Exhibit 10.3
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of March 29, 1999
among
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Lenders,
FLEET CAPITAL CORPORATION,
as Agent,
INTEGRA NEUROCARE LLC
AND THE OTHER PERSONS NAMED HEREIN,
as Borrowers
and
INTEGRA NEUROCARE LLC,
as Borrowing Agent
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as of the
29th day of March, 1999, by and among FLEET CAPITAL CORPORATION ("Fleet"), a
Rhode Island corporation with an office at One North Franklin Street, Suite
3600, Chicago, Illinois 60606, individually as a lender hereunder and in its
capacity as agent (in such capacity, the "Agent") for itself and any other
financial institution that is or becomes a lender hereunder (Fleet, in its
individual capacity as a lender, and each such other financial institution are
sometimes referred to herein individually as a "Lender" and collectively as the
"Lenders"); INTEGRA NEUROCARE LLC ("Integra"), a Delaware limited liability
company, REDMOND NEUROCARE LLC ("Redmond"), a Delaware limited liability
company, HEYER-SCHULTE NEUROCARE, INC. ("Neurocare Inc."), a Delaware
corporation, and CAMINO NEUROCARE, INC. ("Camino"), a Delaware corporation
(Integra, Redmond, Neurocare Inc. and Camino are sometimes referred to herein
individually as a "Borrower" and collectively as "Borrowers"), and Integra, in
its capacity as borrowing agent (in such capacity, "Borrowing Agent") for itself
and the other Borrowers; and, solely for purposes of Section 1A.1, HEYER-SCHULTE
NEUROCARE, L.P., ("Neurocare L.P."), a Delaware limited partnership, and NEURO
NAVIGATIONAL, L.L.C. ("Navigational"), a Delaware limited liability company
(Neurocare L.P. and Navigational are sometimes referred to herein individually
as an "Assigning Seller" and collectively as "Assigning Sellers"). Capitalized
terms used in this Agreement have the meanings assigned to them in Appendix A,
General Definitions. Accounting terms not otherwise specifically defined herein
shall be construed in accordance with GAAP consistently applied.
W I T N E S S E T H:
WHEREAS, the Assigning Sellers, Neurocare Inc., Camino and Fleet have
previously entered into that certain Loan and Security Agreement dated as of
January 8, 1998 (such Loan and Security Agreement, without giving effect to the
amendment and restatement thereof contemplated hereby, being hereinafter
referred to as the "Original Loan Agreement");
WHEREAS, pursuant to the "Integra Acquisition Documents" (as
hereinafter defined), (i) Integra has acquired all of the issued and outstanding
capital stock of Camino and Neurocare Inc.; (ii) Integra and Redmond,
respectively, have acquired substantially all of the assets of the Assigning
Sellers; (iii) Integra and Redmond have assumed on a joint and several basis
certain obligations and liabilities of the Assigning Sellers, including, without
limitation, all of the Assigning Sellers' "Original Obligations" (as hereinafter
defined); and (iv) the Assigning Sellers have assigned to Integra and Redmond on
a joint and several basis certain rights and remedies of Assigning Sellers,
including, without limitation, all of the rights and remedies of the Assigning
Sellers under the Original Loan Agreement;
WHEREAS, in connection with respective transactions contemplated by the
Integra Acquisition Documents, upon the terms and subject to the conditions set
forth herein, Borrowers, Borrowing Agent, Lenders, Agent and, solely for
purposes of Section 1A.1, Assigning Sellers,
have agreed to enter into this Agreement, in order, among other things, to (i)
amend and restate the Original Loan Agreement in its entirety; (ii) join Integra
and Redmond as parties thereunder; (iii) re-evidence, ratify and confirm the
joint and several Obligations of Borrowers outstanding on the date hereof under
the Original Loan Agreement, which Obligations shall be repayable hereafter in
accordance with the respective terms and provisions hereof; (iv) release the
Assigning Sellers from their respective obligations and liabilities thereunder;
and (iv) set forth the terms and conditions under which Lenders will from time
to time hereafter make further loans and extensions of credit to or for the
account of the respective Borrowers; and
WHEREAS, it is the intention of Borrowers, Borrowing Agent, Lenders,
Agent and Assigning Sellers that this Agreement not constitute a novation;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowing Agent, Borrowers, Agent,
Lenders and Assigning Sellers agree as follows:
SECTION 1A. ASSIGNMENT AND ASSUMPTION; AMENDMENT AND
RESTATEMENT OF ORIGINAL LOAN AGREEMENT.
1A.1 ASSIGNMENT BY ASSIGNING SELLERS AND ASSUMPTION BY INTEGRA AND REDMOND.
Effective as of the Amendment Effective Date, (a) each of the Assigning
Sellers hereby assigns and delegates to Integra and Redmond on a joint and
several basis all of such Assigning Seller's respective rights, remedies, duties
and other Obligations under the Original Loan Agreement and each of the other
Loan Documents in its capacity as a debtor, obligor, grantor, mortgagor,
pledgor, guarantor, indemnitor and assignor and all other similar capacities, if
any, in which such Assigning Seller incurred Obligations under the Original Loan
Agreement and the other Loan Documents and granted Liens to Agent or any Lender
on any of such Assigning Seller's real or personal property; (b) Integra and
Redmond hereby accept such assignment and delegation and hereby assume on a
joint and several basis all of such duties and other Obligations; (c) subject to
the terms and conditions of this Agreement, Agent and each of the Lenders hereby
(v) acknowledge and consent to the foregoing assignment, delegation and
assumption; (w) acknowledge and agree that each of Integra and Redmond shall
have the same rights, benefits and obligations in its capacity as a Borrower
under this Agreement and the other Loan Documents as if it were the original
debtor, obligor, grantor, mortgagor, pledgor, guarantor or indemnitor, as the
case may be, thereunder; (x) represent to each of Integra and Redmond that, to
their knowledge, as of the Amendment Effective Date, no Event of Default has
occurred and is continuing; (y) acknowledge and agree that none of the Assigning
Sellers, Saba Medical Group, L.P., Saba Medical Management Co., Inc.,
Continental Illinois Venture Corporation, John R. Willis, Avy H. Stein, Daniel
G. Helle, Marcus D. Wedner, Roderick, G. Johnson, Pamela S. Johnson as custodian
for Brittany A.S. Johnson, Pamela S. Johnson as custodian for Kathryn E.S.
Johnson and Randolph Street Partners shall have any further obligation or
liability under the Original Loan Agreement or any of the other Loan Documents
(as defined therein) and (z) acknowledge and agree that the "Excluded Assets",
including the "Purchase Price" (as such terms are defined in the Integra Asset
Purchase Agreement) and other amounts payable to the
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Assigning Sellers, are released from the Lien of the Original Loan Agreement and
the other Loan Documents (as defined therein) and that, as soon as reasonably
practicable hereafter, the Agent shall execute and file UCC partial release
statements evidencing such release, and hereafter shall at the sole cost and
expense of the Assigning Sellers promptly take such other actions as are
reasonably requested by the Assigning Sellers to give effect to or carry out the
intent of this clause (z).
1A.2 AMENDMENT AND RESTATEMENT OF ORIGINAL LOAN AGREEMENT; NO NOVATION.
(a) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of the respective Borrowers set
forth herein and in the other Loan Documents, effective as of the date hereof,
the Original Loan Agreement is hereby amended and restated in its entirety and,
from and after the date hereof, all references herein to "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Original
Loan Agreement, as amended hereby.
(b) It is expressly understood and agreed by each of the parties hereto
that (i) the Obligations (as such term is defined herein) include all
"Obligations" (as defined in the Original Loan Agreement) owing on the date
hereof (the "Original Obligations"), (ii) the Original Obligations shall be
payable hereafter in accordance with the respective terms and provisions hereof
and (iii) that this Agreement (x) merely re-evidences, ratifies and confirms the
Original Obligations and (y) is in no way intended and shall not be deemed or
construed to constitute a novation of the Original Loan Agreement.
SECTION 1. CREDIT FACILITIES
1.1 Revolving Credit Loans.
(a) Loans. Each Lender agrees, for so long as no Default or
Event of Default exists, to make Revolving Credit Loans to Borrowers from time
to time, as requested by Borrowing Agent in the manner set forth in subsection
3.1(a) hereof, up to a maximum principal amount at any time outstanding equal to
the lesser at such time of (i) such Lender's Revolving Loan Commitment and (ii)
the product of such Lender's Revolving Loan Percentage multiplied by the
Borrowing Base, minus, in the case of both clauses (i) and (ii) above, (x) such
Lender's Revolving Loan Percentage of the LC Amount and (y) such Lender's
Revolving Loan Percentage of any Reserves. Agent shall have the right to
establish reserves in such amounts as Agent shall reasonably deem necessary or
appropriate in its reasonable credit judgment, against the amount of Revolving
Credit Loans which Borrowers may otherwise request under this subsection 1.1(a)
with respect to (i) sums chargeable against the Loan Account as Revolving Credit
Loans under any section of this Agreement; and (ii) amounts owing by any
Borrower to any other Person to the extent secured by a Lien on, or trust over,
any Collateral deemed eligible under the definition of the term Borrowing Base
(collectively, "Reserves").
If Borrowing Agent requests that Lenders make, or permit to remain
outstanding, Revolving Credit Loans in an aggregate amount in excess of the
Borrowing Base less the
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amounts described in clauses (x) and (y) above (such Revolving Credit Loans in
excess of the Borrowing Base less the amounts described in clauses (x) and (y)
above being referred to as "Excess Revolving Credit Loans"), (i) Agent may in
its discretion elect to cause all Lenders, and all Lenders agree, to make, or
permit to remain outstanding, Excess Revolving Credit Loans in an aggregate
amount not exceeding at any time $500,000 and (ii) Majority Lenders may in their
discretion elect to cause all Lenders, and all Lenders agree, to make, or permit
to remain outstanding, Excess Revolving Credit Loans in an aggregate amount not
exceeding at any time $1,000,000, provided that neither Agent nor Majority
Lenders may cause Lenders to make, or permit to remain outstanding, aggregate
Revolving Credit Loans in excess of the Revolving Loan Commitment. Excess
Revolving Credit Loans may not remain outstanding for more than ninety (90) days
during any one hundred eighty (180) day period.
(b) Use of Proceeds. The Revolving Credit Loans shall be used
solely (i) to pay costs and expenses of Borrowers incurred in connection with
the transactions contemplated by the Integra Acquisition Documents and (ii) for
Borrowers' working capital requirements and other general corporate purposes, in
each case in a manner consistent with the provisions of this Agreement and all
applicable laws.
1.2 Term Loans.
Each Lender agrees to maintain outstanding hereunder a portion of the
aggregate principal amount of the "Term Loans" outstanding on the date hereof
under the Original Loan Agreement in an amount equal to such Lender's Term Loan
Percentage multiplied by $11,000,000. The Term Loans shall be repayable in
accordance with the terms of the Term Notes and shall be secured by all of the
Collateral. The proceeds of the Term Loans shall be used solely for purposes for
which the proceeds of the Revolving Credit Loans are authorized to be used.
1.3 Letters of Credit; LC Guaranties.
Agent agrees, for so long as no Default or Event of Default exists and
if requested by Borrowers, to (i) issue its, or cause to be issued by an
Affiliate of Agent, Letters of Credit for the account of any Borrower or (ii)
execute LC Guaranties by which Agent or an Affiliate of Agent shall guaranty the
payment and performance by any Borrower of its reimbursement obligations with
respect to Letters of Credit and letters of credit issued for a Borrower's
account by other Persons in support of such or any other Borrower's obligations
(other than obligations for the repayment of Money Borrowed), provided, that the
LC Amount at any time shall not exceed $250,000. No Letter of Credit or LC
Guarantee may have an expiration date that occurs within 60 days immediately
prior to the last day of the Term. No documentary Letter of Credit or LC
Guarantee covering a documentary Letter of Credit shall have an expiration date
that occurs more than 180 days after the date of issuance thereof. No standby
Letter of Credit shall have an expiration date more than one year after the date
of issuance thereof but may be subject to annual renewal. Each Lender shall be
deemed to have purchased a participation in each Letter of Credit or LC Guaranty
issued on behalf of any Borrower in an amount equal to such Lender's Aggregate
Percentage thereof. Any amounts paid by Agent or any Lender under any LC
Guaranty or in connection with any Letter of Credit shall be treated as
Revolving Credit Loans, shall be secured
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by all of the Collateral and shall bear interest and be payable at the same rate
and in the same manner as Base Rate Revolving Credit Portions.
SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest
(a) Rates of Interest. Interest shall accrue on the principal
amount of the Base Rate Revolving Credit Portion and the Base Rate Term Portion
outstanding at the end of each day at a fluctuating rate per annum equal to the
Applicable Margin plus the Base Rate. The foregoing rate of interest shall
increase or decrease by an amount equal to any increase or decrease in the Base
Rate, effective as of the opening of business on the day that any such change in
the Base Rate occurs. If Borrowers properly exercise the LIBOR Option as
provided in Section 2.3, interest shall accrue on the principal amount of the
LIBOR Revolving Credit Portions and the LIBOR Term Portions outstanding at the
end of each day at a rate per annum equal to the Applicable Margin plus the
LIBOR Rate applicable to each LIBOR Portion for the corresponding LIBOR Period.
(b) Default Rate of Interest Upon and after the occurrence of
an Event of Default, and during the continuation thereof, at the option of Agent
or Majority Lenders, the principal amount of all Loans and all other amounts
which are then due and payable shall bear interest at a rate per annum equal to
2.0% plus the interest rate otherwise applicable thereto (the "Default Rate").
(c) Maximum Interest. In no event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under the Term Notes and
charged or collected pursuant to the terms of this Agreement or pursuant to the
Term Notes exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
If any provisions of this Agreement are in contravention of any such law, such
provisions shall be deemed amended to conform thereto.
2.2 Computation of Interest and Fees.
Interest, Letter of Credit and LC Guaranty fees and unused line fees
hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days. For the purpose of computing interest
hereunder and under the Term Notes, all items of payment received by Agent shall
be deemed applied by Agent on account of the Obligations (subject to final
payment of such items) one Business Day after receipt by Agent of such items in
Agent's account located in Chicago, Illinois.
2.3 LIBOR Option.
(a) Upon the conditions that: (1) Agent shall have received a
LIBOR Request from Borrowing Agent at least 3 Business Days prior to the first
day of the LIBOR Period requested, (2) there shall have occurred no change in
applicable law which would make it unlawful for any Lender to obtain deposits of
U.S. dollars in the London interbank foreign currency deposits market, (3) as of
the date of the LIBOR Request and the first day of the
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LIBOR Period, there shall exist no Default or Event of Default, (4) Agent is
able to determine the LIBOR Rate in respect of the requested LIBOR Period, (5)
each Lender is able to obtain deposits of U.S. dollars in the London interbank
foreign currency deposits market in the applicable amounts and for the requested
LIBOR Period, and (6) as of the first date of the LIBOR Period, there are no
more than five outstanding LIBOR Portions including the LIBOR Portion being
requested; then interest on the LIBOR Portion requested during the LIBOR Period
requested will be based on the applicable LIBOR Rate.
(b) Each LIBOR Request shall be irrevocable and binding on the
Borrowers. Borrowers shall indemnify jointly and severally each Lender for any
loss, penalty or expense incurred by such Lender due to failure on the part of
Borrowers to fulfill, on or before the date specified in any LIBOR Request, the
applicable conditions set forth in this Agreement or due to the prepayment of
the applicable LIBOR Portion prior to the last day of the applicable LIBOR
Period, including, without limitation, any loss (excluding loss of anticipated
profits) or expense incurred by reason of the liquidation or redeployment of
deposits or other funds acquired by any Lender to fund or maintain the requested
LIBOR Portion.
(c) If any Legal Requirement shall (1) make it unlawful for
any Lender to fund through the purchase of U.S. dollar deposits any LIBOR
Portion or otherwise give effect to its obligations as contemplated under this
Section 2.3, or (2) shall impose on any Lender any costs based on or measured by
the excess above a specified level of the amount of a category of deposits or
other liabilities of such Lender which includes deposits by reference to which
the LIBOR Rate is determined as provided herein or a category of extensions of
credit or other assets of such Lender which includes any LIBOR Portion or (3)
shall impose on any Lender any restrictions on the amount of such a category of
liabilities or assets which such Lender may hold, then, in each such case, such
Lender may, by notice thereof to Borrowing Agent, terminate the LIBOR Option.
Any LIBOR Portion subject thereto shall immediately bear interest thereafter at
the rate and in the manner provided for Base Rate Portions pursuant to
subsection 2.1(a). Borrowers shall indemnify jointly and severally each Lender
against any loss (excluding loss of anticipated profits), penalty or expense
incurred by such Lender due to liquidation or redeployment of deposits or other
funds acquired by such Lender to fund or maintain any LIBOR Portion that is
terminated hereunder.
(d) Each Lender shall receive payments of amounts of principal
of and interest with respect to the LIBOR Portions free and clear of, and
without deduction for, any Taxes. If (1) any Lender shall be subject to any Tax
in respect of any LIBOR Portion or any part thereof or, (2) any Borrower shall
be required to withhold or deduct any Tax from any such amount, the LIBOR Rate
applicable to such LIBOR Portion shall be adjusted by Agent on behalf of the
affected Lender to reflect all additional costs incurred by such Lender in
connection with the payment by such Lender or the withholding by any Borrower of
such Tax and Borrowing Agent shall provide Agent and such Lender with a
statement detailing the amount of any such Tax actually paid by any Borrower.
Determination by Agent on behalf of a Lender of the amount of such costs shall,
in the absence of manifest error, be conclusive. If after any such adjustment
any part of any Tax paid by any Lender is subsequently recovered by such Lender,
such Lender shall reimburse Borrowers to the extent of the amount so recovered.
A certificate of an officer of such
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Lender setting forth the amount of such recovery and the basis therefor shall,
in the absence of manifest error, be conclusive.
2.4 Agent Fees.
Borrowers shall pay to Agent, for the respective accounts of Fleet and
Agent, certain fees in the amounts and at the times, in each case as set forth
in the Fee Letter.
2.5 Letter of Credit and LC Guaranty Fees.
Borrowers shall pay to Agent for the ratable benefit of Lenders:
(a) for standby Letters of Credit and LC Guaranties of standby
Letters of Credit, 2.50% per annum of the aggregate face amount of such Letters
of Credit and LC Guaranties outstanding from time to time during the term of
this Agreement, plus all normal and customary charges associated with the
issuance thereof; and
(b) for documentary Letters of Credit and LC Guaranties of
documentary Letters of Credit, a fee equal to 2.50% per annum of the face amount
of each such Letter of Credit or LC Guaranty, plus the normal and customary
charges associated with the issuance thereof.
All of the foregoing Letter of Credit and LC Guaranty fees shall be
payable monthly in arrears on the first day of each calendar month hereafter.
2.6 Unused Line Fee.
Borrowers shall pay to Agent for the ratable benefit of Lenders having
a Revolving Loan Commitment monthly in arrears on the first day of each calendar
month hereafter a fee equal to 1/2 of 1.0% per annum of the average daily amount
determined for such month by which $4,000,000 exceeds the sum of the outstanding
principal balance of the Revolving Credit Loans plus the LC Amount.
2.7 Capital Adequacy.
If any Lender shall have determined that the adoption after the date of
this Agreement of any law, rule or regulation regarding capital adequacy, or any
change after the date of this Agreement therein or in the interpretation or
application thereof or compliance by any Lender with any request or directive
after the date of this Agreement regarding capital adequacy (whether or not
having the force of law) from any central bank or governmental authority, does
or shall have the effect of reducing the rate of return on such Lender's capital
as a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount reasonably deemed by such Lender to be material, then from time to
time, after submission by such Lender to Agent and Borrowers of a written demand
therefor, Borrowers shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction. A certificate of such Lender
claiming entitlement to
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payment as set forth above shall be conclusive in the absence of manifest error.
Such certificate shall set forth the nature of the occurrence giving rise to
such payment, the additional amount or amounts to be paid to such Lender, and
the method by which such amounts were determined. In determining such amount,
such Lender may use any reasonable averaging and attribution method.
2.8 Audit and Appraisal Fees.
Borrowers shall pay to Agent fees in connection with periodic visits to
the places of business of the respective Borrowers to perform financial and
collateral analysis an amount equal to $250 per day for each Person employed to
perform each such analysis plus all out-of-pocket expenses incurred by Agent,
provided, that, if an Event of Default exists, Borrowers shall also pay all
out-of-pocket expenses of each Lender in connection with any such visits by such
Lender. Audit fees shall be payable on the first day of the month following the
date of issuance by Agent of a request for payment thereof to Borrowing Agent.
2.9 Reimbursement of Expenses.
If, at any time or times regardless of whether or not an Event of
Default then exists, Agent, and, if an Event of Default exists, any Lender or
any Participating Lender, incurs legal or accounting expenses or any other costs
or out-of-pocket expenses in connection with (i) the negotiation and preparation
of this Agreement or any of the other Loan Documents, any amendment of or
modification of this Agreement or any of the other Loan Documents, or any sale
or attempted sale of any interest herein to a Participating Lender; (ii) the
administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby; (iii) any litigation, contest,
dispute, suit, proceeding or action (whether instituted by Agent, any Lender,
any Borrower, any Guarantor or any other Person) in any way relating to the
Collateral, this Agreement or any of the other Loan Documents or any Borrower's
affairs; provided, that Borrowers shall have no obligation to Agent or any
Lender pursuant to this clause (iii) with respect to any such expenses incurred
as a result of the gross negligence or wilful misconduct of such Person as
determined by a court of competent jurisdiction in a final judgment no longer
subject to appeal; (iv) any attempt to enforce any rights of Agent, any Lender
or any Participating Lender against any Borrower, any Guarantor or any other
Person which may be obligated to any Lender by virtue of this Agreement or any
of the other Loan Documents, including, without limitation, the Account Debtors;
or (v) any attempt to inspect, verify, protect, preserve, restore, collect,
sell, liquidate or otherwise dispose of or realize upon the Collateral; then all
such legal and accounting expenses, other costs and out of pocket expenses of
Agent, and, if an Event of Default exists, any Lender or any Participating
Lender shall be charged to Borrowers. All amounts chargeable to Borrowers under
this Section 2.9 shall be Obligations secured by all of the Collateral, shall be
payable on demand to Agent for distribution, if applicable, to the applicable
Lender or Participating Lender, and shall bear interest from the date such
demand is made until paid in full at the rate applicable to Base Rate Revolving
Credit Portions from time to time. Borrowers shall also reimburse Agent and each
Lender for expenses incurred by Agent or such Lender in its administration of
the Collateral to the extent and in the manner provided in Section 5 hereof.
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2.10 Bank Charges.
Borrowers shall pay to Agent, on demand, for distribution to the
applicable Lenders any and all fees, costs or expenses which any Lender or any
Participating Lender pays to a bank or other similar institution (including,
without limitation, any fees paid by any Lender to any other Lender or any
Participating Lender) arising out of or in connection with (i) the forwarding to
Borrowing Agent, any Borrower or any other Person on behalf of Borrowing Agent
or any Borrower, by any Lender or any Participating Lender, of proceeds of the
Loans or other extensions of credit made by any Lender to any Borrower pursuant
to this Agreement and (ii) the depositing for collection, by any Lender or any
Participating Lender, of any check or item of payment received or delivered to
such Lender or such Participating Lender on account of the Obligations.
2.11 Payment of Charges
All amounts chargeable to Borrowers under subsections 2.3(b), (c) and
(d) and Sections 2.7, 2.9 and 2.10 hereof shall be Obligations secured by all of
the Collateral, shall be payable on demand and shall bear interest from the date
of such demand until paid in full at the rate applicable to Base Rate Revolving
Credit Portions from time to time.
SECTION 3. LOAN ADMINISTRATION
3.1 Manner of Borrowing Revolving Credit Loans
Borrowings under the credit facility established pursuant to Section 1
hereof shall be as follows:
(a) Loan Requests. A request for a Revolving Credit Loan shall
be made, or shall be deemed to be made, in the following manner: (i) Borrowing
Agent shall give Agent notice of any Borrower's intention to borrow, in which
notice the Borrowing Agent shall specify the amount of the proposed borrowing
(which shall be no less than $100,000 in the case of Base Rate Portions and
$500,000 or a multiple of $100,000 in excess thereof in the case of LIBOR
Portions) and the proposed borrowing date, no later than 11:00 a.m. Chicago,
Illinois, time on the proposed borrowing date (or in accordance with Section 2.3
hereof in the case of a request for a LIBOR Portion), provided, however, that no
such request may be made at a time when there exists a Default or an Event of
Default; and (ii) the becoming due of any amount required to be paid under this
Agreement or under the Term Notes, whether as interest or for any other
Obligation, shall be deemed irrevocably to be a request for a Revolving Credit
Loan on the due date in the amount required to pay such interest or other
Obligation.
(b) Disbursement. The Borrowing Agent and each of the
Borrowers hereby irrevocably authorize and direct Agent to disburse the proceeds
of each Revolving Credit Loan requested, or deemed to be requested, pursuant to
this subsection 3.1(b) as follows: (i) the proceeds of each Revolving Credit
Loan requested under subsection 3.1(a)(i) shall be disbursed by Agent in lawful
money of the United States of America in immediately available funds, in the
case of the initial borrowing, in accordance with the terms of the written
disbursement letter from Borrowing Agent, and in the case of each subsequent
borrowing, by wire transfer to such bank
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account as may be agreed upon by Borrowing Agent and Agent from time to time or
elsewhere if pursuant to a written direction from the Borrowing Agent; and (ii)
the proceeds of each Revolving Credit Loan requested under subsection 3.1(a)(ii)
shall be disbursed by Agent by way of direct payment of the relevant interest or
other Obligation.
(c) Payment by Lenders. Agent shall give to each Lender prompt
written notice by facsimile, telex or cable of the receipt by Agent from
Borrowing Agent of any request for a Revolving Credit Loan. Each such notice
shall specify the requested date and amount of such Revolving Credit Loan,
whether such Revolving Credit Loan shall be subject to the LIBOR Option, and the
amount of each Lender's advance thereunder (in accordance with its applicable
Revolving Loan Percentage). Each Lender shall, not later than 12:00 noon
(Chicago time) on such requested date, wire to a bank designated by Agent the
amount of that Lender's Revolving Loan Percentage of the requested Revolving
Credit Loan. The failure of any Lender to make the Revolving Credit Loans to be
made by it shall not release any other Lender of its obligations hereunder to
make its Revolving Credit Loan. Neither Agent nor any other Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Loan to be made by such other Lender. The foregoing notwithstanding, Agent in
its sole discretion, may from its own funds, make a Revolving Credit Loan on
behalf of any Lender hereto. In such event, the Lender on behalf of whom Agent
made the Revolving Credit Loan shall reimburse Agent for the amount of such
Revolving Credit Loan made on its behalf, on a weekly (or more frequent, as
determined by Agent in its sole discretion) basis. The entire amount of interest
attributable to such Revolving Credit Loan for the period from the date on which
such Revolving Credit Loan was made by Agent on such Lender's behalf until Agent
is reimbursed by such Lender, shall be paid to Agent for its own account.
(d) Authorization. Each of the Borrowers hereby irrevocably
authorizes and directs Agent to advance to Borrowers, and to charge to the Loan
Account hereunder as a Revolving Credit Loan, a sum sufficient to pay all
interest accrued on the Obligations during the immediately preceding month and
to pay all costs, fees and expenses at any time owed by Borrowers to Agent and
any Lender hereunder.
(e) Letter of Credit and LC Guaranty Requests. A request for a
Letter of Credit or LC Guaranty shall be made in the following manner: Borrowing
Agent may give Agent a written notice of its request for the issuance of a
Letter of Credit or LC Guaranty, not later than 11:00 a.m. Chicago, Illinois
time, one Business Day before the proposed issuance date thereof, in which
notice Borrowing Agent shall specify the proposed issuer and issuance date;
provided, that no such request may be made at a time when there exists a Default
or Event of Default. Such request shall be accompanied by an executed
application and reimbursement agreement in form and substance satisfactory to
the Person being asked to issue the Letter of Credit or LC Guaranty, as well as
any required corporate resolutions.
(f) Method of Making Requests. As an accommodation to
Borrowing Agent and Borrowers, unless a Default or an Event of Default is then
in existence, (i) Agent shall permit telephonic requests for Revolving Credit
Loans to Agent, (ii) Agent and Bank may, in their discretion, permit electronic
transmittal of requests for Letters of Credit and LC Guaranties to such Persons
and (iii) Agent may, in Agent's discretion, permit electronic transmittal of
instructions, authorizations, agreements or reports to Agent. Unless Borrowing
Agent or any
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Borrower specifically directs Agent in writing not to accept or act upon
telephonic or electronic communications from Borrowing Agent and/or such
Borrower, Agent shall have no liability to such or any other Person for any loss
or damage suffered by such Person as a result of Agent's honoring of any
requests, execution of any instructions, authorizations or agreements or
reliance on any reports communicated to it telephonically or electronically and
purporting to have been sent to Agent by such Person and Agent shall have no
duty to verify the origin of any such communication or the authority of the
person sending it. Each telephonic request for a Revolving Credit Loan, Letter
of Credit or LC Guaranty accepted by Agent hereunder shall be promptly followed
by a written confirmation of such request from the Borrowing Agent to Agent.
3.2 Payments.
Except where evidenced by notes or other instruments issued or made by
Borrowers to Agent or any Lender and accepted by such Person specifically
containing payment provisions which are in conflict with this Section 3.2 (in
which event the conflicting provisions of said notes or other instruments shall
govern and control), the Obligations shall be payable as follows:
(a) Principal. Principal payable on account of Revolving
Credit Loans shall be payable by Borrowers to Agent for the ratable benefit of
Lenders immediately upon the earliest of (i) the occurrence of an Event of
Default in consequence of which Agent elects, pursuant to Section 3.4(b), to
require Borrowers to maintain a Dominion Account, the receipt by Agent or any
Borrower of any proceeds of any of the Collateral, to the extent of such
proceeds; (ii) the occurrence of an Event of Default in consequence of which
Agent elects to accelerate the maturity and payment of the Obligations, or (iii)
termination of this Agreement pursuant to Section 4 hereof. Notwithstanding the
foregoing, if an Overadvance shall exist at any time, Borrowers shall upon
Agent's demand therefor repay such Overadvance.
(b) Interest. Interest accrued on Base Rate Portions and LIBOR
Portions shall in each case be due and payable on the earliest of (1) the first
calendar day of each month (for the immediately preceding month), computed
through the last calendar day of the preceding month, (2) the occurrence of an
Event of Default in consequence of which Agent elects to accelerate the maturity
and payment of the Obligations or (3) termination of this Agreement pursuant to
Section 4 hereof.
(c) Costs, Fees and Charges. Costs, fees and charges payable
pursuant to this Agreement shall be payable by Borrowers as and when provided in
Section 2 hereof, to Agent or to any other Person designated by Agent in
writing.
(d) Other Obligations. The balance of the Obligations
requiring the payment of money, if any, shall be payable by Borrowers to Agent
as and when provided in this Agreement, the Other Agreements or the Security
Documents, or on demand, whichever is later.
3.3 Prepayments.
(a) Proceeds of Sale, Loss, Destruction or Condemnation of
Collateral. If any Borrower sells any of such Borrower's Equipment or real
Property, or if any of the Collateral
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is lost or destroyed or taken by condemnation, Borrowers shall pay to Agent for
the ratable benefit of Lenders as and when received by or for the account of any
Borrower and as a mandatory prepayment of the Term Loans, as herein provided, a
sum equal to the proceeds (including insurance payments) from such sale, loss,
destruction or condemnation, provided, that no such mandatory prepayment shall
be required to the extent the proceeds of any such sales, losses, destructions
or condemnations do not exceed $100,000 in the aggregate for all Borrowers
combined in any fiscal year of the Consolidated Entity. To the extent that the
Collateral so sold, lost, destroyed or condemned consists of Equipment or real
Property of any Borrower, the applicable prepayment shall be applied, first, to
the installments of principal under the Term Notes, ratably, in the inverse
order of their maturities until paid in full and, second, to reduce the
outstanding principal balance of the Revolving Credit Loans. To the extent that
the Collateral so sold, lost, destroyed or condemned consists of Accounts,
Inventory or other Property of any Borrower (other than such Borrower's
Equipment or real Property), the applicable prepayment shall be applied to
reduce the outstanding principal balance of the Revolving Credit Loans.
Notwithstanding the foregoing, if the proceeds of insurance with respect to any
loss or destruction of Equipment, Inventory or real Property of all Borrowers
combined (i) are less than $250,000, unless an Event of Default is then in
existence, Agent shall remit such proceeds to Borrowing Agent for use in
replacing or repairing the damaged Collateral or (ii) are equal to or greater
than $250,000 and Borrowing Agent has requested that Agent agree to permit the
applicable Borrower or Borrowers to repair or replace the damaged Collateral,
such amounts shall be provisionally applied to reduce the outstanding principal
balance of the Revolving Credit Loans until the earlier of Agent's decision with
respect thereto or the expiration of 30 days from such request. If Agent agrees,
in its reasonable judgment, to permit such repair or replacement under the
foregoing clause (ii), such amount shall, unless an Event of Default is in
existence, be remitted to Borrowing Agent for use in replacing or repairing the
damaged Collateral; if Agent declines to permit such repair or replacement or
does not respond to Borrowing Agent within such 30 day period, such amount shall
be applied, first, to the installments of principal under the Term Notes,
ratably, in the inverse order of their maturities until paid in full and,
second, to reduce the outstanding principal balance of the Revolving Credit
Loans.
(b) Excess Cash Flow Recapture. Borrowers shall prepay the
Term Notes in amounts equal to Excess Cash Flow with respect to each fiscal year
of the Consolidated Entity during the Term hereof, such prepayments to be based
upon, and made within 2 Business Days following the due date for delivery by
Borrowers to Agent of, the annual financial statements required by subsection
7.1(c)(i) hereof and each such prepayment shall be applied to the installments
of principal under the Term Notes, on a pro rata basis to each such installment
until paid in full; provided, that, notwithstanding the foregoing, (i) no such
prepayment of the Term Loan shall be required with respect to Excess Cash Flow
for the fiscal year of the Consolidated Entity ending as of December 31, 1998;
and (ii) any such prepayment with respect to Excess Cash Flow for the fiscal
year of the Consolidated Entity ending as of December 31, 1999, shall be
determined based on Excess Cash Flow as reflected in the audited Consolidated
financial statements of the Consolidated Entity for the period commencing on the
Amendment Effective Date and ending on December 31, 1999.
(c) Optional Prepayments. Borrowers may, at their option from
time to time, prepay installments of the Term Notes, provided, that such
prepayments are made ratably
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with respect to all Term Notes. Any such optional prepayment shall be credited
against the amount of the mandatory prepayment required under subsection 3.3(b)
for the fiscal year in which such optional prepayment was made. Except for
charges under subsection 2.3(b) applicable to prepayments of LIBOR Term Portions
and charges payable under subsection 4.2(c) in case of prepayment in full in
connection with a termination, such prepayments shall be without premium or
penalty.
3.4 Accounts Receivable Management.
(a) Post-Default Account Verification. Following the
occurrence and during the continuation of an Event of Default, any of Agent's
officers, employees or agents shall have the right, at any time or times
hereafter during normal business hours, in the name of Agent, any designee of
Agent or any Borrower, to verify the validity, amount or any other matter
relating to any Accounts of such Borrower by mail, telephone, telegraph or
otherwise. Each Borrower shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process. Agent will
notify Borrowing Agent of the procedure or procedures Agent intends to use in
making such verification during any period when no Default or Event of Default
exists and will only use such procedures during such periods. Agent will not be
obligated to notify Borrowing Agent of such Account verification, and Agent may
use any method or procedure for Account verification at any time a Default of
Event of Default exists.
(b) Dominion of Cash. Prior to the occurrence of an Event of
Default, each Borrower shall maintain dominion over its cash receipts. At any
time after the occurrence and during the continuance of an Event of Default,
Agent may request, and each Borrower shall at all times thereafter maintain a
Dominion Account pursuant to a lockbox arrangement acceptable to Agent with such
banks as may be selected by such Borrower and be acceptable to Agent. Each
Borrower shall issue to any such banks an irrevocable letter of instruction
directing such banks to deposit all payments or other remittances received in
such Borrower's lockbox to the Dominion Account for application on account of
the Obligations. All funds deposited in the Dominion Account shall immediately
become the property of Agent and each Borrower shall obtain the agreement by
such banks in favor of Agent to waive any offset rights against the funds so
deposited. Agent assumes no responsibility for such lockbox arrangement,
including, without limitation, any claim of accord and satisfaction or release
with respect to deposits accepted by any bank thereunder.
(c) Collection of Accounts, Proceeds of Collateral. To
expedite collection, each Borrower shall endeavor in the first instance to make
collection of its Accounts for Agent. If at the time of receipt by any Borrower
thereof a Dominion Account exists as provided in subsection 3.4(b) hereof, all
remittances received by such Borrower on account of its Accounts, together with
the proceeds of any other Collateral, shall be held as Agent's property by such
Borrower as trustee of an express trust for Agent's and Lender's benefit and
such Borrower shall immediately deposit same in kind in the Dominion Account.
Agent retains the right at all times after the occurrence of a Default or an
Event of Default to notify Account Debtors that a Borrower's Accounts have been
assigned to Agent and to collect Accounts directly in its own name and to charge
the collection costs and expenses, including attorneys' fees, to Borrowers.
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3.5 Application of Payments and Collections.
All items of payment received by Agent by 12:00 noon, Chicago,
Illinois, time, on any Business Day shall be deemed received on that Business
Day. All items of payment received after 12:00 noon, Chicago, Illinois, time, on
any Business Day shall be deemed received on the following Business Day. Each
Borrower irrevocably waives the right, during any period for which an Event of
Default exists, to direct the application by Agent of any and all payments and
collections at any time or times hereafter received by Agent or any Lender from
or on behalf of such or any other Borrower, and each Borrower does hereby
irrevocably agree that, subject to subsection 3.2(a)(i), Agent shall have the
continuing exclusive right to apply and reapply any and all such payments and
collections received at any time or times hereafter by Agent, any Lender or any
of their respective agents against the Obligations, in such manner as Agent may
deem advisable, notwithstanding any entry by Agent or any Lender upon any of its
books and records. If, as the result of collections of Accounts as authorized
herein, a credit balance exists in the Loan Account, such credit balance shall
not accrue interest in favor of Borrowers, but shall be available to Borrowers
at any time or times for so long as no Default or Event of Default exists. Such
credit balance shall not be applied or be deemed to have been applied as a
prepayment of the Term Loans, except that the Agent or Majority Lenders may, at
their option, offset such credit balance against any of the Obligations upon and
during the continuance of an Event of Default.
3.6 All Loans to Constitute One Obligation; Joint and Several Liability.
The Loans shall constitute one general Obligation of Borrowers, and
shall be secured by Agent's Lien for the ratable benefit of Agent and Lenders
upon all of the Collateral. Each of the Borrowers shall be irrevocably and
unconditionally jointly and severally liable hereunder and under each of the
other Loan Documents with respect to all Obligations, regardless of which of the
Borrowers actually receives the proceeds of the Loans or the benefit of any
other extensions of credit hereunder or the manner in which Borrowing Agent,
Borrowers, Agent or any Lender accounts therefor in their respective books and
records. Notwithstanding the foregoing, (a) each Borrower's obligations and
liabilities with respect to proceeds of Loans which it receives or Letters of
Credit or LC Guaranties issued for its account, and related fees, costs and
expenses, and (b) its obligations and liabilities arising as a result of the
joint and several liability of Borrowers hereunder with respect to proceeds of
Loans received by, or Letters of Credit or LC Guaranties issued for the account
of, any of the other Borrowers, together with the related fees, costs and
expenses, shall be separate and distinct obligations, both of which are primary
obligations of such Borrower. Neither the joint and several liability of, nor
the Liens granted to Agent hereunder and under the other Loan Documents by, any
Borrower shall be impaired or released by any action or inaction on Agent's or
any Lender's part, or any other event or condition with respect to any other
Borrower, including any such action or inaction or other event or condition,
which might otherwise constitute a defense available to, or a discharge of, such
Borrower, or a guarantor or surety of or for any or all of the Obligations.
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3.7 Loan Account.
Agent shall enter all Loans as debits to a loan account (the "Loan
Account") and shall also record in the Loan Account all payments made by
Borrowers on any Obligations and all proceeds of Collateral which are finally
paid to Agent for the ratable benefit of Agent and Lenders, and may record
therein, in accordance with customary accounting practice, other debits and
credits, including interest and all charges and expenses properly chargeable to
Borrowers.
3.8 Statements of Account.
Agent will account to Borrowing Agent monthly with a statement of
Loans, charges and payments made pursuant to this Agreement, and such account
rendered by Agent shall be deemed final, binding and conclusive upon Borrowers
absent manifest error unless Agent is notified by Borrowing Agent in writing to
the contrary within 30 days of the date each accounting is mailed to Borrowing
Agent. Such notice shall only be deemed an objection to those items specifically
objected to therein.
3.9 Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of any
Loan made by it in excess of its ratable share of payments on account of Loans
made by all Lenders, such Lender shall forthwith purchase from each other Lender
such participation in such Loan as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each other Lenders; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery, together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Each Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 3.9 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of
such Borrower in the amount of such participation. Notwithstanding anything to
the contrary contained herein, all purchases and repayments to be made under
this Section 3.9 shall be made through Agent.
SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement.
Subject to the right of Lenders to cease making Loans to Borrowers upon
or after the occurrence and during the continuance of any Default or Event of
Default, this Agreement shall be in effect for a period of six years from the
date hereof, through and including January 8, 2004 (the "Term"), unless
terminated as provided in Section 4.2 hereof.
4.2 Termination.
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(a) Termination by Agent. Agent may terminate this Agreement
without notice upon or after the occurrence and during the continuance of an
Event of Default.
(b) Termination by Borrowers. Upon at least 30 days' prior
written notice from Borrowing Agent to Agent, Borrowers may, at their option,
terminate this Agreement; provided, that, no such termination shall be effective
until Borrowers have paid all then current Obligations in immediately available
funds and all Letters of Credit and LC Guaranties have expired or have been cash
collateralized to Agent's satisfaction. Any notice of termination given by
Borrowing Agent shall be irrevocable after 20 days unless Agent otherwise agrees
in writing, and if irrevocable neither Agent nor any Lender shall have any
obligation to make any Loans or issue or procure any Letters of Credit or LC
Guaranties on or after the termination date stated in such notice. Borrowers may
elect to terminate this Agreement in its entirety only. No section of this
Agreement or type of Loan available hereunder may be terminated singly.
(c) Termination Charges. At the effective date of termination
of this Agreement for any reason prior to the last day of the Term, Borrowers
shall pay to Agent for the ratable benefit of Lenders (in addition to the then
outstanding principal, accrued interest and other charges owing under the terms
of this Agreement and any of the other Loan Documents) as liquidated damages for
the loss of the bargain and not as a penalty, an amount equal to (i) if such
termination occurs on or prior to January 8, 2001, the product obtained by
multiplying (x) 1% by (y) the sum of $11,000,000, plus the aggregate Revolving
Loan Commitments in effect on the date on which notice of termination is given
and (ii) if such termination occurs after January 8, 2001 but prior to the last
day of the Term, the product obtained by multiplying (x) 1% by (y) the sum of
the aggregate outstanding principal balance of the Term Loans plus the aggregate
Revolving Loan Commitments, in each case on the date on which notice of
termination is given. Agent and Lenders hereby acknowledge and agree that no fee
shall be payable pursuant to this Section 4.2(c) as a result of the transactions
contemplated by the Integra Acquisition Documents.
(d) Effect of Termination. All of the Obligations shall be
immediately due and payable upon the termination date stated in any notice of
termination of this Agreement. All undertakings, agreements, covenants,
warranties and representations of the respective Borrowers contained in the Loan
Documents shall survive any such termination and Agent shall retain its Liens in
the Collateral and Agent and each Lender shall retain all of its rights and
remedies under the Loan Documents notwithstanding such termination until all
then current Obligations have been discharged or paid, in full, in immediately
available funds, together with the applicable termination charge, if any.
Notwithstanding such payment in full of all then current Obligations, Agent
shall not be required to terminate its security interests in the Collateral
unless, with respect to any loss or damage Agent could reasonably be expected to
incur as a result of dishonored checks or other items of payment received by
Agent from any Borrower or any Account Debtor and applied to the Obligations,
Agent shall, at its option, (i) have received a written agreement, executed by
Borrowers jointly and severally, and by any Person whose loans or other advances
to Borrowers are used in whole or in part to satisfy the Obligations,
indemnifying Agent and each such Lender from any such loss or damage; or (ii)
have retained such monetary reserves and Liens on the Collateral for such period
of time as Agent, in its reasonable discretion, may deem necessary to protect
Lender and each Lender from any such loss or damage.
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SECTION 5. SECURITY INTERESTS
5.1 Security Interest in Collateral.
To secure the prompt payment and performance to Agent and each Lender
of the Obligations, each Borrower hereby grants to Agent for the benefit of
itself and each Lender a continuing Lien upon all of such Borrower's assets,
including all of the following Property and interests in Property of such
Borrower, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located:
(i) Accounts;
(ii) Inventory;
(iii) Equipment;
(iv) General Intangibles;
(v) Investment Property;
(vi) All monies and other Property of any kind now or
at any time or times hereafter in the possession or under the control of Agent
or any Lender or a bailee or Affiliate of Agent or any Lender;
(vii) All accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of (i) through (vi) above,
including, without limitation, proceeds of and unearned premiums with respect to
insurance policies insuring any of the Collateral; and
(viii) All books and records (including, without
limitation, customer lists, credit files, computer programs, print-outs, and
other computer materials and records) of such Borrower pertaining to any of (i)
through (vii) above.
5.2 Lien Perfection; Further Assurances.
Each Borrower shall execute such UCC-1 financing statements as are
required by the Code and such other instruments, assignments or documents as are
necessary to perfect Agent's Lien upon any of the Collateral and shall take such
other action as may be required to perfect or to continue the perfection of
Agent's Lien upon the Collateral; provided, that until the earlier to occur of
(i) 30 days' following the date on which the aggregate value of Off-Site
Inventory shall exceed $750,000 and (ii) the occurrence of a Default or an Event
of Default and receipt by Borrowing Agent of Agent's request therefor, Borrowers
shall not be required to perfect or continue Agent's Lien on Collateral
consisting of Off-Site Inventory, provided, further, that, Off-Site Inventory
shall remain subject at all times to all eligibility requirements set forth in
the definition of the term Eligible Inventory set forth herein for purposes of
determining the eligibility of such Inventory for inclusion in the calculation
of the Borrowing Base hereunder. Unless prohibited by applicable law, each
Borrower hereby authorizes Agent to execute and file any such financing
statement on such Borrower's behalf. The parties agree that a carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement
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and may be filed in any appropriate office in lieu thereof. At Agent's request,
Borrowers shall also promptly execute or cause to be executed and shall deliver
to Agent any and all documents, instruments and agreements deemed necessary by
Agent to give effect to or carry out the terms or intent of the Loan Documents.
5.3 Safekeeping of Collateral.
Neither Agent nor any Lender shall be liable or responsible in any way
for the safekeeping of any of the Collateral or for any loss or damage thereto
(except for reasonable care in the custody thereof while any Collateral is in
such Person's actual possession) or for any diminution in the value thereof, or
for any act or default of any warehouseman, carrier, forwarding agency, or other
Person whomsoever, but the same shall be at Borrowers' sole risk.
SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1 General Representations and Warranties
To induce Agent and each Lender to enter into this Agreement and to
make advances hereunder, Borrowers, jointly and severally, warrant, represent
and covenant to Agent and each Lender that:
(a) Organization and Qualification. Each of Redmond and
Integra is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each other Borrower and
each of their respective Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each Borrower and each of their respective Subsidiaries is duly
qualified and is authorized to do business and is in good standing as a foreign
limited liability company or corporation, as applicable, in each state or
jurisdiction listed on Schedule 6.1(a) hereto and in all other states and
jurisdictions in which the failure of any such Person to be so qualified would
be reasonably likely to have a Material Adverse Effect.
(b) Power and Authority. Each Borrower is duly authorized and
empowered to enter into, execute, deliver and perform this Agreement and each of
the other Loan Documents to which it is a party. The execution, delivery and
performance of this Agreement and each of the other Loan Documents have been
duly authorized by all necessary member or corporate action, as the case may be,
and do not and will not (i) require any consent or approval of the respective
members of Integra or Redmond or the respective shareholders of any other
Borrower or any of each of their respective Subsidiaries; (ii) contravene the
Integra Constituent Documents, the Redmond Constituent Documents or any other
Borrower's or any of their respective Subsidiaries' charter, articles or
certificate of incorporation or by-laws; (iii) violate, or cause any Borrower or
any of their respective Subsidiaries to be in default under, any provision of
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award in effect having applicability to such Borrower or any
such Subsidiary, the violation of which would be reasonably likely to have a
Material Adverse Effect; (iv) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or any of their respective Subsidiaries is a
party or by which it or its Properties may be bound or affected; or (v) result
in, or require, the creation or
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imposition of any Lien (other than Permitted Liens) upon or with respect to any
of the Properties now owned or hereafter acquired by any Borrower or any of
their respective Subsidiaries.
(c) Legally Enforceable Agreement. This Agreement is, and each
of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of each of Borrower and each of their
respective Subsidiaries party thereto, enforceable against it in accordance with
its respective terms.
(d) Capital Structure. Schedule 6.1(d) hereto states (i) the
correct name of each of the Subsidiaries of each Borrower, its jurisdiction of
organization and the percentage of its Voting Equity Interests owned by the
relevant Borrower, (ii) the names of each Borrower's corporate or joint venture
Affiliates and the nature of the affiliation, (iii) the number, nature and
holder of all issued, outstanding and treasury shares or partnership, member or
other equity interests, as the case may be, of each other Borrower and each
Subsidiary of each Borrower. Each Borrower has good title to all of the shares
or partnership, member or other equity interests, as the case may be, it
purports to own of the capital stock of each of its Subsidiaries, free and clear
in each case of any Lien other than Permitted Liens. All such shares and
partnership, member and other equity interests, as the case may be, have been
duly issued and are fully paid and non-assessable. Except as set forth on
Schedule 6.1(d), there are no outstanding options to purchase, or any rights or
warrants to subscribe for, or any commitments or agreements to issue or sell, or
any Securities or obligations convertible into, or any powers of attorney
relating to, shares or partnership, member or other equity interests, as the
case may be, of the capital stock of any Borrower or any Subsidiary of any
Borrower. There are no outstanding agreements or instruments binding upon any of
any Borrower's shareholders, partners or members, as applicable, relating to the
ownership of its shares of capital stock or partnership, member or other equity
interests, as the case may be.
(e) Corporate Names. No Borrower and no Subsidiary of any
Borrower has been known as or used any corporate, fictitious or trade names
except those listed on Schedule 6.1(e) hereto. Except as set forth on Schedule
6.1(e), during the immediately preceding 5-year period, no Borrower and no
Subsidiary of any Borrower has been the surviving corporation of a merger or
consolidation or has acquired all or substantially all of the assets of any
Person.
(f) Business Locations; Agent for Process. Each Borrower's and
each of their respective Subsidiaries' chief executive office and other places
of business are as listed on Schedule 6.1(f) hereto. During the preceding
one-year period, no Borrower and none of their respective Subsidiaries has had
an office, place of business or agent for service of process other than as
listed in Part I of Schedule 6.1(f). Except for (i) Inventory of any Borrower in
transit, (ii) Inventory of any Borrower consisting of motor vehicles, (iii)
Inventory of any Borrower from time to time located on the premises of one or
more of such Borrower's customers in accordance with such Borrower's usual and
customary business practices in effect on the date hereof ("Off-Site
Inventory"), and (iv) Inventory of any Borrower consisting of samples from time
to time in the possession of such Borrower's salespersons in the ordinary course
of such Borrower's business, all Collateral is and will at all times be kept by
each Borrower and each Subsidiary of each Borrower at one or more of the
locations set forth in Part I of Schedule 6.1(f), as updated from time to time
by Borrowers, and shall not, without the prior written approval of Agent, be
moved therefrom except, prior to an Event of Default and Agent's acceleration of
the maturity of
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the Obligations in consequence thereof, for sales of Inventory in the ordinary
course of business. As of the Amendment Effective Date, the aggregate value of
all Off-Site Inventory does not exceed $750,000. If the aggregate value of the
Off-Site Inventory exceeds $750,000, the Borrowing Agent shall promptly notify
Agent thereof and take any actions with respect thereto required pursuant to
Section 5.2. Off-Site Inventory shall at all times be at one or more of the
locations set forth in Part II of Schedule 6.1(f), as updated from time to time
(and, in any event, at least annually) by Borrowers. Except as shown on Part III
of Schedule 6.1(f), no Inventory is stored with a bailee, warehouseman or
similar party, nor is any Inventory consigned to any Person
(g) Title to Properties; Priority of Liens. Each Borrower and
each of their respective Subsidiaries has good, indefeasible and marketable
title to and fee simple ownership of, or valid and subsisting leasehold
interests in, all of its real Property, and good title to all of the Collateral
and all of its other Property, in each case, free and clear of all Liens except
Permitted Liens. Each Borrower has paid or discharged all lawful claims which,
if unpaid, might become a Lien against any of such Borrower's Properties that is
not a Permitted Lien. The Liens granted to Agent under Section 5 hereof are
first priority Liens, subject only to Permitted Liens.
(h) Accounts. Unless otherwise indicated in writing to Agent,
with respect to each Account reflected as an Eligible Account in the most recent
borrowing base certificate submitted to Agent pursuant to subsection 7.1(d)
hereof:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale and
delivery of goods or rendition of services by a Borrower in the ordinary course
of its business and in accordance with the terms and conditions of all purchase
orders, contracts or other documents relating thereto and forming a part of the
contract between such Borrower and the Account Debtor and the Account Debtor is
not an Affiliate of any Borrower;
(iii) It is for a liquidated amount maturing as
stated in the duplicate invoice covering such sale or rendition of services, a
copy of which has been furnished or is available to Agent;
(iv) Agent's Lien thereon, is not, and will not (by
voluntary act or omission of any Borrower) be in the future, subject to any
offset, Lien, deduction, defense, dispute, counterclaim or any other adverse
condition;
(v) Such Account is not, and will not (by voluntary
act or omission of any Borrower) be in the future, subject to any offset,
deduction, defense, dispute, counterclaim or any other adverse condition, and
such Account is absolutely owing to a Borrower and is not contingent in any
respect or for any reason;
(vi) No Borrower has made any agreement with the
Account Debtor thereunder for any extension, compromise, settlement or
modification of such Account or any deduction therefrom, except discounts or
allowances which are granted by a Borrower in the
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ordinary course of its business for prompt payment and which are reflected in
the calculation of the net amount of each respective invoice related thereto and
are reflected in the most recent borrowing base certificates submitted to Agent
pursuant to subsection 7.1(d) hereof;
(vii) There are no facts, events or occurrences which
impair in any material respect the validity or enforceability of such Account or
could reasonably be expected to reduce the amount payable thereunder from the
face amount of the invoice and statements delivered to Agent with respect
thereto;
(viii) To each Borrower's knowledge, the Account
Debtor thereunder (1) had the capacity to contract at the time any contract or
other document under which such Account arose was executed and (2) such Account
Debtor is Solvent; and
(ix) To each Borrower's knowledge, there are no
proceedings or actions which are threatened or pending against any Account
Debtor thereunder which could reasonably be expected to result in any material
adverse change in such Account Debtor's financial condition or the
collectibility of such Account.
(i) Equipment. All of the Equipment is in good operating
condition and repair.
(j) Financial Statements; Fiscal Year. Borrowers have
previously delivered or caused to be delivered to Agent the following:
(i) the pro forma balance sheet of the Consolidated
Entity dated as of the Amendment Effective Date and prepared on the basis of the
financial statements of the Consolidated Entity (as defined in the Original Loan
Agreement) as at December 31, 1998, as adjusted to reflect the respective
transactions contemplated by the Integra Acquisition Documents (the "Pro
Forma"); and
(ii) the audited Consolidated and Consolidating
financial statements of the "Consolidated Entity" (as defined in the Original
Loan Agreement) as of December 31, 1998.
The Pro Forma and the Financial Statements have each been prepared in
accordance with GAAP and present fairly in all material respects the respective
financial positions of the Persons covered thereby at the dates indicated and,
in the case of the Financial Statements, the results of such Persons' operations
for the fiscal year then ended. Since December 31, 1998, there has been no
material change in the condition, financial or otherwise, of any Borrower and no
decrease in the aggregate value of Equipment and real Property owned by
Borrowers or such other Persons, except changes in the ordinary course of
business, none of which individually or in the aggregate has been materially
adverse. The fiscal year of the Consolidated Entity ends on December 31 of each
year.
(k) Full Disclosure. The financial statements referred to in
subsection 6.1(j) hereof do not, nor does this Agreement or any other written
statement of any Borrower to Agent or any Lender, contain any untrue statement
of a material fact or, to any Borrower's knowledge omit a material fact
necessary to make the statements contained therein or herein not misleading.
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Except as set forth on Schedule 6.1(k) hereto, to each Borrower's knowledge,
there are no facts which such or any other Borrower has failed to disclose to
Agent in writing which singly or in the aggregate could reasonably be expected
to have a Material Adverse Effect.
(l) Solvent Financial Condition. Each Borrower and each of
their respective Subsidiaries is now and, after giving effect to the Loans to be
made hereunder, at all times will be, Solvent.
(m) Surety Obligations. No Borrower and none of their
respective Subsidiaries is obligated as surety or indemnitor under any surety or
similar bond or other contract issued or entered into to assure payment,
performance or completion of performance of any undertaking or obligation of any
Person.
(n) Taxes. The federal tax identification number of each
Borrower and each Subsidiary of each Borrower is shown on Schedule 6.1(n)
hereto. Each Borrower and each of its Subsidiaries has filed all federal, state
and local tax returns and other reports it is required by law to file, except
where the failure to so file such tax return would not be reasonably likely to
have a Material Adverse Effect, and has paid, or made provision for the payment
of, all taxes, assessments, fees, levies and other governmental charges upon it,
its income and Properties as and when such taxes, assessments, fees, levies and
charges are due and payable, unless and to the extent any thereof are being
actively contested in good faith and by appropriate proceedings and each
Borrower maintains reasonable reserves on its books therefor. The provision for
taxes on the books of each Borrower and each of their respective Subsidiaries is
adequate for all years not closed by applicable statutes, and for the current
fiscal year.
(o) Brokers. Except as set forth on Schedule 6.1(o) hereto,
there are no claims for brokerage commissions, finder's fees or investment
banking fees in connection with the transactions contemplated by this Agreement.
(p) Patents, Trademarks, Copyrights and Licenses. Each
Borrower and each of their respective Subsidiaries owns or possesses all the
patents, trademarks, service marks, trade names, copyrights and licenses
necessary for the present and planned future conduct of its business without any
known conflict with the rights of others except where the failure to own or
possess such property, or the existence of such conflict, would not be
reasonably likely to have a Material Adverse Effect. All such patents,
trademarks, service marks, tradenames, copyrights, licenses and other similar
rights are listed on Schedule 6.1(p) hereto.
(q) Governmental Consents. Each Borrower and each of their
respective Subsidiaries has, and is in good standing with respect to, all
governmental consents, approvals, licenses, authorizations, permits,
certificates, inspections and franchises necessary to continue to conduct its
business as heretofore or proposed to be conducted by it and to own or lease and
operate its Properties as now owned or leased by it, except where the failure to
possess or so maintain such rights would not be reasonably likely to have a
Material Adverse Effect.
(r) Compliance with Laws. Each Borrower and each of their
respective Subsidiaries has duly complied with, and its Properties, business
operations and leaseholds are in compliance in all material respects with, the
provisions of all federal, state and local laws, rules
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and regulations applicable to such Borrower or such Subsidiary, as applicable,
its Properties or the conduct of its business and there have been no citations,
notices or orders of noncompliance issued to such Borrower or any of its
Subsidiaries under any such law, rule or regulation, except where such
noncompliance is not reasonably likely to have a Material Adverse Effect. Each
Borrower and each of their respective Subsidiaries has established and maintains
an adequate monitoring system to insure that it remains in compliance in all
material respects with all federal, state and local laws, rules and regulations
applicable to it. No Inventory has been produced in violation of the Fair Labor
Standards Act (29 U.S.C. Section 201 et seq.), as amended.
(s) Restrictions. No Borrower and none of their respective
Subsidiaries is a party or subject to any contract, agreement, or charter or
other corporate restriction, which materially and adversely affects its business
or the use or ownership of any of its Properties. No Borrower and none of their
respective Subsidiaries is a party or subject to any contract or agreement which
restricts its right or ability to incur Indebtedness, other than as set forth on
Schedule 6.1(s) hereto, none of which prohibit the execution of or compliance
with this Agreement or the other Loan Documents by Borrower or any of their
respective Subsidiaries, as applicable.
(t) Litigation. Except as set forth on Schedule 6.1(t) hereto,
there are no actions, suits, proceedings or investigations pending, or to the
knowledge of any Borrower, threatened, against or affecting any Borrower or any
of their respective Subsidiaries, or the business, operations, Properties,
prospects, profits or condition of any Borrower or any of their respective
Subsidiaries which, if adversely decided, could reasonably be expected to have a
Material Adverse Effect. No Borrower and no Subsidiary of any Borrower is in
default with respect to any order, writ, injunction, judgment, decree or rule of
any court, governmental authority or arbitration board or tribunal.
(u) No Defaults. No event has occurred and no condition exists
which would, upon or after the execution and delivery of this Agreement or any
Borrower's performance hereunder, constitute a Default or an Event of Default.
No Borrower and none of their respective Subsidiaries is in default in (and no
event has occurred and no condition exists which constitutes, or which with the
passage of time or the giving of notice or both would constitute, a default in)
the payment of any Indebtedness to any Person for Money Borrowed.
(v) Leases. Schedule 6.1(v) hereto is a complete listing of
all capitalized leases of each Borrower and their respective Subsidiaries and
Schedule 6.1(v) hereto is a complete listing of all operating leases of each
Borrower and their respective Subsidiaries. Each Borrower and each of their
respective Subsidiaries is in full compliance with all of the terms of each of
its respective capitalized and operating leases, except where the failure to so
comply would not reasonably be likely to cause a Material Adverse Effect.
(w) Pension Plans. Except as disclosed on Schedule 6.1(w)
hereto, no Borrower and none of their respective Subsidiaries has any Plan.
Except as disclosed on Schedule 6.1(w) hereto, each Borrower and each of their
respective Subsidiaries is in full compliance with the requirements of ERISA and
the regulations promulgated thereunder with respect to each Plan, except where
the failure to so comply would not be reasonably likely to have a Material
Adverse Effect. No fact or situation that could result in a material adverse
-23-
change in the financial condition of any Borrower or any of their respective
Subsidiaries exists in connection with any Plan. No Borrower and none of their
respective Subsidiaries has any material withdrawal liability in connection with
a Multiemployer Plan.
(x) Trade Relations. To the knowledge of any Borrower, there
exists no actual or threatened termination, cancellation or limitation of, or
any modification or change in, the business relationship between any Borrower or
any of their respective Subsidiaries and any customer or any group of customers
whose purchases individually or in the aggregate are material to the business of
any Borrower or any of their Subsidiaries, or with any material supplier, except
in each case, where the same singly or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, and to the knowledge of any
Borrower, there exist no present conditions or states of facts or circumstances
which singly or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
(y) Labor Relations. Except as described on Schedule 6.1(y)
hereto, no Borrower and none of their respective Subsidiaries is a party to any
collective bargaining agreement. There are no material grievances, disputes or
controversies with any union or any other organization of any Borrower's or any
of their respective Subsidiaries' employees, or threats of strikes, work
stoppages or any asserted pending demands for collective bargaining by any union
or organization, except those that would not be reasonably likely to have a
Material Adverse Effect.
6.2 Continuous Nature of Representations and Warranties
Each representation and warranty contained in this Agreement and the
other Loan Documents shall be continuous in nature and shall remain accurate,
complete and not misleading at all times during the term of this Agreement,
except for changes in the nature of the business or operations of any Borrower
or any Subsidiary of any Borrower that would render the information in any
exhibit attached hereto or any other Loan Document either inaccurate, incomplete
or misleading, so long as Agent has consented to such changes or such changes
are expressly permitted by this Agreement.
6.3 Survival of Representations and Warranties.
All representations and warranties of Borrowers contained in this
Agreement or any of the other Loan Documents shall survive the execution,
delivery and acceptance thereof by Lenders and the parties thereto and the
closing of the transactions described therein or related thereto.
SECTION 7. COVENANTS AND CONTINUING AGREEMENTS
7.1 Affirmative Covenants.
During the term of this Agreement, and thereafter for so long as there
are any Obligations outstanding (other than Obligations in the nature of
indemnities which survive payment in full of the Obligations, but which are not
yet due and payable on the Termination Date), Borrowers covenant that, unless
otherwise consented to by Majority Lenders in writing, they shall:
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(a) Visits and Inspections. Permit representatives of Agent
(at Borrowers' expense), or any Lender (at such Lender's expense unless an Event
of Default exists, in which event at Borrowers' expense) from time to time, as
often as may be reasonably requested, but only during normal business hours, to
visit and inspect the Properties of Borrowers and each of their respective
Subsidiaries, inspect, audit and make extracts from their respective books and
records, and discuss with their respective officers, employees and independent
accountants, the business, assets, liabilities, financial condition, business
prospects and results of operations of each Borrower and each Subsidiary of each
Borrower.
(b) Notices. Promptly notify Agent in writing of the
occurrence of any event or the existence of any fact which renders any
representation or warranty in this Agreement or any of the other Loan Documents
inaccurate, incomplete or misleading in any material respect.
(c) Financial Statements. Keep, and cause each of their
Subsidiaries to keep, adequate records and books of account with respect to its
business activities in which proper entries are made in accordance with GAAP
reflecting all its financial transactions; and cause to be prepared and
furnished to Agent and each Lender the following (all to be prepared in
accordance with GAAP applied on a consistent basis, unless Borrowers' certified
public accountants concur in any change therein and such change is disclosed to
Agent and is consistent with GAAP):
(i) not later than 90 days after the close of each
fiscal year of the Consolidated Entity, unqualified (except for a qualification
for a change in accounting principles with which the accountant concurs) audited
financial statements of the Consolidated Entity as of the end of such year, on a
Consolidated basis, certified by a firm of independent certified public
accountants of recognized national standing;
(ii) not later than 30 days after the end of each
month hereafter (or, in the case of the last month in each fiscal quarter of the
Consolidated Entity, 45 days after the end of each such month), including the
last month of the Consolidated Entity's fiscal year, unaudited interim financial
statements of the Consolidated Entity as of the end of such month and of the
portion of the Consolidated Entity's fiscal year then elapsed, on a Consolidated
and consolidating basis, certified by the principal financial officer of Holding
as prepared in accordance with GAAP and fairly presenting in all material
respects the Consolidated financial position and results of operations of the
Consolidated Entity for such month and period subject only to changes from audit
and year-end adjustments and except that such statements need not contain notes;
(iii) promptly after the sending or filing thereof,
as the case may be, copies of any proxy statements, financial statements or
reports which any Borrower has made available to its shareholders and copies of
any regular, periodic and special reports or registration statements which any
Borrower files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or any national securities
exchange;
(iv) promptly after the filing thereof, copies of any
annual report to be filed with ERISA in connection with each Plan; and
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(v) such other data and information (financial and
otherwise) as Agent, from time to time, may reasonably request, bearing upon or
related to the Collateral or any Borrower's or any of their respective
Subsidiaries' financial condition or results of operations.
Concurrently with the delivery of the financial statements described in
clause (i) of this subsection 7.1(c), Borrowers shall forward to Agent a copy of
the accountants' management letter to Borrowers' management that is prepared in
connection with such financial statements and also shall cause to be prepared
and shall furnish to Agent and each Lender a certificate of the aforesaid
certified public accountants certifying to Agent and Lenders that, based upon
their examination of the financial statements of Borrowers and their respective
Subsidiaries performed in connection with their examination of said financial
statements, they are not aware of any Default or Event of Default, or, if they
are aware of such Default or Event of Default, specifying the nature thereof.
Concurrently with the delivery of the financial statements described in clauses
(i) and (ii) of this subsection 7.1(c), or more frequently if requested by
Agent, Borrowers shall cause to be prepared and furnished to Agent a Compliance
Certificate in the form of Exhibit B hereto executed by the Chief Financial
Officer of the Consolidated Entity.
(d) Borrowing Base Certificates. On or before the 14th
Business Day of each month from and after the date hereof, Borrowing Agent shall
deliver to Agent with sufficient copies for each Lender, in form acceptable to
Agent, a borrowing base certificate relating to each Borrower's Eligible
Accounts and each Borrower's Eligible Inventory as of the last day of the
immediately preceding month, with such supporting materials as Agent shall
reasonably request. If requested by Agent, or if Borrowers deem it advisable,
Borrowers shall execute and deliver to Agent borrowing base certificates with
respect to their Eligible Accounts and Eligible Inventory more frequently than
monthly, provided that Borrowers shall not be required to provide information
with respect to Borrowers' Inventory more frequently than weekly.
(e) Landlord and Storage Agreements. Provide Agent with copies
of all agreements between any Borrower or any Subsidiary of any Borrower and any
landlord or warehouseman which owns any premises at which any Inventory may,
from time to time, be kept.
(f) Guarantor Financial Statements. Deliver or cause to be
delivered to Agent financial statements for each Guarantor (to the extent not
delivered pursuant to subsection 7.1(c) hereof) in form and substance
satisfactory to Agent at such intervals and covering such time periods as Agent
may request.
(g) Projections. No later than 30 days after the end of each
fiscal year of the Consolidated Entity deliver to Agent Projections of Borrowers
on a combining, consolidated and consolidating basis, for the forthcoming fiscal
year, month by month.
(h) Insurance on Collateral. Borrowers shall maintain and pay
for insurance upon all Collateral wherever located and with respect to each
Borrower's business, covering casualty, hazard, public liability and such other
risks in such amounts and with such insurance companies as are customary for
Persons of established reputation engaged in similar business and which are
reasonably satisfactory to Agent. Borrowers shall also maintain business
-26-
interruption insurance in an amount not less than $4,000,000. Borrowers shall
deliver certified copies of such policies to Agent with satisfactory lender's
loss payable endorsements, naming Agent and Lenders as sole loss payee, assignee
or additional insured, as appropriate. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 10 days prior
written notice to Agent in the event of cancellation of the policy for failure
to pay any premium with respect thereto and not less than 30 days prior written
notice to Agent in the event of cancellation of the policy for any other reason
and a clause specifying that the interest of Agent shall not be impaired or
invalidated by any act or neglect of any Borrower or the owner of any Property
or by the occupation of the premises for purposes more hazardous than are
permitted by said policy. If any insured loss occurs and no Default then exists,
the respective Borrowers shall have the right to adjust such loss and Agent will
permit Borrowers to use the proceeds of insurance of such loss to repair or
replace the Collateral that was damaged, destroyed or lost, provided that if any
Term Loan balance then exists, any excess insurance proceeds are paid to Agent
for application to the Term Loans. If Borrower fails to provide and pay for such
insurance, Agent may, at its option, but shall not be required to, procure the
same and charge Borrowers therefor. Borrowers agree to deliver to Agent,
promptly as rendered, true copies of all reports made in any reporting forms to
insurance companies. All proceeds of each Borrower's business interruption
insurance (if any) shall be remitted to Agent for application to the outstanding
balance of the Revolving Credit Loans; provided that, unless a Default or an
Event of Default is then in existence, the respective Borrowers may settle or
adjust any claim with respect to such insurance and Agent shall remit such
proceeds to Borrowers for use in the ordinary course of their respective
businesses.
(i) Interest Rate Protection. Borrowers shall maintain in
effect one or more agreements designed to provide protection against
fluctuations in interest rates with one or more financial institutions
reasonably acceptable to Agent with respect to at least $6,500,000 of the Term
Loan, which agreement(s) shall contain such terms as are customary and are
reasonably satisfactory to Agent. Agent hereby acknowledges that the Base Rate
Collar Agreement dated May 14, 1998 currently in effect among Fleet, the
Assigning Sellers and Camino and Neurocare Inc. satisfies the requirements of
this Section 7.1(i).
(j) Taxes. Each Borrower shall comply in all material respects
with and will cause each of its Subsidiaries to comply in all material respects
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including, without limitation, laws, rules,
regulations and orders relating to taxes, employer and employee contributions,
securities, employee retirement and welfare benefits, environmental protection
matters and employee health and safety) as now in effect and which may be
imposed in the future; provided, that any Borrower or any Subsidiary of any
Borrower may contest taxes, fees, assessments and other governmental charges in
good faith by appropriate proceedings diligently prosecuted and for which
appropriate reserves have been recorded in conformity with GAAP
(k) Equipment. Each Borrower shall make or cause to be made
all necessary replacements of and repairs to such Borrower's Equipment, to the
extent necessary to maintain and preserve the value and operating efficiency
thereof, reasonable wear and tear excepted.
(l) Ineligible Accounts. Promptly notify Agent in writing if
any Account with an original face amount of $75,000 or more which is reflected
as an Eligible Account in the
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most recent borrowing base certificate submitted to Agent pursuant to subsection
7.1(d) hereof ceases for any reason to satisfy any of the criteria set forth in
subsection 6.1(h) hereof.
(m) Additional Landlord Waivers. Deliver or cause to be
delivered to Agent a landlord waiver in favor of and in form acceptable to Agent
(i) with respect to the leased premises of Integra LifeSciences (or an affiliate
thereof) located at 105 Morgan Lane, Plainsboro, New Jersey 08536, not later
than sixty (60) days after the Amendment Effective Date and (y) with respect to
any other leased premises not set forth on Schedule 6.1(f) as of the Amendment
Effective Date at which Inventory of any Borrower is stored or otherwise located
from time to time thereafter, not later than the date which is the later to
occur of (x) sixty (60) days after the Amendment Effective Date and (y) the date
on which the lease with respect to such premises is executed and delivered by
the respective lessor and lessee thereunder.
7.2 Negative Covenants.
During the term of this Agreement, and thereafter for so long as there
are any Obligations outstanding, Borrowers covenant that, unless Majority
Lenders have first consented thereto in writing, they will not:
(a) Mergers; Consolidations; Acquisitions. Merge or
consolidate, or permit any Subsidiary of any Borrower to merge or consolidate,
with any Person; or acquire, or permit any of their respective Subsidiaries to
acquire, all or any substantial part of the Properties of any Person; provided,
that upon not less than five (5) days prior written notice to Agent, any
Borrower may merge with and into any other Borrower.
(b) Loans. Make, or permit any Subsidiary of any Borrower to
make, any loans or other advances of money to any Person, except for (i) salary,
travel advances, employee relocations, advances against commissions and other
similar advances in the ordinary course of business and (ii) loans and other
advances by any Borrower to any other Borrower.
(c) Total Indebtedness. Create, incur, assume, or suffer to
exist, or permit any Subsidiary of any Borrower to create, incur or suffer to
exist, any Indebtedness, except:
(i) Obligations owing to Agent and Lenders under this
Agreement;
(ii) Indebtedness of any Borrower to any other
Borrower;
(iii) accounts payable to trade creditors and current
operating expenses (other than for Money Borrowed) which are not aged more than
120 days from billing date or more than 30 days from the due date, in each case
incurred in the ordinary course of business and paid within such time period,
unless the same are being actively contested in good faith and by appropriate
and lawful proceedings; and such Borrower or such Subsidiary shall have set
aside such reserves, if any, with respect thereto as are required by GAAP and
deemed adequate by such Borrower or such Subsidiary and its independent
accountants;
(iv) Obligations to pay Rentals permitted by
subsection 7.2(l);
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(v) Permitted Purchase Money Indebtedness and
capitalized Lease Obligations not to exceed at any time, in the aggregate, the
amount set forth in the definition of Permitted Purchase Money Indebtedness;
(vi) contingent liabilities arising out of
endorsements of checks and other negotiable instruments for deposit or
collection in the ordinary course of business;
(vii) Indebtedness described in subsection 7.1(i);
(viii) obligations under the Redmond Notes, so long
as Borrowers' liability thereunder does not exceed $125,000 at any time, after
giving effect to the benefit of indemnification payments provided for pursuant
to the Integra Acquisition Documents; and
(ix) Indebtedness not included in paragraphs (i)
through (viii) above which does not exceed at any time, in the aggregate, the
sum of $250,000.
(d) Affiliate Transactions. Enter into, or be a party to, or
permit any Subsidiary of any Borrower to enter into or be a party to, any
transaction with any Affiliate of any Borrower or stockholder, except (i) in the
ordinary course of and pursuant to the reasonable requirements of such
Borrower's or such Subsidiary's business and upon fair and reasonable terms
which are fully disclosed to Agent and are no less favorable to such Borrower
than would be obtainable in a comparable arm's length transaction with a Person
not an Affiliate or stockholder of such Borrower or such Subsidiary and (ii)
pursuant to the Management Services Agreement, the Tax Sharing Agreement and the
Distribution Agreement, respectively.
(e) Limitation on Liens. Create or suffer to exist, or permit
any Subsidiary of any Borrower to create or suffer to exist, any Lien upon any
of its Property, income or profits, whether now owned or hereafter acquired,
except:
(i) Liens at any time granted in favor of Agent for
the benefit of itself and each Lender;
(ii) Liens for taxes, fees, assessments and
governmental charges (excluding any Lien imposed pursuant to any of the
provisions of ERISA) not yet due, or being contested in the manner described in
subsection 7.1(j) hereto, but only if in Agent's judgment such Lien does not
adversely affect Agent's or Lenders' rights or the priority of Agent's Lien in
the Collateral;
(iii) Liens arising in the ordinary course of a
Borrower's business by operation of law or regulation, but only if payment in
respect of any such Lien is not at the time required and such Liens do not, in
the aggregate, materially detract from the value of the Property of any Borrower
or materially impair the use thereof in the operation of such Borrower's
business;
(iv) Purchase Money Liens securing Permitted Purchase
Money Indebtedness;
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(v) Liens securing Indebtedness of one of a
Borrower's Subsidiaries to such Borrower or another such Subsidiary;
(vi) Liens incurred or deposits made in the ordinary
course of business (1) in connection with worker's compensation, social
security, unemployment insurance and other like laws, or (2) in connection with
sales contracts, leases, statutory obligations, work in progress advances and
other similar obligations not incurred in connection with the borrowing of money
or the payment of the deferred purchase price of property;
(vii) Title exceptions or encumbrances granted in the
ordinary course of business, affecting real property owned by any Borrower,
provided that such exceptions do not in the aggregate materially detract from
the value of such property or materially interfere with its use in the ordinary
course of such Borrower's business;
(viii) Liens arising in connection with Capitalized
Lease Obligations permitted hereunder; provided, that no such Lien shall extend
to or cover any assets other than the assets subject to such Capitalized Lease
Obligations;
(ix) Liens with respect to judgments, attachments and
the like which do not constitute Events of Default hereunder;
(x) Liens arising from leases or subleases granted to
others which do not interfere in any material respects with the business of any
Borrower;
(xi) such other Liens as appear on Schedule 7.2(e)
hereto; and
(xii) such other Liens as Agent may hereafter approve
in writing.
(f) Distributions. Declare or make, or permit any Subsidiary
of any Borrower to declare or make, any Distributions; provided, that:
(i) any Subsidiary of a Borrower may make
Distributions to such or any other Borrower; and
(ii) so long as before and after giving effect to
each such Distribution no Default or Event of Default shall have occurred and be
continuing, any Borrower or any Subsidiary of any Borrower may make
Distributions to Integra LifeSciences at the respective times and in the
respective amounts required pursuant to the Tax Sharing Agreement; provided,
that, (x) no such Distribution may be made in respect of the allocable share of
any Borrower or any Subsidiary of any Borrower of added tax assessments
determined under Step 2 of Section 2 of the Tax Sharing Agreement and (y) no
less than three (3) Business Days prior to the date of any such Distribution,
the Funds Administrator shall deliver to Agent a certificate of the chief
financial office of the Holding setting forth in reasonable detail the
calculation thereof.
(g) Capital Expenditures. Make Capital Expenditures
(including, without limitation, by way of capitalized leases) which, in the
aggregate, as to all Borrowers and all of their respective Subsidiaries, exceed
during any fiscal year of the Consolidated Entity, (i) with respect to the 1998
fiscal year of the Consolidated Entity, $400,000 related to the Beverly Patent
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Purchase and (ii) in addition to the amount set forth in clause (i) above for
the 1998 fiscal year, and for each fiscal year of the Consolidated Entity ending
thereafter, $1,250,000; provided, that, notwithstanding the foregoing,
Borrower's compliance with this Section 7.2(g) shall be determined without
giving effect to any Capital Expenditure made after the Amendment Effective Date
with Equity Contribution Proceeds constituting Unallocated Equity Contribution
Proceeds at the time such Capital Expenditure was made; provided, further, that,
concurrently with the making of any Capital Expenditure with Unallocated Equity
Contribution Proceeds, the Borrowing Agent shall have delivered to Agent an
Equity Contribution Proceeds Allocation Certificate with respect thereto.
(h) Disposition of Assets. Sell, lease or otherwise dispose of
any of, or permit any Subsidiary of any Borrower to sell, lease or otherwise
dispose of any of, its Properties, including any disposition of Property as part
of a sale and leaseback transaction, to or in favor of any Person, except (i)
sales of Inventory in the ordinary course of business for so long as no Event of
Default exists hereunder, (ii) transfers of Property to any Borrower by a
Subsidiary of any Borrower, (iii) dispositions in the ordinary course of
business of obsolete or worn out equipment which is replaced promptly with
productive assets, (iv) dispositions consisting of involuntary losses, thefts,
destructions or condemnations the proceeds of which do not exceed $500,000 in
the aggregate if not covered (subject to such deductibles as Lenders shall have
permitted) by insurance, for all Borrowers combined in any fiscal year of the
Consolidated Entity, and (v) dispositions (other than dispositions described in
the foregoing clause (iv)) the proceeds of which do not exceed $250,000 in the
aggregate for all Borrowers combined in any fiscal year of the Consolidated
Entity.
(i) Stock of Subsidiaries. Permit any of their respective
Subsidiaries to issue any additional shares of its capital stock except
director's qualifying shares.
(j) Bill-and-Hold Sales, Etc. Make a sale to any customer on a
bill-and-hold, guaranteed sale, sale and return, sale on approval or consignment
basis, or any sale on a repurchase or return basis.
(k) Restricted Investment. Make or have, or permit any
Subsidiary of any Borrower to make or have, any Restricted Investment.
(l) Leases. Become, or permit any of their respective
Subsidiaries to become, a lessee under any operating lease (other than a lease
under which a Borrower or any of its Subsidiaries is lessor) of Property if the
aggregate Rentals payable during any current or future period of 12 consecutive
months under the lease in question and all other leases under which any Borrower
or any of their respective Subsidiaries is then lessee would exceed (i)
$750,000, during the period commencing on the Closing Date and ending on
December 31, 2000, and (ii) $800,000, thereafter. The term "Rentals" means, as
of the date of determination, all payments which the lessee is required to make
by the terms of any operating lease.
(m) Tax Consolidation. Except pursuant to the Integra Tax
Sharing Agreement, file or consent to the filing of any consolidated income tax
return with any Person.
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(n) Equipment. Permit any Equipment to become affixed to any
leased real Property so that an interest arises therein under the real estate
laws of the applicable jurisdiction unless the landlord of such real Property
has executed a landlord waiver or leasehold mortgage in favor of and in form
acceptable to Agent, or permit any Equipment to become an accession to any
personal Property other than Equipment that is subject to first priority (except
for Permitted Liens) Liens in favor of Agent.
(o) Changes to Certain Documents. Change or amend in any way
the respective terms or provisions of the Management Services Agreement, the
Distribution Agreement, the Tax Sharing Agreement or any of the Integra
Acquisition Documents.
7.3 Specific Financial Covenants.
During the term of this Agreement, and thereafter for so long as there
are any Obligations outstanding, Borrowers covenant that, unless otherwise
consented to by Majority Lenders in writing, they shall comply with all of the
financial covenants set forth in Exhibit C hereto.
SECTION 8. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any of the
other Loan Documents, and without affecting in any manner the rights of Agent or
any Lender under the other sections of this Agreement, neither Agent nor any
Lender shall be required to make any Loan (or issue or procure the issuance of
any Letter of Credit or LC Guaranty) under this Agreement unless and until each
of the following conditions has been and continues to be satisfied:
8.1 Documentation.
Agent shall have received, in form and substance satisfactory to Agent
and its counsel, a duly executed copy of this Agreement and the other Loan
Documents, together with such additional documents, instruments and certificates
as Agent and its counsel shall reasonably require in connection therewith from
time to time, all in form and substance satisfactory to Agent and its counsel.
8.2 No Default.
No Default or Event of Default shall exist.
8.3 Other Conditions.
Each of the conditions precedent set forth in the Loan Documents shall
have been satisfied.
8.4 No Litigation.
No action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin,
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restrain or prohibit, or to obtain damages in respect of, or which is related to
or arises out of this Agreement or the consummation of the transactions
contemplated hereby.
8.5 Payment of Certain Fees.
Agent shall have received in immediately available funds for the
account of Agent or Fleet, as the case may be, all amounts payable by Borrowers
on the Amendment Effective Date pursuant to the Fee Letter.
8.6 Repayment of Original Obligations.
Agent shall have received in immediately available funds for
application to the outstanding principal balance of the Term Loan under the
Original Credit Agreement not less than $2,500,000.
8.7 Contribution to the Capital of Integra.
Integra shall have received in immediately available funds the proceeds
of a contribution by Holding to the capital of Integra in a amount not less than
$5,750,000 (the "Amendment Effective Date Capital Contribution").
8.8 Integra Acquisition.
The transactions contemplated to occur on the Amendment Effective Date
pursuant to the Integra Acquisition Documents shall have been consummated in
accordance with the terms of the Integra Acquisition Documents, the requirements
of all applicable laws and as contemplated hereby.
8.9 Integra Acquisition Documents.
On the Amendment Effective Date: (a) Agent shall have received executed
or conformed copies of all material Integra Acquisition Documents and any
amendments thereto, all of which shall be in full force and effect and no
material term or condition thereof shall have been amended, modified or waived
after the execution thereof, except with the prior written consent of Agent; (b)
none of the parties to any of the Integra Acquisition Documents shall have
failed to perform any material obligation or covenant required thereby to be
performed or complied with on or before the Amendment Effective Date.
SECTION 9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
9.1 Events of Default.
The occurrence of one or more of the following events shall constitute
an "Event of Default":
(a) Payment of Obligations. Any Borrower shall fail to make
any payment of principal on any of the Obligations on the due date thereof
(whether due at stated maturity, on
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demand, upon acceleration or otherwise) or shall fail to pay any of the other
Obligations within five (5) days of the due date thereof.
(b) Misrepresentations. Any representation, warranty or other
statement made or furnished to Agent or any Lender by or on behalf of any
Borrower, any Subsidiary of any Borrower or any Guarantor in this Agreement, any
of the other Loan Documents or any instrument, certificate or financial
statement furnished in compliance with or in reference thereto proves to have
been false or misleading in any material respect when made or furnished or when
reaffirmed pursuant to this Agreement or the other Loan Documents; provided,
that, notwithstanding the foregoing, the failure of any Account reflected in the
most recent borrowing base certificate submitted to Agent pursuant to subsection
7.1(d) hereof to satisfy one or more of the criteria set forth in subsection
6.1(h) hereof (other than such criteria set forth in clauses (ii) and (iv)
thereof) shall not constitute an Event of Default if (A) the original face
amount of such Account is less than $75,000 and (B) the aggregate original face
amount of all such Accounts which fail to satisfy one or more of such criteria,
does not exceed at any time $250,000.
(c) Breach of Specific Covenants. Any Borrower shall fail or
neglect to perform, keep or observe any covenant contained in Sections 7.1(a),
7.1(b), 7.1(c), 7.1(d), 7.1(h), 7.2 or 7.3 hereof on the date that such Borrower
is required to perform, keep or observe such covenant.
(d) Breach of Other Covenants. Any Borrower shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in Section 9.1
hereof) and the breach of such other covenant is not cured to Agent's
satisfaction within 30 days after the sooner to occur of any Borrower's receipt
of notice of such breach from Agent or the date on which such failure or neglect
first becomes known to any officer of any Borrower.
(e) Default Under Security Documents, Other Agreements or
Purchase Document. Any event of default shall occur under, or any Borrower shall
default in the performance or observance of any term, covenant, condition or
agreement contained in, any of the Security Documents, the Other Agreements or
the Purchase Documents and such default shall continue beyond any applicable
grace period.
(f) Other Defaults. There shall occur any default or event of
default on the part of any Borrower under any agreement, document or instrument
to which such Borrower is a party or by which such Borrower or any of its
Property is bound, creating or relating to any Indebtedness in a principal
amount in excess of $250,000 (other than the Obligations) if the payment or
maturity of such Indebtedness is accelerated in consequence of such event of
default or demand for payment of such Indebtedness is made.
(g) Insolvency and Related Proceedings. Any Borrower or any
Guarantor shall cease to be Solvent or shall suffer the appointment of a
receiver, trustee, custodian or similar fiduciary, or shall make an assignment
for the benefit of creditors, or any petition for an order for relief shall be
filed by or against any Borrower or any Guarantor under the federal bankruptcy
laws (if against a Borrower or any Guarantor, the continuation of such
proceeding for
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more than 60 days), or any Borrower or any Guarantor shall make any offer of
settlement, extension or composition to their respective unsecured creditors
generally.
(h) Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of any Borrower, any Subsidiary
of any Borrower or any Guarantor for a period which significantly affects such
Borrower's or such Guarantor's capacity to continue its business, on a
profitable basis; or any Borrower, any Subsidiary of any Borrower or any
Guarantor shall suffer the loss or revocation of any license or permit now held
or hereafter acquired by any Borrower or such Guarantor which is necessary to
the continued or lawful operation of its business; or any Borrower or any
Guarantor shall be enjoined, restrained or in any way prevented by court,
governmental or administrative order from conducting all or any material part of
its business affairs; or any material lease or agreement pursuant to which Any
Borrower or any Guarantor leases, uses or occupies any Property shall be
canceled or terminated prior to the expiration of its stated term; or any
material part of the Collateral shall be taken through condemnation or the value
of such Property shall be impaired through condemnation.
(i) Change of Ownership. There shall occur a Change of
Ownership.
(j) ERISA. A Reportable Event shall occur which Agent, in its
sole discretion, shall determine in good faith constitutes grounds for the
termination by the Pension Benefit Guaranty Corporation of any Plan or for the
appointment by the appropriate United States district court of a trustee for any
Plan, or if any Plan shall be terminated or any such trustee shall be requested
or appointed, or if any Borrower, any Subsidiary of any Borrower or any
Guarantor is in "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from such Borrower's, such
Subsidiary's or such Guarantor's complete or partial withdrawal from such Plan
and such events singly or in the aggregate could reasonably be expected to have
a Material Adverse Effect.
(k) Challenge to Agreement. Any Borrower, any Subsidiary of
any Borrower or any Guarantor, or any Affiliate of any of them, shall challenge
or contest in any action, suit or proceeding the validity or enforceability of
this Agreement or any of the other Loan Documents, the legality or
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Agent for the benefit of itself and Lenders.
(l) Repudiation of or Default Under Guaranty Agreement. Any
Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed by
such Guarantor, or shall repudiate such Guarantor's liability thereunder or
shall be in default under the terms thereof.
(m) Criminal Forfeiture. Any Borrower, any Subsidiary of any
Borrower or any Guarantor shall be criminally indicted or convicted under any
law that could reasonably be expected to lead to a forfeiture of any Property of
any Borrower, any Subsidiary of any Borrower or any Guarantor.
(n) Judgments. Any money judgment, writ of attachment or
similar process is filed against any Borrower, any Subsidiary of any Borrower or
any Guarantor, or any of their respective Property in an amount of $250,000 or
more, individually or in the aggregate, in each
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case, in excess of any applicable insurance with respect to which the insurer
has admitted liability and which judgment, attachment or process is not stayed,
released or discharged within thirty (30) days.
9.2 Acceleration of the Obligations.
Without in any way limiting the right of Agent to demand payment of any
portion of the Obligations payable on demand in accordance with Section 3.2
hereof, upon or at any time after the occurrence and during the continuance of
an Event of Default, all or any portion of the Obligations shall, at the option
of Agent or at the request of Majority Lenders, and without presentment, demand,
protest or further notice by Agent or any Lender, become at once due and payable
and Borrowers shall forthwith pay to Agent for the ratable benefit of Lenders
the full amount of such Obligations, provided, that upon the occurrence of an
Event of Default specified in subsection 9.1(g) hereof, all of the Obligations
shall become automatically due and payable without declaration, notice or demand
by Agent.
9.3 Other Remedies.
Upon and after the occurrence of an Event of Default, Agent shall have
and may exercise from time to time the following rights and remedies:
(a) All of the rights and remedies of a secured party under
the Code or under other applicable law, and all other legal and equitable rights
to which Agent or any Lender may be entitled, all of which rights and remedies
shall be cumulative and shall be in addition to any other rights or remedies
contained in this Agreement or any of the other Loan Documents, and none of
which shall be exclusive.
(b) The right to take immediate possession of the Collateral,
and to (i) require Borrowers to assemble the Collateral, at Borrowers' expense,
and make it available to Agent at a place designated by Agent which is
reasonably convenient to both parties, and (ii) enter any premises where any of
the Collateral shall be located and to keep and store the Collateral on said
premises until sold (and if said premises be the Property of any Borrower, such
Borrower agrees not to charge Agent for storage thereof).
(c) The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by law, in lots or in bulk, for cash or on credit, all as Agent, in
its sole discretion, may deem advisable. Each Borrower agrees that 10 days
written notice to Borrowers of any public or private sale or other disposition
of Collateral shall be reasonable notice thereof, and such sale shall be at such
locations as Agent may designate in said notice. Agent shall have the right to
conduct such sales on any Borrower's premises, without charge therefor, and such
sales may be adjourned from time to time in accordance with applicable law.
Agent shall have the right to sell, lease or otherwise dispose of the
Collateral, or any part thereof, for cash, credit or any combination thereof,
and Agent, on behalf of Lenders, may purchase all or any part of the Collateral
at public or, if permitted by law, private sale and, in lieu of actual payment
of such purchase price, may set off the amount of such price against the
Obligations. The proceeds realized from the sale of any Collateral may be
applied, after allowing
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2 Business Days for collection, first to the costs, expenses and attorneys' fees
incurred by Agent in collecting the Obligations, in enforcing the rights of
Lenders under the Loan Documents and in collecting, retaking, completing,
protecting, removing, storing, advertising for sale, selling and delivering any
Collateral, second to the interest due upon any of the Obligations; and third,
to the principal of the Obligations. If any deficiency shall arise, each
Borrower and each Guarantor shall remain jointly and severally liable to Lenders
therefor.
(d) Agent is hereby granted a license or other right to use,
without charge, each Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, tradenames, trademarks and advertising matter, or any
Property of a similar nature, as it pertains to the Collateral, in advertising
for sale and selling any Collateral and each Borrower's rights under all
licenses and all franchise agreements shall inure to Agent's benefit.
(e) Agent may, at its option, require Borrowers to deposit
with Agent funds equal to the LC Amount and, if Borrowers fail to promptly make
such deposit, Agent may advance such amount as a Revolving Credit Loan (whether
or not an Overadvance is created thereby). Each such Revolving Credit Loan shall
be secured by all of the Collateral and shall bear interest and be payable at
the same rate and in the same manner as Base Rate Revolving Credit Portions. Any
such deposit or advance shall be held by Agent as a reserve to fund future
payments on such LC Guaranties and future drawings against such Letters of
Credit. At such time as all LC Guaranties have been paid or terminated and all
Letters of Credit have been drawn upon or expired, any amounts remaining in such
reserve shall be applied against any outstanding Obligations, or, if all
Obligations have been indefeasibly paid in full, returned to Borrowers.
9.4 Remedies Cumulative; No Waiver.
All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of Borrowers contained in this Agreement and
the other Loan Documents, or in any document referred to herein or contained in
any agreement supplementary hereto or in any schedule or in any Guaranty
Agreement given to Agent or contained in any other agreement between Agent
and/or Lender and any Borrower, heretofore, concurrently, or hereafter entered
into, shall be deemed cumulative to and not in derogation or substitution of any
of the terms, covenants, conditions, or agreements of Borrowers herein
contained. The failure or delay of Agent or any Lender to require strict
performance by any Borrower of any provision of this Agreement or to exercise or
enforce any rights, Liens, powers, or remedies hereunder or under any of the
aforesaid agreements or other documents or security or Collateral shall not
operate as a waiver of such performance, Liens, rights, powers and remedies, but
all such requirements, Liens, rights, powers, and remedies shall continue in
full force and effect until all Loans and all other Obligations owing or to
become owing from Borrowers to Agent or any Lender shall have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrowers contained in this Agreement or any of the other
Loan Documents and no Event of Default by any Borrower under this Agreement or
any other Loan Documents shall be deemed to have been suspended or waived by
Agent, unless such suspension or waiver is by an instrument in writing
specifying such suspension or waiver and is signed by a duly authorized
representative of Agent and directed to Borrowers.
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SECTION 10. THE AGENT
10.1 Authorization and Action.
Each Lender hereby appoints and authorizes Agent to take such action on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. Each Lender hereby
acknowledges that Agent shall not have by reason of this Agreement assumed a
fiduciary relationship in respect of any Lender. In performing its functions and
duties under this Agreement, Agent shall act solely as Agent of Lenders and
shall not assume, or be deemed to have assumed, any obligation toward, or
relationship of agency or trust with or for, any Borrower. As to any matters not
expressly provided for by this Agreement and the other Loan Documents
(including, without limitation, enforcement or collection of the Term Notes),
Agent may, but shall not be required to, exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, whenever such instruction shall be requested by Agent or
required hereunder, or a greater or lesser number of Lenders if so required
hereunder, and such instructions shall be binding upon all Lenders; provided,
however, that Agent shall not be required to take any action which exposes Agent
to any liability or which is contrary to this Agreement, the other Loan
Documents or applicable law, unless Agent is indemnified therefor to its
satisfaction (which may, at Agent's option, include indemnification by each
Lender other than Fleet for its pro rata share of all such liabilities). If
Agent seeks the consent or approval of the Majority Lenders (or a greater or
lesser number of Lenders as required in this Agreement), with respect to any
action hereunder, Agent shall send notice thereof to each Lender and shall
notify each Lender at any time that the Majority Lenders (or such greater or
lesser number of Lenders) have instructed Agent to act or refrain from acting
pursuant hereto.
10.2 Agent's Reliance; No Liability
Neither Agent, any Affiliate of Agent, nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
Agent: (i) may treat the payee of any Term Note as the holder thereof until
Agent receives written notice of the assignment or transfer thereof signed by
such payee and in form reasonably satisfactory to Agent; (ii) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts, (iii) makes no warranties or representations to any Lender and shall
not be responsible to any Lender for any recitals, statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Documents; (iv) shall not have any duty beyond Agent's customary practices in
respect of loans in which Agent is the only lender, to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or the other Loan Documents on the part of any Borrower, to
inspect the property (including the books and records) of any Borrower, to
monitor the financial condition of any Borrower or to ascertain the existence or
possible existence or continuation of any Default or
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Event of Default; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (vi) shall not be liable to any
Lender for any action taken, or inaction, by Agent upon the instructions of
Majority Lenders pursuant to Section 10.1 hereof or refraining to take any
action pending such instructions; (vii) shall not be liable for any
apportionment or distributions of payments made by it in good faith pursuant to
Section 3 hereof; and (viii) shall incur no liability under or in respect of
this Agreement or the other Loan Documents by acting upon any notice, consent,
certificate, message or other instrument or writing (which may be by telephone,
facsimile, telegram, cable or telex) believed in good faith by it to be genuine
and signed or sent by the proper party or parties. In the event any
apportionment or distribution described in clause (vii) above is determined to
have been made in error, the sole recourse of any Person to whom payment was due
but not made shall be to recover from the recipients of such payments any
payment in excess of the amount to which they are determined to have been
entitled.
10.3 Fleet and Affiliates.
With respect to its commitment hereunder to make Loans, Fleet shall
have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
Agent; and the terms "Lender," "Lenders" or "Majority Lenders" shall, unless
otherwise expressly indicated, include Fleet in its individual capacity as a
Lender. Fleet and its Affiliates may lend money to, and generally engage in any
kind of business with, any Borrower, and any Person who may do business with or
own Securities of any Borrower all as if Fleet were not Agent and without any
duty to account therefor to any other Lender.
10.4 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon Agent or any other Lender and based on the financial statements
referred to in subsection 6.1(j) hereof and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement. Agent
shall not have any duty or responsibility, either initially or on an ongoing
basis, to provide any Lender with any credit or other similar information
regarding any Borrower.
10.5 Indemnification.
Lenders agree to indemnify Agent (to the extent not reimbursed by
Borrowers), in accordance with their respective Aggregate Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this Agreement; provided,
that no
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Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse Agent promptly upon
demand for its ratable share, as set forth above, of any out-of-pocket expenses
(including attorneys' fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiation, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this Agreement and
each other Loan Document, to the extent that Agent is not reimbursed for such
expenses by Borrowers. The obligations of Lenders under this Section 10.5 shall
survive the payment in full of all Obligations and the termination of this
Agreement. In the event that after payment and distribution of any amount by
Agent to Lenders, any Lender or any other Person, including any Borrower, any
creditor of any Borrower or a trustee in bankruptcy, recovers from Agent any
amount found to have been wrongfully paid to Agent or disbursed by Agent to
Lenders, then Lenders, in accordance with their respective Aggregate
Percentages, shall reimburse Agent for all such amounts.
10.6 Agency Provisions Relating to Collateral.
Each Lender authorizes and ratifies Agent's entry into this Agreement
and the Security Documents for the benefit of Lenders. Each Lender agrees that
any action taken by Agent with respect to the Collateral in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by
Agent of the powers set forth herein or therein, together with such other powers
as are reasonably incidental thereto, shall be authorized and binding upon all
Lenders. Agent is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, from time to time
prior to an Event of Default, to take any action with respect to any Collateral
or the Loan Documents which may be necessary to perfect and maintain perfected
Agent's Liens upon the Collateral, for its benefit and the ratable benefit of
Lenders. Lenders hereby irrevocably authorize Agent, at its option and in its
discretion, to release any Lien granted to or held by Agent upon any Collateral
(i) upon termination of the Agreement and payment and satisfaction of all
Obligations; or (ii) constituting property being sold or disposed of if
Borrowing Agent certifies to Agent that the sale or disposition is made in
compliance with subsection 3.3(a) and subsection 7.2(h) hereof (and Agent may
rely conclusively on any such certificate, without further inquiry); or (iii)
constituting property in which no Borrower owns any interest at the time the
Lien was granted or at any time thereafter; or (iv) in connection with any
foreclosure sale or other disposition of Collateral after the occurrence and
during the continuation of an Event of Default or (v) if approved, authorized or
ratified in writing by Agent at the direction of all Lenders. Upon request by
Agent at any time, Lenders will confirm in writing Agent's authority to release
particular types or items of Collateral pursuant hereto. Agent shall have no
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by any Borrower or is cared for, protected or
insured or has been encumbered or that the Liens granted to Agent herein or
pursuant to the Security Documents have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of its
rights, authorities and powers granted or available to Agent in this Section
10.6 or in any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act,
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omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, but consistent with the provisions of this
Agreement, given Agent's own interest in the Collateral as a Lender and that
Agent shall have no duty or liability whatsoever to any Lender.
10.7 Agent's Right to Purchase Commitments.
Agent shall have the right, but shall not be obligated, at any time
upon written notice to any Lender and with the consent of such Lender, which may
be granted or withheld in such Lender's sole discretion, to purchase for Agent's
own account all of such Lender's interests in this Agreement, the other Loan
Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.
10.8 Right of Sale, Assignment, Participations.
Borrowers hereby consent to any Lender's participation, sale,
assignment, transfer or other disposition, at any time or times hereafter, of
this Agreement and any of the other Loan Documents, or of any portion hereof or
thereof, including, without limitation, such Lender's rights, title, interests,
remedies, powers, and duties hereunder or thereunder subject to the terms and
conditions set forth below:
10.8.1 Sales, Assignments. Each Lender hereby agrees that,
with respect to any sale or assignment (i) no such sale or assignment
shall be for an amount of less than $5,000,000 or, if less, such
Lender's entire interest in the Loans and Loan Commitments (ii) each
such sale or assignment shall be made on terms and conditions which are
customary in the banking industry at the time of the transaction, (iii)
Agent and Borrower must consent, such consent not to be unreasonably
withheld, to each such assignment to a party which is not an original
signatory to this Agreement, (iv) the assigning Lender shall pay to the
Agent a processing and recordation fee of $3,500 and any out-of-pocket
attorneys' fees and expenses incurred by the Agent in connection with
any such sale or assignment. After such sale or assignment has been
consummated (x) the assignee lender thereupon shall become a "Lender"
for all purposes of this Agreement and (y) the assigning Lender shall
have no further liability for funding the portion of Loan Commitments
assumed by such other Lender.
10.8.2 Participations. Any Lender may grant participations in
its extensions of credit hereunder to any other Lender or other lending
institution (a "Participating Lender"), provided, that (i) no
Participating Lender shall thereby acquire any direct rights under this
Agreement, (ii) no Participating Lender shall be granted any right to
consent to any amendment, except to the extent any of the same pertain
to (A) reducing the aggregate principal amount of, or interest rate on,
or fees applicable to, any Loan or (B) extending the final stated
maturity of any Loan or the stated maturity of any portion of any
payment of principal of, or interest or fees applicable to, any of the
Loans; provided, however, that the rights described in this subclause
(B) shall not be deemed to include the right to consent to any
amendment with respect to or which has the effect of
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requiring any mandatory prepayment of any portion of any Loan or any
amendment or waiver of any Default or Event of Default, (iii) no sale
of a participation in extensions of credit shall in any manner relieve
the originating Lender of its obligations hereunder, (iv) the
originating Lender shall remain solely responsible for the performance
of such obligations, (v) Borrowers and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and
the other Loan Documents, (vi) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent
of Borrowers (so long as no Event of Default shall have occurred and be
continuing) and Agent, which consents shall not unreasonably be
withheld and (vii) all amounts payable by Borrowers hereunder shall be
determined as if the originating Lender had not sold any such
participation.
10.8.3 Certain Agreements of Borrowers. Borrowers agree that
(i) they will use their best efforts to assist and cooperate with each
Lender in any manner reasonably requested by such Lender to effect the
sale of participation in or assignments of any of the Loan Documents or
any portion thereof or interest therein, including, without limitation,
assisting in the preparation of appropriate disclosure documents; and
(ii) such Lender may disclose credit information regarding any Borrower
to any potential participant or assignee.
10.8.4 Non U.S. Resident Transferees. If, pursuant to this
Section 10.8, any interest in this Agreement or any Loans is
transferred to any transferee which is organized under the laws of any
jurisdiction other than the United States or any state thereof, the
transferor Lender shall cause such transferee (other than any
participant), and may cause any participant, concurrently with the
effectiveness of such transfer, to (i) represent to the transferor
Lender (for the benefit of the transferor Lender, the Agent, and
Borrowers) that under applicable law and treaties no Taxes will be
required to be withheld by Agent, any Borrower or the transferor Lender
with respect to any payments to be made to such transferee in respect
of the interest so transferred, (ii) furnish to the transferor Lender,
Agent and Borrowers either United States Internal Revenue Service Form
4224 or United States Internal Revenue Service Form 1001 (wherein such
transferee claims entitlement to complete exemption from United States
federal withholding tax on all interest payments hereunder), and (iii)
agree (for the benefit of the transferor Lender, Agent and Borrowers)
to provide the transferor Lender, Agent and Borrowers a new Form 4224
or Form 1001 upon the obsolescence of any previously delivered form and
comparable statements in accordance with applicable United States laws
and regulations and amendments duly executed and completed by such
transferee, and to comply from time to time with all applicable United
States laws and regulations with regard to such withholding tax
exemption.
10.9 Amendment.
No amendment or waiver of any provision of this Agreement or any Term
Note or any other Loan Document, nor consent to any departure by any Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders and
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Borrowers, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall be effective, unless it is
(i) in writing and signed by each Lender, if the effect thereof is to do any of
the following: (1) increase or decrease the aggregate Loan Commitments, or any
Lender's Revolving Loan Commitment or Term Loan Commitment, (2) reduce the
principal of, or interest on, the Term Notes or other amount payable hereunder
other than those payable only to Fleet in its capacity as Agent, which may be
reduced by Fleet unilaterally, (3) decrease any interest rate payable hereunder,
(4) postpone any date fixed for any payment of principal of, or interest on, the
Term Notes or other amounts payable hereunder, other than those payable only to
Fleet in its capacity as Agent, which may be postponed by Fleet unilaterally,
(5) reduce the aggregate unpaid principal amount of any Term Note, or the number
of Lenders that shall be required for Lenders or any of them to take any action
hereunder, (6) release or discharge any Person liable for the performance of any
obligations of any Borrower hereunder or under any of the Loan Documents, (7)
amend any provision of this Agreement that requires the consent of all Lenders
or consent to or waive any breach thereof, (8) amend this Section 10.9 or (9)
release any substantial portion of the Collateral, unless otherwise permitted
pursuant to Section 10.6 hereof; or (ii) in writing and signed by Lenders
holding the Aggregate Percentages, Revolving Loan Percentages and/or Term Loan
Percentages specified therein with respect to any provision of this Agreement
that requires the agreement, consent or approval of Lenders holding such
Percentages in a different amount than Majority Lenders; or (iii) in writing and
signed by Agent in addition to the Majority Lenders required above to take such
action, if the amendment, waiver or consent in question affects the rights or
duties of Agent under this Agreement, any Term Note or any Loan Document.
10.10 Resignation of Agent; Appointment of Successor.
The Agent may resign as Agent by giving not less than thirty (30) days'
prior written notice to Lenders and Borrowers. If the Agent shall resign under
this Agreement, then, subject to the consent of the Borrowers (which consent
shall not be unreasonably withheld and which consent shall not be required
during any period in which an Event of Default exists) either (i) the Majority
Lenders shall appoint from among Lenders a successor agent for Lenders or (ii)
if a successor agent shall not be so appointed and approved within the thirty
(30) day period following the Agent's notice to Lenders and the Borrowers of its
resignation, then the Agent shall appoint a successor agent who shall serve as
Agent until such time as the Majority Lenders appoint a successor agent. Upon
its appointment, such successor agent shall succeed to the rights, powers and
duties of the Agent and the term "Agent" shall mean such successor effective
upon its appointment, and the former Agent's rights, powers and duties as Agent
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 resignation of
any Agent hereunder, the provisions of this Section 10 shall inure to the
benefit of such former Agent and such former Agent shall not by reason of such
resignation be deemed to be released from liability for any actions taken or not
taken by it while it was an Agent under this Agreement.
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SECTION 11. MISCELLANEOUS
11.1 Power of Attorney.
Each Borrower hereby irrevocably designates, makes, constitutes and
appoints Agent (and all Persons designated by Agent) as such Borrower's true and
lawful attorney (and agent-in-fact) and Agent, or Agent's agent, may, without
notice to such or any other Borrower and in such Borrower's or Agent's name, but
at the cost and expense of Borrowers:
(a) At such time or times as a Default or an Event of Default
shall exist, as Agent or said agent, in its sole discretion, may determine,
endorse such Borrower's name on any checks, notes, acceptances, drafts, money
orders or any other evidence of payment or proceeds of the Collateral which come
into the possession of Agent or under Agent's control.
(b) At such time or times as an Event of Default shall exist,
as Agent or its agent in its sole discretion may determine: (i) demand payment
of the Accounts from the Account Debtors, enforce payment of the Accounts by
legal proceedings or otherwise, and generally exercise all of such Borrower's
rights and remedies with respect to the collection of its Accounts; (ii) settle,
adjust, compromise, discharge or release any of its Accounts or other Collateral
or any legal proceedings brought to collect any of its Accounts or other
Collateral; (iii) sell or assign any of its Accounts and other Collateral upon
such terms, for such amounts and at such time or times as Agent deems advisable;
(iv) take control, in any manner, of any item of payment or proceeds relating to
any Collateral; (v) prepare, file and sign such Borrower's name to a proof of
claim in bankruptcy or similar document against any Account Debtor or to any
notice of lien, assignment or satisfaction of lien or similar document in
connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to such Borrower and notify postal authorities to change the
address for delivery thereof to such address as Agent may designate; (vii)
endorse the name of such Borrower upon any of the items of payment or proceeds
relating to any Collateral and deposit the same to the account of Agent on
account of the Obligations; (viii) endorse the name of such Borrower upon any
chattel paper, document, instrument, invoice, freight bill, bill of lading or
similar document or agreement relating to the Accounts, Inventory and any other
Collateral; (ix) use any Borrower's stationery and sign the name of such
Borrower to verifications of its Accounts and notices thereof to Account
Debtors; (x) use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to its Accounts,
Inventory, Equipment and any other Collateral; (xi) make and adjust claims under
policies of insurance; and (xii) do all other acts and things necessary, in
Agent's determination, to fulfill such Borrower's obligations under this
Agreement.
The power of attorney granted hereby shall constitute a power coupled
with an interest and shall be irrevocable.
11.2 Indemnity.
Borrowers hereby jointly and severally agree to indemnify and hold
Agent and each Lender harmless from and against any liability, loss, damage,
suit, action or proceeding ever suffered or incurred by Agent or such Lender
(including reasonable attorneys fees and legal expenses) as the result of any
Borrower's failure to observe, perform or discharge any Borrower's
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duties hereunder. In addition, Borrowers, jointly and severally, shall defend
each Lender against and save it harmless from all claims of any Person with
respect to the Collateral; provided that Borrowers shall have no obligation to
Agent or any Lender pursuant to this Section 11.2 with respect to any
liabilities, losses, damages, suits, actions or proceedings arising from the
gross negligence or willful misconduct of such Person as determined by a court
of competent jurisdiction in a final judgment no longer subject to appeal.
Without limiting the generality of the foregoing, these indemnities shall extend
to any claims asserted against Agent or any Lender by any Person under any
Environmental Laws or similar laws by reason of any Borrower's or any other
Person's failure to comply with laws applicable to solid or hazardous waste
materials or other toxic substances. Notwithstanding any contrary provision in
this Agreement, the Obligations of Borrowers under this Section 11.2 shall
survive the payment in full of the other Obligations and the termination of this
Agreement.
11.3 No Sale of Interest by Borrowers.
No Borrower may sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including, without limitation, such Borrower's rights, title,
interests, remedies, powers, and duties hereunder or thereunder.
11.4 Severability.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
11.5 Successors and Assigns.
This Agreement, the Other Agreements and the Security Documents shall
be binding upon and inure to the benefit of the successors and assigns of
Borrowers and Lender.
11.6 Cumulative Effect; Conflict of Terms.
The provisions of the Other Agreements and the Security Documents are
hereby made cumulative with the provisions of this Agreement. Except as
otherwise provided in Section 3.2 hereof and except as otherwise provided in any
of the other Loan Documents by specific reference to the applicable provision of
this Agreement, if any provision contained in this Agreement is in direct
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
11.7 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
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11.8 Notice.
Except as otherwise provided herein, all notices, requests and demands
to or upon a party hereto, to be effective, shall be in writing and shall be
sent by certified or registered mail, return receipt requested, by personal
delivery against receipt, by overnight courier or by facsimile and, unless
otherwise expressly provided herein, shall be deemed to have been validly
served, given or delivered immediately when delivered against receipt, three
Business Days after deposit in the mail, postage prepaid, or one Business Day
after deposit with an overnight courier or, in the case of facsimile notice,
when sent, addressed as follows:
If to Agent: FLEET CAPITAL CORPORATION
20800 Swenson Drive
Suite 350
Waukesha, Wisconsin 53186
Attention: Loan
Administration Manager
Facsimile No.: (414) 798-4882
With a copy to: KATTEN MUCHIN & ZAVIS
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
Attention: Denise Burn, Esq.
Facsimile No.: (312) 577-8914
If to Borrowing Agent or INTEGRA NEUROCARE LLC
any Borrower: c/o Integra LifeSciences Corporation
105 Morgan Lane
Plainsboro, NJ 08536
Attention: John B. Henneman
Facsimile No.: (609) 275-1082
With a copy to: GOODSMITH, GREGG & UNRUH
300 South Wacker Drive
Suite 300
Chicago, Illinois 60606
Attn: David Gregg, Esq.
Facsimile No.: (312) 322-0056
or to such other address as each party may designate for itself by
notice given in accordance with this Section 11.8; provided, however, that any
notice, request or demand to or upon Agent pursuant to subsections 3.1(a),
3.1(e) or 4.2(b) hereof shall not be effective until received by Agent.
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11.9 Agent's and Lender's Consent.
Whenever Agent's or any Lender's consent is required to be obtained
under this Agreement, any of the Other Agreements or any of the Security
Documents as a condition to any action, inaction, condition or event, Agent or
such Lender shall be authorized to give or withhold such consent in its sole and
absolute discretion and to condition its consent upon the giving of additional
collateral security for the Obligations, the payment of money or any other
matter.
11.10 Credit Inquiries.
Each Borrower hereby authorizes and permits Agent and each Lender to
respond to usual and customary credit inquiries from third parties concerning
any Borrower or any of their respective Subsidiaries.
11.11 Time of Essence.
Time is of the essence of this Agreement, the Other Agreements and the
Security Documents.
11.12 Entire Agreement.
This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in connection
therewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.
11.13 Interpretation.
No provision of this Agreement or any of the other Loan Documents shall
be construed against or interpreted to the disadvantage of any party hereto by
any court or other governmental or judicial authority by reason of such party
having or being deemed to have structured or dictated such provision.
11.14 Confidentiality.
Each Lender shall hold all nonpublic information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by a prospective participant or assignee in
connection with the contemplated participation or assignment or as required or
requested by any governmental authority or representative thereof or pursuant to
legal process and shall require any such participant or assignee to agree to
comply with this Section 11.14.
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11.15 GOVERNING LAW; CONSENT TO FORUM.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES; PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN
ANY JURISDICTION OTHER THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN
THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH
COLLATERAL AND THE ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH
COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM
OR INCONSISTENT WITH THE LAWS OF ILLINOIS. AS PART OF THE CONSIDERATION FOR NEW
VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL
PLACE OF BUSINESS OF ANY BORROWER, AGENT OR ANY LENDER, EACH BORROWER HEREBY
CONSENTS AND AGREES THAT THE SUPERIOR COURT OF COOK COUNTY, ILLINOIS, OR, AT
AGENT'S OPTION, THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS, EASTERN DIVISION, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY BORROWER OR BORROWERS AND AGENT OR
ANY LENDER PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT. EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND SUCH BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH BORROWER MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH
IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF ANY BORROWER'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OF ANY JUDGMENT OR
ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
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11.16 WAIVERS BY BORROWERS.
EACH BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH EACH LENDER
HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE
COLLATERAL; (ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT,
PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT,
EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT
OR ANY LENDER ON WHICH ANY BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES
AND CONFIRMS WHATEVER AGENT OR ANY LENDER MAY DO IN THIS REGARD; (iii) NOTICE
PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR
SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING AGENT TO
EXERCISE ANY OF AGENT'S REMEDIES; (iv) THE BENEFIT OF ALL VALUATION,
APPRAISEMENT AND EXEMPTION LAWS; AND (v) NOTICE OF ACCEPTANCE HEREOF. EACH
BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO
EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT EACH LENDER IS RELYING UPON
THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWERS. EACH BORROWER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS
LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
11.17 Appointment and Authorization of Borrowing Agent.
(a) Each Borrower hereby designates and appoints Integra as
its agent to act as specified in this Agreement and each of the other Loan
Documents and Integra hereby acknowledges such designation and accepts such
appointment. Each Borrower hereby irrevocably authorizes and directs Borrowing
Agent to take such action on its behalf under the respective provisions of this
Agreement and the other Loan Documents, and any other instruments, documents and
agreements referred to herein or therein, and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of Borrowing Agent by the respective terms and provisions hereof and
thereof, and such other powers as are reasonably incidental thereto, including,
without limitation, to take the following actions for and on such Borrower's
behalf:
(i) to submit on behalf of each Borrower notices of
borrowing (and notices of conversion/continuation) to the Agent in accordance
with the provisions of Section 2.3 and subsection 3.1(a), respectively, each
such notice to be submitted by Borrowing Agent to the Agent as soon as
practicable after its receipt of a request to do so from a Borrower; and
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(ii) to receive on behalf of each Borrower the
proceeds of the Loans in accordance with the provisions of this Agreement, such
proceeds to be disbursed to the applicable Borrower by Borrowing Agent as soon
as practicable after its receipt thereof; and
(iii) to submit on behalf of each Borrower requests
for the issuance of Letters of Credit and LC Guaranties in accordance with the
provisions of subsection 3.1(e), each such request for the issuance of a Letter
of Credit or LC Guaranty to be submitted by Borrowing Agent as soon as
practicable after its receipt of a request to do so from any Borrower.
The Borrowing Agent is further authorized to take all such actions on
behalf of each Borrower necessary to exercise the specific powers granted in
clauses (i) through (iii) above and to perform such other duties hereunder and
under the Related Documents, and deliver such documents as delegated to or
required of the Borrowing Agent by the terms hereof or thereof.
(b) The Borrowing Agent may perform any of its duties
hereunder or under any of the Related Documents by or through its agents or
employees.
(c) The administration by Agent and Lenders of the respective
credit facilities under this Agreement as a co-borrowing facility with a
borrowing agent in the manner set forth herein is solely as an accommodation to
Borrowers and at their request and neither Agent nor any of the Lenders shall
incur any liability to Borrowing Agent or any of the Borrowers as a result
thereof.
11.18 Illinois Collateral Protection Act.
Unless Borrowers provide Agent with evidence of the insurance coverage
required by this Agreement, Agent may purchase insurance at Borrowers' expense
to protect Agent's interests in the Collateral. This insurance may, but need
not, protect Borrowers' interests. The coverage that Agent purchases may not pay
any claim that Borrowers may make or any claim that is made against Borrowers in
connection with the Collateral. Borrowers may later cancel any insurance
purchased by Agent, but only after providing Agent with evidence that Borrowers
have obtained insurance as required by this Agreement. If Agent purchases
insurance for the Collateral, Borrowers will be jointly and severally
responsible for the costs of that insurance, including interest and any other
charges that may be imposed in connection with the placement of the insurance,
until the effective date of the cancellation or expiration of the insurance. The
costs of the insurance may be added to the Loans. The costs of the insurance may
be more than the cost of insurance Borrowers may be able to obtain on their own.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been duly executed in Chicago,
Illinois, on the day and year specified at the beginning of this Agreement.
INTEGRA NEUROCARE LLC
By: NEUROCARE HOLDING CORPORATION,
its sole Member
By: /s/ John B. Henneman, III
------------------------------------------
John B. Henneman, III, President
REDMOND NEUROCARE LLC
By: INTEGRA NEUROCARE LLC, its
sole Member
By: NEUROCARE HOLDING CORPORATION,
its sole Member
By: /s/ John B. Henneman, III
------------------------------------------
John B. Henneman, III, President
HEYER-SCHULTE NEUROCARE, INC.
By: /s/ John B. Henneman, III
------------------------------------------
John B. Henneman, III, President
CAMINO NEUROCARE, INC.
By: /s/ John B. Henneman, III
------------------------------------------
John B. Henneman, III, President
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FLEET CAPITAL CORPORATION, in its
capacity as Agent
By: /s/ Robert Lund
--------------------------------------
Robert Lund, Vice President
FLEET CAPITAL CORPORATION,
individually as a Lender
By: /s/ Robert Lund
--------------------------------------
Robert Lund, Vice President
Term Loan Commitment: $11,000,000.00
Revolving Loan Commitment: $4,000,000.00
-52-
Each of the undersigned are executing the foregoing Loan and Security
Agreement solely for purposes of Section 1A.1 hereof.
HEYER-SCHULTE NEUROCARE, L.P.
By: SABA MEDICAL MANAGEMENT CO.,
INC., its General Partner
By: /s/ Gerald W. Klopp
--------------------------------------
Gerald W. Klopp, Secretary
NEURO NAVIGATIONAL, L.L.C.
By: HEYER-SCHULTE NEUROCARE, L.P.,
its Managing Member
By: SABA MEDICAL MANAGEMENT
CO, INC., its General Partner
By: /s/ Gerald W. Klopp
--------------------------------------
Gerald W. Klopp, Secretary
-53-
APPENDIX A
GENERAL DEFINITIONS
When used in the Amended and Restated Loan and Security Agreement dated
as of March 29, 1999, among FLEET CAPITAL CORPORATION, individually as a Lender
and in its capacity as Agent, the other Lenders from time to time thereunder,
CAMINO NEUROCARE, INC., HEYER-SCHULTE NEUROCARE, INC., INTEGRA NEUROCARE LLC and
REDMOND NEUROCARE LLC, as Borrowers, and Integra Neurocare LLC, as Borrowing
Agent, the following terms shall have the following meanings (terms defined in
the singular to have the same meaning when used in the plural and vice versa):
Account Debtor - any Person who is or may become obligated under or on
account of an Account of any Borrower.
Accounts - with respect to each Borrower, all accounts, contract
rights, chattel paper, instruments and documents, whether now owned or hereafter
created or acquired by such Borrower or in which such Borrower now has or
hereafter acquires any interest.
Affiliate - a Person (other than a Subsidiary): (i) which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, a Person; (ii) which beneficially owns or holds
10% or more of any class of the Voting Equity Interests of a Person; or (iii)
10% or more of the Voting Equity Interests of which is beneficially owned or
held by a Person or a Subsidiary of a Person.
Aggregate Percentage - with respect to each Lender, the percentage
equal to the quotient of (i) such Lender's Loan Commitment divided by (ii) the
aggregate of all Loan Commitments.
Agreement - the Loan and Security Agreement referred to in the first
sentence of this Appendix A, all Exhibits thereto and this Appendix A.
Amendment Effective Date - March 29, 1999.
Amendment Effective Date Capital Contribution - as defined in Section
8.7 of the Agreement.
Applicable Margin - the percentages set forth below with respect to the
Base Rate Revolving Credit Portion, the LIBOR Revolving Credit Portion, the Base
Rate Term Portion and the LIBOR Term Portion:
Revolver Base Revolver Term Loan Base Term Loan
Rate Margin LIBOR Margin Rate Margin LIBOR Margin
1.00% 2.50% 1.50% 3.00%
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Availability - the amount of money which Borrowers are entitled to
borrow from time to time as Revolving Credit Loans, such amount being the
difference derived when the sum of the principal amount of Revolving Credit
Loans then outstanding (including any amounts which Agent may have paid for the
account of any Borrower pursuant to any of the Loan Documents and which have not
been reimbursed by Borrowers), the LC Amount and the amount of any reserves is
subtracted from the Borrowing Base. If the amount outstanding is equal to or
greater than the Borrowing Base, Availability is zero ($-0-).
Bank - Fleet National Bank.
Base Rate - the rate of interest announced or quoted by Bank from time
to time as its prime rate for commercial loans, whether or not such rate is the
lowest rate charged by Bank to its most preferred borrowers; and, if such prime
rate for commercial loans is discontinued by Bank as a standard, a comparable
reference rate designated by Bank as a substitute therefor shall be the Base
Rate.
Base Rate Portion - a Base Rate Term Portion or a Base Rate Revolving
Credit Portion.
Base Rate Revolving Credit Portion - that portion of the Revolving
Credit Loans that is not subject to a LIBOR Option.
Base Rate Term Portion - that portion of the Term Loans that is not
subject to a LIBOR Option.
Beverly Patent Purchase - the purchase by Neurocare L.P. of the French
patent and associated rights (Registration # 42-14413) from Serge Glories and
Jean-Baptiste Drevet pursuant to that certain Patent Assignment Agreement dated
March 19, 1997.
Borrowing Base - as at any date of determination thereof, an amount
equal to the lesser of:
(i) $4,000,000; or
(ii) an amount equal to:
10.8.1 85% of the net amount of Borrowers' Eligible
Accounts outstanding at such date; provided, that the portion of the Borrowing
Base attributable at any time to Eligible Accounts which arise from a sale to an
Account Debtor outside the United States which are not supported by (x) a letter
of credit or acceptance in form and substance, and issued by a financial
institution, in each case satisfactory to Agent in the exercise of its
reasonable business judgment, or (y) a guaranty in form and substance, and
issued by a United States corporation or other business entity, in each case
satisfactory to Agent in the exercise of its reasonable business judgment, shall
not exceed $1,250,000;
PLUS
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10.8.1 the lesser of (x) $2,000,000 and (y) 50% of
the value of Borrowers' Eligible Inventory at such date, calculated on the basis
of the lower of cost or market with the cost calculated on a first-in, first-out
basis, provided that, notwithstanding the foregoing, the portion of the
Borrowing Base attributable at any time to Eligible Inventory consisting of
packaging materials shall not exceed $100,000.
For purposes hereof, the net amount of Eligible Accounts at any time
shall be the face amount of such Eligible Accounts less any and all returns,
rebates, discounts (which may, at Agent's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time. In the event of any material decrease in the
value of any of the assets specified in any Borrowing Base, Agent may, as
applicable, and after reasonable notice to and consultation with, the applicable
Borrower, decrease from time to time the percentage advance rates related to
such assets included in the calculating of such Borrowing Base.
Business Day - (i) when used with respect to the LIBOR Option, shall
mean a day on which dealings may be effected in deposits of United States
Dollars in the London interbank foreign currency deposits market and on which
Agent is conducting and other banks may conduct business in London, England, in
the State of Wisconsin or the State of Illinois and (ii) when used with respect
to any other provision of the Agreement, any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of Wisconsin or the
State of Illinois or is a day on which banking institutions located in either of
such states are closed.
Capital Expenditures - expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements, replacements, substitutions
or additions thereto which have a useful life of more than one year, including
the total principal portion of Capitalized Lease Obligations.
Capitalized Lease Obligation - any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
Change of Ownership - the occurrence or existence of any of the
following events or conditions:
(a) Integra shall cease for any reason to be the record and
beneficial owner of (i) 100% of the issued and outstanding capital
stock of each of Neurocare Inc. and Camino and (ii) 100% of the
outstanding units of membership interest of Redmond; or
(b) Holding shall cease for any reason to be the record and
beneficial owner of 100% of the outstanding units of membership
interest of Integra; or
(c) Integra LifeSciences shall cease for any reason to be the
record and beneficial owner of 100% of the issued and outstanding
capital stock of Holding.
Closing Date - January 9, 1998.
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Code - the Uniform Commercial Code as adopted and in force in the State
of Illinois, as from time to time in effect.
Collateral - all of the Property and interests in Property described in
Section 5 of the Agreement, and all other Property and interests in Property
that now or hereafter secure the payment and performance of any of the
Obligations.
Consolidated - the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
Consolidated Entity - Holding and its consolidated Subsidiaries.
Current Assets - at any date means the amount at which all of the
current assets of a Person would be properly classified as current assets shown
on a balance sheet at such date in accordance with GAAP.
Default - an event or condition the occurrence of which would, with the
lapse of time or the giving of notice, or both, become an Event of Default.
Default Rate - as defined in subsection 2.1(b) of the Agreement.
Distribution - in respect of any corporation, partnership, limited
liability company or other business entity means and includes: (i) the payment
of any dividends or other distributions on capital stock or equivalent ownership
interests of such Person (except distributions in such capital stock or
equivalent ownership interests) and (ii) the redemption or acquisition of
Securities or equivalent ownership interests of such Person unless made
contemporaneously from the net proceeds of the sale of other Securities or
equivalent ownership interests, as the case may be.
Distribution Agreement - that certain Distribution Agreement of even
date herewith between Integra LifeSciences I, Ltd., a Delaware corporation and
Integra, a true, complete and correct copy of which is attached hereto as
Exhibit D, without giving effect to any amendments, restatements or other
modifications thereof, or supplements thereto, except for any of the foregoing
previously consented to in writing by Agent.
Dominion Account - a special account or accounts of Agent established
by Borrowers pursuant to the Agreement at banks selected by Borrowers, but
acceptable to Agent in its reasonable discretion, and over which Agent shall
have sole and exclusive access and control for withdrawal purposes.
Eligible Account - an Account of a Borrower arising in the ordinary
course of such Borrower's business from the sale of goods or rendition of
services if:
(i) it does not arise out of a sale made by such Borrower to a
Subsidiary or an Affiliate of such or any Borrower or to a Person
controlled by an Affiliate of any Borrower;
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(ii) it does not remain unpaid more than 90 days after the
original invoice date;
(iii) no more than 25% of the Accounts from the Account Debtor
fail to constitute Eligible Accounts hereunder;
(iv) the total unpaid Accounts of the Account Debtor do not
exceed 20% of the net amount of all Eligible Accounts, but only such
excess shall not be Eligible Accounts;
(v) no covenant, representation or warranty contained in the
Agreement with respect to such Account has been breached;
(vi) the Account Debtor is not also such Borrower's creditor
or supplier, or the Account Debtor has not disputed liability with
respect to such Account, and the Account Debtor has not made any claim
with respect to any other Account due from such Account Debtor, or the
Account otherwise is not and may not otherwise become subject to any
right of set-off by the Account Debtor, provided that any such Account
shall be eligible to the extent that the amount thereof exceeds such
contract, dispute, claim, set-off or similar right;
(vii) the Account Debtor has not commenced a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended and has not made an assignment for the benefit of creditors,
nor has a decree or order for relief 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, nor has any other petition or other application
for relief under the federal bankruptcy laws been filed against the
Account Debtor, nor has the Account Debtor 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;
(viii) it does not arise from a sale to the Account Debtor on
a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment or any other repurchase or return basis;
(ix) the Account Debtor is not the United States of America or
any department, agency or instrumentality thereof, unless the such
Borrower assigns its right to payment of such Account to Agent for the
benefit of Agent and Lenders, in a manner satisfactory to Agent, so as
to comply with the Assignment of Claims Act of 1940 (31 U.S.C. ss.203
et seq., as amended);
(x) it is at all times subject to Agent's duly perfected,
first priority security interest and to no other Lien that is not a
Permitted Lien;
(xi) the goods giving rise to such Account have been delivered
to and accepted by the Account Debtor or the services giving rise to
such Account have been performed
A-5
by such Borrower and accepted by the Account Debtor and the Account
otherwise represents a final sale;
(xii) the Account is not evidenced by chattel paper or an
instrument of any kind, and has not been reduced to judgment; and
(xiii) such Borrower has not made any agreement with the
Account Debtor for any deduction therefrom, except for discounts or
allowances which are made in the ordinary course of business for prompt
payment and which discounts or allowances are reflected in the
calculation of the face value of each invoice related to such Account.
Eligible Inventory - Inventory of Borrowers (other than packaging
materials, supplies, displays and parts) if:
(i) it is raw materials or finished goods;
(ii) it is in good, unused and saleable condition;
(iii) it is not slow-moving, obsolete or unmerchantable;
(iv) it meets all standards imposed by any governmental agency
or authority;
(v) it conforms in all respects to the warranties and
representations set forth in the Agreement;
(vi) it is at all times subject to Agent's duly perfected,
first priority security interest and no other Lien except a Permitted
Lien;
(vii) it is situated at a location in compliance with the
Agreement or is in transit;
provided, that, notwithstanding the foregoing and subject to the
limitation set forth in the proviso to paragraph 2 of clause (ii) of the
definition of the term Borrowing Base set forth herein, packaging materials
which satisfy each of the requirements contained in clauses (v), (vi) and (vii)
above shall be deemed Eligible Inventory for purposes of calculating the
Borrowing Base.
Environmental Laws - all federal, state and local laws, rules,
regulations, ordinances, programs, permits, guidances, orders and consent
decrees relating to health, safety and environmental matters.
Equipment - with respect to each Borrower, all machinery, apparatus,
equipment, fittings, furniture, fixtures, motor vehicles and other tangible
personal Property (other than Inventory) of every kind and description used in
such Borrower's operations or owned by such Borrower or in which such Borrower
has an interest, whether now owned or hereafter acquired
A-6
by such Borrower and wherever located, and all parts, accessories and special
tools and all increases and accessions thereto and substitutions and
replacements therefor.
Equity Contribution Proceeds means proceeds of contributions to the
capital of Integra by Holding received by Integra in cash, other than the
Amendment Effective Date Capital Contribution.
Equity Contribution Proceeds Allocation Certificate means a Certificate
executed by the chief financial officer of the Borrowing Agent and delivered to
the Agent in connection with any Capital Expenditure made with Equity
Contribution Proceeds, certifying (a) the aggregate amount of Unallocated Equity
Contribution Proceeds as of the date of such Capital Expenditure, without giving
effect thereto, (b) the amount and a brief description thereof and (c) the
aggregate amount of Unallocated Equity Contribution Proceeds after giving effect
thereto.
ERISA - the Employee Retirement Income Security Act of 1974, as
amended, and all rules and regulations from time to time promulgated thereunder.
Event of Default - as defined in Section 9.1 of the Agreement.
Excess Cash Flow - with respect to any fiscal period of the
Consolidated Entity, 50% of the following amount: net income of the Consolidated
Entity plus, to the extent deducted in determining such net income, the sum of
(a) depreciation and amortization, (b) non-cash interest expense and (c)
non-cash income taxes, and minus the sum of (x) regularly scheduled payments of
principal on Indebtedness for Borrowed Money and (y) Capital Expenditures which
are not financed, in each case determined without duplication in accordance with
GAAP for such fiscal period.
Fee Letter - that certain fee letter agreement of even date herewith
among Fleet, Agent and Borrowers.
GAAP - generally accepted accounting principles in the United States of
America in effect from time to time.
General Intangibles - with respect to each Borrower, all personal
property of such Borrower (including things in action) other than goods,
Accounts, chattel paper, documents, instruments and money, whether now owned or
hereafter created or acquired by such Borrower.
Guarantors - Holding and any other Person who may hereafter guarantee
payment or performance of the whole or any part of the Obligations.
Guaranty Agreements - the Continuing Guaranty Agreements which are to
be executed by each Guarantor in form and substance satisfactory to Agent.
Holding - Neurocare Holding Corporation, a Delaware corporation.
Indebtedness - as applied to a Person means, without duplication:
A-7
(i) all items which in accordance with GAAP would be included
in determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date as of which Indebtedness is
to be determined, including, without limitation, Capitalized Lease
Obligations,
(ii) all obligations of other Persons which such Person has
guaranteed,
(iii) all reimbursement obligations in connection with letters
of credit or letter of credit guaranties issued for the account of such
Person, and
(iv) in the case of each Borrower, the Obligations.
Integra Acquisition Documents - the Integra Asset Purchase Agreement
and all agreements, documents and instruments executed and delivered by any
Person pursuant thereto or in connection therewith, without giving effect to any
amendments, restatements or other modifications thereof, or supplements thereto,
except for any of the foregoing previously consented to in writing by Agent.
Integra Asset Purchase Agreement - that certain Asset Purchase
Agreement of even date herewith among the Assigning Sellers, Integra and
Redmond.
Integra Constituent Documents - The Integra Limited Liability Company
Agreement and the Certificate of Formation of Integra.
Integra Limited Liability Company Agreement - the Limited Liability
Company Agreement of Integra NeuroCare LLC dated as of March 29, 1999.
Integra LifeSciences - Integra LifeSciences Corporation, a Delaware
corporation.
Inventory - with respect to each Borrower, all of such Borrower's
inventory, whether now owned or hereafter acquired including, but not limited
to, all goods intended for sale or lease by such Borrower, or for display or
demonstration; all work in process; all raw materials and other materials and
supplies of every nature and description used or which might be used in
connection with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in
such Borrower's business; and all documents evidencing General Intangibles of
such Borrower relating to any of the foregoing, whether now owned or hereafter
acquired by such Borrower.
Investment Property - with respect to each Borrower, all of such
Borrower's investment property, whether now owned or hereafter acquired,
including, but not limited to, all securities (certificated or uncertificated),
securities accounts, securities entitlements, commodity accounts and commodity
contracts.
LC Amount - at any time, the aggregate undrawn face amount of all
Letters of Credit and LC Guaranties then outstanding.
A-8
LC Guaranty - any guaranty pursuant to which Agent or any Affiliate of
Agent shall guaranty the payment or performance by any Borrower of its
reimbursement obligation under any letter of credit.
Legal Requirement - any requirement imposed upon Lender by any law of
the United States of America or by any regulation, order, interpretation, ruling
or official directive (whether or not having the force of law) of the Federal
Reserve Board, or any other board, central bank or governmental or
administrative agency, institution or authority of the United States of America,
the United Kingdom or any political subdivision of either thereof.
Letter of Credit - any letter of credit issued by Agent or any of
Agent's Affiliates for the account of any Borrower.
LIBOR Interest Payment Date - with respect to any LIBOR Portion, the
last day of each calendar month during the applicable LIBOR Period.
LIBOR Option - the option granted pursuant to Section 2.3 of the
Agreement to have the interest on all or any portion of the principal amount of
the Revolving Credit Loans or the Term Loans based on a LIBOR Rate.
LIBOR Period - any period of one month, two months, three months or six
months, commencing on a Business Day, selected as provided in subsection 2.3(i);
provided, however that no LIBOR Period shall extend beyond the last day of the
Term unless Borrowers and Lender have agreed to an extension of the Term beyond
the expiration of the LIBOR Period in question and that, with respect to any
LIBOR Term Portion, no applicable LIBOR Period shall extend beyond the scheduled
installment payment date for such LIBOR Term Portion. If any LIBOR Period so
selected shall end on a date that is not a Business Day, such LIBOR Period shall
instead end on the next preceding or succeeding Business Day as determined by
Agent in accordance with the then current banking practice in London; provided,
that Borrowers shall not be required to pay double interest, even though the
preceding LIBOR Period ends and the new LIBOR Period begins on the same day.
Each determination by Agent of the LIBOR Period shall, in the absence of
manifest error, be conclusive.
LIBOR Portion - a LIBOR Revolving Credit Portion or a LIBOR Term
Portion.
LIBOR Rate - with respect to any LIBOR Portion for the related LIBOR
Period, an interest rate per annum (rounded upwards, if necessary, to the next
higher 1/8 of 1%) equal to the product of (i) the Base LIBOR Rate (as
hereinafter defined) multiplied by (ii) Statutory Reserves. For purposes of this
definition, the term "Base LIBOR Rate" shall mean the rate (rounded to the
nearest 1/8 of 1% or, if there is no nearest 1/8 of 1%, the next higher 1/8 of
1%) at which deposits of U.S. dollars approximately equal in principal amount to
the LIBOR Portion specified in the applicable LIBOR Request are offered to Agent
by prime banks in the London interbank foreign currency deposits market at
approximately 11:00 a.m., London time, 2 Business Days prior to the commencement
of such LIBOR Period, for delivery on the first day of
A-9
such LIBOR Period. Each determination by Agent of any LIBOR Rate shall, in the
absence of manifest error, be conclusive.
LIBOR Request - a notice in writing (or by telephone confirmed by
telex, telecopy or other facsimile transmission on the same day as the telephone
request) from Borrowing Agent to Agent requesting that interest on a Revolving
Credit Loan or a portion of the Term Loans be based on the LIBOR Rate,
specifying: (i) the first day of the LIBOR Period; (ii) the length of the LIBOR
Period consistent with the definition of that term; and (iii) the dollar amount
of the LIBOR Revolving Credit Portion or the LIBOR Term Portion consistent with
the definition of such terms.
LIBOR Revolving Credit Portion - that portion of the Revolving Credit
Loans specified in a LIBOR Request (including any portion of Revolving Credit
Loans which is being borrowed by Borrowers concurrently with such LIBOR Request)
which is not less than $500,000 and is an integral multiple of $100,000, which
does not exceed the outstanding balance of Revolving Credit Loans not already
subject to a LIBOR Option and, which, as of the date of the LIBOR Request
specifying such LIBOR Revolving Credit Portion, has met the conditions for
basing interest on the LIBOR Rate in Section 2.3 of the Agreement and the LIBOR
Period of which was commenced and not terminated.
LIBOR Term Portion - that portion of the Term Loans specified in a
LIBOR Request which is not less than $500,000 and is an integral multiple of
$100,000, which does not exceed the outstanding balance of the Term Loans not
already subject to a LIBOR Option and, which, as of the date of the LIBOR
Request specifying such LIBOR Term Portion, has met the conditions for basing
interest on the LIBOR Rate in Section 2.3 of the Agreement and the LIBOR Period
of which was commenced and not terminated.
Lien - any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract. The term "Lien" shall also include
rights of seller under conditional sales contracts or title retention
agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of the Agreement, Borrower
shall be deemed to be the owner of any Property which it has acquired or holds
subject to a conditional sale agreement or other arrangement pursuant to which
title to the Property has been retained by or vested in some other Person for
security purposes.
Loan Account - the loan account established on the books of Agent
pursuant to Section 3.7 of the Agreement.
Loan Commitment - with respect to any Lender, the amount of such
Lender's Revolving Loan Commitment plus such Lender's Term Loan Commitment.
Loan Documents - the Agreement, the Other Agreements and the Security
Documents.
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Loans - all loans and advances of any kind made by any Lender pursuant
to the Agreement.
Management Services Agreement - that certain Management Services
Agreement of even date herewith between Integra and Integra LifeSciences I,
Ltd., a Delaware corporation, a true, complete and correct copy of which is
attached hereto as Exhibit E, without giving effect to any amendments,
restatements or modifications thereof or supplements thereto, except for any of
the foregoing previously consented to in writing by Agent.
Material Adverse Effect - (i) a material adverse effect on the
business, condition (financial or otherwise), operation, performance or
properties of any Borrower or any Subsidiary of any Borrower, (ii) a material
adverse effect on the rights and remedies of Agent or Lenders under the Loan
Documents, or (iii) the material impairment of the ability of any Borrower or
any Subsidiary of any Borrower to perform its obligations hereunder or under any
Loan Document.
Majority Lenders - as of any date, Lenders holding 66-2/3% or more of
the Aggregate Percentages of all Lenders as of such date.
Money Borrowed - means (i) Indebtedness arising from the lending of
money by any Person to any Borrower; (ii) Indebtedness, whether or not in any
such case arising from the lending by any Person of money to any Borrower, (1)
which is represented by notes payable or drafts accepted that evidence
extensions of credit, (2) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (3) upon which interest charges are
customarily paid (other than accounts payable) or that was issued or assumed as
full or partial payment for Property; (iii) Indebtedness that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations with respect to
letters of credit or guaranties of letters of credit and (v) Indebtedness of any
Borrower under any guaranty of obligations that would constitute Indebtedness
for Money Borrowed under clauses (i) through (iii) hereof, if owed directly by
any Borrower.
Multiemployer Plan - has the meaning set forth in Section 4001(a)(3) of
ERISA.
Obligations - all Loans and all other advances, debts, liabilities,
obligations, covenants and duties, together with all interest, fees and other
charges thereon, owing, arising, due or payable from any Borrower to any Lender
of any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under the Agreement or any of the
other Loan Documents or otherwise whether direct or indirect (including those
acquired by assignment), absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising and however acquired.
Off-Site Inventory - as defined in subsection 6.1(f) of the Agreement.
Other Agreements - any and all agreements, instruments and documents
(other than the Agreement and the Security Documents), heretofore, now or
hereafter executed by any Borrower, any Subsidiary of any Borrower or any other
third party and delivered to Agent in respect of the transactions contemplated
by the Agreement.
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Overadvance - the amount, if any, by which the outstanding principal
amount of Revolving Credit Loans plus LC Amount plus reserves, if any, exceeds
the Borrowing Base.
Participating Lender - each Person who shall be granted the right by
Lender to participate in any of the Loans described in the Agreement and who
shall have entered into a participation agreement in form and substance
satisfactory to Lender.
Permitted Liens - any Lien of a kind specified in subsection 7.2(e) of
the Agreement.
Permitted Purchase Money Indebtedness - Purchase Money Indebtedness of
any Borrower incurred after the date hereof which is secured by a Purchase Money
Lien and which, when aggregated with the principal amount of all other such
Indebtedness and Capitalized Lease Obligations of all Borrowers at the time
outstanding, does not exceed $500,000. For the purposes of this definition, the
principal amount of any Purchase Money Indebtedness consisting of capitalized
leases shall be computed as a Capitalized Lease Obligation.
Person - an individual, partnership, corporation, limited liability
company, joint stock company, land trust, business trust, or unincorporated
organization, or a government or agency or political subdivision thereof.
Plan - an employee benefit plan now or hereafter maintained for
employees of any Borrower that is covered by Title IV of ERISA.
Projections - the Consolidated Entity's forecasted Consolidated and
consolidating (i) balance sheets, (ii) profit and loss statements and (iii) cash
flow statements, all prepared on a consistent basis with the Consolidated
Entity's historical financial statements, together with such descriptions of
underlying assumptions and other supporting details in each case as shall be
reasonably requested by Agent.
Property - with respect to each Borrower, any interest in any kind of
property or asset of such Borrower, whether real, personal or mixed, or tangible
or intangible.
Purchase Money Indebtedness - means and includes (i) Indebtedness
(other than the Obligations) for the payment of all or any part of the purchase
price of any fixed assets, (ii) any Indebtedness (other than the Obligations)
incurred at the time of or within 10 days prior to or after the acquisition of
any fixed assets for the purpose of financing all or any part of the purchase
price thereof, and (iii) any renewals, extensions or refinancings thereof, but
not any increases in the principal amounts thereof outstanding at the time.
Purchase Money Lien - a Lien upon fixed assets which secures Purchase
Money Indebtedness, but only if such Lien shall at all times be confined solely
to the fixed assets (and insurance for same) the purchase price of which was
financed through the incurrence of the Purchase Money Indebtedness secured by
such Lien.
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Redmond Constituent Documents - The Redmond Limited Liability Company
Agreement and the Certificate of Formation of Redmond.
Redmond Limited Liability Company Agreement - the Limited Liability
Company Agreement of Redmond Neurocare LLC dated as of ___, 1999.
"Redmond Notes" means the Subordinated Promissory Notes, dated January
2, 1997, from Heyer-Schulte Neurocare, L.P. to Redmond Neurotechnologies
Corporation in the face amount of $600,000 and $450,000, respectively.
Rentals - as defined in subsection 7.2(l) of the Agreement.
Reportable Event - any of the events set forth in Section 4043(b) of
ERISA.
Reserves - as defined in subsection 1.1(a) of the Agreement.
Restricted Investment - any investment made in cash or by delivery of
Property to any Person, whether by acquisition of stock, Indebtedness or other
obligation or Security, or by loan, advance or capital contribution, or
otherwise, or in any Property, except the following:
(i) investments, to the extent existing on the Effective Date,
in one or more Subsidiaries of any Borrower by such Borrower;
(ii) Property to be used in the ordinary course of business of
any Borrower or any Subsidiary of any Borrower;
(iii) Current Assets arising from the sale of goods and
services in the ordinary course of business of any Borrower or any
Subsidiary of any Borrower;
(iv) investments in direct obligations of the United States of
America, or any agency thereof or obligations guaranteed by the United
States of America, provided that such obligations mature within one
year from the date of acquisition thereof;
(v) investments in certificates of deposit maturing within one
year from the date of acquisition issued by a bank or trust company
organized under the laws of the United States or any state thereof
having capital surplus and undivided profits aggregating at least
$100,000,000;
(vi) investments in commercial paper given the highest rating
by a national credit rating agency and maturing not more than 270 days
from the date of creation thereof; and
(vii) investments in any wholly-owned Subsidiary of a Borrower
in addition to any such Subsidiaries in existence on the Amendment
Effective Date, so long as in each case, (A) concurrently therewith,
such Subsidiary is joined as a party to the Agreement and all other
applicable Loan Documents and shall have taken such further actions and
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executed such additional documents and instruments as Agent may
reasonably determine to be necessary or desirable to further carry out
and consummate the provisions contemplated by the Loan Documents with
respect to such Subsidiary, including, without limitation, the granting
to Agent for the benefit of Agent and Lenders of an enforceable, first,
prior (subject to Permitted Liens) and perfected Lien on substantially
all properties and assets of such Subsidiary and (B) the Agent shall
have been granted for the benefit of the Agent and Lenders an
enforceable, first, prior (subject to Permitted Liens) and perfected
Lien on all equity and other interests of any kind of therein and shall
have received duly executed copies of all instruments and documents as
Agent may reasonably deem necessary or desirable in connection
therewith, including, without limitation, UCC financing statements.
Revolving Credit Loan - a Loan made by Lenders as provided in Section
1.1 of the Agreement.
Revolving Loan Commitment - with respect to each Lender, the amount of
such Lender's Commitment pursuant to subsection 1.1(a) of the Agreement, as set
forth next to such Lender's name on the signature page thereof.
Revolving Loan Percentage - with respect to each Lender, the percentage
equal to the quotient of such Lender's Revolving Loan Commitment divided by the
aggregate of all Revolving Loan Commitments.
Security - shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
Security Documents - the Guaranty Agreements and all other instruments
and agreements now or at any time hereafter securing the whole or any part of
the Obligations.
Solvent - as to any Person, such Person (i) owns Property whose fair
saleable value on a going concern basis is greater than the amount required to
pay all of such Person's Indebtedness (including contingent debts), (ii) is able
to pay all of its Indebtedness as such Indebtedness matures and (iii) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage.
Statutory Reserves - 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, without limitation,
any marginal, special, emergency or supplemental reserves), expressed as a
decimal, established by the Board of Governors of the Federal Reserve System and
any other banking authority to which Bank or any Lender is subject for
Eurocurrency Liabilities (as defined in Regulation D of the Board of Governors
of the Federal Reserve System or any successor thereto). Such reserve
percentages shall include, without limitation, those imposed under such
Regulation D. LIBOR Portions shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to Bank or any Lender under such
Regulation D. Statutory Reserves
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shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
Subsidiary - of any Person, any corporation, partnership, limited
liability company or other business entity of which such Person owns, directly
or indirectly through one or more intermediaries, more than 50% of the Voting
Equity Interests at the time of determination.
Tax - in relation to any LIBOR Portion and the applicable LIBOR Rate,
any tax, levy, impost, duty, deduction, withholding or charges of whatever
nature required by any Legal Requirement (i) to be paid by Lender and/or (ii) to
be withheld or deducted from any payment otherwise required hereby to be made by
any Borrower to Lender; provided, that the term "Tax" shall not include any
taxes imposed upon the net income of any Lender.
Tax Sharing Agreement - that certain Tax Sharing Agreement, effective
as of the first day of the consolidated return year beginning January 1, 1999,
among Borrowers, Holding, Integra LifeSciences and certain of their affiliates,
a true, complete and correct copy of which is attached hereto as Exhibit F,
without giving effect to any amendments, restatements or other modifications
thereof, or supplements thereto, except for any of the foregoing previously
consented to in writing by Agent.
Term - as defined in Section 4.1 of the Agreement.
Term Loans - the Loans described in Section 1.2 of the Agreement.
Term Notes - the Substituted and Amended Secured Promissory Note to be
executed by Borrowers on or about the Amendment Effective Date in favor Agent,
substantially in the form of Exhibit A to the Agreement.
Term Loan Commitment - with respect to any Lender, the amount of such
Lender's Commitment to lend pursuant to Section 1.2 of the Agreement, as set
forth next to such Lender's name on the signature pages hereof.
Term Loan Percentage - with respect to each Lender, the percentage
equal to the quotient of such Lender's Term Loan Commitment divided by the
aggregate of all Term Loan Commitments.
Total Credit Facility - $15,000,000 minus all repayments of principal
made after the Amendment Effective Date with respect to the Term Loans.
Unallocated Equity Contribution Proceeds means, at any time, the
excess, if any, at such time of (a) the aggregate amount of Equity Contribution
Proceeds received by Borrowers after the Amendment Effect Date over (b) the
aggregate amount thereof previously allocated to a Capital Expenditure.
Voting Equity Interests - of any corporation, partnership, limited
liability company or other business entity, as the case may be, Securities (or
equivalent ownership or controlling
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interests) of any class or classes of such entity entitled (without regard to
the occurrence of any contingency) to vote in the election of directors or
managers (or Persons performing similar functions) thereof.
Other Terms. All other terms contained in the Agreement shall have,
when the context so indicates, the meanings provided for by the Code to the
extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.
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EXHIBITS
--------
EXHIBIT A Substituted and Amended Term Note
EXHIBIT B Compliance Certificate
EXHIBIT C Financial Covenants
EXHIBIT D Distribution Agreement
EXHIBIT E Management Services Agreement
EXHIBIT F Tax Sharing Agreement
SCHEDULES
---------
SCHEDULE 6.1(a) Organization and Qualification
SCHEDULE 6.1(d) Capital Structure
SCHEDULE 6.1(e) Corporate Names
SCHEDULE 6.1(f) Business Locations; Agent for Process
SCHEDULE 6.1(k) Full Disclosure
SCHEDULE 6.1(n) Tax Identification Numbers of Borrowers
SCHEDULE 6.1(o) Brokers
SCHEDULE 6.1(p) Patents, Trademarks, Copyrights and Licenses
SCHEDULE 6.1(s) Contracts Restricting Borrower's Right to
Incur Debts
SCHEDULE 6.1(t) Litigation
SCHEDULE 6.1(v) Leases
SCHEDULE 6.1(w) Pension Plans
SCHEDULE 6.1(y) Labor Relations
SCHEDULE 7.2(e) Permitted Liens