Document:

Employment  Letter Agreement with Charles W. Peacock

 Exhibit 10.1 
 

 
 June 29, 2006 
 Charles Peacock 
 Dear Charles, 
 American Technology Corporation (“Company”) is very pleased to confirm our offer of employment. 
  

			
	Title:	  	Vice President, Government and Military Sales
		
	Start Date:	  	June 30, 2006
		
	Salary:	  	A semi-monthly salary in the amount of $7,500 ($180,000 annually)
		
	Sales Commission Plan:	  	You will be eligible to participate in American Technology Sales Commission Plan. The commission will be based on the Government and Military Group attaining quarterly and annual goals. The
detailed quarterly and annual goals will be created jointly by you and John Zavoli by October 1, 2006 for FY07. During the first three months of your employment (July, August, September 2006) you will receive a 1.5% override on all Government and
Military sales. Commissions are payable on a quarterly basis and will be paid on the second pay period of the month following the end of the commission quarter.
		
	Stock Options:	  	Management will recommend to the Compensation Committee at its first meeting following your start date, that you be granted stock options to purchase 100,000 shares of common stock. The
Compensation Committee has the discretion to approve or deny the grant. The recommended options will have an exercise price equal to the fair market value of our common stock (determined in accordance with our 2005 Stock Option Plan) on the date the
Compensation Committee approves the grant, and will be exercisable for five (5) years after grant, subject to earlier termination as set forth in the 2005 Stock Option Plan. The recommended options will vest over four (4) years with 25% vesting
on

  
  
 13114 Evening Creek Dr. S. San Diego, CA 92128    Ÿ    Tel: 858.679.2114    Ÿ    Fax:
858.679.0545    Ÿ    www.atcsd.com 

			
		  	grant, and will be exercisable for five (5) years after grant, subject to earlier termination as set forth in the 2005 Stock Option Plan. The recommended options will vest over four (4) years
with 25% vesting on the first anniversary of grant, and then in equal quarterly installments over the following three years of continuous service with the Company.
		
	Health Benefits:	  	The Company offers a comprehensive benefits plan that includes medical, dental, vision, short-term disability, long-term disability and life insurances. The company pays 100% of the premiums
for you and your dependents. The company reserves the right to amend the terms of the benefit programs, including premiums, at any time. Benefits begin the first day of the month following your hire date. Except for the 401(k), this has quarterly
enrollments.
		
	Paid Time Off & Holidays:	  	You will receive 15 days of accrued Paid Time Off (PTO) annually, in use for vacation or for personal time off. PTO hours are accrued per pay period.
		
		  	The Company offers 9-paid holidays each calendar year. You must be on active status the day before and the day after the holiday to receive holiday pay.
		
	Retirement:	  	A 401k package is available with multiple investment options and the company matches 25% of the employee’s deferral up to 6% of your annual earnings. (Note: Some IRS limitations may
apply.)

 Due to the enactment of the Immigration Reform and Control Act of 1986, this offer is contingent on your ability
to produce acceptable documentation verifying your eligibility to work in the United States. You will be required to present the necessary documents on the day you begin work at American Technology Corp. 
 Additionally, as a condition of this offer and of your employment with American Technology Corp., you will be required to preserve the Company’s proprietary and
confidential information and you must comply with the Company’s policies and procedures. Accordingly, you will be required to execute the Company’s Non-Disclosure Agreement and other policies on your first date of employment. 

If accepted, your employment will be at-will with no specified period or term of employment. This means that either you or the Company may terminate employment at
anytime, with or without reason. The Company may also transfer, promote, demote or otherwise alter your position and/or status at any time and for any reason. An employment agreement for a specified period of time, which contradicts this at-will
agreement, may only be entered into in writing, signed by the President of the Corporation. 

 If there are any questions, please do not hesitate to call me. 
 Sincerely, 
 /s/ John Zavoli 

 John Zavoli 
 President 
 I understand and agree to the
terms and conditions set forth in this letter. I further understand that any misrepresentations that I have made on my employment application or resume can result in termination. I acknowledge that no statement contradicting this letter, oral or
written, has been made to me, that I am not relying on any statement or term not contained in this letter, and that no agreements exist which are contrary to the terms and conditions set forth in this letter. 
 Accepted by: CW Peacock
                                        
                                        Date:
6/30/06Fifth Amendment and Limited Waiver to the Company's $275,000,000 Credit Agm't

 EXHIBIT 10.1 
 FIFTH AMENDMENT AND LIMITED WAIVER, dated as of August 9, 2006 (this “Amendment”), to the Credit Agreement, dated as of
March 26, 2002 (as amended by the Amendment dated as of December 31, 2002, the Second Amendment and Waiver dated as of June 7, 2004, the Waiver dated as of June 15, 2005, the Third Amendment dated as of November 8, 2005, and
the Fourth Amendment, dated as of May 9, 2006, and as further amended, supplemented or modified from time to time, the “Credit Agreement”), among ROTECH HEALTHCARE INC., a Delaware corporation (the “Borrower”),
the Lenders parties thereto, UBS SECURITIES LLC (formerly known as UBS WARBURG LLC) and GOLDMAN SACHS CREDIT PARTNERS L.P., as joint lead arrangers and joint bookrunners (the “Arrangers”), GOLDMAN SACHS CREDIT PARTNERS L.P., as
Syndication Agent, THE BANK OF NOVA SCOTIA, DEUTSCHE BANK SECURITIES INC. (formerly known as Deutsche Banc Alex. Brown Inc.) and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation Agents, GENERAL ELECTRIC CAPITAL CORPORATION, as Collateral
Agent, and UBS AG, STAMFORD BRANCH, as Administrative Agent. 
 W  I  T  N  E 
S  S  E  T  H: 
 WHEREAS, the Borrower has informed the Lenders that it intends to
record the following non-cash charges as of the end of its fiscal quarter ending June 30, 2006 (collectively, the “Non-cash Charges”): (i) a charge for impairment of goodwill that will not exceed $449,000,000, (ii) a charge
relating to professional and consulting fees attributable to a proposed transaction that will not exceed $3,200,000 and (iii) a charge in respect of additions to its provision for contractual adjustments related to account receivables that will
not exceed $17,500,000; 
 WHEREAS, as a consequence of the Non-cash Charges the Borrower will not be in compliance with the financial
condition covenants set forth in Section 7.1 of the Credit Agreement as of June 30, 2006; 
 WHEREAS, the Borrower has requested
that the Lenders agree to waive certain provisions of the Credit Agreement as provided herein, and the Lenders are agreeable to such request but only upon the terms and subject to the conditions set forth herein. 
 WHEREAS, the Borrower has requested that certain provisions of the Credit Agreement be amended upon the terms and subject to the conditions set forth
herein; and 
 WHEREAS, the Lenders have agreed to such amendments upon the terms and subject to the conditions set forth
herein; 
 NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and in the Credit Agreement, the parties
hereto hereby agree as follows: 
 SECTION 1. DEFINITIONS. 
 Unless otherwise defined herein, terms used herein and defined in the Credit Agreement are used herein as therein defined. 
 SECTION 2. WAIVERS. 
 (a) Waiver
of Section 7.1(a). The Lenders hereby waive any Default or Event of Default arising under Section 7.1(a) of the Credit Agreement solely as a result of the Borrower’s failure to 

 
be in compliance with the Consolidated Total Leverage Ratio for the period ending on June 30, 2006; provided that the Waiver set forth in this
Section 2(a) shall expire and be of no further force or effect on September 15, 2006. 
 (b) Waiver of Section 7.1(b).
The Lenders hereby waive any Default or Event of Default arising under Section 7.1(b) of the Credit Agreement solely as a result of the Borrower’s failure to be in compliance with the Consolidated Senior Leverage Ratio for the period
ending on June 30, 2006; provided that the Waiver set forth in this Section 2(b) shall expire and be of no further force or effect on September 15, 2006. 
 (c) Waiver of Section 7.1(c). The Lenders hereby waive any Default or Event of Default arising under Section 7.1(c) of the Credit Agreement solely as a result of the Borrower’s failure to be in
compliance with the Consolidated Interest Coverage Ratio for the period ending on June 30, 2006; provided that the Waiver set forth in this Section 2(c) shall expire and be of no further force or effect on September 15, 2006.

 (d) Waiver of Section 7.1(d). The Lenders hereby waive any Default or Event of Default arising under Section 7.1(d) of
the Credit Agreement solely as a result of the Borrower’s failure to be in compliance with the Consolidated Fixed Charge Coverage Ratio for the period ending June 30, 2006; provided that the Waiver set forth in this Section 2(d) shall
expire and be of no further force or effect on September 15, 2006. 
 SECTION 3. AMENDMENT. 
 Amendment to Section 6.2 (Certificates; Other Information). Section 6.2 of the Credit Agreement is hereby amended by: 
 (i) inserting a new clause (h) at the end thereof to read as follows: 
 “(h) on the second Business Day of each week commencing with the week of July 31, 2006 and through and including the week of September 25, 2006, a projected cash flow for the period of 13 consecutive
weeks commencing on the first day of such week, in a form reasonably satisfactory to the Administrative Agent.”; 
 (ii) by deleting the
word “and” that appears at the end of clause (f) thereof; and 
 (iii) by replacing the “.” appearing at the end of
clause (g) thereof with the following: 
 “; and”. 
 SECTION 4. OTHER AGREEMENTS. 
 (a) In
order to induce the Lenders to consent to this Amendment, the Borrower hereby agrees that the Administrative Agent shall have the right to engage, at the expense of the Borrower, a third party satisfactory to the Administrative Agent to conduct a
field exam of the books and records of the Borrower and its subsidiaries, to include without limitation, accounts, inventory and payables and supporting documentation in respect thereof of the Borrower and its subsidiaries, and an audit of the
liquidity requirements of the Borrower and its subsidiaries. The Borrower further agrees to cooperate, and to cause its Subsidiaries to cooperate, with such third party audit and field exam and to pay or to reimburse the Administrative Agent
promptly for the reasonable costs and expenses of such audit and 

  

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field exam. The Borrower further agrees that any breach of this provision shall constitute an Event of Default under Section 8(c) of the Credit
Agreement. 
 (b) For the avoidance of doubt the Borrower acknowledges and agrees that the waivers set forth in Section 2 of this
Amendment shall be effective only if the amount of the Non-cash Charges described in the first Whereas clause above does not exceed for each item, the amount set forth for such item. 
 SECTION 5. MISCELLANEOUS. 
 5.1
Conditions to Effectiveness. This Amendment shall become effective on the date (the “Amendment Effective Date”) on which the following conditions are satisfied (or waived): (a) the Administrative Agent shall have
received (i) an executed counterpart of this Amendment duly executed and delivered by the Borrower and each of the Required Lenders and (ii) an Acknowledgement and Consent in the form attached hereto as Exhibit A duly executed and
delivered by each Guarantor and (b) the Administrative Agent and the Lenders shall have received all fees and expenses required to be paid as of the Amendment Effective Date. 
 5.2 Representations and Warranties. On the Amendment Effective Date and after giving effect to the amendments contained herein, the Borrower
hereby confirms, reaffirms and restates the representations and warranties made by it in Section 4 of the Credit Agreement, except to the extent any of such representations and warranties relate to a specific earlier date, in which case such
representations and warranties shall be deemed true and correct on and as of such earlier date; provided, that each reference therein to the Credit Agreement shall be deemed to be a reference to the Credit Agreement after giving effect to
this Amendment. 
 5.3 Payment of Fees and Expenses. (a) The Borrower agrees to pay or reimburse the Administrative Agent for all
of its reasonable out-of-pocket costs and expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent. 
 (b) The Borrower agrees to pay on the Amendment Effective Date an amendment fee
payable to every Lender that executes this Amendment on or prior to the Amendment Effective Date in an aggregate amount equal to 0.10% of the sum of the Revolving Credit Commitments and Term Loans of such Lender, provided that this Amendment
becomes effective. 
 5.4 Continuing Effect. Except as expressly provided hereby, all of the terms and provisions of the Credit
Agreement and the other Loan Documents are and shall remain in full force and effect. The amendments contained herein shall not be construed as a waiver of any other provision of the Credit Agreement or the other Loan Documents or for any purpose
except as expressly set forth herein or a consent to any further or future action on the part of the Borrower that would require the waiver or consent of the Administrative Agent or the Lenders. 
 5.5 Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same instrument. Any executed counterpart delivered by facsimile transmission shall be effective as for all purposes hereof. 
 5.6 GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND 

  

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CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by
their respective proper and duly authorized officers as of the day and year first above written. 
  

			
	ROTECH HEALTHCARE INC.
		
	By:	 	  
		 	Name:
		 	Title:

  
  
  
  

			
	UBS AG, STAMFORD BRANCH, as Administrative Agent and a Lender
		
	By:	 	  
		 	Name:
		 	Title:
		
	By:	 	  
		 	Name:
		 	Title:

  
  
  
  

			
	  
	[LENDER]
		
	By:	 	  
		 	Name:
		 	Title:

  

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