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EXHIBIT 10.11
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AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
BETWEEN
FLEET NATIONAL BANK
AND
BIOSEPRA INC.
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Dated as of December 31, 1996
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TABLE OF CONTENTS
Title
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Section Page
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SECTION 1.
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DEFINITIONS
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1.1. Definitions........................................................ 1
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1.2. Accounting Terms................................................... 9
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SECTION 2.
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DESCRIPTION OF CREDIT
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2.1. The Revolving Loans................................................ 10
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2.2. Commitment Fee..................................................... 10
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2.3. Reduction of Revolving Commitment Amount........................... 11
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2.4. The Note........................................................... 11
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2.5. Capital Requirements............................................... 11
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2.6. Payments and Prepayments of the Revolving Loans.................... 11
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2.7. Method of Payment.................................................. 12
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2.8. Overdue Payments................................................... 12
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2.9. Holidays........................................................... 12
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2.10. Interest........................................................... 12
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2.11. Certain LIBOR Provisions........................................... 13
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2.12. Conditions for Basing Interest on the Libor Rate................... 15
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2.13. Indemnification for Funding and Other Losses....................... 15
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2.14. Change in Applicable Laws, Regulations, etc........................ 16
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2.15. Taxes.............................................................. 16
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2.16. Foreign Exchange Facility.......................................... 16
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SECTION 3.
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CONDITIONS OF LOANS
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3.1. Conditions Precedent to Initial Revolving Loan..................... 17
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3.2. Conditions Precedent to all Revolving Loans........................ 18
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3.3. Conditions Precedent to each Transaction under Foreign Exchange
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Facility
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SECTION 4.
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Section Page
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REPRESENTATIONS AND WARRANTIES
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4.1. Organization and Qualification...................................... 19
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4.2. Corporate Authority................................................. 19
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4.3. Valid Obligations................................................... 20
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4.4. Consents or Approvals............................................... 20
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4.5. Title to Properties; Absence of Encumbrances........................ 20
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4.6. Financial Statements................................................ 20
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4.7. Changes............................................................. 20
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4.8. Defaults............................................................ 21
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4.9. Taxes............................................................... 21
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4.10. Material Agreements................................................. 21
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4.11. Material Licenses................................................... 21
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4.12. Litigation.......................................................... 21
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4.13. Use of Proceeds..................................................... 21
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4.14. Existing Indebtedness............................................... 21
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4.15. Existing Investments................................................ 21
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4.16. Subsidiaries........................................................ 22
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4.17. Investment Company Act.............................................. 22
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4.18. Compliance With Erisa............................................... 22
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4.19. Fda Compliance, Etc................................................. 22
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4.20. Environmental Matters............................................... 22
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SECTION 5.
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AFFIRMATIVE COVENANTS
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5.1. Financial Statements and other Reporting Requirements............... 24
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5.2. Conduct of Business................................................. 25
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5.3. Maintenance and Insurance........................................... 25
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5.4. Taxes............................................................... 26
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5.5. Inspection by the Bank.............................................. 26
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5.6. Maintenance of Books and Records.................................... 27
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5.7. Maintenance of Accounts............................................. 27
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5.8. New Accounts and Investments........................................ 27
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5.9. Minimum Consolidated Tangible Capital Base.......................... 27
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5.10. Minimum Cash or Equivalents......................................... 27
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5.11. Further Assurances.................................................. 27
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SECTION 6.
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NEGATIVE COVENANTS
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6.1. Indebtedness........................................................ 27
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Section Page
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6.2. Contingent Liabilities.............................................. 28
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6.3. Sale and Leaseback.................................................. 28
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6.4. Encumbrances........................................................ 28
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6.5. Lines of Business................................................... 29
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6.6. Merger; Consolidation; Sale or Lease of Assets...................... 29
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6.7. Additional Stock Issuance........................................... 29
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6.8. Restricted Payments................................................. 29
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6.9. Transactions with Affiliates........................................ 30
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6.10. Investments......................................................... 30
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6.11. Erisa............................................................... 30
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6.12. Observance of Subordination Provisions, etc......................... 30
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SECTION 7.
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SECURITY
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7.1. Security Interest................................................... 31
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7.2. Location of Records and Collateral; Name Change..................... 32
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7.3. Status of Collateral................................................ 32
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SECTION 8.
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DEFAULTS
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8.1. Events of Default................................................... 32
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8.2. Remedies............................................................ 34
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SECTION 9.
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MISCELLANEOUS
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9.1. Notices............................................................. 36
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9.2. Expenses............................................................ 37
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9.3. Set-off............................................................. 37
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9.4. Term of Agreement................................................... 37
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9.5. No Waivers.......................................................... 37
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9.6. Governing Law; Jurisdiction......................................... 37
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9.7. Amendments.......................................................... 38
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9.8. Binding Effect of Agreement;assignments; Participations............. 38
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9.9. Amendment and Termination Of Prior Loan Agreement................... 39
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9.10. Currency Conversion................................................. 39
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9.11. Counterparts........................................................ 39
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9.12. Partial Invalidity.................................................. 39
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9.13. Captions............................................................ 39
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Section Page
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9.14. Waiver of Jury Trial................................................ 39
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9.15. Entire Agreement.................................................... 40
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EXHIBITS AND SCHEDULES
Exhibit A Amended and Restated Promissory Note
Exhibit B Compliance Certificate
Schedule 4.10 Material Agreements
Schedule 4.11 Material Licenses
Schedule 4.12 Litigation
Schedule 4.15 Investments
Schedule 4.16 Subsidiaries
Schedule 6.1 Indebtedness
Schedule 6.2 Guarantees
Schedule 6.4 Encumbrances
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AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT
Dated as of December 31, 1996
THIS AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT is
made as of December 31, 1996, by and between BIOSEPRA INC., a Delaware
corporation having its chief executive office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (the "COMPANY") and FLEET NATIONAL BANK (the "BANK"),
formerly known as Fleet National Bank of Connecticut, successor by merger to
Fleet Bank of Massachusetts, N.A., and having its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
This Agreement amends, restates and supersedes the Revolving Credit and
Security Agreement dated as of December 28, 1994 as amended to date (the "PRIOR
CREDIT AGREEMENT") by and among the Company, Biosepra S.A., a wholly-owned
Subsidiary of the Company ("BSA"), and Fleet Bank of Massachusetts, N.A.,
pursuant to which the Bank agreed to establish a Revolving Line of Credit and
make Revolving Credit Loans (the "PRIOR LOANS") in an aggregate principal amount
at any time outstanding not in excess of the Available Aggregate Revolving
Commitment (as defined in the Prior Credit Agreement).
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1.
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DEFINITIONS
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1.1. DEFINITIONS.
All capitalized terms used in this Agreement or in the Note or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
ACCOUNT AND ACCOUNT RECEIVABLE. Include all rights to payment for goods
sold or leased or for services rendered, all sums of money or other proceeds due
or becoming due thereon, all instruments pertaining thereto, all guaranties and
security therefor, and all goods giving rise thereto and the rights pertaining
to such goods, including the right of stoppage in transit, and all related
insurance.
AFFILIATE. As applied to any Person, a spouse or relative of such
Person, any member, director or officer of such Person, any corporation,
association, firm or other entity of which such Person is a member, director or
officer, and any other Person directly or indirectly controlling, controlled by
or under direct or indirect common control with such Person.
AGREEMENT. This Amended and Restated Revolving Credit and Security
Agreement, as the same may be supplemented, amended or restated from time to
time.
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ALTERNATIVE CURRENCY. The lawful currency of a foreign country which
may be established as an alternate currency by mutual agreement entered into
between the Bank and the Company hereafter as confirmed in writing, so long as
any such currency is freely transferable, convertible into Dollars and traded on
the inter-bank currency deposits market in which the Bank customarily funds
foreign currency loans.
ALTERNATIVE CURRENCY COMMITMENT. A commitment, to the extent mutually
agreed by the Bank and the Company, for (i) the exchange, for future delivery,
of an Alternative Currency into Dollars or Dollars into an Alternative Currency
or (ii) the purchase, for future delivery, of an Alternative Currency with
Dollars or Dollars with an Alternative Currency, in accordance with the Bank's
prevailing customs and practices; PROVIDED, that the aggregate Exchange Contract
Amount with respect to all such Alternative Currency Commitments shall not
exceed the Foreign Exchange Facility Sublimit.
ALTERNATIVE CURRENCY EQUIVALENT. The amount in Alternative Currency of
Dollars at the quoted spot rate at which the Bank's principal office in the
United States offers to exchange such Alternative Currency for Dollars at 11:00
a.m (Boston time) two (2) Business Days prior to the date on which such
equivalent is determined.
AUTHORIZED OFFICER. The president, chief financial officer or treasurer
of the Company.
AVAILABLE AGGREGATE REVOLVING COMMITMENT. The excess, if any, of (1)
the Revolving Commitment Amount MINUS (2) the excess of (a) the sum of (i) the
aggregate principal amounts of revolving loans outstanding under the Sepracor
Credit Agreement plus (ii) the sum of the Exchange Contract Amount of the
Company and the Exchange Contract Amount of Sepracor (as defined in Sepracor
Credit Agreement) MINUS (b) $4,000,000.
BANK. See Preamble.
BASE ACCOUNTS. Accounts Receivable of the Company as to which the Bank
has a perfected first security interest.
COMPANY. See Preamble.
BUSINESS DAY. Any day other than a Saturday, Sunday or legal holiday on
which banks in Boston, Massachusetts are open for the conduct of a substantial
part of their commercial banking business.
CAPITAL EXPENDITURE. Any payment made directly or indirectly for the
purpose of acquiring or constructing fixed assets, real property or equipment
which in accordance with GAAP would be added as a debit to the fixed asset
account of the Person making such expenditure, including, without limitation,
amounts paid or payable under any conditional sale or other title retention
agreement or under any lease or other periodic payment arrangement which is of a
nature that payment obligations of the lessee or obligor thereunder would be
required by GAAP to be capitalized and shown as liabilities on the balance sheet
of such lessee or obligor.
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CAPITAL LEASE. Any lease of property (real, personal or mixed) which,
in accordance with GAAP, should be capitalized on the lessee's balance sheet or
for which the amount of the asset and liability thereunder as if so capitalized
should be disclosed in a note to such balance sheet.
CASH EQUIVALENT AMOUNT. The sum of the following, without duplication,
none of which may be subject to any Encumbrances except for Encumbrances in
favor of the Bank or any of its Affiliates: (1) cash held by the Company in the
United States and at the Bank, PLUS (2) Qualified Investments of the Company
held in the United States, France and Canada, PLUS (3) Net Outstanding Amount of
Base Accounts.
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
COLLATERAL. See Section 7.1.
COMPANY. See Preamble.
CONFIRMATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT. The
Confirmation of the Intellectual Property Security Agreement dated as of the
date hereof between the Company and the Bank.
CONSOLIDATED TANGIBLE CAPITAL BASE. At any date as of which the amount
thereof shall be determined, the stockholders' equity of the Company and its
Subsidiaries on a consolidated basis determined in accordance with GAAP PLUS the
outstanding principal amount of any Subordinated Indebtedness MINUS the sum of
any amounts attributable to (a) goodwill, (b) intangible items such as
unamortized debt discount and expense, patents, trade and service marks and
names, copyrights and research and development expenses except prepaid expenses,
(c) all reserves not already deducted from assets, (d) any write-up in the book
value of assets resulting from any revaluation thereof subsequent to the date of
the financial statements referred to in Section 4.6 and (e) any and all items
included as assets on the consolidated balance sheet of the Company and its
Subsidiaries if and to the extent such items consist of the equity in
Subsidiaries or other joint venture holdings or similar investments.
CONTROLLED GROUP. All trades or businesses (whether or not
incorporated) under common control that, together with the Company, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section 4001
of ERISA.
CORPORATE AFFILIATE. As applied to any Person, any corporation,
association, firm or other entity directly or indirectly controlling, controlled
by or under direct or indirect common control with such Person.
CORPORATE SERVICES AGREEMENT. The Corporate Services Agreement dated as
of January 1, 1994 between Sepracor and the Company as originally executed and
delivered.
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CROSS LICENSE AGREEMENT. The Cross License Agreement dated as of
January 1, 1994 between the Company and Hemasure Inc. as originally executed and
delivered.
DEFAULT. Any event or condition that, with the giving of notice or
lapse of time, or both, would constitute an Event of Default.
DOLLARS or $. The lawful currency of the United States of America.
DOLLAR EQUIVALENT. The amount in Dollars of any Alternative Currency at
the quoted spot rate at which the Bank's principal office in the United States
offers to exchange Dollars for such Alternative Currency at 11:00 a.m. (Boston
time) two (2) Business Days prior to the date on which such equivalent is to be
determined.
ENCUMBRANCES. See Section 6.4.
ENVIRONMENTAL LAWS. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, rules,
ordinances, policies and rules or common law (whether now existing or hereafter
enacted or promulgated), of all governmental agencies, bureaus or departments
which may now or hereafter have jurisdiction over the Company or any of its
Subsidiaries and all applicable judicial and administrative and regulatory
decrees, judgments and orders, including common law rulings and determinations,
relating to injury to, or the protection of, real or personal property or human
health or the environment, including, without limitation, all requirements
pertaining to reporting, licensing, permitting, investigation, remediation and
removal of emissions, discharges, releases or threatened releases of Hazardous
Materials, chemical substances, pollutants or contaminants whether solid, liquid
or gaseous in nature, into the environment or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of such Hazardous Materials, chemical substances, pollutants or
contaminants.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
EXCHANGE CONTRACT AMOUNT. At any time, the amount in Dollars or the
Dollar Equivalent of an Alternative Currency, as the case may be, which the Bank
is obligated to deliver to or exchange with the Company pursuant to Alternative
Currency Commitments.
EVENT OF DEFAULT. Any event described in Section 8.1.
FDA. See Section 4.19.
FOREIGN EXCHANGE FACILITY. See Section 2.16.
FOREIGN EXCHANGE FACILITY SUBLIMIT. $1,000,000 (including the Dollar
Equivalent of an Alternative Currency); PROVIDED that the Foreign Exchange
Facility Sublimit shall be (i) proportionately reduced in connection with any
reduction of the Revolving Commitment Amount in accordance with Section 2.3 or
(ii) terminated in accordance with the termination of the
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Bank's commitment to make further the Revolving Loans under Section 8.2 and, in
either case, shall not be subject to reinstatement.
GAAP. Generally accepted accounting principles as defined by the United
States Financial Accounting Standards Board, as from time to time in effect.
GUARANTEES. As applied to the Company and its Subsidiaries, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on the consolidated balance
sheet of the Company and its Subsidiaries, including any obligation to furnish
funds, directly or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of goods, supplies or
services, or by way of stock purchase, capital contribution, advance or loan, or
to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person or entity.
GUARANTY AGREEMENT (BIOSEPRA). That certain Guaranty Agreement dated as
of the date hereof executed by Sepracor guarantying the Obligations of the
Company to the Bank.
GUARANTY AGREEMENT (VERSICOR). That certain Guaranty Agreement dated as
of the date hereof executed by Sepracor guarantying the obligations of Versicor
to the Bank.
HAZARDOUS MATERIAL. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) and any applicable local statutes and the regulations promulgated
thereunder; (iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of any foreign country, the United States, any state
of the United States, or any political subdivision thereof to the extent any of
the foregoing has or had jurisdiction over the Company; or (iv) without
limitation, which contains gasoline, diesel fuel or other petroleum products,
asbestos or polychlorinated biphenyls ("PCB's").
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INDEBTEDNESS. As applied to the Company and its Subsidiaries, (i) all
obligations for borrowed money or other extensions of credit whether or not
secured or unsecured, absolute or contingent, including, without limitation,
Capital Leases, unmatured reimbursement obligations with respect to letters of
credit or guarantees issued for the account of or on behalf of the Company and
its Subsidiaries and all obligations representing the deferred purchase price of
property, other than accounts payable arising in the ordinary course of
business, (ii) all obligations evidenced by bonds, notes, debentures or other
similar instruments, (iii) all obligations secured by any mortgage, pledge,
security interest or other lien on property owned or acquired by the Company or
any of its Subsidiaries whether or not the obligations secured thereby shall
have been assumed, (iv) that portion of all obligations arising under Capital
Leases that is required to be capitalized on the consolidated balance sheet of
the Company and its Subsidiaries, (v) all Guarantees, and (vi) all obligations
that are immediately due and payable
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out of the proceeds of or production from property now or hereafter owned or
acquired by the Company or any of its Subsidiaries.
INTELLECTUAL PROPERTY. See Section 7.1.
INTELLECTUAL PROPERTY SECURITY AGREEMENT. The Intellectual Property
Security Agreement dated as of December 28, 1994 between the Company and the
Bank whereby the Company has granted to the Bank a security interest in its
Intellectual Property, as amended and confirmed on the date hereof by the
Confirmation to the Intellectual Property Security Agreement.
INVENTORY. Goods, merchandise and other personal property, now owned or
hereafter acquired by the Company, which are held for sale or lease or are
furnished or to be furnished under a contract of service or are raw materials,
work in process or materials used or consumed or to be used or consumed in the
Company's business.
INVESTMENT. As applied to the Company and its Subsidiaries, the
purchase or acquisition of any share of capital stock, partnership interest,
evidence of indebtedness or other equity security of any other Person or entity,
any loan, advance or extension of credit to, or contribution to the capital of,
any other Person or entity, any real estate held for sale or investment, any
commodities futures contracts held other than in connection with bona fide
hedging transactions, any other investment in any other Person or entity, and
the making of any commitment or acquisition of any option to make an Investment.
LOAN ACCOUNT. The account on the books of the Bank in which will be
recorded Revolving Loans made by the Bank to the Company pursuant to this
Agreement, payments made on such Revolving Loans and other appropriate debits
and credits as provided by this Agreement.
LOAN DOCUMENTS. See Section 8.2.
MANAGERIAL EXPENSE. All salaries, costs, fees and other expenses
directly or indirectly paid or payable by the Company to any shareholder or to
any Affiliate of the Company for management services, except the direct salaries
and expenses of executive personnel, the expenses of directors and fees and
expenses among and between the Company and its Affiliates in the ordinary course
of business and consistent with past practices.
MATERIAL LICENSES. See Section 4.11.
MONEY MARKETS. See Section 9.10.
NET OUTSTANDING AMOUNT OF BASE ACCOUNTS. The net amount of Base
Accounts outstanding after (a) eliminating from the aggregate amount of
outstanding Base Accounts (i) such Accounts past due under the original terms of
sale more than sixty (60) days, (ii) any Base Account owed by any account debtor
whose principal place of business or chief executive office is not within the
United States or the District of Columbia ("FOREIGN ACCOUNT DEBTORS"), (iii)
such Accounts due from Affiliates or Subsidiaries of the Company, (iv) such
Accounts for services not yet rendered or goods not yet delivered, and (v) such
Accounts representing
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obligations in respect of any joint venture interest owned by the Company and in
respect of royalties and license fees payable to the Company by any such joint
venture or any joint venture therein, and (b) deducting from the aggregate face
amount of the remaining Base Accounts (i) net offsets from accounts owing from
account debtors, other than Foreign Account Debtors, which maintain both
receivable and payable balances with the Company, (ii) the aggregate amount of
outstanding claims asserted by account debtors, other than Foreign Account
Debtors, against the Company and (iii) all payments, adjustments, and credits
applicable thereto and all amounts due thereon considered by the Bank to be
difficult to collect or uncollectible by reason of return, rejection,
repossession, loss or damage of or to the merchandise giving rise thereto, a
merchandise or other dispute, insolvency of the account debtor or any other
reason, all as determined by the Bank in its sole and reasonable discretion,
which determination shall be final and binding upon the Company.
NOTE. The Amended and Restated Promissory Note of the Company,
substantially in the form of EXHIBIT A hereto, evidencing the obligations of the
Company to the Bank to repay the Revolving Loans.
NOTICE OF BORROWING. See Section 2.1(b).
OBLIGATIONS. Any and all obligations of the Company to the Bank of
every kind and description (i) hereunder and under the Note, and (ii) under
Alternative Currency Commitments and under any and all documents pertaining
thereto, direct or indirect, absolute or contingent, primary or secondary, due
or to become due, now existing or hereafter arising, regardless of how they
arise or by what agreement or instrument, if any, and including obligations to
perform acts and refrain from taking action as well as obligations to pay money.
ORIGINAL CURRENCY. See Section 9.10.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
PERMITTED ENCUMBRANCES. See Section 6.4.
PERSON. A corporation, an association, a partnership, a limited
liability company or partnership, a joint venture, an organization, a business,
an individual, a government or political subdivision thereof or a governmental
agency.
PLAN. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Company or any
member of the Controlled Group for employees of the Company or any member of the
Controlled Group or (ii) if such Plan is established, maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which the Company or any member of the
Controlled Group is then making or accruing an obligation to make contributions
or has within the preceding five Plan years made contributions.
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PRIME RATE. The rate of interest announced from time to time by the
Bank at its office in Boston, Massachusetts as its prime rate.
PRIOR CREDIT AGREEMENT. See Preamble.
PRIOR LOANS. See Preamble.
QUALIFIED INVESTMENTS. As applied to the Company and its Subsidiaries,
investments in (i) notes, bonds or other obligations of the United States of
America or any agency thereof that as to principal and interest constitute
direct obligations of or are guaranteed by the United States of America; (ii)
certificates of deposit or other deposit instruments or accounts of banks or
trust companies organized under the laws of the United States or any state
thereof that have capital and surplus of at least $100,000,000, (iii) commercial
paper issued by companies organized under the laws of the United States or any
state thereof and that is rated not less than prime-two or A-2 or their
equivalents by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Corporation,
respectively, or their successors, (iv) mutual or closed end funds that invest
solely in investments described in clauses (i) through (iii) of this definition
and (v) any repurchase agreement secured by any one or more of the foregoing.
RESTRICTED PAYMENTS. (a) Any dividend or other distribution, direct or
indirect, on or on account of any shares of any class of stock of any of the
Company now or hereafter outstanding and (b) any redemption, purchase or other
acquisition, direct or indirect, of any shares of any class of stock of the
Company now or hereafter outstanding or of any warrants or rights to purchase
any such stock (including without limitation the repurchase of any such stock or
warrant or any refund of the purchase price thereof in connection with the
exercise by the holder thereof of any right of rescission or similar remedies
with respect thereto), (c) any Managerial Expense, and (d) any payment of
principal of, premium, if any, or interest on, or otherwise in respect of any
Subordinated Indebtedness.
REVOLVING COMMITMENT AMOUNT. Three Million Dollars ($3,000,000) or any
lesser amount, including zero, resulting from a termination or reduction of such
amount in accordance with Section 2.3 or Section 8.2.
REVOLVING CREDIT PERIOD. The period beginning on the date hereof and
extending through and including the Revolving Credit Termination Date.
REVOLVING CREDIT TERMINATION DATE. April 30, 1999 or such earlier date
on which the commitment to make Revolving Loans is terminated or the Revolving
Commitment Amount is reduced to zero in accordance with the terms of this
Agreement.
REVOLVING LOANS. See Section 2.1(a).
SECOND CURRENCY. See Section 9.10.
SEPRACOR. Sepracor Inc., a Delaware corporation and the parent of the
Company and Versicor.
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SEPRACOR CREDIT AGREEMENT. That certain Amended and Restated Revolving
Credit and Security Agreement dated as of the date hereof among Sepracor,
Sepracor Securities Corporation and the Bank.
SUBORDINATED INDEBTEDNESS. (a) the existing Indebtedness of the Company
which is designated as "Subordinated Indebtedness" in SCHEDULE 6.1 attached
hereto, and (b) any other Indebtedness of the Company consented to in writing by
the Bank which matures in its entirety later than the Note and by its terms (or
by the terms of the instrument under which it is outstanding and to which
appropriate reference is made in the instrument evidencing such Subordinated
Indebtedness) is made subordinate and junior in right of payment to the Note and
to the Company's other obligations to the Bank hereunder by provisions
reasonably satisfactory in form and substance to the Bank and its counsel.
SUBSIDIARY. Any corporation, association, limited liability company,
joint stock company, business trust or other similar organization of which 50%
or more of the ordinary voting power for the election of a majority of the
members of the board of directors or other governing body of such entity is held
or controlled by the Company or its Subsidiaries; or any other such organization
the management of which is directly or indirectly controlled by the Company or a
Subsidiary of the Company through the exercise of voting power or otherwise; or
any joint venture, whether incorporated or not, in which the Company has, at
least, a 50% ownership interest.
TECHNOLOGY TRANSFER AGREEMENT. The Technology Transfer and License
Agreement dated as of January 1, 1994 between Sepracor and the Company as
originally executed and delivered.
U.S. SUBSIDIARY. With respect to any Person, each of such Person's
Subsidiaries having a principal place of business located in the United States.
VERSICOR. Versicor Inc., a Delaware corporation, an Affiliate of the
Company and a Subsidiary of Sepracor.
VERSICOR CREDIT AGREEMENT. That certain Revolving Credit, Term Loan and
Security Agreement dated as of the date hereof between Versicor and the Bank.
1.2. ACCOUNTING TERMS. All terms of an accounting character shall have
the meanings assigned thereto by GAAP applied on a basis consistent with the
financial statements referred to in Section of this Agreement, modified to the
extent, but only to the extent, that such meanings are specifically modified
herein.
SECTION 2.
----------
DESCRIPTION OF CREDIT
---------------------
2.1. THE REVOLVING LOANS.
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(a) Upon the terms and subject to the conditions of this
Agreement, and in reliance upon the representations, warranties and covenants of
the Company made herein, the Bank agrees to make loans ("REVOLVING LOANS") to
the Company pursuant to Notices of Borrowing as delivered by the Company to the
Bank from time to time, from and after the date hereof and during the Revolving
Credit Period; PROVIDED, that (1) the aggregate principal amount of Revolving
Loans outstanding at any time shall not exceed the lesser of (i) the Revolving
Commitment Amount at such time MINUS the Exchange Contract Amount and (ii) the
Available Aggregate Revolving Commitment at such time and (2) at the time the
Company requests a Revolving Loan and after giving effect to the making thereof
there has not occurred and is not continuing any Default or Event of Default.
The Company agrees that it shall be an Event of Default if at any time the debit
balance of the Loan Account shall exceed the lesser of (i) the Revolving
Commitment Amount MINUS the Exchange Contract Amount and (ii) the Available
Aggregate Revolving Commitment unless the Company shall, upon demand by the
Bank, pay, within two (2) Business Days, cash to the Bank to be credited to the
Loan Account in such amount as shall be necessary to eliminate the excess.
(b) Prior to 12:00 noon (Boston time) on the Revolving Loan
request date, the president, an Authorized Officer shall notify the Bank in
writing or by telephone confirmed by (1) telex, (2) telecopy or (3) other
facsimile transmission, on the same day as the telephonic request (the "NOTICE
OF BORROWING"), of the proposed date of borrowing and the principal amount
requested. No Notice of Borrowing shall be revocable by the Company.
(c) The Bank shall enter the Revolving Loans as debits in the Loan
Account. The Bank shall also record in the Loan Account all payments made by the
Company on account of the Revolving Loans, and may also record therein, in
accordance with customary accounting practices, other debits and credits, and
all interest, fees, charges and expenses chargeable to the Company under this
Agreement. The debit balance of the Loan Account shall reflect the amount of the
Company's Obligations to the Bank from time to time by reason of the Revolving
Loans and other appropriate charges hereunder. Periodically, the Bank shall
render a statement of account showing as of its date the debit balance of the
Loan Account which, unless within thirty (30) days of such date notice to the
contrary is received by the Bank from the Company, absent manifest error, shall
be considered correct and accepted by the Company and conclusively binding upon
it.
(d) Subject to the terms and conditions of this Agreement, the
Bank shall make each Revolving Loan on the effective date specified therefor by
crediting the amount of such Revolving Loan to the Company's demand deposit
account with the Bank.
2.2. COMMITMENT FEE. The Company shall pay to the Bank during the
Revolving Credit Period a commitment fee computed at the rate of one quarter of
one percent (0.25%) per annum on the average daily amount of the unborrowed
portion of the Revolving Commitment Amount during each quarter or portion
thereof. Commitment fees shall be payable quarterly in arrears, on the first day
of January, April, July and October of each year beginning on April 1, 1997, and
on the last day of the Revolving Credit Period.
2.3. REDUCTION OF REVOLVING COMMITMENT AMOUNT. The Company may from
time to time by written notice delivered to the Bank by the Company at least
five Business Days prior
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to the date of the requested reduction, reduce by integral multiples of Ten
Thousand Dollars ($10,000) any unborrowed portion of the Revolving Commitment
Amount. No reduction of the Revolving Commitment Amount shall be subject to
reinstatement.
2.4. THE NOTE.
(a) The Revolving Loans shall be evidenced by the Note which is
payable to the order of the Bank and with a final maturity on the Revolving
Credit Termination Date. The Note shall be dated on or before the date of the
first Revolving Loan and shall have the blanks therein appropriately completed.
(b) The Bank shall, and is hereby irrevocably authorized by the
Company to, enter on the schedule forming a part of the Note or otherwise in its
records appropriate notations evidencing the date and the amount of each
Revolving Loan, the interest rate applicable thereto and the date and amount of
each payment of principal made by the Company with respect thereto; and in the
absence of manifest error, such notations shall constitute conclusive evidence
thereof. The Bank is hereby irrevocably authorized by the Company to attach to
and make a part of the Note a continuation of any such schedule as and when
required. No failure on the part of the Bank to make any notation as provided in
this subsection (b) shall in any way affect any Revolving Loan or the rights or
obligations of the Bank or the Company with respect thereto.
2.5. CAPITAL REQUIREMENTS. If after the date hereof, the Bank shall
have determined that the adoption or implementation of any applicable law, rule
or regulation regarding capital requirements for banks or bank holding
companies, or any change therein (including, without limitation, any change
according to a prescribed schedule of increasing requirements, whether or not
known on the date hereof), or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Bank
with any request or directive of such entity regarding capital adequacy (whether
or not having the force of law) has the effect of reducing the return on the
Bank's capital to a level below that which the Bank could have achieved (taking
into consideration the Bank's policies with respect to capital adequacy
immediately before such adoption, implementation, change or compliance and
assuming that the Bank's capital was fully utilized prior to such adoption,
implementation, change or compliance) but for such adoption, implementation,
change or compliance as a consequence of its Commitment to make Revolving Loans
hereunder by any amount deemed by the Bank to be material, the Company shall pay
to the Bank as an additional fee from time to time on demand such amount as the
Bank shall have determined to be necessary to compensate it for such reduction.
The determination by the Bank of such amount, if done on the basis of any
reasonable averaging and attribution methods, shall in the absence of manifest
error be conclusive, and at the Company's request, the Bank shall demonstrate
the basis of such determination.
2.6. PAYMENTS AND PREPAYMENTS OF THE REVOLVING LOANS. On at least
two (2) Banking Days prior written notice to the Bank with respect to Revolving
Loans subject to an exercised LIBOR Option and on at least one (1) Banking Day
prior written notice to the Bank with respect to all other Revolving Loans, the
Company may, at its option, prepay the Note in whole at any
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time or in part from time to time without penalty or premium; PROVIDED, that any
prepayment of any LIBOR Portion shall be made together with the applicable LIBOR
Premium. Any interest accrued on the amounts so prepaid to the date of such
payment must be paid at the time of any such payment. No prepayment of the
Revolving Loans shall affect the Revolving Commitment Amount or impair the
Company's right to borrow as set forth in Section 2.1. On the Revolving Credit
Termination Date, the Company shall repay all outstanding Revolving Loans and
the Note, together with all unpaid interest thereon and all fees and other
amounts due hereunder with respect to the Revolving Loans.
2.7. METHOD OF PAYMENT. All payments and prepayments of principal
and all payments of interest shall be made by the Company to the Bank at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in immediately available funds, on or
before 11:00 a.m. on the due date thereof, free and clear of, and without any
deduction or withholding for, any taxes or other payments. The Bank may, and the
Company hereby authorizes the Bank to, debit the amount of any payment not made
by such time to the demand deposit account of the Company with the Bank.
2.8. OVERDUE PAYMENTS. (a) Upon the occurrence and during the
continuance of an Event of Default, interest on the outstanding principal amount
of the Note and (to the extent permitted by law) on accrued but unpaid interest
shall thereafter be payable on demand at a rate per annum equal to two percent
(2%) above the interest rate otherwise in effect with respect to such Revolving
Loans. Upon the cure of an Event of Default and the payment of interest at the
default rate through the date of such cure, the interest rate shall revert to
that provided for in Section 2.10.
(b) If a payment of principal or interest hereunder is not made in
full within 10 days of date when due, the Company will pay to the Bank a late
fee equal to five percent (5%) of the amount of such payment. Nothing in the
preceding sentence shall affect the Bank's right to exercise any of its rights
or remedies, including those provided in Section 8.2, if an Event of Default has
occurred.
2.9. HOLIDAYS. If any payment required by this Agreement becomes
due on a day that is not a Business Day such payment may be made on the next
succeeding Business Day, and such extension shall be included in computing
interest in connection with such payment.
2.10. INTEREST. The Note shall bear interest on the unpaid principal
amount thereof until paid in full at the rate or rates per annum determined (on
the basis of the actual number of days elapsed over a 360-day year) and payable
as follows:
(a) The rate of interest for any portion of the outstanding
principal amount of the Revolving Loans which is not then subject to an
exercised LIBOR Option under Section 2.11 of this Agreement shall be computed
at the Prime Rate.
(b) The rate for any LIBOR Portion of the Revolving Loans shall be
computed at a rate equal to one and three-quarters percent (1.75%) above the
applicable LIBOR Rate.
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(c) Interest on the Note shall be payable monthly in arrears on
the first Business Day of each month, commencing on January 1, 1997 and, in
addition, interest on any LIBOR Portion of the Revolving Loans in respect of any
LIBOR Period shall also be payable on the last day of such LIBOR Period, on the
last day of the third month for each LIBOR Portion with a 180-day LIBOR Period
and at maturity (whether by acceleration or otherwise). The rate of interest
payable on any portion of the outstanding principal balance of any Revolving
Loan which is not then subject to a LIBOR Option shall take effect
simultaneously with the corresponding change in the Prime Rate.
2.11. CERTAIN LIBOR PROVISIONS.
(a) LIBOR OPTION. Subject to the provisions of this Section 2, the
Company shall have the right to have the interest on all or any portion of the
principal amount of any Revolving Loan, based on a LIBOR Rate.
(b) CERTAIN DEFINITIONS. As used herein, the following terms have
the following respective meanings:
BANKING DAY. (i) When used with respect to the LIBOR Option, a day on
which transactions may be effected in deposits of U.S. dollars in the London
interbank foreign currency deposits market and on which banks may conduct
business in London, England and Boston, Massachusetts and (ii) when used with
respect to the other provisions of this Agreement, any day excluding Saturday
and Sunday and excluding any other day which shall be in Boston, Massachusetts,
a legal holiday or a day on which banking institutions are authorized by law to
close.
BOARD. The Board of Governors of the Federal Reserve System of the
United States.
LEGAL REQUIREMENT. Any requirement imposed upon the Bank by any law of
the United States of America or the United Kingdom or by any regulation, order,
interpretation, ruling or official directive (whether or not having the force of
law) of the Board, the Bank of England or any other board, central bank or
governmental or administrative agency, institution or authority of the United
States of America, the United Kingdom or any political subdivision of either
thereof.
LIBOR OPTION. The option granted pursuant to this Section 2 to have the
interest on all or a portion of the principal amount of the Revolving Loan based
on a LIBOR Rate.
LIBOR PERIOD. Any period, as provided below in this Section 2.11, of
30, 60, 90 or 180 days, commencing on any Banking Day; PROVIDED, however, that
no LIBOR Period with respect to any LIBOR Portion of any Revolving Loan shall
extend beyond the maturity date of the Note. If any LIBOR Period so selected
would otherwise end on a date which is not a Banking Day, such LIBOR Period
shall instead end on the next preceding or succeeding Banking Day as determined
by the Bank in accordance with the then current banking practice in London. Each
determination by the Bank of any LIBOR Period shall, in the absence of manifest
error, be conclusive, and at the Company's request the Bank shall demonstrate
the basis for such determination.
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LIBOR PORTION. That portion of the Revolving Loan specified in a LIBOR
Request, (i) which is not less than Five Hundred Thousand Dollars ($500,000),
(ii) which is an integral multiple of Ten Thousand Dollars ($10,000), (iii)
which does not exceed the outstanding balance of the Revolving Loan not already
subject to an exercised LIBOR Option, (iv) which, as of the date of the LIBOR
Request specifying such LIBOR Portion, has met the conditions for basing
interest on the LIBOR Rate in Section 2.12 of this Agreement and (v) the LIBOR
Period of which has commenced and not terminated.
LIBOR PREMIUM. With respect to the prepayment of any LIBOR Portion of
any Revolving Loan, whether voluntary or as a result of acceleration, an amount
equal to the product of (i) the excess, if any, of the rate of interest on the
principal amount so prepaid over the rate of interest on debt securities issued
by the Treasury of the United States of America on a date approximating the date
of payment of such principal amount and having a maturity date approximating the
last Banking Day of the applicable LIBOR Period, multiplied by (ii) the
principal amount so prepaid, multiplied by (iii) a fraction, the numerator of
which is the number of days remaining in the related LIBOR Period and the
denominator of which is 360.
LIBOR RATE. With respect to any LIBOR Portion for the related LIBOR
Period, an interest rate per annum (rounded upwards, if necessary,to the next
higher 1/8 of 1%) equal to the product of (a) the Base LIBOR Rate (as
hereinafter defined) and (b) Statutory Reserves. For purposes of this
definition, the term "BASE LIBOR RATE" shall mean the rate (rounded to the
nearest 1/8 of 1% or, if there is no nearest 1/8 of 1%, the next higher 1/8 of
1%) at which deposits of U.S. dollars approximately equal in principal amount to
the LIBOR Portion and for a maturity equal to the applicable LIBOR Period are
offered to the Bank in the London interbank foreign currency deposits market at
approximately 11:00 a.m., London time, two (2) Banking Days prior to the
commencement of such LIBOR Period, for delivery on the first day of such LIBOR
Period. Each determination by the Bank of any LIBOR Rate shall, in the absence
of manifest error, be conclusive, and at the Company's request, the Bank shall
demonstrate the basis for such determination.
LIBOR REQUEST. Notice in writing (or by telephonic communications
confirmed by telex, telecopy or other facsimile transmission on the same day as
the telephone request) from the Company to the Bank requesting that interest on
a LIBOR Portion be based on the LIBOR Rate, specifying: (i) the first day of the
LIBOR Period, (ii) the length of the LIBOR Period consistent with the definition
of that term and (iii) a dollar amount of the LIBOR Portion consistent with the
definition of that term.
STATUTORY RESERVES. A fraction, the numerator of which is the number
one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including, without limitation, any marginal,
special, emergency or supplemental reserves), expressed as a decimal,
established by the Board and any other banking authority to which the Bank is
subject for Eurocurrency Liabilities (as defined in Regulation D of the Board).
Such reserve percentages shall include, without limitation, those imposed under
such Regulation D. LIBOR Portions of the Revolving Loans shall be deemed to
constitute Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration, exceptions
or offsets which may be available from time to time to the
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Bank under such Regulation D. Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
TAX. In relation to any LIBOR Portion and the applicable LIBOR Rate,
any tax, levy, impost, duty, deduction, withholding or other charges of whatever
nature required by any Legal Requirement (i) to be paid by the Bank and/or (ii)
to be withheld or deducted from any payment otherwise required hereby to be made
by the Company to the Bank, PROVIDED that the term "Tax" shall not include any
taxes imposed upon the net income of the Bank by the United States of America or
any political subdivision thereof (including state and local governmental
authorities).
2.12. CONDITIONS FOR BASING INTEREST ON THE LIBOR RATE. Upon the
condition that:
(a) The Bank shall have received a LIBOR Request from the Company
prior to noon at least two (2) Banking Days prior to the first day of the LIBOR
Period requested;
(b) There shall have occurred no change in applicable law which
would make it unlawful for the Bank to obtain deposits of U.S. dollars in the
London interbank foreign currency deposits market;
(c) As of the date of the LIBOR Request and the first day of the
LIBOR Period, there shall exist no Event of Default, nor any Default, which has
not been waived by the Bank;
(d) The Bank shall not have determined in good faith that it is
unable to determine the LIBOR Rate in respect of the requested LIBOR Period or
that it is unable to obtain deposits of U.S. dollars in the London interbank
foreign currency deposits market in the applicable amounts and for the requested
LIBOR Period; and
(e) As of the first date of the LIBOR Period specified in such
LIBOR Request, and after having given effect thereto, there shall be no more
than an aggregate of four (4) LIBOR Portions outstanding;
then interest on the LIBOR Portion requested during the LIBOR Period requested
will be at the applicable LIBOR Rate.
2.13. INDEMNIFICATION FOR FUNDING AND OTHER LOSSES. Each LIBOR
Request shall be irrevocable and binding on the Company. Without limiting the
generality of Section 2.14, the Company shall indemnify the Bank against any
loss or expense incurred by the Bank as a result of any failure on the part of
the Company to fulfill, on or before the date specified in any LIBOR Request,
the applicable conditions set forth in this Agreement, including, without
limitation, any loss (including loss of anticipated profits) or expense incurred
by reason of the liquidation or redeployment of deposits or other funds acquired
by the Bank to fund or maintain the requested LIBOR Portion when interest on
such LIBOR Portion, as a result of such failure on the part of the Company, is
not based on the applicable LIBOR for the requested LIBOR Period. The Bank shall
determine the amount of such loss or expense incurred by it, and absent manifest
error such determination shall be conclusive, and at the Company's request the
Bank shall demonstrate the basis for such determination.
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2.14. CHANGE IN APPLICABLE LAWS, REGULATIONS, ETC. If any Legal
Requirement shall make it unlawful for the Bank to fund through the purchase of
U.S. dollar deposits any LIBOR Portion, or otherwise to give effect to its
obligations as contemplated hereby, or shall impose on the Bank any costs based
on or measured by the excess above a specified level of the amount of a category
of deposits or other liabilities of the Bank, which includes deposits by
reference to which the LIBOR Rate is determined as provided herein or a category
of extensions of credit or other assets of the Bank which includes any LIBOR
Portion, or shall impose on the Bank any restrictions on the amount of such a
category of liabilities or assets which the Bank may hold, (a) the Bank may by
notice thereof to the Company terminate the LIBOR Option, (b) any LIBOR Portion
subject thereto shall immediately bear interest thereafter at the rate provided
for in Section 2.10(a), and (c) the Company shall indemnify the Bank against
any loss, penalty or expense incurred by the Bank by reason of the liquidation
or redeployment of deposits or other funds acquired by the Bank to fund or
maintain such LIBOR Portion, as provided in Section 2.13.
2.15. TAXES. It is the understanding of the Company and the Bank that
the Bank shall receive payments of amounts of principal of and interest on the
Revolving Loan with respect to the LIBOR Portions from time to time subject to a
LIBOR Option free and clear of, and without deduction for, any Taxes. If (a) the
Bank shall be subject to any such Tax in respect of any such LIBOR Portion or
part thereof or (b) the Company shall be required to withhold or deduct any such
Tax from any such amount, and (c) such Tax shall not have existed as of the date
of the applicable LIBOR Request, the LIBOR applicable to such LIBOR Portion
shall be adjusted by the Bank to reflect all additional costs incurred by the
Bank in connection with the payment by the Bank or the withholding by the
Company of such Tax and the Company shall provide the Bank with a statement
detailing the amount of any such Tax actually paid by the Company. Determination
by the Bank of the amount of such costs shall, in the absence of manifest error,
be conclusive, and at the Company's request, the Bank shall demonstrate the
basis of such determination. If after any such adjustment, any part of any Tax
paid by any Bank is subsequently recovered by the Bank, the Bank shall reimburse
the Company to the extent of the amount so recovered. A certificate of an
officer of the Bank setting forth the amount of such recovery and the basis
therefor shall, in the absence of manifest error, be conclusive.
2.16. FOREIGN EXCHANGE FACILITY. During the Revolving Credit Period,
the Bank agrees to provide the Company with a foreign exchange facility (the
"FOREIGN EXCHANGE FACILITY") pursuant to which the Bank will issue Alternative
Currency Commitments from time to time, consistent with the definition thereof.
In determining the amount of Dollars or an Alternative Currency purchased or
exchanged, the Bank shall use the same method employed in determining the Dollar
Equivalent or Alternative Currency Equivalent as set forth in each such
definition. All Alternative Currency Commitments of the Company including,
without limitation, fees, charges and any currency loss or similar loss, shall
be Obligations of the Company hereunder and shall be secured by the security
interest granted by the Company to the Bank in the Collateral. The Exchange
Contract Amount shall be recalculated hereunder on each date that it shall be
necessary to determine the unused portion of the Revolving Commitment Amount.
SECTION 3.
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CONDITIONS OF LOANS
-------------------
3.1. CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN. The obligation
of the Bank to make its initial Revolving Loan and to provide the Foreign
Exchange Facility is subject to the condition precedent that the Bank shall have
received, in form and substance satisfactory to the Bank and its counsel, the
following:
(a) this Agreement, duly executed by the Company;
(b) the Note, duly executed by the Company;
(c) the Confirmation of the Intellectual Property Security
Agreement duly executed by the Company in form and substance satisfactory to the
Bank and its counsel;
(d) the Guaranty Agreement (Biosepra), duly executed by Sepracor;
(e) the Sepracor Credit Agreement, the Deposit Pledge Agreement
and the Guaranty Agreement (Versicor) duly executed by Sepracor and the Versicor
Credit Agreement duly executed by Versicor and the consummation of all
transactions contemplated thereby;
(f) a certificate of the Secretary or an Assistant Secretary of
the Company with respect to resolutions of the Board of Directors authorizing
the execution and delivery of this Agreement, the Confirmation of the
Intellectual Property Security Agreement and the Note and identifying the
officer(s) authorized to execute, deliver and take all other actions required
under this Agreement, and providing specimen signatures of such officers;
(g) a certificate signed by an Authorized Officer, certifying that
the conditions of Section 3.2.(b) have been fulfilled;
(h) the certificate of incorporation of the Company and all
amendments and supplements thereto, filed in the office of the Secretary of
State of the State of Delaware, each certified by said Secretary of State as
being a true and correct copy thereof;
(i) the Bylaws of the Company and all amendments and supplements
thereto, certified by the Secretary or an Assistant Secretary as being a true
and correct copy thereof;
(j) a certificate of the Secretary of State of the State of
Delaware, as to legal existence and good corporate standing of the Company in
such state and listing all documents on file in the office of said Secretary of
State;
(k) UCC-1 Financing Statements, for any new locations of the
Company duly executed by the Company and UCC-3 Financing Statements, changing
the name of the Bank as set forth in the preamble to this Agreement and any
other necessary revisions duly executed by the Company and the Bank, each
recorded in the appropriate filing offices;
(l) Lien searches against the Company in all appropriate state
filing offices and in the United States Patent and Trademark Office and the
United States Copyright Office;
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(m) if necessary, UCC-3 Termination Statements and other
appropriate lien discharge documentation terminating all liens except those
consisting of Permitted Encumbrances.
(n) Landlord Waiver as to the real property leased by the Company
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ duly executed by the
lessor of such property;
(o) an insurance binder demonstrating compliance with Section 5.3;
(p) a certificate signed by an Authorized Officer, certifying that
there has been no material adverse change in the condition (financial or
otherwise), operations, properties, assets, liabilities or earnings of the
Company since the date of its most recent financial statement;
(q) an opinion addressed to it from ▇▇▇▇ & ▇▇▇▇, counsel to the
Company, in form and substance satisfactory to the Bank and its counsel; and
(r) such other documents, and completion of such other matters, as
counsel for the Bank may deem necessary or appropriate.
3.2. CONDITIONS PRECEDENT TO ALL REVOLVING LOANS. The obligation of
the Bank to make each Revolving Loan, including the initial Revolving Loan, or
continue or convert the Revolving Loans to loans of another type, is further
subject to the following conditions:
(a) timely receipt by the Bank of the Notice of Borrowing as
provided in Section ;
(b) the representations and warranties contained in Section 4
shall be true and accurate in all material respects on and as of the date of
such Notice of Borrowing and on the effective date of the making, continuation
or conversion of each Revolving Loan as though made at and as of each such date
(except to the extent that such representations and warranties expressly relate
to an earlier date), and no Default or Event of Default shall have occurred and
be continuing, or would result from such Revolving Loan;
(c) the resolutions referred to in Sections 3.1.(f) shall remain
in full force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Bank, would make
it illegal or against the policy of any governmental agency or authority for the
Bank to make Revolving Loans hereunder.
The making of each Revolving Loan shall be deemed to be a
representation and warranty by the Company on the date of the making,
continuation or conversion of such Revolving Loan as to the accuracy of the
facts referred to in subsection (b) of this Section 3.2.
3.3. CONDITIONS PRECEDENT TO EACH TRANSACTION UNDER FOREIGN
EXCHANGE FACILITY. The obligation of the Bank to deliver Dollars or an
Alternative Currency, as the case may be, under the Foreign Exchange Facility is
subject to the following conditions:
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(a) the Bank and the Company shall have agreed upon the
Alternative Currency for the purchase or exchange;
(b) timely receipt by the Bank of written confirmation of each
proposed exchange or purchase in form and substance satisfactory to the Bank,
duly executed by the Company;
(c) No reasonably identifiable disruption of international money
markets shall have occurred, and the Bank shall not have determined that it
shall be unable, in the exercise of reasonable efforts and through customary
means to affect foreign exchange transactions generally or with respect to the
Alternative Currency agreed upon in subsection (a) above;
(d) the Company shall have given the Bank reasonable notice of the
proposed purchase or exchange;
(e) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Bank, would make
it illegal or against the policy of any governmental agency or authority for the
Bank to make Revolving Loans hereunder; and
(f) such other documents, and completion of such other matters, as
the Bank and counsel for the Bank may deem necessary or appropriate.
SECTION 4.
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REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Bank to enter into this Agreement and to make
the Revolving Loans hereunder and to agree to the Foreign Exchange Facility, the
Company represents and warrants to the Bank that as of February __, 1997
(notwithstanding that this Agreement is dated as December 31, 1996):
4.1. ORGANIZATION AND QUALIFICATION. Each of the Company and its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as now
conducted and as presently contemplated and (c) is duly qualified and in good
standing as a foreign corporation and is duly authorized to do business in each
jurisdiction where the nature of its properties or business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the financial condition, operations, properties or
business.
4.2. CORPORATE AUTHORITY. The execution, delivery and performance
of this Agreement and the Note and the transactions contemplated hereby are
within the corporate power and authority of the Company and the execution,
delivery and performance of the Note are within the corporate power and
authority of the Company and have been authorized by all necessary corporate
proceedings, and do not and will not (a) require any consent or approval of the
stockholders of the Company, (b) contravene any provision of the charter
documents or by-laws of the Company or any law, rule or regulation applicable to
the Company, (c)
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contravene any provision of, or constitute an event of default or event that,
but for the requirement that time elapse or notice be given, or both, would
constitute an event of default under, any other agreement, instrument, order or
undertaking binding on the Company, or (d) result in or require the imposition
of any Encumbrance on any of the properties, assets or rights of the Company.
4.3. VALID OBLIGATIONS. This Agreement and the Note and all of their
respective terms and provisions are the legal, valid and binding obligations of
the Company, each enforceable in accordance with their respective terms except
as limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally, and except as the
remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
4.4. CONSENTS OR APPROVALS. The execution, delivery and performance of
this Agreement and the Note and the transactions contemplated herein do not
require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party.
4.5. TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each of the Company
and its Subsidiaries has good and marketable title to all of the properties,
assets and rights of every name and nature now purported to be owned by it,
including, without limitation, such properties, assets and rights as are
reflected in the financial statements referred to in Section 4.6 (except such
properties, assets or rights as have been disposed of in the ordinary course of
business since the date thereof), free from all Encumbrances except Permitted
Encumbrances hereto, and, except as so disclosed, free from all defects of title
that might materially adversely affect such properties, assets or rights, taken
as a whole.
4.6. FINANCIAL STATEMENTS. The Company has furnished the Bank the
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as of December 31, 1995, and the related consolidated and
consolidating statements of income, changes in stockholders' equity and cash
flow for the fiscal year then ended, and related footnotes, audited and
certified by Coopers & ▇▇▇▇▇▇▇. The Company has also furnished the foregoing
unaudited financial statements to the Bank for the nine-month period ending
September 30, 1996 and financial projections for the 1996 fiscal year prepared
by the Company. All such financial statements, except for such projections, were
prepared in accordance with GAAP applied on a consistent basis throughout the
periods specified and present fairly the financial position of the Company and
its Subsidiaries as of such date and the results of the operations of the
Company and its Subsidiaries for such period. The projections were prepared in
good faith and based on assumptions which were reasonable when made. There are
no liabilities, contingent or otherwise, not disclosed in such financial
statements that involve a material amount.
4.7. CHANGES. Since the date of the financial statements for the
nine-month period ending September 30, 1996 referred to in Section 4.6, there
have been no changes in the assets, liabilities, financial condition, business
or prospects of the Company or any of its Subsidiaries other than changes in the
ordinary course of business, the effect of which has not, in the aggregate, been
materially adverse.
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4.8. DEFAULTS. As of the date hereof, no Default or Event of
Default exists.
4.9. TAXES. The Company and each Subsidiary has filed all federal,
state and other tax returns required to be filed, and all taxes, assessments and
other governmental charges due from the Company and each Subsidiary have been
fully paid. The Company and each Subsidiary have established on their books
reserves adequate for the payment of all federal, state and other tax
liabilities.
4.10. MATERIAL AGREEMENTS. SCHEDULE 4.10 hereto accurately and
completely lists all material leases, management, stockholder, partnership,
joint venture, stock redemption or retirement, employment (including severance),
non-competition and related agreements, if any, which are presently in effect in
connection with the conduct of business of the Company and its Subsidiaries.
4.11. MATERIAL LICENSES. SCHEDULE 4.11 hereto accurately and
completely lists all material licenses and related agreements, if any, which are
presently in effect in connection with the conduct of business of the Company
and its Subsidiaries (the "MATERIAL LICENSES"), and all such Material Licenses
are in full force and effect.
4.12. LITIGATION. Except as set forth in SCHEDULE 4.12 hereto, there
is no litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the Company's or any Subsidiary's officers, threatened, against the
Company or any Subsidiary that, if adversely determined, could result in a
material judgment not fully covered by insurance, could result in a forfeiture
of all or any substantial part of the property of the Company or its
Subsidiaries, or could otherwise have a material adverse effect on the assets,
business or prospects of the Company or any Subsidiary.
4.13. USE OF PROCEEDS. (a) The Company will not, directly or
indirectly, use any part of the proceeds of any of the Revolving Loans (i) for
the purpose of making any Restricted Payment which is prohibited by Section 6.8
hereof, (ii) for the purpose of purchasing or carrying any margin stock within
the meaning of Regulations U and X (12 C.F.R. Part 221 and 224) of the Board, or
(iii) for any other purpose which would violate any provision of any other
applicable statute, regulation, order or restriction.
(b) The proceeds of the Revolving Loans shall be used exclusively
for the working capital purposes of the Company, including, without limitation,
for the issuance of letters of credit.
4.14. EXISTING INDEBTEDNESS. SCHEDULE 6.1 hereto accurately and
completely lists all existing Indebtedness of the Company and its Subsidiaries
as of the date hereof.
4.15. EXISTING INVESTMENTS. SCHEDULE 4.15 hereto accurately and
completely lists the record owner, location and any relevant account numbers of
all depository and operating accounts and marketable securities owned by the
Company and its Subsidiaries as of the date hereof.
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4.16. SUBSIDIARIES. As of the date hereof, all the Subsidiaries of
the Company are listed in SCHEDULE 4.16 hereto. The Company or a Subsidiary of
the Company is the owner, free and clear of all liens and encumbrances, except
as expressly provided in such schedule, of all of the issued and outstanding
stock of each Subsidiary. All shares of such stock have been validly issued and
are fully paid and nonassessable, and no rights to subscribe to any additional
shares have been granted, and no options, warrants or similar rights are
outstanding.
4.17. INVESTMENT COMPANY ACT. Neither the Company nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended.
4.18. COMPLIANCE WITH ERISA. The Company and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan.
4.19. FDA COMPLIANCE, ETC. Without limiting the scope of
Section 4.2, the Company and its Subsidiaries are in compliance in all material
respects with all applicable foreign and federal and state laws and regulations,
including all material rules, regulations and administrative orders of the
United States Food and Drug Administration (the "FDA") and of foreign
authorities with jurisdiction over the Company and its Subsidiaries. The Company
and its Subsidiaries are in compliance in all material respects with all of the
applicable provisions of the Food, Drug and Cosmetic Act, as amended.
4.20. ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries have obtained all permits,
licenses and other authorizations which are required under all Environmental
Laws, except to the extent failure to have any such permit, license or
authorization would not have a material adverse effect on the business,
financial condition or operations of the Company and its Subsidiaries. The
Company and its Subsidiaries are in compliance with the terms and conditions of
all such permits, licenses and authorizations, and are also in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a material
adverse effect on the business, financial condition or operations of the Company
and its Subsidiaries.
(b) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Company or any of its Subsidiaries which could materially
adversely affect the properties, business, prospects, operating results or
condition (financial or otherwise) of the Company, to have any permit, license
or authorization required in connection with the conduct of its business or with
respect to any Environmental Laws, including, without
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limitation, Environmental Laws relating to the generation, treatment, storage,
recycling, transportation, disposal or release of any Hazardous Materials.
(c) To the best of the Company's knowledge no oral or written
notification of a release of a Hazardous Material which could materially
adversely affect the properties, business, prospects, operating results or
condition (financial or otherwise) of the Company, has been filed by or on
behalf of the Company or any of its Subsidiaries and no property now or
previously owned, leased or used by the Company or any of its Subsidiaries is
listed or proposed for listing on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or on any similar state list of sites requiring investigation or
clean-up.
(d) There are no liens or encumbrances arising under or pursuant to any
Environmental Laws on any of the real property or properties owned, leased or
used by the Company or any of its Subsidiaries and no governmental actions have
been taken or are in process which could subject any of such properties to such
liens or encumbrances or, as a result of which the Company or any of its
Subsidiaries would be required to place any notice or restriction relating to
the presence of Hazardous Materials at any property owned by it in any deed to
such property.
(e) Neither the Company nor any of its Subsidiaries nor, to the best
knowledge of the Company, any previous owner, tenant, occupant or user of any
property owned, leased or used by the Company or any of its Subsidiaries has (i)
engaged in or permitted any operations or activities upon or any use or
occupancy of such property, or any portion thereof, for the purpose of or in any
way involving the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal (whether legal or illegal,
accidental or intentional) of any Hazardous Materials on, under, in or about
such property, except to the extent commonly used in day-to-day operations of
such property and in such case only in compliance with all Environmental Laws,
or (ii) transported any Hazardous Materials to, from or across such property
except to the extent commonly used in day-to-day operations of such property
and, in such case, in compliance with, all Environmental Laws, except, in the
case of both clause (i) and clause (ii) above, where so doing would not have a
material adverse affect on the business, prospects, operating results or
condition (financial or otherwise) of the Company; nor to the best knowledge of
the Company have any Hazardous Materials migrated from other properties upon,
about or beneath such property, nor, to the best knowledge of the Company, are
any Hazardous Materials presently constructed, deposited, stored or otherwise
located on, under, in or about such property except to the extent commonly used
in day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws.
SECTION 5.
----------
AFFIRMATIVE COVENANTS
---------------------
So long as the Bank has any commitment to lend hereunder or to deliver
Dollars or an Alternative Currency, as the case may be, under the Foreign
Exchange Facility or any Revolving Loan or other Obligation hereunder remains
outstanding, the Company covenants as follows:
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5.1. FINANCIAL STATEMENTS AND OTHER REPORTING REQUIREMENTS. The
Company shall furnish to the Bank:
(a) as soon as available to the Company and its Subsidiaries, but
in any event within 90 days after the end of each of fiscal year, the
consolidated and consolidating balance sheet of the Company and its Subsidiaries
as of the end of, and the related consolidated and consolidating statement of
income, changes in stockholders' equity and cash flow for, such year, audited
and certified by Coopers & ▇▇▇▇▇▇▇ (or other independent nationally recognized
certified public accountants reasonably acceptable to the Bank) in the case of
such consolidated statements, and certified by an Authorized Officer in the case
of such consolidating statements; and, concurrently with such financial
statements, a copy of said certified public accountants' management report and a
written statement by such accountants that, in the making of the audit necessary
for their report and opinion upon such financial statements they have obtained
no knowledge of any Default or Event of Default or, if in the opinion of such
accountants any such Default or Event of Default exists, they shall disclose in
such written statement the nature and status thereof;
(b) as soon as available to the Company, but in any event within
45 days after the end of each fiscal quarter, the consolidated and consolidating
balance sheets of the Company and its Subsidiaries as of the end of, and the
related consolidated and consolidating statements of income for, the period then
ended, certified by an Authorized Officer but subject, however, to normal,
recurring year-end adjustments;
(c) as soon as available to the Company, but in any event
concurrently with the delivery of each financial statement pursuant to
subsection 5.1.(a), a copy of each management letter submitted to the Company
or any of its Subsidiaries by independent certified public accountants in
connection with each annual audit of the books of the Company and its
Subsidiaries by such accountants or in connection with any interim audit thereof
pertaining to any phase of the business of the Company or any such Subsidiary;
(d) concurrently with the delivery of each financial statement
pursuant to subsections 5.1.(a) and 5.1.(b) and at any time reasonably
requested by the Bank, a completed compliance certificate substantially in the
form of EXHIBIT B hereto signed on behalf of the Company by an Authorized
Officer;
(e) as soon as available to the Company and its Subsidiaries, but
in any event within 90 days after the end of each fiscal year, projections for
the Company and its consolidated Subsidiaries on a consolidating and
consolidated basis for the current fiscal year, including projected balance
sheets, income statements, cash flow statements and such other statements as the
Bank may reasonably request and in form and substance satisfactory to the Bank,
all prepared in good faith and based on assumptions which were reasonable when
made;
(f) if and when the Company gives or is required to give notice to
the PBGC of any "Reportable Event" (as defined in Section 4043 of ERISA) with
respect to any Plan that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that any member of the Controlled Group or the
plan administrator of any Plan has given or is required to give notice of any
such Reportable Event, a copy of the notice of such Reportable Event given or
required to be given to the PBGC;
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(g) immediately upon becoming aware of the existence of any
condition or event that constitutes a Default or Event of Default, written
notice thereof specifying the nature and duration thereof and the action being
or proposed to be taken with respect thereto;
(h) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against the Company or any of its Subsidiaries of which it has
notice, the outcome of which would or might have a materially adverse effect on
the assets, business or prospects of the Company or the Company and its
Subsidiaries on a consolidated basis, written notice thereof and the action
being or proposed to be taken with respect thereto;
(i) promptly upon becoming aware of any investigative proceedings
by a governmental agency or authority commenced or threatened against the
Company or any of its Subsidiaries regarding any potential violation of
Environmental Laws or any spill, release, discharge or disposal of any Hazardous
Material, written notice thereof and the action being or proposed to be taken
with respect thereto; and
(j) promptly after the same become available, copies of all proxy
statements and annual, quarterly and interim reports (excluding reports in
respect of the beneficial ownership of officers, directors and certain other
shareholders on Forms 3, 4 and 5 promulgated under the Securities Exchange Act
of 1934, as amended) as the Company shall send to shareholders or as the Company
may file with the Securities and Exchange Commission or any governmental
authority at any time having jurisdiction over the Company; and
(k) from time to time, such other financial data and information
about the Company or its Subsidiaries, including, without limitation, a current
aging of Accounts, as the Bank may reasonably request.
5.2. CONDUCT OF BUSINESS. Each of the Company and its Subsidiaries
shall:
(a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets (including, without limitation, the
Food, Drug and Cosmetic Act, and all regulations promulgated by the FDA, all
Environmental Laws and ERISA), and shall maintain and keep in full force and
effect all licenses and permits necessary in any material respect to the proper
conduct of its business;
(b) maintain its corporate existence; and
(c) maintain its business in developing and commercializing
process technology and chromatographic media and instrument products and
transacting related business.
5.3. MAINTENANCE AND INSURANCE. Each of the Company and its
Subsidiaries shall maintain and keep its properties in good repair, working
order and condition, and from time to time make all needful improvements thereto
so that its business may be properly and advantageously conducted at all times.
The Company will maintain or cause to be maintained on all insurable properties
now or hereafter owned by the Company insurance against loss or
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damage by fire or other casualty to the extent customary with respect to like
properties of companies conducting similar businesses and will maintain or cause
to be maintained, products liability, public liability and workmen's
compensation insurance insuring the Company to the extent customary with respect
to companies conducting similar businesses and, upon request, will furnish to
the Bank satisfactory evidence of the same. Each insurance policy pertaining to
any of the Collateral shall: (i) name the Bank as an insured pursuant to a
so-called "standard mortgagee clause"; (ii) provide that no action of the
Company, or any tenant or subtenant shall void such policy as to the Bank; and
(iii) provide that the Bank shall be notified of any proposed cancellation of
such policy at least thirty (30) days in advance of such proposed cancellation
and will have sufficient time to correct any deficiencies justifying such
proposed cancellation. All such policies shall be delivered to the Bank upon
request. In the event of a casualty loss, the Company may apply the proceeds of
any insurance to the restoration or replacement of the property or asset which
was the subject of such loss, PROVIDED that (A) the Company shall have
demonstrated to the reasonable satisfaction of the Bank that such property or
asset will be restored to substantially its previous condition or will be
replaced by a substantially identical property or asset, and (B) the Bank shall
have received, if requested by it, a favorable opinion from counsel for the
Company satisfactory in scope and form to the Bank, as to the Bank's having a
prior security interest in and valid first lien on such restored or replaced
property or asset.
5.4. TAXES. The Company shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any of its Subsidiaries
or its or their properties on or prior to the time when they become due;
PROVIDED that this covenant shall not apply to any tax, assessment or charge
that is being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been established and are being
maintained in accordance with GAAP.
5.5. INSPECTION BY THE BANK. The Company shall permit the Bank or its
designees, at any reasonable time, and upon reasonable notice (or if a Default
or Event of Default shall have occurred and is continuing, at any time and
without prior notice), to (i) visit and inspect the properties of the Company
and its Subsidiaries, (ii) examine and make copies of and take abstracts from
the books and records of the Company and its Subsidiaries, (iii) discuss the
affairs, finances and accounts of the Company and its Subsidiaries with their
appropriate officers, employees and accountants, and (iv) to arrange for
verification of Accounts Receivable, under reasonable procedures, directly with
account debtors or by other methods; and shall do, make, execute and deliver all
such additional and further acts, things, deeds, assurances, and instruments as
the Bank may reasonably require more completely to vest in and assure to the
Bank its rights hereunder or in any Collateral and to carry into effect the
provisions and intent of this Agreement. In handling such information the Bank
shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to Section 5
except that disclosure of such information may be made (i) to the subsidiaries
or affiliates of the Bank in connection with their present or prospective
business relations with the Company and its Subsidiaries, (ii) to prospective
transferees or purchasers of an interest in the Revolving Loans if they agree to
be bound by the confidentiality obligations of this Section 5.5, (iii) as
required by law, regulation, rule or order, subpoena, judicial order or similar
order and (iv) as may be required in connection with the examination, audit or
similar investigation of the Bank.
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5.6. MAINTENANCE OF BOOKS AND RECORDS. Each of the Company and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with GAAP consistently
applied and applicable law.
5.7. MAINTENANCE OF ACCOUNTS. The Company and each of its U.S.
Subsidiaries will maintain its principal depository and operating accounts and
cash management services with the Bank at all times and shall maintain in such
accounts sufficient funds to make all principal and interest payments when due.
5.8. NEW ACCOUNTS AND INVESTMENTS. The Company will notify the Bank
in writing of any additions or changes in the ownership, location or relevant
account numbers of any depository and operating accounts with a balance equal or
greater than $100,000 and marketable securities owned by the Company and its
Subsidiaries.
5.9. MINIMUM CONSOLIDATED TANGIBLE CAPITAL BASE. The Company and
its Subsidiaries shall maintain at all times a Consolidated Tangible Capital
Base of not less than $2,000,000.
5.10. MINIMUM CASH OR EQUIVALENTS. The Company shall maintain at all
times a Cash Equivalent Amount of not less than $2,500,000.
5.11. FURTHER ASSURANCES. At any time and from time to time the
Company shall, and shall cause each of its Subsidiaries to, execute and deliver
such further instruments and take such further action as may reasonably be
requested by the Bank to effect the purposes of this Agreement and the Note.
SECTION 6.
----------
NEGATIVE COVENANTS
------------------
So long as the Bank has any commitment to lend hereunder or to deliver
Dollars or an Alternative Currency, as the case may be, under the Foreign
Exchange Facility or any Revolving Loan or other Obligation hereunder remains
outstanding, the Company covenants as follows:
6.1. INDEBTEDNESS. Neither the Company nor any of its Subsidiaries
shall create, incur, assume, guarantee or be or remain liable with respect to
any Indebtedness other than the following:
(a) Indebtedness of the Company or any of its Subsidiaries to the
Bank or any of its Affiliates, including, without limitation, the Exchange
Contract Amount not in excess of the Foreign Exchange Facility Sublimit;
(b) Indebtedness existing as of the date hereof and disclosed in
SCHEDULE 6.1 hereto and Guarantees disclosed on SCHEDULE 6.2 hereto and any
refinancing of such Indebtedness in
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amounts not exceeding the principal amount thereof and on terms which are
substantially the same as the terms of the refinanced Indebtedness;
(c) Indebtedness of the Company to or from Sepracor and Versicor
so long as the Company and Versicor remain Subsidiaries of Sepracor;
(d) Indebtedness of the Company to or from its Corporate
Affiliates (except Sepracor and Versicor so long as the Company and Versicor
remain Subsidiaries of Sepracor) in the aggregate principal amount outstanding
at any time not in excess of $10,000,000 and, with respect to each such
Corporate Affiliate, not in excess of $5,000,000 principal amount outstanding at
any time;
(e) Indebtedness secured by Permitted Encumbrances;
(f) Indebtedness of BSA to BNP Gennevilliers disclosed on
SCHEDULE 6.1 hereto, and the refinancing of such Indebtedness in amounts not
exceeding the principal amount thereof and on terms which are substantially the
same as the terms of the refinanced Indebtedness;
(g) Indebtedness in respect of Capital Leases and purchase money
financing for tangible property used in the business of the Company in the
aggregate principal amount outstanding at any time not in excess of $5,000,000
LESS with respect to each of Sepracor and Versicor, any indebtedness in respect
of Capital Leases and purchase money financing for tangible property used in
their businesses; and
(h) Indebtedness of BSA to the government of the Republic of
France or a French financial institution in the maximum principal amount of
22,725,000 French Francs incurred in connection with the construction of, the
purchase of equipment for, and the related expenses for, a new facility located
in the Paris/Cerge Pontise/Roissy ▇▇▇▇▇▇▇ de Gaulle region of France.
6.2. CONTINGENT LIABILITIES. Neither the Company nor any of its
Subsidiaries shall create, incur, assume or remain liable with respect to any
Guarantees other than the following:
(a) Guarantees in favor of the Bank or any of its Affiliates; and
(b) Guarantees disclosed in SCHEDULE 6.2 hereto.
6.3. SALE AND LEASEBACK. Neither the Company nor any of its
Subsidiaries shall enter into any arrangement, directly or indirectly, whereby
it shall sell or transfer any property owned by it in order to lease such
property or lease other property that the Company or any such Subsidiary intends
to use for substantially the same purpose as the property being sold or
transferred.
6.4. ENCUMBRANCES. Neither the Company nor any of its Subsidiaries
shall create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or encumbrance, including the lien or retained
security title of a conditional vendor upon or with respect to any of its
property or assets ("ENCUMBRANCES"), or assign or otherwise convey any
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right to receive income, including the sale or discount of accounts receivable
with or without recourse, except the following ("PERMITTED ENCUMBRANCES"):
(a) Encumbrances in favor of the Bank or any of its Affiliates;
(b) Encumbrances existing as of the date hereof and disclosed in
SCHEDULE 6.4 hereto and securing any refinancing of Indebtedness provided that
such refinancing is permitted pursuant to Section 6.1(b);
(c) Encumbrances for purchase money obligations or Capital Leases
permitted pursuant to Section 6.1(f); PROVIDED that such Encumbrances shall not
attach to property and assets of the Company or any Subsidiary not purchased
with the proceeds of such purchase money obligations;
(d) liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4; and
(e) landlords' and lessors' liens in respect of rent not in
default or liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business.
6.5. LINES OF BUSINESS. Neither the Company nor any Subsidiary will
engage in any line of business if as a result thereof the business of the
Company and its Subsidiaries taken as a whole would be materially different from
what it was on the date hereof.
6.6. MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS. Neither the
Company nor any of its Subsidiaries shall, without the prior written consent of
the Bank, sell, lease or otherwise dispose of assets or properties, other than
sales or leases of inventory in the ordinary course of business; or liquidate,
merge or consolidate into or with any other Person or entity, PROVIDED that any
Subsidiary of the Company may merge or consolidate into or with (i) the Company
if no Default or Event of Default has occurred and is continuing or would result
from such merger and if the Company is the surviving company or (ii) any other
wholly-owned Subsidiary of the Company.
6.7. ADDITIONAL STOCK ISSUANCE. The Company shall not permit any of
its Subsidiaries to issue any additional shares of such Subsidiary's capital
stock or other equity securities, any options therefor or any securities
convertible thereto other than to the Company; PROVIDED, that such Subsidiaries
may issue additional shares of its capital stock if after any such issuance the
Company has 50% or more of the ordinary voting power for the election of a
majority of the members of the board of directors or other governing body of
such entity or the Company has, at least, a 50% ownership interest.
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6.8. RESTRICTED PAYMENTS. The Company will not directly or
indirectly declare, order, pay or make any Restricted Payment or set aside any
sum or property therefore if at the time of such proposed action or immediately
after giving effect thereto, any condition or event shall exist which
constitutes a Default or an Event of Default and unless such Restricted Payment
is expressly permitted by this Section 6.8.
Subject to the foregoing, the Company may (a) make distributions of
shares of its capital stock as stock splits or stock dividends, (b) make
payments under the Corporate Services Agreement, and (c) make any other
Restricted Payment; PROVIDED, that in the last event the Company shall have
received the prior written consent of the Bank to such proposed Restricted
Payment.
The amount involved in any Restricted Payment declared, ordered, paid,
made or set apart in property shall be deemed to be the greater of the fair
market value thereof at the time of such distribution or payment (or the date of
such transaction, as the case may be), as determined in good faith by the
Company, or the net book value thereof on the books of the Company as at such
time.
6.9. TRANSACTIONS WITH AFFILIATES. Except for Sepracor's
Subsidiaries on the date hereof so long as they remain Subsidiaries of Sepracor,
the Company will not, and will not permit any Corporate Affiliate to, directly
or indirectly, enter into any lease or other transaction with any shareholder or
with any Affiliate of the Company or such shareholder, on terms that are less
favorable to the Company or such Subsidiary than those which might be obtained
at the time from Persons who are not a shareholder or an Affiliate.
Notwithstanding the preceding sentence, the Company may (1) sublease its
facilities from Sepracor; (2) enter into and perform the Corporate Services
Agreement, the Technology Transfer Agreement and [the Cross License Agreement,
(3) enter into an amended and restated cross license agreement replacing the
Cross License Agreement if such amended and restated agreement is in form and
substance acceptable to the Bank and its counsel] and (4) engage in transactions
expressly permitted by Sections 6.1, 6.6, and 6.7.
6.10. INVESTMENTS. Neither the Company nor any of its Subsidiaries
shall make or maintain any investments other than (i) existing and additional
investments in Subsidiaries on the date hereof so long as they remain
Subsidiaries of the Company, (ii) Qualified Investments, (iii) investments
consisting of foreign deposit accounts used for ordinary course working capital
purposes of the Company or its Subsidiaries; PROVIDED, that the aggregate
balance of foreign deposit accounts of Sepracor and its Subsidiaries shall not
at any time exceed $1,500,000 and (iv) investments in French Subsidiaries in
existence on or prior to December 28, 1994 but only to the extent such
investments are required for compliance with French statutory requirements
regarding corporate capitalization.
6.11. ERISA. Neither the Company nor any member of the Controlled
Group shall permit any Plan maintained by it to (i) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code, (ii) incur any
"accumulated funding deficiency" (as defined in Section 302 of ERISA) whether or
not waived, or (iii) terminate any Plan in a manner that could result in the
imposition of a lien or encumbrance on the assets of the Company or any of its
Subsidiaries pursuant to Section 4068 of ERISA.
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6.12. OBSERVANCE OF SUBORDINATION PROVISIONS, ETC. The Company will
not make, or cause or permit to be made, any payments in respect of any
Subordinated Indebtedness in contravention of the subordination and other
payment provisions contained in the evidence of such Subordinated Indebtedness
or in contravention of any written agreement pertaining thereto, nor will the
Company (a) amend, modify or change in any manner any of such subordination or
other payment provisions without the prior written consent of the Bank or (b)
amend, modify or change in any manner adverse to the interests of the Bank any
of the other provisions set forth in the agreements under which such
Subordinated Indebtedness is outstanding or contained in the evidence of such
Subordinated or other Indebtedness.
SECTION 7.
----------
SECURITY
--------
7.1. SECURITY INTEREST. As security for the payment and performance
of all Obligations, the Bank shall have and the Company hereby grants to the
Bank a continuing security interest in all property of the Company of every kind
and description, tangible or intangible, whether now or hereafter existing,
whether now owned or hereafter acquired, and wherever located, including but not
limited to the following (and together with all property in which the Bank may
have a security interest pursuant to any other security agreements, pledge
agreements, mortgages and other instruments creating a security interest in
favor of the Bank and securing the Obligations, collectively, the "COLLATERAL"):
all furniture, and similar property of the Company; all Accounts of the Company;
all contract rights of the Company; all other rights of the Company, including,
without limitation, amounts due from affiliates, tax refunds, and insurance
proceeds; all investment property (as defined in the Massachusetts Uniform
Commercial Code); all interest of the Company in goods or services as to which
an Account Receivable shall have arisen; all files, records (including, without
limitation, computer programs, tapes and related electronic data processing
software) and writings of the Company or in which it has an interest in any way
relating to the foregoing property; all goods, instruments, documents of title,
policies and certificates of insurance, securities, chattel paper, deposits,
cash or other property owned by the Company or in which it has an interest which
are now or may hereafter be in the possession of the Bank or as to which the
Bank may now or hereafter control possession by documents of title or otherwise;
all general intangibles of the Company (including, without limitation, all
patents, trademarks, trade names, service marks, copyrights and applications for
any of the foregoing; all rights to use patents, trademarks, trade names,
service marks, and copyrights of any Person and all trade secrets, know how and
other intellectual property rights (collectively "INTELLECTUAL PROPERTY"); and
any rights of the Company to retrieval from third parties of electronically
processed and recorded information pertaining to any of the types of collateral
referred to in this Section 7.1); any other property of the Company, real or
personal, tangible or intangible, in which the Bank now has or hereafter
acquires a security interest or which is now or may hereafter be in the
possession of the Bank; any sums at any time credited by or due from the Bank to
the Company, including deposits; and proceeds and products of all of the
foregoing; PROVIDED THAT the Bank shall not be deemed to have a security
interest in any technology license entered into by the Company and any third
party other than an Affiliate or Subsidiary of the Company prior to December 28,
1994 if the granting of such security interest by the Company would be a
violation of such technology
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license. The provisions of this Section 7.1 applicable to general intangibles
consisting of Intellectual Property are supplemented by the provisions of the
Intellectual Property Security Agreement and any conflict between the provisions
of this Agreement as applicable to such general intangibles and the Intellectual
Property Security Agreement shall be resolved in favor of such Intellectual
Property Security Agreement.
7.2. LOCATION OF RECORDS AND COLLATERAL; NAME CHANGE. The Company
shall give the Bank written notice of each location at which Collateral is or
will be kept and of each office of the Company at which the records pertaining
to its Accounts Receivable and contract rights are kept. Except as such notice
is given, all Collateral is and shall be kept, and all records of the Company
pertaining to Accounts and contract rights are and shall be kept at the
Company's chief executive offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ or at the Bank. The Company shall give the Bank thirty (30) days prior
written notice of any change in the name or corporate form of the Company or any
change in the name under which the Company's business is transacted.
7.3. STATUS OF COLLATERAL. As of the date hereof, the Company has
good and marketable title to all of its properties, assets and rights of every
name and nature now purported to be owned by it, including, without limitation,
the Collateral, free from all liens, charges and encumbrances whatsoever, except
as disclosed on SCHEDULE 6.4 hereof. At the time the Company pledges, sells,
assigns or transfers to the Bank any instrument, document of title, security,
chattel paper or other property (including Inventory, contract rights and
Accounts) or any proceeds or products thereof, or any interest therein, the
Company shall be the lawful owner thereof and shall have good right to pledge,
sell, assign or transfer the same; none of such property shall have been
pledged, sold, assigned or transferred to any Person other than the Bank or in
any way encumbered, except as disclosed in SCHEDULE 6.4 of this Agreement; and
the Company shall defend the same against the claims and demands of all Persons.
SECTION 8.
----------
DEFAULTS
--------
8.1. EVENTS OF DEFAULT. There shall be an Event of Default
hereunder if any of the following events occurs:
(a) the Company shall fail to pay when due (i) any amount of
principal of any Revolving Loans, or (ii) any amount of interest thereon; or
(b) the Company shall fail to pay within three (3) days after
receipt of notice from the Bank any fees or expenses payable hereunder or under
the Note; or
(c) the Company shall fail to perform any term, covenant or
agreement contained in Sections 5 (except Section 5.3) or or shall fail to
perform any term, covenant or agreement contained in the Intellectual Property
Security Agreement; or
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(d) the Company shall fail to perform any term, covenant or agreement
(other than those referred to above in this Section ) contained in this
Agreement and such default shall continue for twenty (20) days; or
(e) any representation or warranty of the Company made in this
Agreement or in the Note, or by the Company in the Intellectual Property
Security Agreement, or by the Company in any other documents or agreements
executed in connection with the transactions contemplated by this Agreement or
in any certificate delivered hereunder shall prove to have been false in any
material respect upon the date when made or deemed to have been made; or
(f) the occurrence of an Event of Default under the Sepracor Credit
Agreement; or
(g) the failure to pay at maturity, or within any applicable period of
grace, any obligations of Sepracor or the Company or one of its Subsidiaries in
excess of One Hundred Thousand Dollars ($100,000) in the aggregate for borrowed
monies or advances, or for the use of real or personal property, or fail to
observe or perform any term, covenant or agreement evidencing or securing such
obligations, the result of which failure is to permit the holder or holders of
such indebtedness to cause such indebtedness to become due prior to its stated
maturity upon delivery of required notice, if any; or
(h) the Company or Sepracor shall default in any payment due on any
Indebtedness in respect of borrowed money, any Capital Lease or the deferred
purchase price of property with an outstanding principal amount in excess of One
Hundred Thousand Dollars ($100,000) and such default shall continue for more
than the period of grace, if any, specified therein and shall not have been
waived pursuant thereto;
(i) the Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) be generally not paying its debts as such
debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding, as debtor, under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, or any other
law providing for the relief of debtors, (vi) fail to contest in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Federal Bankruptcy Code or other law, (vii) take
any action under the laws of its jurisdiction of incorporation or organization
similar to any of the foregoing, or (viii) take any corporate action for the
purpose of effecting any of the foregoing; or
(j) a proceeding or case shall be commenced, without the application or
consent of the Company or any of its Subsidiaries in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding
up, or composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets, or (iii) similar relief in respect of it, under
any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts or any other law providing for the relief of
debtors, and such proceeding or case shall continue undismissed, or unstayed and
in effect, for a period of 60 days; or an order for relief shall be
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entered in an involuntary case under the Federal Bankruptcy Code, against the
Company or such Subsidiary; or action under the laws of the jurisdiction of
incorporation or organization of the Company or any of its Subsidiaries similar
to any of the foregoing shall be taken with respect to the Company or such
Subsidiary and shall continue unstayed and in effect for any period of 60 days;
or
(k) a judgment or order for the payment of money shall be entered
against the Company or any of its Subsidiaries by any court, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Company or such Subsidiary, that in the aggregate exceeds one
hundred thousand dollars ($100,000) in value and such judgment, order, warrant
or process shall continue undischarged or unstayed for 30 days; or
(l) the Company or any member of the Controlled Group shall fail
to pay when due an amount or amounts aggregating in excess of Fifty Thousand
Dollars ($50,000) that it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans
shall be filed under Title IV of ERISA by the Company, any member of the
Controlled Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans against
the Company and such proceedings shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
(m) if Sepracor shall cease to own directly at least 51% of the
issued and outstanding shares of the capital stock of the Company having
ordinary voting power to elect a majority of the board of directors of the
Company; or
(n) a final nonappealable judgment shall be entered against the
Company or Sepracor by any court with respect to any patent litigation involving
HyperD chromatography media or the Company or Sepracor shall have entered into a
settlement in respect of any such litigation, which, in either case would have a
material adverse affect on the Company;
(o) the termination, expiration or non-renewal of any license or
other Material Agreement which termination, expiration or non-renewal has a
material adverse effect on the existing business or prospects of the Company; or
(p) the Company shall fail to perform with respect to any material
term, covenant or agreement of any Alternative Currency Commitment.
8.2. REMEDIES. Upon the occurrence of an Event of Default described
in Sections 8.1.(i) and 8.1.(j), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the Bank's option and upon the Bank's
declaration:
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(a) the Bank's commitment to make any further Revolving Loans hereunder
and to deliver Dollars or an Alternative Currency under any Alternative Currency
Commitment or under the Foreign Exchange Facility, generally, shall terminate;
(b) the unpaid principal amount of the Revolving Loans together with
accrued interest and all other Obligations hereunder shall become immediately
due and payable, including the unpaid principal amount of any Revolving Loan
subject to an exercised LIBOR Option together with accrued interest thereon and
the related LIBOR Premium in the same manner as though the Company had exercised
its right to prepayment pursuant to Section 2.6 of this Agreement, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived; and
(c) the Bank may exercise any and all rights it has under this
Agreement, the Note or any other documents or agreements executed in connection
herewith, or at law or in equity, and proceed to protect and enforce the Bank's
rights by any action at law, in equity or other appropriate proceeding.
(d) Upon the occurrence of any Event of Default and at any time
thereafter (unless such Event of Default shall theretofore have been remedied),
at the Bank's option: (i) the Bank shall thereupon be relieved of all of its
obligations to make any Revolving Loans hereunder; (ii) the Bank shall thereupon
be relieved of all of its obligations with respect to Alternative Currency
Commitments or under the Foreign Exchange Facility, generally; (iii) the unpaid
principal amount of the Note together with accrued interest thereon and all
other Obligations shall become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived;
and (iv) the Bank may exercise any and all rights it has under this Agreement,
the Note, the Intellectual Property Security Agreement or any other documents or
agreements executed in connection with the transactions contemplated by this
Agreement (the "LOAN DOCUMENTS"), or by law or equity, and proceed to protect
and enforce the Bank's rights by any action at law, suit in equity or other
appropriate proceeding, whether for specific performance or for an injunction
against a violation of any covenant contained herein or in any Loan Document or
in aid of the exercise of any power granted hereby or thereby or by law.
(e) Without limiting the rights of the Company set forth in this
Section 8.2 above, upon the occurrence of any Event of Default and at any time
thereafter (such default not having been cured), the Bank shall have the right
to take immediate possession of the Collateral, and for that purpose the Bank
may, so far as the Company can give authority therefor, enter upon any premises
on which the Collateral may be situated and remove the same therefrom. The
Company waives demand and notice with respect to and assents to any repossession
of the Collateral. The Bank may dispose of the Collateral in any order and in
any manner it chooses and may refrain from the sale of any real property, held
as the Collateral, until the sale of personal property. Except for the
Collateral which is perishable or threatens to decline speedily in value or
which is of a type customarily sold on a recognized market, the Bank shall give
to the Company at least ten (10) days' prior written notice of the time and
place of any public sale of the Collateral or of the time after which any
private sale or any other intended disposition is to be made. The residue of any
proceeds of collection or sale, after satisfying all Obligations in such order
of preference as the Bank may determine and making proper allowance for interest
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41
on Obligations not then due, shall be credited to any deposit account which the
Company may maintain with the Bank, or, if there is no such account, held
pending instructions from the Company. The Company shall remain liable for any
deficiency.
(f) The Bank may at any time in its sole discretion (after an
Event of Default has occurred) transfer any securities or other property
constituting the Collateral into its own name or that of its nominee and receive
the income thereon and hold the same as security for Obligations or apply it on
principal or interest due on Obligations. Insofar as the Collateral shall
consist of Accounts or instruments, the Bank may, upon the occurrence of an
Event of Default, without notice to or demand on the Company, demand and collect
such Collateral as the Bank may determine. For the purpose of realizing the
Bank's rights therein, the Bank may receive, open and dispose of mail addressed
to the Company and endorse notes, checks, drafts, money orders, documents of
title or other evidences of payment, shipment or storage or any form of
Collateral on behalf of and in the name of the Company. The powers conferred on
the Bank by this Section are solely to protect the interest of the Bank and
shall not impose any duties on the Bank to exercise any powers.
(g) In addition to all other rights and remedies provided
hereunder or by law, the Bank shall have in any jurisdiction where enforcement
of this Agreement is sought the rights and remedies of a secured party under the
Uniform Commercial Code of Massachusetts.
SECTION 9.
----------
MISCELLANEOUS
-------------
9.1. NOTICES. Unless otherwise specified herein, all notices
hereunder to any party hereto shall be in writing and shall be deemed to have
been given when delivered by hand, or three (3) days after being properly
deposited in the mails postage prepaid, or when sent by telex, answerback
received, or electronic facsimile transmission, or when delivered to the
telegraph company or overnight courier, addressed to such party at its address
indicated below:
If to the Company, at
BioSepra Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer and Treasurer
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Bank, at
Fleet National Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Vice President
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
or at any other address specified by such party in writing.
9.2. EXPENSES. The Company will pay on demand all expenses of the
Bank in connection with the preparation, waiver or amendment of this Agreement,
the Note, or other documents executed in connection therewith, or the
administration, default or collection of the Revolving Loans or other
Obligations, or collection of amounts due with respect to Alternative Currency
Commitments or the Foreign Exchange Facility, or in connection with the Bank's
exercise, preservation or enforcement of any of its rights, remedies or options
thereunder, including, without limitation, reasonable fees and disbursements of
outside legal counsel or accounting, consulting, brokerage or other similar
professional fees or expenses, and any fees or expenses associated with any
travel or other costs relating to any appraisals or examinations conducted in
connection with the Obligations or any Collateral therefor, and the amount of
all such expenses shall, until paid, bear interest at the rate applicable to
principal hereunder (including any default rate).
9.3. SET-OFF. Regardless of the adequacy of any Collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from the head office of the Bank or any of its branch
offices to the Company, may, at any time and from time to time after the
occurrence of an Event of Default hereunder, without notice to the Company or
compliance with any other condition precedent now or hereafter imposed by
statute, rule of law, or otherwise (all of which are hereby expressly waived) be
set off, appropriated, and applied by the Bank against any and all Obligations
of the Company to the Bank or any of its affiliates in such manner as the head
office of the Bank or any of its branch offices in their sole discretion may
determine, and the Company hereby grants the Bank a continuing security interest
in such deposits, balances or other sums for the payment and performance of all
such obligations.
9.4. TERM OF AGREEMENT. This Agreement shall continue in force and
effect so long as the Bank has any commitment to make Revolving Loans hereunder
or any Revolving Loan or any Obligation hereunder shall be outstanding.
9.5. NO WAIVERS. No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Note or under any other
documents or agreements executed in connection herewith shall operate as a
waiver thereof; nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein and in the Note provided are
cumulative and not exclusive of any rights or remedies otherwise provided by
agreement or law.
9.6. GOVERNING LAW; JURISDICTION. This Agreement and the Note shall
be deemed to be contracts made under seal and shall be construed in accordance
with and governed by the laws of Massachusetts (without giving effect to any
conflicts of laws provisions contained therein). The Company, to the extent that
it may lawfully do so, hereby consents to the jurisdiction of the courts of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts, as well as to the jurisdiction of all courts to which
an
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appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of its obligations hereunder or with respect
to the transactions contemplated hereby, and expressly waives any and all
objections it may have as to venue in any such courts. The Company further
agrees that a summons and complaint commencing an action or proceeding in any of
such courts shall be properly served and shall confer personal jurisdiction if
served personally or by certified mail to it at its address provided in Section
of this Agreement or as otherwise provided under the laws of the Commonwealth of
Massachusetts.
9.7. AMENDMENTS. Neither this Agreement nor the Note nor any
provision of this Agreement or thereof may be amended, waived, discharged or
terminated except by a written instrument signed by the Bank and, in the case of
amendments, by the Company.
9.8. BINDING EFFECT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. (a)
This Agreement shall be binding upon and inure to the benefit of the Company and
the Bank and their respective successors and assigns; PROVIDED that the Company
may not assign or transfer its rights or obligations hereunder.
(b) ASSIGNMENTS BY THE BANK. From and after the date hereof, the
Bank may at any time assign all, or a proportionate part of all, of its rights,
interests and duties with respect to the Revolving Commitment Amount and the
Note (1) to any one or more of its Affiliates without the consent or approval of
the Company or (2) to one or more banks or other financial institutions with the
consent of the Company which consent shall not be unreasonably withheld (each
assignee under clauses (1) and (2), an "Assignee"), in each case on such terms,
as between the Bank and each of its Assignees, as the Bank may think fit, and
such Assignee shall assume such rights, interests and duties pursuant to an
instrument executed by such Assignee and the Bank, and for this purpose the Bank
may make available to each of its potential Assignees such information relating
to the Company, this Agreement and the transactions contemplated hereby as the
Bank may think necessary or desirable, which information shall be held by each
potential Assignee strictly in confidence. Upon execution and delivery of such
an instrument and payment by such Assignee to the Bank of an amount equal to the
purchase price agreed between the Bank and such Assignee, such Assignee shall be
a Bank party to this Agreement and shall have all the rights, interests and
duties of a Bank with a Revolving Commitment Amount and Revolving Loan as set
forth in such instrument of assumption, and the Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this paragraph (i), the Bank and the Company shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee.
(c) PARTICIPATIONS BY THE BANK. From and after the date hereof,
the Bank shall be at liberty to offer the participations in the Revolving
Commitment Amount and the Note to one or more banks or other financial
institutions on such terms as the Bank may think fit, and for this purpose the
Bank may make available to each of its potential participants such information
relating to the Company, this Agreement and the transactions contemplated hereby
as the Bank may think necessary or desirable, which information shall be held by
each potential participant strictly in confidence; PROVIDED, that the Bank shall
not offer any participations to foreign banks or other financial institutions
without the prior written consent of the Company; PROVIDED FURTHER, that the
Bank shall retain the sole right to consent to amendments to, or waivers of, the
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44
provisions of this Agreement and the Note and the sole right and responsibility
to enforce the obligations of the Company hereunder and under the Note; PROVIDED
FURTHER, that the Bank may agree with each of its participants that the Bank
will not agree, without the consent of the participant, to any amendment or
waiver of any provision of this Agreement which would increase or otherwise
change such Revolving Commitment Amount or reduce the principal of or rate of
interest on the Revolving Loans subject to such participation, or postpone the
date fixed for any payment of principal or of interest on any Revolving Loans.
9.9. AMENDMENT AND TERMINATION OF PRIOR LOAN AGREEMENT. Upon the
execution and delivery of this Agreement, (i) Section 1.1 of the Prior Loan
Agreement shall be amended to change the "Revolving Credit Termination Date to
"December 31, 1996," and (ii) the Prior Loan Agreement shall be terminated and
of no further force and effect except for the obligation of the Company to pay
any and all of its obligations incurred thereunder or in respect thereof
(including the payment of the entire unpaid amount of principal of, if any, and
accrued interest on the Prior Loans and the payment in full of all fees and
expenses provided for in the Prior Loan Agreement) and except for the
continuation of the Bank's security interest in the Collateral as provided
herein and in the other Loan Documents which continuing security interest is
hereby acknowledged and confirmed.
9.10. CURRENCY CONVERSION. If, for the purpose of obtaining or
enforcing judgment in any court or for any other purpose hereunder it is
necessary to convert an amount due hereunder in the currency in which it is due
(the "ORIGINAL CURRENCY") into another currency (the "SECOND CURRENCY") the rate
of exchange applied shall be that at which, in accordance with normal banking
procedures, the Bank could purchase, in the United States money market or the
United States foreign exchange market (the "MONEY MARKETS"), as the case may be,
the Original Currency with the Second Currency on the Business Day on which
judgment is given or the amount is due. The Company agrees that its obligations
in respect of any amounts due from it to the Bank, in the Original Currency
hereunder shall, notwithstanding any judgment expressed or payment made in the
Second Currency, be discharged only to the extent that on the Business Day
following receipt of any sums so paid or adjudged to be due hereunder in the
Second Currency, the Bank may, in accordance with normal banking procedure
purchase, in the appropriate Money Market, the Original Currency with the amount
of the Second Currency so paid or so adjudged to be due; and if the amount of
the Original Currency so purchased is less than the amount originally due in the
Original Currency, the Company agrees as a separate obligation, and
notwithstanding any such payment or judgment to indemnify the Bank.
9.11. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
9.12. PARTIAL INVALIDITY. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
9.13. CAPTIONS. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
39
45
9.14. WAIVER OF JURY TRIAL. THE BANK AND THE COMPANY AGREE THAT NEITHER
OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT
OF, THIS AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR
THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BANK AND THE COMPANY, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
NEITHER THE BANK NOR THE COMPANY HAS AGREED WITH OR REPRESENTED TO THE OTHER
THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
9.15. ENTIRE AGREEMENT. This Agreement, the Note and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto and supersede any prior agreement or understanding, written or
oral, with respect to the matters contained herein and therein.
40
46
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
BIOSEPRA INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Treasurer
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
41
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EXHIBIT A
FORM OF
BIOSEPRA INC.
AMENDED AND RESTATED PROMISSORY NOTE
December 31, 1996
$3,000,000 Boston, Massachusetts
For value received, the undersigned hereby promises to pay to FLEET
NATIONAL BANK (the "BANK"), or order, at the head office of the Bank at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the principal amount of THREE MILLION
DOLLARS ($3,000,000) or such lesser amount as shall equal the principal amount
outstanding hereunder on April 30, 1999 or such earlier date as provided in the
Agreement (as defined below) in lawful money of the United States of America and
in immediately available funds, and to pay interest on the unpaid principal
balance hereof from time to time outstanding, at said office and in like money
and funds, for the period commencing on the date hereof until paid in full, at
the rates per annum and on the dates provided in the Agreement.
Upon the occurrence and during the continuance of an Event of Default,
interest on the unpaid principal amount hereof and (to the extent permitted by
law) on unpaid interest shall thereafter be payable on demand at a rate per
annum equal to two percent (2%) above the interest rate otherwise in effect with
respect to such Revolving Loans. Upon the cure of an Event of Default and the
payment of interest at the default rate through the date of such cure, the
interest rate shall revert to that provided for in the Agreement.
If the entire amount of any required principal and/or interest is not
paid in full within ten (10) days after the same is due, the undersigned shall
pay to the Bank a late fee equal to five percent (5%) of the required payment;
PROVIDED, that such late fee shall be reduced to three percent (3%) of any
required principal and interest payment that is not paid within fifteen (15)
days of the date it is due if this Note is secured by a mortgage on an
owner-occupied residence, 1-4 units. Nothing in the preceding sentence shall
affect the Bank's rights to exercise any of its rights and remedies provided in
the Agreement (as defined below) if an Event of Default (as defined in the
Agreement) has occurred.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of a certain Amended and Restated Revolving Credit
and Security Agreement dated as of December 31, 1996, by and between the
undersigned and the Bank (herein, as the same may from time to time be amended
or extended, referred to as the "AGREEMENT"), but neither this reference to the
Agreement nor any provision thereof shall affect or impair the absolute and
unconditional obligation of the undersigned makers of this Note to pay the
principal of and interest on this Note as herein provided.
As provided in the Agreement, this Note is secured by certain assets of
the undersigned.
48
In case an Event of Default (as defined in the Agreement) shall occur,
the aggregate unpaid principal of and accrued interest on this Note shall become
or may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The undersigned may at its option prepay all or any part of the
principal of this Note before maturity upon the terms provided in the Agreement,
and this Note is subject to mandatory prepayment in certain circumstances, which
repayment shall in certain cases require the payment of a premium and in certain
cases not require the payment of a premium.
The undersigned makers hereby waive presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.
This instrument shall have the effect of an instrument executed under
seal and shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
BIOSEPRA INC.
By:
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Treasurer
2
49
SCHEDULE I TO PROMISSORY NOTE
AMOUNT OF INTEREST AMOUNT NOTATION
DATE REVOLVING RATE PAID MADE BY
LOAN
3
50
EXHIBIT B
COMPLIANCE CERTIFICATE
----------------------
Fleet National Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Ladies and Gentlemen:
As required by Section 5.1(c) of the Amended and Restated Revolving
Credit and Security Agreement dated as of December 31, 1996 (the "CREDIT
AGREEMENT") by and between BioSepra Inc. (the "COMPANY") and Fleet National Bank
(the "BANK"), a review of the activities of the Company for the fiscal year
and/or fiscal quarter ending ___________, 19___ (the "FISCAL PERIOD") has been
made under my supervision to determine whether the Company has performed and/or
maintained all of its respective obligations under the Credit Agreement. Based
upon such review, I hereby certify to you, as an Authorized Officer of the
Company, that the Company has performed and maintained all such obligations
under the Credit Agreement, the Note and the Loan Documents for the Fiscal
Period and, to the best of my knowledge, no event has occurred that constitutes
a Default or an Even of Default as defined in the Credit Agreement. Other
capitalized terms used herein without definition have the same meanings as in
the Credit Agreement.
As required by Section [5.1(a)][5.1(b)] of the Credit Agreement
financial statements of the Company (the "FINANCIAL STATEMENTS") for the Fiscal
Period and other information required by such sections accompany this
certificate. The Financial Statements present fairly the financial position of
the Company as of the date thereof and the statements of operation of the
Company for the Fiscal Period covered thereby.
I further certify to you, as an Authorized Officer of the Company, that
the figures set forth below accurately represent amounts required to be
calculated under the various provisions or covenants of the Credit Agreement
indicated, each as of the last day of the Fiscal Period unless otherwise
indicated.
Dated: _________ __, 199__ ___________________________________
Title:
51
I. Section 5.9 - Minimum Consolidated Tangible Capital Base
--------------------------------------------------------
(1) Stockholders' equity $____________
(2) Subordinated Indebtedness $____________
(3) Goodwill $____________
(4) Intangible items $____________
(5) Reserves not already deducted from assets $____________
(6) Write-ups from revaluations $____________
(7) Equity in Subsidiaries or joint ventures $____________
(8) Actual Consolidated Tangible Capital Base $____________
(1 + 2) - (sum of 3 through 7)
Required Minimum Consolidated Tangible Capital Base: $2,000,000
II. Section 5.10 - Minimum Cash or Equivalents
------------------------------------------
A. Qualified Investments held in the U.S.
--------------------------------------
(9) Obligations of the United
States of America held in the U.S. $____________
(10) Certificates of deposit, other
deposit instruments, bank accounts
held in the U.S. $____________
(11) Commercial Paper held in the U.S.
(see definition
of Qualified Investments) $____________
(12) Mutual/closed end funds that invest
only in investments set forth
in clauses (9) through (11) $____________
(13) Repurchase agreements secured by
any one or more of the
foregoing held in the U.S. $____________
2
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(14) Qualified Investments: $____________
(sum of 9 through 13)
B. Net Outstanding Amount of Base Accounts
---------------------------------------
(15) Base Accounts $____________
(16) Ineligible as of ________________1
(i) over 60 days from invoice date $____________
(ii) Accounts outside of US $____________
(iii) Accounts due from Affiliates $____________
(iv) Prepayments $____________
(v) Joint venture accounts $____________
(17) Ineligible Accounts $____________
(sum of 16(i through v))
(18) Contra Account offsets $____________
(19) Net Outstanding Amount of Base Accounts $____________
(15 - 17 - 18)
C. Cash Equivalent Amount
----------------------
(20) Unencumbered Cash held in the United States $____________
(21) Qualified Investments (from (14)) $____________
(22) Net Outstanding Amount of Base Accounts $____________
(from (19))
(23) Actual Cash Equivalent Amount $____________
(20 + 21 + 22)
Required Minimum Cash Equivalent Amount $2,500,000
Dated: _________ __, 199__ __________________________
Title:
---------------
1 Ineligible calculated monthly
3