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EXHIBIT 4.4
CREDIT AGREEMENT
By and Between
ENDOVASCULAR TECHNOLOGIES, INC.
Borrower,
and
GUIDANT CORPORATION
Lender,
Dated as of February 27, 1997
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$30,000,000
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TABLE OF CONTENTS
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ARTICLE 1 Definitions................................................... 1
ARTICLE 2 Loan.......................................................... 7
2.1 Loan ......................................................... 7
2.2 Interest ..................................................... 8
2.3 Payments ..................................................... 9
ARTICLE 3 Conditions Precedent ......................................... 11
3.1 Conditions to First Disbursement ............................. 11
3.2 Conditions to Subsequent Disbursements ....................... 12
3.3 Conditions for the Benefit of the Lender ..................... 13
3.4 Failure of Conditions ........................................ 13
ARTICLE 4 Representations and Warranties of the Borrower ............... 13
4.1 Due Organization ............................................. 14
4.2 Capitalization ............................................... 14
4.3 Requisite Power .............................................. 14
4.4 Authorization ................................................ 14
4.5 Officer Authorization ........................................ 14
4.6 Binding Nature ............................................... 14
4.7 No Conflict .................................................. 15
4.8 No Event of Default .......................................... 15
4.9 Financial Statements ......................................... 15
4.10 Tax Returns and Tax Matters .................................. 15
4.11 Compliance with Laws ......................................... 15
4.12 Full Disclosure .............................................. 16
4.13 Title to Assets .............................................. 16
4.14 Environmental Matters ........................................ 16
4.15 Employee Benefits ............................................ 17
ARTICLE 5 Affirmative Covenants ........................................ 17
5.1 Financial Statements and Notices ............................. 17
5.2 Access ....................................................... 19
5.3 Maintenance of Existence ..................................... 19
5.4 Facilities ................................................... 19
5.5 Compliance with Laws ......................................... 19
5.6 Material Agreements .......................................... 20
5.7 Insurance .................................................... 20
5.8 Taxes and Other Liabilities .................................. 20
5.9 Governmental Approvals ....................................... 20
ARTICLE 6 Negative Covenants ........................................... 20
6.1 Distributions ................................................ 20
6.2 Change of Business ........................................... 21
6.3 Liens ........................................................ 21
6.4 Indebtedness ................................................. 21
6.5 Sale - Leasebacks ............................................ 21
6.6 Transactions With Affiliates ................................. 21
6.7 Investments .................................................. 21
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ARTICLE 7 Events of Default ............................................ 22
7.1 Events of Default ............................................ 22
7.2 Acceleration ................................................. 24
ARTICLE 8 Representations and Warranties of the Lender ................. 24
8.1 Due Organization ............................................. 24
8.2 Requisite Power .............................................. 24
8.3 Authorization ................................................ 25
8.4 Officer Authorization ........................................ 25
8.5 Binding Nature ............................................... 25
8.6 No Conflict .................................................. 25
ARTICLE 9 Miscellaneous ................................................ 25
9.1 Successors and Assigns and Sale of Interests ................. 25
9.2 No Implied Waiver ............................................ 25
9.3 Amendments and Waivers ....................................... 26
9.4 Remedies Cumulative .......................................... 26
9.5 Severability ................................................. 26
9.6 Costs, Expenses and Attorneys' Fees .......................... 26
9.7 General Indemnification ...................................... 27
9.8 Confidentiality .............................................. 27
9.9 Notices ...................................................... 28
9.10 Entire Agreement ............................................. 28
9.11 Governing Law and Consent to Jurisdiction .................... 28
9.12 Publicity .................................................... 29
9.13 Counterparts ................................................. 29
9.14 Headings ..................................................... 29
EXHIBITS AND SCHEDULES
No. Description
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Exhibit 2.1(b) Form of Note
Schedule 4.14 Environmental Disclosure
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is entered into as of February
27, 1997, between ENDOVASCULAR TECHNOLOGIES, INC., a Delaware corporation (the
"Borrower"), and GUIDANT CORPORATION, an Indiana corporation (the "Lender").
W I T N E S S E T H:
In consideration of the premises and mutual agreements herein contained,
the parties hereto agree as follows:
ARTICLE 1
Definitions
In addition to any terms defined elsewhere in this Agreement, the
following terms have the meanings indicated for purposes of this Agreement
(such definitions being equally applicable to the singular and plural forms of
the defined term):
"Acceleration" means that the Loan (i) shall not have been paid at the
Maturity Date, or (ii) shall have become due and payable prior to its stated
maturity pursuant to Section 7.2 hereof.
"Agreement" or "Credit Agreement" means this Credit Agreement, as from
time to time amended, modified or supplemented.
"Banking Day" means a day other than a Saturday or a Sunday when
commercial banks are open for business in San Francisco, California.
"Borrower" shall have the meaning specified in the heading to this
Agreement.
"Business" means the development, manufacture and sale (alone or with
others) of medical devices and related products that Business shall not mean the
development, manufacture or sale of coronary stents or other stents not used in
conjunction with the implementation of an endovascular graft and related
products and services.
"Cash Equivalents" means the net current cash value of (i) obligations
issued or guaranteed by the United States of America; (ii) certificates of
deposit, bankers' acceptances and other "money market instruments" issued by any
bank or trust company organized under the laws of the United States of America
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or any state thereof and having capital and surplus of an aggregate amount not
less than $500,000,000; (iii) open market commercial paper bearing the highest
credit rating issued by Standard & Poor's Corp. or by another nationally
recognized credit rating firm; (iv) repurchase agreements entered into with any
bank or trust company organized under the laws of the United States of America
having capital and surplus in an aggregate amount not less than $500,000,000;
and (v) shares of "money market funds," each having net assets of not less than
$500,000,000.
"Cash Interest Payment Date" shall mean the earlier of the date that is
thirty (30) months after the First Disbursement Date (but in no event later
than the Maturity Date) or a date which is the last day of a calendar quarter
and is designated in a written notice from the Borrower to the Lender which
notice is received at least five (5) Banking Days prior to such date.
"Change of Control" means the occurrence of any of the following events:
(a) the Borrower is merged or consolidated with or into another corporation with
the effect that the common stockholders immediately prior to such merger or
consolidation hold less than fifty percent (50%) of the ordinary voting power of
the outstanding securities of the surviving corporation of such merger or the
corporation resulting from such consolidation; (b) a change in the composition
of the board of directors of the Borrower after the date hereof as a result of
which fewer than a majority of the incumbent directors are directors who either
(i) had been directors of the Borrower 12 months prior to such change, or (ii)
were elected, or nominated for election, to the board of directors with the
affirmative votes of a majority of the directors who had been directors of the
Borrower 12 months prior to such change and who were still in office at the time
of the election or nomination; or (c) a Person or group (as such term is used in
rule 13d-5 under the Securities Exchange Act of 1934) of Persons shall, as a
result of a tender or exchange offer, open market purchases, merger, privately
negotiated purchases or otherwise, have become, directly or indirectly, the
beneficial owner (within the meaning of rule 13d-3 under the Securities Exchange
Act of 1934) of securities having twenty percent (20%) or more of the ordinary
voting power of then outstanding securities of Borrower (provided that no Change
of Control shall occur as a result of any outstanding securities owned by any
such Person or group on the day hereof).
"Code" means the Internal Revenue Code of 1986, as amended.
"Disbursement Date" means any date after the First disbursement Date but
prior to August 31, 1999 on which a disbursement of the Loan is made. Each
Disbursement Date shall be on the date designated in a written notice from the
Borrower to the Lender; provided, however, that (a) the Lender shall not be
required to make any disbursement if the conditions thereto
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are not satisfied, and (b) the Lender shall in no event be required to make any
disbursement after August 31, 1999.
"Dollars" and "$" mean United States Dollars.
"Effective Date" means the date of this Agreement.
"Environmental Claim" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief.
"Environmental Laws" means any Governmental Requirement pertaining to
land use, air, soil, surface water, groundwater (including the protection,
cleanup, removal, remediation or damage thereof), public or employee health or
safety or any other environmental matter; including without limitation, the
following laws as the same may be amended from time to time:
(1) Clean Air Act (42 U.S.C. Section 7401, et seq.);
(2) Clean Water Act (33 U.S.C. Section 1251, et seq.);
(3) Resource Conservation and Recovery Act (42 U.S.C.
Section 6901, et seq.);
(4) Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601, et seq.);
(5) Safe Drinking Water Act (42 U.S.C. Section 300f, et
seq.);
(6) Toxic Substances Control Act (15 U.S.C. Section 2601,
et seq.);
(7) Rivers and Harbors Act (33 U.S.C. Section 401, et seq.);
(8) Endangered Species Act (16 U.S.C. Section 1531, et
seq.);
(9) Occupational Safety and Health Act (29 U.S.C. Section
651, et seq.).
"Event of Default" shall have the meaning set forth in Article 7 hereof.
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"First Disbursement Date" means the date on which the first
disbursement of the Loan occurs. The First Disbursement Date shall be on the
date designated in a written notice from the Borrower to the Lender; provided,
however, that (a) the Lender shall not be required to make any disbursement if
the conditions thereto are not satisfied, and (b) the Lender shall in no event
be required to make any disbursement after August 31, 1999.
"Fully Diluted Common Equity" means the number of shares of the
Borrower's common stock that would be outstanding assuming the exercise or
conversion of all outstanding options, warrants, convertible securities and any
other rights to acquire common stock.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination. Each accounting term not defined herein and each accounting term
partly defined herein to the extent not defined shall have the meaning given to
it under GAAP.
"Governmental Approvals" means any consent, right, exemption,
concession, permit, license, authorization, certificate, order, franchise,
determination or approval of any federal, state, provincial, municipal or
governmental department, commission, board, bureau, agency or instrumentality
required for the ownership of, or activities of the Borrower or any other
Person in connection with the business of the Borrower.
"Governmental Authority" means any nation or government, any state,
province or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Requirements" means all legal requirements in effect from
time to time including all laws, statutes, codes, acts, ordinances, orders,
judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, certificates, orders, franchises, determinations, approvals,
notices, demand letters, directions and requirements of all governments,
departments, commissions, boards, courts, authorities, agencies, officials and
officers, and all instruments of record, foreseen or unforeseen, ordinary or
extraordinary, including but not limited to any change in any law, regulation
or the interpretation thereof by any foreign or domestic governmental or other
authority (whether or not having the force of law), relating now or at any time
heretofore or hereafter to the business or operations of the Borrower or to any
of the property owned, leased or
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used by the Borrower, including, without limitation, the development, design,
construction, acquisition, start-up, ownership and operation and maintenance of
property.
"Hazardous Substance" means any pollutant, contaminant, toxic or
hazardous substance, material, constituent or waste as such terms are defined
in or pursuant to any Environmental Law.
"Incipient Default" shall have the meaning set forth in Section 3.1(c)
hereof.
"Indebtedness" means (a) any obligation for borrowed money; (b) any
obligation evidenced by bonds, debentures, notes or other similar instruments;
(c) any obligation to pay the deferred purchase price of property or for
services (other than in the ordinary course of business); (d) any capitalized
lease obligation; (e) any obligation or liability secured by a lien on any
asset of the Borrower, whether or not such obligation or liability is assumed;
and (f) any other long-term obligation or liability which is required by GAAP
to be shown as part of the liabilities on a balance sheet; provided, however,
that Indebtedness shall not mean obligations incurred in connection with (x)
the acquisition of equipment which is less than or equal to two million Dollars
($2,000,000) in the aggregate at any time outstanding or (y) any judgment,
order or decree that does not constitute an Event of Default pursuant to
Section 7.1(e) hereof.
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors; and (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors or other, similar
arrangement.
"Investment," as applied to any party, means any direct or indirect
ownership or purchase or other acquisition by that party of any capital stock,
equity interest, obligations or other securities, or a beneficial interest in
any capital stock, equity interest, obligations, or all or substantially all
assets used to conduct a business or a line of business, or any direct or
indirect loan, or capital contribution by that party to any other party, or any
joint venture or other arrangement involving the sharing of profits or losses
from joint business activities.
"Lender" shall have the meaning specified in the heading of this
Agreement.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
those created
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by, arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable
law) and any contingent or other agreement to provide any of the foregoing;
provided, however, that Lien shall not mean liens created in connection with
the acquisition of equipment which secure obligations less than or equal to two
million Dollars ($2,000,000) in the aggregate at any time outstanding.
"Loan" shall have the meaning set forth in Section 2.1(a) hereof.
"Loan Documents" means this Agreement and the Note and all agreements,
instruments and documents (including, without limitation, if any, security
agreements, loan agreements, notes, fee agreements, guaranties, mortgages, deeds
of trust, subordination agreements, pledges, assignments of intellectual
property, powers of attorney, consents, assignments, contracts, notices,
leases, financing statements, letter of credit applications, reimbursement
agreements, certificates, statements, reports and notices and all other
writings) heretofore, now or hereafter executed by, on behalf of or for the
benefit of the Borrower and delivered to the Lender pursuant to or in
connection with this Agreement or the transactions contemplated hereby,
together with all amendments, modifications and supplements thereto.
"Material Adverse Change" means a material adverse change in the
business, assets, operations, or financial condition of the Borrower and its
subsidiaries considered as a whole.
"Material Adverse Effect" means a material adverse effect on the
business, assets, operations, or financial condition of the Borrower and its
subsidiaries considered as a whole.
"Maturity" means the date on which the Loan or any portion thereof
becomes due and payable whether as stated, by virtue of mandatory prepayment,
by acceleration or otherwise.
"Maturity Date" means March 31, 2002.
"Note" has the meaning specified in Section 2.1(b).
"Obligations" means all loans, advances, debts, liabilities,
obligations, covenants and duties owing, to the Lender by the Borrower of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, arising under any Loan Document, whether or not
for the payment of money, arising by reason of an extension of credit, absolute
or contingent, due or to become due, now existing or hereafter arising,
including all principal, interest, charges, expenses,
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fees, attorneys' fees and disbursements and any other sum chargeable to the
Borrower under this Agreement or any other Loan Document.
"Permitted Encumbrances" means: (a) liens arising in connection with
worker's compensation and unemployment insurance; (b) any lien existing or
arising by operation of law in the ordinary course of business, such as a
"banker's lien" or similar right of offset; (c) liens for taxes, fees,
assessments or other government charges or levies, either not delinquent or
being contested in good faith by appropriate proceedings; (d) liens arising
from judgments, decrees or attachments in circumstances not constituting an
Event of Default hereunder; (e) easements, reservations, rights-of-way,
restrictions, minor defects or irregularities in title or similar encumbrances
affecting real property not interfering in any material respect with the
ordinary conduct of business; (f) liens in favor of customs and revenue
authorities arising in the ordinary course of business; (g) liens (including a
lien consisting of the rights of a lessor under a sale-leaseback transaction)
created in connection with the acquisition of equipment, which liens secure
obligations not in excess of two million Dollars ($2,000,000) in the aggregate
at any time outstanding; and (h) liens securing Indebtedness not in excess of
one million two hundred thousand Dollars ($1,200,000) in the aggregate at any
time outstanding.
"Person" means any individual, corporation, partnership, trust,
association or other entity or organization, including any government,
political subdivision, agency or instrumentality thereof.
"Prepayment Fee" means a fee owing from the Borrower to the Lender upon
exercise of the Borrower's right to pay principal and interest prior to
Maturity under Section 2.3(c), or obligation to pay principal and interest
prior to Maturity under Section 2.3(d), based on a percentage of the amount
prepaid. The initial Prepayment Fee shall be five percent (5%) of the prepaid
principal and such fee shall decrease by one percent (1%) each year on the
anniversary of the Effective Date. Notwithstanding the foregoing, the
Prepayment Fee shall be one percent (1%) of the outstanding principal amount of
the Loan if the Borrower's obligation to pay the Prepayment Fee occurs as a
result of a Change of Control.
ARTICLE 2
Loan
2.1 Loan.
(a) Loan. Subject to all of the terms and conditions of this
Agreement, Lender agrees to make a loan (the "Loan") to the
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Borrower in the amount of thirty million Dollars ($30,000,000) to be governed
by the terms and conditions of, and repaid in accordance with, this Agreement.
The Borrower shall provide the Lender with at least five (5) Banking Days'
written notice of a requested disbursement. Disbursement amounts shall be in
multiples of one hundred thousand dollars ($100,000). Subject to the
satisfaction of applicable conditions set forth in Article 3 hereof, the Loan
shall be disbursed to the Borrower as follows: up to seven million Dollars
($7,000,000) shall be disbursed on the First Disbursement Date and any
subsequent Disbursement Date. In no event shall the Lender be obligated to
disburse to the Borrower more than seven million dollars ($7,000,000) in any
calendar quarter, or more than twenty million dollars ($20,000,000) during any
one year period measured from the anniversary date of the First Disbursement
Date, or more than thirty million dollars ($30,000,000) in total. In addition,
no more than two Disbursement Dates shall occur in any calendar quarter. The
Borrower shall use the proceeds of the Loan solely for the general corporate
purposes of the Business. Amounts prepaid in respect of the Loan (whether
repaid when due or prepaid) may not be reborrowed.
(b) Note. The Borrower's obligation to the Lender to repay the
Loan shall be evidenced by a promissory note of the Borrower (the "Note") in
the form attached hereto as Exhibit 2.1(b).
(c) Disbursement. Upon the prior or contemporaneous satisfaction of
all the applicable conditions precedent set forth in Article 3 hereof, or
waiver by the Lender of any conditions not so satisfied, the Lender shall
disburse the proceeds of each disbursement of the Loan to the Borrower (or to
such other Person as the Borrower may designate in writing) by wire transfer of
immediately available funds to such bank account as is specified in writing by
Borrower to Lender.
2.2 Interest.
(a) Interest. The outstanding principal amount of the Loan shall
bear interest at a rate per annum initially equal to sixteen and one-half
percent (16.5%). Unless the Borrower gives the Lender notice to cause the
occurrence of the Cash Interest Payment Date (in which event interest hereunder
shall be fixed at the rate of interest in effect on the Cash Interest Payment
Date), such rate of interest shall increase by one-quarter of one percent
(0.25%, or 25 "basis points") on the first day of the first calendar quarter
following the First Disbursement Date and thereafter on the first day of each
calendar quarter; provided, however, that (except upon the occurrence and
during the continuation of an Incipient Default or an Event of Default) the
rate of interest hereunder shall not exceed nineteen percent (19%) per annum.
Upon the occurrence and during the continuation of an Incipient Default or an
Event of Default, the outstanding principal amount of the Loan shall, to the
extent
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permitted by applicable law, bear interest at a rate equal to the applicable
rate provided above plus two percent (2%) per annum. Interest shall be payable
as set forth in Section 2.3(a) below.
(b) Computation of Interest. Interest shall be computed for the
actual number of days elapsed on the basis of a year consisting of 360 days.
2.3 Payments.
(a) Interest Payments. Prior to the Cash Interest Payment Date,
interest accrued in respect of the Loan shall be added to the outstanding
principal amount thereof as of the last day of each calendar quarter. The
Lender and the Borrower acknowledge that the outstanding principal amount of
the Loan may thereby exceed thirty million dollars ($30,000,000) by an amount
equal to the aggregate amount of accrued interest that is added to outstanding
principal. On the Cash Interest Payment Date and on the last day of each
calendar quarter after the Cash Interest Payment Date until the Maturity Date,
and on the Maturity Date, the Borrower shall pay the Lender all interest then
accrued. Amounts added to principal pursuant to the first sentence of this
Section shall be treated as principal rather than interest and shall not be due
and payable by the Borrower on the Cash Interest Repayment Date.
(b) Loan Payment. The borrower shall repay the entire outstanding
principal amount of the Loan in full on the Maturity Date.
(c) Optional Prepayment. Upon not less than five (5) Banking Days'
prior written notice to the Lender, the Borrower may at any time prepay the
entire outstanding principal amount of the Loan or any portion thereof,
provided that (a) all accrued interest on the amount so prepaid shall be paid
in full, (b) the Borrower shall also pay to the Lender on the date the
Prepayment Fee, and (c) in the case of a prepayment of less than the entire
outstanding principal amount of the Loan, the principal amount outstanding
after such prepayment shall be an integral multiple of one hundred thousand
dollars ($100,000). If the Borrower gives the Lender notice of the Borrower's
intent to prepay the outstanding principal amount of the Loan in full, the
Lender shall not be obligated to make any further disbursements under this
Agreement.
(d) Prepayment for Sale of Assets. The Borrower shall repay the
outstanding principal amount of the Loan in its entirety, plus all interest
accrued to the date of prepayment, plus the Prepayment Fee, immediately upon the
occurrence of a sale, lease, exchange or transfer of all or substantially all
of the assets of the Borrower, and in such event the Lender shall have no
further obligation to make any further disbursements under this Agreement.
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(e) Prepayment for Sale of Securities. In the event of a sale or
other issuance by the Borrower of any of its securities or any rights to
purchase or otherwise acquire any of its securities (except (A) for the
issuance or sale to officers, directors and employees of and consultants to
Borrower for the primary purpose of retaining the services of such persons
pursuant to option plans approved by the Borrower's shareholders, and (B) in
connection with a bona fide acquisition, joint venture or other business
relationship, provided such sale or other issuance is in furtherance of the
Business and does not result in the issuance of securities representing more
than twenty percent (20%) of Fully Diluted Common Equity immediately prior to
such sale or other issuance) or a sale, exchange or transfer by the Borrower or
any of its subsidiaries of any securities or rights to purchase or otherwise
acquire securities of any subsidiary of the Borrower, the Borrower shall
immediately upon the occurrence of any of such events repay to the Lender the
entire net proceeds thereof, up to the entire amount of the Obligations.
(f) Change of Control-Repayment. Upon the occurrence of a Change of
Control, the Borrower shall immediately notify the Lender in writing of such
occurrence and offer to pay to the Lender the outstanding principal amount of
the Loan, plus all interest accrued to date, plus the Prepayment Fee. The
Lender, shall have the option of requiring the Borrower to repay the Loan in
accordance with this Section 2.3(f) by giving the Borrower written notice to
such effect. The Borrower shall repay such amounts within ten (10) days after
the Lender's notice.
(g) Payments by the Borrower. All payments (including prepayments)
to be made by the Borrower on account of Principal and interest shall be made
without set-off or counterclaim and shall be made to the Lender by wire
transfer in Dollars and in immediately available funds to Lender's Account No.
102-7141, at Mellon Bank, located in Pittsburgh, Pennsylvania, A.B.A. No.
0000-0000-0 no later than 12:00 noon (Eastern Standard Time) of the Banking Day
on which payment is due. Any payment which is received by the Lender later than
12:00 noon (Eastern Standard Time) shall be deemed to have been received on the
immediately succeeding Banking Day. Whenever any payment hereunder shall be
stated to be due on a day other than a Banking Day, such payment shall be made
on the next succeeding Banking Day, and such extension of time shall in such
case be included in the computation of interest.
(h) Offset. In addition to and not in limitation of all rights of
offset that the Lender may have under applicable law, Lender, upon the
occurrence and during the continuance of an Acceleration, shall have the right
to appropriate and apply to the payment of all Obligations any and all amounts
that Lender may owe Borrower for any reason. Lender agrees promptly to notify
the Borrower after any such offset and application;
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provided, however, that the failure to give such notice shall not affect the
validity of such offset and application. The rights of Lender under this
Section 2.3(g) are in addition to the other rights and remedies which the
Lender may have.
ARTICLE 3
Conditions Precedent
3.1 Conditions to First Disbursement. The obligation of the Lender
to make the first disbursement of the Loan shall be subject to the prior or
contemporaneous satisfaction of each of the following conditions:
(a) Delivery of Documents. The Note shall have been duly
executed and delivered to the Lender on the First Disbursement Date;
(b) Reports, Certificates and Other Information. The Lender
shall have received the following, dated and in full force and
effect on the First Disbursement Date:
(i) a certificate of the Secretary or an Assistant
Secretary of the Borrower as to authorization of the execution,
delivery and performance of this Agreement and all of the other
Loan Documents by the Borrower;
(ii) a certificate, signed by an authorized officer
of the Borrower, stating (A) that the representations and
warranties contained in Article 4 hereof are then accurate and
complete in all material respects as though made on and as of
such date and (B) that there has then occurred no Event of
Default or Incipient Default which is continuing; and
(iii) such other instruments or documents as the
lender may reasonably request relating to the existence and good
standing of the Borrower or to the corporate authorization by
the Borrower for execution, delivery and performance of this
Agreement or any of the other Loan Documents.
(c) No Existing Default. No Event of Default or event which,
upon the lapse of time or the giving of notice or both, would constitute
an Event of Default (an "Incipient Default") shall exist on the First
Disbursement Date or after giving effect to the transactions
contemplated to take place hereunder on such date;
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(d) REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties set forth in Article 4 hereof shall be true and correct
in all material respects on and as of the First Disbursement Date, and
after giving effect to the transactions contemplated to occur on such
date;
(e) CASH BALANCES. The Lender shall have received a certificate
of the Chief Financial Officer of the Borrower in form and substance
satisfactory to the Lender stating that as of the close of the second
Banking Day prior to the First Disbursement Date, the aggregate amount
of cash and Cash Equivalents of the Borrower and its subsidiaries on a
consolidated basis does not exceed $10,000,000;
(f) LEGAL OPINION. The Lender shall have received an opinion of
counsel to the Borrower, in form and substance satisfactory to the
Lender and its counsel, as to the enforceability of this Agreement and
the other Loan Documents and as to such other matters as the Lender and
its counsel may reasonably request; and
(g) OTHER DOCUMENTS. The Lender shall have received any other
document, instrument, undertaking or certificate stated in any of the
Loan Documents to be delivered on the First Disbursement Date or as the
Lender may reasonably request.
3.2 CONDITIONS TO SUBSEQUENT DISBURSEMENTS. The obligation of the
Lender to make each disbursement of the Loan after the first disbursement
thereof shall be subject to the prior or contemporaneous satisfaction of each
of the following conditions:
(a) FIRST DISBURSEMENT. The first disbursement of the loan shall
have occurred.
(b) REPORTS, CERTIFICATES AND OTHER INFORMATION. The Lender
shall have received the following, dated and in full force and effect on
the respective Disbursement Date:
(i) a certificate, signed by an authorized officer of the
Borrower, stating (A) that the representations and warranties contained
in Article 4 hereof are then accurate and complete in all material
respects as though made on and as of such date and (B) that there has
then occurred no Event of Default or Incipient Default which is
continuing; and
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(ii) such other instruments or documents as the Lender
may reasonably request relating to the existence and good
standing of the Borrower or to the corporate authorization by
the Borrower for execution, delivery and performance of this
Agreement or any of the other Loan Documents.
(c) No Existing Default. No Event of Default or Incipient
Default shall exist on the respective Disbursement Date or after giving
effect to the transactions contemplated to take place hereunder on such
date;
(d) Representations and Warranties Correct. The
representations and warranties set forth in Article 4 hereof shall be
true and correct in all material respects on and as of the respective
Disbursement Date, and after giving effect to the transactions
contemplated to occur on such date;
(e) Cash Balances. The Lender shall have received a
certificate of the Chief Financial Officer of the Borrower in form and
substance satisfactory to the Lender stating that as of the close of the
second Banking Day prior to the respective Disbursement Date, the
aggregate amount of cash and cash equivalents of the Borrower and its
subsidiaries on a consolidated basis does not exceed $10,000,000; and
(f) Other Documents. The Lender shall have received any
other document, instrument, undertaking or certificate stated in any of
the Loan Documents to be delivered on the Disbursement Date or as the
Lender may reasonably request.
3.3 Conditions for the Benefit of the Lender. The conditions set
forth in this Article 3 are for the exclusive benefit of the Lender and may be
waived, for purposes of this Agreement, only by a written waiver declaration
signed by the Lender.
3.4 Failure of Conditions. Lender's obligations hereunder shall
terminate, and the Lender shall have no further obligation to disburse the
Loan, if the first Disbursement Date shall not have occurred by August 31, 1999.
ARTICLE 4
Representations and Warranties of the Borrower
In order to induce Lender to enter into or become party to this
Agreement and to make the Loan, the Borrower makes the following representations
and warranties to the Lender:
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4.1 Due Organization. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Borrower is duly licensed or qualified to conduct business and
in good standing in each jurisdiction wherein the character of the property
owned or the nature of the business transacted by it makes such licensing or
qualifications necessary, except as to jurisdictions where the failure to be so
licensed or qualified would not have a Material Adverse Effect.
4.2 Capitalization.
(a) The corporate charter or certificate of incorporation and all
amendments thereto for the Borrower have been duly filed and are in proper
order. All of the outstanding capital stock of the Borrower has been validly
issued in compliance with all federal and state securities laws and is fully
paid and nonassessable.
(b) As of the First Disbursement Date and each Disbursement Date
the Borrower is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock.
4.3 Requisite Power. The Borrower has all requisite corporate or
other legal power and all governmental licenses, permits, authorizations,
consents and approvals necessary to own and operate its properties and to carry
on its business as now conducted and as proposed to be conducted. The Borrower
has all requisite power to borrow the sums provided for in this Agreement and
to execute, deliver, issue and perform this Agreement and the Note.
4.4 Authorization. All corporate action on the part of the
Borrower and its directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Note and the
other Loan Documents has been duly taken and is in full force and effect.
4.5 Officer Authorization. Each authorized officer of the Borrower
executing this Agreement or any of the other Loan Documents is (as of the date
of such execution) duly and properly in office and fully authorized to execute
and deliver the same.
4.6 Binding Nature. This Agreement, the Note and each of the other
Loan Documents is, or upon the execution and delivery thereof will be, a
legal, valid and binding obligation of the Borrower, and in full force and
effect and enforceable in accordance with its respective terms, except for the
effect of applicable laws regarding bankruptcy or insolvency or similar laws
affecting creditors' rights generally and by general principles of equity
relating to enforceability.
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4.7 No Conflict. Neither the execution nor delivery of this
Agreement, the Note or any of the other Loan Documents nor fulfillment of nor
compliance with the terms and provisions hereof or thereof will (a) conflict
with or result in a breach of any Governmental Requirement, or of any agreement
or instrument binding upon the Borrower, where such conflict or breach is
reasonably likely to have a Material Adverse Effect, or conflict with or result
in a breach of any provision of the corporate charter or by-laws of the
Borrower, or (b) result in the creation or imposition of any Lien (other than a
Permitted Lien) upon any property of the Borrower pursuant to any such agreement
or instrument, except pursuant to or as contemplated by this Agreement or any
other Loan Documents. No authorization, consent or approval or other action by,
and no notice to or filing with, any Governmental Authority or any other Person
is required to be obtained or made by the Borrower, for the due execution,
delivery and performance by the Borrower of this Agreement, the Note or any of
the other Loan Documents or for the validity or enforceability thereof.
4.8 No Event of Default. No Event of Default or Incipient Default
has occurred and is continuing or would result from the execution of this
Agreement.
4.9 Financial Statements. The financial statements of the Borrower
and its subsidiaries on a consolidated basis dated as of December 31, 1996, and
for the period then ended, copies of which have been furnished to the Lender,
or the financial statements furnished by the Borrower to the Lender pursuant to
Section 5.1 hereof, fairly present the financial condition and results of
operations of the Borrower and its subsidiaries taken as a whole. All such
financial statements were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein. Neither the Borrower nor any of its subsidiaries is subject to any
material liability, direct or contingent, including but not limited to,
liabilities for taxes, long-term leases or long-term commitments, except as
disclosed in such financial statements.
4.10 Tax Returns and Tax Matters. Borrower has filed all federal and
state income tax returns which are required to be filed, and has paid all taxes
as shown on said returns and on all assessments received by it to the extent
that such taxes have become due. There is no proposed, asserted or assessed
tax deficiency against the Borrower where any such deficiency or all such
deficiencies, considered in the aggregate, could have a Material Adverse Effect.
4.11 Compliance with Laws. The Borrower is in compliance with all
Governmental Requirements applicable to its properties, assets and business,
except where the failure to so comply would not in the aggregate have a
Material Adverse Effect. There are no proceedings pending or, to its
knowledge, threatened, to terminate or modify any Government Approvals;
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which termination or modification would have a Material Adverse Effect.
4.12 Full Disclosure. None of the representations or warranties made
by the Borrower in the Loan Documents as of the date of such representations and
warranties contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading.
4.13 Title to Assets. The Borrower and its subsidiaries have good
and marketable title, free and clear of all Liens other than Permitted Liens, to
such properties and assets as are reasonably necessary for the conduct of their
business, taken as a whole.
4.14 Environmental Matters. Except as disclosed in Schedule 4.14
attached hereto, (i) to the knowledge of the Borrower, the Borrower complies in
all respects with all applicable Environmental Laws; (ii) to the knowledge of
the Borrower, none of the properties or operations of the Borrower is subject to
any judicial or administrative proceeding alleging the violation of any
Environmental Law; (iii) to the knowledge of the Borrower, none of the
properties or operations of the Borrower is the subject of any federal or state
investigation concerning any use or release of any Hazardous Substance; (iv)
neither the Borrower, nor, to the knowledge of the borrower, any predecessor of
the Borrower, has filed any notice under any federal or state law indicating
past or present treatment, storage or disposal of a hazardous waste or reporting
a spill or release of a Hazardous Substance into the environment; (v) to the
knowledge of the Borrower, the Borrower does not have any contingent liability
in connection with any release of any Hazardous Substance into the environment
by Borrower, and no release which could require remediation has occurred; (vi)
none of the Borrower's operations involve the generation, transportation,
treatment, storage or disposal of Hazardous Substances (other than in the normal
course of and incidental to the ordinary conduct of its business); (vii) the
Borrower has not disposed of any material amount of any Hazardous Substance in,
on or about any premises owned, leased or used by the Borrower and, to the
Borrower's knowledge, neither has any lessee, prior owner, or other Person;
(viii) no surface impoundments or, to the Borrower's knowledge, underground
storage tanks are located in, on or about any of the premises owned, leased or
used by the Borrower or any of its subsidiaries; and (ix) to the knowledge of
Borrower, no Lien in favor of any Governmental Authority exists for (A) any
liability under environmental Laws, or (B) damages arising from or costs
incurred by such Governmental Authority in response to a release of any
Hazardous Substance into the environment has been filed or attached to any of
the premises owned, leased or used by the Borrower or any of its subsidiaries.
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4.15 Employee Benefits. Neither the Borrower nor any other
corporation, trade or business which, together with the Borrower, would be
treated as a single "employer" under Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code ("controlled group member") is now or has at any time
during the last five years been a "contributing sponsor" (as defined in Section
4001(a)(13) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) with respect to any defined benefit pension plan covered by Title IV
of ERISA by reason of Section 4021 of ERISA. Neither the Borrower no any
controlled group member is now or has at any time during the last five years
been obligated to contribute to any "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA. Other than "continuation coverage" required under
Section 601 of ERISA the Borrower does not pay or provide for any
post-retirement Welfare benefits for its retired employees.
ARTICLE 5
Affirmative Covenants
The Borrower covenants and agrees that so long as any Obligation is
outstanding it will comply with and, if applicable, cause any of its
subsidiaries to comply with the following provisions:
5.1 Financial Statements and Notices. The Borrower shall furnish to
the Lender the following financial statements, information and notices:
(a) Within forty-five (45) days after the close of the first
three quarters of Borrower's fiscal year, commencing with the fiscal
quarter ending March 31, 1997: (i) a statement of stockholders' equity
for such quarter; (ii) a statement of cash flows for such quarter; (iii)
an income statement for such quarter; and (iv) a balance sheet as of the
end of such quarter. All such statements shall be prepared on a
consolidated and consolidating basis for the Borrower and its
subsidiaries, in reasonable detail, subject to year-end audit
adjustments and without footnotes, shall include appropriate comparisons
to the same period for the prior year, and shall be certified by the
Chief financial Officer of the Borrower to have been prepared in
accordance with GAAP consistently applied, subject to year-end audit
adjustments;
(b) Within ninety (90) days after the close of Borrower's
fiscal year, commencing with the fiscal year ending December 31, 1996 a
copy of the annual audit report for such year for the Borrower,
including for the Borrower and its Subsidiaries on a consolidated basis
(i) a statement of stockholders'
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equity for such fiscal year; (ii) a statement of cash flows for such
fiscal year, (iii) an income statement for such fiscal year, and (iv) a
balance sheet as of the end of such fiscal year, together with like
internal unaudited consolidating financial statements for the Borrower
and its Subsidiaries. All statements required by this Section 5.1(b)
shall include appropriate comparisons to the prior year. Such
consolidated financial statements shall be audited by an independent
certified public accounting firm and shall include a report of such
accounting firm, which report shall be unqualified as to the Borrower's
status as a going concern and as to the scope of the audit performed by
such accounting firm and shall state that such financial statements
fairly present the financial position of the Borrower and its
subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP, consistently applied;
(c) Promptly after they are sent, made available or filed,
copies of all material reports, proxy statements and financial
statements that the Borrower sends or makes available to its
stockholders and all registration statements and reports that the
Borrower may file with the Securities and Exchange Commission;
(d) Promptly but in no event later than five (5) Banking Days
after the Chief Financial Officer of the Borrower obtains knowledge of
the occurrence of an Event of Default or an Incipient Default and,
within ten (10) calendar days after obtaining such knowledge, provide
the Lender with a statement of an authorized officer of the Borrower
setting forth details of such Event of Default or Incipient Default and
the action which the Borrower proposes to take with respect thereto;
(e) Promptly but in no event later than ten (10) calendar days
after the Chief Financial Officer of the Borrower learns thereof,
written notice of any actual or threatened claims, litigation, suits,
investigations, or proceedings against or affecting the Borrower,
including, without limitation: (i) any claim, litigation, suit,
investigation, proceeding or dispute involving a monetary amount,
whether or not covered by insurance, in excess of two million dollars
($2,000,000), (ii) any denial, suspension, or revocation of any material
Governmental Approval; (iii) any investigation or proceeding before or
by any administrative or governmental agency which is reasonably likely
to have a Material Adverse Effect; (iv) any environmental Claim from any
person concerning any
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alleged violation of any Environmental Law by the Borrower or any of its
predecessors which is reasonably likely to either (x) have a Material
Adverse Effect or (y) result in a liability to the Borrower, whether or
not insured, in excess of two million Dollars ($2,000,000); or (v) the
commencement of any investigation by any Government Authority, or the
receipt by the Borrower of written request by any Government Authority
for information, relating to the handling, storage or disposal of any
Hazardous Substance, or the release thereof into the environment, by the
Borrower, or any of its predecessors, or any other Person, which
investigation or request is other than routine; and
(f) Within a reasonable time after a request therefor, such
other information as the Lender may reasonably request.
Each notice pursuant to this Section 5.1 (d), (e) or (f) shall be
accompanied by a written statement by an authorized officer of the Borrower
setting forth details of the occurrence referred to therein known to such
officer and stating what action the Borrower proposes to take with respect
thereto.
5.2 Access. The Borrower shall permit the Lender, at such reasonable
times and intervals as the Lender may designate upon reasonable notice, at its
own expense by and through the representatives and agents of the Lender, to
inspect, audit and examine its books and records, to make copies thereof, to
discuss its affairs, finances and accounts with its officers and independent
public accountants, and to visit and inspect its properties.
5.3 Maintenance of Existence. The Borrower, each of its subsidiaries
shall preserve and maintain their respective corporate existences and all of
their licenses, privileges and franchises and other rights necessary or
desirable in the normal course of their businesses.
5.4 Facilities. The Borrower and its subsidiaries shall use
commercially reasonable efforts to keep the properties used in their respective
businesses in good repair, working order and condition, and from time to time
shall use commercially reasonable efforts to make necessary repairs or
replacements thereto so that their property shall be maintained adequately for
its intended use. The foregoing notwithstanding, the Borrower may dispose of
obsolete and unneeded property.
5.5 Compliance with Laws. The Borrower and its subsidiaries shall
use commercially reasonable efforts to comply in all respects with all
Governmental Requirements, except where the failure to do so could not in the
aggregate have a Material Adverse Effect.
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5.6 Material Agreements. The Borrower and its subsidiaries shall use
commercially reasonable efforts to comply in all material respects with the
terms of each agreement to which any of them is a party.
5.7 Insurance. The Borrower and its subsidiaries shall maintain in
full force and effect insurance of such types and in such amounts as are
customarily carried in their respective lines of business, including, but not
limited to, fire, public liability, property damage, hazard insurance, products
liability and workers' compensation insurance.
5.8 Taxes and Other Liabilities. The Borrower and its subsidiaries
shall pay and discharge when due any and all indebtedness, obligations,
liabilities, assessments and real and personal property taxes, including, but
not limited to, federal and state income and personal and real property taxes,
except as may be subject to good faith contest or as to which a bona fide
dispute may arise; provided, however, that an adequate reserve therefor is made
in accordance with GAAP.
5.9 Governmental Approvals. The Borrower and its subsidiaries shall
use commercially reasonable efforts to apply for, diligently pursue, and obtain
or cause to be obtained, and shall thereafter maintain in full force and effect
all material Governmental Approvals that shall now or hereafter be necessary
under any Governmental Requirement (i) for land use, public and employee health
and safety, pollution or protection of the environment and (ii) for the
operation of the business of the Borrower and the subsidiaries, except where the
failure to obtain or maintain such Governmental Approval would not have a
Material Adverse Effect.
ARTICLE 6
Negative Covenants
The Borrower covenants and agrees that so long as any Obligation is
outstanding and the Lender has not failed to make a disbursement of the Loan
which Lender was required to make, the Borrower will comply with and, if
applicable, cause any of its subsidiaries to comply with, the following
provisions:
6.1 Distributions. The Borrower shall not, directly or indirectly,
make or declare any dividend (in cash, securities or any other form of property)
on, or other payment or distribution on account of, or set aside assets for a
sinking or other similar fund for purchase, or redeem, purchase, retire or
otherwise acquire, any capital stock of the Borrower, or make any other
distribution in respect thereof, whether in cash or other property (provided,
however, that the Borrower may repurchase shares of its capital stock at cost
from officers, directors, employees and consultants following termination of
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their services pursuant to option plans approved by the Borrower's shareholders.
The Borrower shall not permit any subsidiary of the Borrower to make or declare
any dividend (in cash, securities or any other form of property) on, or other
payment or distribution on account of, or set aside assets for a sinking or
other similar fund for purchase, or redeem, purchase, retire or otherwise
acquire, any capital stock of the Borrower or any subsidiary of the Borrower,
except that a wholly owned subsidiary of the Borrower may declare and pay cash
dividends or otherwise distribute capital to the Borrower.
6.2 Change of Business. The Borrower shall not engage in any
business other than the Business.
6.3 Liens and Encumbrances. The Borrower shall not, and shall not
allow any of its subsidiaries to, create, incur, assume, or permit to exist any
Lien of any kind upon any of the property or assets of the Borrower or such
subsidiary now owned or hereafter acquired, other than Permitted Encumbrances.
6.4 Indebtedness. Neither the Borrower nor any of its subsidiaries
shall incur, create, assume or permit to exist any Indebtedness except: (a) the
Obligations; (b) trade Indebtedness incurred in the ordinary course of business;
(c) taxes, assessments and governmental charges or levies which are not
delinquent or which are being contested in good faith and for which adequate
reserves have been set aside on the books of the Borrower or the affected
Subsidiary of the Borrower; and (d) current liabilities incurred in connection
with the obtaining of goods or services in the ordinary course of business.
6.5 Sale - Leasebacks. Neither the Borrower nor any of its
subsidiaries shall enter into or become liable in connection with any
sale-leaseback transaction, except for a sale-leaseback in connection with which
the property subject thereto is subject to a Permitted Encumbrance.
6.6 Transactions With Affiliates. Except on terms no less favorable
to the Borrower than would be obtainable if no such relationship existed,
Borrower shall not purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or loan or advance money to, or otherwise
deal with any affiliate or subsidiary.
6.7 Investments. Neither the Borrower nor any of its subsidiaries
shall make or permit to remain outstanding any Investment, except (a)
Investments by the Borrower in its subsidiaries; (b) investment-grade debt
securities having a term not longer than one (1) year; (c) Investments received
in the settlement of any debt owing to the Borrower or any of its subsidiaries,
where such debt was incurred in the ordinary course of business; (d) other
Investments not to exceed three million Dollars ($3,000,000) in the aggregate at
any time outstanding;
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and (e) other Investments in connection with a bona fide acquisition, joint
venture or other business relationship, provided such sale or other issuance is
in furtherance of the Business and does not result in the issuance of securities
representing twenty percent (20%) or more of Fully Diluted Common Equity
immediately prior to such sale or other issuance.
ARTICLE 7
Events of Default
7.1 Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:
(a) Principal Payments. The Borrower shall fail to pay when due
(whether due when scheduled or as a result of a mandatory prepayment)
any payment of principal in respect of the Loan;
(b) Interest and Other Payments. The Borrower shall fail to pay
when due any payment of interest or other sum payable hereunder or under
any of the other Loan Documents and continuance of such default for
fifteen (15) Banking Days after notice thereof to the Borrower from the
Lender;
(c) Other Covenants and Loan Agreements. The Borrower shall
default in the performance of any of its respective agreements set forth
in any provision herein or in any of the other Loan Documents (and not
constituting an Event of Default under any of the other clauses of this
Section 7.1) and such default shall continue for thirty (30) days after
notice thereof to the Borrower from the Lender;
(d) Representations and Warranties. Any representation or
warranty contained in Section 4 hereof or certification pursuant to
Section 3.2(b)(i) or 5.1 made by the Borrower or any officer of the
Borrower, shall be untrue in any material and adverse respect and shall
have a Material Adverse Effect, in any case on any date as of which the
facts set forth are stated or certified;
(e) Judgments. Any final judgment, order or decree shall be
rendered against the Borrower in an amount equal to or greater than four
million Dollars ($4,000,000), and either (i) enforcement proceedings
shall have been commenced by any Person upon such judgment or order or
(ii) there shall be any period of thirty (30) consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect,
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unless such judgment, order or decree shall, within such 30-day period,
be vacated or discharged (other than by satisfaction thereof);
(f) Cross-Default. The Borrower shall (i) fail to pay when due,
whether by stated maturity, acceleration or otherwise, any Indebtedness
for borrowed money of, or any guaranty of Indebtedness for borrowed
money by, the Borrower (not arising hereunder or under any of the other
Loan Documents) outstanding in aggregate principal amount greater than
(A) two million Dollars ($2,000,000), and such failure continues after
the applicable grace period, if any, specified in the document relating
thereto, or (ii) fail to perform or observe (subject to any applicable
grace period) any agreement, covenant or condition with respect to any
such Indebtedness or guaranty if the effect of such failure is to
accelerate the maturity of any such Indebtedness or to permit the holder
or holders of any such Indebtedness or guaranty, or any trustee or agent
for such holders, to cause such Indebtedness to become due and payable
prior to its expressed maturity or to call upon such guaranty in advance
of nonpayment of the guaranteed Indebtedness;
(g) Insolvency. An Insolvency Proceeding (whether voluntary or
involuntary) shall be commended against the Borrower or any subsidiary
of the Borrower; or the Borrower or any subsidiary of the Borrower shall
file a petition initiating or shall otherwise institute any similar
Insolvency Proceeding under any other applicable federal or state law,
or shall consent thereto; or the Borrower or any subsidiary of the
Borrower shall apply for, or by consent or acquiescence there shall be
an appointment of, a receiver, liquidator, sequestrator, trustee or
other officer with similar powers, or the Borrower or any subsidiary of
the Borrower shall make an assignment for the benefit of creditors; or
the Borrower or any subsidiary of the Borrower shall admit in writing
its inability to pay its debts generally as they become due; or, if an
involuntary case shall be commenced seeking the liquidation or
reorganization of the Borrower or any subsidiary of the Borrower under
Chapter 7 or Chapter 11, respectively, of the United States Bankruptcy
Code, or any similar proceeding shall be commenced against the Borrower
or any subsidiary of the Borrower under any other applicable federal or
state law, and (i) the petition commencing the involuntary case is not
timely controverted; or (ii) the petition commencing the involuntary
case is not dismissed within forty-five (45) days of its filing; or
(iii) an interim trustee is appointed to take possession of all or a
portion of the property
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and/or to operate all or any part of the business of the debtor; or (iv)
an order for relief shall have been issued or entered therein; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee or other
officer having similar powers over the debtor, or of all or any part of
the property of any of the foregoing, shall have been entered; or any
other similar relief shall be granted against the Borrower or any
subsidiary of the Borrower, under any applicable federal or state law;
or
(h) Invalidity of Loan Documents. Any of the Loan Documents
shall cease for any reason to be in full force and effect and the Lender
shall be substantially deprived of any of its rights under the Loan
Documents or any party thereto (other than Lender) shall purport to
disavow its obligations thereunder, shall declare that it does not have
any further obligation thereunder or shall contest the validity or
enforceability thereof.
7.2 Acceleration. If any Event of Default described in Section
7.1(g) hereof shall occur, the Note and all other Obligations shall become
immediately due and payable, all without notice of any kind, and the Lender
shall have no further obligation to make any disbursement of the Loan which has
not then been made. Notwithstanding any other provision in this Agreement, if
any other Event of Default shall occur, the Lender shall have no further
obligation to make any disbursement of the Loan which has not then been made
and may declare, at any time after the occurrence of an Event of Default, the
Note and all other Obligations to be due and payable, whereupon the Note and all
other Obligations shall immediately become due and payable, all as so declared
by the Lender and without presentment, demand, protest or other notice of any
kind. Any such declaration made pursuant to this Section 7.2 may be rescinded
by the Lender.
ARTICLE 8
Representations and Warranties of the Lender
The Lender makes the following representations and warranties to the
Borrower:
8.1 Due Organization. The Lender is a corporation duly organized,
validly existing and in good standing under the laws of the State of Indiana.
8.2 Requisite Power. The Lender has all requisite corporate or
other legal power and all governmental licenses, per-
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mits, authorizations, consents and approvals necessary to enter into and
perform its obligations under this Agreement.
8.3 Authorization. All corporate action on the part of the Lender
and its directors and stockholders necessary for the authorization, execution,
delivery and performance of this Agreement and the other Loan Documents has
been duly taken and is in full force and effect.
8.4 Officer Authorization. Each authorized officer of the Lender
executing this Agreement or any of the other Loan Documents is (as of the date
of such execution) duly and properly in office and fully authorized to execute
and deliver the same.
8.5 Binding Nature. This Agreement is a legal, valid and binding
obligation of the Lender, and in full force and effect and enforceable in
accordance with its terms, except for the effect of applicable laws regarding
bankruptcy or insolvency or similar laws affecting creditors' rights generally
and by general principles of equity relating to enforceability.
8.6 No Conflict. Neither the execution nor delivery of this
Agreement or any of the other Loan Documents nor fulfillment of nor compliance
with the terms and provisions hereof or thereof will (a) conflict with or
result in a breach of any Governmental Requirement, or of any agreement or
instrument binding upon the Lender, or conflict with or result in a breach of
any provision of the articles of incorporation or by-laws of the Lender. No
authorization, consent or approval or other action by, and no notice to or
filing with, any Governmental Authority or any other Person is required to be
obtained or made by the Lender, for the due execution, delivery and performance
by the Lender of this Agreement or any of the other Loan Documents or for the
validity or enforceability thereof.
ARTICLE 9
Miscellaneous
9.1 Successors and Assigns and Sale of Interests. The terms and
provisions of this Agreement shall be binding upon, and, subject to the
provisions of this Section 9.1, the benefits thereof shall inure to, the
parties hereto and their respective successors and assigns; provided, however,
that the Borrower shall not assign this Agreement or any of its rights, duties
or obligations hereunder without the prior written consent of the Lender; and
the Lender shall not delegate its obligations or duties hereunder without the
prior written consent of the Borrower.
9.2 No Implied Waiver. No delay or omission to exercise any right,
power or remedy accruing to the Lender upon any
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breach or default of the Borrower under this Agreement or under any of the
other Loan Documents shall impair any such right, power or remedy of the
Lender, nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default occurring
thereafter, nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default occurring theretofore or thereafter.
9.3 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document and no consent with
respect to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Lender, and then any such waiver
shall be effective only in the specific instance and for the specific purpose
for which given.
9.4 Remedies Cumulative. All rights and remedies, either under
this Agreement, by law or otherwise afforded to the Lender shall be cumulative
and not exclusive, and any single or partial exercise of any power or right
hereunder or thereunder does not preclude other or further exercise thereof, or
the exercise of any other power or right. In no event shall either party hereto
be liable for consequential damages for breach hereof, even if foreseeable.
9.5 Severability. Any provision of this Agreement, the Note or any
of the other Loan Documents which is prohibited or unenforceable in any
jurisdiction, shall be, only as to such jurisdiction, ineffective to the extent
of such prohibition or unenforceability, but all the remaining provisions of
this Agreement, the Note and the other Loan Documents shall remain valid.
9.6 Costs, Expenses and Attorneys' Fees. Each party shall pay all
of its fees and expenses associated with the negotiation, preparation,
execution and closing of this Agreement and the first disbursement of the Loan,
including, but not limited to, reasonable attorneys' fees and expenses. The
Borrower shall pay all costs and expenses, including, but not limited to,
reasonable attorneys' fees and expenses (including the allocated cost of
in-house counsel), expended or incurred by the Lender in collecting any sum
which becomes due under the Note or under this Agreement, any of the other Loan
documents, or in the protection, perfection, preservation and enforcement of
any and all rights of the Lender in connection with the Loan Documents
including, without limitation, the fees and costs incurred in any out-of-court
work-out or a bankruptcy or reorganization proceeding. This obligation on the
part of the Borrower shall survive the expiration or termination of this
Agreement, without occurrence of the Closing Date and shall survive repayment
of the Loan in full.
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9.7 General Indemnification. The Borrower shall indemnify and hold
the Lender and each of its directors, officers, employees, affiliates,
attorneys and agents (collectively referred to herein as the "Lender
Indemnitees") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without
limitation, any expenses (including attorneys' fees and the allocated cost of
in-house counsel) incurred by any such Lender Indemnitee in connection with any
investigation in connection with any such matter, whether or not any such
Lender Indemnitee shall be designated a party thereto) which may be imposed on,
incurred by or asserted against such Lender Indemnities by any Person other
than the Lender with which such Lender Indemnitee is affiliated (whether direct,
indirect or consequential and whether based on any federal or state laws or
other statutory regulations, including, without limitation, securities,
environmental and commercial laws and regulations, under common law or at
equitable cause, or on contract or otherwise) in any manner relating to or
arising out of this Agreement and any other Loan Documents, or any act, event
or transaction related or attendant thereto; the making of the Loan hereunder,
the management of the Loan (including any liability under federal, state or
local environmental laws or regulations), the use or intended use of the
proceeds of the Loan (collectively, the "Indemnified Matters"); provided,
however, that the Borrower shall have no obligation to any Lender Indemnitee
under this Section 9.7 with respect to Indemnified Matters to the extent such
Indemnified Matters were caused by or resulted from the gross negligence or
willful misconduct of a Lender Indemnitee. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall contribute to the payment and satisfaction of all Indemnified Matters
incurred by the Lender Indemnities the maximum portion which the Borrower is
permitted to pay and satisfy under applicable law. This indemnification shall
survive repayment by the Borrower of the Loan made under this Agreement, and
the termination of this Agreement without occurrence of the Closing Date.
9.8 Confidentiality. Lender agrees that all information furnished to
Lender by Borrower pursuant to this Agreement will be held under the Lender's
obligations pursuant to the Mutual Confidentiality Agreement dated October 1,
1996 by and between Lender and Borrower. Borrower agrees that, notwithstanding
the terms of said Mutual Confidentiality Agreement, all such information may be
used by Lender in connection with this Agreement and that Lender need not
comply with the provisions of the next-to-last paragraph of the Mutual
Confidentiality Agreement until all Obligations hereunder have been paid or
otherwise satisfied in full and the Lender has no further obligation to make
the Loan.
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9.9 Notices. Any notice which the Borrower or the Lender may be
required or may desire to give to the other party under any provision of this
Agreement shall be in writing by electronic facsimile transmission and shall be
deemed to have been given or made when transmitted to the Lender or the
Borrower as follows:
To the Borrower: EndoVascular Technologies, Inc.
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
To the Lender: Guidant Corporation
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Treasurer
Facsimile: (000) 000-0000
Any party may change the address to which all notices, requests and other
communications are to be sent to it by giving written notice of such address
change to the other parties in conformity with this paragraph, but such change
shall not be effective until notice of such change has been received by the
other parties.
9.10 Entire Agreement. This Agreement, together with the exhibits to
this Agreement and all of the other Loan Documents, is intended by the Borrower
and the Lender as a final expression of their agreement and, together with all
of the other Loan Documents, is intended as a complete statement of the terms
and conditions of their agreement. This Agreement and the other Loan Documents
contain all of the agreements and understandings between the Borrower and the
Lender concerning the Loan and the other transactions contemplated hereby.
9.11 Governing Law and Consent to Jurisdiction. The validity,
construction and effect of this Agreement, the Note and all of the other Loan
Documents shall be governed by the laws of the State of California, without
regard to its laws regarding choice of applicable law. All judicial proceedings
brought against the Borrower with respect to this Agreement, the Note or any of
the other Loan Documents may be brought in any state or federal court of
competent jurisdiction in the State of California, and the Borrower accepts for
itself and its assets and properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts. The Borrower waives, to the
fullest extent permitted by applicable law, any objection (including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens) which it
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may now or hereafter have to the bringing of any such action or proceeding in
any such jurisdiction. Nothing herein shall limit the right of Lender to bring
proceedings against the Borrower in the court of any other jurisdiction. TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER WAIVES COMPLETELY ANY
RIGHT WHICH IT MIGHT OTHERWISE HAVE TO TRIAL BY JURY.
9.12 Publicity. Neither party may disclose the existence or content
of this Agreement without the prior written consent of the other party, unless
such disclosure is in the judgment of the disclosing party reasonably necessary
to comply with applicable law. Each party shall have the opportunity to review
and approve any press releases with respect to this Agreement and/or the
transaction contemplated hereunder prior to disclosure. In the case of any
disclosure required by law, the parties shall consult with each other for the
purpose of limiting disclosure to such matters as are required by law.
9.13 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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9.14 Headings. Captions, headings and the table of contents in this
Agreement are for convenience only, and are not to be deemed part of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
its duly authorized officers as of the date and year first above written.
ENDOVASCULAR TECHNOLOGIES, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
Title President and CEO
-------------------------------
GUIDANT CORPORATION
By
----------------------------------
Title
-------------------------------
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9.14 Headings. Captions, headings and the table of contents in this
Agreement are for convenience only, and are not to be deemed part of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
its duly authorized officers as of the date and year first above written.
ENDOVASCULAR TECHNOLOGIES, INC.
By
----------------------------------
Title
-------------------------------
GUIDANT CORPORATION
By /s/ Xxxxxx X. Dallena
----------------------------------
Title President and Chief Executive Officer
-------------------------------
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Exhibit 2.1(b)
Form of Note
PROMISSORY NOTE
$30,000,000 Menlo Park, California
___________, 199_
On or before March 31, 2002, the undersigned, for value received,
promises to pay to the order of Guidant Corporation ("Payee"), at 000 Xxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000-0000, the principal sum of
thirty million dollars ($30,000,000) plus interest added to such principal sum
or, if less, the aggregate unpaid principal amount of all disbursements of
the Loan made by the Payee to the undersigned pursuant to the Credit Agreement
(as hereinafter defined) plus interest added to such principal amount, as shown
in the records of the Payee. Prior to the Cash Interest Payment Date, interest
accrued hereunder shall be added to the outstanding principal amount hereof as
of the last day of each calendar quarter.
The unpaid principal amount hereof from time to time outstanding shall
bear interest from the First Disbursement Date at a rate per annum initially
equal to sixteen and one-half percent (16.5%). Unless the undersigned gives
Payee notice to cause the occurrence of the Cash Interest Payment Date (in
which event interest hereunder shall be fixed at the rate of interest in effect
on the Cash Interest Payment Date), such rate of interest shall increase by
one-quarter of one percent (0.25%, or 25 "basis points") on the first day of
the first calendar quarter following the First Disbursement Date and thereafter
on the first day of each calendar quarter; provided, however, that (except upon
the occurrence and during the continuation of an Incipient Default or an Event
of Default) the rate of interest hereunder shall not exceed nineteen percent
(19%) per annum. Upon the occurrence and during the continuation of an
Incipient Default or an Event of Default, the outstanding principal amount of
the Loan shall, to the extent permitted by applicable law, bear interest at a
rate equal to the applicable rate provided above plus two percent (2%) per
annum. Interest on the Loan shall be payable in arrears on the last Banking Day
of each calendar quarter, commencing with the Cash Interest Payment Date and
ending on the Maturity Date.
Payments of both principal and interest shall be made in immediately
available funds in lawful money of the United States of America.
This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of that certain Credit
36
Agreement dated as of February 27, 1997 (as from time to time amended, modified
or supplemented) between the undersigned and the Payee (said Credit Agreement,
as so amended, modified or supplemented being herein referred to as the "Credit
Agreement"), to which Credit Agreement reference is hereby made for a statement
of said terms and provisions, including those under which this Note may be paid
prior to its due date or under which its due date may be accelerated.
Capitalized terms used in this Note and not otherwise defined shall have the
meaning set forth in the Credit Agreement.
This Note is made under and governed by the internal laws of the State
of California.
ENDOVASCULAR TECHNOLOGIES, INC., a
Delaware corporation
By
------------------------------------
Its
---------------------------------
Address:
EndoVascular Technologies, Inc.
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
37
Schedule 4.14
ENVIRONMENTAL DISCLOSURE
None
