Exhibit (1)
AGREEMENT
THIS AGREEMENT is made this 14th day of May, 1993 by and between General
Electric Company, a New York corporation, acting through GE Medical Systems
("GE") and Medical Imaging Centers of America, Inc., a California corporation
("MICA").
RECITALS
A. GE is a primary supplier of equipment and services to MICA.
B. MICA has requested that GE restructure the terms of its obligations
and the obligations of its Subsidiaries to GE arising in connection with GE's
provision of equipment and services to MICA and its Subsidiaries and GE has
agreed to do so on the terms and conditions set forth herein.
C. MICA acknowledges that GE is making valuable monetary and other
concessions pursuant to this Agreement and the transactions contemplated hereby,
including without limitation (i) GE's agreement to terminate certain equipment
leases and to accept the return of the equipment subject to the leases in full
satisfaction of rent(s) due under the leases without imposition of any early
termination fees or penalties, (ii) reduction by $32,497.16 of current monthly
finance and service payments of MICA and certain of its subsidiaries pursuant to
a sale-leaseback of equipment, (iii) cancellation of MICA's November 1, 1992
promissory note to GE and acceptance of a replacement note which provides for an
interest rate of 0.0% for the period May 1993 through April 1994, and (iv)
deferral of March and April 1993 equipment and service payments owing for the
"Fee for Service" segment of MICA's business, all as more completely described
in this Agreement and the other instruments and documents to be executed in
connection with closing the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing recitals and the terms
and conditions contained herein, and of any extension of credit or financial
accommodation heretofore, now or hereafter made by GE to or on behalf of MICA
and its Subsidiaries, GE and MICA hereby agree as follows:
1. GENERAL DEFINITIONS AND RULES OF CONSTRUCTION
In addition to the defined terms appearing above or defined in subsequent
sections of this Agreement, capitalized terms used in this Agreement shall have
(unless otherwise provided elsewhere in this Agreement) the following respective
meanings when used in this Agreement:
1.1 "Affiliate" shall mean as to any Person (i) any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with that Person, and (ii) any Person in which, directly or indirectly, any
Person described in (i) controls, is controlled by or is under common control.
1.2 "Bankruptcy Code" shall mean Title 11 of the United States Code, as
from time to time amended, and the rules applicable with respect thereto.
1.3 "Xxxx of Sale" shall mean that certain xxxx of sale in the form
attached hereto as Schedule 1.3 whereby MICA and certain of its Subsidiaries
shall transfer the Sale-Leaseback Equipment to GE.
1.4 "Business Day" shall mean any day except Saturday, Sunday or any day
in which banks in Milwaukee, Wisconsin are required or authorized by law to
remain closed.
1.5 "Closing Date" shall mean May 21, 1993.
1.6 "Collateral" shall have the meaning assigned to it in Section 2(a) of
the Security Agreement.
1.7 "Default" shall mean any event which, with the passage of time, the
giving of notice, or both, would become an Event of Default, unless cured or
unless waived as specifically provided in this Agreement.
1.8 "Disposition" shall mean the sale, transfer or other disposition in
any single transaction or series of related transactions of any asset, or group
of related assets, of MICA or any of its Subsidiaries, other than the sale or
other disposition of inventory in the ordinary course of business. As used in
this Agreement, the phrase "series of related transactions" shall mean that the
transactions, taken as a whole, were conceived and are implemented on a
strategically integrated basis and the phrase "related assets" shall mean that
the assets are functionally related to one another.
1.9 "Distributions" shall mean, with respect to any shares of capital
stock or any warrant or right to acquire shares of capital stock or any other
equity security issued by MICA, (i) the retirement, redemption, purchase or
other acquisition, directly or indirectly, for value by MICA of any such
security, except to the extent that the consideration therefor consists of
shares of Stock, (ii) the declaration or (without duplication) payment by MICA
of any dividend in cash or in Property, directly or indirectly, on or with
respect to any such security, (iii) any investment by MICA in the holder of 5%
or more of any such security if a purpose of such investment is to avoid
characterization of the transaction as a Distribution, and (iv) any other
payment by MICA constituting a distribution under applicable laws with respect
to such security.
1.10 "Event of Default" shall have the meaning assigned to it in Section
7.1.
1.11 "Financing Statements" shall mean the Form UCC-1 or other financing
statements to be filed in the appropriate offices for the perfection of a
security interest in any of the Collateral.
1.12 "GAAP" shall mean Generally Accepted Accounting Principles applied on
a consistent basis as in effect from time to time and practices which are
recognized as such by the American Institute of Certified Public Accountants
acting through its Accounting Principles Board or by the Financial Accounting
Standards Board or through other appropriate boards or committees thereof and
which are consistently applied for all periods after the date of this Agreement.
1.12A "Xxxxxx Bank" shall mean Xxxxxx Trust and Savings Bank, an Illinois
banking corporation.
1.12B "Xxxxxx Documents" shall have the meaning set forth in Section 1 of
the Security Agreement.
1.13 "Hazardous Materials" shall mean any substance, material, or waste
that is regulated because of its hazardous, toxic, or polluting nature, by any
city, county, or other local or regional government authority, any State, or the
United States Government or any agency thereof having jurisdiction, including
any material or substance that is (i) petroleum or petroleum distillates,
including crude oil, natural gas, natural gas liquids, liquefied natural gas or
synthetic gas, (ii) asbestos, (iii) designated as a "hazardous substance"
pursuant to section 311 of the Clean Water Act, 33 U.S.C. 1251, et seq., 33
U.S.C. 1321, or listed pursuant to section 307 of the Clean Water Act, 33 U.S.C.
1317, (iv) defined as a "hazardous waste" pursuant to section 1004 of the
Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., 42 U.S.C. 6903,
(v) defined as a "hazardous substance" pursuant to section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
9601, et seq., 42 U.S.C. 9601, (vi) determined to be a chemical substance or
mixture that poses an unreasonable risk of injury to human health or the
environment under the Toxic Substances Control Act, 15 U.S.C. 2601, et seq.,
(vii) determined to be a Hazardous Air Pollutant under the Clean Air Act, 42
U.S.C. 7501, et seq., or (viii) listed, defined, or identified in the
regulations adopted pursuant to any of the foregoing laws.
1.14 "Indebtedness" means, as applied to any Person, without duplication
(i) all items, except items of capital stock or of surplus or of general
contingency or deferred tax reserves, which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person on the date as of which Indebtedness is to be
determined, (ii) all obligations secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien to which any Property or asset owned or held by such Person is subject,
whether or not the obligation secured thereby shall have been assumed, and (iii)
all obligations of other Persons which such Person has guaranteed, including,
but not limited to, all obligations of such Person consisting of recourse
liabilities with respect to accounts receivable sold or otherwise disposed of by
such Person.
1.15 "Installment Agreements" shall have the meaning set forth in Section
2.2 hereof.
1.15A "Installment Sale Termination Agreements" shall have the meaning set
forth in Section 2.2 hereof.
1.16 "IRC" shall mean the Internal Revenue Code of 1986, as heretofore or
hereafter amended, and all regulations promulgated thereunder.
1.17 "Lease Termination Agreements" shall mean those certain Lease
Termination Agreements to be entered into on the Closing Date by GE and MICA and
its Subsidiaries, as applicable, in a form substantially as set forth in
Schedule 1.17 hereto.
1.18 "Liabilities" or "Liability" shall mean all loans, advances,
indebtedness, liabilities, and obligations of MICA and its Subsidiaries to GE,
of any and every kind and nature, whether now or hereafter owing, arising, due
or payable from MICA or its Subsidiaries to GE, whether or not evidenced by any
note, agreement, or other instrument and whether primary, secondary, direct,
contingent, fixed or otherwise, including obligations of performance, and
including, particularly, principal, interest, loan fees, charges, expenses,
attorneys' fees, and other amounts chargeable to MICA or its Subsidiaries by GE.
1.19 "Lien" shall mean (i) any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien (including tax liens,
judgment liens, liens of mechanics, suppliers, and other Persons for the
provision of goods or services, and all other liens arising under statute,
common law or judicial interpretation), charge, claim, security interest,
capitalized lease obligation, easement, encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any lease or title retention agreement, or any financing
lease having substantially the same economic effect as any of the foregoing),
(ii) any arrangement, express or implied, under which any Property is
transferred, sequestered or otherwise identified for the purpose of subjecting
the same to the payment of Indebtedness or performance of any other obligation
in priority to the payment of general, unsecured creditors; (iii) any
indebtedness which is unpaid more than forty-five (45) days after the same shall
have become due and payable and which if unpaid would by law (including but not
limited to bankruptcy and insolvency laws), or otherwise, be given any priority
whatsoever over general, unsecured creditors; and (iv) the filing of, or
agreement to give, any financing statement perfecting a security interest under
the UCC or comparable law of any jurisdiction.
1.20 "Material Adverse Effect" shall mean any set of circumstances or
events which (i) was initiated or approved by MICA or any of its Subsidiaries
and which has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Agreement or any
other agreement between MICA or one of its Subsidiaries and GE, (ii) is or could
reasonably be expected to be material and adverse to the condition (financial or
otherwise), or business operations of MICA and its Subsidiaries, taken as a
whole, (iii) materially impairs or could reasonably be expected to materially
impair the ability of MICA to satisfy the Liabilities, or (iv) was initiated or
approved by MICA or any of its Subsidiaries and which materially impairs or
could reasonably be expected to materially impair the ability of GE to enforce
its legal remedies pursuant to this Agreement or any of the Scheduled Documents.
1.21 "MaxiService Agreements" shall have the meaning set forth in Section
2.2 hereof.
1.22 "MICA Imaging" shall mean MICA Imaging, Inc., an Illinois
corporation.
1.23 "1992 Note" shall have the meaning set forth in Section 2.3 hereof.
1.24 "Note" shall have the meaning set forth in Section 2.3 hereof.
1.25 "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity, party, or government (whether
federal, state, county, city, municipal, or otherwise, including any
instrumentality, division, agency, body, or department thereof).
1.26 "Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
1.27 "Release and Settlement Agreement" shall have the meaning set forth
in Section 3.1(A) hereof.
1.28 "Reserves" shall mean reserves for returns, allowances, and the like
as may be established by MICA or as may otherwise be required in accordance with
GAAP.
1.29 "Sale-Leaseback Equipment" shall have the meaning set forth in
Section 2.2 hereof.
1.30 "Scheduled Documents" shall mean, collectively, the Note, the
Security Agreement, the Warrant, the Lease Termination Agreements, the Release
and Settlement Agreement, the MaxiService Agreements and the Xxxx of Sale.
1.31 "Security Agreement" shall mean that certain Security Agreement in
the form attached as Schedule 1.31 hereto.
1.32 "Solvent" when used with respect to MICA, shall mean that (i) the
fair salable value of the total amount of MICA's assets is in excess of the
total amount of its liabilities (including for purposes of this definition all
liabilities, whether or not reflected on a balance sheet prepared in accordance
with generally accepted accounting principles, and whether direct or indirect,
fixed or contingent, secured or unsecured, and disputed or undisputed); (ii)
MICA is able to pay its debts or obligations in the ordinary course as they
mature; and (iii) MICA has capital sufficient to carry on its businesses and all
businesses in which it is about to engage.
1.33 "Stock" shall mean all shares, options, warrants, interests,
participations, or other equivalents, howsoever designated, of or in a
corporation or equivalent entity, whether voting or non-voting, including common
stock, preferred stock, convertible debentures, and all agreements, instruments,
any other "option" (as such term is defined in temporary Treasury Regulation
1.382-2T(h)(4)(v) promulgated under the Internal Revenue Code), or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), and documents convertible, in
whole or in part, into any one or more or all of the foregoing.
1.34 "Subsidiary" shall mean any corporation of which fifty percent (50%)
or more of the outstanding shares of each class having voting power (other than
shares having such power by reason of the happening of a contingency) is at the
time owned or controlled, directly or indirectly, by MICA.
1.35 "Supplemental Documentation" shall mean agreements, instruments,
documents, financing statements, warehouse receipts, bills of lading, and other
written matter necessary or requested by GE to perfect and/or maintain the
perfection of GE's Lien upon the Collateral and to consummate the transactions
contemplated in or by this Agreement and the Scheduled Documents.
1.36 "Termination Date" shall mean the date on which all Liabilities under
or in connection with the Note have been completely and finally paid and
discharged, whether by prepayment or otherwise.
1.37 "UCC" shall mean the Uniform Commercial Code of the jurisdiction with
respect to which such term is used, as in effect from time to time.
1.38 "Warrant" shall have the meaning set forth in Section 2.4 hereto.
1.39 Other Terms: All other terms hereinbefore or hereinafter defined,
including, without limitation, all terms defined in the preamble and recitals
hereto, shall have the meanings herein assigned to such terms. All terms used
in the above definitions and all other terms contained in this Agreement, where
the context so indicates or requires, shall have the meanings provided by the
UCC as in effect in the State of California to the extent the same are used or
defined therein. Any accounting terms used in this Agreement and not
specifically defined herein shall have the meanings given them in accordance
with GAAP, and all financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP, consistently
applied. That certain terms or computations are explicitly modified by the
phrase "in accordance with GAAP" shall in no way be construed to limit the
foregoing.
1.40 Rules of Construction: Except as otherwise specifically provided in
this Agreement, the singular of any term shall include the plural, and vice
versa, the use of any term shall be equally applicable to any gender, "or" shall
not be exclusive, and "including" shall not be limiting. The words "herein,"
"hereof," and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, as the same
may from time to time be amended, modified or supplemented, and not to any
particular section, subsection or clause contained in this Agreement. Any
reference to a "Section," "Exhibit," or "Schedule" shall refer to the relevant
Section of, or Exhibit or Schedule to, this Agreement, unless specifically
indicated to the contrary.
2. RESTRUCTURING OF OBLIGATIONS
2.1 Termination or Assignment of Equipment Leases. GE and MICA (or the
applicable Subsidiary of MICA) shall terminate or assign the equipment leases
relating to the equipment described on Exhibit 2.1 hereto on the Closing Date by
executing and delivering Lease Termination Agreements or Assignment and
Assumption Agreements with respect to such leases as provided in Exhibit 2.1.
The equipment shall be returned to GE in full satisfaction of rental payments
due under the corresponding leases, all as more specifically set forth in the
Lease Termination Agreements.
2.2 Sale-Leaseback. On the Closing Date, MICA shall sell, assign,
transfer and deliver and shall cause certain of its Subsidiaries to sell,
assign, transfer and deliver to GE, and GE shall purchase and receive from MICA
and such Subsidiaries, all of the equipment ("Sale-Leaseback Equipment") subject
to the installment sales agreements identified on Exhibit 2.2 hereto
(collectively, the "Installment Agreements") including but not limited to the
equipment identified on Exhibit 2.2, free and clear of any and all security
interests, mortgages, pledges, liens, restrictions, charges or encumbrances of
any kind or character, direct or indirect, whether accrued, absolute, contingent
or otherwise, other than liens granted to GE. The aggregate purchase price,
including applicable Illinois sales tax, for the Sale-Leaseback Equipment shall
be equal to Five Million Seven Hundred Four Thousand One Hundred Twelve Dollars
and Nine Cents ($5,704,112.09) ("Purchase Price"). MICA shall deliver an
invoice to GE in the amount of the Illinois sales tax payable in connection with
the sale of the Sale-Leaseback Equipment to GE. GE shall promptly deliver a
check to MICA in the amount of such sales tax. The remainder of the Purchase
Price shall be paid by GE by cancelling MICA or the applicable Subsidiary's
remaining obligation under the Installment Agreements pursuant to the terms of
the "Installment Sale Termination Agreements" (as defined below). Concurrent
with the transfer of the Sale-Leaseback Equipment, GE and MICA shall (i) execute
and deliver installment sale termination agreements in a form substantially as
set forth in Schedule 2.2(A) hereto ("Installment Sale Termination Agreements")
with respect to each of the Installment Agreements, and (ii) execute and deliver
lease and service agreements in a form substantially as set forth in Schedule
2.2(B) hereto (the "MaxiService Agreements"), whereby GE shall lease to MICA or
one of its Subsidiaries the Sale-Leaseback Equipment and provide service
thereon, all as more specifically set forth in the MaxiService Agreements.
Payment terms under the MaxiService Agreements with respect to the Sale-
Leaseback Equipment shall be as set forth in Exhibit 2.2 hereto.
2.3 Note. On the Closing Date, MICA shall execute and deliver to GE its
promissory note (the "Note") in the principal amount of Seven Million Four
Hundred Forty-Two Thousand Six Hundred Sixteen Dollars and Thirty-Eight Cents
($7,442,616.38) in the form attached hereto as Schedule 2.3, which amount
corresponds to the sum of (i) the aggregate indebtedness of MICA to GE under the
November 1, 1992 promissory note (the "1992 Note") made by MICA and payable to
GE in the original principal amount of Three Million Three Hundred Thirty-Four
Thousand Four Hundred Eighteen and 94/100 Dollars ($3,334,418.94) and (ii) all
payments due and owing to GE from MICA and its Affiliates under all service
agreements and equipment leases related to the "Fee For Service" segment of
MICA's business (as identified on Exhibit 2.3 hereto) for the months of March,
April and May 1993 (the "Deferred Payments"). GE's acceptance of the Note shall
reflect GE's deferral of the Deferred Payments and waiver of all penalties and
events of default under the service agreements and equipment leases identified
on Exhibit 2.3 arising from the nonpayment of such amounts in March, April and
May 1993. GE shall return the 1992 Note to MICA marked "Superseded" on the face
thereof concurrently with its receipt of the Note.
2.4 Warrant. On the Closing Date, MICA shall issue and deliver to GE its
common stock warrant (the "Warrant"), in the form attached hereto as Schedule
2.4, to acquire 2,300,000 shares of its common stock, no par value, at an
exercise price per share equal to (i) $0.45 plus (ii) the last reported sales
price of MICA's common stock, no par value, on NASDAQ on the date immediately
preceding the Closing Date. The Warrant shall be exercisable from time to time
commencing on the second anniversary of the Closing Date and ending at 5:00
p.m., California time on the fifth anniversary of the Closing Date.
2.5 Security Interest. To secure the performance of the Liabilities by
MICA and its Subsidiaries, MICA shall grant and shall cause its Subsidiaries to
grant a security interest to GE in their respective accounts receivable and in
all equipment purchased from and financed by GE or leased pursuant to capital
leases by them from GE or one of its Affiliates, free and clear of all Liens,
except the Lien of Xxxxxx Bank in the accounts receivable of MICA Imaging and
any Liens granted to GE, pursuant to that certain Security Agreement in the form
attached hereto as Schedule 1.31. Notwithstanding the foregoing, nothing in
this Agreement or in the Security Agreement shall be construed to give GE any
right to the accounts receivable of any joint venture or partnership in
existence as of the Closing Date which is an Affiliate of MICA as identified in
Exhibit 4.1(L). Pursuant to the Security Agreement, GE shall agree, in the
exercise of its reasonable discretion, to subordinate its security interest in
the accounts receivable, except those of MICA Imaging, to a new lender who
provides new capital to MICA.
2.6 One Obligation. All indebtedness, obligations, and Liabilities of
MICA to GE under this Agreement and the Note shall constitute one obligation
secured by GE's Lien upon all Collateral and by all other Liens, security
interests, claims and encumbrances heretofore, now, or at any time or times
hereafter granted by MICA to GE. MICA agrees that all of the rights of GE set
forth in this Agreement shall apply to any modification of or supplement to this
Agreement except as otherwise specifically provided in any such modification or
supplement.
2.7 Term. The provisions of this Agreement shall be in effect until the
Termination Date, unless terminated sooner in accordance with the provisions of
this Agreement. Notwithstanding any provision herein to the contrary, MICA and
GE expressly agree that the Note shall be due and payable at any time any other
Liability of MICA to GE is accelerated or terminated (except by prepayment or
final payment on the due date thereof) in accordance with this Agreement or any
other agreement evidencing such Liability, as the case may be.
2.8 Application of Payments and Collections. Upon the occurrence and
during the continuance of any Default or Event of Default, MICA irrevocably
waives the right to direct the application of any and all payments and
collections at any time or times hereafter received by GE from or on behalf of
MICA, and MICA irrevocably agrees that GE shall have the continuing exclusive
right to apply and reapply any and all such payments and collections received at
any time or times hereafter by GE or its agents against the Liabilities in such
manner as GE may deem advisable, notwithstanding any entry by GE upon any of its
books and records.
3. CONDITIONS PRECEDENT
3.1 Conditions Precedent of GE to Closing. GE's obligation to close the
transactions contemplated hereby and to perform its obligations as of the
Closing Date shall be, at the option of GE, subject to satisfaction of each of
the following conditions (which may be waived specifically in writing by GE in
whole or in part) at or prior to the Closing Date:
(A) Release and Settlement Agreement. GE, MICA and MICA's
Subsidiaries shall have executed and delivered a Release and Settlement
Agreement in the form attached as Schedule 3.1(A) ("Release and Settlement
Agreement") hereto whereby MICA and its Subsidiaries shall release any and all
claims against GE except those involving equipment and maintenance problems not
within their knowledge as of the Closing Date.
(B) Obligations. All obligations of MICA and its Affiliates under
all leases, agreements and instruments with or payable to GE that have accrued
as of the Closing Date shall have been satisfied in full by MICA or its
Affiliates, except as otherwise specifically provided in this Agreement or the
Lease Termination Agreements.
(C) Warranties True; Covenants Performed. Each of the
representations and warranties made by MICA and set forth in this Agreement and
the Exhibits attached hereto or otherwise made in writing in connection herewith
shall be true and correct in all material respects at and as of the Closing
Date, and the covenants required by this Agreement to be performed and complied
with by MICA as of the Closing Date shall have all been performed and complied
with in all material respects.
(D) MICA Consents, Approvals and Authorizations. MICA shall have
obtained all consents, approvals and authorizations of third parties necessary
in connection with the valid execution, delivery and performance of this
Agreement and the Scheduled Documents.
(E) Signing of Instruments. MICA and its Subsidiaries shall have
executed and delivered all documents and instruments required to be executed by
them pursuant to the provisions of this Agreement, including, without
limitation, all of the Scheduled Documents.
(F) Unfavorable Action or Proceeding. On the Closing Date no action
or proceeding shall be pending or threatened against MICA wherein an unfavorable
judgment, decree or order would, in GE's reasonable opinion, prevent or make
unfavorable the carrying out of this Agreement, would cause the transactions
contemplated by this Agreement to be rescinded, or would have a Material Adverse
Effect on MICA. In the event of the receipt of any communication from any
Person or any other notice (a copy of which communication or notice shall be
promptly delivered to GE) prior to the Closing Date, which communication or
notice shall in the reasonable opinion of GE threaten such action or proceeding,
GE may cancel this Agreement by giving written notice to MICA and shall
thereupon be released from any and all liability related to this Agreement.
(G) Officer's Certificate. GE shall have received a certificate of
the President of MICA, dated as of the Closing Date, in the form attached hereto
as Schedule 3.1(G) and certifying to GE the accuracy of the representations and
warranties set forth in this Agreement and compliance with MICA's covenants set
forth in this Agreement that are required to be performed as of the Closing
Date.
(H) Certificate of Incumbency. GE shall have received a certificate
of the corporate Secretary of MICA dated as of the Closing Date and certifying
to GE (i) that attached thereto is a true and complete copy of the Articles of
Incorporation and the Bylaws of MICA, as in effect on the date of such
certification, (ii) as to the incumbency and genuineness of the signature of the
officers of MICA from the date hereof to the Closing Date and bearing the
authentic signatures of all such officers who shall execute this Agreement and
the Scheduled Documents, (iii) as to the resolutions of the Board of Directors
of MICA authorizing the execution, delivery and performance of this Agreement
and the Scheduled Documents, and (iv) that such resolutions have not been
amended or rescinded and remain in full force and effect.
(I) Good Standing Certificates. GE shall have received a copy of the
Articles of Incorporation of MICA and MICA Imaging, Inc., an Illinois
corporation ("MICA Imaging"), and all amendments thereto, certified by the
Secretaries of State of their respective States of incorporation, and good
standing certificates for each such corporation, issued by the Secretaries of
State of the States where they are qualified to do business, as set forth in
Exhibit 4.1(A).
(J) Default. There shall exist no Default or Event of Default on the
Closing Date under this Agreement.
(K) Debt Holder Concessions. Holders of not less than seventy-five
percent (75%) of MICA's $11 million convertible subordinated debentures due in
1999 shall have agreed to the concessions set forth in Exhibit 3.1(K).
(L) Automatic Drafting. MICA and each of its Subsidiaries shall have
executed and delivered to GE an Authorization Agreement for Pre-Arranged
Payments (Debits) in the form attached as Schedule 3.1(L) hereto whereby GE
shall be authorized to debit the account or accounts of MICA and its
Subsidiaries that are identified in Exhibit 3.1(L) for payments due each month
under all leaseline, maxiservice, lease agreements, installment and/or service
contracts with GE.
(M) Exhibits and Schedules. The provisions of all Exhibits and
Schedules attached to this Agreement that have not been completed as of the date
of this Agreement shall be acceptable to GE in its reasonable discretion.
Further, GE shall have been given the opportunity through and including the
Closing Date to update and amend the Exhibits attached to this Agreement;
provided, however, that any amendments to such Exhibits made by GE shall be
acceptable to MICA in its sole discretion.
(N) Xxxxxx Bank Consent. Xxxxxx Bank shall have provided its written
consent to the terms of the Security Agreement.
3.2 Conditions Precedent of MICA to Closing. MICA's obligation to close
the transactions contemplated hereby and to perform its obligations as of the
Closing Date shall be, at the option of MICA, subject to satisfaction of the
condition (which may be waived specifically in writing by GE in whole or in
part) at or prior to the Closing Date, that the provisions of all Exhibits and
Schedules attached to this Agreement that have not been completed as of the date
of this Agreement are acceptable to MICA in its reasonable discretion. Further,
MICA shall have been given the opportunity through and including the Closing
Date to update and amend the Exhibits attached to this Agreement; provided,
however, that any amendments to such Exhibits made by MICA shall be acceptable
to GE in its sole discretion.
4. WARRANTIES AND REPRESENTATIONS OF MICA
4.1 Warranties and Representations. MICA warrants and represents to GE
that:
(A) Existence and Qualification; Power; Good Standing. MICA and each
of its Subsidiaries are corporations duly organized and validly existing under
the laws of the States of their incorporation. MICA and MICA Imaging are in
good standing under the laws of the States of their incorporation. MICA and
MICA Imaging have the full corporate power and authority to own, lease and
operate their respective properties and assets as presently owned, leased and
operated, and to carry on their business as it is now being conducted. MICA and
MICA Imaging are duly qualified and in good standing to do business in each
jurisdiction in which the character of their properties or the character of
their business requires such qualification, license or good standing. Exhibit
4.1(A) sets forth MICA's chief executive office, (ii) principal place of
business, and (iii) a complete list of all jurisdictions in which MICA and MICA
Imaging are qualified to do business.
(B) Authority; Binding Obligations. MICA and each of its
Subsidiaries have the requisite corporate power and authority, and have taken
all necessary corporate and other actions, necessary to enter into, execute,
deliver and perform this Agreement and all the Scheduled Documents, as
applicable. This Agreement has been, and the Scheduled Documents at Closing
will have been, duly executed and delivered by MICA and its Subsidiaries, as
applicable, and are the legal, valid and binding obligations of MICA and such
Subsidiaries enforceable against MICA and the Subsidiaries, as applicable, in
accordance with their respective terms, subject as to the enforcement of
remedies only, to limitations imposed by general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity) and the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general application relating
to or affecting creditors' rights generally. To the best knowledge of MICA, the
Security Agreement, along with all action required to fully perfect GE's
security interest thereunder as of the Closing Date, creates and constitutes a
valid and perfected security interest in and Lien on the now owned or existing
Collateral in accordance with the priorities set forth in the Security
Agreement, enforceable against all third parties, and, to the best knowledge of
MICA, will create a valid and perfected security interest in and Lien on all
remaining Collateral when acquired by MICA or any of its Subsidiaries, in
accordance with the priorities set forth in the Security Agreement, enforceable
against all third parties. All filings and other actions necessary or desirable
to protect and perfect such Lien and security interest in each item of the
Collateral have been duly made or taken or will be duly made or taken when such
Collateral is acquired by MICA or any of its Subsidiaries.
(C) Compliance with Laws/Agreements. The execution, delivery and
performance by MICA of this Agreement shall not, by the lapse of time, the
giving of notice, or otherwise, directly or indirectly (i) constitute a
violation of any applicable law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award presently in effect having
applicability to MICA, (ii) result in a default under or a breach of any
provision contained in MICA's Articles of Incorporation or By-Laws or, any
indenture, loan, mortgage, lease, or deed of trust, agreement relating to the
borrowing of monies, instrument, document or, to MICA's knowledge, any agreement
to which MICA is now a party or by which it is bound, the violation or breach of
which would in any of such cases have a Material Adverse Effect on MICA or
result in the creation or imposition of any material Lien, charge or encumbrance
upon any of the Collateral. MICA is not a party to, or otherwise subject to,
any provision contained in any instrument evidencing Indebtedness of MICA, any
agreement relating thereto, or any other contract or agreement (including its
charter) that limits the amount of, or otherwise imposes restrictions on, the
incurring of obligations by MICA or any of its Subsidiaries that would have a
Material Adverse Effect on the ability of MICA or any of its Subsidiaries to
perform its obligations hereunder or under any Scheduled Document.
(D) Absence of Defaults. Neither MICA nor any of its Subsidiaries
has breached any material provisions of, or is in default in any material
respect under the terms of, or has engaged in any activity which would cause
revocation or suspension of, any governmental license, franchise, permit,
authorization, and, to MICA's knowledge, no action or proceeding seeking or
contemplating the revocation or suspension of any thereof is pending or
threatened.
(E) Licenses and Permits. MICA and its Subsidiaries possess and are
in good standing with respect to all licenses (including without limitation
lending licenses), franchises, permits and other authorizations materially
necessary to continue to conduct their business as heretofore conducted.
(F) Consents and Approvals. Except as set forth in Exhibit 4.1(F)
attached hereto, no consent, approval, permit, waiver, authorization or other
action of or by any court, governmental or nongovernmental Person or entity, is
required or will be necessary in connection with the execution, delivery or
performance of this Agreement or any other document contemplated hereby by MICA
or any of its Subsidiaries. MICA shall be responsible for and shall take any
and all steps necessary, at its sole expense, to obtain all such consents,
approvals and authorizations prior to the Closing Date and shall keep GE
informed as to the status of obtaining such consents. All such consents,
approvals and authorizations shall be approved as to form by GE in writing.
(G) Liabilities. MICA has no Indebtedness and has not guaranteed the
obligations of any Person, except (i) as shown in the financial statements
delivered to GE by MICA, including all footnotes thereto, (ii) for trade
payables arising in the ordinary course of its business since the date of the
financial statements delivered to GE, and (iii) for money borrowed and other
financial accommodations from GE.
(H) Title to Collateral; Location of Equipment. On the Closing Date
(or with respect to after-acquired property, on the date acquired), MICA and its
Subsidiaries will have good, indefeasible, and merchantable title to and
ownership of the Collateral (except Collateral that is leased and not owned by
MICA and/or its Subsidiaries), free and clear of all Liens except those of GE
and those set forth in Exhibit 4.1(H) attached hereto, which Liens and GE's Lien
will be in the priority set forth in the Security Agreement. As of the date of
this Agreement and the Closing Date, the Collateral and all related books and
records, including computer programs, printouts, and other computer materials
are located only at the locations set forth in Exhibit 4.1(H).
(I) Compliance with Laws. Except as set forth in Exhibit 4.1(I)
attached hereto, MICA and its Subsidiaries have materially complied with and are
not in default in any material respect under any law, ordinance, requirement,
regulation or order applicable to their business, operations or properties, and
MICA has received no notice and is unaware of any claimed default with respect
to the foregoing.
(J) Environmental Matters.
(i) To MICA's knowledge, neither MICA, nor any of its
Subsidiaries, nor any previous owner, tenant, occupant, or user of any real
property now or previously owned or leased by MICA or any of its Subsidiaries
has used, generated, manufactured, installed, released, discharged, stored,
handled, transported, or disposed of any Hazardous Materials, on, under, in or
about the site of any such real property; and
(ii) To MICA's knowledge, MICA's and its Subsidiaries' use of
such real property complies with all applicable environmental laws and
governmental regulations, including all applicable federal, state, and local
laws, ordinances, and regulations pertaining to air and water quality, Hazardous
Materials, waste disposal, or other environmental matters, including the Clean
Water Act, the Clean Air Act, the Federal Water Pollution Control Act, the Solid
Waste Disposal Act, the Resource Conservation Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, and the rules,
regulations, and ordinances of the city and county in which such property is
located, the Environmental Protection Agency, and all other applicable federal,
state, regional, and local agencies and bureaus, where the failure to so comply
would have a Material Adverse Effect either as to the value of such real
property, as to MICA's or its Subsidiaries' occupancy or use of such real
property, or as to MICA or its Subsidiaries.
(K) Insurance. Set forth in Exhibit 4.1(K) attached hereto is a list
of all insurance of any nature maintained by MICA including descriptions of the
coverage, policy limits, and deductibles with respect thereto. All such
policies, unless otherwise specified, are in full force and effect and provide
coverage of such risks and for such amounts as is required by this Agreement.
There has not occurred any accident or loss or any other event known to MICA,
other than those listed in Exhibit 4.1(K), that might reasonably be expected to
result in (a) the cancellation or reduction of any insurance policies in effect,
which cancellation would, individually or in the aggregate, materially diminish
such insurance coverage, or (b) any material premium adjustment with respect to
any insurance policies identified in Exhibit 4.1(K).
(L) Joint Ventures. Except as set forth in Exhibit 4.1(L) attached
hereto, neither MICA nor any of its Subsidiaries is engaged in any joint venture
or partnership with any Person.
(M) Subsidiaries and Affiliates. MICA has no Subsidiaries and
Affiliates except as set forth in Exhibit 4.1(M) attached hereto.
(N) Financial Statements. The financial statements, interim
financial statements and balance sheets of MICA as of December 31, 1992
previously delivered by MICA to GE and required to be delivered by MICA to GE
during the term of this Agreement under Section 6.1: (i) are and will be true,
complete and correct in all material respects, (ii) present and will present
fairly and accurately the financial condition of MICA and its Subsidiaries,
respectively, and the results of their respective operations at the dates and
for the periods indicated, and (iii) have and will have been prepared in
conformity with GAAP, applied consistently for the periods specified, except
that the interim financial statements need not contain any of the footnotes
required to comply with GAAP. From and after December 31, 1992, MICA has not
made any changes in its accounting methods or practices.
(O) Litigation or Claims. Except as set forth in Exhibit 4.1(O)
attached hereto (said matters set forth in Exhibit 4.1(O) being collectively
referred to herein as "Pending Litigation"), neither MICA nor MICA's
Subsidiaries, properties, businesses or assets is engaged in or a party to or
threatened with any suit, action, proceeding, inquiry, enforcement action,
investigation, claim or demand or legal, administrative, arbitration or other
method of settling disputes or disagreements, and MICA, to the best of its
knowledge after due investigation, does not know, anticipate or have notice of
any basis for any such action. MICA has not received notice of any
investigation, threatened or contemplated, by any federal or state governmental
authority or agency, that remains unresolved. None of the Pending Litigation
has created a Lien or a claim therefor against any of MICA's Property,
including, without limitation, the Collateral.
(P) Taxes. Except as set forth in Exhibit 4.1(P) attached hereto,
all federal, state, county and other tax returns, reports and declarations of
every nature (including, without limitation, income, employment, payroll,
excise, Property, sales and use taxes, unemployment contributions) required to
be filed by or on behalf of, or with respect to MICA and its assets, including,
without limitation, the Collateral have been duly and timely filed, and will
continue to be duly and timely filed (within the time periods required by law)
by MICA, all such returns or reports are, or will be at the time of filing,
complete and accurate and in accordance with the tax laws applicable thereto and
accurately reflect all such taxes, charges and assessments required to be paid
by MICA for the periods covered thereby. No extension of time or requests
therefor or waiver thereof, have been made or are presently pending or effective
with respect to such reports, returns or taxes that will have a Material Adverse
Effect on MICA. All taxes shown to be due and payable on such returns and
reports and any deficiency, assessments, penalties and interest thereon have
been paid. All required tax estimates, deposits, prepayments and the like for
current periods have been properly made. There are no tax liens on any of the
Collateral and, to MICA's knowledge, no basis exists for the imposition of any
such liens. The accrual for taxes reflected in the balance sheets of MICA is in
the aggregate adequate to cover any and all federal, state, local or foreign tax
liabilities (whether or not disputed) of MICA for the period ended on the date
thereof and all prior periods. MICA has no dispute with any taxing authority as
to taxes of any nature which affects the subject matter of this Agreement.
There is no unassessed tax deficiency proposed or, to the best of MICA's
knowledge, threatened against MICA, and no action, proceeding or audit of any of
MICA's returns or reports by any governmental authority is pending or, to MICA's
knowledge, threatened by any governmental authority for assessment, reassessment
or collection of any taxes or assessments affecting MICA that will have a
Material Adverse Effect on MICA.
(Q) Brokers. Except as set forth in Exhibit 4.1(Q), all
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried out without the intervention of any person on behalf of MICA
in such manner as to give rise to any claim against GE, its Affiliates or MICA
for any brokerage or finder's fee commission, fee or similar compensation.
(R) Transfer for Value. Section 3440.1(k) of the California Civil
Code applies to the transfer of the Sale-Leaseback Equipment contemplated
hereby. MICA acknowledges that the concessions granted by GE pursuant to this
Agreement and the Scheduled Documents constitute reasonably equivalent value for
the transfer of the Sale-Leaseback Equipment and the other consideration
delivered by MICA and its Subsidiaries hereunder and under the Scheduled
Documents.
(S) No Untrue or Inaccurate Representations or Warranties. All
statements contained in any certificate, financial statement or other instrument
delivered by or on behalf of MICA pursuant to or in connection with this
Agreement or the other documents contemplated by this Agreement (including but
not limited to any such statements made in or in connection with any amendment
hereto) shall constitute representations and warranties made by MICA under this
Agreement. The representations and warranties of MICA contained in each
Scheduled Document and each Exhibit or other written statement delivered
pursuant to this Agreement, or in connection with the transactions contemplated
hereby, are, as of the date when given, accurate, correct and complete, and do
not contain any untrue statement of material fact or omit to state a material
fact necessary in order to make the statements and information contained therein
not misleading.
4.2 Survival of Warranties and Representations. All representations and
warranties of MICA contained in this Agreement shall survive the execution,
delivery, and acceptance of this Agreement by the parties hereto and the
consummation of the transactions described herein or related hereto and shall
expire on the Termination Date.
5. COVENANTS AND CONTINUING AGREEMENTS
5.1 Affirmative Covenants of MICA. MICA covenants that at all times
during the Term:
(A) Automatic Drafting. MICA shall maintain the automatic drafting
arrangement described in Section 3.1(L) hereof and shall adequately fund the
accounts utilized in connection therewith as necessary to pay the Liabilities
when due and owing.
(B) Maintenance of Property. MICA shall, at its sole cost and
expense, keep and maintain, insure, preserve and protect its Property at any
time owned by it and useful or necessary for its business in good working order
and condition, ordinary wear and tear excepted, and shall use reasonable efforts
to not permit any waste of its Property. MICA shall notify Lender promptly of
any event or occurrence causing a material loss or decline in value of its
Property and the estimated (or actual, if available) amount of such loss or
decline.
(C) Audit Rights. MICA shall permit Lender and its agents and
representatives to enter upon MICA's premises at any time during usual business
hours (or at such other times as may be reasonably requested by Lender) upon at
least three (3) Business Days prior written notice to MICA, exercisable as
frequently as Lender or any designated representative of Lender may reasonably
request, for the purpose of inspecting all records, files and books of account
of MICA (and to make extracts from such records, files and books of account at
Lender's expense). All executive officers and other officers of MICA charged
with knowledge of the financial condition of MICA shall make themselves
available at all reasonable times to discuss, and provide all reasonable
information requested by Lender with respect to MICA's business.
(D) Compliance with Agreements. MICA and its Subsidiaries shall
perform, within all required time periods (after giving effect to any applicable
grace periods), all of their obligations and enforce all of its rights under
each agreement to which they are a party, including any leases to which they are
a party, where the failure to so perform and enforce would have a Material
Adverse Effect upon MICA. Neither MICA nor any of its Subsidiaries shall
terminate or modify in any manner adverse to MICA any provision of any agreement
or lease to which it is a party which termination or modification could
reasonably be expected to have a Material Adverse Effect upon MICA or the
Collateral.
(E) Payment of Taxes. MICA shall use its best efforts to prepare and
file all tax returns and pay and discharge at or before their due date, all
taxes, assessments and other similar governmental levies, charges, fees and
imposts, all liabilities for judgments, assessments and other governmental
charges and all other obligations for the payment of money, which, if unpaid
might become a Lien on Property of MICA or its Subsidiaries, except those being
contested in good faith by appropriate proceedings if by reason of such
nonpayment and contest no material item or portion of Property of MICA or its
Subsidiaries, including the Collateral, taken as a whole, is in jeopardy of
being seized, levied upon or forfeited prior to judgment. MICA shall maintain,
in accordance with GAAP, appropriate reserves for the accrual of any of the
foregoing obligations and liabilities.
(F) Insurance; Payment of Premiums. MICA shall, at its sole cost and
expense, maintain in full force and effect the insurance coverages set forth on
Exhibit 4.1(K).
5.2 Negative Covenants of MICA. Without GE's prior written consent,
which GE may or may not give, in its sole discretion (except as otherwise
expressly provided in Section 5.4 hereof to the contrary), MICA covenants as
follows:
(A) Future Subsidiaries. Except as set forth in Exhibit 5.2(A)
attached hereto, MICA shall not create, form or otherwise acquire any Subsidiary
unless such Subsidiary is separate and separately funded. MICA shall not make,
nor shall it permit any Subsidiary to make, any loan or advances of money to any
Person or any investment, directly or indirectly (by way of transfer of
Property, contributions to capital, purchase of stock or securities or evidences
of Indebtedness, acquisition of the business or assets, or otherwise), in any
Person in amounts exceeding Three Hundred Thousand Dollars ($300,000) in any
single transaction or series of related transactions or One Million Dollars
($1,000,000) in the aggregate. Requests by MICA to take any action that is not
permitted by this Section 5.2(A) shall comply with Section 5.4 hereof and shall
be approved or disapproved by GE in accordance with Section 5.4 hereof within
ten (10) Business Days following GE's receipt of MICA's request for consent.
(B) Distributions. MICA shall not make any Distributions. Requests
by MICA to take any action that is not permitted by this Section 5.2(B) shall
comply with Section 5.4 hereof and shall be approved or disapproved by GE in
accordance with Section 5.4 hereof within ten (10) Business Days following GE's
receipt of MICA's request for consent.
(C) Capital Expenditures. Neither MICA nor any of its Subsidiaries
shall make capital expenditures (including expenditures for capitalized leases
but excluding expenditures for routine repairs and replacements) in excess of
Three Hundred Thousand Dollars ($300,000) in any single transaction or series of
related transactions or One Million Dollars ($1,000,000) in the aggregate during
any fiscal year. Requests by MICA to take any action that is not permitted by
this Section 5.2(C) shall comply with Section 5.4 hereof and shall be approved
or disapproved by GE in accordance with Section 5.4 hereof within ten (10)
Business Days following GE's receipt of MICA's request for consent.
(D) Operating Leases. Neither MICA nor any of its Subsidiaries shall
become the lessee under any operating lease if the aggregate payments thereunder
during any one fiscal year exceed Three Hundred Thousand Dollars ($300,000).
Requests by MICA to take any action that is not permitted by this Section 5.2(D)
shall comply with Section 5.4 hereof and shall be approved or disapproved by GE
in accordance with Section 5.4 hereof within ten (10) Business Days following
GE's receipt of MICA's request for consent.
(E) Indebtedness. Except for Indebtedness outstanding on the Closing
Date, MICA shall not create, incur, assume, permit to exist or guarantee, and
will not permit any of its Subsidiaries to create, incur, assume, permit to
exist or guarantee, more than Three Hundred Thousand Dollars ($300,000) of
Indebtedness in connection with any single transaction or series of related
transactions or One Million Dollars ($1,000,000) in the aggregate in any one
fiscal year. Requests by MICA to take any action that is not permitted by this
Section 5.2(E) shall comply with Section 5.4 hereof and shall be approved or
disapproved by GE in accordance with Section 5.4 hereof within ten (10) Business
Days following GE's receipt of MICA's request for consent.
(F) Disposition of Property. Neither MICA nor any of its
Subsidiaries shall make any Disposition of its Property, whether now owned or
hereafter acquired, which exceeds One Hundred Fifty Thousand Dollars ($150,000)
in any single transaction or series of related transactions; provided that (i)
no Disposition of Property by MICA or one of its Subsidiaries in excess of Fifty
Thousand Dollars ($50,000) shall be made if the aggregate amount of all
Dispositions of Property by MICA and its Subsidiaries during that fiscal year
exceeds One Million Dollars ($1,000,000), and (ii) no Disposition of Receivables
(as that term is defined in the Security Agreement) constituting part of the
Collateral may be made. Requests by MICA to take any action that is not
permitted by this Section 5.2(F) shall comply with Section 5.4 hereof and shall
be approved or disapproved by GE in accordance with Section 5.4 hereof within
ten (10) Business Days following GE's receipt of MICA's request for consent.
5.3 Survival of Liabilities Upon Termination of Agreement. Except as
otherwise expressly provided in this Agreement, no termination or cancellation
(regardless of cause or procedure) of this Agreement shall in any way affect or
impair the powers, obligations, duties, rights, and Liabilities of MICA or GE
that accrued and remain unperformed as of the Termination Date.
5.4 Requests for GE's Consent. Any request by MICA for GE's written
consent prior to taking any action prohibited by Subsections 5.2(A), 5.2(B),
5.2(C), 5.2(D), 5.2(E), and 5.2(F) hereof as described in such Subsections,
shall be in writing and shall include a detailed description that is reasonably
acceptable to GE of the proposed action to be taken by MICA. GE shall approve
or disapprove of such request within the number of Business Days provided in the
respective Subsections identified in Section 5.2 hereof, which approval shall
not be unreasonably denied; provided, however, that GE may reasonably request
additional information regarding the proposed action to be taken by MICA and
shall have an additional period of ten (10) Business Days following GE's receipt
of all such information to consider such information.
6. INFORMATION AND REPORTING REQUIREMENTS
Until the Termination Date, unless GE shall otherwise consent in writing,
MICA shall furnish to GE at GE's address provided in Section 8.11, the
following:
6.1 Financial Statements. MICA shall prepare, or cause the preparation
of, and deliver to GE the following financial statements that have been prepared
in accordance with GAAP:
(A) Audited Year-End Financial Statements. For each fiscal year of
MICA, as soon as available, but not later than one hundred five (105) days after
the end of MICA's fiscal year, MICA shall deliver the audited consolidated
balance sheet of MICA as at the end of such fiscal year together with related
consolidated statements of operations, stockholders' equity and cash flows for
the twelve (12) month period then ended, setting forth in comparative form the
figures as at the end of and for the previous fiscal year, in each case
accompanied by an auditor's report thereon that is certified by a firm of
independent certified public accountants of recognized national standing which
report shall be in scope and substance reasonably satisfactory to GE, and, as
soon as available, but not later than seventy-five (75) days after the close of
MICA's fiscal year, an unaudited preliminary draft of the balance sheet of MICA
as at the end of such fiscal year together with preliminary drafts of such
related statements of income and retained earnings and cash flows. In case any
Affiliate shall be consolidated in the financial statements of MICA, the
statements referred to in this Section 6.1 shall be on a consolidated and
consolidating basis, in accordance with GAAP.
(B) Quarterly Financial Statements. As soon as available, but not
later than sixty (60) days after the end of each calendar quarter of MICA's
fiscal year, MICA shall deliver the unaudited balance sheet of MICA as at the
end of such quarterly period and the related statements of income and retained
earnings, cash flows and changes in financial position of MICA for the elapsed
portion of the fiscal year ended with the last day of such quarterly period,
setting forth in each case in comparative form the figures for the corresponding
periods of the previous fiscal year, prepared in accordance with GAAP, subject
only to normal year-end auditing adjustments, and in form and substance as GE
may reasonably request.
(C) Monthly Financial Statements. As soon as available, but not
later than fifteen (15) business days after the end of each calendar month, MICA
shall deliver detailed statements of cash flow and volume reports of scans by
unit as at the end of such month.
(D) Officer's Certificate. Concurrently with each delivery of said
annual audited financial statements and of the interim financial statements
referred to in subsections 6.1(B) and (C) hereof, MICA shall deliver a
certificate of MICA's chief financial officer stating that (1) in his opinion,
such financial statements are complete and correct and present fairly, in
accordance with GAAP (except for changes that have been approved in writing by
MICA's accountants or that do not have a Material Adverse Effect on MICA)
applied consistently with those followed in the preparation of the audited
consolidated financial statements of MICA and that have been consistently
applied throughout the period involved, the financial position of MICA as at the
end of such period and the results of operations and the changes in the
financial position of MICA for such period and for the elapsed portion of the
fiscal year ended with the last day of such period, in each case on the basis
presented and subject only to normal year-end auditing adjustments specified in
such financial statements (2) a review of the activities of MICA and its
Subsidiaries during the fiscal year or interim period covered by such financial
statements, as the case may be, has been made under his supervision with a view
to determining whether MICA has observed, performed and fulfilled each and every
covenant, obligation and agreement contained in this Agreement and that he is
not aware of the occurrence or existence of any condition or event that
constitutes a Default or an Event of Default, or, if he is aware of such
condition or event, the nature thereof, when it occurred, whether it is
continuing and the steps being taken by MICA with respect to such event or
failure.
6.2 Public Documents. Promptly after the sending or filing thereof, as
the case may be, copies of any definitive proxy statements, financial statements
or reports which MICA sends to its shareholders; and copies of any regular,
periodic and special reports or registration statements which MICA files with
the Securities and Exchange Commission or any governmental authority which may
be substituted therefor, or any national securities exchange.
6.3 Other Reports. From time to time and promptly upon each request,
such data, certificates, reports, statements, opinions of counsel, documents or
further information regarding the Collateral or the business, assets, financial
condition or results of operation of MICA and its Affiliates as GE may
reasonably request.
6.4 Certain Notices. MICA shall notify GE in writing promptly, but in no
event later than five (5) Business Days upon learning of (i) any litigation
commenced against MICA, its officers, directors, shareholders, or an Affiliate
of MICA, that may have a Material Adverse Effect upon MICA, the Collateral or
GE's Lien on the Collateral, whether or not the claim is considered by MICA to
be covered by insurance, and MICA shall also notify GE in writing promptly upon
learning of any threatened litigation against MICA, or an Affiliate of MICA, in
which the claim might have a Material Adverse Effect on MICA, the Collateral or
GE's Lien on the Collateral; (ii) any Default or Event of Default known to MICA,
or any event which with the passage of time or giving of notice or both would
constitute a Default or Event of Default by MICA; (iii) any default by MICA or
an Affiliate under any material agreement other than this Agreement or the
Scheduled Documents to which any of them is a party or by which any of them or
any of their properties may be bound that is reasonably likely to have a
Material Adverse Effect on MICA and the Affiliates as a whole; (iv) any penalty
assessed against MICA, or an Affiliate of MICA, by any federal, state, or local
government agency; (v) any notice received from any federal, state, or local
government agency of any violation by MICA, or an Affiliate of MICA, of any
federal, state, or local law or regulation, the commencement of any proceedings
or investigations by or before any governmental on nongovernmental body
affecting MICA, or an Affiliate of MICA, or any of their respective properties,
assets or businesses, in which the damages claimed or the potential liability
would be reasonably likely to exceed Fifty Thousand Dollars ($50,000) or which
would be reasonably likely individually or in the aggregate with other actions,
suits and proceedings, to have a Material Adverse Effect on MICA or its
Affiliates; (vi) any violation by MICA, or an Affiliate of MICA, of any such law
or regulation of which MICA becomes aware, which violation could result in the
assessment of a penalty or the revocation of a registration or license of MICA,
or an Affiliate of MICA, by any federal, state, or local government agency; and
(vii) any other event or condition having a Material Adverse Effect on (a) MICA,
(b) the aggregate value of the Collateral, or (c) the security interests created
hereunder.
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
7.1 Event of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default":
(A) MICA shall fail to make any payment of principal of, or interest
on, or any other amount owing in respect of the Note, or any of the other
Liabilities within ten (10) days of the date such payment is due and payable and
such Default continues for a period of five (5) days after notice of nonpayment
is received by MICA from GE;
(B) Except as provided in Section 7.1(A) above, MICA or one of its
Subsidiaries shall fail or neglect to perform, keep or observe, in any material
respect, any other term, provision, condition, covenant, duty or obligation
contained in this Agreement or in any of the other Scheduled Documents which is
required to be performed, kept, or observed by MICA or one of its Subsidiaries
and, with respect to any breach of any condition, covenant, duty or obligation,
and such breach shall not have been remedied to GE's satisfaction within ten
(10) days after GE has delivered notice of such breach to MICA;
(C) Any event under any agreement to which MICA or one of its
Subsidiaries is a party shall occur, which event (i) if based on the failure to
pay any amount (whether of principal, interest, or otherwise) as and when due,
(x) has caused any Person to demand payment of any part of MICA's Indebtedness
in excess of One Hundred Thousand Dollars ($100,000) before such Indebtedness
would otherwise be due, or (y) would deprive MICA or any of its Subsidiaries of
any rights to the Collateral, or (ii) if based on any other failure, event or
condition, is the basis of any notice to MICA accelerating payment of such
Indebtedness or enforcing rights in such Collateral, in any case, resulting in a
Material Adverse Effect;
(D) Any representation or warranty contained in this Agreement, any
Scheduled Document or any statement, report, financial statement, or certificate
made or delivered by MICA or any of its officers, employees, or agents to GE
shall be untrue, incorrect, or incomplete in any material respect, or shall be
misleading in any material respect, in each case, as of the time when made;
(E) The Security Agreement after delivery thereof shall for any
reason, other than any action taken by GE and except to the extent permitted by
the terms thereof, cease to create a valid and perfected Lien on, or security
interest in, any of the Collateral purported to be covered thereby as required
by the Security Agreement;
(F) The Collateral, or any portion of it, shall be attached, seized,
levied upon, or subjected to a judgment Lien, execution Lien, writ or distress
warrant which exceeds Fifty Thousand Dollars ($50,000) in value and which is not
released or bonded off by MICA before it may be executed upon, or the
Collateral, or any portion of it, shall come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors of MICA or
any of its Subsidiaries for a continuous period of forty-five (45) consecutive
days, and the same shall not be released or otherwise cured to the satisfaction
of GE within ten (10) days thereafter;
(G) (i) MICA or any of its Subsidiaries shall (a) commence a
voluntary case or involuntary case under the Bankruptcy Code, as now constituted
or hereafter amended, or any other applicable federal or state bankruptcy,
insolvency, or similar law; (b) apply for or consent to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, agent, or
other similar official for MICA or any of its Subsidiaries for any material part
of MICA's or any of its Subsidiaries' respective assets, and any such
application or proceeding shall not be dismissed or stayed within the next sixty
(60) consecutive days; (c) make any assignment for the benefit of creditors;
(d) commence any case or proceeding for dissolution, liquidation, or
termination; (e) have concealed, removed, or permitted to be concealed or
removed, any part of its Property, with intent to hinder, delay, or defraud its
creditors or any of them, or made or suffered a transfer of any of its Property
or the incurring of an obligation which may be fraudulent under any bankruptcy,
fraudulent conveyance or other similar law; (f) admit in writing it inability to
pay, or generally not be paying, its debts as they become due; or (g) take any
corporate action for the purposes of effecting any of the foregoing; or
(ii) A case or other proceedings shall be commenced involuntarily
against any of MICA or any of its Subsidiaries in any court of competent
jurisdiction seeking (a) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(b) the appointment of a trustee, receiver, custodian, liquidator or the like of
any of MICA, or any of its Subsidiaries, or of all or any substantial part of
the assets, domestic or foreign, of any of MICA or any of its Subsidiaries and
such case or proceeding shall continue undismissed or unstayed for a period of
forty-five (45) consecutive calendar days, or an order granting the relief
requested in such case or proceeding against any of MICA or any of its
Subsidiaries (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(H) A notice of Lien, levy, or assessment with respect to all or any
material portion of assets of MICA and its Subsidiaries, taken as a whole, shall
be filed of record by the United States, or any department, agency, or
instrumentality thereof, or by the Pension Benefit Guaranty Corporation or any
Person succeeding to its functions under ERISA or by any state, county,
municipal, or other governmental agency; and
(I) MICA shall not be Solvent or shall cease to conduct its business
substantially as now conducted, or shall be enjoined, restrained, or in any way
prevented by court order from conducting all or any material part of its
business affairs for a period of time in excess of thirty (30) consecutive days.
7.2 Remedies. Upon the occurrence of an Event of Default, GE shall have
the following rights and remedies:
(A) GE shall have the right to declare all or any portion of the
Liabilities immediately due and payable, whereupon all or any portion of the
Liabilities, as appropriate, shall become due and payable without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by MICA and its Subsidiaries.
(B) GE and its agents and representatives shall have the right to
enter upon the premises of MICA, and MICA shall use reasonable efforts to cause
GE and its agents and representatives to have the right to enter upon the
premises of any other place or places where Collateral is located and kept
through self-help and without judicial process without first obtaining a final
judgment or giving MICA notice and opportunity for a hearing on the validity of
GE's claim and without any obligation to pay rent to MICA or MICA's lessee.
(C) GE and its agents and representatives shall have the right to
remove the Collateral to the premises of GE or any agent of GE, for such time as
GE may desire, in order to collect or dispose of Collateral.
(D) In addition to all of its other rights and remedies under this
Agreement and applicable law, GE shall have all of the rights and remedies of a
secured party under the UCC of the state in which such rights and remedies are
asserted, all of which rights and remedies shall be cumulative and none
exclusive, to the fullest extent permitted by law.
(E) Until GE is able to effect a sale, lease, or other disposition of
the Collateral, GE and its Affiliates shall have the right to use or operate the
Collateral, or any part thereof, to the extent that XX xxxxx appropriate for the
purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by GE. GE shall have no obligation to MICA to maintain or
preserve the rights of MICA as against third parties with respect to the
Collateral while the Collateral is in the possession of GE. GE may, if it so
elects, seek the appointment of a receiver or keeper to take possession of the
Collateral and to enforce any of GE's remedies with respect to such appointment
without prior notice or hearing. GE and its Affiliates and agents shall act in
a commercially reasonable manner in enforcing their respective remedies pursuant
to this Section 7.2(E). The foregoing remedy set forth in this Section 7.2(E)
is subject to the rights of Xxxxxx Bank pursuant to the Xxxxxx Documents.
Accordingly, GE shall take no action pursuant to this Section 7.2(E) in a manner
inconsistent with Xxxxxx Bank's rights pursuant to the Xxxxxx Documents as in
effect on the date hereof without Xxxxxx Bank's prior written consent.
(F) GE shall have the right to sell, lease, or otherwise dispose of
all or any Collateral in its then existing condition, or after any further
assembly, manufacturing, or processing thereof, at public or private sale or
sales, with such notice as may be required by law, in lots or in bulk, for cash
or on credit, all as GE, acting in a commercially reasonable manner, may deem
advisable and as permitted by applicable law. Such sales may be adjourned and
continued from time to time with or without notice. GE and its agents and
representatives shall have the right to conduct such sales on MICA's premises or
elsewhere and shall have the right to use MICA's premises, and MICA shall use
reasonable efforts to cause any lessee of the Collateral to permit GE and its
agents and representatives to conduct sales on lessee's premises and use such
lessee's premises, without charge for such sales for such time as XX xxxxx
necessary or advisable. The rights of MICA and its Subsidiaries under all
licenses and certificates of need, to the extent transferable, and all franchise
agreements shall inure to GE's benefit. GE may purchase all or any part of the
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of such purchase price, may set off the amount of such price
against the Liabilities. Except as otherwise provided by law, the proceeds
realized from the sale of any Collateral may be applied by GE first to the
reasonable costs, expenses, and attorneys' fees and expenses incurred by GE for
collection and for acquisition, completion, protection, removal, storage, sale,
and delivery of Collateral, and then to any principal and interest due on the
Liabilities, as GE, in its sole discretion, may elect. If any deficiency shall
exist after the application of such proceeds, MICA shall remain liable to GE
therefor. GE and its Subsidiaries and agents shall act in a commercially
reasonable manner in enforcing its remedies pursuant to this Section 7.2(F).
7.3 Right of Set-Off. Upon the occurrence and during the continuance of
any Event of Default, GE is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, upon three (3) Business Days prior
written notice to MICA, to set-off, appropriate and apply any and all funds in
the possession of GE and other Indebtedness at any time owing by GE to or for
the credit or the account of MICA, against any and all of the Liabilities of
MICA now or hereafter existing that are then due and payable, whether by
maturity or acceleration. The rights of GE under this Section 7.3 are in
addition to any other rights and remedies (including, without limitation, other
rights of set-off) which GE may have.
7.4 Appointment of GE as MICA's Lawful Attorney. MICA hereby irrevocably
designates, makes, constitutes, and appoints GE and all Persons designated by GE
as its true and lawful agent and attorney-in-fact upon and after the occurrence
of an Event of Default for the purposes set forth in this Section 7.4.
Accordingly, upon and after the occurrence of an Event of Default, GE or GE's
agent designated by GE for purposes of this Section 7.4 may, without notice to
MICA, and at such time or times as GE or said agent in its sole discretion may
determine, in the name of MICA, any of its Subsidiaries or GE: (i) take control,
in any manner, of any item of payment or proceeds of Collateral; (ii) prepare,
file, and sign MICA's or any its Subsidiaries name on any proof of claim or
similar document in any bankruptcy, insolvency, reorganization, or similar case
against any Person indebted to MICA or any of its Subsidiaries; (iii) do all
acts and things necessary, in GE's sole discretion, to fulfill MICA's
obligations under this Agreement; (iv) endorse the name of MICA or any of its
Subsidiaries upon any of the items of payment or proceeds and deposit the same
to the account of GE on account of Liabilities; (v) endorse the name of MICA or
any of its Subsidiaries upon any chattel paper, document, instrument, invoice,
freight xxxx, xxxx of lading, or similar document or agreement relating to
Collateral; and (vi) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to Collateral
to which MICA or any of its Subsidiaries has access. GE shall act (i) in a
commercially reasonable manner when exercising its rights pursuant to this
Section 7.4, and (ii) only as necessary in the reasonable judgment of GE to
protect its rights under the Scheduled Documents and to the Collateral. GE's
rights pursuant to this Section 7.4 are subject to the rights of Xxxxxx Bank
pursuant to the Xxxxxx Documents. Accordingly, GE shall not take any action
pursuant to this Section 7.4 in a manner inconsistent with Xxxxxx Bank's rights
pursuant to the Xxxxxx Documents as in effect on the date hereof without Xxxxxx
Bank's prior written consent.
8. MISCELLANEOUS.
8.1 Modification of Agreement; Sale of Interest. This Agreement may not
be modified, altered, or amended except by an agreement in writing signed by
MICA and GE. MICA may not sell, assign, or transfer, by operation of law or
otherwise, this Agreement or any of MICA's rights, title, interests, remedies,
powers, or duties hereunder or thereunder without the prior written consent of
GE, which shall not be unreasonably withheld. Any sale, assignment, or transfer
not consented to by GE shall be void and of no effect. MICA hereby consents to
GE's participation, sale, assignment, transfer, or other disposition of this
Agreement or of any of GE's rights, title, interests, remedies, powers, or
duties hereunder.
8.2 Expenses. Notwithstanding the provisions of this Section 8.2 set
forth below, each party to this Agreement shall pay its own costs and expenses,
including the disbursements and fees of their respective attorneys, accountants
and advisors, incidental to (i) the preparation and negotiation of this
Agreement and the Scheduled Documents and (ii) the closing of the transactions
contemplated by this Agreement.
Except as specifically set forth above, if, upon or after the
occurrence or existence of an Event of Default, GE employs counsel for advice or
other representation or incurs other professional costs and expenses in
connection with:
(A) any litigation, contest, dispute, suit, case, proceeding, or
action (whether instituted by GE, MICA, or any other Person) in any way relating
to Collateral, this Agreement, or MICA's affairs, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against MICA or one of its
Subsidiaries under the Bankruptcy Code or any other applicable federal or state
bankruptcy, insolvency, or similar law;
(B) any attempt to enforce any rights of GE against MICA, any other
Person that may be or become obligated to GE by virtue of this Agreement,
including any attempt to enforce such rights in connection with a case commenced
by or against any of the foregoing under the Bankruptcy Code or any other
applicable federal or state bankruptcy, insolvency or similar law; and/or
(C) the protection, collection, sale, liquidation, or other
disposition of Collateral;
then, in any such event, the professional fees arising from such services, and
all expenses, costs, charges, and other fees incurred by GE arising in
connection with or relating to any of the events or actions described in this
Section 8.2 shall be payable by MICA to GE on demand and shall constitute
Liabilities secured by the Collateral.
Without limiting the generality of the foregoing, the expenses,
costs, charges, and fees described above in this Section 8.2 may include
attorneys' fees, accountants' fees, appraisers' fees and any other professional
costs and expenses; stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of the
Scheduled Documents; costs and expenses of UCC and Lien searches and reports;
court costs and expenses, photocopying and duplicating expenses; court reporter
fees, costs, and expenses; long distance telephone charges; air express and
other delivery charges; telegram and telex charges; secretarial overtime
charges; expenses for travel, lodging and food paid or incurred in connection
with the performance of such professional services; sales tax in connection with
the sale of equipment by MICA and its Subsidiaries to GE as provided in
Subsection 2.2 hereof. MICA agrees to save GE harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay any such professional costs, expenses, fees and taxes.
8.3 Waivers by GE; Cumulative Remedies. GE's failure, at any time or
times hereafter, to require strict performance by MICA of any provision of this
Agreement, shall not waive, affect, or diminish any right of GE thereafter to
demand strict compliance and performance therewith. Any suspension or waiver by
GE of an Event of Default under this Agreement shall not suspend, waive, or
affect any other Event of Default by MICA under this Agreement whether the same
is prior or subsequent thereto and whether of the same or of a different type.
None of the undertakings, agreements, warranties, covenants, and representations
of MICA contained in this Agreement nor any Event of Default by MICA under this
Agreement shall be deemed to have been suspended or waived by GE unless such
suspension or waiver is in a writing signed by GE which designates the specific
suspension or waiver. The rights and remedies hereunder are cumulative and may
be exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law or which GE would otherwise have.
8.4 Waivers by MICA. Except as otherwise provided in this Agreement, MICA
waives: (i) presentment, demand, and protest and notice of presentment, protest,
default, non-payment, maturity, release, compromise, settlement, extension, or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper, and guaranties at any time held by GE under or
pursuant to which MICA may in any way be liable, and MICA hereby ratifies and
confirms whatever GE may do in this regard; (ii) notice prior to taking
possession or control of the Collateral or, so long as GE remains a party to
this Agreement, any bond or security that might be required by any court prior
to allowing GE to exercise any of GE's remedies; and (iii) the benefit of all
valuation, appraisement, and exemption laws. If and to the extent that any
obligation of MICA to GE shall be considered an obligation of guaranty or
suretyship, then the following waivers shall apply:
(A) MICA agrees that no election to proceed in one form of action or
against any party or on any obligation shall constitute a waiver of GE's right
to proceed in any other form of action for a deficiency, except to the extent GE
realizes payment by such action, notwithstanding the effect of such action upon
MICA's rights of subrogation, reimbursement, or indemnity, if any, against any
Person; and
(B) MICA agrees that GE shall be under no obligation and expressly
waives the right to require GE: (i) to xxxxxxxx any assets in favor of MICA,
(ii) to proceed first against any guarantor or any Property of guarantor or
against any collateral, (iii) to enforce first any other guaranty obligations
with respect to, or security for, the Liabilities, or (iv) to pursue any other
remedy in GE's power that MICA may or may not be able to pursue itself and that
may lighten MICA's burden, any right to which MICA hereby expressly waives.
8.5 Further Assurances. In addition to the acts recited herein and
contemplated to be performed, executed and/or delivered by MICA, MICA hereby
agrees, at any time, and from time to time, to perform, execute and/or deliver
to GE upon request, in form and substance acceptable to GE, any and all such
further acts, additional instruments, or further assurances as may be reasonably
necessary or proper to (a) promptly implement the intent of the parties under
this Agreement, (b) promptly correct any defect, error or omission which may be
discovered in this Agreement or any Scheduled Document, and execute any and all
additional documents as may be requested by GE to correct such defect, error or
omission, (c) assure GE a valid Lien and security interest under the Security
Agreement on the Collateral referenced in the Security Agreement in accordance
with the priorities set forth therein, (d) create, perfect, preserve, maintain
and protect the Liens and security interests created or intended to be created
pursuant to the Security Agreement, and (e) provide the rights and remedies to
GE granted or provided for by this Agreement. MICA shall pay the costs of any
recording or filing of any such documents if required.
8.6 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in a manner as to be effective and valid under applicable
law. If any provision of this Agreement shall be held to be prohibited by or
invalid under applicable law in any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective only to the extent of such provision and the
remaining provisions of this Agreement shall remain unaffected and in full force
and effect, and such prohibition and invalidity in such jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
8.7 Parties. This Agreement shall be binding upon and shall inure to the
benefit of the respective successors and assigns of MICA and GE including any
trustee or interim trustee of MICA appointed pursuant to Bankruptcy Code section
1104 or sections 701 and 702. This provision, however, shall not be deemed to
modify Section 8.1.
8.8 Conflict of Terms. The provisions of any other related agreement and
any schedule or exhibit thereto or to this Agreement are incorporated in this
Agreement as if set forth in full by this reference. Except as otherwise
provided in this Agreement by specific reference to the applicable provision of
this Agreement, if any provision contained in this Agreement conflicts or is
inconsistent with any provision in any other related agreement, the provision
contained in this Agreement shall govern and control.
8.9 Governing Law; Consent to Jurisdiction and Venue. Except as otherwise
expressly provided in any other related agreements in all respects, including
all matters of construction, validity and performance, this Agreement and the
Liabilities arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of California applicable to contracts
made and performed in such state, without regard to the principles thereof
regarding conflict of laws and any applicable laws of the United States of
America. MICA CONSENTS TO PERSONAL JURISDICTION, WAIVES ANY OBJECTION AS TO
JURISDICTION OR VENUE, AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA.
Service of process on MICA or GE in any action arising out of or relating to any
Agreement contemplated herein shall be effective if mailed to such party at the
address listed in Section 8.11. Nothing herein shall preclude GE or MICA from
bringing suit or taking other legal action in any other jurisdiction.
8.10 MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER
THIS AGREEMENT OR ANY OTHER AGREEMENT.
8.11 Notice. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by
another, or whenever any of the parties desires to give or serve upon another
any communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be delivered (i) in person with receipt acknowledged, or (ii)
by facsimile transmission, with receipt electronically confirmed during normal
business hours of recipient, and with confirmation by mailing of, no later than
one (1) Business Day following such transmission, of a copy of such facsimile,
by registered or certified mail, return receipt requested, postage prepaid or by
overnight courier, (iii) by registered or certified mail, return receipt
requested, postage prepaid or by overnight courier, or (iv) by Federal Express
or similar reliable overnight delivery service, addressed as follows:
(A) If to GE, at:
General Electric Company, acting through
GE Medical Systems
North 14, West 00000
Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Investment Manager
Facsimile: (000) 000-0000
and
General Electric Company, acting through
GE Medical Systems
North 14, West 00000
Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Finance Manager
Facsimile: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
(B) If to MICA, at:
Medical Imaging Centers of America, Inc.
0000 Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
or to such other addresses or facsimile transmission number as any party may
designate for itself by like notice. The giving of any notice required
hereunder may be waived in writing by the party entitled to receive such notice.
Every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered with receipt acknowledged or sent by
facsimile with receipt electronically confirmed during normal business hours of
recipient, the next Business Day after deposit with Federal Express or three (3)
Business Days after deposit in the United States mail. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration
or other communication to the Persons designated above to receive copies shall
in no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
8.12 Indemnification.
(A) MICA. In addition to any other amounts payable by MICA under
this Agreement and the Note, MICA hereby agrees to protect, indemnify, pay and
hold harmless GE and its directors, officers and employees from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable fees and expenses of counsel) (i) that GE may
incur or be subject to as a consequence, directly or indirectly, of (a) issuance
of the financial accommodations described in this Agreement, (b) any breach by
MICA of any warranty, covenant, term or condition in, or the occurrence of any
Event of Default under, this Agreement or any Scheduled Document, including all
reasonable fees or expenses resulting from the settlement or defense of any
claims or liabilities arising as a result of any such breach or default, and
(c) involvement in any legal suit, investigation, proceeding, inquiry or action
as to which GE is involved as a consequence, directly or indirectly, of
financial accommodations described in this Agreement, the holding or owning of
any Collateral by GE, GE's execution of this Agreement and any Scheduled
Document to which it is a party or any other event or transaction contemplated
by any of the foregoing, except for any claims, demands, liabilities, damages,
losses, charges and expenses which are caused by GE's gross negligence or
willful misconduct or other activities of GE described in Subsection 8.12(B)
hereof and (ii) that are related to any claims, actions or proceedings which may
be asserted against GE in connection with the transactions contemplated by this
Agreement. The obligations of MICA under this Section 8.12 shall survive the
termination of this Agreement. In furtherance and not in limitation hereof, GE
may accept documents that appear on their face to be in order, without
responsibility for further investigation, except if GE has received any notice
or information to the contrary.
(B) GE. GE hereby agrees to protect, indemnify, pay and hold
harmless MICA and its directors, officers and employees from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees and expenses of counsel) that MICA may incur or be
subject to as a consequence, directly or indirectly, of (i) GE's gross
negligence or willful misconduct; (ii) any breach by GE of any warranty,
covenant, term or condition, or the occurrence of any default by GE under this
Agreement or any Scheduled Document, including all reasonable fees or expenses
resulting from the settlement or defense of any claims or liabilities arising as
a result of any such breach or default.
8.13 Section Titles and Table of Contents. The section titles and the
Table of Contents contained in this Agreement are merely for convenience and
shall be without substantive meaning or content, and are not a part of the
Agreement between the parties hereto.
8.14 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original, all of which taken together
shall be deemed to constitute one (1) and the same agreement.
8.15 Successors and Assigns. All of the terms and provisions of this
Agreement and the Scheduled Documents shall be binding upon and shall inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto. GE is hereby specifically authorized to assign or sell any
or all of its rights and obligations under this Agreement to any party without
the prior written consent of MICA.
8.16 Limitation of Liability. Notwithstanding any other provision herein
to the contrary, to the fullest extent permitted by applicable law, neither MICA
nor GE shall be liable to the other party or to the other party's Affiliates or
agents, for any incidental or consequential damages of any kind to the other
party in connection with the Scheduled Documents and transactions contemplated
by this Agreement.
8.17 Integration. This Agreement, together with the Scheduled Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof, including but not limited to, that certain commitment
letter dated April 2, 1993 from GE Medical Systems to MICA. Each Scheduled
Document and this Agreement was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
8.18 Confidentiality and Publicity. The parties hereto shall hold in
confidence the information contained in the Scheduled Documents and all
information related to the transactions contemplated by this Agreement, which is
not otherwise known to the public, shall be held by each party hereto as
confidential and proprietary information and shall not be disclosed to third
persons without the prior written consent of the other party. Accordingly, GE
and MICA shall not, and shall not permit any of their respective Affiliates to,
discuss with, or provide nonpublic information to, any third party concerning
this Agreement or the Scheduled Documents, except: (i) as required in
governmental filings or judicial, administrative or arbitration proceedings, or
(ii) pursuant to public announcements made with the prior written approval of GE
and MICA, and (iii) as required by law. GE shall have the right to review and
approve, which approval may be denied in GE's sole discretion, any written
characterization of this Agreement, and any transaction contemplated hereby
except GE shall not have the right to review, but shall have the right to
approve, characterizations included in governmental filings or judicial,
administrative or arbitration proceedings.
8.19 Closing. The delivery of documents and instruments on the Closing
Date as contemplated hereby shall take place at 10:00 a.m. at the offices of
GE's counsel located at 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first specified above.
GENERAL ELECTRIC COMPANY, a New York
corporation, acting through
GE Medical Systems
By: _____________________________
Its: ________________________
MEDICAL IMAGING CENTERS OF AMERICA, INC., a
California corporation
By: _____________________________
Its: ________________________
AGREEMENT
BY AND BETWEEN
GENERAL ELECTRIC COMPANY,
A NEW YORK CORPORATION,
ACTING THROUGH GE MEDICAL SYSTEMS
AND
MEDICAL IMAGING CENTERS OF AMERICA, INC.,
A CALIFORNIA CORPORATION
TABLE OF CONTENTS
Page
1. GENERAL DEFINITIONS AND RULES OF CONSTRUCTION . . . . . . . . . . 2
1.1 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Xxxx of Sale . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Business Day . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Default . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Disposition . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Distributions . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Event of Default . . . . . . . . . . . . . . . . . . . . . . 3
1.11 Financing Statements . . . . . . . . . . . . . . . . . . . . 4
1.12 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12A Xxxxxx Bank . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12B Xxxxxx Documents . . . . . . . . . . . . . . . . . . . . . 4
1.13 Hazardous Materials . . . . . . . . . . . . . . . . . . . . 4
1.14 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 5
1.15 Installment Agreements . . . . . . . . . . . . . . . . . . . 5
1.15A Installment Sale Termination Agreements . . . . . . . . . . 5
1.16 IRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.17 Lease Termination Agreements . . . . . . . . . . . . . . . . 6
1.18 Liabilities or Liability . . . . . . . . . . . . . . . . . . 6
1.19 Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.20 Material Adverse Effect . . . . . . . . . . . . . . . . . . 7
1.21 MaxiService Agreements . . . . . . . . . . . . . . . . . . . 7
1.22 MICA Imaging . . . . . . . . . . . . . . . . . . . . . . . . 7
1.23 1992 Note . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.24 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.25 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.26 Property . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.27 Release and Settlement Agreement . . . . . . . . . . . . . . 8
1.28 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.29 Sale-Leaseback Equipment . . . . . . . . . . . . . . . . . . 8
1.30 Scheduled Documents . . . . . . . . . . . . . . . . . . . . 8
1.31 Security Agreement . . . . . . . . . . . . . . . . . . . . . 8
1.32 Solvent . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.33 Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.34 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.35 Supplemental Documentation . . . . . . . . . . . . . . . . . 9
1.36 Termination Date . . . . . . . . . . . . . . . . . . . . . . 9
1.37 UCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.38 Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.39 Other Terms . . . . . . . . . . . . . . . . . . . . . . . . 10
1.40 Rules of Construction . . . . . . . . . . . . . . . . . . . 10
Page
2. RESTRUCTURING OF OBLIGATIONS . . . . . . . . . . . . . . . . . . 11
2.1 Termination or Assignment of Equipment Leases . . . . . . . 11
2.2 Sale-Leaseback . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5 Security Interest . . . . . . . . . . . . . . . . . . . . . 13
2.6 One Obligation . . . . . . . . . . . . . . . . . . . . . . . 13
2.7 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.8 Application of Payments and Collections . . . . . . . . . . 14
3. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 14
3.1 Conditions Precedent of GE to Closing . . . . . . . . . . . 14
(A) Release and Settlement Agreement . . . . . . . . . . . 15
(B) Obligations . . . . . . . . . . . . . . . . . . . . . . 15
(C) Warranties True; Covenants Performed . . . . . . . . . 15
(D) MICA Consents, Approvals and Authorizations . . . . . . 15
(E) Signing of Instruments . . . . . . . . . . . . . . . . 15
(F) Unfavorable Action or Proceeding . . . . . . . . . . . 16
(G) Officer's Certificate . . . . . . . . . . . . . . . . . 16
(H) Certificate of Incumbency . . . . . . . . . . . . . . . 16
(I) Good Standing Certificates . . . . . . . . . . . . . . 17
(J) Default . . . . . . . . . . . . . . . . . . . . . . . . 17
(K) Debt Holder Concessions . . . . . . . . . . . . . . . . 17
(L) Automatic Drafting . . . . . . . . . . . . . . . . . . 17
(M) Exhibits and Schedules . . . . . . . . . . . . . . . . 17
(N) Xxxxxx Bank Consent . . . . . . . . . . . . . . . . . . 18
3.2 Conditions Precedent of MICA to Closing . . . . . . . . . . 18
4. WARRANTIES AND REPRESENTATIONS OF MICA . . . . . . . . . . . . . 18
4.1 Warranties and Representations . . . . . . . . . . . . . . . 18
(A) Existence and Qualification; Power;
Good Standing . . . . . . . . . . . . . . . . . . . . 18
(B) Authority; Binding Obligations . . . . . . . . . . . . 19
(C) Compliance with Laws/Agreements . . . . . . . . . . . . 20
(D) Absence of Defaults . . . . . . . . . . . . . . . . . . 21
(E) Licenses and Permits . . . . . . . . . . . . . . . . . 21
(F) Consents and Approvals . . . . . . . . . . . . . . . . 21
(G) Liabilities . . . . . . . . . . . . . . . . . . . . . . 21
(H) Title to Collateral; Location of Equipment . . . . . . 22
(I) Compliance with Laws . . . . . . . . . . . . . . . . . 22
(J) Environmental Matters . . . . . . . . . . . . . . . . . 22
(K) Insurance . . . . . . . . . . . . . . . . . . . . . . . 23
(L) Joint Ventures . . . . . . . . . . . . . . . . . . . . 23
(M) Subsidiaries and Affiliates . . . . . . . . . . . . . . 23
(N) Financial Statements . . . . . . . . . . . . . . . . . 24
Page
(O) Litigation or Claims . . . . . . . . . . . . . . . . . 24
(P) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 24
(Q) Brokers . . . . . . . . . . . . . . . . . . . . . . . . 26
(R) Transfer for Value . . . . . . . . . . . . . . . . . . 26
(S) No Untrue or Inaccurate Representations
or Warranties . . . . . . . . . . . . . . . . . . . . 26
4.2 Survival of Warranties and Representations . . . . . . . . . 26
5. COVENANTS AND CONTINUING AGREEMENTS . . . . . . . . . . . . . . . 27
5.1 Affirmative Covenants of MICA . . . . . . . . . . . . . . . 27
(A) Automatic Drafting . . . . . . . . . . . . . . . . . . 27
(B) Maintenance of Property . . . . . . . . . . . . . . . . 27
(C) Audit Rights . . . . . . . . . . . . . . . . . . . . . 27
(D) Compliance with Agreements . . . . . . . . . . . . . . 28
(E) Payment of Taxes . . . . . . . . . . . . . . . . . . . 28
(F) Insurance; Payment of Premiums . . . . . . . . . . . . 29
5.2 Negative Covenants of MICA . . . . . . . . . . . . . . . . . 29
(A) Future Subsidiaries . . . . . . . . . . . . . . . . . . 29
(B) Distributions . . . . . . . . . . . . . . . . . . . . . 29
(C) Capital Expenditures . . . . . . . . . . . . . . . . . 29
(D) Operating Leases . . . . . . . . . . . . . . . . . . . 30
(E) Indebtedness . . . . . . . . . . . . . . . . . . . . . 30
(F) Disposition of Property . . . . . . . . . . . . . . . . 31
5.3 Survival of Liabilities Upon Termination of Agreement . . . 31
5.4 Requests for GE's Consent . . . . . . . . . . . . . . . . . 31
6. INFORMATION AND REPORTING REQUIREMENTS . . . . . . . . . . . . . 32
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . 32
(A) Audited Year-End Financial Statements . . . . . . . . . 32
(B) Quarterly Financial Statements . . . . . . . . . . . . 33
(C) Monthly Financial Statements . . . . . . . . . . . . . . 33
(D) Officer's Certificate . . . . . . . . . . . . . . . . . 33
6.2 Public Documents . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Other Reports . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 Certain Notices . . . . . . . . . . . . . . . . . . . . . . 34
Page
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT . . . . . . . . 36
7.1 Event of Default . . . . . . . . . . . . . . . . . . . . . . 36
7.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.3 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . 41
7.4 Appointment of GE as MICA's Lawful Attorney . . . . . . . . 42
8. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.1 Modification of Agreement; Sale of Interest . . . . . . . . 43
8.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.3 Waivers by GE; Cumulative Remedies . . . . . . . . . . . . . 45
8.4 Waivers by MICA . . . . . . . . . . . . . . . . . . . . . . 45
8.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . 46
8.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . 47
8.7 Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.8 Conflict of Terms . . . . . . . . . . . . . . . . . . . . . 48
8.9 Governing Law; Consent to Jurisdiction and Venue . . . . . . 48
8.10 Mutual Waiver of Jury Trial . . . . . . . . . . . . . . . . 48
8.11 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . 51
(A) MICA . . . . . . . . . . . . . . . . . . . . . . . . . 51
(B) GE . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.13 Section Titles and Table of Contents . . . . . . . . . . . 52
8.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 52
8.15 Successors and Assigns . . . . . . . . . . . . . . . . . . 52
8.16 Limitation of Liability . . . . . . . . . . . . . . . . . . 52
8.17 Integration . . . . . . . . . . . . . . . . . . . . . . . . 53
8.18 Confidentiality and Publicity . . . . . . . . . . . . . . . 53
8.19 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 54
EXHIBITS
2.1 Equipment
2.2 Installment Sales Agreements
2.3 "Fee for Service" Service Agreements and Equipment
Leases
3.1(K) Debt Holder Concessions
3.1(L) Accounts Subject to Automatic Drafting
4.1(A) Corporate Information
4.1(F) Consents and Approvals
4.1(H) Liens
4.1(I) Compliance with Laws
4.1(K) Insurance
4.1(L) Joint Ventures
4.1(M) Subsidiaries and Affiliates
4.1(O) Litigation
4.1(P) Taxes
4.1(Q) Brokers
5.2(A) Future Subsidiaries
SCHEDULES
1.3 Xxxx of Sale
1.17 Lease Termination Agreements
1.31 Security Agreement
2.2(A) Installment Sales Termination Agreement
2.2(B) MaxiService Agreements
2.3 Promissory Note
2.4 Common Stock Warrant
3.1(A) Release and Settlement Agreement
3.1(G) Officer's Certificate
3.1(L) Authorization Agreement for Pre-Arranged Payments