CREDIT AGREEMENT
BETWEEN
PHYSIO-CONTROL CORPORATION
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
AS AGENT
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
AND
MELLON BANK, N.A.
AS BANKS
DATED JUNE 3, 1997
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 ADJUSTED LIBOR RATE . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 ADVANCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 AGENT'S RELATED PARTIES . . . . . . . . . . . . . . . . . . . . . . 1
1.4 ASSESSMENT RATE . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 AVAILABLE AMOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 BASE RATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 BASE RATE ADVANCES. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 BASE RATE MARGIN. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 BUSINESS DAY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 COLLATERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 COMMENCEMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 CREDIT LIMIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.16 EXCHANGE RATE . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.17 FED FUNDS RATE. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.18 FEE MARGIN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 FIXED CHARGE COVERAGE RATIO . . . . . . . . . . . . . . . . . . . . 3
1.20 FIXED RATE MARGIN . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.21 GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 HAZARDOUS SUBSTANCES. . . . . . . . . . . . . . . . . . . . . . . . 3
1.23 INTEREST PAYMENT DATES. . . . . . . . . . . . . . . . . . . . . . . 3
1.24 INTEREST PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.25 ISSUANCE FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.26 L/C AGREEMENT(S). . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.27 LETTER(S) OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . 3
1.28 LIBOR RATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.29 LIBOR RATE ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . 4
1.30 LOAN DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.31 LONDON BANKING DAY. . . . . . . . . . . . . . . . . . . . . . . . . 4
1.32 MAJORITY BANKS. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.33 MARGIN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.34 MATERIAL SUBSIDIARY . . . . . . . . . . . . . . . . . . . . . . . . 4
1.35 MULTICURRENCY ADVANCES. . . . . . . . . . . . . . . . . . . . . . . 4
1.36 MULTICURRENCY RATE. . . . . . . . . . . . . . . . . . . . . . . . . 4
1.37 OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.38 PERSON. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.39 PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.40 PRO RATA SHARE(S) . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.41 QUOTED RATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.42 REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.43 REFERENCE RATE. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.44 RESERVE ADJUSTMENT. . . . . . . . . . . . . . . . . . . . . . . . . 5
1.45 REVOLVING LOAN. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.46 SUBORDINATED DEBT . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.47 SWING LINE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.48 SWING LINE ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . 6
1.49 TANGIBLE NET WORTH. . . . . . . . . . . . . . . . . . . . . . . . . 6
1.50 TERMINATION DATE. . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2
REVOLVING LOAN . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 REVOLVING LOAN FACILITY . . . . . . . . . . . . . . . . . . . . . . 6
2.2 PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 PROCEDURE FOR BASE RATE ADVANCES. . . . . . . . . . . . . . . . . . 7
2.4 PROCEDURE FOR LIBOR RATE ADVANCES . . . . . . . . . . . . . . . . . 7
2.5 PROCEDURE FOR MULTICURRENCY ADVANCES. . . . . . . . . . . . . . . . 7
2.6 BANK FUNDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.7 COMMITMENT FEES . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3
LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 ISSUANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 YIELD INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 4
SWING LINE . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 DESCRIPTION OF FACILITY . . . . . . . . . . . . . . . . . . . . . . 9
4.2 PROCEDURE FOR SWING LINE ADVANCES . . . . . . . . . . . . . . . . . 9
ARTICLE 5
RISK PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 6
COLLATERAL SECURITY. . . . . . . . . . . . . . . . . . . . . . . 10
6.1 COLLATERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 COLLATERAL AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.3 FINANCING STATEMENTS AND OTHER DOCUMENTS. . . . . . . . . . . . . . 10
6.4 COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.5 AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT . . . . . . . . . . . . . . 10
6.6 NEGATIVE PLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 7
GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 8
INTEREST RATE OPTIONS. . . . . . . . . . . . . . . . . . . . . . 11
8.1 INTEREST RATES AND PAYMENT DATE . . . . . . . . . . . . . . . . . . 11
8.2 OPTION RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . 11
8.3 PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.4 REVERSION TO BASE RATE. . . . . . . . . . . . . . . . . . . . . . . 11
8.5 INABILITY TO PARTICIPATE IN MARKET. . . . . . . . . . . . . . . . . 11
8.6 COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.7 BASIS OF QUOTES . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 9
CONDITIONS OF LENDING. . . . . . . . . . . . . . . . . . . . . . 12
9.1 AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.2 DOCUMENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.3 REFINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.4 LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.5 GUARANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.6 PROOF OF INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . 12
9.7 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . 12
9.8 MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . . . . 12
9.9 COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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ARTICLE 10
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 13
10.1 EXISTENCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.2 ENFORCEABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.3 NO LEGAL BAR . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.4 LIENS AND ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . . 13
10.5 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.6 PAYMENT OF TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.7 EMPLOYEE BENEFIT PLAN. . . . . . . . . . . . . . . . . . . . . . . 13
10.8 MISREPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . 13
10.9 NO DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10.10 NO BURDENSOME RESTRICTIONS . . . . . . . . . . . . . . . . . . . . 14
10.11 HAZARDOUS SUBSTANCES . . . . . . . . . . . . . . . . . . . . . . . 14
10.12 MATERIAL SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . 14
10.13 MARGIN STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10.14 MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 11
AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 14
11.1 USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . 14
11.2 FIXED CHARGE COVERAGE RATIO. . . . . . . . . . . . . . . . . . . . 14
11.3 TANGIBLE NET WORTH . . . . . . . . . . . . . . . . . . . . . . . . 14
11.4 DEBT RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.5 FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 15
11.6 MAINTENANCE OF EXISTENCE . . . . . . . . . . . . . . . . . . . . . 15
11.7 BOOKS AND RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . 16
11.8 ACCESS TO PREMISES AND RECORDS . . . . . . . . . . . . . . . . . . 16
11.9 NOTICE OF EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . 16
11.10 PAYMENT OF DEBTS AND TAXES . . . . . . . . . . . . . . . . . . . . 16
11.11 FDA CONSENT DECREE . . . . . . . . . . . . . . . . . . . . . . . . 16
11.12 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
11.13 HAZARDOUS SUBSTANCES . . . . . . . . . . . . . . . . . . . . . . . 17
11.14 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 12
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 17
12.1 DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.2 LIENS AND ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . . 18
12.3 DISPOSITION OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . 18
12.4 MERGERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.5 CAPITAL STRUCTURE. . . . . . . . . . . . . . . . . . . . . . . . . 18
12.6 WAGE AND HOUR LAWS . . . . . . . . . . . . . . . . . . . . . . . . 18
12.7 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.8 DISSOLUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.9 BUSINESS ACTIVITIES. . . . . . . . . . . . . . . . . . . . . . . . 18
12.10 DIVIDENDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.11 PERMISSIBLE LOANS AND INVESTMENTS. . . . . . . . . . . . . . . . . 19
ARTICLE 13
AGENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
13.1 APPOINTMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
13.2 SUCCESSOR AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . 19
13.3 DUTIES OF AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . 19
13.4 DELEGATION OF DUTIES . . . . . . . . . . . . . . . . . . . . . . . 20
13.5 EXCULPATORY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 20
13.6 RELIANCE BY AGENT. . . . . . . . . . . . . . . . . . . . . . . . . 20
13.7 INSTRUCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
13.8 NOTICE OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 20
13.9 REPRESENTATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 21
13.10 INDEPENDENT CREDIT REVIEW. . . . . . . . . . . . . . . . . . . . . 21
13.11 INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13.12 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13.13 SEPARATION OF CAPACITIES . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 14
EVENTS AND CONSEQUENCES OF DEFAULT . . . . . . . . . . . . . . . 22
14.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 22
14.2 REMEDIES UPON DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 23
14.3 DEFAULT INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 15
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 24
15.1 MANNER OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 24
15.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15.3 DOCUMENTATION AND ADMINISTRATION EXPENSES. . . . . . . . . . . . . 25
15.4 COLLECTION EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . 26
15.5 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.6 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.7 MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.8 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.9 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
EXHIBITS:
Exhibit 1 -- Prepayment Fee Exhibit
Exhibit 2 -- Borrowing Notice
Exhibit 3 -- Form of Participation Certificate
Exhibit 4 -- Form of Guarantor CFO Certificate
Exhibit 5 -- Form of Subsidiary's Certificate
Schedule 10.5 - List of Pending Litigation
Schedule 10.12 - List of Material Subsidiaries
Schedule 12.1(b) - Disclosure List of Existing Debt
Schedule 12.2(a) - Disclosure List of Existing Liens
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made between Physio-Control
Corporation, a Delaware corporation ("Borrower"), and Bank of America
National Trust and Savings Association, doing business as Seafirst Bank, a
national banking association, as agent ("Agent"), and the following financial
institutions that are individually called a "Bank" and collectively called
the "Banks," including their respective successors and/or assigns: Bank of
America National Trust and Savings Association, doing business as Seafirst
Bank (in its capacity as a Bank, "Seafirst"), and Mellon Bank, N.A.
("Mellon"). For mutual consideration, the parties agree as follows:
ARTICLE 1
DEFINITIONS
All terms defined below shall have the meaning indicated. All references
in this Agreement to:
(a) "dollars" or "$" shall mean U.S. dollars;
(b) "Article," "Section," or "Subsection" shall mean articles,
sections, and subsections of this Agreement, unless otherwise indicated;
(c) all interest and fees payable on a per annum basis with regard to
this Agreement shall be calculated on the basis of the actual number of
days elapsed over a year of 360 days, unless otherwise specified;
(d) terms defined in the Washington version of the Uniform Commercial
Code, R.C.W. Section 62A.9-101, ET SEQ. ("UCC"), and not otherwise defined
in this Agreement, shall have the meaning given in the UCC; and
(e) an accounting term not otherwise defined in this Agreement shall
have the meaning assigned to it under GAAP.
1.1 ADJUSTED LIBOR RATE shall mean for any day that per annum rate equal
to the sum of (a) the Fixed Rate Margin, (b) the Assessment Rate, and (c) the
quotient of (i) the LIBOR Rate as determined for such day, divided by (ii)
the Reserve Adjustment. The Adjusted LIBOR Rate shall change with any change
in the LIBOR Rate on the first day of each Interest Period and on the
effective date of any change in the Assessment Rate or Reserve Adjustment.
1.2 ADVANCES shall mean Base Rate Advances, LIBOR Rate Advances, Swing
Line Advances, and Multicurrency Advances. No Advance shall constitute a
"payment order" under R.C.W. Section 62A.4A-103.
1.3 AGENT'S RELATED PARTIES shall mean Agent, its affiliates, and all
officers, directors and employees of Agent and such affiliates.
1.4 ASSESSMENT RATE shall mean as of any day the minimum annual
percentage rate established by the Federal Deposit Insurance Corporation (or
any successor) for the assessment due from members of the Bank Insurance Fund
(or any successor) in effect for the assessment period during which said day
occurs based on deposits maintained at such members' offices located outside
of the United States. In the event of a retroactive reduction in the
Assessment Rate after a commencement of any Interest Period, Agent shall not
retroactively adjust as to such Interest Period any interest rate calculated
using the Assessment Rate.
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1.5 AVAILABLE AMOUNT shall mean at any time the amount of the Credit
Limit, minus the unpaid principal balance of the Revolving Loan, minus the
aggregate outstanding principal amount of all Letters of Credit, minus the
sum of the U.S. dollar equivalent of the outstanding balance of all
Multicurrency Advances, based on the Exchange Rate for each such Advance.
1.6 BASE RATE shall mean (a) the greater of the Reference Rate or the
Fed Funds Rate, plus (b) the Base Rate Margin.
1.7 BASE RATE ADVANCES shall mean those portions of principal of the
Revolving Loan accruing interest at the Base Rate.
1.8 BASE RATE MARGIN shall have the meaning given in Section 1.33.
1.9 BUSINESS DAY shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in Seattle, Washington, or Pittsburgh,
Pennsylvania, are authorized or required by law to close.
1.10 COLLATERAL shall have the meaning given in Section 6.1.
1.11 COMMENCEMENT DATE shall mean the first day of any Interest Period as
requested by Borrower.
1.12 CREDIT LIMIT shall mean $25,000,000.
1.13 DEBT shall mean all consolidated obligations, on a GAAP basis,
included in the liability section of a balance sheet of Guarantor, together
with, regardless of whether such items would otherwise not be shown on the
liability side of a balance sheet:
(a) all obligations guaranteed or assumed by Guarantor or any
subsidiary, directly or indirectly in any manner, or endorsed (other than
for collection and deposit in the ordinary course of business) or
discounted by Guarantor or any subsidiary with recourse, including all
indebtedness guaranteed by Guarantor or any subsidiary through any
agreement, contingent or otherwise;
(b) all obligations for the payment of money or other property
pursuant to capital leases under which Guarantor or any of its subsidiaries
is leasing real or personal property; and
(c) all obligations of any partnership or joint venture of which
Guarantor or any of its subsidiaries is a member, if Guarantor or any such
subsidiary is legally liable for such obligations.
1.14 DEFAULT shall have the meaning given in Section 14.1.
1.15 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.16 EXCHANGE RATE shall mean the rate of exchange actually obtained by
Agent for a given currency in funding a Multicurrency Advance in such
currency.
1.17 FED FUNDS RATE shall mean, for any period, a fluctuating interest
rate per annum equal for each day during such period to (a) the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of San Francisco or, if such rate
is not so published for any day which is a Business Day, the average of the
quotations for such day on transactions received by Agent from three federal
funds brokers of recognized standing selected by Agent; plus (b) 0.5%.
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1.18 FEE MARGIN shall have the meaning given in Section 1.33.
1.19 FIXED CHARGE COVERAGE RATIO shall mean, as to Guarantor on a
consolidated basis, the ratio of:
(a) earnings before interest expense, taxes, depreciation, and
amortization, minus capital expenditures (excluding, through fiscal quarter
ending September 30, 1997, $4,900,000 in capital expenditures consisting of
soft costs of a major computer system upgrade carried out in 1996); to
(b) (i) interest expense, plus (ii) the current portion of long-term
Debt (excluding the Obligations), plus (iii) 20% of the outstanding
principal amount of all Obligations.
1.20 FIXED RATE MARGIN shall have the meaning given in Section 1.33.
1.21 GUARANTOR shall mean Physio-Control International Corporation, a
Washington corporation.
1.22 HAZARDOUS SUBSTANCES shall mean any substance or material defined or
designated as hazardous or toxic wastes, a hazardous or toxic material, a
hazardous, toxic, or radioactive substance, or other similar term by any
applicable federal, state, or local statute, regulation, or ordinance now or
hereafter in effect.
1.23 INTEREST PAYMENT DATES shall mean (a) for Multicurrency Advances,
the last day of its Interest Period; (b) for Base Rate Advances, the last
Business Day of each month; (c) for LIBOR Rate Advances, the last day of each
Interest Period (PROVIDED, that if the Interest Period is longer than three
months, the end of the third month of the Interest Period shall also be an
Interest Payment Date); and (d) in each case, upon maturity, including upon
maturity by acceleration.
1.24 INTEREST PERIOD shall mean the period commencing on the date of any
Advance, or Multicurrency Advance, or of any conversion to an Adjusted LIBOR
Rate and ending on any date thereafter as selected by Borrower. Interest
Periods for Multicurrency Advances may be one week or one, two, three, or six
months, and Interest Periods for LIBOR Rate Advances shall be subject to the
restrictions of Section 8.2. If any Interest Period would end on a day which
is not a Business Day, the Interest Period shall be extended to the next
succeeding Business Day, unless the next succeeding Business Day falls in the
next month, in which case the Interest Period shall be shortened to the
preceding Business Day.
1.25 ISSUANCE FEE shall have the meaning assigned to it in Section 3.2.
1.26 L/C AGREEMENT(S) shall have the meaning assigned to it in Article 3.
1.27 LETTER(S) OF CREDIT shall have the meaning assigned to it in Article
3.
1.28 LIBOR RATE shall mean for any Interest Period that per annum rate
equal to the arithmetic mean (rounded to the nearest hundred-thousandth of a
percentage point) of the offered rates for U.S. Dollar deposits for a period
equal to the Interest Period appearing on the display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page on such
service as may replace said page or, if none, on such other available service
which displays two or more London interbank offered rates of major banks for
U.S. Dollar deposits) as of 11:00 a.m., London time, on the day which is two
London Banking Days prior to the first day of the Interest Period. If there
is no period equal to the Interest Period on the display, the LIBOR Rate
shall be determined by straight-line interpolation to the nearest month (or
week or day if expressed in weeks or days) corresponding to the Interest
Period between the two nearest neighboring periods on the display.
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1.29 LIBOR RATE ADVANCES shall mean those portions of principal of the
Revolving Loan accruing interest at the Adjusted LIBOR Rate.
1.30 LOAN DOCUMENTS shall mean collectively this Agreement, the L/C
Agreements, each guaranty of the Obligations, and all other security
agreements, documents, instruments, and other agreements now or later
executed in connection with this Agreement.
1.31 LONDON BANKING DAY shall mean any Business Day other than a day on
which commercial banks in London, England, are authorized or required by law
to close.
1.32 MAJORITY BANKS shall mean Banks holding 67% of the Pro Rata Shares.
1.33 MARGIN shall mean (a) as to Base Rate Advances the "Base Rate
Margin" as determined by the following chart; (b) as to LIBOR Rate Advances,
Swing Line Advances, Multicurrency Advances, and the calculation of Letter of
Credit Issuance Fees, the "Fixed Rate Margin" as determined by the following
chart; and (c) as to the calculation of the commitment fee under Section 2.7,
the "Fee Margin" as determined by the following chart:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Fixed Charge Base Rate Margin Fixed Rate Margin Fee Margin
Coverage Ratio*
--------------------------------------------------------------------------------
GREATER THAN
OR EQUAL TO 2.75 to 1 -0- 0.50% 0.125%
--------------------------------------------------------------------------------
GREATER THAN
OR EQUAL TO 2.50 to 1 -0- 0.625% 0.125%
--------------------------------------------------------------------------------
GREATER THAN
OR EQUAL TO 2.25 to 1 -0- 0.75% 0.125%
--------------------------------------------------------------------------------
GREATER THAN
OR EQUAL TO 2.00 to 1 -0- 1.0% 0.125%
--------------------------------------------------------------------------------
GREATER THAN
OR EQUAL TO 1.75 to 1 -0- 2.00% 0.25%
--------------------------------------------------------------------------------
LESS THAN 1.75 to 1 2.0% 3.00% 0.50%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* AS DETERMINED BASED ON THE MOST RECENTLY DELIVERED QUARTERLY CONSOLIDATED
FINANCIAL STATEMENT OF GUARANTOR.
Upon receipt of a quarterly financial statement showing a decrease or
increase in Fixed Charge Coverage Ratio which places Borrower in a new
pricing category, all Advances, commitment fees, and Letter of Credit
issuance fees shall begin being calculated at the higher or lower margin, as
the case may be, for the period beginning on the date 30 days after the end
of the quarter reported on in such statement.
1.34 MATERIAL SUBSIDIARY shall mean Physio-Control Manufacturing
Corporation, and each other direct or indirect subsidiary of Guarantor which
has assets in excess of 10% of Guarantor's total consolidated assets, or
annual net income in excess of 10% of Guarantor's consolidated annual net
income.
1.35 MULTICURRENCY ADVANCES shall have the meaning given in Subsection
2.5.
1.36 MULTICURRENCY RATE shall mean for each Multicurrency Advance (i) the
per annum rate for the currency advanced, calculated on the basis of actual
number of days elapsed over a year of 365/366 days as to Canadian Dollars and
British Pounds Sterling, and on the basis of actual number of days elapsed
over a year of 360 days as to all other currencies, determined by Agent to be
the applicable borrowing rate for such currency in an amount and for the
Interest Period of the Multicurrency Advance requested, as determined between
6:30 a.m. and 7:00 a.m., Seattle time, on the day which is (a) two Business
Days prior to the date of such Advance as to all currencies other
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than Canadian Dollars, and (b) one Business Day prior to the date of such
Advance as to Canadian Dollars; which rate shall be a rate within 0.125% of
the index rate appearing on the display designated as "Page 3740" and "Page
3750" on the Telerate Service for such currency between 6:30 a.m. and 7:00
a.m., Seattle time, on the same date; plus (ii) the Fixed Rate Margin.
1.37 OBLIGATIONS shall mean Borrower's obligation to repay all Advances,
with interest, the L/C Agreements, Borrower's obligation to reimburse Banks
for all amounts drawn under the Letters of Credit, and all fees, costs,
expenses, and indemnifications due to Agent and/or Banks under this Agreement.
1.38 PERSON shall mean any individual, partnership, corporation, business
trust, unincorporated organization, joint venture, or any governmental
entity, department, agency, or political subdivision.
1.39 PLAN shall mean any employee benefit plan or other plan maintained
for Borrower's employees and covered by Title IV of ERISA, excluding any plan
created or operated by or for any labor union.
1.40 PRO RATA SHARE(S) shall mean 50% as to Seafirst and 50% as to
Mellon; or if any assignments are made by a Bank pursuant to Section 15.6,
then such different percentages resulting from any such assignment; PROVIDED
that, (1) after the occurrence and during the continuance of a Default, and
(2) with regard to Sections 1.32, 6.2, 13.7, 13.12, and 14.2:
- Mellon's Pro Rata Share shall be the percentage arrived at by dividing:
(a) the sum of (i) 50% of the sum of all outstanding Base Rate
Advances, LIBOR Rate Advances, and Multicurrency Advances (based on U.S.
Dollar equivalent determined as of the date of Advance) plus (ii) 50% of
the sum of the combined face amount of all outstanding Letters of Credit
plus the aggregate of all unreimbursed Letter of Credit draws, to
(b) the combined outstanding principal balance of all Obligations
(including issued but undrawn Letters of Credit); and
- Seafirst's Pro Rata Share shall be 100% minus Mellon's Pro Rata Share.
1.41 QUOTED RATE shall mean that per annum fixed rate quoted by Seafirst
and accepted by Borrower as the applicable rate for a Swing Line Advance
commencing on the date of advance and continuing until the next Business Day,
plus an interest rate spread equal to the Fixed Rate Margin.
1.42 REAL PROPERTY shall mean any real property owned or leased by
Borrower or any of its subsidiaries ("Subject Property"), or any adjacent
real property affected by any Hazardous Substances stored or used in, on,
under, over, or about any such Subject Property.
1.43 REFERENCE RATE shall mean the rate of interest publicly announced
from time to time by Agent in San Francisco, California, as its "Reference
Rate." The Reference Rate is set based on various factors, including Agent's
costs and desired return, general economic conditions, and other factors, and
is used as a reference point for pricing some loans. Agent may price loans
to its customers at, above, or below the Reference Rate. Any change in the
Reference Rate shall take effect at the opening of business on the day
specified in the public announcement of a change in the Reference Rate.
1.44 RESERVE ADJUSTMENT shall mean as of any day the remainder of one
minus that percentage (expressed as a decimal) which is the highest of any
such percentages established by the Board of Governors of the Federal Reserve
System (or any successor) for required reserves (including any emergency,
marginal, or supplemental reserve requirement) regardless of the aggregate
amount of deposits with said member bank and without benefit of any possible
credit, proration, exemptions,
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or offsets for time deposits established at offices of member banks located
outside of the United States or for eurocurrency liabilities, if any.
1.45 REVOLVING LOAN shall have the meaning given in Section 2.1.
1.46 SUBORDINATED DEBT shall mean consolidated Debt of Guarantor to third
parties, the repayment of which is subordinated to Banks, in form
satisfactory to Banks.
1.47 SWING LINE shall have the meaning given in Section 4.1.
1.48 SWING LINE ADVANCES shall mean the disbursement of loan proceeds
under the Swing Line.
1.49 TANGIBLE NET WORTH shall mean the excess of total consolidated
assets over total consolidated liabilities, excluding, however, from the
determination of total assets (a) all assets which should be classified as
intangible assets (such as goodwill, patents, trademarks, copyrights,
franchises, and deferred charges, including unamortized debt discount and
research and development costs), (b) cash held in a sinking or other similar
fund established for the purpose of redemption or other retirement of capital
stock, (c) to the extent not already deducted from total assets, reserves for
depreciation, depletion, obsolescence, or amortization of properties and
other reserves or appropriations of retained earnings which have been or
should be established in connection with Guarantor's business, and (d) any
revaluation or other write-up in book value of assets subsequent to the
fiscal year of Guarantor last ended at the date Tangible Net Worth is being
measured.
1.50 TERMINATION DATE shall mean May 31, 2000, or such earlier date upon
which the commitments to make Advances, and issue Letters of Credit is
terminated pursuant to Subsection 14.2(a); PROVIDED, that the Termination
Date may be extended on May 31, 1998, to May 31, 2001, and on May 31, 1999,
to May 31, 2002, upon the mutual written consent of Borrower, Agent, and all
Banks, which any one or more of them may withhold in their sole discretion.
ARTICLE 2
REVOLVING LOAN
2.1 REVOLVING LOAN FACILITY. Subject to the terms and conditions of
this Agreement and to the extent of its Pro Rata Share of the Credit Limit,
each Bank shall make Advances (other than Swing Line Advances) to Borrower
from time to time, until the Termination Date ("Revolving Loan"), with the
aggregate principal amount at any one time outstanding not to exceed the
Credit Limit less the aggregate outstanding principal amount of all Letters
of Credit. Borrower may use the Revolving Loan by borrowing, prepaying and
reborrowing the amounts available under the Revolving Loan, in whole or in
part; PROVIDED that Borrower shall fully and finally pay off the Revolving
Loan on the Termination Date. Each borrowing by Borrower under this Agreement
shall constitute a representation and warranty by Borrower as of the date of
each such borrowing that the conditions precedent contained in Sections 9.7
through 9.9 of this Agreement have been satisfied.
2.2 PAYMENTS. Except as set forth below as to Multicurrency Advances,
Borrower shall repay all Advances, with interest, which shall accrue and be
paid as provided in Article 8. All Advances shall be repaid on or before the
Termination Date. Each of the Banks shall note on its internal records each
Advance made by it, each payment of principal and/or interest received by it,
and any interest rate conversions. As to Multicurrency Advances:
(a) INTEREST. Each Multicurrency Advance shall bear interest from
the date of Advance until the end of its respective Interest Period at the
Multicurrency Rate determined by Agent for such Advance pursuant to Section
1.35. All interest accrued on each such Advance shall be due and payable
in full on each Interest Payment Date applicable to such Advance.
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(b) PRINCIPAL. Borrower shall repay in full the outstanding
principal balance of each Multicurrency Advance, in the currency advanced,
on the last day of its Interest Period. Such repayment may be effected
either (i) by making payment to Agent in immediately available funds
pursuant to Subsection 15.1(b), or (ii) by obtaining, subject to
satisfaction of all conditions precedent, an Advance, pursuant to the
procedures of Section 2.5, in the same currency and at least the same
amount as the maturing Multicurrency Advance (but in any case not to exceed
the Available Amounts), with instructions to Agent to apply the proceeds of
such new Advance to the maturing Advance before disbursing the balance (if
any) to Borrower. Agent and Banks shall have no liability for, nor bear
any of the risk of, intra-day fluctuations in foreign exchange rates.
Multicurrency Advances may not be prepaid prior to the end of their
respective Interest Periods.
2.3 PROCEDURE FOR BASE RATE ADVANCES. In accordance with all terms and
conditions of this Agreement, Borrower may borrow at the Base Rate under the
Revolving Loan on any Business Day. Borrower shall give Agent irrevocable
notice (written or oral) specifying the amount to be borrowed on or before
9:30 a.m., Seattle time, on the day that a Base Rate Advance is requested;
all Base Rate Advances shall be discretionary to the extent notification by
Borrower is given subsequent to that time. Agent shall advise each Bank by
10:30 a.m., Seattle time, of a request for a Base Rate Advance, and each Bank
shall make available to Agent its respective Pro Rata Share of such requested
Base Rate Advance no later than 12:00 noon, Seattle time, on the same day.
Agent shall make such funds available to Borrower on the same Business Day.
Whether or not any Bank fails to fund its Pro Rata Share of a Base Rate
Advance, each Bank shall only be obligated to disburse to Agent such Bank's
Pro Rata Share of such requested Base Rate Advance.
2.4 PROCEDURE FOR LIBOR RATE ADVANCES. In accordance with all terms and
conditions of this Agreement, Borrower may borrow at the Adjusted LIBOR Rate
under the Revolving Loan on any Commencement Date. Borrower shall, on any
London Banking Day two London Banking Days before such Commencement Date, no
later than 9:30 a.m., Seattle time, request Agent to give an Adjusted LIBOR
Rate quote for a specified loan amount and Interest Period. Agent will then
quote to Borrower the available Adjusted LIBOR Rate. Borrower shall have 60
minutes from the time of the quote to elect an Adjusted LIBOR Rate by giving
Agent irrevocable notice of such election, of which election Agent will
promptly notify Banks. On the Commencement Date, each Bank shall make
available to Agent its respective Pro Rata Share of such requested LIBOR Rate
Advance no later than 12:00 noon, Seattle time, on the specified borrowing
date. Whether or not any Bank fails to fund its Pro Rata Share of a LIBOR
Rate Advance, each Bank shall only be obligated to disburse to Agent such
Bank's Pro Rata Share of such requested LIBOR Rate Advance. At the time that
Agent is informed by any Bank of any change in the Assessment Rate or Reserve
Adjustment, Agent shall notify Borrower of the change and of the impact on
any LIBOR Rate Advances then outstanding.
2.5 PROCEDURE FOR MULTICURRENCY ADVANCES. Borrower may request an
Advance in British Pounds Sterling, Canadian Dollars, French Francs, German
Marks, Italian Lire, Dutch Guilders, Swedish Kroner, or Spanish Pesetas (each
a "Multicurrency Advance"), up to the U.S. Dollar equivalent of the lesser of
(a) U.S.$5,000,000, or (b) the Available Amounts, as determined by the
Exchange Rate for each such currency, as determined on the date the interest
rate for such Advance is determined, by delivering its borrowing notice to
Agent, in the form of Exhibit 2 attached, on or before 9:30 a.m., Seattle
time, on a London Banking Day at least three Business Days prior to the date
the Multicurrency Advance is to be made. Such notice shall specify the
currency, principal amount, and Interest Period requested. Agent shall
advise each Bank of a request for a Multicurrency Advance by 10:30 a.m.,
Seattle time, three Business Days prior to the date the Multicurrency Advance
is to be made. Each Bank shall make available to Agent its Pro Rata Share of
such requested Multicurrency Advance to the account in the bank and country
specified to each Bank by Agent, on the date the Advance is to be made.
Multicurrency Advances shall be credited on the date of Advance to the
account specified by Borrower. Each Multicurrency Advance shall be in a
minimum amount equivalent to U.S.$500,000.
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2.6 BANK FUNDING. Agent shall have no obligation to fund any portion of
an Advance which has not been funded by such time by the applicable Bank.
If, however, a Bank does not fund its Pro Rata Share of a Multicurrency
Advance in a timely manner, and Agent funds such Advance to Borrower before
having received funding from such Bank, such Bank shall reimburse Agent for
any overdraft charges and interest incurred by Agent on account of such late
or failed funding.
2.7 COMMITMENT FEES. On the first Business Day of each April, July,
October, and January, beginning July 1, 1997, Borrower shall pay:
(A) to Agent for the account of Banks, in arrears, to be applied in
accordance with their respective Pro Rata Shares, a commitment fee equal to
the Fee Margin multiplied by the difference between (a) $25,000,000, and
(b) the sum of (i) the daily outstanding principal balance of the Revolving
Loan (with Multicurrency Advances to be valued as the U.S. Dollar
equivalent of such Multicurrency Advances, based on the Exchange Rate for
each such Advance); and (ii) the daily aggregate outstanding principal
amount of all Letters of Credit; and
(B) to Seafirst for its sole account, in arrears, a commitment fee
equal to the Fee Margin multiplied by the difference between
(a) $5,000,000, and (b) the daily outstanding principal balance of the
Swing Line.
ARTICLE 3
LETTERS OF CREDIT
3.1 ISSUANCE. Upon Borrower's execution of Seafirst's then-standard
form Application and Agreement for Standby Credit ("L/C Agreement(s)"),
Seafirst shall issue on Borrower's behalf standby letters of credit ("Letters
of Credit") until the Termination Date, up to the Available Amount, in
amounts not to exceed $5,000,000 in the aggregate, and with tenors not to
extend beyond the Termination Date. If there is a draw under a Letter of
Credit, Borrower shall on demand immediately reimburse Seafirst for the
amount of the draw, together with interest on the amount drawn, from the date
of draw until paid, at a floating rate equal to the Base Rate plus 3% per
annum. Seafirst shall in addition have all rights provided in the L/C
Agreement executed with respect to such Letter of Credit. Any default in the
L/C Agreement shall be a Default.
3.2 FEES. Borrower shall pay to Seafirst in advance, for the account of
Banks, upon issuance of each Letter of Credit, a nonreimbursable Issuance Fee
equal to the greater of (a) a percentage per annum equal to the Fixed Rate
Margin (as determined on the date of issuance) on the face amount of the
Letter of Credit, or (b) $250. Borrower shall additionally, on demand, pay
the following administrative fees to Seafirst for its own account (i.e., not
for the account of the other Banks):
(A) a fee of $100 for each Letter of Credit which is required to be
issued on the same Business Day as application is made for such Letter of
Credit by Borrower;
(B) a fee of $50 for each Letter of Credit, the application for which
does not have a form of letter of credit attached thereto, or where such form
needs substantial re-working prior to its issuance;
(C) a fee of $100 for each Letter of Credit to be confirmed, advised, or
guaranteed by banks which are not a correspondent bank of Seafirst or with
which Seafirst does not have other standing relationships (in each case as
such categorization is reasonably determined by Seafirst);
(D) reimbursement to Seafirst of all fees and charges charged to
Seafirst by any advising or confirming bank with regard to any Letter of
Credit;
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plus additional transaction fees according to Seafirst's then-outstanding
standard fee schedule, as delivered to Borrower, on all drafts, transfers,
extensions, and other transactions in regard to the Letters of Credit, and
reimburse Seafirst for all out-of-pocket costs, legal fees, and expenses.
3.3 YIELD INDEMNITY. If any law or regulation imposes or increases any
reserve, special deposit, or similar requirement against letters of credit
issued by Seafirst or subjects Seafirst or any Bank to any tax, charge, fee,
deduction, or withholding of any kind in regard to the Letters of Credit,
Borrower shall promptly on demand indemnify Seafirst or such Bank for any
such increased costs, taxes, or charges. Seafirst or such Bank, as the case
may be, shall provide documentation to Borrower of any such increased costs,
taxes, or charges.
ARTICLE 4
SWING LINE
4.1 DESCRIPTION OF FACILITY. Seafirst shall make Swing Line Advances to
Borrower, PROVIDED that (a) the aggregate amount of all outstanding Swing
Line Advances shall not exceed $5,000,000, and (b) each Swing Line Advance
shall mature and be repaid on the earlier of (i) the next Business Day after
the date such Swing Line Advance is advanced or (ii) the Termination Date
(the "Swing Line"). Each Swing Line Advance shall bear interest at the
Quoted Rate (or Base Rate, whichever is lower) as determined on the date the
Swing Line Advance is disbursed to or for the benefit of Borrower, with all
principal and accrued interest to be repaid on the next Business Day;
PROVIDED, however, that Borrower may elect to pay all accrued interest on
Swing Line Advances quarterly, on the last Business Day of each March, June,
September, and December, in which case the Fixed Rate Margin shall be
increased by 4 basis points (0.04%) for all Swing Line Advances.
4.2 PROCEDURE FOR SWING LINE ADVANCES. In accordance with all terms and
conditions of this Agreement, Borrower may borrow at the Quoted Rate (or Base
Rate, whichever is lower) under the Swing Line on any Business Day. Borrower
shall give Agent irrevocable notice (written or oral) specifying the amount
to be borrowed on or before 3:30 p.m., Seattle time, on the day that a Swing
Line Advance is requested; all Swing Line Advances shall be discretionary to
the extent notification by Borrower is given subsequent to that time. Agent
shall advise Seafirst of a request for a Swing Line Advance, and Seafirst
shall make available to Borrower its Swing Line Advance by the end of the
same Business Day.
ARTICLE 5
RISK PARTICIPATION
Mellon agrees for the benefit of Seafirst that it hereby purchases a risk
participation in the Letters of Credit and any unreimbursed Letter of Credit
draws equal to Mellon's Pro Rata Share of the outstanding balance of Letters
of Credit plus the aggregate unreimbursed Letter of Credit draws. Upon the
occurrence of a Default, Mellon shall fund to Seafirst, pursuant to this risk
participation, Mellon's Pro Rata Share of the aggregate unreimbursed Letter
of Credit draws. Mellon shall have no interest in any principal, interest,
fees, or expenses due to Seafirst with regard to the Swing Line. Prior to
its funding under this Article, Mellon shall have no interest in any
principal, interest, fees, or expenses due to Seafirst with regard to Letters
of Credit, except (a) those accruing after the date such participation is
funded, (b) those fees payable under Subsection 2.7, and (c) as to Issuance
Fees, Mellon's Pro Rata Share of the amount of such fees. Mellon's purchase
of such participations shall be evidenced by a certificate in the form of
Exhibit 3 attached.
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ARTICLE 6
COLLATERAL SECURITY
6.1 COLLATERAL. As security for the prompt satisfaction of all
Obligations, Borrower hereby grants to Agent, as agent for Banks, a lien
upon, and a security interest in, all of the following as described below
wherever the same shall be located, whether now owned or hereafter acquired,
together with all replacements therefor and proceeds (including, but without
limitation, insurance proceeds) and products thereof, all of which shall be
of first-lien priority: all of Borrower's accounts, all of Borrower's
inventory located in the United States, and all proceeds thereof (together
the "Collateral").
6.2 COLLATERAL AGENT. To the extent required by this Agreement, Agent
shall perfect all Collateral in its own name as agent for each Bank,
according to its respective Pro Rata Share, and such agency shall be
disclosed on any UCC filings. Agent shall only be required to perfect upon
those portions of the Collateral which can be perfected by the filing of a
UCC1 financing statement.
6.3 FINANCING STATEMENTS AND OTHER DOCUMENTS.
Borrower shall:
(a) Join with Agent in executing such UCC financing statements
(including amendments thereto and continuation statements thereof) and
other documents, in form satisfactory to Agent and as Agent may reasonably
specify, in order to perfect, or continue the perfection of, the rights of
Banks in the Collateral, with the priority of security interest required by
this Agreement;
(b) Pay, or reimburse Agent for paying, all costs and taxes of filing
or recording the same in such public offices as Agent may reasonably
designate;
(c) Except as provided in Subsection (d), take such other steps as
Agent may reasonably direct, including the noting of the Agent's lien on
the Collateral and on any certificates of title therefor, as is necessary
to perfect to Agent's satisfaction the interest of Agent, as agent for the
Banks, in the Collateral; and
(d) Upon a Default and notice from Agent, deliver to Agent all
Collateral which is deliverable.
6.4 COSTS. If a Default has occurred and is continuing, Banks, upon
unanimous agreement, shall have the right, but not the obligation, to pay
taxes, assessments, charges, claims, liens or encumbrances and to cause
compliance with all applicable governmental requirements if Banks, upon
unanimous consent, consider it necessary to protect their security or the
prospects of repayment of the Obligations. Such payments and expenses are
repayable on demand with interest at a floating rate equal to the Base Rate
plus 3% per annum.
6.5 AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. Borrower hereby
irrevocably constitutes and appoints Agent and any officer or agent thereof,
with full power of substitution, effective upon the occurrence of and during
the continuation of a Default, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of Borrower and
in the name of Borrower or in its own name, from time to time in accordance
with this Agreement, for the purposes of exercising its rights as a secured
creditor pursuant to this Agreement, to take any and all appropriate action
and to execute any or all documents and instruments that may be necessary or
desirable to accomplish such purposes.
6.6 NEGATIVE PLEDGE. So long as any amount is payable by Borrower under
this Agreement, or any Bank is committed to make Advances or issue Letters of
Credit under this Agreement, Borrower
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shall not allow any property of Borrower, Guarantor, or any Material
Subsidiary, whether real or personal, tangible or intangible, to be
transferred or encumbered, or to have any lien placed upon such property,
except (a) sales of inventory in the ordinary course of business, (b)
patents, or intellectual or proprietary property, (c) to secure the
Obligations, or (d) as otherwise expressly permitted by Sections 12.2 or 12.3.
ARTICLE 7
GUARANTIES
The Obligations shall be absolutely and unconditionally guaranteed by
Guarantor and every Material Subsidiary of Guarantor, jointly and severally,
in form satisfactory to Banks. Borrower authorizes Agent to release to any
present or future guarantor all information Agent possesses concerning
Borrower or any loans, credits, or other financial accommodations made to
Borrower by Agent or Banks.
ARTICLE 8
INTEREST RATE OPTIONS
8.1 INTEREST RATES AND PAYMENT DATE. The Revolving Loan shall bear
interest from the date of Advance on the unpaid principal balance outstanding
from time to time at the Base Rate or Adjusted LIBOR Rate as selected by
Borrower, and all accrued interest shall be payable in arrears on each
Interest Payment Date.
8.2 OPTION RESTRICTIONS. Each Interest Period for LIBOR Rate Advances
shall be one week or one, two, three, or six months. In no event shall the
Interest Period extend beyond the Termination Date. The minimum amount of a
LIBOR Rate Advance shall be $500,000, with additional increments of $100,000
each permitted.
8.3 PREPAYMENTS. Borrower may prepay any Base Rate Advance on any
Business Day without premium or penalty. If Borrower prepays all or any
portion of a LIBOR Rate Advance prior to the end of an Interest Period, there
shall be due at the time of any such prepayment the Prepayment Fee,
determined in accordance with Form 51-6325, which shall be attached as
Exhibit 1 to this Agreement, and any such prepayment may only be made if in
the amount of $100,000 or more.
8.4 REVERSION TO BASE RATE. The Revolving Loan shall bear interest at
the Base Rate unless an Adjusted LIBOR Rate is specifically selected. At the
termination of any Interest Period, each LIBOR Rate Advance shall revert to a
Base Rate Advance unless Borrower directs otherwise pursuant to Section 2.4.
8.5 INABILITY TO PARTICIPATE IN MARKET. If Agent or any Bank in good
faith cannot participate in the Eurodollar market for legal or practical
reasons, the Adjusted LIBOR Rate shall cease to be an interest rate option.
Agent or such Bank shall notify Borrower if and when it again becomes legal
or practical to participate in the Eurodollar market, at which time the
Adjusted LIBOR Rate shall resume being an interest rate option.
8.6 COSTS. Borrower shall, as to LIBOR Rate Advances, reimburse Agent,
for the account of Banks, for all costs, taxes, and expenses, and defend and
hold Banks harmless for any liabilities, which Banks may incur as a
consequence of any changes in the cost of participating in, or in the laws or
regulations affecting, the Eurodollar market, including any additional
reserve requirements, except to the extent such costs are already calculated
into the Adjusted LIBOR Rate. This covenant shall survive this Agreement and
the repayment of the Revolving Loan. Banks shall provide documentation to
Borrower detailing the basis for any charges made pursuant to this Section.
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8.7 BASIS OF QUOTES. Borrower acknowledges that Agent or Banks may or
may not in any particular case actually match-fund a LIBOR Rate Advance.
Whether the mechanism for setting a particular rate in fact represents the
actual cost to Banks for any particular dollar or Eurodollar deposit or any
LIBOR Rate Advance will depend upon how such Bank actually chooses to fund
the LIBOR Rate Advance, or any foreign exchange contract. By electing an
Adjusted LIBOR Rate, Borrower waives any right to object to Agent's means of
calculating the Adjusted LIBOR Rate quote accepted by Borrower.
ARTICLE 9
CONDITIONS OF LENDING
Banks' obligation to make the initial Advance or Swing Line Advance or
issue any Letter of Credit is subject to the conditions precedent listed in
Sections 9.1 through 9.6, and their obligation to make subsequent Advances
and Swing Line Advances, and to issue subsequent Letters of Credit, is
subject to the conditions precedent listed in Sections 9.7 through 9.9,
unless waived by all Banks in writing:
9.1 AUTHORIZATION. Borrower shall have delivered to Agent a certified
copy of the resolution of Borrower's board of directors authorizing the
transactions contemplated by this Agreement and the execution, delivery, and
performance of all Loan Documents, together with appropriate certificates of
incumbency. Each corporate guarantor shall have delivered to Agent a
certified copy of a resolution of such guarantor's board of directors,
satisfactory in form to Agent, authorizing its guaranty.
9.2 DOCUMENTATION. Borrower shall have executed and delivered to Agent
all documents to reflect the existence of the Obligations and to perfect, as
a first lien, the security interests granted to Banks.
9.3 REFINANCE. Borrower shall have repaid, or shall have provided Agent
with instructions sufficient to repay, from Advances and/or Swing Line
Advances, all indebtedness owing to Creditanstalt-Bankverein, and all
agreements and security interests relating to such facility shall have been
terminated or released.
9.4 LEGAL OPINION. Borrower shall have provided to each Bank a legal
opinion of Borrower's legal counsel (which may be provided by Borrower's
in-house legal counsel) that the Agreement and all other Loan Documents are
duly authorized, valid, and binding obligations of Borrower and/or Guarantor,
as the case may be, and attesting to the truth of the representations made in
Sections 10.1 through 10.5.
9.5 GUARANTIES. Guarantor and each other entity required to provide a
guaranty of the Obligations pursuant to the terms of this Agreement shall
have executed and delivered its guaranty to Agent, and each such guaranty
shall remain in full force and effect.
9.6 PROOF OF INSURANCE. Proof of insurance as required by Section 11.12
shall have been provided to Agent.
9.7 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Borrower or Guarantor in the Loan Documents and in any certificate,
document, or financial statement furnished at any time shall continue to be
true and correct, except to the extent that such representations and
warranties expressly relate to an earlier date.
9.8 MATERIAL ADVERSE CHANGE. No material adverse change has occurred in
Borrower or Guarantor's business, property, or financial condition since the
end of Guarantor's 1996 fiscal year, as reported in Guarantor's audited
financial statements, and at the time of each Advance, or issuance of each
Letter of Credit.
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9.9 COMPLIANCE. No Default or other event which, upon notice or lapse
of time or both would constitute a Default, shall have occurred and be
continuing, or shall exist after giving effect to the Advance or the issuance
of a Letter of Credit to be made.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Agreement, Borrower represents,
warrants, and covenants to Agent and Banks as follows:
10.1 EXISTENCE. Borrower is in good standing as a corporation under the
laws of the state of Delaware, has the power, authority, and legal right to
own and operate its property or lease the property it operates and to conduct
its current business; and is qualified to do business and is in good standing
in all other jurisdictions where the ownership, lease, or operation of its
property or the conduct of its business requires such qualification.
10.2 ENFORCEABILITY. The Loan Documents, when executed and delivered by
Borrower, shall be enforceable against Borrower in accordance with their
respective terms.
10.3 NO LEGAL BAR. The execution, delivery, and performance by Borrower
of the Loan Documents, and the use of the loan proceeds, shall not violate
any existing law or regulation applicable to Borrower; any ruling applicable
to Borrower of any court, arbitrator, or governmental agency or body of any
kind; Borrower's organizational documents; any security issued by Borrower;
or any mortgage, indenture, lease, contract, undertaking, or other agreement
to which Borrower is a party or by which Borrower or any of its property may
be bound.
10.4 LIENS AND ENCUMBRANCES. As of this date, Borrower and each Material
Subsidiary has good and marketable title to its property free and clear of
all security interests, liens, encumbrances, or rights of others, except as
disclosed in writing to Banks on attached Schedule 12.2(a), and except for
taxes which are not yet delinquent and for conditions, restrictions,
easements, and rights of way of record which do not materially affect the use
of any of Borrower's property.
10.5 LITIGATION. Except as disclosed in writing to Banks on attached
Schedule 10.5, there is no threatened (to Borrower's knowledge) or pending
litigation, investigation, arbitration, or administrative action which may
materially adversely affect Borrower's business, property, operations, or
financial condition.
10.6 PAYMENT OF TAXES. Borrower has filed or caused to be filed all tax
returns when required to be filed; and has, to the best of its knowledge,
paid all taxes, assessments, fees, licenses, excise taxes, franchise taxes,
governmental liens, penalties, and other charges levied or assessed against
Borrower or any of its property imposed on it by any governmental authority,
agency, or instrumentality that are due and payable (other than those returns
or payments of which the amount, enforceability, or validity are contested in
good faith by appropriate proceedings and with respect to which adequate
reserves in conformity with GAAP are provided on Borrower's books).
10.7 EMPLOYEE BENEFIT PLAN. Borrower is, to the best of its knowledge,
in material compliance with the provisions of ERISA and the regulations and
published interpretations thereunder. Borrower has not engaged in any acts
or omissions which would make Borrower liable to the Plan, to any of its
participants, or to the Internal Revenue Service, under ERISA.
10.8 MISREPRESENTATIONS. No information, exhibits, data, or reports
furnished by Borrower or Guarantor or delivered to Agent or Banks in
connection with Borrower's application for credit misstates any material
fact, or omits any fact necessary to make such information, exhibits, data,
or reports not misleading.
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10.9 NO DEFAULT. Borrower is not in default in any Loan Document, or in
any material contract, agreement, or instrument to which it is a party.
10.10 NO BURDENSOME RESTRICTIONS. No contract or other instrument to
which Borrower is a party, or order, award, or decree of any court,
arbitrator, or governmental agency, materially impairs Borrower's ability to
repay the Obligations.
10.11 HAZARDOUS SUBSTANCES. To the best of Borrower's knowledge after
due and diligent inquiry, no hazardous or toxic waste or substances are being
stored on any Real Property, other than in accordance with all applicable
environmental laws and regulations, or as disclosed in writing to Banks at
the closing of this Agreement; nor have any such waste or substances been
stored or used in, on, under, over, or about the Real Property prior to or
during Borrower's or any subsidiary's ownership, possession, or control of
any of such Real Property, other than in accordance with all applicable
environmental laws and regulations or as disclosed in writing to Banks at the
closing of this Agreement. Borrower agrees to provide written notice to
Agent immediately upon Borrower becoming aware that the Real Property is
being or has been contaminated with hazardous or toxic waste or substances.
Borrower will not cause nor permit any activities on the Real Property which
directly or indirectly would be likely to result in the Real Property or any
other property becoming contaminated with hazardous or toxic waste or
substances.
10.12 MATERIAL SUBSIDIARIES. As of the date of this Agreement no
Material Subsidiaries exist other than as listed on attached Schedule 10.12.
10.13 MARGIN STOCK. Borrower is not engaged, nor shall it engage,
principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" margin stock
under Regulation U of the Board of Governors of the Federal Reserve System.
Borrower shall not use any part of the proceeds of any Advance for any
purpose which violates or is inconsistent with the provisions of Regulation
G, T, U, or X of such Board of Governors, as the same may be amended,
supplemented, or modified from time to time.
10.14 MATERIAL ADVERSE CHANGE. As of each request for an Advance or for
issuance of a Letter of Credit, that no material adverse change has occurred
in Borrower's or Guarantor's business, property, or financial condition since
the end of Guarantor's 1996 fiscal year, as reported in Guarantor's audited
financial statements, and at the time of such Advance, or at the time of
issuance of such Letter of Credit.
ARTICLE 11
AFFIRMATIVE COVENANTS
So long as this Agreement shall remain in effect, or any liability exists
under the Loan Documents, Borrower shall, as to Sections 11.1, and 11.6
through 11.14 (and shall take any action necessary to assure that each
Material Subsidiary shall); and Guarantor shall, as to Sections 11.2 through
11.14:
11.1 USE OF PROCEEDS. Use the proceeds of the Revolving Loan and Swing
Line for working capital, for acquisitions permitted under this Agreement,
and to refinance obligations owing prior to the execution of this Agreement
to Creditanstalt-Bankverein.
11.2 FIXED CHARGE COVERAGE RATIO. Maintain a Fixed Charge Coverage
Ratio, measured quarterly for the four quarters then ending, of not less than
1.75 to 1.
11.3 TANGIBLE NET WORTH. Maintain a Tangible Net Worth of not less than
$37,500,000, increasing each fiscal quarter, beginning quarter ending March
31, 1997, by an amount equal to 90%
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of net income for the quarter then ending, without adjustment downward for
quarters in which a net loss is incurred.
11.4 DEBT RATIO. Maintain a ratio of (a) Debt minus Subordinated Debt to
(b) the sum of Tangible Net Worth plus Subordinated Debt, of not more than
1.5 to 1.
11.5 FINANCIAL INFORMATION. Maintain a standard system of accounting in
accordance with GAAP and furnish to each Bank the following:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available and, in any
event, within 45 days after the end of each fiscal quarter except the last
fiscal quarter of each fiscal year, a copy of the consolidated statement of
income and retained earnings of Guarantor for the quarter and for the
current fiscal year through such quarter, and for each such quarter a copy
of the consolidated balance sheet, consolidated statement of shareholders'
equity, and consolidated statement of cash flow of Guarantor as of the end
of such quarter, and for the current fiscal year through such quarter,
setting forth, in each case, in comparative form, figures for the
corresponding period of the preceding fiscal year, all in reasonable detail
and satisfactory in scope to each Bank, prepared under the supervision of
the chief financial officer of Guarantor, and in form and substance
satisfactory to each Bank;
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available and, in any
event, within 90 days after the end of each fiscal year, a copy of the
consolidated balance sheet, consolidated statement of income and retained
earnings, consolidated statement of shareholders' equity, and consolidated
statement of cash flow of Guarantor for such year, setting forth in each
case, in comparative form, corresponding figures from the preceding annual
statements, each audited by independent certified public accountants of
recognized standing selected by Guarantor and satisfactory to each Bank
certifying that such statement is complete and correct, fairly presents
without qualification the consolidated financial condition of Guarantor for
such period, is prepared in accordance with GAAP, and has been audited in
conformity with generally accepted auditing standards;
(c) CONSOLIDATING STATEMENTS. If Guarantor or Borrower shall create
or acquire any Material Subsidiary, Guarantor shall thereafter also provide
to each Bank consolidating annual and quarterly financial statements as to
each Material Subsidiary, including Borrower;
(d) PROJECTIONS. By December 31 of each year, an update of
Guarantor's three-year financial projections;
(e) OTHER CERTIFICATES. Together with the delivery of the financial
statements required by Subsections 11.5(a) and 11.5(b), a certificate of
the chief financial officer of Guarantor, in the form of Exhibit 4
attached, together with the calculations made to determine compliance with
Sections 11.2 through 11.5; and
(f) ADDITIONAL FINANCIAL INFORMATION. As soon as available and, in
any event, within ten days after request, such other data, information, or
documentation as any Bank may reasonably request.
11.6 MAINTENANCE OF EXISTENCE. Preserve and maintain its existence,
powers, and privileges in the jurisdiction of its formation, and qualify and
remain qualified in each jurisdiction in which its presence is necessary or
desirable in view of its business, operations, or ownership of its property.
Borrower and Guarantor shall also maintain and preserve all of its respective
property which is necessary or useful in the proper course of its business,
in good working order and condition, ordinary wear and tear excepted.
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11.7 BOOKS AND RECORDS. Keep accurate and complete books, accounts, and
records in which complete entries shall be made in accordance with GAAP,
reflecting all financial transactions of Borrower or Guarantor, as the case
may be.
11.8 ACCESS TO PREMISES AND RECORDS. At all reasonable times and as
often as Agent or Banks may reasonably request, permit any authorized
representative designated by Agent or Banks to have access to the premises,
property, and financial records of Borrower or Guarantor, as the case may be,
including all records relating to the finances, operations (other than
relating to research and development, or any trade secrets), and procedures
of Borrower or Guarantor, as the case may be, and to make copies of or
abstracts from such records.
11.9 NOTICE OF EVENTS. Furnish Banks prompt written notice of:
(a) PROCEEDINGS. Any proceeding instituted by or against Borrower or
Guarantor, as the case may be, in any court or before any commission or
regulatory body, or any proceeding threatened against it in writing by any
governmental agency which if adversely determined would have a material
adverse effect on Borrower's or Guarantor's business, property, or
financial condition, or where the amount involved is $500,000 or more and
not covered by insurance;
(b) MATERIAL DEVELOPMENT. Any material development in any such
proceeding referred to in Subsection 11.9(a);
(c) MATERIAL SUBSIDIARIES. Creation or acquisition of any Material
Subsidiary;
(d) DEFAULTS. Any accident, event, or condition which is or, with
notice or lapse of time or both, would constitute a Default, or a default
under any other material agreement to which Borrower or Guarantor, as the
case may be, is a party, along with a statement describing actions being
taken to remedy such default;
(e) ADVERSE EFFECT. Any other action, event, or condition of any
nature which could result in a material adverse effect on the business,
property, or financial condition of Borrower or Guarantor, as the case may
be; and
(f) CONSENT DECREE. Any violation of the Consent Decree described in
Section 11.11.
11.10 PAYMENT OF DEBTS AND TAXES. Pay all Debt and perform all
obligations promptly and in accordance with their terms, and pay and
discharge promptly all taxes, assessments, and governmental charges or levies
imposed upon Guarantor, on a consolidated basis, its property, or revenues
prior to the date on which penalties attach thereto, as well as all lawful
claims for labor, material, supplies, or otherwise which, if unpaid, might
become a lien or charge upon the property of Guarantor, Borrower, or any
Material Subsidiary. Guarantor, Borrower, and the Material Subsidiaries shall
not, however, be required to pay or discharge any such tax, assessment,
charge, levy, or claim so long as its enforceability, amount, or validity is
contested in good faith by appropriate proceedings, and adequate reserves are
maintained.
11.11 FDA CONSENT DECREE. Remain in compliance at all times with the
Consent Decree dated July 24, 1992, entered into between the U.S. Food and
Drug Administration ("FDA") and Borrower with respect to a civil complaint
filed by the FDA for alleged violations of "good manufacturing practices" and
FDA medical device reporting regulations.
11.12 INSURANCE. Maintain commercially adequate levels of coverage with
financially sound and reputable insurers, including, without limitation:
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(a) PROPERTY INSURANCE. Insurance on all property of a character
usually insured by organizations engaged in the same or similar type of
business as Borrower or Guarantor, as the case may be, against all risks,
casualties, and losses through extended coverage or otherwise and of the
kind customarily insured against by such organizations, with such policy or
policies covering tangible collateral to name Agent as loss payee, as its
interests may appear;
(b) LIABILITY INSURANCE. Public liability insurance against tort
claims which may be asserted against Borrower or Guarantor, as the case may
be; and
(c) ADDITIONAL INSURANCE. Such other insurance as may be required by
law.
11.13 HAZARDOUS SUBSTANCES. Promptly comply, at Borrower's expense, with
all statutes, regulations, and ordinances which apply to Borrower or the Real
Property, and with all orders, decrees, or judgments of governmental
authorities or courts having jurisdiction which Borrower is bound by,
relating to the use, collection storage, treatment, control, removal, or
cleanup of hazardous or toxic waste or substances in, on, under, over, or
about the Real Property or in, on, under, over, or about any adjacent
property that becomes contaminated with hazardous or toxic waste or
substances as a result of construction, operations, or other activities on,
or the contamination of, the Real Property. Borrower shall defend, protect,
hold harmless, and indemnify Agent, Banks, and their affiliates, and their
successors and assigns, and their shareholders, directors, officers,
employees, attorneys, and agents, from and against any and all claims,
demands, penalties, fees, liens, damages, losses, expenses, and liabilities
arising out of or in any way connected with any alleged or actual past or
future presence on or under the Real Property of any hazardous or toxic waste
or substances from any cause whatsoever; it being intended that Borrower
shall be strictly and absolutely liable to Agent and Banks without regard to
any fault by Borrower.
11.14 COMPLIANCE WITH LAWS. Comply in all material respects with all
laws and regulations applicable to Borrower or Guarantor, as the case may be,
and its respective business activities.
ARTICLE 12
NEGATIVE COVENANTS
So long as this Agreement shall remain in effect, or any liability shall
exist under the Loan Documents, neither Borrower nor Guarantor nor any
Material Subsidiary shall:
12.1 DEBT. Create, incur, assume, permit to exist, or otherwise become
committed for any Debt except any:
(a) UNSECURED TRADE CREDIT. Unsecured, short-term Debt arising from
current operations by purchasing on credit goods, services, supplies, or
merchandise and not constituting borrowings;
(b) EXISTING OBLIGATIONS. Debt in existence as of the date of this
Agreement and disclosed to Banks in Schedule 12.1(b) attached hereto, and
all renewals, modifications, and extensions thereof;
(c) NEGOTIABLE INSTRUMENTS. Endorsements on negotiable instruments
for deposit or collection in the ordinary course of business;
(d) AFFILIATES. Guaranties by Guarantor or any Material Subsidiary
of the Obligations;
(e) PERFORMANCE BONDS. Performance bonds as required in the ordinary
course of Borrower's business; and
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(f) OTHER INDEBTEDNESS. Debt which in the aggregate does not exceed
$500,000 outstanding at any one time.
12.2 LIENS AND ENCUMBRANCES. Create, incur, or assume, or agree to
create, incur, or assume any lien, whether consensual or nonconsensual, on
any of its property, or to enter into any lease with respect to any of its
property except:
(a) EXISTING LIENS. Liens in existence as of the date of this
Agreement and disclosed to Banks in Schedule 12.2(a) attached hereto;
(b) PURCHASE MONEY. Purchase money security interests on equipment
acquired by Borrower through the financing which is secured by such lien;
(c) TAX LIENS. Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, and for which adequate
reserves are maintained; and
(d) INCIDENTAL LIENS. Other liens incidental to the conduct of
Borrower's business or the ownership of its property which are not incurred
in connection with the borrowing of money or the obtaining of credit, and
which do not in the aggregate materially impair the value or use of
property.
12.3 DISPOSITION OF ASSETS. Sell, transfer, lease, or otherwise assign
or dispose of more than five percent (5%) of its assets, outside the ordinary
course of business (PROVIDED, that assets held less than 60 days shall be
deemed sales in the ordinary course of business), in any one fiscal year;
PROVIDED, that Borrower may transfer a substantial portion of its business to
a wholly-owned subsidiary if (a) such subsidiary fulfills the requirements
for Material Subsidiaries to guaranty the Obligations, (b) such subsidiary
grants to Banks, to secure its guaranty, a first-lien security interest in
all of such subsidiary's accounts and inventory, and all proceeds thereof,
providing to Agent all documents and instruments necessary to create and
perfect such security interests, and (c) such subsidiary shall execute and
deliver to Agent the certificate in the form of Exhibit 5 attached.
12.4 MERGERS. Become a party to any merger, consolidation, or like
corporate change, other than where Borrower is the surviving entity of a
merger and no other provision of this Agreement is thereby violated; or make
any substantial transfer or contribution to, or material investment in,
stock, shares, or licenses of any Person, other than acquisitions or joint
ventures involving an investment of no more than $2,000,000 in the aggregate
in any one fiscal year.
12.5 CAPITAL STRUCTURE. Purchase, retire, or redeem any of its capital
stock or otherwise effect any change in Borrower's capital structure, other
than stock purchased pursuant to 401(k) plans.
12.6 WAGE AND HOUR LAWS. Engage in any material violation of the
federal Fair Labor Standards Act or any comparable state wage and hour law.
12.7 ERISA. Engage in any act or omission which would make Borrower
materially liable under ERISA to the Plan, to any of its participants, or to
the Internal Revenue Service.
12.8 DISSOLUTION. Adopt any agreement or resolution for dissolving,
terminating, or substantially altering Borrower's present business activities.
12.9 BUSINESS ACTIVITIES. Engage or enter into any activity which is
unusual to Borrower's existing business.
12.10 DIVIDENDS. Declare or pay any dividend.
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12.11 PERMISSIBLE LOANS AND INVESTMENTS. Make any loan or advance to any
Person otherwise than in the ordinary course of business, or make any
investment outside the ordinary course of Borrower's or Guarantor's business,
except:
(a) CERTIFICATES OF DEPOSIT. Investments in certificates of deposit
maturing within one year from the date of acquisition from any one or more
of the top 000 Xxxxxx Xxxxxx commercial banks, as rated by dollar value of
assets;
(b) MONEY MARKET. Money market mutual funds, bankers' acceptances,
eurodollar investments, repurchase agreements, and other short-term money
market investments acceptable to Agent;
(c) COMMERCIAL PAPER. Prime commercial paper with ratings of A-1/P-1
or better by Xxxxx'x or Standard & Poor (or equivalent rating if such
rating systems change) with maturities of less than one year; and
(d) U. S. GOVERNMENT PAPER. Obligations issued or guaranteed by the
United States Government or its agencies with maturities of less than one
year.
ARTICLE 13
AGENCY
13.1 APPOINTMENT. The Banks irrevocably designate and appoint Agent as
their agent under this Agreement, and irrevocably authorize Agent, as their
agent, to take such action on their behalf under the provisions of this
Agreement and to exercise all such powers as are expressly delegated to Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. No implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist against Agent. Notwithstanding any provision to
the contrary in this Agreement, Agent shall have no implied duties or
responsibilities to take any action, except such action as it is expressly
required to take under the express terms of this Agreement, and shall have no
fiduciary relationship with any of the Banks as to any matter not expressly
provided for by the Loan Documents including, without limitation, enforcement
or collection of the Obligations. Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain
from acting upon the consent and instructions of Majority Banks. Any company
into which Agent may be merged or converted or with which it may be
consolidated, or any company resulting from any merger, conversion, or
consolidation to which it shall be a party, or any company to which Agent may
sell or transfer all or substantially all of its agency relationships, shall
be the successor to Agent without any further action by Banks or Borrower and
without the execution or filing of any paper.
13.2 SUCCESSOR AGENT. Agent may resign as Agent upon 30 days' notice to
Banks. Upon Agent's resignation as agent under this Agreement, Banks, upon
consent of Majority Banks, shall appoint from among the Banks a successor
agent for the Banks. If no successor agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after
consulting with Banks, a successor agent, and Agent shall remain in place
until a new agent accepts such appointment. Upon the acceptance of its
appointment as successor agent hereunder, (a) such successor agent shall
succeed to all the rights, powers, and duties of the retiring Agent, (b) the
term "Agent" shall mean such successor agent, and (c) the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
Agreement shall inure to such retiring Agent's benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
13.3 DUTIES OF AGENT. Agent shall service the Revolving Loan, the Swing
Line, and the Letter of Credit Facility in accordance with its usual practice
in connection with similar credits. In servicing and collecting the
Revolving Loan, the Swing Line, and the Letter of Credit Facility and in
carrying out
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the terms and provisions of the Loan Documents, Agent shall not be liable to
any of the Banks for any error of judgment, or for any action taken or
omitted to be taken by it, except for gross negligence or willful misconduct.
13.4 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be
entitled to rely upon advice of counsel concerning all matters pertaining to
such duties. Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact selected by it with reasonable care or any
action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel.
13.5 EXCULPATORY PROVISIONS. Agent's Related Parties shall not be
responsible or otherwise liable to any of Banks in any manner for:
(a) ACTIONS. Any action lawfully taken or omitted to be taken by it
or by such other persons or entities under or in connection with this
Agreement or any other Loan Document, except for its or their own gross
negligence or willful misconduct;
(b) BORROWER STATEMENTS. Any recital, statement, representation, or
warranty made by Borrower or any officer thereof contained in this
Agreement or any other Loan Document, or in any certificate, report,
statement, or other document relating to this Agreement or any other Loan
Document;
(c) ENFORCEABILITY. The validity, effectiveness, genuineness,
enforceability, or sufficiency of this Agreement or any other Loan
Document, the financial condition of Borrower, or any failure of Borrower
to perform its obligations under this Agreement or any other Loan Document;
(d) FAILURE TO PERFECT. Inability to perfect any Collateral to the
extent required by this Agreement where such inability is due to Borrower's
failure to act or take such steps as Agent may direct; or
(e) INVESTIGATION. Ascertaining or inquiring as to the observance of
or Borrower's performance under any Loan Document, or inspecting the
property, books, or records of Borrower.
13.6 RELIANCE BY AGENT. Agent's Related Parties shall be entitled to
rely, and shall be fully protected in relying upon, any note, writing,
resolution, notice, consent, certificate, message, statement, order, or other
document or conversation believed to have been authorized, genuine or
correct, or signed, sent, or made by the proper Person, or upon advice and
statements of counsel (including, without limitation, legal counsel to Agent
or Borrower, and independent accountants and other experts selected by Agent).
13.7 INSTRUCTIONS. Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document as Agent
deems appropriate, unless it shall first receive the consent of Majority
Banks or shall first be indemnified to its satisfaction by all Banks, in
accordance with their respective Pro Rata Share, against all liabilities and
expenses which may be incurred by it or by reason of taking or continuing to
take any such action. Agent shall in all cases be fully protected in acting
or in refraining from acting under this Agreement or any other Loan Document
in accordance with the consent of Majority Banks, where required, and such
request and any action taken or not taken to act pursuant thereto shall be
binding upon all of the Banks and all future holders of any interest in the
Obligations.
13.8 NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default unless Agent has actual knowledge or
has received notice from one or more of the Banks or Borrower referring to
this Agreement, describing such Default and stating in substance
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that such notice is a "notice of default." In the event Agent receives such
a notice or has actual knowledge of any Default, Agent shall give notice
thereof to all of the Banks.
13.9 REPRESENTATIONS. None of Agent's Related Parties have made any
representation or warranty to Banks, and no action taken by Agent after the
date of this Agreement, including any review of Borrower's affairs, shall be
deemed to constitute any representation or warranty by Agent to any of the
Banks.
13.10 INDEPENDENT CREDIT REVIEW. Each Bank represents to Agent that it
has, independently and without reliance upon Agent, and based upon such
financial statements, documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, property,
operations, and financial condition of Borrower and Guarantor and made its
own decision to enter into this Agreement. Each of the Banks also represents
that it shall, independently and without reliance upon Agent, and based upon
such financial statements, documents, and information as it shall deem
appropriate at the time, continue to make its own credit analysis,
appraisals, and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, property, operations, and financial condition of
Borrower. For purposes of determining compliance with the conditions
specified in Article 9, each Bank that has executed this Agreement shall be
deemed to have consented to, approved, or accepted, or to be satisfied with,
each document or other matter either sent by Agent to such Bank for consent,
approval, acceptance, or satisfaction, or required under said Article to be
consented to or approved by or acceptable or satisfactory to such Bank,
unless such Bank promptly provides Agent with notice to the contrary.
13.11 INFORMATION. Agent shall have no obligation, duty, or
responsibility, either initially or on a continuing basis, to provide Banks
with any credit or other information concerning the business, property,
operations, or financial condition of Borrower or Guarantor which may come
into possession of any of Agent's Related Parties. Although Agent may
furnish to Banks, upon request, copies of documents Agent has received
pursuant to this Agreement, Agent assumes no responsibility as to the
authenticity, validity, or enforceability of any such documents.
13.12 INDEMNITY. The Banks shall indemnify Agent, according to their
respective Pro Rata Share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, suits, judgments,
reasonable costs and expenses, taxes, and disbursements of any kind or nature
whatsoever (except to the extent they arise from Agent's gross negligence or
willful misconduct) which may at any time be imposed on, incurred by, or
asserted against any of Agent's Related Parties or in any way relating to or
arising out of this Agreement, any other Loan Document, or any document
contemplated by or referred to therein, any transaction contemplated thereby,
or any action taken or omitted by Agent under or in connection with any of
the foregoing. Without limiting the foregoing, each Bank shall reimburse
Agent, in accordance with such Bank's Pro Rata Share, for any costs or
expenses incurred by Agent subsequent to the closing of this Agreement,
including outside or in-house legal fees, which (a) are required to be
reimbursed to Agent by Borrower under any of the Loan Documents, but are not
so reimbursed, or (b) arise out of action taken by Agent at the unanimous
consent of Banks in accordance with this Agreement. This subsection shall
survive the final payment of the Obligations and payment of all other amounts
due under this Agreement or the other Loan Documents.
13.13 SEPARATION OF CAPACITIES. In its capacity as a lender that is one
of the Banks, Seafirst shall have the same rights and powers hereunder as the
other Banks and may exercise the same as though it were not Agent. The term
"Bank(s)" shall include Seafirst, in its individual capacity as a lender and
not as an agent, unless the context otherwise indicates. This Agreement
shall not restrict in any way any Bank's ability to enter into other credit
or banking facilities with Borrower or Guarantor, so long as such facility
(a) does not violate any other provision of this Agreement and (b) is not
secured by any of the Collateral; and the other Bank or Banks hereunder shall
not have any rights or obligations as to any such facilities not provided by
such Bank or Banks.
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ARTICLE 14
EVENTS AND CONSEQUENCES OF DEFAULT
14.1 EVENTS OF DEFAULT. Any of the following events shall constitute a
default by Borrower under the terms of this Agreement, the L/C Agreements,
and all other Loan Documents ("Default"):
(a) NONPAYMENT. Any payment of principal or reimbursement of a draw
on a Letter of Credit is not made on the date when due, or any other
payment or reimbursement due or demanded under this Agreement or any Loan
Document is not made within five days of the date when due;
(b) BREACH OF WARRANTY. Any material representation or warranty made
or deemed made in connection with this Agreement or any other Loan
Document, or any certificate, notice, or report furnished pursuant hereto,
is determined by any Bank to be false in any respect when made;
(c) FAILURE TO PERFORM. Any other term, covenant, or agreement
contained in any Loan Document is not performed or satisfied, and, if
remediable, such failure continues unremedied for 30 days after written
notice thereof has been given to Borrower by Agent;
(d) DEFAULTS ON OTHER OBLIGATIONS. There exists a default by
Borrower, Guarantor, or any Material Subsidiary in the performance of any
other agreement or obligation for the payment of borrowed money, for the
deferred purchase price of property or services, or for the payment of rent
under any lease, whether by acceleration or otherwise, which would permit
such obligation to be declared due and payable prior to its stated
maturity, with any such occurrence to be a Default immediately if the
obligation concerned exceeds $500,000 or, if such occurrence is with regard
to an obligation of $500,000 or less, if such default continues for 30 days
after Borrower, Guarantor, or such Material Subsidiary, as the case may be,
receives written notice thereof from the creditor so affected;
(e) GUARANTIES. Any Guarantor or any Material Subsidiary revokes or
attempts to revoke such guaranty, whether with respect to future
transactions or outstanding Obligations, or otherwise breaches the terms
and conditions of such guaranty, or violates any promise made pursuant to
this Agreement, or any such guaranty is ruled to be invalid or
unenforceable by any court of competent jurisdiction;
(f) CHANGE OF CONTROL. Any Person (including any affiliated group of
individuals and/or entities) shall acquire 25% or more of the outstanding
voting stock of Guarantor; or Guarantor shall cease to own 100% of the
outstanding voting stock of Borrower;
(g) AFFILIATES. Any Material Subsidiary shall violate any of the
covenants made by it in a certificate in the form of Exhibit 5 attached
hereto, or any representation or warranty made or deemed made by it in such
certificate is determined by any Bank to be false in any material respect
when made, or any of the representations and warranties made by Guarantor
in the addendum to this Agreement is determined by any Bank to be false in
any material respect when made;
(h) LOSS, DESTRUCTION, OR CONDEMNATION OF PROPERTY. A portion of
Borrower's, Guarantor's, or any Material Subsidiary's property is affected
by any uninsured loss, damage, destruction, theft, sale, or encumbrance
other than created herein or is condemned, seized, or appropriated, the
effect of which materially impairs Borrower's, Guarantor's, or such
Material Subsidiary's financial condition or its ability to pay its debts
as they come due;
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(i) ATTACHMENT PROCEEDINGS AND INSOLVENCY. Borrower, Guarantor, or
any Material Subsidiary, or any of Borrower's, Guarantor's, or any such
Material Subsidiary's property is affected by any:
(I) Judgment lien, execution, attachment, garnishment, general
assignment for the benefit of creditors, sequestration, or forfeiture,
to the extent Borrower's, Guarantor's, or such Material Subsidiary's
financial condition or its ability to pay its debts as they come due
is thereby materially impaired; or
(II) Proceeding under the laws of any jurisdiction relating to
receivership, insolvency, or bankruptcy, whether brought voluntarily
or involuntarily by or against Borrower, Guarantor, or any Material
Subsidiary, including, without limitation, any reorganization of
assets, deferment or arrangement of debts, or any similar proceeding,
and, if such proceeding is involuntarily brought against Borrower,
Guarantor, or such Material Subsidiary, it is not dismissed within 60
days;
(j) JUDGMENTS. Final judgment on claims not covered by insurance
which, together with other outstanding final judgments against Borrower,
Guarantor, or any Material Subsidiary, exceeds $500,000, is rendered
against Borrower, Guarantor, or any Material Subsidiary and is not
discharged, vacated, or reversed, or its execution stayed pending appeal,
within 60 days after entry, or is not discharged within 60 days after the
expiration of such stay; or
(k) GOVERNMENT APPROVALS. Any governmental approval, registration,
or filing with any governmental authority, now or later required in
connection with the performance by Borrower of its obligations under the
Loan Documents, is revoked, withdrawn, or withheld, or fails to remain in
full force and effect, except Borrower shall have 60 days after notice of
any such event to take whatever action is necessary to obtain all necessary
approvals, registrations, and filings.
14.2 REMEDIES UPON DEFAULT. If any Default occurs under Subsection
14.1(i), the Banks' commitment to make Advances and Seafirst's commitment to
make Swing Line Advances and issue new Letters of Credit shall immediately
and automatically terminate (but Agent shall have no liability to any other
Bank for, and any risk participations shall be effective as to, any Advances
made by Agent or Letters of Credit issued by Seafirst prior to Agent
receiving actual notice of such occurrence, absent Agent's willful misconduct
or gross negligence), and all Obligations, including all accrued interest,
shall immediately and automatically become due and payable, without
presentment, demand, protest, or notice of any kind, all of which are hereby
expressly waived by Borrower, and Agent may immediately, upon receiving
notice of such an occurrence, exercise any or all of the following remedies
for Default; and if any other Default occurs and is continuing, Agent, upon
direction of Majority Banks, shall, by notice from Agent to Borrower:
(a) TERMINATE COMMITMENTS. Terminate Banks' commitment to make
Advances and Seafirst's commitment to make Swing Line Advances and issue
new Letters of Credit;
(b) SUSPEND COMMITMENTS. Refuse to make further Advances or Swing
Line Advances or issue new Letters of Credit until any Default has been
cured;
(c) ACCELERATE. Declare all Obligations, including all accrued
interest, to be immediately due and payable without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived by
Borrower;
(d) COLLATERAL. Proceed to realize on any or all Collateral by any
available means; and/or
(e) ALL REMEDIES. Pursue any other available legal and equitable
remedies.
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In addition, each Bank shall have the right to set off against, or place an
administrative freeze upon, deposit accounts of Borrower at such Bank any
amounts owing under the Obligations, including amounts in excess of such
Bank's Pro Rata Share of the outstanding balance of the Obligations. Any
such amounts, and any other amounts received by any Bank on account of the
Obligations, other than from Agent, shall be delivered to Agent to be
distributed to each Bank in accordance with its respective Pro Rata Share;
PROVIDED, however, that if all or any portion of such payment turned over
from a Bank to Agent and distributed to each Bank is thereafter recovered by
Borrower from such Bank, each Bank shall, in accordance with its respective
Pro Rata Share, reimburse such other Bank for the amount so recovered. All
of Banks' and Agent's rights and remedies in all Loan Documents shall be
cumulative and can be exercised separately or concurrently. Borrower shall
have no liability to any Bank with respect to any sum that Agent receives in
accordance with this Agreement and fails to distribute to such Bank as
required by this Agreement.
14.3 DEFAULT INTEREST. Upon Default, whether or not acceleration has
occurred, all outstanding Advances shall, upon direction by Majority Banks to
Agent, accrue interest at a floating rate per annum of 3.0% above the Base
Rate, as it may vary from time to time.
ARTICLE 15
MISCELLANEOUS
15.1 MANNER OF PAYMENTS.
(a) PAYMENTS ON NONBUSINESS DAYS. Whenever any event is to occur or
any payment is to be made under any Loan Document on any day other than a
Business Day, such event shall occur or such payment shall be made on the
next succeeding Business Day and such extension of time shall be included
in computation of interest in connection with any such payment.
(b) PAYMENTS. All payments and prepayments to be made by Borrower
shall be made to Agent when due, at Agent's office as may be designated by
Agent, without offsets or counterclaims for any amounts claimed by Borrower
to be due from Agent or Banks, in the currency advanced, and in immediately
available funds.
(c) TIMING OF PAYMENTS. All payments and prepayments to be made by
Borrower shall be made to Banks care of Agent, no later than 12:00 noon on
the date when due (with payments received after 12:00 noon to be deemed
received on the following Business Day), at Agent's office as may be
designated by Agent, without offsets or counterclaims for any amounts
claimed by Borrower to be due from any Bank, in the currency which was
advanced to Borrower and in immediately available funds. Notwithstanding
the foregoing, payments due under the Swing Line may be made until 3:30
p.m.
(d) APPLICATION OF PAYMENTS. All payments made by Borrower shall be
applied first against fees, expenses, and indemnities due; second, against
interest due; and third, against principal, with Agent having the
obligation, after a Default which is continuing, to apply any payments or
collections received against the Obligations owing to the Banks in
accordance with their respective Pro Rata Shares. Except for payments made
by Borrower to Agent for fees and indemnities due Agent, or payments made
with regard to Swing Line Advances or Letters of Credit in which no Bank
has been called upon to purchase a participation pursuant to Article 5, all
payments made by Borrower shall be deemed to be made to Agent, as agent for
Banks in accordance with each Bank's Pro Rata Share, and shall be
distributed by Agent to Banks according to their respective Pro Rata Share;
PROVIDED, that while Agent will make a good faith effort to make such
remittances on the same Business Day as received, if payments are received
from Borrower after 12:00 noon, and if it is not practicable for Agent to
make same-day remittances to the Banks, then Agent shall not be obligated
to remit funds to the Banks
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until the next Business Day, along with interest at the Fed Funds Rate.
Any such payments which are received by a Bank shall be delivered
immediately by such Bank to Agent for distribution to Banks in accordance
with this subsection.
(e) RECORDING OF PAYMENTS. Agent is authorized to record on a
schedule or computer-generated statement the date and amount of each
Advance and Swing Line Advance, all conversions between interest rate
options, and all payments of principal and interest. All such schedules or
statements shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded.
(f) ANTICIPATORY PAYMENTS. Agent shall have the right (but not the
obligation), if it reasonably anticipates receipt of payment from Borrower
but has not actually received such payment, to forward payment to each Bank
of its respective Pro Rata Share; PROVIDED, that if Borrower fails within
one Business Day to make such payment, each Bank shall, immediately upon
the demand of Agent, return such funds to Agent.
(g) PAYMENTS PURSUANT TO ADVANCES. If an Advance is repaid by means
of a new Advance in a like amount, Agent shall credit such new Advance
directly to repayment of the maturing Advance, and no funds shall be
transferred to or from Banks.
(h) MULTICURRENCY ADVANCES. If a Multicurrency Advance is not repaid
on the date when due, Borrower shall indemnify Agent and all Banks for all
costs, expenses, and interest incurred by Agent and each such Bank in
covering any foreign exchange contracts and xxxxxx entered into by such
parties with regard to such Multicurrency Advance.
15.2 NOTICES. Agent may make Advances and conversions between interest
rates, and Seafirst shall make Swing Line Advances, based on telephonic,
telex, and oral requests made by any Person whom Agent in good faith believes
to be authorized to act on behalf of Borrower. All other notices, demands,
and other communications to be given pursuant to any of the Loan Documents
shall be in writing and shall be deemed received the earlier of when actually
received, or two days after being mailed, postage prepaid and addressed as
follows, or as later designated in writing:
AGENT: BORROWER:
SEAFIRST BANK PHYSIO-CONTROL CORPORATION
Seafirst Agency Services 00000 Xxxxxxx Xxxx Xxxxxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx Xxxxxxx, XX 00000-0000
Xxxxxxx, XX 00000 Attention: Xxxxxx X. Xxxxxxxxxx
Attention: Xxx Xxxx
BANKS:
SEAFIRST BANK MELLON BANK, N.A.
Metropolitan Wholesale, Team 1 Western Region
000 Xxxxx Xxxxxx, 00xx Xxxxx 000 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx Attention: Xxxxx X. Xxxxxx
15.3 DOCUMENTATION AND ADMINISTRATION EXPENSES. Borrower shall pay,
reimburse, and indemnify Agent and Banks for all of Agent's and Banks'
reasonable costs and expenses, including, without limitation, all accounting,
appraisal, and report preparation fees or expenses, all attorneys' fees
(including the allocated cost of in-house counsel), legal expenses, and
recording or filing fees, incurred in connection with the negotiation,
preparation, execution, and administration of this Agreement and
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all other Loan Documents, and all amendments, supplements, or modifications
thereto, and the perfection of all security interests, liens, or encumbrances
that may be granted to Banks; PROVIDED, that Borrower shall pay no more than
$3,000 in legal fees for the initial documentation of the facilities
evidenced by this Agreement. Borrower acknowledges that any legal counsel
retained or employed by Agent or Banks acts solely on the Agent's and Banks'
behalf and not on Borrower's behalf, despite Borrower's obligation to
reimburse Agent and Banks for the cost of such legal counsel, and that
Borrower has had sufficient opportunity to seek the advice of its own legal
counsel with regard to this Agreement.
15.4 COLLECTION EXPENSES. The nonprevailing party shall, upon demand by
the prevailing party, reimburse the prevailing party for all of its costs,
expenses, and reasonable attorneys' fees (including the allocated cost of
in-house counsel) incurred in connection with any controversy or claim
between said parties relating to this Agreement or any of the other Loan
Documents, or to an alleged tort arising out of the transactions evidenced by
this Agreement, including those incurred in any action, bankruptcy
proceeding, arbitration or other alternative dispute resolution proceeding,
or appeal, or in the course of exercising any judicial or nonjudicial
remedies.
15.5 WAIVER. No failure to exercise and no delay in exercising, on the
part of Agent or Banks, any right, power, or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power, or privilege. Further,
no waiver or indulgence by Agent or Banks of any Default shall constitute a
waiver of Agent's and Banks' right to declare a subsequent similar failure or
event to be a Default.
15.6 ASSIGNMENT. This Agreement is made expressly for the sole benefit
of Borrower and for the protection of Agent and Banks and their respective
successors and assigns. The rights of Borrower hereunder shall not be
assignable by operation of law or otherwise, without the prior written
consent of Agent and Banks. Upon any assignment, the assigning Bank shall
pay Agent an assignment fee of $2,500. Either Bank may at any time sell,
assign, grant participations in, or otherwise transfer to any other financial
institution (a "Participant") all or any part of its obligations under the
Letters of Credit and its rights under this Agreement and the Loan Documents,
with assignments only to be made with the consent of Borrower, which shall
not be unreasonably withheld. Participations may be sold without the consent
of Borrower, PROVIDED that any voting rights of such participants shall be
limited to matters of principal amount, interest rates, fees, payment dates,
release of any Collateral or any guarantors, and extensions of the
Termination Date or other maturities. Banks acknowledge and agree that any
such disposition will not alter or affect such Bank's direct obligations
under this Agreement and under the Letters of Credit and its participation
therein. Borrower acknowledges that any such Participant will become an
owner PRO RATA of the Obligations, and Borrower waives any right it may have
to setoff the Obligations against any claims or counterclaims it may have
against the Bank selling such participation. Assignments by Banks, as opposed
to participations, must be in minimum amounts of $5,000,000, and may only be
made with the prior written consent of Borrower and Agent. It is the
intention of the parties that Borrower's obligation to pay or reimburse
expenses will not be increased because of an assignment or the creation or
transfer of a participation interest. Notwithstanding anything in this
Agreement to the contrary, Borrower shall not be required to pay or reimburse
Agent or Banks for any fees, costs, or expenses, including attorneys' fees,
relating to the creation or transfer of any assignment or participation
interest. Neither shall Borrower be required to pay or reimburse Agent or
Banks for any documentation and administration expenses incurred by an
assignee or Participant except to the extent that such expenses are in lieu
of, and not in addition to, expenses incurred by Seafirst or Mellon.
15.7 MERGER. The rights and obligations set forth in this Agreement
shall not merge into or be extinguished by any of the Loan Documents, but
shall continue and remain valid and enforceable. This Agreement and the
other Loan Documents constitute Agent's and Banks' entire agreement with
Borrower with regard to the Revolving Loan, the Swing Line, and the Letters
of Credit, and supersede all prior writings and oral negotiations. No oral
or written representation, covenant, commitment,
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waiver, or promise of either Agent, any Bank or Borrower shall have any
effect, whether made before or after the date of this Agreement, unless
contained in this Agreement or another Loan Document, or in an amendment
complying with Section 15.8. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.
15.8 AMENDMENTS. Any amendment or waiver of, or consent to any
departure by Borrower from any provision of, this Agreement or any other Loan
Document shall be in writing signed by each party to be bound thereby, and
shall be effective only in the specific instance and for the specific purpose
for which given. Banks authorize Agent (i) to make the following amendments
only upon the prior written consent of all Banks:
(a) increase the Credit Limit or the maximum amounts permitted for
the Swing Line or issuance of Letters of Credit;
(b) extend the Termination Date;
(c) release any guaranty of the Obligations, or release any
Collateral;
(d) reduce the principal, interest, or interest rate on the Revolving
Loan or Swing Line, or the issuance fees charged with regard to Letters of
Credit, or fees otherwise accruing under this Agreement, from that
otherwise required under this Agreement; or
(e) postpone the date fixed for payment of any principal, interest,
or fees;
and (ii) to waive, change, or release Borrower from any affirmative or
negative covenant under this Agreement only upon the prior written consent of
Majority Banks. Seafirst shall not make Swing Line Advances after the
occurrence of and during the continuance of a Default without the consent of
all Banks.
15.9 CONSTRUCTION. Each term of this Agreement and each Loan Document
shall be binding to the extent permitted by law and shall be governed by the
laws of the State of Washington, excluding its conflict of laws rules. If
one or more of the provisions of this Agreement should be invalid, illegal,
or unenforceable in any respect, the remaining provisions of this Agreement
shall remain effective and enforceable. If there is a conflict among the
provisions of any Loan Documents, the provisions of this Agreement shall be
controlling. The captions and organization of this Agreement are for
convenience only, and shall not be construed to affect any provision of this
Agreement.
15.10 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures to such counterparts were upon the same instrument. This
Agreement shall become effective when Agent shall have received counterparts
of the Agreement signed by all of the parties to the Agreement.
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DATED June 3, 1997.
BORROWER: AGENT:
PHYSIO-CONTROL CORPORATION SEAFIRST BANK
By By
-------------------------------- ------------------------------
Title Title
----------------------------- ---------------------------
By
--------------------------------
Title
-----------------------------
BANKS:
SEAFIRST BANK MELLON BANK, N.A.
By By
-------------------------------- ------------------------------
Title Title
----------------------------- ---------------------------
CONSENT OF GUARANTOR
The undersigned Guarantor acknowledges receipt of a copy of the above
Agreement, consents to its contents, and agrees to comply with the covenants
of Sections 11.2 through 11.14 thereof. By submitting each of the financial
statements required by Subsection 11.5(a) and 11.5(b), Guarantor is deemed to
represent and warrant that: (a) such statement is complete and correct and
fairly presents the consolidated financial condition of Guarantor as of the
date of such statement; (b) such statement discloses all liabilities of
Guarantor that are required to be reflected or reserved against under GAAP,
whether liquidated or unliquidated, fixed or contingent; and (c) such
statement has been prepared in accordance with GAAP. As of the date of
execution of this Agreement, there has been no adverse change in Guarantor's
financial condition since preparation of the last such financial statements
delivered to Banks which would materially impair Guarantor's ability to honor
Guarantor's guaranty of the Obligations. Guarantor hereby adopts and
repeats, as to Guarantor, all representations and warranties made by Borrower
as to Borrower in Article 10 of the above Agreement.
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DATED June 3, 1997.
GUARANTOR:
PHYSIO-CONTROL INTERNATIONAL
CORPORATION
By
--------------------------------
Title
-----------------------------
By
--------------------------------
Title
-----------------------------
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EXHIBIT 1 TO CREDIT AGREEMENT
PREPAYMENT FEES
If the principal balance of this note is prepaid in whole or in part,
whether by voluntary prepayment, operation of law, acceleration or otherwise,
a prepayment fee, in addition to any interest earned, will be immediately
payable to the holder of this note.
The amount of the prepayment fee depends on the following:
(1) The amount by which interest reference rates as defined below have changed
between the time the loan is prepaid and either a) the time the loan was
made for fixed rate loans, or b) the time the interest rate last changed
(repriced) for variable rate loans.
(2) A prepayment fee factor (see "Prepayment Fee Factor Schedule" on reverse).
(3) The amount of principal prepaid.
If the proceeds from a CD or time deposit pledged to secure the loan are used
to prepay the loan resulting in payment of an early withdrawal penalty for
the CD, a prepayment fee will not also be charged under the loan.
DEFINITION OF PREPAYMENT REFERENCE RATE FOR VARIABLE RATE LOANS
The "Prepayment Reference Rate" used to represent interest rate levels for
variable rate loans shall be the index rate used to determine the rate on
this loan having maturities equivalent to the remaining period to interest
rate change date (repricing) of this loan rounded upward to the nearest
month. The "Initial Prepayment Reference Rate" shall be the Prepayment
Reference Rate at the time of last repricing and a new Initial Prepayment
Reference Rate shall be assigned at each subsequent repricing. The "Final
Prepayment Reference Rate" shall be the Prepayment Reference Rate at the time
of prepayment.
DEFINITION OF PREPAYMENT REFERENCE RATE FOR FIXED RATE LOANS
The "Prepayment Reference Rate" used to represent interest rate levels on
fixed rate loans shall be the bond equivalent yield of the average U.S.
Treasury rate having maturities equivalent to the remaining period to
maturity of this loan rounded upward to the nearest month. The "Initial
Prepayment Reference Rate" shall be the Prepayment Reference Rate at the time
the loan was made. The "Final Prepayment Reference Rate" shall be the
Prepayment Reference Rate at time of prepayment.
The Prepayment Reference Rate shall be interpolated from the yields as
displayed on Page 119 of the Dow Xxxxx Telerate Service (or such other page
or service as may replace that page or service for the purpose of displaying
rates comparable to said U.S. Treasury rates) on the day the loan was made
(Initial Prepayment Reference Rate) or the day of prepayment (Final
Prepayment Reference Rate).
CALCULATION OF PREPAYMENT FEE
If the Initial Prepayment Reference Rate is less than or equal to the Final
Prepayment Reference Rate, there is no prepayment fee.
If the Initial Prepayment Reference Rate is greater than the Final Prepayment
Reference Rate, the prepayment fee shall be equal to the difference between the
Initial and Final Prepayment Reference Rates (expressed as a decimal),
multiplied by the appropriate factor from the Prepayment Fee Factor Schedule,
multiplied by the principal amount of the loan being prepaid.
EXAMPLE OF PREPAYMENT FEE CALCULATION
VARIABLE RATE LOAN: A non-amortizing 6-month LIBOR based loan with principal
of $250,000 is fully prepaid with 3 months remaining until next interest rate
change date (repricing). An Initial Prepayment Reference Rate of 7.0% was
assigned to the loan at last repricing. The Final Prepayment Reference Rate
(as determined by the 3-month LIBOR index) is 6.5%. Rates therefore have
dropped 0.5% since last repricing and a prepayment fee applies. A prepayment
fee factor of 0.31 is determined from Table 3 below and the prepayment fee is
computed as follows:
Prepayment Fee = (0.07 - 0.065) x (0.31) x ($250,000) = $387.50
FIXED RATE LOAN: An amortizing loan with remaining principal of $250,000 is
fully prepaid with 24 months remaining until maturity. An Initial Prepayment
Reference Rate of 9.0% was assigned to the loan when the loan was made. The
Final Prepayment Reference Rate (as determined by the current 24-month U.S.
Treasury rate on Page 119 of Telerate) is 7.5%. Rates therefore have dropped
1.5% since the loan was made and a prepayment fee applies. A prepayment fee
factor of 1.3 is determined from Table 1 below and the prepayment fee is
computed as follows:
Prepayment Fee = (0.09 - 0.075) x (1.3) x ($250,000) = $4,875
PREPAYMENT FEE FACTOR SCHEDULE
TABLE I: FULLY AMORTIZING LOANS
Proportion of Remaining
Principal Amount Being Prepaid Months Remaining To Maturity/Repricing(1)
--------------------------------------------------------------------------------------------------------------------------
0 3 6 9 12 24 36 48 60 84 120 240 360
--------------------------------------------------------------------------------------------------------------------------
90-100% 0 .21 .36 .52 .67 1.3 1.9 2.5 3.1 4.3 5.9 10.3 13.1
60-89% 0 .24 .44 .63 .83 1.6 2.4 3.1 3.9 5.4 7.5 13.2 17.0
30-59% 0 .28 .53 .78 1.02 2.0 3.0 4.0 5.0 7.0 9.9 18.5 24.4
0-29% 0 .31 .63 .92 1.22 2.4 3.7 5.0 6.3 9.0 13.4 28.3 41.8
TABLE II: PARTIALLY AMORTIZING (BALLOON) LOANS
Proportion of Remaining Principal
Amount Being Prepaid Months Remaining To Maturity/Repricing(1)
--------------------------------------------------------------------------------------------------------------------------
0 3 6 9 12 24 36 48 60 84 120 240 360
--------------------------------------------------------------------------------------------------------------------------
90-100% 0 .26 .49 .71 .94 1.8 2.7 3.4 4.2 5.6 7.4 11.6 14.0
60-89% 0 .30 .59 .86 1.15 2.2 3.3 4.3 5.3 7.1 9.4 15.0 18.1
30-59% 0 .31 .63 .95 1.27 2.6 3.9 5.3 6.6 9.1 12.6 21.2 26.2
0-29% 0 .31 .63 .95 1.27 2.6 4.0 5.4 7.0 10.2 15.7 33.4 46.0
TABLE III: NONAMORTIZING (INTEREST ONLY) LOANS
Proportion of Remaining Principal
Amount Being Prepaid Months Remaining To Maturity/Repricing(1)
--------------------------------------------------------------------------------------------------------------------------
0 3 6 9 12 24 36 48 60 84 120 240 360
--------------------------------------------------------------------------------------------------------------------------
0-100% 0 .31 .61 .91 1.21 2.3 3.4 4.4 5.3 6.9 8.9 13.0 14.8
(1) For the remaining period to maturity/repricing between any two
maturities/repricings shown in the above schedules, interpolate between the
corresponding factors to the closest month.
The holder of this note is not required to actually reinvest the prepaid
principal in any U.S. Government Treasury Obligations, or otherwise prove its
actual loss, as a condition to receiving a prepayment fee as calculated above.
EXHIBIT 2 TO CREDIT AGREEMENT
FORM OF MULTICURRENCY BORROWING NOTICE
To: Seafirst Agency Services
000 Xxxxx Xxx., 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
-----------------------
Phone: (000) 000-0000
Fax: (000) 000-0000
BORROWING INSTRUCTIONS:
Date of Borrowing:
----------------------------
Specify New Advance or Rollover:
----------------------------
Currency Type:
----------------------------
Amount requested (in applicable currency):
----------------------------
Interest Period:
----------------------------
WIRE INSTRUCTIONS:
Bank Name:
----------------------------
Swift Code:
----------------------------
Account Name:
----------------------------
Account Number:
----------------------------
Attention:
----------------------------
Phone Number:
----------------------------
Borrower hereby represents and warrants to Banks that as of the date
hereof (a) the statements set forth in Article 10 of the Credit Agreement
dated June 3, 1997, among Physio-Control Corporation, Bank of America
National Trust and Savings Association, doing business as Seafirst Bank as
Agent, and Bank of America National Trust and Savings Association, doing
business as Seafirst Bank, and Mellon Bank, N.A., as Banks (the "Credit
Agreement") are true and correct; and (b) no Default (as defined in the
Credit Agreement) has occurred and is continuing or will result from
disbursement of the requested Advance.
DATED: .
--------------------------------------
PHYSIO-CONTROL CORPORATION
By
--------------------------------
Title
-----------------------------
EXHIBIT 3 TO CREDIT AGREEMENT
FORM OF PARTICIPATION CERTIFICATE
$ Date:
---------------------- ---------------------
Bank of America National Trust and Savings Association, a national
banking association, doing business as Seafirst Bank (the "Issuing Bank"),
for and in consideration of the mutual covenants and agreements of the
Issuing Bank and Mellon Bank, N.A. (the "Participating Bank") set forth in
that certain Credit Agreement dated June 3, 1997 ("Credit Agreement") among
Physio-Control Corporation ("Borrower"), the Issuing Bank, and the
Participating Bank, hereby assigns to Participating Bank a 50% interest (the
"Participation Interest") in all of its rights and obligations under the
following letters of credit issued by the Issuing Bank for the account of
Borrower, including all rights of the Issuing Bank relating thereto under the
Credit Agreement and any L/C Agreement:
---------------------------------------------------------------------------
Such Participation Interest is equal to $ .
----------------------------------
All capitalized terms used in this certificate and not otherwise defined
shall have the meaning given in the Credit Agreement.
The Participation Interest granted hereby and the respective rights and
duties of the Issuing Bank and the Participating Bank are governed by the
terms of the Credit Agreement referred to above.
Dated as of the date first set forth above.
SEAFIRST BANK
By
--------------------------
Title
-----------------------
EXHIBIT 4 TO CREDIT AGREEMENT
[Form of Certificate to be sent with financial reports]
[Date]
Seafirst Bank
Seafirst Agency Services
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxx
Re: Certificate of Chief Financial Officer
Ladies and Gentlemen:
With respect to that certain Credit Agreement between Physio-Control
Corporation ("Borrower") and Physio-Control International Corporation
("Guarantor"), Bank of America National Trust and Savings Association, doing
business as Seafirst Bank as Agent, and Bank of America National Trust and
Savings Association, doing business as Seafirst Bank, and Mellon Bank, N.A.,
as Banks, dated June 3, 1997 (the "Credit Agreement"), we hereby represent to
you the following (capitalized terms used in this certificate shall have the
same meaning as in the Credit Agreement):
1. Enclosed are financial statements dated as of _________________________
required by Section 11.5 of the Credit Agreement.
2. As of the date of such financial statements, Guarantor's Tangible Net Worth
is $________________________.
3. As of the date of such financial statements, Guarantor's ratio of Debt to
Tangible Net Worth is ________________________.
4. As of the date of such financial statements, Guarantor's Fixed Charge
Coverage Ratio is ________________________.
5. As of the date of such financial statements, the following entities
constitute all of Guarantor's Material Subsidiaries:______________________
__________________________________________________________________________.
6. Such financial statements are complete and correct, fairly present, without
qualification, the financial condition of Guarantor for such period, and
are prepared in accordance with GAAP.
7. No Default exists, nor any event which, with lapse of time or upon the
giving of notice, would constitute a Default under the Credit Agreement.
Sincerely,
PHYSIO-CONTROL INTERNATIONAL CORPORATION
By
------------------------------------
Chief Financial Officer
EXHIBIT 5 TO CREDIT AGREEMENT
FORM OF SUBSIDIARY'S CERTIFICATE
The undersigned corporation, which is a corporation organized under the
laws of the state of _________________________________ (the "Company"), and
which is a "Material Subsidiary" as such term is defined in the Credit
Agreement dated June 3, 1997 ("Credit Agreement"), among Physio-Control
Corporation ("Borrower"), Bank of America National Trust and Savings
Association, doing business as Seafirst Bank, a national banking association,
as agent ("Agent"), and Seafirst Bank and Mellon Bank, N.A. as "Banks," makes
this certificate with respect to the Credit Agreement. Terms defined in the
Credit Agreement have the same meaning when used in this certificate. The
Company acknowledges that it is a Material Subsidiary, and hereby adopts and
repeats, as to itself and as of the date of this certificate, all
representations and warranties made by Borrower as to Borrower in Article 10
of the Credit Agreement; and agrees to comply with, as to the Company, all
the covenants made by Borrower as to Borrower in Articles 11 and 12 of the
Credit Agreement.
DATED , 199 .
------------------------- ----
COMPANY:
----------------------------
By
--------------------------
Title
-----------------------
