EXHIBIT 10.39
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of September 15, 2000 between
LASERSIGHT INCORPORATED, a Delaware corporation (the "Borrower") and THE
HUNTINGTON NATIONAL BANK (the "Bank"). The parties hereto hereby agree as
follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):
"Affiliate" means any Person (1) which directly or indirectly controls,
or is controlled by, or is under common control with the Borrower or a
Subsidiary; (2) which directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of the Borrower or any
Subsidiary; or (3) five percent (5%) or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Borrower or a
Subsidiary. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Agreement" means this Revolving Credit Agreement, as amended,
supplemented, or modified from time to time.
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks in Orlando, Florida are authorized or
required to close under the laws of the State of Florida.
"Capital Lease" means all leases which have been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations and published interpretations thereof.
"Commitment" means the Bank's obligation to make Loan disbursements to
the Borrower pursuant to Section 2.01 in the amount referred to therein.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 414(b) or 414(c) of the Code.
"Consolidated Tangible Net Worth" means the Borrower's stockholder's
equity as shown on the Borrower's consolidated balance sheet (which balance
sheet shall be prepared in accordance with GAAP) for the most recent preceding
calendar quarter less:
(i) intangible assets, such as (without limitation) goodwill
(whether representing the excess of cost over book value of assets
acquired or otherwise), capitalized expenses, patents, trademarks,
trade names, copyrights, franchises, licenses and deferred charges,
such as (without limitation) unamortized costs and costs of research
and development, and
(ii) advances to stockholders or Affiliates of the Borrower.
"Debt" means (1) indebtedness or liability for borrowed money; (2)
obligations evidenced by bonds, debentures, notes, or other similar instruments;
(3) obligations for the deferred purchase price of property or services
(including trade obligations); (4) obligations as lessee under Capital Leases;
(5) current liabilities in respect of unfunded vested benefits under Plans
covered by ERISA; (6) obligations under letters of credit; (7) obligations under
acceptance facilities; (8) all guaranties, endorsements (other than for
collection or deposit in the ordinary course of business), and other contingent
obligations to purchase, to provide funds for payment, to supply funds to invest
in any Person or entity, or otherwise to assure a creditor against loss; and (9)
obligations secured by any Liens, whether or not the obligations have been
assumed.
"Default" means any of the events specified in Section 8.01, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Eligible Purchase Contract" means a United States domestic contract or
purchase order on a form substantially similar to Borrower's standard laser
purchase agreement (the form of which has been provided to and reviewed by Bank)
between Borrower or a Subsidiary and an unaffiliated third party to purchase a
Laserscan LSX machine or machines pursuant to which the third party purchaser
has paid a non-refundable $25,000.00 deposit or such lesser amount as may be
approved by Bank from time to time to Borrower or the Subsidiary and the third
party purchaser has provided evidence of financing satisfactory to the Bank
which would allow said third party purchaser to complete the purchase pursuant
to the terms of said contract or purchase order. Acceptable financing will
include financing provided to said third party purchaser by banks, savings and
loans or other financing companies, including, without limitation, ▇▇▇▇▇
Financial Services Incorporation, d/b/a Secured Funding ("Secured Funding").
Notwithstanding the foregoing with respect to any financing of such machine by
Secured Funding pursuant to that certain Agreement between LaserSight
Technologies, Inc. and Secured Funding dated May 2, 2000 (the "Secured Funding
Agreement") and to the extent Secured Funding approves said financing, the
contract to sell the machine to the third party purchaser shall remain an
Eligible Contract only for a period of ninety (90) days from the "credit
approval" by Secured Funding pursuant to paragraph 3 of the Secured Funding
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereof.
"Event of Default" means any of the events specified in Section 8.01,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Financing Statements" shall have the meaning assigned to such term in
Section 3.01(2).
"GAAP" means generally accepted accounting principles in the United
States.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing).
"Loan" shall have the meaning assigned to such term in Section 2.01.
"Loan Documents" means this Agreement and the Note.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of
ERISA.
"Negative Pledge" means a provision of any agreement (other than this
Agreement) that prohibits the creation of any Lien on any assets of a Person.
"Non-Material Subsidiary" means those subsidiaries of the Borrower that
are described on Exhibit "C-1".
"Note" shall have the meaning assigned to such term in Section 2.05.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"Plan" means any pension plan which is covered by Title IV of ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest announced by the Bank from time
to time as its prime commercial lending rate, which rate is not intended to be
the lowest rate of interest charged by the Bank to its borrowers.
"Principal Office" means the Bank's office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"SEC" means the Securities and Exchange Commission.
"Security Agreement" shall have the meaning assigned to such term in
Section 3.01(2).
"Subsidiary" means, as to the Borrower, a corporation (other than a Non
Material Subsidiary) of which shares of stock having ordinary voting power
(other than stock having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by the Borrower.
"Termination Date" means August 30, 2001.
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP consistent with those
applied in the preparation of the financial statements referred to in Section
4.04, and all financial data submitted pursuant to this Agreement shall be
prepared in accordance with such principles.
Article II
AMOUNT AND TERMS OF THE LOAN
Section 2.01. Revolving Credit. The Bank agrees on the terms and
conditions hereinafter set forth, to loan the Borrower (the "Loan"), from time
to time during the period from the date of this Agreement up to but not
including the Termination Date an aggregate principal amount not to exceed at
any time outstanding FIVE MILLION DOLLARS ($5,000,000.00) (the "Commitment").
Within the limits of the Commitment and subject to the funding limitation set
forth in Section 3.03 of this Agreement, the Borrower may borrow, prepay
pursuant to Section 2.07, and reborrow under this Section 2.01.
Section 2.02. Notice and Manner of Borrowing. The Borrower shall give
the Bank at least one (1) Business Days' notice of any Loan draws under this
Agreement, specifying the date and amount thereof. Upon fulfillment of the
applicable conditions set forth in Article III, the Bank will make such Loan
funds available to the Borrower in immediately available funds by crediting the
amount thereof to the Borrower's account with the Bank.
Section 2.03. Interest. The Borrower shall pay interest to the Bank on
the outstanding and unpaid principal amount of the Loan made hereunder at a rate
per annum equal to one half of one percent (1/2%) above the Prime Rate. Any
change in the interest rate resulting from a change in the Prime Rate shall be
effective as of the opening of business on the day on which such change in the
Prime Rate becomes effective. Interest shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed. Interest shall be paid
in immediately available funds on the 30th day of each month and at maturity at
the Principal Office. Any principal amount not paid when due, whether at stated
maturity, by acceleration, or otherwise, shall bear interest from the date when
due until said principal amount is paid in full, payable on demand, at a rate
per annum equal at all times to the highest rate allowed by Florida law.
Section 2.04. Unused Fee. In consideration of the Commitment of the
Bank hereunder, the Borrower promises to pay to the Bank a fee (the "Unused
Fee") equal to three-eighths of one percent (0.375%) per annum times the "Unused
Revolving Committed Amount". "Unused Revolving Committed Amount" means, for any
given Unused Fee Calculation Period, the average amount (if any), as calculated
on a daily basis, by which the $5,000,000.00 Commitment exceeds the sum of the
aggregate outstanding principal amount of the Loan. The Unused Fee shall
commence to accrue on the date of this Agreement and shall be due and payable in
arrears on the 15th day of each April, July, October and January for the
immediately preceding calendar quarter (or portion thereof) (each such quarter
or portion thereof for which the Unused Fee is payable hereunder being herein
referred to as an "Unused Fee Calculation Period"), beginning with the first of
such dates to occur after the date of this Agreement.
Section 2.05. Note. All Loan disbursements made by the Bank under this
Agreement shall be evidenced by, and repaid with interest in accordance with, a
single promissory note of the Borrower in substantially the form of Exhibit "A",
duly completed, in the principal amount of FIVE MILLION DOLLARS ($5,000,000.00),
dated the date of this Agreement, payable to the Bank, and maturing as to
principal on the Termination Date (the "Note").
Section 2.06. Prepayments; Termination of Commitment. The Borrower may
prepay the Note in whole or in part with accrued interest to the date of such
prepayment on the amount prepaid. The Borrower may terminate the Commitment at
any time by paying the then outstanding principal amount with accrued interest
and any other amounts due hereunder and under the Note and the Unused Fee
payable through the date of the termination.
Section 2.07. Method of Payment. The Borrower shall make each payment
under this Agreement and under the Note not later than 2:00 P.M. (eastern time)
on the date when due in lawful money of the United States to the Bank at its
Principal Office in immediately available funds. The Borrower hereby authorizes
the Bank, if and to the extent payment is not made when due under this Agreement
or under the Note, to charge from time to time against any account of the
Borrower with the Bank any amount so due. Whenever any payment to be made under
this Agreement or under the Note shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
the payment of interest and the Unused Fee, as the case may be.
Section 2.08. Use of Proceeds. The proceeds of the Loans hereunder
shall be used by the Borrower for short term working capital or such other
purposes as may be approved in writing by the Bank. The Borrower will not,
directly or indirectly, use any part of such proceeds for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System or to extend credit to any
Person for the purpose of purchasing or carrying any such margin stock, or for
any purpose which violates, or is inconsistent with, Regulation X of such Board
of Governors.
Article III
CONDITIONS PRECEDENT
Section 3.01. Condition Precedent to Initial Loan Disbursement. The
obligation of the Bank to make the initial Loan disbursement to the Borrower is
subject to the condition precedent that the Bank shall have received on or
before the day of such Loan disbursement each of the following, in form and
substance satisfactory to the Bank and its counsel:
(1) Note. The Note duly executed by the Borrower;
(2) Security Agreement and Financing Statement. A Security Agreement
or Agreements executed by the Borrower and each Subsidiary granting a first lien
on all accounts receivables and inventory of the Borrower and each of its
Subsidiaries. Borrower and each Subsidiary shall also execute and deliver
Uniform Commercial Code Financing Statements to Lender to perfect the security
interest granted under said Security Agreement;
(3) Evidence of all corporate action by the Borrower and each
Subsidiary. Certified (as of the date of this Agreement) copies of all corporate
action taken by the Borrower and each Subsidiary, including resolutions of the
respective Board of Directors, authorizing the execution, delivery, and
performance of the Loan Documents and each other document to be delivered
pursuant to this Agreement;
(4) Incumbency and signature certificate of the Borrower. A
certificate (dated as of the date of this Agreement) of the Secretary of
the Borrower certifying the names and true signatures of the officers of
the Borrower authorized to sign the Loan Documents to which it is a party
and the other documents to be delivered by the Borrower under this Agreement;
(5) Articles of Incorporation and Bylaws. A copy of the Articles of
Incorporation and Bylaws of the Borrower, certified by the Secretary or an
Assistant Secretary of the Borrower as of the date of this Agreement as being
accurate and complete;
(6) Certificates of Good Standing. A certificate of good standing of
the Borrower, from the Secretary of State of Delaware as of a recent date and
certificates of good standing for each of the Subsidiaries (other than LST
Laser, S.A. and LaserSight Europe GmbH) from the Secretary of State of the
respective states of incorporation as of a recent date;
(7) Certificate of Authority to do Business. Certificates of authority
and good standing of the Borrower for each state in which the Borrower is
qualified to do business; and
(8) Opinion of counsel for the Borrower. A favorable opinion of The
Lowenbaum Partnership, L.L.C., counsel for the Borrower, in substantially the
form of Exhibit "B" and as to such other matters as the Bank may reasonably
request;
(9) UCC Searches. UCC Searches on the Borrower and all Subsidiaries in
jurisdictions in which UCC-1 financing statements could be filed to perfect a
security interest in any asset of the Borrower and Subsidiaries;
(10) Release of UCC Financing Statements. Release of all UCC Financing
Statements filed against assets of the Borrower and its Subsidiaries other than
UCC Financing Statements filed in connection herewith and with respect to the
two (2) existing Capital Leases described on Exhibit "D" and "notice filings"
for operating leases filed prior to the date hereof or subsequent to the date
hereof in accordance with the terms hereof.
Section 3.02. Conditions Precedent to All Loan Disbursements. The
obligation of the Bank to make each Loan disbursement (including the initial
Loan disbursement) shall be subject to the further conditions precedent that on
the date of such Loan disbursement:
(1) The following statements shall be true and the Bank shall have
received a certificate signed by a duly authorized officer of the
Borrower dated the date of such Loan, stating that
(a) The representations and warranties contained in Article IV of
this Agreement are correct on and as of the date of such Loan
disbursement as though made on and as of such date; and
(b) No Default or Event of Default has occurred and is continuing,
or would result from such Loan disbursement; and
(2) The Bank shall have received such other approvals, opinions,
or documents as the Bank may reasonably request.
Section 3.03. Funding Limitation. Notwithstanding anything set forth
herein, Loan Disbursements shall be limited to an amount not to exceed fifty
percent (50%) of the aggregate purchase price amounts set forth in the Eligible
Purchase Contracts. The Bank acknowledges and agrees that it will consider
increases to the amount of the Loan and Loan disbursements based on orders
placed by Borrower's laser center customers, provided that Borrower acknowledges
Bank will have no obligation to do so.
Article IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
Section 4.01. Incorporation, Good Standing, and Due Qualification. The
Borrower and its Subsidiaries are corporations duly incorporated, validly
existing, and in good standing under the laws of the jurisdiction of their
respective incorporation; each has the corporate power and authority to own its
assets and to transact the business in which it is now engaged or proposed to be
engaged in; and is duly qualified as a foreign corporation and in good standing
under the laws of each other jurisdiction in which the failure to be so
qualified reasonably could be expected to have a material adverse effect on the
Borrower.
Section 4.02. Corporate Power and Authority. The execution, delivery,
and performance by the Borrower of the Loan Documents has been duly authorized
by all necessary corporate action and does not and will not (1) require any
consent or approval of the stockholders of such corporation; (2) contravene such
corporation's charter or bylaws; (3) violate any provision of any law, rule,
regulation (including, without limitation, Regulations U. and X of the Board of
Governors of the Federal Reserve System) order, writ, judgment, injunction,
decree, determination, or award presently in effect having applicability to such
corporation; (4) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease, or
instrument to which such corporation is a party or by which it or its properties
may be bound or affected; (5) result in, or require, the creation or imposition
of any Lien, upon or with respect to any of the properties now owned or
hereafter acquired by such corporation; and (6) cause such corporation to be in
default under any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination, or award or any such indenture, agreement, lease, or
instrument.
Section 4.03. Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be,
legal, valid, and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency, and other
similar laws affecting creditors' rights generally.
Section 4.04. Financial Statements. The consolidated balance sheet of
the Borrower and its Subsidiaries as at December 31, 1999, and the related
consolidated statements of operations and retained earnings of the Borrower and
its Subsidiaries for the fiscal year then ended, and the accompanying footnotes,
together with the opinion thereon, dated February 11, 2000 of KPMG, L.L.P.
independent certified public accountants, and the interim condensed consolidated
balance sheet of the Borrower and its Subsidiaries as at March 31, 2000 and the
related condensed consolidated statement of operations and retained earnings for
the three (3) month period then ended, copies of which have been furnished to
the Bank, are complete and correct and fairly present the financial condition of
the Borrower and its Subsidiaries as at such dates and the results of the
operations of the Borrower and its Subsidiaries for the periods covered by such
statements, all in accordance with GAAP consistently applied (subject to
year-end adjustments in the case of the interim financial statements), and since
March 31, 2000 there has been no material adverse change in the condition
(financial or otherwise), business, or operations of the Borrower or any
Subsidiary. There are no liabilities of the Borrower or any Subsidiary, fixed or
contingent, which are material but are not reflected in the financial statements
or in the notes thereto, other than liabilities arising in the ordinary course
of business since March 31, 2000. No written information, exhibit, or written
report furnished by the Borrower to the Bank in connection with the negotiation
of this Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statement contained
therein not materially misleading.
Section 4.05. Labor Disputes and Acts of God. Neither the business nor
the properties of the Borrower or any Subsidiary are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy, or other casualty
(whether or not covered by insurance) materially and adversely affecting such
business properties or the operation of the Borrower, when considered on a
consolidated basis.
Section 4.06. Other Agreements. Neither the Borrower nor any Subsidiary
is a party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction
which could have a material adverse effect on the business, properties, assets,
operations, or conditions, financial or otherwise, of the Borrower or any
Subsidiary, or the ability of the Borrower to carry out its obligations under
the Loan Documents. Except as described on Exhibit "E" attached hereto and made
a part hereof, neither the Borrower nor any Subsidiary is in default in any
respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or instrument
material to its business to which it is a party.
Section 4.07. Litigation. Except as disclosed on Exhibit "F" attached
hereto and made a part hereof, there is no pending or, to the best of the
Borrower's knowledge, threatened action or proceeding against or affecting the
Borrower or any of its Subsidiaries before any court, governmental agency, or
arbitrator which may, in anyone case or in the aggregate, materially adversely
affect the financial condition, operations, properties, or business of the
Borrower or any Subsidiary or the ability of the Borrower to perform its
obligations under the Loan Documents.
Section 4.08. No Defaults on Outstanding Judgments or Orders. The
Borrower and its Subsidiaries have satisfied all judgments and neither the
Borrower nor any Subsidiary is in default with respect to any judgment, writ,
injunction, decree, rule, or regulation of any court or arbitrator. Neither the
Borrower nor any Subsidiary is in default with respect to any rule or regulation
of any federal, state, municipal, or other governmental authority, commission,
board, bureau, agency or instrumentality, domestic or foreign where the result
of such default reasonably could be expected to have a material adverse effect
on the Borrower.
Section 4.09. Ownership and Liens. The Borrower and each Subsidiary
have title to, or valid leasehold interests in, all of their properties and
assets, real and personal, including the properties and assets and leasehold
interest reflected in the financial statements referred to in Section 4.04
(other than any properties or assets disposed of in the ordinary course of
business), and none of the properties and assets owned by the Borrower or any
Subsidiary and none of their leasehold interests is subject to any Lien, except
such as may be permitted pursuant to Section 6.01 of this Agreement.
Section 4.10. Subsidiaries and Ownership of Stock. Set forth in Exhibit
"C" is a complete and accurate list of the Subsidiaries of the Borrower, showing
the jurisdiction of incorporation of each and showing, the percentage of the
Borrower's ownership of the outstanding stock of each Subsidiary. All of the
outstanding capital stock of each Subsidiary has been validly issued, is fully
paid and nonassessable, and is owned by the Borrower free and clear of all
Liens.
Section 4.11. ERISA. The Borrower and each Subsidiary are in compliance
in all material respects with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan; no notice of intent to terminate a Plan has been
filed, nor has any Plan been terminated; to the best of the Borrower's
knowledge, no circumstances exist which constitute grounds entitling the PBGC to
institute proceedings to terminate, or appoint a trustee to administer, a Plan,
nor has the PBGC instituted any such proceedings; neither the Borrower nor any
Commonly Controlled Entity has completely or partially withdrawn from a
Multiemployer Plan; the Borrower and each Commonly Controlled Entity have met
their minimum funding requirements under ERISA with respect to all of their
Plans, and the present value of all vested benefits under each Plan does not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA; and neither the Borrower nor any Commonly Controlled
Entity has incurred any liability to the PBGC under ERISA.
Section 4.12. Operation of Business. Except as is disclosed in the
Borrower's filings with the SEC, and to the best of the Company's knowledge, the
Borrower and its Subsidiaries possess (either through license or ownership), or
has applied for, all licenses, permits, franchises, patents, copyrights,
trademarks, service marks, and trade names, or rights thereto, to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and the Borrower and its Subsidiaries are not in violation of
any valid rights of others with respect to any of the foregoing.
Section 4.13. Taxes. The Borrower and each of its Subsidiaries have
filed all tax returns (federal, state, and local) required to be filed and have
paid all taxes, assessments, and governmental charges and levies thereon to be
due, including interest and penalties, except where proper action has been taken
by the Borrower to extend the relevant filing or payment deadline. Such returns
are complete and accurate in all material respects.
Section 4.14. Debt. Exhibit "D" is a complete and correct list of all
credit agreements, indentures, purchase agreements (other than purchase
agreements entered into in the ordinary course of the Borrower's business),
guaranties, Capital Leases, and other agreements, and arrangements presently in
effect providing for or relating to extensions of credit (including agreements
and arrangements for the issuance of letters of credit or for acceptance
financing) in respect of which the Borrower or any Subsidiary is in any manner
directly or contingently obligated; and the maximum principal or face amounts of
the credit in question, which are outstanding and which can be outstanding, are
correctly stated, and all Liens of any nature given or agreed to be given as
security therefor are correctly described or indicated in such Exhibit.
Section 4.15. Environment. The Borrower and each Subsidiary have duly
complied with, and their businesses, operations, assets, equipment, property,
leaseholds, or other facilities are in compliance with, the provisions of all
federal, state, and local environmental, health, and safety laws, codes and
ordinances, and all rules and regulations promulgated thereunder where the
failure to so comply reasonably could be expected to have a material adverse
effect on the Borrower. The Borrower and each Subsidiary have been issued and
will maintain all required federal, state, and local permits, licenses,
certificates, and approvals relating to (1) air emissions; (2) discharges to
surface water or groundwater; (3) noise emissions; (4) solid or liquid waste
disposal; (5) the use, generation, storage, transportation, or disposal of toxic
or hazardous substances or wastes (intended hereby and hereafter to include any
and all such materials listed in any federal, state, or local law, code or
ordinance and all rules and regulations promulgated thereunder as hazardous or
potentially hazardous); or (6) other environmental, health, or safety matters.
Neither the Borrower nor any Subsidiary has received notice of, nor knows of, or
suspects facts which might constitute any violations of any federal, state, or
local environmental, health, or safety laws, codes or ordinances, and any rules
or regulations promulgated thereunder with respect to its businesses,
operations, assets, equipment, property, leaseholds, or other facilities. To the
best of the Borrower's knowledge, there has been no emission, spill, release, or
discharge into or upon (1) the air; (2) soils; or any improvements located
thereon; (3) surface water or groundwater; or (4) the sewer, septic system or
waste treatment, storage or disposal system servicing the premises of any toxic
or hazardous substances or wastes at or from the premises; and accordingly the
premises of the Borrower and its Subsidiaries are free of all such toxic or
hazardous substances or wastes. To the best of the Borrower's knowledge, there
has been no complaint, order, directive, claim, citation, or notice by any
governmental authority or any person or entity with respect to (1) air
emissions; (2) spills, releases or discharges to soils or improvements located
thereon, surface water, groundwater or the sewer, septic system or waste
treatment, storage or disposal systems servicing the premises; (3) noise
emissions; (4) solid or liquid waste disposal; (5) the use, generation, storage,
transportation, or disposal of toxic or hazardous substances or waste; or (6)
other environmental, health, or safety matters affecting the Borrower or its
business, operations, assets, equipment, property, leaseholds, or other
facilities. Neither the Borrower nor its Subsidiaries have any indebtedness,
obligation, or liability, absolute or contingent, matured or not matured, with
respect to the storage, treatment, cleanup, or disposal of any solid wastes,
hazardous wastes or other toxic or hazardous substances (including without
limitation any such indebtedness, obligation, or liability with respect to any
current regulation, law, or statute regarding such storage, treatment, cleanup,
or disposal).
Section 4.16. Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Borrower Act of 1940, as amended.
Section 4.17. Securities Act. The Borrower has not issued any
unregistered securities in violation of the registration requirements of Section
5 of the Securities Act of 1933, as amended, or any other law, and is not
violating any rule, regulation, or requirement under the Securities Act of 1933,
as amended, or the Securities and Exchange Act of 1934, as amended. The Borrower
is not required to qualify an indenture under the, Trust Indenture Act of 1939,
as amended, in connection with its execution and delivery of the Note.
Article V
AFFIRMATIVE COVENANTS
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement, the Borrower will:
Section 5.01. Maintenance of Existence. Preserve and maintain, and
cause each Subsidiary to preserve and maintain, its corporate existence and good
standing in the jurisdiction of its incorporation, and qualify and remain
qualified, and cause each Subsidiary to qualify and remain qualified, as a
foreign corporation in each jurisdiction where the failure to be so qualified
reasonably could be expected to have a material adverse effect on the Borrower.
Section 5.02. Maintenance of Records. Keep, and cause each Subsidiary
to keep, adequate records and books of account, in which complete entries will
be made in accordance with GAAP consistently applied, reflecting all financial
transactions of the Borrower and its Subsidiaries.
Section 5.03. Maintenance of Properties. Maintain, keep, and preserve,
and cause each Subsidiary to maintain, keep, and preserve, all of its properties
(tangible and intangible) necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted.
Section 5.04. Conduct of Business. Continue, and cause each Subsidiary
to continue, to engage in a business of the same general type as conducted by it
on the date of this Agreement.
Section 5.05. Maintenance of Insurance. Maintain, and cause each
Subsidiary to maintain, insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in the same or a similar business and similarly
situated, which insurance may provide for reasonable deductibility from coverage
thereof.
Section 5.06. Compliance With Laws. Comply, and cause each Subsidiary
to comply, in all respects with all applicable laws, rules, regulations, and
orders where the failure to so comply reasonably could be expected to have a
material adverse effect on the Borrower. The compliance described in this
Section 5.06 shall include, without limitation, paying before the same become
delinquent all taxes, assessments, and governmental charges imposed upon it or
upon its property.
Section 5.07. Right of Inspection. At any reasonable time (during the
Borrower's normal business hours) and upon at least two (2) days advance notice,
permit the Bank or any agent or representative thereof to examine and make
copies of and abstracts from the records and books of account of, and visit the
properties of, the Borrower and any Subsidiary, and to discuss the affairs,
finances, and accounts of the Borrower and any Subsidiary with any of their
respective officers and directors and the Borrower's independent accountants.
Section 5.08. Reporting Requirements. Furnish to the Bank:
(1) Quarterly financial statements. As soon as available and in any
event within forty five (45) days after the end of each of the first three
quarters of each fiscal year of the Borrower, the Form 10-Q the Borrower files
with the SEC for such quarter;
(2) Annual financial statements. As soon as available and in any
event within one hundred twenty (120) days after the end of each fiscal year of
the Borrower, the Form 10-K the Borrower files with the SEC for such year and
internally prepared consolidating statement of income and retained earnings and
consolidating balance sheets of the Borrower and its Subsidiaries for such
fiscal year;
(3) Receivables Aging Report. Within twenty (20) days after the end
of each month an accounts receivables aging report and sales backlog report
for Borrower and each Subsidiary in form approved by Bank. At the request of
Bank, such report shall include a detailed aging report listing the names
of all accounts;
(4) Management letters. Promptly upon receipt thereof, copies of any
reports submitted to the Borrower or any Subsidiary by independent certified
public accountants in connection with examination of the financial statements of
the Borrower or any Subsidiary made by such accountants;
(5) Certificate of no Default. Within thirty (30) days after the end
of each of the quarters of each fiscal year of the Borrower during which any
Loans remain unpaid, a certificate of the chief financial officer of the
Borrower (a) certifying that to the best of his knowledge no Default or Event
of Default has occurred and is continuing or, if a Default or Event of Default
has occurred and is continuing, a statement as to the nature thereof and the
action which is proposed to be taken with respect thereto, and (b) with
computations demonstrating compliance with the covenants contained in Article
VII;
(6) Projection for next Fiscal Year. A copy of the Borrower's
projections for operations for the next fiscal year, within thirty (30) days
after the Borrower's Board of Directors has approved such projections, such
projections to be in the same form and detail as provided to the Borrower's
Board of Directors;
(7) Notice of litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any court or
governmental department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, affecting the Borrower or any Subsidiary, which, if
determined adversely to the Borrower or such Subsidiary, could have a material
adverse effect on the financial condition, properties, or operations of the
Borrower or such Subsidiary;
(8) Notice of Defaults and Events of Default. As soon as possible
and in any event within ten (10) days after Borrower learns of the occurrence
of each Default or Event of Default, a written notice setting forth the details
of such Default or Event of Default and the action which is proposed to be taken
by the Borrower with respect thereto;
(9) ERISA reports. As soon as possible, and in any event within
thirty (30) days after the Borrower knows or has reason to know that any
circumstances exist that constitute grounds entitling the PBGC to institute
proceedings to terminate a Plan subject to ERISA with respect to the Borrower
or any Commonly Controlled Entity, and promptly but in any event within two (2)
Business Days of receipt by the Borrower or any Commonly Controlled Entity
of notice that the PBGC intends to terminate a Plan or appoint a trustee to
administer the same, and promptly but in any event within five (5) Business
Days of the receipt of notice concerning the imposition of withdrawal liability
in excess of $50,000.00 with respect to the Borrower or any Commonly
Controlled Entity, the Borrower will deliver to the Bank a certificate of
the chief financial officer of the Borrower setting forth all relevant
details and the action which the Borrower proposes to take with respect thereto;
(10) Proxy statements, etc. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements, and reports which
the Borrower or any Subsidiary sends to its stockholders, and copies of all
regular, periodic, and special reports, and all registration statements which
the Borrower or any Subsidiary files with the Securities and Exchange Commission
or any governmental authority which may be substituted therefor, or with any
national securities exchange; and
(11) General information. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower or any
Subsidiary as the Bank may from time to time reasonably request.
Section 5.09. Environment. Be and remain, and cause each Subsidiary to
be and remain, in compliance with the provisions of all federal, state, and
local environmental, health, and safety laws, codes and ordinances, and all
rules and regulations issued thereunder where the failure to so comply
reasonably could be expected to have a material adverse effect on the Borrower;
notify the Bank immediately of any notice of a hazardous discharge or
environmental complaint received by the Borrower or any Subsidiary from any
governmental agency or any other party; notify the Bank immediately of any
hazardous discharge from or affecting its premises for which the Borrower is
responsible and which is in violation of any federal, state, or local
environmental, health, or safety laws, codes or ordinances; immediately contain
and remove the same, in compliance with all applicable laws; promptly pay any
fine or penalty assessed in connection therewith; permit the Bank to inspect the
premises, to conduct tests thereon, and to inspect all books, correspondence,
and records pertaining thereto; and at the Bank's request, and at the Borrower's
expense, provide a report of a qualified environmental engineer, satisfactory in
scope, form, and content to the Bank, and such other and further assurances
reasonably satisfactory to the Bank that the condition has been corrected.
Article VI
NEGATIVE COVENANTS
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement, the Borrower will not:
Section 6.01. Liens. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur, assume, or suffer to exist, any Lien
upon or with respect to any of its properties, now owned or hereafter acquired,
except:
(1) Liens in favor of the Bank;
(2) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or, if due and payable, if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(3) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than thirty (30) days or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
(4) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance, or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(5) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use, and enjoyment by the Borrower or any Subsidiary of the property
or assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto;
(6) A Lien incurred in connection with a Capital Lease; provided
that:
(a) Any property subject to any of the foregoing is acquired
by the Borrower or any Subsidiary in the ordinary course of
its respective business and the Lien on any such property
attaches to such asset concurrently or within ninety (90) day
after the acquisition thereof;
(b) Each such Lien shall attach only to the asset leased; and
(c) The Debt incurred that is secured by all such Liens shall
not exceed Five Hundred Dollars ($500,000.00) at any time
outstanding in the aggregate,
Section 6.02. Financing Statements. Except for financing statements
signed in connection with Capital Leases or financing statements that would be
considered "notice filings" for operating leases, sign or file, or permit any
Subsidiary to sign or file, under the Uniform Commercial Code of any
jurisdiction a financing statement which names the Borrower or any Subsidiary as
a debtor (other than a financing statement naming Bank as Secured Party) or
sign, or permit any Subsidiary to sign, any security agreement authorizing any
secured party thereunder other than the Bank to file such financing statement.
Section 6.03. Further Negative Pledges. Sign, or permit any Subsidiary
to sign, or permit to exist, any documentation in favor of any Person other than
Bank which includes a Negative Pledge or language similar to that set forth in
Sections 6.01 and 6.02 above which would create a default in such documents if
Borrower or any of its Subsidiaries pledged any of its assets to Bank as
security for the Note or other obligations of Borrower or any of its
Subsidiaries in favor of Bank.
Section 6.04. Debt. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur, assume, or suffer to exist, any Debt,
except:
(1) Debt of the Borrower under this Agreement or the Note;
(2) Debt described in Schedule D or in the Borrower's financial
statements for the period ending March 31, 2000 (a copy of which has been
provided to the Bank) but no voluntary renewals, extensions, or refinancings
thereof;
(3) Accounts payable to trade creditors for goods or services which
are not aged more than ninety (90) days from the billing date and current
operating liabilities (other than for borrowed money) which are not more than
ninety (90) days past due, in each case incurred in the ordinary course of
business, as presently conducted, and paid within the specified time, unless
contested in good faith; or
(4) Debt secured by the Liens described in Section 6.01.
Section 6.05. Mergers, Etc. Wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all or substantially all
of the assets or the business of any Person, or permit any Subsidiary to do so,
except that (1) any Subsidiary may merge into or transfer assets to the
Borrower, (2) any Subsidiary may merge into or consolidate with or transfer
assets to any other Subsidiary, and (3) any Subsidiary may merge into or
consolidate with another Person in connection with the acquisition of all or
substantially all of the assets or the business of any Person as long as the
merger or consolidation is approved by a majority of those members of the
Borrower's Board of Directors who are not employees of the Borrower and is in
compliance with the terms of Section 6.01.
Section 6.06. Leases. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur, assume, or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except: (1) leases existing on the date of this Agreement and any extensions or
renewals thereof; (2) leases (other than Capital Leases) which are entered into
in the ordinary course of the Borrower's business; and (3) leases between the
Borrower and any Subsidiary or between any Subsidiaries.
Section 6.07. Sale and Leaseback. Sell, transfer, or otherwise dispose
of, or permit any Subsidiary to sell, transfer, or otherwise dispose of, any
real or personal property to any Person and thereafter directly or indirectly
lease back the same or similar property.
Section 6.08. Dividends. Declare or pay any dividends; or purchase,
redeem, retire, or otherwise acquire for value any of its capital stock now or
hereafter outstanding; or make any distribution of assets to its stockholders as
such whether in cash, assets, or obligations of the Borrower; or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption, or retirement of any shares of its capital
stock; or make any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock; or permit any of its Subsidiaries to
purchase or otherwise acquire for value any stock of the Borrower or another
Subsidiary, except that the Borrower (1) may declare and deliver dividends and
make distributions payable solely in common stock of the Borrower and (2) may
purchase or otherwise acquire shares of its capital stock by exchange for or out
of the proceeds received from a substantially concurrent issue of new shares of
its capital stock.
Section 6.09. Sale of Assets. Sell, lease, assign, transfer, or
otherwise dispose of, or permit any Subsidiary to sell, lease, assign, transfer,
or otherwise dispose of, any of its now owned or hereafter acquired assets
(including, without limitation, shares of stock and indebtedness of
Subsidiaries, receivables, and leasehold interests), except: (1) inventory
disposed of in the ordinary course of business; (2) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
and (3) that any Subsidiary may sell, lease, assign, or otherwise transfer its
assets to the Borrower.
Section 6.10. Investments. Make, or permit any Subsidiary to make, any
loan or advance to any Person, or purchase or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire, any capital stock, assets,
obligations, or other securities of, make any capital contribution to, or
otherwise invest in or acquire any interest in any Person, or participate as a
partner or joint venturer with any other Person, except: (1) direct obligations
of the United States or any agency thereof with maturities of one year or less
from the date of acquisition; (2) commercial paper of a domestic issuer rated at
least "A-1 " by Standard & Poor's Corporation or "P-1 " by ▇▇▇▇▇'▇ Investors
Service, Inc. or of an issuer who is recommended by the Bank or an affiliate of
the Bank; (3) certificates of deposit with maturities of one year or less from
the date of acquisition issued by any commercial bank; (4) stock, obligations,
or securities received in settlement of debts (created in the ordinary course of
business) owing to the Borrower or any Subsidiary, and (5) acquisitions
described in Section 6.04(3) or acquisitions that require the Borrower to expend
$5,000,000 or less (any debt assumed by the Borrower or a Subsidiary in
connection with such acquisition shall be considered an expenditure).
Section 6.11. Guaranties, Etc. Assume, guaranty, endorse, or otherwise
be or become directly or contingently responsible or liable, or permit any
Subsidiary to assume, guaranty, endorse, or otherwise be or become directly or
contingently responsible or liable (including, but not limited to, an agreement
to purchase any obligation, stock, assets, goods, or services, or to supply or
advance any funds, assets, goods, or services, or an agreement to maintain or
cause such Person to maintain a minimum working capital or net worth, or
otherwise to assure the creditors of any Person against loss) for obligations of
any Person, except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business.
Section 6.12. Transactions With Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, or permit any Subsidiary to
enter into any transaction, including, without limitation, the purchase, sale,
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Borrower's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
Section 6.13. Capital Expenditures. Make or permit any Subsidiary to
make capital expenditures which exceed, on a cumulative basis, $3,000,000.00.
Article VII
FINANCIAL COVENANTS
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement:
Section 7.01. Minimum Liquidity. The Borrower will maintain at all
times minimum liquidity (cash or cash equivalents) of not less than THREE
MILLION DOLLARS ($3,000,000.00) , such liquidity to be measured utilizing the
Borrower's financial statements (a copy of which have been provided to the Bank)
as of March 31, 2000 and each quarter thereafter as of the later of (i) the date
the quarterly or annual financial statement required by Section 5.08 is
delivered to the Bank or (ii) the date the quarterly or annual financial
statement is required to be delivered.
Section 7.02. Minimum Tangible Net Worth. The Borrower will maintain
Consolidated Tangible Net Worth of not less than TWENTY-TWO MILLION FIVE HUNDRED
THOUSAND DOLLARS ($22,500,000.00) , Consolidated Tangible Net Worth to be
calculated utilizing the Borrower's financial statements (a copy of which have
been provided to the Bank) as of March 31, 2000 and each quarter thereafter as
of the later of (i) the date the quarterly or annual financial statement
required by Section 5.08 is delivered to the Bank or (ii) the date the quarterly
or annual financial statement is required to be delivered.
Article VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default. If any of the following events shall
occur:
(1) The Borrower should fail to pay the principal of, or interest on,
the Note, or any amount of a commitment or other fee, as and when due and
payable;
(2) Any representation or warranty made or deemed made by the
Borrower in this Agreement or which is contained in any certificate, document,
opinion, or financial or other statement furnished at any time under or in
connection with any Loan Document shall prove to have been incorrect,
incomplete, or misleading in any material respect on or as of the date made or
deemed made and such incorrectness or incompleteness continues for 15 Business
Days;
(3) The Borrower shall fail to perform or observe any term, covenant,
or agreement contained in Articles V, VI, or VII hereof, provided that an Event
of Default will only be deemed to have occurred in connection with Sections
5.02, 5.03, 5.06 or 5.09 if such failure continues for a period of 15 Business
Days;
(4) The Borrower or any of its Subsidiaries shall (a) fail to pay any
Debt (other than the Note) of the Borrower or such Subsidiary, as the case may
be, or any interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise), or (b) fail to perform
or observe any term, covenant, or condition on its part to be performed or
observed under any agreement or instrument relating to any such Debt, when
required to be performed or observed, if the effect of such failure to perform
or observe is to accelerate, or to permit the acceleration of, after the giving
of notice or passage of time, or both, the maturity of such indebtedness,
whether or not such failure to perform or observe shall be waived by the holder
of such Debt; or any such indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(5) The Borrower or any of its Subsidiaries (a) shall generally not
pay, or shall be unable to pay, or shall admit in writing its inability to pay
its debts as such debts become due; or (b) shall make an assignment for the
benefit of creditors, or petition or apply to any tribunal for the appointment
of a custodian, receiver, or trustee for it or a substantial part of its assets;
or (c) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (d) shall have had any
such petition or application filed or any such proceeding commenced against it
in which an order for relief is entered or an adjudication or appointment is
made, and which remains undismissed for a period of thirty (30) days or more; or
(e) shall take any corporate action indicating its consent to, approval of, or
acquiescence in any such petition, application, proceeding, or order for relief
or the appointment of a custodian, receiver, or trustee for all or any
substantial part of its properties; or (f) shall suffer any such custodianship,
receivership, or trusteeship to continue undischarged for a period of thirty
(30) days or more;
(6) One or more judgments, decrees, or orders for the payment of money
in excess of ONE MILLION DOLLARS ($1,000,000.00) in the aggregate shall be
rendered against the Borrower or any of its Subsidiaries and such judgments,
decrees, or orders shall continue unsatisfied and in effect for a period of
thirty (30) consecutive days without being vacated, discharged, satisfied, or
stayed or bonded pending appeal;
(7) Any of the following events shall occur or exist with respect to
the Borrower and any Commonly Controlled Entity under ERISA: any Reportable
Event shall occur; complete or partial withdrawal from any Multiemployer Plan
shall take place; any Prohibited Transaction shall occur; a notice of intent to
terminate a Plan shall be filed, or a Plan shall be terminated; or circumstances
shall exist which constitute grounds entitling the PBGC to institute proceedings
to terminate a Plan, or the PBGC shall institute such proceedings;
(8) If the Bank receives its first notice (which is required to be
given pursuant to the terms of this Agreement) of a hazardous discharge or an
environmental complaint from a source other than the Borrower, and the Bank does
not receive notice (which may be given in oral form, provided same is followed
with all due dispatch by written notice given by Certified Mail, Return Receipt
Requested) of such hazardous discharge or environmental complaint from the
Borrower within twenty-four (24) hours of the time the Bank first receives said
notice from a source other than the Borrower; or if any federal, state, or local
agency asserts or creates a Lien upon any material part of or all of the assets,
equipment, property, leaseholds, or other facilities of the Borrower by reason
of the occurrence of a hazardous discharge or an environmental complaint; or if
any federal, state, or local agency asserts a claim against the Borrower and/or
its assets, equipment, property, leaseholds, or other facilities for damages or
cleanup costs relating to a hazardous discharge or an environmental complaint;
provided, however, that such claim shall not constitute a default if, within
five (5) Business Days of the occurrence giving rise to the claim, (a) the
Borrower can prove to the Bank's satisfaction that the Borrower has commenced
and is diligently pursuing either: (i) a cure or correction of the event which
constitutes the basis for the claim, and continues diligently to pursue such
cure or correction to completion or (ii) proceedings for an injunction, a
restraining order, or other appropriate emergent relief preventing such agency
or agencies from asserting such claim, which relief is granted within ten (10)
Business Days of the occurrence giving rise to the claim and the injunction,
order, or emergent relief is not thereafter resolved or reversed on appeal; and
(b) in either of the foregoing events, the Borrower has posted a bond, letter of
credit, or other security satisfactory in form, substance, and amount to both
the Bank and the agency or entity asserting the claim to secure the proper and
complete cure or correction of the event which constitutes the basis for the
claim;
(9) If there is a change in the persons operating as Chief Executive
Officer, Chief Financial Officer or President of Borrower without Banks written
consent;
then, and in any such event, the Bank may, by notice to the Borrower,
(1) declare its obligation to make Loan disbursements to be terminated,
whereupon the same shall forthwith terminate, and (2) declare the Note, all
interest thereon, and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Note, all such interest, and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by the Borrower.
Upon the occurrence and during the continuance of any Event of Default,
the Bank is hereby authorized at any time and from time to time, without notice
to the Borrower (any such notice being expressly waived by the Borrower), to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Bank to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or the Note or any other Loan Document, irrespective of whether or not
the Bank shall have made any demand under this Agreement or the Note or such
other Loan Document and although such obligations may be unmatured. The Bank
agrees promptly to notify the Borrower after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of the Bank under this Section 8.01 are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Bank may have.
Section 8.02. INTEREST INCREASE FOR NON-MONETARY DEFAULTS.
NOTWITHSTANDING ANY PROVISION OF THE NOTE OR THIS AGREEMENT, IN THE EVENT OF ANY
EVENT OF DEFAULT UNDER THE NOTE OR THIS AGREEMENT OTHER THAN A DEFAULT FOR
NON-PAYMENT OF MONIES DUE UNDER THE NOTE OR THIS AGREEMENT, THEN IN ADDITION TO
ALL OTHER REMEDIES AVAILABLE TO LENDER UNDER THE NOTE OR THIS AGREEMENT, AT
LENDER'S OPTION, THE INTEREST RATE UNDER THE NOTE SHALL BE AUTOMATICALLY
INCREASED BY TWO PERCENT (2%) FROM THE DATE OF SUCH DEFAULT UNTIL THE LATER OF
(1) THE DATE DEFAULT IS CURED OR (2) THIRTY (30) DAYS FROM THE DATE THE INTEREST
RATE IS INCREASED; IT BEING THE INTENT HEREOF THAT IF THE INTEREST RATE IS
INCREASED PURSUANT TO THIS PROVISION SUCH INCREASE IN THE INTEREST RATE SHALL
REMAIN IN EFFECT FOR AT LEAST THIRTY (30) DAYS NOTWITHSTANDING A CURE OF THE
DEFAULT PRIOR TO THE END OF THE THIRTY (30) DAY PERIOD. ANY SUCH ADDITIONAL
INTEREST DUE PURSUANT TO THE PRECEDING SENTENCE SHALL BE DUE AND PAYABLE WITH
THE NEXT MONTHLY PAYMENT OR PAYMENTS BECOMING DUE AND SAID MONTHLY PAYMENT OR
PAYMENTS DUE HEREUNDER WILL BE INCREASED BY SAID AMOUNT.
Article IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. No amendment, modification, termination,
or waiver of any provision of any Loan Document to which the Borrower is a
party, nor consent to any departure by the Borrower from any Loan Document to
which it is a party, shall in any event be effective unless the same shall be in
writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 9.02. Notices, Etc. All notices and other communications
provided for under this Agreement and under the other Loan Documents to which
the Borrower is a party shall be in writing (including telegraphic, telex, and
facsimile transmissions) and mailed or transmitted or delivered, if to the
Borrower, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer, with a copy to The Lowenbaum
Partnership, L.L.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., and if to the Bank, at its address at ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇; or, as to each party, at such other address as shall be designated
by such party in a written notice to the other party complying as to delivery
with the terms of this Section 9.02. Except as otherwise provided in this
Agreement, all such notices and communications shall be effective when deposited
in the mails or delivered to the telegraph company, or sent, answerback
received, respectively, addressed as aforesaid, except that notices to the Bank
pursuant to the provisions of Article 11 shall not be effective until received
by the Bank.
Section 9.03. No Waiver. No failure or delay on the part of the Bank in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy hereunder. The rights and remedies provided herein
are cumulative, and are not exclusive of any other rights, powers, privileges,
or remedies, now or hereafter existing, at law or in equity or otherwise.
Section 9.04. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights under any Loan Document to which the Borrower is a party without
the prior written consent of the Bank.
Section 9.05. Costs, Expenses, and Taxes. The Borrower agrees to pay on
demand all costs and expenses incurred by the Bank in connection with the
preparation, execution, delivery, filing, and administration of the Loan
Documents, and of any amendment, modification, or supplement to the Loan
Documents, including, without limitation, the fees and out-of-pocket expenses of
counsel for the Bank incurred in connection with advising the Bank as to its
rights and responsibilities hereunder. The Borrower also agrees to pay all such
costs and expenses, including court costs, incurred in connection with
enforcement of the Loan Documents, or any amendment, modification, or supplement
thereto, whether by negotiation, legal proceedings, or otherwise. In addition,
the Borrower shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of any of the Loan Documents and the other documents to be delivered
under any such Loan Documents, and agrees to hold the Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees. This provision shall survive
termination of this Agreement.
Section 9.06. Integration. The Loan Documents contain the entire
agreement between the parties relating to the subject matter hereof and
supersede all oral statements and prior writings with respect thereto.
Section 9.07. Indemnity. The Borrower hereby agrees to defend,
indemnify, and hold the Bank harmless from and against any and all claims,
damages, judgments, penalties, costs, and expenses (including reasonable
attorney fees and court costs now or hereafter arising from the aforesaid
enforcement of this clause) arising directly or indirectly from the activities
of the Borrower and its Subsidiaries, its predecessors in interest, or third
parties with whom it has a contractual relationship, or arising directly or
indirectly from the violation of any environmental protection, health, or safety
law, whether such claims are asserted by any governmental agency or any other
person. This indemnity shall survive termination of this Agreement.
Section 9.08. Governing Law. This Agreement and the Note shall be
governed by, and construed in accordance with, the laws of the State of Florida.
Section 9.09. Severability of Provisions. Any provision of any Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 9.10. Headings. Article and Section headings in the Loan
Documents are included in such Loan Documents for the convenience of reference
only and shall not constitute a part of the applicable Loan Documents for any
other purpose.
Section 9.11. Consent to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF FLORIDA OR OF THE UNITED STATES FOR THE MIDDLE DISTRICT
OF FLORIDA AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER
AND THE LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER AND THE LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER AND THE LENDER
EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT, OR OTHER PROCESS, THAT
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAW.
Section 9.12. Jury Trial Waiver. THE BANK AND THE BORROWER HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN
CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO
THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER OF THE BANK HAS AUTHORITY TO
WAIVE, CONDITION, OR MODIFY THIS PROVISION.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LASERSIGHT INCORPORATED, a Delaware corporation
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
and Secretary
THE HUNTINGTON NATIONAL BANK
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
STATE OF GEORGIA
COUNTY OF ▇▇▇▇▇▇
------
The foregoing instrument was acknowledged before me this
15th day of September, 2000, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer and
Secretary, on behalf of LASERSIGHT INCORPORATED, a Delaware corporation. Said
person (check one) [ ] is personally known to me, [X] produced a driver's
license (issued by a state of the United States within the last five (5) years)
as identification, or [ ] produced other identification, to
wit:___________________________.
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Notary Public, State of Georgia
Commission No.: ▇▇▇▇▇▇ County, GA
-------------------------
My Commission Expires: May 17, 2003
-------------------
STATE OF GEORGIA
COUNTY OF ▇▇▇▇▇▇
------
The foregoing instrument was acknowledged before me this
15th day of September, 2000, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as a Vice President of THE
HUNTINGTON NATIONAL BANK, on behalf of the Bank. Said person (check one) [ ] is
personally known to me, [X] produced a driver's license (issued by a state of
the United States within the last five (5) years) as identification, or [ ]
produced other identification, to wit:______________________.
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Notary Public, State of Georgia
Commission No.: ▇▇▇▇▇▇ County, GA
-------------------------
My Commission Expires: May 17, 2003
-------------------
JOINDER BY SUBSIDIARIES
The Subsidiaries of Borrower join in the execution of this
Agreement to acknowledge the benefit conferred upon them by the Loan and to
confirm their agreement to the terms herein which apply to the Subsidiaries.
LASERSIGHT TECHNOLOGIES, INC., LASERSIGHT CENTERS INCORPORATED,
a Delaware corporation a Delaware corporation
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------- ------------------------
Title: Treasurer Title: Treasurer
------------------------- ------------------------
(CORPORATE SEAL) (CORPORATE SEAL)
Executed by LaserSight Technologies, Executed by LaserSight Centers
Inc. on the 15th day of September, Incorporated on the 15th day of
2000. September, 2000.
PHOTOMED ACQUISITION, INC., LASERSIGHT PATENTS, INC.,
a Delaware corporation a Delaware corporation
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- --------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------- -------------------------
Title: Treasurer Title: Treasurer
------------------------- -------------------------
(CORPORATE SEAL) (CORPORATE SEAL)
Executed by Photomed Acquisition, Executed by LaserSight Patents,
Inc. on the 15th day of September, Inc.on the 15th day of September,
2000. 2000.
MRF, INC., a Missouri corporation
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: Treasurer
-------------------------
(CORPORATE SEAL)
Executed by MRF, Inc. on the 15th
day of September, 2000.