Initial Purchaser.
The statements set forth in the last paragraph on the front
cover page and the last two sentences of the third paragraph
under the heading "Private Placement" in the Final Memorandum
(to the extent such statements relate to the Initial Purchaser)
constitute the only information furnished by the Initial
Purchaser to the Company for the purposes of Sections 2(a) and
9 hereof.
13. Notices. All communications hereunder shall be
in writing and, if sent to the Initial Purchaser, shall be
mailed or delivered to BT Alex. Brown Incorporated, 130 Liberty
Street, New York, New York 10006, Attention: Corporate Finance
Department; if sent to the Company, shall be mailed or
delivered to the Company at 1250 Northland Plaza, 3800 West
80th Street, Bloomington, MN 55431-4442, Attention: Chief
Executive Officer; with a copy to Skadden, Arps, Slate, Meagher
& Flom LLP, 919 Third Avenue, New York, NY 10022-3897,
Attention: Vincent J. Pisano, Esq.
All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally
delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; and one business day after
being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchaser and
Acquisition Corp. and their respective successors and legal
representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or
in respect of this Agreement, or any provisions herein
contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no
other person except that (i) the indemnities of Acquisition
Corp. contained in Section 9 of this Agreement shall also be
for the benefit of any person or persons who control the
Initial Purchaser within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of
the Initial Purchaser contained in Section 9 of this Agreement
shall also be for the benefit of the directors of Acquisition
Corp., its officers and any person or persons who control
Acquisition Corp. within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act. No purchaser of Notes from
the Initial Purchaser will be deemed a successor because of
such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION
OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH
HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO
ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
If the foregoing correctly sets forth our
understanding, please indicate your acceptance thereof in the
space provided below for that purpose, whereupon this letter
shall constitute a binding agreement by and between Acquisition
Corp. and the Initial Purchaser.
Very truly yours,
UHS ACQUISITION CORP.
By: /s/ Edward D. Yun
--------------------
Name:
Title:
The foregoing Agreement
is hereby confirmed and accepted
as of the date first above
written.
BT ALEX. BROWN INCORPORATED
By: /s/ Alex Freedman
-----------------
Name: Alex Freedman
Title: Vice President
Exhibit (a)(8)
===========================================================================
INDENTURE
Dated as of February 25, 1998
Among
UNIVERSAL HOSPITAL SERVICES, INC., as Issuer,
and
FIRST TRUST NATIONAL ASSOCIATION, as Trustee
__________________
up to $180,000,000
10 1/4% Senior Notes due 2008, Series A
10 1/4% Senior Notes due 2008, Series B
=========================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1) . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . 7.08; 7.10
(b) . . . . . . . . . . . . . . . . . 7.08; 7.10; 11.02
(c) . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . 11.03
313(a) . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . 7.06; 11.02
(d) . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . 4.06; 4.08; 11.02
(b) . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . 7.05; 11.02
(c) . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . 6.07
317(a)(1) . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . 11.01
(c) . . . . . . . . . . . . . . . . . 11.01
TABLE OF CONTENTS
Page
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of TIA . . . . . . . . . . . 28
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . 28
ARTICLE TWO THE NOTES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . 31
SECTION 2.04. Paying Agent To Hold Assets in Trust . . . . . . . . . . 32
SECTION 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . 33
SECTION 2.07. Replacement Notes . . . . . . . . . . . . . . . . . . . 34
SECTION 2.08. Outstanding Notes . . . . . . . . . . . . . . . . . . . 34
SECTION 2.09. Treasury Notes . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.10. Temporary Notes . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . 36
SECTION 2.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.14. Deposit of Moneys . . . . . . . . . . . . . . . . . . . 37
SECTION 2.15. Book-Entry Provisions for Global Notes . . . . . . . . . 38
SECTION 2.16. Special Transfer Provisions . . . . . . . . . . . . . . 39
SECTION 2.17. Restrictive Legends . . . . . . . . . . . . . . . . . . 43
ARTICLE THREE REDEMPTION
SECTION 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . 43
SECTION 3.02. Selection of Notes To Be Redeemed . . . . . . . . . . . 44
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . 44
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . 45
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . 46
SECTION 3.06. Notes Redeemed in Part . . . . . . . . . . . . . . . . . 46
ARTICLE FOUR COVENANTS
SECTION 4.01. Payment of Notes . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.02. Maintenance of Office or Agency . . . . . . . . . . . . 47
SECTION 4.03. Corporate Existence . . . . . . . . . . . . . . . . . . 47
SECTION 4.04. Payment of Taxes and Other Claims . . . . . . . . . . . 47
SECTION 4.05. Maintenance of Properties and Insurance . . . . . . . . 48
SECTION 4.06. Compliance Certificate; Notice of Default . . . . . . . 48
SECTION 4.07. Compliance with Laws . . . . . . . . . . . . . . . . . . 49
SECTION 4.08. Reports to Holders . . . . . . . . . . . . . . . . . . . 50
SECTION 4.09. Waiver of Stay, Extension or Usury Laws . . . . . . . . 50
SECTION 4.10. Limitation on Restricted Payments . . . . . . . . . . . 51
SECTION 4.11. Limitations on Transactions with Affiliates . . . . . . 53
SECTION 4.12. Limitation on Incurrence of Additional
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 4.14. Change of Control . . . . . . . . . . . . . . . . . . . 57
SECTION 4.15. Limitation on Asset Sales . . . . . . . . . . . . . . . 59
SECTION 4.16. Limitation on Liens . . . . . . . . . . . . . . . . . . 63
SECTION 4.17. Conduct of Business . . . . . . . . . . . . . . . . . . 64
SECTION 4.18. Limitation on Preferred Stock of Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 4.19. Limitation of Guarantees by Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE FIVE SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets . . . . . . . . 65
SECTION 5.02. Successor Corporation Substituted . . . . . . . . . . . 66
ARTICLE SIX DEFAULT AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . 67
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . 70
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . . 70
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . 71
SECTION 6.07. Rights of Holders To Receive Payment . . . . . . . . . . 71
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . 71
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . 72
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . 73
ARTICLE SEVEN TRUSTEE
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . 73
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . 75
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . 76
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . 76
SECTION 7.05. Notice of Default . . . . . . . . . . . . . . . . . . . 77
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . 77
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . 78
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . 79
SECTION 7.09. Successor Trustee by Merger, Etc . . . . . . . . . . . . 80
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . 80
SECTION 7.11. Preferential Collection of Claims Against the
Company . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE EIGHT DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations . . . . . . . . 81
SECTION 8.02. Legal Defeasance and Covenant Defeasance . . . . . . . . 82
SECTION 8.03. Conditions to Legal Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 8.04. Application of Trust Money . . . . . . . . . . . . . . . 86
SECTION 8.05. Repayment to the Company . . . . . . . . . . . . . . . . 86
SECTION 8.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . . . 87
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . . . 88
SECTION 9.03. Compliance with TIA . . . . . . . . . . . . . . . . . . 89
SECTION 9.04. Revocation and Effect of Consents . . . . . . . . . . . 89
SECTION 9.05. Notation on or Exchange of Notes . . . . . . . . . . . . 90
SECTION 9.06. Trustee To Sign Amendments, Etc . . . . . . . . . . . . 90
ARTICLE TEN GUARANTEE
SECTION 10.01. Unconditional Guarantee . . . . . . . . . . . . . . . . 91
SECTION 10.02. Release of a Guarantor . . . . . . . . . . . . . . . . . 92
SECTION 10.03. Limitation of a Guarantor's Liability . . . . . . . . . 92
SECTION 10.04. Guarantors May Consolidate, etc., on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 10.05. Contribution . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 10.06. Waiver of Subrogation . . . . . . . . . . . . . . . . . 95
SECTION 10.07. Execution of Guarantee . . . . . . . . . . . . . . . . . 95
SECTION 10.08. Waiver of Stay, Extension or Usury Laws . . . . . . . . 96
ARTICLE ELEVEN MISCELLANEOUS
SECTION 11.01. TIA Controls . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 11.03. Communications by Holders with Other Holders . . . . . . 98
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 11.05. Statements Required in Certificate or Opinion
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar . . . . . . . 99
SECTION 11.07. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 99
SECTION 11.08. Governing Law . . . . . . . . . . . . . . . . . . . . . 99
SECTION 11.09. No Adverse Interpretation of Other Agreements
. . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . . . 100
SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 11.12. Duplicate Originals . . . . . . . . . . . . . . . . . 100
SECTION 11.13. Severability . . . . . . . . . . . . . . . . . . . . . 100
SECTION 11.14. Independence of Covenants . . . . . . . . . . . . . . 101
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Exhibit A - Form of Series A Note
Exhibit B - Form of Series B Note
Exhibit C - Form of Legend for Global Notes
Exhibit D - Form of Certificate To Be Delivered in
Connection with Transfers to Non-QIB Accredited
Investors
Exhibit E - Form of Certificate To Be Delivered in
Connection with Transfers Pursuant to Regulation S
Exhibit F - Form of Guarantee
Note: This Table of Contents shall not, for any purpose, be deemed to be
part of this Indenture.
INDENTURE, dated as of February 25, 1998, between UNIVERSAL
HOSPITAL SERVICES, INC., a Minnesota corporation (the "Company"), and FIRST
TRUST NATIONAL ASSOCIATION, as trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 10 1/4%
Senior Notes due 2008, Series A, and 10 1/4% Senior Notes due 2008, Series
B, to be issued in exchange for the 10 1/4% Senior Notes due 2008, Series
A, pursuant to a Registration Rights Agreement (as defined) and, to provide
therefor, the Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make the Notes (as defined), when
duly issued and executed by the Company and authenticated and delivered
hereunder, the valid and binding obligations of the Company and to make
this Indenture a valid and binding agreement of the Company, have been
done.
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the
Company's 10 1/4% Senior Notes due 2008, Series A and Series B:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 6.02.
"Acquired Indebtedness" means Indebtedness of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Restricted Subsidiaries or assumed in connection with
the acquisition of assets from such Person and in each case not incurred by
such Person in connection with, or in anticipation or contemplation of,
such Person becoming a Restricted Subsidiary of the Company or such
acquisition, merger or consolidation.
"Additional Interest" has the meaning provided in the
Registration Rights Agreement.
"Affiliate" means, with respect to any specified Person, any
other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such
specified Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
"Applicable Premium" means, with respect to a Note, the greater
of (i) 1.0% of the then outstanding principal amount of such Note and (ii)
the excess of (A) the present value at such time of (1) the redemption
price of such Note at March 1, 2003 plus (2) all remaining required
interest payments due on such Note through March 1, 2003, computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (B) the
then outstanding principal amount of such Note.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Restricted Subsidiary of the Company or any
Restricted Subsidiary of the Company, or shall be merged with or into the
Company or any Restricted Subsidiary of the Company, or (b) the acquisition
by the Company or any Restricted Subsidiary of the Company of the assets of
any Person (other than a Restricted Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person or
comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in
the ordinary course of business), assignment or other transfer for value by
the Company or any of its Restricted Subsidiaries (including any Sale and
Leaseback Transaction) to any Person other than the Company or a Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted
Subsidiary of the Company; or (b) any other property or assets of the
Company or any Restricted Subsidiary of the Company other than in the
ordinary course of business; provided, however, that Asset Sales shall not
include (i) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration of
less than $1.0 million; (ii) disposals or replacements of obsolete or worn-
out equipment in the ordinary course of business; (iii) the sale or
discount, in each case without recourse (other than recourse for a breach
of a representation or warranty) of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof; (iv) any Restricted Payment and (v) the sale, lease,
conveyance, disposition or other transfer of all or substantially all of
the assets of the Company as permitted under Article Five.
"Bankruptcy Law" means Title 11, United States Code or any
similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors of such Person
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate
stock, including each class of Common Stock and Preferred Stock of such
Person and (ii) with respect to any Person that is not a corporation, any
and all partnership or other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes
of this definition, the amount of such obligations at any date shall be the
capitalized amount of such obligations at such date, determined in
accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from either Standard & Poor's
Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"); (iii)
commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any bank organized under the laws of the United States of
America or any state thereof or the District of Columbia or any U.S. branch
of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $250,000,000; (v) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any
bank meeting the qualifications specified in clause (iv) above; and (vi)
investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (v)
above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company to any Person or group of related Persons
for purposes of Section 13(d) of the Exchange Act (a "Group"), together
with any Affiliates thereof (whether or not otherwise in compliance with
the provisions of the Indenture) other than to the Permitted Holders; (ii)
the approval by the holders of Capital Stock of the Company of any plan or
proposal for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the provisions of the Indenture); (iii) any
Person or Group (other than the Permitted Holders) shall become the owner,
directly or indirectly, beneficially or of record, of shares representing
more than 50% of the aggregate ordinary voting power represented by the
issued and outstanding Capital Stock of the Company; or (iv) the
replacement of a majority of the Board of Directors of the Company over a
two-year period from the directors who constituted the Board of Directors
of the Company at the beginning of such period, and such replacement shall
not have been approved by a vote of at least a majority of the Board of
Directors of the Company then still in office who either were members of
such Board of Directors at the beginning of such period or whose election
as a member of such Board of Directors was previously so approved.
"Change of Control Offer" has the meaning provided in Section
4.14.
"Change of Control Payment Date" has the meaning provided in
Section 4.14.
"Commission" or "SEC" means the Securities and Exchange
Commission.
"Common Stock" of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of such Person's common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
"Company" means Universal Hospital Services, Inc., a Minnesota
corporation.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and
(ii) to the extent Consolidated Net Income has been reduced thereby, (A)
all income taxes of such Person and its Restricted Subsidiaries paid or
accrued in accordance with GAAP for such period (other than income taxes
attributable to extraordinary, unusual or nonrecurring gains or losses or
taxes attributable to sales or dispositions outside the ordinary course of
business), (B) Consolidated Interest Expense and (C) Consolidated Non-cash
Charges less any non-cash items increasing Consolidated Net Income for such
period, all as determined on a consolidated basis for such Person and its
Restricted Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four
full fiscal quarters (the "Four Quarter Period") ending on or prior to the
date of the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio for which financial statements are
available (the "Transaction Date") to Consolidated Fixed Charges of such
Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA"
and "Consolidated Fixed Charges" shall be calculated after giving effect on
a pro forma basis for the period of such calculation to (i) the incurrence
or repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to
the need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities,
occurring during the Four Quarter Period or at any time subsequent to the
last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such incurrence or repayment, as the case may be (and the
application of the proceeds thereof), occurred on the first day of the Four
Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make
such calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being
liable for Acquired Indebtedness and also including any Consolidated EBITDA
(including any pro forma expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Exchange Act) attributable to the
assets which are the subject of the Asset Acquisition or Asset Sale during
the Four Quarter Period) occurring during the Four Quarter Period or at any
time subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period. If such
Person or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall
give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in
calculating "Consolidated Fixed Charges" for purposes of determining the
denominator (but not the numerator) of this "Consolidated Fixed Charge
Coverage Ratio," (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be
so determined thereafter shall be deemed to have accrued at a fixed rate
per annum equal to the rate of interest on such Indebtedness in effect on
the Transaction Date; (2) if interest on any Indebtedness actually incurred
on the Transaction Date may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank
offered rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the Four
Quarter Period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest
is covered by agreements relating to Interest Swap Obligations, shall be
deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the sum, without duplication, of (i) Consolidated Interest
Expense, plus (ii) the product of (x) the amount of all dividend payments
on any series of Preferred Stock of such Person (other than dividends paid
in Qualified Capital Stock) paid, accrued or scheduled to be paid or
accrued during such period times (y) a fraction, the numerator of which is
one and the denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person, expressed as
a decimal.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Restricted Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP,
including without limitation, (a) any amortization of debt discount and
amortization or write-off of deferred financing costs, (b) the net costs
under Interest Swap Obligations, (c) all capitalized interest and (d) the
interest portion of any deferred payment obligation; and (ii) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled
to be paid or accrued by such Person and its Restricted Subsidiaries during
such period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person, for
any period, the aggregate net income (or loss) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis, determined
in accordance with GAAP; provided that there shall be excluded therefrom
(a) after-tax gains or losses from Asset Sales or abandonments or reserves
relating thereto, (b) after-tax items classified as extraordinary or
nonrecurring gains or losses, (c) the net income or loss of any Person
acquired in a "pooling of interests" transaction accrued prior to the date
it becomes a Restricted Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Restricted Subsidiary of the
referent Person, (d) the net income (but not loss) of any Restricted
Subsidiary of the referent Person to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that
income is restricted by a contract, operation of law or otherwise, (e) the
net income of any Person, other than a Restricted Subsidiary of the
referent Person, except to the extent of cash dividends or distributions
paid to the referent Person or to a Restricted Subsidiary of the referent
Person by such Person, (f) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out
of Consolidated Net Income accrued at any time following the Issue Date,
(g) income or loss attributable to discontinued operations (including,
without limitation, operations disposed of during such period whether or
not such operations were classified as discontinued), and (h) in the case
of a successor to the referent Person by consolidation or merger or as a
transferee of the referent Person's assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets.
"Consolidated Non-cash Charges" means, with respect to any
Person, for any period, the aggregate depreciation, amortization and other
non-cash expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP
(excluding any such charges constituting an extraordinary item or loss or
any such charge which requires an accrual of or a reserve for cash charges
for any future period).
"Covenant Defeasance" has the meaning set forth in Section 8.02.
"Credit Agreement" means the Credit Agreement dated as of
February 25, 1998, among the Company, the lenders party thereto in their
capacities as lenders thereunder and Bankers Trust Company, as agent,
together with the related documents thereto (including, without limitation,
any guarantee agreements and security documents), in each case as such
agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including
any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available
borrowings thereunder or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement
and whether by the same or any other agent, lender or group of lenders.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed
to protect the Company or any Restricted Subsidiary of the Company against
fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is,
or with the lapse of time or the giving of notice or both would be, an
Event of Default.
"Depository" means, with respect to the Notes issued in the form
of one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Discharged" means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by, and obligations
under, the Notes and to have satisfied all the obligations under this
Indenture relating to the Notes (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same upon
compliance by the Company with the provisions of Article Eight), except
(i) the rights of the Holders of Notes to receive, from the trust fund
described in Article Eight, payment of the principal of and the interest on
such Notes when such payments are due, (ii) the Company's obligations with
respect to the Notes under Sections 2.03 through 2.07, 7.07 and 7.08 and
(iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder.
"Disqualified Capital Stock" means that portion of any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the final maturity date of the Notes.
"Equity Offering" means a public or private offering of Qualified
Capital Stock of the Company.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Notes" means the 101/4% Senior Notes due 2008, Series B
to be issued in exchange for the Initial Notes pursuant to the Registration
Rights Agreement or, with respect to Initial Notes issued under this
Indenture subsequent to the Issue Date pursuant to Section 2.02, a
registration rights agreement substantially identical to the Registration
Rights Agreement.
"Exchange Offer" has the meaning provided in the Registration
Rights Agreement.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able
buyer, neither of whom is under undue pressure or compulsion to complete
the transaction. Fair market value shall be determined by the Board of
Directors of the Company acting reasonably and in good faith and shall be
evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.
"Funds" means the aggregate amount of U.S. Legal Tender and/or
U.S. Government Obligations deposited with the Trustee pursuant to Article
Eight.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States, which are in effect as
of the Issue Date.
"Global Note" has the meaning provided in Section 2.01.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters
of credit and reimbursement agreements in respect thereof), of all or any
part of any Indebtedness.
"Guarantor" means each of the Company's Restricted Subsidiaries
that in the future executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of the Indenture as a
Guarantor; provided that any Person constituting a Guarantor as described
above shall cease to constitute a Guarantor when its respective Guarantee
is released in accordance with the terms of the Indenture.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"incur" has the meaning provided in Section 4.12.
"Indebtedness" means with respect to any Person, without
duplication, (i) all Obligations of such Person for borrowed money, (ii)
all Obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (iii) all Capitalized Lease Obligations of such
Person, (iv) all Obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations and
all Obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary
course of business that are not overdue 180 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted), (v) all Obligations for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any lien on any property or
asset of such Person, the amount of such Obligation being deemed to be the
lesser of the fair market value of such property or asset or the amount of
the Obligation so secured, (viii) all Obligations under currency agreements
and interest swap agreements of such Person and (ix) all Disqualified
Capital Stock issued by such Person with the amount of Indebtedness
represented by such Disqualified Capital Stock being equal to the greater
of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock
as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture,
and if such price is based upon, or measured by, the fair market value of
such Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the Board of Directors of the issuer of
such Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent Financial Advisor" means a firm (i) which does not,
and whose directors, officers and employees or Affiliates do not, have a
direct or indirect financial interest in the Company and (ii) which, in the
judgment of the Board of Directors of the Company, is otherwise independent
and qualified to perform the task for which it is to be engaged.
"Initial Notes" means, collectively, (i) the 10 1/4% Senior Notes
due 2008, Series A, of the Company issued on the Issue Date and (ii) one or
more series of 10 1/4% Senior Notes due 2008 that are issued under this
Indenture subsequent to the Issue Date pursuant to Section 2.02, in each
case for so long as such securities constitute Restricted Notes.
"Initial Purchaser" means BT Alex. Brown Incorporated.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of
interest on a stated notional amount in exchange for periodic payments made
by such other Person calculated by applying a fixed or a floating rate of
interest on the same notional amount and shall include, without limitation,
interest rate swaps, caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation,
a guarantee) or capital contribution to (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by, any Person. "Investment" shall exclude
extensions of trade credit by the Company and its Restricted Subsidiaries
on commercially reasonable terms in accordance with normal trade practices
of the Company or such Restricted Subsidiary, as the case may be. For the
purposes of Section 4.10, (i) "Investment" shall include and be valued at
the fair market value of the net assets of any Restricted Subsidiary at the
time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary and shall exclude the fair market value of the net assets of any
Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary and (ii) the amount of any Investment
shall be the original cost of such Investment plus the cost of all
additional Investments by the Company or any of its Restricted
Subsidiaries, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment,
reduced by the payment of dividends or distributions in connection with
such Investment or any other amounts received in respect of such
Investment; provided that no such payment of dividends or distributions or
receipt of any such other amounts shall reduce the amount of any Investment
if such payment of dividends or distributions or receipt of any such
amounts would be included in Consolidated Net Income. If the Company or
any Restricted Subsidiary of the Company sells or otherwise disposes of any
Common Stock of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such
Subsidiary is no longer a Restricted Subsidiary, the Company shall be
deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Common Stock of such
Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of the Notes.
"Legal Defeasance" has the meaning set forth in Section 8.02.
"Legal Holiday" has the meaning provided in Section 11.07.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Management Agreement" means the management agreement by and
between the Company and J.W. Childs Associates, L.P., as in effect on the
Issue Date.
"Maturity Date" means March 1, 2008.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash
or Cash Equivalents (other than the portion of any such deferred payment
constituting interest) received by the Company or any of its Restricted
Subsidiaries from such Asset Sale net of (a) out-of-pocket expenses and
fees relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions), (b) taxes
paid or payable after taking into account any reduction in consolidated tax
liability due to available tax credits or deductions and any tax sharing
arrangements, (c) repayment of Indebtedness that is required to be repaid
in connection with such Asset Sale and (d) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the case may be,
as a reserve, in accordance with GAAP, against any liabilities associated
with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale.
"Net Proceeds Offer" has the meaning provided in Section 4.15.
"Net Proceeds Offer Amount" has the meaning provided in
Section 4.15.
"Net Proceeds Offer Payment Date" has the meaning provided in
Section 4.15.
"Net Proceeds Offer Trigger Date" has the meaning provided in
Section 4.15.
"Non-U.S. Person" has the meaning assigned to such term in
Regulation S.
"Notes" means, collectively, the Initial Notes, the Private
Exchange Notes, if any, and the Exchange Notes, treated as a single class
of securities, as amended or supplemented from time to time in accordance
with the terms of this Indenture, that are issued pursuant to this
Indenture.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing any
Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Treasurer, the Controller, or the Secretary of
such Person, or any other officer designated by the Board of Directors
serving in a similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any
Vice President and the Chief Financial Officer or any Treasurer of such
Person that shall comply with applicable provisions of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee complying with the requirements
of Sections 11.04 and 11.05, as they relate to the giving of an Opinion of
Counsel, and delivered to the Trustee.
"Participants" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03, except
that, during the continuance of a Default or Event of Default and for the
purposes of Articles Three and Eight and Sections 4.14 and 4.15, the Paying
Agent shall not be the Company or any Affiliate of the Company.
"Permitted Holders" means J.W. Childs Equity Partners, L.P. and
its Affiliates.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Notes and the Indenture up
to $100 million at any time outstanding;
(ii) Indebtedness incurred pursuant to the Credit
Agreement in an aggregate principal amount at any time outstanding not
to exceed the greater of $30.0 million and (y) the sum of 85% of
Eligible Accounts Receivable and 60% of the net book value of Eligible
Rental Equipment, in each case as defined in the Credit Agreement,
reduced, in either case, by any required permanent repayments pursuant
to the provisions of Section 4.15 (which are accompanied by a
corresponding permanent commitment reduction in the case of a
revolving credit facility) thereunder;
(iii) other Indebtedness of the Company and its
Restricted Subsidiaries outstanding on the Issue Date reduced by the
amount of any scheduled amortization payment or mandatory prepayments
when actually paid or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company covering
Indebtedness of the Company or any of its Restricted Subsidiaries;
provided, however, that such Interest Swap Obligations are entered
into to protect the Company and its Restricted Subsidiaries from
fluctuations in interest rates on Indebtedness incurred in accordance
with the Indenture to the extent the notional principal amount of such
Interest Swap Obligation does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates;
(v) Indebtedness of a Restricted Subsidiary of the
Company to the Company or to a Restricted Subsidiary of the Company
for so long as such Indebtedness is held by the Company or a
Restricted Subsidiary of the Company or the lenders or collateral
agent under the Credit Agreement, in each case subject to no Lien held
by a Person other than the Company or a Restricted Subsidiary of the
Company or the lenders or collateral agent under the Credit Agreement;
provided that if as of any date any Person other than the Company or a
Restricted Subsidiary of the Company or the lenders or collateral
agent under the Credit Agreement owns or holds any such Indebtedness
or holds a Lien in respect of such Indebtedness, such date shall be
deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness;
(vi) Indebtedness of the Company to a Restricted
Subsidiary of the Company for so long as such Indebtedness is held by
a Restricted Subsidiary of the Company or the lenders or collateral
agent under the Credit Agreement, in each case subject to no Lien held
by a Person other than the lenders or the collateral agent under the
Credit Agreement; provided that (a) any Indebtedness of the Company to
any Restricted Subsidiary of the Company is unsecured and
subordinated, pursuant to a written agreement, to the Company's
obligations under the Indenture and the Notes and (b) if as of any
date any Person other than a Restricted Subsidiary of the Company owns
or holds any such Indebtedness or any Person holds a Lien in respect
of such Indebtedness, such date shall be deemed the incurrence of
Indebtedness not constituting Permitted Indebtedness by the Company;
(vii) Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business;
provided, however, that such Indebtedness is extinguished within three
business days of incurrence;
(viii) Indebtedness of the Company or any of its
Restricted Subsidiaries represented by letters of credit for the
account of the Company or such Restricted Subsidiary, as the case may
be, in order to provide security for workers' compensation claims,
payment obligations in connection with self-insurance or similar
requirements in the ordinary course of business;
(ix) Refinancing Indebtedness;
(x) additional Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed
$10.0 million at any one time outstanding;
(xi) Purchase Money Indebtedness and Capitalized Lease
Obligations in an aggregate amount for all Indebtedness incurred by
the Company or any Restricted Subsidiary pursuant to this subclause
(xi) not to exceed $5.0 million at any one time outstanding;
(xii) guarantees of Indebtedness otherwise permitted
under the Indenture; and
(xiii) Indebtedness of the Company or any Restricted
Subsidiary consisting of guarantees, indemnities or obligations in
respect of purchase price adjustments in connection with the
acquisition or disposition of assets, including, without limitation
shares of Capital Stock.
"Permitted Investments" means:
(i) Investments by the Company or any Restricted
Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Restricted Subsidiary of the
Company or that will merge or consolidate into the Company or a
Restricted Subsidiary of the Company;
(ii) Investments in the Company by any Restricted
Subsidiary of the Company; provided that any Indebtedness
evidencing such Investment is unsecured and subordinated,
pursuant to a written agreement, to the Company's obligations
under the Notes and the Indenture;
(iii) investments in cash and Cash Equivalents;
(iv) loans and advances to employees and officers
of the Company and its Restricted Subsidiaries in the ordinary
course of business for bona fide business purposes (including to
permit the purchase of or to carry Capital Stock of the Company)
not in excess of $500,000 at any one time outstanding;
(v) Interest Swap Obligations entered into in the
ordinary course of the Company's or its Restricted Subsidiaries'
businesses and otherwise in compliance with the Indenture;
(vi) other Investments not to exceed $7.5 million
at any one time outstanding; provided that on the date such
Investment is made, after giving effect to such Investment, the
Consolidated Fixed Charge Coverage Ratio of the Company is
greater than (x) 2.25 to 1.0 if the Investment is made prior to
March 1, 2001 and (y) 2.50 to 1.0 if the Investment is made on or
after March 1, 2001;
(vii) Investments in securities of trade creditors
or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers;
(viii) Investments made by the Company or its
Restricted Subsidiaries as a result of consideration received in
connection with an Asset Sale made in compliance with Section
4.15;
(ix) Investments the payment of which consists
exclusively of Qualified Capital Stock of the Company;
(x) Investments in existence on the Issue Date;
(xi) guarantees of Indebtedness otherwise
permitted under the Indenture;
(xii) receivables owing to the Company or any
Restricted Subsidiary, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance
with customary trade terms; and
(xiii) Investments consisting of Permitted
Indebtedness.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental
charges or claims either (a) not delinquent or (b) contested in
good faith by appropriate proceedings and as to which the Company
or its Restricted Subsidiaries shall have set aside on its books
such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made in respect
thereof;
(iii) Liens incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in
the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the
payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of
Default;
(v) easements, rights-of-way, zoning
restrictions, eminent domain proceedings and other similar
charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of
the business of the Company or any of its Restricted
Subsidiaries;
(vi) any interest or title of a lessor under any
Capitalized Lease Obligation; provided that such Liens do not
extend to any property or assets which is not leased property
subject to such Capitalized Lease Obligation;
(vii) purchase money Liens to finance the
acquisition, construction or improvement in the ordinary course
of business of property or assets of the Company or any
Restricted Subsidiary of the Company; provided, however, that (A)
the related purchase money Indebtedness shall not exceed the cost
of such acquisition, construction or improvement of such property
or assets and shall not be secured by any property or assets of
the Company or any Restricted Subsidiary of the Company other
than the property and assets so acquired (whether through the
direct acquisition of such property or assets or indirectly
through the acquisition of the Capital Stock of any Person owning
such property or assets or completion of construction or
improvement), constructed or improved and (B) the Lien securing
such Indebtedness shall be created within 90 days of such
acquisition;
(viii) Liens upon specific items of inventory or
other goods and proceeds of any Person securing such Person's
obligations in respect of bankers' acceptances issued or created
for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;
(ix) Liens securing reimbursement obligations with
respect to commercial letters of credit which encumber documents
and other property relating to such letters of credit and
products and proceeds thereof;
(x) Liens encumbering deposits made to secure
obligations arising from statutory, regulatory, contractual, or
warranty requirements of the Company or any of its Restricted
Subsidiaries, including rights of offset and set-off;
(xi) Liens securing Interest Swap Obligations
which Interest Swap Obligations relate to Indebtedness that is
otherwise permitted under this Indenture;
(xii) Liens securing Acquired Indebtedness incurred
in accordance with Section 4.12; provided that (A) such Liens
secured such Acquired Indebtedness at the time of and prior to
the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary of the Company and were not granted in
connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary
of the Company and (B) such Liens do not extend to or cover any
property or assets of the Company or of any of its Restricted
Subsidiaries other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became
Acquired Indebtedness of the Company or a Restricted Subsidiary
of the Company and are no more favorable to the lienholders than
those securing the Acquired Indebtedness prior to the incurrence
of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company;
(xiii) Liens existing as of the Issue Date;
(xiv) Liens securing Indebtedness under the Credit
Agreement incurred under clauses (ii) and (x) of the definition
of Permitted Indebtedness;
(xv) Liens in favor of the Company or a Restricted
Subsidiary;
(xvi) Liens on property or assets of the Company or
any Restricted Subsidiary securing Indebtedness incurred under
clause (x) of the definition of "Permitted Indebtedness";
(xvii) licenses, leases or subleases to third
parties;
(xviii) Liens arising from precautionary Uniform
Commercial Code financing statements relating to operating leases
of the Company and its Restricted Subsidiaries;
(xix) Liens incurred in the ordinary course of
business of the Company or any Restricted Subsidiary of the
Company with respect to obligations that do not exceed $7.5
million at any one time outstanding and that (a) are not incurred
in connection with the borrowing of money or the obtaining of
advances or credit (other than trade credit in the ordinary
course of business) and (b) do not materially detract from the
value of the property or materially impair the use thereof in the
ordinary course of business of the Company and its Restricted
Subsidiaries; and
(xx) any extension, renewal or replacement, in
whole or in part, of any Lien described in the foregoing clauses
(i) through (xix); provided that the lien so extended, renewed or
replaced does not extent to any additional property or assets.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental
agency or political subdivision thereof.
"Physical Notes" shall have the meaning provided in Section 2.01.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.
"Private Exchange Notes" shall have the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth
on the Initial Notes in the form set forth on Exhibit A.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation
in accordance with Article 11 of Regulation S-X under the Securities Act as
interpreted by the Company's Board of Directors in consultation with its
independent certified public accountants.
"Purchase Money Indebtedness" means Indebtedness of the Company
or its Restricted Subsidiaries incurred for the purpose of financing all or
any part of the purchase price or the cost of installation, construction or
improvement of any property and any Refinancing thereof.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Recapitalization" means the recapitalization of the Company
which is being effected through the merger of UHS Acquisition Corp. with
and into the Company pursuant an Agreement and Plan of Merger dated as of
November 25, 1997 (the "Merger Agreement").
"Redemption Date" means, with respect to any Notes, the Maturity
Date of such Note or the earlier date on which such Note is to be redeemed
by the Company pursuant to paragraph 5 of the Notes.
"Redemption Price" has the meaning provided in Section 3.03.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire,
or to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company
or any Restricted Subsidiary of the Company of Indebtedness incurred in
accordance with Section 4.12 (other than pursuant to clause (ii), (iv),
(v), (vi), (vii), (viii), (x) or (xi) of the definition of Permitted
Indebtedness), in each case that does not (1) result in an increase in the
aggregate principal amount of Indebtedness of such Person as of the date of
such proposed Refinancing (plus the amount of any premium required to be
paid under the terms of the instrument governing such Indebtedness and plus
the amount of reasonable expenses incurred by the Company in connection
with such Refinancing) or (2) create Indebtedness with (A) a Weighted
Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or (B) a final maturity
earlier than the final maturity of the Indebtedness being Refinanced;
provided that (x) if such Indebtedness being Refinanced is Indebtedness of
the Company, then such Refinancing Indebtedness shall be Indebtedness
solely of the Company and (y) if such Indebtedness being Refinanced is
subordinate or junior to the Notes, then such Refinancing Indebtedness
shall be subordinate to the Notes at least to the same extent and in the
same manner as the Indebtedness being Refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the registration rights
agreement dated the Issue Date between the Company and the Initial
Purchaser.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means a permanent global note in
registered form representing the aggregate principal amount of Notes sold
in reliance on Regulation S under the Securities Act.
"Replacement Assets" has the meaning provided in Section 4.15.
"Restricted Note" means a Note that constitutes a "Restricted
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Note.
"Restricted Payment" has the meaning provided in Section 4.10.
"Restricted Subsidiary" of a Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted
Subsidiary.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to the Company or a Restricted Subsidiary of any
property, whether owned by the Company or any Restricted Subsidiary at the
Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person or
to any other Person from whom funds have been or are to be advanced by such
Person on the security of such property.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Significant Subsidiary" shall have the meaning set forth in Rule
1.02(w) of Regulation S-X under the Securities Act.
"Stockholders' Agreement" means the stockholders' agreement dated
the Issue Date between the Company and the stockholders party thereto.
"Subsidiary," with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a
majority of the votes entitled to be cast in the election of directors
under ordinary circumstances shall at the time be owned, directly or
indirectly, by such Person or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the
time, directly or indirectly, owned by such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa- 77bbbb), as amended, as in effect on the date hereof, except as
otherwise provided in Section 9.03.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity
(as compiled by, and published in, the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at least
two business days prior to the date fixed for redemption of the Notes
following a Change of Control (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most
nearly equal to the then remaining Weighted Average Life to Maturity of the
Notes; provided, however, that if the Weighted Average Life to Maturity of
the Notes is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall
be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of United States Treasury
securities for which such yields are given, except that if the Weighted
Average Life to Maturity of the Notes is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted
to a constant maturity of one year shall be used.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters
or, in the case of a successor trustee, an officer assigned to the
department, division or group performing the corporate trust work of such
successor.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture
and thereafter means such successor.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary
of such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such
Person in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any
Subsidiary (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock
of, or owns or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be
so designated; provided that (x) the Company certifies to the Trustee that
such designation complies with Section 4.10 and (y) each Subsidiary to be
so designated and each of its Subsidiaries has not at the time of
designation, and does not thereafter, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to
any Indebtedness pursuant to which the lender has recourse to any of the
assets of the Company or any of its Restricted Subsidiaries. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if (x) immediately after giving effect to such designation,
the Company is able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.12 and (y)
immediately before and immediately after giving effect to such designation,
no Default or Event of Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an officers' certificate certifying
that such designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding aggregate principal amount of such Indebtedness into (b)
the sum of the total of the products obtained by multiplying (i) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payment of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of such
payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than in the case of a foreign Restricted Subsidiary,
directors' qualifying shares or an immaterial amount of shares required to
be owned by other Persons pursuant to applicable law) are owned by such
Person or any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this
Indenture. The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by the TIA by reference to another statute or defined by
SEC rule and not otherwise defined herein have the meanings assigned to
them therein.
SECTION 1.03 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the Issue Date;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular; and
(5) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes, the notation thereon relating to the
Guarantees, if any, and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto. The Exchange Notes, the
notation thereon relating to the Guarantees, if any, and the Trustee's
certificate of authentication relating thereto shall be substantially in
the form of Exhibit B hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company
shall approve the form of the Notes and any notation, legend or endorsement
thereon. Each Note shall be dated the date of issuance and shall show the
date of its authentication. Each Note shall have an executed Guarantee
from each of the Guarantors, if any, endorsed thereon substantially in the
form of Exhibit F hereto.
The terms and provisions contained in the Notes annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part
of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A and Notes offered
and sold in reliance on Regulation S shall be issued initially in the form
of one or more Global Notes, substantially in the form set forth in
Exhibit A (the "Global Note"), deposited with the Trustee, as custodian for
the Depository, duly executed by the Company (and having an executed
Guarantee from each of the Guarantors, if any, endorsed thereon) and
authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Exhibit C. The aggregate principal amount of the
Global Note may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
Notes issued in exchange for interests in a Global Note pursuant
to Section 2.16 may be issued and Notes offered and sold in reliance on any
other exemption from registration under the Securities Act other than as
described in the preceding paragraph shall be issued in the form of
permanent certificated Notes in registered form in substantially the form
set forth in Exhibit A, with respect to Initial Notes, and Exhibit B, with
respect to Exchange Notes (in each case, the "Physical Notes").
All Notes offered and sold in reliance on Regulation S shall
remain in the form of a Global Note until the consummation of the Exchange
Offer pursuant to Section 2(a) of the Registration Rights Agreement;
provided, however, that such Exchange Offer shall be consummated in the
time period specified in the Registration Rights Agreement.
SECTION 2.02. Execution and Authentication;
Aggregate Principal Amount.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign, and one Officer or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Notes for the Company,
and the Guarantees for any Guarantors, by manual or facsimile signature.
If an Officer or Assistant Secretary whose signature is on a Note
or a Guarantee, as the case may be, was an Officer or Assistant Secretary
at the time of such execution but no longer holds that office or position
at the time the Trustee authenticates the Note, the Note shall nevertheless
be valid.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature of such representative of the Trustee shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original
issue in an aggregate principal amount not to exceed $180,000,000 in one or
more series; provided that the aggregate principal amount of Initial Notes
on the Issue Date shall not exceed $100,000,000, (ii) Private Exchange
Notes from time to time only in exchange for a like principal amount of
Initial Notes and (iii) Exchange Notes from time to time only in exchange
for (A) a like principal amount of Initial Notes or (B) a like principal
amount of Private Exchange Notes, in each case upon a written order of the
Company in the form of an Officers' Certificate of the Company. Each such
written order shall specify the amount of Notes to be authenticated and the
date on which the Notes are to be authenticated, whether the Notes are to
be Initial Notes, Private Exchange Notes or Exchange Notes and whether
(subject to Section 2.01) the Notes are to be issued as Physical Notes or
Global Notes and such other information as the Trustee may reasonably
request. The aggregate principal amount of Notes outstanding at any time
may not exceed $180,000,000, except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Notes issued under this
Indenture shall vote and consent together on all matters (as to which any
of such Notes may vote or consent) as one class and no series of Notes will
have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Notes. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication
by the Trustee includes authentication by such agent. An authenticating
agent has the same rights as an Agent to deal with the Company and
Affiliates of the Company.
The Notes shall be issuable in fully registered form only,
without coupons, in denominations of $1,000 and any integral multiple
thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New
York) where (a) Notes may be presented or surrendered for registration of
transfer or for exchange ("Registrar"), (b) Notes may be presented or
surrendered for payment ("Paying Agent") and (c) notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served.
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company, upon notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably
acceptable to the Trustee. The term "Paying Agent" includes any additional
paying agent. The Company may change the Paying Agent or Registrar without
notice to any Holder. The Company may act as its own Paying Agent, except
that for the purposes of payments on the Notes pursuant to Sections 4.14
and 4.15, neither the Company nor any Affiliate of the Company may act as
Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate
the provisions of the TIA and implement the provisions of this Indenture
that relate to such Agent. The Company shall notify the Trustee, in
advance, of the name and address of any such Agent. If the Company fails
to maintain a Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has
been appointed. Any of the Registrar, the Paying Agent or any other agent
may resign upon 30 days' notice to the Company. The office of the Paying
Agent as Registrar for purposes of this Section 2.03 shall initially be at
100 Wall Street, Suite 2000, 20th Floor, New York, New York 10005.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for
the benefit of the Holders or the Trustee all assets held by the Paying
Agent for the payment of principal of, premium, if any, or interest on, the
Notes (whether such assets have been distributed to it by the Company or
any other obligor on the Notes), and shall notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any
such payment. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such
Paying Agent to distribute all assets held by it to the Trustee and to
account for any assets distributed. Upon distribution to the Trustee of
all assets that shall have been delivered by the Company to the Paying
Agent and the completion of any accounting required to be made hereunder,
the Paying Agent shall have no further liability for such assets.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of the Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee five
(5) Business Days before each Interest Payment Date and at such other times
as the Trustee may request in writing a list as of the applicable Record
Date and in such form as the Trustee may reasonably require of the names
and addresses of the Holders, which list may be conclusively relied upon by
the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to Sections 2.15 and 2.16, when Notes are presented to
the Registrar or a co-Registrar with a request to register the transfer of
such Notes or to exchange such Notes for an equal principal amount of Notes
of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements
for such transaction are met; provided, however, that the Notes presented
or surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes and the Guarantors, if any, shall execute
Guarantees thereon at the Registrar's or co-Registrar's written request.
No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental
charge payable upon exchanges or transfers pursuant to Section 2.10, 3.03,
4.14, 4.15 or 9.05, in which event the Company shall be responsible for the
payment of such taxes).
The Registrar or co-Registrar shall not be required to register
the transfer of or exchange of any Note (i) during a period beginning at
the opening of business 15 days before the mailing of a notice of
redemption of Notes and ending at the close of business on the day of such
mailing and (ii) selected for redemption in whole or in part pursuant to
Article Three, except the unredeemed portion of any Note being redeemed in
part.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such beneficial interest, agree that transfers of beneficial
interests in such Global Notes may be effected only through a book entry
system maintained by the Holder of such Global Note (or its agent), and
that ownership of a beneficial interest in the Note shall be required to be
reflected in a book entry system.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the
Holder of a Note claims that the Note has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note and each of the Guarantors, if any, shall
execute a Guarantee thereon if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an
indemnity bond or other indemnity, sufficient in the reasonable judgment of
the Company, the Guarantors, if any, and the Trustee, to protect the
Company, the Guarantors, if any, the Trustee or any Agent from any loss
which any of them may suffer if a Note is replaced. The Company and the
Trustee may charge such Holder for its reasonable out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of counsel. Every
replacement Note shall constitute an additional obligation of the Company
and every replacement Guarantee shall constitute an additional obligation
of the Guarantors.
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not
outstanding. Subject to Section 2.09, a Note does not cease to be
outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), such Note, together with the
related Guarantee, if any, ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a bona
fide purchaser. A mutilated Note and the related Guarantee, if any, cease
to be outstanding upon surrender of such Note and replacement thereof
pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent
holds U.S. Legal Tender or U.S. Government Obligations sufficient to pay
all of the principal, premium, if any, and interest due on the Notes
payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after
that date such Notes cease to be outstanding and interest on them ceases
to accrue.
If on any date which is no earlier than 60 days prior to a
Redemption Date, the Company has irrevocably deposited in trust with the
Trustee U.S. Legal Tender, U.S. Government Obligations or a combination
thereof in an amount sufficient to pay all of the principal, premium, if
any, and interest due on the Notes payable on such Redemption Date,
together with irrevocable instructions from the Company directing the
Trustee to apply such finds to the payment thereof on such Redemption Date
pursuant to the terms of this Indenture, then and after the date of such
deposit such Notes shall be deemed to be not outstanding for purposes of
determining whether the Holders of the required aggregate principal amount
of Notes have concurred in any direction, waiver, consent or notice which
requires the consent of at least a majority in aggregate principal amount
of Notes then outstanding.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required aggregate
principal amount of Notes have concurred in any direction, waiver, consent
or notice, Notes owned by the Company or an Affiliate shall be considered
as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which the Trustee actually knows
are so owned shall be so considered. The Company shall notify the Trustee,
in writing, when it or any of its Affiliates repurchases or otherwise
acquires Notes, of the aggregate principal amount of such Notes so
repurchased or otherwise acquired and such other information as the Trustee
may reasonably request and the Trustee shall be entitled to rely thereon.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes and the
Guarantors, if any, shall prepare temporary Guarantees thereon upon receipt
of a written order of the Company in the form of an Officers' Certificate.
The Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be
authenticated. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and so indicate in the Officers'
Certificate. Without unreasonable delay, the Company shall prepare and
execute, and the Trustee shall authenticate and the Guarantors, if any,
shall execute Guarantees on, upon receipt of a written order of the Company
pursuant to Section 2.02, definitive Notes in exchange for temporary Notes.
SECTION 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Notes surrendered to them for transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent, and no one else, shall cancel and dispose, in its customary
manner, and deliver evidence of disposal of all Notes surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Notes to replace Notes that the Company has paid
or delivered to the Trustee for cancellation. If the Company shall acquire
any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Notes unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company will pay interest on overdue principal from time to
time on demand at the rate of interest then borne by the Notes. The
Company shall, to the extent lawful, pay interest on overdue installments
of interest (without regard to any applicable grace periods) from time to
time on demand at the rate of interest then borne by the Notes. Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a
subsequent special record date, which special record date shall be the
fifteenth day next preceding the date fixed by the Company for the payment
of defaulted interest or the next succeeding Business Day if such date is
not a Business Day. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment (a "Default Interest Payment Date"), and on or
prior to the date of the proposed payment the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest, such money when deposited to be
held in trust for the benefit of the Persons entitled to such defaulted
interest as provided in this Section. At least 15 days before the
subsequent special record date, the Company shall mail to each Holder, with
a copy to the Trustee, a notice that states the subsequent special record
date, the Default Interest Payment Date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be
paid.
Notwithstanding the foregoing, any interest which is paid prior
to the expiration of the 30-day period set forth in Section 6.01(1) shall
be paid to Holders as of the regular record date for the Interest Payment
Date for which interest has not been paid. Notwithstanding the foregoing,
the Company may make payment of any defaulted interest in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by
such exchange.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Notes may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided, however, that
no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP numbers printed in the notice or on
the Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the
Trustee of any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys.
On or prior to each Interest Payment Date, Maturity Date,
Redemption Date, Change of Control Payment Date, and Net Proceeds Offer
Payment Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date, Maturity Date, Redemption Date, Change
of Control Payment Date, and Net Proceeds Offer Payment Date, as the case
may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such Interest Payment Date, Maturity Date, Redemption
Date, Change of Control Payment Date, and Net Proceeds Offer Payment Date,
as the case may be.
SECTION 2.15. Book-Entry Provisions for
Global Notes.
(a) The Global Notes initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as
set forth in Exhibit C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Note, and the Depository may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute
owner of the Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and Participants, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.
(b) Transfers of Global Notes shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global Notes
may be transferred or exchanged for Physical Notes in accordance with the
rules and procedures of the Depository and the provisions of Section 2.16.
In addition, Physical Notes shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Notes if (i) the
Depository notifies the Company that it is unwilling or unable to continue
as Depository for any Global Note and a successor Depository is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a
written request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of
the beneficial interest in a Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and
the Company shall execute and the Trustee shall authenticate and deliver,
one or more Physical Notes of authorized denominations in an aggregate
principal amount equal to the principal amount of the beneficial interest
in the Global Note so transferred.
(d) In connection with the transfer of a Global Note as an
entirety to beneficial owners pursuant to paragraph (b) of this Section
2.15, such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, any Guarantors shall execute
Guarantees on and the Trustee shall upon written instructions from the
Company authenticate and deliver, to each beneficial owner identified by
the Depository in exchange for its beneficial interest in such Global Note,
an equal aggregate principal amount of Physical Notes of authorized
denominations.
(e) Any Physical Note constituting a Restricted Note delivered
in exchange for an interest in a Global Note pursuant to paragraph (b) or
(c) of this Section 2.15 shall, except as otherwise provided by Section
2.16, bear the Private Placement Legend.
(f) The Holder of any Global Note may grant proxies and
otherwise authorize any Person, including Participants and Persons that may
hold interests through Participants, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.16. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Restricted Note to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S.
Person:
(i) the Registrar shall register the transfer of any
Restricted Note, whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is after the
second anniversary of the Issue Date; provided, however, that
neither the Company nor any Affiliate of the Company has held any
beneficial interest in such note, or portion thereof, at any time
on or prior to the second anniversary of the Issue Date or
(y) (1) in the case of a transfer to an Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit D hereto and any legal
opinions and certifications required thereby and (2) in the case
of a transfer to a Non-U.S. Person, the proposed transferor has
delivered to the Registrar a certificate substantially in the
form of Exhibit E hereto;
(ii) if the proposed transferee is a Participant and
the Notes to be transferred consist of Physical Notes which after
transfer are to be evidenced by an interest in the Global Note,
upon receipt by the Registrar of (x) written instructions given
in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required
by clause (y) of paragraph (i) above, the Registrar shall
register the transfer and reflect on its books and records the
date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of Physical Notes to
be transferred, and the Trustee shall cancel the Physical Notes
so transferred; and
(iii) if the proposed transferor is a Participant
seeking to transfer an interest in a Global Note, upon receipt by
the Registrar of (x) written instructions given in accordance
with the Depository's and the Registrar's procedures and (y) the
appropriate certificate, if any, required by clause (y) of
paragraph (i) above, the Registrar shall register the transfer
and reflect on its books and records the date and (A) a decrease
in the principal amount of the Global Note from which such
interests are to be transferred in an amount equal to the
principal amount of the Notes to be transferred and (B) an
increase in the principal amount of the Global Note in an amount
equal to the principal amount of the Notes to be transferred.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Restricted
Security to a QIB:
(i) the Registrar shall register the transfer of any
Restricted Note, whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is after the
second anniversary of the Issue Date; provided, however, that
neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Note, or portion thereof, at any time
on or prior to the second anniversary of the Issue Date or
(y) such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing, that
the sale has been made in compliance with the provisions of Rule
144A to a transferee who has signed the certification provided
for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the
Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware
that the transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided by
Rule 144A;
(ii) if the proposed transferee is a Participant and
the Notes to be transferred consist of Physical Notes which after
transfer are to be evidenced by an interest in the Global Note,
upon receipt by the Registrar of written instructions given in
accordance with the Depository's and the Registrar's procedures,
the Registrar shall register the transfer and reflect on its book
and records the date and an increase in the principal amount of
the Global Note in an amount equal to the principal amount of
Physical Notes to be transferred, and the Trustee shall cancel
the Physical Note so transferred; and
(iii) if the proposed transferor is a Participant
seeking to transfer an interest in the Regulation S Global Note,
upon receipt by the Registrar of written instructions given in
accordance with the Depository's and the Registrar's procedures,
the Registrar shall register the transfer and reflect on its
books and records the date and (A) a decrease in the principal
amount of the Regulation S Global Note in an amount equal to the
principal amount of the Notes to be transferred and (B) an
increase in the principal amount of the Global Note in an amount
equal to the principal amount of the Notes to be transferred.
(c) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture, a Global Note may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(d) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Notes that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Notes
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Notes that bear the Private Placement Legend unless (i) the
requested transfer is after the second anniversary of the Issue Date
(provided, however, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Note, or portion thereof,
at any time prior to or on the second anniversary of the Issue Date), (ii)
there is delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (iii) such
Note has been sold pursuant to an effective registration statement under
the Securities Act.
(e) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions
on transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as
provided in this Indenture.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this
Section 2.16. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the
Registrar.
(f) Transfers of Notes Held by Affiliates. Any certificate (i)
evidencing a Note that has been transferred to an Affiliate of the Company
within two years after the Issue Date, as evidenced by a notation on the
Assignment Form for such transfer or in the representation letter delivered
in respect thereof or (ii) evidencing a Note that has been acquired from an
Affiliate (other than by an Affiliate) in a transaction or a chain of
transactions not involving any public offering, shall, until two years
after the last date on which either the Company or any Affiliate of the
Company was an owner of such Note, in each case, bear the Private Placement
Legend, unless otherwise agreed by the Company (with written notice thereof
to the Trustee).
SECTION 2.17. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted
Note shall bear the legend (the "Private Placement Legend") as set forth in
Exhibit A on the face thereof until after the second anniversary of the
later of the Issue Date and the last date on which the Company or any
Affiliate of the Company was the owner of such Note (or any predecessor
security) (or such shorter period of time as permitted by Rule 144(k) under
the Securities Act or any successor provision thereunder) (or such longer
period of time as may be required under the Securities Act or applicable
state securities laws in the opinion of counsel for the Company, unless
otherwise agreed by the Company and the Holder thereof).
Each Global Note shall also bear the legend as set forth in
Exhibit C.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to paragraph 5 of
the Notes, it shall notify the Trustee and the Paying Agent in writing of
the Redemption Date and the aggregate principal amount of the Notes to be
redeemed. Such notice must be given at least 45 days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee), but shall not be given more than 60 days before the Redemption
Date. Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.02. Selection of Notes To Be Redeemed.
In the event that less than all of the Notes are to be redeemed
at any time, selection of such Notes for redemption will be made by the
Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which such Notes are listed or, if such
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that no Notes of a principal amount of
$1,000 or less shall be redeemed in part; provided, further, that if a
partial redemption is made with the proceeds of an Equity Offering,
selection of the Notes or portions thereof for redemption shall be made by
the Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to DTC procedures), unless such method is otherwise
prohibited. If any Note is to be redeemed in part only, a new Note in a
principal amount equal to the unredeemed portion thereof will be issued in
the name of the Holder thereof upon cancellation of the original Note. On
and after the Redemption Date, interest will cease to accrue on Notes or
portions thereof called for redemption as long as the Company has deposited
with the Paying Agent funds in satisfaction of the applicable Redemption
Price.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail or cause to be mailed a notice of redemption
by first-class mail to each Holder whose Notes are to be redeemed at its
registered address, with a copy to the Trustee. At the Company's request,
the Trustee shall give the notice of redemption in the Company's name and
at the Company's expense. Each notice for redemption shall identify the
Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the redemption price (the "Redemption Price") and the amount
of accrued interest, if any, to be paid as of the Redemption Date;
(3) the paragraph and subparagraph of the Notes pursuant to
which the Notes are being redeemed;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(6) that, unless the Company defaults in paying the Redemption
Price, interest, if any, on Notes called for redemption shall cease to
accrue on and after the Redemption Date, and the only remaining right
of the Holders of such Notes is to receive payment of the Redemption
Price plus accrued interest as of the Redemption Date, if any, upon
surrender to the Paying Agent of the Notes redeemed;
(7) that, if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes
in the aggregate principal amount equal to the unredeemed portion
thereof will be issued; and
(8) that, if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with
the purchase of Notes.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with
Section 3.03, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price plus accrued interest, if any.
Upon surrender to the Trustee or Paying Agent, such Notes called for
redemption shall be paid at the Redemption Price plus accrued interest
thereon to the Redemption Date, but installments of interest, the maturity
of which is on or prior to the Redemption Date, shall be payable to Holders
of record at the close of business on the relevant record dates referred to
in the Notes. Interest shall accrue on or after the Redemption Date and
shall be payable only if the Company defaults in payment of the Redemption
Price.
SECTION 3.05. Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the Redemption
Price plus accrued interest, if any, of all Notes to be redeemed on that
date. The Paying Agent shall promptly return to the Company any U.S. Legal
Tender so deposited that is not required for that purpose, except with
respect to monies owed as obligations to the Trustee pursuant to Article
Seven.
Unless the Company fails to comply with the preceding paragraph
and defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and
after the applicable Redemption Date, whether or not such Notes are
presented for payment.
SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Note or Notes equal in
principal amount to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
The Company shall pay the principal of, premium, if any, and
interest on the Notes on the dates and in the manner provided in the Notes
and in this Indenture. An installment of principal of or interest on the
Notes shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or an Affiliate of the Company) holds
on that date U.S. Legal Tender designated for and sufficient to pay in a
timely manner the installment in full and is not prohibited from paying
such money to the Holders, pursuant to the terms of this Indenture.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United
States of America from principal, premium or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prior written notice to the Trustee
of the location, and any change in the location, of such office or agency.
If at any time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address thereof,
the presentations, surrenders, notices and demands referred to in Section
2.03 may be made or served at the address of the Trustee set forth in
Section 11.02.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five, the Company shall
do or cause to be done all things reasonably necessary to preserve and keep
in full force and effect its corporate or other existence and the corporate
or other existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of the Company and each such
Restricted Subsidiary and the material rights (charter and statutory) and
franchises of the Company and each such Restricted Subsidiary; provided,
however, that the Company shall not be required to preserve, with respect
to itself, any material right or franchise and, with respect to any of its
Restricted Subsidiaries, any such existence, material right or franchise,
if the Board of Directors of the Company or such Restricted Subsidiary, as
the case may be, shall determine that the preservation thereof is no longer
reasonably necessary or desirable in the conduct of the business of the
Company or its Subsidiaries, taken as a whole.
SECTION 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material
taxes, assessments and governmental charges (including withholding taxes
and any penalties, interest and additions to taxes) levied or imposed upon
it or any of its Subsidiaries or properties of it or any of its
Subsidiaries and (ii) all material lawful claims for labor, materials,
supplies and services that, if unpaid, might by law become a Lien upon the
property of it or any of its Subsidiaries; provided, however, that there
shall not be required to be paid or discharged any such tax, assessment,
charge or claim, the amount, applicability or validity of which is being
contested in good faith by appropriate proceedings and for which adequate
provision has been made or for which adequate reserves, to the extent
required under GAAP, have been taken or where the failure to effect such
payment or discharge is not adverse in any material respect to the Holders.
SECTION 4.05. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain all of its material properties used or useful in
the conduct of its business in good working order and in normal condition
(subject to ordinary wear and tear) and make all necessary repairs,
renewals and replacements thereto as in the reasonable judgment of the
Company are necessary to the active conduct of its business; provided,
however, that nothing in this Section 4.05 shall prevent the Company or any
of its Restricted Subsidiaries from discontinuing the operation and
maintenance of any of its properties, if such properties are, in the
reasonable and good faith judgment of the Board of Directors of the Company
or the Restricted Subsidiary, as the case may be, no longer reasonably
necessary in the conduct of their respective businesses and is not
disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for
itself and each of its Restricted Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in
the reasonable, good faith judgment of the Board of Directors of the
Company, are adequate and appropriate for the conduct of the business of
the Company and such Restricted Subsidiaries.
SECTION 4.06 Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each of the Company's fiscal years, an Officers'
Certificate stating that a review of its activities and the activities of
its Restricted Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing officers with a view to determining
whether it has kept, observed, performed and fulfilled its obligations
under this Indenture and further stating, as to each such officer signing
such certificate, that to the best of such officers' knowledge the Company
during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such obligation and no Default or Event of Default
occurred during such year and at the date of such certificate there is no
Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity.
The Officers' Certificate shall also notify the Trustee should the Company
elect to change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered pursuant to
Section 4.08 shall be accompanied by a written report of the Company's
independent certified public accountants stating (A) that their audit
examination has included a review of the terms of this Indenture and the
form of the Notes as they relate to accounting matters, and (B) whether, in
connection with their audit examination, any Default or Event of Default
has come to their attention and if such a Default or Event of Default has
come to their attention, specifying the nature and period of existence
thereof; provided, however, that, without any restriction as to the scope
of the audit examination, such independent certified public accountants
shall not be liable by reason of any failure to obtain knowledge of any
such Default or Event of Default that would not be disclosed in the course
of an audit examination conducted in accordance with generally accepted
auditing standards.
(c) So long as any of the Notes are outstanding (i) if any
Default or Event of Default has occurred and is continuing or (ii) if any
Holder seeks to exercise any remedy hereunder with respect to a claimed
Default under this Indenture or the Notes, the Company shall deliver to the
Trustee as soon as practicable by registered or certified mail or by
telegram, telex or facsimile transmission followed by hard copy by
registered or certified mail an Officers' Certificate specifying such
event, notice or other action.
SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations,
orders and restrictions of the United States of America, all states and
municipalities thereof, and of any governmental department, commission,
board, regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except for such noncompliances as
are not in the aggregate reasonably likely to have a material adverse
effect on the financial condition or results of operations of the Company
and its Restricted Subsidiaries taken as a whole.
SECTION 4.08. Reports to Holders.
(a) The Company (at its own expense) will deliver to the Trustee
within 15 days after the filing of the same with the Commission, copies of
the quarterly and annual reports and of the information, documents and
other reports, if any, which the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on
the financial statements included therein by the Company's certified
independent accountants.
(b) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company will provide the Trustee and each Holder with such annual reports
and such information, documents and other reports specified in Sections 13
and 15(d) of the Exchange Act.
(c) In addition, whether or not required by the rules and
regulations of the Commission, at any time after the Company files the
Exchange Offer Registration Statement with the Commission, the Company will
file a copy of all such information with the Commission for public
availability (unless the Commission will not accept such a filing) and make
such information available to investors who request it in writing. The
Company will also comply with the other provisions of TIA Section 314(a).
Notwithstanding anything to the contrary herein, the Trustee
shall have no duty to review such documents for purposes of determining
compliance with any provisions of this Indenture.
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury law or other law that would prohibit or forgive the
Company from paying all or any portion of the principal of, premium or
interest on the Notes as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the obligations or the
performance of this Indenture; and (to the extent that it may lawfully do
so) the Company hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
SECTION 4.10. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any distribution (other than dividends or distributions
payable in Qualified Capital Stock of the Company) on or in respect of
shares of the Company's Capital Stock to holders of such Capital Stock, (b)
purchase, redeem or otherwise acquire or retire for value (except from the
Company or a Restricted Subsidiary) any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of
such Capital Stock, (c) make any principal payment on, purchase, defease,
redeem, prepay, decrease or otherwise acquire or retire for value, prior to
any scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company not held by a Restricted
Subsidiary that is subordinate or junior in right of payment to the Notes
(except the prepayment, purchase, repurchase, or other acquisition or
retirement of Indebtedness in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity in each case within one
year of the date of prepayment, purchase, repurchase or other acquisition
or retirement) or (d) make any Investment (other than Permitted
Investments) (each of the foregoing actions set forth in clauses (a), (b)
(c) and (d) being referred to as a "Restricted Payment"), if at the time of
such Restricted Payment or immediately after giving effect thereto, (i) a
Default or an Event of Default shall have occurred and be continuing; (ii)
the Company is not able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.12; or
(iii) the aggregate amount of Restricted Payments (including such proposed
Restricted Payment) made subsequent to the Issue Date (the amount expended
for such purposes, if other than in cash, being the fair market value of
such property as determined reasonably and in good faith by the Board of
Directors of the Company) shall exceed the sum of: (w) 50% of the
cumulative Consolidated Net Income (or if cumulative Consolidated Net
Income shall be a loss, minus 100% of such loss) of the Company earned
subsequent to the Issue Date and on or prior to the date the Restricted
Payment occurs (the "Reference Date") (treating such period as a single
accounting period); plus (x) 100% of the aggregate net cash proceeds
received by the Company from any Person (other than a Subsidiary of the
Company) from the issuance and sale subsequent to the Issue Date and on or
prior to the Reference Date of Qualified Capital Stock of the Company; plus
(y) without duplication of any amounts included in clause (iii)(x) above,
100% of the aggregate net cash proceeds of any equity contribution received
by the Company from a holder of the Company's Capital Stock (excluding, in
the case of clauses (iii)(x) and (y), any net cash proceeds from Equity
Offerings to the extent used to redeem the Notes in accordance with
Paragraph 5 of the Notes; plus (aa) 100% of the aggregate net cash proceeds
received after the Issue Date by the Company from any Person (other than a
Subsidiary of the Company) for debt securities that have been converted or
exchanged into or for Qualified Capital Stock of the Company (to the extent
such debt securities were originally sold for cash) plus the aggregate
amount of cash received by the Company (other than from a Subsidiary of the
Company) in connection with such conversion or exchange, plus (bb) in the
case of the disposition or repayment of any Investment constituting a
Restricted Payment after the Issue Date, an amount equal to the lesser of
the return of capital with respect to such Investment and the initial
amount of such Investment, in either case, less the cost of the disposition
of such Investment, and (cc) so long as the designation thereof was treated
as a Restricted Payment made after the Issue Date, with respect to any
Unrestricted Subsidiary that has been redesignated as a Restricted
Subsidiary after the Issue Date, the fair market value of the Company's
interest in such Subsidiary calculated in accordance with GAAP, provided
that such amount shall not in any case exceed the designation amount with
respect to such Restricted Subsidiary upon its designation.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any
dividend or the consummation of any purchase or redemption within 60 days
after the date of declaration of such dividend or the giving of any
irrevocable notice in respect of any such purchase or redemption if the
dividend or purchase or redemption would have been permitted on the date of
declaration or the giving of each irrevocable notice; (2) if no Default or
Event of Default shall have occurred and be continuing, the acquisition of
any shares of Capital Stock of the Company, either (i) solely in exchange
for shares of Qualified Capital Stock of the Company or (ii) through the
application of net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of shares of Qualified Capital
Stock of the Company; (3) if no Default or Event of Default shall have
occurred and be continuing, the purchase, defeasance, redemption,
prepayment or other acquisition or retirement for value of any Indebtedness
of the Company that is subordinate or junior in right of payment to the
Notes either (i) solely in exchange for shares of Qualified Capital Stock
of the Company, or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of (A) shares of Qualified Capital Stock of the Company or (B)
Refinancing Indebtedness; (4) so long as no Default or Event of Default
shall have occurred and be continuing, repurchases by the Company of Common
Stock of the Company or stock appreciation rights or similar interests in
the Company from directors, officers or employees of the Company or any of
its Subsidiaries or their authorized representatives upon the death,
disability or termination of employment of such employees, in an aggregate
amount not to exceed $750,000 in any calendar year; (5) Investments in
securities not constituting cash or Cash Equivalents and received in
connection with an Asset Sale made pursuant to Section 4.15; and (6)
payments made in connection with the application of the net proceeds of the
Recapitalization. In determining the aggregate amount of Restricted
Payments made subsequent to the Issue Date in accordance with clause (iii)
of the immediately preceding paragraph, amounts expended pursuant to
clauses (1), (2) and (4) shall be included in such calculation.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment complies with the Indenture and setting forth in
reasonable detail the basis upon which the required calculations were
computed, which calculations may be based upon the Company's latest
available internal quarterly financial statements.
SECTION 4.11. Limitations on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into any
transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its
Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under paragraph (b) below and (y) Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate of the Company
or such Restricted Subsidiary. All Affiliate Transactions (and each series
of related Affiliate Transactions which are similar or part of a common
plan) involving aggregate payments or other property with a fair market
value in excess of $2.5 million shall be approved by the Board of Directors
of the Company or such Restricted Subsidiary, as the case may be, such
approval to be evidenced by a Board Resolution stating that such Board of
Directors has determined that such transaction complies with the foregoing
provisions. If the Company or any Restricted Subsidiary of the Company
enters into an Affiliate Transaction (or a series of related Affiliate
Transactions related to a common plan) that involves an aggregate fair
market value of more than $5.0 million, the Company or such Restricted
Subsidiary, as the case may be, shall, prior to the consummation thereof,
obtain a favorable opinion as to the fairness of such transaction or series
of related transactions to the Company or the relevant Restricted
Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and file the same with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to
(i) reasonable fees and compensation paid to and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or
any Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management; (ii) transactions
exclusively between or among the Company and any of its Restricted
Subsidiaries or exclusively between or among such Restricted Subsidiaries,
provided such transactions are not otherwise prohibited by the Indenture;
(iii) Restricted Payments permitted by the Indenture; (iv) payments made
pursuant to the Management Agreement; (v) loans and advances (or guarantees
of third party loans) to officers or employees of the Company or any of its
Restricted Subsidiaries in the ordinary course of business not to exceed
$750,000 at any time outstanding; (vi) any employment agreement, collective
bargaining agreement, employee benefit plan, related trust agreement,
indemnification agreement, benefit plan or similar plan (including
arrangements made with respect to bonuses) for the benefit of directors,
officers or employees of the Company or any of its Restricted Subsidiaries
entered into in the ordinary course of business; and (vii) the transactions
and payments contemplated by any agreement as in effect as of the Issue
Date (including without limitation, the Merger Agreement and the
Stockholders' Agreement).
SECTION 4.12. Limitation on Incurrence of Additional
Indebtedness.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, acquire, become liable, contingently or otherwise, with respect
to, or otherwise become responsible for payment of (collectively, "incur")
any Indebtedness (other than Permitted Indebtedness); provided, however,
that if no Default or Event of Default shall have occurred and be
continuing at the time of or as a consequence of the incurrence of any such
Indebtedness, the Company may incur Indebtedness (including, without
limitation, Acquired Indebtedness) and Subsidiaries of the Company may
incur Acquired Indebtedness, in each case if on the date of the incurrence
of such Indebtedness, after giving effect to the incurrence thereof, the
Consolidated Fixed Charge Coverage Ratio of the Company is greater than (w)
2.0 to 1.0 if the date of such incurrence is prior to March 1, 1999, or (x)
2.25 to 1.0, if the date of such incurrence is on or after March 1, 1999
and prior to March 1, 2001, or (y) 2.5 to 1.0, if the date of such
incurrence is on or after March 1, 2001.
(b) For the purposes of determining compliance with this Section
4.12, in the event that an item of Indebtedness meets the criteria of more
than one of the categories of Permitted Indebtedness or is otherwise
entitled to be incurred pursuant to this Section 4.12, the Company shall,
in its sole discretion, classify such item of Indebtedness in any manner
that complies with this Section 4.12 and such items of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph hereof. Accrual of interest and the
accretion of accreted value will not be deemed to be an incurrence of
Indebtedness for purposes of this Section 4.12.
(c) Neither the Company nor any Guarantor will incur any
Indebtedness which by its terms (or by the terms of any agreement governing
such Indebtedness) is subordinated in right of payment to any other
Indebtedness of the Company or such Guarantor, as the case may be, unless
such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinate in right of payment
to the Notes or the Guarantee (as defined in Section 4.19) pursuant to
subordination provisions that are substantively identical to the
subordination provisions of such Indebtedness (or such agreement) that are
most favorable to the holders of any other Indebtedness of the Company or
such Guarantor, as the case may be.
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary of the Company to
(a) pay dividends or make any other distributions on or in respect of its
Capital Stock; (b) make loans or advances or to pay any Indebtedness or
other obligation owed to the Company or any other Restricted Subsidiary of
the Company; or (c) transfer any of its property or assets to the Company
or any other Restricted Subsidiary of the Company, except for such
encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) customary non-assignment provisions
of any contract or any lease governing a leasehold interest of any
Restricted Subsidiary of the Company; (4) any instrument governing Acquired
Indebtedness, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person or
the properties or assets of the Person so acquired (including, but not
limited to, such Person's direct and indirect Subsidiaries); (5) agreements
existing on the Issue Date to the extent and in the manner such agreements
are in effect on the Issue Date; (6) an agreement entered into for the sale
or disposition of all or substantially all of the Capital Stock or assets
of a Restricted Subsidiary or an agreement entered into for the sale of
specified assets (in either case, so long as such encumbrance or
restriction, by its terms, terminates on the earlier of the termination of
such agreement or the consummation of such agreement and so long as such
restriction applies only to the Capital Stock or assets to be sold); (7)
the Credit Agreement; (8) an agreement governing Indebtedness incurred to
Refinance the Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clause (2), (4), (5) or (7) above; provided,
however, that the provisions relating to such encumbrance or restriction
contained in any such Indebtedness are no less favorable to the Company in
any material respect as determined by the Board of Directors of the Company
in their reasonable and good faith judgment than the provisions relating to
such encumbrance or restriction contained in agreements referred to in such
clause (2), (4) or (5); (9) any security or pledge agreements, leases or
options (or similar agreements) containing customary restrictions on
transfers of the assets encumbered thereby or leased or subject to option
or on the transfer or subletting of the leasehold interest represented
thereby; or (10) any encumbrances or restrictions imposed by any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of contracts, instruments or
obligations referred to in clauses (1) through (9); provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of
the Company, no more restrictive with respect to such encumbrances or
restrictions than those contained in such contracts, instruments or
obligations prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.
SECTION 4.14. Change of Control.
(a) Upon a Change of Control, each Holder will have the right to
require the Company to purchase all or a portion of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of purchase.
(b) Within 30 days following the date upon which a Change of
Control occurs, the Company shall send, by first class mail, a notice to
each Holder, with a copy to the Trustee, which notice shall govern the
terms of the Change of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to
Section 4.14 of this Indenture and that all Notes validly tendered and
not withdrawn will be accepted for payment and that the Change of
Control Offer shall remain open for such period as is required by law;
(2) the purchase price (including the amount of accrued
interest, if any) and the purchase date (which shall be no earlier
than 30 days nor later than 45 days from the date such notice is
mailed, other than as may be required by law) (the "Change of Control
Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment
therefor, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, to the Paying Agent and Registrar for the Notes
at the address specified in the notice prior to the close of business
on the third Business Day prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the second Business Day
prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Notes the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have
such Note purchased;
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased
portion of the Notes surrendered; provided, however, that each Note
purchased and each new Note issued shall be in a principal amount of
$1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding such Change
of Control.
(c) On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Notes or portions thereof (in integral
multiples of $1,000) validly tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the purchase price plus accrued and unpaid interest, if any, of all
Notes so tendered and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or portions
thereof being purchased by the Company. The Paying Agent shall promptly
mail to the Holders of Notes so accepted payment in an amount equal to the
purchase price plus accrued and unpaid interest, if any, and the Trustee
shall promptly authenticate and mail to such Holders new Notes equal in
principal amount to any unpurchased portion of the Notes surrendered. Any
Notes not so accepted shall be promptly mailed by the Company to the Holder
thereof. For purposes of this Section 4.14, the Trustee shall act as the
Paying Agent.
Neither the Board of Directors of the Company nor the Trustee may
waive provisions of this Section 4.14 relating to the Company's obligations
to make a Change of Control Offer.
(d) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with the repurchase of Notes pursuant to a Change of Control
Offer. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.14, the Company
shall comply with the applicable securities laws and regulations and shall
not be deemed to have breached its obligations relating to such Change of
Control Offer by virtue thereof.
SECTION 4.15. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company
or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets sold or otherwise disposed of (as determined in
good faith by the Company's Board of Directors); (ii) at least 75% of the
consideration received by the Company or the Restricted Subsidiary, as the
case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and is received at the time of such disposition; and (iii) upon
the consummation of an Asset Sale, the Company shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such
Asset Sale within 360 days of receipt thereof either (A) to prepay any
Indebtedness ranking at least pari passu with the Notes (including amounts
under the Credit Agreement) and, in the case of any such Indebtedness under
any revolving credit facility, effect a permanent reduction in the
availability under such revolving credit facility, (B) to make an
investment in properties and assets that replace the properties and assets
that were the subject of such Asset Sale or in properties and assets that
will be used in the business of the Company and its Subsidiaries as
existing on the Issue Date or in businesses reasonably related thereto
("Replacement Assets"), or (C) a combination of prepayment and investment
permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 361st day
after an Asset Sale or such earlier date, if any, as the Board of Directors
of the Company or of such Restricted Subsidiary determines not to apply the
Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a
"Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the
next preceding sentence (each a "Net Proceeds Offer Amount") shall be
applied by the Company or such Restricted Subsidiary to make an offer to
purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 30 nor more than 45 days following the
applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata
basis, that amount of Notes equal to the Net Proceeds Offer Amount at a
price equal to 100% of the principal amount of the Notes to be purchased,
plus accrued and unpaid interest thereon, if any, to the date of purchase;
provided, however, that if at any time any non-cash consideration received
by the Company or any Restricted Subsidiary of the Company, as the case may
be, in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash (other than interest received with respect
to any such non-cash consideration), then such conversion or disposition
shall be deemed to constitute an Asset Sale hereunder and the Net Cash
Proceeds thereof shall be applied in accordance with this covenant. The
Company may defer any Net Proceeds Offer until there is an aggregate
unutilized Net Proceeds Offer Amount equal to or in excess of $5.0 million
resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not just the amount in excess of
$5.0 million, shall be applied as required pursuant to this paragraph).
In the event of the transfer of substantially all (but not all)
of the property and assets of the Company and its Restricted Subsidiaries
as an entirety to a Person in a transaction permitted under Article Five,
the successor corporation shall be deemed to have sold the properties and
assets of the Company and its Restricted Subsidiaries not so transferred
for purposes of this Section 4.15, and shall comply with the provisions of
this Section 4.15 with respect to such deemed sale as if it were an Asset
Sale. In addition, the fair market value of such properties and assets of
the Company or its Restricted Subsidiaries deemed to be sold shall be
deemed to be Net Cash Proceeds for purposes of this Section 4.15.
(b) Notwithstanding Section 4.15(a), the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 75% of
the consideration for such Asset Sale constitutes Replacement Assets and
(ii) such Asset Sale is for fair market value; provided that any
consideration not constituting Replacement Assets received by the Company
and its Restricted Subsidiaries in connection with any Asset Sale permitted
to be consummated under this paragraph shall constitute Net Cash Proceeds
subject to the provisions of Section 4.15(a).
(c) Subject to the deferral of the Net Proceeds Offer contained
in clause (a) above, each notice of a Net Proceeds Offer will be mailed to
the record Holders as shown on the register of Holders within 25 days
following the Net Proceeds Offer Trigger Date, with a copy to the Trustee.
The notice shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Net Proceeds Offer and shall
state the following terms:
(i) that the Net Proceeds Offer is being made pursuant
to this Section 4.15, that all Notes tendered will be accepted
for payment; provided, however, that if the aggregate principal
amount of Notes tendered in a Net Proceeds Offer plus accrued
interest at the expiration of such offer exceeds the aggregate
amount of the Net Proceeds Offer, the Company shall select the
Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000 or multiples thereof shall be purchased)
and that the Net Proceeds Offer shall remain open for such period
as is required by law;
(ii) the purchase price (including the amount of
accrued interest) and the Net Proceeds Offer Payment Date (which
shall be not less than 30 nor more than 45 days following the
applicable Net Proceeds Offer Trigger Date and which shall be at
least five Business Days after the Trustee receives notice
thereof from the Company);
(iii) that any Note not tendered will continue to
accrue interest;
(iv) that, unless the Company defaults in making
payment therefor, any Note accepted for payment pursuant to the
Net Proceeds Offer shall cease to accrue interest after the Net
Proceeds Offer Payment Date;
(v) that Holders electing to have a Note purchased
pursuant to a Net Proceeds Offer will be required to surrender
the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying
Agent at the address specified in the notice prior to the close
of business on the third Business Day prior to the Net Proceeds
Offer Payment Date;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the second
Business Day prior to the Net Proceeds Offer Payment Date, a
telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes the
Holder delivered for purchase and a statement that such Holder is
withdrawing its election to have such Note purchased; and
(vii) that Holders whose Notes are purchased only in
part will be issued new Notes in a principal amount equal to the
unpurchased portion of the Notes surrendered; provided, however,
that each Note purchased and each new Note issued shall be in an
original principal amount of $1,000 or integral multiples
thereof;
On or before the Net Proceeds Offer Payment Date, the Company
shall (i) accept for payment Notes or portions thereof (in integral
multiples of $1,000) validly tendered pursuant to the Net Proceeds Offer,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price plus accrued and unpaid interest, if any, of all Notes to be
purchased and (iii) deliver to the Trustee Notes so accepted together with
an Officers' Certificate stating the Notes or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the purchase
price plus accrued and unpaid interest, if any. For purposes of this
Section 4.15, the Trustee shall act as the Paying Agent. The Trustee shall
promptly authenticate and mail to such Holders new Notes equal in principal
amount to any unpurchased portion of the Notes surrendered. Upon the
payment of the purchase price for the Notes accepted for purchase, the
Trustee shall return the Notes purchased to the Company for cancellation.
Any monies remaining after the purchase of Notes pursuant to a Net Proceeds
Offer shall be returned within three Business Days by the Trustee to the
Company except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven. For purposes of this Section 4.15, the Trustee
shall act as the Paying agent.
To the extent the aggregate amount of the Notes tendered pursuant
to any Net Proceeds Offer is less than the Net Proceeds Offer Amount, the
Company may use such deficiency for general corporate purposes. Upon
completion of such offer to purchase, the Net Proceeds Offer Amount shall
be reset at zero.
(d) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with the repurchase of Notes pursuant to a Net Proceeds Offer.
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.15, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed
to have breached its obligations under the provisions of this Section 4.15
by virtue thereof.
SECTION 4.16. Limitation on Liens.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or permit or suffer to exist any Liens of any kind against or upon any
property or assets of the Company or any of its Restricted Subsidiaries
whether owned on the Issue Date or acquired after the Issue Date, or any
proceeds therefrom, or assign or otherwise convey any right to receive
income or profits therefrom unless (i) in the case of Liens securing
Indebtedness that is expressly subordinate or junior in right of payment to
the Notes, the Notes are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens and (ii) in all other
cases, the Notes are equally and ratably secured, except for (A) Liens
existing as of the Issue Date to the extent and in the manner such Liens
are in effect on the Issue Date; (B) Liens securing obligations under the
Credit Agreement; (C) Liens securing the Notes; (D) Liens of the Company or
a Restricted Subsidiary of the Company on assets of any Subsidiary of the
Company; (E) Liens securing Refinancing Indebtedness which is incurred to
Refinance any Indebtedness which has been secured by a Lien permitted under
this Indenture and which has been incurred in accordance with the
provisions of this Indenture; provided, however, that such Liens (A) are no
less favorable to the Holders and are not more favorable to the lienholders
with respect to such Liens than the Liens in respect of the Indebtedness
being Refinanced and (B) do not extend to or cover any property or assets
of the Company or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced; and (F) Permitted Liens.
SECTION 4.17. Conduct of Business.
The Company and its Restricted Subsidiaries shall not engage in
any businesses which are not the same, similar, reasonably related,
ancillary or complementary to the businesses in which the Company and its
Restricted Subsidiaries are engaged on the Issue Date.
SECTION 4.18. Limitation on Preferred Stock of
Restricted Subsidiaries.
The Company shall not permit any of its Restricted Subsidiaries
to issue any Preferred Stock (other than to the Company or to a Wholly
Owned Restricted Subsidiary of the Company) or permit any Person (other
than the Company or a Wholly Owned Restricted Subsidiary of the Company) to
own any Preferred Stock of any Restricted Subsidiary of the Company.
Notwithstanding the foregoing, nothing in this Section 4.18 will prohibit
the ownership of Preferred Stock issued by a person prior to the time (A)
such person becomes a Restricted Subsidiary of the Company, (B) such person
merges with or into a Restricted Subsidiary of the Company or (C) a
Restricted Subsidiary of the Company merges with or into such person;
provided that such Preferred Stock was not issued by such person in
anticipation of a transaction contemplated by subclause (A), (B) or (C)
above.
SECTION 4.19. Limitation of Guarantees by Restricted
Subsidiaries.
The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, by way of the pledge of any intercompany note or
otherwise, to assume, guarantee or in any other manner become liable with
respect to any Indebtedness of the Company or any other Restricted
Subsidiary (other than Indebtedness incurred under the Credit Agreement),
unless such Restricted Subsidiary executes and delivers a supplemental
indenture to the Indenture, providing a guarantee of payment of the Notes
by such Restricted Subsidiary (the "Guarantee").
Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any
further action required on the part of the Trustee or any Holder, upon:
(i) the unconditional release of such Restricted Subsidiary from its
liability in respect of the Indebtedness in connection with which such
Guarantee was executed and delivered pursuant to the preceding paragraph;
or (ii) any sale or other disposition (by merger or otherwise) to any
Person which is not a Restricted Subsidiary of the Company of all of the
Company's Capital Stock in, or all or substantially all of the assets of,
such Restricted Subsidiary; provided that (a) such sale or disposition of
such Capital Stock or assets is otherwise in compliance with the terms of
this Indenture and (b) such assumption, guarantee or other liability of
such Restricted Subsidiary has been released by the holders of the other
Indebtedness so guaranteed.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of
Assets.
(a) The Company shall not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or
sell, assign, transfer, lease, convey or otherwise dispose of (or cause or
permit any Restricted Subsidiary of the Company to sell, assign, transfer,
lease, convey or otherwise dispose of) all or substantially all of the
Company's assets (determined on a consolidated basis for the Company and
the Company's Restricted Subsidiaries) whether as an entirety or
substantially as an entirety to any Person unless: (i) either (1) the
Company shall be the surviving or continuing corporation or (2) the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets
of the Company and of the Company's Restricted Subsidiaries substantially
as an entirety (the "Surviving Entity") (x) shall be a corporation
organized and validly existing under the laws of the United States or any
State thereof or the District of Columbia and (y) shall expressly assume,
by supplemental indenture (in form and substance satisfactory to the
Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of
the Notes and the performance of every covenant of the Notes, the Indenture
and the Registration Rights Agreement on the part of the Company to be
performed or observed; (ii) immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above
(including giving effect to any Indebtedness and Acquired Indebtedness
incurred or anticipated to be incurred in connection with or in respect of
such transaction), the Company or such Surviving Entity, as the case may
be, shall be able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 4.12; (iii) immediately
before and immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including, without
limitation, giving effect to any Indebtedness and Acquired Indebtedness
incurred or anticipated to be incurred and any Lien granted in connection
with or in respect of the transaction), no Default or Event of Default
shall have occurred or be continuing; and (iv) the Company or the Surviving
Entity shall have delivered to the Trustee an officers' certificate and an
opinion of counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to
such transaction have been satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of
one or more Restricted Subsidiaries of the Company the Capital Stock of
which constitutes all or substantially all of the properties and assets of
the Company, shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Company.
Notwithstanding clauses (a) (ii), (iii) and (iv), (A) any
Restricted Subsidiary may consolidate with, merge into or transfer all or
part of its properties and assets to the Company or another Restricted
Subsidiary of the Company and (B) the Company may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Company in
another jurisdiction.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer of
all or substantially all of the assets of the Company in accordance with
Section 5.01, in which the Company is not the continuing corporation, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture and the Notes with the same effect as if such
surviving entity had been named as such.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default":
(1) the failure to pay interest on any Notes when the same
becomes due and payable and the default continues for a period of 30
days;
(2) the failure to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds
Offer);
(3) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default
continues for a period of 60 days after the Company receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes (except in the case of a
default with respect to Article Five, which will constitute an Event
of Default with such notice requirement but without such passage of
time requirement);
(4) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal
amount of any Indebtedness of the Company or any Restricted Subsidiary
of the Company and such failure continues for a period of 20 days or
more, or the acceleration of the final stated maturity of any such
Indebtedness (which acceleration is not rescinded, annulled or
otherwise cured within 20 days of receipt by the Company or such
Restricted Subsidiary of notice of any such acceleration) if the
aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure
to pay principal at final maturity or which has been accelerated,
aggregates $5.0 million or more at any time;
(5) one or more judgments in an aggregate amount in excess of
$5.0 million shall have been rendered against the Company or any of
its Significant Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable;
(6) the Company or any of its Significant Subsidiaries pursuant
to or under or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
(d) makes a general assignment for the benefit of its
creditors; or
(e) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay its
debts generally; or
(7) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any Significant
Subsidiary of the Company in an involuntary case or proceeding,
(b) appoints a Custodian of the Company or any Significant
Subsidiary of the Company for all or substantially all of its
properties, or
(c) orders the liquidation of the Company or any
Significant Subsidiary of the Company.
SECTION 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default
specified in Section 6.01(a)(6) or (7) with respect to the Company) shall
occur and be continuing, the Trustee or the Holders of at least 25% in
principal amount of outstanding Notes may declare the principal of and
accrued interest on all the Notes to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration
Notice"), and the same shall become immediately due and payable.
(b) If an Event of Default specified in Section 6.01(a)(6) or
(7) occurs and is continuing with respect to the Company, all unpaid
principal of and premium, if any, and accrued and unpaid interest on all of
the outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or
any Holder.
(c) At any time after a declaration of acceleration with respect
to the Notes as described in Section 6.02(a) or (b), the Holders of a
majority in principal amount of the Notes may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict
with any judgment or decree, (ii) if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration, (iii) to the extent the
payment of such interest is lawful, interest (at the same rate specified in
the Notes) on overdue installments of interest and overdue principal, which
has become due otherwise than by such declaration of acceleration, has been
paid, (iv) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances and
(v) in the event of the cure or waiver of an Event of Default of the type
described in Section 6.01(a)(6) or (7), the Trustee shall have received an
Officers' Certificate and an Opinion of Counsel that such Event of Default
has been cured or waived. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of, premium, if any, or accrued and unpaid
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
All rights of action and claims under this Indenture or the Notes
may be entered by the Trustee even if it does not possess any of the Notes
or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Noteholder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute
a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to
the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may, on
behalf of the Holders of all the Notes, waive any existing Default or Event
of Default and its consequences under this Indenture, except a Default or
Event of Default specified in Section 6.01(1) or (2) or in respect of any
provision hereof which cannot be modified or amended without the consent of
the Holder so affected pursuant to Section 9.02. When a Default or Event
of Default is so waived, it shall be deemed cured and shall cease to exist.
This Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and
such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the then outstanding Notes may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it, including, without
limitation, any remedies provided for in Section 6.03. Subject to
Section 7.01, however, the Trustee may, in its discretion, refuse to follow
any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Holder (it being understood that the Trustee shall have no duty to
ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders) or that may involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action
deemed proper by the Trustee, in its discretion, that is not inconsistent
with such direction.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture
or the Notes unless:
(1) the Holder gives to the Trustee notice of a continuing Event
of Default;
(2) Holders of at least 25% in aggregate principal amount of the
then outstanding Notes make a written request to the Trustee to pursue
the remedy;
(3) such Holders offer to the Trustee indemnity or security
against any loss, liability or expense to be incurred in compliance
with such request which is satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 25 days
after receipt of the request and the offer of satisfactory indemnity
or security; and
(5) during such 25-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give
the Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other
Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of, premium and interest on a
Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in clause (1) or (2) of Section 6.01 occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an
express trust against the Company or any other obligor on the Notes for the
whole amount of principal and accrued interest remaining unpaid, together
with interest on overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest at the
rate set forth in the Notes and such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
taxes, disbursements and advances of the Trustee, its agents and counsel)
and the Holders allowed in any judicial proceedings relating to the Company
or any other obligor upon the Notes, any of their respective creditors or
any of their respective property, and shall be entitled and empowered to
collect and receive any monies or other property payable or deliverable on
any such claims and to distribute the same, and any custodian in any such
judicial proceedings is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07. The Company's payment
obligations under this Section 6.09 shall be secured in accordance with the
provisions of Section 7.07. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six,
it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Sections 6.09 and 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, and interest, respectively;
and
Fourth: to the Company or any other obligor on the Notes, as
their interests may appear, or as a court of competent jurisdiction
may direct.
The Trustee, upon prior notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing
by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit
by a Holder or Holders of more than 10% in aggregate principal amount of
the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture and use the same degree of care and skill in its
exercise thereof as a prudent Person would exercise or use under the
circumstances in the conduct of its own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture or the TIA and no duties,
covenants, responsibilities or obligations shall be implied in this
Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
(including Officers' Certificates) or opinions (including Opinions of
Counsel) furnished to the Trustee and conforming to the requirements
of this Indenture. However, as to any certificates or opinions which
are required by any provision of this Indenture to be delivered or
provided to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree with the Company.
Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
(g) In the absence of bad faith, negligence or willful
misconduct on the part of the Trustee, the Trustee shall not be responsible
for the application of any money by any Paying Agent other than the
Trustee.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting
or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion
of Counsel, which shall conform to Sections 11.04 and 11.05. The Trustee
shall not be liable for and shall be fully protected in respect of any
action it takes or omits to take in good faith in reliance on such
Officers' Certificate, or an Opinion of Counsel or advice of counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
(d) The Trustee shall not be liable for any action that it takes
or omits to take in good faith that it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate (including
any Officers' Certificate), statement, instrument, opinion (including any
Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order
or direction of any of the Holders of the Notes pursuant to the provisions
of this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred by it in compliance with such request,
order or direction.
(g) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability with respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(h) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
(i) Except with respect to Section 4.01, the Trustee shall have
no duty to inquire as to the performance of the Company's covenants in
Section 4. In addition, the Trustee shall be deemed not to have knowledge
of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Section 6.01(1) or (2) or Section 4.01 or (ii) any
Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company, any
Restricted or Unrestricted Subsidiary, or their respective Affiliates, with
the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10
and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Notes, and it shall not be accountable
for the Company's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Company in this Indenture or the Notes
other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and
if the Trustee has knowledge of such Default or Event of Default, the
Trustee shall mail to each Holder notice of the uncured Default or Event of
Default within 60 days after such Default or Event of Default occurs.
Except in the case of a Default or an Event of Default in the payment of
interest or principal of, premium or interest on, any Note, including an
accelerated payment and the failure to make payment on the Change of
Control Payment Date pursuant to a Change of Control Offer or on the Net
Proceeds Offer Payment Date pursuant to a Net Proceeds Offer and, except in
the case of a failure to comply with Article Five, the Trustee may withhold
the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its Board of
Directors and/or Trust Officers in good faith determines that withholding
the notice is in the interest of the Holders. The Trustee shall not be
deemed to have knowledge of a Default or Event of Default other than (i)
any Event of Default occurring pursuant to Sections 6.01(1) or 6.01(2); or
(ii) any Default or Event of Default of which a Trust Officer shall have
received written notification or obtained actual knowledge. As used
herein, the term "actual knowledge" means the actual fact or statement of
knowing, without any duty to make any investigation with regard thereto.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of each year beginning with May 15,
1998, the Trustee shall, to the extent that any of the events described in
TIA Section 313(a) occurred within the previous twelve months, but not
otherwise, mail to each Holder a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Noteholders
shall be mailed to the Company and filed with the SEC and each stock
exchange, if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange, and if the Notes are so listed, the Trustee
shall comply with TIA Section 313(d).
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as may be agreed upon by
the Company and the Trustee. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable out-of-
pocket expenses, disbursements and advances incurred or made by it in
connection with the performance of its duties and the discharge of its
obligations under this Indenture. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents,
employees, officers, stockholders and directors for, and hold them harmless
against, any loss, liability or expense incurred by them except for such
actions to the extent caused by any negligence, bad faith or willful
misconduct on their part, arising out of or in connection with the
acceptance or administration of this trust including the reasonable costs
and expenses of defending themselves against or investigating any claim or
liability in connection with the exercise or performance of any of the
Trustee's rights, powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee or any of its
agents, employees, officers, stockholders and directors for which it may
seek indemnity. At the Trustee's sole discretion, the Company shall defend
the claim and the Trustee shall cooperate and may participate in the
defense; provided that any settlement of a claim shall be approved in
writing by the Trustee. Alternatively, the Trustee may at its option have
separate counsel of its own choosing and the Company shall pay the
reasonable fees and expenses of one such separate counsel; provided,
however, that the Company will not be required to pay such fees and
expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee and its agents, employees,
officers, stockholders and directors subject to the claim in connection
with such defense as reasonably determined by the Trustee. The Company
need not pay for any settlement made without its written consent. The
Company need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Notes on all assets or money
held or collected by the Trustee, in its capacity as Trustee, except assets
or money held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) occurs, such expenses and the
compensation for such services shall be paid to the extent allowed under
any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing at
least 30 days in advance. The Holders of a majority in principal amount of
the outstanding Notes may remove the Trustee by so notifying the Company
and the Trustee and may appoint a successor Trustee. A resignation or
removal of the Trustee and appointment of a successor Trustee shall become
effective only with the successor Trustee's acceptance of appointment as
provided in this Section. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall notify each Holder
of such event and shall promptly appoint a successor Trustee. Within one
year after the successor Trustee takes office, the Holders of a majority in
principal amount of the Notes may appoint a successor Trustee to replace
the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Promptly after
that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee
shall mail notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in aggregate principal amount of the
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the resulting, surviving or transferee corporation
without any further act shall, if such resulting, surviving or transferee
corporation is otherwise eligible hereunder, be the successor Trustee;
provided, however, that such corporation shall be otherwise qualified and
eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), (2) and (5). The Trustee (or in the
case of a corporation included in a bank holding company system, the related
bank holding company) shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition and have a Corporate Trust Office in the City of New York. In
addition, if the Trustee is a corporation included in a bank holding
company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA Section 310(a)(2). The Trustee
shall comply with TIA Section 310(b); provided, however, that there shall
be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other notes, or certificates of interest or
participation in other notes, of the Company are outstanding, if the require-
ments for such exclusion set forth in TIA section 310(b)(1) are met. The
provisions of TIA Section 310 shall apply to the Company and any other obligor
of the Notes.
SECTION 7.11. Preferential Collection of
Claims Against the Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company and any
other obligor of the Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's
Obligations.
The Company may terminate its obligations under the Notes and
this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 8.01, if all Notes previously authenticated and
delivered (other than destroyed, lost or stolen Notes which have been
replaced or paid or Notes for whose payment U.S. Legal Tender has
theretofore been deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company, as provided in Section 8.05) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable by it hereunder,
or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Notes under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Notes have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee,
under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds in trust solely
for the benefit of the Holders for that purpose, U.S. Legal Tender in
such amount as is sufficient, in the opinion of a nationally
recognized firm of independent public accountants, without
consideration of reinvestment of such interest, to pay principal of,
premium, if any, and interest on the outstanding Notes to maturity or
redemption; provided that the Trustee shall have been irrevocably
instructed to apply such U.S. Legal Tender to the payment of said
principal, premium, if any, and interest with respect to the Notes;
(c) no Default or Event of Default with respect to this
Indenture or the Notes shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company
is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent providing for or relating to the termination of
the Company's obligations under the Notes and this Indenture have been
complied with. Such Opinion of Counsel shall also state that such
satisfaction and discharge does not result in a default under the
Credit Agreement (if then in effect) or any other agreement or
instrument then known to such counsel that binds or affects the
Company.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05 and
8.06 shall survive until the Notes are no longer outstanding pursuant to
the last paragraph of Section 2.08. After the Notes are no longer
outstanding, the Company's obligations in Sections 7.07, 8.05 and 8.06
shall survive.
After such delivery or irrevocable deposit, the Trustee upon
request shall acknowledge in writing the discharge of the Company's
obligations under the Notes and this Indenture except for those surviving
obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant
Defeasance.
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, elect to have either
paragraph (b) or (c) below be applied to all outstanding Notes upon
compliance with the conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of
the option applicable to this paragraph (b), the Company shall, subject to
the satisfaction of the conditions set forth in Section 8.03, be deemed to
have been discharged from its obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section
8.04 hereof and the other Sections of this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Notes and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following provisions, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments
in respect of the principal of and interest on such Notes when such
payments are due, (ii) the Company's obligations with respect to such Notes
under Article Two and Section 4.02 hereof, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (iv) this Article Eight. Subject
to compliance with this Article Eight, the Company may exercise its option
under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) hereof.
If the Company exercises its Legal Defeasance option, upon
satisfaction of the conditions set forth in Section 8.03, payment of the
Notes may not be accelerated because of an Event of Default.
(c) Upon the Company's exercise under paragraph (a) hereof of
the option applicable to this paragraph (c), the Company shall, subject to
the satisfaction of the conditions set forth in Section 8.03 hereof, be
released from its obligations under the covenants contained in Sections
4.08, 4.10 through 4.19 and Article Five hereof with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of
any thereof) in connection with such covenants, but shall continue to be
deemed "outstanding" for all other purposes hereunder (it being understood
that such Notes shall not be deemed outstanding for accounting purposes).
For this purpose, such Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of
Default under Section 6.01(3) hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
SECTION 8.03. Conditions to Legal Defeasance or
Covenant Defeasance.
The following shall be the conditions to the application of
either Section 8.02(b) or 8.02(c) hereof to the outstanding Notes:
(a) the Company shall have irrevocably deposited with the
Trustee, in trust, for the benefit of the Holders cash in U.S.
dollars, non-callable U.S. Government Obligations, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest on the Notes on the
stated date for payment thereof or on the applicable redemption date,
as the case may be;
(b) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of the Indenture, there
has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon such opinion of counsel
shall confirm that, the Holders will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will
not recognize income, gain or loss for federal income tax purposes as
a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit and the grant of any lien securing such borrowing);
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under the
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the
Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an opinion
of counsel to the effect that after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally.
Notwithstanding the foregoing, the opinion of counsel required by
Section 8.03(b) and (c) need not be delivered if all the Notes not
therefore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) will become due and payable on the maturity date within one
year, or (iii) are to be called for redemption within one year under
arrangement satisfactory to the Trustee for giving of notice of redemption
by such Trustee in the name, and at the expense of the Company.
SECTION 8.04. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender
or U.S. Government Obligations deposited with it pursuant to Article Eight,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of
principal of and interest on the Notes. The Trustee shall be under no
obligation to invest said U.S. Legal Tender or U.S. Government Obligations
except as it may agree with the Company.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Legal Tender or
U.S. Government Obligations deposited pursuant to Section 8.03 hereof or
the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of
the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
Company's request any U.S. Legal Tender or U.S. Government Obligations held
by it as provided in Section 8.03 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of
the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.05. Repayment to the Company.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest
that remains unclaimed for two years after the date of payment of such
principal and interest; provided that the Trustee or such Paying Agent,
before being required to make any payment, may at the expense of the
Company, cause to be published once in a newspaper of general circulation
in the City of New York or mail to each Holder entitled to such money
notice that such money remains unclaimed and that after a date specified
therein which shall be at least 30 days from the date of such publication
or mailing any unclaimed balance of such money then remaining will be
repaid to the Company. After payment to the Company, Holders entitled to
such money must look to the Company for payment as general creditors unless
an applicable law designates another Person.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Article Eight by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Article Eight until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or
U.S. Government Obligations in accordance with Article Eight; provided that
if the Company has made any payment of interest on or principal of any
Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such
payment from the U.S. Legal Tender or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, any Guarantor
and the Trustee, together, may amend or supplement this Indenture or the
Notes without the consent of any Holders:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(4) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(5) to make any other change that would provide any additional
benefit or rights to the Holders or that does not adversely affect in
any material respect the rights of any Holders hereunder;
(6) to provide for issuance of the Exchange Notes, which will
have terms substantially identical in all material respects to the
Initial Notes (except that the transfer restrictions contained in the
Initial Notes will be modified or eliminated, as appropriate), and
which will be treated together with any outstanding Initial Notes, as
a single issue of securities; or
(7) to make any other change that does not, in the opinion of
the Trustee, adversely affect in any material respect the rights of
any Holders hereunder;
provided, however, that the Company has delivered to the Trustee an Opinion
of Counsel and an Officers' Certificate, each stating that such amendment
or supplement complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
(a) Subject to Section 6.07, the Company, when authorized by a
Board Resolution, any Guarantor and the Trustee, together, with the written
consent of the Holder or Holders of at least a majority in aggregate
principal amount of the outstanding Notes, may amend or supplement this
Indenture or the Notes, without notice to any other Holders. Subject to
Section 6.07, the Holder or Holders of a majority in aggregate principal
amount of the outstanding Notes may waive compliance by the Company with
any provision of this Indenture or the Notes without notice to any other
Holder. No amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, shall, without the consent of each Holder of each Note
affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing
the time for payment of interest, if any, including defaulted
interest, on any Notes;
(3) reduce the principal of or change or have the effect of
changing the fixed maturity of any Notes, or change the date on which
any Notes may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor;
(4) make any Notes payable in money other than that stated in
the Notes;
(5) make any change in provisions of this Indenture protecting
the right of each Holder to receive payment of principal and interest
on such Note on or after the due date thereof or to bring suit to
enforce such payment, or permitting Holders of a majority in principal
amount of Notes to waive Defaults or Events of Default;
(6) amend, change or modify in any material respect the
obligation of the Company to make and consummate a Change of Control
Offer in the event of a Change of Control or make and consummate a Net
Proceeds Offer with respect to any Asset Sale that has been
consummated or modify any of the provisions or definitions with
respect thereto after a Change of Control has occurred or the subject
Asset Sale has been consummated; or
(7) modify or change any provision of this Indenture or the
related definitions affecting the ranking of the Notes or any
Guarantee in a manner which adversely affects the Holders.
After an amendment, supplement or waiver under this Section 9.02
becomes effective (as provided in Section 9.04), the Company shall mail to
the Holders affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
SECTION 9.03. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Notes shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is
not made on any Note. Subject to the following paragraph, any such Holder
or subsequent Holder may revoke the consent as to his Note or portion of
his Note by notice to the Trustee or the Company received before the date
on which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver
(at which time such amendment, supplement or waiver shall become
effective).
The Company may, but shall not be obligated to, fix such record
date as it may select for the purpose of determining the Holders entitled
to consent to any amendment, supplement or waiver. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their
duly designated proxies), and only those Persons, shall be entitled to
revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
After an amendment or waiver becomes effective, it shall bind
every Noteholder.
SECTION 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a
Note, the Trustee may require the Holder of the Note to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Note about
the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to and adopted in accordance with this Article Nine;
provided, however, that the Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The
Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Opinion of Counsel and an Officers' Certificate each
stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE TEN
GUARANTEE
SECTION 10.01. Unconditional Guarantee.
Each Guarantor unconditionally, jointly and severally, guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to
the Trustee and its successors and assigns, that: (i) the principal of and
interest on the Notes will be promptly paid in full when due, subject to
any applicable grace period, whether at maturity, by acceleration or
otherwise and interest on the overdue principal, if any, and interest on
any interest, to the extent lawful, of the Notes and all other obligations
of the Company to the Holders or the Trustee hereunder or thereunder will
be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (ii) in case of any extension of time of payment or
renewal of any Notes or of any such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, subject to any applicable grace period, whether
at stated maturity, by acceleration or otherwise. Each Guarantor agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor waives
diligence, presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of the Company, any right to require
a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that this Guarantee will not be discharged except
by complete performance of the obligations contained in the Notes, this
Indenture and in this Guarantee. If any Holder or the Trustee is required
by any court or otherwise to return to the Company, any Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation
to the Company or any Guarantor, any amount paid by the Company or any
Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between each Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
for the purposes of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Article Six, such obligations (whether or
not due and payable) shall forthwith become due and payable by each
Guarantor for the purpose of this Guarantee.
SECTION 10.02. Release of a Guarantor.
Upon (i) the unconditional release of a Guarantor from its
liability in respect of the Indebtedness in connection with which its
Guarantee was executed and delivered pursuant to Section 4.19 or (ii) the
sale or disposition (whether by merger, stock purchase, asset sale or
otherwise) of a Guarantor (or all or substantially all its assets) to an
entity which is not a Restricted Subsidiary of the Company and which sale
or disposition is otherwise in compliance with the terms of this Indenture,
such Guarantor shall be deemed released from all obligations under this
Article Ten without any further action required on the part of the Trustee
or any Holder; provided, however, that any such termination shall occur
only to the extent that all obligations of such Guarantor under the other
Indebtedness so guaranteed and all of its guarantees of, and under all of
its pledges of assets or other security interests which secure, such
Indebtedness of the Company or the Guarantor shall also terminate upon such
release, sale or transfer.
The Trustee shall execute an appropriate instrument delivered by
the Company evidencing such release upon receipt of a request by the
Company accompanied by an Officers' Certificate and Opinion of Counsel
certifying as to the compliance with this Section 10.02. Any Guarantor not
so released remains liable for the full amount of principal of and interest
on the Notes as provided in this Article Ten.
SECTION 10.03. Limitation of a Guarantor's Liability.
Each Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by
such Guarantor pursuant to its Guarantee not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of
such Guarantor under the Guarantee shall be limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities
of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to
Section 10.05, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 10.04. Guarantors May Consolidate, etc., on
Certain Terms.
(a) Nothing contained in this Indenture or in any of the Notes
shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor that is a Wholly Owned Restricted Subsidiary
of the Company or shall prevent any sale of assets or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety, to
the Company or another Guarantor that is a Wholly Owned Restricted
Subsidiary of the Company. Upon any such consolidation, merger, sale or
conveyance, the Guarantee given by such Guarantor shall no longer have any
force or effect.
(b) Except as set forth in Article Four and Article Five hereof,
nothing contained in this Indenture or in any of the Notes shall prevent
any consolidation or merger of a Guarantor with or into a corporation or
corporations other than the Company or another Guarantor (whether or not
affiliated with the Guarantor) or shall prevent any sale of assets or
conveyance of the property of a Guarantor as an entirety or substantially
as an entirety, to a corporation or corporations other than the Company or
another Guarantor (whether or not affiliated with the Guarantor); provided,
however, that, subject to Sections 10.02 and 10.04(a), (i) immediately
after such transaction and giving effect thereto, such transaction does not
(a) violate any covenants set forth herein or (b) result in a Default or
Event of Default under this Indenture that is continuing, (ii) upon any
such consolidation, merger, sale or conveyance, the Guarantee of such
Guarantor set forth in this Article Ten, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by such Guarantor, shall be expressly assumed (in
the event that the Guarantor is not the surviving corporation in the
merger), by supplemental indenture satisfactory in form to the Trustee and
in compliance with Section 9.06, executed and delivered to the Trustee, by
the corporation formed by such consolidation, or into which the Guarantor
shall have merged, or by the corporation that shall have acquired such
property, and (iii) in the event that such Guarantor is not the surviving
corporation in the merger, such surviving corporation shall be a
corporation organized and existing under the laws of the United States or
any State thereof or the District of Columbia. In the case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture executed and delivered to
the Trustee and satisfactory in form to the Trustee of the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor corporation shall succeed to and
be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor.
SECTION 10.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment
or distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from
all other Guarantors in a pro rata amount based on the Adjusted Net Assets
of each Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Company's obligations with respect to the Notes or any other Guarantor's
obligations with respect to the Guarantee. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of the amount by which (x) the
fair value of the property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities (after
giving effect to all other fixed and contingent liabilities incurred or
assumed on such date), but excluding liabilities under the Guarantee, of
such Guarantor at such date and (y) the present fair salable value of the
assets of such Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Guarantor on its debts
(after giving effect to all other fixed and contingent liabilities incurred
or assumed on such date and after giving effect to any collection from any
Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Guarantee), excluding debt in respect of the Guarantee
of such Guarantor, as they become absolute and matured.
SECTION 10.06. Waiver of Subrogation.
Until all Obligations under this Indenture are paid in full each
Guarantor irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Company that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under
the Guarantees and this Indenture, including, without limitation, any right
of subrogation, reimbursement, exoneration, indemnification, and any right
to participate in any claim or remedy of any Holder of Notes against the
Company, whether or not such claim, remedy or right arises in equity, or
under contract, statute or common law, including, without limitation, the
right to take or receive from the Company, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security
on account of such claim or other rights. If any amount shall be paid to
any Guarantor in violation of the preceding sentence and the Notes shall
not have been paid in full, such amount shall have been deemed to have been
paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders of the Notes, and shall forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this
Indenture and that the waiver set forth in this Section 10.06 is knowingly
made in contemplation of such benefits.
SECTION 10.07. Execution of Guarantee.
To evidence their guarantee to the Holders set forth in this
Article Ten, each Guarantor which is required pursuant to Section 4.19 to
execute and deliver a supplemental indenture agree to execute at such time
a Guarantee in substantially the form included in Exhibit F, which shall be
endorsed on each Note ordered to be authenticated and delivered by the
Trustee. Each Guarantor agrees that its Guarantee set forth in this
Article Ten shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Guarantee. Each such
Guarantee shall be signed on behalf of each Guarantor by two Officers, or
an Officer and an Assistant Secretary or one Officer shall sign and one
Officer or an Assistant Secretary (each of whom shall, in each case, have
been duly authorized by all requisite corporate actions) shall attest to
such Guarantee prior to the authentication of the Note on which it is
endorsed, and the delivery of such Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of such
Guarantee on behalf of such Guarantor. Such signatures upon the Guarantees
may be by manual or facsimile signature of such officers and may be
imprinted or otherwise reproduced on the Guarantees, and in case any such
officer who shall have signed the Guarantees shall cease to be such officer
before the Note on which such Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company,
such Note nevertheless may be authenticated and delivered or disposed of as
though the person who signed the Guarantees had not ceased to be such
officer of the Guarantor.
SECTION 10.08. Waiver of Stay, Extension or Usury
Laws.
Each Guarantor covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury law or other law that would prohibit or forgive each such
Guarantor from performing its Guarantee as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it
may lawfully do so) each such Guarantor expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA
that may be so modified or excluded, the latter provision shall be deemed
to apply to this Indenture as so modified or excluded, as the case may be.
SECTION 11.02. Notices.
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by
hand delivery, by telex, by telecopier, by reputable overnight delivery
service, or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company or any Guarantor:
UNIVERSAL HOSPITAL SERVICES, INC.
1250 Northland Plaza
3800 West 80th Street
Bloomington, MN 55431-4442
Attention: Chief Executive Officer
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022-3897
Attention: Vincent J. Pisano
if to the Trustee:
FIRST TRUST NATIONAL ASSOCIATION
180 East 5th Street
St. Paul, MN 55101
Attention: Corporate Trust Administration
The Company and the Trustee by written notice to each other may
designate additional or different addresses for notices. Any notice or
communication to the Company or the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; one (1)
business day after mailing by reputable overnight courier, and five (5)
calendar days after mailing if sent by registered or certified mail,
postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to
him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be
sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other
Holders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other
Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to
Conditions Precedent.
Upon any request or application by the Company or any Guarantor
to the Trustee to take any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory
to the Trustee, stating that, in the opinion of the signers, all
conditions precedent to be performed by the Company, if any, provided
for in this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company,
if any, provided for in this Indenture relating to the proposed
action have been complied with;
provided, however, that, in the case of such request or application as to
which the furnishing of such certificates or opinions is otherwise
expressly provided for by any provision of this Indenture, no additional
certificate or opinion need be furnished.
SECTION 11.05 Statements Required in Certificate or
Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the
Officers' Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition and the definitions
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is reasonably necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying Agent,
Registrar.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking institutions in
New York, New York, Minneapolis, Minnesota, or at such place of payment are
not required to be open. If a payment date is a Legal Holiday at such
place, payment may be made at such place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening
period.
SECTION 11.08. Governing Law.
THIS INDENTURE, THE NOTES AND THE GUARANTEES, IF ANY, SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
SECTION 11.09. No Adverse Interpretation of Other
Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. No Recourse Against Others.
A past, present or future director, officer, employee,
stockholder or incorporator, as such, of the Company or any Guarantor shall
not have any liability for any obligations of the Company or any Guarantor
under the Notes, the Guarantees, if any, or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
SECTION 11.11. Successors.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of any Guarantor in this
Indenture and its Guarantee shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together shall
represent the same agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Notes shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of
the provisions hereof shall be enforceable to the full extent permitted by
law.
SECTION 11.14. Independence of Covenants.
All covenants and agreements in this Indenture and the Notes
shall be given independent effect so that if any particular action or
condition is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or otherwise be within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists.
[Remainder of Page Intentionally Left Blank]
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the date first written above.
UNIVERSAL HOSPITAL SERVICES, INC.,
as Issuer
By: /s/ David E. Dovenberg
Name: David E. Dovenberg
Title: President and CEO
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Richard H. Prokosch
Name: Richard H. Prokosch
Title: Assistant Vice President
EXHIBIT A
[FORM OF SERIES A NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT) OR
(B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (2) AGREES THAT IT
WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE ACT, (C) INSIDE
THE UNITED STATES TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1),(2),(3) or (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE
FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF
AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS
AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATIONS S UNDER THE ACT.
CUSIP No.
UNIVERSAL HOSPITAL SERVICES, INC.
10 1/4% Senior Note due 2008, Series A
No. $
UNIVERSAL HOSPITAL SERVICES, INC., a Minnesota corporation (the
"Company"), for value received, promises to pay to CEDE & CO. or registered
assigns, the principal sum of Dollars, on
March 1, 2008.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if
set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated: February 25, 1998 UNIVERSAL HOSPITAL SERVICES, INC.
By:____________________________________
Name:
Title:
By:___________________________________
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 10 1/4% Senior Notes due 2008, Series A,
referred to in the within-mentioned Indenture.
Dated: February 25, 1998
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:__________________________________
Authorized Signatory
(REVERSE OF NOTE)
10 1/4% Senior Note due 2008, Series A
1. Interest. UNIVERSAL HOSPITAL SERVICES, INC., a Minnesota
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at the rate per annum shown above. Interest on the
Notes will accrue from the most recent date on which interest has been paid
or, if no interest has been paid, from February 25, 1998. The Company will
pay interest semi-annually in arrears on each March 1 and September 1
(each, an "Interest Payment Date") and at stated maturity, commencing on
September 1, 1998. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by
the Notes and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders
at the close of business on the Record Date immediately preceding the
Interest Payment Date even if the Notes are canceled on registration of
transfer or registration of exchange after such Record Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The
Company shall pay principal, premium and interest in money of the United
States that at the time of payment is legal tender for payment of public
and private debts ("U.S. Legal Tender"). However, the Company may pay
principal, premium and interest by its check payable in such U.S. Legal
Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. FIRST TRUST NATIONAL ASSOCIATION
(the "Trustee") will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Registrar or co-Registrar.
4. Indenture. The Company issued the Notes under an Indenture,
dated as of February 25, 1998 (the "Indenture"), between the Company and
the Trustee. This Note is one of a duly authorized issue of Notes of the
Company designated as its 10 1/4% Senior Notes due 2008, Series A (the
"Initial Notes"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $180,000,000, which may be issued under
the Indenture; provided the principal amount of Initial Notes issued on the
Issue Date will not exceed $100,000,000. The Notes include the Initial
Notes, the Private Exchange Notes (as defined in the Registration Rights
Agreement) and the Exchange Notes, as defined below, issued in exchange for
the Initial Notes pursuant to the Registration Rights Agreement. The
Initial Notes, the Private Exchange Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders
of Notes are referred to the Indenture and the TIA for a statement of them.
The Notes are general unsecured obligations of the Company.
5. (a) Redemption. The Notes will be redeemable at the Company's
option, in whole at any time or in part from time to time, on and after
March 1, 2003, upon not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of principal amount
thereof) if redeemed during the twelve-month period commencing on March 1
of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption:
Year Percentage
2003 . . . . . . . . . . . 105.125%
2004 . . . . . . . . . . . 103.844%
2005 . . . . . . . . . . . 102.563%
2006 . . . . . . . . . . . 101.281%
2007 and thereafter . . . 100.000%
(b) Optional Redemption Upon Equity Offerings. At any time, or
from time to time, on or prior to March 1, 2001, the Company may, at its
option, use the net cash proceeds of one or more Equity Offerings (as
defined below) to redeem up to 35% of the aggregate principal amount of
Notes originally issued at a redemption price equal to 110.250% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any,
to the date of redemption; provided that at least 65% of the principal
amount of Notes originally issued remains outstanding immediately after any
such redemption. In order to effect the foregoing redemption with the
proceeds of any Equity Offering, the Company shall make such redemption not
more than 120 days after the consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a
public or private offering of Qualified Capital Stock of the Company.
(c) Optional Redemption Upon a Change of Control. In addition
to the rights set forth above and the obligations set forth below, the
Notes will be subject to redemption, at the option of the Company, in whole
or in part, at any time prior to March 1, 2003 and within 180 days after a
Change of Control on not less than 30 nor more than 60 days' prior notice
to each Holder of Notes to be redeemed, in principal amounts of $1,000 or
integral multiples thereof, at a redemption price equal to the sum of (i)
the principal amount thereof plus (ii) accrued and unpaid interest, if any,
to the redemption date plus (iii) the Applicable Premium.
6. Notice of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Notes to be redeemed at such Holder's registered address.
Notes in denominations larger than $1,000 may be redeemed in part.
7. Offers to Purchase. Sections 4.14 and 4.15 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and
upon the occurrence of a Change of Control (as defined in the Indenture),
and subject to further limitations contained therein, the Company will make
an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
8. Denominations; Transfer; Exchange. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer or exchange of
Notes in accordance with this Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as required by law or
as permitted by the Indenture. The Registrar need not register the
transfer or exchange of any Notes during a period beginning 15 days before
the mailing of a redemption notice for any Notes or portions thereof
selected for redemption.
9. Persons Deemed Owners. The registered Holder of a Note
shall be treated as the owner of it for all purposes.
10. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent
will pay the money back to the Company. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity. If the Company
at any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of, premium and interest on the
Notes to redemption or maturity and complies with the other provisions of
this Indenture relating thereto, the Company will be discharged from
certain provisions of the Indenture and the Notes (including certain
covenants, but excluding its obligation to pay the principal of, premium
and interest on the Notes).
12. Amendment; Supplement; Waiver. Subject to certain
exceptions set forth in the Indenture, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders of at least
a majority in aggregate principal amount of the then outstanding Notes, and
any existing Default or Event of Default or noncompliance with any
provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes.
Without consent of any Holder, the parties thereto may amend or supplement
this Indenture or the Notes to, among other things, cure any ambiguity,
defect or inconsistency, provide for uncertificated Notes in addition to or
in place of certificated Notes, or comply with Article Five of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
13. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among
other things, incur additional Indebtedness, pay dividends or make certain
other Restricted Payments, consummate certain Asset Sales, enter into
certain transactions with Affiliates, incur Liens, impose restrictions on
the ability of a Subsidiary to pay dividends or make certain payments to
the Company and its Subsidiaries, merge or consolidate with any other
Person or sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of the assets of the Company. Such limitations are
subject to a number of important qualifications and exceptions. The
Company must annually report to the Trustee on compliance with such
limitations.
14. Successors. When a successor assumes, in accordance with
the Indenture, all the obligations of its predecessor under the Notes, the
Guarantees, if any, and the Indenture, the predecessor will be released
from those obligations.
15. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Notes may declare all the Notes to be due and
payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has been offered indemnity or
security reasonably satisfactory to it. The Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Notes then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of
Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) if it determines in good faith
that withholding notice is in their interest.
16. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries
or their respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others. No stockholder, director,
officer, employee or incorporator, as such, of the Company shall have any
liability for any obligation of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Note by accepting a Note
waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
18. Authentication. This Note shall not be valid until the
Trustee or authenticating agent manually signs the certificate of
authentication on this Note.
19. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. EACH OF THE HOLDERS AGREES TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS NOTE.
20. Abbreviations and Defined Terms. Customary abbreviations
may be used in the name of a Holder of a Note or an assignee, such as: TEN
COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Notes as a convenience to the
Holders of the Notes. No representation is made as to the accuracy of such
numbers as printed on the Notes and reliance may be placed only on the
other identification numbers printed hereon.
22. Registration Rights. Pursuant to the Registration Rights
Agreement, the Company will be obligated upon the occurrence of certain
events to consummate an exchange offer pursuant to which the Holder of this
Note shall have the right to exchange this Series A Note for a 10 1/4% Senior
Note due 2008, Series B, of the Company (an "Exchange Note") which have
been registered under the Securities Act, in like principal amount and
having terms identical in all material respects as the Series A Notes. The
Holders shall be entitled to receive certain additional interest payments
in the event such exchange offer is not consummated and upon certain other
conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement.
23. Indenture. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of this Indenture, as the same may
be amended from time to time. Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture.
24. Guarantees. This Note will be entitled to the benefits of
certain Guarantees, if any, made for the benefit of the Holders. Reference
is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors,
if any, the Trustee and the Holders.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made
to: UNIVERSAL HOSPITAL SERVICES, INC., 1250 Northland Plaza, 3800 West
80th Street, Bloomington, MN 55431-4442, Attention: Chief Executive
Officer.
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
________________________________
_______________________________________________________________
(please print or type name and address)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
_______________________________________________________________
attorney to transfer the Note on the books of the Company with full power
of substitution in the premises.
Dated:_________________ ________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Signature Guarantee: ___________________________________________________
In connection with any transfer of this Note occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") covering resales
of this Note (which effectiveness shall not have been suspended or
terminated at the date of the transfer) and (ii) February 25, 2000 the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer:
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the
Securities Act; or
(3) ___ to an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which
letter can be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign purchaser" in
compliance with Rule 904 of Regulation S under the
Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule
144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement under the
Securities Act; or
(7) ___ pursuant to another available exemption from the
registration statement requirements of the Securities Act.
and unless the box below is checked, the undersigned confirms that such
Note is not being transferred to an "affiliate" of the Company as defined
in Rule 144 under the Securities Act (an "Affiliate"):
( ) The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if
item (3), (4), (5) or (7) is checked, the Company or the Trustee may
require, prior to registering any such transfer of the Notes, in their sole
discretion, such written legal opinions, certifications (including an
investment letter in the case of box (3) or (4) and other information as
the Trustee or the Company have reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act.
If none of the foregoing items are checked, the Trustee or
Registrar shall not be obligated to register this Note in the name of any
person other than the Holder hereof unless and until the conditions to any
such transfer of registration set forth herein and in Section 2.16 of the
Indenture shall have been satisfied.
Dated:__________________ Signed:_______________________________
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee:__________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act, and is aware that the sale to it is being made in reliance
on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule
144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided
by Rule 144A.
Dated: __________________ _____________________________
NOTICE: To be executed by an
executive officer
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the
appropriate box:
Section 4.14 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by
the Company pursuant to Section 4.14 or Section 4.15 of the Indenture,
state the amount: $_____________
Date:_______________ Your Signature:_________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:_______________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
EXHIBIT B
CUSIP NO.
UNIVERSAL HOSPITAL SERVICES, INC.
10 1/4% Senior Note due 2008, Series B
No. 1 $
UNIVERSAL HOSPITAL SERVICES, INC., a Minnesota corporation (the
"Company"), for value received, promises to pay to or
registered assigns, the principal sum of Dollars, on March 1,
2008.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if
set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated: [ ] [ ], [ ] UNIVERSAL HOSPITAL SERVICES, INC.
By: _______________________________________
Name:
Title:
By: _______________________________________
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 10 1/4% Senior Notes due 2008, Series B referred
to in the within-mentioned Indenture.
Dated: [ ] [ ], [ ]
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: _____________________________________
Authorized Signatory
B-2
(REVERSE OF NOTE)
10 1/4% Senior Note due 2008, Series B
1. Interest. UNIVERSAL HOSPITAL SERVICES, INC., a Minnesota
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at the rate per annum shown above. Interest on the
Notes will accrue from the most recent date on which interest has been paid
or, if no interest has been paid, from February 25, 1998. The Company will
pay interest semi-annually in arrears on each March 1 and September 1
(each, an "Interest Payment Date") and at stated maturity, commencing on
September 1, 1998. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and on
overdue installments of interest from time to time on demand at the rate
borne by the Notes and on overdue installments of interest (without regard
to any applicable grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons who are the registered
Holders at the close of business on the Record Date immediately preceding
the Interest Payment Date even if the Notes are canceled on registration of
transfer or registration of exchange after such Record Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The
Company shall pay principal, premium and interest in money of the United
States that at the time of payment is legal tender for payment of public
and private debts ("U.S. Legal Tender"). However, the Company may pay
principal, premium and interest by its check payable in such U.S. Legal
Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, FIRST TRUST NATIONAL
ASSOCIATION (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without
notice to the Holders. The Company or any of its Subsidiaries may, subject
to certain exceptions, act as Registrar or co-Registrar.
4. Indenture. The Company issued the Notes under an Indenture,
dated as of February 25, 1998 (the "Indenture"), between the Company and
the Trustee. This Note is one of a duly authorized issue of Notes of the
Company designated as its 10 1/4% Senior Notes due 2008, Series B (the
"Exchange Notes"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $180,000,000, which may be issued under
the Indenture; provided, the principal amount of Initial Notes issued on
the Issue Date shall not exceed $100,000,000. The Notes include the 10 1/4%
Senior Notes due 2008, Series A (the "Initial Notes"), the Private Exchange
Notes (as defined in the Registration Rights Agreement) and the Exchange
Notes. The Initial Notes, the Private Exchange Notes and the Exchange
Notes are treated as a single class of securities under the Indenture.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA
for a statement of them. The Notes are general unsecured obligations of the
Company.
5. (a) Redemption. The Notes will be redeemable at the
Company's option, in whole at any time or in part from time to time, on and
after March 1, 2003 at the following redemption prices (expressed as
percentages of principal amount thereof) if redeemed during the twelve-
month period commencing on March 1 of the year set forth below, plus, in
each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
Year Percentage
2003 . . . . . . . . . . . . 105.125%
2004 . . . . . . . . . . . . 103.844%
2005 . . . . . . . . . . . . 102.563%
2006 . . . . . . . . . . . 101.281%
2007 and thereafter . . . . 100.000%
(b) Optional Redemption Upon Equity Offerings. At any time, or
from time to time, on or prior to March 1, 2001, the Company may, at its
option, use the net cash proceeds of one or more Equity Offerings (as
defined below) to redeem up to 35% of the aggregate principal amount of
Notes originally issued at a redemption price equal to 110.250% of the
principal amount of Notes to be redeemed, plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided that at least 65% of
the principal amount of Notes originally issued remains outstanding
immediately after any such redemption. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall make
such redemption not more than 120 days after the consummation of any such
Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a
public or private offering of Qualified Capital Stock of the Company.
(c) Optional Redemption Upon a Change of Control. In addition
to the rights set forth above and the obligations set forth below, the
Notes will be subject to redemption, at the option of the Company, in whole
or in part, at any time prior to March 1, 2003 and within 180 days after a
Change of Control on not less than 30 nor more than 60 days' prior notice
to each Holder of Notes to be redeemed, in principal amounts of $1,000 or
integral multiples thereof, at a redemption price equal to the sum of (i)
the principal amount thereof plus (ii) accrued and unpaid interest, if any,
to the redemption date plus (iii) the Applicable Premium.
6. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes
in denominations larger than $1,000 may be redeemed in part.
7. Offers to Purchase. Sections 4.14 and 4.15 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and
upon the occurrence of a Change of Control (as defined in the Indenture),
and subject to further limitations contained therein, the Company will make
an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
8. Denominations; Transfer; Exchange. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange
Notes in accordance with this Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as required by law or
as permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Notes during a period beginning 15 days before
the mailing of a redemption notice for any Notes or portions thereof
selected for redemption.
9. Persons Deemed Owners. The registered Holder of a Note shall
be treated as the owner of it for all purposes.
10. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent
will pay the money back to the Company. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity. If the Company
at any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of, premium and interest on the
Notes to redemption or maturity and complies with the other provisions of
this Indenture relating thereto, the Company will be discharged from
certain provisions of the Indenture and the Notes (including certain
covenants, but excluding its obligation to pay the principal of, premium
and interest on the Notes).
12. Amendment; Supplement; Waiver. Subject to certain
exceptions set forth in the Indenture, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders of at least
a majority in aggregate principal amount of the then outstanding Notes, and
any existing Default or Event of Default or noncompliance with any
provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes.
Without consent of any Holder, the parties thereto may amend or supplement
this Indenture or the Notes to, among other things, cure any ambiguity,
defect or inconsistency, provide for uncertificated Notes in addition to or
in place of certificated Notes, or comply with Article Five of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
13. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among
other things, incur additional Indebtedness, pay dividends or make certain
other Restricted Payments, consummate certain Asset Sales, enter into
certain transactions with Affiliates, incur Liens, impose restrictions on
the ability of a Subsidiary to pay dividends or make certain payments to
the Company and its Subsidiaries, merge or consolidate with any other
Person, sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of the assets of the Company. Such limitations are
subject to a number of important qualifications and exceptions. The
Company must annually report to the Trustee on compliance with such
limitations.
14. Successors. When a successor assumes, in accordance with
the Indenture, all the obligations of its predecessor under the Notes, the
Guarantees, if any, and the Indenture, the predecessor will be released
from those obligations.
15. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Notes may declare all the Notes to be due and
payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has been offered indemnity or
Security reasonably satisfactory to it. The Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Notes then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of
Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) if it determines in good faith
that withholding notice is in their interest.
16. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries
or their respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others. No stockholder, director,
officer, employee or incorporator, as such, of the Company shall have any
liability for any obligation of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Note by accepting a Note
waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
18. Authentication. This Note shall not be valid until the
Trustee or authenticating agent manually signs the certificate of
authentication on this Note.
19. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. EACH OF THE HOLDERS AGREES TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
RELATING TO THIS NOTE.
20. Abbreviations and Defined Terms. Customary abbreviations
may be used in the name of a Holder of a Note or an assignee, such as: TEN
COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Notes as a convenience to the
Holders of the Notes. No representation is made as to the accuracy of such
numbers as printed on the Notes and reliance may be placed only on the
other identification numbers printed hereon.
22. Indenture. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of this Indenture, as the same may
be amended from time to time. Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture.
23. Guarantees. This Note will be entitled to the benefits of
certain Guarantees, if any, made for the benefit of the Holders. Reference
is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors,
if any, the Trustee and the Holders.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made
to: UNIVERSAL HOSPITAL SERVICES, INC., 1250 Northland Plaza, 3800 West
80th Street, Bloomington, MN 55431-4442, Attention: Chief Executive
Officer.
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
________________________________
_______________________________________________________________
(please print or type name and address)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
_______________________________________________________________
attorney to transfer the Note on the books of the Company with full power
of substitution in the premises.
Dated:______________ ________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Signature Guarantee: _________________________________________________
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the
appropriate box:
Section 4.14 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by
the Company pursuant to Section 4.14 or Section 4.15 of the Indenture,
state the amount: $_____________
Date:______________ Your Signature:__________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:______________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
EXHIBIT C
FORM OF LEGEND FOR GLOBAL NOTE
Any Global Note authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the
case of a Restricted Note) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[ ], [ ]
First Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of 10 1/4% Senior Notes
due 2008 (the "Notes") of Universal Hospital Services, Inc. (the
"Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated February 23, 1998, relating to the Notes and
such other information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agreed to the matters
stated on pages (i)-(iii) of the Offering Memorandum and in the section
entitled "Transfer Restrictions" of the Offering Memorandum, including the
restrictions on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in this Indenture
relating to the Notes (as described in the Offering Memorandum) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act") and all applicable state securities laws.
3. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes may not be
offered or sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Notes prior to the date that
is the later of two years after the original issuance of the Notes and the
last date on which the Company or any affiliated person of the Company was
the owner of the Notes, we will do so only (i) to the Company or any of its
subsidiaries, (ii) inside the United States in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act), (iii) inside the United States to
an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S. broker-
dealer) to the Trustee (as defined in the Indenture relating to the Notes),
a signed letter containing certain representations and agreements relating
to the restrictions on transfer of the Notes (the form of which letter can
be obtained from the Trustee), (iv) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act
(if available), or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will
not transfer the Notes to, any pension or welfare plan (as defined in
Section 3 of the Employee Retirement Income Security Act of 1974), except
as permitted in the section entitled "Transfer Restrictions" of the
Offering Memorandum.
5. We understand that, on any proposed resale of any Notes, we
will be required to furnish to the Trustee and the Company such
certification, legal opinions and other information as the Trustee and the
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
and have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You, the Company, the Trustee and others are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: _______________________________
Name:
Title:
EXHIBIT E
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[ ], [ ]
First Trust National Association
180 East 5th Street
St. Paul, MN 55101
Attention: Corporate Trust Administration
Re: Universal Hospital Services, Inc.
(the "Company") 10 1/4% Senior
Notes due 2008 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting
on our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: __________________________________
Authorized Signature
EXHIBIT F
GUARANTEE
For value received, the undersigned hereby unconditionally
guarantees, as principal obligor and not only as a surety, to the Holder of
this Note the cash payments in United States dollars of principal of,
premium, if any, and interest on this Note (and including Additional
Interest payable thereon) in the amounts and at the times when due and
interest on the overdue principal, premium, if any, and interest, if any,
of this Note, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture (as defined below) or the
Notes, to the Holder of this Note and the Trustee, all in accordance with
and subject to the terms and limitations of this Note, Article Ten of the
Indenture and this Guarantee. This Guarantee will become effective in
accordance with Article Ten of the Indenture and its terms shall be
evidenced therein. The validity and enforceability of any Guarantee shall
not be affected by the fact that it is not affixed to any particular Note.
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Indenture dated as of February 25, 1998,
between Universal Hospital Services, Inc., a Minnesota corporation, as
issuer (the "Company"), and First Trust National Association as trustee
(the "Trustee"), as amended or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Notes and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Article Ten of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Guarantee and all of the other
provisions of the Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAW. THE UNDERSIGNED GUARANTOR HEREBY AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE.
This Guarantee is subject to release upon the terms set forth in
the Indenture.
IN WITNESS WHEREOF, the Guarantor has caused its Guarantee to be
duly executed.
Dated: [ ], [ ]
[ ], as Guarantor
By: __________________________________
Name:
Title:
Exhibit (a)(9)
--------------
============================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of February 25, 1998
Between
UNIVERSAL HOSPITAL SERVICES, INC
and
BT ALEX. BROWN INCORPORATED
as Initial Purchaser
============================================================================
$100,000,000
10 1/4% SENIOR NOTES DUE 2008
TABLE OF CONTENTS
-----------------
Page
----
1. Definitions . . . . . . . . . . . . . . . . . . . 1
2. Exchange Offer . . . . . . . . . . . . . . . . . . 5
3. Shelf Registration . . . . . . . . . . . . . . . . 9
Shelf Registration . . . . . . . . . . . . . 9
Subsequent Shelf Registrations . . . . . . . 10
Supplements and Amendments . . . . . . . . . 10
4. Additional Interest . . . . . . . . . . . . . . . 10
5. Registration Procedures . . . . . . . . . . . . . 13
6. Registration Expenses . . . . . . . . . . . . . . 24
7. Indemnification . . . . . . . . . . . . . . . . . 25
8. Rule 144 and 144A . . . . . . . . . . . . . . . . 29
9. Underwritten Registrations . . . . . . . . . . . . 29
10. Miscellaneous . . . . . . . . . . . . . . . . . . 29
No Inconsistent Agreements . . . . . . . . . 29
Adjustments Affecting Registrable Notes . . . 30
Amendments and Waivers . . . . . . . . . . . 30
Notices . . . . . . . . . . . . . . . . . . . 30
Successors and Assigns . . . . . . . . . . . 32
Counterparts . . . . . . . . . . . . . . . . 32
Headings . . . . . . . . . . . . . . . . . . 32
Governing Law . . . . . . . . . . . . . . . . 32
Severability . . . . . . . . . . . . . . . . 32
Securities Held by the Company or Its
Affiliates . . . . . . . . . . . . . . . . 32
Third Party Beneficiaries . . . . . . . . . . 33
Entire Agreement . . . . . . . . . . . . . . 33
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement")
is dated as of February 25, 1998 between Universal Hospital
Services, Inc., a Minnesota corporation (the "Company"), and BT
Alex. Brown Incorporated, as initial purchaser (the "Initial
Purchaser").
This Agreement is entered into in connection with the
Purchase Agreement, dated as of February 23, 1998, between the
Company and the Initial Purchaser (the "Purchase Agreement"),
which provides for the sale by the Company to the Initial
Purchaser of $100,000,000 aggregate principal amount of the
Company's 10 1/4% Senior Notes due 2008 (the "Notes"). In
order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement for the benefit
of the Initial Purchaser and its direct and indirect
transferees and assigns. The execution and delivery of this
Agreement is a condition to the Initial Purchaser's obligation
to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
-----------
As used in this Agreement, the following terms shall
have the following meanings:
Additional Interest: See Section 4(a) hereof.
Advice: See the last paragraph of Section 5 hereof.
Agreement: See the first introductory paragraph
hereto.
Applicable Period: See Section 2(b) hereof.
Closing Date: The Closing Date as defined in the
Purchase Agreement.
Company: See the first introductory paragraph
hereto.
Effectiveness Date: The date that is 180 days after
the Issue Date; provided, however, that with respect to any
Shelf Registration, the Effectiveness Date shall be the Shelf
Effectiveness Date.
Effectiveness Period: See Section 3(a) hereof.
Event Date: See Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934,
as amended, and the rules and regulations of the SEC
promulgated thereunder.
Exchange Notes: See Section 2(a) hereof.
Exchange Offer: See Section 2(a) hereof.
Exchange Registration Statement: See Section 2(a)
hereof.
Filing Date: If no Exchange Registration Statement
has been filed by the Company pursuant to this Agreement, the
45th day after the Issue Date.
Holder: Any holder of a Registrable Note or
Registrable Notes.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of February 25,
1998 by and between the Company and First Trust National
Association, as Trustee, pursuant to which the Notes are being
issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchaser: See the first introductory
paragraph hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Inspectors: See Section 5(o) hereof.
Issue Date: The date on which the original Notes
were sold to the Initial Purchaser pursuant to the Purchase
Agreement.
NASD: See Section 5(t) hereof.
Notes: See the second introductory paragraph hereto.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2(b)
hereof.
Person: An individual, trustee, corporation,
partnership, limited liability company, joint stock company,
trust, unincorporated association, union, business association,
firm or other legal entity.
Private Exchange: See Section 2(b) hereof.
Private Exchange Notes: See Section 2(b) hereof.
Prospectus: The prospectus included in any
Registration Statement (including, without limitation, any
prospectus subject to completion and a prospectus that includes
any information previously omitted from a prospectus filed as
part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, and all other
amendments and supplements to the Prospectus, with respect to
the terms of the offering of any portion of the Registrable
Notes covered by such Registration Statement including
post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such
Prospectus.
Purchase Agreement: See the second introductory
paragraph hereto.
Records: See Section 5(o) hereof.
Registrable Notes: Each Note upon original issuance
of the Notes and at all times subsequent thereto, each Exchange
Note as to which Section 2(c)(v) hereof is applicable upon
original issuance and at all times subsequent thereto and each
Private Exchange Note upon original issuance thereof and at all
times subsequent thereto, until in the case of any such Note,
Exchange Note or Private Exchange Note, as the case may be, the
earliest to occur of (i) a Registration Statement (other than,
with respect to any Exchange Note as to which Section 2(c)(v)
hereof is applicable, the Exchange Registration Statement)
covering such Note, Exchange Note or Private Exchange Note, as
the case may be, has been declared effective by the SEC and
such Note, Exchange Note or Private Exchange Note, as the case
may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note, Exchange Note or
Private Exchange Note, as the case may be, is sold in
compliance with Rule 144, (iii) such Note has been exchanged
for an Exchange Note or Exchange Notes pursuant to an Exchange
Offer and is entitled to be resold without complying with the
prospectus delivery requirements of the Securities Act or
(iv) such Note, Exchange Note or Private Exchange Note, as the
case may be, ceases to be outstanding for purposes of the
Indenture.
Registration Statement: Any registration statement
of the Company, including, but not limited to, the Exchange
Registration Statement and any registration statement filed in
connection with a Shelf Registration, filed with the SEC
pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits
and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities
Act, as such Rule may be amended from time to time, or any
similar rule (other than Rule 144A) or regulation hereafter
adopted by the SEC providing for offers and sales of securities
made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus
delivery requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the
Securities Act, as such Rule may be amended from time to time,
or any similar rule (other than Rule 144) or regulation
hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities
Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
Shelf Effectiveness Date: With respect to any Shelf
Registration, the 150th day after the Shelf Filing Date.
Shelf Filing Date: The later of (i) the Filing Date
or (ii) the 30th day after the delivery of a Shelf Notice.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(b) hereof.
Subsequent Shelf Registration: See Section 3(b)
hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if
existent, the trustee under any indenture governing the
Exchange Notes and Private Exchange Notes (if any).
Underwritten registration or underwritten offering:
A registration in which securities of one or more of the
Issuers are sold to an underwriter for reoffering to the
public.
2. Exchange Offer
--------------
(a) The Company shall file with the SEC no later
than the Filing Date an offer to exchange (the "Exchange
Offer") any and all of the Registrable Notes (other than the
Private Exchange Notes, if any) for a like aggregate principal
amount of debt securities of the Company that are identical in
all material respects to the Notes (the "Exchange Notes") (and
that are entitled to the benefits of the Indenture or a trust
indenture that is identical in all material respects to the
Indenture (other than such changes to the Indenture or any such
identical trust indenture as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification
thereof under the TIA) and that, in either case, has been
qualified under the TIA), except that the Exchange Notes (other
than Private Exchange Notes, if any) shall have been registered
pursuant to an effective Registration Statement under the
Securities Act and shall contain no restrictive legend thereon.
The Exchange Offer shall be registered under the Securities Act
on the appropriate form (the "Exchange Registration Statement")
and shall comply with all applicable tender offer rules and
regulations under the Exchange Act. The Company agrees to use
its best efforts to (x) cause the Exchange Registration
Statement to be declared effective under the Securities Act on
or before the Effectiveness Date; (y) keep the Exchange Offer
open for at least 20 business days (or longer if required by
applicable law) after the date that notice of the Exchange
Offer is mailed to Holders; and (z) consummate the Exchange
Offer on or prior to the 210th day following the Issue Date.
If after such Exchange Registration Statement is declared
effective by the SEC, the Exchange Offer or the issuance of the
Exchange Notes thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or any
other governmental agency or court, such Exchange Registration
Statement shall be deemed not to have been effective for
purposes of this Agreement during the period of such
interference, until the Exchange Offer or issuance of Exchange
Notes, as the case may be, may legally resume. Each Holder who
participates in the Exchange Offer will be required, as a
condition to its participation in the Exchange Offer, to
represent in writing (which may be contained in the applicable
letter of transmittal) that any Exchange Notes received by it
will be acquired in the ordinary course of its business, that
at the time of the consummation of the Exchange Offer such
Holder will have no arrangement or understanding with any
Person to participate in the distribution (within the meaning
of the Securities Act) of the Exchange Notes in violation of
the provisions of the Securities Act and that such Holder is
not an affiliate of the Company within the meaning of the
Securities Act and is not acting on behalf of any persons or
entities who could not truthfully make the foregoing
representations. Upon consummation of the Exchange Offer in
accordance with this Section 2, the provisions of this
Agreement shall continue to apply, mutatis mutandis, solely
with respect to Registrable Notes that are Private Exchange
Notes and Exchange Notes held by Participating Broker-Dealers,
and the Company shall have no further obligation to register
Registrable Notes (other than Private Exchange Notes and other
than in respect of any Exchange Notes as to which clause
2(c)(v) hereof applies) pursuant to Section 3 hereof. No
securities other than the Exchange Notes shall be included in
the Exchange Registration Statement.
(b) The Company shall include within the Prospectus
contained in the Exchange Registration Statement a section
entitled "Plan of Distribution," reasonably acceptable to the
Initial Purchaser, that shall contain a summary statement of
the positions taken or policies made by the Staff of the SEC
with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of Exchange Notes received by
such broker-dealer in the Exchange Offer (a "Participating
Broker-Dealer"), which have been publicly disseminated by the
Staff of the SEC. Such "Plan of Distribution" section shall
also expressly permit, to the extent permitted by applicable
policies and regulations of the SEC, the use of the Prospectus
by all Persons subject to the prospectus delivery requirements
of the Securities Act, including all Participating
Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange
Notes.
The Company shall use its best efforts to keep the
Exchange Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit
such Prospectus to be lawfully delivered by all Persons subject
to the prospectus delivery requirements of the Securities Act
for such period of time as is necessary to comply with
applicable law in connection with any resale of the Exchange
Notes; provided, however, that such period shall not exceed 180
days after the consummation of the Exchange Offer (or such
longer period if extended pursuant to the last paragraph of
Section 5 hereof) (the "Applicable Period").
Subject to applicable SEC policies and regulations,
prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Notes acquired by it and having, or that
are reasonably likely to be determined to have, the status of
an unsold allotment in the initial distribution, the Company,
upon the request of the Initial Purchaser simultaneously with
the delivery of the Exchange Notes in the Exchange Offer, shall
issue and deliver to the Initial Purchaser in exchange (the
"Private Exchange") for such Notes held by the Initial
Purchaser a like principal amount of debt securities of the
Company that are identical in all material respects to the
Exchange Notes (the "Private Exchange Notes") (and that are
issued pursuant to the same indenture as the Exchange Notes),
except for the placement of a restrictive legend on such
Private Exchange Notes. The Private Exchange Notes shall bear
the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private
Exchange Notes will accrue (A) from the later of (i) the last
interest payment date on which interest was paid on the Notes
surrendered in exchange therefor, or (ii) if the Note is
surrendered for exchange on a date in a period which includes
the record date for an interest payment date to occur on or
after the date of such exchange and as to which interest will
be paid, the date of such interest payment date or (B) if no
interest has been paid on the Notes, from the Issue Date.
In connection with the Exchange Offer, the Company
shall:
(1) mail, or cause to be mailed, to each Holder
entitled to participate in the Exchange Offer a copy of
the Prospectus forming part of the Exchange Registration
Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the
Exchange Offer with an address in the Borough of
Manhattan, The City of New York;
(3) permit Holders to withdraw tendered Notes at any
time prior to the close of business, New York time, on the
last business day on which the Exchange Offer shall remain
open; and
(4) otherwise comply in all material respects with
all applicable laws, rules and regulations.
As soon as practicable after the close of the
Exchange Offer or the Private Exchange, as the case may be, the
Company shall:
(1) accept for exchange all Notes properly tendered
and not validly withdrawn pursuant to the Exchange Offer
or the Private Exchange;
(2) deliver to the Trustee for cancellation all
Notes so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver
promptly to each Holder of Notes, Exchange Notes or
Private Exchange Notes, as the case may be, equal in
principal amount to the Notes of such Holder so accepted
for exchange.
The Exchange Notes and the Private Exchange Notes may
be issued under (i) the Indenture or (ii) an indenture
identical in all material respects to the Indenture, which in
either event shall provide that (1) the Exchange Notes shall
not be subject to the transfer restrictions set forth in the
Indenture and (2) the Private Exchange Notes shall be subject
to the transfer restrictions set forth in the Indenture. The
Indenture or such indenture shall provide that the Exchange
Notes, the Private Exchange Notes and the Notes shall vote and
consent together on all matters as one class and that neither
the Exchange Notes, the Private Exchange Notes or the Notes
will have the right to vote or consent as a separate class on
any matter.
(c) If, (i) because of any change in law or in
currently prevailing interpretations of the Staff of the SEC,
the Company is not permitted to effect an Exchange Offer,
(ii) the Exchange Offer is not consummated within 210 days of
the Issue Date, (iii) the holder of Private Exchange Notes so
requests at any time after the consummation of the Private
Exchange, (iv) the Holders of not less than a majority in
aggregate principal amount of the Registrable Notes reasonably
determine that the interests of the Holders would be materially
adversely affected by consummation of the Exchange Offer or
(v) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date
of the exchange that may be sold without restriction under
state and federal securities laws (other than due solely to the
status of such Holder as an affiliate of the Company within the
meaning of the Securities Act), then the Company shall promptly
deliver written notice thereof (the "Shelf Notice") to the
Trustee and in the case of clauses (i), (ii) and (iv), all
Holders, in the case of clause (iii), the Holders of the
Private Exchange Notes and in the case of clause (v), the
affected Holder, and shall file a Shelf Registration pursuant
to Section 3 hereof.
3. Shelf Registration
------------------
If a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. No later than the Shelf
Filing Date, the Company shall file with the SEC a Registration
Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Registrable Notes not
exchanged in the Exchange Offer and Exchange Notes as to which
Section 2(c)(v) is applicable (the "Initial Shelf
Registration"). The Initial Shelf Registration shall be on
Form S-1 or another appropriate form permitting registration of
such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one
or more underwritten offerings). The Company shall not permit
any securities other than the Registrable Notes to be included
in the Initial Shelf Registration.
The Company shall use its best efforts to cause the
Initial Shelf Registration to be declared effective under the
Securities Act on or prior to the Effectiveness Date and to
keep the Initial Shelf Registration continuously effective
under the Securities Act until the date which is two years from
the Issue Date (the "Effectiveness Period"), or such shorter
period ending when (i) all Registrable Notes covered by the
Initial Shelf Registration have been sold in the manner set
forth and as contemplated in such Initial Shelf Registration
or (ii) a Subsequent Shelf Registration covering all of the
Registrable Notes covered by and not sold under the Initial
Shelf Registration or an earlier Subsequent Shelf Registration
has been declared effective under the Securities Act; provided,
however, that the Effectiveness Period in respect of the
Initial Shelf Registration shall be extended to the extent
required to permit dealers to comply with the applicable
prospectus delivery requirements of Rule 174 and as otherwise
provided herein.
(b) Subsequent Shelf Registrations. If the Initial
Shelf Registration or any Subsequent Shelf Registration ceases
to be effective for any reason at any time during the
Effectiveness Period (other than because of the sale of all of
the securities registered thereunder), the Company shall use
its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall
within 30 days of such cessation of effectiveness amend the
Initial Shelf Registration in a manner to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415
covering all of the Registrable Notes covered by and not sold
under the Initial Shelf Registration or an earlier Subsequent
Shelf Registration (each, a "Subsequent Shelf Registration").
If a Subsequent Shelf Registration is filed, the Company shall
use its best efforts to cause the Subsequent Shelf Registration
to be declared effective under the Securities Act as soon as
practicable after such filing and to keep such Subsequent Shelf
Registrations continuously effective for a period equal to the
number of days in the Effectiveness Period less the aggregate
number of days during which the Initial Shelf Registration was
previously continuously effective. As used herein the term
"Shelf Registration" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Company shall
promptly supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable
to the registration form used for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by
any underwriter of such Registrable Notes.
4. Additional Interest
-------------------
(a) The Company and the Initial Purchaser agree that
the Holders of Registrable Notes will suffer damages if the
Company fails to fulfill its obligations under Section 2 or
Section 3 hereof and that it would not be feasible to ascertain
the extent of such damages with precision. Accordingly, the
Company agrees to pay, as liquidated damages, additional
interest on the Notes ("Additional Interest") under the
circumstances and to the extent set forth below (without
duplication):
(i) if (A) neither the Exchange Registration
Statement nor the Shelf Registration Statement is filed
with the SEC on or prior to the Filing Date or (B)
notwithstanding that the Company has consummated or will
consummate an Exchange Offer, the Company is required to
file a Shelf Registration and such Shelf Registration is
not filed on or prior to the Shelf Filing Date, then
commencing on the day after (x) the Filing Date, in the
case of clause (A) above, or (y) the Shelf Filing Date, in
the case of clause (B) above, Additional Interest shall
accrue on the principal amount of the Notes so affected at
a rate of 0.50% per annum for the first 90 days
immediately following,(x) the Filing Date, in the case of
clause (A) above, or (y) the Shelf Filing Date, in the
case of clause (B) above, and such Additional Interest
rate shall increase by an additional 0.50% per annum at
the beginning of each subsequent 90-day period; or
(ii) if (A) neither the Exchange Registration
Statement nor a Shelf Registration Statement is declared
effective by the SEC or (B) notwithstanding that the
Company has consummated or will consummate the Exchange
Offer, the Company is required to file a Shelf
Registration and such Shelf Registration is not declared
effective by the SEC on or prior to the Shelf
Effectiveness Date, then, commencing on the day after (x)
the Effectiveness Date, in the case of clause (A) above,
or (y) the Shelf Effectiveness Date, in the case of clause
(B) above, Additional Interest shall accrue on the
principal amount of the Notes so affected at a rate of
0.50% per annum for the first 90 days immediately
following (x) the Effectiveness Date, in the case of
clause (A) above, or (y) the Shelf Effectiveness Date, in
the case of clause (B) above, with such Additional
Interest rate increasing by an additional 0.50% per annum
at the beginning of each subsequent 90-day period; or
(iii) if (A) the Company has not exchanged Exchange
Notes for all Notes validly tendered in accordance with
the terms of the Exchange Offer on or prior to the 45th
day after the date on which the Exchange Registration
Statement was declared effective or (B) if applicable, a
Shelf Registration has been declared effective and such
Shelf Registration ceases to be effective at any time
prior to the second anniversary of the Issue Date (other
than after such time as all Notes have been disposed of
thereunder), then Additional Interest shall accrue on the
principal amount of the Notes so affected at a rate of
0.50% per annum for the first 90 days commencing on (x)
the 46th day after such effective date, in the case of (A)
above, or (y) the day such Shelf Registration ceases to be
effective in the case of (B) above, such Additional
Interest rate increasing by an additional 0.50% per annum
at the beginning of each subsequent 90-day period;
provided, however, that the Additional Interest rate on any
affected Note may not exceed at any one time in the aggregate
1.0% per annum; provided, further, however, that (1) upon the
filing of the Exchange Registration Statement or a Shelf
Registration (in the case of clause (i) of this Section 4(a)),
(2) upon the effectiveness of the Exchange Registration
Statement or a Shelf Registration (in the case of clause (ii)
of this Section 4(a)), or (3) upon the exchange of Exchange
Notes for all Notes tendered (in the case of clause (iii)(A) of
this Section 4(a)), or upon the effectiveness of the Shelf
Registration that had ceased to remain effective (in the case
of (iii)(B) of this Section 4(a)), Additional Interest on the
Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue.
(b) The Company shall notify the Trustee within one
business day after each and every date on which an event occurs
in respect of which Additional Interest is required to be paid
(an "Event Date"). Any amounts of Additional Interest due
pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will
be payable in cash semi-annually on each March 1 and September
1 (to the holders of record on the February 15 and August 15
immediately preceding such dates), commencing with the first
such date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest
rate by the principal amount of the Registrable Notes,
multiplied by a fraction, the numerator of which is the number
of days such Additional Interest rate was applicable during
such period (determined on the basis of a 360-day year
consisting of twelve 30-day months) and the denominator of
which is 360.
5. Registration Procedures
-----------------------
In connection with the filing of any Registration
Statement pursuant to Section 2 or 3 hereof, the Company shall
effect such registrations to permit the sale of the securities
covered thereby in accordance with the intended method or
methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Company
hereunder, the Company shall:
(a) Prepare and file with the SEC on or prior to the
Filing Date, a Registration Statement or Registration
Statements as prescribed by Sections 2 or 3 hereof, and
use its best efforts to cause each such Registration
Statement to become effective and remain effective as
provided herein; provided, however, that, if (1) such
filing is pursuant to Section 3 hereof or (2) a Prospectus
contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, before filing any Registration
Statement or Prospectus or any amendments or supplements
thereto, the Company shall furnish to and afford the
Holders of the Registrable Notes covered by such
Registration Statement or each such Participating
Broker-Dealer, as the case may be, a reasonable
opportunity to review copies of all such documents
(including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be
filed (in each case at least five business days prior to
such filing, or such later date as is reasonable under the
circumstances). The Company shall not file any
Registration Statement or Prospectus or any amendments or
supplements thereto if the Holders of a majority in
aggregate principal amount of the Registrable Notes
covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, shall
reasonably object.
(b) Prepare and file with the SEC such amendments
and post-effective amendments to each Shelf Registration
or Exchange Registration Statement, as the case may be, as
may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the
Applicable Period, as the case may be; cause the related
Prospectus to be supplemented by any prospectus supplement
required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then
in force) promulgated under the Securities Act; and comply
with the provisions of the Securities Act and the Exchange
Act applicable to it with respect to the disposition of
all securities covered by such Registration Statement as
so amended or in such Prospectus as so supplemented and
with respect to the subsequent resale of any securities
being sold by a Participating Broker-Dealer covered by any
such Prospectus; the Company shall be deemed not to have
used its best efforts to keep a Registration Statement
effective during the Applicable Period if it voluntarily
takes any action that would result in selling Holders of
the Registrable Notes covered thereby or Participating
Broker-Dealers seeking to sell Exchange Notes not being
able to sell such Registrable Notes or such Exchange Notes
during that period, unless such action is required by
applicable law or permitted by this Agreement.
(c) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period from whom the
Company has received written notice that it will be a
Participating Broker-Dealer in the Exchange Offer, notify
the selling Holders of Registrable Notes, or each such
Participating Broker-Dealer, as the case may be, within
two business days and confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect
to a Registration Statement or any post-effective
amendment, when the same has become effective under the
Securities Act (including in such notice a written
statement that any Holder may, upon request, obtain, at
the sole expense of the Company, one conformed copy of
such Registration Statement or post-effective amendment
including financial statements and schedules, and, if
specifically requested, documents incorporated or deemed
to be incorporated by reference and exhibits), (ii) of the
issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that
purpose, (iii) if at any time when a prospectus is
required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales
of Exchange Notes by Participating Broker-Dealers the
representations and warranties of the Company contained in
any agreement (including any underwriting agreement)
contemplated by Section 5(n) hereof cease to be true and
correct, (iv) of the receipt by the Company of any
notification with respect to the suspension of the
qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes or
the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or
the initiation or written threat of any proceeding for
such purpose, (v) of the happening of any event, the
existence of any condition or any information becoming
known that makes any statement made in such Registration
Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires
the making of any changes in or amendments or supplements
to such Registration Statement, Prospectus or documents so
that, in the case of the Registration Statement, it will
not contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading and (vi) of the Company's determination
that a post-effective amendment to a Registration
Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in the
Exchange Offer Registration Statement filed pursuant to
Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period,
use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement
or of any order preventing or suspending the use of a
Prospectus or suspending the qualification (or exemption
from qualification) of any of the Registrable Notes or the
Exchange Notes for sale in any jurisdiction and, if any
such order is issued, to use its best efforts to obtain
the withdrawal of any such order at the earliest possible
moment.
(e) If a Shelf Registration is filed pursuant to
Section 3 and if requested by the managing underwriter or
underwriters, if any, or the Holders of a majority in
aggregate principal amount of the Registrable Notes being
sold in connection with an underwritten offering,
(i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing
underwriter or underwriters, if any, such Holders or
counsel for any of them determine is reasonably necessary
to be included therein and (ii) make all required filings
of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in
such prospectus supplement or post-effective amendment.
(f) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, furnish to
each selling Holder of Registrable Notes and to each such
Participating Broker-Dealer who so requests, at the sole
expense of the Company, one conformed copy of the
Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial
statements and schedules and, if requested, all documents
incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, deliver to
each selling Holder of Registrable Notes, or each such
Participating Broker-Dealer, as the case may be, at the
sole expense of the Company, as many copies of the
Prospectus or Prospectuses (including each form of
preliminary prospectus) and each amendment or supplement
thereto and any documents incorporated by reference
therein as such Persons may reasonably request; and,
subject to the last paragraph of this Section 5, the
Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the
selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, in
connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating
Broker-Dealers of the Exchange Notes pursuant to, such
Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable
Notes or Exchange Notes or any delivery of a Prospectus
contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, to use its best
efforts to register or qualify and to cooperate with the
selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, and their
respective counsel in connection with the registration or
qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and
sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling
Holder or Participating Broker-Dealer reasonably request
in writing; provided, however, that where Exchange Notes
held by Participating Broker-Dealers or Registrable Notes
are offered other than through an underwritten offering,
the Company agrees to cause its counsel to perform Blue
Sky investigations and file registrations and
qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification
(or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective
and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions
of the Exchange Notes held by Participating Broker-Dealers
or the Registrable Notes covered by the applicable
Registration Statement; provided, however, that the
Company shall not be required to (A) qualify generally to
do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to
general service of process in any such jurisdiction where
it is not then so subject or (C) subject itself to
taxation in any such jurisdiction where it is not then so
subject.
(i) If a Shelf Registration is filed pursuant to
Section 3 hereof, cooperate with the selling Holders of
Registrable Notes and the managing underwriter or
underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable
Notes to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for
deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and
registered in such names as the managing underwriter or
underwriters, if any, or Holders may request.
(j) Use its best efforts to cause the Registrable
Notes covered by the Registration Statement to be
registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the
Holders thereof or the underwriter or underwriters, if
any, to consummate the disposition of such Registrable
Notes, except as may be required solely as a consequence
of the nature of such selling Holder's business, in which
case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the
granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by paragraph 5(c)(v)
or 5(c)(vi), hereof, as promptly as practicable prepare
and (subject to Section 5(a) hereof) file with the SEC, at
the Company's sole expense, a supplement or post-effective
amendment to the Registration Statement or a supplement to
the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, or file
any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes being
sold thereunder or to the purchasers of the Exchange Notes
to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, the Company
shall not be required to amend or supplement a
Registration Statement, any related Prospectus or any
document incorporated therein by reference, in the event
that, and for a period not to exceed an aggregate of 60
days in any calendar year if, (i) an event occurs and is
continuing as a result of which the Shelf Registration
would, in the Company's good faith judgment, contain an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; and (ii) (a) the Company
determines in its good faith judgment that the disclosure
of such event at such time would have a material adverse
effect on the business operations or prospects of the
Company or (b) the disclosure otherwise relates to a
pending material business transaction that has not yet
been publicly disclosed.
(l) Use its best efforts to cause the Registrable
Notes covered by a Registration Statement or the Exchange
Notes, as the case may be, to be rated with the
appropriate rating agencies, if so requested by the
Holders of a majority in aggregate principal amount of
Registrable Notes covered by such Registration Statement
or the Exchange Notes, as the case may be, or the managing
underwriter or underwriters, if any.
(m) Prior to the effective date of the first
Registration Statement relating to the Registrable Notes,
(i) provide the Trustee with certificates for the
Registrable Notes or Exchange Notes, as the case may be,
in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the
Registrable Notes or Exchange Notes, as the case may be.
(n) In connection with any underwritten offering of
Registrable Notes pursuant to a Shelf Registration, enter
into an underwriting agreement as is customary in
underwritten offerings of debt securities similar to the
Notes and take all such other actions as are reasonably
requested by the managing underwriter or underwriters in
order to expedite or facilitate the registration or the
disposition of such Registrable Notes and, in such
connection, (i) make such representations and warranties
to, and covenants with, the underwriters with respect to
the business of the Company and its subsidiaries
(including any acquired business, properties or entity, if
applicable) and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in
underwritten offerings of debt securities similar to the
Notes, and confirm the same in writing if and when
requested; (ii) obtain the written opinion of counsel to
the Company and written updates thereof in form, scope and
substance reasonably satisfactory to the managing
underwriter or underwriters, addressed to the underwriters
covering the matters customarily covered in opinions
requested in underwritten offerings of debt similar to the
Notes and such other matters as may be reasonably
requested by the managing underwriter or underwriters;
(iii) obtain "cold comfort" letters and updates thereof in
form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters from the independent
certified public accountants of the Company (and, if
necessary, any other independent certified public
accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial
statements and financial data are, or are required to be,
included or incorporated by reference in the Registration
Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in
connection with underwritten offerings of debt securities
similar to the Notes and such other matters as reasonably
requested by the managing underwriter or underwriters in
accordance with Statement on Auditing Standards No. 72;
and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and
procedures no less favorable than those set forth in
Section 7 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Registration
Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to
the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, make
available for inspection by any selling Holder of such
Registrable Notes being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable
Notes, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such
Participating Broker-Dealer, as the case may be, or
underwriter (collectively, the "Inspectors"), at the
offices where normally kept, during reasonable business
hours, all financial and other records, pertinent
corporate documents and instruments of the Company and its
subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the
respective officers, directors and employees of the
Company and its subsidiaries to supply all information
reasonably requested by any such Inspector in connection
with such Registration Statement and/or Prospectus. If
the Company shall so require, each Inspector shall agree
in writing that it will keep the Records confidential and
that it will not disclose any of the records that the
Company determines, in good faith, to be confidential and
notifies the Inspectors are confidential unless (i) the
disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Registration
Statement and/or Prospectus, (ii) the release of such
Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, (iii) disclosure
of such information is, in the reasonable opinion of
counsel for any Inspector, necessary or advisable in
connection with any action, claim, suit or proceeding
directly or indirectly involving or potentially involving
such Inspector and arising out of, based upon, relating to
or involving this Agreement, or any transactions
contemplated hereby or arising hereunder or (iv) the
information in such Records has been made generally
available to the public. Each selling Holder of such
Registrable Notes and each such Participating Broker-
Dealer will be required to agree that information obtained
by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for
any market transactions in the securities of the Company
unless and until such information is generally available
to the public. Each selling Holder of such Registrable
Notes and each such Participating Broker-Dealer will be
required to further agree that it will, upon learning that
disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and
allow the Company to undertake appropriate action to
prevent disclosure of the Records deemed confidential at
the Company's sole expense. In addition, prior notice
shall be provided as soon as practicable to the Company of
the potential disclosure of any information by such
Inspector pursuant to clauses (i) or (ii) above to permit
the Company to obtain a protective order (or waive the
provisions of this paragraph (o)) and that such Inspector
shall take such actions as are reasonably necessary to
protect the confidentiality of such information (if
practicable) to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of
the rights and interest of the Holder or any Inspector.
(p) Provide an indenture trustee for the Registrable
Notes or the Exchange Notes, as the case may be, and cause
the Indenture or the trust indenture provided for in
Section 2(a) hereof, as the case may be, to be qualified
under the TIA not later than the effective date of the
Exchange Offer or the first Registration Statement
relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, to
effect such changes to such indenture as may be required
for such indenture to be so qualified in accordance with
the terms of the TIA; and execute, and use its best
efforts to cause such trustee to execute, all documents as
may be required to effect such changes and all other forms
and documents required to be filed with the SEC to enable
such indenture to be so qualified in a timely manner.
(q) Comply with all applicable rules and regulations
of the SEC and make generally available to its
securityholders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any
fiscal quarter (or 90 days after the end of any fiscal
year) (i) commencing at the end of any fiscal quarter in
which Registrable Notes are sold to underwriters in a firm
commitment or best efforts underwritten offering and
(ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of
the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month
periods.
(r) Upon consummation of an Exchange Offer or a
Private Exchange, obtain an opinion of counsel to the
Company, who may, at the Company's election, be internal
counsel to the Company, in a form customary for
underwritten transactions, addressed to the Trustee for
the benefit of all Holders of Registrable Notes
participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or
Private Exchange Notes, as the case may be, and the
related indenture constitute legal, valid and binding
obligations of the Company, enforceable against the
Company in accordance with its respective terms, subject
to customary exceptions and qualifications.
(s) If an Exchange Offer or a Private Exchange is to
be consummated, upon delivery of the Registrable Notes by
Holders to the Company (or to such other Person as
directed by the Company) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be,
the Company shall mark, or cause to be marked, on such
Registrable Notes that such Registrable Notes are being
cancelled in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be; in no event
shall such Registrable Notes be marked as paid or
otherwise satisfied.
(t) Cooperate with each seller of Registrable Notes
covered by any Registration Statement and each
underwriter, if any, participating in the disposition of
such Registrable Notes and their respective counsel in
connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (the
"NASD").
(u) Use its best efforts to take all other steps
reasonably necessary to effect the registration of the
Registrable Notes covered by a Registration Statement
contemplated hereby.
The Company may require each seller of Registrable
Notes as to which any registration is being effected to furnish
to the Company such information regarding such seller and the
distribution of such Registrable Notes as the Company may, from
time to time, reasonably request. The Company may exclude from
such registration the Registrable Notes of any seller who
unreasonably fails to furnish such information within a
reasonable time after receiving such request and in such event
shall have no further obligation under this Agreement
(including, without limitation, obligations under Section 4
hereof) with respect to such seller or any subsequent holder of
such Registrable Notes. Each seller as to which any Shelf
Registration is being effected agrees to furnish promptly to
the Company all information required to be disclosed in order
to make the information previously furnished to the Company by
such seller not materially misleading.
Each Holder of Registrable Notes and each
Participating Broker-Dealer agrees by acquisition of such
Registrable Notes or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, that, upon
actual receipt of any notice from the Company of the happening
of any event of the kind described in Sections 5(c)(ii),
5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder will
forthwith discontinue disposition of such Registrable Notes
covered by such Registration Statement or Prospectus or
Exchange Notes to be sold by such Holder or Participating
Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k)
hereof, or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or
supplements thereto. In the event that the Company shall give
any such notice, the Applicable Period shall be extended by the
number of days during such periods from and including the date
of the giving of such notice to and including the date when
each seller of Registrable Notes covered by such Registration
Statement or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated
by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
---------------------
All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne
by the Company whether or not the Exchange Offer or a Shelf
Registration is filed or becomes effective, including, without
limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required
to be made with the NASD in connection with an underwritten
offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation,
reasonable fees and disbursements of counsel in connection with
Blue Sky qualifications of the Registrable Notes or Exchange
Notes and determination of the eligibility of the Registrable
Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are
located, in the case of the Exchange Notes, or (y) as provided
in Section 5(h) hereof, in the case of Registrable Notes or
Exchange Notes to be sold by a Participating Broker-Dealer
during the Applicable Period)), (ii) printing expenses,
including, without limitation, expenses of printing
certificates for Registrable Notes or Exchange Notes in a form
eligible for deposit with The Depository Trust Company and of
printing prospectuses if the printing of prospectuses is
requested by the managing underwriter or underwriters, if any,
by the Holders of a majority in aggregate principal amount of
the Registrable Notes included in any Registration Statement or
by any Participating Broker-Dealer, as the case may be,
(iii) fees and disbursements of counsel for the Company and
reasonable fees and disbursements of one special counsel for
all of the sellers of Registrable Notes, (iv) fees and
disbursements of all independent certified public accountants
referred to in Section 5(n)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance),
(v) rating agency fees, if any, and any fees associated with
making the Registrable Notes or Exchange Notes eligible for
trading through the Depository Trust Company, (vi) fees and
expenses of all other Persons retained by the Company,
(vii) the expense of any annual audit, (viii) the fees and
expenses incurred in connection with the listing of the
securities to be registered on any securities exchange, if
applicable, and (ix) the expenses relating to printing, word
processing and distributing of all Registration Statements,
underwriting agreements, securities sales agreements,
indentures and any other documents necessary to comply with
this Agreement.
7. Indemnification
---------------
(a) The Company agrees to indemnify and hold
harmless each Holder of Registrable Notes offered pursuant to a
Shelf Registration Statement and each Participating
Broker-Dealer selling Exchange Notes during the Applicable
Period, the officers, directors, employees and agents of each
such Person or its affiliates, and each other Person, if any,
who controls any such Person within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act (each, a "Participant"), from and against any and all
losses, claims, damages and liabilities (including, without
limitation, the legal fees and other expenses actually incurred
in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
contained in any Registration Statement pursuant to which the
offering of such Registrable Notes or Exchange Notes, as the
case may be, is registered (or any amendment thereto) or
related Prospectus (or any amendments or supplements thereto)
or any related preliminary prospectus, or caused by, arising
out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the Company will not be required to
indemnify a Participant if (i) such losses, claims, damages or
liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and
in conformity with information relating to any Participant
furnished to the Company in writing by or on behalf of such
Participant expressly for use therein or (ii) if such
Participant sold to the person asserting the claim the
Registrable Notes or Exchange Notes that are the subject of
such claim and such untrue statement or omission or alleged
untrue statement or omission was contained or made in any
preliminary prospectus and corrected in the Prospectus or any
amendment or supplement thereto and the Prospectus does not
contain any other untrue statement or omission or alleged
untrue statement or omission of a material fact that was the
subject matter of the related proceeding and it is established
by the Company in the related proceeding that such Participant
failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the
confirmation of the sale of such Registrable Notes or Exchange
Notes sold to such Person if required by applicable law, unless
such failure to deliver or provide a copy of the Prospectus (as
amended or supplemented) was a result of noncompliance by the
Company with Section 5(g) of this Agreement.
(b) Each Participant agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
officers, directors, employees and agents and each Person who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each
Participant, but only (i) with reference to information
relating to such Participant furnished to the Company in
writing by or on behalf of such Participant expressly for use
in any Registration Statement or Prospectus, any amendment or
supplement thereto or any preliminary prospectus or (ii) with
respect to any untrue statement or representation made by such
Participant in writing to the Company. The liability of any
Participant under this paragraph shall in no event exceed the
proceeds received by such Participant from sales of Registrable
Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand
shall be brought or asserted against any Person in respect of
which indemnity may be sought pursuant to either of the two
preceding paragraphs, such Person (the "Indemnified Person")
shall promptly notify the Person against whom such indemnity
may be sought (the "Indemnifying Person") in writing, and the
Indemnifying Person, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding
and shall pay the fees and expenses actually incurred by such
counsel related to such proceeding; provided, however, that the
failure to so notify the Indemnifying Person shall not relieve
it of any obligation or liability that it may have hereunder or
otherwise (unless and only to the extent that such failure
directly results in the loss or compromise of any material
rights or defenses by the Indemnifying Person and the
Indemnifying Person was not otherwise aware of such action or
claim). In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed in writing to the
contrary, (ii) the Indemnifying Person shall have failed within
a reasonable period of time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named
parties in any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any one such
proceeding or separate but substantially similar related
proceeding in the same jurisdiction arising out of the same
general allegations, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel)
for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed promptly as they are incurred.
Any such separate firm for the Participants and such control
Persons of Participants shall be designated in writing by
Participants who sold a majority in interest of Registrable
Notes and Exchange Notes sold by all such Participants and any
such separate firm for the Company, its officers, directors,
employees and agents and such control Persons of the Company
shall be designated in writing by the Company and shall be
reasonably acceptable to the Participants.
The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its prior written
consent, which consent shall not be unreasonably withheld, but
if settled with such consent or if there be a final
non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to
this Agreement, the Indemnifying Person agrees to indemnify and
hold harmless each Indemnified Person from and against any loss
or liability by reason of such settlement or judgment. No
Indemnifying Person shall, without the prior written consent of
the Indemnified Person (which consent shall not be unreasonably
withheld), effect any settlement or compromise of any pending
or threatened proceeding in respect of which any Indemnified
Person is or could have been a party, and indemnity could have
been sought hereunder by such Indemnified Person, unless such
settlement (A) includes an unconditional written release of
such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on
claims that are the subject matter of such proceeding and
(B) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any
Indemnified Person.
(d) If the indemnification provided for in the first
and second paragraphs of this Section 7 is for any reason
unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person
under such paragraphs, in lieu of indemnifying such Indemnified
Person thereunder and in order to provide for just and
equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying
Person or Persons on the one hand and the Indemnified Person or
Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in
respect thereof). The relative fault of the parties shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or such
Participant or such other Indemnified Person, as the case may
be, on the other, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission, and any other equitable
considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and
equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Participants
were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages
and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
actually incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. No Person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f) The indemnity and contribution agreements
contained in this Section 7 will be in addition to any
liability that the Indemnifying Persons may otherwise have to
the Indemnified Persons referred to above.
8. Rule 144 and 144A
-----------------
The Company covenants and agrees that it will file
the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations adopted by
the SEC thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if
at any time the Company is not required to file such reports,
the Company will, upon the request of any Holder of Registrable
Notes, make publicly available annual reports and such
information, documents and other reports of the type specified
in Sections 13 and 15(d) of the Exchange Act. The Company
further covenants and agrees for so long as any Registrable
Notes remain outstanding, to make available to any Holder or
beneficial owner of Registrable Notes in connection with any
sale thereof and any prospective purchaser of such Registrable
Notes from such Holder or beneficial owner the information
required by Rule 144A(d)(4) under the Securities Act in order
to permit resales of such Registrable Notes pursuant to
Rule 144A.
9. Underwritten Registrations
--------------------------
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Holders
of a majority in aggregate principal amount of such Registrable
Notes included in such offering and reasonably acceptable to
the Company.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder
(a) agrees to sell such Holder's Registrable Notes on the basis
provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other
documents required under the terms of such underwriting
arrangements.
10. Miscellaneous
-------------
(a) No Inconsistent Agreements. The Company has
not, as of the date hereof, and shall not, after the date of
this Agreement, enter into any agreement with respect to any of
its securities that is inconsistent with the rights granted to
the Holders of Registrable Notes in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to
the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of any
of the Company's other issued and outstanding securities under
any such agreements. The Company has not entered and will not
enter into any agreement with respect to any of its securities
that will grant to any Person piggy-back registration rights
with respect to a Registration Statement.
(b) Adjustments Affecting Registrable Notes. The
Company shall not, directly or indirectly, take any action with
respect to the Registrable Notes as a class that would
adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration
undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof
may not be given, otherwise than with the prior written consent
of the Holders of not less than a majority in aggregate
principal amount of the then outstanding Registrable Notes.
Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable
Notes whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders
of Registrable Notes may be given by Holders of at least a
majority in aggregate principal amount of the Registrable Notes
being sold by such Holders pursuant to such Registration
Statement; provided, however, that the provisions of this
sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding
sentence.
(d) Notices. All notices and other communications
(including without limitation any notices or other
communications to the Trustee) provided for or permitted
hereunder shall be made in writing by hand delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Notes or any
Participating Broker-Dealer, at the most current address
of such Holder or Participating Broker-Dealer, as the case
may be, set forth on the records of the registrar under
the Indenture, with a copy in like manner to the Initial
Purchaser as follows:
BT ALEX. BROWN INCORPORATED
130 Liberty Street
New York, New York 10006
Facsimile No.: (212) 250-7200
Attention: Corporate Finance Department
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No.: (212) 269-5420
Attention: William M. Hartnett, Esq.
2. if to the Initial Purchaser, at the address
specified in Section 10(d)(1);
3. if to the Company, at the address as follows:
UNIVERSAL HOSPITAL SERVICES, INC.
1250 Northland Plaza
3800 West 80th Street
Bloomington, MN 55431-4442
Facsimile No.: (612) 843-3237
Attention: David E. Dovenberg
with a copy to:
Skadden, Arps, Slate, Meagher
& Flom LLP
919 Third Avenue
New York, NY 10022-3897
Facsimile No.: (212) 735-2000
Attention: Vincent J. Pisano, Esq.
All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally
delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; one business day after being
timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same
to the Trustee at the address and in the manner specified in
such Indenture.
(e) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto; provided, however, that
this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent
such successor or assign holds Registrable Notes.
(f) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(g) Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
(i) Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or
unenforceable.
(j) Securities Held by the Company or Its
Affiliates. Whenever the consent or approval of Holders of a
specified percentage of Registrable Notes is required
hereunder, Registrable Notes held by the Company or its
affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether
such consent or approval was given by the Holders of such
required percentage.
(k) Third Party Beneficiaries. Holders of
Registrable Notes and Participating Broker-Dealers are intended
third party beneficiaries of this Agreement and this Agreement
may be enforced by such Persons.
(l) Entire Agreement. This Agreement, together with
the Purchase Agreement and the Indenture, is intended by the
parties as a final and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein and therein and any and all prior oral
or written agreements, representations, or warranties,
contracts, understandings, correspondence, conversations and
memoranda between the Initial Purchaser on the one hand and the
Company on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect
to the subject matter hereof and thereof are merged herein and
replaced hereby.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
UNIVERSAL HOSPITAL SERVICES, INC.
By: /s/ David E. Dovenberg
----------------------------
Name: David E. Dovenberg
Title: President and CEO
BT ALEX. BROWN INCORPORATED
as Initial Purchaser
/s/ Steven Gorski
-----------------------------
Name: Steven Gorski
Title: Vice President
Exhibit (c)(10)
---------------
PLEDGE AGREEMENT
----------------
PLEDGE AGREEMENT, dated as of February 25,
1998, made by David E. Dovenberg (the "Pledgor"), to
Universal Hospital Services, Inc. (the "Pledgee").
WHEREAS, to secure the repayment of monies
loaned to the Pledgor by the Pledgee pursuant to the
terms of that certain Secured Promissory Note by the
Pledgor, as Maker, dated of even date herewith (the
"Note"), the Pledgor has agreed to enter into this Pledge
Agreement;
NOW, THEREFORE, in consideration of the
benefits accruing to the Pledgor, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor
hereby makes the following representations and warranties
to the Pledgee and hereby covenants and agrees with
Pledgee as follows:
1. SECURITY FOR NOTES, ETC. This
Agreement is for the benefit of the Pledgee to secure the
payment due of the principal of and interest on the Note,
the payment of all other obligations and liabilities of
the Pledgor, now existing or hereafter incurred under,
arising out of or in connection with the Note and the due
performance and compliance with the terms of the Note by
the Pledgor (all such principal, interest, obligations
and liabilities, collectively, the "Secured
Obligations").
2. DEFINITION OF STOCK. As used
herein, the term "Stock" shall mean the issued and
outstanding shares of common stock, par value $.01 per
share, of the Pledgee set forth on Annex A hereto (the
"Initial Stock"), together with all issued and
outstanding shares of capital stock of the Pledgee
hereafter acquired by the Pledgor with respect to the
Initial Stock, whether by stock dividend, stock split,
recapitalization or otherwise (including without
limitation pursuant to any transaction described in
paragraph 6 hereof).
3. PLEDGE OF STOCK, ETC.
3.1 Pledge. To secure the Secured
Obligations and for the purposes set forth in Section 1,
the Pledgor: (a) hereby grants to the Pledgee a security
interest in all of the Collateral (as defined in Section
3.3); (b) hereby pledges and deposits as security with
the Pledgee (except as otherwise permitted below) the
Stock and delivers to the Pledgee certificates therefor
accompanied by stock powers duly executed in blank by the
Pledgor or such other instruments of transfer as are
acceptable to the Pledgee; and (c) hereby assigns,
transfers, hypothecates, mortgages, charges and sets over
to the Pledgee all of the Pledgor's right, title and
interest in and to such Stock (and in and to the
certificates or instruments evidencing such Stock), to be
held by the Pledgee upon the terms and conditions set
forth in this Agreement.
3.2 Subsequently Acquired Stock.
If the Pledgor shall acquire (by stock dividend or
otherwise) any additional Stock at any time or from time
to time after the date hereof, the Pledgor will forthwith
pledge and deposit such Stock as security with the
Pledgee and deliver to the Pledgee certificates therefor
accompanied by stock powers duly executed in blank by the
Pledgor or such other instruments of transfer as are
acceptable to the Pledgee, and will promptly thereafter
deliver to the Pledgee a certificate executed by the
Pledgor describing such Stock and certifying that the
same has been duly pledged with the Pledgee hereunder.
3.3 Definitions of Pledged Stock
and Collateral. All Stock in which the Pledgor now or
hereafter has any right, title or interest is hereinafter
called the "Pledged Stock," and the Pledged Stock,
together with all proceeds thereof, including any
securities and moneys received and at the time held by
the Pledgee hereunder, is hereinafter called the
"Collateral."
4. APPOINTMENT OF SUB-AGENTS;
ENDORSEMENTS, ETC. The Pledgee shall have the right to
appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Stock, which
may be held (in the discretion of the Pledgee) in the
name of the Pledgor, endorsed or assigned in blank or in
favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF
DEFAULT. Unless and until an Event of Default (as
defined herein) shall have occurred and be continuing,
the Pledgor shall be entitled to vote any and all Pledged
Stock and to give consents, waivers or ratifications in
respect thereof, provided that no vote shall be past or
any consent, waiver or ratification given or any action
taken which would violate or be inconsistent with any of
the terms of this Agreement, the Note or any other
instrument or agreement referred to herein or therein, or
which would have the effect of impairing the position or
interests of the Pledgee or any holder of the Note. All
such rights of the Pledgor to vote and to give consents,
waivers and ratifications shall cease in case an Event of
Default shall occur and be continuing, and Section 7
shall become applicable. For purposes of this Agreement,
"Event of Default" shall mean any Event of Default as
defined under the Note.
6. DIVIDENDS AND OTHER
DISTRIBUTIONS. Unless and until an Event of Default
shall have occurred and be continuing, all cash dividends
payable in respect of the Pledged Stock shall be paid to
the Pledgor, provided that all cash dividends payable in
respect of the Pledged Stock which are determined by the
Pledgee, in its absolute discretion, to represent in
whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid to the
Pledgee and retained by it as part of the Collateral.
The Pledgee shall also be entitled to receive directly,
and to retain as part of the Collateral:
(a) all other or
additional stock or securities or property (other than
cash) paid or distributed by way of dividend in respect
of the Pledged Stock;
(b) all other or
additional stock or other securities or property
(including cash) paid or distributed in respect of the
Pledged Stock by way of stock split, spin-off, split-up,
reclassification, combination of shares or similar
rearrangement; and
(c) all other or
additional stock or other securities or property which
may be paid in respect of the Collateral by reason of any
consolidation, merger, exchange of stock, conveyance of
assets, liquidation or similar corporate reorganization.
7. REMEDIES IN CASE OF EVENT OF
DEFAULT. In case an Event of Default shall have occurred
and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether
vested in it by this Agreement or by law) for the
protection and enforcement of its rights in respect of
the Collateral, and the Pledgee shall be entitled,
without limitation, to exercise the following rights,
which the Pledgor hereby agrees to be commercially
reasonable:
(a) to receive all
amounts payable in respect of the Collateral otherwise
payable under Section 6 to the Pledgor;
(b) to transfer all or
any part of the Pledged Stock into the Pledgee's name or
the name of its nominee or nominees;
(c) to vote all or any
part of the Pledged Stock (whether or not transferred
into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral
and otherwise act with respect thereto as though it were
the outright owner thereof (the Pledgor hereby
irrevocably constituting and appointing the Pledgee the
proxy and attorney-in-fact of the Pledgor, with full
power of substitution to do so); and
(d) at any time or from
time to time to sell, assign and deliver, or grant
options to purchase, all or any part of the Collateral,
or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of
intention to sell or of the time or place of sale or
adjournment thereof or to redeem or otherwise (all of
which are hereby waived by the Pledgor), for cash, or
credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for
such price or prices and on such terms as the Pledgee in
its absolute discretion may determine, provided that at
least 10 days' notice of the time and place of any such
sale shall be given to the Pledgor. The Pledgor hereby
waives and releases to the fullest extent permitted by
law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and
all rights, if any, of marshalling the Collateral and any
other security for the Secured Obligations or otherwise.
At any such sale, unless prohibited by applicable law,
the Pledgee on behalf of any holder of the Note may bid
for and purchase all or any part of the Collateral so
sold free from any such right or equity of redemption.
Neither the Pledgee nor any holder of the Note shall be
liable for failure to collect or realize upon any or all
of the Collateral or for any delay in so doing nor shall
any of them be under any obligation to take any action
whatsoever with regard thereto.
8. APPLICATION OF PROCEEDS. All
moneys collected by the Pledgee upon any sale or other
disposition of the Collateral, together with all other
moneys received by the Pledgee hereunder, shall be
applied to the payment of all costs and expenses incurred
by the Pledgee in connection with such sale, the delivery
of the Collateral or the collection of any such moneys
(including, without limitation, attorneys' fees and
expenses), and the balance of such moneys shall be held
by the Pledgee and applied by it to satisfy the Secured
Obligations.
9. PURCHASERS OF COLLATERAL. Upon
any sale of the Collateral by the Pledgee hereunder
(whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt
of the Pledgee or the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of
the Collateral so sold, and such purchaser or purchasers
shall not be obligated to see to the application of any
part of the purchase money paid over to the Pledgee or
such officer or be answerable in any way for the
misapplication or nonapplication thereof.
10. FURTHER ASSURANCES. The
Pledgor agrees that it will join and cooperate fully with
the Pledgee in executing and filing and refiling under
the Uniform Commercial Code such financing statements,
continuation statements and other documents in such
offices as the Pledgee may deem necessary or desirable
and wherever required or permitted by law in order to
perfect and preserve the Pledgee's security interest in
the Collateral and hereby authorizes the Pledgee to file
financing statements and amendments thereto relative to
all or any part of the Collateral without the signature
of the Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver
to the Pledgee such additional conveyances, assignments,
agreements and instruments as the Pledgee may reasonably
require or deem advisable to carry into effect the
purposes of this Agreement or to further assure and
confirm unto the Pledgee its rights, powers and remedies
hereunder.
11. TRANSFER BY THE PLEDGOR. The
Pledgor will not sell or otherwise dispose of, grant any
option with respect to, or create, incur, assume or
suffer to exist any lien or any portion of the Collateral
(except the lien created by this Agreement).
12. REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE PLEDGOR. The Pledgor represents and
warrants that: (a) he is the legal, record and
beneficial owner of, and has valid title to, the Stock
described in Section 2 hereof, subject to no lien (except
the lien created by this Agreement); (b) he has full
power, authority and legal right to pledge all such Stock
pursuant to this Agreement; and (c) either (i) he is not
legally married or (ii) this Agreement has been duly
executed by his spouse on the signature page hereof. The
Pledgor covenants and agrees that he will defend the
Pledgee's right, title and lien in and to the Collateral
against the claims and demands of all persons; and the
Pledgor covenants and agrees that he will have like title
to and right to pledge any other property at any time
hereafter pledged to the Pledgee as Collateral hereunder.
13. PLEDGOR'S OBLIGATIONS
ABSOLUTE, ETC. The obligations of the Pledgor under this
Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence
whatsoever, including without limitation: (a) any
renewal, extension, amendment or modification of, or
addition or supplement to or deletion from, the Note, or
any assignment or transfer of any thereof; (b) any
waiver, consent, extension, indulgence or other action or
inaction under or in respect of the Note or this
Agreement or any exercise or non-exercise of any right,
remedy, power or privilege under or in respect of the
Note or this Agreement; (c) any furnishing of any
additional security to the Pledgee or any acceptance
thereof or any sale, exchange, release, surrender or
realization of or upon any security by the Pledgee; or
(d) any invalidity, irregularity or unenforceability of
all or part of the Secured Obligations or of any security
therefor.
14. PRIVATE SALE, ETC. If at any
time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Stock
pursuant to Section 7 hereof, such Pledged Stock or the
part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the
Securities Act of 1933, as amended (the "Act"), the
Pledgee may, in its sole and absolute discretion, sell
such Pledged Stock or part thereof by private sale in
such manner and under such circumstances as Pledgee may
deem necessary or advisable in order that such sale may
legally be effected without such registration, provided
that at least 10 days' notice of the time and place of
any such sale shall be given to the Pledgor. Without
limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion
(i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of
registering such Pledged Stock or part thereof shall have
been filed under the Act, (ii) may approach and negotiate
with a single possible purchaser to effect such sale and
(iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for
its own account, for investment, and not with a view to
the distribution or sale of such Pledged Stock or part
thereof. In the event of any such sale, the Pledgee
shall incur no responsibility or liability for selling
all or any part of the Pledged Stock at a price which the
Pledgee, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially
higher price might be realized if the sale were deferred
until after registration as aforesaid.
15. TERMINATION; RELEASE. When
all Secured Obligations have been paid in full, this
Agreement shall terminate, and the Pledgee, at the
request and expense of the Pledgor, will execute and
deliver to the Pledgor a proper instrument or instruments
acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to
the Pledgor (without recourse and without any
representation or warranty) such of the Collateral as may
be in the possession of the Pledgee and has not
theretofore been sold or otherwise applied or released
pursuant to this Agreement, together with any moneys at
the time held by the Pledgee hereunder.
16. NOTICES, ETC. Any notice,
request, instruction or other document to be given
hereunder by any party to any other party shall be in
writing and delivered personally or sent by registered or
certified mail or by FedEx or other nationally-recognized
overnight courier, postage prepaid, as follows:
(a) If to the Pledgor, to:
David E. Dovenberg
17110 Fifth Avenue North
Plymouth, Minnesota 55447
(612) 473-0026 (telephone)
(b) If to the Pledgee, to:
Universal Hospital Services, Inc.
1250 Northland Plaza
3800 West 80th Street
Bloomington, Minnesota 55431-4442
Attention: President
(612) 893-3200 (telephone)
with a copy to:
J.W. Childs Associates, L.P.
One Federal Street, 21st Floor
Boston, Massachusetts 02110
Attention: Steven G. Segal
(617) 753-1100 (telephone)
or to such other persons or addresses as may be
designated in writing by like notice by the party to
receive such notice, request, instruction or other
document.
17. MISCELLANEOUS. This
Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that
the Pledgor may not assign or transfer any of its rights
or obligations hereunder without the prior written
consent of the Pledgee. This Agreement may be changed,
waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought.
This Agreement shall be construed in accordance with and
governed by the law of the State of Minnesota. The
headings of the several sections and subsections in this
Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any
provision of this Agreement. This Agreement may be
executed in any number of counterparts and by the
different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an
original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the Pledgor and the Pledgee
have caused this Agreement to be executed by their duly
elected officers duly authorized as of the date first
above written.
PLEDGOR:
/s/ David E. Dovenberg
------------------------------
Name: David E. Dovenberg
PLEDGEE:
UNIVERSAL HOSPITAL SERVICES, INC.
By /s/ Edward D. Yun
--------------------------
Name: Edward D. Yun
Title: Vice President and Secretary
The undersigned, as spouse of the above-named Pledgor,
acknowledges that he or she has read the foregoing Pledge
Agreement and agrees to bound by all of the terms
thereof, including without limitation with respect to any
and all right, title and interest of the undersigned in
and to the Collateral.
/s/ Jean Marie Dovenberg
------------------------------
Signature of Spouse
Jean Marie Dovenberg
------------------------------
Name of Spouse
ANNEX A TO
Pledge Agreement
----------------
Description of Initial Stock
----------------------------
63,226 shares of common stock, par value
$.01 per share of Universal Hospital
Services, Inc., a Minnesota corporation,
standing in the name of David E. Dovenberg
on the books of said corporation and
represented by Certificate No. 53.
Exhibit (c)(11)
---------------
FORM OF
INVESTMENT REPRESENTATION
AND
"ROLL OVER" SUBSCRIPTION AGREEMENT"
-----------------------------------
Investment Representation and "Roll Over"
Subscription Agreement (the "Agreement"), dated as of
February 25, 1998, by and among J.W. Childs Equity
Partners, L.P., a Delaware limited partnership
("Childs"), UHS Acquisition Corp., a Minnesota
corporation ("Merger Sub"), and __________________________
(the "Stockholder").
WHEREAS, Childs and Merger Sub are parties to
an Agreement and Plan of Merger (the "Merger Agreement")
dated as of November 25, 1997 by and among Merger Sub,
Childs and Universal Hospital Services, Inc., a Minnesota
corporation (the "Company"), providing for, among other
things, the merger (the "Merger") of Merger Sub with and
into the Company, with the Company being the surviving
corporation in the Merger (the "Surviving Corporation");
WHEREAS, the Merger Agreement provides, among
other things, that subject to the terms and conditions of
the Merger Agreement, at the effective time of the Merger
(the "Effective Time"), except as otherwise agreed in
writing between Merger Sub and any holder thereof, (i)
each share of the Company's common stock, par value $.01
per share, together with the associated preferred stock
purchase rights (the "Common Stock"), issued and
outstanding immediately prior to the Effective Time,
shall be canceled, extinguished and converted into a
right to receive $15.50 in net cash per share without
interest thereon (the "Merger Consideration"), and (ii)
each option to acquire shares of Common Stock outstanding
immediately prior to the Effective Time under certain
benefit plans set forth in Section 1.8(a) of the Merger
Agreement, whether vested or unvested (each, an
"Option"), shall automatically become vested and
exercisable, and each holder of an Option shall have the
right to receive from the Surviving Corporation a cash
payment in an aggregate amount equal to the difference
between the Merger Consideration less the applicable
exercise price per share of Common Stock applicable to
such Option for all shares of Common Stock subject to the
Option (the "Option Consideration");
WHEREAS, the Stockholder is the beneficial and
record owner of _____________________ shares of Common
Stock and the holder of options to purchase ______________
shares of Common Stock;
WHEREAS, the Stockholder is currently a member
of management or key employee of the Company;
WHEREAS, Childs, Merger Sub and the Stockholder
desire to allow the shares of Common Stock and options to
purchase shares of Common Stock held by the Stockholder
to remain issued and outstanding in the Merger, in lieu
of receipt of the Merger Consideration and Option
Consideration, respectively, therefor;
WHEREAS, this Agreement is one of several
subscription agreements being entered into by Childs and
Merger Sub with certain members of management or key
employees of the Company;
NOW, THEREFORE, in consideration of the
foregoing and in consideration of the mutual agreements
contained herein, the parties hereto agree as follows:
1. "Roll Over" of Shares and Options.
----------------------------------
a. Upon the terms and subject to the
conditions hereinafter set forth, the Stockholder hereby
agrees that at the Effective Time, the number of shares
of Common Stock owned beneficially and of record by such
Stockholder (together with the associated preferred
stock purchase rights, the "Rollover Shares"), as set
forth opposite such Stockholder's name on Appendix I
hereto, will not be cancelled, extinguished or converted
into the right to receive the Merger Consideration, but
instead each such Rollover Share will remain issued and
outstanding as one fully paid and nonassessable share of
common stock, par value $.01 per share, of the Surviving
Corporation ("Surviving Corporation Stock"), and (ii)
upon consummation of the Merger, all options to purchase
shares of Common Stock held by such Stockholder
(collectively, the "Rollover Options"), as set forth
opposite such Stockholder's name on Appendix I hereto
will not become vested and exercisable for the Option
Consideration in accordance with Section 1.8(a) of the
Merger Agreement, but instead all such Options will
remain issued and outstanding options to purchase shares
of Surviving Corporation Stock. For purposes of this
Section 1(a) only, "Rollover Shares" includes any shares
of Common Stock acquired by the undersigned after the
date hereof and prior to the Effective Time pursuant to
employee benefit plans of the Company or otherwise. The
Stockholder further agrees that he will not, and will not
permit any company, trust or other entity controlled by
him, to (i) contract to sell, sell or otherwise transfer
or dispose of any of the Rollover Shares or any interest
therein or Rollover Options or other options or
securities convertible into shares of Common Stock or any
voting rights with respect thereto, other than as
contemplated hereby, or (ii) take any action which would
make any representation or warranty made by him in this
Agreement untrue or incorrect. Capitalized terms used
and not defined herein shall have the respective meanings
ascribed to such terms in the Merger Agreement.
b. Upon the terms and subject to the
conditions hereinafter set forth, as soon as practicable
following the Effective Time, (i) the Stockholder shall
surrender to the Surviving Corporation a certificate or
certificates representing the Rollover Shares, and the
Surviving Corporation shall deliver to the Stockholder in
exchange therefor a certificate or certificates
representing a like number of fully paid and
nonassessable shares of Surviving Corporation Stock, and
(ii) the Stockholder shall surrender to the Surviving
Corporation an Option Agreement or Option Agreements
pursuant to which the Rollover Options were granted to
such Stockholder, and the Surviving Corporation shall
grant to such Stockholder in exchange therefor an option
to purchase a like number of shares of Surviving
Corporation Stock. The Stockholder further agrees that
prior to receipt of any shares of Surviving Corporation
Stock, the Stockholder will execute a Stockholders'
Agreement (the "Stockholders' Agreement") by and among
the Surviving Corporation and each of the stockholders of
the Surviving Corporation, substantially in the form
attached as Exhibit C to the Private Placement Memorandum
(as hereinafter defined). The shares of Surviving
Corporation Stock acquired by the Stockholder pursuant to
the terms of this Agreement or after the Closing pursuant
to any employee benefit plans of the Surviving
Corporation, the Stockholders' Agreement or otherwise are
hereinafter sometimes referred to collectively herein as
the "Stock."
c. Notwithstanding anything to the contrary
contained herein, the Surviving Corporation shall have no
obligation to issue or deliver any shares of Surviving
Corporation Stock to (i) any person who is not a member
of management or key employee of the Surviving
Corporation on the date of such issuance and delivery or
(ii) any person who is a resident of a state or foreign
jurisdiction in which such issuance or delivery to him
would constitute a violation of the securities or "blue
sky" laws of such state or foreign jurisdiction.
2. Representations of the Stockholder.
-----------------------------------
a. The Stockholder hereby represents and
warrants that he is the beneficial and record owner of
the number of shares of Common Stock, and the holder of
the number of options to purchase shares of Common Stock,
set forth opposite his name on Appendix I hereto, free
and clear of all liens, charges, encumbrances, adverse
claims, voting agreements and commitments of every kind,
except as disclosed on Appendix I. Except as set forth
on Appendix I, none of the Stockholder or any company,
trust or other entity controlled by the Stockholder owns
any additional shares of the capital stock of the Company
or securities convertible thereinto or any interest
therein or has any voting rights with respect to any
additional shares of capital stock of the Company.
b. The Stockholder hereby represents and
warrants that (i) the Stockholder is acquiring the Stock
for the Stockholder's own account, for investment only
and not with a view toward resale or other distribution
of the Stock within the meaning of the Securities Act of
1933, as amended (the "Securities Act"); (ii) the
Stockholder has no present intention of selling or
otherwise disposing of all or any portion of the Stock;
and (iii) the Stockholder understands that the Stock has
not been registered under the Securities Act, in reliance
upon exemptions contained in the Securities Act and
applicable regulations promulgated thereunder or
interpretations thereof, and cannot be offered for sale,
sold or otherwise transferred unless such sale or
transfer is so registered or qualifies for exemption from
registration under the Securities Act.
c. The Stockholder acknowledges that he has
been advised by the Company that: (i) the Stock must be
held indefinitely and the Stockholder must continue to
bear the economic risk of the investment in the Stock
unless the offer and sale of such Stock is subsequently
registered under the Act and all applicable state or
foreign securities laws or an exemption from such
registration is available; (ii) it is not anticipated
that there will be any public market for the Stock in the
foreseeable future; (iii) the Stock may be considered
"restricted securities" within the meaning of Rule 144
promulgated under the Act; (iv) Rule 144 is not currently
expected to be available with respect to the offers or
sales of any securities of the Surviving Corporation
after the Merger, and the Surviving Corporation has made
no covenant and is under no obligation to make such Rule
available; (v) when and if the Stock may be disposed of
without registration under the Act in reliance on Rule
144, such disposition can be made by certain persons only
in limited amounts in accordance with the terms and
conditions of such Rule; (vi) if the Rule 144 exemption
is not available, public offer or sale without
registration will require the availability of an
exemption under the Act and if an exemption for such
offers or sales is not available, registration of the
Stock may be required, but that the Surviving Corporation
is under no obligation to register the Stock or to
facilitate compliance or to comply with any exemption,
except as otherwise provided in the Stockholders'
Agreement; (vii) a restrictive legend or legends
substantially in the form set forth in the Stockholders'
Agreement shall be placed on the certificates
representing the Stock; and (viii) a notation shall be
made in the appropriate records of the Surviving
Corporation indicating that the Stock is subject to
restrictions on transfer and, if the Surviving
Corporation should at some time in the future engage the
services of a stock transfer agent, appropriate stop
transfer restrictions will be issued to such transfer
agent with respect to the Stock.
d. The Stockholder further represents and
warrants that (i) he and his representatives have
carefully reviewed the Private Placement Memorandum dated
February 4, 1998, including the exhibits thereto, and any
supplement thereto furnished to the undersigned
(collectively, the "Private Placement Memorandum"); (ii)
he understands and has taken cognizance of, or has been
advised by his representatives as to, all the risk
factors related to the acquisition of the Stock,
including those set forth in the Private Placement
Memorandum and the exhibits thereto, and no
representations have been made to the Stockholder or such
representatives concerning the Stock, the Surviving
Corporation or its business or prospects or other
matters, except as set forth in the Private Placement
Memorandum; (iii) the Stockholder and his representatives
have been granted the opportunity to ask questions of,
and receive answers from, representatives of the
Surviving Corporation concerning the terms and conditions
of the acquisition of the Stock and to obtain any
documents, records or other additional information which
the Stockholder, or his representatives, deem necessary
to verify the accuracy of the information contained in
the Private Placement Memorandum; (iv) the Stockholder's
knowledge and experience in financial and business
matters is such that he is capable of evaluating the
merits and risks of the investment in the Stock, or he
has been advised by a representative possessing such
knowledge and experience; (v) the Stockholder is a member
of management or key employee of the Company and will,
after the consummation of the Merger, be a member of
management or key employee of the Surviving Corporation;
(vi) in making the Stockholder's decision to invest in
the Stock hereby subscribed for, he has relied solely
upon the independent investigations made by him and, to
the extent believed by the Stockholder to be appropriate,
his representatives, including his own professional
legal, tax and other advisors; (vii) his financial
condition is such that he can afford to bear the economic
risk of holding the unregistered Stock for an indefinite
period of time and has adequate means for providing for
his current needs and personal contingencies; (viii) he
can afford to suffer a complete loss of his investment in
the Stock; (ix) the Stock is a speculative investment
which involves a high degree of risk of loss of his
investment therein and there are substantial restrictions
on the transferability of, and there will be no public
market for, the Stock and, accordingly, it may not be
possible to liquidate his investment without a
substantial loss in the case of an emergency, if at all;
and (x) the Stockholder resides at the address set forth
on the signature page hereto and does not have any
present intention of establishing a residence in any
other state or jurisdiction.
e. The Stockholder further represents and
warrants that (i) he has full right, power and authority
to enter into and perform this Agreement, and this
Agreement has been duly authorized, executed and
delivered by him and is valid, binding and enforceable
against him in accordance with its terms, and (ii) either
(A) he is not legally married or (B) this Agreement has
been duly executed by his spouse on the signature page
hereof.
3. Conditions to the Company's Obligations. The
Surviving Corporation's obligation to issue the Stock
hereunder is subject to the occurrence of the Effective
Time and to the satisfaction at or prior to the Effective
Time of the following further conditions:
a. The representations and warranties of the
Stockholder contained in Section 2 hereof shall be true
and correct as of the Effective Time.
b. The Stockholder shall have performed all
obligations and complied with all agreements required to
be performed or complied with by the Stockholder under
this Agreement at or prior to the Effective Time.
c. The Stockholder shall have executed and
delivered to Childs the Stockholders' Agreement.
4. Binding Effect. The provisions of this
Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs,
successors and assigns. Notwithstanding the foregoing,
neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof shall
be assignable by any of the parties hereto without the
prior written consent of the other parties hereto.
5. Applicable Law. The laws of the state of
Minnesota shall govern the interpretation, validity and
performance of the terms of this Agreement, regardless of
the law that might be applied under applicable principles
of conflicts of law.
6. Survival of Representations and Warranties.
The representations and warranties of the parties hereto
contained in this Agreement shall survive the execution
and delivery of this Agreement.
7. Headings; Execution in Counterparts. The
headings and captions contained herein are for
convenience of reference only and shall not control or
affect the meaning or construction of any provision
hereof. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an
original and which together shall constitute one and the
same instrument.
8. Pronouns. Unless otherwise indicated herein
or the context otherwise requires, the masculine pronoun
shall include the feminine and neuter, and the singular
shall include the plural.
9. Amendment. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to
departures from the provisions hereof may be given unless
consented to in writing by the parties hereto. Unless
otherwise specified in such waiver or consent, a waiver
or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which
given.
10. Entire Agreement. This Agreement and the
Stockholders' Agreement and the other documents referred
to herein contain the entire agreement of the parties in
respect of the matters set forth herein and therein.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above
written.
J.W. Childs Equity Partners, L.P.
By: J.W. Childs Advisors, L.P.
General Partner
By: J.W. Childs Associates, L.P.
General Partner
By: J.W. Childs Associates, Inc.
General Partner
By:______________________________________
Name: Steven G. Segal
Title: Vice President
UHS Acquisition Corp.
By:______________________________________
Name: Steven G. Segal
Title: President
STOCKHOLDER:
_________________________________________
Signature of Stockholder
_________________________________________
Name of Stockholder
_________________________________________
_________________________________________
Address of Stockholder
Acknowledgment and Agreement of Spouse
--------------------------------------
The undersigned spouse of the above-named
Stockholder acknowledges that he/she has read the foregoing
Agreement and agrees to be bound thereby.
____________________________________
Signature of Spouse
____________________________________
Name of Spouse
Appendix I
----------
Name of Stockholder:_________________________________________
Number of Shares of Common Stock Number of Options to Purchase
Owned Beneficially or of Record Shares of Common Stock Held
-------------------------------- -----------------------------
Exhibit (c)(12)
---------------
INVESTMENT REPRESENTATION
AND
"ROLL OVER" SUBSCRIPTION AGREEMENT
----------------------------------
Investment Representation and "Roll Over"
Subscription Agreement (the "Agreement"), dated as of
February 25, 1998, by and among J.W. Childs Equity
Partners, L.P., a Delaware limited partnership
("Childs"), UHS Acquisition Corp., a Minnesota
corporation ("Merger Sub"), and Robert H. Braun
(the "Stockholder").
WHEREAS, Childs and Merger Sub are parties to
an Agreement and Plan of Merger (the "Merger Agreement")
dated as of November 25, 1997 by and among Merger Sub,
Childs and Universal Hospital Services, Inc., a Minnesota
corporation (the "Company"), providing for, among other
things, the merger (the "Merger") of Merger Sub with and
into the Company, with the Company being the surviving
corporation in the Merger (the "Surviving Corporation");
WHEREAS, the Merger Agreement provides, among
other things, that subject to the terms and conditions of
the Merger Agreement, at the effective time of the Merger
(the "Effective Time"), except as otherwise agreed in
writing between Merger Sub and any holder thereof, each
share of the Company's common stock, par value $.01 per
share, together with the associated preferred stock
purchase rights (the "Common Stock"), issued and
outstanding immediately prior to the Effective Time,
shall be canceled, extinguished and converted into a
right to receive $15.50 in net cash per share without
interest thereon (the "Merger Consideration");
WHEREAS, the Stockholder is the beneficial and
record owner of 984 shares of Common Stock;
WHEREAS, the Stockholder is currently a member
of management or key employee of the Company;
WHEREAS, Childs, Merger Sub and the Stockholder
desire to allow the shares of Common Stock held by the
Stockholder to remain issued and outstanding in the
Merger, in lieu of receipt of the Merger Consideration
therefor;
WHEREAS, this Agreement is one of several
subscription agreements being entered into by Childs and
Merger Sub with certain members of management or key
employees of the Company;
NOW, THEREFORE, in consideration of the
foregoing and in consideration of the mutual agreements
contained herein, the parties hereto agree as follows:
1. "Roll Over" of Shares.
a. Upon the terms and subject to the
conditions hereinafter set forth, the Stockholder hereby
agrees that at the Effective Time, the number of shares
of Common Stock owned beneficially and of record by such
Stockholder (together with the associated preferred
stock purchase rights, the "Rollover Shares"), as set
forth opposite such Stockholder's name on Appendix I
hereto, will not be cancelled, extinguished or converted
into the right to receive the Merger Consideration, but
instead each such Rollover Share will remain issued and
outstanding as one fully paid and nonassessable share of
common stock, par value $.01 per share, of the Surviving
Corporation ("Surviving Corporation Stock"). For
purposes of this Section 1(a) only, "Rollover Shares"
includes any shares of Common Stock acquired by the
undersigned after the date hereof and prior to the
Effective Time pursuant to employee benefit plans of the
Company or otherwise. The Stockholder further agrees
that he will not, and will not permit any company, trust
or other entity controlled by him, to (i) contract to
sell, sell or otherwise transfer or dispose of any of the
Rollover Shares or any interest therein or any voting
rights with respect thereto, other than as contemplated
hereby, or (ii) take any action which would make any
representation or warranty made by him in this Agreement
untrue or incorrect. Capitalized terms used and not
defined herein shall have the respective meanings
ascribed to such terms in the Merger Agreement.
b. Upon the terms and subject to the
conditions hereinafter set forth, as soon as practicable
following the Effective Time, the Stockholder shall
surrender to the Surviving Corporation a certificate or
certificates representing the Rollover Shares, and the
Surviving Corporation shall deliver to the Stockholder in
exchange therefor a certificate or certificates
representing a like number of fully paid and
nonassessable shares of Surviving Corporation Stock. The
Stockholder further agrees that prior to receipt of any
shares of Surviving Corporation Stock, the Stockholder
will execute a Stockholders' Agreement (the
"Stockholders' Agreement") by and among the Surviving
Corporation and each of the stockholders of the Surviving
Corporation, substantially in the form attached as
Exhibit C to the Private Placement Memorandum (as
hereinafter defined). The shares of Surviving
Corporation Stock acquired by the Stockholder pursuant to
the terms of this Agreement or after the Closing pursuant
to any employee benefit plans of the Surviving
Corporation, the Stockholders' Agreement or otherwise are
hereinafter sometimes referred to collectively herein as
the "Stock."
c. Notwithstanding anything to the contrary
contained herein, the Surviving Corporation shall have no
obligation to issue or deliver any shares of Surviving
Corporation Stock to (i) any person who is not a member
of management or key employee of the Surviving
Corporation on the date of such issuance and delivery or
(ii) any person who is a resident of a state or foreign
jurisdiction in which such issuance or delivery to him
would constitute a violation of the securities or "blue
sky" laws of such state or foreign jurisdiction.
2. Representations of the Stockholder.
a. The Stockholder hereby represents and
warrants that he is the beneficial and record owner of
the number of shares of Common Stock set forth opposite
his name on Appendix I hereto, free and clear of all
liens, charges, encumbrances, adverse claims, voting
agreements and commitments of every kind, except as
disclosed on Appendix I. Except as set forth on Appendix
I and except for options to purchase 17,630 shares of
Common Stock, none of the Stockholder or any company,
trust or other entity controlled by the Stockholder owns
any additional shares of the capital stock of the Company
or securities convertible thereinto or any interest
therein or has any voting rights with respect to any
additional shares of capital stock of the Company.
b. The Stockholder hereby represents and
warrants that (i) the Stockholder is acquiring the Stock
for the Stockholder's own account, for investment only
and not with a view toward resale or other distribution
of the Stock within the meaning of the Securities Act of
1933, as amended (the "Securities Act"); (ii) the
Stockholder has no present intention of selling or
otherwise disposing of all or any portion of the Stock;
and (iii) the Stockholder understands that the Stock has
not been registered under the Securities Act, in reliance
upon exemptions contained in the Securities Act and
applicable regulations promulgated thereunder or
interpretations thereof, and cannot be offered for sale,
sold or otherwise transferred unless such sale or
transfer is so registered or qualifies for exemption from
registration under the Securities Act.
c. The Stockholder acknowledges that he has
been advised by the Company that: (i) the Stock must be
held indefinitely and the Stockholder must continue to
bear the economic risk of the investment in the Stock
unless the offer and sale of such Stock is subsequently
registered under the Act and all applicable state or
foreign securities laws or an exemption from such
registration is available; (ii) it is not anticipated
that there will be any public market for the Stock in the
foreseeable future; (iii) the Stock may be considered
"restricted securities" within the meaning of Rule 144
promulgated under the Act; (iv) Rule 144 is not currently
expected to be available with respect to the offers or
sales of any securities of the Surviving Corporation
after the Merger, and the Surviving Corporation has made
no covenant and is under no obligation to make such Rule
available; (v) when and if the Stock may be disposed of
without registration under the Act in reliance on Rule
144, such disposition can be made by certain persons only
in limited amounts in accordance with the terms and
conditions of such Rule; (vi) if the Rule 144 exemption
is not available, public offer or sale without
registration will require the availability of an
exemption under the Act and if an exemption for such
offers or sales is not available, registration of the
Stock may be required, but that the Surviving Corporation
is under no obligation to register the Stock or to
facilitate compliance or to comply with any exemption,
except as otherwise provided in the Stockholders'
Agreement; (vii) a restrictive legend or legends
substantially in the form set forth in the Stockholders'
Agreement shall be placed on the certificates
representing the Stock; and (viii) a notation shall be
made in the appropriate records of the Surviving
Corporation indicating that the Stock is subject to
restrictions on transfer and, if the Surviving
Corporation should at some time in the future engage the
services of a stock transfer agent, appropriate stop
transfer restrictions will be issued to such transfer
agent with respect to the Stock.
d. The Stockholder further represents and
warrants that (i) he and his representatives have
carefully reviewed the Private Placement Memorandum dated
February 4, 1998, including the exhibits thereto, and any
supplement thereto furnished to the undersigned
(collectively, the "Private Placement Memorandum"); (ii)
he understands and has taken cognizance of, or has been
advised by his representatives as to, all the risk
factors related to the acquisition of the Stock,
including those set forth in the Private Placement
Memorandum and the exhibits thereto, and no
representations have been made to the Stockholder or such
representatives concerning the Stock, the Surviving
Corporation or its business or prospects or other
matters, except as set forth in the Private Placement
Memorandum; (iii) the Stockholder and his representatives
have been granted the opportunity to ask questions of,
and receive answers from, representatives of the
Surviving Corporation concerning the terms and conditions
of the acquisition of the Stock and to obtain any
documents, records or other additional information which
the Stockholder, or his representatives, deem necessary
to verify the accuracy of the information contained in
the Private Placement Memorandum; (iv) the Stockholder's
knowledge and experience in financial and business
matters is such that he is capable of evaluating the
merits and risks of the investment in the Stock, or he
has been advised by a representative possessing such
knowledge and experience; (v) the Stockholder is a member
of management or key employee of the Company and will,
after the consummation of the Merger, be a member of
management or key employee of the Surviving Corporation;
(vi) in making the Stockholder's decision to invest in
the Stock hereby subscribed for, he has relied solely
upon the independent investigations made by him and, to
the extent believed by the Stockholder to be appropriate,
his representatives, including his own professional
legal, tax and other advisors; (vii) his financial
condition is such that he can afford to bear the economic
risk of holding the unregistered Stock for an indefinite
period of time and has adequate means for providing for
his current needs and personal contingencies; (viii) he
can afford to suffer a complete loss of his investment in
the Stock; (ix) the Stock is a speculative investment
which involves a high degree of risk of loss of his
investment therein and there are substantial restrictions
on the transferability of, and there will be no public
market for, the Stock and, accordingly, it may not be
possible to liquidate his investment without a
substantial loss in the case of an emergency, if at all;
and (x) the Stockholder resides at the address set forth
on the signature page hereto and does not have any
present intention of establishing a residence in any
other state or jurisdiction.
e. The Stockholder further represents and
warrants that (i) he has full right, power and authority
to enter into and perform this Agreement, and this
Agreement has been duly authorized, executed and
delivered by him and is valid, binding and enforceable
against him in accordance with its terms, and (ii) either
(A) he is not legally married or (B) this Agreement has
been duly executed by his spouse on the signature page
hereof.
3. Conditions to the Company's Obligations. The
Surviving Corporation's obligation to issue the Stock
hereunder is subject to the occurrence of the Effective
Time and to the satisfaction at or prior to the Effective
Time of the following further conditions:
a. The representations and warranties of the
Stockholder contained in Section 2 hereof shall be true
and correct as of the Effective Time.
b. The Stockholder shall have performed all
obligations and complied with all agreements required to
be performed or complied with by the Stockholder under
this Agreement at or prior to the Effective Time.
c. The Stockholder shall have executed and
delivered to Childs the Stockholders' Agreement.
4. Binding Effect. The provisions of this
Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs,
successors and assigns. Notwithstanding the foregoing,
neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof shall
be assignable by any of the parties hereto without the
prior written consent of the other parties hereto.
5. Applicable Law. The laws of the state of
Minnesota shall govern the interpretation, validity and
performance of the terms of this Agreement, regardless of
the law that might be applied under applicable principles
of conflicts of law.
6. Survival of Representations and Warranties.
The representations and warranties of the parties hereto
contained in this Agreement shall survive the execution
and delivery of this Agreement.
7. Headings; Execution in Counterparts. The
headings and captions contained herein are for
convenience of reference only and shall not control or
affect the meaning or construction of any provision
hereof. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an
original and which together shall constitute one and the
same instrument.
8. Pronouns. Unless otherwise indicated herein
or the context otherwise requires, the masculine pronoun
shall include the feminine and neuter, and the singular
shall include the plural.
9. Amendment. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to
departures from the provisions hereof may be given unless
consented to in writing by the parties hereto. Unless
otherwise specified in such waiver or consent, a waiver
or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which
given.
10. Entire Agreement. This Agreement and the
Stockholders' Agreement and the other documents referred
to herein contain the entire agreement of the parties in
respect of the matters set forth herein and therein.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above
written.
J.W. Childs Equity Partners, L.P.
By: J.W. Childs Advisors, L.P.
General Partner
By: J.W. Childs Associates, L.P.
General Partner
By: J.W. Childs Associates, Inc.
General Partner
By: /s/ Steven G. Segal
-------------------------------
Name: Steven G. Segal
Title: Vice President
UHS Acquisition Corp.
By: /s/ Steven G. Segal
-------------------------------
Name: Steven G. Segal
Title: President
STOCKHOLDER:
/s/ Robert H. Braun
------------------------------------
Signature of Stockholder
Robert H. Braun
------------------------------------
Name of Stockholder
1262 Wilderness Curve
------------------------------------
Eagan, MN 55123
------------------------------------
Address of Stockholder
Acknowledgment and Agreement of Spouse
--------------------------------------
The undersigned spouse of the above-named
Stockholder acknowledges that he/she has read the foregoing
Agreement and agrees to be bound thereby.
/s/ Mary Braun
------------------------------------
Signature of Spouse
Mary Braun
------------------------------------
Name of Spouse
Appendix I
----------
Name of Stockholder: Robert H. Braun
----------------------------------------
Number of Shares of Common Stock
Owned Beneficially or of Record
--------------------------------
984
Exhibit (c)(13)
---------------
INVESTMENT REPRESENTATION
AND
"ROLL OVER" SUBSCRIPTION AGREEMENT
----------------------------------
Investment Representation and "Roll Over"
Subscription Agreement (the "Agreement"), dated as of
February 25, 1998, by and among J.W. Childs Equity
Partners, L.P., a Delaware limited partnership
("Childs"), UHS Acquisition Corp., a Minnesota
corporation ("Merger Sub"), and Timothy P. Lynch
(the "Stockholder").
WHEREAS, Childs and Merger Sub are parties to
an Agreement and Plan of Merger (the "Merger Agreement")
dated as of November 25, 1997 by and among Merger Sub,
Childs and Universal Hospital Services, Inc., a Minnesota
corporation (the "Company"), providing for, among other
things, the merger (the "Merger") of Merger Sub with and
into the Company, with the Company being the surviving
corporation in the Merger (the "Surviving Corporation");
WHEREAS, the Merger Agreement provides, among
other things, that subject to the terms and conditions of
the Merger Agreement, at the effective time of the Merger
(the "Effective Time"), except as otherwise agreed in
writing between Merger Sub and any holder thereof, (i)
each share of the Company's common stock, par value $.01
per share, together with the associated preferred stock
purchase rights (the "Common Stock"), issued and
outstanding immediately prior to the Effective Time,
shall be canceled, extinguished and converted into a
right to receive $15.50 in net cash per share without
interest thereon (the "Merger Consideration"), and (ii)
each option to acquire shares of Common Stock outstanding
immediately prior to the Effective Time under certain
benefit plans set forth in Section 1.8(a) of the Merger
Agreement, whether vested or unvested (each, an
"Option"), shall automatically become vested and
exercisable, and each holder of an Option shall have the
right to receive from the Surviving Corporation a cash
payment in an aggregate amount equal to the difference
between the Merger Consideration less the applicable
exercise price per share of Common Stock applicable to
such Option for all shares of Common Stock subject to the
Option (the "Option Consideration");
WHEREAS, the Stockholder is the beneficial and
record owner of 2300 shares of Common Stock and the
holder of options to purchase 5887 shares of Common
Stock;
WHEREAS, the Stockholder is currently a member
of management or key employee of the Company;
WHEREAS, Childs, Merger Sub and the Stockholder
desire to allow certain of the shares of Common Stock and
all of the options to purchase shares of Common Stock
held by the Stockholder to remain issued and outstanding
in the Merger, in lieu of receipt of the Merger
Consideration and Option Consideration, respectively,
therefor;
WHEREAS, this Agreement is one of several
subscription agreements being entered into by Childs and
Merger Sub with certain members of management or key
employees of the Company;
NOW, THEREFORE, in consideration of the
foregoing and in consideration of the mutual agreements
contained herein, the parties hereto agree as follows:
1. "Roll Over" of Shares and Options.
a. Upon the terms and subject to the
conditions hereinafter set forth, the Stockholder hereby
agrees that at the Effective Time, (i) the number of
shares of Common Stock owned beneficially and of record
by such Stockholder set forth below such Stockholder's
name on Appendix I hereto (together with the associated
preferred stock purchase rights, the "Rollover Shares")
will not be cancelled, extinguished or converted into the
right to receive the Merger Consideration, but instead
each such Rollover Share will remain issued and
outstanding as one fully paid and nonassessable share of
common stock, par value $.01 per share, of the Surviving
Corporation ("Surviving Corporation Stock"), and (ii)
upon consummation of the Merger, all options to purchase
shares of Common Stock held by such Stockholder
(collectively, the "Rollover Options"), as set forth
below such Stockholder's name on Appendix I hereto will
not become vested and exercisable for the Option
Consideration in accordance with Section 1.8(a) of the
Merger Agreement, but instead all such Options will
remain issued and outstanding options to purchase shares
of Surviving Corporation Stock. The Stockholder further
agrees that he will not, and will not permit any company,
trust or other entity controlled by him, to (i) contract
to sell, sell or otherwise transfer or dispose of any of
the Rollover Shares or any interest therein or Rollover
Options or other options or securities convertible into
shares of Common Stock or any voting rights with respect
thereto, other than as contemplated hereby, or (ii) take
any action which would make any representation or
warranty made by him in this Agreement untrue or
incorrect. Capitalized terms used and not defined herein
shall have the respective meanings ascribed to such terms
in the Merger Agreement.
b. Upon the terms and subject to the
conditions hereinafter set forth, as soon as practicable
following the Effective Time, (i) the Stockholder shall
surrender to the Surviving Corporation a certificate or
certificates representing the Rollover Shares, and the
Surviving Corporation shall deliver to the Stockholder in
exchange therefor a certificate or certificates
representing a like number of fully paid and
nonassessable shares of Surviving Corporation Stock, and
(ii) the Stockholder shall surrender to the Surviving
Corporation an Option Agreement or Option Agreements
pursuant to which the Rollover Options were granted to
such Stockholder, and the Surviving Corporation shall
grant to such Stockholder in exchange therefor an option
to purchase a like number of shares of Surviving
Corporation Stock. The Stockholder further agrees that
prior to receipt of any shares of Surviving Corporation
Stock, the Stockholder will execute a Stockholders'
Agreement (the "Stockholders' Agreement") by and among
the Surviving Corporation and each of the stockholders of
the Surviving Corporation, substantially in the form
attached as Exhibit C to the Private Placement Memorandum
(as hereinafter defined). The shares of Surviving
Corporation Stock acquired by the Stockholder pursuant to
the terms of this Agreement or after the Closing pursuant
to any employee benefit plans of the Surviving
Corporation, the Stockholders' Agreement or otherwise are
hereinafter sometimes referred to collectively herein as
the "Stock."
c. Notwithstanding anything to the contrary
contained herein, the Surviving Corporation shall have no
obligation to issue or deliver any shares of Surviving
Corporation Stock to (i) any person who is not a member
of management or key employee of the Surviving
Corporation on the date of such issuance and delivery or
(ii) any person who is a resident of a state or foreign
jurisdiction in which such issuance or delivery to him
would constitute a violation of the securities or "blue
sky" laws of such state or foreign jurisdiction.
2. Representations of the Stockholder.
a. The Stockholder hereby represents and
warrants that he is the beneficial and record owner of
the number of shares of Common Stock, and the holder of
the number of options to purchase shares of Common Stock,
set forth opposite his name on Appendix I hereto, free
and clear of all liens, charges, encumbrances, adverse
claims, voting agreements and commitments of every kind,
except as disclosed on Appendix I. Except as set forth
on Appendix I and except for 1,784 additional shares of
Common Stock, none of the Stockholder or any company,
trust or other entity controlled by the Stockholder owns
any additional shares of the capital stock of the Company
or securities convertible thereinto or any interest
therein or has any voting rights with respect to any
additional shares of capital stock of the Company.
b. The Stockholder hereby represents and
warrants that (i) the Stockholder is acquiring the Stock
for the Stockholder's own account, for investment only
and not with a view toward resale or other distribution
of the Stock within the meaning of the Securities Act of
1933, as amended (the "Securities Act"); (ii) the
Stockholder has no present intention of selling or
otherwise disposing of all or any portion of the Stock;
and (iii) the Stockholder understands that the Stock has
not been registered under the Securities Act, in reliance
upon exemptions contained in the Securities Act and
applicable regulations promulgated thereunder or
interpretations thereof, and cannot be offered for sale,
sold or otherwise transferred unless such sale or
transfer is so registered or qualifies for exemption from
registration under the Securities Act.
c. The Stockholder acknowledges that he has
been advised by the Company that: (i) the Stock must be
held indefinitely and the Stockholder must continue to
bear the economic risk of the investment in the Stock
unless the offer and sale of such Stock is subsequently
registered under the Act and all applicable state or
foreign securities laws or an exemption from such
registration is available; (ii) it is not anticipated
that there will be any public market for the Stock in the
foreseeable future; (iii) the Stock may be considered
"restricted securities" within the meaning of Rule 144
promulgated under the Act; (iv) Rule 144 is not currently
expected to be available with respect to the offers or
sales of any securities of the Surviving Corporation
after the Merger, and the Surviving Corporation has made
no covenant and is under no obligation to make such Rule
available; (v) when and if the Stock may be disposed of
without registration under the Act in reliance on Rule
144, such disposition can be made by certain persons only
in limited amounts in accordance with the terms and
conditions of such Rule; (vi) if the Rule 144 exemption
is not available, public offer or sale without
registration will require the availability of an
exemption under the Act and if an exemption for such
offers or sales is not available, registration of the
Stock may be required, but that the Surviving Corporation
is under no obligation to register the Stock or to
facilitate compliance or to comply with any exemption,
except as otherwise provided in the Stockholders'
Agreement; (vii) a restrictive legend or legends
substantially in the form set forth in the Stockholders'
Agreement shall be placed on the certificates
representing the Stock; and (viii) a notation shall be
made in the appropriate records of the Surviving
Corporation indicating that the Stock is subject to
restrictions on transfer and, if the Surviving
Corporation should at some time in the future engage the
services of a stock transfer agent, appropriate stop
transfer restrictions will be issued to such transfer
agent with respect to the Stock.
d. The Stockholder further represents and
warrants that (i) he and his representatives have
carefully reviewed the Private Placement Memorandum dated
February 4, 1998, including the exhibits thereto, and any
supplement thereto furnished to the undersigned
(collectively, the "Private Placement Memorandum"); (ii)
he understands and has taken cognizance of, or has been
advised by his representatives as to, all the risk
factors related to the acquisition of the Stock,
including those set forth in the Private Placement
Memorandum and the exhibits thereto, and no
representations have been made to the Stockholder or such
representatives concerning the Stock, the Surviving
Corporation or its business or prospects or other
matters, except as set forth in the Private Placement
Memorandum; (iii) the Stockholder and his representatives
have been granted the opportunity to ask questions of,
and receive answers from, representatives of the
Surviving Corporation concerning the terms and conditions
of the acquisition of the Stock and to obtain any
documents, records or other additional information which
the Stockholder, or his representatives, deem necessary
to verify the accuracy of the information contained in
the Private Placement Memorandum; (iv) the Stockholder's
knowledge and experience in financial and business
matters is such that he is capable of evaluating the
merits and risks of the investment in the Stock, or he
has been advised by a representative possessing such
knowledge and experience; (v) the Stockholder is a member
of management or key employee of the Company and will,
after the consummation of the Merger, be a member of
management or key employee of the Surviving Corporation;
(vi) in making the Stockholder's decision to invest in
the Stock hereby subscribed for, he has relied solely
upon the independent investigations made by him and, to
the extent believed by the Stockholder to be appropriate,
his representatives, including his own professional
legal, tax and other advisors; (vii) his financial
condition is such that he can afford to bear the economic
risk of holding the unregistered Stock for an indefinite
period of time and has adequate means for providing for
his current needs and personal contingencies; (viii) he
can afford to suffer a complete loss of his investment in
the Stock; (ix) the Stock is a speculative investment
which involves a high degree of risk of loss of his
investment therein and there are substantial restrictions
on the transferability of, and there will be no public
market for, the Stock and, accordingly, it may not be
possible to liquidate his investment without a
substantial loss in the case of an emergency, if at all;
and (x) the Stockholder resides at the address set forth
on the signature page hereto and does not have any
present intention of establishing a residence in any
other state or jurisdiction.
e. The Stockholder further represents and
warrants that (i) he has full right, power and authority
to enter into and perform this Agreement, and this
Agreement has been duly authorized, executed and
delivered by him and is valid, binding and enforceable
against him in accordance with its terms, and (ii) either
(A) he is not legally married or (B) this Agreement has
been duly executed by his spouse on the signature page
hereof.
3. Conditions to the Company's Obligations. The
Surviving Corporation's obligation to issue the Stock
hereunder is subject to the occurrence of the Effective
Time and to the satisfaction at or prior to the Effective
Time of the following further conditions:
a. The representations and warranties of the
Stockholder contained in Section 2 hereof shall be true
and correct as of the Effective Time.
b. The Stockholder shall have performed all
obligations and complied with all agreements required to
be performed or complied with by the Stockholder under
this Agreement at or prior to the Effective Time.
c. The Stockholder shall have executed and
delivered to Childs the Stockholders' Agreement.
4. Binding Effect. The provisions of this
Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs,
successors and assigns. Notwithstanding the foregoing,
neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof shall
be assignable by any of the parties hereto without the
prior written consent of the other parties hereto.
5. Applicable Law. The laws of the state of
Minnesota shall govern the interpretation, validity and
performance of the terms of this Agreement, regardless of
the law that might be applied under applicable principles
of conflicts of law.
6. Survival of Representations and Warranties.
The representations and warranties of the parties hereto
contained in this Agreement shall survive the execution
and delivery of this Agreement.
7. Headings; Execution in Counterparts. The
headings and captions contained herein are for
convenience of reference only and shall not control or
affect the meaning or construction of any provision
hereof. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an
original and which together shall constitute one and the
same instrument.
8. Pronouns. Unless otherwise indicated herein
or the context otherwise requires, the masculine pronoun
shall include the feminine and neuter, and the singular
shall include the plural.
9. Amendment. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to
departures from the provisions hereof may be given unless
consented to in writing by the parties hereto. Unless
otherwise specified in such waiver or consent, a waiver
or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which
given.
10. Entire Agreement. This Agreement and the
Stockholders' Agreement and the other documents referred
to herein contain the entire agreement of the parties in
respect of the matters set forth herein and therein.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above
written.
J.W. Childs Equity Partners, L.P.
By: J.W. Childs Advisors, L.P.
General Partner
By: J.W. Childs Associates, L.P.
General Partner
By: J.W. Childs Associates, Inc.
General Partner
By: /s/ Steven G. Segal
-------------------------------
Name: Steven G. Segal
Title: Vice President
UHS Acquisition Corp.
By: /s/ Steven G. Segal
-------------------------------
Name: Steven G. Segal
Title: President
STOCKHOLDER:
/s/ Timothy P. Lynch
------------------------------------
Signature of Stockholder
Timothy P. Lynch
------------------------------------
Name of Stockholder
10214 Miss. Blvd.
------------------------------------
Coon Rapids, MN 55433
------------------------------------
Address of Stockholder
Acknowledgement and Agreement of Spouse
---------------------------------------
The undersigned spouse of the above-named
Stockholder acknowledges that he/she has read the foregoing
Agreement and agrees to be bound thereby.
/s/ Kimberly Lynch
------------------------------------
Signature of Spouse
Kimberly Lynch
------------------------------------
Name of Spouse
Appendix I
----------
Name of Stockholder: Timothy P. Lynch
-----------------------------------------
Number of Shares of Common Stock Number of Options to Purchase
Owned Beneficially or of Record Shares of Common Stock Held
-------------------------------- -----------------------------
516 5887
Exhibit (c)(14)
FORM OF
INVESTMENT REPRESENTATION
AND
STOCK SUBSCRIPTION AGREEMENT
Investment Representation and Stock Subscription Agreement (the
"Agreement"), dated as of February 25, 1998, by and between Universal
Hospital Services, Inc., a Minnesota corporation (the "Company"), and
______________________ (the "Purchaser").
WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") dated as of November 25, 1997 by and among UHS Acquisition
Corp., a Minnesota corporation ("Merger Sub"), J.W. Childs Equity Partners,
L.P., a Delaware limited partnership, and the Company, the parties thereto
have agreed that, subject to the terms and conditions contained therein,
Merger Sub shall merge with and into the Company, with the Company being
the surviving corporation in such merger (the "Merger");
WHEREAS, the closing of the transactions contemplated by the
Merger Agreement (the "Merger Closing") is taking place on the date hereof;
WHEREAS, the Purchaser is presently a member of management or key
employee of the Company;
WHEREAS, the Purchaser desires to subscribe for and acquire from
the Company, and the Company desires to sell to the Purchaser, the
aggregate number of shares of common stock, par value $.01 per share, of
the Company (the "Common Stock") set forth on Appendix I hereto, as
hereinafter set forth;
WHEREAS, this Agreement is one of several subscription agreements
being entered into by the Company with certain members of management or key
employees of the Company;
NOW, THEREFORE, in consideration of the foregoing and in
consideration of the mutual agreements contained herein, the parties hereto
agree as follows:
1. Subscription for and Acquisition of Common Stock.
a. Upon the terms and subject to the conditions hereinafter set
forth, the Purchaser hereby subscribes for and shall, immediately following
the Merger Closing, purchase for cash in an amount set forth on Appendix I
hereto, and the Company shall, immediately following the Merger Closing,
sell to the Purchaser the aggregate number of shares of Common Stock set
forth on Appendix I hereto (the "Shares") at a purchase price of $15.50 per
share of Common Stock for the total consideration in cash set forth on
Appendix I hereto (the "Purchase Price").
b. Upon the terms and subject to the conditions hereinafter set
forth, the closing of the purchase and sale of the Shares (the "Closing")
shall take place immediately following the Merger Closing at the offices of
Dorsey & Whitney LLP, Pillsbury Center South, 220 South Sixth Street,
Minneapolis, Minnesota, or at such other time and place as the Company
shall determine. In consideration of the sale by the Company and the
purchase by the Purchaser of the Shares, at the Closing (i) the Company
shall deliver to the Purchaser certificates representing the Shares [(or,
if the Purchaser is required to execute a Pledge Agreement as provided
below, the Company will retain the certificates representing the Shares
pursuant thereto)]* and (ii) the Purchaser shall deliver or cause to be
delivered to the Company the Purchase Price in immediately available funds
(or such other means as the Company, in its sole discretion, shall specify
prior to the closing) [or, if the Purchaser receives a loan from the
Company for all or a portion of the Purchase Price (the "Company Loan") as
hereinafter provided, the Purchaser shall cause the proceeds of such
Company Loan to be provided to the Company in immediately available funds.
The Company shall provide a Company Loan to the Purchaser in the amount, if
any, set forth on Appendix I hereto opposite "Company Loan Amount." If the
Purchaser receives such Company Loan, such Purchaser shall, at or prior to
the Closing, execute and deliver to the Company (A) a Secured Promissory
Note, substantially in the form attached hereto as Annex I, for the Company
Loan Amount, (B) a Pledge Agreement in the form attached hereto as Annex II
and (C) such other documents as the Company may require.]* The Shares and
any shares of Common Stock acquired by the Purchaser after the Closing
pursuant to any employee benefit plans of the Company, the Stockholders'
Agreement (as hereinafter defined) or otherwise are hereinafter sometimes
referred to collectively herein as the "Stock."
__________________________
** The bracketed language will appear only in agree-
ments with those employees to whom the Company, in its
sole discretion, has offered to loan funds for the pur-
pose of purchasing shares of Common Stock.
c. Notwithstanding anything to the contrary contained herein,
the Company shall have no obligation to issue, sell or deliver any shares
of Common Stock to (i) any person who is not a member of management or key
employee of the Company on the date of sale or delivery thereof or (ii) any
person who is a resident of a state or foreign jurisdiction in which such
issuance, sale or delivery to him would constitute a violation of the
securities or "blue sky" laws of such state or foreign jurisdiction.
2. Investment Representations of Purchaser.
a. The Purchaser hereby represents and warrants that (i) the
Purchaser is acquiring the Stock for the Purchaser's own account, for
investment only and not with a view toward resale or other distribution of
the Stock within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"); (ii) the Purchaser has no present intention of selling
or otherwise disposing of all or any portion of the Stock; and (iii) the
Purchaser understands that the Stock has not been registered under the
Securities Act, in reliance upon exemptions contained in the Securities Act
and applicable regulations promulgated thereunder or interpretations
thereof, and cannot be offered for sale, sold or otherwise transferred
unless such sale or transfer is so registered or qualifies for exemption
from registration under the Securities Act.
b. The Purchaser acknowledges that he has been advised by the
Company that: (i) the Stock must be held indefinitely and the Purchaser
must continue to bear the economic risk of the investment in the Stock
unless the offer and sale of such Stock is subsequently registered under
the Act and all applicable state or foreign securities laws or an exemption
from such registration is available; (ii) it is not anticipated that there
will be any public market for the Stock in the foreseeable future; (iii)
the Stock may be considered "restricted securities" within the meaning of
Rule 144 promulgated under the Act; (iv) Rule 144 is not presently
available with respect to the offers or sales of any securities of the
Company, and the Company has made no covenant and is under no obligation to
make such Rule available; (v) when and if the Stock may be disposed of
without registration under the Act in reliance on Rule 144, such
disposition can be made only by certain persons in limited amounts in
accordance with the terms and conditions of such Rule; (vi) if the Rule 144
exemption is not available, public offer or sale without registration will
require the availability of an exemption under the Act and if an exemption
for such offers or sales is not available, registration of the Stock may be
required, but that the Company is under no obligation to register the Stock
or to facilitate compliance or to comply with any exemption, except as
otherwise provided in the Stockholders' Agreement; (vii) a restrictive
legend or legends substantially in the form set forth in the Stockholders'
Agreement dated as of the date hereof, by and among the Company and each of
the stockholders of the Company (the "Stockholders' Agreement") shall be
placed on the certificates representing the Stock; and (viii) a notation
shall be made in the appropriate records of the Company indicating that the
Stock is subject to restrictions on transfer and, if the Company should at
some time in the future engage the services of a stock transfer agent,
appropriate stop transfer restrictions will be issued to such transfer
agent with respect to the Stock.
c. The Purchaser further represents and warrants that (i) he
and his representatives have carefully reviewed the Private Placement
Memorandum dated February 4, 1998, including the exhibits thereto, and any
supplement thereto furnished to the undersigned (collectively, the "Private
Placement Memorandum"); (ii) he understands and has taken cognizance of, or
has been advised by his representatives as to, all the risk factors related
to the purchase of the Stock, including those set forth in the Private
Placement Memorandum and the Exhibits thereto, and no representations have
been made to the Purchaser or such representatives concerning the Stock,
the Company or its business or prospects or other matters, except as set
forth in the Private Placement Memorandum; (iii) the Purchaser and his
representatives have been granted the opportunity to ask questions of, and
receive answers from, representatives of the Company concerning the terms
and conditions of the purchase of the Stock and to obtain any documents,
records or other additional information which the Purchaser, or his
representatives, deem necessary to verify the accuracy of the information
contained in the Private Placement Memorandum; (iv) the Purchaser's
knowledge and experience in financial and business matters is such that he
is capable of evaluating the merits and risks of the investment in the
Stock, or he has been advised by a representative possessing such knowledge
and experience; (v) the Purchaser is a member of management or key employee
of the Company and will, after the consummation of the Merger, be a member
of management or key employee of the Company; (vi) in making the
Purchaser's decision to purchase the Stock hereby subscribed for, he has
relied solely upon the independent investigations made by him and, to the
extent believed by the Purchaser to be appropriate, his representatives,
including his own professional legal, tax and other advisors; (vii) his
financial condition is such that he can afford to bear the economic risk of
holding the unregistered Stock for an indefinite period of time and has
adequate means for providing for his current needs and personal
contingencies; (viii) he can afford to suffer a complete loss of his
investment in the Stock; (ix) the Stock is a speculative investment which
involves a high degree of risk of loss of his investment therein and there
are substantial restrictions on the transferability of, and there will be
no public market for, the Stock and, accordingly, it may not be possible to
liquidate his investment without a substantial loss in the case of an
emergency, if at all; and (x) the Purchaser resides at the address set
forth on the signature page hereto and does not have any present intention
of establishing a residence in any other state or jurisdiction.
d. The Purchaser further represents and warrants that (i) he
has full right, power and authority to enter into and perform this
Agreement, and this Agreement has been duly authorized, executed and
delivered by him and is valid, binding and enforceable against him in
accordance with its terms, and (ii) either (A) he is not legally married or
(B) this Agreement has been duly executed by his spouse on the signature
page hereof.
3. Conditions to the Company's Obligations. The Company's
obligation to issue the Stock hereunder is subject to the occurrence of the
Merger Closing and to the satisfaction at or prior to the Closing of the
following further conditions:
a. The representations and warranties of the Purchaser
contained in Section 2 hereof shall be true and correct as of the date of
the Closing.
b. The Purchaser shall have performed all obligations and
complied with all agreements required to be performed or complied with by
the Purchaser under this Agreement at or prior to the Closing.
c. The Purchaser shall have executed and delivered to the
Company the Stockholders' Agreement.
4. Binding Effect. The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, successors and assigns. Notwithstanding the foregoing,
neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any of the
parties hereto without the prior written consent of the other parties
hereto.
5. Applicable Law. The laws of the state of Minnesota shall govern
the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under applicable
principles of conflicts of law.
6. Survival of Representations and Warranties. The representations
and warranties of the parties hereto contained in this Agreement shall
survive the execution and delivery of this Agreement.
7. Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience of reference only and shall not
control or affect the meaning or construction of any provision hereof.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original and which together shall constitute one
and the same instrument.
8. Pronouns. Unless otherwise indicated herein or the context
otherwise requires, the masculine pronoun shall include the feminine and
neuter, and the singular shall include the plural.
9. Amendment. This Agreement may not be amended, modified or
supplemented and no waivers of or consents to departures from the
provisions hereof may be given unless consented to in writing by the
parties hereto. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
10. Entire Agreement. This Agreement and the Stockholders' Agreement
and the other documents referred to herein contain the entire agreement of
the parties in respect of the matters set forth herein and therein.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
UNIVERSAL HOSPITAL SERVICES, INC.
By _________________________________
Name:
Title:
PURCHASER:
__________________________________
Signature of Purchaser
___________________________________
Name of Purchaser
___________________________________
___________________________________
Address of Purchaser
Acknowledgment and Agreement of Spouse
The undersigned spouse of the above-named Purchaser acknowledges
that he/she has read the foregoing Agreement and agrees to be bound
thereby.
__________________________
Signature of Spouse
__________________________
Name of Spouse
Appendix I
Name of Purchaser: _______________________________
Total Number of Shares of
Common Stock To Be Purchased . . . . . . . . . . . . . ________ *
Per Share Purchase Price . . . . . . . . . . . . . . . . . . $15.50
[Aggregate Purchase Price
less Company Loan Amount]** . . . . . . . . . . . . . . . $
[Company Loan Amount]** . . . . . . . . . . . . . . . . . $
Aggregate Cash Purchase Price . . . . . . . . . . . . . . $
*Each Purchaser shall subscribe for, if any, not less than 323, nor
more than 3225, shares of Common Stock.
__________________________
** The bracketed language will appear only in agree-
ments with those employees to whom the Company, in its
sole discretion, has offered to loan funds for the pur-
pose of purchasing shares of Common Stock.
Exhibit (c)(15)
UNIVERSAL HOSPITAL SERVICES, INC.
FORM OF STOCKHOLDERS' AGREEMENT
Dated as of February 25, 1998
TABLE OF CONTENTS
ARTICLE I
Definitions
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
Transfer Provisions
2.1 Restrictions on Transfers . . . . . . . . . . . . . . . . . . . 11
2.2 Call by the Company . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Put By Management Holders . . . . . . . . . . . . . . . . . . . 15
2.4 Tagalong . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.5 Dragalong . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.6 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7 Restrictions on Other Agreements . . . . . . . . . . . . . . . 21
2.8 Stockholder Action . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
Registration Rights
3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 Piggyback Registration . . . . . . . . . . . . . . . . . . . . 22
3.3 Obligations of the Company . . . . . . . . . . . . . . . . . . 23
3.4 Furnish Information . . . . . . . . . . . . . . . . . . . . . . 27
3.5 Expenses of Registration . . . . . . . . . . . . . . . . . . . 27
3.6 Underwriting Requirements . . . . . . . . . . . . . . . . . . . 27
3.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 28
3.8 Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.9 Market Stand-Off Agreement . . . . . . . . . . . . . . . . . . 32
ARTICLE IV
Certain Miscellaneous Other Provisions
4.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2 Entire Agreement; Amendment; Termination . . . . . . . . . . . 33
4.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.5 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 34
4.6 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.7 Recapitalization, Exchanges, etc. . . . . . . . . . . . . . . . 35
4.8 JWC Representative . . . . . . . . . . . . . . . . . . . . . . 35
4.9 Action Necessary to Effectuate the Agreement . . . . . . . . . 36
4.10 Purchase for Investment; Legend on Certificate . . . . . . . . 36
4.11 Effectiveness of Transfers . . . . . . . . . . . . . . . . . . 37
4.12 Additional Stockholders . . . . . . . . . . . . . . . . . . . . 37
4.13 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.15 Headings, etc. . . . . . . . . . . . . . . . . . . . . . . . . 38
4.16 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.17 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . 38
Exhibits
Exhibit A - - Schedule of Stockholders . . . . . . . . . . . . . . . A-1
Exhibit B - - Form of Promissory Note . . . . . . . . . . . . . . . . . B-1
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement") is entered into as
of February 25, 1998, by and among Universal Hospital Services, Inc., a
Minnesota corporation (the "Company"), those persons listed as the
Management Holders on the signature pages hereof (the "Management Holders")
and those persons listed as the JWC Holders on the signature pages hereof
(the "JWC Holders").
RECITALS
A. Upon consummation of the transactions contemplated by the
Agreement and Plan of Merger, dated as of November 25, 1997 by and among
J.W. Childs Equity Partners, L.P., a Delaware limited partnership, UHS
Acquisition Corp., a Minnesota corporation, and Universal Hospital
Services, Inc., a Minnesota corporation (the "Acquisition Agreement"), and
of certain related transactions to be consummated concurrently therewith,
the Stockholders (as hereinafter defined) will own (and may hereafter
acquire) certain shares of Common Stock (as hereinafter defined) and
certain options, warrants, securities and other rights to acquire from the
Company, by exercise, conversion, exchange or otherwise, shares of Common
Stock or securities convertible into Common Stock.
B. All of the Stockholders desire to enter into this Agreement for
the purpose of regulating certain aspects of the Stockholders'
relationships with one another and with the Company.
AGREEMENT
In consideration of the premises and the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties to this Agreement mutually agree as follows:
ARTICLE I
Definitions
1.1 Definitions. For the purposes of this Agreement, the
following terms shall be defined as follows:
The "1933 Act" shall mean the Securities Act of 1933, as amended,
or any successor federal statute thereto, and the rules and regulations of
the SEC promulgated thereunder, all as the same shall be in effect from
time to time.
The "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute thereto, and the rules and
regulations of the SEC promulgated thereunder, all as the same shall be in
effect from time to time.
An "Affiliate" of a specified Person shall mean a Person who,
directly or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with the specified Person and,
when used with respect to the Company or any Subsidiary of the Company,
shall include any holder of at least 5% of the capital stock, or any
officer or director, of the Company or any Subsidiary of the Company.
"Business Day" shall mean any day, other than a Saturday, Sunday or
a day on which commercial banking institutions in New York, New York or
Boston, Massachusetts are authorized or required by law to be closed.
"Call Event" shall have the meaning set forth in Section 2.2(a).
"Call Group" shall have the meaning set forth in Section 2.2(a).
"Call Notice" shall have the meaning set forth in Section 2.2(a).
"Call Option" shall have the meaning set forth in Section 2.2(a).
"Call Price" shall mean, as of any date, a per share price equal to
the remainder of (a) (i) the excess of (A) the product of 4.75 times
EBITDA, over (B) the aggregate amount of the Consolidated Indebtedness as
of the date of the most recently prepared consolidated balance sheet of the
Company and its Subsidiaries, divided by (ii) the aggregate number of
Common Stock Equivalents at the time outstanding, minus, (b) in the case of
Vested Options, the per share exercise price payable in connection with
such Vested Options.
"Call Securities" shall have the meaning set forth in Section
2.2(a).
"Cause" shall mean, with respect to any Management Holder, such
Management Holder's (a) continued failure, whether willful, intentional or
grossly negligent, after written notice, to perform substantially his
duties as an employee of the Company or any of its Subsidiaries, other than
as a result of a "Disability" as defined (if applicable) in any Employment
Agreement by and between the Company and the Management Holder; (b)
dishonesty in the performance of such Management Holder's duties as an
employee of the Company; (c) conviction or confession of an act or acts on
such Management Holder's part constituting a felony under the laws of the
United States or any state thereof; (d) other willful act or omission on
such Management Holder's part which is materially injurious to the
financial condition or business reputation of the Company or any of its
Subsidiaries; (e) breach of any duty or obligation of noncompetition or
confidentiality owed by such Management Holder to the Company or any of its
Subsidiaries; or (f) breach of any provision or covenant contained in any
employment agreement between such Management Holder and the Company or any
of its Subsidiaries, which breach shall not have been cured within sixty
(60) days after notice thereof from the Company to the Management Holder.
"Common Stock" shall mean shares of Common Stock, par value $.01
per share, of the Company.
"Common Stock Equivalents" shall mean, as of any date, (a) all
shares of Common Stock outstanding as of such date and (b) all shares of
Common Stock that may be acquired as of such date pursuant to Vested
Options.
The "Company" shall mean Universal Hospital Services, Inc., a
Minnesota corporation, and its successors and assigns.
"Company Call Period" shall have the meaning set forth in Section
2.2(a).
"Consolidated Indebtedness" shall mean, as of any date, the
aggregate amount outstanding, on a consolidated basis, of (a) all
indebtedness of the Company and its Subsidiaries for borrowed money (other
than intercompany debt), (b) those letters of credit that would be required
to be honored upon liquidation of the Company and/or its Subsidiaries (c)
all notes payable, drafts accepted and other obligations (including,
without limitation, any amounts representing deferred signing bonuses
payable to various employees of the Company in accordance with the terms of
their respective employment agreements with the Company and any Promissory
Note (as hereinafter defined) of the Company issued pursuant to Section
2.3(e) hereof) representing extensions of credit to the Company and/or its
Subsidiaries, whether or not representing obligations for borrowed money,
and (d) that portion of obligations with respect to capital leases which is
reflected as a liability on the most recently prepared consolidated balance
sheet of the Company and its Subsidiaries.
"Cost Price" shall mean, with respect to any Subject Securities,
the purchase price, if any, per share of Common Stock or per Vested Option,
as the case may be, paid to the Company for such Subject Securities by the
original holder thereof; provided, however, that in the event that any such
Subject Securities were obtained by the holder thereof pursuant to the
terms of an agreement in writing between JWC Equity Partners and/or UHS
Acquisition Corp., a Minnesota corporation, and the holder of such Subject
Securities, as referenced in the first clause of Section 1.6(a) or the
first clause of Section 1.8(a) of the Acquisition Agreement, then the Cost
Price of such Subject Securities shall be (a) in the case of Common Stock,
the Merger Consideration (as defined in the Acquisition Agreement), and (b)
in the case of Vested Options, the Option Consideration (as defined in the
Acquisition Agreement). If at any time the number of shares of Common
Stock outstanding is (a) increased by a stock dividend payable in shares of
Common Stock or by a subdivision or split-up of shares of Common Stock or
(b) decreased by a combination of shares of such Common Stock, following
the record date for such stock dividend, subdivision, split-up or
combination, the Cost Price per share of Common Stock shall be adjusted
upward or downward, as appropriate, to reflect the decrease or increase in
shares of Common Stock outstanding.
"Credit Agreement" means the Credit Agreement dated as of February
25, 1998, among the Company, the lenders party thereto in their capacities
as lenders thereunder and Bankers Trust Company, as administrative agent,
together with the related documents thereto (including, without limitation,
any guarantee agreements and security documents), in each case as such
agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including
any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available
borrowings thereunder or adding additional borrowers or guarantors
thereunder) all or any portion of the indebtedness under such agreement or
any successor or replacement agreement and whether by the same or any other
administrative agent, lender or group of lenders.
"Designated Employee" and "Designated Employees" shall have the
meanings set forth in Section 2.2(e).
"Dragalong Group" shall have the meaning set forth in Section
2.5(a).
"EBITDA" shall mean, as of any date for which it is to be
determined, the consolidated earnings of the Company and its Subsidiaries
before interest, taxes, depreciation and amortization and after deduction
of all operating expenses, all as calculated in accordance with generally
accepted accounting principles consistently applied, as reflected in the
Company's consolidated financial statements for the four (4) most recent
consecutive fiscal quarters of the Company ending at least 45 days prior to
such date.
"Equity Partners Agreement" shall have the meaning set forth in
Section 4.8.
"Executive Officers" shall mean David E. Dovenberg, Gerald L.
Brandt, Robert H. Braun, Randy C. Engen, Michael R. Johnson and Gary L.
Preston.
"Good Reason" shall mean, with respect to any Management Holder,
such Management Holder's resignation from his employment with the Company
or any of its Subsidiaries following and because of (a) the Company's
reducing or reassigning a material portion of the Management Holder's
duties under his employment agreement, if any, without Cause (b) in the
case of David E. Dovenberg, Gerald L. Brandt, Robert H. Braun, Michael R.
Johnson or Gary L. Preston, the Company's requiring such Executive Officer
to relocate outside the greater Minneapolis, Minnesota area; (c) in the
case of Randy C. Engen only, the Company's requiring Mr. Engen to relocate
outside the greater Madison, Wisconsin area; (d) a reduction of the
Management Holder's base salary other than in connection with an
across-the-board reduction of executive compensation imposed by the Board
of Directors of the Company in response to negative financial results or
other adverse circumstances affecting the Company; (e) an illness of the
Management Holder, that, in the good faith determination of the Board of
Directors of the Company, is likely to result in the Management Holder
becoming disabled and unable to continue his employment with the Company;
or (f) a material breach by the Company of any Employment Agreement by and
between the Company and the Management Holder.
"Holder" shall have the meaning set forth in Section 3.1.
"Indenture" shall mean the Indenture dated as of February 25, 1998
among Universal Hospital Services, Inc. and First Trust National
Association, as amended and in effect from time to time.
"Initiating Stockholder" shall have the meaning set forth in
Section 2.4(a).
"JWC Equity Partners" shall mean J.W. Childs Equity Partners, L.P.,
a Delaware limited partnership.
"JWC Holders" shall have the meaning set forth in the preamble
preceding the Recitals to this Agreement and shall also include Permitted
Transferees of the JWC Holders and other transferees of the JWC Holders
unless immediately prior to such Transfer such transferee was a Management
Holder.
"JWC Inc." shall mean J.W. Childs Associates, Inc., a Delaware
corporation.
"JWC Representative" shall have the meaning set forth in Section
4.8.
"Management Holders" shall have the meaning set forth in the
preamble preceding the Recitals to this Agreement and shall also include
(a) any director, officer or management employee of the Company or any of
its Subsidiaries (other than JWC Holders) who, with the written consent of
the Company and the JWC Representative, hereafter becomes a party to this
Agreement and (b) Permitted Transferees of the Management Holders, unless
immediately prior to such Transfer such transferee was a JWC Holder.
"Non-Initiating Management Holders" shall have the meaning set
forth in Section 2.3(c).
"Participating Notice" shall have the meaning set forth in Section
2.4(a).
"Participating Offerees" shall have the meaning set forth in
Section 2.4(a).
"Participating Securities" shall have the meaning set forth in
Section 2.4(a).
"Permitted Transfer" shall mean:
(a) a Transfer of any Subject Securities between any JWC Holder or
Management Holder who is a natural person and such Stockholder's spouse,
children, parents or siblings (whether natural, step or by adoption) or to
a trust solely for the benefit of one or more of any of such Persons;
provided that with respect to any such Transfer, the Stockholder retains,
as trustee or by some other means, the sole authority to vote such Subject
Securities (including any Common Stock that may be acquired pursuant to any
Vested Options);
(b) a Transfer of Subject Securities by a JWC holder to JWC Inc.
or to an officer, employee or consultant of JWC Inc. or to a corporation or
to a partnership (or other entity for collective investment, such as a
fund) which is (and continues to be) controlled by, controlling or under
common control with JWC Inc.;
(c) a Transfer of Subject Securities (i) by a Management Holder to
another Management Holder or (ii) from a JWC Holder to another JWC Holder;
(d) a Transfer of Subject Securities between any Stockholder who
is a natural person and such Stockholder's guardian or conservator; or
(e) (i) a bona fide pledge of Subject Securities by a JWC Holder
to a bank or financial institution or (ii) any pledge existing at the date
hereof of Subject Securities by a Management Holder.
No permitted Transfer shall be effective unless and until the transferee of
the Subject Securities so transferred executes and delivers to the company
an executed counterpart of this Agreement in accordance with Section 4.13
hereof.
"Permitted Transferee" shall mean any Person who shall have
acquired and who shall hold any Subject Securities pursuant to a Permitted
Transfer.
"Person" means an individual, corporation, partnership, limited
liability company, trust, unincorporated association, government or any
agency or political subdivision thereof, or other entity.
"Promissory Note" shall have the meaning set forth in Section
2.3(e).
"Public Float Date" shall mean the first date on which shares of
Common Stock shall have been sold pursuant to one or more Public Offerings
in which the aggregate proceeds (before deducting underwriter discounts and
commissions) to the Company and the selling stockholders, if any, of such
shares equal or exceed $25 million.
A "Public Offering" shall mean the completion of a sale of shares
of Common Stock pursuant to a registration statement which has become
effective under the 1933 Act, excluding registration statements on Form S-4
or Form S-8 or similar limited purpose forms.
"Put Event" shall have the meaning set forth in Section 2.3(a).
"Put Notice" shall have the meaning set forth in Section 2.3(a).
"Put Option" shall have the meaning set forth in Section 2.3(a).
"Put Period" shall have the meaning set forth in Section 2.3(a).
"Put Price" shall mean, as of any date, a per share price equal to
the remainder of (a) (i) the excess of (A) the product of 4.5 times EBITDA,
over (B) the aggregate amount of the Consolidated Indebtedness as of the
date of the most recently prepared consolidated balance sheet of the
Company and its Subsidiaries, divided by (ii) the aggregate number of
Common Stock Equivalents at the time outstanding, minus, (b) in the case of
Vested Options, the per share exercise price payable in connection with
such Vested Options.
"Put Securities" shall have the meaning set forth in Section
2.3(a).
"Registrable Securities" shall mean, as of any date, with respect
to any Stockholder, (a) all shares of Common Stock held by such Stockholder
as of such date and (b) all shares of Common Stock that may be acquired as
of such date by such Stockholder upon exercise of Vested Options; provided
that, as to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a registration statement (other
than a registration statement on Form S-8) with respect to the sale or
exchange of such securities shall have become effective under the 1933 Act
and such securities shall have been disposed of in accordance with such
registration statement, (ii) a registration statement on Form S-8 with
respect to such securities shall have become effective under the 1933 Act,
(iii) such securities shall have been sold or acquired under a Rule 144
Transaction, or (iv) such securities have ceased to be outstanding.
"Rule 144 Transaction" means a transfer of Common Stock (a)
complying with Rule 144 under the 1933 Act as such rule or a successor
thereto is in effect on the date of such transfer (but only a sale pursuant
to a "brokers transaction" as defined in clauses (i) and (ii) of paragraph
(g) of Rule 144 as in effect on the date hereof) and (b) occurring at a
time when the Common Stock is registered pursuant to Section 12 of the 1934
Act.
"Sale Request" shall have the meaning set forth in Section 2.5(a).
"Schedule of Stockholders" shall refer to the Schedule of
Stockholders attached hereto as Exhibit A as from time to time amended
pursuant to Section 4.2.
"SEC" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the 1933 Act.
"Stockholder" shall mean any party hereto other than the Company,
including any Person who hereafter becomes a party to this Agreement
pursuant to Section 4.13 hereof.
"Stockholder Group" shall mean any of (a) the JWC Holders taken as
a group or (b) the Management Holders taken as a group. The Company shall
not in any case be deemed to be a member of any Stockholder Group (whether
or not the Company holds or repurchases any Common Stock Equivalents).
"Subject Securities" shall mean any Common Stock or Vested Options
now or hereafter held by any Stockholder.
"Subsidiary" with respect to any Person (the "parent") shall mean
any Person of which such parent, at the time in respect of which such term
is used, (a) owns directly or indirectly more than fifty percent (50%) of
the equity or beneficial interest, on a consolidated basis, or (b) owns
directly or controls with power to vote, indirectly through one or more
Subsidiaries, shares of capital stock or beneficial interest having the
power to cast at least a majority of the votes entitled to be cast for the
election of directors, trustees, managers or other officials having powers
analogous to those of directors of a corporation. Unless otherwise
specifically indicated, when used herein the term Subsidiary shall refer to
a direct or indirect Subsidiary of the Company.
"Third Party" means any Person other than the Company.
"Transfer" shall mean to transfer, sell, assign, pledge,
hypothecate, give, grant or create a security interest in or lien on, place
in trust (voting or otherwise), assign an interest in or in any other way
encumber or dispose of, directly or indirectly and whether or not by
operation of law or for value, any of the Subject Securities.
"Vested Options" shall mean, as of any date, options, warrants,
securities and other rights to acquire from the Company, by exercise,
conversion, exchange or otherwise, shares of Common Stock or securities
convertible into Common Stock, but only to the extent that such options,
warrants, securities and other rights are both, as of such date, (a) vested
under the terms thereof or under any plan, agreement or instrument pursuant
to which such options, warrants, securities and other rights were issued,
and (b) so exchangeable, exercisable or convertible.
ARTICLE II
Transfer Provisions
2.1 Restrictions on Transfers.
(a) Without the prior written consent of the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders, no
Stockholder shall Transfer all or any part of the Subject Securities at the
time held by such Stockholder to any Person.
(b) The provisions of this Section 2.1 shall not apply to a
Transfer which is (i) a Permitted Transfer, (ii) pursuant to a Public
Offering, or (iii) after a Public Offering, pursuant to a Rule 144
Transaction.
2.2 Call by the Company.
(a) (i) If the employment of a Management Holder by the Company
or any of its Subsidiaries shall terminate (a "Call Event") for any
reason prior to the Public Float Date, then, subject to Section
2.2(a)(ii), the Company shall have the right to purchase (the "Call
Option"), by delivery of a written notice (the "Call Notice") to such
terminated Management Holder (with a copy thereof to the JWC
Representative) no later than 90 days after the date of the Call Event
(the "Company Call Period"), and such Management Holder and such
Management Holder's direct and indirect transferees (a "Call Group")
shall be required to sell, all or any portion of the Subject
Securities which are held by the members of the Call Group on the date
of such Call Event that (A) were originally issued by the Company to
such Management Holder, and (B) were owned by such Management Holder
or his direct or indirect transferees on the date of the Call Event
(such Subject Securities to be purchased hereunder being referred to
collectively as the "Call Securities") at, except as otherwise
provided in Section 2.2(a)(ii) hereof, a price per share equal to the
greater of (x) the Call Price of such Call Securities as of the date
of the Call Event and (y) the Cost Price of such Call Securities.
(ii) Notwithstanding anything set forth in this
Section 2.2 to the contrary, in the event a Management Holder resigns
without Good Reason from his employment with the Company or any of its
Subsidiaries, or his employment is terminated for Cause by the Company
or a Subsidiary, then the purchase price per share payable for the
Call Securities shall be an amount equal to the Cost Price of such
Call Securities.
(b) The closing of any purchase of Call Securities by the Company
from a Call Group pursuant to this Section 2.2 shall take place at the
principal office of the Company on such date within 30 days after the
expiration of the Company Call Period with respect to such Call Group as
the Company shall specify to the members of such Call Group in writing. At
such closing, the members of the Call Group shall deliver, against payment
for the Call Securities in accordance with Section 2.2(f) hereof, to the
Company certificates and/or other instruments representing, together with
stock or other appropriate powers duly endorsed with respect to, the Call
Securities, free and clear of all claims, liens and encumbrances. All of
the foregoing deliveries will be deemed to be made simultaneously and none
shall be deemed completed until all have been completed.
(c) Notwithstanding anything set forth in this Section 2.2 to the
contrary, prior to the exercise by the Company of its Call Option to
purchase Call Securities pursuant to this Section 2.2, one or more
prospective or existing employees of the Company or any Subsidiary may be
designated by the Chief Executive Officer of the Company, subject to the
approval of the Board of Directors of the Company (individually, a
"Designated Employee" and, collectively, "Designated Employees"), who shall
have the right, but not the obligation, to exercise the Call Option and to
acquire, in lieu of the Company, some or all (as determined by the Company)
of the Call Securities that the Company is entitled to purchase from the
Call Group hereunder, for cash and otherwise on the same terms and
conditions as set forth in Section 2.2(b) which apply to the repurchase of
Call Securities by the Company. Concurrently with any such purchase of
Call Securities by any such Designated Employee, such Designated Employee
shall execute a counterpart of this Agreement whereupon such Designated
Employee shall be deemed a "Management Holder" and shall have the same
rights and be bound by the same obligations as the other Management Holders
hereunder. Payment under this Section 2.2(c) and under Section 2.2(d)
below shall be made by a certified check or checks payable to the
respective members of the Call Group, in an amount equal to the purchase
price for such Call Securities under Section 2.2(a) hereof.
(d) If and to the extent that, subsequent to a Call Event, (i)
neither the Company nor any Designated Employee elects to exercise the Call
Option by delivery of a Call Notice prior to the expiration of the Company
Call Period with respect to such Management Holder in accordance with this
Section 2.2 and (ii) if applicable, the Management Holder has not delivered
a Put Notice to the Company prior to the expiration of the Put Period with
respect to such Management Holder in accordance with Section 2.3(a), then
the JWC Holders, pro rata in accordance with the respective Common Stock
Equivalents at the time held by the JWC Holders so exercising their rights
under this Section 2.2(d), may exercise the Call Option in lieu of the
Company and such Designated Employees by delivery of a Call Notice to such
terminated Management Holder no later than 30 days after the expiration of
the Company Call Period with respect to such Management Holder. The
closing of any purchase of Call Securities by such JWC Holders shall take
place on such date within 60 days after the expiration of the Company Call
Period with respect to such Management Holder as the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders so
exercising their rights under this Section 2.2(d) shall specify to the
members of such Call Group in writing, provided that if any such JWC Holder
fails to purchase all or a portion of the number of Call Securities which
such JWC Holder may purchase pursuant to this Section 2.2(d), then the
other JWC Holders so exercising their rights under this Section 2.2(d)
shall be entitled to purchase such Call Securities (pro rata based upon
their respective Common Stock Equivalents at the time held, or as otherwise
agreed, by such JWC Holders).
(e) If none of the Company, any Designated Employees or any JWC
Holders elects to exercise the Call Option and deliver a Call Notice within
120 days after the date of the Call Event, then the Call Option provided
for in this Section 2.2 shall terminate, but such Management Holder and his
direct and indirect transferees shall continue to hold such Call Securities
pursuant to all of the other provisions of this Agreement, including
Sections 2.1 and 2.5 hereof.
(f) At each closing for the purchase of Call Securities to be
purchased pursuant to Section 2.2(a) above, the Company shall repurchase
such Call Securities for cash (by delivery of a certified check or checks
payable to the Management Holder or his direct or indirect transferees, as
the case may be). If an agreement or indenture governing indebtedness for
borrowed money of the Company or any Subsidiary (including, without
limitation, the Credit Agreement and the Indenture) contains a restriction
on the amount of Call Securities that can be repurchased from any
terminated Management Holder or his direct or indirect transferees in any
given fiscal year of the Company, the maximum amount which the Company
shall be permitted to pay in such fiscal year for the repurchase of Call
Securities pursuant to Section 2.2 hereof from a terminated Management
Holder or his transferees shall be, in the aggregate, (x) the maximum
amount permitted by such agreement or indenture for the fiscal year of the
Company in which such Management Holder terminates his employment with the
Company, less (y) the aggregate amount previously paid by the Company to
repurchase Call Securities from any other Management Holder whose
employment with the Company terminated in such fiscal year.
2.3 Put by Management Holders.
(a) (i) If the employment of any Management Holder by the
Company or any Subsidiary shall be terminated for any reason (other
than for Cause or upon a resignation without Good Reason) prior to the
Public Float Date (any such termination being hereinafter referred to
as a "Put Event"), any such terminated or resigning Management Holder
and his direct and indirect transferees shall have the right (the "Put
Option"), subject to Section 2.3(a)(ii) below, by delivery of one or
more written notices to the Company (with copies to each Non-
Initiating Management Holder and JWC Holder) (the "Put Notice") during
the 30-day period beginning on the date of the Put Event (the "Put
Period"), to cause the Company to purchase, and the Company shall
purchase, all of the Subject Securities that (x) were originally
issued by the Company to such Management Holder, and (y) were owned by
such Management Holder or his direct or indirect transferees on the
date of the Put Event (such Subject Securities to be purchased
hereunder being referred to collectively as the "Put Securities"), at
the Put Price of such Put Securities as of the date of the Put Event.
Neither termination for Cause nor resignation without Good Reason
shall constitute a Put Event.
(ii) If and to the extent that, subsequent to a
Put Event and prior to the expiration of the Put Period with respect
to such Management Holder, the Management Holder and his direct and
indirect transferees do not elect to exercise the Put Option by
delivery of a Put Notice to the Company in accordance with this
Section 2.3, all of the Management Holder's and such transferees'
rights to sell Put Securities to the Company pursuant to this Section
2.3 shall terminate.
(b) The closing of the purchase of any Put Securities from a
Management Holder or his direct and indirect transferees pursuant to this
Section 2.3 shall take place at the principal office of the Company on such
date within 30 days after the expiration of the Put Period with respect to
such Management Holder as the Company shall specify to such Management
Holder and his direct and indirect transferees in writing. At any closing
pursuant to this Section 2.3, the Company shall deliver the payment for the
Put Securities in accordance with Section 2.3(e) hereof against delivery of
certificates and/or other instruments representing, together with stock or
other appropriate powers duly endorsed with respect to, the Put Securities
specified in the Put Notice, free and clear of all claims, liens and
encumbrances.
(c) The Company shall have the right, but not in any case the
obligation, to satisfy its obligations pursuant to this Section 2.3 by
allowing the Management Holders other than the Management Holder and his
direct and indirect transferees, if any, exercising his rights under this
Section 2.3 (the "Non-Initiating Management Holders"), to purchase all or
any portion of the Put Securities, pro rata in accordance with the Common
Stock Equivalents at the time held by such Non-Initiating Management
Holders (with rights to over-allotment to the other Non-Initiating
Management Holders should any Non-Initiating Management Holder choose to
purchase none (or less than its pro rata share) of such Put Securities
under this Section 2.3(c)). Each Non-Initiating Management Holder shall,
within 30 days after the receipt of the Put Notice by it, notify the
Company if such Non-Initiating Management Holder wishes to purchase all or
any portion of its pro rata share of the Put Securities at the Put Price.
At the closing of the purchase of the Put Securities in accordance with
Section 2.3(b) above, each Non-Initiating Management Holder purchasing Put
Securities shall deliver a certified check or checks payable to the
Management Holder or his direct or indirect transferees, as the case may
be, selling Put Securities as specified in the Put Notice, in an aggregate
amount equal to the Put Price for such Put Securities, against delivery of
certificates and/or other instruments representing the Put Securities to be
purchased by it in accordance with this Section 2.3(c), free and clear of
all claims, liens and encumbrances, together with stock or other
appropriate powers therefor duly endorsed.
(d) If and to the extent that, subsequent to a Put Event, the Non-
Initiating Management Holders elect to purchase fewer than all of the Put
Securities by delivery of written notice to the Company pursuant to Section
2.3(c), the Company shall have the right, but not in any case the
obligation, to satisfy its obligations pursuant to this Section 2.3 by
allowing the JWC Holders to purchase all or any portion of the Put
Securities, pro rata in accordance with the Common Stock Equivalents at the
time held by such JWC Holders (with rights to over-allotment to the JWC
Holders should any JWC Holder choose to purchase none (or less than its pro
rata share) of such Put Securities under this Section 2.3(c)). The
procedures by which such JWC Holders shall notify the Company and purchase
the Put Securities shall be identical in all respects to the procedures
provided for in Section 2.3(c) for the Non-Initiating Management Holders.
(e) Notwithstanding anything to the contrary set forth herein, the
Company shall not be required to purchase Put Securities pursuant to this
Section 2.3 (i) after the Public Float Date, (ii) if, after giving effect
to such purchase, the Company would be (or with the lapse of time or the
giving of notice would be) in default under any of the agreements and
indentures governing indebtedness for borrowed money of the Company or any
Subsidiary (including, without limitation, the Credit Agreement and the
Indenture) or (iii) if the Company does not at the time have sufficient
funds legally available for such purchase.
(f) At each closing for the purchase of Put Securities to be
purchased pursuant to Section 2.3(a)(i) above, such Subject Securities
shall, subject to Section 2.3(f) below, be purchased as follows: to the
extent (and only to the extent) that (i) funds are legally available for
the repurchase of equity securities of the Company and (ii) the Company is
permitted to repurchase for cash equity securities of terminated employees
pursuant to the agreements and indentures governing indebtedness for
borrowed money of the Company or any Subsidiary, the Company shall
repurchase such Put Securities for cash (by delivery of a certified check
or checks payable to the Management Holder or his direct or indirect
transferees, as the case may be). If the Company is unable pursuant to the
foregoing provisions of this Section 2.3(f) to purchase for cash any Put
Securities from any terminated Management Holder or his direct or indirect
transferees, and only so long as the incurrence of such indebtedness is
permitted pursuant to the terms of the agreements and indentures referred
to in clause (ii) above, the purchase price therefor shall be paid by
delivery of a subordinated promissory note (each a "Promissory Note")
substantially in the form attached hereto as Exhibit B in an original
principal amount equal to the purchase price of such Put Securities not so
paid in cash. If an agreement or indenture referred to in clause (ii)
above contains a restriction on the amount of Put Securities that can be
repurchased from any terminated Management Holder or his direct or indirect
transferees in any given fiscal year of the Company, the maximum amount
which the Company shall be required to apply to the repurchase of Put
Securities pursuant to this Section 2.3 in such fiscal year shall be, in
the aggregate, (x) the maximum amount permitted by such agreement or
indenture for the fiscal year of the Company in which such Management
Holder terminates his employment with the Company, less (y) the aggregate
amount previously paid by the Company to repurchase Put Securities from any
other Management Holder whose employment with the Company terminated in
such fiscal year.
(g) Any amounts which would otherwise be available with respect to
any fiscal year of the Company for the repurchase of Put Securities and
Call Securities shall first be applied to prepayment of outstanding
Promissory Notes issued under Section 2.3(e) and any payment-in-kind
Promissory Notes issued in payment of interest, in the order in which such
Promissory Notes were issued, until all such Promissory Notes have been
prepaid in accordance herewith. Prepayments shall be applied first to
accrued and unpaid interest and second to principal.
2.4 Tagalong. Except as provided in Section 2.2 or 2.3 hereof, no
Stockholder shall Transfer (in one or a series of transactions within any
24-month period) any Subject Securities representing more than ten percent
(10%) of the Common Stock Equivalents held by such Stockholder on the date
of execution of this Agreement by such stockholder, to a Third Party
without complying with the terms and conditions set forth in this Section
2.4, as applicable; provided that this Section 2.4 shall not in any way
limit or affect the restrictions of Section 2.1, and any Stockholder may be
an Initiating Stockholder (as defined below) under this Section 2.4 only if
such Transfer is permitted under Section 2.1:
(a) Any Stockholder (the "Initiating Stockholder") desiring to
Transfer such Subject Securities shall give not less than 10 days' prior
written notice of such intended Transfer to each other Stockholder
("Participating Offerees") and to the Company. Such notice (the
"Participation Notice") shall set forth the terms and conditions of such
proposed Transfer, including the name of the prospective transferee, the
number of Common Stock Equivalents proposed to be transferred (the
"Participation Securities") by the Initiating Stockholder, the purchase
price per share proposed to be paid therefor and the payment terms and type
of Transfer to be effectuated. Within 15 days following the delivery of
the Participation Notice by the Initiating Stockholder to each
Participating Offeree and to the Company, each Participating Offeree shall,
by notice in writing to the Initiating Stockholder and to the Company, have
the opportunity and right to sell to the purchasers in such proposed
Transfer (upon the same terms and conditions as the Initiating Stockholder)
up to that number of Subject Securities representing Common Stock
Equivalents at the time held by such Participating Offeree as shall equal
the product of (i) a fraction, the numerator of which is the number of
Common Stock Equivalents owned by such Participating Offeree as of the date
of such proposed Transfer and the denominator of which is the aggregate
number of Common Stock Equivalents owned as of the date of such
Participation Notice by each Initiating Stockholder and by all
Participating Offerees so electing to sell Subject Securities pursuant to
this Section 2.4(a), multiplied by (ii) the number of Participation
Securities. The amount of Participation Securities to be sold by any
Initiating Stockholder shall be reduced to the extent necessary to provide
for such sales of Subject Securities by Participating Offerees.
(b) At the closing of any proposed Transfer in respect of which a
Participation Notice has been delivered, the Initiating Stockholder,
together with all Participating Offerees so electing to sell Subject
Securities pursuant to this Section 2.4(a) shall deliver to the proposed
transferee certificates and/or other instruments representing the Subject
Securities to be sold, free and clear of all liens and encumbrances,
together with stock or other appropriate powers duly endorsed therefor, and
shall receive in exchange therefor the consideration to be paid or
delivered by the proposed transferee in respect of such Subject Securities
as described in the Participation Notice.
(c) The provisions of this Section 2.4 shall not apply to (i) any
Transfer pursuant to a Public Offering, (ii) following a Public Offering,
pursuant to a Rule 144 Transaction or (iii) any Transfers pursuant to
Section 2.5 hereof.
2.5 Dragalong.
(a) If Stockholders holding at least a majority of Common Stock
Equivalents at the time held by the Stockholders (the "Dragalong Group")
determine to sell or exchange (in a sale or exchange of securities of the
Company or in a merger, consolidation or other business combination or any
similar transaction) in one or a series of bona fide arms-length
transactions to an unrelated and unaffiliated Third party fifty percent
(50%) or more of the Subject Securities at the time held by them (the
actual percentage of the total number of Subject Securities held by the
Dragalong Group represented by the Subject Securities determined to be so
sold or exchanged being referred to as the "Dragalong Percentage"), then,
upon 30 days' written notice from the Dragalong Group to the other
Stockholders, which notice shall include reasonable details of the proposed
sale or exchange including the proposed time and place of closing and the
consideration to be received by the Dragalong Group (such notice being
referred to as the "Sale Request"), each other Stockholder shall be
obligated to, and shall, (i) sell, transfer and deliver, or cause to be
sold, transferred and delivered, to such Third Party the Dragalong
Percentage of the Subject Securities at the time held by such Stockholder,
in the same transaction at the closing thereof and shall (A) execute and
deliver such agreements for the purchase of such Subject Securities and
other agreements, instruments and certificates as the members of the
Dragalong Group shall execute and deliver in connection with such proposed
transaction and (B) deliver certificates and/or other instruments
representing all of such Stockholder's Subject Securities, together with
stock or other appropriate powers therefor duly executed, at the closing,
free and clear of all claims, liens and encumbrances), and each Stockholder
shall receive upon the closing of such transaction the same per share
consideration to be paid or delivered by the proposed transferee in respect
of such Stockholder's Subject Securities as shall be payable to the members
of the Dragalong Group in respect of their Subject Securities, and (ii) if
stockholder approval of the transaction is required, vote such
Stockholder's Common Stock in favor thereof.
(b) The provisions of this Section 2.5 shall not apply to any
Transfer (i) pursuant to a Public Offering or (ii) pursuant to a Permitted
Transfer.
2.6 [RESERVED]
2.7 Restrictions on Other Agreements. Except for JWC Holders as
provided in Sections 4.8 and 4.9, no Stockholder shall grant any proxy or
enter into or agree to be bound by any voting trust with respect to any
Subject Securities nor shall any Stockholder enter into any stockholders
agreements or arrangements of any kind with any Person with respect to any
of the Subject Securities on terms which conflict with the provisions of
this Agreement (whether or not such agreements and arrangements are with
other Stockholders or holders of Common Stock Equivalents that are not
parties to this Agreement), including but not limited to, agreements or
arrangements with respect to the acquisition, disposition or voting of
Subject Securities inconsistent herewith.
2.8 Stockholder Action. Each Stockholder agrees that, in such
Stockholder's capacity as a stockholder of the Company, such Stockholder
shall, pursuant to Section 2.5 hereof, vote, or grant proxies relating to
the Common Stock at the time held by such Stockholder to vote, all of such
Stockholder's Common Stock in favor of any sale or exchange of securities
of the Company or any merger, consolidation or other business combination
or any similar transaction pursuant to Section 2.5 hereof if, and to the
extent that, approval of the Company's stockholders is required in order to
effect such transaction.
ARTICLE III
Registration Rights
3.1 General. For purposes of this Article III: (a) the terms
"register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement on Form S-1, S-2
or S-3 in compliance with the 1933 Act and the declaration or ordering of
effectiveness of such registration statement; and (b) the term "Holder"
means any Stockholder.
3.2 Piggyback Registration. If, at any time, the Company
determines to register any Public Offering of any of the Common Stock
Equivalents for the account of any JWC Holder under the 1933 Act in
connection with the public offering of such securities, the Company shall,
at each such time, promptly give each Holder written notice of such
determination no later than 30 days before its intended filing with the
SEC. Upon the written request of any Holder received by the Company within
10 days after the giving of any such notice by the Company, the Company
shall use its best efforts to cause to be registered under the 1933 Act all
of the Registrable Securities of such Holder that such Holder has requested
be registered. If the total amount of Registrable Securities that are to
be included by the Company in such registration exceeds the amount of
securities that the underwriters reasonably believe compatible with the
success of the offering, then the Company will include in such registration
only the number of securities which in the opinion of such underwriters can
be sold, in the following order:
(i) first, all securities of the Company to be
offered for the account of the Company; and
(ii) second, the Registrable Securities, pro rata
based on the number of Registrable Securities held by each Holder
seeking to have Registrable Securities included in such registration.
3.3 Obligations of the Company.
(a) Whenever required under Section 3.2 hereof to use its best
efforts to effect the registration of any Registrable Securities, the
Company shall:
(i) prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become and remain
effective, including, without limitation, filing of post-effective
amendments and supplements to any registration statement or prospectus
necessary to keep the registration statement current;
(ii) as expeditiously as reasonably possible,
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement and to keep each
registration and qualification under this Agreement effective (and in
compliance with the 1933 Act) by such actions as may be necessary or
appropriate for a period of 90 days after the effective date of such
registration statement (unless all securities covered by such
registration statement are sooner disposed of), all as requested by
such Holder or Holders;
(iii) as expeditiously as reasonably possible
furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
Registrable Securities owned by them in accordance with the plan of
distribution provided for in such registration statement;
(iv) as expeditiously as reasonably possible use
its best efforts to register and qualify the securities covered by
such registration statement under such securities or "blue sky" laws
of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement;
provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such jurisdiction;
and further provided that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any
jurisdiction in which the securities shall be qualified shall require
that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling stockholders, then
such expenses shall be payable by selling stockholders pro rata, to
the extent required by such jurisdiction;
(v) notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act, upon
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any
such seller or Holder promptly prepare to furnish to such seller or
Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made;
(vi) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least 12 months but not more than
18 months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section ll(a) of the 1933
Act, and will furnish to each such seller at least 2 Business Days
prior to the filing thereof a copy of any amendment or supplement to
such registration statement or prospectus and shall not file any
thereof to which any such seller shall have reasonably objected,
except to the extent required by law, on the grounds that such
amendment or supplement does not comply in all material respects with
the requirements of the 1933 Act or of the rules or regulations
thereunder;
(vii) provide and cause to be maintained a
transfer agent and registrar for all Registrable Securities covered by
such registration statement from and after a date not later than the
effective date of such registration statement; and
(viii) use its best efforts to list all
Registrable Securities covered by such registration statement on any
securities exchange on which any class of Registrable Securities is
then listed.
(b) The Company will furnish to each Holder on whose behalf
Registrable Securities have been registered pursuant to this Agreement a
signed counterpart, addressed to such Holder, of (i) an opinion of counsel
for the Company dated the effective date of such registration statement,
and (ii) a so-called "cold comfort" letter signed by the independent public
accountants who have certified the Company's financial statements included
in such registration statement, and such opinion of counsel and
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to underwriters in connection
with underwritten public offerings of securities.
(c) If the Company at any time proposes to register any of its
securities under the Securities Act subject to the piggyback registration
rights of the Holders under Section 3.2 hereof, and such securities are to
be distributed by or through one or more underwriters, then the Company
will make reasonable efforts, if requested by any Holder of Registrable
Securities who requests registration of Registrable Securities in
connection therewith pursuant to Section 3.2 hereof, to arrange for such
underwriters to include such Registrable Securities among the securities to
be distributed by or through such underwriters.
(d) In connection with the preparation and filing of each
registration statement registering Registrable Securities under this
Agreement, the Company will give the Holders of Registrable Securities on
whose behalf such Registrable Securities are to be so registered and their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the SEC, and each
amendment thereof or supplement thereto, and will give each of them such
access to its books and records and such opportunities to discuss the
business of the Company with its officers, its counsel and the independent
public accountants who have certified its financial statements, as shall be
reasonably necessary, in the opinion of such Holders or such underwriters
or their respective counsel, in order to conduct a reasonable and diligent
investigation within the meaning of the 1933 Act. Without limiting the
foregoing, each registration statement, prospectus, amendment, supplement
or any other document filed with respect to a registration under this
Agreement shall be subject to review and reasonable approval by the Holders
registering Registrable Securities in such registration and by their
counsel.
3.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article III
that each Holder shall furnish to the Company such information regarding
such Holder, the Registrable Securities held by such Holder, and the
intended method of disposition of such securities as the Company shall
reasonably request and as shall be required in connection with the action
to be taken by the Company.
3.5 Expenses of Registration. All expenses incurred in connection
with a registration pursuant to Section 3.2 hereof (excluding underwriters'
discounts and commissions, which shall be borne by the sellers), including
without limitation all registration and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders
(which counsel shall be selected by the holders of a majority in interest
of such Holders based on the number of Registrable Securities included in
such registration) shall be borne by the Company.
3.6 Underwriting Requirements. In connection with any
underwritten registration of Registrable Securities under this Agreement,
the Company shall, if requested by the Company or the underwriters for any
Registrable Securities included in such registration, enter into an
underwriting agreement with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company and
such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, provisions relating to indemnification and
contribution. The Holders on whose behalf Registrable Securities are to be
distributed by such underwriters shall be parties to any such underwriting
agreement, and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall be also made to and for the benefit of such Holders of
Registrable Securities. Such underwriting agreement shall comply with
Section 3.7.
3.7 Indemnification. In the event any Registrable Securities are
included in a registration statement pursuant to this Article III:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder joining in a registration, any
underwriter (as defined in the 1933 Act) for it, and each Person, if any,
who controls such Holder or such underwriter within the meaning of the 1933
Act, from and against any losses, claims, damages, expenses (including
reasonable attorneys' fees and expenses and reasonable costs of
investigation) or liabilities, joint or several, to which they or any of
them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages, expenses or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based on any untrue or alleged untrue statement of any material
fact contained in such registration statement including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein not misleading in
light of the circumstances under which they were made or arise out of any
violation by the Company of any rule or regulation promulgated under the
1933 Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration; provided
that the indemnity agreement contained in this Section 3.7(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of
the Company (which consent shall not be unreasonably withheld), nor shall
the Company be liable to anyone for any such loss claim, damage, liability
or action to the extent that it arises out of or is based upon an untrue
statement or omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements
thereto in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by such
Holder, underwriter or control person. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
such Holder, underwriter or control person and shall survive the transfer
of such securities by such Holder.
(b) To the fullest extent permitted by law, each Holder joining in
a registration shall indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement,
each Person, if any, who controls the Company within the meaning of the
1933 Act, and each agent and any underwriter for the Company and any Person
who controls any such agent or underwriter and each other Holder and any
Person who controls such Holder (within the meaning of the 1933 Act)
against any losses, claims, damages or liabilities to which the Company or
any such director, officer, control person, agent, underwriter or other
Holder may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
an untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of
or are based upon the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in such registration statement,
preliminary or final prospectus, or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished by such
Holder with respect to such Holder expressly for use in connection with
such registration, and such Holder shall reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
control person, agent, underwriter or other Holder in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided that the indemnity obligation of each such Holder
hereunder shall be limited to and shall not exceed the proceeds actually
received by such Holder upon a sale of Registrable Securities pursuant to a
registration statement hereunder; provided, further that the indemnity
agreement contained in this Section 3.7(b) shall not apply to amounts paid
in settlements effected without the consent of such Holder (which consent
shall not be unreasonably withheld). Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer, Holder, underwriter or control
person and shall survive the transfer of such securities by such Holder.
(c) Any person seeking indemnification under this Section 3.7 will
(i) give prompt notice to the indemnifying party of any claim with respect
to which it seeks indemnification, but the failure to give such notice will
not affect the right to indemnification hereunder, (except to the extent
the indemnifying party is materially prejudiced by such failure) and (ii)
unless in such indemnified party's reasonable judgment a conflict of
interest may exist between such indemnified and indemnifying parties with
respect to such claim, permit such indemnifying party, and other
indemnifying parties similarly situated, jointly to assume the defense of
such claim with counsel reasonably satisfactory to the parties. In the
event that the indemnifying parties cannot mutually agree as to the
selection of counsel, each indemnifying party may retain separate counsel
to act on its behalf and at its expense. The indemnified party shall in
all events be entitled to participate in such defense at its expense
through its own counsel. If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such consent
will not be unreasonably withheld). No indemnifying party will consent to
entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect of such
claim or litigation. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party
shall be obligated to pay the reasonable fees and expenses of such
additional counsel.
(d) If for any reason the foregoing indemnification is unavailable
to any party or insufficient to hold it harmless as and to the extent
contemplated by the preceding paragraphs of this Section 3.7, then each
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage expense or
liability in such proportion as is appropriate to reflect the relative
benefits received by the applicable indemnifying party, on the one hand,
and the applicable indemnified party, as the case may be, on the other
hand, and also the relative fault of the applicable indemnifying party and
any applicable indemnified party, as the case may be, as well as any other
relevant equitable considerations.
3.8 Rule 144. With a view to making available to the Holders and
their transferees the benefits of Rule 144 and Rule 144A under the 1933 Act
and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without
registration, the Company agrees to use its best efforts to take all action
that may be required as a condition to the availability after a public
offering of Rule 144, Rule 144A or such other rules or regulations,
including without limitation to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to 90 days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Company;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act
(including, without limitation, under Section 13 or Section 15 of the 1934
Act); and
(c) furnish to any Holder forthwith upon request a written
statement by the Company that it has complied with the reporting
requirements of Rule 144 (at any time after 90 days after the effective
date of said first registration statement filed by the Company), and of the
1933 Act and the 1934 Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as may be reasonably requested in availing any Holder of any rule
or regulation of the SEC permitting the selling of any such securities
without registration.
3.9 Market Stand-Off Agreement. Each Stockholder agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company at the time held by such Stockholder (other than
securities included in the applicable registration statement or shares
purchased in the public market after the effective date of registration) or
any interest or future interest therein during such period (not to exceed
180 days) as is mutually acceptable to a majority in interest of
Stockholders and the underwriter following the effective date of each
registration statement of the Company filed under the 1933 Act which
includes securities of the Company to be sold to the public in an
underwritten offer.
ARTICLE IV
Certain Miscellaneous Other Provisions
4.1 Remedies. The parties to this Agreement acknowledge and agree
that the covenants of the Company and the Stockholders set forth in this
Agreement may be enforced in equity by a decree requiring specific
performance. Without limiting the foregoing, if any dispute arises
concerning the sale or other disposition of any of the securities of the
Company subject to this Agreement or concerning any other provisions hereof
or the obligations of the parties hereunder, the parties to this Agreement
agree that an injunction may be issued in connection therewith. Such
remedies shall be cumulative and non-exclusive and shall be in addition to
any other rights and remedies the parties may have under this Agreement or
otherwise.
4.2 Entire Agreement; Amendment; Termination.
(a) This Agreement, together with the Acquisition Agreement, sets
forth the entire understanding of the parties, and supersedes all prior
agreements and all other arrangements and communications, whether oral or
written, with respect to the subject matter hereof.
(b) The Schedule of Stockholders may be amended in writing by the
Company to reflect changes in the composition of the Stockholders and
changes in their addresses or telecopy numbers that may occur from time to
time as a result of Permitted Transfers or Transfers permitted under
Article II hereof. Amendments to the Schedule of Stockholders reflecting
Permitted Transfers or Transfers permitted under Article II hereof shall
become effective when the amended Schedule of Stockholders, and a copy of
the Agreement as executed by any new transferee in accordance with Section
4.14, are filed with the Company.
(c) Any other amendment to this Agreement shall be in writing and
shall require the written consent of (a) the Company, (b) either the JWC
Representative or the holders of a majority of Common Stock Equivalents at
the time held by the JWC Holders, and, (c) if adverse to the interests of a
particular Stockholder or Stockholder Group, that Stockholder or the
holders of a majority of the Common Stock Equivalents at the time held by
that Stockholder Group, as the case may be.
(d) Notwithstanding the foregoing provisions of this Section 4.2,
this Agreement may be terminated at any time upon the written consent of
(i) the Company and (ii) the holders of a majority of the Common Stock
Equivalents at the time held by the Management Holders and the JWC Holders
(or the JWC Representative), voting together as a single group.
4.3 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as
if the invalid or unenforceable provision were omitted.
4.4 Notices. All notices, consents and other communications
required, or contemplated under this Agreement shall be in writing and
shall be delivered in the manner specified herein or, in the absence of
such specification, shall be deemed to have been duly given (i) 3 Business
Days after mailing by first class certified mail, postage prepaid, (ii)
when delivered by hand, (iii) upon confirmation of receipt by telecopy, or
(iv) 1 Business Day after sending by overnight delivery service, to the
respective addresses of the parties set forth below:
(a) For notices and communications to the Company:
c/o J.W. Childs Associates, L.P.
One Federal Street
Boston, MA 02110
Attention: Steven G. Segal
Telecopy: (617) 753-1101
(b) For notices and communications to the Stockholders, to the
respective addresses set forth in the Schedule of Stockholders.
(c) With a copy in the case of the JWC Holders to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108-3194
Attention: Louis A. Goodman, Esq.
Telecopy: (617) 573-4822
By notice complying with the foregoing provisions of this Section 4.4, each
party shall have the right to change the mailing address for future notices
and communications to such party.
4.5 Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and to their respective
transferees, successors, assigns, heirs and administrators; provided that
the rights under this Agreement may not be assigned except as expressly
provided herein. No such assignment shall relieve an assignor of its
obligations hereunder.
4.6 Termination. Without affecting any other provision of this
Agreement requiring termination of any rights in favor of any Stockholder,
Permitted Transferee or any other transferee of Common Stock Equivalents,
the provisions of Articles II and III of this Agreement shall terminate as
to such Stockholder, Permitted Transferee or other transferee, when,
pursuant to and in accordance with this Agreement, such Stockholder,
Permitted Transferee or other transferee, as the case may be, no longer
owns any Common Stock Equivalents.
4.7 Recapitalization, Exchanges, etc. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to
Common Stock Equivalents, to any and all shares of capital stock of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect
of, in exchange for, or in substitution of the Common Stock Equivalents, by
reason of a stock dividend, stock split, stock issuance, reverse stock
split, combination, recapitalization, reclassification, merger,
consolidation or otherwise. Upon the occurrence of any such events,
amounts hereunder shall be appropriately adjusted.
4.8 JWC Representative. Each JWC Holder hereby designates and
appoints (and each Permitted Transferee of each such JWC Holder shall be
deemed to have so designated and appointed) Steven G. Segal, with full
power of substitution (the "JWC Representative") the representative of each
such Person to perform all such acts as are required, authorized or
contemplated by this Agreement to be performed by any such Person and
hereby acknowledges that the JWC Representative shall be the only Person
authorized to take any action so required, authorized or contemplated by
this Agreement by each such Person. Each such Person further acknowledges
that the foregoing appointment and designation shall be deemed to be
coupled with an interest and shall survive the death or incapacity of such
Person. Each such person hereby authorizes (and each Permitted Transferee
shall be deemed to have authorized) the other parties hereto to disregard
any notice or other action taken by such Person pursuant to this Agreement
except for the JWC Representative. The other parties hereto are and will
be entitled to rely on any action so taken or any notice given by the JWC
Representative and are and will be entitled and authorized to give notices
only to the JWC Representative for any notice contemplated by this
Agreement to be given to any such Person. A successor to the JWC
Representative may be chosen by the holders of a majority of the Common
Stock Equivalents at the time held by the JWC Holders; provided that
written notice thereof is given by the successor JWC Representative to the
Company, the Management Holders and the other JWC Holders. Each of the JWC
Holders agrees to be bound by all of the provisions of paragraph 3.07 of
the First Amended and Restated Agreement of Limited Partnership of J.W.
Childs Equity Partners, L.P. dated as of December 20, 1995 (the "Equity
Partners Agreement") including without limitation, the provisions of
paragraph 3.07(b) thereof, and further agrees to be bound by the
confidentiality provisions set forth in paragraph 14.08 of the Equity
Partners Agreement as if such JWC Holder were a limited partner under the
Equity Partners Agreement.
4.9 Action Necessary to Effectuate the Agreement. The parties
hereto agree to use their reasonable best efforts to take or cause to be
taken all such corporate and other action as may be necessary to effect the
intent and purposes of this Agreement.
4.10 Purchase for Investment; Legend on Certificate. Each
Stockholder acknowledges that all of the securities of the Company held by
such Stockholder are being (or have been) acquired for investment and not
with a view to the distribution thereof and that no transfer, hypothecation
or assignment of any such securities (including the Common Stock for which
such securities may be exercisable or exchangeable or into which such
securities may be convertible) may be made except in compliance with
applicable federal and state securities laws. All the certificates or
other instruments representing any of such securities (including the Common
Stock for which such securities may be exercisable or exchangeable or into
which such securities may be convertible) which are now or hereafter held
by any Stockholder shall be subject to the terms of this Agreement and
shall have endorsed in writing, stamped or printed, thereon the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF FEBRUARY
25, 1998, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE
WITH AND AVAILABLE FROM THE SECRETARY OF THE COMPANY."
4.11 Effectiveness of Transfers. Any Subject Securities
transferred by a Stockholder (other than pursuant to an effective
registration statement under the 1933 Act or a Rule 144 Transaction) shall
be held by the transferee thereof pursuant to this Agreement. Such
transferee shall, except as otherwise expressly stated herein, have all the
rights and be subject to all of the obligations of a Stockholder under this
Agreement automatically and without requiring any further act by such
transferee or by any parties to this Agreement. Without affecting the
preceding sentence, if such transferee is not a Stockholder on the dates of
such transfer, then such transferee, as a condition to such transfer, shall
confirm such transferee's obligations hereunder in accordance with Section
4.12 hereof. The Subject Securities shall not be transferred on the
Company's books and records, and no transfer thereof shall be otherwise
effective, unless any such transfer is made in accordance with the terms
and conditions of this Agreement, and the Company is hereby authorized by
all of the Stockholders to enter appropriate stop transfer notations on its
transfer records to give effect to this Agreement.
4.12 Additional Stockholders. Any Person acquiring any Subject
Securities (except for any acquisition thereof (a) in an offering
registered under the 1933 Act or (b) in a Rule 144 Transaction) shall on or
before the transfer or issuance to it of such Subject Securities, sign a
counterpart signature page hereto in form reasonably satisfactory to the
Company and the JWC Representative and shall thereby become a party to this
Agreement; provided that a transferee which is a pledgee and within the
definition of a Permitted Transferee shall not be obligated so to agree
until foreclosure on its pledge. The Company shall require each Person
acquiring an option, warrant or other right to purchase shares of Common
Stock under any option or other equity participation plan to execute a
counterpart signature page hereto.
4.13 No Waiver. No course of dealing and no delay on the part of
any party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such
party's rights, powers and remedies. No single or partial exercise of any
rights, powers or remedies conferred by this Agreement shall preclude any
other or further exercise thereof or the exercise of any other right, power
or remedy.
4.14 Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures
need not appear on any one counterpart.
4.15 Headings, etc. All headings and captions in this Agreement
are for purposes of reference only and shall not be construed to limit or
affect the substance of this Agreement. Words used in this Agreement,
regardless of the gender and number used, will be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other
number, singular or plural, as the context requires. As used in this
Agreement, the word "including" is not limiting, and the word "or" is not
exclusive. The words "this Agreement", "hereto", "herein", "hereunder",
"hereof", and words or phrases of similar import refer to this Agreement as
a whole, together with any and all Schedules and Exhibits hereto, and not
to any particular article, section, subsection, paragraph, clause or other
portion of this Agreement.
4.16 Governing Law. This Agreement shall be construed under and
governed by the substantive and procedural laws of The Commonwealth of
Massachusetts applicable to a contract executed in and wholly performed
within Massachusetts.
4.17 Effective Time. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall become binding and effective as of the
date of the Closing (as defined in the Merger Agreement).
[Signatures on Following Pages]
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE COMPANY:
UNIVERSAL HOSPITAL
SERVICES, INC.
By: ________________________
Name:
Title:
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Additional Counterpart Signature Page
THE MANAGEMENT HOLDERS:
Print Name: ________________________
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Additional Counterpart Signature Page
THE JWC HOLDERS:
By: ____________________________
Name:
By executing above, the foregoing JWC Holder acknowledges that,
pursuant to Section 4.8 of this Stockholders' Agreement, the foregoing JWC
Holders has designated and appointed Steven G. Segal as its sole
representative to perform all acts as are required, authorized or
contemplated by this Stockholders' Agreement, all as set forth in such
Section 4.8.
EXHIBIT A
Schedule of Stockholders
I. The Management Holders
Gerald L. Brandt
Gerald L. Brandt and Karen V. Brandt, joint tenants
Robert H. Braun and Mary Braun, joint tenants
Randy C. Engen
Piper Jaffray, Inc. as Custodian FBO Robert H. Braun
Gary L. Preston
Gary L. Preston and Sandra L. Preston,joint tenants
John D. Ainsworth and Lori J. Ainsworth, joint tenants
Barbara J. Dummer and Allan J. Dummer, joint tenants
James T. Ekbom
Michael D. Engberg and Denise G. Engberg, joint tenants
Judy M. Fuentes
Susan J. Gillen
Scott A. Halseth
Kathleen Hawkins
William J. Jensen and Rebecca L. Jensen, joint tenants
Mark R. Jensen and Christine K. Jensen, joint tenants
Michael R. Johnson
Robert K. Knowles and Jayne S. Knowles, joint tenants
Timothy P. Lynch
Kent R. Martens
Amy J. McDonald
Michael A. Needleman
Susan K. Quigley
William M. Richards
Allen A. Satter and Marjorie L. Satter, joint tenants
Michael F. Schmidt
Kenneth A. Schumacher and Carole Schumacher, joint tenants
Darren J. Thieding
Dale R. Voegeli
Marcia G. Menk
David E. Dovenberg
Piper Jaffray, Inc. FBO Custodian David E. Dovenberg
David E. Dovenberg and Jean M. Dovenberg, joint tenants
Jean M. Dovenberg
II. The JWC Holders
J.W. Childs Equity Partners, L.P.
Bock Family Trust
James E. Childs
John W. Childs
Richard S. Childs
Jerry D. Horn
Glenn A. Hopkins
Lambros J. Lambros
OFS Investment Partners
Raymond B. Rudy
Dana L. Schmaltz
Steven G. Segal
SGS 1995 Family Limited Partnership
SGS - III Family Limited Partnership
Steven G. Segal 1995 Irevocable Trust
Adam L. Suttin
Suttin Family Trust
Edward D. Yun
Exhibit B
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Form of Promissory Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH APPLICABLE STATE LAW.
AS PROVIDED IN THIS NOTE, PAYMENT OF PRINCIPAL OF AND INTEREST ON THIS NOTE
IS SUBORDINATED AND JUNIOR IN RIGHT OF PAYMENT TO ALL "SENIOR DEBT" (AS
SUCH TERM IS DEFINED IN THIS NOTE).
UNIVERSAL HOSPITAL SERVICES, INC.
SUBORDINATED NOTE DUE 20__
Boston, Massachusetts
U.S.$ _________ _____________ __, 19
FOR VALUE RECEIVED, the undersigned, Universal Hospital Services,
Inc., a Minnesota corporation (the ''Company''), hereby promises to pay to
__________, a __________ with a business address at
_______________(facsimile number __________) (the "holder"), on [I.E. 10
YEARS AFTER THE DATE OF ISSUANCE], the principal amount of __________United
States Dollars (U.S.$__________ ) or such part thereof as then remains
unpaid, with interest (computed on the basis of a 365/6-day year and the
actual number of days elapsed) on the unpaid principal amount hereof at a
rate per annum equal to the Applicable Rate (as defined in Section 4) from
the date hereof payable semiannually on the last day of May and November in
each year (each such date is hereinafter referred to as a "Payment Date"),
beginning on __________, 19__, until such principal amount shall become due
and payable (whether at maturity or a date fixed for payment or prepayment
or by acceleration or otherwise).
1. The Note. All payments of principal, interest and other amounts
payable on or in respect of this Note or the indebtedness evidenced hereby
shall be made at the address of the holder specified herein. All payments
received in respect of the indebtedness evidenced by this Note shall,
subject to the provisions of Section 5 hereof, be applied first to interest
hereon accrued to the date of payment, then to the payment of other amounts
(except principal) at the time due and unpaid hereunder, and finally to the
unpaid principal hereof.
If any payment on this Note becomes due and payable on a day other than
a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to any payment of principal,
interest thereon shall be payable at the then Applicable Rate during such
extension.
2. Payment Provisions.
2.1 On __________ __, ____ [I.E. THE MATURITY DATE] or on any
accelerated maturity of this Note, the Company will pay to the holder
hereof the entire principal amount of this Note then outstanding, without
premium, but together with accrued and unpaid interest thereon. The Company
may at any time or from time to time prepay all or any part of the
outstanding principal amount of this Note at the principal amount thereof,
without premium, but together with accrued and unpaid interest thereon.
2.2 Except as otherwise expressly provided herein, payments on
account of principal and interest with respect to this Note shall be made
by mailing a check or money order to the holder hereof at the address of
such holder appearing herein and without the necessity of any presentment
or notation of payment, except upon payment in full, and the amount of
principal so paid on this Note shall be regarded as having been retired and
canceled at the time of the mailing of such payment. The holder of this
Note, before any transfer thereof, shall make a notation thereon of the
date to which interest has been paid and of all principal payments
theretofore made thereon and shall in writing notify the Company of the
name and address of the transferee. Anything herein to the contrary
notwithstanding, the Corporation may elect to pay interest payable on any
Payment Date occurring on or before __________ __, ____, in lieu of cash
interest payments, by issuing and delivering a note (each, a "Paid-in-Kind
Interest Note") to the holder hereof having an aggregate original principal
amount equal to the accrued and unpaid interest on this Note and otherwise
containing the same terms and provisions as this Note.
3. Defaults.
3.1 Events of Default. If any one or more Events of Default shall
occur and be continuing, then and in each and every such case, the holder
may by notice in writing to the Company declare all or any part of the
unpaid balance of this Note then outstanding to be forthwith due and
payable without presentation, protest or further demand or notice of any
kind, all of which are hereby expressly waived, and the holder may proceed
to enforce payment of such balance or part thereof in such manner as he may
elect, except in each and every such case to the extent the foregoing
rights of the holder hereof are restricted by the provisions of Section 5
hereof.
3.2 Annulment of Defaults. An Event of Default shall not be
deemed to have occurred or to be in existence for any purpose of this Note
if the holder shall have waived such Event of Default in writing or stated
in writing that the same has been cured to such holder' s satisfaction, but
no such waiver shall extend to or affect any subsequent Event of Default or
impair any of the rights of the holder upon the occurrence thereof.
3.3 Waivers. The Company hereby waives to the extent not
prohibited by applicable law (a) all presentments, demands for performance,
notices of nonperformance (except to the extent required by the provisions
hereof or of any instrument executed and delivered in connection with this
Note), protests, notices or protest, and notices of dishonor in connection
with this Note.
4. Definitions. For purposes of this Note:
4.1 "Applicable Rate" shall mean, for any period, the weighted
average of the daily interest rates for such period applicable to all
borrowings by the Company outstanding during such period under the Credit
Agreement, as determined by the Company in accordance with sound financial
practice; provided, however, that if the Company is not party to any Credit
Agreement during any (or any portion of any) period, the Applicable Rate
during such (or such portion of such) period shall be equal to the Prime
Rate plus one percent (1%). Notwithstanding anything in this Note to the
contrary, the interest rate hereunder shall not exceed the maximum legal
rate.
4.2 "Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., and
the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations and any reference to any statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
4.3 "Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in Boston,
Massachusetts or New York, New York are authorized or required by
applicable law to be closed.
4.4 "Code" shall mean the Internal Revenue Code of 1986, as
amended, or any successor federal law of similar import.
4.5 "Credit Agreement" shall mean that Credit Agreement dated as
of February 25, 1998 by and among the Company, the lenders from time to
time party thereto and Bankers Trust Company, as administrative agent, as
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including without limitation any
agreement extending the maturity of, refinancing, replacing otherwise
restructuring (including without limitation increasing the amount of
available borrowings thereunder or adding additional borrowers or
guarantors thereunder) all or any portion of the indebtedness under such
agreement or any successor or replacement agreement and whether by the same
or any other agent, lender, or group of lenders.
4.6 "Debt" shall mean (a) indebtedness for borrowed money, (b)
obligations evidenced by bonds, debentures, notes or other similar
instruments, (c) obligations to pay the deferred purchase price of property
(other than trade accounts payable), (d) obligations as lessee under leases
which shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capitalized leases, and (e) obligations
under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise
assure a creditor against loss in respect of, indebtedness or obligations
of the kinds referred to in clauses (a) through (d) above.
4.7 "Event of Default" shall mean the occurrence and continuance
of any of the following events:
(a) The Company shall have failed, for a period of thirty
(30) days after written notice thereof, to make any principal,
interest, fee or other payment on any of the indebtedness evidenced by
this Note or pursuant to any provision of this Note (notwithstanding
that such payment shall have been suspended pursuant to the
subordination provisions hereof); or
(b) The Company shall:
(i) commence a voluntary case under the Bankruptcy
Code or authorize, by appropriate proceedings of its board of
directors, the commencement of such a voluntary case;
(ii) (A) have filed against it a petition commencing
an involuntary case under the Bankruptcy Code that shall not have
been dismissed within sixty (60) days after the date on which
such petition is filed, or (B) file an answer or other pleading
within such 60-day period admitting or failing to deny the
material allegations of such a petition or seeking, consenting or
to acquiescing in the relief therein provided, or (C) have
entered against it an order for relief in any involuntary case
commenced under the Bankruptcy Code;
(iii) seek relief as a debtor under any applicable
law, other than the Bankruptcy Code, of any jurisdiction relating
to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors, or consent
to or acquiesce in such relief;
(iv) have entered against it an order by a court of
competent jurisdiction (A) finding it to be bankrupt or
insolvent, (B) ordering or approving its liquidation or
reorganization as a debtor or any modification or alteration of
the rights of its creditors or (C) assuming custody of, or
appointing a receiver or other custodian for all or a substantial
portion of its property; or
(v) make an assignment for the benefit of, or enter
into a composition with, its creditors, or appoint, or consent to
the appointment or, or suffer to exist a receiver or other
custodian for, all or a substantial portion of its property.
4.8 "Indenture" shall mean the Indenture dated as of February
25, 1998 among Universal Hospital Services, Inc. and First Trust National
Association, as amended and in effect from time to time.
4.9 "Obligations" means any principal, interest (including
post-petition interest, whether or not allowed as a claim in any
proceeding), penalties, fees, costs, expenses, indemnifications,
reimbursements, damages and other liabilities payable under or in
connection with any Debt.
4.10 "Payment Date" shall have the meaning given such term in
the first paragraph of this Note.
4.11 "Person" shall mean any natural individual or any
corporation, firm, limited liability company, unincorporated organization,
association, partnership, a trust (inter vivos or testamentary), an estate
of a deceased individual, business trust, joint stock company, joint
venture or other organization, entity or business, or any governmental
authority.
4.12 "Prime Rate" shall mean the prime rate in effect as
announced from time to time by Senior Bank Documents.
4.13 "Senior Bank Debt" means all Obligations outstanding
under or in connection with the Senior Bank Documents.
4.14 "Senior Bank Documents" shall mean the Credit Agreement
and any note, mortgage, security agreement, pledge agreement, guaranty or
other agreement or instrument now or hereafter evidencing, securing or
executed in connection with any Senior Bank Debt, and any credit agreement,
note, mortgage, security agreement, pledge agreement, guaranty or other
agreement or instrument hereafter executed in connection with any
extension, renewal, refunding or refinancing thereof.
4.15 "Senior Debt" means (a) the Senior Bank Debt and (b) any
other Debt, including without limitation the Indenture, unless the
instrument under which such Debt is incurred expressly provides that it is
on a parity with or subordinated in right of payment to this Note,
including in the case of each of (a) and (b) above, any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided
for in the documentation with respect thereto, whether or not such interest
is an allowed claim under applicable law. Notwithstanding anything to the
contrary in the foregoing, Senior Debt shall not include (i) any liability
for federal, state, local or other taxes owed or owing by the Company, (ii)
any Debt of the Company to any of its Subsidiaries or other Affiliates or
(iii) any trade payables.
4.16 "Senior Debt Default" shall have the meaning given such
term in Section 5.2 hereof.
4.17 "Subordinated Distributions" shall have the meaning given
such term in Section 5.1 hereof.
4.18 "Subordinated Payments" shall have the meaning given such
term in Section 5 hereof.
5. Subordination. The payment of principal (whether at maturity,
upon mandatory or voluntary prepayment, or upon declaration or otherwise)
of, interest on, and all fees, expenses, indemnities and other amounts
payable with respect to, this Note (collectively, the "Subordinated
Payments") are hereby subordinated and junior in right of payment, to the
extent and in the manner set forth in this Section to all Senior Debt.
This Section shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to
hold, Senior Debt, whether now outstanding or hereafter created, incurred,
assumed or guaranteed, and such provisions are made for the benefit of the
holders (which term shall include owners, if not otherwise holders, of
Senior Debt) of Senior Debt, and such holders of Senior Debt are made
obligees hereunder and beneficiaries hereof (with the same force and effect
as if named herein) and any one or more of them may enforce such
provisions. This Section is binding upon the Company and its successors and
assigns and the holders, from time to time, of this Note, each of whom, by
his acceptance of this Note, agrees to be bound by and comply with all of
the provisions of this Section. Notwithstanding any provision of this Note
to the contrary, neither this Section nor any of its provisions may be
changed or waived to adversely affect or impair in any way whatsoever the
rights of the holders of Senior Debt, except with the prior written consent
of the holders of the Senior Debt at the time outstanding.
5.1 Subordinated Distributions. Upon any payment or
distribution of assets or securities of the Company of any kind or
character, whether in cash, property or securities, by way of set-off or
otherwise (including any collateral, whether the proceeds thereof or in
kind, at any time securing this Note and including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of this Note) of the Company (all such payments and distributions being
referred to collectively as "Subordinated Distributions"), upon any
dissolution, winding up, liquidation (partial or complete) or
reorganization of the Company (whether voluntary or involuntary and whether
in bankruptcy, insolvency, receivership or other proceedings, or upon an
assignment for the benefit of creditors or any other marshaling of the
assets and liabilities of the Company or otherwise), each of the Company
and the holder of this Note, by acceptance hereof, covenants and agrees
that:
(a) all Senior Debt shall first be paid in full in cash,
or provision made for such payment, in accordance with the terms of
such Senior Debt, before any payment or distribution of any
Subordinated Distribution is made on account of any Subordinated
Payments and before the holder of this Note shall be entitled to
retain any amounts so paid or distributed in respect thereof;
(b) any payment or distribution of any Subordinated
Distribution to which the holder of this Note would be entitled except
for the provisions of this Section, shall be paid or delivered by the
Company or any debtor, custodian, receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of Senior Debt or their
representative or representatives (in accordance with any certificate
referred to in this Section) or to the trustee or agent for the
holders of such Senior Debt, as their respective interests may appear,
to the extent necessary to pay in full all Senior Debt remaining
unpaid in accordance with the terms of such Senior Debt, after giving
effect to any concurrent payment or distribution to or for the holders
of such Senior Debt, before any payment or distribution is made to the
holder of this Note; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of any Subordinated Distribution shall be
received by the holder of this Note before all Senior Debt is paid in
full in cash, or provision made for the payment thereof, in accordance
with the terms of such Senior Debt, such payment or distribution shall
be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of such Senior Debt or their representative
or representatives, or to the trustee or agent for the holders of such
Senior Debt, as their respective interests may appear, to the extent
necessary to pay in full all Senior Debt remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders
of such Senior Debt.
The Company shall give prompt written notice to the holder of
this Note of any declaration of any Senior Debt as due and payable before
its stated maturity and of any event which pursuant to this Section would
prevent payment or distribution of any Subordinated Distribution or any
Subordinated Payment with respect to this Note. The holder of this Note
shall be entitled to assume that no such event has occurred and shall not
at any time be charged with knowledge of the existence of any event which
would prohibit the making of any payment to it, unless and until such
holder shall have received written notice thereof from the Company or from
the holders of Senior Debt or any trustee, agent or representative thereof;
and prior to the receipt of any such written notice the holder of this Note
shall be entitled to assume conclusively that no such event exists,
without, however, limiting any such rights of holders of Senior Debt under
this Section to recover from the holder of this Note any payment made to
any such holder which it is not entitled under this Section to retain.
Upon any payment or distribution of any Subordinated
Distribution, the holder of this Note shall be entitled to rely upon an
order or decree of any court of competent jurisdiction in which such
bankruptcy, insolvency, reorganization, liquidation, receivership or other
proceeding is pending, or a certificate of the debtor, custodian, receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making
such payment or distribution, to the holder of this Note, for the purpose
of ascertaining the Persons entitled to participate in such distribution,
the holders of the Senior Debt and other indebtedness of the Company, the
amount distributed thereon and all other facts pertinent thereto or to this
Section.
The holder of this Note shall be entitled to rely on the delivery
to it of a written notice by a Person representing himself to be a holder
of Senior Debt to establish that such notice has been given by a holder of
Senior Debt.
5.2 No Payments Under Certain Circumstances.
(a) No payment (by purchase of this Note or otherwise)
shall be made or agreed to be made, directly or indirectly, in cash,
property or securities (other than Paid-in-Kind Interest Notes), or by
way of set-off or otherwise, by the Company of any Subordinated
Payment with respect to this Note if, at the time of such payment or
immediately after giving effect thereto,
(i) (A) the Company shall be in default in the
payment of any Senior Debt, and all applicable grace or cure
periods shall have expired (a "Senior Debt Payment Default") or
(B) there shall have occurred and be continuing any default
(other than a Senior Debt Payment Default) with respect to any
Senior Debt and all applicable grace or cure periods shall have
expired (a "Senior Debt Non-Payment Default", and including any
Senior Debt Payment Default, a "Senior Debt Default"), which
Senior Debt Non-Payment Default would entitle the holder of such
Senior Debt, or any trustee therefor, to declare the principal of
such Senior Debt, if not already due and payable, to be due and
payable, unless and until such Senior Debt Non-Payment Default
shall have been cured or waived or shall cease to exist; and
(b) The Company shall immediately deliver to the holder
of this Note a copy of any written notice by the holders of any Senior
Debt, or any trustee therefor, of any Senior Debt Default received by
the Company.
(c) If notwithstanding the foregoing provisions of this
Section 5.2, the Company shall make any Subordinated Payment
prohibited by the provisions of this Section, then, except as
hereinafter in this Section otherwise provided, unless and until full
payment in cash of all amounts then due for principal of, sinking
fund, if any, premium, if any, and interest on, and all other amounts
payable with respect to, Senior Debt has been made in cash or duly
provided for in accordance with the terms of such Senior Debt, or
unless and until any such default or Senior Debt Default shall have
been cured or waived or shall cease to exist, such prohibited
Subordinated Payment shall be held in trust for the benefit of, and
shall be paid over or delivered, in the form received and without
interest, to the holders of Senior Debt or their respective
representative or to the trustee or agent for the holders of such
Senior Debt, as their respective interests may appear, to the extent
necessary to pay in full all principal of, premium, if any, and
interest on, and all other amounts payable with respect to, Senior
Debt, to the extent any of the same are then due after giving effect
to any concurrent payment or distribution to the holders of such
Senior Debt.
(d) Unless and until written notice of such event shall
be given to the holder of this Note at its address set forth on the
register maintained by the Company by or on behalf of any holder of
Senior Debt or by the Company, the holder of this Note shall be
entitled to conclusively presume that no event exists which would
prohibit the making of any payment to the holder of this Note.
5.3 Standstill.
(a) Acceleration. No holder of this Note shall take any
action to accelerate the maturity of the indebtedness evidenced by
this Note unless the Senior Debt shall have been paid in full in cash
or all Senior Debt shall theretofore have become due and payable.
(b) Remedies. No holder of this Note as such will
commence any action or proceeding against the Company to recover all
or any part of any indebtedness evidenced by this Note or bring or
join with any creditor in bringing, unless the holders of the Senior
Debt then outstanding shall join therein, any proceeding against the
Company under any bankruptcy, reorganization, readjustment of debt,
arrangement of debt, receivership, liquidation or insolvency law or
statute unless and until all Senior Debt shall be paid in full,
provided that the foregoing shall not prohibit a holder of this Note
from, at any time at which the holder of this Note shall be permitted
to accelerate the maturity of this Note as provided in Section 5.3(a),
commencing any proceeding against the Company under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt,
receivership, liquidation, or insolvency law or statute, provided
further, that any amounts received by the holder of this Note as a
result of any such action or proceeding shall be subject to the
provisions of Sections 5.1 and 5.2 of this Note.
5.4 No Impairment. Nothing contained in this Section or
elsewhere in this Note is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Debt and the holder
of this Note, the obligation of the Company, which is absolute and
unconditional, to pay to the holder of this Note, subject to the rights of
the holders of Senior Debt, all Subordinated Payments with respect to this
Note, as and when the same shall become due and payable in accordance with
its terms (subject to the applicable requirements of the Code concerning
withholding of taxes), or is intended to or shall affect the relative
rights of the holders and creditors of the Company other than the holders
of Senior Debt, nor shall anything herein or therein prevent the holder of
this Note from exercising all remedies otherwise permitted by applicable
law or under the terms of this Note upon an Event of Default with respect
to this Note subject to the rights, if any, under this Section, of the
holders of Senior Debt in respect of Subordinated Distributions received
upon the exercise of any such remedy.
5.5 Subrogation. Subject to the payment in full in cash of
all Senior Debt at the time outstanding, the holder of this Note shall be
subrogated (equally and ratably with the holders of all indebtedness of the
Company which, by its express terms, ranks on a parity with this Note and
is entitled to like rights of subrogation) to the rights of the holders of
Senior Debt (to the extent of payments or distributions previously made to
such holders of Senior Debt pursuant to the provisions of this Section) to
receive payments or distributions of assets or securities of the Company
payable or distributable to holders of the Senior Debt until all
Subordinated Payments with respect to this Note shall be paid in full. For
purposes of such subrogation, no payments or distributions on the Senior
Debt pursuant to Section 5.1 or 5.2 shall, as between the Company and its
creditors other than the holders of Senior Debt, and the holder of this
Note, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt, and no payments or distributions to the holder
of this Note of assets or securities by virtue of the subrogation herein
provided for shall, as between the Company and its creditors other than the
holders of Senior Debt and the holder of this Note, be deemed to be a
payment to or on account of this Note. The provisions of this Section are
and are intended solely for the purpose of defining the relative rights of
the holder of this Note, on the one hand, and the holders of the Senior
Debt, on the other hand.
5.6 No Impairment of Rights. No right of any present or
future holder of any Senior Debt of the Company to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any act or
failure to act, in good faith, by any such holder of Senior Debt, or by any
noncompliance by the Company with the terms, provisions and covenants of
this Note, regardless of any knowledge thereof with which any such holder
of Senior Debt may have or be otherwise charged.
5.7 Waiver of Notice. The holder of this Note, by his
acceptance thereof, waives all notice of the acceptance of the
subordination provisions contained herein by each holder of Senior Debt,
whether now outstanding or hereafter incurred, and waives reliance by each
such holder upon such provisions.
5.8 Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Debt. The holders of Senior Debt may at any
time or from time to time, and in their absolute discretion, change the
manner, place or terms of payment of, change or extend the time of payment
of, renew or alter, any Senior Debt, or amend or supplement any agreement,
instrument or document evidencing any Senior Debt, or exercise or refrain
from exercising any other of their rights under the Senior Debt including
without limitation the waiver of default thereunder, all without notice to
or assent from the holder of this Note. No right of any present or future
holders of any Senior Debt to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act
by any such holder or by any noncompliance by the Company with the terms of
this Note, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with.
6. Waivers; Amendments. Subject to the provisions of Section 9
hereof, amendments to and modifications of this Note may be made, required
consents and approvals may be granted, compliance with any term, covenant,
agreement, condition or other provision set forth herein may be omitted or
waived, either generally or in a particular instance and either
retroactively or prospectively with, but only with, the written consent of
the Company and the holder; provided, however, that no amendment or
modification of this Note shall be made without the prior written consent
of the holders of the Senior Bank Debt.
7. Notices. All notices and other communications which by any
provision of this Note are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, or by
recognized courier service, postage prepaid, (b) sent by facsimile or other
form of rapid transmission, confirmed by mailing (by first class or express
mail, or by recognized courier service, postage prepaid) written
confirmation at substantially the same time as such rapid transmission, or
(c) personally delivered to the receiving party (which if other than an
individual shall be an officer or other responsible party of the receiving
party). All such notices and communications shall be mailed, sent or
delivered as follows: if to the holder hereof, at the address and/or
facsimile number of such holder appearing on the first page hereof; if to
the Company, c/o J.W. Childs Associates, L.P., One Federal Street, 21st
Floor, Boston, Massachusetts 02110, Attention: Mr. John W. Childs
(Facsimile No.: (617) 753-1101); or to such other person(s), facsimile
number(s) or address(es) as the party to receive any such communication or
notice may have designated by written notice to the other party.
8. Section Headings. The headings contained in this Note are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Note.
9. Governing Law. The validity, interpretation, construction and
performance of this Note shall be governed by, and construed in accordance
with, the internal laws of the state of New York, without giving effect to
any choice or conflict of laws provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed as a sealed instrument as of the date first above written.
UNIVERSAL HOSPITAL
SERVICES, INC.
By:_______________________
Title:
