Exhibit 10.7
WAIVER AGREEMENT
THIS
WAIVER AGREEMENT (this "Agreement"), dated as of November 7, 2005,
is
entered into among CURATIVE HEALTH SERVICES, INC., a Minnesota corporation
formerly known as Curative Holding Co. ("Holdings"), EBIOCARE.COM, INC., a
Delaware corporation ("eBioCare"), HEMOPHILIA ACCESS, INC., a Tennessee
corporation ("Hemophilia Access"), APEX THERAPEUTIC CARE, INC., a California
corporation ("Apex"), CHS SERVICES, INC., a Delaware corporation ("CHS"),
CURATIVE HEALTH SERVICES OF NEW YORK,
INC., a New York
corporation
("CHSNY"),
OPTIMAL CARE PLUS, INC., a Delaware corporation ("Optimal Care"), INFINITY
INFUSION, LLC, a Delaware limited liability company ("Infinity"), INFINITY
INFUSION II, LLC, a Delaware limited
liability company ("Infinity II"), INFINITY
INFUSION CARE, LTD., a Texas limited
partnership ("Infinity Infusion"), MEDCARE,
INC., a Delaware corporation ("Medcare"), CURATIVE PHARMACY SERVICES,
INC., a
Delaware corporation ("CPS"), CURATIVE HEALTH SERVICES CO., a Minnesota
corporation formerly known as Curative
Health Services, Inc. ("CHSC"), CRITICAL
CARE SYSTEMS, INC., a Delaware corporation ("CCS") (Holdings, eBioCare,
Hemophilia Access, Apex, CHS, CHSNY, Optimal Care, Infinity, Infinity II,
Infinity Infusion, Medcare, CPS, CHSC and CCS are sometimes collectively
referred to herein as the "Borrowers" and individually as a "Borrower"),
CURATIVE HEALTH SERVICES III CO., a
Minnesota corporation,
and GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation
("GE Capital"), as Agent and Lender.
W I T N E S S E T H:
WHEREAS,
the Borrowers and GE
Capital are parties to that certain Amended
and Restated Credit Agreement, dated April 23, 2004, as amended by (i) that
certain First Amendment to Amended and
Restated Credit
Agreement and Collateral
Documents dated as of May 3, 2004, (ii)
that certain Second Amendment to Amended
and Restated Credit Agreement dated as of June 30, 2004, (iii) that certain
Third Amendment to Amended and Restated
Credit Agreement dated as of October 20,
2004 and (iv) that certain Fourth Amendment to Amended and Restated Credit
Agreement dated as of December 31, 2004 (as
so amended, the
"Credit Agreement";
capitalized terms used but not defined in
this Agreement have the meanings given
in the Credit Agreement), whereby the Lenders have made
available a
revolving
credit facility and other financial
accommodations to the Borrowers, subject to
the terms and conditions contained in the
Credit Agreement;
WHEREAS,
certain Events of Default have occurred under the Credit
Agreement prior to the date hereof, specifically (a) an Event of Default has
occurred under Sections 8.1(e) and 8.1(u)
of the Credit Agreement as a result of
the failure of Curative to timely pay the interest payment due and payable
November 1, 2005 under the Senior
Unsecured High Yield Note Indenture and the
Senior Unsecured High Yield Notes (such
Event of Defaults are referred to herein
collectively as the "November Note Interest
Payment Default"),
(b) an Event of
Default has occurred under Section 8.1(b)
of the Credit Agreement as a result of
the failure of the Borrowers to comply with
the Total Leverage
Ratio and Senior
Secured Leverage Ratio financial
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covenants set forth in Sections 7.15 and 7.16, in each case for the Fiscal
Quarter ended September 30, 2005 (such
financial covenant
Events of Default are
referred to herein collectively as the
"Specified Financial
Covenant Defaults";
together with the November Note Interest Payment Default referred to herein
collectively as the "Specified
Defaults");
WHEREAS,
the Borrowers
have requested that
Agent and Lenders (a) grant a
permanent waiver of the Specified
Financial Covenant
Defaults, and (b)
grant a
temporary waiver of the November Note
Interest Payment Default, which may become
a permanent waiver upon satisfaction of
certain conditions
specified in Section
2.2 hereof; and
WHEREAS,
subject to the terms
and conditions
specified herein, Agent and
Lenders are willing to (a) grant a
permanent waiver of
the Specified
Financial
Covenant Defaults, and (b) grant a temporary waiver of the November Note
Interest Payment Default.
NOW,
THEREFORE,
in consideration of the foregoing, the respective
agreements, warranties and covenants
contained herein,
for $10 and other
good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
SECTION 1. ACKNOWLEDGMENTS AND
AGREEMENTS
1.1
Acknowledgment
of Obligations. Each of the Borrowers hereby
acknowledges, confirms and agrees that the
Borrowers are indebted to Lenders in
respect of the Revolving Credit Advances, Swingline Advances and Letter of
Credit Obligations outstanding on the date hereof. All such Obligations,
together with interest accrued and accruing
thereon, and fees,
costs, expenses
and other charges now or hereafter
payable by the
Borrowers to Lenders, are
unconditionally owing by the Borrowers to Lenders,
without offset,
defense or
counterclaim of any kind, nature or
description whatsoever.
1.2
Acknowledgment of Liens. Each Borrower hereby acknowledges, confirms
and agrees that Agent has and shall
continue to have
valid, enforceable and
perfected first-priority liens upon and security
interests in the
Collateral
granted to Agent for the benefit of the
Lenders pursuant to
the Loan Documents
or otherwise granted to or held by Agent
for the benefit of the Lenders.
1.3
Binding Effect of Documents. Each Borrower hereby acknowledges,
confirms and agrees that: (a) each of the Loan Documents has
been duly executed
and delivered to the Agent and the
Lenders by each Borrower that is intended to
be a party thereto, and each is in full force and
effect as of the date hereof,
(b) the agreements and obligations of each Borrower contained in such Loan
Documents and in this Agreement constitute the legal, valid and binding
obligations of such Borrower, enforceable against it in accordance
with their
respective terms, and no Borrower has any valid
defense to the
enforcement of
such obligations, and (c) the Agent and the
Lenders are and shall be entitled to
the rights, remedies and benefits provided for in the Loan Documents and
applicable law.
1.4
Acknowledgment
of Defaults.
Each Borrower hereby
acknowledges
and
agrees that (a) the Specified Defaults have occurred and, prior to the
effectiveness of this Agreement, are
continuing and constitute Events of Default
which entitle the Agent and the Lenders
to
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exercise their rights and remedies under
the Loan Documents,
applicable law or
otherwise, (b) Agent and the Lenders have the
presently exercisable right to
cease funding and declare the
Obligations
to be immediately due and payable
under the terms of the Loan Documents.
SECTION 2. WAIVERS
2.1 Waiver
of Specified Financial Covenant Defaults. In reliance upon the
representations, warranties and covenants of the Borrowers contained in this
Agreement, and subject to the terms and
conditions
of this Agreement and any
documents or instruments executed or
delivered in connection herewith, the Agent
and the Lenders hereby waive the Specified
Financial Covenant Defaults, in each
case solely for the fiscal quarter ending
September 30, 2005.
2.2
Temporary Waiver of November Note Interest Payment Default. In
reliance upon the representations, warranties and covenants of the Borrowers
contained in this Agreement, and subject to the terms and
conditions
of this
Agreement and any documents or instruments executed or delivered in
connection
herewith, the Agent and the Lenders hereby grant a temporary waiver of the
November Note Interest Payment Default, which temporary waiver shall
remain in
effect only during the Waiver Period
(defined below). As
used herein, the
term
"Waiver Period" shall mean the period
commencing on the
effective date of this
Agreement and ending on the earlier of (i) December 1, 2005 and (ii) the
occurrence of any other Event of Default
under the Credit
Agreement (other than
the Specified Defaults), including, without limitation, the occurrence of any
Event of Default under Section 8.1(e) or
(u) of the Credit Agreement as a result
of the occurrence of any "Default" or "Event of Default" (as such terms are
defined under the Senior Unsecured High Yield Note Indenture) other than the
November Note Interest Payment Default. Upon the expiration of the Waiver
Period, the November Note Interest Payment
Default shall automatically (without
notice or any other action on the party of
Agent, Lenders or any
other Person)
constitute an immediate Event of Default
hereunder;
provided, however that if
prior to December 1, 2005, Holdings shall have made payment in full to the
holders of Senior Unsecured High Yield Notes of all
interest due and payable on
November 1, 2005 under the Senior Unsecured High Yield Notes and the Senior
Unsecured Note Indenture, together with any default interest and any other
amounts then due and payable by Holdings to
the holders of the Senior Unsecured
High Yield Notes or the indenture
trustee under the
Senior Unsecured High Yield
Note Indenture, then the November Note Interest
Payment Default shall be deemed
permanently waived by Agent and the
Lenders.
2.3 No
Other Waivers; Reservation of Rights.
(a) Neither the Agent nor any other Lender has waived, or is by
this
Agreement waiving, (i) any Default or Event of
Default which may be continuing
on the date hereof (other than the limited
waiver of the Specified Defaults, in
each case to the extent expressly set forth
herein) or (ii) any Default or Event
of Default which may hereafter arise
(whether similar to the Specified Defaults
or otherwise), including, without limitation, any failure by the Borrowers
to
comply with Sections 7.15 or 7.16 of the
Credit Agreement for any Fiscal Quarter
ended prior to or after September 30, 2005 and any Event
of Default as a result
of the occurrence of any "Default" or "Event of Default" as such terms are
defined in the Senior
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Unsecured High Yield Note Indenture (other than the November Note Interest
Payment Default which is the subject of the
temporary waiver granted above under
Section 2.2 above).
(b) The Agent and the Lenders reserve the right, in their
discretion, to exercise any or all of their
rights and remedies under the Credit
Agreement and the other Loan Documents as a result of any Default or
Event of
Default (other than the Specified Financial
Covenant Defaults and, solely during
the Waiver Period, the November Note Interest Payment
Default, in each case
to
the extent expressly set forth herein) which may be continuing on the date
hereof or any Default or Event of Default
(other than the
Specified Defaults
and, solely during the Waiver Period, the November Note Interest Payment
Default, in each case to the extent
expressly set forth herein) which may occur
after the date hereof, and nothing in this Agreement,
and no delay on the
part
of the Agent or any Lender in exercising any such right or remedy, shall be
construed as a waiver of any such right or
remedy.
SECTION 3. CONDITIONS TO EFFECTIVENESS
3.1 This
Agreement shall become effective on the date upon which the
conditions specified belo
