Commitment Letter for $355,000,000 Credit Facilities between General Electric Capital Corporation and Metropolitan Health Networks, Inc.
General Electric Capital Corporation and GE Capital Markets, Inc. have agreed to provide Metropolitan Health Networks, Inc. with $355 million in credit facilities, including a $265 million senior secured first lien facility and a $90 million senior secured second lien term loan. The funds will be used for Metropolitan Health Networks’ acquisition of Continucare Corporation. The agreement outlines the terms, syndication process, and conditions for the loans, including cooperation requirements and information sharing by Metropolitan Health Networks. The commitment is subject to detailed terms in attached exhibits and a separate fee letter.

GE Capital Markets, Inc.
299 Park Avenue
New York, New York 10171
(212)  ###-###-####
Chief Executive Officer
Metropolitan Health Networks, Inc.
777 Yamato Road, Suite 510
Boca Raton, Florida 33431
$355,000,000 Credit Facilities
Commitment Letter
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By: Name: | /s/ Jason Ricketts | |||
Title: | Its Duly Authorized Signatory |
By: Name: | /s/ Joseph Lee | |||
Title: | Its Duly Authorized Signatory |
THIS 26TH DAY OF JUNE, 2011
By: Name: | /s/ Michael M. Earley | |||
Title: | CEO |
$265,000,000 First Lien Credit Facilities
June 26, 2011
Borrower: | Metropolitan Health Networks, Inc. (Borrower). | |
Guarantors: | Each of Borrowers existing and subsequently acquired or formed direct and indirect subsidiaries (each, a Guarantor and collectively, the Guarantors). | |
Administrative Agent: | General Electric Capital Corporation (GECC and, in such capacity, the Agent) | |
Sole Lead Arranger and Sole Bookrunner: | GE Capital Markets, Inc. (GECM and, in such capacity, the Lead Arranger) | |
Lenders: | GECC and/or one or more of its direct or indirect subsidiaries and a syndicate of banks, financial institutions and other entities arranged by the Lead Arranger for the portion not held by GECC and/or its subsidiaries. | |
First Lien Credit Facilities: | $265,000,000 in senior secured first lien credit facilities (the First Lien Credit Facilities) consisting of the following: |
Incremental Facility: | Borrower shall have the right to increase the size of the Term Loan and/or add one or more incremental term loan facilities to the First Lien Credit Facilities (each, whether or not a separate tranche, an Incremental Term Loan) and/or increase commitments under the Revolving Credit Facility (any such increase, an Incremental Revolving Facility; each Incremental Term Loan and each Incremental Revolving Facility are each sometimes referred to herein individually as an Incremental Facility and collectively as the Incremental Facilities), in an aggregate amount of up to $50,000,000 at any time and from time to time provided: |
Use of Proceeds: | The proceeds of the First Lien Credit Facilities on the Closing Date and advances under the Revolving Credit Facility made after the Closing Date (collectively, the Loans) will be used together with the proceeds of the Second Lien Credit Facility (as defined in Exhibit B) solely to, first, repay all amounts owing under the Acquired Businesses existing senior secured credit facilities and all other indebtedness (other than indebtedness to be agreed upon), and, thereafter, (a) to pay a portion of the consideration under the Acquisition Agreement (as defined below), (b) to pay fees and expenses incurred in connection with the foregoing and with the First Lien Credit Facilities and (c) in the case of the Loans under the Revolving Credit Facility made after the Closing Date, for working capital and general corporate purposes. | |
Interest: | Interest will be payable on the unpaid principal amount of all Loans at a rate per annum equal to, at the option of Borrower, (a) the Base Rate (as defined below) plus the Applicable Margin (as defined below), payable quarterly in arrears or (b) LIBOR (as defined below) plus the Applicable Margin, payable at the end of the relevant interest period, but in any event, at least quarterly. |
Default Rate: | Automatically upon the occurrence of a bankruptcy or payment event of default (unless waived) or at the election of the Required Lenders (as defined below) upon the occurrence and during the continuance of any other event of default, the loans shall bear interest at a default rate of interest (the Default Rate) equal to an additional two percent (2%) per annum over the rate otherwise applicable and such interest will be payable on demand. | |
Interest Rate Protection: | Borrower shall obtain, within 90 days following the Closing Date, interest rate protection agreements on terms and with counterparties reasonably satisfactory to Agent in effect for not less than a three-year term covering a notional amount that equals at least 50% of the aggregate principal amount of Borrowers consolidated floating rate indebtedness (other than the Revolving Credit Facility). |
Fees: | In addition to the fees payable pursuant to the Fee Letter, Borrower shall pay the following fees: | |
A non-refundable fee of 0.50% per annum of the average daily balance of the unused portion of the Revolving Credit Facility to the Agent, for the account of the Lenders under the Revolving Credit Facility, quarterly in arrears (the Commitment Fee). | ||
A non-refundable fee on the average daily issued but undrawn face amount of all outstanding Letters of Credit at a rate per annum equal to the Applicable Margin for Loans under the Revolving Credit Facility bearing interest based on LIBOR. Such fee may be increased upon the occurrence of an event of default in the same manner as the Default Rate is implemented. Such fee will be due and payable to Agent, for the account of the respective Lenders under the Revolving Credit Facility, quarterly in arrears. | ||
Customary letter of credit fees to each issuing bank upon the issuance, amendment or extension of letters of credit at the prevailing rate. Such fees will be due and payable to the Agent for the account of the issuing bank or issuing banks, as the case may be, in respect of such letters of credit. | ||
All fees will be calculated based on a 360-day year and actual days elapsed. | ||
Prepayments and Commitment Reductions: | Borrower shall make the following mandatory prepayments (subject to certain basket amounts and exceptions to be negotiated in the First Lien Credit Agreement): | |
(a) Excess Cash Flow. Annual prepayments in an amount equal to 50% of Excess Cash Flow (to be defined), with a reduction to 25% based upon achievement and maintenance of a total leverage ratio not exceeding 2.00x as of the last day of each year commencing with the fiscal year ending December 31, 2012. | ||
(b) Equity and Debt Issuances. Prepayments (i) in an amount equal to 50% of the net cash proceeds of issuances of publicly offered equity by Borrower and its subsidiaries with a reduction in such percentage upon achievement of a senior leverage ratio to be agreed upon and (ii) in an amount equal to 100% of the net cash proceeds of issuances or incurrences of debt obligations of Borrower and its subsidiaries (other than debt incurrences expressly permitted by the First Lien Credit Agreement). |
Collateral: | Subject to the Funds Certain Provisions and to exceptions to be agreed on for property below a certain value, all obligations of Borrower under the First Lien Credit Facilities and under any interest rate protection, or certain other hedging arrangements to be agreed, entered into with or arranged by Agent or an entity that is a Lender at the time such arrangements are entered into (or any affiliate of the foregoing) and of the Guarantors under the guarantees will be secured by a first priority perfected security interests in substantially all existing and after-acquired real and personal property of Borrower and each Guarantor, including, without limitation, 100% of all outstanding equity interests in their subsidiaries (the Collateral). | |
Borrower and the Guarantors shall be required to maintain springing account control agreements with respect to all |
material deposit and securities accounts, excluding zero balance payroll, withholding and trust accounts and petty cash accounts containing less than a to be determined amount, and subject to customary carve outs for Medicare and Medicaid proceeds in accordance with a cash management system reasonably satisfactory to the Agent. | ||
Notwithstanding the foregoing, Borrower and Guarantors will not be required to take any action to perfect a security interest in any asset where Agent and Borrower agree the cost of perfection is excessive in relation to the benefit afforded thereby. | ||
All of the above-described pledges, security interests and mortgages shall be created on terms, and pursuant to documentation reasonably satisfactory to the Agent (including, in the case of real property, by customary items such as satisfactory title insurance and surveys), and none of the Collateral shall be subject to any other liens, claims or encumbrances, except second priority liens securing the Second Lien Credit Facility and other permitted liens and encumbrances reasonably acceptable to Agent to be set forth in the First Lien Credit Facilities Documentation. |
Conditions Precedent to Closing: | Solely as set forth in Schedule I hereto (the date upon which all such conditions precedent shall be satisfied and the initial funding under the Credit Facilities shall take place, the Closing Date). | |
Conditions Precedent to each Subsequent Extension of Credit under the First Lien Credit Facilities: | All of the representations and warranties in the First Lien Credit Facilities Documentation shall be true and correct in all material respects (but in all respects if such representation or warranty is qualified by material or Material Adverse Effect); no default or event of default shall be continuing; and delivery of any relevant borrowing notices or letter of credit requests. | |
Representations and Warranties: | The First Lien Credit Agreement will contain, without limitation, the following representations and warranties with materiality and other exceptions, qualifications and thresholds as are customary in transactions of this type to be mutually agreed upon: | |
Valid existence, power and authority, foreign qualifications, compliance with law, no conflict, governmental authorization, enforceability, absence of litigation, no default or event of default, ERISA compliance, use of proceeds, margin |
regulations, title to properties, taxes, financial condition (including as to projections and no material adverse change), environmental matters, investment company and other regulated entities, solvency, labor relations, intellectual property, brokers and investment bankers fees, insurance matters, capitalization, capital structure and investments, jurisdiction of organization, location of assets and chief executive office, deposit and other accounts, acquisition agreement, status of First Lien Credit Facilities as senior debt, healthcare and other regulatory matters, compliance with OFAC, money laundering, Patriot Act and other anti-terrorism laws and accuracy of all information provided. |
Affirmative Covenants: | The First Lien Credit Agreement will contain, without limitation, the following affirmative covenants with materiality and other exceptions, qualifications and thresholds as are customary in transactions of this type to be mutually agreed upon: | |
Preservation of corporate existence, licenses and intellectual property, maintenance of property, insurance, payment and performance of obligations, compliance with laws, inspection of property and books and records, use of proceeds, cash management systems, landlord agreements at locations to be determined, healthcare and other regulatory matters, further assurances (including provision of additional collateral and guaranties consistent with the paragraph above entitled Collateral and use of commercially reasonable efforts to deliver required landlord, mortgagee and bailee waivers), environmental matters and maintenance of Moodys and S&P ratings without regard to the level of such ratings. | ||
Reporting Requirements: | The First Lien Credit Agreement will contain, without limitation, the following financial and other reporting requirements: | |
Delivery of quarterly financial statements together with an MD&A report and of annual audited financial statements; delivery of management letters; delivery of an annual budget (including assumptions made in the build-up of such budget); annual insurance reports; quarterly schedules of intercompany loan balances; copies of certain reports sent to other parties and with required notices with respect to defaults, mandatory prepayment events, material litigation, taxes, labor matters, ERISA or environmental events, owned margin stock and other material information. | ||
Financial Performance Covenants: | The First Lien Credit Agreement will contain the following financial performance covenants, each with definitions and levels to be agreed upon but which will have a 25% cushion below EBITDA in the financial model during the period from |
the Closing Date until the third anniversary of the Closing Date and thereafter with a cushion to be agreed upon: |
| minimum fixed charge coverage | ||
| maximum senior leverage | ||
| maximum total leverage |
Negative Covenants: | The First Lien Credit Agreement will contain, without limitation, the following negative covenants with materiality and other exceptions, qualifications and thresholds as are customary in transactions of this type to be mutually agreed upon: | |
Limitations on liens, acquisitions, disposition of assets, consolidations and mergers, loans and investments, indebtedness, capital expenditures, transactions with affiliates, management fees and compensation, use of proceeds, contingent obligations, compliance with ERISA, restricted payments, change in business, change in structure, changes in accounting, name and jurisdiction of organization, amendments to related agreements and subordinated indebtedness, no negative pledges, OFAC; PATRIOT Act, healthcare and other regulatory matters, sale-leasebacks, hazardous materials and restructuring fees. | ||
Events of Default: | The First Lien Credit Agreement will contain, without limitation, the following events of default with notice provisions, grace periods and thresholds customary in transactions of this type to be mutually agreed upon: | |
Failure to pay principal, interest or any other amount when due; representations and warranties incorrect in any material respect when made or deemed made; failure to comply with covenants in the First Lien Credit Agreement; cross-default to other material indebtedness and certain contingent obligations; failure to satisfy or stay execution of judgments; bankruptcy or insolvency; actual or asserted invalidity or impairment of any part of the First Lien Credit Facilities Documentation (including the failure of any lien on a portion of Collateral having a value in excess of an amount to be determined to remain perfected); invalidity of subordination provisions; breach of a material agreement; healthcare and regulatory matters; and change of ownership or control. | ||
Voting | Amendments, waivers and other modifications to the First Lien Credit Facilities Documentation shall require the consent of Lenders holding more than 50% of total commitments and/or Loans (the Required Lenders); provided that certain customary amendments, waivers and other modifications to be agreed shall require class votes or the consent of all Lenders; |
provided, further, that the First Lien Credit Facilities Documentation shall provide the right for any individual Lender to agree to extend the maturity date of its outstanding Term Loan upon the request of Borrower without the consent of Agent or any other Lender on to-be-determined terms and conditions. |
Miscellaneous: | The First Lien Credit Facilities Documentation will include (a) standard yield protection provisions (including, without limitation, provisions relating to compliance with risk-based capital guidelines, increased costs, withholding taxes, illegality and LIBOR breakage costs), (b) a waiver of consequential and punitive damages and right to a jury trial, (c) customary agency, set-off and sharing language, (d) customary defaulting lender and yank-a-bank provisions and (e) other provisions as are usual and customary for facilities of this kind (including voting, indemnity and expense provisions). | |
Assignments and Participations: | Lenders will be permitted to make assignments in a minimum amount of $1 million (unless such assignment is of a Lenders entire interest in a particular tranche of the First Lien Credit Facilities) to other financial institutions with the consent of Agent and, so long as no event of default has occurred and is continuing, the consent of Borrower, which consents shall not be unreasonably withheld or delayed; provided however, that the consent of Borrower shall not be required in connection with assignments to other Lenders (or to affiliates or approved funds of Lenders) and the consent of Borrower will be deemed to have been given if Borrower has not responded within five business days of a request for such consent. All assignments of a Lenders interest in the First Lien Credit Facilities will be made via an electronic settlement system designated by Agent. An assignment fee of $3,500 shall be payable to Agent upon the effectiveness of any such assignment. Agent may impose restrictions on assignments to potential Lenders that hold subordinated or other junior indebtedness. | |
Governing Law and Submission to Jurisdiction: | New York | |
Agents Counsel: | Paul, Hastings, Janofsky & Walker LLP |
$90,000,00 Second Lien Credit Facility
June 26, 2011
Borrower: | Metropolitan Health Networks, Inc. (Borrower). | |
Guarantors: | Each of Borrowers existing and subsequently acquired or formed direct and indirect subsidiaries (each, a Guarantor and collectively, the Guarantors). | |
Administrative Agent: | General Electric Capital Corporation (GECC and, in such capacity, the Agent) | |
Sole Lead Arranger and Sole Bookrunner: | GE Capital Markets, Inc. (GECM and, in such capacity, the Lead Arranger) | |
Lenders: | A syndicate of financial institutions arranged by GECM in consultation with Borrower. | |
Credit Facility: | $90,000,000 senior secured second lien term loan (the Second Lien Term Loan) under a second lien credit facility (the Second Lien Credit Facility) will be advanced in one drawing on the Closing Date (as defined below) and have a term of six years. The Second Lien Term Loan will not amortize and will be paid in full on the maturity date. | |
Use of Proceeds: | Same as for First Lien Credit Facilities. | |
Interest: | Interest will be payable on the unpaid principal amount of all Loans at a rate per annum equal to, at the option of Borrower, (a) the Base Rate (as defined below) plus the Applicable Margin (as defined below), payable quarterly in arrears or (b) LIBOR (as defined below) plus the Applicable Margin, payable at the end of the relevant interest period, but in any event, at least quarterly. | |
LIBOR means, for each interest period, the greater of (a) the offered rate for deposits in U.S. dollars in the London interbank market for the relevant interest period which appears on Reuters Screen LIBOR01 Page, as of 11:00 a.m. (London time) on the day which is two (2) business days prior to the first day of such interest period adjusted for reserve requirements and (b) 1.75% per annum. When selecting the LIBOR option, Borrower will be entitled to choose 1, 2, 3 or 6 month (and, to the extent |
Schedule I-1
available to all relevant Lenders, 9 or 12 month) interest periods; provided that Borrower may not select any interest period of more than one (1) month until the earlier of (a) the date which is 90 days after the Closing Date and (b) the completion of the Syndication Process. | ||
All interest will be calculated based on a 360-day year (or, in the case of Base Rate Loans, a 365/366-day year) and actual days elapsed. The Second Lien Credit Facility will set forth appropriate detail describing the exact method of calculation and relevant reserve requirements for the interest rates referred to above as well as LIBOR breakage provisions, LIBOR borrowing mechanics and other provisions relating to LIBOR. | ||
The Applicable Margin (on a per annum basis) means with respect to the Term Loan, 7.50%, in the case of Base Rate Loans, and 8.50%, in the case of LIBOR Loans; and |
Default Rate: | Same as for First Lien Credit Facilities. | |
Fees : | As provided in the Fee Letter. | |
Prepayment Premiums: | Upon any prepayment of the Second Lien Term Loan, or any mandatory assignment of the Second Lien Term Loan pursuant to any yank-a-bank provisions pertaining to non-consenting Lenders, Borrower shall pay a premium equal to (i) 3% of the prepaid or assigned amount of the Second Lien Term Loan, if such prepayment or assignment occurs on or prior to the first anniversary of the Closing Date, (ii) 2% of the prepaid or assigned amount of the Second Lien Term Loan, if such prepayment or assignment occurs after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date and (iii) 1% of the prepaid or assigned amount of the Second Lien Term Loan, if such prepayment or assignment occurs after the second anniversary of the Closing Date but on or prior to the third anniversary of the Closing Date. | |
Collateral: | Same as for First Lien Credit Facilities, but with second priority lien. |
Conditions Precedent to Closing: | As set forth in Schedule I hereto (the date upon which all such conditions precedent shall be satisfied and the initial funding under the Credit Facilities shall take place, the Closing Date). | |
Representations and Warranties: | Same as for First Lien Credit Facilities. | |
Affirmative Covenants: | Same as for First Lien Credit Facilities. | |
Reporting Requirements: | Same as for First Lien Credit Facilities. |
Financial Performance Covenants: | The Second Lien Credit Facility will contain the following financial performance covenants, each with definitions and levels to be agreed upon: |
| minimum fixed charge coverage | ||
| maximum total leverage; |
provided that the covenant levels will be set at amounts that provide a 10% cushion to the corresponding covenants in the First Lien Credit Facilities. | ||
Negative Covenants: | Same as for First Lien Credit Facilities, subject to increased baskets to be agreed upon. | |
Events of Default: | Same as for First Lien Credit Facilities, subject to increased thresholds to be agreed upon and provided that there shall be a cross acceleration but not a cross default to the First Lien Credit Facilities. |
Voting: | Same as for First Lien Credit Facilities. | |
Miscellaneous: | Same as for First Lien Credit Facilities. | |
Assignments and Participations: | Same as for First Lien Credit Facilities. | |
Governing Law and Submission to Jurisdiction: | Same as for First Lien Credit Facilities. | |
Agents Counsel: | Same as for First Lien Credit Facilities. |
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Commitment Letter
1. | Absence of Orders. No governmental authority shall have obtained, enacted, issued, promulgated, enforced or entered any Applicable Law (as defined in the Acquisition Agreement), arbitration award, finding or Order (as defined in the Acquisition Agreement) (whether temporary, preliminary or permanent), in any case that is in effect and prevents or prohibits consummation of the Transaction. | ||
2. | Maximum Leverage. The consolidated total leverage multiple, which solely for the purpose of this condition, shall exclude the Closing Date Letters of Credit (as defined below), of Borrower and its subsidiaries on the Closing Date after giving effect to the initial funding of the Credit Facilities and other transactions contemplated hereby shall not exceed 3.60x assuming average working capital levels. For the purposes of this calculation, EBITDA shall be calculated in accordance with Exhibit A attached hereto. | ||
3. | Acquisition. The Acquisition shall have been consummated in accordance with the terms of the merger agreement (the Acquisition Agreement) substantially concurrent with the initial funding of the Credit Facilities, without any amendment, modification or waiver of any of the provisions thereof that would be materially adverse to the Lenders without the consent of Agent (it being understood that any amendment or waiver to the definition of Material Adverse Effect (as defined in the Acquisition Agreement) or that results in a reduction of the cash portion of the purchase price, unless the commitments under the First Lien Credit Facilities and the Second Lien Credit Facility are reduced by a like amount with such reduction to be applied to the First Lien Credit Facilities and Second Lien Credit facility in GECCs discretion, will be deemed to be materially adverse to the Lenders) and all requirements of law. | ||
4. | No Combined Material Adverse Effect. Except as disclosed in the Company SEC Reports (as defined in the Acquisition Agreement) or in the schedules to the Acquisition Agreement, from March 31, 2011, to the date of the Acquisition Agreement there shall not have occurred a Combined Material Adverse Effect and since the date of the Acquisition Agreement, there shall not have occurred and be continuing, a Combined Material Adverse Effect. For purposes hereof, Combined Material Adverse Effect means any event, development, change or effect, that, individually or in the aggregate, has had, or would reasonably be likely to have (i) a material adverse effect on the financial condition, business, assets, liabilities, or results of operations of Borrower, Target and their respective subsidiaries, taken as a whole, or (ii) would prevent or materially impair the ability of Borrower and Target to consummate the Transaction; provided, however, that no event, development, change or effect (by itself or when aggregated or taken together with any and all other events, developments, changes or effects) to the extent resulting from, arising out of, or attributable to, any of the following shall be deemed to constitute or be taken into account when determining whether a Combined Material Adverse Effect has occurred or may, would or could occur: (A) any changes, effects, developments or events in the economy or the financial, credit or securities markets in general (including changes |
in interest or exchange rates), (B) any changes, effects, developments or events in the industries in which Borrower and Target operate, (C) any changes, effects, developments or events resulting from the announcement or pendency of the transactions contemplated by the Acquisition Agreement, the identity of Borrower or Target or the performance or compliance with the terms of the Acquisition Agreement (including in each case (i) any actions, challenges or investigations relating to the Acquisition Agreement or the Transaction made or brought by any current or former stockholders of Borrower or Target and (ii) any loss of customers, suppliers or employees or any disruption in business relationships resulting therefrom), (D) any changes, effects, developments or events resulting from the failure of Borrower or Target to meet internal or published forecasts, budgets, earnings or financial projections for any period or fluctuations in the trading price or volume of Borrower or Targets common stock (but not, in each case, the underlying cause of such failure or fluctuations, unless such underlying cause would otherwise be excepted from this definition), (E) acts of God, natural disasters, calamities, national or international political or social conditions, including the engagement by any country in hostility (whether commenced before, on or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war), or the occurrence of a military or terrorist attack, or (F) any adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any Applicable Law or GAAP (as defined in the Acquisition Agreement) (or any interpretation thereof), except to the extent such changes, effects, developments or events resulting from or arising out of the matters described in clauses (A), (B) and (F) disproportionately affect Borrower and Target taken as a whole as compared to other for profit companies operating in the industries in which Borrower and Target operate (after taking into account the size of the Borrower and Target taken as a whole, relative to such other for profit companies). | |||
5. | Documentation and Other Customary Deliveries. The preparation, execution and delivery of a definitive first lien credit agreement (the First Lien Credit Agreement), intercreditor, and other documents executed in connection therewith (collectively, with the First Lien Credit Agreement, the First Lien Credit Facilities Documentation) shall be mutually acceptable to Borrower and Agent, incorporating substantially the terms and conditions as outlined herein and in the Commitment Letter to which this Schedule is attached and the delivery of other customary closing documents and for any other provisions not addressed herein, to be negotiated in good faith, customary for transactions of this type and mutually satisfactory. The preparation, execution and delivery of a definitive second lien credit agreement (the Second Lien Credit Agreement) and other documents executed in connection therewith (collectively, with the Second Lien Credit Agreement, the Second Lien Credit Facility Documentation; and together with the First Lien Credit Facilities Documentation, the Credit Facilities Documentation) shall be mutually acceptable to Borrower and Agent, incorporating substantially the terms and conditions as outlined herein and in the Commitment Letter to which this Schedule is attached and the delivery of other customary closing documents and for any other provisions not addressed herein, to be negotiated in good faith, customary for transactions of this type and mutually satisfactory. | ||
6. | Agent shall have received (a) customary opinions of counsel to Borrower and the Guarantors (which shall cover, among other things, authority, legality, validity, binding effect and enforceability of the Credit Facilities Documentation, no conflicts with other material agreements, creation and perfection of the liens granted thereunder on the Collateral) and of appropriate local counsel and customary evidence of authorization, customary officers certificates and good standing certificates (to the extent applicable), (b) a solvency certificate of Borrowers chief financial officer (certifying that, after giving effect to the Transaction, Borrower and its subsidiaries on a consolidated basis are solvent), and (c) customary |
endorsements naming the Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies to be maintained with respect to the properties of Borrower and its subsidiaries forming part of the Collateral. Reliance letters with respect to any legal opinions given by counsel to Borrower or Target in connection with the Acquisition. | |||
7. | Subject in all respects to the Funds Certain Provisions, all documents and instruments required to create and perfect Agents security interest in the Collateral shall have been executed and delivered and, if applicable, be in proper form for filing. | ||
8. | Agent shall have received all documentation and other information about Borrower and the Guarantors as has been reasonably requested in writing by Agent or Lead Arranger at least 10 days prior to the Closing Date and that they reasonably determine is required by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including without limitation the PATRIOT Act. | ||
9. | Agent shall have received (a) unaudited consolidated balance sheets and related statements of income, changes in equity and cash flows of Borrower for each subsequent fiscal quarter after December 31, 2010 ended at least 45 days before the Closing Date and (b) unaudited consolidated balance sheets and related statements of income, changes in equity and cash flows of Borrower and the Acquired Business, respectively, for each subsequent month after April 30, 2011 ended at least 30 days before the Closing Date. | ||
10. | Agent shall have received (a) a pro forma consolidated balance sheet and related pro forma consolidated statement of income of Borrower and its subsidiaries as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period ended at least 45 days prior to the Closing Date; (b) the combined estimated pro forma financial statements for Borrower and the Acquired Business for the year 2011, including revenue and EBITDA for Borrower and the Acquired Business by quarter for 2011; and (c) the Borrowers consolidated financial projections for the six year period commencing for the calendar year following the Closing Date, in each case prepared after giving effect to the Transaction as if the Transaction had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements); provided that such pro forma financial statements shall meet the requirements of Regulation S-X under the Securities Act of 1933, as amended, and all other accounting rules and regulations of the SEC promulgated thereunder applicable to a registration statement under such Act on FormS-1; provided, further, that the pro forma financial statements delivered pursuant to clauses (a) and (b) above were prepared in good faith on the basis of the assumptions stated therein, which assumptions are reasonable in light of the then existing conditions, and, in the case of each of this and the immediately preceding provisos, the chief financial officer of Borrower shall have provided to Agent a written certification to that effect. | ||
11. | All fees required to be paid pursuant to the Fee Letter and reasonable out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter and the Fee Letter shall, upon the initial borrowing under the Credit Facilities, have been paid on the Closing Date (which amounts may be offset against the proceeds of the Credit Facilities). | ||
12. | After giving effect to the consummation of the Transaction, Borrower and its subsidiaries shall have no outstanding preferred equity, debt for borrowed money or capitalized lease obligations, except for (a) 5,000 shares of Series A preferred stock, par value $.001 per share; stated value $100 per share of Borrower, (b) debt for borrowed money incurred pursuant to the Credit |
Facilities, (c) outstanding letters of credit with an aggregate face amount of not more than $4,660,000 (the Closing Date Letters of Credit) and (d) such other existing debt for borrowed money and capitalized lease obligations in an aggregate amount not to exceed $1,500,000. |