1
Exhibit 10.1
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
among
UROHEALTH SYSTEMS, INC.,
BANQUE INDOSUEZ, NEW YORK BRANCH, AS AGENT,
and
THE LENDING INSTITUTIONS LISTED HEREIN
--------------------
Dated as of April 10, 1997
--------------------
$50,000,000
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit............................ 1
1.01 Commitments........................................... 1
1.02 Minimum Amount of Each Borrowing...................... 2
1.03 Notice of Borrowings.................................. 2
1.04 Disbursement of Funds................................. 3
1.05 Notes................................................. 4
1.06 Conversions........................................... 4
1.07 Pro Rata Borrowings................................... 5
1.08 Interest.............................................. 6
1.09 Interest Periods...................................... 7
1.10 Special Provisions Governing LIBOR
Loans............................................... 7
1.11 Capital Requirements.................................. 12
1.12 Total Loan Revolving Loan Commitment;
Limitations on Outstanding Loan Amounts............. 12
SECTION 2. Commitments........................................... 13
2.01 Voluntary Reduction of Commitments.................... 13
2.02 Mandatory Adjustments of
Commitments, etc.................................... 13
2.03 Commitment Commission................................. 13
SECTION 3. Payments.............................................. 13
3.01 Voluntary Prepayments................................. 13
3.02 Mandatory Prepayments................................. 14
3.03 Method and Place of Payment........................... 15
3.04 Net Payments.......................................... 16
SECTION 4. Conditions Precedent.................................. 18
4.01 Conditions Precedent to Effectiveness
of Amendment........................................ 18
4.02 Conditions Precedent to All Loans..................... 26
SECTION 5. Representations, Warranties and
Agreements.......................................... 27
5.01 Corporate Status...................................... 28
5.02 Corporate Power and Authority......................... 28
5.03 No Violation.......................................... 29
5.04 Litigation............................................ 29
5.05 Use of Proceeds....................................... 29
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Page
5.06 Governmental Approvals, etc........................... 29
5.07 Investment Company Act................................ 30
5.08 Public Utility Holding Company Act.................... 30
5.09 True and Complete Disclosure.......................... 30
5.10 Financial Condition; Financial
Statements; Projections............................. 31
5.11 Security Interests.................................... 32
5.12 Tax Returns and Payments.............................. 33
5.13 ERISA................................................. 33
5.14 Borrower's Subsidiaries............................... 35
5.15 Patents, etc.......................................... 35
5.16 Compliance with Laws, etc............................. 35
5.17 Properties............................................ 36
5.18 Securities............................................ 36
5.19 Collective Bargaining Agreements...................... 36
5.20 Environmental Protection.............................. 36
5.21 Environmental Investigations.......................... 38
5.22 Labor Matters......................................... 39
5.23 Indebtedness, etc..................................... 39
SECTION 6. Affirmative Covenants................................. 39
6.01 Information Covenants................................. 39
6.02 Books, Records and Inspections........................ 44
6.03 Maintenance of Property; Insurance.................... 45
6.04 Payment of Taxes...................................... 45
6.05 Corporate Franchises.................................. 46
6.06 Compliance with Statutes, etc......................... 46
6.07 ERISA................................................. 46
6.08 Performance of Obligations............................ 47
6.09 Fiscal Quarters; Fiscal Year.......................... 47
6.10 Use of Proceeds....................................... 47
6.11 No Further Negative Pledges........................... 47
6.12 Environmental Events.................................. 47
6.13 Pledge of Additional Collateral....................... 48
6.14 Security Interests.................................... 49
6.15 Inactive Subsidiaries................................. 49
SECTION 7. Negative Covenants.................................... 50
7.01 Changes in Business................................... 50
7.02 Amendments or Waivers of Certain
Documents........................................... 50
7.03 Liens................................................. 50
7.04 Indebtedness.......................................... 52
7.05 Capital Expenditures.................................. 53
7.06 Advances, Investments and Loans....................... 53
7.07 Prepayments of Securities, Amendments,
etc................................................. 54
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Page
7.08 Dividends, etc........................................ 55
7.09 Transactions with Affiliates.......................... 55
7.10 Total Interest Coverage Ratio......................... 56
7.11 Fixed Charge Coverage Ratio........................... 55
7.12 Leverage Ratio........................................ 57
7.13 Issuance of Subsidiary Stock.......................... 57
7.14 Disposition of Assets................................. 58
7.15 Contingent Obligations................................ 60
7.16 ERISA................................................. 61
7.17 Merger and Consolidations............................. 62
7.18 Sale and Lease-Backs.................................. 62
7.19 Sale or Discount of Receivables....................... 62
SECTION 8. Events of Default..................................... 62
8.01 Payments.............................................. 62
8.02 Representations, etc.................................. 62
8.03 Covenants............................................. 63
8.04 Default Under Other Agreements........................ 63
8.05 Bankruptcy, etc....................................... 63
8.06 ERISA................................................. 64
8.07 Security Documents.................................... 65
8.08 Guarantees............................................ 65
8.09 Judgments............................................. 65
8.10 Ownership............................................. 65
SECTION 9. Definitions........................................... 66
SECTION 10. The Agent and the Collateral Agent.................... 92
10.01 Appointment........................................... 92
10.02 Delegation of Duties.................................. 92
10.03 Exculpatory Provisions................................ 92
10.04 Reliance by the Agent or the
Collateral Agent.................................... 93
10.05 Notice of Default..................................... 94
10.06 Non-Reliance on Agent, Collateral
Agent and Other Banks............................... 94
10.07 Indemnification....................................... 95
10.08 The Agent in Its Individual Capacity.................. 95
10.09 Successor Agents...................................... 96
10.10 Resignation, Transfer by Agent........................ 96
SECTION 11. Miscellaneous......................................... 97
11.01 Payment of Expenses, etc.............................. 97
11.02 Right of Setoff....................................... 98
11.03 Notices............................................... 98
11.04 Benefit of Agreement.................................. 99
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11.05 No Waiver; Remedies Cumulative........................ 101
11.06 Payments Pro Rata..................................... 101
11.07 Calculations; Computations............................ 102
11.08 Governing Law; Submission to
Jurisdiction; Venue................................. 102
11.09 Counterparts.......................................... 103
11.10 Effectiveness......................................... 103
11.11 Headings Descriptive.................................. 103
11.12 Amendment or Waiver................................... 103
11.13 Survival.............................................. 104
11.14 Domicile of Loans..................................... 104
11.15 Waiver of Jury Trial.................................. 104
11.16 Independence of Covenants............................. 104
ANNEX I - List of Banks
ANNEX II - Bank Addresses
Schedule 4.01I - Schedule of Corporate Insurance Policies
Schedule 4.01J - Schedule of Surviving Indebtedness and Liens
Schedule 5.01 - Schedule of Non-Compliance
Schedule 5.04 - Schedule of Litigation
Schedule 5.10 - Financial Statements
Schedule 5.14 - Schedule of Subsidiaries
Schedule 5.16 - Schedule of Violations
Schedule 5.18 - Schedule of Securities
Schedule 5.19 - Schedule of Collective Bargaining Agreements
Schedule 5.20 - Environmental Matters
EXHIBIT A - Form of Revolving Note
EXHIBIT C-1 - Form of Opinion of Xxxxxxxx & Xxxxxxxx
EXHIBIT C-2 - Form of Opinion of General Counsel
EXHIBIT D - Form of Guarantee
EXHIBIT E-1 - Form of Borrower Securities Pledge Agreement
EXHIBIT E-2 - Form of Subsidiary Securities Pledge Agreement
EXHIBIT F - Form of Mortgage
EXHIBIT G - Form of Subsidiary Intellectual Property
Security Agreement
EXHIBIT H-1 - Form of Borrower General Security Agreement
EXHIBIT H-2 - Form of Subsidiary General Security Agreement
EXHIBIT I-1 - Form of Notice of Assignment
EXHIBIT I-2 - Form of Assignment and Assumption Agreement
EXHIBIT J - Form of Notice of Borrowing
EXHIBIT K - Form of Borrowing Base Certificate
EXHIBIT L-1 - Form of Officers' Certificate Regarding
Conditions Precedent
EXHIBIT L-2 - Form of Officers' Certificate Regarding
Environmental Review
EXHIBIT L-3 - Form of Officers' Certificate Regarding
Compliance with Covenants
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EXHIBIT L-4 - Form of Officers' Certificate Regarding
Solvency
EXHIBIT M - Form of Subordinated Note Indenture
EXHIBIT N - Form of Supplemental Indenture to Subordinated
Debenture Indenture
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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of April
10, 1997, among UROHEALTH SYSTEMS, INC., a Delaware corporation (the
"Borrower"), the lending institutions listed in Annex I (each a "Bank" and,
collectively, the "Banks") and BANQUE INDOSUEZ, NEW YORK BRANCH ("Indosuez"), as
agent for the Banks (the "Agent") and as collateral agent for the Banks (in such
capacity, the "Collateral Agent"). Unless otherwise defined herein, all
capitalized terms used herein and defined in Section 9 are used herein as so
defined.
WITNESSETH:
WHEREAS, the Borrower and the Banks have entered into a Credit
Agreement dated as of August 14, 1996 and as amended to date (the "Old Credit
Agreement");
WHEREAS, the Borrower has issued $110 million of its 12 1/2%
Senior Subordinated Notes due 2004 (the "Subordinated Notes");
WHEREAS, the Borrower has applied a portion of the net proceeds of
the Subordinated Notes (i) to repay all Term Loans under the Old Credit
Agreement and permanently terminate all Term Loan Commitments under the Old
Credit Agreement and (ii) to repay all Revolving Loans then outstanding under
the Old Credit Agreement; and
WHEREAS, the Borrower and the Banks desire to amend and restate
the Old Credit Agreement (the "Amendment") and provide for the continuation of
and increase in the amount of available Revolving Loan Commitments thereunder as
described herein;
NOW, THEREFORE, IT IS AGREED:
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SECTION 1. Amount and Terms of Credit.
1.01 Commitments. Subject to and upon the terms and conditions herein
set forth, each Bank severally agrees, at any time and from time to time on and
after the Amendment Date and prior to the Final Maturity Date, to make a Loan or
Loans to the Borrower, under the Loan Facility (each a "Revolving Loan" and,
collectively, the "Revolving Loans") which (i) shall be made to the Borrower at
any time and from time to time on and after the Amendment Date and prior to the
Final Maturity Date, (ii) shall initially be made as Base Rate Loans and, 60
days after the Amendment Date or such earlier time as the Agent may agree, shall
be made at the option of the Borrower either as Base Rate Loans or as LIBOR
Loans; provided that all Revolving Loans made by all Banks pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, consist entirely
of Loans of the same Type, (iii) may be repaid and reborrowed in accordance with
the provisions hereof, (iv) shall not exceed for any Bank at any time
outstanding the Revolving Loan Commitment of such Bank at such time and (v)
shall not be made if the aggregate principal amount of Revolving Loans then
outstanding, after giving effect to the Revolving Loan requested by the relevant
Notice of Borrowing, would exceed the lesser of the Borrowing Base as shown in
the Borrowing Base Certificate that was last required to be delivered pursuant
to Section 6.01 or the Total Revolving Loan Commitment.
1.02 Minimum Amount of Each Borrowing. The minimum aggregate principal
amount of a Borrowing of Loans shall be the Minimum Borrowing Amount and
Borrowings in excess thereof shall be in integral multiples of $100,000. More
than one Borrowing may be incurred on any date; provided that at no time shall
there be outstanding more than six Borrowings of LIBOR Loans.
1.03 Notice of Borrowings. Whenever the Borrower desires that the Banks
make Loans under the Loan Facility, it shall give the Agent at the Agent's
Office prior to 12:00 Noon (New York time) (i) at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of LIBOR Loans and (ii) at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Base Rate Loans; provided that if written notice (or telephonic notice promptly
confirmed in writing) of Base Rate Loans is given prior to 10:00 a.m. (New York
time) on the day of a requested Borrowing, Borrowings shall be made available on
a same-day basis. Each such notice (each a "Notice of Borrowing"), which shall
be
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substantially in the form of Exhibit J, shall be irrevocable, shall be deemed a
representation by the Borrower that all conditions precedent to such Borrowing
have been satisfied and shall specify (a) the aggregate principal amount in U.S.
dollars of the Loans to be made pursuant to such Borrowing, all of which shall
be specified in such manner as is necessary to comply with all limitations on
Revolving Loans outstanding hereunder, including without limitation,
availability under the Borrowing Base, (b) the requested date of such Borrowing
(which shall be a Business Day) and (c) whether the respective Borrowing shall
consist of Base Rate Loans or LIBOR Loans and, if LIBOR Loans, the requested
Interest Period to be initially applicable thereto. The Agent shall as promptly
as practicable give each Bank written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Bank's proportionate
share thereof and of the other matters covered by the Notice of Borrowing.
1.04 Disbursement of Funds. (a) No later than 12:00 noon (New York
time) on the date specified in each Notice of Borrowing, each Bank will make
available to the Agent in New York its pro rata portion of each Borrowing
requested to be made on such date in the manner provided below.
(b) Each Bank shall make available all amounts it is to fund under any
Borrowing on or after the Closing Date in immediately available funds to the
Agent to the account specified therefor by the Agent or if no account is so
specified at the Agent's Office and the Agent will make such funds available to
the Borrower by depositing to the account specified therefor by the Borrower or
if no account is so specified to its account at the Agent's Office the aggregate
of the amounts so made available in the type of funds received. Unless the Agent
shall have been notified by any Bank prior to the date of any such Borrowing
that such Bank does not intend to make available to the Agent its portion of the
Borrowing or Borrowings to be made on such date, the Agent may assume that such
Bank has made such amount available to the Agent on such date of Borrowing, and
the Agent, in reliance upon such assumption, may (in its sole discretion and
without any obligation to do so) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the Agent
by such Bank and the Agent has made available same to the Borrower, the Agent
shall be entitled to recover such corresponding amount from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent shall promptly notify the Borrower, and the Borrower shall
immediately pay such
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corresponding amount to the Agent. The Agent shall also be entitled to recover
from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to (x)
if paid by such Bank, the Federal Funds Rate or (y) if paid by the Borrower, the
then applicable rate of interest, calculated in accordance with Section 1.08,
for the respective Loans. The Agent shall also be entitled to recover from any
Bank an amount equal to any other losses incurred by the Agent as a result of
the failure of such Bank to provide such amount as provided in this Agreement.
(c) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitment hereunder or to prejudice any rights which
the Borrower or any other Credit Party may have against any Bank as a result of
any default by such Bank hereunder.
1.05 Notes. (a) The Borrower's obligations to pay the principal of and
interest on all the Loans made to it by each Bank shall be evidenced by a
promissory note (each, a "Revolving Note" and, collectively, the "Revolving
Notes") duly executed and delivered by the Borrower substantially in the form of
Exhibit A hereto, with blanks appropriately completed in conformity herewith.
The Obligations (including, but not limited to, each Loan) shall (i) be senior
in right of payment to the Subordinated Debentures and shall constitute Senior
Debt (as defined in the Subordinated Debenture Indenture) under the Subordinated
Debenture Indenture and (ii) be senior in right of payment to the Subordinated
Notes and shall constitute Senior Indebtedness (as defined in the Subordinated
Note Indenture) under the Subordinated Note Indenture.
(b) The Revolving Note of the Borrower issued to each Bank shall (i)
be executed by the Borrower, (ii) be payable to the order of such Bank and be
dated the Amendment Date, (iii) be in a stated principal amount equal to the
Revolving Loan Commitment of such Bank and be payable in the aggregate principal
amount of the Revolving Loans evidenced thereby, (iv) mature, with respect to
each Loan evidenced thereby, on the Final Maturity Date, (v) be subject to
mandatory prepayment as provided in Section 3.02, (vi) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
LIBOR Loans, as the case may be, and (vii) be entitled to the benefits of this
Agreement and the other applicable Credit
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Documents.
(c) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby; provided, however, that
failure to make any such notation shall not affect the Borrower's or any other
Credit Party's obligations hereunder or under the other applicable Credit
Documents in respect of such Loans.
1.06 Conversions. Subject to the provisions of Section 1.10 hereof, the
Borrower shall have the option to convert (or, in the case of LIBOR Loans,
continue) on any Business Day all or a portion (which portion shall not be less
than the Minimum Borrowing Amount and in integral multiples of $100,000) of the
outstanding principal amount of the Loans owing by the Borrower into a Borrowing
or Borrowings of another Type of Loan; provided that (i) except as otherwise
provided in Section 1.10(b), LIBOR Loans may be converted into Base Rate Loans
only on the last day of an Interest Period applicable thereto, (ii) no such
partial conversion of LIBOR Loans shall reduce the outstanding principal amount
of LIBOR Loans under the Loan Facility made pursuant to a single Borrowing to
less than the Minimum Borrowing Amount, (iii) one Type of Loan may only be
continued as or converted into LIBOR Loans if no Default or Event of Default is
in existence on the date of the conversion and (iv) Borrowings resulting from
conversions pursuant to this Section 1.06 shall be limited in amount and number
as provided in Section 1.02. Each such conversion (or continuation) shall be
effected by the Borrower by giving the Agent at the Agent's Office prior to
10:00 A.M. (New York time) at least three Business Days' (or one Business Day's
in the case of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each a "Notice of Conversion")
specifying the Loans to be so converted, the proposed conversion/continuation
date, the Type of Loans to be converted into and, if to be converted into LIBOR
Loans, the requested Interest Period to be initially applicable thereto. The
Agent shall give each Bank notice as promptly as practicable of any such
proposed conversion affecting any of its Loans. Notwithstanding the foregoing or
the provisions of Section 1.09, if a Default or Event of Default is in existence
at the time any Interest Period in respect of any Borrowing of LIBOR Loans is to
expire, such Loans may not be continued as LIBOR Loans but instead shall be
automatically converted on the last day of such Interest Period into Base Rate
Loans. If no Notice of Conversion has been duly
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delivered with respect to a LIBOR Loan on or before the third Business Day prior
to the last day of the Interest Period applicable thereto, such LIBOR Loan shall
be automatically converted into a Base Rate Loan.
Except as provided in Section 1.10 hereof, a Notice of Conversion for
conversion to or continuation of LIBOR Loans or for conversion to Base Rate
Loans shall be irrevocable.
The giving to the Agent of a Notice of Conversion with respect to Loans
which are to be converted to or continued as LIBOR Loans shall be deemed to be a
representation by the Borrower on the date of such Notice of Conversion that no
Default or Event of Default has occurred and is continuing under this Agreement.
1.07 Pro Rata Borrowings. All Borrowings under this Agreement shall be
loaned by the Banks pro rata on the basis of their Revolving Loan Commitments.
No Bank shall be responsible for any default by any other Bank in its obligation
to make Loans hereunder and each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other Bank
to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate Loan
shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) (or unless sooner converted into a LIBOR
Loan) at a rate per annum equal to the sum of the Base Rate in effect from time
to time plus 1.25% (the "Base Rate Margin").
(b) The unpaid principal amount of each LIBOR Loan shall bear interest
from the date of the Borrowing thereof until maturity (whether by acceleration
or otherwise) (or unless sooner converted to a Base Rate Loan) at a rate per
annum equal to Adjusted LIBOR.
(c) Principal and, to the extent permitted by law, interest in respect
of each Loan following a payment default or any other Event of Default shall
bear interest at a rate per annum equal to the sum of (i) 2% plus (ii) the rate
otherwise applicable, payable on demand.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on the last Business Day of
each
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March, June, September and December, beginning June 30, 1997; (ii) in respect of
each LIBOR Loan, in arrears on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three-month intervals after the first date of such
Interest Period; and (iii) in respect of each Loan, on any prepayment (on the
amount prepaid), at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with Section 11.07(b).
(f) The Agent, upon determining the interest rate for any Borrowing of
LIBOR Loans for any Interest Period, shall promptly notify the Borrower and the
Banks thereof. Such determination shall, absent manifest error, be final,
conclusive and binding upon all parties hereto.
1.09 Interest Periods. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of LIBOR Loans, it shall have the right to elect, by giving
the Agent written notice (or telephonic notice promptly confirmed in writing),
the Interest Period applicable to the Borrowing, which Interest Period shall, at
the option of such Borrower, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(a) the initial Interest Period for any Borrowing of LIBOR Loans shall
commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter (including continuation thereof) in respect of such
Borrowing shall commence on the date on which the next preceding Interest
Period expires;
(b) if any Interest Period relating to a Borrowing of LIBOR Loans
begins on a date for which there is no numerically corresponding date in
the calendar month in which such Interest Period ends, such Interest Period
shall end on the last Business Day of such calendar month;
(c) if any Interest Period would otherwise expire on a day which is not
a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided that if any Interest Period in respect of a LIBOR
Loan would otherwise expire on a day which is not a Business Day but is
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a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day; and
(d) no Interest Period shall extend beyond the Final Maturity Date.
1.10 Special Provisions Governing LIBOR Loans. Notwithstanding other
provisions of this Agreement, the following provisions shall govern with respect
to LIBOR Loans as to the matters covered:
(a) On an Interest Rate Determination Date, the Agent shall determine
(which determination shall, absent manifest error, be final, conclusive and
binding upon all parties hereto) the interest rate which shall apply to the
LIBOR Loans for which an interest rate is then being determined for the
applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to the Borrower and to each
Bank.
(b) In the event that (x) in the case of clause (i) below, the Agent
or (y) in the case of clause (ii) or (iii) below, any Bank shall have
determined (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties hereto):
(i) on any Interest Rate Determination Date that, by reason of
any changes arising on or after the Closing Date affecting the LIBOR
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
LIBOR;
(ii) at any time that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any LIBOR Loans or its obligation to make LIBOR Loans because of (x)
any change since the Closing Date (including changes proposed or
published prior to the Closing Date) in any applicable law,
governmental rule, regulation, guideline, request or order, whether or
not having the force of law (or in the interpretation or administration
thereof and including the introduction of any new law or governmental
rule, regulation, guideline, request or order) (such as, for example,
but not limited to, (A) a change in the basis of taxation
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of payments to any Bank of the principal of or interest on the Notes or
any other amounts payable hereunder (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of
such Bank pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office
is located or any subdivision thereof or therein) or (B) a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation
of Adjusted LIBOR) and/or (y) other circumstances affecting such Bank,
the LIBOR market or the position of such Bank in such market; or
(iii) at any time that the making or continuance of any LIBOR
Loan has become unlawful by compliance by such Bank in good faith with
any law, governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply
therewith would not be unlawful), or has become impracticable as a
result of a contingency occurring after the Closing Date which
materially and adversely affects the LIBOR market;
then, and in any such event, the Agent in the case of clause (i) above or
such Bank in the case of clause (ii) or (iii) above shall on such date give
notice (by telephone confirmed in writing) to the Borrower of the Loan
affected and, in the case of clause (ii) or (iii) to the Agent, of such
determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, LIBOR
Loans shall no longer be available until such time as the Agent notifies
the Borrower and the Banks that the circumstances giving rise to such
notice by the Agent no longer exist, and any Notice of Borrowing or Notice
of Conversion given by the Borrower with respect to the borrowing of or
conversion into (including continuance of) LIBOR Loans which have not yet
been incurred shall be deemed rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower shall pay to such Bank, upon written demand
therefor, such additional amounts (in the form of an increased rate of, or
a different method of calculating, interest or otherwise as such Bank in
its reasonable discretion shall determine) as shall be required to
compensate such Bank for such increased costs or
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reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Bank, showing the basis for the calculation
thereof, submitted to the Borrower by such Bank shall, absent manifest
error, be final, conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in Section 1.10(c) as promptly as possible and, in any event,
within the time period required by law.
(c) At any time that any LIBOR Loan is affected by the circumstances
described in Section 1.10(b)(ii) or (iii), the Borrower may (and in the
case of a LIBOR Loan affected pursuant to Section 1.10(b)(iii) shall)
either (i) if a Notice of Borrowing or Notice of Conversion has been given
with respect to the affected LIBOR Loan, cancel said Notice of Borrowing or
Notice of Conversion by giving the Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was
notified by a Bank pursuant to Section 1.10(b)(ii) or (iii), or (ii) if the
affected LIBOR Loan is then outstanding, upon at least three Business Days'
notice to the Agent, require the affected Bank to convert each such LIBOR
Loan into a Base Rate Loan, or prepay such LIBOR Loan; provided that if
more than one Bank is affected at any time, then all affected Banks must be
treated the same pursuant to this Section 1.10(c); and provided, further,
that the Borrower shall compensate any such affected Banks as set forth in
Section 1.10(f).
(d) Anything herein to the contrary notwithstanding, if on any Interest
Rate Determination Date no LIBOR is available by reason of the inability of
the Agent to determine such interest rate in accordance with the definition
thereof, the Agent shall give the Borrower and each Bank prompt notice
thereof and the Loans requested to be made as LIBOR Loans shall, subject to
the applicable notice requirements, be made as Base Rate Loans.
(e) Each Bank agrees that, as promptly as practicable after it becomes
aware of the occurrence of any event or the existence of a condition that
would cause it to be an affected Bank under Section 1.10(b)(ii) or (iii),
it will, to the extent not inconsistent with such Bank's internal policies,
use reasonable efforts to make, fund or maintain the affected LIBOR Loans
of such Bank through another lending office of such Bank if as a result
thereof the additional moneys which would otherwise be required to be
17
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paid in respect of such Loans pursuant to Section 1.10(b)(ii) would be
materially reduced or the illegality or other adverse circumstances which
would otherwise require prepayment of such Loans pursuant to Section
1.10(b)(iii) would cease to exist, and if, as determined by such Bank, in
its reasonable discretion, the making, funding or maintaining of such Loans
through such other lending office would not otherwise materially adversely
affect such Loans or such Bank. The Borrower hereby agrees to pay all
reasonable expenses incurred by any Bank in utilizing another lending
office of such Bank pursuant to this Section 1.10(e).
(f) The Borrower shall compensate each Bank, upon written request by
that Bank, for all reasonable losses, expenses and liabilities (including,
without limitation, such factors as any interest paid by that Bank to
lenders of funds borrowed by it to make or carry its LIBOR Loans and any
loss sustained by that Bank in connection with re-employment of such funds
(based upon the difference between the amount earned in connection with
re-employment of such funds and the amount payable by the Borrower if such
funds had been borrowed or remained outstanding)) which that Bank may
sustain with respect to the Borrower's LIBOR Loans: (i) if for any reason
(other than a default or error by that Bank) a Borrowing of any such LIBOR
Loan does not occur on a date specified therefor in a Notice of Borrowing
or a Notice of Conversion or in a telephonic request for borrowing or
conversion, or a successive Interest Period in respect of any such LIBOR
Loan does not commence after notice therefor is given pursuant to Section
1.06 (whether or not withdrawn by the Borrower or deemed withdrawn pursuant
to Section 1.10(b)(i)), (ii) if any prepayment or conversion (as required
by Sections 3.01 and 3.02, by acceleration or otherwise) of any of such
Bank's LIBOR Loans to the Borrower occurs on a date which is not the last
day of the Interest Period applicable to that Loan, (iii) if any prepayment
or repayment of any such Bank's LIBOR Loans to the Borrower is not made on
any date specified in a notice of prepayment or repayment given by the
Borrower, or (iv) as a consequence of (x) any other failure by the Borrower
to repay such Bank's LIBOR Loans to the Borrower when required by the terms
of this Agreement or (y) any election made pursuant to Section 1.10(b)(ii).
Compensation owing under this Section 1.10(f) shall be equal to the
amount of interest which would have accrued on
18
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the amount of principal prepaid or repaid or converted or not borrowed for
the period from the date of such prepayment or repayment or conversion or
failure to borrow or prepay or repay to the last day of the then current
Interest Period for the relevant LIBOR Loan (or, in the case of a failure
to borrow, the Interest Period for such LIBOR Loan which would have
commenced on the date of such failure to borrow) at the applicable rate of
interest for such LIBOR Loan provided for herein minus any amount such
Bank, in good faith and in its sole discretion, determines is realizable
upon the re-employment of such funds. A certificate as to the amount of
such losses, expenses and liabilities submitted to the Borrower by such
Bank shall, absent manifest error, be final, conclusive and binding for all
purposes.
(g) During the continuance of a Default or an Event of Default, the
Borrower may not elect to have a Loan made or maintained as, or converted
into, a LIBOR Loan after the expiration of any Interest Period then in
effect for that Loan.
1.11 Capital Requirements. If any Bank shall have determined that
the adoption or effectiveness after the Closing Date of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank or such Bank's parent with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency
(including in each case any such change proposed or published prior to the date
hereof), has or would have the effect of reducing the rate of return on such
Bank's or such Bank's parent's capital or assets as a consequence of such Bank's
obligations hereunder to a level below that which such Bank or such Bank's
parent could have achieved but for such adoption, effectiveness or change or as
a consequence of an increase in the amount of capital required to be maintained
by such Bank (including in each case, without limitation, with respect to any
Bank's Commitment or any Loan), then from time to time, within 15 days after
written demand by such Bank (with a copy to the Agent), the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank or
such Bank's parent, as the case may be, for such reduction. Each Bank, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.11, will give prompt written
19
-13-
notice thereof to the Borrower, which notice shall set forth in reasonable
detail the basis of the calculation of such additional amounts, although any
delay in giving any notice shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 1.11.
1.12 Total Revolving Loan Commitments; Limitations on Outstanding
Loan Amounts. The original amount of the Total Revolving Loan Commitment is
$50,000,000, including $9,250,000 in Revolving Loan Commitments that continue
from the Old Credit Agreement and $40,750,000 in new Revolving Loan Commitments.
Anything contained in this Agreement to the contrary notwithstanding, (a) in no
event shall the sum of the aggregate principal amount of all Revolving Loans of
any Bank at any time exceed such Bank's portion of the Total Revolving Loan
Commitment, (b) in no event shall the sum of the aggregate principal amount of
all Revolving Loans of all Banks at any time exceed the Total Revolving Loan
Commitment and (c) in no event shall the aggregate principal amount of
outstanding Revolving Loans exceed the lesser of the Total Revolving Loan
Commitment or the Borrowing Base.
SECTION 2. Commitments.
2.01 Voluntary Reduction of Commitments. Upon at least one Business
Day's prior written notice (or telephonic notice promptly confirmed in writing)
to the Agent at the Agent's Office (which notice the Agent shall promptly
transmit to each of the Banks), the Borrower shall have the right, without
premium or penalty, to terminate the unutilized portion of the Total Revolving
Loan Commitment, in part or in whole; provided that (x) any such termination
shall apply to proportionately and permanently reduce the Revolving Loan
Commitment of each of the Banks and (y) any partial reduction pursuant to this
Section 2.01 shall be in the amount of at least $100,000 and integral multiples
of $100,000 in excess of that amount.
2.02 Mandatory Adjustments of Commitments, etc. The Total Revolving
Loan Commitment shall terminate on the Final Maturity Date.
2.03 Commitment Commission. The Borrower agrees to pay the Agent a
commitment commission ("Commitment Commission") for the account of each Bank for
the period from and including the Closing Date to, but not including, the date
the Total Revolving Loan Commitment has been terminated, computed at a rate
equal to 1/2% per annum on the daily average unutilized Revolving
20
-14-
Loan Commitment of such Bank. Accrued Commitment Commissions shall be due and
payable in arrears on the last Business Day of each March, June, September and
December, commencing June 30, 1997 and on the Final Maturity Date.
SECTION 3. Payments.
3.01 Voluntary Prepayments. The Borrower shall have the right to prepay
Revolving Loans in whole or in part from time to time, without premium or
penalty, on the following terms and conditions: (i) the Borrower shall give the
Agent at the Agent's Office written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay the Loans, the amount of such
prepayment and, in the case of LIBOR Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice shall be given by the Borrower at least one
Business Day prior to the date of such prepayment and which notice shall
promptly be transmitted by the Agent to each of the Banks; (ii) each partial
prepayment of any Borrowing shall be in an aggregate principal amount of at
least $100,000 and integral multiples of $100,000 in excess of such amount;
provided that no partial prepayment of LIBOR Loans made pursuant to a single
Borrowing under the Loan Facility shall reduce the outstanding Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount;
and (iii) LIBOR Loans may only be prepaid pursuant to this Section 3.01 on the
last day of an Interest Period applicable thereto.
3.02 Mandatory Prepayments.
(A) Requirements:
(a) The Borrower shall prepay the outstanding principal amount of
Revolving Loans on any date on which the aggregate outstanding principal amount
of such Loans (after giving effect to any other repayments or prepayments on
such day) exceeds the Total Revolving Loan Commitment in the amount of such
excess.
(b) If the aggregate principal amount of outstanding Revolving Loans
exceeds the Borrowing Base as set forth in the Borrowing Base Certificate
required to be delivered pursuant to Section 6.01 of this Agreement (such amount
is hereinafter referred to as the "Excess"), then the Borrower shall prepay its
Revolving Loans in a principal amount equal to such Excess no later than one (1)
Business Day after the Borrower has delivered, or was required to deliver, such
Borrowing Base Certificate to
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the Agent and the Banks.
(c) On the date of receipt by the Borrower and/or any of the Borrower's
Subsidiaries, as the case may be, of Net Cash Proceeds or Net Financing
Proceeds, an amount equal to 100% of such Net Cash Proceeds or Net Financing
Proceeds shall be applied as provided in Section 3.02(B)(a).
(d) At the Agent's discretion, on the date of receipt thereof by the
Borrower, an amount equal to 100% of any insurance proceeds received less any
portion of such proceeds not in excess of $100,000 that is promptly applied to
repair or replace the damaged property which is the subject of such proceeds
shall be applied as provided in Section 3.02(B)(a).
(e) On the date of the receipt thereof by the Borrower, an amount equal
to 100% of (i) any surplus assets of any Pension Plan returned to the Borrower
or any Subsidiary and (ii) any tax refund in excess of $100,000 per year made to
the Borrower shall be applied as provided in Section 3.02(B)(a).
(B) Application:
(a) Prepayments by the Borrower to be applied pursuant to this Section
3.02(B)(a) shall be applied, without penalty or premium except for LIBOR
breakage costs, if any to prepay Revolving Loans.
(b) With respect to each prepayment of Loans required by Section
3.02(A), the Borrower shall give the Agent two Business Days notice and may
designate the specific Borrowing or Borrowings which are to be prepaid; provided
that (i)(x) LIBOR Loans may be designated for prepayment pursuant to this
Section 3.02 only on the last day of an Interest Period applicable thereto
unless all LIBOR Loans with Interest Periods ending on such date of required
prepayment and all Base Rate Loans have been or are concurrently being paid in
full and (y) if any prepayment of LIBOR Loans made pursuant to a single
Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to
an amount less than $100,000, such Borrowing shall immediately be converted into
Base Rate Loans; and (ii) each prepayment of any Loans made pursuant to a single
Borrowing shall be applied pro rata among such Loans. In the absence of a
designation by the Borrower, the Agent shall, subject to the above, made such
designation in its sole discretion. All prepayments shall include payment of
accrued interest on the
22
-16-
principal amount so prepaid, shall be applied to the payment of interest before
application to principal and shall include amounts payable, if any, under
Section 1.10(f).
3.03 Method and Place of Payment. (a) Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the Agent,
for the ratable account of the Banks entitled thereto, not later than 1:00 p.m.
(New York time) on the date when due and shall be made in immediately available
funds in lawful money of the United States of America to the account specified
therefor by the Agent or if no account has been so specified at the Agent's
Office, it being understood that written notice by the Borrower to the Agent to
make a payment from the funds in the Borrower's account at the Agent's Office
shall constitute the making of such payment to the extent of such funds held in
such account. The Agent will thereafter cause to be distributed on the same day
(if payment is actually received by the Agent in New York prior to 1:00 p.m.
(New York time) on such day) funds relating to the payment of principal or
interest or fees ratably to the Banks entitled to receive any such payment in
accordance with the terms of this Agreement. If and to the extent that any such
distribution shall not be so made by the Agent in full on the same day (if
payment is actually received by the Agent prior to 1:00 p.m. (New York time) on
such day), the Agent shall pay to each Bank its ratable amount thereof and each
such Bank shall be entitled to receive from the Agent, upon demand, interest on
such amount at the Federal Funds Rate for each day from the date such amount is
paid to the Agent until the date the Agent pays such amount to such Bank.
(b) Any payments under this Agreement which are made by the Borrower
later than 1:00 p.m. (New York time) shall be deemed to have been made on the
next succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
3.04 Net Payments. (a) All payments under this Agreement or under any
Credit Document shall be made without set-off or counterclaim and in such
amounts as may be necessary in order that all such payments (after deduction or
withholding for or on account of any present or future taxes, levies, imposts,
duties or other charges of whatsoever nature imposed by any governmental
authority or any political subdivision or taking
23
-17-
authority thereof, other than any tax on or measured by the net income of a Bank
pursuant to the income tax laws of the jurisdictions where such Bank's principal
or lending office is located (collectively "Taxes")) shall not be less than the
amounts otherwise specified to be paid under this Agreement and/or any other
Credit Document. If the Borrower or the Company is required by law to make any
deduction or withholding on account of Taxes from any payment due hereunder or
under the other Credit Documents, then (i) the Borrower shall timely remit such
Taxes to the governmental authority imposing the same and (ii) the amount
payable hereunder or under the applicable Credit Documents will be increased to
such amount which, after deduction from such increased amount of all amounts
required to be deducted or withheld therefrom, will not be less than the amount
otherwise due and payable.
(b) Without prejudice to the provisions of clause (a) of this Section
3.04, if any Bank or the Agent is required to make any payment on account of
Taxes, the Borrower will, promptly indemnify such person against such Taxes,
together with any interest, penalties and expenses payable or incurred in
connection therewith. The Borrower shall also reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net income
of such Bank pursuant to the laws of the jurisdiction in which the principal
office or lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction as such Bank
shall determine are payable by such Bank in respect of Taxes paid to or on
behalf of such Bank pursuant to this Section 3.04. For purposes of this Section
3.04, the term "Taxes" includes interest, penalties and expenses payable or
incurred in connection therewith. A certificate as to any additional amounts
payable to a Bank under this Section 3.04 submitted to the Borrower by such Bank
shall, absent manifest error, be final, conclusive and binding for all purposes
upon all parties hereto. With respect to each deduction or withholding for or on
account of any Taxes, the Borrower shall promptly furnish to each Bank such
certificates, receipts and other documents as may be required (in the judgment
of such Bank) to establish any tax credit to which such Bank may be entitled.
(c) (i) Each Bank that is organized under the laws of any
jurisdiction other than the United States or any State thereof (including the
District of Columbia) (a "Foreign Bank") agrees to furnish to the Borrower and
the Agent, prior to the date it receives any payment under this Agreement or
other Credit Documents, two signed copies of either U.S. Internal Revenue
24
-18-
Service Form 4224 or U.S. Internal Revenue Service Form 1001 or any successor
form thereto (wherein such Bank claims entitlement to a complete exemption from
U.S. federal withholding tax on interest paid by the Borrower hereunder).
(ii) In addition, each Foreign Bank agrees to provide subsequently
to the Borrower and the Agent additional signed copies of Form 4224 or Form 1001
or any successor forms thereto (wherein such Bank claims entitlement to a
complete exemption from or reduced rate of U.S. federal withholding tax on
interest paid by the Borrower hereunder) as may be reasonably requested in
writing by the Borrower or the Agent. A Foreign Bank shall be required to
furnish a form under this Section 3.04(c)(ii) only if it is entitled to claim an
exemption from or a reduced rate of withholding tax under applicable law. A Bank
that is not entitled to claim an exemption from or a reduced rate of withholding
under applicable law at the time that a request to provide forms is received
from the Borrower or the Agent, shall so inform the Borrower and the Agent in
writing. In such event the Borrower shall be entitled to designate a replacement
bank that is reasonably acceptable to the Agent; provided that the Borrower
shall not be entitled to replace the Agent.
SECTION 4. Conditions Precedent.
4.01 Conditions Precedent to Effectiveness of Amendment. The
effectiveness of this Amendment is subject to the satisfaction of the following
conditions, unless otherwise waived:
(A) Officers' Certificate. The Agent shall have received a certificate
dated the Amendment Date and signed by Xxxxx X. Xxxxxxx, the Executive Vice
President and Chief Financial Officer of the Borrower, substantially in the form
of Exhibit L-1 annexed hereto, stating that all of the applicable conditions set
forth in Sections 4.01(K), (L), (N), (O), (Q), (R), (S) and (U) (in each case
disregarding any reference therein that such condition be deemed satisfactory by
the Agent and/or the Required Banks) have been satisfied or waived as of such
date.
(B) Opinions of Counsel. The Agent shall have received an opinion or
opinions addressed to each of the Banks and dated the Amendment Date, each in
form and substance satisfactory to the Required Banks, from (i) Xxxxxxxx &
Xxxxxxxx, counsel to the Borrower, in the form of Exhibit C-1 hereto and (ii)
Xxxxx Xxxxxxx, general counsel to the Borrower, in the form
25
-19-
of Exhibit C-2 hereto.
(C) Corporate Proceedings. (i) All corporate and legal proceedings and
all instruments and agreements in connection with the transactions contemplated
by the Documents shall be reasonably satisfactory in form and substance to the
Required Banks, and the Agent shall have received all information and copies of
all certificates, documents and papers, including records of corporate
proceedings and governmental approvals, if any, which the Agent may have
reasonably requested from the Borrower or any other Credit Party or in
connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities. Without limiting the
foregoing, the Agent shall have received:
(a) resolutions of the Board of Directors of the Borrower and the other
Credit Parties which shall include, without limitation, resolutions
approving such documents and actions as are contemplated hereby,
resolutions as to the due authorization, execution and delivery of this
Agreement, and resolutions stating that each such document has been
certified by the Borrower's or such other Credit Party's, as appropriate,
corporate secretary or an assistant secretary and is or will be on the
Amendment Date in full force and effect, without modification or amendment.
Such resolutions shall be in form and substance satisfactory to the Agent;
and
(b) signature and incumbency certificates of each officer of the
Borrower and each other Credit Party executing instruments, documents or
agreements required to be executed in connection with the transactions
contemplated by this Agreement.
(ii) Prior to the Amendment Date, the Agent shall have received
evidence, satisfactory to the Required Banks, as to the due incorporation of the
Borrower in the State of Delaware, including, without limitation, the Borrower's
certificate of incorporation as set forth in paragraph (E)(1) of this Section
4.01.
(D) Credit Documents. Each of this Agreement and the other Credit
Documents shall (i) be in form and substance reasonably satisfactory to the
Required Banks and (ii) have been, on or prior to the Amendment Date, duly
authorized, executed and delivered by each of the parties signatory thereto.
26
-20-
(E) Organizational Documentation, etc. The Banks shall have received a
true and complete certified copy of the following documents of each of the
Borrower and the other Credit Parties, the provisions of which shall be
reasonably satisfactory to the Required Banks:
(1) Its respective Certificate of Incorporation, which shall be
certified and be accompanied by a good standing or other comparable
certificate from the Secretary of State, each to be dated a recent date
prior to the Amendment Date;
(2) Its respective By-laws certified as of a recent date prior to the
Amendment Date by its corporate secretary.
(F) Notes. There shall have been delivered to the Agent for the
account of each of the Banks the Revolving Notes executed by the Borrower in the
amount and maturity and as otherwise provided herein.
(G) Certain Fees. All reasonable costs, fees and expenses (including,
without limitation, reasonable legal fees and expenses) payable to Indosuez by
Borrower shall have been paid in full, and the Borrower shall have paid or have
caused to be paid the commitment and other fees and expenses (including, without
limitation, reasonable legal fees and expenses) contemplated hereby and/or in
connection with the other Credit Documents, to the extent such fees and expenses
are due and payable at such time.
(H) Financial Statements, etc. The Agent shall have received audited
consolidated financial statements of the Borrower for the fiscal years ended
June 30, 1994, June 30, 1995 and the nine months ended March 31, 1996, and
unaudited financial statements for the nine months ended December 31, 1996. The
Borrower shall have delivered to the Agent financial projections with respect to
the Borrower on a consolidated basis and such projections are based on
assumptions believed by the Borrower in light of conditions which existed at the
time of their preparation in good faith to be reasonable as to the future
financial performance of the Borrower, which shall be satisfactory to the
Required Banks. Such financial projections shall reflect the forecasted
financial condition, income and expenses of the Borrower and its Subsidiaries,
the Borrowings under this Agreement and the other transactions contemplated
herein, shall cover the remainder of fiscal year 1998 (which shall be prepared
on a monthly basis) and shall cover through and including fiscal year 2001
(which shall be prepared on an annual
27
-21-
basis). Since the time of the preparation of such financial projections, no fact
or facts have come to the attention of the Borrower other than as disclosed to
Indosuez in writing to cause it to believe that any of the estimates and
assumptions on which such projections are based are not reasonable.
(I) Insurance. Set forth on Schedule 4.01I is a summary of all
insurance policies maintained by the Borrower and its Subsidiaries, and the
insurance coverage provided for the Borrower and its Subsidiaries by such
insurance policies shall be reasonably satisfactory to the Required Banks.
(J) Indebtedness, Liens, etc. (i) Schedule 4.01J, part I, sets forth a
true list of all Indebtedness of the Borrower and its Subsidiaries as of the
Amendment Date in excess of $250,000 in the aggregate and all Indebtedness in
excess of $50,000 individually.
(ii) Schedule 4.01J, part II, under the heading "Liens," sets forth a
true list of all Liens other than Permitted Encumbrances on the property of the
Borrower and its Subsidiaries as of the Amendment Date.
(K) Security Documents and Guarantees. Amendments to the Security
Documents and Guarantees, each in form and substance satisfactory to the
Required Banks, shall have been duly executed and delivered by the respective
parties thereto and there shall have been delivered to the Collateral Agent, to
the extent not previously delivered, (i) all Pledged Securities, together with
executed and undated stock powers and/or assignments in blank, (ii) evidence of
the filing of appropriate amendments to the filed financing statements and other
documents under the provisions of the UCC, applicable foreign, domestic or local
laws, rules or regulations in each of the offices where such filing is necessary
or appropriate to confirm the Lien in favor of the Collateral Agent, as security
for the payment and performance of the Obligations as amended and restated in
accordance with the terms hereof, in all Collateral superior to and prior to the
rights of all third persons and subject to no other Liens except Prior Liens,
(iii) certified copies of Requests for Information (Form UCC-11 or the
equivalent), or equivalent reports or lien search reports listing all effective
financing statements which name the Borrower or any other Credit Party as debtor
and which are filed in those jurisdictions in which any of the Collateral is
located and the jurisdiction in which the Borrower's and each other Credit
Party's principal place of business is located (none of which shall cover the
28
-22-
Collateral covered, or intended or purported to be covered, by the Security
Documents other than Prior Liens), (iv) to the extent inventory is maintained on
a leased premise, agreements from the respective landlords of such of the Real
Property which is being leased by the Borrower or its Subsidiaries (to the
extent such agreements can be obtained through commercially reasonable efforts
by the Borrower) confirming that such landlords have subordinated their landlord
liens in the Borrower's (or such Subsidiaries', as applicable) personal property
to the security interests held by Collateral Agent pursuant to applicable
Security Documents and that such landlords will provide Collateral Agent with
reasonable access to such facilities to exercise Collateral Agent's remedies
pursuant to such applicable Security Documents, (v) insurance certificates
naming Collateral Agent as loss payee or additional insured as required pursuant
to the Security Documents, and (vi) delivery of such other security and other
documents as may be reasonably necessary and as are reasonably requested by the
Collateral Agent to perfect the Liens created, or purported or intended to be
created, by the Security Documents.
(L) Consents, etc. All material governmental and third party approvals
and consents (including, without limitation, all material approvals and consents
required in connection with any environmental statutes, rules or regulations),
if any, in connection with the transactions contemplated by the Credit
Documents, and otherwise referred to herein or therein to be completed on or
before the Amendment Date shall have been obtained and remain in effect. There
shall not exist any judgment, order, injunction or other restraint issued or
filed with respect to the making of the Loans hereunder.
(M) Environmental Review. (i) The Agent shall have received a duly
executed questionnaire relating to (x) the Borrower's and its Subsidiaries'
compliance with or liability under any Environmental Law and (y) environmental
matters in respect of the Real Property or the business of the Borrower or its
Subsidiaries or any facility leased by the Borrower or its Subsidiaries.
(ii) The Agent shall have received environmental questionnaires with
respect to the Borrower's properties.
(iii) There shall have been delivered to the Agent an Officers'
Certificate of the Borrower in substantially the form of Exhibit L-2 annexed
hereto.
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(N) Litigation. There shall be no litigation pending or threatened
involving the Borrower or any of its Subsidiaries or any of their respective
properties or assets or, to the best knowledge of the Borrower, that could
impair the consummation of the transactions contemplated by the Credit
Documents, or that in the good faith judgment of the Agent, could be reasonably
expected to have a Materially Adverse Effect.
(O) Capital Leases, etc. All Capital Leases of the Borrower and its
Subsidiaries outstanding immediately prior to the Amendment Date shall remain
outstanding after giving effect to the financings hereunder, on terms reasonably
satisfactory to the Required Banks.
(P) Solvency. The Agent shall have received an Officers' Certificate
as to the solvency of the Borrower after giving effect to the incurrence of the
Subordinated Notes and the Indebtedness contemplated hereunder, substantially in
the form of Exhibit L-4 hereto. Such Officers' Certificate shall be
satisfactory, in form and substance, to the Required Banks in their sole
discretion.
(Q) Labor Matters. There shall be no labor disputes, strikes or work
stoppages, pending or, to the best knowledge of the Borrower, threatened,
involving the Borrower or any of its Subsidiaries that could impair the
operations of the Borrower or any of its Subsidiaries or that could reasonably
be expected to have a Materially Adverse Effect.
(R) Performance Bonds. Prior to the Closing Date, the Agent shall have
received evidence, satisfactory to the Required Banks, that the Borrower will be
able to service and maintain performance bonds required in the ordinary course
of business on reasonable terms and conditions.
(S) Material Adverse Change; Business of Borrower. There shall be no
change in the business, assets, properties, condition (financial or otherwise)
or prospects of the Borrower or in the industries in which it competes that
could impair the operations of the Borrower or any of its Subsidiaries or that
could reasonably be expected to have a Materially Adverse Effect.
(T) Subordinated Notes. Substantially contemporaneously with the
closing of this transaction, the Company shall have issued and sold $110 million
of Subordinated Notes, and shall have applied a portion of the proceeds to the
repayment in full of all outstanding indebtedness under the Old
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Credit Agreement.
(U) Conditions Relating to Mortgaged Real Property and Real Property.
On or prior to the Amendment Date, the Borrower shall have caused to be
delivered to the Agent, on behalf of the Banks, the following documents and
instruments to the extent not previously delivered:
(i) an amendment to each Mortgage encumbering each Mortgaged Real
Property in favor of the Agent, as Collateral Agent for the benefit of the
Banks, duly executed and acknowledged by the Credit Party that is the owner
of or holder of an interest in such Mortgaged Real Property, and otherwise
in form for recording in the recording office of each political subdivision
where each such Mortgaged Real Property is situated, together with such
certificates, affidavits, questionnaires or returns as shall be required in
connection with the recording or filing thereof to confirm the Lien in
favor of the Collateral Agent on such Mortgaged Real Property under
applicable law, and amendments to the filed such UCC-1 financing statements
and other similar statements as are contemplated by the counsel opinions
described in Section 4.01(B)(iii) in respect of such Mortgage, all of which
shall be in form and substance reasonably satisfactory to the Agent, and
any other instruments necessary to confirm a mortgage lien under the laws
of any applicable jurisdiction, which Mortgage and financing statements and
other instruments, as amended, shall be effective to create a Lien on such
Mortgaged Real Property to secure payment and performance of the
Obligations as amended and restated in accordance with the terms hereof,
subject to no Liens other than Prior Liens;
(ii) with respect to each Mortgaged Real Property, such consents,
approvals, amendments, supplements, estoppels, tenant subordination
agreements or other instruments as necessary or required to consummate the
transactions contemplated hereby or as shall reasonably be deemed necessary
by the Agent in order for the owner or holder of the fee or leasehold
interest constituting such Mortgaged Real Property to confirm the Lien
contemplated by the Mortgage, as amended pursuant to clause (i) above, with
respect to such Mortgaged Real Property;
(iii) with respect to each Mortgage, an endorsement to the policy (or
commitment to issue a policy) of title insurance insuring (or committing to
insure) the Lien of
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such Mortgage as amended pursuant to clause (i) above, as a valid mortgage
Lien on the real property described therein in an amount not less than 115%
of the fair market value thereof, which policies (or commitment) shall (a)
be issued by the Title Company, (b) include such reinsurance arrangements
(with provisions for direct access) as shall be reasonably acceptable to
the Agent, (c) contain a "tie-in" or "cluster" endorsement (if applicable
and if available under applicable law) (i.e., policies which insure against
losses regardless of location or allocated value of the insured property up
to a stated maximum coverage amount) and have been supplemented by such
endorsements (or where such endorsements are not available, opinions of
special counsel reasonably acceptable to the Agent to the extent that such
opinions can be obtained at a cost which is reasonable with respect to the
value of the Real Property subject to such Mortgage) as shall be reasonably
requested by the Agent (including, without limitation, endorsements on
matters relating to usury, first loss, last dollar, contiguity (as
applicable), revolving credit, doing business, zoning, variable rate and
so-called comprehensive coverage over covenants and restrictions, in each
case to the extent that such endorsements can be obtained at a cost which
is reasonable with respect to the value of the Real Property subject to
such Mortgage) and (d) contain only such exceptions to title as shall be
Prior Liens or are otherwise agreed to by the Agent on or prior to the
Closing Date with respect to such Mortgaged Real Property;
(iv) with respect to each Mortgaged Real Property, a Survey;
(v) with respect to each Mortgaged Real Property, policies or
certificates of insurance as required by the Mortgage relating thereto,
which policies or certificates shall comply with the insurance requirements
contained in such Mortgage;
(vi) with respect to each Mortgaged Real Property, UCC, judgment and
tax lien searches confirming that the personal property comprising a part
of such Mortgaged Real Property is subject to no Liens other than Prior
Liens;
(vii) with respect to each Mortgaged Real Property, such affidavits,
certificates, information (including financial data) and instruments of
indemnification (including, without limitation, a so-called "gap"
indemnification) as shall be
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reasonably required to induce the Title Company to issue the policy or
policies (or commitment) and endorsements contemplated in subparagraph
(iii) above;
(viii) evidence reasonably acceptable to the Agent of payment by the
Borrower of all title insurance premiums, search and examination charges,
survey costs and related charges, mortgage recording taxes, fees, charges,
costs and expenses required for the recording of the Mortgages and issuance
of the title insurance policies referred to in subparagraph (iii) above;
(ix) with respect to each Real Property or Mortgaged Real Property,
copies of all Leases in which a Credit Party holds the landlord's, tenant's
or other interest and any other agreements relating to possessory interests
in such Real Property or Mortgaged Real Property. To the extent any of the
foregoing affect any Mortgaged Real Property, such Leases shall be
reasonably acceptable to the Agent; and
(x) with respect to each Mortgaged Real Property, an Officers'
Certificate or other evidence reasonably satisfactory to the Agent that as
of the date thereof, to the best of such officer's knowledge, there (a)
have been issued and are in effect valid and proper certificates of
occupancy or other local equivalents for the use then being made of such
Mortgaged Real Property to the extent currently required by law in the
jurisdiction in which such Mortgaged Real Property is located which
certificates if not obtained or maintained would have a material adverse
effect upon the value of the Mortgaged Real Property and that there is not
outstanding any citation, violation or similar notice indicating that such
Mortgaged Real Property contains conditions which are not in compliance in
all material respects with local codes or ordinances relating to building
or fire safety or structural soundness, (b) has not occurred any Taking or
Destruction of any Mortgaged Real Property that has not been repaired or
restored except as set forth therein and (c) is no litigation regarding
boundary lines, encroachment or possession of any Mortgaged Real Property
and no state of facts known to any Credit Party which could give rise to
any such claim, except as set forth therein.
(V) Effectiveness. This Amendment shall have been executed by the
Company and the Required Banks.
(W) Borrowing Base Certificate. Prior to the
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Amendment Date, the Agent and the Banks shall have received and the Agent and
the Required Banks shall be satisfied (both as to form and substance) with a pro
forma Borrowing Base Certificate which shall be prepared as of a date prior to
the Amendment Date.
The effectiveness of this Amendment shall constitute a representation
and warranty by each Credit Party to each of the Banks that all of the
applicable conditions specified above have been satisfied or waived as of that
time. All of the certificates, legal opinions and other documents and papers
referred to in this Section 4.01, unless otherwise specified, shall be delivered
to the Agent at its Office (or such other location as may be specified by the
Agent) for the account of each of the Banks and in sufficient counterparts for
each of the Banks and shall be satisfactory in form and substance to the
Required Banks.
4.02 Conditions Precedent to All Loans. The obligation of the Banks to
make all Loans is subject, at the time of each such Loan, to the satisfaction of
the following conditions:
(A) Effectiveness. This Amendment shall have become effective.
(B) No Default; Representations and Warranties. At the time of the
making of each Loan and also after giving effect thereto (i) there shall exist
and be continuing no Default or Event of Default and (ii) all representations
and warranties contained herein and in each of the other Credit Documents in
effect at such time shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on and
as of the date of the making of such Loan, unless such representation and
warranty expressly indicates that it is being made as of any other specific date
in which case on and as of such other date.
(C) Adverse Change, etc. (a) Since the Amendment Date nothing shall
have occurred or become known which the Required Banks or the Agent could
reasonably expect to have a Materially Adverse Effect; such determination shall
be made both before and after giving effect to the making of the Loans
hereunder.
(b) All material governmental and third party approvals and consents
(including, without limitation, all material approvals and consents required in
connection with any
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environmental statutes, rules or regulations), if any, in connection with the
conduct of the business of the Borrower and its Subsidiaries shall have been
obtained and remain in effect.
(c) There shall not exist any judgment, order, injunction or other
restraint issued or filed with respect to the making of any Loans hereunder the
effect of which judgment, order, injunction or restraint is adverse to the
performance hereunder by any Bank.
(D) Margin Rules. On the date of each Borrowing of Loans, neither the
making of any Loan nor the use of the proceeds thereof will violate the
provisions of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
(E) Borrowing Base Certificate. The Agent shall have received and the
Required Banks shall be reasonably satisfied (both as to form and substance)
with the Borrowing Base Certificate last delivered to the Banks.
The acceptance of the proceeds of each Borrowing of Loans shall
constitute a representation and warranty by the Borrower and each other Credit
Party to each of the Banks that all of the applicable conditions specified in
Section 4.02 have been satisfied or waived.
All of the certificates, legal opinions and other documents and papers
referred to in this Section 4.02, unless otherwise specified, shall be delivered
to the Agent at its Office (or such other location as may be specified by the
Agent) for the account of each of the Banks and in sufficient counterparts for
each of the Banks and shall be satisfactory in form and substance to the
Required Banks.
SECTION 5. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Amendment and to make the Loans provided for
herein, the Borrower on behalf of itself and its Subsidiaries makes the
following representations and warranties to, and agreements with, the Banks, all
of which shall survive the execution and delivery of this Agreement and the
making of the Loans (with the execution and delivery of this Agreement and the
making of each Loan thereafter being deemed to constitute a representation and
warranty that the matters specified in this Section 5 are true and correct in
all material respects as of the date of each such Loan unless such
representation and warranty expressly indicates that it is being made as of any
specific date). It is understood by all parties
35
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to this Agreement that all Schedules referred to herein set forth information as
known to the Borrower and the Guarantors only as of the Amendment Date.
5.01 Corporate Status. Except as set forth on Schedule 5.01, each of
the Borrower and each of its Subsidiaries (i) is a duly organized and validly
existing corporation or limited liability company in good standing under the
laws of the jurisdiction of its incorporation or organization; (ii) has the
corporate or other organizational power and authority and has obtained all
requisite governmental licenses, authorizations, consents and approvals to own
and operate its property and assets and to transact the business in which it is
engaged and presently proposes to engage, including, without limitation, those
in compliance with or required by the Environmental Laws, except for those
governmental licenses, authorizations, consents or approvals the failure of
which to be so obtained could not reasonably be expected to have a Materially
Adverse Effect; and (iii) is duly qualified and authorized to do business and is
in good standing in all jurisdictions where it is required to be so qualified,
except where the failure to be so qualified could not reasonably be expected to
have a Materially Adverse Effect.
5.02 Corporate Power and Authority. The Borrower and each other Credit
Party has the corporate power and authority to execute, deliver and carry out
the terms and provisions of the Documents to which it is a party and has taken
all necessary corporate or other action to authorize the execution, delivery and
performance of the Documents to which it is a party. The Borrower and each other
Credit Party has duly executed and delivered each Document to which it is a
party and each such Document constitutes the legal, valid and binding obligation
of such Person, enforceable against such Person in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally or by general
principles of equity or the discretion of the court before which any proceeding
therefor may be brought.
5.03 No Violation. Neither the execution, delivery or performance by
the Borrower or any other Credit Party of the Documents to which it is a party
nor compliance with the terms and provisions thereof nor the consummation of the
transactions contemplated therein (i) will violate any applicable provision of
any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental authority, (ii) conflicts or
36
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will conflict or be inconsistent with, results or will result in any breach or
violation of any of the terms, covenants, conditions or provisions of,
constitutes a default under, or (other than pursuant to the Security Documents)
results in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Borrower or any other Credit
Party pursuant to the terms of, any indenture, mortgage, deed of trust, material
agreement or other material instrument to which the Borrower or any other Credit
Party is a party or by which it or any of its property or assets is bound or to
which it may be subject, or (iii) will violate any provision of the charter or
by-laws of the Borrower or any other Credit Party, except with respect to
clauses (i), (ii) and (iii) where such contravention, conflict, inconsistency,
breach, default, creation, imposition, obligation or violation could not
reasonably be expected to have a Materially Adverse Effect.
5.04 Litigation. Except as set forth on Schedule 5.04, there are no
actions, judgments, suits, investigations or proceedings by any administrative,
governmental or other public authority or other Person pending or, to the
Borrower's knowledge, threatened against or with respect to the Borrower or any
of its Subsidiaries or any of their respective assets that (a) challenges the
validity of any of the Credit Documents or the transactions contemplated
thereby, including the making of any Loans, or (b) could reasonably be expected
to have a Materially Adverse Effect.
5.05 Use of Proceeds. The proceeds of all Revolving Loans to be made to
the Borrower hereunder shall be utilized for working capital and other general
corporate purposes.
Neither the making of any Loan hereunder, nor the use of the proceeds
therefrom, will violate or be inconsistent with the provisions of Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System.
5.06 Governmental Approvals, etc. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption or other action by or notice to, any third party or any foreign or
domestic, administrative, governmental or public body or authority, or by any
subdivision thereof (other than those orders, consents, approvals, licenses,
authorizations or validations which, if not obtained or made, could not
reasonably be expected to have a Materially Adverse Effect or which have
previously been obtained or made, and except for filings to perfect security
interests
37
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granted pursuant to the Security Documents, all of which will be accomplished on
or prior to the Amendment Date), is necessary or required to authorize or is
required in connection with (i) the execution, delivery and performance of any
Document or the transactions contemplated therein or (ii) the legality,
validity, binding effect or enforceability of any Document. At the time of the
making of the Initial Loans, there does not exist any judgment, order,
injunction or other restraint issued or filed against or with respect to the
making of Loans or the performance by the Borrower or any other Credit Party of
its respective obligations under the Documents.
5.07 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is, nor will be after giving effect to the transactions
contemplated hereby or by any of the other Documents, an "investment company" or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
5.08 Public Utility Holding Company Act. Neither the Borrower nor any
of its Subsidiaries is, nor will be after giving effect to the transactions
contemplated hereby or by any of the other Documents, a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
5.09 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by the Borrower or any of its
Subsidiaries in writing to any Bank and all information furnished in writing by
the Borrower or any of its Subsidiaries in writing to the Agent and which is
furnished to any Bank by the Agent on behalf of the Borrower or any of its
Subsidiaries (including, without limitation, all information contained in the
Credit Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein is (or was, on the date of making the Initial
Loans), and all other such factual information (taken as a whole) hereafter
furnished by any such Person in writing to any Bank (or furnished by such Person
in writing to the Agent and which is furnished to any Bank by the Agent on
behalf of such Person) will be, true and accurate in all material respects on
the date as of which such information is dated or certified.
The projections and pro forma financial information contained in such
materials are based on good faith estimates and
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assumptions believed by such Persons to be reasonable at the time made, it being
recognized by the Agent and the Banks that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There is no fact known to the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Materially Adverse Effect which has not been
disclosed herein or in such other documents, certificates and written statements
furnished to the Banks for use in connection with the transactions contemplated
hereby.
5.10 Financial Condition; Financial Statements; Projections. (a)
Neither the Borrower nor any other Credit Party is entering into the
arrangements contemplated hereby or by the other Credit Documents, or intends to
make any transfer or incur any obligations hereunder or thereunder, with actual
intent to hinder, delay or defraud either present or future creditors. On and as
of the Amendment Date, on a pro forma basis after giving effect to all
Indebtedness incurred and Liens created, or to be created, by the Borrower and
each other Credit Party, (w) the Borrower does not expect that final judgments
against it or any of its Subsidiaries in actions for money damages with respect
to pending or threatened litigation will be rendered at a time when, or in an
amount such that, it will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered and the cash available to such Person, after
taking into account all other anticipated uses of the cash of such Person
(including the payments on or in respect of debts (including its Contingent
Obligations))); (x) neither the Borrower nor any of its Subsidiaries will have
incurred or intends to, or believes that it will, incur debts beyond its ability
to pay such debts as such debts mature (taking into account the timing and
amounts of cash to be received by such Person from any source, and of amounts to
be payable on or in respect of debts of such Person and the amounts referred to
in the preceding clause (w)); (y) each of the Borrower and each of its
Subsidiaries, after taking into account all other anticipated uses of the cash
of such Person, anticipates being able to pay all amounts on or in respect of
debts of such Person when such amounts are required to be paid; and (z) each of
the Borrower and each of its Subsidiaries will have sufficient capital with
which to conduct its present and proposed business and the property of such
Person does not constitute unreasonably small capital with which to conduct its
present or proposed business. For purposes of this Section 5.10, "debt" means
any liability on a claim, and
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"claim" means a (i) right to payment whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. On the date of each Borrowing (and after giving effect to all
Borrowings as of such date), the representations set forth in this Section
5.10(a) shall be true and correct with respect to the Borrower and each of its
Subsidiaries on such date.
(b) The Borrower has heretofore delivered to the Banks the historical
financial statements described in Section 4.01(H). Except as set forth on
Schedule 5.10 hereto, all such historical financial statements referred to in
the preceding sentence were prepared in accordance with GAAP consistently
applied. Such historical financial statements present fairly the financial
position of the Borrower for each of the periods covered thereby.
(c) As of the Amendment Date, except as fully reflected or reserved
against in the financial statements and the notes thereto described in Section
5.10(b), there were no liabilities or obligations with respect to the Borrower
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, would be
material to the Borrower. As of the Amendment Date, the Borrower does not know
of any basis for the assertion against the Borrower of any liability or
obligation of any nature whatsoever that is not fully reflected in the financial
statements described in Section 5.10(b) or (c), which, either individually or in
the aggregate, could reasonably be expected to be material to Borrower.
5.11 Security Interests. The Security Documents, once executed,
delivered and properly recorded, will create, in favor of the Collateral Agent
for the benefit of the Banks, as security for the obligations purported to be
secured thereby, a valid and enforceable perfected first priority security
interest in and Lien upon all of the Collateral to the extent provided for in
the applicable Security Document, superior to and prior to the rights of all
third persons and subject to no Liens except the Prior Liens applicable to such
Collateral. Notwithstanding anything to the contrary contained herein or in the
Intellectual Property Security Agreements, neither the Borrower or any
Subsidiary makes any representation or warranty about perfecting a security
40
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interest in Copyrights (as defined in the Intellectual Property Security
Agreement) which are not registered with the U.S. Copyright Office or Licenses
(as defined in the Intellectual Property Security Agreement) or foreign patents
or trademarks. The mortgagor under each Mortgage, if any, has good and
marketable title to the Mortgaged Real Property free and clear of all Liens
other than Prior Liens. The respective pledgor or assignor, as the case may be,
has (or, on and after the time it executes the respective Security Document,
will have) good title to or the necessary right or licenses to use all items of
Collateral (other than real property subject to a Mortgage) covered by such
Security Document free and clear of all Liens other than Liens permitted under
the applicable Security Document. Other than as contemplated in Section 4.01(K),
no filings or recordings are required in order to perfect the security interests
created under any Security Document except for filings or recordings required in
connection with any such Security Document which shall have been made prior to
the Amendment Date.
5.12 Tax Returns and Payments. The Borrower and each of its
Subsidiaries has filed all tax returns required to be filed by it (which are
true and correct in all material respects) and has paid all taxes and
assessments shown to be due thereon, other than those not yet delinquent and
except for those contested in good faith and for which adequate reserves have
been established. Each of the Borrower and each of its Subsidiaries has paid, or
has provided adequate reserves (in accordance with GAAP) for the payment of, all
federal, state, local and foreign taxes applicable for all prior fiscal years
and for the current fiscal year to the date hereof. Neither the Borrower nor any
of its Subsidiaries knows of any proposed tax assessment against any such Person
that could reasonably be expected to have a Materially Adverse Effect which is
not being actively contested in good faith by such Person to the extent affected
thereby in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.13 ERISA. (A) Each of the Borrower and the ERISA Affiliates is in
compliance in all material respects with all applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder with
respect to all employee benefit plans, Pension Plans and Multiemployer Plans.
(B) No Termination Event has occurred or is reasonably
41
-35-
expected to occur with respect to any Pension Plan which resulted or is
reasonably expected to result in a liability to the Borrower or any ERISA
Affiliate in excess of $100,000.
(C) The sum of the amount of unfunded benefit liabilities (determined
in accordance with Statement of Financial Accounting Standards No. 87) under all
Title IV Plans (excluding each Title IV Plan with an amount of unfunded benefit
liabilities of zero or less) is not more than $100,000. As of the Amendment
Date, the sum of the amount of unfunded benefit liabilities (within the meaning
of Section 4001(a)(18) of ERISA) under all Title IV Plans (excluding each Title
IV Plan with an amount of unfunded benefit liabilities of zero or less) is not
more than $100,000.
(D) Neither the Borrower nor any ERISA Affiliate has any obligation to
contribute to or any liability or potential liability (including, but not
limited to, actual or potential withdrawal liability) with respect to any
Multiemployer Plan or any employee benefit plan of the type described in
Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code. The Borrower
and each ERISA Affiliate has complied in all material respects with the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan.
Neither the Borrower nor any ERISA Affiliate has incurred or reasonably expects
to incur any withdrawal liability under Section 4201 et seq. of ERISA to any
Multiemployer Plan or any employee benefit plan of the type described in
Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code.
(E) Neither the Borrower nor any ERISA Affiliate has incurred any
accumulated funding deficiency (whether or not waived) with respect to any
Pension Plan.
(F) Neither the Borrower nor any ERISA Affiliate has or reasonably
expects to become subject to a Lien in favor of any Pension Plan under Section
302(f) or 307 of ERISA or Section 401(a)(29) or 412(n) of the Code.
(G) Assuming that no portion of the Loans to be advanced hereunder is
attributable, directly or indirectly, to the assets of any employee benefit
plan, the execution, performance and delivery of the Credit Documents by any
party thereto will not involve any prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code for which an exemption
therefrom is not available.
42
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(H) No unfunded liability has arisen with respect to any Foreign
Pension Plan (individually or in the aggregate) in excess of $500,000.
As used in this Section 5.13, the term "accumulated funding deficiency"
has the meaning specified in Section 302 of ERISA and Section 412 of the Code,
and the term "employee benefit plan" has the meaning specified in Section 3(3)
of ERISA.
5.14 Borrower's Subsidiaries. Each of the Borrower's Subsidiaries as of
the date hereof is listed on Schedule 5.14 hereto. As of the date hereof, each
such Subsidiary is a Wholly-Owned Subsidiary of the Borrower.
5.15 Patents, etc. The Borrower and each of its Subsidiaries owns or
possesses adequate licenses or other rights to use all material patents, patent
applications, trademarks, trademark applications, servicemarks, servicemark
applications, trade names, copyrights, trade secrets and know how (collectively,
the "Intellectual Property") necessary for the operation of their respective
businesses as presently conducted and as proposed to be conducted. No claim is
pending or, to the best of the Borrower's knowledge, threatened to the effect
that the actions of Borrower or any of its Subsidiaries infringe upon or
conflict with the asserted rights of any other Person under any Intellectual
Property, and, to the best of the Borrower's knowledge, there is no basis for
any such claim (whether or not pending or threatened). No claim is pending or,
to the best of the Borrower's knowledge, threatened to the effect that any such
Intellectual Property owned or licensed by the Borrower or any of its
Subsidiaries or which the Borrower or any of its Subsidiaries otherwise has the
right to use is invalid or unenforceable by the Borrower or such Subsidiary,
and, to the best of the Borrower's knowledge, there is no basis for any such
claim (whether or not pending or threatened).
5.16 Compliance with Laws, etc. Except as set forth in Schedule 5.16
hereto, each of the Borrower and each of its Subsidiaries is in material
compliance with all applicable laws and regulations, including without
limitation those relating to pollution and environmental control, equal
employment opportunity and employee safety, in all jurisdictions in which it is
presently doing business, and the Borrower will and the Borrower will cause each
of its Subsidiaries to comply with all such material laws and regulations which
may be imposed in the future in jurisdictions in which it or such Subsidiary may
then be doing business other than those the non-compliance with which could not
43
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reasonably be expected to have a Materially Adverse Effect.
5.17 Properties. Each of the Borrower and the other Credit Parties has
good and marketable title to and beneficial ownership of or the necessary
licenses to use all its respective properties owned by it, including after the
Amendment Date all property reflected in the most recent balance sheet referred
to in Section 5.10(b) and except as sold or otherwise disposed of since the date
of such balance sheet in the ordinary course of business. Title to each such
property or asset that is not Collateral is held by the Borrower or its
Subsidiaries free and clear of all Liens except Permitted Encumbrances. Title to
each such property or asset that constitutes Collateral is held by the Borrower
or its Subsidiaries free and clear of all Liens other than the Liens
contemplated by the applicable Security Documents. Each of the Borrower and each
of its Subsidiaries holds all licenses, certificates of occupancy or operation
and similar certificates and clearances of municipal and other authorities
necessary to own and operate its properties in the manner and for the purposes
currently operated by such party. Each Real Property and each Mortgaged Real
Property, if any, is suitable for its intended purposes and is served by such
utilities as are necessary for the operation thereof. There are no actual,
threatened or alleged defaults of a material nature with respect to any leases
of real property under which the Borrower, or any of its Subsidiaries, is lessor
or lessee.
5.18 Securities. The outstanding capital stock of the Borrower is duly
authorized, issued and delivered and is fully paid, nonassessable and free of
preemptive rights. Except as set forth on Schedule 5.18 there are not, as of the
Amendment Date, any existing options, warrants, calls, subscriptions,
convertible or exchangeable securities, rights, agreements, commitments or
arrangements for any person to acquire any capital stock of the Borrower or any
other securities convertible into, exchangeable for or evidencing the right to
subscribe for any such capital stock.
5.19 Collective Bargaining Agreements. Set forth on Schedule 5.19
hereto is a list and description (including dates of termination) of all
collective bargaining or similar agreements between or applicable to the
Borrower and its Subsidiaries as of the date hereof, and any union, labor
organization or other bargaining agent in respect of the employees of the
Borrower and its Subsidiaries as of the date hereof.
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5.20 Environmental Protection. Except as set forth on Schedule
5.20 hereto and except as could not reasonably be expected to have a
Materially Adverse Effect:
(A) Each of the Borrower and each other Credit Party has obtained
all permits, licenses and other authorizations which are required with respect
to the operation of the business and use, ownership and operation of Real
Property of the Borrower and each other Credit Party under any Environmental Law
and each such authorization is in full force and effect.
(B) Each of the Borrower and each other Credit Party is in
compliance with all terms and conditions of the permits, licenses and
authorizations specified in subsection 5.20(A) above, and is also in compliance
with, and not subject to liability under, any Environmental Law applicable to it
and its business, assets, operations and Real Property (including, without
limitation, compliance with standards, schedules and timetables therein),
including without limitation those arising under the Resource Conservation and
Recovery Act of 1976, as amended, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 ("CERCLA"), the Federal Water Pollution Control
Act, as amended, the Federal Clean Air Act, as amended, and the Toxic Substances
Control Act, as amended.
(C) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the knowledge of the
Borrower or any other Credit Party, threatened against the Borrower or any of
its Subsidiaries under any Environmental Law.
(D) Neither the Borrower nor any other Credit Party has received
notice that it has been identified as a potentially responsible party under
CERCLA or any comparable state law nor has the Borrower or any other Credit
Party received any notification that any Hazardous Materials that it or any of
their respective predecessors in interest has used, generated, stored, treated,
handled, transported or disposed of or arranged for transport for disposal or
treatment of, or arranged for disposal or treatment of, has been found at any
site at which any governmental agency or private party is conducting or planning
to conduct a remedial investigation or other action pursuant to any
Environmental Law.
(E) There have been no releases (i.e., any past or
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present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping) of Hazardous
Materials by the Borrower or any other Credit Party or any of their respective
predecessors on, at, upon, into or from any of the Real Properties. To the best
knowledge of the Borrower and each other Credit Party after due inquiry there
have been no such releases on, at, upon, under, from or into any real property
in the vicinity of any of the Real Properties that, through air, soil, surface
water or groundwater migration or contamination, may be located on, in or under
such Real Properties.
(F) There is no asbestos in, on, or at any Real Properties or any
facility or equipment of the Borrower or any other Credit Party.
(G) No Real Properties currently or formerly owned or operated by the
Borrower or any other Credit Party or any of their respective predecessors in
interest of the Borrower or any other Credit Party are (i) listed or proposed
for listing on the National Priorities List under CERCLA or (ii) listed in the
Comprehensive Environmental Response, Compensation, Liability Information System
List promulgated pursuant to CERCLA, or on any comparable list maintained by any
governmental authority.
(H) There are no past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with or
prevent compliance with any Environmental Law, or which may give rise to any
liability under any Environmental Law, including, without limitation, liability
under CERCLA or similar state, local or foreign laws, or which may otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing or notice
of violation, study or investigation, based on or related to the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport, shipping or handling, or the emission, discharge, release or
threatened release into the environment, of any Hazardous Material.
(I) No Lien has been recorded under any Environmental Law with respect
to any assets, facility or Real Property owned, operated, leased or controlled
by the Borrower or any of the Credit Parties or any of their respective
Subsidiaries.
5.21 Environmental Investigations. All environmental investigations,
assessments, studies, audits or reviews conducted of which the Borrower or any
other Credit Party has knowledge in
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relation to the current or prior business or assets of the Borrower or any of
its Subsidiaries or any Real Property, asset or facility now or previously
owned, operated or leased by the Borrower or any of its Subsidiaries have been
delivered to the Agent.
5.22 Labor Matters. Neither the Borrower nor any other Credit Party has
experienced within the last twelve months any strike, labor dispute, slowdown or
work stoppage due to labor disagreements which could reasonably be expected to
have a Materially Adverse Effect, and (ii) to the best knowledge of the Borrower
and each other Credit Party, there is no such strike, dispute, slowdown or work
stoppage threatened against any Credit Party which could reasonably be expected
to have a Materially Adverse Effect.
5.23 Indebtedness, etc. Each of the Borrower and each other Credit
Party has no Indebtedness in excess of $500,000 in the aggregate and $100,000
individually other than as set forth in Schedule 4.01J and the Indebtedness
hereunder.
SECTION 6. Affirmative Covenants. Borrower covenants and agrees that on
the Amendment Date and thereafter for so long as this Agreement is in effect and
until the Revolving Loan Commitments have terminated and the Loans together with
interest, fees and all other Obligations incurred hereunder are paid in full:
6.01 Information Covenants. The Borrower will furnish or cause to be
furnished to each Bank:
(a) As soon as available and in any event within 90 days after the
close of each fiscal year of the Borrower, the audited consolidated balance
sheets of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of operations, of cash flows
and of stockholders' equity for such fiscal year, setting forth comparative
consolidated figures for the preceding fiscal year, and a report on such
consolidated balance sheets and financial statements by a "Big Six"
accounting firm or another firm of independent public accountants of
nationally recognized standing that is satisfactory to the Required Banks,
which report shall not be qualified as to the scope of audit or as to the
status of the Borrower and its Subsidiaries as a going concern and shall
state that such consolidated financial statements present fairly the
consolidated financial position of the Borrower and its
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Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for such changes
with which the independent certified public accountants concur) and the
examination by such accountants was conducted in accordance with generally
accepted auditing standards.
(b) As soon as available and in any event within 45 days after the
close of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, commencing with the first fiscal quarter
following the Amendment Date, the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such quarterly period
and the related unaudited consolidated statements of operations, of cash
flows and of stockholders' equity for such quarterly period and for the
elapsed portion of the fiscal year ended with the last day of such
quarterly period, and in each case setting forth comparative consolidated
figures for the related periods in the prior fiscal year, subject to normal
year-end audit adjustments.
(c) As soon as practicable and in any event within 30 days after the
end of each month, commencing with the first full month ending after the
Amendment Date, (i) the unaudited consolidated balance sheet of the
Borrower as at the end of such period and (ii) the related unaudited
statements of income and cash flows of the Borrower, in each case for such
fiscal month and for the period from the beginning of the then current
fiscal year to the end of such fiscal month, setting forth in comparative
form the corresponding periods of the prior fiscal year.
(d) Within 30 days after the commencement of each fiscal year, budgets
of the Borrower and its Subsidiaries in reasonable detail for each month of
such fiscal year, as customarily prepared by management for its internal
use, setting forth, with appropriate discussion, the principal assumptions
upon which such budgets are based. Together with each delivery of financial
statements pursuant to Sections 6.01(a) and (b), a comparison of the
current year to date financial results against the budgets required to be
submitted pursuant to this subsection (d) shall be presented.
(e) At the time of the delivery of the financial statements provided
for in Sections 6.01(a), (b) and (c), an
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Officers' Certificate, signed by the chief financial officer, controller,
chief accounting officer or other Authorized Officer of the Borrower,
substantially in the form of Exhibit L-3 hereto, to the effect that, to the
best of such officer's knowledge after due inquiry, no Default or Event of
Default exists, or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate, when delivered
at the end of any fiscal quarter, shall be accompanied by a Compliance
Certificate in a form reasonably acceptable to the Required Banks setting
forth the calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the covenants in this Agreement
(including without limitation the covenants set forth in Sections 7.05 and
7.10 through 7.12 inclusive) as at the end of such fiscal period or year,
as the case may be.
(f) Promptly upon receipt thereof, a copy of each annual "management
letter" submitted to the Borrower by its independent accountants in
connection with any annual audit made by them of the books of the Borrower
or any of its Subsidiaries.
(g) Promptly upon their becoming available, copies of all consolidated
financial statements, reports, notices and proxy statements sent or made
available generally by the Borrower or any Subsidiary of the Borrower to
its security holders, of all regular and periodic reports and all
registration statements and prospectuses, if any, filed by the Borrower or
any of its Subsidiaries with any securities exchange or with the SEC and of
all press releases and other statements made available generally by the
Borrower or any Subsidiary of the Borrower to the public concerning
material developments in the business of the Borrower and its Subsidiaries.
(h) Promptly upon any officer of the Borrower or any other Credit Party
obtaining knowledge (w) of any condition or event which constitutes a
Default or Event of Default, or becoming aware that any Bank has given any
notice or taken any other action with respect to the Borrower or any other
Credit Party with respect to a claimed Default or Event of Default under
this Agreement, (x) that any Person has given any notice to the Borrower or
any other Credit Party or taken any other action with respect to the
Borrower or any other Credit Party with respect to a claimed default or
event or condition of the type referred to in Section 8.04,
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or (y) of a material adverse change in the business, operations,
properties, assets, nature of assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, an
Officers' Certificate specifying the nature and period of existence of any
such condition or event, or specifying the notice given or action taken by
such holder or Person and the nature of such claimed Default, Event of
Default, event or condition, or material adverse change, and what action
the Borrower has taken, is taking and proposes to take with respect
thereto.
(i) (i) Promptly upon any officer of the Borrower or any other Credit
Party obtaining knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against
or directly affecting the Borrower or any of its Subsidiaries or any
property of the Borrower or any of its Subsidiaries not previously
disclosed to the Banks, which action, suit, proceeding, governmental
investigation or arbitration seeks (or in the case of multiple actions,
suits, proceedings, governmental investigations or arbitrations arising out
of the same general allegations or circumstances which seek) recovery from
the Borrower or any of its Subsidiaries aggregating $350,000 or more
(exclusive of claims covered by insurance policies of the Borrower or any
of its Subsidiaries unless the insurers of such claims have disclaimed
coverage or reserved the right to disclaim coverage on such claims), the
Borrower shall give notice thereof to the Banks and provide such other
information as may be reasonably available to enable the Banks and their
counsel to evaluate such matters; (ii) as soon as practicable and in any
event within 45 days after the end of each fiscal quarter, the Borrower
shall provide a quarterly report to the Banks covering the institution of,
or written threat of, any action, suit, proceeding, governmental
investigation or arbitration (not previously reported) against or directly
affecting the Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries not previously disclosed to the Banks,
which action, suit, proceedings, governmental investigation or arbitration
seeks (or in the case of multiple actions, suits, proceedings, governmental
investigations or arbitrations arising out of the same general allegations
or circumstances which seek) recovery from the Borrower or any of its
Subsidiaries aggregating $250,000 or more (exclusive of claims covered by
insurance policies of the Borrower or any of its Subsidiaries unless the
insurers of such claims
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have disclaimed coverage or reserved the right to disclaim coverage on
such claims), and shall provide such other information at such time as
may be reasonably available to enable the Banks and their counsel to
evaluate such matters; (iii) in addition to the requirements set forth
in clauses (i) and (ii) of this Section 6.01(i), the Borrower upon
request shall promptly give notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a
report delivered to the Banks pursuant to clause (i) or (ii) above to
the Banks and provide such other information as may be reasonably
available to it to enable the Banks and their counsel to evaluate such
matters; and (iv) promptly upon any officer of the Borrower or any of
its Subsidiaries obtaining knowledge of any dispute in respect of or
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or directly affecting
any material contract of the Borrower or any of its Subsidiaries, the
Borrower shall give notice thereof to the Banks and shall provide such
other information as may be reasonably available and reasonably
requested by the Banks to enable the Banks and their counsel to
evaluate such matters.
(j) Within 30 days of the last day of each fiscal year of the
Borrower, a report in form and substance reasonably satisfactory to the
Required Banks outlining all material insurance coverage maintained as
of the date of such report by the Borrower and its Subsidiaries and
outlining all material insurance coverage planned to be maintained by
the Borrower and its Subsidiaries in the subsequent fiscal year.
(k) To the extent reasonably requested by the Agent, as soon
as practicable and in any event within ten days of the later of such
request and the making of any such amendment or waiver, copies of
amendments or waivers with respect to Indebtedness of the Borrower or
any of its Subsidiaries.
(l) At least 30 days prior to the commencement of each fiscal
year, the Borrower shall provide to the Agent its consolidated plan,
prepared on an annual basis, for the current year, the next succeeding
fiscal year and on or prior to the Closing Date, the Borrower's
consolidated plan, prepared on an annual basis, for the next succeeding
five fiscal years, in each case prepared in accordance with the
Borrower's normal accounting procedures (and which will
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represent management's reasonable estimate of the Borrower's projected
performance during such periods) applied on a consistent basis,
including, without limitation, (A) forecasted consolidated balance
sheets and consolidated statements of operations, of cash flows and of
stockholders' equity of the Borrower and its Subsidiaries on a
consolidated basis and consolidating profit and loss statements for
each Subsidiary of the Borrower for such periods, (B) the amount of
forecasted capital expenditures for such fiscal periods, and (C)
forecasted compliance with Sections 7.05 and 7.10-7.12; provided that
if any such forecast indicates that the Borrower may not be in
compliance with any provision of this Agreement at some future date,
such forecast shall not constitute a Default or an Event of Default or
anticipatory or other breach thereof.
(m) Within twenty-five (25) days after the last Business Day
of each month following the Amendment Date, the Agent shall have
received for distribution to each Bank a borrowing base certificate in
the form of Exhibit K hereto (the "Borrowing Base Certificate")
detailing the Borrower's Eligible Accounts Receivable and Eligible
Inventory as of the last day of such month, certified as complete and
correct on behalf of the Borrower by the Borrower's chief executive
officer, chief financial officer, controller or other Authorized
Officer. In addition, each Borrowing Base Certificate shall have
attached to it such additional schedules and/or other information as
the Agent may reasonably request. If the Borrower fails to deliver any
such Borrowing Base Certificate within thirty (30) days after the end
of any such month, then the Borrowing Base shall be deemed to be $0
until such time as the Agent shall have received such required
Borrowing Base Certificate.
(n) With reasonable promptness, such other information and
data with respect to the Borrower or any of its Affiliates or any other
similar entity in which the Borrower or any Subsidiary has an
investment, as from time to time may be reasonably requested by any
Bank if such information may materially affect the business, operations
or prospects of the Borrower or its Subsidiaries.
6.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep true books of records and accounts
in which full and correct entries will be made of all its business transactions,
and will reflect in its financial statements adequate accruals and
appropriations to
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reserves, all in accordance with GAAP (or in accordance with generally accepted
accounting principles of the country in which such Subsidiary is located). The
Borrower will, and will cause each of its Subsidiaries to, permit, upon
reasonable prior notice to the chief financial officer, controller or any other
Authorized Officer of the Borrower, officers and designated representatives of
the Agent or any Bank to visit and inspect any of the properties or assets of
the Borrower and any of its Subsidiaries in whosesoever possession, and to
examine the books of account of the Borrower and any of its Subsidiaries and
discuss the affairs, finances and accounts of the Borrower and of any of its
Subsidiaries with, and be advised as to the same by, its and their officers and
independent accountants (in the presence of such officers), all at such
reasonable times and intervals and to such reasonable extent as the Agent or any
Bank may reasonably request.
6.03 Maintenance of Property; Insurance. (a) The Borrower and
each Subsidiary will exercise commercially reasonable efforts to maintain or
cause to be maintained in good repair, working order and condition (subject to
normal wear and tear) all properties used in its businesses and from time to
time will make or cause to be made all appropriate repairs, renewals and
replacements thereof and will maintain and renew as necessary all licenses,
permits and other clearances necessary to use and occupy such properties of the
Borrower and each Subsidiary, as the case may be.
(b) Subject to the provisions of subsection 6.03(c) below, the
Borrower and each Subsidiary will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by corporations engaged in the same or similar businesses and similarly
situated, of such types and in such amounts as are customarily carried under
similar circumstances by such other corporations to the extent that such types
and such amounts of insurance are available at commercially reasonable rates.
The Borrower or each Subsidiary, as applicable, will furnish to each Bank, upon
reasonable request, information as to the insurance carried, and will not cancel
any such insurance without the consent of the Required Banks, which consent
shall not be unreasonably withheld.
(c) Without limiting subsection 6.03(b) above, the Borrower
and each Subsidiary, as applicable, shall maintain, or cause to be maintained,
in full force the insurance coverages
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specified in the Mortgages, if any, and the Security Documents.
6.04 Payment of Taxes. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries or cause a failure or forfeiture of title thereto; provided that
neither the Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings promptly instituted and diligently conducted if it has
maintained adequate reserves with respect thereto in accordance with GAAP (or in
accordance with generally accepted accounting principles of the country in which
such Subsidiary is located).
6.05 Corporate Franchises. The Borrower will do, and will
cause each Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its existence, rights and authority,
except where such failure to keep in full force and effect such rights and
authority could not reasonably be expected to have a Materially Adverse Effect.
6.06 Compliance with Statutes, etc. The Borrower will, and
will cause each Subsidiary to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls) other than
non-compliance which could not reasonably be expected to have a Materially
Adverse Effect.
6.07 ERISA. The Borrower will furnish to each of the Banks:
(a) promptly upon the Borrower knowing or having reason to
know of the occurrence of any (i) Termination Event, or (ii)
"prohibited transaction," within the meaning of Section 406 of ERISA or
Section 4975 of the Code, in connection with any Pension Plan or any
trust created thereunder, which in the case of all such events
described in clause (i) or (ii) results or could reasonably be expected
to result in a liability of the Borrower or its ERISA Affiliates in the
aggregate in excess of $50,000, or the imposition of a Lien on the
assets of the Borrower a written notice specifying the nature thereof,
what action the Borrower or its
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ERISA Affiliates have taken, are taking or propose to take with respect
thereto, and, when known, any action taken or threatened by the
Internal Revenue Service, Department of Labor, PBGC or Multiemployer
Plan sponsor with respect thereto.
(b) with reasonable promptness copies of (i) all notices
received by the Borrower or any of its ERISA Affiliates of PBGC's
intent to terminate any Title IV Plan or to have a trustee appointed to
administer any Title IV Plan, the notice of which event is required
pursuant to the preceding paragraph (a); (ii) upon the request of the
Agent each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by the Borrower or any of its ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan;
(iii) upon the request of the Agent, the most recent actuarial
valuation report for each Title IV Plan; and (iv) all notices received
by the Borrower or any of its ERISA Affiliates from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA, the notice of which event
is required pursuant to the preceding paragraph (a).
6.08 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform in all material respects all of its
obligations under the terms of each mortgage, indenture, security agreement,
other debt instrument and material contract by which it is bound or to which it
is a party, except where such nonperformance could not reasonably be expected to
have a Materially Adverse Effect.
6.09 Fiscal Quarters; Fiscal Year. The Borrower will, and
will cause each of its Subsidiaries to, have its fiscal quarters end on March
31, June 30, September 30 and December 31. The Borrower shall cause, and shall
cause each of its Subsidiaries' fiscal year to, commence on April 1.
6.10 Use of Proceeds. All proceeds of the Loans shall be used
as provided in Section 5.05.
6.11 No Further Negative Pledges. Except with respect to
prohibitions against other encumbrances on specific property encumbered to
secure payment of particular Indebtedness permitted hereunder (which
Indebtedness relates solely to the acquisition
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or improvement of such specific property), neither the Borrower nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired.
6.12 Environmental Events. (i) The Borrower and the other
Credit Parties will promptly give notice to the Agent upon becoming aware (a) of
any violation by Borrower or any other Credit Party of any Environmental Law,
(b) of any inquiry, proceeding, investigation or other action by or with respect
to Borrower or any other Credit Party under any Environmental Law, including,
without limitation, a request for information or a notice of potential
environmental liability from any foreign, federal, state or local environmental
agency or board or any other Person, or (c) of the discovery of the release of
any Hazardous Material at, on, under or from any of the Real Properties or any
facility or equipment thereat in excess of reportable quantities or allowable
standards or levels under any Environmental Law, or in a manner and/or amount
which could reasonably be expected to result in liability under any
Environmental Law, in each case which could reasonably be expected to have a
Materially Adverse Effect.
(ii) In the event of the presence of any Hazardous Material
on, at, upon or under any of the Real Properties which is in violation of, or
which could reasonably be expected to result in liability on the part of the
Borrower or its Subsidiaries under, any Environmental Law, in each case which
could reasonably be expected to have a Materially Adverse Effect, the Borrower
or any other Credit Party, upon discovery thereof, shall take all necessary
steps to initiate and expeditiously complete all response, corrective and other
action to mitigate and eliminate any such adverse effect, except to the extent
that such actions are taken by a third party to the satisfaction of the Agent,
and shall keep the Agent informed of their actions and the results.
(iii) The Borrower shall provide the Agent with copies of any
notice, submittal or documentation provided by the Borrower or any other Credit
Party to any governmental authority or third party under any Environmental Law
if the matter which is the subject of the notice, submittal or other
documentation could reasonably be expected to have a Materially Adverse Effect.
Such notice, submittal or documentation shall be provided to the Agent promptly
and, in any event, within 15 calendar days after such material is provided to
the governmental authority or third party.
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6.13 Pledge of Additional Collateral. Subject to Section 6.11,
promptly, and in any event within 45 days after the acquisition of assets of the
type that would have constituted Collateral (if the person acquiring such assets
had executed an appropriate Security Document on the Closing Date) at the
Closing Date (the "Additional Collateral"), the Borrower will, and will cause
each of its Subsidiaries to, take all necessary action, including the filing of
appropriate financing statements under the provisions of the UCC, applicable
foreign, domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate to grant the Collateral Agent a
perfected Lien in such Additional Collateral (or comparable interest under
foreign law in the case of foreign Additional Collateral), unless the Agent
notifies the Borrower that such action shall not be required. In the event that
the Borrower or its Subsidiaries acquire a fee interest in real property, the
Borrower or its applicable Subsidiary, as the case may be, will take such
actions and execute such documents as the Collateral Agent shall require
pursuant to notification of the Borrower to confirm the Lien of a Mortgage on
such real property (including, without limitation, satisfaction of the
conditions set forth in Section 4.01(U) hereto). All actions taken by the
parties in connection with the pledge of Additional Collateral, including,
without limitation, reasonable costs of counsel for the Collateral Agent, shall
be for the account of the Borrower, which shall pay all sums due as promptly as
practicable and in any event within 15 days of receipt of a reasonably detailed
notice (consisting of aggregate attorney time, disbursements and costs) thereof.
6.14 Security Interests. The Borrower and each other Credit
Party shall perform any and all acts and execute any and all documents
(including, without limitation, the execution, amendment or supplementation of
any financing statement and continuation statement) to enable the Collateral
Agent to file such documents in any appropriate jurisdiction under the
provisions of the UCC, local law or any statute, rule or regulation of any
applicable jurisdiction which are necessary in order to maintain or confirm in
favor of the Collateral Agent for the ratable benefit of the Banks a valid and
perfected Lien on the Collateral, including, without limitation, patents and
trademarks owned by any Credit Party which are not used in any product line as
of the date hereof but which are subsequently so used or licensed for use, but
excluding Copyrights (as defined in the Intellectual Property Security
Agreement) which are not registered with the U.S. Copyright Office and License
(as defined
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in the Intellectual Property Security Agreement) and foreign patents and foreign
trademarks, subject to no Liens except for Prior Liens and Liens permitted by
the applicable Security Documents. The Borrower and each other Credit Party
shall, at the request of the Collateral Agent, as promptly as practicable after
the filing of any financing statements, deliver to the Collateral Agent
acknowledgment copies of, or copies of lien search reports confirming the filing
of, financing statements duly filed under the UCC of all jurisdictions as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable to
perfect the Lien created, or purported or intended to be created, by each
Security Document.
6.15 Inactive Subsidiaries. The Borrower shall prevent the
Inactive Subsidiaries from engaging in any business activity or other actions
other than those specifically required by law. The Borrower represents and
warrants that the Inactive Subsidiaries are inactive corporations and do not
have assets with an aggregate value in excess of $15,000.
SECTION 7. Negative Covenants. The Borrower hereby covenants
and agrees that as of the Amendment Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated and until the
Loans together with interest, fees and all other Obligations incurred hereunder
are paid in full:
7.01 Changes in Business. The Borrower will not, and will not
permit any of its Subsidiaries to, materially alter the character of its
businesses from that conducted by the Borrower or such Subsidiary, as the case
may be, at the Amendment Date.
7.02 Amendments or Waivers of Certain Documents. After the
Amendment Date, the Borrower will not, and will not permit any of its
Subsidiaries to, amend or otherwise change the terms of its Certificate of
Incorporation (including, without limitation, by the filing of a certificate of
designation) or By-laws or any agreement entered into the Borrower or any of its
Subsidiaries with respect to the capital stock of the Borrower or any of its
Subsidiaries in a manner that could reasonably be deemed to be adverse to the
Banks, without the prior written consent of the Required Banks.
7.03 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist any Lien upon or with respect to any item constituting
Collateral, whether now
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owned or hereafter acquired, except for the Lien of the Security Document
relating thereto, Prior Liens applicable thereto and other Liens expressly
permitted by such Security Document. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets of the Borrower or any Subsidiary
which does not constitute Collateral, whether now owned or hereafter acquired,
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets or assign any
right to receive income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording or
notice statute, except the following, which are herein collectively referred to
as "Permitted Encumbrances":
(a) Liens for taxes, assessments or governmental charges or
claims not yet delinquent or Liens for taxes, assessments or
governmental charges or claims being contested in good faith and by
appropriate proceedings for which adequate reserves, as may be required
by GAAP or the generally accepted accounting principles in the country
in which such property or assets are located, have been established;
(b) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law (i) which were incurred in the
ordinary course of business, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary course
of business, and (x) which do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to
such Lien or (ii) which do not relate to material liabilities of the
Borrower and its Subsidiaries and do not in the aggregate materially
detract from the value of the property and assets of the Borrower and
its Subsidiaries taken as a whole;
(c) Liens in connection with any attachment or judgment
(including judgment or appeal bonds) unless such Liens secure judgments
in excess of $150,000 in the aggregate (exclusive of any amount
adequately covered by
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insurance as to which the insurance company has acknowledged coverage)
and such judgments that are so secured shall, within 60 days after the
entry thereof, not have been discharged or execution thereof not stayed
pending appeal, or shall not have been discharged within 30 days after
the expiration of any such stay;
(d) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money or the
equivalent);
(e) subject to the provisions of Section 7.20 and, with
respect to any Mortgaged Real Property, to the provisions of any
applicable Mortgage, Leases with respect to the assets or properties of
the Borrower entered into in the ordinary course of the Borrower's
business and subordinate in all respects to the Liens granted and
evidenced by the Security Documents;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title not interfering in any material respect with
the business of the Borrower or any of its Subsidiaries, in each case
incurred in the ordinary course of business and which do not materially
impair for its intended purposes the Real Property to which it relates;
and
(g) Liens upon real or tangible personal property acquired by
the Borrower or its Subsidiaries after the date hereof; provided that
(i) any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, the cost of the item
of property subject thereto, (ii) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of the fair
value (as determined in good faith by the board of directors of the
Borrower) of the respective property at the time it was so acquired,
(iii) such Lien does not extend to or cover any other property other
than such item of property and (iv) the incurrence of such Indebtedness
secured by such Lien is permitted by Section 7.04.
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7.04 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume, become liable for
(contingently or otherwise) or suffer to exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to the Credit Documents;
(b) Interest Rate Agreements;
(c) $250,000 of Indebtedness incurred to finance the cost of
the acquisition of real or personal tangible property (including
Capital Leases); provided that all such Indebtedness shall not exceed
100% of the fair value of such property; and provided, further, that
such Indebtedness is not secured by any Lien other than a Lien referred
to in clause (g) of Section 7.03;
(d) Indebtedness owing by the Borrower to a Wholly Owned
Subsidiary of the Borrower or Indebtedness owing by a Wholly Owned
Subsidiary of the Borrower to the Borrower; provided, however, that all
such Indebtedness in excess of an aggregate principal amount of
$100,000 outstanding at any one time shall be evidenced by Intercompany
Notes which shall be pledged to the Collateral Agent on behalf of the
Banks pursuant to a Pledge Agreement;
(e) the Subordinated Notes;
(f) other unsecured Indebtedness not exceeding $150,000 in the
aggregate at any time outstanding;
(g) Indebtedness listed as "Surviving Indebtedness" on
Schedule 4.01J, part I, attached hereto; and
(h) the Subordinated Debentures
7.05 Capital Expenditures. The Borrower will not, and will not
permit any of its Subsidiaries to, make Consolidated Capital Expenditures for
any purpose in excess of the amount set forth below for the year ended on the
date listed below:
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Amount in
Date Dollars
---- -------
March 31, 1998................................ $10,000,000
March 31, 1999................................ 12,000,000
March 31, 2000................................ 14,000,000
March 31, 2001................................ 16,000,000
March 31, 2002................................ 16,000,000
7.06 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to any
Person, except:
(a) investments in Cash and Cash Equivalents;
(b) receivables owing to them and advances to customers and
suppliers, in each case if created, acquired or made in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms;
(c) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(d) investments in capital stock of any Wholly Owned
Subsidiary of the Borrower existing on the Closing Date or thereafter
created with the prior written consent of the Required Banks, in each
case to the extent thereof as of the Closing Date or the date of such
creation, but excluding any additional Investments in the capital stock
thereof except to the extent arising from an increase in the retained
earnings of such Subsidiary; and
(e) additional loans, advances and/or investments of a nature
not contemplated by the foregoing clauses (a) through (d); provided
that all loans, advances and investments made pursuant to this clause
(e) shall not exceed $500,000 in the aggregate at any time outstanding;
and provided, further, that all Securities or other instruments
evidencing such loans, investments or advances shall be pledged
pursuant to an appropriate Security Document in the event that such
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Securities or other instruments shall have been acquired for
aggregate consideration in excess of $50,000; and provided, further,
that no loans, advances or investments shall be made to any Subsidiary
of the Borrower pursuant to this clause (e).
To the extent any such receivables are not included in the
calculation of Eligible Accounts Receivable, the provisions of this Section 7.06
shall not preclude or restrict the Borrower's financings (by means of sales to
customers made with extended payment terms) of receivables for Borrower's
Endoview and RigiScan products, which financings are at commercially reasonable
rates and do not extend beyond three years from the Closing Date. The
outstanding balance of such financings shall not at any time exceed $6,000,000
of net accounts receivable.
7.07 Prepayments of Securities, Amendments, etc. The Borrower
will not, and will not permit any of its Subsidiaries to, (i) other than in
connection with this Agreement, make (or give any notice in respect of) any
voluntary or optional payment or prepayment or redemption or acquisition for
value of (including, without limitation, by way of depositing with any trustee
with respect thereto money or securities before such Indebtedness is due for the
purpose of paying such Indebtedness when due) or exchange of any Indebtedness
(other than upon conversion into capital stock pursuant to the terms of such
Indebtedness existing on the Closing Date) or any capital stock; or (ii) amend
or otherwise change the terms of any Indebtedness for borrowed money, or make
any payment consistent with an amendment or change thereto, if the effect of
such amendment or change is to increase the interest rate on such Indebtedness,
accelerate the dates upon which payments of principal or interest are due
thereon, make more restrictive on the Borrower or any Subsidiary any event of
default or condition to an event of default with respect to such Indebtedness,
grant any security interest to secure such Indebtedness, make more onerous on
the Borrower or any Subsidiary the redemption or prepayment provisions thereof,
change the subordination provisions thereof (if any), cause such Indebtedness to
be guaranteed by any Person or, together with all other amendments or changes
made, increase materially the obligations of the obligor or confer additional
rights on the holder of such Indebtedness which would be adverse to the
Borrower, any Subsidiary or the Banks.
7.08 Dividends, etc. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or pay any dividends or return any
capital to, its stockholders or authorize
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or make any other distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for any consideration, any shares of any class of its capital
stock now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or make any loans or
advances to Affiliates (other than as permitted by Section 7.06), or set aside
any funds for any of the foregoing purposes, or permit any of its Subsidiaries
to purchase or otherwise acquire for consideration any shares of any class of
the capital stock of the Borrower or any other Subsidiary, as the case may be,
now or hereafter outstanding (or any options or warrants or stock appreciation
rights issued by such Person with respect to its capital stock) (all of the
foregoing, "Dividends"), except that any Subsidiary of the Borrower may pay
Dividends to its parent corporation if such parent corporation is the Borrower
or a Wholly-Owned Subsidiary of the Borrower; provided that Urohealth, Inc.
(California) may redeem its Series A Preferred Stock outstanding on the date
hereof pursuant to its terms at an aggregate price not in excess of $1,400,000.
7.09 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of transactions, whether or not in the ordinary course of business, with any
holder of 5% or more of any class of equity securities of the Borrower or any
Affiliate of the Borrower other than on terms and conditions substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's-length transaction
with a Person other than a holder of 5% or more of any class of equity
securities of the Borrower or an Affiliate of the Borrower; provided that the
foregoing restrictions shall not apply to (i) transactions between the Borrower
and any of its Wholly-Owned Subsidiaries and (ii) the payment of fees (including
any fees described in Section 11.04 hereof) to Indosuez and its Affiliates for
financial services, such fees not to exceed the usual and customary fees of
Indosuez for similar services.
7.10 Total Interest Coverage Ratio. The Borrower will not
permit the ratio of (i) Consolidated EBITDA of the Borrower to (ii) Consolidated
Interest Expense of the Borrower for any Test Period ending during any period
listed below to be less than the ratio set forth opposite such date below:
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Test Period Ending Ratio
------------------ -----
June 30, 1997.................................................... 1.50 to 1.0
September 30, 1997............................................... 1.75 to 1.0
December 31, 1997................................................ 2.00 to 1.0
March 31, 1998................................................... 3.00 to 1.0
June 30, 1998.................................................... 3.00 to 1.0
September 30, 1998............................................... 3.00 to 1.0
December 31, 1998................................................ 3.00 to 1.0
March 31, 1999................................................... 4.00 to 1.0
June 30, 1999.................................................... 4.00 to 1.0
September 30, 1999............................................... 4.00 to 1.0
December 31, 1999................................................ 4.00 to 1.0
March 31, 2000................................................... 4.00 to 1.0
June 30, 2000.................................................... 4.00 to 1.0
September 30, 2000............................................... 4.00 to 1.0
December 31, 2000................................................ 4.00 to 1.0
March 31, 2001................................................... 4.00 to 1.0
June 30, 2001.................................................... 4.00 to 1.0
September 30, 2001............................................... 4.00 to 1.0
December 31, 2001................................................ 4.00 to 1.0
March 31, 2002................................................... 4.00 to 1.0
7.11 Fixed Charge Coverage Ratio. The Borrower will not permit
the ratio of (i) Consolidated EBITDAC of the Borrower minus cash taxes paid by
the Borrower to (ii) the sum of (A) Consolidated Interest Expense of the
Borrower and (B) the amount of scheduled mandatory payments on account of
principal of Indebtedness made by the Borrower for any Test Period ending on or
after June 30, 1997 and on or before December 31, 1997 to be less than 1.00 to
1.00, for any Test Period ending on or after March 31, 1998 and on or before
December 31, 1999 to be less than 1.05 to 1.00 or less than 1.10 to 1.00 for any
Test Period ending on or after March 31, 2000.
7.12 Leverage Ratio. The Borrower will not permit the ratio of
(i)(A) Indebtedness of the Borrower and its Subsidiaries (other than
Indebtedness represented by the Subordinated Debentures) as of the last day of
the period set forth below less (B) the product of .25 multiplied by the total
amount of Cash and Cash Equivalents of the Borrower and its Subsidiaries as of
the last day of the period set forth below to (ii) Consolidated EBITDA of the
Borrower for the Test Period ending on each date listed below to be more than
the ratio set forth below as of the
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last day of each of the Test Period set forth below; provided that for the first
three quarters of fiscal 1998 Consolidated EBITDA shall be annualized to an
amount equal to the product of Consolidated EBITDA for such Test Period and a
fraction, the numerator of which is 365 and the denominator of which is the
number of days elapsed during Test Period:
Test Period Ratio
----------- -----
June 30, 1997................................................... 5.00 to 1.00
September 30, 1997.............................................. 5.00 to 1.00
December 31, 1997............................................... 5.00 to 1.00
March 31, 1998.................................................. 3.50 to 1.00
June 30, 1998................................................... 3.50 to 1.00
September 30, 1998.............................................. 3.50 to 1.00
December 31, 1998............................................... 3.50 to 1.00
March 31, 1999.................................................. 3.00 to 1.00
June 30, 1999................................................... 3.00 to 1.00
September 30, 1999.............................................. 3.00 to 1.00
December 31, 1999............................................... 3.00 to 1.00
March 31, 2000.................................................. 2.50 to 1.00
June 30, 2000................................................... 2.50 to 1.00
September 30, 2000.............................................. 2.50 to 1.00
December 31, 2000............................................... 2.50 to 1.00
March 31, 2001.................................................. 2.50 to 1.00
June 30, 2001................................................... 2.50 to 1.00
September 30, 2001.............................................. 2.50 to 1.00
December 31, 2001............................................... 2.50 to 1.00
March 31, 2002.................................................. 2.50 to 1.00
7.13 Issuance of Subsidiary Stock. The Borrower will not and
will not permit any of its Subsidiaries directly or indirectly to issue, sell,
assign, pledge or otherwise encumber or dispose of any shares of its capital
stock or other securities (or warrants, rights or options to acquire capital
stock or convertible securities or other equity securities) of such Subsidiary.
7.14 Disposition of Assets. A. The Borrower will not, and will
not permit any of its Subsidiaries to, dispose of all or any part of its
interest in any asset, except that the Borrower and its Subsidiaries may sell
assets so long as either (i) such sales are approved by the Required Banks and
the sales price thereof is, in the reasonable judgment of the Required Banks, at
least equal to the fair market value of such assets,
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(ii) such sales are for at least the fair market value of such assets and the
aggregate amount of such asset sales does not exceed $250,000 in any year and,
in any such case, the Borrower or such Subsidiary complies with the mandatory
prepayment and Commitment reduction provisions and, in the case of Collateral,
so long as the conditions to the release of Collateral described herein and in
the applicable Security Documents are met, (iii) such sales are of inventory and
in the ordinary course of business, or (iv) such sales are (A) of obsolete
equipment, (B) for at least the fair market value of such equipment, (C) not in
excess of $75,000 individually or $250,000 per year in the aggregate and (D) the
proceeds of such sales are used within 30 days of such sales to (1) purchase
equipment used in substantially similar lines of business or (2) repay
Indebtedness under this Credit Agreement pursuant to Section 3.01.
The consideration received by the Borrower and its
Subsidiaries from each sale of assets permitted above shall be received in whole
at the time of sale and at least 85% of the consideration from each sale shall
consist of Cash or Cash Equivalents. Any non-cash proceeds received from the
sale of assets shall be pledged pursuant to and in accordance with the
applicable Security Documents and shall constitute Collateral.
B. Upon compliance with the conditions in subsection A of
this Section 7.14, the Release Conditions and the Partial Release Conditions
(each as hereinafter defined), the Borrower shall be entitled to receive from
the Collateral Agent an instrument in form and substance reasonably satisfactory
to the Borrower (each, a "Release"), releasing the Lien of the Mortgage with
respect to all or any portion of a Mortgaged Real Property (each, a "Released
Real Property"). The Borrower shall exercise its rights under this Section by
delivering to Collateral Agent a notice (each, a "Release Notice"), which shall
refer to this Section, describe with particularity the proposed Released
Property and be accompanied by (i) four counterparts of the Release fully
executed and acknowledged by all necessary parties other than Collateral Agent,
(ii) executed counterparts of UCC termination statements necessary to terminate
the Lien of the applicable Mortgage and (iii) an Officer's Certificate
certifying that no Default or Event of Default shall have occurred and the
parties executing any and all documents in connection with the Release (other
than Collateral Agent) were duly authorized to do so (collectively, the "Release
Conditions"). In the event the proposed Released Property consists of less than
all of the Mortgaged Real Property subject to a single Mortgage, the Partial
Release Conditions must be
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satisfied in order for the Borrower to receive the Release.
C. Collateral Agent's obligation to deliver a Release in
respect of less than all of the Mortgaged Real Property subject to a single
Mortgage shall be contingent upon the satisfaction of the conditions in
subsection A of this Section 7.16 and the Release Conditions as well as the
following conditions (collectively, the "Partial Release Conditions"):
(i) following the sale, transfer or other disposition of and
release of the Lien of the applicable Mortgage with respect to the
proposed Released Real Property, the remaining Mortgaged Real Property
shall have access to such services and public roads as is necessary for
the continued use of such Mortgaged Real Property in the manner
utilized prior to the Release;
(ii) following the sale, transfer or other disposition of the
proposed Released Real Property, the remaining Mortgaged Real Property
shall comply in all material respects with applicable laws, rules,
regulations and ordinances relating to environmental protection,
zoning, land use, configuration and building and workplace safety;
(iii) following the sale, transfer or other disposition of the
proposed Released Real Property, the value of the remaining Mortgaged
Real Property shall not be less than the value of such remaining
Mortgaged Real Property prior to the Release;
(iv) the Title Company shall have issued an endorsement to the
Collateral Agent's title insurance policy relating to the Mortgaged
Real Property confirming that after the proposed release, the Lien of
the applicable Mortgage continues unimpaired as a first priority Lien
upon the remaining Mortgaged Real Property subject only to Prior Liens;
(v) the Borrower shall cause to have been delivered to the
Collateral Agent a Survey reasonably acceptable to the Collateral Agent
of the Mortgaged Real Property remaining after the Collateral proposed
Released Real Property has been released; and
(vi) the Borrower shall cause to have been delivered to the
Collateral Agent an Officer's Certificate certifying that the
conditions set forth in subsections (i) through (v)
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have been satisfied.
D. The Collateral Agent shall execute, acknowledge (if
applicable) and deliver to the Borrower counterparts of the documents described
in subsection B(i) and (ii) within 10 Business Days after receipt by the
Collateral Agent of a Release Notice provided that the Release Conditions and
the Partial Release Conditions (if applicable) have been satisfied. Borrower
shall (i) execute, deliver, obtain and record such instruments as the Collateral
Agent may require, including, without limitation, amendments to the Security
Documents or this Agreement and (ii) deliver to the Collateral Agent such
evidence of the satisfaction of the Release Conditions and the Partial Release
Conditions as the Collateral Agent may require. The Borrower shall reimburse the
Collateral Agent, the Agent and the Banks upon demand for all reasonable
out-of-pocket costs or expenses incurred in connection with any actions taken
pursuant to this Section 7.14.
7.15 Contingent Obligations. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, create or become
or be liable with respect to any Contingent Obligation except:
(a) guarantees resulting from endorsement of negotiable
instruments for collection in the ordinary course of business;
(b) Interest Rate Agreements;
(c) performance or similar bonds relating to the performance
or expected performance of operational obligations of the Borrower or
any of its Subsidiaries which arise in the ordinary course of business
consistent with past practice and which do not involve any direct or
indirect credit support, whether by guarantee by any other entity or by
the granting of any Lien or the provision of any security or otherwise;
(d) Guarantees made by the Borrower in the ordinary course of
business following the Closing Date in favor of any of its Subsidiaries
not to exceed a maximum aggregate amount of $250,000 at any one time;
and
(e) other Contingent Obligations not to exceed $100,000
outstanding at any one time.
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7.16 ERISA. The Borrower will not, and will not permit any of
its ERISA Affiliates to:
(i) engage in any transaction in connection with which the
Borrower or any of its ERISA Affiliates could be subject to either a
tax imposed by Section 4975(a) of the Code or the corresponding civil
penalty assessed pursuant to Section 502(i) of ERISA, which penalties
and taxes for all such transactions could reasonably be expected to be
in an aggregate amount in excess of $50,000;
(ii) permit to exist any accumulated funding deficiency, for
which a waiver has not been obtained from the Internal Revenue Service,
with respect to any Pension Plan;
(iii) permit to exist any failure to make contributions or any
unfunded benefits liability which creates, or with the passage of time
would create, a statutory lien or requirement to provide security under
ERISA or the Code in favor of the PBGC or any Pension Plan,
Multiemployer Plan or other entity;
(iv) permit the sum of the amount of unfunded benefit
liabilities (determined in accordance with Statement of Financial
Accounting Standards No. 87) under all Title IV Plans (excluding each
Title IV Plan with an amount of unfunded benefit liabilities of zero or
less) to exceed $50,000 for a period in excess of twelve months; or
(v) fail to make any payment to any Multiemployer Plan that it
or any of its ERISA Affiliates may be required to make under such
Multiemployer Plan, any agreement relating to such Multiemployer Plan,
or any law pertaining thereto.
As used in this Section 7.16, the term "accumulated funding
deficiency" has the meaning specified in Section 302 of ERISA and Section 412 of
the Code, and the term "amount of unfunded benefit liabilities" has the meaning
specified in Section 4001(a)(18) of ERISA.
7.17 Merger and Consolidations. The Borrower will not, and
will not permit any of its Subsidiaries to, merge or consolidate with or into
any other entity other than the merger of one or more Inactive Subsidiaries with
and into the Subsidiaries of the Borrower.
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7.18 Sale and Lease-Backs. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, become or thereafter
remain liable as lessee or as guarantor or other surety with respect to the
lessee's obligations under any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real or personal or mixed) whether now owned or
hereafter acquired, (a) which the Borrower or any of its Subsidiaries has sold
or transferred or is to sell or transfer to any other Person or (b) which the
Borrower or any such Subsidiary intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by
the Borrower or any such Subsidiary to any Person in connection with such lease,
if in the case of clause (a) or (b) above, such sale and such lease are part of
the same transaction or a series of related transactions or such sale and such
lease occur within one year of each other or are with the same other Person.
7.19 Sale or Discount of Receivables. The Borrower will not,
nor will it permit any of its Subsidiaries to, sell, with or without recourse,
or discount (other than in connection with trade discounts in the ordinary
course of business consistent with past practice) or otherwise sell for less
than the face value thereof, notes or accounts receivable.
SECTION 8. Events of Default. Upon the occurrence and during
the continuance of any of the following specified events (each an "Event of
Default"):
8.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans, (ii) default, and such default shall
continue for two or more Business Days, in the payment when due of any interest
on the Loans or under any other Credit Document or (iii) fail to pay any other
amounts owing hereunder for five days after receiving notice thereof; or
8.02 Representations, etc. Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
8.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.01, 6.10, 6.13, 6.14 or Section 7 hereof or Section 1.1 of any
Mortgage or (b) default in the due
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performance or observance by it of any other term, covenant or agreement
contained in this Agreement, any other Credit Documents or any Security Document
(other than those referred to in Section 8.01, 8.02 or clause (a) of this
Section 8.03) and such defaults under this clause (b) shall continue unremedied
for a period of at least ten days after the date of such default; or
8.04 Default Under Other Agreements. (a) Any Credit Party
shall (i) default in any payment with respect to any Indebtedness having a
principal amount in excess of $100,000 individually or $500,000 in the
aggregate, beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created, or (ii) default in the
observance or performance of any agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause any such Indebtedness to become due (whether by
acceleration, redemption, etc.) prior to its stated maturity; provided that for
purposes of this clause (a) such default shall be deemed to have occurred
whether or not any requisite notice has been given, grace period has expired or
time has lapsed in connection with such default or (b) any such Indebtedness of
any Credit Party shall be declared to be due and payable, required to be prepaid
or redeemed other than by a regularly scheduled required prepayment, prior to
the stated maturity thereof; provided that the Borrower shall not be in default
of this Section as a result of the non-payment of the $3.0 million note payable
to X-Med, Inc. so long as the Borrower is contesting in good faith the amount
owed to X-Med; or
8.05 Bankruptcy, etc. Any Credit Party shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against any Credit
Party or any of its Subsidiaries and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of any Credit Party or any of its
Subsidiaries; or any Credit Party or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in
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effect relating to any Credit Party or any of its Subsidiaries; or there is
commenced against any Credit Party or any of its Subsidiaries any such
proceeding which remains undismissed for a period of 60 days; or any Credit
Party or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or any Credit Party or any of its Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or any Credit Party or any of
its Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by any Credit Party or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or
8.06 ERISA. (i) Any "reportable event" as described in Section
4043 of ERISA or the regulations thereunder (excluding those events for which
the requirement for notice has been waived by regulation by the PBGC), or any
other event or condition, which the Required Banks determine constitutes
reasonable grounds under Section 4042 of ERISA for the termination of any Title
IV Plan by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer or liquidate any Title IV Plan shall
have occurred; or
(ii) A trustee shall be appointed by a United States District
Court to administer any Title IV Plan; or
(iii) The PBGC shall institute proceedings to terminate any
Title IV Plan or to appoint a trustee to administer any Title IV Plan; or
(iv) The Borrower or any of its ERISA Affiliates shall become
liable to the PBGC or any other party under Section 4062, 4063, 4064 or 4069 of
ERISA with respect to any Title IV Plan; or
(v) The Borrower or any of its ERISA Affiliates shall become
liable to any Multiemployer Plan under Section 4201 et seq. of ERISA;
if the sum of each of the Borrower's and its ERISA Affiliates' various
liabilities (such liabilities to include, without limitation, any liability to
the PBGC or to any other party under Section 4062, 4063, 4064 or 4069 of ERISA
with respect to any Title IV Plan, or to any Multiemployer Plan under Section
4201 et seq. of ERISA which the Required Banks determine could reasonably be
expected to be incurred as a result of such events listed in
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subclauses (i) through (v) above exceeds $100,000 and is unpaid for a period of
45 days; or
8.07 Security Documents. Any Security Document shall cease to
be in full force and effect, or shall cease to give the Collateral Agent the
Liens, if any, rights, powers and privileges purported to be created thereby, in
favor of the Collateral Agent, superior to and prior to the rights of all third
Persons and subject to no Liens other than Prior Liens and Liens expressly
permitted by the applicable Security Document; or
8.08 Guarantees. Any Guarantee or any provision thereof shall
cease to be in full force or effect in any material respect, or any Guarantor or
any Person acting by or on behalf of any Guarantor shall deny or disaffirm such
Guarantor's obligations under such Guarantee or any Guarantor shall default in
the due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to any Guarantee; or
8.09 Judgments. One or more judgments or decrees shall be
entered against any Credit Party involving a liability of $50,000 or more in the
case of any one such judgment or decree and $300,000 or more in the aggregate
for all such judgments and decrees for all Credit Parties (in either case in
excess of the amount covered by insurance as to which the insurance company has
acknowledged coverage) and any such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within five days from the
entry thereof; or
8.10 Ownership. (i) Either or both of Xx. Xxxxxxx Xxxxxxx or
Mr. Xxxxx Xxxxxxx, the Chairman and Executive Vice President, respectively, of
the Borrower, (x) ceases to remain in the employ of the Borrower in his current
capacity or in some other executive capacity or (y) ceases to retain at least
his current stock ownership (including securities which may be exchanged for,
converted into or exercised for shares of stock) in the Borrower, provided that
Mr. Xxxxx Xxxxxxx may sell up to 50,000 shares of such stock ownership and Xx.
Xxxxxxx Xxxxxxx may sell, during each of the Borrower's fiscal quarters, up to
25,000 shares of such stock ownership; (ii) individuals who constituted the
Board of Directors of Borrower or any Guarantor on the Closing Date (together
with any new directors whose proposal for election by the shareholders of
Borrower or any Guarantor was approved by a vote of 51% of the directors of
Borrower or such Guarantor then still in office who either were directors on the
Closing Date or whose election or nomination for election was
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previously so approved) shall cease for any reason to constitute a majority of
the members of the Board of Directors of Borrower or such Guarantor still in
office; (iii) Borrower or any Guarantor conveys, transfers or leases all or
substantially all of its assets to any Person; or (iv) the approval by
stockholders of Borrower or any Guarantor of any plan or proposal for the
liquidation, dissolution or winding up of Borrower or any such Guarantor;
Then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, the Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the Agent or
any Bank to enforce its claims against the Borrower, except as otherwise
specifically provided for in this Agreement (provided that an Event of Default
specified in Section 8.05 shall occur automatically without the giving of any
notice): (i) declare the Total Revolving Loan Commitments terminated, whereupon
the Commitment of each Bank shall forthwith terminate immediately and any
accrued and unpaid Commitment Commission shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and accrued
interest in respect of all Loans and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and/or (iii) enforce, as Collateral Agent (or
direct the Collateral Agent to enforce), any or all of the remedies created
pursuant to the Security Documents. If an Event of Default is cured or waived in
accordance with the terms of the Agreement, it ceases (and, if waived, pursuant
to the terms, and to the extent, of such waiver).
SECTION 9. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Account" means all of the Borrower's "accounts" (as that term
is defined in Section 9-106 of the Uniform Commercial Code as in effect in the
State of New York) whether or not such Account has been earned by performance,
whether now existing or existing in the future, including, without limitation,
all (i) accounts receivable, including, without limitation, all accounts created
by or arising from all of the Borrower's sales
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of goods or rendition of services made under any of the Borrower's trademarks or
trade names; (ii) unpaid seller's rights (including rescission, replevin,
reclamation and stopping in transit) relating to the foregoing or arising
therefrom; (iii) rights to any goods represented by any of the foregoing,
including returned or repossessed goods; (iv) reserves and credit balances held
by the Borrower with respect to any such accounts receivable or any account
debtor; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
"Additional Collateral" shall have the meaning provided in
Section 6.14.
"Adjusted LIBOR" shall mean, with respect to any LIBOR
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (i) the sum of (a)
the LIBOR in effect for such Interest Period and (b) 2.75% and (ii) Statutory
Reserves, if any.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and executive officers of such Person), controlled by, or under direct
or indirect common control with such Person; provided that neither Indosuez nor
any Affiliate of Indosuez shall be deemed to be an Affiliate of any Credit
Party. A Person shall be deemed to control a corporation for the purposes of
this definition if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean Indosuez, or any successor thereto
appointed in accordance herewith, in its capacity as agent for the Banks.
"Agreement" shall mean the Old Credit Agreement, as the same
may after its execution be amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof, including the Amendment.
"Amendment Date" means the effective date of this Amended and
Restated Revolving Credit Agreement.
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"Asset Sale" shall mean the sale, transfer or other
disposition, to the extent consummated after the Closing Date, by the Borrower
or any Subsidiary of the Borrower to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset of Borrower or such
Subsidiary (other than transactions included in the definition of Net Financing
Proceeds and sales, transfers or other dispositions of inventory in the ordinary
course of business and/or of obsolete equipment effected in compliance with
Section 7.14A(iv)).
"Authorized Officer" shall mean any senior officer of the
Borrower, designated as such in writing to the Agent by the Borrower, to the
extent acceptable to the Agent.
"Bank" shall have the meaning provided in the first paragraph
of this Agreement and in Section 11.04.
"Bankruptcy Code" shall have the meaning provided in Section
8.05.
"Base Rate" shall mean the higher of (x) 1/2% per annum in
excess of the Federal Funds Rate and (y) the rate which the Agent announces from
time to time as its prime commercial lending rate, as in effect from time to
time. The rate the Agent announces as its prime commercial lending rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Agent may make commercial loans or other
loans at rates of interest at, above or below the rate it announces as its prime
commercial lending rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rate provided in Section 1.08(a).
"Base Rate Margin" shall have the meaning set forth in Section
1.08(a).
"Borrower" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Borrower General Security Agreement" shall mean the Borrower
General Security Agreement substantially in the form of Exhibit H-1 hereto, and
any other general security agreement delivered by Borrower pursuant to Section
6.13 or 6.14.
"Borrower Securities Pledge Agreement" shall mean the Borrower
Securities Pledge Agreement substantially in the form of
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Exhibit E-1 hereto, and any other securities pledge agreement delivered by
Borrower pursuant to Section 6.13 or 6.14.
"Borrowing" shall mean the incurrence pursuant to a Notice of
Borrowing and to the Loan Facility of one Type of Loan by the Borrower from all
of the Banks on a pro rata basis on a given date (or resulting from conversions
on a given date) having, in the case of LIBOR Loans, the same Interest Periods.
"Borrowing Base" means an amount equal to the sum of (i) 80%
of the Eligible Accounts Receivable and (ii) 50% of Eligible Inventory.
"Borrowing Base Certificate" has the meaning assigned to that
term in Section 6.01(n).
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, LIBOR Loans, any day which is a Business
Day described in clause (i) and which is also a day for trading by and between
banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" of any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is, or is required to be, accounted for as a capital lease
on the balance sheet of that Person, together with any renewals of such leases
(or entry into new leases) on substantially similar terms.
"Capitalized Lease Obligations" of any Person shall mean all
obligations under Capital Leases of such Person or any of its Subsidiaries in
each case taken at the amount thereof accounted for as liabilities in accordance
with GAAP.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof) having maturities of
not more than
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three years from the date of acquisition, (ii) marketable direct obligations
issued by any State of the United States of America or any local government or
other political subdivision thereof rated (at the time of acquisition of such
security) at least AA by Standard & Poor's Corporation ("S&P") or the equivalent
thereof by Xxxxx'x Investors Service, Inc. ("Moody's") having maturities of not
more than one year from the date of acquisition, (iii) U.S. dollar denominated
time deposits, certificates of deposit and bankers' acceptances of (x) any Bank,
(y) any domestic commercial bank of recognized standing having capital and
surplus in excess of $250,000,000 or (z) any bank whose short-term commercial
paper rating (at the time of acquisition of such security) by S&P is at least
A-1 or the equivalent thereof or by Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank, an "Approved Bank"), in each case with maturities of not
more than six months from the date of acquisition, (iv) commercial paper and
variable or fixed rate notes issued by any Bank or Approved Bank or by the
parent company of any Bank or Approved Bank and commercial paper and variable
rate notes issued by, or guaranteed by, any industrial or financial company with
a short-term commercial paper rating (at the time of acquisition of such
security) of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody's, or guaranteed by any industrial company with
a long-term unsecured debt rating (at the time of acquisition of such security)
of at least AA or the equivalent thereof by S&P or the equivalent thereof by
Moody's and in each case maturing within one year after the date of acquisition
and (v) repurchase agreements with any Bank or any primary dealer maturing
within one year from the date of acquisition that are fully collateralized by
investment instruments that would otherwise be Cash Equivalents; provided that
the terms of such repurchase agreements comply with the guidelines set forth in
the Federal Financial Institutions Examination Council Supervisory Policy --
Repurchase Agreements of Depository Institutions With Securities Dealers and
Others, as adopted by the Comptroller of the Currency on October 31, 1985.
"Closing Date" shall mean August 14, 1996.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall mean all of the Intellectual Property
Collateral, Pledged Collateral and Mortgaged Real Property.
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"Collateral Agent" shall mean Indosuez in its capacity as
collateral agent for the Banks.
"Collective Bargaining Agreement" shall mean each Collective
Bargaining Agreement set forth on Schedule 5.19.
"Commitment Commission" shall have the meaning provided in
Section 2.03.
"Compliance Certificate" shall mean a certificate issued
pursuant to Section 6.01(f) signed by a chief financial officer, controller,
chief accounting officer or other Authorized Officer of the Borrower.
"Consolidated Amortization Expense" for any Person shall mean,
for any period, the consolidated amortization expense of such Person for such
period, determined on a consolidated basis for such Person and its Subsidiaries
in conformity with GAAP.
"Consolidated Capital Expenditures" of any Person shall mean,
for any period, the aggregate gross increase during that period, in the
property, plant or equipment reflected in the consolidated balance sheet of such
Person and its consolidated Subsidiaries, in conformity with GAAP, but excluding
expenditures made in connection with the replacement, substitution or
restoration of assets (i) to the extent financed from insurance proceeds paid on
account of the loss of or damage to the assets being replaced or restored, (ii)
with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced or (iii) with regard to equipment that
is purchased simultaneously with the trade-in of existing equipment, fixed
assets or improvements, the credit granted by the seller of such equipment for
the trade-in of such equipment, fixed assets or improvements; provided that
Consolidated Capital Expenditures shall in any event include the purchase price
paid in connection with the acquisition of any other Person (including through
the purchase of all of the capital stock or other ownership interests of such
Person or through merger or consolidation) to the extent allocable to property,
plant and equipment.
"Consolidated Depreciation Expense" for any Person shall mean,
for any period, the consolidated depreciation expense of such Person for such
period, determined on a consolidated basis for such Person and its consolidated
Subsidiaries in conformity with GAAP.
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"Consolidated EBITDA" for any Person shall mean, for any
period, the difference between (A) the sum of the amounts for such period of (i)
Consolidated Net Income, (ii) Consolidated Tax Expense, (iii) Consolidated
Interest Expense, (iv) Consolidated Amortization Expense, (v) Consolidated
Depreciation Expense and (vi) all other non-cash charges deducted in computing
Consolidated Net Income (with respect to clauses (ii) through (v), to the extent
such amounts were deducted in computing Consolidated Net Income) less (B) the
sum of the amounts for such period of (i) interest income to the extent included
in Consolidated Net Income and (ii) net gains on sales of assets to the extent
included in Consolidated Net Income, whether or not extraordinary (excluding
sales in the ordinary course of business), and other extraordinary gains plus
(C) net losses on sales of assets to the extent included in Consolidated Net
Income, whether or not extraordinary (excluding sales in the ordinary course of
business), and other extraordinary losses, plus (D) without duplication,
Consolidated Restructuring Expense to the extent included in Consolidated Net
Income, all as determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP.
"Consolidated EBITDAC" for any Person shall mean, for any
period, Consolidated EBITDA minus Consolidated Capital Expenditures for such
period.
"Consolidated Interest Expense" for any Person shall mean, for
any period, the sum of (x) total interest expense (including that attributable
to Capital Leases in accordance with GAAP) and (y) total cash dividends paid on
any preferred stock, in each case of such Person and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness and preferred
stock of such Person and its Subsidiaries, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, but excluding, however, any
amortization of deferred financing costs, all as determined on a consolidated
basis for such Person and its consolidated Subsidiaries in accordance with GAAP
minus any interest income. For purposes of clause (y) above, dividend
requirements shall be increased to an amount representing the pretax earnings
that would be required to cover such dividend requirements; accordingly, the
increased amount shall be equal to such dividend requirements multiplied by a
fraction, the numerator of which is such dividend requirement and the
denominator of which is 1 minus the applicable actual combined Federal, state,
local and foreign
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income tax rate of such Person and its subsidiaries (expressed as a decimal), on
a consolidated basis, for the fiscal year immediately preceding the date of the
transaction giving rise to the need to calculate Consolidated Interest Expense.
"Consolidated Net Income" for any Person shall mean, for any
period, the net income (or loss) of such Person and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined on a consolidated basis for such Person and its consolidated
Subsidiaries in conformity with GAAP; provided that there shall be excluded (i)
the income (or loss) of any other Person (other than consolidated Subsidiaries
of such Person) in which any third Person (other than such Person or any of its
consolidated Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such Person or any
of its Subsidiaries by such other Person during such period, (ii) the income (or
loss) of any other Person accrued prior to the date it becomes a consolidated
Subsidiary of such Person or is merged into or consolidated with such Person or
any of its consolidated Subsidiaries or such other Person's assets are acquired
by such Person or any of its consolidated Subsidiaries, and (iii) the income of
any consolidated Subsidiary of such Person to the extent that the declaration or
payment of dividends or similar distributions by that consolidated Subsidiary of
that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that consolidated Subsidiary.
"Consolidated Restructuring Expense" shall mean the
consolidated one-time charge of the Borrower and its Subsidiaries of not more
than $30.00 million made not later than December 31, 1997 relating to the
restructuring of operations, incomplete research and development write-downs and
other items related to the acquisitions of certain product lines from companies
related to X-Cardia Corporation, Microsurge, Inc., Xxxxx Medical Systems Ltd.,
PEBB Biopsy Corporation and other potential acquisitions identified to the
Agent; provided that such charge (a detailed account of which shall be provided
to the Agent as soon as it is available) shall be reasonably acceptable to the
Agent and, if such charge is not reasonably acceptable to the Agent, shall mean
$0.
"Consolidated Tax Expense" for any Person shall mean, for any
period, the consolidated tax expense of such Person for such period, determined
on a consolidated basis for such Person
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and its consolidated Subsidiaries in conformity with GAAP.
"Contingent Obligations" shall mean, as to any Person, without
duplication, any obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the maximum amount that such Person may be obligated to expend
pursuant to the terms of such Contingent Obligation or, if such Contingent
Obligation is not so limited, the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Credit Documents" shall mean (i) this Agreement, (ii) each
Note, (iii) each Guarantee and (iv) each Security Document.
"Credit Party" shall mean the Borrower and each Person (other
than the Banks and their respective Affiliates) party to the Credit Documents or
the Security Documents.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Deposit Account" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an
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account evidenced by a negotiable certificate of deposit.
"Destruction" has the meaning assigned to that term in the
Mortgages.
"Dividends" shall have the meaning provided in Section 7.08.
"Documents" shall mean each Credit Document.
"Dollars" or "$" means United States Dollars.
"Eligible Accounts Receivable" shall mean, as at any
applicable date of determination, the aggregate face amount of Borrower's and
each of its Subsidiaries' Accounts included in clause (i) of the definition of
Account hereunder (excluding any Accounts set forth in clause (ii) through (vi)
of such definition), without duplication, in each case less (without
duplication) the aggregate amount of all reserves, limits and deductions with
respect to such Accounts set forth below or as otherwise provided in this
Agreement and less the aggregate amount of all returns, discounts, claims,
credits, charges (including warehouseman's charges) and allowances of any nature
with respect to such Accounts (whether issued, owing, granted or outstanding).
Unless otherwise approved in writing by the Agent in its sole discretion (or, if
the aggregate amount of approvals exceeds $250,000 at any one time, the approval
of the Required Banks), no individual Account shall be deemed to be an Eligible
Account Receivable if:
(a) the Borrower or one of its Subsidiaries does not have
legal and valid title to the Account; or
(b) the Account is not the valid, binding and legally
enforceable obligation of the account debtor subject, as to
enforceability, only to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws at the time in effect
affecting the enforceability of creditors' rights generally and (ii)
judicial discretion in connection with the remedy of specific
performance and other equitable remedies; or
(c) the Account arises out of a sale made by the Borrower or
one of its Subsidiaries to an Affiliate of the Borrower; or
(d) the Account or any portion thereof is unpaid more
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than 90 days after the original invoice date, with respect to Accounts
the invoice for which provides that payment is due in 30 days or less
from the date of such invoice; or
(e) the Account is unpaid more than 60 days after the original
payment due date, with respect to Accounts the invoice for which
provides that payment is due more than 30 days from the date of such
invoice; or
(f) the Account, when aggregated with all other Accounts of
the same account debtor (or any Affiliate thereof), exceeds thirty
percent in face value of all Accounts of the Borrower then outstanding,
to the extent of such excess; or
(g) (i) the Account is subject to any claim on the part of the
account debtor disputing liability under such Account in whole or in
part, to the extent of the amount of such dispute or (ii) except in
cases when the account debtor is the United States government or an
agency thereof, the Account otherwise is or is reasonably likely to
become subject to any right of setoff or any counterclaim, claim or
defense by the account debtor, to the extent of the amount of such
setoff or counterclaim, claim or defense; or
(h) the account debtor has commenced a voluntary case under
the federal bankruptcy laws, as now constituted or hereafter amended,
or made an assignment for the benefit of creditors or if a decree or
order for relief has been entered by a court having jurisdiction in the
premises in respect of the account debtor in an involuntary case under
the federal bankruptcy laws, as now constituted or hereafter amended,
or if any other petition or other application for relief under the
federal bankruptcy laws has been filed by or against the account
debtor, or if the account debtor has failed, suspended business, ceased
to be solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; provided, however, that
if the amount owed to the Borrower by such account debtor is entitled
to administrative expense status under Xxxxxxx 000 xx Xxxxx 00, Xxxxxx
Xxxxxx Code, such account shall not be deemed ineligible pursuant to
this clause (h); or
(i) the Collateral Agent does not have a valid and perfected
first priority security interest in such Account (subject only to (i) a
tax lien being contested in good
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faith and by appropriate proceedings and permitted by Section 7.03(a)
and (ii) the rights of the United States government with respect to
receivables due from the United States government or any agency
thereof); or
(j) the sale to the account debtor is on a consignment,
xxxx-and-hold, sale on approval, guaranteed sale or sale-and-return
basis or pursuant to any written agreement providing for repurchase or
return rights not in the ordinary course of business; or
(k) it is from the same account debtor (or any Affiliate
thereof) and fifty percent (50%) or more, in face amount, of other
Accounts from either such account debtor or any Affiliate thereof are
due or unpaid for more than 60 days after the payment due date; or
(l) the Account is an Account a security interest in which
would be subject to the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. Section 3727 et seq.), unless the Borrower has
provided to the Agent notices in compliance with the provisions of such
Act; or
(m) the sale is to an account debtor outside the continental
United States or incorporated in or primarily conducting business in
any jurisdiction located outside the United States, unless the sale is
(i) on letter of credit, guaranty or acceptance terms, in each case
acceptable to the Agent, or (ii) otherwise approved by and acceptable
to the Agent, which approval and acceptance shall not, in either case,
be unreasonably withheld; or
(n) the Agent reasonably determines in good faith in
accordance with its internal credit policies that (i) collection of the
Account is insecure or (ii) the Account may not be paid by reason of
the account debtor's financial inability to pay; provided, however,
that any Account referred to in this clause (n) shall not become
ineligible until the Agent shall have given the Borrower five Business
Days' advance notice of such determination; or
(o) the Account does not comply in all material respects with
all applicable legal requirements, including, where applicable, the
Federal Consumer Credit Protection Act, the Federal Truth in Lending
Act and Regulation Z of the Board of Governors of the Federal Reserve
System, in each case as amended.
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"Eligible Assignee" means a commercial bank, financial
institution or other "accredited investor" (as defined in SEC Regulation D).
"Eligible Inventory" shall mean (A) the gross amount of the
Inventory of the Borrower and its Subsidiaries, valued at the lower of cost (on
a FIFO basis) or market, which (i) is owned solely by the Borrower or one of its
Subsidiaries and with respect to which the Borrower or one of its Subsidiaries
has good, valid and marketable title; (ii) is stored on property that is either
(a) owned or leased by the Borrower or one of its Subsidiaries or (b) owned or
leased by a warehouseman that has contracted with the Borrower or one of its
Subsidiaries to store Inventory on such warehouseman's property (provided that,
with respect to Inventory stored on property leased by the Borrower or one of
its Subsidiaries, the Borrower or one of its Subsidiaries shall have delivered
in favor of the Agent an acknowledgment agreement executed by the lessor of such
property, and, with respect to the Inventory stored on property owned or leased
by a warehouseman, the Borrower or one of its Subsidiaries shall have delivered
to the Agent acknowledgment agreements executed by such warehouseman); (iii) is
subject to a valid, enforceable and first priority Lien in favor of the
Collateral Agent subject to (a) a tax lien being contested in good faith and by
appropriate proceedings and permitted by Section 7.03(a), and (b) with respect
to Eligible Inventory stored at sites described in clause (ii)(b) above, Liens
for normal and customary warehouseman charges; and (iv) is located in the United
States; (B) less any goods returned or rejected by the Borrower's customers and
goods in transit to third parties (other than to the Borrower's agents or
warehousemen that comply with clause (A)(ii)(b) above); and (C) less any
reserves required by the Agent for special order goods and market value
declines. In addition to the foregoing, Eligible Inventory shall include such
items of the Borrower's Inventory as the Borrower shall request and that the
Agent approves in advance, in writing and in its sole discretion (or if the
aggregate amount of approvals exceeds $250,000 at any one time, the approval of
the Required Banks).
"Environmental Laws" means the common law and all federal,
state, local and foreign laws or regulations, codes, orders, decrees, judgments
or injunctions issued, promulgated, approved or entered thereunder, now or
hereafter in effect, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or
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threatened releases of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous constituents, substances or wastes, including, without limitation,
petroleum, including crude oil or any fraction thereof, or any petroleum product
(collectively referred to as "Hazardous Materials"), into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), (ii) the manufacture, processing, distribution,
use, generation, treatment, storage, disposal, transport or handling of
Hazardous Materials, and (iii) underground and aboveground storage tanks, and
related piping, and emissions, discharges, releases or threatened releases
therefrom.
"Equipment" shall mean all of the Equipment (as defined in the
Security Agreements) secured by the Security Agreements.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time. Section references to ERISA are to ERISA
as in effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any entity, whether or not
incorporated, which is under common control or would be considered a single
employer with the Borrower within the meaning of Section 414(b), (c), (m) or (o)
of the Code and regulations promulgated under those sections or within the
meaning of section 4001(b) of ERISA and regulations promulgated under that
section.
"Event of Default" shall have the meaning provided in Section
8.
"Excess" shall have the meaning set forth in Section
3.02(A)(b).
"Federal Funds Rate" means on any one day the weighted average
of the rate on overnight Federal funds transactions with members of the Federal
Reserve System only arranged by Federal funds brokers as published as of such
day by the Federal Reserve Bank of New York, or if not so published, the rate
then used by first-class banks in extending overnight loans to other first-class
banks.
"Final Maturity Date" shall mean the last Business Day of
March, 2002.
"Financing Proceeds" means the cash (other than Net
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Cash Proceeds) received by any Credit Party, directly or indirectly, from any
financing transaction of whatever kind or nature, including without limitation
from any incurrence of Indebtedness, any mortgage or pledge of an asset or
interest therein (including a transaction which is the substantial equivalent of
a mortgage or pledge), from the sale of tax benefits, from a lease to a third
party and a pledge of the lease payments due thereunder to secure Indebtedness,
from an exchange of assets and a sale of the assets received in such exchange,
or any other similar arrangement or technique whereby a Credit Party obtains
Cash in respect of an asset, net of direct costs associated therewith.
"FIRREA" means the Financial Institutions Reform, Recovery &
Enforcement Act of 1989, as amended from time to time, and any successor
statute.
"Foreign Pension Plan" shall mean any Pension Plan or other
deferred compensation plan, program or arrangement maintained by any Subsidiary
of the Borrower organized under the laws of a jurisdiction other than the United
States of America or any state thereof which, under applicable law, is required
to be funded through a trust or other funding vehicle.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, it being understood and agreed that determinations
in accordance with GAAP for purposes of Section 7, including defined terms as
used therein, are subject (to the extent provided therein) to Section 11.07(a).
"General Security Agreements" shall mean and include, once
executed and delivered the Borrower General Security Agreement and the
Subsidiary General Security Agreement.
"Governmental Authority" means any federal, state, local,
foreign or other governmental or administrative (including self-regulatory)
body, instrumentality, department or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission, or other similar
dispute-resolving panel or body including, without limitation, those governing
the regulation and protection of the environment, whether now or hereafter in
existence, or any officer or official thereof.
"Guarantees" shall mean each guarantee of the Borrower's
Obligations hereunder made by the Guarantors in favor of the Banks, pursuant to
the Guarantee Agreements, substantially in the form of Exhibit D annexed hereto.
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"Guarantors" shall mean the parties guaranteeing the
Borrower's Obligations hereunder pursuant to the Guarantee Agreements.
"Inactive Subsidiaries" means NT Reudt Corporation, Advanced
Urocare, Inc., Intermed Associates, Inc. and Laparomed Corporation.
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed by such first Person (but the
amount of such Indebtedness, for all calculations hereunder, will not exceed the
lesser of (i) the amount of Indebtedness of such second Person so secured and
(ii) the fair market value of the property of such first Person securing such
Indebtedness), (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, and (vii) all obligations of such Person under Interest Rate
Agreements; provided that Indebtedness shall not include trade payables, accrued
expenses, accrued dividends, accrued income taxes and other similar current
liabilities, in each case arising in the ordinary course of business.
"Indosuez" shall mean Banque Indosuez, New York Branch.
"Intellectual Property Collateral" shall mean all the Pledged
Collateral as defined in the Intellectual Property Security Agreements.
"Intellectual Property Security Agreements" shall mean and
include, once executed and delivered, the Subsidiary Intellectual Property
Security Agreement.
"Intercompany Notes" shall mean demand promissory notes in
form, scope and substance satisfactory to the Agent evidencing intercompany
Indebtedness of any Wholly Owned Subsidiary of the Borrower to the Borrower or
of the Borrower to any Wholly Owned
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Subsidiary of the Borrower.
"Interest Period" shall mean, with respect to any LIBOR Loan,
the interest period applicable thereto, as determined pursuant to Section 1.08.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate futures contract, interest rate option contract or other similar agreement
or arrangement to which the Borrower is a party, designed to protect the
Borrower or any of its Subsidiaries against fluctuations in interest rates.
"Interest Rate Determination Date" shall mean each date for
calculating LIBOR for purposes of determining the interest rate in respect of
the Interest Period. The Interest Rate Determination Date shall be the second
Business Day prior to the first day of the related Interest Period for a LIBOR
Loan.
"Inventory" shall mean all of the inventory of Borrower
including without limitation: (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in Borrower's
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale or lease or leased or furnished or to be furnished under contracts of
service; and (iii) all goods returned or repossessed by Borrower.
"Lease" shall mean any lease, sublease, franchise agreement,
license, occupancy or concession agreement.
"LIBOR" means, with respect to any LIBOR Loan for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the rate at which U.S. dollar deposits approximately equal
in principal amount to the applicable Loan of the Agent, in its capacity as a
Bank, included in such LIBOR Loan and for a maturity comparable to such Interest
Period are offered to the principal London office of the Agent in the London
interbank market at approximately 11:00 A.M., London time, on the Interest Rate
Determination Date for such LIBOR Loan.
"LIBOR Loan" shall mean each Loan bearing interest at a rate
determined by reference to Adjusted LIBOR in accordance with the provisions of
Section 1.08(b) hereof.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, claim, hypothecation, assignment for
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security or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"Loan" shall mean each and every Revolving Loan.
"Loan Facility" shall mean the credit facility evidenced by
the Total Revolving Loan Commitment.
"Materially Adverse Effect" means (i) with respect to the
Borrower, any materially adverse effect (both before and after giving effect to
the financing contemplated hereby and by the other Documents) with respect to
the operations, business, properties, assets, liabilities (contingent or
otherwise) or financial condition or prospects of the Borrower and its
Subsidiaries, taken as a whole, or (ii) any fact or circumstance (whether or not
the result thereof would be covered by insurance) as to which singly or in the
aggregate there is a reasonable likelihood of (w) a materially adverse change
described in clause (i) with respect to the Borrower and its Subsidiaries, taken
as a whole, or (x) the inability of the Borrower to perform in any material
respect its Obligations hereunder or under any of the other Documents or the
inability of the Banks to enforce in any material respect their rights purported
to be granted hereunder or under any of the other Documents or the Obligations
(including realizing on the Collateral), or (y) a materially adverse effect on
the ability to effect (including hindering or unduly delaying) the transactions
contemplated hereby and by the Documents on the terms contemplated hereby and
thereby.
"Minimum Borrowing Amount" shall mean $100,000.
"Mortgage" shall mean a term loan and revolving credit
mortgage (or deed of trust), assignment of rents, security agreement and fixture
filing creating and evidencing a Lien on a Mortgaged Real Property, which shall
be substantially in the form of Exhibit F hereto, containing such schedules and
including such additional provisions and other deviations from such Exhibit as
shall be necessary to conform such document to applicable or local law or as
shall be customary under local law and made and which shall be dated the date of
delivery thereof and made by the owner of the Mortgaged Real Property described
therein for the benefit of the Collateral Agent, as grantee or beneficiary,
assignee and secured party, as the same may at any time be amended, modified or
supplemented in accordance with the terms thereof and hereof.
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"Mortgaged Real Property" shall mean each Real Property which
shall become subject to a Mortgage.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA with respect to which the Borrower or any of its
ERISA Affiliates is or has been required to contribute or otherwise may have
liability.
"Net Award" shall have the meaning assigned to that term in
each Mortgage.
"Net Cash Proceeds" shall mean:
(a) with respect to any Asset Sale, the aggregate cash
payments received by the Borrower or any of the Borrower's
Subsidiaries, as the case may be, from such Asset Sale, net of direct
expenses (including income taxes) of sale;
(b) with respect to any Taking or Destruction, the Net Award
or Net Proceeds, as applicable, resulting therefrom, to be applied as
Net Cash Proceeds under this Agreement pursuant to the applicable
provisions of any Mortgage; and
(c) with respect to any loss of title to all or any portion of
any Mortgaged Real Property, any title insurance proceeds resulting
therefrom, to be applied as Net Cash Proceeds under this Agreement
pursuant to the applicable provisions of any Mortgage;
provided, further, that Net Cash Proceeds shall not include any amounts or items
included in the definition of Financing Proceeds or Net Financing Proceeds
(including in any proviso appearing therein or exclusion therefrom).
"Net Financing Proceeds" means Financing Proceeds, net of
direct expenses (including income taxes), of the transaction.
"Net Proceeds" shall have the meaning assigned to that term in
each Mortgage.
"Notes" shall mean any Revolving Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
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"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document or secured by any of the Security Documents.
"Office" shall mean the office of the Agent located at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office as the
Agent may hereafter designate in writing as such to the other parties hereto.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its Chairman of the
Board (if an officer) or its President or one of its Vice Presidents and by its
Chief Financial Officer or its Treasurer or any Assistant Treasurer (in such
Person's capacity as an officer and not individually); provided that every
Officers' Certificate with respect to compliance with a condition precedent to
the making of any Loan hereunder shall include (i) a statement that the officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to enable
them to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers based on the foregoing, such condition has been complied with.
"Old Credit Agreement" has the meaning set forth in the
recitals hereto.
"Operating Lease" of any Person shall mean any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) by such Person as
Lessee which is not a Capital Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan" means any pension plan as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) which is or has been maintained
by or to which contributions are or have been made by the Borrower or any of its
ERISA Affiliates or as to which the Borrower or any of its ERISA Affiliates may
have
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liability.
"Permitted Encumbrances" shall have the meaning provided in
Section 7.03.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Pledge Agreements" shall mean and include, once executed and
delivered, the Borrower Securities Pledge Agreement and the Subsidiary
Securities Pledge Agreement.
"Pledged Collateral" shall mean all the Pledged Collateral as
defined in the General Security Agreements and in the Pledge Agreements.
"Pledged Securities" shall have the meaning assigned to that
term in the Pledge Agreements.
"Prior Liens" shall mean Liens which, pursuant to the
provisions of any Security Document, are or may be superior to the Lien of such
Security Document.
"Real Property" shall mean all right, title and interest of
Borrower or any of its Subsidiaries (including, without limitation, any
leasehold estate) in and to a parcel of real property owned or operated by the
Borrower or any of its Subsidiaries together with, in each case, all
improvements and appurtenant fixtures, equipment, personal property, easements
and other property and rights incidental to the ownership, lease or operation
thereof.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing
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margin requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Required Banks" shall mean at any time Banks holding at least
51% of the Total Revolving Loan Commitments held by the Banks; provided that for
the purposes of Section 4, the requirement that any document, agreement,
certificate or other writing is to be satisfactory to the Required Banks shall
be satisfied if (x) such document, agreement, certificate or other writing was
delivered in its final form to the Banks prior to the Amendment Date (or if
amended or modified thereafter, the Agent has reasonably determined such
amendment or modification not to be material), (y) such document, agreement,
certificate or other writing is satisfactory to the Agent and (z) Banks holding
more than 51% of the Total Revolving Loan Commitments held by Banks have not
objected in writing to such document, agreement, certificate or other writing to
the Agent and the Borrower prior to the Amendment Date.
"Restoration" shall have the meaning assigned to that term in
each Mortgage.
"Revolving Loan Commitment" shall mean, with respect to each
Bank, the amount set forth below such Bank's name on the signature pages hereto
directly below the column entitled "Revolving Loan Commitment," as same may be
reduced from time to time pursuant to Sections 2.01, 2.02, 3.02 and/or 8.
"Revolving Loans" shall have the meaning provided in Section
1.01(b).
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"SEC Regulation D" shall mean Regulation D as
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promulgated under the Securities Act, as the same may be in effect from time to
time.
"Secured Parties" shall have the meaning specified in the
Security Documents.
"Securities" shall mean any stock, shares, voting trust
certificates, bonds, debentures, options, warrants, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Documents" shall mean each of the Mortgages, the
Pledge Agreements, the General Security Agreements, the Intellectual Property
Security Agreements and any other documents utilized to pledge any other
property or assets of whatever kind or nature as Collateral for the Obligations,
as such documents may after their execution be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"State and Local Real Property Disclosure Requirements" means
any state or local laws requiring notification of the buyer of real property, or
notification, registration, or filing to or with any state or local agency,
prior to the sale of any real property or transfer of control of an
establishment, of the actual or threatened presence or release into the
environment, or the use, disposal, or handling of Hazardous Materials on, at,
under, or near the real property to be sold or the establishment for which
control is to be transferred.
"Statutory Reserves" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board of Governors of the Federal Reserve System
of the United States or by any other Governmental Authority, domestic or
foreign, with jurisdiction over the Agent or any Bank (including any branch,
Affiliate or other funding office thereof making or holding a Loan) with respect
to Adjusted
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LIBOR applicable to any Borrowing, for any category of liabilities which
includes deposits by reference to which Adjusted LIBOR in respect of such
Borrowing is determined. Such reserve percentages shall include those imposed
pursuant to Regulation D. For purposes of this definition, LIBOR Loans shall be
deemed to constitute "Eurocurrency Liabilities" within the meaning of Regulation
D and to be subject to such reserve requirements without benefit of or credit
for proration, exemptions or offsets which may be available from time to time to
any Bank under Regulation D. Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
"Sublease" shall have the meaning provided in the Mortgages.
"Subordinated Debenture Indenture" means the Indenture related
to the Subordinated Debentures, as amended to date.
"Subordinated Debentures" means the Borrower's 8.75%
Convertible Subordinated Debentures due May 30, 2006.
"Subordinated Note Indenture" means the Indenture pursuant to
which the Company issued the Subordinated Notes, in the form of Exhibit M
hereto.
"Subordinated Notes" has the meaning set forth in the recitals
hereto.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a 50% equity interest at the time.
"Subsidiary General Security Agreement" shall mean the
Subsidiary General Security Agreement substantially in the form of Exhibit H-2
hereto, and any other general security agreement delivered by a Guarantor
pursuant to Section 6.13 or 6.14.
"Subsidiary Intellectual Property Security Agreement"
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shall mean the Subsidiary Intellectual Property Security Agreement substantially
in the form of Exhibit G hereto, and any other intellectual property security
agreement delivered by a Guarantor pursuant to Section 6.13 or 6.14.
"Subsidiary Securities Pledge Agreement" shall mean the
Subsidiary Securities Pledge Agreement substantially in the form of Exhibit E-2
hereto, and any other securities pledge agreement delivered by a Guarantor
pursuant to Section 6.13 or 6.14.
"Survey" means a survey of any Mortgaged Real Property (and
all improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state where such Mortgaged Real Property is located, (ii)
dated (or redated) not earlier than six months prior to the date of delivery
thereof unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such Mortgaged Real Property,
in which event such survey shall be dated (or redated) after the completion of
such construction or if such construction shall not have been completed as of
such date of delivery, not earlier than 20 days prior to such date of delivery,
(iii) certified by the surveyor (in a manner reasonably acceptable to the
Collateral Agent) to Collateral Agent and the Title Company and (iv) complying
in all respects with the minimum detail requirements of the American Land Title
Association as such requirements are in effect on the date of preparation of
such survey.
"Taking" has the meaning assigned to that term in each
Mortgage.
"Taxes" shall have the meaning provided in Section 3.04.
"Termination Event" means (i) a "reportable event" described
in Section 4043 of ERISA or in the regulations thereunder (excluding events for
which the requirement for notice of such reportable event has been waived by
regulation by the PBGC) with respect to a Title IV Plan, or (ii) the withdrawal
of the Borrower or any of its ERISA Affiliates from a Title IV Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a Title IV Plan amendment as a termination
under Section 4041 of ERISA, or (iv) the institution of proceedings by the PBGC
to terminate a Title IV Plan or to appoint a trustee to administer a Title IV
Plan, or (v) any other event or condition which might
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constitute reasonable grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Title IV Plan, or (vi)
the complete or partial withdrawal (within the meaning of Sections 4203 and
4205, respectively, of ERISA) of the Borrower or any of its ERISA Affiliates
from a Multiemployer Plan, or (vii) the insolvency or reorganization (within the
meaning of Sections 4245 and 4241, respectively, of ERISA) or termination of any
Multiemployer Plan, or (viii) the failure to make any payment or contribution to
any Pension Plan or Multiemployer Plan or the making of any amendment to any
Pension Plan which could result in the imposition of a lien or the posting of a
bond or other security.
"Test Period" means the shorter of (i) the four consecutive
complete fiscal quarters of the Borrower then last ended or (ii) the period of
all complete fiscal quarters of the Borrower since the Amendment Date; provided
that for purposes of this clause (ii), the first fiscal quarter of the Borrower
shall be deemed to be the period from April 1, 1997 to June 30, 1997.
"Title Company" shall mean First American Title Insurance
Company or such other title insurance or abstract company as shall be designated
by the Required Banks.
"Title IV Plan" means any Pension Plan (other than a
Multiemployer Plan) described in Section 4021(a) of ERISA, and not excluded
under Section 4021(b) of ERISA.
"Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitment of each of the Banks.
"Type" shall mean a Base Rate Loan or LIBOR Loan.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York.
"Voting Stock" means all classes of capital stock of a
corporation then outstanding and normally entitled to vote in the election of
directors.
"Wholly-Owned Subsidiary" of any Person shall mean any
Subsidiary of such Person to the extent all of the capital stock or other
ownership interests in such Subsidiary, other than directors' or nominees'
qualifying shares, is owned directly or indirectly by such Person.
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"written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier device, telegraph
or cable.
SECTION 10. The Agent and the Collateral Agent.
10.01 Appointment. Each Bank hereby irrevocably designates and
appoints Indosuez as Agent and Collateral Agent of such Bank to act as specified
herein and in the other Credit Documents and each such Bank hereby irrevocably
authorizes each such agent to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to such agent by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent and the Collateral Agent
agree to act as such upon the express conditions contained in this Section 10.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent and the Collateral Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in the other Credit Documents, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against such agent. The provisions of this Section
10 are solely for the benefit of such agent and the Banks, and no Credit Party
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the Agent
and the Collateral Agent shall act solely as an agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for any Credit Party. The Borrower hereby agrees to pay
the Agent an annual agency fee of $50,000, payable quarterly in arrears.
10.02 Delegation of Duties. Each of the Agent and the
Collateral Agent may execute any of its duties under this Agreement or any other
Credit Document by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. No agent
shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 10.03.
10.03 Exculpatory Provisions. Neither the Agent, the
Collateral Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i)
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liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Banks for any recitals, statements, representations or warranties by the
Borrower, any Subsidiary of the Borrower or any of their respective officers
contained in this Agreement, any other Document or in any certificate, report,
statement or other document referred to or provided for in, or received by such
agent under or in connection with, this Agreement or any other Document or for
any failure of the Borrower, any Subsidiary of the Borrower or any of their
respective officers to perform its obligations hereunder or thereunder. Neither
the Agent nor the Collateral Agent shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any Subsidiary of the Borrower.
Neither the Agent nor the Collateral Agent shall be responsible to any Bank for
the effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by such agent to the Banks or by or on behalf of the Borrower,
any of its Subsidiaries or any Guarantor to such agent or any Bank or be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Default or Event of Default.
10.04 Reliance by the Agent or the Collateral Agent. The Agent
and the Collateral Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by them to be
genuine and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Credit Parties), independent accountants and other experts
selected by such agent. The Agent and the Collateral Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Document unless they shall first
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receive such advice or concurrence of the Required Banks as they deem
appropriate or they shall first be indemnified to their satisfaction by the
Banks against any and all liability and expense which may be incurred by them by
reason of taking or continuing to take any such action. The Agent and the
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Banks (or to the extent specifically
provided in Section 11.12, all the Banks), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Banks.
10.05 Notice of Default. Neither the Agent nor the Collateral
Agent shall be deemed to have knowledge of the occurrence of any Default or
Event of Default, other than a default in the payment of principal or interest
on the Loans hereunder unless it has received notice from a Bank or the Borrower
or any other Credit Party referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". In
the event that an agent receives such a notice, such agent shall give prompt
notice thereof to the Banks. Such agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Banks; provided that, unless and until such agent shall have received such
directions, such agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
10.06 Non-Reliance on Agent, Collateral Agent and Other Banks.
Each Bank expressly acknowledges that neither the Agent, the Collateral Agent
nor officers, directors, employees, agents, attorneys-in-fact or affiliates of
any agent has made any representations or warranties to it and that no act by
any agent hereafter taken, including any review of the affairs of the Borrower
or any Subsidiary of the Borrower, shall be deemed to constitute any
representation or warranty by such agent to any Bank. Each Bank represents to
each agent that it has, independently and without reliance upon any such agent
or any other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement and the other
agreements contemplated hereby. Each Bank also represents that it will,
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independently and without reliance upon any agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Banks by any agent hereunder, no agent
shall have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, operations, assets, property,
financial and other conditions, prospects or creditworthiness of the Borrower or
any of its Subsidiaries which may come into the possession of any such agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.07 Indemnification. The Banks agree to indemnify each of
the Agent and the Collateral Agent in its capacity as such or in any other
representative capacity under any other Credit Document, ratably according to
their aggregate Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against each such agent in
its capacity as such in any way relating to or arising out of this Agreement or
any other Credit Document, or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action taken or omitted to
be taken by any such agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by Borrower or any of
its Subsidiaries; provided that no Bank shall be liable to the Agent or the
Collateral Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from any such agent's gross
negligence or willful misconduct. If any indemnity furnished to an agent for any
purpose shall, in the opinion of such agent, be insufficient or become impaired,
the agent may call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished. The
agreements in this Section 10.07 shall survive the payment of all Obligations.
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10.08 The Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and other Affiliates of the Borrower as
though such agent were not an agent hereunder. With respect to the Loans made by
it and all Obligations owing to it, the Agent shall have the same rights and
powers under this Agreement as any Bank and may exercise the same as though it
were not an agent, and the terms "Bank" and "Banks" shall include such agent in
its individual capacity.
10.09 Successor Agents. Upon the acceptance of any appointment
as an Agent hereunder by a successor Agent or as a Collateral Agent by a
successor Collateral Agent, the term "Agent" or "Collateral Agent," as the case
may be, shall include such successor agent effective upon its appointment, and
the resigning Agent's or Collateral Agent's, as the case may be, rights, powers
and duties as Agent or Collateral Agent, as the case may be, shall be
terminated, without any other or further act or deed on the part of such former
agent or any of the parties to this Agreement. After the retiring Agent's or
Collateral Agent's, as the case may be, resignation hereunder as Agent or the
Collateral Agent, as the case may be, the provisions of this Section 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent or Collateral Agent, as the case may be, under this Agreement.
10.10 Resignation, Transfer by Agent. (A) An Agent or a
Collateral Agent may resign from the performance of all its functions and duties
hereunder at any time by giving 15 Business Days' prior written notice to the
Borrower and the Banks. Such resignation shall take effect upon the acceptance
by a successor Agent or Collateral Agent, as the case may be, of appointment
pursuant to subsections B and C below or as otherwise provided below.
(B) Upon any such notice of resignation of an agent, the
Required Banks shall appoint a successor agent acceptable to the Borrower and
which shall be an incorporated bank or trust company or other qualified
financial institution with operations in the United States and total assets of
at least $1 billion.
(C) If a successor agent shall not have been so appointed
within said 15 Business Day period, the resigning agent with the consent of the
Borrower shall then appoint a successor agent (which shall be an incorporated
bank or trust company or other qualified financial institution with operations
in the United States and total assets of at least $1 billion) who shall
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serve as a successor agent until such time, if any, as the Required Banks
appoint a successor agent as provided above.
(D) If no successor agent has been appointed pursuant to
subsection B or C by the 20th Business Day after the date such notice of
resignation was given by the resigning agent, such agent's resignation shall
become effective and the Required Banks shall thereafter perform all the duties
of agent hereunder until such time, if any, as the Required Banks appoint a
successor agent as provided above.
(E) Notwithstanding anything to the contrary contained in this
Section 10, Indosuez, as Agent and Collateral Agent, may transfer its rights and
obligations to perform all of its functions and duties hereunder to its parent
company or to any Affiliate of it or its parent company.
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SECTION 11. Miscellaneous.
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11.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses (x) of the Agent and the Collateral
Agent in connection with the negotiation, preparation, execution and delivery of
the Credit Documents (including the Amendment) and the documents and instruments
referred to therein and any amendment, waiver or consent relating thereto
(including, without limitation, the reasonable fees and disbursements of Xxxxxx
Xxxxxx & Xxxxxxx and local counsel to the Agent and the Borrower) and (y) of the
Collateral Agent and each of the Banks in connection with the enforcement of the
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and disbursements of counsel
for the Collateral Agent and each of the Banks) and the reasonable fees and
expenses of any appraisers or any consultants or other advisors engaged with
prior notice to the Borrower of any such engagement; (ii) pay and hold the
Collateral Agent and each of the Banks harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save the Collateral Agent and each of the Banks harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to the Collateral Agent or such
Bank) to pay such taxes; (iii) indemnify the Collateral Agent and each Bank, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses (including, without limitation, any and all losses, liabilities,
claims,damages or expenses arising under Environmental Laws) incurred by any of
them as a result of, or arising out of, or in any way related to, or by reason
of, any investigation, litigation or other proceeding (whether or not the
Collateral Agent or any Bank is a party thereto) related to the entering into
and/or performance of any Document or the use of the proceeds of any Loans
hereunder or the consummation of any other transactions contemplated in any
Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified); and (iv) pay
all reasonable out-of-pocket costs and expenses of Indosuez in connection with
the assignment to any other Person of all or any portion of Indosuez's interest
under this Agreement pursuant to Section 11.04.
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11.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to any
Credit Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of such Credit Party to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations of such Credit Party purchased
by such Bank pursuant to Section 11.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured; as a courtesy to the Borrower, the Borrower
shall receive notice of such set-off.
11.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to the Borrower or any
of the Guarantors, to UroHealth Systems, Inc., 0000 Xxxxxxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000, Attention: President and Chief Executive Officer, Facsimile
Number: (000) 000-0000, with a copy to: Xxxxxxxx & Xxxxxxxx, 00000 XxxXxxxxx
Xxxx., Xxxxxx, Xxxxxxxxxx 00000-0000, Attention: Xxxxxx X. Xxxxxx, Facsimile
Number: (000) 000-0000, or if to another Credit Party, to its address specified
in the other relevant Credit Documents, as the case may be; if to any Bank, at
its address specified for such Bank on Annex II hereto; or, at such other
address as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective two days after being deposited in the mails, when delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
when delivered by telex or telecopier, except that notices and communications to
the Agent, the Borrower or the Guarantors shall not be effective
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until received by such party.
11.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto, all future holders of the Notes, and their respective successors and
assigns; provided that no Credit Party may assign or transfer any of its
interests hereunder without the prior written consent of the Banks; and
provided, further, that the rights of each Bank to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth below in this Section 11.04; provided that nothing in this Section
11.04 shall prevent or prohibit any Bank from (i) pledging its Loans hereunder
to a Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank and (ii) granting participations in or assignments of such
Bank's Loans, Notes and/or Revolving Loan Commitments hereunder to its parent
company and/or to any Affiliate of such Bank that is at least 50% owned by such
Bank or its parent company.
(b) Each Bank shall have the right to transfer, assign or
grant participations in all or any part of its remaining Loans, Notes and/or
Commitments hereunder on the basis set forth below in this clause (b). Each Bank
may furnish any information concerning the Borrower in the possession of such
Bank from time to time to assignees and participants (including prospective
assignees and participants).
(A) Assignments. Each Bank, with the written consent of the
Agent, which shall not be unreasonably withheld, which shall be
evidenced on the notice in the form of Exhibit I-1 hereto, may assign
pursuant to an Assignment Agreement substantially in the form of
Exhibit I-2 hereto all or a portion of its Loans, Notes and/or
Revolving Loan Commitments hereunder pursuant to this clause (b)(A) to
(x) one or more Banks or (y) one or more Eligible Assignees; provided,
however, that any such assignment pursuant to this clause (y) shall not
be less than $500,000. Any assignment pursuant to this clause (b)(A)
will become effective after the Agent's receipt of (i) a written notice
in the form of Exhibit I-1 hereto from the assigning Bank and the
assignee Bank or Eligible Assignee, as the case may be, and (ii) a
processing and recordation fee of $2,000 from the assigning Bank in
connection with the Agent's recording of such sale, assignment,
transfer or negotiation; provided that such fee shall only be payable
if the assignment is between a Bank and a party that is not a Bank
prior to the assignment. The
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Borrower shall issue new Notes to the assignee Bank or Eligible
Assignee, as the case may be, in conformity with Section 1.05 and the
assignor shall return the old Notes to the Borrower. Upon the
effectiveness of any assignment in accordance with this clause (b)(A),
the assignee, if not a Bank, will become a "Bank" for all purposes of
this Agreement and the other Credit Documents and, to the extent of
such assignment, the assigning Bank shall be relieved of its
obligations hereunder with respect to the Commitments being assigned.
The Agent shall maintain at its address specified in Annex II hereto a
copy of each Assignment Agreement delivered to and accepted by it and a
register in which it shall record the names and addresses of the Banks
and the Commitment of, and principal amount of the Loans owing to, each
Bank from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent demonstrable
error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Agent or any Bank at any reasonable
time and from time to time upon reasonable prior notice.
(B) Participations. Each Bank may transfer, grant or assign
participations in all or any part of such Bank's Loans, Notes and/or
Commitments hereunder pursuant to this clause (b)(B) to any Person;
provided that (i) such Bank shall remain a "Bank" for all purposes of
this Agreement and the transferee of such participation shall not
constitute a Bank hereunder and (ii) no participant under any such
participation shall have rights to approve any amendment to or waiver
of this Agreement or any other Credit Document except to the extent
such amendment or waiver would (x) change the scheduled final maturity
date of any of the Loans, Notes or Commitments in which such
participant is participating or (y) reduce the principal amount,
interest rate or fees applicable to any of the Loans, Notes or
Commitments in which such participant is participating or postpone the
payment of any interest or fees or (z) release all or substantially all
of the Collateral. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of
the other Credit Documents (the participant's rights against the
granting Bank in respect of such participation to be those set forth in
the agreement with such Bank creating such participation) and all
amounts payable by the Borrower hereunder shall be
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determined as if such Bank had not sold such participation; provided
that such participant shall be considered to be a "Bank" for purposes
of Sections 11.02 and 11.06(b).
11.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of any Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and any Agent or any Bank shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power, or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which any Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any Agent
or the Banks to any other or further action in any circumstances without notice
or demand.
11.06 Payments Pro Rata. (a) The Agent agrees that promptly
after its receipt of each payment from or on behalf of any Credit Party in
respect of any Obligations of such Credit Party, it shall distribute such
payment to the Banks pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligations
then owed and due to such Bank bears to the total of such Obligations then owed
and due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Credit Party to such Banks in such amount as shall result in a proportional
participation by all of the Banks in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price
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restored to the extent of such recovery, but without interest.
11.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by Borrower to the Banks); provided that, except as otherwise specifically
provided herein, all computations determining compliance with Section 7 and all
definitions used herein for any purpose (including Section 1.08(d)) shall
utilize accounting principles and policies in effect at the time of the
preparation of, and in conformity with those used to prepare, the historical
financial statements delivered to the Banks pursuant to Section 4.01(H).
(b) All computations of interest and fees hereunder shall be
made on the actual number of days elapsed over a year of 365 days; provided that
all computations of Commitment Commission and interest on LIBOR Loans shall be
made on the actual number of days elapsed over a year of 360 days.
11.08 Governing Law; Submission to Jurisdiction; Venue. (a)
This Agreement and the rights and obligations of the parties hereunder shall be
construed and enforced in accordance with and be governed by the laws of the
State of New York applicable to contracts made and to be performed wholly
therein. Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the courts of the State of New York or
of the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, each Credit Party hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. Each Credit Party further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the respective Credit Party at
its address for notices pursuant to Section 11.03, such service to become
effective 30 days after such mailing. Each Credit Party hereby irrevocably
appoints the Borrower and such other persons as may hereafter be selected by
Borrower irrevocably agreeing in writing to serve as its agent for service of
process in respect of any such action or proceeding. Nothing herein shall affect
the right of the Agent or any Bank to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any Credit Party in any other jurisdiction.
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(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
11.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Agent.
11.10 Effectiveness. This Agreement shall become effective on
the date on which each of the Borrower and the Guarantors and each of the Banks
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered the same to the Agent at its Office or, in the case of the Banks,
shall have given to the Agent telephonic (confirmed in writing), written, telex
or telecopy notice (actually received) at such office that the same has been
signed and mailed to it. The Agent will give the Borrower and each Bank prompt
written notice of the effectiveness of this Agreement.
11.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
11.12 Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Required Banks; provided that no such change, waiver,
discharge or termination shall, without the consent of each affected Bank and
the Agent, (i) extend the scheduled final maturity date of any Loan, or any
portion thereof, or reduce the rate or extend the time of payment of interest
thereon or fees or reduce the principal amount thereof, or increase the
Revolving Loan Commitments of any Bank over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of
114
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Default or of a mandatory reduction in the Total Revolving Loan Commitment shall
not constitute a change in the terms of any Commitment of any Bank), (ii)
release all or substantially all of the Collateral (except as expressly
permitted by the Credit Documents), (iii) amend, modify or waive any provision
of this Section, or Section 1.10, 1.11, 3.04, 10.07, 11.01, 11.02, 11.04, 11.06
or 11.07(b), (iv) reduce any percentage specified in, or otherwise modify, the
definition of Required Banks or (v) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under this Agreement. No
provision of Section 10 may be amended without the consent of the Agent.
11.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.11, 3.04, 10.07 or 11.01, shall survive the
execution and delivery of this Agreement and the making of the Loans, the
repayment of the Obligations and the termination of the Total Revolving Loan
Commitments.
11.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or Affiliate of
such Bank; provided that in doing so such Bank will use its commercially
reasonable efforts to mitigate any resulting increase in withholding tax
obligations.
11.15 Waiver of Jury Trial. Each of the parties to this
agreement hereby irrevocably waives all right to a trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement, the
Credit Documents or the transactions contemplated hereby or thereby.
11.16 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amended and Restated Revolving Credit Agreement to be duly
executed and delivered as of the date first above written.
UROHEALTH SYSTEMS, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
Guarantors: ALLSTATE MEDICAL PRODUCTS, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
DACOMED CORPORATION
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
DACOMED INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
GATES PLASTIC
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
116
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UROHEALTH, INC. (CALIFORNIA)
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
UROHEALTH OF KENTUCKY, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
XXXXX MEDICAL SYSTEMS LTD.
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
117
Amended and Restated Revolving Credit Agreement among
UroHealth Systems, Inc., Banque Indosuez
and the Banks listed herein
BANQUE INDOSUEZ, NEW YORK BRANCH
as Agent and Collateral Agent
By: /s/ XXXX X. SABRE
--------------------------------
Name: Xxxx X. Sabre
Title: First Vice President
By: /s/ XXXXXXXX FRANTEEL
--------------------------------
Name: Xxxxxxxx Franteel
Title: First Vice President
Revolving Loan Commitment: $50,000,000
118
ANNEX I
List of Banks
Banque Indosuez, New York Branch
119
ANNEX II
Bank Addresses
Banque Indosuez, New York Branch
1211 Avenue of the Americas - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
