EXHIBIT 10.18
AMENDED AND RESTATED CREDIT AGREEMENT
BY AND AMONG
XOMED SURGICAL PRODUCTS, INC.,
MEROCEL CORPORATION,
XOMED, INC.,
XOMED-▇▇▇▇▇▇, ▇.▇. INC.,
TREBAY MEDICAL CORPORATION,
MEROCEL FUNDING CORPORATION,
BANK OF BOSTON CONNECTICUT,
THE OTHER LENDERS WHICH ARE OR MAY BECOME PARTIES HERETO
AND
BANK OF BOSTON CONNECTICUT, AS AGENT
DATED: AS OF MAY 5, 1997
TABLE OF CONTENTS
/section/1. DEFINITIONS AND RULES OF INTERPRETATION..........................1
/section/1.1. Definitions...........................................1
/section/1.2. Rules of Interpretation...............................1
/section/2. THE REVOLVING CREDIT FACILITY....................................1
/section/2.1. Commitment to Lend....................................2
/section/2.2. Commitment Fee........................................2
/section/2.3. Reduction of Total Commitment.........................2
/section/2.4. The Notes.............................................3
/section/2.5. Interest on Loans.....................................3
/section/2.6. Requests for Loans....................................4
/section/2.7. Conversion Options....................................4
/section/2.8. Funds for Loans.......................................5
/section/2.9. Settlement; Application of Repayments of Loans........6
/section/2.10. Change in Borrowing Base.............................8
/section/3. REPAYMENT OF THE LOANS...........................................8
/section/3.1. Maturity..............................................8
/section/3.2. Mandatory Repayments of Loans.........................8
/section/3.3. Optional Repayments of Loans..........................8
/section/4. CERTAIN GENERAL PROVISIONS.......................................9
/section/4.1. Funds for Payments....................................9
/section/4.2. Computations..........................................10
/section/4.3. Inability to Determine Eurodollar Rate................10
/section/4.4. Illegality............................................10
/section/4.5. Additional Costs, Etc.................................11
/section/4.6. Capital Adequacy......................................12
/section/4.7. Certificate...........................................12
/section/4.8. Indemnity.............................................13
/section/4.9. Interest After Default................................13
/section/4.10. Concerning Joint and Several Liability
of the Borrowers...................................13
/section/5. COLLATERAL SECURITY..............................................15
/section/6. REPRESENTATIONS AND WARRANTIES...................................15
/section/6.1. Corporate Authority; Ownership........................15
/section/6.2. No Business Activity; Subsidiaries....................17
/section/6.3. Governmental Approvals................................17
/section/6.4. Title to Properties; Leases...........................17
/section/6.5. Financial Statements..................................17
/section/6.6. No Material Changes, Etc..............................18
/section/6.7. Franchises, Patents, Copyrights, Etc..................18
/section/6.8. Litigation............................................18
/section/6.9. No Materially Adverse Contracts, Etc..................18
/section/6.10. Compliance with Other Instruments, Laws, Etc..........19
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/section/6.11. Tax Status...........................................19
/section/6.12. No Event of Default..................................19
/section/6.13. Holding Company and Investment Company Acts..........19
/section/6.14. Absence of Financing Statements, Etc.................19
/section/6.15. Perfection of Security Interest......................20
/section/6.16. Certain Transactions.................................20
/section/6.17. Employee Benefit Plans...............................20
/section/6.18. Regulations U and X..................................21
/section/6.19. Environmental Compliance.............................21
/section/6.20. Fiscal Year..........................................23
/section/6.21. Loans as Senior Indebtedness.........................23
/section/6.22. Other Representations................................23
/section/6.23. Bank Accounts........................................24
/section/6.24. Puerto Rico Collateral...............................24
/section/7. AFFIRMATIVE COVENANTS OF THE BORROWERS...........................24
/section/7.1. Punctual Payment.....................................24
/section/7.2. Maintenance of Office................................24
/section/7.3. Records and Accounts.................................24
/section/7.4. Financial Statements, Certificates and Information...24
/section/7.5. Notices..............................................25
/section/7.6. Corporate Existence; Maintenance of Properties.......26
/section/7.7. Insurance............................................27
/section/7.8. Taxes................................................27
/section/7.9. Inspection of Properties and Books, Etc..............28
/section/7.10. Compliance with Laws, Contracts,
Licenses, and Permits..............................29
/section/7.11. Employee Benefit Plans...............................29
/section/7.12. Use of Proceeds......................................29
/section/7.13. Additional Mortgaged Property........................29
/section/7.14. Further Assurances...................................30
/section/7.15. Bank Accounts........................................30
/section/8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS......................30
/section/8.1. Restrictions on Indebtedness.........................30
/section/8.2. Restrictions on Liens................................32
/section/8.3. Restrictions on Investments..........................33
/section/8.4. Distributions........................................34
/section/8.5. Merger, Consolidation and Disposition of Assets......34
/section/8.6. Sale and Leaseback...................................35
/section/8.7. Compliance with Environmental Laws...................35
/section/8.8. Employee Benefit Plans...............................35
/section/8.9. Changes in Terms of Subordinated Debt................36
/section/8.10. Acquisition Documents................................36
/section/8.11. Change of Fiscal Year................................38
/section/8.12. Total Commitment Amount..............................38
/section/8.13. Amendment of Receivable Servicing Agreement..........38
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/section/9. FINANCIAL COVENANTS OF THE BORROWERS.............................38
/section/9.1. Operating Cash Flow to Financial Obligations.........38
/section/9.2. Consolidated Shareholders Equity.....................38
/section/9.3. Liabilities to Equity................................38
/section/10. CLOSING CONDITIONS..............................................38
/section/10.1. Loan Documents.......................................39
/section/10.2. Certified Copies of Charter Documents................39
/section/10.3. Corporate Action.....................................39
/section/10.4. Incumbency Certificate...............................39
/section/10.5. Legality of Transactions.............................39
/section/10.6. Validity of Liens....................................39
/section/10.7. UCC Search Results...................................40
/section/10.8. Title Insurance Policy Endorsements..................40
/section/10.9. Landlord Consents....................................40
/section/10.10. Certificates of Insurance............................40
/section/10.11. Borrowing Base Report................................40
/section/10.12. Proceedings and Documents............................40
/section/10.13. Accounts Receivable Aging Report.....................40
/section/10.14. Financial Condition..................................41
/section/10.15. Opinion of Counsel...................................41
/section/10.16. Intentionally omitted................................41
/section/10A Acquisition Credit Loan Closing Conditions...........41
/section/10A.1 Acquisition Documents................................41
/section/10A.2 Corporate Action.....................................41
/section/10A.3 Discharge of Liens...................................41
/section/10A.4 Proceedings and Documents............................42
/section/10A.5 Closing of Acquisition...............................42
/section/10A.6 Opinion of Counsel...................................42
/section/10A.7 Capital Structure....................................42
/section/10A.8 Financial Condition..................................42
/section/10A.9 Additional Guaranty..................................43
/section/10A.10 Approvals............................................43
/section/10A.11 Other Conditions.....................................43
/section/11. CONDITIONS TO ALL BORROWINGS....................................43
/section/11.1. Representations True; No Event of Default............43
/section/11.2. No Legal Impediment..................................44
/section/11.3. Governmental Regulation..............................44
/section/11.4. Proceedings and Documents............................44
/section/11.5. Borrowing Base Report................................44
/section/12. EVENTS OF DEFAULT; ACCELERATION; ETC............................44
/section/12.1. Events of Default and Acceleration...................44
/section/12.2. Termination of Commitments...........................47
/section/12.3. Remedies.............................................48
/section/12.4. Distribution of Collateral Proceeds..................48
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/section/13. SETOFF..........................................................49
/section/14. THE AGENT.......................................................50
/section/14.1. Authorization........................................50
/section/14.2. Employees and Agents.................................50
/section/14.3. No Liability.........................................50
/section/14.4. No Representations...................................51
/section/14.5. Payments.............................................51
/section/14.6. Holders of Notes.....................................52
/section/14.7. Indemnity............................................52
/section/14.8. Agent as Bank........................................52
/section/14.9. Resignation..........................................53
/section/14.10. Notification of Defaults and Events of Default.......53
/section/14.11. Duties in the Case of Enforcement....................53
/section/15. EXPENSES........................................................54
/section/16. INDEMNIFICATION.................................................54
/section/17. SURVIVAL OF COVENANTS, ETC......................................55
/section/18. ASSIGNMENT AND PARTICIPATION....................................55
/section/18.1. Conditions to Assignment by Banks....................56
/section/18.2. Certain Representations and Warranties;
Limitations; Covenants.............................56
/section/18.3. Register.............................................57
/section/18.4. New Notes............................................57
/section/18.5. Participations.......................................58
/section/18.6. Disclosure...........................................58
/section/18.7. Assignee or Participant Affiliated with
the Borrowers......................................58
/section/18.8. Miscellaneous Assignment Provisions..................59
/section/18.9. Assignment by Borrowers..............................59
/section/19. NOTICES, ETC....................................................59
/section/20. GOVERNING LAW...................................................60
/section/21. HEADINGS........................................................60
/section/22. COUNTERPARTS....................................................61
/section/23. ENTIRE AGREEMENT, ETC...........................................61
/section/24. WAIVER OF JURY TRIAL............................................61
/section/25. CONSENTS, AMENDMENTS, WAIVERS, ETC..............................61
/section/26. SEVERABILITY....................................................62
/section/27. COMMERCIAL TRANSACTION; PREJUDGMENT REMEDY WAIVER...............62
/section/28. EFFECTIVE DATE..................................................63
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EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Compliance Certificate
Exhibit C Form of Assignment and Acceptance
Exhibit D Borrowing Base Report
SCHEDULES
Schedule 1 Lending Institutions
Schedule 2 Definitions and Rules of Interpretation
Schedule 6.2 Ownership Interests
Schedule 6.4 Owned Assets not listed on Balance Sheet
Schedule 6.7 Patents
Schedule 6.8 Litigation
Schedule 6.16 Permitted Transactions
Schedule 6.19 Environmental Issues
Schedule 6.23 Bank Accounts
Schedule 8.1 Permitted Indebtedness
Schedule 8.2 Permitted Liens
Schedule 8.3 Permitted Investments
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is made as of the 5th day of
May, 1997, by and among MEROCEL CORPORATION ("Merocel"), XOMED, INC. ("Xomed"),
XOMED-▇▇▇▇▇▇, ▇.▇. INC. ("Xomed P.R."), XOMED SURGICAL PRODUCTS, INC.
("Holdings"), TREBAY MEDICAL CORPORATION ("Trebay") and MEROCEL FUNDING
CORPORATION ("MFC" and, together with Merocel, Xomed, Xomed P.R., Holdings and
Trebay, the "Borrowers" and each, singularly, a "Borrower"), each a Delaware
corporation, and BANK OF BOSTON CONNECTICUT and the other lending institutions
listed on SCHEDULE 1 attached hereto (collectively, the "Banks") and BANK OF
BOSTON CONNECTICUT as agent for itself and the other Banks (in such capacity,
the "Agent").
WHEREAS, pursuant to a certain Credit Agreement dated as of April 15,
1994, as amended by a certain First Amendment Agreement dated June 24, 1994, an
Amendment and Waiver Agreement dated as of March 31, 1995, a Second Amendment
and Waiver Agreement dated as of July 3, 1995, a Third Amendment and Waiver
Agreement dated as of April 15, 1996, a Joinder Agreement dated as of April 16,
1996, a Fourth Amendment and Waiver Agreement dated as of June 7, 1996, a Fifth
Amendment and Waiver Agreement dated as of September 3, 1996, a Sixth Amendment
Agreement dated as of December 31, 1996 and a Joinder Agreement dated as of
December 31, 1996 (as amended and in effect from time to time, the "ORIGINAL
CREDIT AGREEMENT"), the Banks made revolving loans in an aggregate original
principal amount of up to $14,000,000 to the Borrowers for the purposes
described therein; and
NOW, THEREFORE, the Borrowers, the Banks and the Agent agree that as of
the Effective Date (as hereinafter defined), the Original Credit Agreement shall
be amended and restated in its entirety as set forth herein.
/section/1. DEFINITIONS AND RULES OF INTERPRETATION.
/section/1.1. DEFINITIONS. Except as otherwise expressly provided
herein, all capitalized terms used in this Credit Agreement, the exhibits hereto
and any notes, certificates, reports or other documents or instruments made or
delivered pursuant to or in connection with this Credit Agreement shall have the
meanings set forth for such terms in SCHEDULE 2 hereto.
/section/1.2. RULES OF INTERPRETATION. Except as otherwise expressly
provided herein, the rules of interpretation set forth in SCHEDULE 2 hereto
shall apply to this Credit Agreement, the exhibits hereto and any notes,
certificates, reports or other documents or instruments made or delivered
pursuant to or in connection with this Credit Agreement.
/section/2. THE REVOLVING CREDIT FACILITY.
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/section/2.1. COMMITMENT TO LEND. Subject to the terms and conditions
set forth in this Credit Agreement, each of the Banks severally agrees to lend
to the Borrowers and the Borrowers may borrow, repay, and reborrow from time to
time between the Effective Date and the Maturity Date upon notice by the
Borrowers to the Agent given in accordance with /section/2.6, such sums as are
requested by the Borrowers up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment or, if Bank of Boston Connecticut elects, in its sole discretion, to
fund any Loan pursuant to the terms of /section/2.9 hereof, no later than 12:00
noon (Hartford, Connecticut time) on the proposed Drawdown Date of such Loan;
PROVIDED that the outstanding aggregate amount of all Loans shall not at any
time exceed at the lesser of (i) the Total Commitment and (ii) the Borrowing
Base. The Loans shall be made PRO RATA in accordance with each Bank's Commitment
Percentage. Each request for a Loan hereunder shall constitute a representation
and warranty by the Borrowers that the conditions set forth in /section/10 and
/section/11, in the case of the initial Loans to be made on the Effective Date,
/section//section/10A and 11 in the case of a Loan which is an Acquisition
Credit Loan, and /section/11 in the case of all other Loans, have been satisfied
on the date of such request.
/section/2.2. COMMITMENT FEE. The Borrowers agree to pay to the Agent
for the respective accounts of the Banks in accordance with their respective
Commitment Percentages a commitment fee calculated as follows: (a) at the rate
of one-quarter of one percent (0.25%) per annum on the average daily amount
during each calendar quarter or portion thereof from the Effective Date to the
Maturity Date by which $8,000,000 exceeds the average daily aggregate principal
amount of Loans outstanding during such period and (b) at the rate of one-eighth
of one percent (0.125%) per annum on the average daily amount during each
calendar quarter or portion thereof from the Effective Date to the Maturity Date
by which the Total Commitment exceeds the average daily aggregate principal
amount of Loans outstanding in excess of $8,000,000 during such period. The
commitment fee shall be payable quarterly in arrears on the first day of each
calendar quarter for the immediately preceding calendar quarter commencing on
the first such date following the date hereof, with a final payment on the
Maturity Date or any earlier date on which the Commitments shall terminate.
/section/2.3. REDUCTION OF TOTAL COMMITMENT. The Borrowers shall have
the right at any time and from time to time upon three (3) Business Days' prior
written notice to the Agent to reduce by $500,000 or any greater integral
multiple thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced PRO RATA in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice from the
Borrowers delivered pursuant to this /section/2.3, the Agent will notify the
Banks of the
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substance thereof. Upon the effective date of any such reduction or termination,
the Borrowers shall pay to the Agent for the respective accounts of the Banks
the full amount of any commitment fee then accrued on the amount of the
reduction. No reduction or termination of the Commitments may be reinstated.
/section/2.4. THE NOTES. The Loans shall be evidenced by separate
promissory notes of the Borrowers in substantially the form of EXHIBIT A hereto
(each a "Note"), dated as of the Effective Date and completed with appropriate
insertions. One Note shall be payable to the order of each Bank in a principal
amount equal to such Bank's Commitment or, if less, the outstanding amount of
all Loans made by such Bank, plus interest accrued thereon, as set forth below.
Each Borrower irrevocably authorizes each Bank to make or cause to be made, at
or about the time of the Drawdown Date of any Loan or at the time of receipt of
any payment of principal on such Bank's Note, an appropriate notation on such
Bank's Note Record reflecting the making of such Loan or (as the case may be)
the receipt of such payment. The outstanding amount of the Loans set forth on
such Bank's Note Record shall be PRIMA FACIE evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to record, or any error
in so recording, any such amount on such Bank's Note Record shall not limit or
otherwise affect the obligations of the Borrowers hereunder or under any Note to
make payments of principal of or interest on any Note when due.
/section/2.5. INTEREST ON LOANS. Except as otherwise provided in
/section/4.09,
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto at a rate per annum equal to the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the Eurodollar Rate determined for such
Interest Period plus the Eurodollar Rate Applicable Margin. With respect to each
Eurodollar Rate Loan and each fiscal quarter of the Borrowers and their
Subsidiaries, the Eurodollar Rate Applicable Margin will be determined by the
Agent after review of the Earnings Before Interest, Taxes, Depreciation and
Amortization of the Borrowers for the period of four (4) consecutive fiscal
quarters ending on the immediately preceding fiscal quarter, all as follows:
----------------------------------- ---------------------------------
EBITDA EURODOLLAR RATE APPLICABLE
MARGIN
----------------------------------- ---------------------------------
----------------------------------- ---------------------------------
Greater than $12,000,000 1.25%
----------------------------------- ---------------------------------
Less than or equal to 1.50%
$12,000,000
----------------------------------- ---------------------------------
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The Agent will determine the Eurodollar Rate Applicable Margin (i) on
the ninetieth (90th) day following the last day of the last fiscal quarter of
each fiscal year and (ii) on the forty-fifth (45th) day following the last day
of each of the first three (3) fiscal quarters of each fiscal year by reference
to the financial statements delivered to the Banks by the Borrowers in
accordance with the terms hereof, in each case, with respect to the period of
four (4) consecutive fiscal quarters ending on such last day. Each such
determination of the Eurodollar Rate Applicable Margin shall be effective for
all Eurodollar Rate Loans commencing on or after the period that begins on the
date of such determination and ending on the date immediately preceding the next
date of determination of the Eurodollar Rate Applicable Margin.
(c) The Borrowers promise to pay interest on each Loan in arrears on
each Interest Payment Date with respect thereto.
/section/2.6. REQUESTS FOR LOANS. The Borrowers shall give to the Agent
notice, whether written or oral, in form and substance satisfactory to Agent of
each Loan requested hereunder (a "Loan Request") no less than (i) two (2)
Business Days prior to the proposed Drawdown Date of any Base Rate Loan and (ii)
two (2) Eurodollar Business Days prior to the proposed Drawdown Date of any
Eurodollar Rate Loan (except that no such notice with respect to Base Rate Loans
will be required to the extent that the proceeds of such borrowing are disbursed
to the Borrowers' controlled disbursement account maintained with the Agent).
Each such notice shall specify (1) the principal amount of the Loan requested,
(2) the proposed Drawdown Date of such Loan, (3) the Interest Period for such
Loan and (4) the Type of such Loan. Promptly upon receipt of any such notice,
the Agent shall notify each of the Banks thereof. Each Loan Request shall be
irrevocable and binding on each Borrower and shall obligate the Borrowers to
accept the Loan requested from the Banks on the proposed Drawdown Date. Each
Loan Request shall be in a minimum aggregate amount of $500,000 or an integral
multiple thereof.
/section/2.7. CONVERSION OPTIONS.
(a) The Borrowers may elect from time to time to convert any
outstanding Loan to a Loan of another Type, PROVIDED that (i) with respect to
any such conversion of a Loan to a Base Rate Loan, the Borrowers shall give the
Agent at least two (2) Business Days' prior written notice of such election;
(ii) with respect to any such conversion of a Base Rate Loan to a Eurodollar
Rate Loan, the Borrowers shall give the Agent at least two (2) Eurodollar
Business Days' prior written notice of such election; (iii) with respect to any
such conversion of a Eurodollar Rate Loan into a Loan of another Type, such
conversion shall only be made on the last day of the Interest Period with
respect thereto and (iv) no Loan may be converted into a Eurodollar Rate Loan
when any Default or Event of Default has occurred and is continuing. On the date
on
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which such conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its Domestic
Lending Office or its Eurodollar Lending Office, as the case may be. All or any
part of outstanding Loans of any Type may be converted into a Loan of another
Type as provided herein, PROVIDED that any partial conversion shall be in an
aggregate principal amount of $500,000 or a whole multiple thereof (except that
the foregoing limitation shall not be applicable to Base Rate Loans to the
extent that the proceeds of such borrowing are requested to be disbursed to the
Borrowers' controlled disbursement account maintained with the Agent). Each
Conversion Request relating to the conversion of a Loan to a Eurodollar Rate
Loan shall be irrevocable by the Borrowers.
(b) Any Loan of any Type may be continued as a Loan of the same Type
upon the expiration of an Interest Period with respect thereto by compliance by
the Borrowers with the notice provisions contained in /section/2.7(a); PROVIDED
that no Eurodollar Rate Loan may be continued as such when any Default or Event
of Default has occurred and is continuing, but shall be automatically converted
to a Base Rate Loan on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of Default of
which officers of the Agent active upon the Borrowers' account have actual
knowledge. The Agent shall notify the Banks promptly when any such automatic
conversion contemplated by this /section/2.7 is scheduled to occur.
(c) Any conversion to or from Eurodollar Rate Loans shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of all Eurodollar Rate Loans having the
same Interest Period shall not be less than $500,000 or a whole multiple of
$100,000 in excess thereof.
/section/2.8. FUNDS FOR LOANS.
(a) Not later than 12:00 noon (Hartford, Connecticut time) on the
proposed Drawdown Date of any Loan, each of the Banks will make available to the
Agent, at the Agent's Head Office, in immediately available funds, the amount of
such Bank's Commitment Percentage of the amount of the requested Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by (i) /section//section/10 and 11 in the case of initial Loans, (ii)
/section//section/10A and 11 in the case of any Loan which is an Acquisition
Credit Loan and (iii) /section/11 for all other Loans, and the satisfaction of
the other conditions set forth therein, to the extent applicable, the Agent will
make available to the Borrowers the aggregate amount of such Loans made
available to the Agent by the Banks. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any Drawdown Date the
amount of such Bank's Commitment Percentage of the requested Loans shall not
relieve any other Bank from its
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several obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Loans.
(b) The Agent may, unless notified to the contrary by any Bank prior to
a Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Loans to be
made on such Drawdown Date, and the Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrowers a
corresponding amount. If any Bank makes available to the Agent such amount on a
date after such Drawdown Date, such Bank shall pay to the Agent on demand an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Agent for federal funds acquired by the Agent during each day included in such
period, TIMES (ii) the amount of such Bank's Commitment Percentage of such
Loans, TIMES (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Drawdown Date to the date on which the amount of
such Bank's Commitment Percentage of such Loans shall become immediately
available to the Agent, and the denominator of which is 365. A statement of the
Agent submitted to such Bank with respect to any amounts owing under this
paragraph shall be PRIMA FACIE evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of such Loans
is not made available to the Agent by such Bank within three (3) Business Days
following such Drawdown Date, the Agent shall be entitled to recover such amount
from the Borrowers on demand, with interest thereon at the rate per annum
applicable to the Loans made on such Drawdown Date.
/section/2.9. SETTLEMENT; APPLICATION OF REPAYMENTS OF LOANS. (a) Bank
of Boston Connecticut may, but is not required to, fund all Loans made in
accordance with the provisions of this Agreement. Prior to each Settlement, (i)
all payments of the principal of the Loans shall be credited to the account of
Bank of Boston Connecticut, and (ii) the outstanding amount of Loans made by
Bank of Boston Connecticut may exceed Bank of Boston Connecticut's Commitment
Percentage of the outstanding amount of Loans.
(b) The Banks shall effect Settlements (i) on the last Business Day of
each week, (ii) within one Business Day after each other date on which
borrowings of Loans (net of payments of principal of Loans by the Borrowers) or
payments of principal of Loans (net of borrowings of Loans by the Borrowers)
exceed $5,000,000 and (iii) on the Maturity Date or such earlier date that the
outstanding principal amount of the Loans become due and payable, whether by
acceleration or otherwise (each such date, a "SETTLEMENT DATE"). On the Business
Day prior to each such Settlement Date, the Agent shall give telephonic notice
to the Banks of (A) the respective outstanding amount of Loans made by each Bank
as at the close of business on the prior day, (B) the amount
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that any Bank, as applicable (the "SETTLING BANK"), shall pay to effect a
Settlement (the "SETTLEMENT AMOUNT") and (C) the portion (if any) of the
aggregate Settlement Amount to be paid to each Bank. A statement of the Agent
submitted to the Banks with respect to any amounts owing hereunder shall be
PRIMA FACIE evidence of the amount due and owing. Each Settling Bank shall, not
later than 11:00 a.m. (Hartford, Connecticut time) on each Settlement Date,
effect a wire transfer of immediately available funds to the Agent at its head
office in the amount of such Bank's Settlement Amount. The Agent shall, as
promptly as practicable during normal business hours on each Settlement Date,
effect a wire transfer of immediately available funds to each Bank of the
Settlement Amount to be paid to such Bank. All funds advanced by any Bank as a
Settling Bank pursuant to this /section/2.9(b) shall for all purposes be treated
as a Loan made by such Settling Bank to the Borrowers and all funds received by
any Bank pursuant to this /section/2.9(b) shall for all purposes be treated as
repayment of amounts owed by the Borrowers with respect to Loans made by such
Bank.
(c) The Agent may (unless notified to the contrary by a Settling Bank
by 2:00 p.m. (Hartford, Connecticut time) on the Settlement Date) assume that
each Settling Bank has made available to the Agent on such Settlement Date the
Settlement Amount, and the Agent may (but shall not be required to), in reliance
upon such assumption, make available to each applicable Bank its share (if any)
of the aggregate Settlement Amount. If the Settlement Amount of such Settling
Bank is made available to the Agent by such Settling Bank (or, conversely, if
the Agent makes the Settlement Amount available to a Bank entitled thereto) on a
date after such Settlement Date, such Settling Bank shall pay the Agent (or,
conversely, the Agent shall pay such Bank entitled to such Settlement Amount) on
demand an amount equal to the product of (i) the average computed for the period
referred to in clause (iii) below, of the weighted average annual interest rate
paid by the Agent or such Bank, as applicable, for federal funds acquired by the
Agent or such Bank, as applicable during each day included in such period TIMES
(ii) the Settlement Amount, TIMES (iii) a fraction, the numerator of which is
the number of days that elapse from and including such Settlement Date to but
not including the date on which the Settlement Amount shall become immediately
available to the Agent or such Bank, as applicable, and the denominator of which
is 365. Upon payment of such amount the Settling Bank shall be deemed to have
delivered the Settlement Amount of such Settling Bank on the Settlement Date and
shall become entitled to interest payable by the Borrowers with respect to such
Bank's Settlement Amount as if such share were delivered on the Settlement Date.
If the Settlement Amount is not in fact made available to the Agent by the
Settling Bank within three (3) Business Days of such Settlement Date, the Agent
shall be entitled to debit the Borrowers' account with the Agent to recover such
amount from the Borrowers and if the Borrowers' account with the Agent does not
contain sufficient funds the Borrowers agree to deposit into the account such
amount, with interest
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thereon at the rate per annum applicable to any Loans made on such Settlement
Date. The failure or refusal of any of the Banks to make available to the Agent
at the aforesaid time on any Settlement Date the amount of the Settlement Amount
representing Loans to be made by such Bank on such date shall not relieve any
other Bank from its obligations hereunder to make Settlements and Loans on such
Settlement Date or on any subsequent Settlement Date but in no event shall any
Bank or the Agent be responsible or liable for the failure of any other Bank to
make the Loans to be made by such other Bank.
(d) Each payment by the Borrowers of Loans hereunder shall be allocated
among the Banks on the first Settlement Date after such payment, in amounts
determined to provide that after such application the outstanding amount of
Loans of each Bank equals, as nearly as practicable, such Bank's Commitment
Percentage of all outstanding Loans.
/section/2.10. CHANGE IN BORROWING BASE. The Borrowing Base shall be
determined monthly (or at such other interval as may be specified pursuant to
/section/7.4(e)) by the Agent by reference to the Borrowing Base Report most
recently delivered to the Agent pursuant to /section/7.4(e).
/section/3. REPAYMENT OF THE LOANS.
/section/3.1. MATURITY. The Borrowers absolutely and unconditionally
promise to pay on the Maturity Date, and there shall become absolutely due and
payable on the Maturity Date, all of the Loans outstanding on such date,
together with any and all accrued and unpaid interest thereon and all fees and
reasonable expenses incurred by the Banks and Agent in connection therewith and
payable by the Borrowers hereunder.
/section/3.2. MANDATORY REPAYMENTS OF LOANS. If at any time the
outstanding amount of the Loans exceeds an amount equal to the lesser of (i) the
Total Commitment and (ii) the Borrowing Base, then the Borrowers shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application to the Loans. Each prepayment of Loans
shall be allocated among the Banks, in proportion, as nearly as practicable, to
the respective unpaid principal amount of each Bank's Note, with adjustments to
the extent practicable to equalize any prior payments or repayments not exactly
in proportion.
/section/3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrowers shall have
the right, at their election, to repay the outstanding amount of the Loans, as a
whole or in part, at any time without penalty or premium, PROVIDED that any full
or partial prepayment of the outstanding amount of any Eurodollar Rate Loans
pursuant to this /section/3.3 may be made only on the last day of the Interest
Period relating thereto unless the Borrowers shall pay to the Agent for the
respective
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accounts of the Banks the additional amount, if any, required by /section/4.8(c)
of this Credit Agreement. The Borrowers shall give the Agent, no later than
10:00 a.m., Hartford time, at least two (2) Eurodollar Business Days' prior
notice of any proposed prepayment pursuant to this /section/3.3 of Eurodollar
Rate Loans, in each case specifying the proposed date of prepayment of Loans and
the principal amount to be prepaid. Each such partial prepayment of the Loans
shall be in an integral multiple of $500,000, shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment
and shall be applied, in the absence of instruction by the Borrowers, first to
the principal of Base Rate Loans and then to the principal of Eurodollar Rate
Loans (except that the foregoing limitation shall not be applicable to Base Rate
Loans to the extent that the source of prepayment is funds held in the
Borrowers' holding account maintained with the Agent). Each partial prepayment
shall be allocated among the Banks, in proportion, as nearly as practicable, to
the respective unpaid principal amount of each Bank's Note, with adjustments to
the extent practicable to equalize any prior repayments not exactly in
proportion.
/section/4. CERTAIN GENERAL PROVISIONS
/section/4.1. FUNDS FOR PAYMENTS.
(a) All payments of principal, interest, commitment fees and any other
amounts due hereunder or under any of the other Loan Documents shall be made to
the Agent, for the respective accounts of the Banks and the Agent, at the
Agent's Head Office or at such other location in the Hartford, Connecticut area
that the Agent may from time to time designate, in each case in immediately
available funds.
(b) All payments by the Borrowers hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrowers
are compelled by law to make such deduction or withholding. If any such
obligation is imposed upon the Borrowers with respect to any amount payable by
it hereunder or under any of the other Loan Documents, the Borrowers will pay to
the Agent, for the account of the Banks or (as the case may be) the Agent, on
the date on which such amount is due and payable hereunder or under such other
Loan Document, such additional amount in Dollars as shall be necessary to enable
the Banks or the Agent to receive the same net amount which the Banks or the
Agent would have received on such due date had no such obligation been imposed
upon the Borrowers. The Borrowers will deliver promptly to the Agent
certificates or other valid vouchers
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for all taxes or other charges deducted from or paid with respect to payments
made by the Borrowers hereunder or under such other Loan Document.
/section/4.2. COMPUTATIONS. All computations of interest on the Loans
and of commitment fees, or other fees shall, unless otherwise expressly provided
herein, be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Note Records from time to
time shall be considered correct and binding on each Borrower unless within five
(5) Business Days after receipt of any notice by the Agent or any of the Banks
of such outstanding amount, the Agent or such Bank shall notify the Borrowers to
the contrary.
/section/4.3. INABILITY TO DETERMINE EURODOLLAR RATE. In the event,
prior to the commencement of any Interest Period relating to any Eurodollar Rate
Loan, the Agent shall determine or be notified by any Bank that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrowers and the
Banks) to the Borrowers and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrowers and the Banks.
/section/4.4. ILLEGALITY. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Rate Loans, such Bank shall forthwith give notice of
such circumstances to the Borrowers and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (b) such
Bank's Loans then outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
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may be required by law. The Borrowers hereby agree promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this /section/4.4, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Loans hereunder.
/section/4.5. ADDITIONAL COSTS, ETC. If any future applicable law or
any change in any present law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Bank or the Agent by any central bank or
other fiscal, monetary or other authority (whether or not having the force of
law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this Credit
Agreement, the other Loan Documents, such Bank's Commitment or the Loans (other
than taxes based upon or measured by the income or profits of such Bank or the
Agent or the intangible assets or property of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or the
interest on any Loans or any other amounts payable to any Bank or the Agent
under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan Documents,
the Loans, such Bank's Commitment, or any class of loans, letters of credit or
commitments of which any of the Loans or such Bank's Commitment forms a part,
and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Loans or such Bank's Commitment,
or
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(ii) to reduce the amount of principal, interest, or other amount
payable to such Bank or the Agent hereunder on account of such Bank's
Commitment, or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Bank or the Agent from the
Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as often
as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as will be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum.
/section/4.6. CAPITAL ADEQUACY. If after the date hereof any Bank
(other than a Foreign Bank) or the Agent determines that (a) the adoption of or
change in any law, governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) regarding capital requirements for
banks or bank holding companies or any change in the interpretation or
application thereof by a court or governmental authority with appropriate
jurisdiction, or (b) compliance by such Bank or the Agent or any corporation
controlling such Bank or the Agent with any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) of any
such entity regarding capital adequacy, has the effect of reducing the return on
such Bank's or the Agent's commitment with respect to any Loans to a level below
that which such Bank or the Agent could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's or the Agent's then
existing policies with respect to capital adequacy and assuming full utilization
of such entity's capital) by any amount deemed by such Bank or (as the case may
be) the Agent to be material, then such Bank or the Agent may notify the
Borrowers of such fact. To the extent that the amount of such reduction in the
return on capital is not reflected in the Base Rate, the Borrowers agree to pay
such Bank or (as the case may be) the Agent for the amount of such reduction in
the return on capital as and when such reduction is determined upon presentation
by such Bank or (as the case may be) the Agent of a certificate in accordance
with /section/4.7 hereof. Each such Bank shall allocate such cost increases
among its customers in good faith and on an equitable basis.
/section/4.7. CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to /section//section/4.5 or 4.6 and a brief explanation
of such amounts which are due, submitted by any Bank or the Agent to the
Borrowers,
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shall be conclusive, absent manifest error, that such amounts are due and owing.
/section/4.8. INDEMNITY. Each Borrower agrees to indemnify each Bank
and to hold each Bank harmless from and against any loss, cost or expense
(including loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (a) default by the Borrowers in payment of the principal amount
of or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain its Eurodollar Rate
Loans, (b) default by the Borrowers in making a borrowing or conversion after
the Borrower has given (or is deemed to have given) a Loan Request, notice or a
Conversion Request relating thereto in accordance with /section/2.6 or
/section/2.7 or (c) the making of any payment of a Eurodollar Rate Loan or the
making of any conversion of any such Loan to a Base Rate Loan on a day that is
not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by such Bank to lenders of funds obtained by
it in order to maintain any such Loans.
/section/4.9. INTEREST AFTER DEFAULT.
(a) Overdue principal and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder or under
any of the other Loan Documents shall bear interest compounded monthly and
payable on demand at a rate per annum equal to two percent (2%) above the Base
Rate until such amount shall be paid in full (after as well as before judgment).
(b) During the continuance of any Event of Default arising as a result
of the failure of the Borrowers to pay any principal or interest due and payable
hereunder or under any of the other Loan Documents, the principal of the Loans
not overdue shall, until such Event of Default has been cured or remedied or
such Event of Default has been waived by the Majority Banks pursuant to
/section/25, bear interest at a rate per annum equal to the rate of interest
applicable to overdue principal pursuant to /section/4.09(a) hereof.
/section/4.10. CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
Agent and the Banks under this Agreement, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in consideration of the undertakings of
each of the Borrowers to accept joint and several liability for the obligations
of each of them.
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(b) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with each other Borrower, with respect to the
payment and performance of all of the Obligations, it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of all of the Borrowers without preferences or distinction among
them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of such Obligations in accordance with the terms thereof, then in each such
event each other Borrower will make such payment with respect to, or perform,
such Obligation.
(d) The obligations of each Borrower under the provisions of this
/section/4.10 constitute the absolute and unconditional obligations of such
Borrower enforceable against it to the full extent permitted under the terms
hereof, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstance whatsoever.
(e) Each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of the Loans made under this Agreement, notice of the
occurrence of any Default or Event of Default, or of any demand for any payment
under this Agreement, notice of any action at any time taken or omitted by the
Agent or the Banks under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, all demands,
notices and other formalities of every kind in connection with this Agreement.
Each Borrower hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by the Agent or the Banks at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Agent or the Banks in respect of any of the
obligations hereunder, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of such
obligations or the addition, substitution or release, in whole or in part, of
any Borrower. Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on the part of
the Agent or the Banks including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder, which might, but for the provisions
of this /section/4.10, afford grounds for terminating, discharging or relieving
such Borrower, in whole or in part, from any of its Obligations under this
/section/4.10, it being the intention of each Borrower that, so long as any of
the Obligations remain unsatisfied, the Obligations of such Borrower under this
/section/4.10 shall not be discharged except by
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performance and then only to the extent of such performance. The joint and
several liability of the Borrowers hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any
Borrower or the Agent or the Banks. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by the Agent or the Banks upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise, the
provisions of this /section/4.10 will forthwith be reinstated in effect, as
though such payment had not been made.
/section/5. COLLATERAL SECURITY. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the issued and outstanding
capital stock of each Borrower (other than Holdings) and in all of the assets
(other than the Florida Real Estate) of the Borrowers and their Subsidiaries,
whether now owned or hereafter acquired, including, without limitation, accounts
receivable, inventory, real property, plant, equipment, joint venture and
limited partnership interests, intangibles and shares of stock of any subsidiary
of the Borrowers pursuant to the terms of the Security Documents.
/section/6. REPRESENTATIONS AND WARRANTIES. Each Borrower represents
and warrants to the Banks and the Agent as follows:
/section/6.1. CORPORATE AUTHORITY; OWNERSHIP.
(a) INCORPORATION; GOOD STANDING. Each Borrower and its Subsidiaries
(i) is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation, (ii) has all requisite corporate power
to own its property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where a failure to be so
qualified would have a materially adverse effect on the business, assets or
financial condition of such Borrower or its Subsidiary.
(b) AUTHORIZATION. The execution, delivery and performance of this
Credit Agreement, the other Loan Documents and the Acquisition Documents to
which any Borrower, any of its Subsidiaries, or any Seller, as applicable, is or
is to become a party, and the performance by each such Person of all of its
agreements and obligations under each of such documents, including, and the
transactions contemplated hereby and thereby (i) are within the corporate or
trust, as applicable, authority of each such Person, (ii) have been (or will be
prior to the consummation of such Acquisition) duly authorized by all necessary
corporate or trust, as applicable, proceedings, (iii) do not conflict with or
result in any breach or contravention of any provision of law, statute, rule or
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regulation to which such Borrower or any of its Subsidiaries is subject or any
judgment, order, writ, injunction, license or permit applicable to such Person,
(iv) do not conflict with any provision of the corporate charter or bylaws of,
any agreement or other instrument binding upon, or trust agreement of, such
Person and (v) do not require any approval, consent, order, authorization or
license by, or giving notice to, or taking any other action with respect to, any
governmental or regulatory authority or agency under any provision of any
applicable law which has not been obtained or made on or prior to the
consummation of such Acquisition.
(c) ENFORCEABILITY.
(i) The execution and delivery of this Credit Agreement, the other
Loan Documents and the Acquisition Documents to which any Borrower, any
of its Subsidiaries or any Seller is or is to become a party will
result in valid and legally binding obligations of such Person
enforceable against such Person in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights
and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
(ii) Each Seller has duly executed and delivered each of the
Acquisition Documents to which it is a party and each of such documents
is in full force and effect. The agreements and obligations of each
Seller contained in each of the Acquisition Documents to which it is a
party constitute the legal, valid and binding obligations of such
Seller, enforceable against it in accordance with their respective
terms, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
the availability of the remedy of specific performance and injunctive
or other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor
may be brought.
(d) ACQUISITION ASSETS. In connection with each Acquisition, the
applicable Seller has transferred to the applicable Borrower valid title to the
property and assets of such Seller purported to be conveyed thereby, free and
clear of all mortgages, pledges, liens, charges, restrictions, conditions and
other sale agreements, encumbrances, security interests, options or claims other
than the Permitted Liens.
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/section/6.2. NO BUSINESS ACTIVITY; SUBSIDIARIES. Except as set forth
on SCHEDULE 6.2, no Borrower owns or holds of record and/or beneficially
(whether directly or indirectly) any shares of any class in the capital of any
other corporations or any legal and/or beneficial interests in any corporation,
partnership, business trust or joint venture or in any other unincorporated
trade or business enterprise.
/section/6.3. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by each Borrower and its Subsidiaries of any of the Loan Documents
or the Acquisition Documents to which such Borrower or any of its Subsidiaries
is or is to become a party and the transactions contemplated hereby and thereby
do not require the approval or consent of, or filing with, any governmental
agency or authority other than those already obtained.
/section/6.4. TITLE TO PROPERTIES; LEASES. Except as indicated on
SCHEDULE 6.4 hereto, Holdings and its Subsidiaries own all of the assets
reflected in the consolidated balance sheets of Holdings and its Subsidiaries as
at the Balance Sheet Date or acquired since that date (except property and
assets sold or otherwise disposed of in the ordinary course of business since
that date), subject to no rights of others, including any mortgages, leases,
conditional sales agreements, title retention agreements, liens or other
encumbrances except Permitted Liens.
/section/6.5. FINANCIAL STATEMENTS.
(a) There has been furnished to each of the Banks a consolidated
balance sheet of Holdings and its Subsidiaries as at December 31, 1996, and a
consolidated statement of income and a consolidated statement of cash flow of
Holdings and its Subsidiaries for the fiscal year then ended, each setting forth
in comparative form the figures for the previous fiscal year and in each case
together with the notes related thereto and audited and certified by Ernst &
Young. Such balance sheet and statements of income and cash flow of Holdings and
its Subsidiaries shall have been prepared in accordance with generally accepted
accounting principles and fairly present the financial condition of Holdings and
its Subsidiaries as at the close of business on the date thereof and the results
of operations for the fiscal year then ended. There are no contingent
liabilities of Holdings or any of its Subsidiaries as of such date involving
material amounts, known to the officers of Holdings, which were not disclosed in
such balance sheet and the notes related thereto.
(b) Both before and immediately after giving effect to the transactions
contemplated hereby and by the Acquisition Documents, each Borrower and its
Subsidiaries is and shall be solvent on a going concern basis, has assets having
a fair value in excess of the amount required to pay its probable liabilities on
its existing debts as they become absolute and matured,
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and has, and will have as of the Effective Date, access to adequate capital for
the conduct of its business and the ability to pay its debts from time to time
incurred in connection therewith as such debts mature.
/section/6.6. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date,
there has occurred no materially adverse change in the financial condition or
business of any Borrower or its Subsidiaries as shown on or reflected in the
consolidated balance sheet of Holdings and its Subsidiaries as at the Balance
Sheet Date, or the consolidated statements of income and cash flow of Holdings
and its Subsidiaries for the fiscal period then ended, other than changes in the
ordinary course of business that have not had any materially adverse effect
either individually or in the aggregate on the business or financial condition
of the Borrowers or any of their respective Subsidiaries. Since the Balance
Sheet Date, no Borrower has made any Distributions.
/section/6.7. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Except as set forth
on SCHEDULE 6.7, each Borrower and its Subsidiaries possesses all franchises,
patents, copyrights, trademarks, trade names, licenses and permits, and rights
in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted and as contemplated after the consummation of any
Acquisition without known conflict with any rights of others.
/section/6.8. LITIGATION. Except as set forth on SCHEDULE 6.8, there
are no actions, suits, proceedings or investigations of any kind pending (except
for any actions or suits which have been commenced by the filing of a complaint
or other pleading with the appropriate judicial or administrative authorities,
which have not yet been served upon any Borrower or any of its Subsidiaries, as
to which such Borrower has no knowledge) or, to the best knowledge of the
Borrowers after due inquiry, threatened against any Borrower or any of its
Subsidiaries or, to the best of the Borrowers' knowledge after due inquiry,
against any Seller, before any court, tribunal or administrative agency or board
that, if adversely determined, might, either in any case or in the aggregate,
materially adversely affect the properties, assets, financial condition or
business of any Borrower or its Subsidiaries or materially impair the right of
such Borrower and its Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of such Borrower and its
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents or the Acquisition Documents or any action taken or to
be taken pursuant hereto or thereto.
/section/6.9. NO MATERIALLY ADVERSE CONTRACTS, ETC. No Borrower, or any
Subsidiary of such Borrower, or any Seller is subject to any charter, corporate
or other legal restriction, or any judgment, decree, order, rule or
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regulation that has or is expected in the future to have a materially adverse
effect on the business, assets or financial condition of any of the Borrowers or
any of their Subsidiaries. No Borrower or any Subsidiary of such Borrower, or
any Seller is a party to any contract or agreement that has or is expected, in
the judgment of such Borrowers' officers, to have any materially adverse effect
on the business of any of the Borrowers or any of their Subsidiaries.
/section/6.10. COMPLIANCE WITH OTHER INSTRUMENTS, LAW, ETC. No Borrower
or any Subsidiary of such Borrower, or any Seller, is in violation of any
provision of their respective charter documents, bylaws, or any agreement or
instrument to which any of them may be subject or by which any of them or any of
their properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of any of the Borrowers or any
of their Subsidiaries.
/section/6.11. TAX STATUS. Each Borrower and its Subsidiaries (a) have
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and to the best knowledge of
such Borrower after due and diligent inquiry, there is no basis for any such
claim.
/section/6.12. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
/section/6.13. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. No Borrower
or any Subsidiary of such Borrower is a "holding company", or a "subsidiary
company" of a "holding company", or an affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
/section/6.14. ABSENCE OF FINANCING STATEMENTS, ETC. Except with
respect to Permitted Liens, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry or other public office, that purports to cover,
affect or
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give notice of any present or possible future lien on, or security interest in,
any assets or property of the Borrowers or any of their respective Subsidiaries
or any rights relating thereto.
/section/6.15. PERFECTION OF SECURITY INTEREST. All filings,
assignments, pledges and deposits of documents or instruments have been made and
all other actions have been taken that are necessary or advisable, under
applicable law, to establish and perfect the Agent's security interest in the
Collateral. The Collateral and the Agent's rights with respect to the Collateral
are not subject to any setoff, claims, withholdings or other defenses. The
Borrowers and their respective Subsidiaries are the owners of the Collateral
free from any lien, security interest, encumbrance and any other claim or
demand, except for Permitted Liens.
/section/6.16. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE
6.16, none of the officers, directors, or employees of the Borrowers or any of
their respective Subsidiaries is presently a party to any transaction with any
Borrower or any of its Subsidiaries (other than for services as employees,
officers and directors or for management services), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrowers, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
/section/6.17. EMPLOYEE BENEFIT PLANS.
(a) IN GENERAL. Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions. Each Borrower has
heretofore delivered to the Agent the most recently completed annual report,
Form 5500, with all required attachments, and actuarial statement required to be
submitted under /section/103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
(b) TERMINABILITY OF WELFARE PLANS. Under each Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of /section/3(1) or
/section/3(2)(B) of ERISA, no benefits are due unless the event giving rise to
the benefit entitlement occurs prior to plan termination (except as required by
Title I, Part 6 of ERISA). The Borrowers or an ERISA Affiliate, as appropriate,
may terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of the
Borrowers or such ERISA Affiliate without liability to any Person if the cost of
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providing such benefits should increase in any material respect, or any time
after December 31, 1995.
(c) GUARANTEED PENSION PLANS. Each contribution required to be made to
a Guaranteed Pension Plan, whether required to be made to avoid the incurrence
of an accumulated funding deficiency, the notice or lien provisions of /section/
302(f) of ERISA, or otherwise, has been timely made. No waiver of an accumulated
funding deficiency or extension of amortization periods has been received with
respect to any Guaranteed Pension Plan. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has been incurred by
any Borrower, or any ERISA Affiliate with respect to any Guaranteed Pension Plan
and there has not been any ERISA Reportable Event, or any other event or
condition which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date of
this representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed Pension
Plans within the meaning of /section/4001 of ERISA did not exceed the aggregate
value of the assets of all such Guaranteed Pension Plans, disregarding for this
purpose the benefit liabilities and assets of any Guaranteed Pension Plan with
assets in excess of benefit liabilities.
(d) MULTIEMPLOYER PLANS. No Borrower or any ERISA Affiliate has
incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under /section/4201 of ERISA or as a result of a sale of
assets described in /section/4204 of ERISA. No Borrower or any ERISA Affiliate
has been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of /section/4241 or /section/4245 of ERISA or that
any Multiemployer Plan intends to terminate or has been terminated under
/section/4041A of ERISA.
/section/6.18. REGULATIONS U AND X. The proceeds of the Loans shall be
used (i) to consummate the Acquisitions in accordance with the terms of the
Acquisition Documents, and (ii) for working capital and general corporate
purposes. No portion of any Loan is to be used for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
/section/6.19. ENVIRONMENTAL COMPLIANCE. As set forth on SCHEDULE 6.19,
each Borrower has taken all reasonable steps to investigate the past and present
condition and usage of the Real Estate and the operations conducted thereon and,
based upon such diligent investigation, has determined that:
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(a) To the best knowledge of the Borrowers after the investigation
referred to above, no Borrower or any Subsidiary of such Borrower, or any
operator of the Real Estate or any operations thereon, is in violation, or
alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("▇▇▇▇"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any applicable state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws"), which violation would have a material
adverse effect on the environment or the business, assets or financial condition
of such Borrower and any of its Subsidiaries;
(b) No Borrower or any Subsidiary of such Borrower, has received notice
from any third party including, without limitation: any federal, state or local
governmental authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇ (1986); (ii) that any hazardous
waste, as defined by 42 U.S.C. /section/9601(5), any hazardous substances as
defined by 42 U.S.C. /section/9601(14), any pollutant or contaminant as defined
by 42 U.S.C. /section/9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated, transported or
disposed of has been found at any site at which a federal, state or local agency
or other third party has conducted or has ordered that such Borrower or any of
its Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out of
any third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances;
(c) (i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance
with applicable Environmental Laws; and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any portion of the
Real Estate; (ii) in the course of any activities conducted by the Borrowers,
their Subsidiaries or operators of their respective properties, no Hazardous
Substances have been generated or are being used on the Real Estate except in
accordance with applicable Environmental Laws; (iii) there have been no releases
(i.e. any past or present releasing, spilling, leaking, pumping,
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pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping) of Hazardous Substances on, upon, into or from the properties of the
Borrowers or their Subsidiaries, which releases would have a material adverse
effect on the value of any of the Real Estate or adjacent properties or the
environment; (iv) to the best of the Borrowers' knowledge, there have been no
releases on, upon, from or into any real property in the vicinity of any of the
Real Estate which, through soil or groundwater contamination, may have come to
be located on, and which would have a material adverse effect on the value of,
the Real Estate and to the best of the Borrowers' knowledge, there is no
asbestos contamination on any of the Real Estate which would result in a
violation of applicable Environmental Laws or which would require removal under
such Environmental Laws; and (v) in addition, to the best of the Borrowers'
knowledge, any Hazardous Substances that have been generated on any of the Real
Estate have been transported off site only by carriers having an identification
number issued by the EPA, treated or disposed of only by treatment or disposal
facilities maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are, to the best of the
Borrowers' knowledge, operating in compliance with such permits and applicable
Environmental Laws; and
(d) No Borrower or any Subsidiary of such Borrower, any Mortgaged
Property or any of the other Real Estate is subject to any applicable
environmental law requiring the performance of Hazardous Substances site
assessments, or the removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or statement by virtue of
the transactions set forth herein and contemplated hereby, or as a condition to
the recording of any Mortgage or to the effectiveness of any other transactions
contemplated hereby.
/section/6.20. FISCAL YEAR. Each fiscal year of each Borrower and each
of its Subsidiaries begins on January 1 of each calendar year and ends on
December 31 of each calendar year.
/section/6.21. LOANS AS SENIOR INDEBTEDNESS. All Indebtedness of the
Borrowers to the Banks in respect of the principal of and interest on the Loans
will constitute "Senior Indebtedness" under the terms of each of the
Subordinated Agreements and any other instrument evidencing, or pursuant to
which there is issued indebtedness which purports to be Subordinated Debt.
/section/6.22. OTHER REPRESENTATIONS. Each of the representations and
warranties made by each of the Borrowers or any other Person in any of the Loan
Documents to which any such Person is a party, was true and correct in all
material respects when made and continues to be true and correct in all material
respects on the Effective Date, except to the extent that any of such
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representations and warranties may have been affected by the consummation of the
transactions contemplated and permitted or required by the Loan Documents and
Acquisition Documents.
/section/6.23. BANK ACCOUNTS. SCHEDULE 6.23 sets forth the account
numbers and locations of all bank and deposit accounts of the Borrowers or any
of their Subsidiaries.
/section/6.24. PUERTO RICO COLLATERAL. Except as described on SCHEDULE
/section/8.3 hereto, the fair market value of all Collateral and other
properties and assets of any of the Borrowers and their respective Subsidiaries
located in the Commonwealth of Puerto Rico does not exceed $1,000,000 in the
aggregate.
/section/7. AFFIRMATIVE COVENANTS OF THE BORROWERS. Each Borrower
covenants and agrees that, so long as any Loan or Note is outstanding or any
Bank has any obligation to make any Loans:
/section/7.1. PUNCTUAL PAYMENT. The Borrowers will duly and punctually
pay or cause to be paid the principal and interest on the Loans, the commitment
fees, the Agent's fee and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which any Borrower or any of its
Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
/section/7.2. MAINTENANCE OF OFFICE. Each Borrower will maintain its
chief executive office at the addresses set forth in the Borrower Security
Agreement, or at such other place in the United States of America as such
Borrower shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon such Borrower in respect of the Loan
Documents to which such Borrower is a party may be given or made.
/section/7.3. RECORDS AND ACCOUNTS. Each Borrower will (a) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
generally accepted accounting principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
/section/7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION.
Holdings will deliver to each of the Banks:
(a) as soon as available but in any event within ninety (90) days after
the close of each fiscal year of Holdings (or promptly following the filing
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thereof with the SEC) the Form 10-K filed by Holdings with respect to such
fiscal year;
(b) as soon as available but in any event within forty-five (45) days
after the end of each fiscal quarter of Holdings (or promptly following the
filing thereof with the SEC) the Form 10-Q quarterly report filed by Holdings
with the SEC with respect to such fiscal quarter;
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of Holdings in substantially the form
of EXHIBIT B hereto and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in /section/9;
(d) promptly following the filing or mailing thereof, copies of all
other material of a financial nature filed with the SEC;
(e) within seven (7) days after the last day of each calendar month
during which either (i) the average daily aggregate outstanding amount of the
Loans equaled or exceeded $5,000,000 during the immediately preceding calendar
month, (ii) the outstanding amount of the Loans equaled or exceeded $5,000,000
on the last day of such calendar month, or (iii) at such other times as the
Agent may reasonably request during the continuance of a Default or an Event of
Default, a Borrowing Base Report setting forth the Borrowing Base as at the end
of such calendar month or other date so requested by the Agent;
(f) within thirty (30) days after the end of each calendar month (i)
during which the average daily aggregate outstanding amount of the Loans equaled
or exceeded $5,000,000 during the immediately preceding calendar month or (ii)
the outstanding amount of the Loans equaled or exceeded $5,000,000 on the last
day of such calendar month, an Accounts Receivable aging report setting forth
the Accounts Receivable, both foreign and domestic of each of Merocel, Xomed and
Trebay and each of their Subsidiaries; and
(g) from time to time such other financial data and information
(including accountants management letters) as the Agent or any Bank may
reasonably request.
/section/7.5. NOTICES.
(a) DEFAULTS. Each Borrower will promptly notify the Agent and each of
the Banks in writing of the occurrence of any Default or Event of Default. If
any Person shall give any notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under this
Credit Agreement or any other note, evidence of indebtedness, indenture or
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other obligation to which or with respect to which such Borrower or any of its
Subsidiaries is a party or obligor, whether as principal, guarantor, surety or
otherwise, such Borrower shall forthwith give written notice thereof to the
Agent and each of the Banks, describing the notice or action and the nature of
the claimed default.
(b) ENVIRONMENTAL EVENTS. Each Borrower will promptly give notice to
the Agent and each of the Banks (i) of any violation of any Environmental Law
that such Borrower or any of its Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency and (ii) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, or any federal, state or local
environmental agency or board, that has the potential to materially affect the
assets, liabilities, financial conditions or operations of such Borrower or any
of its Subsidiaries, or the Agent's mortgages, deeds of trust or security
interests pursuant to the Security Documents.
(c) NOTIFICATION OF CLAIMS AGAINST COLLATERAL. Each Borrower will,
immediately upon becoming aware thereof, notify the Agent and each of the Banks
in writing of any setoff, claims (including, with respect to the Real Estate,
environmental claims), withholdings or other defenses to which any Collateral
having a fair value, either, singularly or in the aggregate in excess of
$100,000 is subject, or the Agent's rights with respect to any such Collateral,
is subject.
(d) NOTICE OF LITIGATION AND JUDGMENTS. Each Borrower will, and will
cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks in writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting such Borrower or any of its Subsidiaries or to which such Borrower or
any of its Subsidiaries is or becomes a party involving an uninsured claim
against such Borrower or any of its Subsidiaries that could reasonably be
expected to have a materially adverse effect on such Borrower or any of its
Subsidiaries and stating the nature and status of such litigation or
proceedings. Each Borrower will, and will cause each of its Subsidiaries to,
give notice to the Agent and each of the Banks, in writing, in form and detail
satisfactory to the Agent, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against such Borrower or any of its Subsidiaries
in an amount in excess of $100,000.
/section/7.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Except
for mergers expressly permitted by the terms of /section/8.5(a) and the
possible dissolution of Xomed Puerto Rico and FessCo, Inc., each Borrower will
do or
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cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights and franchises and those of its
Subsidiaries. It (a) will cause all of its properties and those of its
Subsidiaries used or useful in the conduct of its business or the business of
its Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, (b) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of such Borrower may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, and (c) will, and will cause each of its Subsidiaries to, continue
to engage primarily in the businesses now conducted by them and in related
businesses and will not, and will not permit its Subsidiaries to, alter the
nature of its business as operated on the date hereof in any material respect.
In addition, without limiting the foregoing, (y) Holdings' assets will consist
solely of cash and shares of stock of its Subsidiaries and Holdings will not
legally own or hold any assets or properties other than cash and such shares of
stock and (z) Merocel FSC's assets will consist solely of certain contract
rights arising in connection with foreign sales transactions conducted for the
benefit of Merocel, and Merocel FSC will not legally or beneficially own or hold
any properties or assets other than such contract rights.
/section/7.7. INSURANCE. Each Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements. Each Borrower will, and will cause each of its Subsidiaries to,
maintain insurance on the Mortgaged Properties in accordance with the terms of
the Mortgage. All such insurance shall be payable to the Agent on behalf of the
Banks as loss payee in accordance with the terms of the Security Documents.
/section/7.8. TAXES. Each Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if such Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and PROVIDED FURTHER that such Borrower
and each
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Subsidiary of such Borrower will pay all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor.
/section/7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
(a) GENERAL. Upon two (2) Business Days' prior notice by the Agent or
any of the Banks to the Borrowers, each Borrower shall permit the Banks (at the
Banks' expense after the first $3,000 annually, unless a Default or Event of
Default shall have occurred whereupon any and all expenses shall be for the
account of the Borrowers), through the Agent or any of the Banks' other
designated representatives, to visit and inspect any of the properties of such
Borrower or any of its Subsidiaries, to examine the books of account of such
Borrower and its Subsidiaries (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of such Borrower
and its Subsidiaries with, and to be advised as to the same by, its and their
officers, all during normal business hours and at such reasonable intervals as
the Agent or any Bank may reasonably request.
(b) ENVIRONMENTAL ASSESSMENTS. At any time an Event of Default shall
have occurred and be continuing and, whether or not an Event of Default shall
have occurred and be continuing, at any time after Agent shall receive notice of
a spill or release of any Hazardous Substances on any of the Real Estate from
any Borrower, or shall have received notice from any source deemed reliable by
Agent that a spill or release may have occurred with respect to any Real Estate,
the Agent may in its reasonable discretion for the purpose of assessing and
ensuring the value of any Mortgaged Property, obtain one or more environmental
assessments or audits of such Mortgaged Property prepared by a hydrogeologist,
an independent engineer or other qualified consultant or expert approved by the
Agent (and, unless a Default or an Event of Default shall have occurred and be
continuing, the Borrowers) to evaluate or confirm (i) whether any Hazardous
Substances are present in the soil or water at such Mortgaged Property in excess
of applicable Environmental Law clean-up limits and (ii) whether the use and
operation of such Mortgaged Property complies with all Environmental Laws.
Environmental assessments may include without limitation detailed visual
inspections of such Mortgaged Property including any and all storage areas,
storage tanks, drains, dry ▇▇▇▇▇ and leaching areas, and the taking of soil
samples, surface water samples and ground water samples, as well as such other
investigations or analyses as the Agent reasonably deems appropriate. All such
environmental assessments shall be conducted by the Borrowers (unless a Default
or an Event of Default has occurred and is continuing) and shall be made at the
expense of the Borrowers.
(c) COMMUNICATIONS WITH ACCOUNTANTS. Each Borrower authorizes the Agent
and, if accompanied by the Agent, the Banks to
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communicate directly with such Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent and the
Banks any and all financial statements and other supporting financial documents
and schedules including copies of any management letter with respect to the
business, financial condition and other affairs of such Borrower or any of its
Subsidiaries. At the request of the Agent, such Borrower shall deliver a letter
addressed to such accountants instructing them to comply with the provisions of
this /section/7.9(c).
/section/7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.
Each Borrower will, and will cause each of its Subsidiaries to, (a) comply in
all material respects with the applicable laws and regulations wherever its
business is conducted, including all Environmental Laws, (b) comply with the
provisions of its charter documents and by-laws, (c) comply in all material
respects with all agreements and instruments by which it or any of its
properties may be bound and (d) comply in all material respects with all
applicable decrees, orders, and judgments. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that such Borrower or any
of its Subsidiaries may fulfill any of its obligations hereunder or any of the
other Loan Documents to which such Borrower or such Subsidiary is a party, such
Borrower will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
such Borrower or such Subsidiary to obtain such authorization, consent,
approval, permit or license and furnish the Agent and the Banks with evidence
thereof.
/section/7.11. EMPLOYEE BENEFIT PLANS. Each Borrower will, and will
cause each of its Subsidiaries to, (i) promptly upon filing the same with the
Department of Labor or Internal Revenue Service, furnish to the Agent a copy of
the most recent actuarial statement required to be submitted under
/section/103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon
receipt or dispatch, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under /section//section/302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under /section//section/4041A, 4202, 4219, 4242, or 4245 of
ERISA.
/section/7.12. USE OFPROCEEDS. Each Borrower will use the proceeds of
the Loans solely (i) to consummate the Acquisitions in accordance with the terms
of the Acquisition Documents and (ii) for working capital and general corporate
purposes.
/section/7.13. ADDITIONAL MORTGAGED PROPERTY. If, after the Effective
Date, any Borrower or any of its Subsidiaries acquires fee simple title to any
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additional real estate having a fair value or cost in excess of $1,000,000, or
leases any real estate (and the annual lease payments with respect to such real
estate exceeds $250,000), such Borrower shall, or shall cause such Subsidiary
to, forthwith deliver to the Agent a fully executed mortgage over its fee or
leasehold interest in such real estate, in form and substance satisfactory to
the Agent, together with title insurance policies, surveys, evidences of
insurance with the Agent named as loss payee and additional insured, legal
opinions and other documents and certificates with respect to such real estate
as was required for Real Estate of such Borrower or such Subsidiary as of the
Effective Date. Each Borrower further agrees that, following the taking of such
actions with respect to such real estate, the Agent shall have, for the benefit
of the Banks and the Agent, a valid and enforceable first priority mortgage over
such real estate, free and clear of all defects and encumbrances except for
Permitted Liens.
/section/7.14. FURTHER ASSURANCES. Each Borrower will, and will cause
each of its Subsidiaries to, cooperate with the Banks and the Agent and execute
such further instruments and documents as the Banks or the Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
/section/7.15. BANK ACCOUNTS. Each Borrower will, and will cause each
of its Subsidiaries to, together with the employees, agents and other Persons
acting on behalf of such Borrower or such Subsidiary, receive and hold in trust
for the Bank all payments constituting proceeds of Accounts Receivable or other
Collateral which come into their possession or under their control and,
immediately upon receipt thereof, deposit such payments in the form received,
with any appropriate endorsements, in one of the accounts designated as a
central depository account on SCHEDULE 6.23.
/section/8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. Each Borrower
covenants and agrees that, so long as any Loan or Note is outstanding or any
Bank has any obligation to make any Loans:
/section/8.1. RESTRICTIONS ON INDEBTEDNESS. No Borrower will, and will
not permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;
(b) current liabilities of such Borrower or such Subsidiary incurred in
the ordinary course of business not incurred through (i) the borrowing of money,
or (ii) the obtaining of credit except for credit on an open
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account basis customarily extended and in fact extended in connection with
normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental charges
or levies and claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be made in accordance with
the provisions of /section/7.8;
(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which such Borrower or such
Subsidiary shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(f) obligations under Capitalized Leases (other than Capitalized Leases
referred to on SCHEDULE 8.1) not exceeding $1,000,000 in aggregate amount for
all Borrowers and their respective Subsidiaries at any time outstanding;
(g) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by such Borrowers or such
Subsidiary, PROVIDED that the aggregate principal amount of all such
Indebtedness of all Borrowers and their respective Subsidiaries shall not exceed
the aggregate amount of $500,000 at any one time; and FURTHER, PROVIDED that the
aggregate amount of indebtedness permitted under this clause (g) and the
immediately preceding clause (f) of this /section/8.1 shall not at any time
together exceed $1,000,000.
(h) Indebtedness existing on the date hereof and listed and described
on SCHEDULE 8.1 hereto;
(i) Subordinated Debt;
(j) Unsecured Indebtedness owing by MFC to Xomed; PROVIDED, however,
that any such Indebtedness shall be evidenced by an intercompany note which
shall be pledged to the Agent pursuant to arrangements in form and substance
satisfactory to the Agent.
(k) Unsecured Indebtedness in an aggregate amount not to exceed
$2,500,000 assumed by Borrowers in connection with the Acquisitions.
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/section/8.2. RESTRICTIONS ON LIENS. No Borrower will, and will not
permit any of its Subsidiaries to, (a) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (e) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse (other than as permitted by
/section/8.5(b)(ii)); PROVIDED that such Borrower and any Subsidiary of such
Borrower may create or incur or suffer to be created or incurred or to exist:
(i) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties other than
Mortgaged Properties to secure claims for labor, material or supplies in respect
of obligations not overdue;
(ii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations;
(iii) liens on properties other than Mortgaged Properties in
respect of judgments or awards, the Indebtedness with respect to which is
permitted by /section/8.1(d);
(iv) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties other than Mortgaged Properties, in existence
less than 120 days from the date of creation thereof in respect of obligations
not overdue;
(v) encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's liens
under leases to which such Borrower or a Subsidiary of such Borrower is a party,
and other minor liens or encumbrances none of which in the opinion of such
Borrower interferes materially with the use of the property affected in the
ordinary conduct of the business of such Borrower
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and its Subsidiaries, which defects do not individually or in the aggregate have
a materially adverse effect on the business of such Borrower individually or of
such Borrower and its Subsidiaries on a consolidated basis;
(vi) liens existing on the date hereof and listed on SCHEDULE 8.2
hereto;
(vii) purchase money security interests in or purchase money
mortgages on real or personal property other than Mortgaged Properties acquired
after the date hereof to secure purchase money Indebtedness of the type and
amount permitted by /section/8.1(g), incurred in connection with the acquisition
of such property, which security interests or mortgages cover only the real or
personal property so acquired;
(viii) liens and encumbrances on each Mortgaged Property as and
to the extent permitted by the Mortgage applicable thereto; and
(xi) liens in favor of the Agent for the benefit of the Banks and
the Agent under the Loan Documents.
/section/8.3. RESTRICTIONS ON INVESTMENTS. No Borrower will, and will
not permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except:
(a) Investments in marketable direct or guaranteed obligations of the
United States of America or its agencies that mature within three (3) years from
the date of purchase by such Borrower;
(b) Investments in demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $2,000,000,000;
(c) Investments in securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by ▇▇▇▇▇'▇
Investors Services, Inc., and not less than "A 1" if rated by Standard and
Poor's;
(d) Investments existing on the date hereof and listed on SCHEDULE 8.3
hereto;
(e) extensions of trade credit in the ordinary course of business;
(f) loans and advances to (i) employees of such Borrower or its
Subsidiaries for (A) travel and relocation expenses in the ordinary course of
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business in an outstanding aggregate amount for all such loans not to exceed
$500,000 at any time for all Borrowers, and (B) the purchase of the capital
stock of Holdings in an outstanding aggregate amount for all such loans not to
exceed $1,100,000 at any time for all Borrowers and (ii) with respect to Trebay
only, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in an aggregate principal amount not in excess of $883,330
and as evidenced by a certain Promissory Note dated November 7, 1995;
(g) Investments in wholly-owned Subsidiaries of any Borrower; PROVIDED,
that each such Subsidiary shall have (i) either (A) become a borrower under the
Credit Agreement and the other Loan Documents or (B) guaranteed the prompt
payment and performance of all of the Obligations pursuant to a guaranty in form
and substance satisfactory to the Majority Banks and (ii) granted to the Agent
on behalf of the Banks a valid and perfected security interest in and lien on
all of the assets and properties of such Subsidiary pursuant to a security
agreement in form and substance satisfactory to the Majority Banks; and
PROVIDED, FURTHER, that the aggregate Dollar amount of all Investments by the
Borrowers in all such Subsidiaries with their principal places of business
located outside the United States by the Borrowers shall not exceed $4,000,000
in the aggregate; and PROVIDED, FURTHER that the aggregate Dollar amount of all
Investments by the Borrowers in all Subsidiaries by the Borrowers shall not
exceed $10,000,000 in the aggregate (other than Investments permitted under
/section/8.3(i));
(i) Investments by Xomed in MFC as evidenced by the Indebtedness
permitted under /section/8.1(j) hereof; and
(j) the Acquisitions.
/section/8.4. DISTRIBUTIONS. None of the Borrowers will, and will not
permit any of its Subsidiaries to, make any Distributions at any time if a
Default or Event of Default shall have occurred and be continuing or would
result from the making thereof.
/section/8.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
(a) None of the Borrowers will, and will not permit any of its
Subsidiaries to, become a party to any merger or consolidation, or agree to or
effect any asset acquisition or stock acquisition except (i) the acquisition of
assets in the ordinary course of business consistent with past practices, (ii)
the Acquisitions, (iii) the merger or consolidation of one or more of the
Subsidiaries of any Borrower (other than Holdings) with and into such Borrower
(other than Holdings), (iv) the merger or consolidation of two or more
Subsidiaries of the Borrowers, (v) the acquisition by Xomed of all of the assets
and properties of Xomed Puerto Rico or (vi) the acquisition by any Borrower
other than Holdings of all of the assets and properties of FessCo, Inc.
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(b) No Borrower will, and will not permit any of its Subsidiaries to,
become a party to or agree to or effect any disposition of assets, other than
the disposition of assets in the ordinary course of business consistent with
past practices and other than (i) the transfer to Xomed of all of the assets and
properties of Xomed Puerto Rico and (ii) the sale or assignment from time to
time, subject to the liens and security interests granted in favor of the Agent,
by Xomed to MFC or MFC to Xomed of Accounts Receivable and other amounts
receivable arising from Xomed's business.
/section/8.6. SALE AND LEASEBACK. No Borrower will, and will not permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby such Borrower or any Subsidiary of such Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that such Borrower or any Subsidiary of such Borrower
intends to use for substantially the same purpose as the property being sold or
transferred.
/section/8.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. No Borrower will, and
will not permit any of its Subsidiaries to conduct any activity at any Real
Estate or use any Real Estate in any manner that would violate any Environmental
Law or bring such Real Estate in violation of any Environmental Law, including
(a) using any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances in a manner that would
violate Environmental Laws, (b) causing or permitting to be located on any of
the Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances in a manner that would violate Environmental Laws, (c)
generating of any Hazardous Substances on any of the Real Estate in a manner
that would violate Environmental Laws, or (d) conducting of any activity at any
Real Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) of Hazardous Substances on,
upon or into the Real Estate in a manner that would violate Environmental Laws.
/section/8.8. EMPLOYEE BENEFIT PLANS. No Borrower or any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
406 of ERISA or /section/4975 of the Code which could result in a
material liability for such Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in /section/302 of ERISA, whether or not
such deficiency is or may be waived; or
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(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a lien or encumbrance on the assets of such Borrower or any
of its Subsidiaries pursuant to /section/302(f) or /section/4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of /section/4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities.
/section/8.9. CHANGES IN TERMS OF SUBORDINATED DEBT. Without the prior
written consent of the Majority Banks, no Borrower will, and will not permit any
of its Subsidiaries to, make any changes relating to the interest rate,
maturity, scheduled amortization, notice to the Banks and the Agent of defaults,
events of default or intended accelerations, subordination or any other
provision of any promissory note, indenture, agreement or other instrument
evidencing or governing any Subordinated Debt.
/section/8.10. ACQUISITION DOCUMENTS. Each Borrower acknowledges and
agrees that, pursuant to the Security Agreements, the Borrowers and their
Subsidiaries have assigned, conveyed and granted a security interest to the
Agent on behalf of the Banks in, among other things, all of the Borrowers' and
their respective Subsidiaries' right, title and interest in and to all payment
and indemnification obligations of the Sellers under the Acquisition Documents
(referred to herein as the "Rights"). Without limiting anything set forth in the
Security Agreements or the other Loan Documents, each Borrower agrees and
covenants as follows:
(a) In connection with any Acquisition for which the total purchase
price of the Acquisition Assets equals or exceeds $5,000,000, no Borrower, and
no Subsidiary of any Borrower, shall effect or cause any amendment or
modification of any of the Acquisition Documents in any material respect without
the prior written consent of the Majority Banks;
(b) The Borrowers shall promptly (and in any event within three (3)
Business Days) notify the Agent (according to the notification provisions set
forth herein) of the exercise by any Borrower or any Subsidiary of any rights or
remedies relating to any of the Rights;
(c) Each Borrower hereby constitutes and appoints the Agent and the
Agent's successors and assigns as the Assignor's true and lawful attorney (and
agent-in-fact), with full power of substitution, in such Borrower's name and
stead, but on behalf and for the benefit of the Agent and its successors and
assigns, to, after the occurrence and during the continuance of an Event of
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Default, demand, receive, exercise and enforce all of the Rights conveyed to the
Agent and to give receipts and releases for and in respect of the same, and any
part thereof, and from time to time to institute and prosecute in such
Borrower's name, or otherwise, for the benefit of the Agent and its successors
and assigns, all proceedings at law, in equity or otherwise, which the Agent or
its successors or assigns may reasonably deem proper (i) for the collection or
reduction to possession of any of the Rights and to do all acts and things in
relation to the collection or reduction to possession of the Rights conveyed to
the Agent as the Agent or its successors or assigns shall reasonably deem
desirable and (ii) for the obtaining of any benefit and coverage of and under
any and all of the Rights as the Agent or its successors or assigns shall
reasonably deem desirable, each Borrower hereby declaring that the foregoing
powers are coupled with an interest and are and shall be irrevocable by such
Borrower or by its dissolution or in any other manner or for any reason
whatsoever. Each Borrower hereby irrevocably authorizes and empowers the Agent,
in the sole discretion of the Agent, to, after the occurrence and during the
continuance of an Event of Default, (1) exercise and enforce any and all of the
Rights and (2) receive and collect any payments, damages, awards and other
moneys resulting from the exercise of the foregoing rights and to apply the same
on account of any of the Obligations;
(d) In connection with any Acquisition for which the total purchase
price of the Acquisition Assets equals or exceeds $5,000,000, the Borrowers
shall keep the Agent informed of all material circumstances bearing upon or
involving any of the Acquisition Documents related thereto or the transactions
contemplated thereby;
(e) None of the Borrowers or any of their respective Subsidiaries will
assign, pledge or otherwise encumber any of its right, title or interest under,
in or to any of the Acquisition Documents to anyone other than the Agent and its
respective successors or assigns;
(f) None of the Borrowers or any of their respective Subsidiaries will
take or omit to take any action, the taking or omission of which might result in
the termination or suspension of any of the Rights; and
(g) After the occurrence of an Event of Default, each Borrower and each
of its Subsidiaries will act at the direction of the Agent in taking any action
or omitting to take any action, including without limitation, the delivery of
demands and releases and the exercise and enforcement of any and all of the
Rights, permitted to be taken by such Borrower under any of the other
Acquisition Documents.
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/section/8.11. CHANGE OF FISCAL YEAR. No Borrower or any of its
Subsidiaries shall change its fiscal year without the prior written consent of
the Majority Banks, provided that, such consent shall not be unreasonably
withheld.
/section/8.12. TOTAL COMMITMENT AMOUNT. The Borrowers shall not cause
or permit the sum of the outstanding amount of all Loans to exceed the Total
Commitment or the Borrowing Base.
/section/8.13. AMENDMENT OF RECEIVABLE SERVICING AGREEMENT. Without the
prior written consent of the Majority Banks, such consent not to be unreasonably
withheld, no Borrower shall cause or permit or consent to any material amendment
or modification of any term or condition of the Receivable Servicing Agreement.
/section/9. FINANCIAL COVENANTS OF THE BORROWERS. Each Borrower covenants
and agrees that, so long as any Loan or Note is outstanding or any Bank has any
obligation to make any Loans:
/section/9.1. OPERATING CASH FLOW TO FINANCIAL OBLIGATIONS. Holdings
will not permit the ratio of Consolidated Operating Cash Flow to Consolidated
Financial Obligations plus Distributions of Holdings and its Subsidiaries to be
less than 1.75 to 1.0 for (a) the fiscal quarter of Holdings ending ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇) the period consisting of two consecutive fiscal quarters of Holdings
ending June 27, 1997, (c) the period consisting of three consecutive fiscal
quarters of Holdings ending September 26, 1997 and (d) any period consisting of
four consecutive fiscal quarters of Holdings ending on or after December 31,
1997.
/section/9.2. CONSOLIDATED SHAREHOLDERS EQUITY. Holdings will not
permit the Consolidated Shareholders Equity of Holdings and its Subsidiaries as
of the last day of any fiscal quarter ending after December 31, 1996 to be less
than $31,000,000 PLUS on a cumulative basis, fifty percent (50%) of positive
Consolidated Net Income of Holdings and its Subsidiaries for each fiscal year of
Holdings beginning with the fiscal year ending December 31, 1996.
/section/9.3. LIABILITY TO EQUITY. Holdings will not permit the ratio
of Consolidated Total Liabilities to Consolidated Shareholders Equity of
Holdings and its Subsidiaries to exceed 1.0:1.0 as of the end of any fiscal
quarter ending after December 31, 1996.
/section/10. CLOSING CONDITIONS. The obligations of the Banks to make
the initial Loans and to amend and restate the Original Credit Agreement shall
be subject to the satisfaction of the following conditions precedent on or prior
to the date hereof:
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/section/10.1. LOAN DOCUMENTS. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to each of
the Banks. Each Bank shall have received a fully executed copy of each such
document, certified as true and correct by the Borrowers.
/section/10.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks
shall have received from each Borrower and each of its Subsidiaries a copy,
certified by a duly authorized officer of such Person to be true and complete on
the Effective Date, of each of (a) its charter or other incorporation documents
as in effect on such date of certification, and (b) its by-laws as in effect on
such date.
/section/10.3. CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by each Borrower and each of its
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided to each of
the Banks.
/section/10.4.INCUMBENCY CERTIFICATE. Each of the Banks shall have
received from each Borrower and each of its Subsidiaries an incumbency
certificate, dated as of the Effective Date, signed by a duly authorized officer
of such Borrower or such Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of Borrower or such Subsidiary, each of the Loan Documents to
which such Borrower or such Subsidiary is or is to become a party; (b) in the
case of such Borrower, to make Loan Requests; and (c) to give notices and to
take other action on such Persons behalf under the Loan Documents.
/section/10.5. LEGALITY OF TRANSACTIONS. No change in applicable law
shall have occurred as a consequence of which it shall have become and continue
to be unlawful (a) for any Bank or the Agent to perform any of its agreements or
obligations under any of the Loan Documents to which any such Person is a party
on the Effective Date or (b) for any Borrower or any of its Subsidiaries to
perform any of its agreements or obligations under any of the Loan Documents or
the Acquisition Documents to which it is a party on the Effective Date.
/section/10.6. VALIDITY OF LIENS. The Security Documents shall be
effective to create in favor of the Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the Agent
to protect and preserve such security interests shall have been duly effected.
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The Agent shall have received evidence thereof in form and substance
satisfactory to the Agent.
/section/10.7. UCC SEARCH RESULTS. The Agent shall have received UCC
searches with respect to the Collateral, indicating no liens other than
Permitted Liens and otherwise in form and substance satisfactory to the Agent.
/section/10.8. TITLE INSURANCE POLICY ENDORSEMENTS. The Agent shall
have received endorsements to the Title Policies covering each Mortgaged
Property from the Title Insurance Company insuring the interest of the Agent and
each of the Banks as mortgagee under the Mortgage.
/section/10.9. LANDLORD CONSENTS. The Borrowers and their Subsidiaries
shall have delivered to the Agent all landlord consents required by the Agent,
together in each case with such estoppel certificates as the Agent may request.
/section/10.10. CERTIFICATES OF INSURANCE. The Agent shall have
received (a) a certificate of insurance from an independent insurance broker
dated as of the Effective Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Security Agreements and (b)
certified copies of all policies evidencing such insurance (or certificates
therefore signed by the insurer or an agent authorized to bind the insurer).
/section/10.11. BORROWING BASE REPORT. If the outstanding amount of the
Loans equals or exceeds $5,000,000, the Agent shall have received from the
Borrowers a Borrowing Base Report dated as a date which shall be no more than
thirty (30) days prior to the Effective Date.
/section/10.12. PROCEEDINGS AND DOCUMENTS. All corporate, partnership,
governmental and other proceedings in connection with the transactions
contemplated by the Loan Documents and all instruments and documents incidental
thereto, shall be in form and substance reasonably satisfactory to the Banks and
the Banks shall have received all such counterpart originals or certified or
other copies of all such instruments and documents as the Banks shall have
reasonably requested.
/section/10.13. ACCOUNTS RECEIVABLE AGING REPORT. If the outstanding
amount of the Loans equals or exceeds $5,000,000, the Agent shall have received
from the Borrowers the most recent Accounts Receivable aging report of the
Borrowers and their Subsidiaries dated as of a date which shall be no more than
thirty (30) days prior to the Balance Sheet Date and the Borrowers shall have
notified the Agent in writing on the Effective Date of any material deviation
from the Accounts Receivable values reflected in such Accounts Receivable aging
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report and shall have provided the Agent with such supplementary documentation
as the Agent may reasonably request.
/section/10.14. FINANCIAL CONDITION. The Banks shall be satisfied that
the financial statements referred to in /section/6.5 fairly present the business
and financial condition of the Borrowers, as at and for the periods ending on
the respective dates thereof, and that, except for changes described in writing
to the Banks and acceptable to them, there has been no material adverse change
in the assets, business or financial condition of any Borrower since the
applicable dates set forth in /section/6.5 hereof.
/section/10.15. OPINION OF COUNSEL. Each of the Banks and the Agent
shall have received a favorable legal opinion addressed to the Banks and the
Agent, dated as of the Effective Date, in form and substance satisfactory to the
Banks and the Agent, from ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel to the Borrowers and
their Subsidiaries.
/section/10.16. Intentionally omitted.
/section/10A ACQUISITION CREDIT LOAN CLOSING CONDITIONS. The
obligations of the Banks to make any Acquisition Credit Loan shall be subject to
the satisfaction of the following conditions precedent on or prior to the
Drawdown Date of such Acquisition Credit Loan:
/section/10A.1 ACQUISITION DOCUMENTS. Each of the Acquisition Documents
applicable to such Acquisition Credit Loan and the related Acquisition shall
have been duly executed and delivered by the respective parties thereto, shall
be in full force and effect and, if the total purchase price for the applicable
Acquisition Assets in any particular transaction equals or exceeds $5,000,000,
shall be in form and substance reasonably satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
/section/10A.2 CORPORATE ACTION. All corporate and partnership action
necessary for the valid execution, delivery and performance by the Borrowers and
each of their Subsidiaries of the applicable Acquisition Document to which it is
or is to become a party shall have been duly and effectively taken, and, if the
total purchase price for the applicable Acquisition Assets equals or exceeds
$5,000,000, evidence of such corporate and partnership action reasonably
satisfactory to the Banks shall have been provided to each of the Banks.
/section/10A.3 DISCHARGE OF LIENS. If the total purchase price for the
applicable Acquisition Assets in any one transaction equals or exceeds
$5,000,000, the Banks shall have received from the Borrowers evidence reasonably
satisfactory to the Agent that all liens and encumbrances with
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respect to property of the Borrowers or property to be acquired by the Borrowers
from any Seller or transferred to the Borrowers pursuant to or as a result of
the transactions contemplated by the applicable Acquisition Documents, other
than Permitted Liens, shall have been discharged in full.
/section/10A.4 PROCEEDINGS AND DOCUMENTS. If the total purchase price
for the applicable Acquisition Assets in any one transaction equals or exceeds
$5,000,000, all corporate, partnership, governmental and other proceedings in
connection with the transactions contemplated by the applicable Acquisition
Documents and all instruments and documents incidental thereto shall be in form
and substance reasonably satisfactory to the Banks and, regardless of the amount
of such purchase price, the Banks shall have received all such certified or
other copies of all such instruments and documents as the Banks shall have
reasonably requested.
/section/10A.5 CLOSING OF ACQUISITION. The Borrowers shall complete on
the Drawdown Date of such Acquisition Credit Loan the purchase of the applicable
Acquisition Assets pursuant to the applicable Acquisition Documents without
recourse, if the total purchase price of such Acquisition Assets equals or
exceeds $5,000,000, to any provision of such Acquisition Documents permitting
the waiver by the Borrowers of any material condition, obligation, covenant or
other requirement unless the Borrower shall have received the prior written
consent of the Majority Banks, such consent not to be unreasonably withheld.
Upon the purchase of the Acquisition Assets pursuant to the applicable
Acquisition Documents, the Borrowers will have valid and marketable title to all
of the assets and properties intended to be conveyed to the Borrowers pursuant
to the such Acquisition Documents.
/section/10A.6 OPINION OF COUNSEL. If the total purchase price for the
applicable Acquisition Assets in any one transaction equals or exceeds
$5,000,000, each of the Banks and the Agent shall have received a favorable
legal opinion addressed to the Banks and the Agent, dated as of the Drawdown
Date of such Acquisition Credit Loan, in form and substance satisfactory to the
Bank, from counsel for the Borrowers, delivered in connection with the
applicable Acquisition.
/section/10A.7 CAPITAL STRUCTURE. If the total purchase price for the
applicable Acquisition Assets in any one transaction equals or exceeds
$5,000,000, the Banks shall be satisfied with the capital structure of the
Borrowers and their Subsidiaries (including, without limitation, any entity
acquired in the applicable Acquisition) on the Drawdown Date of such Acquisition
Credit Loan.
/section/10A.8 FINANCIAL CONDITION. If the total purchase price for the
applicable Acquisition Assets in any one transaction equals or exceeds
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$5,000,000, the Banks shall be satisfied (i) that the financial information
delivered to the Bank with respect to the applicable Acquisition Assets is in
form and detail satisfactory to the Banks and fairly presents the business and
financial condition of the proposed Acquisition Assets and that there has been
no material adverse change in the business, assets or financial condition of the
Acquisition Assets, the Borrowers and/or their Subsidiaries since the dates of
such financial information and (ii) that the Banks' due diligence review of the
proposed Acquisition Assets in any one transaction, including, without
limitation, industry checking and, if such Acquisition Credit Loan to be made in
connection with such Acquisition exceeds $5,000,000, a review by the Agent's
commercial finance examiners of the Acquisition Assets, does not reveal to the
Banks after the date hereof any materially adverse information.
/section/10A.9 ADDITIONAL GUARANTY. If applicable, any corporation,
partnership, joint venture or business association acquired with the proceeds of
such Acquisition Credit Loan shall execute and deliver to the Agent and the
Banks a guaranty satisfactory to the Banks and their counsel.
/section/10A.10 APPROVALS. The Banks shall be reasonably satisfied that
all parties to the proposed Acquisition have received all necessary regulatory
approvals and evidence of compliance with all state and federal laws, including
but not limited to Regulation U, and state and federal securities laws,
applicable to any of the parties to such transactions.
/section/10A.11 OTHER CONDITIONS. The Banks shall have determined that
all of the conditions precedent set forth in /section/11 shall have been
satisfied.
/section/11. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks
to make any Loan, in each case whether on or after the Effective Date, shall
also be subject to the satisfaction of the following conditions precedent:
/section/11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Borrowers and their Subsidiaries contained
in this Credit Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan, with the same effect as if
made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
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/section/11.2. NO LEGAL IMPEDIMENT. No change shall have occurred in
any law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Banks would make it illegal for such Banks to make
such Loan.
/section/11.3. GOVERNMENTAL REGULATION. Each Bank shall have received
such statements in substance and form reasonably satisfactory to such Bank as
such Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
/section/11.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be satisfactory in
substance and in form to the Banks and to the Agent and the Agent's Special
Counsel, and the Banks, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Agent may reasonably request.
/section/11.5. BORROWING BASE REPORT. The Agent and the Banks shall
have received the most recent Borrowing Base Report required to be delivered to
the Agent and the Banks in accordance with /section/7.4(e).
/section/12. EVENTS OF DEFAULT; ACCELERATION; ETC.
/section/12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the
following events ("Events of Default" or, if the giving of notice or the lapse
of time or both is required, then, prior to such notice or lapse of time,
"Defaults") shall occur:
(a) the Borrowers shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(b) any Borrower or any of its Subsidiaries shall fail to pay any
interest on the Loans, the commitment fee, the Agent's fee, or other sums due
hereunder or under any of the other Loan Documents, within five (5) Business
Days after the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(c) any Borrower shall fail to comply with any of its covenants
contained in /section//section/7, 8 or 9 (other than the covenants set forth in
/section//section/7.2, 7.5, 7.7, 7.11, 7.14, 8.3, and 8.8 hereof);
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(d) any Borrower shall fail to comply with any of its covenants
contained in /section//section/7.2, 7.5, 7.7, 7.11, 7.14, 8.3 and 8.8 hereof
within fifteen (15) days after the Agent has given notice of such failure to the
Borrowers;
(e) any Borrower or any of its Subsidiaries shall fail to perform any
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this /section/12.1) for
thirty (30) days after written notice of such failure has been given to such
Borrower by the Agent;
(f) any representation or warranty of any Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or in
any other document or instrument delivered pursuant to or in connection with
this Credit Agreement shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;
(g) any Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace (not to exceed thirty (30)
days), any obligation in excess of $100,000 for borrowed money or credit
received or in respect of any Capitalized Leases or fail to observe or perform
any material term, covenant or agreement contained in any agreement by which it
is bound, evidencing or securing obligations in excess of $100,000 in respect of
borrowed money or credit received or in respect of any Capitalized Leases for
such period of time as would permit (assuming the giving of appropriate notice
if required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;
(h) any Borrower or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of such Borrower or any of its Subsidiaries or of any substantial part
of the assets of such Borrower or any of its Subsidiaries or shall commence any
case or other proceeding relating to such Borrower or any of its Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application shall be filed or
any such case or other proceeding shall be commenced against such Borrower or
any of its Subsidiaries and such Borrower or any of its Subsidiaries shall
indicate its approval thereof, consent thereto acquiescence therein or otherwise
remain undismissed for a period of sixty (60) days;
(i) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower or any of its
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Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of such
Borrower or any Subsidiary of such Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted (which order is not dismissed
within sixty (60) days after the entry thereof);
(j) there shall remain in force, undischarged, unsatisfied, unstayed
for more than sixty (60) days, whether or not consecutive, any final judgment
(unless bonded pending appeal) against the Borrowers or any of their
Subsidiaries that, with other outstanding final judgments, undischarged, against
the Borrowers or any of their Subsidiaries exceeds in the aggregate $1,000,000;
(k) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or the
Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in part;
(l) if any of the Loan Documents shall be canceled, terminated, revoked
or rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any action
at law, suit or in equity or other legal proceeding to cancel, revoke or rescind
any of the Loan Documents shall be commenced by or on behalf of any Borrower or
any of its Subsidiaries party thereto or any of their respective stockholders,
or any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;
(m) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrowers or any of their Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and such
event in the circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;
(n) any Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
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administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30) days;
(o) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing activities
at any facility of any Borrower or any of its Subsidiaries if such event or
circumstance is not covered by business interruption insurance and would have a
material adverse effect on the business or financial condition of such Borrower
or such Subsidiary;
(p) there shall occur the loss, suspension or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by any Borrower
or any of its Subsidiaries if such loss, suspension, revocation or failure to
renew would have a material adverse effect on the business or financial
condition of such Borrower or such Subsidiary; or
(q) the Borrowers or any of their Subsidiaries shall be indicted for a
federal crime, a punishment for which could include the forfeiture of any assets
of the Borrowers or such Subsidiaries included in the Borrowing Base or any
assets of the Borrowers or such Subsidiaries not included in the Borrowing Base
but having a fair market value in excess of $1,000,000;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrowers declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrowers; PROVIDED that in the event of any Event of Default specified in
/section//section/12.1(h), 12.1(i) or 12.1(l), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank; PROVIDED further that in the event of any Event of
Default specified in /section//section/12.1(h), 12.1(i) or 12.1(l), the
Commitments of the Banks shall immediately terminate and all such amounts owing
shall become immediately due and payable automatically and without any
requirement of notice from the Agent or the Banks. No remedy herein conferred
upon the Banks is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of law.
/section/12.2. TERMINATION OF COMMITMENTS. If any one or more of the
Events of Default specified in /section/12.1(h), /section/12.1(i) or
/section/12.1(l) shall occur, any
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unused portion of the Total Commitment hereunder shall forthwith terminate and
each of the Banks shall be relieved of all further obligations to make Loans to
the Borrowers. If any other Event of Default shall have occurred and be
continuing, or if on any Drawdown Date the conditions precedent to the making of
the Loans to be made on such Drawdown Date are not satisfied, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrowers,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make
Loans. No termination of the credit hereunder shall relieve any Borrower or any
of its Subsidiaries of any of the Obligations.
/section/12.3. REMEDIES. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Loans pursuant to /section/12.1, each
Bank, if owed any amount with respect to the Loans, may, with the consent of the
Majority Banks but not otherwise, proceed to protect and enforce its rights by
suit in equity, action at law or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Credit
Agreement and the other Loan Documents or any instrument pursuant to which the
Obligations to such Bank are evidenced, including as permitted by applicable law
the obtaining of the EX PARTE appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of such Bank. No remedy
herein conferred upon any Bank or the Agent or the holder of any Note is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
/section/12.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that,
following the occurrence or during the continuance of any Default or Event of
Default, the Agent or any Bank, as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement
of the Agent for or in respect of all reasonable costs, expenses, disbursements
and losses which shall have been incurred or sustained by the Agent in
connection with the collection of such monies by the Agent, for the exercise,
protection or enforcement by the Agent of all or any of the rights, remedies,
powers and privileges of the Agent under this Credit Agreement or any of the
other Loan Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Agent against any taxes or liens
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which by law shall have, or may have, priority over the rights of the Agent to
such monies;
(b) Second, to all other Obligations in such order or preference as the
Majority Banks may determine; PROVIDED, HOWEVER, that distributions in respect
of such obligations shall be made (i) PARI PASSU among Obligations with respect
to the Agent's fee payable pursuant to /section/4.1 and all other Obligations
and (ii) Obligations owing to the Banks with respect to each type of Obligation
such as interest, principal, fees and expenses, shall be made among the Banks
PRO RATA; and PROVIDED, FURTHER, that the Agent may in its discretion make
proper allowance to take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant to
/section/9-504(1)(c) of the Uniform Commercial Code of the State of Connecticut
as in effect from time to time; and
(d) Fourth, the excess, if any, shall be returned to the Borrowers or
to such other Persons as are entitled thereto.
/section/13. SETOFF. (a)Regardless of the adequacy of any collateral,
during the continuance of any Event of Default, any deposits or other sums
credited by or due from any of the Banks to any Borrower and any securities or
other property of such Borrower in the possession of such Bank may be applied to
or set off by such Bank against the payment of Obligations and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of such Borrower to such Bank. Each of the
Banks agrees with each other Bank that (a) if an amount to be set off is to be
applied to Indebtedness of the Borrowers to such Bank, other than Indebtedness
evidenced by the Notes held by such Bank, such amount shall be applied ratably
to such other Indebtedness and to the Indebtedness evidenced by all such Notes
held by such Bank, and (b) if such Bank shall receive from any Borrower, whether
by voluntary payment, exercise of the right of setoff, counterclaim, cross
action, enforcement of the claim evidenced by the Notes held by such Bank by
proceedings against such Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Bank any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Notes held by all of the Banks,
such Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, PRO TANTO assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it, its proportionate payment as contemplated by
this Credit Agreement; PROVIDED that if all or any part of such excess payment
is
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thereafter recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery, but without
interest.
(b) In case any Event of Default shall have occurred and be continuing,
to the extent that any Bank has made Loans or holds Notes exceeding in the
aggregate principal amount such Bank's Commitment Percentage of the then
outstanding aggregate principal amount of the Loans held by the Banks, the other
Banks shall purchase such participations in such Bank's Loans as to result in
the outstanding aggregate principal amount of the Loans made by each Bank to
equal each such Bank's Commitment Percentage of the then outstanding aggregate
principal amount of the Loans. Each of the Borrowers hereby agrees that any Bank
so purchasing a participation from another Bank pursuant to this paragraph may,
to the fullest extent permitted by law, exercise all of its rights to payment
(including the right of set-off) with respect to such participation as fully as
if such Bank were the direct creditor of the Borrower of such Loan in the amount
of such participation.
/section/14. THE AGENT.
/section/14.1. AUTHORIZATION. The Agent is authorized to take such
action on behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably incident
thereto, PROVIDED that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Banks is and shall be that of agent and
principal only, and nothing contained in this Credit Agreement or any of the
other Loan Documents shall be construed to constitute the Agent as a trustee for
any Bank.
/section/14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers
and execute its duties by or through employees or agents and shall be entitled
to take, and to rely on, advice of counsel concerning all matters pertaining to
its rights and duties under this Credit Agreement and the other Loan Documents.
The Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrowers.
/section/14.3. NO LIABILITY. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
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other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
/section/14.4. NO REPRESENTATIONS. The Agent shall not be responsible
for the execution or validity or enforceability of this Credit Agreement, the
Notes, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrowers or any of their
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books or records of
the Borrowers or any of their Subsidiaries. The Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to it by the
Borrowers or any holder of any of the Notes shall have been duly authorized or
is true, accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
condition of the Borrowers or any of their Subsidiaries. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or any other
Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
/section/14.5. PAYMENTS.
(a) A payment by the Borrowers to the Agent hereunder or any of the
other Loan Documents for the account of any Bank shall constitute a payment to
such Bank. The Agent agrees promptly to distribute to each Bank such Bank's PRO
RATA share of payments received by the Agent for the account of the Banks except
as otherwise expressly provided herein or in any of the other Loan Documents.
(b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
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repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(c) Notwithstanding anything to the contrary contained in this Credit
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its PRO RATA share of any Loan or (ii) to comply with the
provisions of /section/13 with respect to making dispositions and arrangements
with the other Banks, where such Bank's share of any payment received, whether
by setoff or otherwise, is in excess of its PRO RATA share of such payments due
and payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Credit Agreement, shall be deemed delinquent
(a "Delinquent Bank") and shall be deemed a Delinquent Bank until such time as
such delinquency is satisfied. A Delinquent Bank shall be deemed to have
assigned any and all payments due to it from the Borrowers, whether on account
of outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective PRO
RATA shares of all outstanding Loans. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective PRO RATA shares of all outstanding Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Loans of the
nondelinquent Banks, the Banks' respective PRO RATA shares of all outstanding
Loans have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
/section/14.6. HOLDERS OF NOTES. The Agent may deem and treat the payee
of any Note as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
/section/14.7. INDEMNITY. The Banks ratably agree hereby to indemnify
and hold harmless the Agent from and against any and all claims, actions and
suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Agent has not been reimbursed by the
Borrowers as required by /section/16), and liabilities of every nature and
character arising out of or related to this Credit Agreement, the Notes, or any
of the other Loan Documents or the transactions contemplated or evidenced hereby
or thereby, or the Agent's actions taken hereunder or thereunder, except to the
extent that any of the same shall be directly caused by the Agent's willful
misconduct or gross negligence.
/section/14.8. AGENT AS BANK. In its individual capacity, Bank of
Boston Connecticut shall have the same obligations and the same rights, powers
and privileges in respect to its Commitment and the Loans made by it, and as the
holder of any of the Notes, as it would have were it not also the Agent.
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/section/14.9. RESIGNATION. The Agent may resign at any time by giving
sixty (60) days' prior written notice thereof to the Banks and the Borrowers.
Upon any such resignation, the Majority Banks shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a financial
institution having a rating of not less than A or its equivalent by Standard &
Poor's Corporation. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
/section/14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each
Bank hereby agrees that, upon learning of the existence of a Default or an Event
of Default, it shall promptly notify the Agent in writing thereof. The Agent
hereby agrees that upon receipt of any notice under this /section/14.10 it shall
promptly notify the other Banks in writing of the existence of such Default or
Event of Default.
/section/14.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, PROVIDED that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
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/section/15. EXPENSES. The Borrowers agree to pay (a) the reasonable
costs of producing and reproducing this Credit Agreement, the other Loan
Documents and the other agreements and instruments mentioned herein, (b) any
taxes (including any interest and penalties in respect thereto) payable by the
Agent or any of the Banks (other than taxes based upon the Agent's or any Bank's
net income or intangible assets or property) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrowers hereby
agreeing to indemnify the Agent and each Bank with respect thereto), (c) the
reasonable fees, expenses and disbursements of the Agent's Special Counsel or
any local counsel to the Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the fees, expenses and
disbursements of the Agent incurred by the Agent in connection with the
preparation, administration, syndication or interpretation of the Loan Documents
and other instruments mentioned herein, including all title insurance premiums
and surveyor, engineering, appraisal and commercial finance examination charges,
(e) any fees, costs, expenses and bank charges, including bank charges for
returned checks, incurred by the Agent in establishing, maintaining or handling
agency accounts, lock box accounts and other accounts for the collection of any
of the Collateral; (f) all reasonable out-of-pocket expenses (including without
limitation reasonable attorneys' fees and costs, which attorneys may be
employees of any Bank or the Agent, and reasonable consulting, accounting,
appraisal, syndication, investment banking and similar professional fees and
charges) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrowers or any of their Subsidiaries or the administration thereof after
the occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Bank's or the Agent's relationship with the Borrowers or any of their
Subsidiaries and (g) all reasonable fees, expenses and disbursements of any Bank
or the Agent incurred in connection with UCC searches, UCC filings or mortgage
recordings. The covenants of this /section/15 shall survive payment or
satisfaction of all other Obligations.
/section/16. INDEMNIFICATION. The Borrowers agree to indemnify and hold
harmless the Agent and the Banks from and against any and all claims, actions
and suits whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (a) any actual
or proposed use by the Borrowers or any of their
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Subsidiaries of the proceeds of any of the Loans, (b) any actual or alleged
infringement of any patent, copyright, trademark, service ▇▇▇▇ or similar right
of the Borrowers or any of their Subsidiaries comprised in the Collateral, (c)
the Borrowers or any of their Subsidiaries entering into or performing this
Credit Agreement or any of the other Loan Documents or (d) with respect to the
Borrowers and their Subsidiaries and their respective properties and assets, the
violation of any Environmental Law, the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release or threatened release of any
Hazardous Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Banks and the Agent shall be
entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrowers agree to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of the Borrowers
under this /section/16 are unenforceable for any reason, the Borrowers hereby
agrees to make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law. The covenants contained
in this /section/16 shall survive payment or satisfaction in full of all other
Obligations PROVIDED, HOWEVER, that the Borrowers and their Subsidiaries shall
have no obligation hereunder to the Agent or any Bank with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of the Agent or any such Bank.
/section/17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrowers or any of their Subsidiaries pursuant hereto shall be deemed to
have been relied upon by the Banks and the Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and shall survive the
making by the Banks of any of the Loans, as herein contemplated, and shall
continue in full force and effect so long as any amount due under this Credit
Agreement or the Notes or any of the other Loan Documents remains outstanding or
any Bank has any obligation to make any Loans hereunder, and for such further
time as may be otherwise expressly specified in this Credit Agreement. All
statements contained in any certificate or other paper delivered to any Bank or
the Agent at any time by or on behalf of any Borrower or any of its Subsidiaries
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by such Borrower or such Subsidiary
hereunder.
/section/18. ASSIGNMENT AND PARTICIPATION.
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/section/18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided
herein, each Bank may assign to one or more Eligible Assignees all or a portion
of its interests, rights and obligations under this Credit Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it and the Notes held by it; PROVIDED
that (a) the Agent and unless a Default or Event of Default shall have occurred,
the Borrowers shall have given their prior written consent to such assignment,
which consent, in the case of the Borrowers, will not be unreasonably withheld,
(b) each such assignment shall be of a constant, and not a varying, percentage
of all the assigning Bank's rights and obligations under this Credit Agreement,
(c) each assignment shall be in an amount that is a whole multiple of $5,000,000
unless such assigning Bank is assigning its entire Commitment, and (d) unless a
Default or Event of Default shall have occurred each Bank (other than Bank of
Boston Connecticut) which is a Bank on the date hereof shall retain, free of any
such assignment, an amount of its Commitment of not less than $5,000,000, (e)
unless a Default or Event of Default shall have occurred, Bank of Boston
Connecticut shall retain free of any such assignment (exclusive of assignments
to its Affiliates) not less than forty percent (40%) of the Total Commitment and
(f) the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of EXHIBIT C hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in /section/18.3,
be released from its obligations under this Credit Agreement.
/section/18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows: (a) other than the representation and warranty that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto; (b) the assigning Bank
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers and their
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Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations, or the performance or observance by the Borrowers and
their Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under this Credit
Agreement or any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (c) such assignee confirms that it has
received a copy of this Credit Agreement, together with copies of the most
recent financial statements referred to in /section/6.5 and /section/7.4 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the assigning
Bank, the Agent or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Credit Agreement; (e) such assignee
represents and warrants that it is an Eligible Assignee; (f) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Credit Agreement and the other Loan Documents
as are delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto; (g) such assignee agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of this Credit Agreement are required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance.
/section/18.3. REGISTER. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Banks and the
Commitment Percentage of, and principal amount of the Loans owing to the Banks
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrowers and the Banks at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $2,500.00.
/section/18.4. NEW NOTES. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each Note
subject to such assignment, the Agent shall (a) record the information contained
therein in the Register, and (b) give prompt notice thereof to the Borrowers and
the Banks (other than the assigning Bank). Within five (5) Business Days after
receipt of such notice, the Borrowers, at its own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to the
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order of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such in Assignment and Acceptance and shall
otherwise be substantially the form of the assigned Notes. Within five (5)
Business Days of issuance of any new Notes pursuant to this /section/18.4, the
Borrowers shall deliver an opinion of counsel, addressed to the Banks and the
Agent, relating to the due authorization, execution and delivery of such new
Notes and the legality, validity and binding effect thereof, in form and
substance satisfactory to the Banks. The surrendered Notes shall be canceled and
returned to the Borrowers.
/section/18.5. PARTICIPATIONS. Each Bank may sell participations to one
or more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) each such participation shall be in an amount of not less than
$1,000,000 or multiples thereof, (b) any such sale or participation shall not
affect the rights and duties of the selling Bank hereunder to the Borrowers and
(c) the only rights granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of the Loan
Documents shall be the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on any Loans, extend the
term or increase the amount of the Commitment of such Bank as it relates to such
participant, reduce the amount of any commitment fees to which such participant
is entitled, extend any regularly scheduled payment date for principal or
interest or release any of the Collateral.
/section/18.6. DISCLOSURE. The Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; PROVIDED that such assignees or participants or potential assignees
or participants shall agree (a) to treat in confidence such information, (b) not
to disclose such information to a third party and (c) not to make use of such
information for purposes of transactions unrelated to such contemplated
assignment or participation.
/section/18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS.
If any assignee Bank is an Affiliate of the Borrowers, then any such assignee
Bank shall have no right to vote as a Bank hereunder or under any of the other
Loan Documents for purposes of granting consents or waivers or for purposes of
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agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to /section/12.1 or
/section/12.2, and the determination of the Majority Banks shall for all
purposes of this Agreement and the other Loan Documents be made without regard
to such assignee Bank's interest in any of the Loans. If any Bank sells a
participating interest in any of the Loans to a participant, and such
participant is any Borrower or an Affiliate of any Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
/section/12.1 or /section/12.2 to the extent that such participation is
beneficially owned by any Borrower or any Affiliate of such Borrower, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to the interest of such
transferor Bank in the Loans to the extent of such participation.
/section/18.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrowers and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes. If any
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the Borrowers and with
the consent of the Borrowers and the Majority Banks, appoint another Bank to act
as a Reference Bank hereunder. Anything contained in this /section/18 to the
contrary notwithstanding, any Bank may at any time pledge all or any portion of
its interest and rights under this Credit Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks organized under
/section/4 of the Federal Reserve Act, 12 U.S.C. /section/341. No such pledge or
the enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
/section/18.9. ASSIGNMENT BY BORROWERS. No Borrowers shall assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
/section/19. NOTICES, ETC. Except as otherwise expressly provided in
this Credit Agreement, all notices and other communications made or required to
be given pursuant to this Credit Agreement or the Notes shall be in writing and
shall be delivered in hand, mailed by United States registered or certified
first class mail, postage prepaid, sent by overnight courier, or sent by
telegraph,
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telecopy, facsimile or telex and confirmed by delivery via courier or postal
service, addressed as follows:
(a) if to the Borrowers, c/o Xomed Surgical Products, Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇,
or at such other address for notice as the Borrowers shall last have furnished
in writing to the Person giving the notice;
(b) if to the Agent, at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President, or such other address for
notice as the Agent shall last have furnished in writing to the Person giving
the notice; and
(c) if to any Bank, at such Bank's address set forth on SCHEDULE 1
hereto, or such other address for notice as such Bank shall have last furnished
in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
/section/20. GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE STATE OF CONNECTICUT AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF CONNECTICUT OR
ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN /section/19. EACH BORROWER HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT IN THE STATE OF CONNECTICUT OR THAT SUCH SUIT IS BROUGHT
IN AN INCONVENIENT COURT.
/section/21. HEADINGS. The captions in this Credit Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
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/section/22. COUNTERPARTS. This Credit Agreement and any amendment
hereof may be executed in several counterparts and by each party on a separate
counterpart, each of which when executed and delivered shall be an original, and
all of which together shall constitute one instrument. In proving this Credit
Agreement it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
/section/23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in /section/25.
/section/24. WAIVER OF JURY TRIAL. Each Borrower, as an inducement to
the Agent and the Banks to enter into this Credit Agreement, hereby waives its
right to a jury trial with respect to any action or claim arising out of any
dispute in connection with this Credit Agreement, the Notes or any of the other
Loan Documents, any rights or obligations hereunder or thereunder or the
performance of which rights and obligations. Except as prohibited by law, each
Borrower hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each Borrower (a) certifies that no representative, agent or
attorney of any Bank or the Agent has represented, expressly or otherwise, that
such Bank or the Agent would not, in the event of litigation, seek to enforce
the foregoing waivers and (b) acknowledges that the Agent and the Banks have
been induced to enter into this Credit Agreement, the other Loan Documents to
which it is a party and the Subordination Documents to which it is a party by,
among other things, the waivers and certifications contained herein.
/section/25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or
approval required or permitted by this Credit Agreement to be given by all of
the Banks may be given, and any term of this Credit Agreement, the other Loan
Documents or any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by any Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrowers and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Notes (other than interest accruing pursuant to
/section/4.9(b) following the effective date of any waiver by the Majority
Banks of the Default or Event of Default relating thereto), the term of the
Notes, the scheduled payment dates for principal and interest under the Notes,
the
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amount of the Commitments of the Banks, and the amount of commitment fee
hereunder may not be changed without the written consent of the Borrowers and
the written consent of each Bank affected thereby; the definition of Majority
Banks may not be amended without the written consent of all of the Banks; and
the amount of the Agent's Fee payable for the Agent's account and /section/14
may not be amended without the written consent of the Agent. Furthermore, the
Agent shall not release any of the Collateral (other than Collateral which is
permitted to be sold or otherwise disposed of pursuant to the terms hereof or
the terms of the other Loan Documents) without the written consent of each Bank.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Agent or any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Borrowers shall entitle the Borrowers to other or further notice or demand
in similar or other circumstances.
/section/26. SEVERABILITY. The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
/section/27. COMMERCIAL TRANSACTION; PREJUDGMENT REMEDY WAIVER. EACH
BORROWER REPRESENTS, WARRANTS AND ACKNOWLEDGES THAT THE TRANSACTION OF WHICH
THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE A PART IS A "COMMERCIAL
TRANSACTION" WITHIN THE MEANING OF CHAPTER 903A OF CONNECTICUT GENERAL STATUTES,
AS AMENDED. EACH BORROWER HEREBY WAIVES ITS RIGHT TO NOTICE AND PRIOR COURT
HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL STATUTES SECTIONS 52-278a ET.
SEQ. AS AMENDED OR UNDER ANY OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND
ALL PREJUDGMENT REMEDIES THE AGENT OR THE BANKS MAY EMPLOY TO ENFORCE THEIR
RIGHTS AND REMEDIES HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS. MORE
SPECIFICALLY, EACH BORROWER ACKNOWLEDGES THAT THE AGENT'S ATTORNEY AND/OR THE
BANKS' ATTORNEY MAY, PURSUANT TO CONN. GEN. STAT. /section/52-278f, ISSUE A
WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER. EACH BORROWER
ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE
ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY AS AFORESAID AND THE AGENT
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AND THE BANKS ACKNOWLEDGES BY SUCH BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT
TO THE ISSUANCE OF SAID WRIT.
/section/28. EFFECTIVE DATE. This Agreement shall become effective
among the parties hereto as of the Effective Date. Until the Effective Date, the
terms of the Original Credit Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as of the date first set forth above.
XOMED SURGICAL PRODUCTS, INC.
By:
------------------------------
Its
MEROCEL CORPORATION
By:
------------------------------
Its
XOMED, INC.
By:
------------------------------
Its
XOMED-▇▇▇▇▇▇, ▇.▇. INC.
By:
------------------------------
Its
-▇▇-
▇▇▇▇▇▇ MEDICAL CORPORATION
By:
------------------------------
Its
MEROCEL FUNDING CORPORATION
By:
------------------------------
Its
BANK OF BOSTON CONNECTICUT,
individually and as Agent
By:
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its Vice President
SCHEDULE 2
TO CREDIT AGREEMENT
The following terms shall have the meanings set forth in this SCHEDULE
2 or elsewhere in the provisions of this Credit Agreement referred to below:
ACCOUNTS RECEIVABLE. All rights of the Borrowers (other than Holdings,
Xomed P.R and MFC) and the Subsidiaries of Xomed International, Inc. to payment
for goods sold, leased or otherwise marketed in the ordinary course of business
and all rights of the Borrowers (other than Holdings, Xomed P.R. and MFC) to
payment for services rendered in the ordinary course of business and all sums of
money or other proceeds due thereon pursuant to transactions with account
debtors, except for that portion of the sum of money or other proceeds due
thereon that relate to sales, use or property taxes in conjunction with such
transactions, recorded on books of account in accordance with generally accepted
accounting principles.
ACQUISITION. The acquisition by any Borrower of any Acquisition Assets
pursuant to the terms of the applicable Acquisition Documents.
ACQUISITION ASSETS. Either (a) the issued and outstanding capital stock
of, or business assets of any corporation, partnership or business involved in
the medical technology industry or (b) any new equipment purchased by any
Borrower that is to be used in such Borrower's medical technology business.
ACQUISITION CREDIT LOANS. Any Loan the proceeds of which are used or
intended for use in connection with any Acquisition.
ACQUISITION DOCUMENTS. In connection with any Acquisition after the
Effective Date for which the total purchase price of the Acquisition Assets
equals or exceeds $5,000,000, any and all documents, agreements and instruments
executed or to be executed in connection with any Acquisition, together with all
schedules, exhibits, and annexes thereto, each in form and substance
satisfactory to the Agent and the Banks.
AFFILIATE. Any Person that would be considered to be an affiliate of
any Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if such Borrower were
issuing securities.
AGENT'S HEAD OFFICE. The Agent's head office located at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
AGENT. Bank of Boston Connecticut acting as agent for the Banks.
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AGENT'S SPECIAL COUNSEL. ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ or such other counsel as
may be approved by the Agent that represents the Agent when acting on behalf of
the Banks in accordance with the terms hereof.
ASSIGNMENT AND ACCEPTANCE. See /section/18.1.
BALANCE SHEET DATE. December 31, 1996.
BANKS. Bank of Boston Connecticut and the other lending institutions
listed on SCHEDULE 1 hereto and any other Person who becomes an assignee of any
rights and obligations of a Bank pursuant to /section/18.
BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by The First National Bank of Boston at its head office in Boston,
Massachusetts, as its "base rate" and (b) one-half of one percent (1/2%) above
the Federal Funds Effective Rate. For the purposes of this definition, "Federal
Funds Effective Rate" shall mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent.
BASE RATE LOANS. Loans bearing interest calculated by reference to the
Base Rate.
BORROWER SECURITY AGREEMENT. The Second Amended and Restated Security
Agreement, dated as of December 31, 1996, among the Borrowers and the Agent and
in form and substance satisfactory to the Banks and the Agent, as the same may
be amended, modified and/or restated from time to time.
BORROWERS. As defined in the preamble hereto.
BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to /section/7.4(e), which is
equal to the sum of:
(a) 85% of Domestic Eligible Accounts Receivable for which invoices
have been issued and are payable; plus
(b) 80% of Foreign Eligible Accounts Receivable for which invoices have
been issued and are payable; plus
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(c) the lesser of (i) $11,000,000 and (ii) the sum of (A) 35% of the
net book value (determined on a first-in first-out basis at lower of cost or
market) of raw material Eligible Inventory, plus (B) 45% of the net book value
(determined on a first-in first-out basis at the lower of cost or market of
finished goods Eligible Inventory; plus
(d) $4,900,000.
BORROWING BASE REPORT. A Borrowing Base Report signed by the principal
financial officer of Holdings and in substantially the form of EXHIBIT D hereto.
BUSINESS DAY. Any day on which banking institutions in Hartford,
Connecticut are open for the transaction of banking business.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by any
Borrower or any of its Subsidiaries in connection with the purchase or lease by
such Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles.
CAPITALIZED LEASES. Leases under which any Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See /section/6.19.
CODE. The Internal Revenue Code of 1986, as amended.
COLLATERAL. All of the property, rights and interests of the Borrowers
and their Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
COLLATERAL ASSIGNMENT OF LEASES, RENTALS AND PROPERTY INCOME. The
Collateral Assignment of Leases, Rentals and Property Income, dated or to be
dated on or prior to the Effective Date, made by Merocel in favor of the Agent
and in form and substance satisfactory to the Banks and Agent.
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COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE
1 hereto as the amount of such Bank's commitment to make Loans to the Borrower,
as the same may be reduced from time to time; or if such commitment is
terminated pursuant to the provisions hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
CONSOLIDATED or CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of Holdings and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED FINANCIAL OBLIGATIONS. With respect to any fiscal period,
an amount equal to the sum of all principal, interest and fee payments on
Indebtedness that become due and payable or that are to become due and payable
during such fiscal period pursuant to any agreement or instrument to which
Holdings or any of its Subsidiaries is a party relating to the borrowing of
money or the obtaining of credit or in respect of Capitalized Leases. Demand
obligations shall be deemed to be due and payable during any fiscal year during
which such obligations are outstanding. The Indebtedness permitted under
/section/8.1(j) shall not be included when calculating Consolidated Financial
Obligations under /section/9.1 of the Credit Agreement.
CONSOLIDATED NET INCOME (OR DEFICIT). For any period, the consolidated
net income (or deficit) of Holdings and its Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with
generally accepted accounting principles; PROVIDED, that no Section 338 Event
shall be included when calculating Consolidated Net Income hereunder.
CONSOLIDATED OPERATING CASH FLOW. For any period, an amount equal to
(a) the sum of (i) Earnings Before Interest and Taxes for such period, PLUS (ii)
depreciation and amortization and, with respect to the fiscal quarters of the
Borrowers ending June 29, 1996, September 28, 1996, December 31, 1996 and March
29, 1997 only, a one time non-cash charge in the amount of $2,380,000 in
connection with the write off of Trebay's research and development expenses,
PLUS (iii) with respect to the fiscal quarters of the Borrowers ending June 29,
1996, September 28, 1996, December 31, 1996 and March 29, 1997 only, a one time
restructuring expense in the amount of $3,093,000, LESS (b) the sum of (i) cash
payments for all taxes paid during such period, PLUS (ii) Capital Expenditures
made during such period to the extent permitted hereunder; PLUS (iii) cash
payments by Holdings for the purchase of its capital stock during such period;
PROVIDED, that no Section 338 Event shall be included when calculating
Consolidated Operating Cash Flow hereunder.
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CONSOLIDATED SHAREHOLDERS EQUITY. An amount equal to the sum of (a) the
Consolidated capital accounts (including common stock and preferred stock, but
excluding treasury stock) of Holdings and its Subsidiaries, PLUS (b) the
Consolidated earned surplus and capital surplus of Holdings and its
Subsidiaries, MINUS (c) the Consolidated book value of all assets acquired by
Holdings and its Subsidiaries after the Effective Date not in the ordinary
course of business which, under generally accepted accounting principles, would
be treated as intangible assets; PROVIDED, that no Section 338 Event shall be
included when calculating Consolidated Shareholders Equity hereunder; PROVIDED,
further that such amount shall include the Series C Redeemable Preferred Stock
of Holdings in all calculations of Consolidated Shareholders Equity.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of Holdings and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of Holdings and its
Subsidiaries, whether or not so classified.
CONVERSION REQUEST. A notice given by the Borrowers to the Agent of the
Borrowers' election to convert or continue Loan in accordance with /section/2.7
CREDIT AGREEMENT. This Amended and Restated Credit Agreement, including
the Schedules and Exhibits hereto.
DEFAULT. See /section/12.1.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any Borrower, other than
dividends payable solely in shares of common stock of such Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of such Borrower, directly or indirectly through a Subsidiary of such
Borrower or otherwise; the return of capital by such Borrower to its
shareholders as such; or any other distribution on or in respect of any shares
of any class of capital stock of such Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC ELIGIBLE ACCOUNTS RECEIVABLE. Eligible Accounts Receivable
that are payable by account debtors located within the United States of America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
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DRAWDOWN DATE. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with
/section/2.7.
EARNINGS BEFORE INTEREST AND TAXES. The consolidated earnings (or loss)
from the consolidated earnings (or loss) from the operations of Holdings and its
Subsidiaries for any period, after all expenses and other proper charges but
before payment or provision for any income taxes or interest expense for such
period, determined in accordance with generally accepted accounting principles;
PROVIDED, that no Section 338 Event or any amortization expense shall be
included when calculating Earnings Before Interest and Taxes hereunder.
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (OR
EBITDA). For any period, an amount equal to the sum of (a) Earnings Before
Interest and Taxes for such period, PLUS (b) depreciation and amortization for
such period.
EFFECTIVE DATE. The date on which the Agent determines that the
conditions set forth in /section/10 and 11 have been satisfied and any Loans are
to be made.
ELIGIBLE ACCOUNTS RECEIVABLE. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (a) that the Borrowers reasonably and in good faith
determine to be collectible; (b) that are with account debtors that (i) are not
Affiliates of any Borrower, (ii) purchased the goods or services giving rise to
the relevant Account Receivable in an arm's length transaction, (iii) are not
insolvent or involved in any case or proceeding, whether voluntary or
involuntary, under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, dissolution, liquidation or similar law of any jurisdiction
and (iv) are, in the Majority Banks' reasonable judgment, creditworthy; (c) that
are in payment of obligations that have been fully performed and are not subject
to dispute or any other similar claims that would reduce the cash amount payable
therefor; (d) that are not subject to any pledge, restriction, security interest
or other lien or encumbrance other than those created by the Loan Documents; (e)
in which the Agent has a valid and perfected first priority security interest
(other than in the case of Accounts Receivable of foreign Subsidiaries of Xomed
International, Inc.); (f) that are not outstanding for more than the earlier to
occur of (i) ninety (90) days past the earlier to occur of (A) the date of the
respective invoices therefor and (B) the date of shipment thereof in the case of
goods or the end of the calendar month following the provision thereof in the
case of services and (ii) thirty (30) days past the due date thereof; and (g)
that are payable in Dollars (other than Accounts Receivable of Holdings'
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indirect foreign Subsidiaries net of their allowance for doubtful Accounts
Receivable in accordance with generally accepted accounting principles).
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, PROVIDED that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any country
which is a member of the OECD; and (e) if, but only if, any Event of Default has
occurred and is continuing, any other bank, insurance company, commercial
finance company or other financial institution approved by the Agent, such
approval not to be unreasonably withheld.
ELIGIBLE INVENTORY. With respect to the Borrowers (other than Holdings,
MFC and Xomed P.R.) and the Subsidiaries of Xomed International, Inc., finished
goods and raw materials inventory owned by the Borrowers (other than Holdings,
MFC and Xomed P.R.) or the Subsidiaries of Xomed International, Inc.; PROVIDED
that Eligible Inventory shall not include any inventory (i) held on consignment,
or not otherwise owned by any such Person, or of a type no longer sold by such
Person, (ii) which has been returned by a customer or is damaged or subject to
any legal encumbrance other than Permitted Liens, (iii) which is not in the
possession of such Person unless the Agent has received a waiver from the party
in possession of such inventory in form and substance satisfactory to the Agent,
(iv) which is held by such Person on property leased by such Person, unless (A)
the Agent has received a waiver from the lessor of such leased property and, if
any, sublessor thereof in form and substance satisfactory to the Agent or (B)
the Agent has waived in writing such requirement for such property, (v) as to
which appropriate Uniform Commercial Code financing statements showing such
Person (other than such Subsidiaries) as debtor and the Agent as secured party
have not been filed in the proper filing office or offices in order to perfect
the Agent's security interest therein, (vi) which has been shipped to a customer
of such Person regardless of whether such shipment is on a consignment basis,
(vii) which the Majority Banks reasonably deem to be obsolete or not marketable
or (viii) which is a so-called "demonstration system" or is otherwise in the
possession of any sales representative of any of the such Persons.
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EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
/section/3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
ENVIRONMENTAL LAWS. See /section/6.19(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under /section/414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of /section/4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank
designated as such in SCHEDULE 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the arithmetic average of the rates
per annum for each Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Rate Loan of such Reference Bank to which such
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Interest Period applies, divided by (b) a number equal to 1.00 minus the
Eurocurrency Reserve Rate, if applicable.
EURODOLLAR RATE APPLICABLE MARGIN. See /section/2.5(b) hereof.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by reference
to the Eurodollar Rate.
EVENT OF DEFAULT. See /section/12.1.
FLORIDA REAL ESTATE. The Real Estate owned by Xomed and located at and
adjacent to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
FOREIGN ELIGIBLE ACCOUNTS RECEIVABLE. Eligible Accounts Receivable that
are payable by account debtors located outside the United States of America.
FOREIGN BANK. Any Bank that is not incorporated under the laws of the
United States or any state thereof.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in /section/9,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
Holdings reflected in its financial statements for the year ended on the Balance
Sheet Date, and (b) when used in general, other than as provided above, means
principles that are (i) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (ii) consistently applied with past financial statements of
Holdings adopting the same principles, provided that in each case referred to in
this definition of "generally accepted accounting principles" a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of /section/3(3) of ERISA maintained or contributed to by any Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
HAZARDOUS SUBSTANCES. See /section/7.20(b).
HOLDINGS. As defined in the preamble hereto.
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HOLDINGS STOCKHOLDERS Collectively, Warburg, ▇▇▇▇▇▇ Investors, L.P.,
Accel IV L.P., Accel Investors '94 L.P., Accel Keiretsu L.P., ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ Partners, Prosper Partners, Vertical Fund Associates, L.P., Vertical
Medical Partners, L.P., Vertical Partners, L.P., ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or any of
their respective successors or assigns.
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the Borrowers' balance sheet as liabilities, or to which reference should
be made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit; PROVIDED, that in no
event shall the Series C Redeemable Preferred Stock of Holdings constitute
Indebtedness under this definition.
INTEREST PAYMENT DATE. As to any Loan, the first day of each calendar
month following the Effective Date.
INTEREST PERIOD. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrowers in a Loan Request
(i) for any Base Rate Loan, the last day of the calendar quarter; and (ii) for
any Eurodollar Rate Loan, 1, 2 or 3 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrowers in a Conversion Request; PROVIDED that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan would
otherwise end on a day that is not a Eurodollar Business Day, that Interest
Period shall be extended to the next succeeding Eurodollar Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Eurodollar Business Day;
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(B) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;
(C) if the Borrowers shall fail to give notice as provided in
/section/2.7, the Borrowers shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan on the last day of the
then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Eurodollar Business Day of a
calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LIFE INSURANCE ASSIGNMENTS. The several life insurance assignments,
dated or to be dated on or prior to the Effective Date, made by the Borrowers
and their Subsidiaries in favor of the Agent and in form and substance
satisfactory to the Banks and the Agent.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Subordination
Agreements, the Acquisition Documents and the Security Documents and any
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other agreement, instrument or document executed in connection with any of the
foregoing.
LOANS. Loans made or to be made by the Banks to the Borrowers pursuant
to /section/2.
LOAN REQUEST. See /section/2.6.
MAJORITY BANKS. As of any date of determination, (a) if there are two
(2) or less Banks, the Banks holding one hundred percent (100%) of the
outstanding principal amount of the Notes on such date; and if no such principal
is outstanding, the Banks whose aggregate Commitments constitute one hundred
percent (100%) of the Total Commitments; and (b) if there are more than two (2)
Banks, the Banks holding at least sixty-six and two-thirds (66 2/3%) of the
outstanding principal amount of the Notes on such date; and if no such principal
is outstanding, the Banks whose aggregate Commitments constitutes at least
sixty-six and two thirds percent (66 2/3%) of the Total Commitment.
MATURITY DATE. May 5, 2000.
MEROCEL FSC. Merocel Foreign Sales Corp., a United States Virgin Island
Corporation
MEROCEL STOCK PLEDGE AGREEMENT. The Amended and Restated Stock Pledge
Agreement between Merocel and the Agent, dated as of December 31, 1996, in form
and substance satisfactory to the Agent, as the same may be amended, modified
and/or restated from time to time.
MORTGAGED PROPERTY. Any Real Estate which is subject to any Mortgage.
MORTGAGE. The mortgage and deed of trust, dated or to be dated on or
prior to the Effective Date, from the Borrowers and their Subsidiaries to the
Agent with respect to the fee and leasehold interests of the Borrowers and their
Subsidiaries in the Real Estate (other than the Florida Real Estate) and in form
and substance satisfactory to the Banks and the Agent, as the same may be
amended and/or modified from time to time.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
/section/3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
NOTE PLEDGE AGREEMENTS. Collectively, the Trebay Note Pledge Agreement
and the Xomed Note Pledge Agreements.
NOTE RECORD. A Record with respect to a Note.
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NOTES. See /section/2.4.
OBLIGATIONS. All indebtedness, obligations and liabilities of any
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or any of the Notes or other instruments at any time evidencing any
thereof or in respect of any cash management services provided by the Agent to
any Borrower.
PATENT ASSIGNMENTS. The several Patent Assignments, dated or to be
dated on or prior to the Effective Date, made by the Borrowers and their
Subsidiaries in favor of the Agent and in form and substance satisfactory to the
Banks and the Agent, as the same may be amended, modified and/or restated from
time to time.
PBGC. The Pension Benefit Guaranty Corporation created by /section/4002
of ERISA and any successor entity or entities having similar responsibilities.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by /section/8.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PREFERRED STOCK. Collectively, (i) Series A Convertible Preferred
Stock, par value $1.00 per share, of Holdings, (ii) Series B Convertible
Preferred Stock, par value $1.00 per share, of Holdings and (iii) Series C
Redeemable Preferred Stock, par value $1.00 per share of Holdings, in each case
as described in, and being subject to the terms, limitations and relative rights
and preferences set forth in, the Restated Certificate of Incorporation of
Holdings on the date hereof.
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by any Borrower or any of its Subsidiaries.
RECEIVABLE SERVICING AGREEMENT. That certain Receivables Servicing
Agreement by and between Xomed and MFC dated December 31, 1996.
RECORD. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
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REFERENCE BANK. Bank of Boston Connecticut.
RESTATED CERTIFICATE OF INCORPORATION. The Restated Certificate of
Incorporation of Holdings as in effect on the date hereof.
RIGHTS. See /section/8.10.
SEC. Securities and Exchange Commission.
SECTION 338 EVENT. Any incremented deductions arising out of any basis
step-up under /section/338(h)(10) of the Code to certain assets from the
allocation of the purchase price under the Stock Purchase Agreement in
conjunction with the acquisition of shares pursuant thereto.
SECURITY AGREEMENTS. Collectively, the Borrower Security Agreement and
the Subsidiary Security Agreement.
SECURITY DOCUMENTS. The Security Agreements, the Mortgage, the
Collateral Assignment of Leases, Rentals and Property Income, the Patent
Assignments, the Trademark Assignments, the Merocel Stock Pledge Agreement, the
Stock Pledge Agreement, the Note Pledge Agreements, the Life Insurance
Assignments, the Subsidiary Stock Pledge Agreements and the Subsidiary
Guaranties.
SELLERS. Any Person who is designated as the "seller" in any
Acquisition Document in connection with any Acquisition where the total purchase
price for the applicable Acquisition Assets equals or exceeds $5,000,000.
SETTLEMENT. The making of, or receiving of, payments in immediately
available funds, by the Banks to or from the Agent in accordance with /section/
2.9(b) hereof to the extent necessary to cause each Bank's actual share of the
outstanding amount of the Loans to be equal to each Bank's Commitment Percentage
of the outstanding amount of such Loans, in any case when, prior to such event
or action, the actual share is not so equal.
SETTLEMENT AMOUNT. See /section/2.9(b) hereof.
SETTLING BANK. See /section/2.9(b) hereof.
SETTLEMENT DATE. See /section/2.9.
STOCK PLEDGE AGREEMENT. The Amended and Restated Stock Pledge
Agreement, dated as of April 15, 1996, between Holdings and the Agent, in form
and substance satisfactory to the Banks and the Agent, as the same may be
amended, modified and/or restated from time to time.
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AGREEMENT. That certain Stock Purchase Agreement dated
as of March 3, 1994 by and between Merocel and the seller thereunder.
SUBORDINATED LOAN AGREEMENTS. Collectively, any agreements, instruments
or documents evidencing the Subordinated Debt, each in form and substance
satisfactory to the Majority Banks in all respects.
SUBORDINATED DEBT. Unsecured Indebtedness of any Borrower or any of its
Subsidiaries to any Holdings Stockholder that is expressly subordinated and made
junior to the payment and performance in full of the Obligations pursuant to
Subordination Agreements in form and substance satisfactory to the Agent and the
Banks, and evidenced as such by the Subordinated Loan Agreements, which in no
event shall exceed $1,000,000 in the aggregate at any time outstanding.
SUBORDINATION AGREEMENTS. Collectively, the Subordination Agreements
among the Borrowers, the holders of Subordinated Debt and the Agent on behalf of
the Banks, each in form and substance satisfactory to the Majority Banks.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
SUBSIDIARY GUARANTIES. Collectively, the Guaranties, each in form and
substance satisfactory to the Agent and the Banks, from each Subsidiary of the
Borrowers to the Agent and the Banks, as the same may be amended, modified
and/or restated from time to time.
SUBSIDIARY SECURITY AGREEMENTS. Collectively, the Security Agreements
dated or to be dated on or prior to the Effective Date among the Subsidiaries of
the Borrowers and the Agent on behalf of the Banks, each in form and substance
satisfactory to the Banks, as the same may be amended, modified and/or restated
from time to time.
SUBSIDIARY STOCK PLEDGE AGREEMENTS. The Stock Pledge Agreements dated
or to be dated on or prior to the Effective Date between certain of the
Subsidiaries of Holdings and the Agent on behalf of the Banks, each in form and
substance satisfactory to the Banks, as the same may be amended, modified and/or
restated from time to time.
TITLE INSURANCE COMPANY shall mean First American Title Insurance
Company.
TITLE POLICY. In relation to each Mortgaged Property, an ALTA standard
form title insurance policy issued by the Title Insurance Company (with such
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reinsurance or co-insurance as the Agent may require, any such reinsurance to be
with direct access endorsements) in such amount as may be determined by the
Agent insuring the priority of the Mortgage of such Mortgaged Property and that
the Borrowers or one of their Subsidiaries holds marketable fee simple or
leasehold, as applicable, title to such Mortgaged Property, subject only to the
encumbrances permitted by such Mortgage and which shall not contain exceptions
for mechanics liens, persons in occupancy or matters which would be shown by a
survey (except as may be permitted by such Mortgage), shall not insure over any
matter except to the extent that any such affirmative insurance is acceptable to
the Agent in its sole discretion, and shall contain such endorsements and
affirmative insurance as the Agent in its discretion may require, including but
not limited to (a) comprehensive endorsement, (b) variable rate of interest
endorsement, (c) usury endorsement, (d) revolving credit endorsement, (e) tie-in
endorsement, (f) doing business endorsement and (g) ALTA form 3.1 zoning
endorsement.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TRADEMARK ASSIGNMENTS. The several Trademark Assignments, dated or to
be dated on or prior to the Effective Date, made by the Borrowers and their
Subsidiaries in favor of the Agent and in form and substance satisfactory to the
Banks and the Agent, as the same may be amended, modified and/or restated from
time to time.
TREBAY NOTE PLEDGE AGREEMENT. The Security and Pledge Agreement dated
as of April 15, 1996 by and between Trebay and the Agent, as the same may be
amended, modified and/or restated from time to time.
TYPE. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
XOMED NOTE PLEDGE AGREEMENTS. The several Security and Pledge
Agreements dated or to be dated on or prior to the Effective Date by and between
Xomed and the Agent, as the same may be amended, modified and/or restated from
time to time.
/section/1.2. RULES OF INTERPRETATION.
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(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the State of Connecticut, have the meanings assigned to them
therein.
(h) Reference to a particular "/section/" refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.