Document:

Exhibit 10.5

 

PURSUANT TO 17 C.F.R. § 240.24B-2, CONFIDENTIAL INFORMATION (INDICATED BY {*****}) HAS BEEN OMITTED FROM THIS DOCUMENT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT APPLICATION FILED WITH THE COMMISSION.

 

PURCHASE AGREEMENT AND RELEASE

 

THIS PURCHASE AGREEMENT AND RELEASE (the “Agreement”) is effective as of this 21st day of December, 2012 by and among Compact Particle Acceleration Corporation, a Wisconsin corporation (“Buyer”), Accuray Incorporated, a Delaware corporation (“Accuray”) and TomoTherapy Incorporated, a Wisconsin corporation (“TomoTherapy,” and collectively with Accuray, “Seller”).  Buyer and Seller are sometimes collectively referred to herein as the “Parties” and individually as a “Party.”

 

RECITALS

 

WHEREAS, Buyer desires to purchase from Seller certain shares of Buyer’s outstanding equity (the “Equity Securities”) and notes representing indebtedness owed from Buyer to Seller (“Debt Securities,” and collectively with the Equity Securities, the “Purchased Securities”), as more further described below, upon the terms and conditions hereinafter set forth; and

 

WHEREAS, Seller desires to sell the Purchased Securities to Buyer, and Buyer desires to purchase the Purchased Securities, upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

AGREEMENT

 

ARTICLE I
 PURCHASE AND SALE

 

1.1                               Purchase and Sale.  On the Closing Date, Seller shall sell and deliver to the Buyer, and Buyer shall purchase and accept from Seller the following:

 

(a)           1,900,859 shares of Buyer’s Class A Common Stock,

 

(b)           1,000,000 shares of Buyer’s Class B Common Stock,

 

(c)           1,694,196 shares of Buyer’s Series A Preferred Stock,

 

(d)           2,430,658 shares of Buyer’s Series A-1 Preferred Stock,

 

(e)           that certain Amended and Restated Promissory Note (the “Note”) dated as of May 9, 2011 in the principal amount of $1,900,000, including all accrued but unpaid interest and fees thereon;

 

(f)            all outstanding fees and expenses related to certain license fees, accounting services, labor billings and other related expenses owed to Seller;

 

 

(g)           all of Seller’s rights in that certain Limited Exclusive Patent License Agreement dated as of February 23, 2007, as amended by Amendment One on April 8, 2008 and Amendment Two on February 10, 2011, and as supplemented by Supplement One on July 2, 2008, Supplement Two on March 6, 2009, Supplement Three on January 11, 2010, Supplement Four on January 28, 2010, Supplement Five on May 19, 2010, Supplement Six on September 30, 2010, Supplement Seven on January 6, 2011 and Supplement Eight on March 4, 2011 (as amended and supplemented, the “License”); and

 

(h)           all of Seller’s rights pursuant to those certain Warrants to purchase, in the aggregate, 1,725,820 shares of CPAC’s Series B Common Stock.

 

1.2                               Purchase Price.  The consideration to be paid by Buyer to Seller for the Purchased Securities shall be {*****} (the “Purchase  Price”) payable by Buyer to Seller, in cash, at Closing.

 

1.3                               Delivery of Note and Stock Certificates.  At the Closing, Seller shall deliver to Buyer the original Note and any and all stock certificates representing the Equity Securities purchased by Buyer.  In the alternative, Seller shall deliver an affidavit of lost stock certificate and/or an affidavit of lost promissory note, as applicable, in a form reasonably acceptable to Buyer.

 

1.4                               Closing.  The closing of the transactions contemplated hereby (“Closing”) shall take place at 10:00 a.m. on the date hereof or such other date and time as may be mutually agreed upon by the parties hereto (the “Closing Date”), at the offices of Michael Best & Friedrich LLP, 1 South Pinckney Street, Suite 700, Madison, Wisconsin 53703, or at such other place as may be mutually agreed upon by the parties hereto, including, without limitation, closing by mail, e-mail or facsimile.

 

ARTICLE II
 TERMINATION

 

Effective immediately upon the execution of this Agreement, each of Accuray and TomoTherapy terminates any and all rights it has in Buyer, including, but not limited to, all rights pursuant to each of the following:

 

(a)           the License;

 

(b)           that certain Amended and Restated Limited Exclusive Sublicense and Cross-License License Agreement dated as of April 20, 2012;

 

(c)           that certain Second Amended and Restated Shareholder Agreement dated as of April 20, 2012;

 

(d)           that certain Preferred Stock and Warrant Purchase Agreement dated as of April 20, 2012;

 

(e)           that certain Amended and Restated Investors’ Rights Agreement dated as of April 20, 2012;

 

(f)            that certain Series B Common Stock Purchase Agreement dated as of April 20, 2012;

 

(g)           that certain Side Letter dated as of April 20, 2012 for the benefit of Accuray;

 

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(h)           those certain Warrants to purchase, in the aggregate, 1,725,820 shares of CPAC’s Series B Common Stock; and

 

(i)            any other rights Accuray and/or TomoTherapy has in Buyer.

 

ARTICLE III
 SELLER REPRESENTATIONS AND WARRANTIES

 

In order to induce Buyer to enter into this Agreement, in addition to the Release (as defined below), each of Accuray and TomoTherapy make the following representations and warranties to Buyer, each of which shall be deemed to be independently material and relied upon by Buyer, regardless of any investigation made by, or information known to, Buyer.  Accuray and TomoTherapy jointly and severally represent and warrant to Buyer as follows:

 

3.1                               Ownership of Purchased Securities.  Each of Accuray and TomoTherapy, as applicable, is the record and beneficial owner of the Purchased Securities to be sold to Buyer as set forth in Section 1.1.  Each of Accuray and TomoTherapy, as applicable, owns such Purchased Securities free and clear of all liens, encumbrances, pledges, claims and other security interests.  None of the Purchased Securities are subject to any order or contract, including, but not limited to, any marital property agreement, voting trust or proxy relating to the exercise of voting rights or subjecting such Purchased Securities to transfer restrictions.

 

3.2                               Enforceability; Conflicting Obligations.  Each of Accuray and TomoTherapy, as applicable, has all necessary power and authority to enter into and consummate the transactions contemplated by this Agreement in accordance with its terms and to sell to Buyer the Purchased Securities.  This Agreement is each of Accuray’s and TomoTherapy’s valid and binding obligation, enforceable against it in accordance with its terms.  The execution and delivery of this Agreement do not, and the consummation of the sale of the Purchased Securities contemplated hereby will not, conflict with or violate the provisions of such Seller’s articles of incorporation or certificate of incorporation, as applicable, or bylaws, or any contract, order or restriction to which such Seller is a party, or to which such Seller is bound.

 

3.3                               Compliance with Law.  All legal action necessary for each of Accuray’s and TomoTherapy’s execution and performance of this Agreement and consummation of the transactions contemplated hereby have been duly and validly taken.

 

3.4                               Organization and Qualification.  Accuray is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has filed with the Delaware Secretary of State the most recent annual report required to be filed by it, has not filed a certificate of dissolution and has a perpetual period of existence.  TomoTherapy is a corporation duly organized and validly existing under the laws of the State of Wisconsin, has filed with the Wisconsin Department of Financial Institutions the most recent annual report required to be filed by it, has not filed articles of dissolution and has a perpetual period of existence.

 

3.5                               Brokerage.  Neither Accuray nor TomoTherapy has incurred, nor made commitments for, any brokerage, finders’ or similar fee in connection with the transactions contemplated by this Agreement.

 

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ARTICLE IV
 BUYER REPRESENTATIONS AND WARRANTIES

 

In order to induce Seller to enter into this Agreement, Buyer makes the following representations and warranties to Seller, each of which shall be deemed to be independently material and relied upon by Seller, regardless of any investigation made by, or information known to Seller.

 

4.1                               Enforceability; Conflicting Obligations.  Buyer has all necessary power and authority to enter into and consummate the transactions contemplated by this Agreement in accordance with its terms and to purchase from Seller the Purchased Securities.  This Agreement is Buyer’s valid and binding obligation, enforceable against it in accordance with its terms.  The execution and delivery of this Agreement do not, and the consummation of the sale of the Purchased Securities contemplated hereby will not, conflict with or violate the provisions of Buyer’s articles of incorporation or bylaws, or any contract, order or restriction to which Buyer is a party, or to which Buyer is bound.

 

4.2                               Compliance with Law.  All legal action necessary for Buyer’s execution and performance of this Agreement and consummation of the transactions contemplated hereby have been duly and validly taken.

 

4.3                               Organization and Qualification.  Buyer is a corporation duly organized and validly existing under the laws of the State of Wisconsin, has filed with the Wisconsin Department of Financial Institutions the most recent annual report required to be filed by it, has not filed articles of dissolution and has a perpetual period of existence.

 

4.4                               Brokerage.  Buyer has not incurred, nor made commitments for, any brokerage, finders’ or similar fee in connection with the transactions contemplated by this Agreement.

 

ARTICLE V
 RELEASE AND CONFIDENTIALITY

 

5.1                               Seller’s Release.  As a material inducement for Buyer to enter into this Agreement, each of Accuray and TomoTherapy, on behalf of its respective successors and assigns, hereby irrevocably and unconditionally waives, releases and forever discharges Buyer and each of Buyer’s shareholders, predecessors, successors, assigns, agents, directors, officers, employees, representatives, attorneys, subsidiaries, and affiliates, and all persons acting by, through, under, or in concert with any of them, from any and all claims or liabilities arising out of or in any way connected with its ownership of the Purchased Securities in Buyer, its previous loans to Buyer specifically including the Debt or the transactions contemplated by this Agreement, including any transactions set forth in any of the Exhibits attached hereto.

 

5.2                               Buyer’s Release.  As a material inducement for each of Accuray and TomoTherapy to enter into this Agreement, Buyer, on behalf of its respective successors and assigns, hereby irrevocably and unconditionally waives, releases and forever discharges Seller and each of Seller’s shareholders, predecessors, successors, assigns, agents, directors, officers, employees, representatives, attorneys, subsidiaries, and affiliates, and all persons acting by, through, under, or in concert with any of them, from any and all claims or liabilities arising out of or in any way connected with Seller’s ownership of the Purchased Securities, its purchase of the loans described herein specifically including the Debt or the transactions contemplated by this Agreement, including any transactions set forth in any of the Exhibits attached hereto.

 

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5.3                               Confidentiality.  Buyer acknowledges that Accuray is required to file this Agreement with the Securities and Exchange Commission (“SEC”).  Accuray shall use commercially reasonable efforts to obtain confidential treatment of the Purchase Price in its filings with the SEC and other required disclosures and to otherwise keep the Purchase Price confidential.

 

ARTICLE VI
 CLOSING CONDITIONS

 

6.1                               Conditions to Obligations of Buyer.  The obligation of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment (or waiver by Buyer) at or prior to the Closing of the following conditions:

 

(a)                                 Seller shall have performed and complied in all material respects with the covenants and agreements contained in this Agreement required to be performed and complied with by Seller on or prior to the Closing Date.

 

(b)                                 Each of the representations and warranties of Seller set forth in Article III shall be true and correct in all material respects as of the date hereof.

 

(c)                                  All deliveries required to be delivered at or prior to the Closing by Seller shall have been delivered to Buyer, including, without limitation:

 

(i)            That certain Assignment of Rights Under License Agreement No. TL02168-0.0 duly executed by each of TomoTherapy and Lawrence Livermore National Security, LLC (the “Assignment of Rights”), a copy of which is attached hereto as Exhibit A;

 

(ii)           The written resignation of Chris Raanes as a director of the Buyer’s Board of Directors; and

 

(iii)          Such other agreements, documents, instruments and writings as are required to be delivered by Seller on or prior to the Closing Date pursuant to this Agreement or as may be reasonably requested by Buyer or its counsel to carry out the intent and purposes of this Agreement.

 

6.2                               Conditions to Obligations of Seller.  The obligation of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment (or waiver by Seller) at or prior to the Closing of the following additional conditions:

 

(a)                                 Buyer shall have performed and complied with in all material respects the covenants and agreements contained in this Agreement required to be performed and complied with by it on or prior to the Closing Date including, without limitation, payment to Seller of the Purchase Price.

 

(b)                                 Each of the representations and warranties of Buyer set forth in Article IV shall be true and correct in all material respects as of the date hereof.

 

(c)                                  All deliveries required to be delivered at or prior to the Closing by Buyer shall have been delivered to the Seller including, without limitation:

 

(i)            The Assignment of Rights duly executed by Buyer; and

 

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(ii)           Such other agreements, documents, instruments, and writings as are expressly required to be delivered by Buyer on or prior to the Closing Date pursuant to this Agreement or as may reasonably be requested by the Seller to carry out the intent and purposes of this Agreement.

 

ARTICLE VII
 MISCELLANEOUS

 

7.1                               Further Assurances.  Each party hereto from time to time hereafter, and upon request, shall execute, acknowledge and deliver such other instruments as reasonably may be required to more effectively transfer and vest in Buyer the Purchased Securities or to otherwise carry out the terms and conditions of this Agreement.

 

7.2                               Benefit and Assignment.  This Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, successors, assignees, and beneficiaries in interest.

 

7.3                               Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Wisconsin, regardless of such State’s conflicts of laws principles, and without reference to any rules of construction regarding the party responsible for the drafting hereof.

 

7.4                               Expenses.  Except as otherwise herein provided, any expenses and costs incurred by Seller in connection with this Agreement or the transactions herein provided for shall be paid by Seller; any expenses and costs incurred by Buyer shall be paid by Buyer.

 

7.5                               Notices.  All notices, demands, and communications provided for herein or made hereunder shall be given in writing and shall be deemed given to a party at the earlier of (i) when actually delivered to such party or (ii) when mailed to such party by registered or certified U.S. Mail (return receipt requested) or sent by overnight courier, confirmed by receipt, and addressed to such party at the address designated below for such party (or to such other address for such party as such party may have substituted by notice pursuant to this Section):

 

	
(a)   If to Buyer:
    	
 
    	
Compact Particle Acceleration Corporation
    
	
 
    	
 
    	
Attn:   James Schultz, Chairman
    
	
 
    	
 
    	
6336   Patterson Pass Road, Suite B
    
	
 
    	
 
    	
Livermore,   CA 94550
    
	
 
    	
 
    	
 
    
	
(b)   If to Seller:
    	
 
    	
Accuray Incorporated
    
	
 
    	
 
    	
TomoTherapy Incorporated
    
	
 
    	
 
    	
Attn: General Counsel
    
	
 
    	
 
    	
1310 Chesapeake Terrace
    
	
 
    	
 
    	
Sunnyvale, CA 94089
    

 

7.6                               Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, provided that all such counterparts, in the aggregate, shall contain the signatures of all parties hereto.

 

7.7                               Headings.  All Section headings herein are inserted for convenience only and shall not modify or affect the construction or interpretation of any provision of this Agreement.

 

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7.8          Amendment, Modification and Waiver.  This Agreement may not be modified, amended or supplemented except by mutual written agreement of each of the Parties hereto. Both Buyer and Seller may waive in writing any term or condition contained in this Agreement and intended to be for its benefit; provided, however, that no waiver by any party, whether by conduct or otherwise, in any one or more instances, shall be deemed or construed as a further or continuing waiver of any such term or condition.  Each amendment, modification, supplement or waiver shall be in writing signed by the party or parties to be charged.

 

7.9          Entire Agreement.  This Agreement and the Exhibits attached hereto represents the entire agreement of the Parties with respect to the subject matter hereof and supersede and replace any prior or other contemporaneous understandings and agreements with respect to the subject matter hereof and no provision or document of any kind shall be included in or form a part of such agreement unless signed and delivered to the other party by the party to be charged.

 

7.10        Third-Party Beneficiaries.  No third parties are intended to benefit from this Agreement, and no third-party beneficiary rights shall be implied from anything contained in this Agreement.

 

[Signatures on next page following]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase Agreement and Release to be executed as of the date first written above.

 

	
 
    	
BUYER:
    
	
 
    	
 
    
	
 
    	
COMPACT   PARTICLE ACCELERATION
   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James M. Schultz
    
	
 
    	
 
    
	
 
    	
James   M. Schultz, Chairman of the Board
    
	
 
    	
 
    
	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
ACCURAY   INCORPORATED
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joshua Levine
    
	
 
    	
Name:   Joshua Levine
    
	
 
    	
Title:   President and CEO
    
	
 
    	
 
    
	
 
    	
TOMOTHERAPY   INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Derek Bertocci
    
	
 
    	
Name:   Derek Bertocci
    
	
 
    	
Title:   CFO
    

 

[Signature Page to Stock Purchase Agreement and Release]

 

 

EXHIBIT A

 

ASSIGNMENT OF RIGHTS UNDER LICENSE AGREEMENT NO. TL02168-0.0

 

This Assignment of Rights under License Agreement No. TL02168-0.0 (this “Assignment”) is effective as of December 21, 2012 (the “Effective Date”) by and between TomoTherapy Incorporated, a wholly-owned subsidiary of Accuray Incorporated (“TomoTherapy”), and Compact Particle Acceleration Corporation (“CPAC”), referred to jointly as the “Parties.”

 

RECITALS

 

WHEREAS, Lawrence Livermore National Security, LLC (“LLNS”) has granted to TomoTherapy pursuant to a limited exclusive patent license agreement dated as of February 23, 2007, as amended by Amendment One on April 8, 2008 and Amendment Two on February 10, 2011, and as supplemented by Supplement One on July 2, 2008, Supplement Two on March 6, 2009, Supplement Three on January 11, 2010, Supplement Four on January 28, 2010, Supplement Five on May 19, 2010, Supplement Six on September 30, 2010, Supplement Seven on January 6, 2011, Supplement Eight on March 4, 2011 and Supplement Nine on September 30, 2011 (as amended and supplemented, the “License”), an exclusive license under the Licensed Patents (as defined in the License); and

WHERAS, CPAC and TomoTherapy have entered into that a Limited Exclusive Patent License Agreement dated as of April 25, 2011 (the “Original Sublicense”) under which TomoTherapy granted an exclusive sublicense of the Licensed Patents to CPAC;

 

WHERAS, CPAC and TomoTherapy entered into that Amended and Restated Limited Exclusive Sublicense and Cross-License License Agreement dated as of May 16, 2012 (the “Restated Sublicense”); and

 

WHEREAS, subject to LLNS’s written consent, TomoTerapy desires to assign all of its rights under the License to CPAC.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

ASSIGNMENT

 

Subject to receiving LLNS’s written consent to the assignment of rights under the License made hereby, TomoTherapy hereby assigns to CPAC all of its right, title and interest in, to and under the License.

 

TomoTherapy hereby agrees that, upon the request of CPAC or any of its successors and assigns, and without further consideration to TomoTherapy, they will execute any and all papers that are reasonably requested by CPAC or any of its successors and assigns to carry out the intent and purposes of this Assignment.

 

A-1

 

In witness whereof, both TomoTherapy and CPAC have executed this Assignment, in duplicate originals, by their respective officers hereunto duly authorized, as of the Effective Date.

 

	
TOMOTHERAPY   INCORPORATED
    	
 
    	
COMPACT   PARTICLE ACCELERATION
   CORPORATION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Derek Bertocci
    	
 
    	
By:
    	
/s/   James M. Schultz
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   Derek Bertocci
    	
 
    	
Name:   James M. Schultz
    
	
 
    	
 
    	
 
    
	
Title:   CFO
    	
 
    	
Title:   Chairman of the Board
    

 

CONSENT TO ASSIGNMENT

 

LLNS hereby consents to the assignment by TomoTherapy to CPAC of all of its right, title and interest in, to and under the License.

 

	
LAWRENCE   LIVERMORE NATIONAL SECURITY, LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Roger Werne
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   Roger Werne, 1-8-13
    	
 
    
	
 
    	
 
    
	
Title:   Account Director - IPO
    	
 
    
				

 

10Exhibit 10.1 Third Amendment

Execution Version

THIRD AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT

THIS THIRD AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (this “Amendment”) is made and entered into as of February 1,  2013, by and among THE ENSIGN GROUP, INC., a Delaware corporation (the “Borrower”), the several banks and other financial institutions and lenders party hereto (collectively, the “Lenders”) and SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to that certain Revolving Credit and Term Loan Agreement, dated as of July 15, 2011, as amended by that certain First Amendment to Revolving Credit and Term Loan Agreement dated as of October 27, 2011 and that certain Second Amendment to Revolving Credit and Term Loan Agreement dated as of April 30, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement), pursuant to which the Lenders have made certain financial accommodations available to the Borrower; 
WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent amend certain provisions of the Credit Agreement, and, subject to the terms and conditions hereof, the Lenders are willing to do so; 
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of all of which are acknowledged, the Borrower, the Lenders and the Administrative Agent agree as follows:

1.Increase to Revolving Commitments.    Each Revolving Lender reaffirms its Revolving Commitment under the Credit Agreement and increases its Revolving Commitment to the aggregate principal amount set forth on Schedule I attached to this Amendment.   The Borrower acknowledges and agrees that the Revolving Commitments in effect for each Lender under the Credit Agreement are as set forth on Schedule I attached to this Amendment.  Immediately upon this Amendment becoming effective, (i) the principal amount of all outstanding Revolving Loans shall be reallocated to be outstanding ratably based on the Revolving Commitments, as increased hereby, and any breakage costs related thereto are waived by the Lenders and (ii) the LC Exposure shall be reallocated among the Lenders ratably based on their Revolving Commitment, as increased hereby.   

2.Amendment.  

(a)      Section 1.1 of the Credit Agreement is amended by adding the following sentence at the end of the definition of “Applicable Margin”: 
Notwithstanding the foregoing, the Applicable Margin from the Third Amendment Date until the earlier of (i) the date by which the financial statements and Compliance Certificate for the Fiscal Year ending December 31, 2012 are required to be delivered and (ii) the date on which such financial statements and Compliance Certificate are actually delivered shall be at Level III as set forth in the Pricing Grid.  
(b)  Section 1.1 of the Credit Agreement is hereby amended by adding the following sentence at the end of the definition of “Applicable Percentage”: 
Notwithstanding the foregoing, the Applicable Percentage for the commitment fee from the Third Amendment Date until the earlier of (i) the date by which the financial statements and Compliance Certificate for the Fiscal Year ending December 31, 2012 are required to be delivered and (ii) the date 

on which such financial statements and Compliance Certificate are actually delivered shall be at Level III as set forth in the Pricing Grid.
(c)    Section 1.1 of the Credit Agreement is further amended by (x) adding the following definition of “Third Amendment Date” in the appropriate alphabetical order and (y)  replacing the definitions of “Aggregate Revolving Commitment Amount”, “Consolidated EBITDA”, “Consolidated Total Adjusted Debt”, “Encumbered Facility”, “Maturity Date” and “Revolving Commitment Termination Date” in their entirety with the following: 
“Aggregate Revolving Commitment Amount” shall mean the aggregate principal amount of the Aggregate Revolving Commitments from time to time.  On the Third Amendment Date, the Aggregate Revolving Commitment Amount is $150,000,000.  
“Consolidated EBITDA” shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period, and without duplication, (A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP, (C) depreciation and amortization determined on a consolidated basis in accordance with GAAP, (D) non-cash stock-based compensation expense determined on a consolidated basis in accordance with GAAP, (E) non-cash acquisition-related charges determined on a consolidated basis in accordance with GAAP and (F) all other non-cash charges acceptable to the Administrative Agent determined on a consolidated basis in accordance with GAAP, in each case for such period; provided that for purposes of calculating compliance with the financial covenants set forth in Article VI, to the extent that during such period any Loan Party shall have consummated a Permitted Acquisition or other Acquisition approved in writing by the Required Lenders, or any sale, transfer or other disposition of any Person, business, property or assets, Consolidated EBITDA shall be calculated on a Pro Forma Basis with respect to such Person, business, property or assets so acquired or disposed of. 
“Consolidated Total Adjusted Debt” shall mean, as of any date, (i) Consolidated Total Debt plus (ii) (A) Consolidated Lease Expense for the most recently ended four consecutive Fiscal Quarters for which financial statements have been delivered  multiplied by (B) five (5) minus (iii) all Indebtedness of the Borrower and its Subsidiaries secured by Liens on Real Property owned by the Borrower and its Subsidiaries. 
“Encumbered Facility” shall mean (i)  any HUD Facility (other than the Existing HUD Facility) or (ii) any facility located on any Real Property subject to a Lien securing the RBS Note, the Ten Project Note or any other Indebtedness of the Borrower or any of its Subsidiaries (other than the Obligations).   For the avoidance of doubt, no Mortgaged Property shall be considered an Encumbered Facility. 
“Maturity Date” shall mean, with respect to the Term Loans, the earlier of (i) February 1, 2018 and (ii) the date on which the principal amount of all outstanding Term Loans have been declared or automatically have become due and payable (whether by acceleration or otherwise).
“Revolving Commitment Termination Date” shall mean the earliest of (i) February 1, 2018, (ii) the date on which the Revolving Commitments are terminated pursuant to Section 2.8 and (iii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise).
“Third Amendment Date” shall mean February 1, 2013.
(d)    Section 2.9 of the Credit Agreement is amended by replacing subsection (b) of such Section in its entirety with the following:
(b)    The Borrower unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of the Term Loan of such Lender in 

installments payable on the dates set forth below, with each such installment being in the aggregate principal amount for all Lenders set forth opposite such date below (and on such other date(s) and in such other amounts as may be required from time to time pursuant to this Agreement):
Installment Date            Aggregate Principal Amount
September 30, 2011                $937,500
December 31, 2011                $937,500
March 31, 2012                    $937,500
June 30, 2012                    $937,500
September 30, 2012                $937,500
December 31, 2012                $937,500
March 31, 2013                    $937,500
June 30, 2013                    $937,500
September 30, 2013                $937,500
December 31, 2013                $937,500
March 31, 2014                    $937,500
June 30, 2014                    $937,500
September 30, 2014                $937,500
December 31, 2014                $937,500
March 31, 2015                    $937,500
June 30, 2015                    $937,500
September 30, 2015                $937,500
December 31, 2015                $937,500
March 31, 2016                    $937,500
June 30, 2016                    $937,500
September 30, 2016                $937,500
December 31, 2016                $937,500
March 31, 2017                    $937,500
June 30, 2017                    $937,500
September 30, 2017                $937,500
December 31, 2017                $937,500
        
provided that, to the extent not previously paid, the aggregate unpaid principal balance of the Term Loans shall be due and payable on the Maturity Date.
(e)    Section 2.23 of the Credit Agreement is hereby amended by replacing subsection (a)(i) of such Section in its entirety with the following:
(i)    the aggregate principal amount of all such Incremental Commitments made pursuant to this Section (including those made on the Third Amendment Date) shall not exceed $175,000,000 (the principal amount of each such Incremental Commitment, the “Incremental Commitment Amount”);

(f)    Schedule I to the Credit Agreement is amended by replacing such Schedule in its entirety with the Schedule I attached hereto.

3.    Conditions to Effectiveness of this Amendment.  Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the Lenders hereunder, it is understood and agreed that this Amendment shall not become effective, and the Borrower shall have no rights under this Amendment, until the Administrative Agent shall have received (i) reimbursement or payment of its costs and expenses incurred in connection with this Amendment or otherwise outstanding in connection with the Credit Agreement (including reasonable fees and disbursements of King & Spalding LLP, counsel to the Administrative Agent), (ii) an amendment fee for each 

Lender executing this Amendment in the amount of 0.10% of such Lender's Revolving Commitment and Term Loan (prior to the allocation of any increase to Revolving Commitments arising hereunder), (iii) such other fees as the Borrower has previously agreed to pay the Administrative Agent or any of its affiliates in connection with this Amendment and (iv) each of the following documents:
(a)    executed counterparts to this Amendment from the Borrower, each of the Guarantors and the Lenders;
(b)    a certificate of the Secretary or Assistant Secretary of each Loan Party, attaching and certifying copies of its articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents and its bylaws, partnership agreement or limited liability company agreement, or comparable organizational documents (or certifying that the foregoing documents were previously delivered to the Administrative Agent on the Closing Date, have not been amended or modified in any manner and are in full force and effect) and resolutions of its board of directors and holders of its Series A Preferred Stock, authorizing the execution, delivery and performance of this Amendment (and the Credit Agreement, as amended hereby) and certifying the name, title and true signature of each officer of such Loan Party executing this Amendment; 

(c)    certificates of good standing or existence, as may be avail-able from the Secretary of State of the jurisdiction of organization of such Loan Party; and

(d)    a favorable written opinion of counsel to the Loan Parties, as to such matters as the Administrative Agent may request, dated as of the date hereof and in form and substance reasonably satisfactory to the Administrative Agent.
4.    Joinder of New Lenders.  

(a)    Each Additional Lender hereby joins the Credit Agreement as a Lender and shall hereby be deemed to be party as a Lender under the Credit Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Credit Agreement as fully as if such Additional Lender had executed and delivered the Credit Agreement as of the date thereof and, without limiting the generality of the foregoing, hereby expressly assume all obligations and liabilities of a Lender thereunder.  Each Additional Lender certifies that it has delivered to the Administrative Agent, together with its signature page hereto, (i) the documentation required under Section 2.20(e) of the Credit Agreement, duly completed and executed by the Additional Lender, and (ii) an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Additional Lender.   

(b)     Each Additional Lender (x) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Amendment and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) from and after the date hereof, such Additional Lender will be bound by the provisions of the Credit Agreement as a Lender thereunder with the same force and effect as if originally named therein as a Lender and, to the extent of its Commitments thereunder, shall have the obligations of a Lender thereunder, (iii) such Additional Lender has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and to provide its Revolving Commitment, and on the basis of which such Additional Lender has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (y) agrees that (i) it will, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it deems appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) such Additional Lender will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

5.    Representations and Warranties.  To induce the Lenders and the Administrative Agent to enter into this Amendment, each Loan Party hereby represents and warrants to the Lenders and the Administrative Agent that:  

(a)    The Borrower and each of its Subsidiaries (i) is duly orga-nized, validly existing and in good standing as a corporation, partnership or limited liability company under the laws of the jurisdiction of its organization, (ii) -has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified would not reasonably be expected to result in a Material Adverse Effect;

(b)        The execution, delivery and performance by each Loan Party of this Amendment are within such Loan Party's organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder, partner or member, action; 

(c)    The execution, delivery and performance by the Loan Parties of this Amendment (i) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (ii) will not violate any Requirements of Law applicable to the Borrower or any of its Subsidiaries or any judgment, order or ruling of any Governmental Authority, (iii) will not violate or result in a default under any Contractual Obligation of the Borrower or any of its Subsidiaries or any of their assets or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries and (iv) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens (if any) created under the Loan Documents;

(d)    This Amendment has been duly executed and delivered for the benefit of or on behalf of each Loan Party and constitutes a legal, valid and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights and remedies in general; and

(e)    After giving effect to this Amendment, the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects, and no Default or Event of Default has occurred and is continuing as of the date hereof.

6.    Reaffirmations and Acknowledgments.  

(a)    Reaffirmation of Guaranty and Negative Pledges.  Each Guarantor consents to the execution and delivery by the Borrower of this Amendment and jointly and severally ratifies and confirms the terms of the Guaranty and Security Agreement and the Negative Pledges to which it is a party with respect to the indebtedness now or hereafter outstanding under the Credit Agreement as amended hereby and all promissory notes issued thereunder. Each Guarantor acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing any indebtedness of the Borrower to the Lenders or any other obligation of the Borrower, or any actions now or hereafter taken by the Lenders with respect to any obligation of the Borrower, the Guaranty and Security Agreement and each Negative Pledge to which it is a party (i) is and shall continue to be a primary obligation of the Guarantors, (ii) is and shall continue to be an absolute, unconditional, joint and several, continuing and irrevocable guaranty of payment, and (iii) is and shall continue to be in full force and effect in accordance with its terms.  Nothing contained herein to the contrary shall release, discharge, modify, change or affect the original liability of the Guarantors under the Guaranty and Security Agreement or under any Negative Pledge to which they are a party.  

(b)    Acknowledgment of Perfection of Security Interest. Each Loan Party hereby acknowledges that, as of the date hereof, the security interests and liens granted to the Administrative Agent and the Secured Parties under the Credit Agreement and the other Loan Documents are in full force and effect, are properly perfected and are enforceable in accordance with the terms of the Credit Agreement and the other Loan Documents.

7.    Effect of Amendment.  Except as set forth expressly herein, all terms of the Credit Agreement, as amended hereby, and the other Loan Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Borrower to the Lenders and the Administrative Agent.  The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.  This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement.

8.    Governing Law.   This Amendment shall be governed by, and construed in accordance with, the law of the State of New York.  

9.    No Novation.  This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement or an accord and satisfaction in regard thereto.

10.    Costs and Expenses.  The Borrower agrees to pay on demand all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for the Administrative Agent with respect thereto.

11.    Counterparts.  This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by facsimile transmission or by electronic mail in pdf form shall be as effective as delivery of a manually executed counterpart hereof.

12.    Binding Nature.  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.

13.    Entire Understanding.  This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotia-tions or agreements, whether written or oral, with respect thereto.

[Signature Pages To Follow]

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