-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E3PUXLFOAd5K0EJUxcgm0QmbeCLl3S+ZnHPmhGvAgBkSq7sTYO3p2xfR2T9NLD3/ GaYO5D5r987OShwikwmWrA== 0000950172-98-000231.txt : 19980310 0000950172-98-000231.hdr.sgml : 19980310 ACCESSION NUMBER: 0000950172-98-000231 CONFORMED SUBMISSION TYPE: SC 13E3/A PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19980309 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL HOSPITAL SERVICES INC CENTRAL INDEX KEY: 0000886171 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS EQUIPMENT RENTAL & LEASING [7350] IRS NUMBER: 410760940 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3/A SEC ACT: SEC FILE NUMBER: 005-42484 FILM NUMBER: 98560498 BUSINESS ADDRESS: STREET 1: 1250 NORTHLAND PLZ STREET 2: 3800 W 80TH ST CITY: BLOOMINGTON STATE: MN ZIP: 55431-4442 BUSINESS PHONE: 6128933200 MAIL ADDRESS: STREET 1: 1250 NORTHLAND PLAZA STREET 2: 3800 W 80TH STREET CITY: BLOOMINGTON STATE: MN ZIP: 55431-4442 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL HOSPITAL SERVICES INC CENTRAL INDEX KEY: 0000886171 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS EQUIPMENT RENTAL & LEASING [7350] IRS NUMBER: 410760940 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3/A BUSINESS ADDRESS: STREET 1: 1250 NORTHLAND PLZ STREET 2: 3800 W 80TH ST CITY: BLOOMINGTON STATE: MN ZIP: 55431-4442 BUSINESS PHONE: 6128933200 MAIL ADDRESS: STREET 1: 1250 NORTHLAND PLAZA STREET 2: 3800 W 80TH STREET CITY: BLOOMINGTON STATE: MN ZIP: 55431-4442 SC 13E3/A 1 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 -------------------------------------------------------- (Name of Person(s) Filing Statement) Common Stock, par value $.01 per share -------------------------------------- (Title of Class of Securities) 91359L109 ------------------------------------- (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 ----------------------------------------------- (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 --------------------------------------- David E. Dovenberg EXHIBIT INDEX Sequentially Exhibit No. Numbered Page ----------- ------------- (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) EX-99 2 EXHIBIT (A)(5) 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: EX-99 3 EXHIBIT (A)(6) 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
Insurance Type of Policy Form Insurance Company Policy Term 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
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. EX-99 4 EXHIBIT (A)(7) 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 EX-99 5 EXHIBIT (A)(8) 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: EX-99 6 EXHIBIT (A)(9) 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 EX-99 7 EXHIBIT (C)(10) 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. EX-99 8 EXHIBIT (C)(11) 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 -------------------------------- ----------------------------- EX-99 9 EXHIBIT (C)(12) 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 EX-99 10 EXHIBIT (C)(13) 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 EX-99 11 EXHIBIT (C)(14) 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. EX-99 12 EXHIBIT (C)(15) 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: -----END PRIVACY-ENHANCED MESSAGE-----