ex-10.5



 






Exhibit 10.5




FIRST
AMENDMENT TO AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT





     This FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT (the
“First Amendment”) is made as of this 10th day of August, 2004 by and between CAPITALSOURCE FINANCE
LLC, a Delaware limited liability company, with its chief executive office located at 4445 Willard
Avenue, Chevy Chase, Maryland 20815 (“Lender”) and UNITED STATES PHARMACEUTICAL GROUP, L.L.C.
d/b/a NATIONSHEALTH, a Delaware limited liability company and NATIONSHEALTH HOLDINGS, L.L.C., a
Florida limited liability company (jointly and severally, the “Borrower”).



W I T N E S S E T H:




     WHEREAS, Lender and Borrower entered into a certain Revolving Credit and Security Agreement
dated as of the 30th day of April, 2004 (the “Original Credit Agreement”) whereby Lender
agreed to make loans, advances and other extensions of credit to Borrower thereunder; and



     WHEREAS, Lender and Borrower entered into a certain Amended and Restated Revolving Credit and
Security Agreement dated as of the 29th of June, 2004 (the “Agreement”) whereby Lender
made available to Borrower a separate Overadvance Facility and permitted Borrower to include its
inventory within the Borrowing Base for the Revolving Facility; and



     WHEREAS, Borrower failed to consummate the Merger as contemplated under the Merger Documents
on or before July 31, 2004; and



     WHEREAS, Borrower has requested and Lender has agreed to the modification of certain
provisions of the Agreement upon the terms and subject to the conditions set forth herein; and



     WHEREAS, Section 12.8 of the Agreement provides that no modification or amendment of the
Agreement shall be effective unless the same shall be in writing and signed by the parties thereto.



     NOW, THEREFORE, in consideration of the promises and other mutual covenants contained herein,
the receipt and sufficiency of which is hereby acknowledged, Lender and Borrower agree as follows:



     1. Amendment of Agreement. Lender and Borrower hereby agree to amend the
Agreement as follows:



     (a) The last sentence of Subsection (a) of Section 5.23 of the Agreement, entitled “Merger
Documents, HealthTrans Agreement, Wellpoint Agreement and Employment Agreements,” is hereby
amended and restated in its entirety as follows:




     No Borrower is aware of any event, fact, condition or circumstance (other than
conditions set forth in the Merger Documents as of the Closing Date) which, with the giving
of notice or passage of time or both, which may result in the termination of the Merger
Documents, prevent the closing of the Merger or delay the closing of the Merger beyond
September 1, 2004.



     (b) Subsection (a) of Section 11.1 of the Agreement, entitled “Termination and Effective
Date Thereof,” is hereby amended and restated in its entirety as follows:



 









 






     (a) Subject to Lender’s right to terminate and cease making Advances and Overadvances
upon or after any Event of Default, this Agreement shall continue in full force and effect
until the full performance and indefeasible payment in cash of all Obligations, unless
terminated sooner as provided in this Section 11.1. Borrower may terminate this
Agreement at any time upon not less than sixty (60) calendar days’ prior written notice to
Lender and upon full performance and indefeasible payment in full in cash of all Obligations
on or prior to such 60th calendar day after Receipt by Lender of such written
notice; provided, however, that, notwithstanding any other provision of any Loan
Document, Borrower shall have no right to terminate this Agreement until after the second
anniversary of the Closing Date. All of the Obligations shall be immediately due and
payable upon any such termination on the termination date stated in any notice of
termination (the “Termination Date”); provided that, notwithstanding any other
provision of any Loan Document, the Termination Date shall be effective no earlier than the
first Business Day of the month following the expiration of the sixty (60) calendar days’
prior written notice period. Notwithstanding any other provision of any Loan Document, no
termination of this Agreement shall affect Lender’s rights or any of the Obligations
existing as of the effective date of such termination, and the provisions of the Loan
Documents shall continue to be fully operative until the Obligations have been fully
performed and indefeasibly paid in cash in full. The Liens granted to Lender under the
Security Documents and the financing statements filed pursuant thereto and the rights and
powers of Lender shall continue in full force and effect notwithstanding the fact that
Borrower’s borrowings hereunder may from time to time be in a zero or credit position until
all of the Obligations have been fully performed and indefeasibly paid in full in cash.



     (c) Section 1 of Annex I of the Agreement, entitled “Minimum EBITDA,” is hereby
amended and restated in its entirety as follows (effective as of May 31, 2004):



     1) Minimum EBITDA



          At no time shall Borrower permit EBITDA to be less than the amounts set forth across from such
month or month(s) for the Test Period most recently ended:




	 	 	 
	Test Period Ending	 	Minimum EBITDA
	May 31, 2004
	 	($3,300,000)
	 	 	 
	June 30, 2004
	 	($4,000,000)
	 	 	 
	July 31, 2004
	 	($3,200,000)
	 	 	 
	August 31, 2004
	 	($1,500,000)
	 	 	 
	September 30, 2004
	 	$350,000
	 	 	 
	October 31, 2004
	 	$650,000
	 	 	 
	November 30, 2004 through December 31, 2004
	 	$950,000
	 	 	 
	January 31, 2005 through June 30, 2005
	 	$4,000,000
	 	 	 
	July 31, 2005 through December 31, 2005
	 	$7,000,000
	 	 	 
	January 31, 2006 through December 31, 2006
	 	$8,500,000
	 	 	 
	January 31, 2007 and thereafter
	 	$9,400,000






2









 






     (d) Section 2 of Annex I of the Agreement, entitled “Fixed Charge Coverage Ratio
(EBITDA/Fixed Charge),” is hereby amended and restated in its entirety as follows (effective as
of May 31, 2004):



     2) Fixed Charge Coverage Ratio (EBITDA/Fixed Charges)



          At no time shall Borrower permit Fixed Charge Coverage Ratio to be less than the following as
at the end of the following calendar months:




	 	 	 
	Calendar Month Ending	 	Ratio
	May 31, 2004 through July 31, 2004
	 	(8.00) to 1.0
	 	 	 
	August 31, 2004
	 	(3.00) to 1.0
	 	 	 
	September 30, 2004
	 	.50 to 1.0
	 	 	 
	October 31, 2004
	 	.75 to 1.0
	 	 	 
	November 30, 2004 through December 31, 2004
	 	1.00 to 1.0
	 	 	 
	January 31, 2005 and thereafter
	 	1.50 to 1.0






     (e) Section 3 of Annex I of the Agreement, entitled “Cash Velocity,” is hereby amended
and restated in its entirety as follows (effective as of May 31, 2004):



     3) Cash Velocity



          Collections of Borrower’s Accounts shall not be less than the amount set forth below for each
calendar month during the Term; provided, that upon any violation of or failure to comply
with this covenant Lender shall have the right, in its sole discretion, to consider for all
purposes under the Agreement as though Borrower actually collected Accounts equal to such minimum
required amount.




	 	 	 	 	 
	Calendar Month Ending	 	Cash Velocity
	May 31, 2004

	 	$	3,800,000	 
	 
	 	 	 	 
	June 30, 2004 through July 31, 2004

	 	$	4,600,000	 
	 
	 	 	 	 
	August 31, 2004 through September 30, 2004

	 	$	7,000,000	 
	 
	 	 	 	 
	October 31, 2004 through December 31, 2004

	 	$	8,000,000	 
	 
	 	 	 	 
	January 31, 2005 through June 30, 2005

	 	$	12,000,000	 
	 
	 	 	 	 
	July 31, 2005 through December 31, 2005

	 	$	14,000,000	 
	 
	 	 	 	 
	January 31, 2006 through December 31, 2006

	 	$	16,000,000	 
	 
	 	 	 	 
	January 31, 2007 and thereafter

	 	$	17,500,000	 






3









 








     (f) The definition of “Minimum Termination Fee” as contained within Appendix A of the
Agreement is hereby amended and restated to read as follows:




     “Minimum Termination Fee” shall mean (for the time period indicated) the amount
equal to 3% of the Facility Cap if the date of notice of such termination by Borrower is
after the second anniversary date of the Closing Date but prior to the end of the Term.



     (g) The Form of Compliance Certificate required under Section 6.1(a) of the Agreement, shall
be replaced with Exhibit A attached hereto.



     2. Amendment Fee. In consideration of the amendment of certain provisions of the
Agreement and as a condition thereof, Borrower agrees to pay to Lender a nonrefundable amendment
fee in the amount of $25,000.00.



     3. Conditions to Effectiveness. This First Amendment shall be effective on the date
(the “Effective Date”) upon which the following conditions precedent are satisfied:



     (a) Borrower shall have delivered to Lender an executed original copy of this First Amendment
and each other agreement, document or instrument reasonably requested by the Lender in connection
with this First Amendment, each in form and substance reasonably satisfactory to Lender; Lender
shall have received this First Amendment, duly executed by Borrower.



     (b) Lender shall have received payment in full of the Amendment Fee as set forth in Section 2
of this First Amendment.



     (c) The representations and warranties contained herein and in all other Loan Documents shall
be true and correct.



     (d) No Default or Event of Default shall be in existence; and




     (e) Lender shall have received all fees, charges and expenses payable to Lender as required by
this First Amendment and in connection with this First Amendment and the documentation related
hereto, including, but not limited to, legal fees and out-of-pocket costs (including in-house
counsel fees and expenses).



     4. Representations and Warranties.



          (a) Notwithstanding any other provision of this First Amendment, Borrower hereby confirms and
makes all of the representations and warranties set forth in the Agreement and other Loan Documents
with respect to such Borrower and this First Amendment as of the date hereof and as of the
Effective Date and confirms that they are true and correct and no Default or Event of Default has
occurred and is continuing as of the date hereof.




          (b) Borrower hereby represents and warrants as of the date of this First Amendment and as of
the Effective Date as follows: (i) it is duly incorporated or organized, validly existing and in
good standing under the laws of its jurisdiction of organization; (ii) the execution, delivery and

4









 








performance by it of this First Amendment, as applicable, are within its powers, have been
duly authorized, and do not contravene (A) its articles of organization, operating agreement, or
other organizational documents, or (B) any applicable law; (iii) no consent, license, permit,
approval or authorization of, or registration, filing or declaration with any Governmental
Authority or other Person, is required in connection with the execution, delivery, performance,
validity or enforceability of this First Amendment, as applicable, by or against it; (iv) this
First Amendment has been duly executed and delivered by it; (v) this First Amendment constitutes
its legal, valid and binding obligations enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general
principles of equity; and (iii) after giving effect to this First Amendment, it is not in default
under the Agreement and no Default or Event of Default exists, has occurred or is continuing.




     5. Expenses. Borrower shall pay all costs and expenses incurred by Lender or any of
its Affiliates, including, without limitation, documentation and diligence fees and expenses, all
search, audit, appraisal, recording, professional and filing fees and expenses and all other
out-of-pocket charges and expenses and reasonable attorneys’ fees and expenses, in connection with
entering into, negotiating, preparing, reviewing and executing this First Amendment contemplated
hereby and all related agreements, documents and instruments, and all of the same, to the extent
incurred and not promptly reimbursed by Borrower, may be charged to Borrower’s account and shall be
part of the Obligations. If Lender or any of its Affiliates uses in-house counsel for any of the
purposes set forth above Borrower expressly agrees that its Obligations include reasonable charges
for such work commensurate with the fees that would otherwise be charged by outside legal counsel
selected by Lender or such Affiliate in its sole discretion for the work performed.



     6. Effect of Amendment. Lender and Borrower hereby acknowledge and agree that except
as provided in this First Amendment, the Agreement, the Note and the other Loan Documents remain in
full force and effect and have not been modified or amended in any respect, it being the intention
of Lender and Borrower that this First Amendment and the Agreement be read, construed and
interpreted as one and the same instrument. The foregoing amendments are subject to Borrower
executing and delivering this First Amendment and all additional documents required to be executed
and delivered herein. Borrower hereby acknowledges that Lender shall be entitled to require strict
compliance with the affirmative, negative and financial covenants set forth in the Agreement at all
times in the future. In addition, the foregoing does not constitute a waiver by Lender of any
Default or Event of Default.



     7. Confirmation of Agreements. Lender and Borrower hereby acknowledge and agree that,
except as provided in this First Amendment, the Agreement, the Note and the other Loan Documents,
and the grant of the liens, security interests and other encumbrances thereunder, and their
agreements, covenants, obligations, representations and warranties thereunder and therein, are
hereby expressly ratified, confirmed and restated as of the date hereof.



     8. References to Loan Documents. Each of the other Loan Documents are hereby modified
in such a manner as to be consistent with all modifications and agreements contained herein and to
the extent that all references therein to and descriptions therein of the Agreement and the Note
shall be deemed to refer to and describe the Agreement, as modified by this First Amendment.



     9. Capitalized Terms. All capitalized terms not otherwise defined in this First
Amendment shall have the meanings ascribed to such terms in the Agreement.



     10. Benefit. This First Amendment shall inure to the benefit of and bind the parties
hereto and their respective successors and assigns.



5








 





     11. Amendments. This First Amendment may not be changed, modified, amended,
restated, waived, supplemented, discharged, canceled or terminated orally or by any course of
dealing or in any other manner other than by the written agreement of Lender and Borrower. This
First Amendment shall be considered part of the Agreement for all purposes under the Agreement.



     12.  Headings and Counterparts. The captions in this First Amendment are intended for
convenience and reference only and do not constitute and shall not be interpreted as part of this
First Amendment and shall not affect the meaning or interpretation of this First Amendment. This
First Amendment may be executed in one or more counterparts, all of which taken together shall
constitute but one and the same instrument. This First Amendment may be executed by facsimile
transmission, which facsimile signatures shall be considered original executed counterparts for all
purposes, and each party to this First Amendment agrees that it will be bound by its own facsimile
signature and that it accepts the facsimile signature of each other party to this First Amendment.



     13. Governing Law. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE CHOICE OF LAW PROVISIONS SET FORTH IN THE AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY
TRIAL AND NOTICE PROVISIONS OF THE AGREEMENT.



     14. Entire Agreement. This First Amendment, the Agreement and the other Loan
Documents constitute the entire agreement between the parties with respect to the subject matter
hereof and thereof and supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof and thereof and may not be contradicted by evidence of prior, contemporaneous
or subsequent oral agreements between the parties. There are no unwritten oral agreements between
the parties.



     15. Miscellaneous. Whenever the context and construction so require, all words used
in the singular number herein shall be deemed to have been used in the plural, and vice versa, and
the masculine gender shall include the feminine and neuter and the neuter shall include the
masculine and feminine. This First Amendment shall inure to the benefit of Lender, all future
holders of any Note, any of the Obligations or any of the Collateral and all Transferees, and each
of their respective successors and permitted assigns. No Borrower may assign, delegate or transfer
this First Amendment or any of its rights or obligations under this First Amendment without the
prior written consent of Lender. No rights are intended to be created under this First Amendment
for the benefit of any third party donee, creditor or incidental beneficiary of Borrower or any
Guarantor. Nothing contained in this First Amendment shall be construed as a delegation to Lender
of any Borrower’s or any Guarantor’s duty of performance, including, without limitation, any duties
under any account or contract in which Lender has a security interest or Lien. This First
Amendment shall be binding upon Borrowers and their respective successors and assigns.



[SIGNATURES APPEAR ON THE FOLLOWING PAGE]




6









 








     IN WITNESS WHEREOF, Lender and Borrower have executed this First Amendment as of the date
first above written.



LENDER:




	 	 	 	 	 
	 	CAPITALSOURCE FINANCE LLC


 	 
	 	By:  	/s/ Keith D. Reuben
 	 
	 	 	Name:  	Keith D. Reuben 	 
	 	 	Title:  	Chief Operating Officer 	 
	 



BORROWER:




	 	 	 	 	 
	 	UNITED STATES PHARMACEUTICAL GROUP, L.L.C. d/b/a
NATIONSHEALTH


 	 
	 	By:  	/s/ Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	 	 
	 
	 	NATIONSHEALTH HOLDINGS, L.L.C.


 	 
	 	By:  	/s/ Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	 	 



7









 






	 	 	 	 	 



EXHIBIT A




FORM OF COMPLIANCE CERTIFICATE




 









 








FORM OF COMPLIANCE CERTIFICATE




UNITED STATES PHARMACEUTICAL GROUP, L.L.C.

and

NATIONSHEALTH HOLDINGS, L.L.C.




Date: __________, _______.



This Certificate is given by United States Pharmaceutical Group, L.L.C. and NationsHealth Holdings,
L.L.C. (individually, collectively, jointly, and severally, the “Borrower”), pursuant to
subsection 6.1(a) of that certain Amended and Restated Revolving Credit and Security
Agreement dated as of June 29, 2004 among the Borrower and, CapitalSource Finance LLC, a Delaware
limited liability company (the “Lender”) (as amended, modified, supplemented or restated
from time to time, the “Loan Agreement”). Capitalized terms used herein without definition
shall have the meanings set forth in the Loan Agreement.





     The
officer executing this Certificate is the __________________ of the Borrower and as such
is duly authorized to execute and deliver this Certificate on behalf of the Borrower. By so
executing this Certificate, the Borrower hereby certifies to the Lender that:




     (a) the financial statements delivered with this Certificate in accordance with
subsection 6.1(a) of the Loan Agreement fairly present the consolidated results of
operations and financial condition of the Borrower as of, and for the respective periods
ending on, the dates of such financial statements;




     (b) the Borrower has reviewed the relevant terms of the Loan Documents and the
condition of the Borrower;




     (c) no Default or Event of Default has occurred or is continuing, except as set forth
in Schedule 2 hereto, which includes a description of the nature and status and
period of existence of such Default or Event of Default, if any, and what action the
Borrower has taken, and is undertaking and proposes to take with respect thereto;




     (d) the Borrower is in compliance with all financial covenants set forth in the Loan
Agreement and then applicable, as demonstrated, with respect to Annex I of the Loan
Agreement, by the calculations of such covenants in Schedule 1 hereto, except as set
forth in Schedule 2 hereto, and




     (e) the Borrower is not aware of any event, fact, condition or circumstance (other than
conditions set forth in the Merger Documents as of the Closing Date) which, with the giving
of notice or passage of time or both, which may result in the termination of the Merger
Documents, prevent the closing of the Merger or delay the closing of the Merger beyond
September 1, 2004.



 









 





     IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed by its duly
authorized officer on behalf of the Borrower this ___day of _______________, 20___.



	 	 	 	 	 
	 	UNITED STATES PHARMACEUTICAL GROUP, L.L.C. d/b/a
NATIONSHEALTH


 	 
	 	By:  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Its: 	 
	 
	 	NATIONSHEALTH HOLDINGS, L.L.C.


 	 
	 	By:  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Its: 	 



 









 






	 	 	 	 	 



SCHEDULE 1 TO COMPLIANCE CERTIFICATE




Date: _______________ __, 20__




MINIMUM EBITDA

(ANNEX I (1))




	 	 	 
	 	 	Test Period
	 	 	(the three most
	 	 	recent calendar
	 	 	months)
	EBITDA for the applicable period is defined as follows (all of the
the following determined in accordance with GAAP):
	 	 
	 
	 	 
	Net income (or loss) of the Borrower 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 in
which any other Person (other than the Borrower) has a joint interest,
except to the extent of the amount of dividends or other distributions
actually paid to the Borrower by such Person during such period, (ii)
the income (or loss) of any Person accrued prior to the date it becomes
a Borrower or is merged into or consolidated with a Borrower or that
Person’s assets are acquired by a Borrower, (iii) the income of any
Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions of that income by that
Subsidiary is not at the time permitted by operation of the terms
of the charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that
Subsidiary, (iv) compensation expense resulting from the issuance
of capital stock, stock options or stock appreciation rights issued to
former or current employees, including officers, 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
thereof, and (v) compensation expense resulting from the
repurchase of capital stock, options and rights described in clause (iv)
above.

	 	$_________
	 
	 	 
	Plus: Interest Expense, defined for any Test Period as, total interest
expense (including attributable to Capital Leases in accordance with
GAAP) and fees with respect to all outstanding Indebtedness including
capitalized interest but excluding commissions, discounts and other
fees owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Interest Rate Agreements.

	 	_________
	 
	Plus: Taxes on income, whether paid, payable or accrued for such period,
to the extent deducted in determining such net income (or loss)

	 	_________






 









 






	 	 	 	 	 
	 	 	Test Period
	Plus: Depreciation expense for such period to the extent deducted in
determining such net income (or loss)

	 	 	_________	 
	 
	 	 	 	 
	Plus: Amortization expense for such period to the extent deducted in
determining such net income (or loss)

	 	 	_________	 
	 
	 	 	 	 
	Plus: Losses from any sale of assets (other than sales in the ordinary
course of business) for such period to the extent deducted in
determining such net income (or loss)

	 	 	_________	 
	 
	 	 	 	 
	Plus: All other non-cash, non-recurring charges and expenses,
excluding accruals for cash expenses made in the ordinary course of
business for such period to the extent deducted in determining such
net income (or loss)

	 	 	_________	 
	 
	 	 	 	 
	Minus: Gains from any sale of assets, other than sales in the
ordinary course of business, for such period to the extent included
in determining such net income (or loss)

	 	 	_________	 
	 
	 	 	 	 
	Minus: Other extraordinary or non-recurring gains for such period
to the extent included in determining such net income (or
loss)

	 	 	_________	 
	 
	 	 	 	 
	EBITDA

	 	 	$	 
	 

	 	 	 	 
	Minimum EBITDA for the applicable period required under Loan Agreement

	 	$	_________	 
	 
	In Compliance

	 	Yes / No







 









 






SCHEDULE 1 TO COMPLIANCE CERTIFICATE (cont’d)




Date: __________________ __, 20__




FIXED CHARGE COVERAGE RATIO

(EBITDA/Fixed Charges)

(ANNEX I (2))




	 	 	 	 	 
	Fixed Charges for the applicable period:

	 	Test Period

	 

	 	 	 	 
	 
	 	 	 	 
	Scheduled or other required payments of principal on Indebtedness

	 	$	_________	 
	 
	 	 	 	 
	Plus: Interest Expense paid, or required to be paid (Interest
Expense calculated in the manner set forth above under “Minimum
EBITDA (Annex I (2))”)

	 	 	_________	 
	 
	 	 	 	 
	Plus: Dividends paid or accrued or declared

	 	 	_________	 
	 
	 	 	 	 
	Plus: Capital Expenditures during such period

	 	 	_________	 
	 
	 	 	 	 
	Plus: Income taxes paid in cash or accrued during such period

	 	 	_________	 
	 
	 	 	 	 
	Fixed Charges

	 	 	$	 
	 

	 	 	 	 
	 
	 	 	 	 
	EBITDA (calculated in the manner set forth above under “Minimum
EBITDA (Annex I (2))”)

	 	 	$	 
	 

	 	 	 	 
	 
	 	 	 	 
	Fixed Charge Coverage Ratio (EBITDA divided by Fixed Charges)
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Minimum Fixed Charge Coverage Ratio for the applicable period

required under Loan Agreement

	 	_________to

1.00

	 
	 	 	 	 
	In Compliance

	 	Yes / No







 









 






SCHEDULE 1 TO COMPLIANCE CERTIFICATE (cont’d)




Date: _______________ __, 20__




CASH VELOCITY

(ANNEX I (3))




	 	 	 
	 	 	Calendar Month
	For each calendar month during the Term, collections
of Borrower’s Accounts shall not be less than amount
required for the applicable period in the Loan Agreement,
provided that upon any violation of or failure to comply
with this covenant Lender shall have the right, in its
sole discretion, to consider for all purposes under the
Loan Agreement as though Borrower actually collected
Accounts equal to such minimum required amount.
	 	 
	 
	 	 
	Collections of Borrower’s Accounts for the calendar month of
____________

	 	$_________
	 
	 	 
	Collections of Borrower’s Accounts, for the applicable
period as required under Loan Agreement

	 	$_________
	 
	 	 
	In Compliance

	 	Yes / No






 









 






SCHEDULE 1 TO COMPLIANCE CERTIFICATE (cont’d)




Date: _______________ __, 20__




MINIMUM LIQUIDITY AND WORKING CAPITAL

(ANNEX I (4))




	 	 	 
	 	 	 
	 	 	Calendar Month
	At Closing and at all other times Borrower shall have
Available Cash on hand, which shall mean, for and on any
date, the sum without duplication of the following for
Borrower: (a) unrestricted cash on hand on such date, (b)
Cash Equivalents held on such date, and (c) the
un-borrowed Availability on and as of such date.
	 	 
	 
	 	 
	Unrestricted cash on hand as of the date of the balance
sheet submitted herewith

	 	$_________
	 
	 	 
	Cash Equivalents as of the date of the balance sheet
submitted herewith

	 	_________
	 
	 	 
	Un-borrowed availability on and as of the date of the most
recently submitted Borrowing Base Certificate

	 	_________
	 
	 	 
	Total Available Cash, as defined above for the applicable

period required under Loan Agreement

	 	$_________
	 
	 	 
	In Compliance

	 	Yes / No







 










 






SCHEDULE 1 TO COMPLIANCE CERTIFICATE (cont’d)

SCHEDULE 2 TO COMPLIANCE CERTIFICATE




Date: ________________ __, 20__




CONDITIONS OR EVENTS WHICH CONSTITUTE

A DEFAULT OR AN EVENT OF DEFAULT



If any condition or event exists that constitutes a Default or an Event of Default, specify nature
and period of existence and what action the Borrower has taken, is taking or proposes to take with
respect thereto; if no such condition or event exists, state “None.”