Exhibit 10.1
[FIRST UNION LOGO]
LOAN AGREEMENT
First Union National Bank
000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000 (Hereinafter
referred to as the "Bank")
Q-Med, Inc.
000 Xxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxxx, Xxx Xxxxxx 00000
(Individually and collectively "Borrower")
This Loan Agreement ("Agreement") is entered into September 11, 2001, by and
between Bank and Borrower.
This Agreement applies to the loan or loans (individually and collectively, the
"Loan") evidenced by one or more promissory notes dated September 11, 2001 or
other notes subject hereto, as modified from time to time (whether one or more,
the "Note") and all Loan Documents. The terms "Loan Documents" and
"Obligations," as used in this Agreement, are defined in the Note.
Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:
REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: Accurate Information. All
information now and hereafter furnished to Bank is and will be true, correct and
complete. Any such information relating to Borrower's financial condition will
accurately reflect Borrower's financial condition as of the dates) thereof,
(including all contingent liabilities of every type), and Borrower further
represents that its financial condition has not changed materially or adversely
since the dates) of such documents. Authorization; Non-Contravention. The
execution, delivery and performance by Borrower and any guarantor, as
applicable, of this Agreement and other Loan Documents to which it is a party
are within its power, have been duly authorized as may be required and, if
necessary, by making appropriate filings with any governmental agency or unit
and are the legal, binding, valid and enforceable obligations of Borrower and
any guarantors; and do not (i) contravene, or constitute (with or without the
riving of notice or lapse of time or both) a violation of any provision of
applicable law, a violation of the organizational documents of Borrower or any
guarantor, or a default under any agreement, judgment, injunction, order, decree
or other instrument binding upon or affecting Borrower or any guarantor, (ii)
result in the creation or imposition of any lien (other than the lien(s) created
by the Loan Documents) on any of Borrower's or any guarantor's assets, or (iii)
give cause for the acceleration of any obligations of Borrower or any guarantor
to any other creditor. Asset Ownership. Borrower has good and marketable title
to all of the properties and assets reflected on the balance sheets and
financial statements supplied Bank by Borrower, and all such properties and
assets are free and clear of mortgages, security deeds, pledges, liens, charges,
and all other encumbrances, except as otherwise disclosed to Bank by Borrower in
writing and approved by Bank ("Permitted Liens"). To Borrower's knowledge, no
default has occurred under any Permitted Liens and no claims or interests
adverse to Borrower's present rights in its properties and assets have arisen.
Discharge of Liens and Taxes. Borrower has duly filed, paid and/or discharged
all taxes or other claims which may become a lien on any of its property or
assets, except to the extent that such items are being appropriately contested
in good faith and an adequate reserve for the payment thereof is being
maintained. Sufficiency of Capital. Borrower is not, and after consummation of
this Agreement and after giving effect to all indebtedness incurred and liens
created by Borrower in connection with the Note and any other Loan Documents,
will not be, insolvent within the meaning of 11 U.S.C. ss. 101 (32). Compliance
with Laws. Borrower is in compliance in all respects with all federal, state and
local laws, rules and
regulations applicable to its properties, operations, business, and finances,
including, without limitation, any federal or state laws relating to liquor
(including 18 U.S.C. ss. 3617, et seq.) or narcotics (including 21 U.S.C. ss.
801, et seq.) and/or any commercial crimes; all applicable federal, state and
local laws and regulations intended to protect the environment; and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), if applicable.
Organization and Authority. Each corporate or limited liability company Borrower
and/or guarantor, as applicable, is duly created, validly existing and in good
standing under the laws of the state of its organization, and has all powers,
governmental licenses, authorizations, consents and approvals required to
operate its business as now conducted. Each corporate or limited liability
company Borrower and/or guarantor, as applicable, is duly qualified, licensed
and in good standing in each jurisdiction where qualification or licensing is
required by the nature of its business or the character and location of its
property, business or customers, and in which the failure to so qualify or be
licensed, as the case may be, in the aggregate, could have a material adverse
effect on the business, financial position, results of operations, properties or
prospects of Borrower or any such guarantor. No Litigation. There are no pending
or threatened suits, claims or demands against Borrower or any guarantor that
have not been disclosed to Bank by Borrower in writing, and approved by Bank.
Regulation U. None of the proceeds of the credit extended pursuant to this
Agreement shall be used directly or indirectly for the purpose of purchasing or
carrying any margin stock in violation of any of the provisions of Regulation U
of the Board of Governors of the Federal Reserve System ("Regulation U"), or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry margin stock or for any other purchase which might
render the Loan a "Purpose Credit" within the meaning of Regulation U.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: Access to Books and Records. Allow Bank, or its agents,
during normal business hours, access to the books, records and such other
documents of Borrower as Bank shall reasonably require, and allow Bank to make
copies thereof at Bank's expense. Business Continuity. Conduct its business in
substantially the same manner and locations as such business is now and has
previously been conducted. Compliance with Other Agreements. Comply with all
terms and conditions contained in this Agreement, and any other Loan Documents,
and swap agreements, if applicable, as defined in the 11 U.S.C. ss. 101.
Estoppel Certificate. Furnish, within 15 days after request by Bank, a written
statement duly acknowledged of the amount due under the Loan and whether offsets
or defenses exist against the Obligations. Insurance. Maintain adequate
insurance coverage with respect to its properties and business against loss or
damage of the kinds and in the amounts customarily insured against by companies
of established reputation engaged in the same or similar businesses including,
without limitation, commercial general liability insurance, workers compensation
insurance, and business interruption insurance; all acquired in such amounts and
from such companies as Bank may reasonably require. Maintain Properties.
Maintain, preserve and keep its property in good repair, working order and
condition, making all needed replacements, additions and improvements thereto,
to the extent allowed by this Agreement. Notice of Default and Other Notices.
(a) Notice of Default. Furnish to Bank immediately upon becoming aware of the
existence of any condition or event which constitutes a Default (as defined in
the Loan Documents) or any event which, upon the giving of notice or lapse of
time or both, may become a Default, written notice specifying the nature and
period of existence thereof and the action which Borrower is taking or proposes
to take with respect thereto. (b) Other Notices. Promptly notify Bank in writing
of (i) any material adverse change in its financial condition or its business;
(ii) any default under any material agreement, contract or other instrument to
which it is a party or by which any of its properties are bound, or any
acceleration of the maturity of any indebtedness owing by Borrower; (iii) any
material adverse claim against or affecting Borrower or any part of its
properties; (iv) the commencement of, and any material determination in, any
litigation with any third party or any proceeding before any governmental agency
or unit affecting Borrower; and (v) at least 30 days prior thereto, any change
in Borrower's name or address as shown above, and/or any change in Borrower's
structure. Other Financial Information. Deliver promptly such other information
regarding the operation, business affairs, and financial condition of Borrower
which Bank may reasonably request. Payment of Debts. Pay and discharge when due,
and before subject to penalty or further charge, and otherwise satisfy before
maturity or delinquency, all obligations, debts, taxes, and liabilities of
whatever nature or amount, except those which Borrower in good faith disputes.
Reports and Proxies. Deliver to Bank, promptly, a copy of all financial
statements,
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reports, notices, and proxy statements, sent by Borrower to stockholders, and
all regular or periodic reports required to be filed by Borrower with any
governmental agency or authority.
NEGATIVE COVENANTS. Borrower agrees that from the date of this Agreement and
until final payment in full of the Obligations, unless Bank shall otherwise
consent in writing, Borrower will not: Default on Other Contracts or
Obligations. Default on any material contract with or obligation when due to a
third party or default in the performance of any obligation to a third party
incurred for money borrowed. Government Intervention. Permit the assertion or
making of any seizure, vesting or intervention by or under authority of any
government by which the management of Borrower or any guarantor is displaced of
its authority in the conduct of its respective business or its such business is
curtailed or materially impaired. Judgment Entered. Permit the entry of any
monetary judgment or the assessment against, the filing of any tax lien against,
or the issuance of any writ of garnishment or attachment against any property of
or debts due. Retire or Repurchase Capital Stock. Retire or otherwise acquire
any of its capital stock unless approved by the Board of Directors.
FINANCIAL DATA REQUIREMENTS. Borrower shall deliver to the Bank within 120 days
after the close of each fiscal year a copy of its 10K report as required to be
filed under the Securities and Exchange Act of 1934 and any amendments and
modifications thereto.
Borrower shall deliver to the Bank within 60 days after the close of each fiscal
quarter a copy of its 10Q report as required to be filed under the Securities
and Exchange Act of 1934 and any amendments and modifications thereto.
Borrower shall provide to Bank copies of all other reports required to be filed
by the Borrower under the Securities and Exchange Act of 1934 and any amendments
and modifications thereto.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing, using the financial information for Borrower, its
subsidiaries, affiliates and its holding or parent company, as applicable:
Tangible Net Worth. Borrower shall, at all times, maintain a Tangible Net Worth
of not less than $2,000,000.00. "Tangible Net Worth" shall mean total assets
minus total liabilities. For purposes of this computation, the aggregate amount
of any intangible assets of Borrower including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, and brand names, shall be subtracted from total assets, and total
liabilities shall include debt fully subordinated to Bank.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances
pursuant to this Agreement are subject to the following conditions precedent:
Additional Documents. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request.
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IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
Q-Med, Inc.
By:
-------------------------------------(SEAL)
Xxxxxxx X. Xxx, President and Treasurer
First Union National Bank
By:
-------------------------------------(SEAL)
Xxxxxx Xxxxxxxxx, Senior Vice President
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