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EXHIBIT 10.31
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AMENDED AND RESTATED LOAN AGREEMENT
by and among
SPACELABS MEDICAL, INC.
a California corporation
as Borrower,
BANK OF AMERICA, N.A.
a national banking association
U.S. BANK NATIONAL ASSOCIATION,
a national banking association
as Lenders,
BANK OF AMERICA, N.A.
a national banking association
as Agent
and
SPACELABS MEDICAL, INC.,
a Delaware corporation,
as Guarantor.
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August 11, 2000
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[BANK OF AMERICA LOGO]
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TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS....................................................... 2
Section 1.1 Certain Defined Terms......................................... 2
Section 1.2 General Principles Applicable to Definitions.................. 15
Section 1.3 Accounting Terms.............................................. 15
Section 1.4 Currency Equivalents.......................................... 15
ARTICLE 2. THE LOANS......................................................... 15
Section 2.1 Term Loan..................................................... 15
Section 2.2 ▇▇▇▇▇▇▇ Loans................................................. 15
Section 2.3 Revolving Loans............................................... 16
Section 2.4 Manner of Borrowing........................................... 16
(a) Generally.......................................................... 16
(b) Lender Notification................................................ 17
(c) Funding of Loans................................................... 17
Section 2.5 Reduction of Commitment....................................... 17
Section 2.6 Repayment of Principal........................................ 18
(a) Term Loan.......................................................... 18
(b) ▇▇▇▇▇▇▇ Loans...................................................... 18
(c) Revolving Loans.................................................... 18
Section 2.7 Agent's Right to Fund......................................... 19
Section 2.8 Interest on Loans............................................. 19
(a) Interest Rate...................................................... 19
(1) Term Loan........................................................ 19
(2) ▇▇▇▇▇▇▇ Loans.................................................... 19
(3) Revolving Loans.................................................. 20
(4) Default Interest................................................. 20
(b) Authorization to Charge Borrower's Bank Account.................... 20
(c) Interest Payment Dates............................................. 20
(d) Selection of Alternative Rates..................................... 21
(e) Applicable Days For Computation of Interest........................ 22
(f) Unavailable IBOR or LIBOR Rates.................................... 23
(g) Compensation for Increased Costs................................... 23
(h) Determination of Interest Rates and Equivalent Amounts............. 24
Section 2.9 Prepayments................................................... 25
Section 2.10 Notes; Recordation of Loans.................................. 25
(a) Promissory Notes................................................... 25
(b) Recordation of Loans............................................... 25
(c) Substitute Notes................................................... 25
Section 2.11 Manner of Payments........................................... 26
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Section 2.12 Application of Payments...................................... 26
Section 2.13 Fees......................................................... 27
(a) Unused Commitment Fees............................................. 27
(b) Up-front Fee....................................................... 27
(c) Arrangement Fee.................................................... 28
Section 2.14 Sharing of Payments, Etc..................................... 28
Section 2.15 Extension of Revolving Commitment Period..................... 28
Section 2.16 Offshore Currency Loans...................................... 28
(a) Dollar Equivalent Amount........................................... 29
(b) Offshore Currency Unavailable...................................... 29
(c) Offshore Rate Unavailable.......................................... 29
(d) Occurrence of Event of Default..................................... 30
(e) Agreed Alternate Currencies........................................ 30
ARTICLE 3. CONDITIONS OF LENDING............................................. 30
Section 3.1 Conditions to Initial Loan.................................... 30
(a) Loan Documents..................................................... 30
(b) Corporate Authority................................................ 30
(c) Evidence of Security............................................... 31
(d) Evidence of Insurance.............................................. 31
(e) Legal Opinion...................................................... 32
(f) Certificates....................................................... 32
Section 3.2 Conditions to All Loans....................................... 32
(a) Prior Conditions................................................... 32
(b) Notice of Borrowing................................................ 32
(c) No Termination of Guaranty Agreement............................... 32
(d) No Default......................................................... 32
(e) Other Information.................................................. 32
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.................................... 33
Section 4.1 Corporate Existence and Power................................. 33
Section 4.2 Corporate Authorization....................................... 33
(a) Borrower Authorization............................................. 33
(b) Guarantor Authorization............................................ 33
(c) Subsidiary Authorization........................................... 34
Section 4.3 Government Approvals, Etc..................................... 34
Section 4.4 Binding Obligations, Etc...................................... 34
Section 4.5 Litigation.................................................... 34
Section 4.6 Financial Condition........................................... 34
Section 4.7 Title and Liens............................................... 35
Section 4.8 Building and Environmental Laws............................... 35
Section 4.9 Taxes......................................................... 35
Section 4.10 Laws, Orders; Other Agreements............................... 35
Section 4.11 Federal Reserve Regulations.................................. 36
Section 4.12 ERISA........................................................ 36
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Section 4.13 Subsidiaries................................................. 36
Section 4.14 Patents, Licenses, Franchises................................ 37
Section 4.15 Investment Company; Public Utility Holding Company........... 37
ARTICLE 5. AFFIRMATIVE COVENANTS............................................. 37
Section 5.1 Use of Proceeds............................................... 37
Section 5.2 Financial Statements.......................................... 37
(a) Annual Guarantor Statements........................................ 37
(b) Quarterly Guarantor Statements..................................... 38
(c) Stockholder Reports and Proxy Statements........................... 38
Section 5.3 Inspection of Property........................................ 38
Section 5.4 Payment of Taxes.............................................. 39
Section 5.5 Preservation of Corporate Existence........................... 39
Section 5.6 Maintenance of Property....................................... 39
Section 5.7 Insurance..................................................... 39
Section 5.8 Records and Accounts.......................................... 40
Section 5.9 Additional Payments; Additional Acts.......................... 40
Section 5.10 Notification................................................. 40
Section 5.11 Funded Debt to EBITDA Ratio.................................. 41
Section 5.12 EBITDA to Debt Service Ratio................................. 41
Section 5.13 Fixed Charge Coverage Ratio.................................. 41
Section 5.14 Tangible Net Worth........................................... 41
ARTICLE 6. NEGATIVE COVENANTS................................................ 42
Section 6.1 Limitations on Liens.......................................... 42
Section 6.2 Limitations on Indebtedness................................... 43
Section 6.3 Limitation on Investments..................................... 43
Section 6.4 Merger or Sale of Assets...................................... 44
Section 6.5 Limitation on Net Losses...................................... 45
ARTICLE 7. EVENTS OF DEFAULT................................................. 46
Section 7.1 Events of Default............................................. 46
(a) Payment Default.................................................... 46
(b) Breach of Warranty................................................. 46
(c) Breach of Certain Covenants........................................ 46
(d) Breach of Other Covenants.......................................... 46
(e) Cross-default...................................................... 46
(f) Voluntary Bankruptcy, Etc.......................................... 46
(g) Involuntary Bankruptcy, Etc........................................ 47
(h) Insolvency, Etc.................................................... 47
(i) Judgment........................................................... 47
(j) ERISA.............................................................. 47
(k) Interest Rate Swap Agreement....................................... 48
(l) Change in Ownership................................................ 48
Section 7.2 Consequences of Default....................................... 48
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ARTICLE 8. THE AGENT......................................................... 48
Section 8.1 Authorization and Action...................................... 48
Section 8.2 Duties and Obligations........................................ 49
Section 8.3 Dealings Between Agent and Borrower........................... 50
Section 8.4 Lender Credit Decision........................................ 50
Section 8.5 Indemnification............................................... 50
Section 8.6 Successor Agent............................................... 51
Section 8.7 Agent's Fee................................................... 51
ARTICLE 9. MISCELLANEOUS..................................................... 51
Section 9.1 No Waiver; Remedies Cumulative................................ 51
Section 9.2 Governing Law................................................. 52
Section 9.3 Mandatory Arbitration......................................... 52
Section 9.4 Consent to Jurisdiction....................................... 52
Section 9.5 Notices....................................................... 52
Section 9.6 Subordination of Security Interests........................... 52
Section 9.7 Successors and Assigns........................................ 53
Section 9.8 Severability.................................................. 54
Section 9.9 Survival...................................................... 54
Section 9.10 Conditions Not Fulfilled..................................... 55
Section 9.11 Entire Agreement; Amendment.................................. 55
Section 9.12 Headings..................................................... 55
Section 9.13 Prevailing Party Attorney's Fees............................. 55
Section 9.14 Concerning Oral Agreements................................... 55
SCHEDULES
Schedule 1 Prepayment Fees
Schedule 2 Borrower and Subsidiary Schedule
Schedule 3 Pending Litigation
EXHIBITS
Exhibit A Term Note
Exhibit B ▇▇▇▇▇▇▇ Note
Exhibit C Revolving Note
Exhibit D Borrower Security Agreement
Exhibit E Subsidiary Security Agreement
Exhibit F Account Subordination Agreement
Exhibit G Deed of Trust
Exhibit H Hazardous Substances Agreement
Exhibit I Legal Opinion
Exhibit J Guaranty Agreement
Exhibit K Subordination Agreement
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Exhibit L Quarterly Compliance Certificate
Exhibit M Notice of Borrowing
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AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is made as of the
11th day of August, 2000, by and among BANK OF AMERICA, N.A., formerly known as
Bank of America National Trust and Savings Association, a national banking
association ("Bank of America"), U.S. BANK NATIONAL ASSOCIATION, a national
banking association ("U.S. Bank" and together with Bank of America, the
"Lenders"), BANK OF AMERICA N.A., formerly known as Bank of America National
Trust and Savings Association, a national banking association, as agent for
Lenders (the "Agent"), SPACELABS MEDICAL, INC., a California corporation (the
"Borrower") and SPACELABS MEDICAL, INC., a Delaware corporation (the
"Guarantor").
RECITALS
A. Borrower, Bank of America and Guarantor entered into that certain
Loan Agreement dated as of December 7, 1995 (as amended, restated, supplemented
or otherwise modified, the "Original Agreement"), pursuant to which Bank of
America made a term loan to Borrower in the principal amount of $15,000,000 (the
"Term Loan") and agreed, subject to the terms therein contained to make
revolving loans to Borrower in an aggregate principal amount of up to
$10,000,000 (the "Original Commitment").
B. Borrower, Bank of America and Guarantor thereafter entered into that
certain Amended and Restated Loan Agreement dated as of July 16, 1997 (as
amended, restated, supplemented or otherwise modified, the "Existing
Agreement"), pursuant to which Bank of America continued the Term Loan and
agreed to make available a revolving loan facility converting to term in the
aggregate principal amount of up to $30,000,000 for the purpose of financing
Borrower's acquisition of ▇▇▇▇▇▇▇, Inc. (the "▇▇▇▇▇▇▇ Commitment"), to make
available a revolving loan facility converting to term in the aggregate
principal amount of up to $35,000,000 for general corporate purposes (the
"Revolving Commitment") and in connection therewith, cancelled the Original
Commitment. The Existing Agreement was amended by that certain First Amendment
to Amended and Restated Loan Agreement dated as of October 16, 1997.
C. Under an Assignment and Assumption Agreement dated as of January 8,
1998, Bank of America assigned and sold, and U.S. Bank assumed and purchased a
percentage interest of Bank of America's rights and obligations with respect to
the ▇▇▇▇▇▇▇ Commitment and the Revolving Commitment under the Existing
Agreement.
D. The Existing Agreement was further amended by that certain Second
Amendment to Amended and Restated Loan Agreement dated as of October 15, 1998,
that certain Third Amendment to Amended and Restated Loan Agreement dated as of
March 15, 1999, by that certain Fourth Amendment to Amended and Restated Loan
Agreement dated as of August 27, 1999 pursuant to which Lenders agreed to
increase the Revolving Commitment to $45,000,000 and by that certain Fifth
Amendment to Amended and Restated Loan Agreement dated as of June 30, 2000
pursuant to which Lenders agreed to extend the revolving term of the Revolving
Commitment and the ▇▇▇▇▇▇▇ Commitment to August 18, 2000.
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E. Borrower has requested that Lenders extend the maturity date of the
▇▇▇▇▇▇▇ Commitment and the Revolving Commitment and make certain modifications
to the financial covenants set forth in the Existing Agreement which Lenders
have agreed to do on the terms and conditions set forth below.
NOW, THEREFORE, the parties hereto hereby agree to amend and restate the
Existing Agreement as follows:
AGREEMENT
ARTICLE 1.
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS
As used in this Agreement, the following terms have the following
meanings:
"Account Subordination Agreement" has the meaning given in Section
9.6.
"Adjusted EBITDA" means, (i) for the fiscal quarter ended September
30, 2000, EBITDA computed using four (4) times the EBITDA for the fiscal quarter
ended September 30, 2000, (ii) for the fiscal quarter ended December 31, 2000,
EBITDA computed using four (4) times the EBITDA for the fiscal quarter ended
December 31, 2000, (iii) for the fiscal quarter ended ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇
computed using the sum of three (3) times the EBITDA for the fiscal quarter
ended March 31, 2001 plus the EBITDA for the fiscal quarter ended December 31,
2000, (iv) for the fiscal quarter ended June 30, 2001, EBITDA computed using the
sum of two (2) times the EBITDA for the fiscal quarter ended June 30, 2001 plus
the EBITDA for the fiscal quarters ended December 31, 2000 and March 31, 2001
and (v) for the fiscal quarter ended September 30, 2001 and each fiscal quarter
ending thereafter, EBITDA computed using the four (4) consecutive fiscal
quarters immediately preceding the date of determination.
"Agent" means Bank of America, N.A., a national banking association,
in its capacity as agent for Lenders, and any successor agent designated in
accordance with Section 8.6.
"Agreed Alternative Currency" has the meaning given in Section
2.16(e).
"Applicable ▇▇▇▇▇▇▇ Interest Rate" means for each ▇▇▇▇▇▇▇ Loan (or
portion of thereof) the Overnight Rate, the ▇▇▇▇▇▇▇ ▇▇▇▇ Rate, the ▇▇▇▇▇▇▇ LIBOR
Rate or the Base Rate as designated by Borrower in an Interest Rate Notice given
with respect to such ▇▇▇▇▇▇▇ Loan (or portion thereof) or as otherwise
determined pursuant to Section 2.8(d).
"Applicable Currency" means, as to any particular payment or Loan,
Dollars or the Offshore Currency in which it is denominated or is payable.
"Applicable IBOR Rate" means the ▇▇▇▇▇▇▇ ▇▇▇▇ Rate or the Revolving
IBOR Rate, as applicable.
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"Applicable Interest Period" means, with respect to any Loan, the
period commencing on the first day Borrower elects to have the Overnight Rate,
the IBOR Rate, the LIBOR Rate or the Quoted Rate, as applicable, apply to such
Loan and ending:
(a) The following Business Day in the case of a Overnight Rate Loan
as specified in the Interest Rate Notice given in respect of such Overnight Rate
Loan;
(b) One, two or three weeks thereafter in the case of a IBOR Rate
Loan as specified in the Interest Rate Notice given in respect of such IBOR Rate
Loan;
(c) One, two, three or six months thereafter in the case of a LIBOR
Rate Loan as specified in the Interest Rate Notice given in respect of such
LIBOR Rate Loan;
(d) On any date that is an anniversary of the date that the Quoted
Rate was selected to apply to the Term Loan as specified in the Interest Rate
Notice;
provided, however, that the Applicable Interest Period with respect to any Loan
shall end on the first LIBOR Business Day of the first, second, third, fourth or
seventh month following the last day of any period during which the Base Rate or
the Quoted Rate applied to such Loan, and all subsequent Applicable Interest
Periods shall end on the first LIBOR Business Day of a month, provided, further,
that the initial Applicable Interest Period with respect to any ▇▇▇▇▇▇▇ Loan or
Revolving Loan shall end on the first LIBOR Business Day of the first, second,
third, fourth or seventh month following the disbursement of such Loan, and all
subsequent Applicable Interest Periods shall end on the first LIBOR Business Day
of a month, provided, further, that no Applicable Interest Period for any Loan
may be selected if it extends beyond the Maturity Date, provided, further, that
no Applicable Interest Period for any Offshore Currency Loan may be selected if
it extends beyond the last day of the Revolving Commitment Period.
"Applicable Interest Rate" means the Applicable Term Interest Rate,
Applicable ▇▇▇▇▇▇▇ Interest Rate or the Applicable Revolving Interest Rate, as
applicable.
"Applicable LIBOR Rate" means the Term LIBOR Rate, the ▇▇▇▇▇▇▇ LIBOR
Rate or the Revolving LIBOR Rate, as applicable.
"Applicable Margin" means on any date, a per annum interest rate
determined in accordance with the following table:
Funded Debt to
EBITDA Rating Applicable Margin
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▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (1.50%)
▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (2.50%)
"Applicable Revolving Interest Rate" means for each Revolving Loan
(or portion of thereof) the Overnight Rate, the Revolving IBOR Rate, the
Revolving LIBOR Rate or the Base Rate as designated by Borrower in an Interest
Rate Notice given with respect to such Revolving Loan (or portion thereof) or as
otherwise determined pursuant to Section 2.8(d).
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"Applicable Term Interest Rate" means for the Term Loan (or portion
thereof), the Term LIBOR Rate, the Quoted Rate or the Base Rate as designated by
Borrower in an Interest Rate Notice given with respect to the Term Loan (or
portion thereof) or otherwise determined pursuant to Section 2.8(d).
"Bank of America" means Bank of America, N.A., a national banking
association, and any Successors thereof.
"Banking Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City, New York, San Francisco,
California or Seattle, Washington are authorized or required by law to close and
(i) with respect to disbursements and payments in Dollars, a day on which
dealings are carried on in the applicable offshore Dollar interbank market, and
(ii) with respect to any disbursements and payments in and calculations
pertaining to any Offshore Currency Loan, a day on which commercial banks are
open for foreign exchange business in London, England, and on which dealings in
the relevant Offshore Currency are carried on in the applicable offshore foreign
exchange interbank market in which disbursement of or payment in such Offshore
Currency will be made or received hereunder.
"Base Rate" means a per annum rate equal to the greater of (a) the
Prime Rate, or (b) the sum of (i) fifty (50) basis points (0.5%) plus (ii) the
Federal Funds Rate, changing as such Prime Rate or Federal Funds Rate changes.
"Base Rate Loan" means any Loan (or portion thereof) bearing
interest at the Base Rate.
"Borrower" means Spacelabs Medical, Inc., a California corporation,
and any permitted Successor or assign pursuant to Section 9.7.
"Borrower Security Agreement" means that certain Security Agreement
of even date herewith executed by Borrower in favor of Agent substantially in
the form of Exhibit D attached hereto, as such security agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"▇▇▇▇▇▇▇" means Spacelabs ▇▇▇▇▇▇▇, Inc., a Delaware corporation.
"▇▇▇▇▇▇▇ Commitment" has the meaning given in Section 2.2.
"▇▇▇▇▇▇▇ Commitment Period" means the period beginning on July 16,
1997 and ending on July 16, 2001.
"▇▇▇▇▇▇▇ Conversion Date" has the meaning given in Section 2.6(b).
"▇▇▇▇▇▇▇ ▇▇▇▇ Rate" means, for any Applicable Interest Period, an
interest rate per annum equal to the IBOR Rate for such Applicable Interest
Period plus the Applicable Margin (changing as such Applicable Margin changes).
"▇▇▇▇▇▇▇ LIBOR Rate" means, for any Applicable Interest Period, an
interest rate
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per annum equal to the LIBOR Rate for such Applicable Interest Period plus the
Applicable Margin (changing as such Applicable Margin changes).
"▇▇▇▇▇▇▇ Maturity Date" has the meaning given in Section 2.6(b).
"▇▇▇▇▇▇▇ Notes" has the meaning given in Section 2.10(a).
"▇▇▇▇▇▇▇ Percentage Interest" means for any Lender, at any time, the
percentage that such Lender's ▇▇▇▇▇▇▇ Commitment bears to the Total ▇▇▇▇▇▇▇
Commitment.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in Seattle, Washington are authorized or required
by law to close and, if the applicable Business Day relates to any LIBOR Rate
Loan, means a London Business Day, and if the applicable Business Day relates to
any Offshore Currency Loan, means a Banking Day.
"Canadian Security Agreement" means, together, (i) that certain
Security Agreement and (ii) that certain Hypothec on Universality of Movable
Assets, each of even date herewith executed by Spacelabs Produits Medicaux Ltee.
in favor of Agent and/or Lenders, as such security agreement and such hypothec
may each be amended, restated, supplemented or otherwise modified from time to
time.
"Capital Leases" means for any person, all obligations of such
person under leases which shall have been, or in accordance with GAAP, should be
recorded as capital leases.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means the property in which the Security Documents
create or purport to create a security interest or other lien in favor of Agent.
"Computation Date" has the meaning given in Section 2.16(a).
"Consolidated Net Income" means for any period, the consolidated net
income of Guarantor and the Guarantor Subsidiaries after eliminating all
intercompany items and portions of earnings properly attributable to minority
interests in stock of the Subsidiaries, all computed in accordance with GAAP.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower, are treated as a single employer
under Section 414(b) or 414(c) of the Code.
"Debt Service" means, for any period, the sum of (i) interest
expense for Guarantor and the Guarantor Subsidiaries for such period plus (ii)
the current portion of any Funded Debt of Guarantor and the Guarantor
Subsidiaries (determined in accordance with GAAP) on the last date of such
period, less (iii) for the fiscal quarter containing the Revolving Maturity Date
and the four consecutive fiscal quarters immediately preceding such fiscal
quarter, the aggregate outstanding principal amount of the Revolving Loans, less
(iv) for the fiscal quarter containing the Term Maturity Date and the four
consecutive fiscal quarters immediately
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preceding such fiscal quarter, the Term Loan principal payment due on the Term
Maturity Date.
"Deed of Trust" means the Deed of Trust, Security Agreement and
Fixture Filing with Assignment of Leases and Rents of even date herewith
executed by Borrower and Guarantor substantially in the form of Exhibit G
attached hereto covering certain real and personal property located in King
County, Washington, as any such deed of trust may be amended, restated,
supplemented or otherwise modified from time to time.
"Default" means any event which but for the passage of time or the
giving of notice or both would be an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United
States of America.
"Dollar Equivalent" means, at any time, (i) as to any amount
denominated in Dollars, the amount thereof at such time, and (ii) as to any
amount denominated in an Offshore Currency, the equivalent amount in Dollars as
determined by Agent at such time on the basis of the Spot Rate for the purchase
of Dollars with such Offshore Currency on the most recent Computation Date
provided for in Section 2.16(a).
"EBITDA" means, for any period, Consolidated Net Income of Guarantor
and the Guarantor Subsidiaries (or net loss), plus the sum of (a) interest
expense, (b) income tax expense, (c) depreciation expense and (d) amortization
expense, in each case determined in accordance with GAAP for such period;
provided, however, that for purposes of this definition, the determination of
Consolidated Net Income shall exclude non-recurring charges to income related to
(1) acquisitions (except acquisitions prohibited by Section 6.3), provided, that
such non-recurring charges are recognized within twelve (12) months of the date
the applicable acquisition was consummated, (2) restructuring of Guarantor or
any Guarantor Subsidiary (subject to consent of all Lenders, which consent shall
not be unreasonably withheld or delayed), or (3) changes in accounting
principles of Borrower or any Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Reserves" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including, without
limitation, any special, supplemental, marginal or emergency reserves) expressed
as a decimal established by the Board of Governors of the Federal Reserve System
or any other banking authority to which Lenders are subject for Eurocurrency
Liability (as defined in Regulation D of such Board of Governors). It is agreed
that for purposes hereof, each Loan (or portion thereof) accruing interest at
the IBOR Rate or the LIBOR Rate shall be deemed to constitute a Eurocurrency
Liability and to be subject to the reserve requirements of Regulation D, without
benefit of credit or proration, exemptions or offsets which might otherwise be
available to Lenders from time to time under such Regulation D. Eurodollar
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage and shall apply to Applicable Interest Periods
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commencing after the effective date of change.
"Event of Default" has the meaning given in Section 7.1.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day 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.
"Financial Transaction Liability" means (i) any overdraft on any
account maintained by Borrower with Bank of America, (ii) liabilities owing by
Borrower to Bank of America with respect to bank card services and (iii)
liabilities incurred by Bank of America as a result of Automated Clearing House
transactions for the account of Borrower.
"Fiscal Year" means the year which ends on December 31st of each
calendar year.
"Funded Debt" means (a) all indebtedness or liability of Guarantor
and the Guarantor Subsidiaries for borrowed money, (b) all Capital Leases of
Guarantor and the Guarantor Subsidiaries and (c) all indebtedness or liability
for borrowed money or for Capital Leases for which Guarantor or any Guarantor
Subsidiary is directly or contingently liable as obligor, guarantor, or
otherwise, or in respect of which Guarantor or any Guarantor Subsidiary
otherwise assures a creditor against loss.
"Funded Debt to EBITDA Ratio" has the meaning given in Section 5.11.
"Funded Debt to EBITDA Rating" means a rating determined in
accordance with the following table:
Guarantor's Funded Debt to
Funded Debt to EBITDA Ratio EBITDA Rating
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Less than 3.0 to 1 Level 1
Equal to or greater than 3.0 to 1, Level 2
The Funded Debt to EBITDA Rating shall be determined in accordance with the
following procedures on the basis of the Funded Debt to EBITDA Ratio as of the
end of Guarantor's most recently completed fiscal quarter (the "Prior Quarter"),
and shall be effective as of the first Business Day of the week following
Agent's receipt of the financial statements in respect of each such Prior
Quarter pursuant to Sections 5.2(a) and (b). All resulting adjustments in
interest rate margins shall likewise be effective as of the first Business Day
of the week following Agent's receipt of such financial statements, including
adjustments to the Applicable IBOR Rate or Applicable LIBOR Rate during any
Applicable Interest Period. If Borrower or Guarantor shall fail to provide the
financial statements due in respect of the Prior Quarter by the date required
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pursuant to Sections 5.2(a) and (b) and such failure shall remain unremedied for
three (3) days after written notice thereof shall have been given to Borrower or
Guarantor by Agent, from and after the date on which such financial statements
are due and until the first day of the month following Agent's receipt of such
financial statements, any payments of interest due hereunder shall be calculated
and paid as if the Funded Debt to EBITDA Rating was one level higher than the
Funded Debt to EBITDA Rating applicable as of the date such financial statements
were due pursuant to Sections 5.2(a) and (b). For the fiscal quarters ending
September 30, 2000 and December 31, 2000, the Funded Debt to EBITDA Rating shall
be deemed to be Level 2.
"FX Trading Office" means the Foreign Exchange Trading Center,
Seattle, Washington, of Bank of America, or such other of Bank of America's
offices as Bank of America may designate from time to time.
"GAAP" shall have the meaning given in Section 1.3.
"Guarantor" means Spacelabs Medical, Inc., a Delaware corporation.
"Guarantor Subsidiary" means Borrower, any Subsidiary and any other
corporation of which a majority (by number of shares or by number of votes) of
any class of outstanding capital stock normally entitled to vote for the
election of one or more directors (regardless of any contingency which does or
may suspend or dilute the voting rights of such class) is at such time owned
directly or indirectly by Guarantor, Borrower or one or more Subsidiaries or
Guarantor Subsidiaries.
"Guaranty Agreement" means that certain Amended and Restated
Guaranty Agreement executed by Guarantor in favor of Lenders and Agent
substantially in the form of Exhibit J attached hereto, as such guaranty may be
amended, restated, supplemented or otherwise modified from time to time.
"Government Approval" means an approval, permit, license,
authorization, certificate, or consent of any Governmental Authority.
"Governmental Authority" means the government of the United States
or any State or any foreign country or any political subdivision of any thereof
or any branch, department, agency, instrumentality, court, tribunal or
regulatory authority which constitutes a part or exercises any sovereign power
of any of the foregoing.
"Hazardous Substances Agreement" means that certain Certificate and
Indemnity Agreement Regarding Building Laws and Hazardous Substances of even
date herewith executed by Borrower in favor of Lenders and Agent substantially
in the form of Exhibit H attached hereto, as such certificate and indemnity
agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"IBOR Rate" means, for any Applicable Interest Period, an interest
rate per annum equal to the product of (i) the Offshore Rate; and (ii) the
Eurodollar Reserves in effect on the first day of such Applicable Interest
Period.
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As used herein the "Offshore Rate" means the rate of interest per annum
determined by Agent as the rate at which deposits in the Applicable Currency in
the approximate amount of such Loan for such Applicable Interest Period would be
offered by Bank of America's Grand Cayman Branch, Grand Cayman B.W.I. (or such
other office as may be designated for such purpose by Bank of America), to major
banks in the offshore dollar interbank market at their request at approximately
11:00 a.m. (New York City time) on the first date of the proposed Applicable
Interest Period.
"IBOR Rate Loan" means a Loan or portion thereof bearing interest at
an IBOR Rate.
"Indebtedness" means for any person (i) all items of indebtedness or
liability (except capital, surplus, deferred taxes and deferred revenues as
such) which would be included in determining total liabilities as shown on the
liability side of a balance sheet as of the date as of which indebtedness is
determined, (ii) indebtedness secured by any Lien, whether or not such
indebtedness shall have been assumed, (iii) any other indebtedness or liability
for borrowed money or for the deferred purchase price of property or services
for which such person is directly or contingently liable as obligor, guarantor,
or otherwise, or in respect of which such person otherwise assures a creditor
against loss, (iv) any other obligations of such person under leases which shall
have been or should be recorded as capital leases and (v) obligations of such
person for unsatisfied judgments or orders; provided, however, Indebtedness does
not include accounts payable and accrued expenses arising in the ordinary course
of such person's business, payable on terms customary in the trade.
"Interest Rate Notice" shall have the meaning given in Section
2.8(d).
"Interest Rate Swap Agreement" means that certain ISDA Master
Agreement and Schedule thereto by and between Borrower and Bank of America dated
as of October 12, 1995, as amended from time to time.
"Interest Rate Swap Obligations" means net obligations due and owing
to Bank of America (for its own account and not as Agent or Lender) by reason of
default by Borrower under any existing or future interest rate swap, hedge,
collar, floor or any other interest rate protection arrangement entered into
between Borrower and Bank of America under or pursuant to the Interest Rate Swap
Agreement with respect to any Loan.
"Lender" or "Lenders" means Bank of America, U.S. Bank National
Association and any assignees thereof of pursuant to Section 9.7, and any
Successors thereof.
"LIBOR Business Day" means any day other than Saturday, Sunday or
another day on which banks are authorized or obligated to close in London,
England or Seattle, Washington.
"LIBOR Rate Loan" means any Loan or portion thereof bearing interest
at an Applicable LIBOR Rate.
"LIBOR Rate" means, for any Applicable Interest Period, an interest
rate per
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annum equal to the product of (i) the Euro-dollar Rate in effect for such
Applicable Interest Period and (ii) the Eurodollar Reserves in effect on the
first day of such Applicable Interest Period.
As used herein the "Euro-dollar Rate" will be determined by reference to that
rate (rounded, if necessary, to the nearest one-hundred thousandth of one
percent (.00001%)) which appears on the Reuters Screen LIBO Page as of 11:00
o'clock a.m. (London time) on the day that is two (2) London Business Days prior
to the first date of the proposed Applicable Interest Period. If more than one
such rate appears on the Reuters Screen LIBO Page, the rate will be the
arithmetic mean of such rates. If there are no applicable quotes on such Reuters
Screen LIBO Page, the Euro-dollar Rate will be determined by reference to that
rate (rounded, if necessary, to the nearest one-hundred thousandth of one
percent (.00001%)) appearing on the display designated as "Page 3750" on the
Telerate Service (or on such other page on that service or such other service
designated by the British Banker's Association for the display of that
Association's Interest Settlement Rates for U.S. Dollar deposits) as of 11:00
a.m. (London time) on the day that is two (2) Business Days prior to the first
date of the proposed Applicable Interest Period. If there are no applicable
quotes on the Reuters Screen LIBO Page or available through Telerate Service,
then the Adjusted LIBOR Rate shall be deemed unavailable as provided in Section
2.6(e).
"Lien" means, for any person, any security interest, pledge,
mortgage, charge, assignment, hypothecation, encumbrance, attachment,
garnishment, execution or other voluntary or involuntary lien upon or affecting
the revenues of such person or any real or personal property in which such
person has or hereafter acquires any interest, except (i) liens for Taxes which
are not delinquent or which remain payable without penalty or the validity or
amount of which is being contested in good faith by appropriate proceedings upon
stay of execution of the enforcement thereof; (ii) liens imposed by law (such as
mechanics' liens) incurred in good faith in the ordinary course of business
which are not delinquent or which remain payable without penalty or the validity
or amount of which is being contested in good faith by appropriate proceedings
upon stay of execution of the enforcement thereof; and (iii) deposits or pledges
under worker's compensation, unemployment insurance, social security or other
similar laws or made to secure the performance of bids, tenders, contracts
(except for repayment of borrowed money), or leases, or to secure statutory
obligations or surety or appeal bonds or to secure indemnity, performance or
other similar bonds given in the ordinary course of business.
"Loan Documents" means, collectively (i) this Agreement, the Term
Note, the ▇▇▇▇▇▇▇ Notes, the Revolving Notes, the Subordination Agreement, the
Guaranty Agreement, the Security Documents, the Hazardous Substances Agreement,
as any thereof shall be amended, restated, supplemented or otherwise modified
from time to time and (ii) all other documents and instruments executed by
Borrower, Guarantor or any Subsidiary in connection therewith.
"Loan" or "Loans" mean the Term Loan, the ▇▇▇▇▇▇▇ Loans and the
Revolving Loans.
"London Business Day" means any day other than Saturday, Sunday or
another day on which banks are authorized or obligated to close in London,
England.
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"Majority Lenders" means two (2) or more Lenders holding not less
than fifty-one (51%) percent of the aggregate pro rata interests in all Loans or
such greater percentage of the aggregate pro rata interests in all Loans as
shall be agreed to by all Lenders and Agent.
"Maturity Date" means, in the case of the Term Loan, the Term
Maturity Date, in the case of a ▇▇▇▇▇▇▇ Loan, the ▇▇▇▇▇▇▇ Maturity Date, and, in
the case of a Revolving Loan, the Revolving Maturity Date.
"Note" or "Notes" means the Term Note, the ▇▇▇▇▇▇▇ Notes and the
Revolving Notes.
"Notice of Borrowing" means a request for a Loan from Borrower
delivered to Agent and containing the information set forth in Section 2.4 which
shall be delivered prior to 11:00 a.m. (Seattle time) (i) on the requested date
of borrowing of an IBOR Rate Loan (other than an Offshore Currency Loan) or Base
Rate Loan, (ii) at least three (3) London Business Days before the requested
date of borrowing in the case of a LIBOR Rate Loan denominated in Dollars, and
(iii) at least four (4) Banking Days before the requested date of borrowing in
the case of an Offshore Currency Loan. Requests for borrowing received after the
designated hour will be deemed received on the next succeeding Business Day. A
Notice of Borrowing given in respect of a borrowing comprised of Offshore
Currency Loans shall be given in writing in the form of Exhibit M attached
hereto. In all other cases, a Notice of Borrowing may be given in writing or
telephonically (but if given telephonically, shall be confirmed in writing prior
to 1:00 p.m. (Seattle time) on the first day of the Applicable Interest Period).
"Officer's Certificate" means a certificate signed in the name of
Borrower by its Chairman, President, or its Chief Financial Officer.
"Offshore Currency" means at any time English pounds sterling,
Canadian dollars, French francs, Deutsche ▇▇▇▇, Japanese yen and any Agreed
Alternative Currency.
"Offshore Currency Loan" means any Offshore Rate Loan denominated in
an Offshore Currency.
"Offshore Overnight Rate" means, for any day, the rate of interest
per annum at which overnight deposits in the Applicable Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by Bank of America's London Branch to
major banks in the London or other applicable offshore interbank market.
"Overnight Rate" means, with respect to any ▇▇▇▇▇▇▇ Loan or any
Revolving Loan for any Applicable Interest Period, an interest rate per annum,
as determined by Agent in its sole discretion and quoted to Borrower.
"Overnight Rate Loan" means a Loan or portion thereof bearing
interest at an Overnight Rate.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
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succeeding to any or all of its functions under ERISA.
"Pension Plan" means an "employee pension benefit plan" (as such
term is defined in ERISA) from time to time maintained by Borrower or a member
of the Controlled Group.
"Permitted Foreign Governments" shall mean the governments of the
nations of Canada, all OECD nations, Australia and Singapore, or any agencies
thereof entitled to commit the full faith and credit of such national
government.
"Person" shall mean any natural person, corporation, unincorporated
organization, trust, joint stock company, joint venture, association, company,
partnership or government, or any agency or political subdivision of any
government.
"Plan" shall mean, at any time, an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (a) maintained by Borrower
or any member of a Controlled Group for employees of Borrower or any member of
such Controlled Group or (b) maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which Borrower or any member of a Controlled Group is then
making or accruing an obligation to make contributions or has within the
preceding five (5) plan years made contributions.
"Prime Rate" means on any day, the rate of interest publicly
announced from time to time by Bank of America, as its "Prime Rate." The Prime
Rate is set based on various factors, including Bank of America's costs and
desired return, general economic conditions, and other factors, and is used as a
reference point for pricing some loans. Bank of America may price loans to its
customers at, above, or below the Prime Rate. Any change in the Prime Rate shall
take effect at the opening of business on the day specified in the public
announcement of a change in the Prime Rate.
"Quoted Rate" means, with respect to the Term Loan for any
Applicable Interest Period, an interest rate per annum, as determined by Bank of
America in its sole discretion and quoted to Borrower.
"Quoted Rate Loan" means the Term Loan bearing interest at the
Quoted Rate.
"Receivable Purchase Agreement" means any agreement (including any
master agreement and any agreement relating to any single transaction) that is
an accounts receivable purchase agreement, accounts receivable factoring
agreement or any other, similar agreement, including all schedules thereto,
confirmations of transactions thereunder, and documents, definitions, and
agreements incorporated therein by reference or relating thereto, entered into
by Borrower and any other Person or Persons, as any such agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"Receivable Purchaser" means any Person (other than Borrower) a
party to any Receivable Purchase Agreement.
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"Reference Rate" means the Prime Rate.
"Revolving Commitment" has the meaning given in Section 2.3.
"Revolving Commitment Period" means the period beginning on the date
hereof and ending on the Revolving Maturity Date.
"Revolving IBOR Rate" means, for any Applicable Interest Period, an
interest rate per annum equal to the IBOR Rate for the Applicable Currency for
such Applicable Interest Period plus the Applicable Margin (changing as such
Applicable Margin changes).
"Revolving LIBOR Rate" means, for any Applicable Interest Period, an
interest rate per annum equal to the LIBOR Rate for such Applicable Interest
Period plus the Applicable Margin (changing as such Applicable Margin changes).
"Revolving Loans" has the meaning given in Section 2.3.
"Revolving Maturity Date" means July 16, 2005 or such later date as
shall be established pursuant to Section 2.15.
"Revolving Notes" has the meaning given in Section 2.10(a).
"Revolving Percentage Interest" means for any Lender, at any time,
the percentage that such Lender's Revolving Commitment bears to the Total
Revolving Commitment.
"Same Day Funds" means (i) with respect to disbursements and
payments in Dollars, immediately available funds, and (ii) with respect to
disbursements and payments in an Offshore Currency, same day or other funds as
may be determined by Agent to be customary in the place of disbursement or
payment for the settlement of international banking transactions in the relevant
Offshore Currency.
"Seafirst" means Bank of America.
"Security Documents" means, collectively, (i) Borrower Security
Agreement, the Subsidiary Security Agreement, the Canadian Security Agreement
and the Deed of Trust, as any thereof shall be from time to time amended,
restated, supplemented or otherwise modified from time to time, (ii) all
financing statements and notices of hypothec filed in connection with the
foregoing, and (iii) all other documents and instruments executed by Borrower,
Guarantor or any Subsidiary in connection therewith.
"Spot Rate" means for a currency, the rate quoted by Bank of America
as the spot rate for the purchase by Bank of America of such currency with
another currency through its FX Trading Office at approximately 8:00 a.m.
(Seattle time) on the date which the foreign exchange computation is made.
"Subordination Agreement" means that certain Amended and Restated
Subordination Agreement executed by Guarantor and Borrower in favor of Lenders
and Agent
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substantially in the form of Exhibit K attached hereto, as such subordination
agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"Subsidiary" means any corporation of which a majority (by number of
shares or by number of votes) of any class of outstanding capital stock normally
entitled to vote for the election of one or more directors (regardless of any
contingency which does or may suspend or dilute the voting rights of such class)
is at such time owned directly or indirectly by Borrower or one or more
Subsidiaries.
"Subsidiary Security Agreement" means that certain Security
Agreement of even date herewith executed by ▇▇▇▇▇▇▇ and Vita-Stat Medical
Services, Inc. and to be executed and delivered by additional Subsidiaries from
time to time in favor of Agent substantially in the form of Exhibit E attached
hereto, as such security agreement may be amended, restated, supplemented or
otherwise modified from time to time.
"Successor" means, for any corporation or banking association, any
successor by merger or consolidation, or by acquisition of substantially all of
the assets of the predecessor.
"Tangible Net Worth" shall have the meaning given in Section 5.13.
"Tax" means for any person any tax, assessment, duty, levy, impost
or other charge imposed by any Governmental Authority on such person or on any
property, revenue, income, or franchise of such person and any interest or
penalty with respect to any of the foregoing, provided, however, as used herein
a "Tax" imposed on or assessed against Lender shall not include any income tax,
business and occupation tax, gross receipts tax, value added tax, franchise tax,
tax penalty (unless the tax penalty is the result of Borrower's failure to
perform its obligations hereunder) or any other tax imposed generally upon the
business of Lender if any of the above taxes are imposed by a Governmental
Authority of a jurisdiction (including a municipal, state, national or federal
jurisdiction) under the laws of which Lender is organized, maintains a place of
business or would otherwise be subject to taxation without regard to the
transactions with Borrower contemplated by this Agreement or the activities of
Borrower and the Subsidiaries.
"Term LIBOR Rate" means, for any Applicable Interest Period, an
interest rate per annum equal to the LIBOR Rate for such Applicable Interest
Period plus 150 basis points (1.50%).
"Term Loan" has the meaning given in Section 2.1.
"Term Maturity Date" has the meaning given in Section 2.6(a).
"Term Note" has the meaning given in Section 2.10(a).
"Total ▇▇▇▇▇▇▇ Commitment" has the meaning given in Section 2.2.
"Total Revolving Commitment" has the meaning given in Section 2.3.
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"Unfunded Vested Liabilities" shall mean, with respect to any Plan,
at any time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds (b) the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of Borrower or any member of the Controlled
Group to the PBGC or the Plan under Title IV of ERISA.
"Wholly-owned Subsidiary" shall mean any Subsidiary of which all of
each class of outstanding capital stock is owned by Borrower, or by one or more
other Wholly-owned Subsidiaries.
SECTION 1.2 GENERAL PRINCIPLES APPLICABLE TO DEFINITIONS
Definitions given in Section 1.1 shall be equally applicable to both
singular and plural forms of the terms therein defined and references herein to
he or it shall be applicable to persons whether masculine, feminine or neuter.
References herein to any document including, but without limitation, this
Agreement shall be deemed a reference to such document as it now exists, and as,
from time to time hereafter, the same may be amended.
SECTION 1.3 ACCOUNTING TERMS
Except as otherwise provided herein, accounting terms not specifically
defined shall be construed, and all accounting procedures shall be performed, in
accordance with generally accepted United States accounting principles
consistently applied ("GAAP") and as in effect on the date of application.
SECTION 1.4 CURRENCY EQUIVALENTS
For all purposes of this Agreement (but not for purposes of the
preparation of any financial statements delivered pursuant hereto), the
equivalent in any Offshore Currency or other currency of an amount in Dollars,
and the equivalent in Dollars of an amount in any Offshore Currency or other
currency, shall be determined at the Spot Rate.
ARTICLE 2.
THE LOANS
SECTION 2.1 TERM LOAN
On December 7, 1995, Bank of America made a term loan to Borrower in the
principal amount of Fifteen Million Dollars ($15,000,000). The loan referred to
in this Section 2.1 is hereinafter referred to as the "Term Loan."
SECTION 2.2 ▇▇▇▇▇▇▇ LOANS
Each Lender severally agrees on the terms and conditions of this
Agreement to make revolving loans in Dollars (the "▇▇▇▇▇▇▇ Loans") to Borrower
from time to time on Business Days during the ▇▇▇▇▇▇▇ Commitment Period in an
aggregate principal amount not exceeding at
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any one time the principal amount set forth opposite such Lender's name below
(such Lender's "▇▇▇▇▇▇▇ Commitment").
Lender Commitment
------ ----------
Bank of America $21,000,000
U.S. Bank $ 9,000,000
-----------
Total $30,000,000
The line of credit extended hereunder is a revolving line of credit and, subject
to the terms and conditions hereof, Borrower may borrow, repay and reborrow up
the maximum principal amount of Thirty Million Dollars ($30,000,000) outstanding
at any one time less any reductions therein pursuant to Section 2.5 (the "Total
▇▇▇▇▇▇▇ Commitment") at any time on or before the last day of the ▇▇▇▇▇▇▇
Commitment Period.
SECTION 2.3 REVOLVING LOANS
Each Lender severally agrees on the terms and conditions of this
Agreement to make revolving loans in Dollars and in Offshore Currencies (the
"Revolving Loans") to Borrower from time to time on Business Days during the
Revolving Commitment Period in an aggregate principal Dollar Equivalent amount
not exceeding at any one time the principal amount set forth opposite such
Lender's name below (such Lender's "Revolving Commitment"), provided that, after
giving effect to any requested loan, aggregate principal Dollar Equivalent
amount of all outstanding Offshore Currency Loans denominated in any single
Offshore Currency shall not exceed $10,000,000.
Lender Commitment
------ ----------
Bank of America $29,000,000
U.S. Bank $16,000,000
-----------
Total $45,000,000
The line of credit extended hereunder is a revolving line of credit and, subject
to the terms and conditions hereof, Borrower may borrow, repay and reborrow up
the maximum principal Dollar Equivalent amount of Forty-five Million Dollars
($45,000,000) outstanding at any one time less any reductions therein pursuant
to Section 2.5 (the "Total Revolving Commitment") at any time on or before the
last day of the Revolving Commitment Period. Any Revolving Loans denominated in
an Offshore Currency as of the last day of the Revolving Commitment Period
shall, as of such date, be redenominated and converted into Base Rate Loans in
Dollars with effect from such date. Agent will promptly notify Borrower and
Lenders of any such redenomination and in such notice by Agent to each Lender,
Agent will state the aggregate Dollar Equivalent amount of the redenominated
Offshore Currency Loans and such Lender's Revolving Percentage Interest thereof.
SECTION 2.4 MANNER OF BORROWING
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(a) GENERALLY
Borrower shall give Agent the required Notice of Borrowing specifying
(i) the date of the borrowing, (ii) whether such borrowing is a ▇▇▇▇▇▇▇ Loan or
a Revolving Loan and the amount thereof, which shall be in integral multiples of
Ten Thousand Dollars ($10,000) and not less than One Hundred Thousand Dollars
($100,000), and (iii) in the case of a borrowing comprised of Offshore Currency
Loans, the Applicable Currency. Such notice shall be irrevocable and shall be
deemed to constitute a representation and warranty by Borrower that as of the
date of the notice the statements set forth in Article 4 hereof are true and
correct and that no Default or Event of Default has occurred and is continuing
or will occur as a result of making the ▇▇▇▇▇▇▇ Loan or Revolving Loan.
(b) LENDER NOTIFICATION
Upon receipt of the Notice of Borrowing, Agent will promptly notify each
Lender by telephone (confirmed immediately by telex, facsimile transmission or
cable), telex, facsimile transmission, or cable thereof, and, in the case of a
▇▇▇▇▇▇▇ Loan, such Lender's ▇▇▇▇▇▇▇ Percentage Interest of the borrowing, or, in
the case of a Revolving Loan, such Lender's Revolving Percentage Interest of the
borrowing. The Dollar Equivalent amount of any borrowing in an Offshore Currency
will be determined by Agent for such Borrowing on the Computation Date therefor
in accordance with Section 2.16(a). In the case of a borrowing comprised of
Offshore Currency Loans, such notice will provide the approximate amount of each
Lender's Revolving Percentage Interest of the borrowing, and Agent will, upon
the determination of Dollar Equivalent amount of such borrowing as specified in
the Notice of Borrowing, promptly notify each Lender of the exact amount of such
Lender's Revolving Percentage Interest of the borrowing.
(c) FUNDING OF LOANS
Each Lender, in the case of a ▇▇▇▇▇▇▇ Loan, shall before 12:00 noon
(Seattle time) pay in Dollars the lesser of (i) such Lender's ▇▇▇▇▇▇▇ Percentage
Interest of the aggregate principal amount of the requested borrowing identified
in the Notice of Borrowing or (ii) the maximum amount such Lender is committed
to advance pursuant to the terms of Section 2.2, or, in the case of a Revolving
Loan, shall (A) in the case of a borrowing comprised of Loans in Dollars, before
12:00 noon (Seattle time) or (B) in the case of a borrowing comprised of
Offshore Currency Loans, by such time as Agent may specify, pay in the requested
currency the lesser of (i) such Lender's Revolving Percentage Interest of the
aggregate principal amount of the requested borrowing identified in the Notice
of Borrowing or (ii) the maximum amount such Lender is committed to advance
pursuant to the terms of Section 2.3, in all cases in Same Day Funds to Agent at
its Commercial Loan Processing Center, Seattle, Washington. Upon fulfillment to
Agent's satisfaction of the applicable conditions set forth in Article 3, and
after receipt by Agent of such funds, Agent will promptly make like funds
available to Borrower in accordance with written instructions provided to Agent
by Borrower.
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SECTION 2.5 REDUCTION OF COMMITMENT
Upon not less than ten (10) Business Days' written notice to Agent,
Borrower may terminate the ▇▇▇▇▇▇▇ Commitment or the Revolving Commitment in
whole or in part, provided that in no event may the ▇▇▇▇▇▇▇ Commitment be
reduced to an amount less than the then- outstanding principal balance of the
▇▇▇▇▇▇▇ Loans nor may the Revolving Commitment be reduced to an amount less than
the then-outstanding principal Dollar Equivalent amount of the Revolving Loans.
Subsequent to the date of termination, Borrower shall not be obligated to pay
the unused commitment fees set forth in Section 2.13(a) for any commitment or
portion thereof that has been terminated.
SECTION 2.6 REPAYMENT OF PRINCIPAL
(a) TERM LOAN
Borrower shall repay to Bank of America the principal amount of the
outstanding Term Loan in consecutive monthly installments of Sixty Two Thousand
Five Hundred Dollars ($62,500) which payments commenced on the first LIBOR
Business Day of January, 1996 and have and shall continue to be made on the
first LIBOR Business Day of each month, provided, however, that the entire
remaining principal balance of the Term Loan shall be payable in full on or
before December 7, 2003 (the "Term Maturity Date").
(b) ▇▇▇▇▇▇▇ LOANS
Borrower shall repay to Agent for the account of Lenders the principal
amount of the ▇▇▇▇▇▇▇ Loans outstanding as of the last day of the ▇▇▇▇▇▇▇
Commitment Period (the "▇▇▇▇▇▇▇ Loan Amount") in twenty (20) quarterly
installments commencing the first LIBOR Business Day of October, January, April
or July following the last day of the ▇▇▇▇▇▇▇ Commitment Period, whichever is
earlier (the "▇▇▇▇▇▇▇ Conversion Date"), and continuing on the first LIBOR
Business Day of each January, April, July and October thereafter. The amount of
the quarterly installments shall be (i) for the first four (4) quarterly
installments an amount equal to one fortieth (1/40) of the ▇▇▇▇▇▇▇ Loan Amount,
(ii) for the next twelve (12) quarterly installments an amount equal to one
twentieth (1/20) of the ▇▇▇▇▇▇▇ Loan Amount and (iii) for the last four (4)
quarterly installments an amount equal to one thirteenth and three hundred
thirty-three one thousandths (1/13.333) of the ▇▇▇▇▇▇▇ Loan Amount. The entire
remaining principal balance of the ▇▇▇▇▇▇▇ Loans shall be payable in full on or
before the date which is five (5) years after the ▇▇▇▇▇▇▇ Conversion Date (the
"▇▇▇▇▇▇▇ Maturity Date").
(c) REVOLVING LOANS
(1) Borrower shall repay to Agent for the account of Lenders the
principal amount of the Revolving Loans on or before the last day of the
Revolving Commitment Period.
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(2) If, on any Computation Date Agent shall have determined that
the aggregate Dollar Equivalent principal amount of all Revolving Loans then
outstanding exceeds the Total Revolving Commitment by more than $1,500,000, due
to a change in applicable rates of exchange between Dollars and Offshore
Currencies, then Agent shall give notice to Borrower of such determination, and
Borrower agrees thereupon to make prepayments of Revolving Loans such that,
after giving effect to such prepayment the aggregate Dollar Equivalent amount of
all Revolving Loans does not exceed the Total Revolving Commitment. If Borrower
shall pay any LIBOR Loan pursuant to this Section 2.6(c) prior to the end of the
Applicable Interest Period, Borrower shall include with such payment any amount
payable pursuant to Section 2.9 and applicable to the payment of such LIBOR Loan
prior to the termination of the Applicable Interest Period.
SECTION 2.7 AGENT'S RIGHT TO FUND
Unless Agent shall have received notice from a Lender prior to 12:00
noon (Seattle time) on the date of any ▇▇▇▇▇▇▇ Loan or Revolving Loan that such
Lender will not make available to Agent such Lender's ▇▇▇▇▇▇▇ Percentage
Interest or Revolving Percentage Interest, as the case may be, of the requested
borrowing, Agent may assume that such Lender has made such funds available to
Agent on the date of such ▇▇▇▇▇▇▇ Loans or Revolving Loans in accordance with
Section 2.4 and Agent may, in reliance upon such assumption, make available to
Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such portion available to Agent in Same Day Funds
and Agent in such circumstances shall have advanced such portion to Borrower,
such Lender agrees to pay to Agent forthwith on demand such corresponding
amount, together with interest thereon for each day from the date such amount is
made available to borrower until the date such amount is repaid to Agent at the
Federal Funds Rate or, in the case of any borrowing consisting of Offshore
Currency Loans, the Offshore Overnight Rate. Simultaneous with the making of
such demand on such Lender, Agent shall give notice of such demand to Borrower.
If such Lender shall pay to Agent such corresponding amount, the amount so paid
shall constitute such Lender's Loan included in such requested borrowing for
purposes of this Agreement. If such Lender does not pay such amount promptly
upon Agent's demand therefor, Borrower agrees to pay to Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to Borrower until the date such
amount is repaid to Agent at the Applicable Interest Rate. Any such repayment by
Borrower shall be without prejudice to any rights it may have against the Lender
that has failed to make available its funds for any requested borrowing.
SECTION 2.8 INTEREST ON LOANS
(a) INTEREST RATE
(1) TERM LOAN
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Borrower agrees to pay to Lender interest on the unpaid principal amount
of the Term Loan from the date the Term Loan is disbursed until the Term Loan
shall be due and payable at a per annum rate equal to the Applicable Term
Interest Rate.
(2) ▇▇▇▇▇▇▇ LOANS
Borrower agrees to pay to Agent for the account of each Lender interest
on the unpaid principal amount of each ▇▇▇▇▇▇▇ Loan from the date such ▇▇▇▇▇▇▇
Loan is disbursed until such ▇▇▇▇▇▇▇ Loan shall be due and payable at a per
annum rate equal to the Applicable ▇▇▇▇▇▇▇ Interest Rate.
(3) REVOLVING LOANS
Borrower agrees to pay to Agent for the account of each Lender interest
on the unpaid principal amount of each Revolving Loan from the date such
Revolving Loan is disbursed until such Revolving Loan shall be due and payable
at a per annum rate equal to the Applicable Revolving Interest Rate.
(4) DEFAULT INTEREST
If default shall occur in the payment when due of any Loan or any
portion thereof (whether at maturity or upon acceleration), then interest shall
accrue on the past due amounts until such amounts are paid in full at a per
annum rate equal to two percentage points (2%) above the Prime Rate (changing as
the Prime Rate changes).
(b) AUTHORIZATION TO CHARGE BORROWER'S BANK ACCOUNT
On each date when the payment of any principal, interest or commitment
fees are due hereunder or under any Note, Borrower agrees to maintain on deposit
in an ordinary checking account maintained by Borrower with Bank of America (as
such account shall be designated by Borrower in a written notice to Agent from
time to time, the "Borrower Account") an amount sufficient to pay such
principal, interest or commitment fees in full on such date. Borrower hereby
authorizes Agent (i) to deduct automatically all principal, interest or
commitment fees when due hereunder or under the Notes from the Borrower Account,
and (ii) if and to the extent any payment of principal, interest or commitment
fees under this Agreement or any Note is not made when due, to deduct
automatically any such amount from any or all of the accounts of Borrower
maintained with Bank of America. Agent agrees to provide timely written notice
to Borrower of any automatic deduction made pursuant to this Section 2.8(b)
showing in reasonable detail the amounts of such deduction. Lenders agree to
reimburse Borrower for amounts, if any, deducted from such accounts in excess of
amounts due hereunder or under any other Loan Document, together with interest
thereon for each day from the date such excess amount is deducted until the date
such excess amount is reimbursed to Borrower at a per annum rate of interest
equal to the then existing earnings allowance credited to Borrower by Bank of
America for balances maintained in the Borrower Account.
(c) INTEREST PAYMENT DATES
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Accrued but unpaid interest on each LIBOR Rate Loan and IBOR Rate Loan
shall be paid on the last day of each Applicable Interest Period, on the date of
any principal payment (to the extent accrued on the principal amount paid), and
on the Maturity Date and, in the case of a LIBOR Rate Loan for which the
Applicable Interest Period is six months, on the day that is three months after
the commencement of such Applicable Interest Period. Accrued but unpaid interest
on each Base Rate Loan, Overnight Rate Loan and Quoted Rate Loan shall be paid
on the first Business Day of the month immediately following the date hereof and
continuing on the first Business Day of each month thereafter and on the date of
any principal payment (to the extent accrued on the principal amount paid) and
on the Maturity Date. Unpaid interest accruing on amounts in default shall be
payable on demand.
(d) SELECTION OF ALTERNATIVE RATES
(1) Borrower may, subject to the requirements of this Section
2.8(d), on same-day notice (in the case of a Loan denominated in Dollars and a
selection of an Applicable IBOR Rate, the Overnight Rate, or the Quoted Rate),
three (3) London Business Days' prior notice (in the case of a selection of an
Applicable LIBOR Rate) or four (4) Banking Days' prior notice (in the case of an
Offshore Currency Loan) elect to have interest accrue on any Loan denominated in
Dollars (or any portion thereof) at an Applicable LIBOR Rate, and in the case of
any ▇▇▇▇▇▇▇ Loan or any Revolving Loan denominated in Dollars (or any portion
thereof) at the Overnight Rate, and in the case of any ▇▇▇▇▇▇▇ Loan or any
Revolving Loan (or any portion thereof) at an Applicable IBOR Rate, and in the
case of the Term Loan at the Quoted Rate, in each case for an Applicable
Interest Period. Such notice (herein, an "Interest Rate Notice") shall be deemed
delivered on receipt by Agent except that any Interest Rate Notice received by
Agent after 11:00 a.m. (Seattle time), on any Business Day, shall be deemed to
be received on the immediately succeeding Business Day. An Interest Rate Notice
may be given in writing or telephonically (but, if given telephonically, shall
be confirmed in writing prior to 12:00 noon (Seattle time) on the first day of
the Applicable Interest Period). Such Interest Rate Notice shall identify,
subject to the conditions of this Section 2.8(d), the Loan or portions thereof,
the Overnight Rate, the Applicable IBOR Rate, the Applicable LIBOR Rate, the
Base Rate or the Quoted Rate and the Applicable Interest Period which Borrower
selects. Any such Interest Rate Notice shall be irrevocable and shall constitute
a representation and warranty by Borrower that as of the date of such Interest
Rate Notice no Event of Default or Default has occurred and is continuing. On
receipt of such Interest Rate Notice, Agent shall promptly notify each Lender by
telephone (confirmed promptly by telex or facsimile transmission) of the
information set forth in the Interest Rate Notice.
(2) Borrower's right to select an Overnight Rate, Applicable
IBOR Rate or Applicable LIBOR Rate to apply to a Loan or any portion thereof
shall be subject to the following conditions: (i) neither an Overnight Rate, an
Applicable IBOR Rate or an Applicable LIBOR Rate may be selected for any Loan or
portion thereof which is already accruing interest at an Overnight Rate, an
Applicable IBOR Rate or an Applicable LIBOR Rate unless such selection is only
to become effective at the maturity of the Applicable Interest Period then in
effect; (ii) Agent shall not have given notice pursuant to Section 2.8(f) that
the LIBOR Rate selected by
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Borrower is not available; (iii) in the case of a ▇▇▇▇▇▇▇ Loan, the aggregate of
all ▇▇▇▇▇▇▇ Loans or portions thereof accruing interest at a particular
Overnight Rate, IBOR Rate or LIBOR Rate for the same Applicable Interest Period,
and in the case of a Revolving Loan, the aggregate of all Revolving Loans or
portions thereof accruing interest at a particular Overnight Rate, IBOR Rate or
LIBOR Rate for the same Applicable Interest Period, shall, in each case, be an
integral multiple of Five Thousand Dollars ($5,000); (iv) no Default or Event of
Default shall have occurred and be continuing; and (v) if Borrower elects to
have some portion (but less than all) of the ▇▇▇▇▇▇▇ Loans or the Revolving
Loans accrue interest at a designated Overnight Rate, IBOR Rate or LIBOR Rate,
Borrower shall select a portion of each Lender's ▇▇▇▇▇▇▇ Loans or Revolving
Loans, as the case may be, to accrue interest at such rate in proportion to
their respective ▇▇▇▇▇▇▇ Percentage Interests or Revolving Percentage Interests,
as the case may be.
(3) Borrower's right to select a Quoted Rate to apply to the
Term Loan shall be subject to the following conditions: (i) that the Quoted Rate
shall apply to the entire outstanding principal balance of the Term Loan; (ii)
the Quoted Rate may not be selected if any portion of the Term Loan is already
accruing interest at an Applicable LIBOR Rate unless such selection is only to
become effective at the maturity of the Applicable Interest Period then in
effect and (iii) no Default or Event of Default shall have occurred and be
continuing.
(4) In the absence of an effective request for the application
of an Overnight Rate, an Applicable IBOR Rate, an Applicable LIBOR Rate or
Quoted Rate, the Loans or remaining portions thereof shall accrue interest at
the Base Rate. In the absence of a request for the application of an applicable
IBOR Rate to be applicable to Offshore Currency Loans prior to the fourth
Business Day in advance of the expiration date of the current Applicable
Interest Period applicable thereto as provided in Section 2.8(d)(i), or if a
Default or Event of Default shall have occurred and be continuing, subject to
the provisions of Section 2.16(d), Borrower shall be deemed to have elected to
continue such Offshore Currency Loans on the basis of an Applicable Interest
Period of one week.
(5) The Interest Rate Notice may be given with and contained in
any Notice of Borrowing.
(6) If Borrower delivers an Interest Rate Notice with any Notice
of Borrowing and thereafter Borrower declines to take such Loan or a condition
precedent to the making of such Loan (excluding any condition imposed by Section
3.2(d) after receipt of an Interest Rate Notice) is not satisfied or waived in
writing, Borrower shall indemnify Agent and each Lender for all losses and any
costs which Agent or any Lender may sustain as a consequence thereof including,
without limitation, the costs of redeployment of funds at rates lower than the
cost to the Lenders of such funds and any charges relating to any Offshore
Currency Loans. A certificate of Agent or any Lender setting forth the amount
due to it pursuant to this subparagraph (6) and the basis for, and the
calculation of, such amount shall, absent manifest error, be conclusive evidence
of the amount due hereunder. Payment of the amount owed shall be due within
fifteen (15) days after Borrower's receipt of such certificate.
(e) APPLICABLE DAYS FOR COMPUTATION OF INTEREST
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Computations of interest shall be made on the basis of a year of three
hundred sixty days (360), in each case, for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest is payable. Notwithstanding the foregoing to the contrary, computations
of interest in respect of Offshore Currency Loans denominated in English pounds
sterling and Canadian dollars shall be made on the basis of a year of 365/366
days, in each case, for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable.
(f) UNAVAILABLE IBOR OR LIBOR RATES
If, for any reason, any Lender determines that a fair and adequate means
does not exist for establishing a particular IBOR Rate or LIBOR Rate or that the
making or continuation of any IBOR Rate Loan or LIBOR Rate Loan by such Lender
has become unlawful, then such Lender may give notice of that fact to Agent and
Borrower and such determination shall become conclusive and binding absent
manifest error. After such notice has been given and until Lender notifies Agent
and Borrower that the circumstances giving rise to such notice no longer exist,
(i) such IBOR Rate or LIBOR Rate, as the case may be, shall no longer be
available in respect of Loans, (ii) Borrower shall not be entitled to request a
borrowing comprised of Offshore Currency Loans denominated in an Offshore
Currency for which an IBOR Rate is unavailable, and (iii) any outstanding
Offshore Currency Loans denominated in an Offshore Currency for which an IBOR
Rate is unavailable, shall, as of the last day of the Applicable Interest Period
with respect to any such Offshore Currency Loans, be redenominated and converted
into Base Rate Loans in Dollars with effect from such date. Any subsequent
request by Borrower to have interest accrue at such an IBOR Rate or LIBOR Rate
shall be deemed to be a request for interest to accrue at the Base Rate. If the
Lender shall thereafter determine to permit borrowing at such IBOR Rate or LIBOR
Rate, as the case may be, such Lender shall notify Agent and Borrower in writing
of that fact, and Borrower shall then once again become entitled to (i) request
that such rate apply to the Loans in accordance with Section 2.8(d), and (ii) in
the case of a notice restoring the availability of an IBOR Rate, request a
borrowing comprised of Offshore Currency Loans in accordance with Section
2.4(a).
(g) COMPENSATION FOR INCREASED COSTS
In the event that after the date hereof any change occurs in any
applicable law, regulation, treaty or directive or interpretation thereof by any
Government Authority charged with the administration or interpretation thereof,
or any condition is imposed by any Government Authority after the date hereof or
any change occurs in any condition imposed by any Government Authority on or
prior to the date hereof which:
(1) subjects any Lender to any Tax, or changes the basis of taxation
of any payments to any Lender on account of principal of or interest on any IBOR
Rate Loan, LIBOR Rate Loan, Quoted Rate Loan, the Notes (to the extent such Note
evidences an IBOR Rate Loan, a LIBOR Rate Loan or a Quoted Rate Loan) or fees in
respect of such Lender's obligation to make an IBOR Rate Loan, a LIBOR Rate
Loan, a Quoted Rate Loan or other amounts payable with respect to any IBOR Rate
Loan, LIBOR Rate Loan or Quoted Rate Loan (other than a change in the rate of
tax based solely on the overall net or gross income of such
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Lender); or
(2) imposes, modifies, or determines applicable any reserve,
deposit or similar requirements against any assets held by, deposits with or for
the account of, or loans or commitments by, any office of any Lender in
connection with an IBOR Rate Loan, a LIBOR Rate Loan or a Quoted Rate Loan to
the extent the amount of which is in excess of, or was not applicable at the
time of computation of, the amounts provided for in the definition of Applicable
IBOR Rate, Applicable LIBOR Rate or Quoted Rate; or
(3) affects the amount of capital required or expected to be
maintained by banks generally or corporations controlling banks and any Lender
determines the amount by which such Lender or any corporation controlling such
Lender is required or expected to maintain or increase its capital is increased
by, or based upon, the existence of this Agreement or of any Loan hereunder; or
(4) imposes upon any Lender any other condition with respect to
any IBOR Rate Loan, LIBOR Rate Loan or Quoted Rate Loan or its obligation to
make an IBOR Rate Loan, a LIBOR Rate Loan or a Quoted Rate Loan;
which, as a result thereof, (a) increases the cost to any Lender of making or
maintaining its Loans hereunder, or (b) reduces the net amount of any payment
received by any Lender in respect of its IBOR Rate Loans, LIBOR Rate Loans or
Quoted Rate Loans (whether of principal, interest, or otherwise), or (c)
requires any Lender to make any payment on or calculated by reference to the
gross amount of any sum received by it in respect of its IBOR Rate Loans, LIBOR
Rate Loans or Quoted Rate Loans, in each case by an amount which such Lender in
its sole judgment deems material, then in any such case Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
any increased cost, deduction or payment actually incurred or made by such
Lender. The demand for payment by such Lender shall be delivered to Borrower and
Agent and shall state the subjection or change which occurred or the reserve or
deposit requirements or other conditions which have been imposed upon such
Lender or the request, direction or requirement with which it has complied,
together with the date thereof, the amount of such cost, reduction or payment
and the manner in which such amount has been calculated. The statement of any
Lender as to the additional amounts payable pursuant to this Section 2.8(g)
shall be binding on Borrower in the absence of manifest error.
The protection of this Section 2.8(g) shall be available to any such
Lender regardless of any possible contention of invalidity or inapplicability of
the relevant law, regulation, treaty, directive, condition or interpretation
thereof. In the event that Borrower pays any Lender the amount necessary to
compensate the Lender for any charge, deduction or payment incurred or made by
the Lender as provided in this Section 2.8(g), and such charge, deduction or
payment or any part thereof, is subsequently returned to such Lender as a result
of the final determination of the invalidity or inapplicability of the relevant
law, regulation, treaty, directive or condition, then such Lender shall remit to
Borrower the amount paid by Borrower which has actually been returned to such
Lender (together with any interest actually paid to such Lender on such returned
amount), less such Lender's costs and expenses incurred in connection with such
governmental regulation or any challenge made by such Lender with respect to its
validity or applicability.
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(h) DETERMINATION OF INTEREST RATES AND EQUIVALENT AMOUNTS
Each determination of an interest rate or a Dollar Equivalent amount by
Agent shall be conclusive and binding on Borrower and Lenders in the absence of
manifest error. Agent will, at the request of Borrower or any Lender, deliver to
Borrower or such Lender, as the case may be, a statement showing the quotations
used by Agent in determining any interest rate or Dollar Equivalent amount.
SECTION 2.9 PREPAYMENTS
Base Rate Loans may be repaid at any time without a prepayment fee.
Overnight Rate Loans, IBOR Rate Loans, LIBOR Rate Loans and any Quoted Rate Loan
may be repaid at the end of an Applicable Interest Period without a prepayment
fee. Quoted Rate Loans may not be voluntarily repaid prior to the end of the
Applicable Interest Period. If an Overnight Rate Loan, an IBOR Rate Loan, a
LIBOR Rate Loan or a Quoted Rate Loan is repaid prior to the end of the
Applicable Interest Period, a prepayment fee computed in the manner set out in
Schedule 1 shall be assessed and paid at the time of such early repayment. If an
Offshore Currency Loan is repaid prior to the end of the Applicable Interest
Period, Borrower shall reimburse each Lender and hold each Lender harmless from
any loss or expense which the Lender may sustain or incur as a consequence
thereof, including, without limitation, any such loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain its Offshore
Currency Loans or from fees payable to terminate the deposits from which such
funds were obtained or from any other charges relating its Offshore Currency
Loans. Such fee shall apply in all circumstances where an Overnight Rate Loan,
an IBOR Rate Loan, a LIBOR Rate Loan or a Quoted Rate Loan is paid prior to the
end of the Applicable Interest Period, regardless of whether such payment is
voluntary, mandatory or the result of Agent's or Lenders' collection efforts.
SECTION 2.10 NOTES; RECORDATION OF LOANS
(a) PROMISSORY NOTES
The Loans shall be evidenced by promissory notes of Borrower as follows:
(i) the Term Loan is evidenced by a promissory note of Borrower, a copy of which
is attached as Exhibit A hereto (the "Term Note"); (ii) the ▇▇▇▇▇▇▇ Loans shall
be evidenced by promissory notes of Borrower substantially in the form of
Exhibit B hereto, with appropriate insertions, payable to the order of Lenders,
and for each Lender in the face amount of such Lender's ▇▇▇▇▇▇▇ Commitment (the
"▇▇▇▇▇▇▇ Notes"); and (iii) the Revolving Loans shall be evidenced by promissory
notes of Borrower substantially in the form of Exhibit C hereto, with
appropriate insertions, payable to the order of Lenders, and for each Lender in
the face amount of such Lender's Revolving Commitment (the "Revolving Notes").
(b) RECORDATION OF LOANS
Each Lender is hereby authorized to record the date and amount of the
Loans it makes,
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the Base Rate, the Overnight Rate, the Applicable IBOR Rate, Applicable LIBOR
Rate or Quoted Rate, as applicable, the Applicable Currency, and the date and
amount of each payment of principal and interest thereon on a schedule annexed
to or kept in respect of any Note. Any such recordation by Lender shall
constitute prima facie evidence of the accuracy of the information so recorded;
provided, however, that the failure to make any such recordation or any error in
any such recordation shall not affect the obligations of Borrower hereunder or
under any Note.
(c) SUBSTITUTE NOTES
Subject to the terms and conditions of Section 9.7, any Lender shall
have the right to assign or participate all or portions of its ▇▇▇▇▇▇▇ Loans and
Revolving Loans to certain other persons. In connection with any assignment,
such Lender may deliver its ▇▇▇▇▇▇▇ Note or Revolving Note, as the case may be,
to Borrower and simultaneously require Borrower to execute new substitute
promissory notes in favor of such Lender and the new Lender(s), each
substantially in the form of Exhibit B or Exhibit C, as the case may be. The
aggregate principal amount of such substitute promissory notes shall be equal to
(i) prior to the ▇▇▇▇▇▇▇ Conversion Date or Revolving Conversion Date, as the
case may be, the original principal amount of the ▇▇▇▇▇▇▇ Note or Revolving Note
so surrendered, or (ii) on and after the ▇▇▇▇▇▇▇ Conversion Date or Revolving
Conversion Date, as the case may be, the outstanding principal amount of the
▇▇▇▇▇▇▇ Note or Revolving Note so surrendered. References herein to "▇▇▇▇▇▇▇
Note" or "▇▇▇▇▇▇▇ Notes" shall be deemed to include a reference to all
substitute promissory notes issued hereunder and references herein to "Revolving
Note" or "Revolving Notes" shall be deemed to include a reference to all
substitute promissory notes issued hereunder.
SECTION 2.11 MANNER OF PAYMENTS
(a) All payments and prepayments of principal and interest on any
Loan (other than an Offshore Currency Loan) and all other amounts payable
hereunder by Borrower to Agent or any Lender shall be made by paying the same in
Dollars, and all payments and prepayments of principal and interest on and any
other amounts relating to any Offshore Currency Loan shall be made in the
Offshore Currency in which such Loan is denominated or payable. All such
payments shall be made in Same Day Funds to Agent at its Commercial Loan
Processing Center, Seattle, Washington, and (i) in the case of any Dollar
payments, not later than 12:00 noon (Seattle time) on the date specified herein,
and (ii) in the case of Offshore Currency payments, no later than such time on
the dates specified herein as may be determined by Agent to be necessary for
such payment to be credited on such date in accordance with normal banking
procedures in the place of payment. If such payment is received after 12:00
noon, or later than the time specified by Agent as provided in clause (ii) above
(in the case of Offshore Currency payments) then it will be deemed received on
the next Business Day.
(b) Whenever any payment hereunder or under any other Loan Document
shall be stated to be due or whenever the last day of any Applicable Interest
Period would otherwise occur on a day other than a Business Day, such payment
shall be made and the last day
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of such Applicable Interest Period shall occur on the next succeeding Business
Day and such extension of time shall in such case be included in the computation
and payment of interest or commitment fees, as the case may be, unless such
extension would cause such payment to be made or the last day of such Applicable
Interest Period to occur in the next following calendar month, in which case
such payment shall be due and the last day of such Applicable Interest Period
shall occur on the next preceding Business Day.
SECTION 2.12 APPLICATION OF PAYMENTS
Any payments made by Borrower in respect of amounts owing by it
hereunder or under any other Loan Document shall be applied in the manner
directed by Borrower and, in the absence of any such direction, such payments
and any prepayments of any Loan shall be applied first against fees, expenses
and indemnities due under the Loan Documents; second, against interest due on
amounts in default, if any; third, against interest due on the Loans; fourth,
ratably against Loan principal, Interest Rate Swap Obligations, if any,
Financial Transaction Liabilities, if any, according to the respective amounts
of principal due to Lenders and Interest Rate Swap Obligations and Financial
Transaction Liabilities due to Bank of America. Any payments received by Agent
or any Lender by any means and from any source after the occurrence and during
the continuation of an Event of Default shall be applied to such portions of
Borrower's obligations hereunder, under any other Loan Document or under the
Interest Rate Swap Agreement, any Financial Transaction Liabilities due Bank of
America, and in such order as Agent may elect in its sole discretion.
SECTION 2.13 FEES
(a) UNUSED COMMITMENT FEES
Borrower agrees to pay to Agent (i) for the account of Lenders in
proportion to their ▇▇▇▇▇▇▇ Percentage Interests an unused commitment fee during
the period commencing on the date hereof and ending on the last day of the
▇▇▇▇▇▇▇ Commitment Period computed daily at the rate of sixty basis points
(.60%) per annum on the difference between the then existing Total ▇▇▇▇▇▇▇
Commitment and the outstanding principal balance of the ▇▇▇▇▇▇▇ Loans, and (ii)
for the account of Lenders in proportion to their Revolving Percentage Interests
an unused commitment fee during period commencing on the date hereof and ending
on the last day of the Revolving Commitment Period computed daily at the rate of
sixty basis points (.60%) per annum on the difference between the then existing
Total Revolving Commitment and the outstanding principal balance of the
Revolving Loans. Such unused commitment fees shall be payable in arrears at
quarterly intervals commencing the first Business Day of October, January, April
or July following the date hereof, whichever is earlier, and payable on the
first Business Day of each October, January, April and July thereafter, except
that accrued unused commitment fees with respect to the then existing ▇▇▇▇▇▇▇
Commitment shall be payable on the ▇▇▇▇▇▇▇ Conversion Date, accrued unused
commitment fees with respect to the then existing Revolving Commitment shall be
payable on the Revolving Maturity Date and all such fees shall be payable on
demand after the occurrence of an Event of Default. Computations of unused
commitment fees shall be
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made on the basis of a year of three hundred sixty (360) days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such fees are payable. For purposes of determining
utilization of each Lender's Revolving Commitment in order to calculate the
unused commitment fee due hereunder, the amount of any outstanding Offshore
Currency Loan on any date shall be determined based upon the Dollar Equivalent
amount as of the most recent Computation Date with respect to such Offshore
Currency Loan. The unused commitment fees payable under this Section 2.13(a)
shall be deemed fully earned when due and non-refundable when paid.
(b) UP-FRONT FEE
Borrower agrees to pay to Agent for the account of Lenders an upfront
fee equal to forty-five basis points (.45%) of the aggregate amount of the Total
▇▇▇▇▇▇▇ Commitment and the Total Revolving Commitment, half of which amount is
payable on the date hereof and half of which is payable on October 1, 2000. The
upfront fee payable under this Section 2.13(b) shall be deemed fully earned on
the date hereof and non-refundable when paid.
(c) ARRANGEMENT FEE
Borrower agrees to pay to Agent for the account of Bank of America the
arrangement fees described in that certain letter agreement dated June 30, 2000
written by Bank of America and accepted by Borrower.
SECTION 2.14 SHARING OF PAYMENTS, ETC.
Each borrowing of ▇▇▇▇▇▇▇ Loans from Lenders under Section 2.2, will be
made pro rata in accordance with each Lender's ▇▇▇▇▇▇▇ Percentage Interest, and
each payment and prepayment of the ▇▇▇▇▇▇▇ Loans and each payment of interest on
the ▇▇▇▇▇▇▇ Loans will be made pro rata to each Lender in accordance with its
▇▇▇▇▇▇▇ Percentage Interest. Each borrowing of Revolving Loans from Lenders
under Section 2.3, will be made pro rata in accordance with each Lender's
Revolving Percentage Interest, and each payment and prepayment of the Revolving
Loans and each payment of interest on the Revolving Loans will be made pro rata
to each Lender in accordance with its Revolving Percentage Interest. If any
Lender shall obtain any payment in respect of Borrower's obligations under this
Agreement or the Notes (whether voluntary or involuntary, through the exercise
of any right of set-off or otherwise) in excess of the share which it would have
been entitled to receive had such payment been made to Agent, such Lender shall
forthwith purchase from the other Lenders such participations in the Loans made
by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them, but if any of such excess payment is
afterward recovered from such purchasing Lender, the purchase shall be rescinded
and the purchase price restored, without interest, to the extent of such
recovery. Borrower authorizes the purchase of such participations and agrees
that any Lender so purchasing a participation from another Lender may exercise
all its rights to payment (including the right of set off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.
SECTION 2.15 EXTENSION OF REVOLVING COMMITMENT PERIOD
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Borrower may request that Lenders extend the Revolving Maturity Date for
successive one-year periods by notifying Agent and Lenders in writing at any
time before a date one hundred twenty (120) days prior to the last day of the
then-existing Revolving Commitment Period. If Lenders consent in writing to such
an extension within sixty (60) days of such request, the Revolving Maturity Date
shall be extended for one (1) additional year. Nothing in this Section 2.15
shall be construed as a commitment on the part of Agent or any Lender to grant
any extension requested by Borrower.
SECTION 2.16 OFFSHORE CURRENCY LOANS
(a) DOLLAR EQUIVALENT AMOUNT
Agent will determine the Dollar Equivalent amount with respect to any
(i) borrowing comprised of Offshore Currency Loans as of the requested date of
such borrowing, (ii) outstanding Offshore Currency Loans as of the last Banking
Day of each month, and (iii) outstanding Offshore Currency Loans as of any
redenomination date pursuant to Section 2.8(f) or this Section 2.16 (each such
date under clauses (i) through (iii) a "Computation Date").
(b) OFFSHORE CURRENCY UNAVAILABLE
In the case of a proposed borrowing comprised of Offshore Currency
Loans, Lenders shall be under no obligation to make Offshore Currency Loans in
the requested Offshore Currency as part of such borrowing if Agent has received
notice from any Lender by 5:00 p.m. (Seattle time) four (4) Business Days prior
to the day of such borrowing that such Lender cannot provide Revolving Loans in
the requested Offshore Currency, in which event Agent will give notice to
Borrower no later than 9:00 a.m. (Seattle time) on the third Business Day prior
to the requested date of such borrowing that the borrowing in the requested
Offshore Currency is not then available, and notice thereof also will be given
promptly by Agent to Lenders. If Agent shall have so notified Borrower that any
such borrowing in a requested Offshore Currency is not then available, Borrower
may, by notice to Agent not later than 5:00 p.m. (Seattle time) four Business
Days prior to the requested date of such borrowing, withdraw the Notice of
Borrowing relating to such requested borrowing. If Borrower does so withdraw
such Notice of Borrowing, the borrowing requested therein shall not occur and
Agent will promptly so notify each Lender. If Borrower does not so withdraw such
Notice of Borrowing, Agent will promptly so notify each Lender and such Notice
of Borrowing shall be deemed to be a Notice of Borrowing that requests a
borrowing comprised of Base Rate Loans in an aggregate amount equal to the
amount of the originally requested borrowing as expressed in Dollars in the
Notice of Borrowing; and in such notice by Agent to each Lender, Agent will
state such aggregate amount of such borrowing in Dollars and such Lender's
Revolving Percentage Interest thereof.
(c) OFFSHORE RATE UNAVAILABLE
In the case of a proposed continuation of Offshore Currency Loans for an
additional
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Applicable Interest Period as provided in Section 2.8(c)(i), Lenders shall be
under no obligation to continue such Offshore Currency Loans if Agent has
received notice from any Lender by 5:00 p.m. (Seattle time) four (4) Business
Days prior to the day of such continuation that such Lender cannot continue to
provide Revolving Loans in the relevant Offshore Currency, in which event Agent
will give notice to Borrower not later than 9:00 a.m. (Seattle time) on the
third Business Day prior to the last day of the Applicable Interest Period with
respect to such Offshore Currency Loans that the continuation of such Revolving
Loans in the relevant Offshore Currency is not then available, and notice
thereof also will be given promptly by Agent to Lenders. If Agent shall have so
notified Borrower that any such continuation of Offshore Currency Loans is not
then available, any Interest Rate Notice with respect thereto shall be deemed
withdrawn and such Offshore Currency Loans shall be redenominated into Base Rate
Loans in Dollars with effect from the last day of the Applicable Interest
Period with respect to any such Offshore Currency Loans. Agent will promptly
notify Borrower and Lenders of any such redenomination and in such notice by
Agent to each Lender, Agent will state the aggregate Dollar Equivalent amount of
the redenominated Offshore Currency Loans as of the Computation Date with
respect thereto and such Lender's Revolving Percentage Interest thereof.
(d) OCCURRENCE OF EVENT OF DEFAULT
Notwithstanding anything herein to the contrary, if a Default or Event
of Default shall have occurred and be continuing, upon the request of Majority
Lenders, all or any part of any outstanding Offshore Currency Loans shall be
redenominated and converted into Base Rate Loans in Dollars with effect from the
last day of the Interest Period with respect to any such Offshore Currency
Loans. Agent will promptly notify Borrower of any such redenomination and
conversion request.
(e) AGREED ALTERNATE CURRENCIES
Borrower shall be entitled to request that Revolving Loans hereunder
also be permitted to be made in any other lawful currency constituting a
eurocurrency (other than Dollars), in addition to the eurocurrencies specified
in the definition of "Offshore Currency" herein, that in the opinion of the
Majority Lenders is at such time freely traded in the offshore interbank foreign
exchange markets and is freely transferable and freely convertible into Dollars
(an "Agreed Alternative Currency"). Borrower shall deliver to Agent any request
for designation of an Agreed Alternate Currency in accordance with Section 9.4,
to be received by Agent not later than 11:00 a.m. (Seattle time) at least ten
(10) Business Days in advance of the date of any borrowing hereunder proposed to
be made in such Agreed Alternate Currency. Upon receipt of any such request
Agent will promptly notify Lenders thereof, and each Lender will use its best
efforts to respond to such request within two (2) Business Days of receipt
thereof. Each Lender may grant or accept such request in its sole discretion.
Agent will promptly notify Borrower of the acceptance or rejection of any such
request.
ARTICLE 3.
CONDITIONS OF LENDING
SECTION 3.1 CONDITIONS TO INITIAL LOAN
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In addition to the conditions set forth in Section 3.2, the obligations
of each Lender to deliver its Loan proceeds to Agent and the obligation of Agent
to disburse such proceeds to Borrower are subject to the fulfillment of the
following conditions:
(a) LOAN DOCUMENTS
Agent shall have received this Agreement and the other Loan Documents,
each duly executed and delivered as applicable by Borrower, Guarantor and the
other parties thereto.
(b) CORPORATE AUTHORITY
Agent shall have received all of the following, each satisfactory to
Agent in form and substance:
(1) a copy of the Articles of Incorporation and Bylaws of
Borrower and a copy of resolutions adopted by the Board of Directors of Borrower
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents to which Borrower is a party together with evidence of the
authority and specimen signatures of the natural persons who have signed this
Agreement and who will sign on behalf of Borrower the other Loan Documents to
which Borrower is a party;
(2) a copy of the Certificate of Incorporation and Bylaws of
Guarantor and a copy of resolutions adopted by the Board of Directors of
Guarantor authorizing the execution, delivery and performance of this Agreement
and the other Loan Documents to which Guarantor is a party together with
evidence of the authority and specimen signatures of the natural persons who
have signed this Agreement and who will sign on behalf of Guarantor the other
Loan Documents to which Guarantor is a party;
(3) a copy of the Articles of Incorporation and Bylaws of each
Subsidiary that is a party to any Loan Document and a copy of resolutions
adopted by the Board of Directors of such Subsidiary authorizing the execution,
delivery and performance of the Loan Documents to which such Subsidiary is a
party together with evidence of the authority and specimen signatures of the
natural persons who will sign on behalf of such Subsidiary the Loan Documents to
which such Subsidiary is a party; and
(4) evidence that Borrower, Guarantor and each Subsidiary that
is a party to any Loan Document is in good standing in the jurisdiction of its
incorporation and such other evidence of corporate authority as Agent or any
Lender shall request.
(c) EVIDENCE OF SECURITY
Agent shall have received evidence satisfactory to it that the security
interests created by the Security Documents have been duly perfected by all such
means as Lenders may deem necessary or advisable to create a valid and perfected
lien in the Collateral enforceable against all third parties in all
jurisdictions to secure all obligations of Borrower, Guarantor and Subsidiaries
a party to any Security Document to Lenders and Agent under this Agreement or
the other Loan Documents, subject to the rights of any third parties, if any,
benefited by an Account
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Subordination Agreement executed and delivered by Agent pursuant to Section 9.6.
Agent shall have also received such evidence as it may require that its security
interests in the Collateral have priority over any and all other security
interests or other liens therein other than the security interests of third
parties, if any, benefited by an Account Subordination Agreement executed and
delivered by Agent pursuant to Section 9.6, and that the Collateral is free and
clear of all Liens, except as expressly permitted by this Agreement. Without
limiting the generality of the foregoing, Agent shall have received evidence
satisfactory to it that the UCC financing statement in favor of ▇▇▇▇▇ Fargo HSBC
Trade Bank, N.A. has been terminated.
(d) EVIDENCE OF INSURANCE
Agent shall have received evidence satisfactory to it that all insurance
required by this Agreement or any Security Document is in full force and effect.
(e) LEGAL OPINION
Agent shall have received a legal opinion of ▇▇▇▇ ▇▇▇▇, Esq., counsel to
Borrower and Guarantor, substantially in the form of Exhibit I attached hereto.
(f) CERTIFICATES
Agent shall have received a certificate of Borrower's chief financial
officer or president as to the accuracy of Borrower's representations and
warranties set forth in Article 4. Agent shall have received a certificate of
Guarantor's chief financial officer or president as to the accuracy of
Guarantor's representations and warranties set forth in the Guaranty Agreement.
SECTION 3.2 CONDITIONS TO ALL LOANS
The obligations of each Lender to deliver its Loan proceeds to Agent and
the obligation of Agent to disburse such proceeds to Borrower are subject to the
fulfillment of the following conditions:
(a) PRIOR CONDITIONS
All of the conditions set forth in Section 3.1 shall have been
satisfied.
(b) NOTICE OF BORROWING
Agent shall have received the Notice of Borrowing in respect of such
Loan.
(c) NO TERMINATION OF GUARANTY AGREEMENT
Neither Agent nor any Lender shall have received from Borrower or
Guarantor any notice terminating or purporting to terminate Guarantor's
obligations under the Guaranty Agreement or claiming that the Guaranty Agreement
is not or will in the future not be fully enforceable against Guarantor in
accordance with its terms.
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(d) NO DEFAULT
At the date of the Loan no Default or Event of Default shall have
occurred and be continuing or will have occurred as the result of the making of
the Loans; and the representations and warranties in Article 4 hereof and in the
Guaranty Agreement shall be true on and as of such date with the same force and
effect as if made on and as of such date.
(e) OTHER INFORMATION
Agent shall have received such other statements, opinions, certificates,
documents and information as Agent or any Lender may reasonably request in order
to satisfy itself that the foregoing conditions have been fulfilled.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent as follows:
SECTION 4.1 CORPORATE EXISTENCE AND POWER
Borrower and each Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation. Borrower and each Subsidiary is duly qualified to do business in
each other jurisdiction where the nature of their respective activities or the
ownership of their respective properties requires such qualification. Schedule 2
to this Agreement states as of the date hereof the jurisdictions of
incorporation or organization of Borrower and of each Subsidiary. Borrower has
full corporate power, authority and legal right to carry on its business as
presently conducted, to own and operate its properties and assets, and to
execute, deliver and perform this Agreement and the other Loan Documents to
which Borrower is a party. Borrower has 100 shares of issued and outstanding
common stock, all of which have been duly authorized and validly issued, and are
fully paid and nonassessable. All of such shares are owned by Guarantor.
SECTION 4.2 CORPORATE AUTHORIZATION
(a) BORROWER AUTHORIZATION
The execution, delivery and performance by Borrower of this Agreement
and the other Loan Documents to which Borrower is a party, and any borrowing
hereunder have been duly authorized by all necessary corporate action of
Borrower, do not require any shareholder approval or the approval or consent of
any trustee or the holders of any Indebtedness of Borrower, except such as have
been obtained (certified copies thereof having been delivered to Agent), do not
contravene any law, regulation, rule or order binding on Borrower or the
Articles of Incorporation or Bylaws of Borrower and do not contravene the
provisions of or constitute a
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default under any indenture, mortgage, contract or other agreement or instrument
to which Borrower is a party or by which Borrower or any of its properties may
be bound or affected.
(b) GUARANTOR AUTHORIZATION
The execution, delivery and performance by Guarantor of this Agreement
and the other Loan Documents to which Guarantor is a party, and any borrowing
hereunder have been duly authorized by all necessary corporate action of
Guarantor, do not require any shareholder approval or the approval or consent of
any trustee or the holders of any Indebtedness of Guarantor, except such as have
been obtained (certified copies thereof having been delivered to Agent), do not
contravene any law, regulation, rule or order binding on Guarantor or the
Certificate of Incorporation or Bylaws of Guarantor and do not contravene the
provisions of or constitute a default under any indenture, mortgage, contract or
other agreement or instrument to which Guarantor is a party or by which
Guarantor or any of its properties may be bound or affected.
(c) SUBSIDIARY AUTHORIZATION
The execution, delivery and performance by each Subsidiary of Loan
Documents to which such Subsidiary is a party, and any borrowing hereunder have
been duly authorized by all necessary corporate action of such Subsidiary, do
not require any shareholder approval or the approval or consent of any trustee
or the holders of any Indebtedness of such Subsidiary, except such as have been
obtained (certified copies thereof having been delivered to Agent), do not
contravene any law, regulation, rule or order binding on such Subsidiary or the
Articles or Certificate of Incorporation or Bylaws of such Subsidiary and do not
contravene the provisions of or constitute a default under any indenture,
mortgage, contract or other agreement or instrument to which such Subsidiary is
a party or by which such Subsidiary or any of its properties may be bound or
affected.
SECTION 4.3 GOVERNMENT APPROVALS, ETC.
No Government Approval or filing or registration with any Governmental
Authority is required for the making and performance by Borrower, Guarantor or
any Subsidiary of this Agreement or the other Loan Documents to which Borrower,
Guarantor or such Subsidiary is a party or in connection with any of the
transactions contemplated hereby or thereby, except such as have been heretofore
obtained and are in full force and effect (certified copies thereof having been
delivered to Agent).
SECTION 4.4 BINDING OBLIGATIONS, ETC.
This Agreement and the other Loan Documents to which Borrower, Guarantor
or any Subsidiary is a party have been duly executed and delivered by Borrower,
Guarantor and such Subsidiary and constitute the legal, valid and binding
obligation of Borrower enforceable against Borrower, Guarantor and such
Subsidiary in accordance with their respective terms.
SECTION 4.5 LITIGATION
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Except as disclosed in Schedule 3, there are no actions, proceedings,
investigations, or claims against or affecting Borrower or any Subsidiary now
pending before any court, arbitrator or Governmental Authority (nor to the
knowledge of Borrower has any thereof been threatened nor to the knowledge of
Borrower does any basis exist therefor) which if determined adversely to
Borrower or any Subsidiary would (a) be likely to have a material adverse effect
on the consolidated financial condition of Borrower and the Subsidiaries or on
the ability of Borrower to perform its obligations under this Agreement, the
Notes and the Subordination Agreement or (b) impair or defeat the lien of Agent
on any of the Collateral or any rights of Borrower therein.
SECTION 4.6 FINANCIAL CONDITION
The consolidated balance sheet of Guarantor and the Guarantor
Subsidiaries as of December 31, 1999, and the related consolidated statements of
income, cash flows, and shareholders' equity for the Fiscal Year then ended,
copies of which have been furnished to Lenders, fairly present the financial
condition of Guarantor and the Guarantor Subsidiaries as at such dates and the
results of operations of Guarantor and the Guarantor Subsidiaries for the
periods then ended, all in accordance with GAAP. Guarantor and the Guarantor
Subsidiaries did not have on such dates any contingent liabilities for Taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or provided
for in that balance sheet and in the notes to those financial statements. Except
as disclosed to Lenders in writing prior to the date of this Agreement, since
December 31, 1999, there have been no changes to the operations, business or
financial condition of Guarantor and the Guarantor Subsidiaries that would be
sufficient to impair Borrower's ability to repay the Loans or that have resulted
in, or are forecast by Guarantor or Borrower to result in, a Default or Event of
Default.
SECTION 4.7 TITLE AND LIENS
Guarantor, Borrower and the other Guarantor Subsidiaries have good and
marketable title to each of the properties and assets reflected in the balance
sheet referred to in Section 4.6 (except such as have been since sold or
otherwise disposed of in the ordinary course of business). No assets or revenues
of Guarantor, Borrower or any Subsidiary are subject to any Lien except as
required or permitted by this Agreement or disclosed in the balance sheets
referred to in Section 4.6 or otherwise disclosed to Lenders in writing prior to
the date of this Agreement. None of the Collateral is subject to any Lien other
than security interests in specific accounts receivable granted to purchasers in
connection with the sale of accounts receivable expressly permitted under
Section 6.4(e).
SECTION 4.8 BUILDING AND ENVIRONMENTAL LAWS
All properties of Borrower and the Subsidiaries and their respective use
thereof comply in all material respects with all applicable material zoning and
use restrictions and with applicable material laws and regulations relating to
the environment.
SECTION 4.9 TAXES
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Borrower and the Subsidiaries have filed all tax returns and reports
required of them, have paid all Taxes which are due and payable, and Borrower on
its consolidated books has provided adequate reserves for payment of any Tax
whose payment is being contested. The charges, accruals and reserves on the
consolidated books of Borrower and the Subsidiaries in respect of Taxes for all
fiscal periods to date are accurate. There are no questions or disputes between
Borrower or any Subsidiary and any Governmental Authority with respect to any
Taxes except as disclosed in the balance sheets referred to in Section 4.6 or
otherwise disclosed to Lenders in writing prior to the date of this Agreement
and except disputes which if resolved adversely to the positions being asserted
by Borrower or any Subsidiary would not result in a material adverse change in
the consolidated financial condition of Borrower and the Subsidiaries.
SECTION 4.10 LAWS, ORDERS; OTHER AGREEMENTS
Except as described in the financial statements delivered to Agent
pursuant to Section 4.6 neither Borrower nor any Subsidiary is in violation of
or subject to any contingent liability on account of any laws, statutes, rules,
regulations and orders of any Governmental Authority. Neither Borrower nor any
Subsidiary is in material breach of or default under any agreement to which it
is a party or which is binding on it or any of its assets.
SECTION 4.11 FEDERAL RESERVE REGULATIONS
Borrower is not engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or
carrying any margin stock (within the meaning of Federal Reserve Regulation U),
and no part of the proceeds of the Loan will be used to purchase or carry any
such margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or for any other purpose that violates the
applicable provisions of any Federal Reserve Regulation. Borrower will, on
request of any Lender, furnish to such Lender a statement conforming with the
requirements of Regulation U.
SECTION 4.12 ERISA
(a) The present value of all benefits vested under all Pension Plans
did not, as of the most recent valuation date of such Pension Plans, exceed the
value of the assets of the Pension Plans allocable to such vested benefits by an
amount which would represent a potential material liability of Borrower and the
Subsidiaries, taken as a whole, or affect materially the ability of Borrower to
perform this Agreement.
(b) Except as disclosed to Lenders in writing prior to the date
hereof, no Plan or trust created thereunder, or any trustee or administrator
thereof, has engaged in a "prohibited transaction" (as such term is defined in
Section 406 or Section 2003(a) of ERISA) which could subject such Plan or any
other Plan, any trust created thereunder, or any trustee or administrator
thereof, or any party dealing with any Plan or any such trust to the tax or
penalty on prohibited transactions imposed by Section 502 or Section 2003(a) of
ERISA.
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(c) No Pension Plan or trust has been terminated, except in
accordance with the Code, ERISA, and the regulations of the Internal Revenue
Service and the PBGC as applicable to solvent plans in which benefits of
participants are fully protected. No "reportable event" as defined in Section
4043 of ERISA has occurred for which notice has not been waived or for which
alternative notice procedures are permitted.
(d) No Pension Plan or trust created thereunder has incurred any
"accumulated funding deficiency" (as such term is defined in Section 302 of
ERISA) whether or not waived, since the effective date of ERISA.
(e) The required allocations and contributions to Pension Plans will
not violate Section 415 of the Code.
SECTION 4.13 SUBSIDIARIES
Schedule 2 to this Agreement sets forth as of the date of this Agreement
a list of the Wholly-owned Subsidiaries. As to each Subsidiary that is not a
Wholly-owned Subsidiary, Schedule 2 sets forth as of the date of this Agreement
the number and percentage of outstanding shares of each class of capital stock
of such Subsidiary owned by Borrower or by any Subsidiary. The outstanding
shares of each Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable. Borrower and each Subsidiary owns beneficially and
has good title to its ownership interest in each Subsidiary it is listed as
owning on Schedule 2, free and clear of any Lien, and has fully paid its capital
contribution to each such Subsidiary.
SECTION 4.14 PATENTS, LICENSES, FRANCHISES
Borrower and each Subsidiary owns or possesses all the patents,
trademarks, service marks, trade names, copyrights, licenses, franchises,
permits and rights with respect to the foregoing necessary to own and operate
its properties and to carry on its business as presently conducted and presently
planned to be conducted without conflict with the rights of others except as
previously disclosed in writing to Lenders prior to the date hereof.
SECTION 4.15 INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY
Borrower is not (a) an "investment company" or a company "controlled" by
an investment company within the meaning of the Investment Company Act of 1940,
as amended; or (b) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
ARTICLE 5.
AFFIRMATIVE COVENANTS
So long as Agent or any Lender shall have any commitment hereunder and,
until payment in full of each Loan, the Notes and performance of all other
obligations of Borrower under this
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Agreement, Borrower and Guarantor, as applicable, each agree to do all of the
following unless Majority Lenders shall otherwise consent in writing.
SECTION 5.1 USE OF PROCEEDS
The proceeds of all ▇▇▇▇▇▇▇ Loans shall be used by Borrower solely for
the acquisition of ▇▇▇▇▇▇▇, Inc., a Delaware corporation. The proceeds of all
Revolving Loans shall be used by Borrower solely for general corporate purposes
of Borrower.
SECTION 5.2 FINANCIAL STATEMENTS
Guarantor and Borrower each covenant and agree that it will deliver or
cause to be delivered to Agent with sufficient copies for each Lender:
(a) ANNUAL GUARANTOR STATEMENTS
As soon as practicable and in any event within ninety (90) days after
the end of each Fiscal Year, consolidated statements of income, cash flows, and
shareholders' equity of Guarantor and the Guarantor Subsidiaries for such year,
and a consolidated balance sheet of Guarantor and the Guarantor Subsidiaries as
at the end of such year, together with the corresponding company prepared
consolidating statements of Guarantor and the Guarantor Subsidiaries, setting
forth in each case in comparative form corresponding figures from the preceding
annual financial statements, all in reasonable detail and satisfactory in scope
to Lenders. The annual consolidated financial statements shall be accompanied by
an opinion to Guarantor (or to its Board of Directors and shareholders) from
independent public accountants of recognized standing selected by Guarantor
whose opinion shall be in scope and substance reasonably satisfactory to
Lenders;
(b) QUARTERLY GUARANTOR STATEMENTS
As soon as practicable and in any event within forty-five (45) days
after the end of each quarterly period (other than the last quarterly period) in
each Fiscal Year, the consolidated statements of income and of cash flows of
Guarantor and the Guarantor Subsidiaries for such quarterly period and for the
period from the beginning of the current Fiscal Year to the end of such
quarterly period, and a consolidated balance sheet of Guarantor and the
Guarantor Subsidiaries as at the end of such quarterly period, setting forth in
each case in comparative form figures for the corresponding period in the
preceding Fiscal Year, all in reasonable detail and certified by an authorized
financial officer of Guarantor; and
(c) STOCKHOLDER REPORTS AND PROXY STATEMENTS
Promptly after transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as Guarantor or Borrower shall
send to its stockholders and copies of all registration statements (without
exhibits) and all reports, if any, which Guarantor or Borrower files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission);
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Together with each delivery of financial statements required by clause
(b) above, Guarantor will deliver to Agent an Officer's Certificate of Guarantor
in the form of Exhibit L attached hereto stating that (1) the financial
statements have been prepared in accordance with GAAP and present fairly the
consolidated financial position and results of operations of Guarantor and the
Guarantor Subsidiaries as of the end of and for the applicable fiscal period and
(2) since the last Fiscal Year-end report provided to Agent pursuant to Sections
4.6 or 5.2(a) there have been no changes to the operations, business or
financial condition of Guarantor and the Guarantor Subsidiaries that would be
sufficient to adversely impact Borrower's ability to repay the Loans or that
have resulted in, or are forecast by Guarantor or Borrower to result in, a
Default or Event of Default and (3) there has not existed during such fiscal
period, and there does not then exist, any Event of Default or Default, or, if
any such Event of Default or Default has existed or does then exist, specifying
the nature thereof, the period of existence thereof and what action Guarantor or
Borrower has taken or proposes to take with respect thereto, and, further,
setting forth calculations demonstrating compliance as of the end of such fiscal
period with the financial covenants set forth in Sections 5.11 through 5.14 and
Sections 6.3 through 6.5.
SECTION 5.3 INSPECTION OF PROPERTY
Borrower covenants and agrees that it will permit Agent or any Lender on
reasonable notice, at Agent's or such Lender's expense (unless a Default or
Event of Default shall have occurred, in which event the expense of such visit
and inspection shall be for Borrower's account), to visit and inspect any of the
properties of Borrower and the Subsidiaries, to examine the corporate books and
financial records of Borrower and the Subsidiaries, and to make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of
Borrower, and the Subsidiaries with the principal officers of Borrower and its
independent public accountants, all at such reasonable times and as often as
Agent or such Lender may reasonably request. Without limiting the generality of
the foregoing, Borrower covenants and agrees that it will permit Agent or its
representative on reasonable notice, at Agent's expense, to inspect on or before
September 30, 2000 the books and records maintained by Borrower and the
Subsidiaries with respect to the Collateral and to make copies thereof or
extracts therefrom and to discuss such books and records and the Collateral with
the principal officers of Borrower or its designees.
SECTION 5.4 PAYMENT OF TAXES
Borrower and Guarantor shall cause to be paid and discharged all Taxes
imposed upon Borrower, any Subsidiary or Guarantor or upon the income or profits
of Borrower, any Subsidiary or Guarantor or upon property belonging to Borrower,
any Subsidiary or Guarantor before the same shall be in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid, might become a
lien or charge upon such property or any part thereof; provided, however, that
neither Borrower, any Subsidiary nor Guarantor shall be required to cause to be
paid or discharged any such Tax or claim so long as the validity thereof shall
be contested in good faith by appropriate proceedings, and Borrower, the
Subsidiaries or Guarantor shall set aside on their books adequate reserves with
respect thereto.
SECTION 5.5 PRESERVATION OF CORPORATE EXISTENCE
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Borrower and Guarantor shall each cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate existence of each Subsidiary (except where the failure to maintain
such corporate existence is the result of a consolidation, merger, dissolution
or disposition of assets by Borrower or any Subsidiary not prohibited by Section
6.4), and shall comply with, and cause each Subsidiary to comply, with all laws
applicable to Borrower, such Subsidiary or Guarantor.
SECTION 5.6 MAINTENANCE OF PROPERTY
Borrower and Guarantor shall, at all times keep, maintain, preserve and
protect all the property of Borrower, the Subsidiaries and Guarantor in good
repair, working order and condition and from time to time make all necessary and
proper repairs, renewals, replacements, betterments and improvements thereto, as
necessary such that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
SECTION 5.7 INSURANCE
Borrower and Guarantor shall at all times keep adequately insured, by
financially sound and reputable insurers, all property of Borrower, the
Subsidiaries and Guarantor of the character usually insured by corporations
engaged in the same or similar business against loss or damage of the kinds
customarily insured against by such corporations, and carry such other insurance
as is usually carried by corporations engaged in the same or similar business.
SECTION 5.8 RECORDS AND ACCOUNTS
Borrower and Guarantor shall at all times keep and cause each Subsidiary
to keep true and complete books of record and accounts in accordance with GAAP.
SECTION 5.9 ADDITIONAL PAYMENTS; ADDITIONAL ACTS
From time to time, Borrower and Guarantor shall (a) pay or reimburse
Agent and Lenders for all out-of-pocket expenses, including reasonable legal
fees, actually incurred by Agent or any Lender in connection with the
preparation of the Loan Documents, the making of the Loans or, except as
provided in Section 8.11, incurred by Agent or any Lender in connection with the
enforcement by judicial proceedings or otherwise of any of the rights of Agent
and Lenders under any Loan Document; (b) upon Agent's request, obtain and
promptly furnish to Agent evidence of all such Government Approvals as may be
required to enable Borrower or Guarantor to comply with its obligations under
the Loan Documents; (c) execute and deliver all such instruments and documents
(including, without limitation, UCC financing statements) and perform all such
other acts as Agent or any Lender may reasonably request to carry out the
transactions contemplated by the Loan Documents and to maintain the continuous
perfection and priority of Agent's Lien on all Collateral.
SECTION 5.10 NOTIFICATION
Promptly after learning thereof, Borrower will notify Agent (a) of the
details of any action, proceeding, investigation or claim against or affecting
Borrower or any Subsidiary
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instituted before any court, arbitrator or Governmental Authority or, to
Borrower's knowledge threatened to be instituted, which, if determined adversely
to Borrower or any Subsidiary would be likely to result in a material adverse
change in the consolidated financial condition of Borrower and the Subsidiaries,
or to impair or defeat the lien of Agent on any Collateral or Borrower's rights
therein; (b) of any labor controversy which has resulted in or, to Borrower's
knowledge, threatens to result in a strike which would significantly affect the
consolidated financial condition of Borrower and the Subsidiaries; (c) if
Borrower or any member of the Controlled Group gives or is required to give
notice to the PBGC of any "reportable event" (as defined in Sections (b)(1),
(2), (5) or (6) of Section 4043 of ERISA) with respect to any Plan (or the
Internal Revenue Service gives notice to the PBGC of any "reportable event" as
defined in Section (c)(2) of Section 4043 of ERISA and Borrower obtains
knowledge thereof) which might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the PBGC; and
(d) if any Event of Default or Default exists, the nature and period of
existence thereof and any action Borrower has taken or proposes to take with
respect thereto.
SECTION 5.11 FUNDED DEBT TO EBITDA RATIO
Guarantor shall maintain and Borrower shall cause Guarantor to maintain
as of the end of each of its fiscal quarters ending on or after December 31,
2000, for the period of four consecutive fiscal quarters then ended, a Funded
Debt to EBITDA Ratio of not less than 3.5 to 1. As used herein, "Funded Debt to
EBITDA Ratio" shall mean as of any date of determination, the ratio of (a)
Adjusted EBITDA for the period of four consecutive fiscal quarters then ended
(as such computation is set forth in the definition of Adjusted EBITDA) to (b)
the aggregate principal balance of all Funded Debt as of the date of
determination.
SECTION 5.12 EBITDA TO DEBT SERVICE RATIO
Guarantor shall maintain and Borrower shall cause Guarantor to maintain
as of the end of each of its fiscal quarters ending on or after December 31,
2000, for the period of four consecutive fiscal quarters then ended, an EBITDA
to Debt Service Ratio of not less than 1.75 to 1. As used herein, "EBITDA to
Debt Service Ratio" shall mean for any period, the ratio of (a) Adjusted EBITDA
for such period to (b) Debt Service for such period.
SECTION 5.13 FIXED CHARGE COVERAGE RATIO
Guarantor shall maintain and Borrower shall cause Guarantor to maintain
as of the end of each of its fiscal quarters, for the period of four consecutive
fiscal quarters then ended, a Fixed Charge Coverage Ratio of not less than 1.10
to 1. As used herein, "Fixed Charge Coverage Ratio" shall mean for any period,
the ratio of (a) Adjusted EBITDA for such period minus the sum of (i) all cash
income taxes paid (net of cash income tax refunds received) by Guarantor and the
Guarantor Subsidiaries with respect to such period plus (ii) Unfunded Capital
Expenditures plus (iii) all cash dividends paid on any shares of any class of
Guarantor's capital stock for such period to (b) Debt Service for such period.
As used herein, "Unfunded Capital Expenditures" shall mean, for any period, the
amount by which the aggregate amount of capital expenditures
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made by Guarantor and the Guarantor Subsidiaries for such period exceeds the sum
of (i) the aggregate principal amount of all Indebtedness (including Capital
Leases) assumed or incurred by Guarantor or any Guarantor Subsidiary during such
period for the purpose of financing such capital expenditures plus (ii) an
amount equal to difference between the Total Revolving Commitment and the
outstanding principal balance of the Revolving Loans as of the last day of such
period.
SECTION 5.14 TANGIBLE NET WORTH
Guarantor shall maintain and Borrower shall cause Guarantor to maintain
at all times a consolidated Tangible Net Worth equal to or greater than the sum
of (a) One Hundred Thirty-five Million Dollars ($135,000,000), plus (b) fifty
percent (50%) of the cumulative Consolidated Net Income of Borrower and the
Subsidiaries for all fiscal quarters ended after June 30, 2000, in which
Borrower's net income was greater than zero, plus (c) one hundred percent (100%)
of the amount, if any, by which the shareholders' equity of Borrower has
increased since June 30, 2000 as a result of the issuance of common stock or the
conversion of debt securities into common stock, less (d) one hundred percent
(100%) of the cumulative Non-recurring Charges of Borrower and the Subsidiaries
for all fiscal quarters ended after June 30, 2000. As used herein,
"Non-recurring Charges" shall mean non-recurring, non-cash charges to income
that recognizes a permanent write-down in the book value of an asset of
Guarantor or any Guarantor Subsidiary, including, without limitation, charges to
income for the acquisition of in-process research and development. As used
herein, "Tangible Net Worth" shall mean the sum of (a) the excess of the
consolidated total assets over total liabilities of Guarantor and the Guarantor
Subsidiaries (excluding from such difference the cumulative foreign currency
translation adjustment appearing on the applicable consolidated balance sheet of
Guarantor and the Guarantor Subsidiaries) and (b) an amount equal to the lesser
of (i) the purchase price of treasury stock acquired by Borrower since March 29,
1997 and (ii) an amount equal to the product of (x) Fifteen Million Dollars
($15,000,000) and (y) the number of years (or portions thereof) that have
elapsed since the date of this Agreement; provided, however, that for purposes
of this Section 5.13, the determination of total assets shall exclude (i) all
assets which should be classified as intangible assets (such as goodwill,
patents, trademarks, copyrights, franchises, unamortized debt discount,
capitalized research and development costs, capitalized software costs and
organization costs) (ii) cash held in a sinking or other similar fund
established for the purpose of redemption or other retirement of capital stock,
(iii) 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 the business conducted by the relevant
corporation, and (iv) any revaluation or other write-up in book value of assets
subsequent to the fiscal year of Borrower ended December 27, 1996.
ARTICLE 6.
NEGATIVE COVENANTS
So long as Agent or any Lender shall have any commitment hereunder and,
until payment in full of each Loan, the Notes and performance of all other
obligations of Borrower under this Agreement, Borrower agrees that it will not
do any of the following unless Majority Lenders shall otherwise consent in
writing.
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SECTION 6.1 LIMITATIONS ON LIENS
Borrower will not, and will not permit any Subsidiary to, create, assume
or suffer to be created or to exist any Lien upon any of its property or assets,
except:
(a) existing Liens reflected in the balance sheets referred to in
Section 4.6 or otherwise previously disclosed to Lenders in writing;
(b) Liens in favor of Agent arising pursuant to the Security
Documents;
(c) security interests in specific accounts receivable granted to
purchasers in connection with the sale of accounts receivable expressly
permitted under Section 6.4(e);
(d) easements, rights-of-way, restrictions and other similar charges
or encumbrances, which, in each case, and in the aggregate, do not materially
interfere with the ordinary conduct of the business of Borrower or any
Subsidiary and market leases with aggregate annual rentals not to exceed
Twenty-five Million Dollars ($25,000,000);
(e) purchase-money security interests in equipment;
(f) any Lien renewing, extending, refunding or replacing any Lien
permitted above by clauses (a) through (e), inclusive, to the extent that the
principal amount of Indebtedness secured thereby shall not exceed the principal
amount of Indebtedness secured at the time of such renewal, extension, refunding
or replacement, and that such renewal, extension, refunding or replacement Lien
shall be limited to all or part of the same property (plus improvements,
additions, extensions, repairs and replacements to or on such property) which
was covered by the Lien that was renewed, extended, refunded or replaced; and
(g) Liens in addition to those described in clauses (a) and (e) in
an amount not to exceed Fifteen Million Dollars ($15,000,000).
SECTION 6.2 LIMITATIONS ON INDEBTEDNESS.
Borrower will not, and will not permit any Subsidiary to, create, incur,
or become liable for any Indebtedness (other than the Term Loan, the ▇▇▇▇▇▇▇
Loans and the Revolving Loans) except:
(a) Indebtedness reflected in the balance sheets referred to in
Section 4.6;
(b) Taxes;
(c) Indebtedness of Borrower to a Wholly-owned Subsidiary or of a
Wholly-owned Subsidiary to Borrower or another Wholly-owned Subsidiary;
(d) Indebtedness for the payment of obligations under capital and
operating leases in an amount not to exceed Twenty-five Million Dollars
($25,000,000) in any Fiscal Year;
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(e) Indebtedness of Borrower or a Subsidiary to Guarantor; provided,
however, that at any time the amount of such Indebtedness exceeds the then
outstanding Indebtedness of Guarantor to Borrower or the Subsidiaries, the
obligation of Borrower and the Subsidiaries to repay such excess shall be
subordinated to Borrower's obligation hereunder, pursuant to the Subordination
Agreement;
(f) Indebtedness owed to persons other than Borrower, a Wholly-owned
Subsidiary, or Guarantor in addition to that described in clauses (a) - (e) in
an aggregate outstanding principal amount not exceeding at any time Fifty
Million Dollars ($50,000,000) (or its equivalent in foreign currencies); and
(g) Guarantees by Borrower or a Subsidiary of Indebtedness of a
Subsidiary that is permitted hereunder.
SECTION 6.3 LIMITATION ON INVESTMENTS
Neither Guarantor nor Borrower will, nor will Guarantor permit any
Guarantor Subsidiary to and nor will Borrower permit any Subsidiary to, make or
permit to remain outstanding any loan or advance to any Person or purchase or
otherwise acquire the capital stock, shares, voting trust certificates, bonds,
debentures, notes or instruments or other securities or evidences of
indebtedness of, or any interest in, or make any capital contribution to, any
Person (collectively, "Investments") except that Guarantor, Borrower or any
Wholly-owned Subsidiary, as applicable, may:
(a) Make or permit to remain outstanding loans or advances to any
Wholly-owned Subsidiary or to Borrower;
(b) Own, purchase or acquire stock, obligations or securities of a
corporation that, upon such ownership, purchase or acquisition, shall be a
Subsidiary in which at least eighty percent (80%) of each class of outstanding
capital stock is owned by Borrower, or by one or more other Wholly-owned
Subsidiaries;
(c) Make or permit to remain outstanding loans or advances to
Guarantor; provided, however, no new loans or advances may be made at any time
when a Default or an Event of Default has occurred and is continuing.
(d) Own, purchase or acquire (i) obligations including, but not
limited to, time deposits maturing within one year of commercial banks having
combined capital and surplus in excess of $100,000,000 (or the equivalent in a
foreign currency), organized or licensed to conduct a banking business under the
laws of the United States of America, any state thereof, or a Permitted Foreign
Government; (ii) deposits in bank accounts held in Borrower's name at banks not
meeting the criteria set out in clause (i) above if such deposits do not exceed
$1,000,000 in any one bank; (iii) obligations of the United States government,
any agency thereof or of a Permitted Foreign Government; (iv) obligations
guaranteed by the United States government or a Permitted Foreign Government;
(v) short-term commercial paper rated P-2 or higher or A-2 or higher by ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Rating
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Services, respectively; and (vi) investments through and as permitted by
Borrower's Liquid Asset Management Account agreement with Bank of America's
Trust Department; and,
(e) Except during a time when a Default or Event of Default has
occurred and is continuing, Borrower and all Subsidiaries may make Investments
in addition to investments permitted in clauses (a) - (d) in an aggregate amount
not exceeding at any time Fifty Million Dollars ($50,000,000), and which are
consistent with guidelines adopted from time to time by Borrower's Board of
Directors.
SECTION 6.4 MERGER OR SALE OF ASSETS
Neither Guarantor nor any Guarantor Subsidiary may merge or consolidate
with any other corporation or sell, lease or transfer or otherwise dispose of
any portion of its or their business or assets or of any Collateral, to any
person (either in a single transaction or in a series of transactions during any
Fiscal Year), except that:
(a) Any Subsidiary may merge with Borrower (provided that Borrower
shall be the continuing or surviving corporation) or with any Wholly-owned
Subsidiary (provided that a Wholly-owned Subsidiary shall be the continuing or
surviving corporation);
(b) Any Wholly-owned Subsidiary may sell, lease, transfer or
otherwise dispose of any of its assets to Borrower or another Wholly-owned
Subsidiary;
(c) Borrower may merge with any other corporation, provided that (i)
Borrower shall be the continuing or surviving corporation, and (ii) immediately
after such merger, no Default or Event of Default shall exist;
(d) Borrower and Subsidiaries may sell, lease or transfer their
products in the ordinary course of business;
(e) Borrower may sell specific accounts receivable; provided that
(i) the sale of such accounts receivable are made to third parties on
commercially reasonable terms, (ii) the aggregate principal amount of all such
accounts receivable sold does not exceed Ten Million Dollars ($10,000,000)
during any quarterly period of any Fiscal Year or Thirty Million Dollars
($30,000,000) during any Fiscal Year, (iii) no Default or Event of Default has
occurred and is continuing or will occur as a result of selling such accounts
receivable, and (iv) the proceeds of the sale of such accounts receivable are
applied to the Loans as set forth in Section 2.12 or deposited into the Borrower
Account or such other account maintained by Borrower with Bank of America as may
be designated by Borrower in a written notice to Agent from time to time;
(f) Borrower may sell or otherwise transfer the real property and
improvements located at ▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ to any direct or indirect Wholly-owned Subsidiary of
Borrower; or
(g) Borrower and Subsidiaries may sell assets in addition to those
described in clauses (a) through (f) above in an aggregate amount for all sales
by Borrower and the Subsidiaries in any Fiscal Year not to exceed the product of
(i) the consolidated total assets of
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Borrower and Subsidiaries as of the end of the immediately preceding Fiscal
Year, and (ii) ten percent (10.0%).
Borrower shall notify Agent in writing of any asset sale by Borrower or any
Subsidiary that involves a sales price of more than Fifteen Million Dollars
($15,000,000) and that is outside the ordinary course of business.
SECTION 6.5 LIMITATION ON NET LOSSES
The sum of (a) the Consolidated Net Income of Guarantor and the
Guarantor Subsidiaries minus (b) One Dollar ($1) shall not be less than zero in
the last quarterly period of the Fiscal Year ended December 31, 2000 or in any
Fiscal Year ending thereafter; provided, however, that for purposes of this
Section 6.5, the determination of Consolidated Net Income shall exclude
non-recurring charges to income related to (i) acquisitions (except acquisitions
prohibited by Section 6.3), provided, that such non-recurring charges are
recognized within twelve (12) months of the date the applicable acquisition was
consummated, (ii) restructuring of Guarantor or any Guarantor Subsidiary
(subject to consent of all Lenders, which consent shall not be unreasonably
withheld or delayed), or (iii) changes in accounting principles of Guarantor or
any Guarantor Subsidiary.
ARTICLE 7.
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an "Event
of Default" hereunder.
(a) PAYMENT DEFAULT
Borrower shall fail to pay when due any amount of principal of or
interest on any Loan or, within five (5) days after written notice thereof shall
have been given to Borrower by Agent, any other amount payable by it hereunder;
or
(b) BREACH OF WARRANTY
Any representation or warranty made by the Guarantor or Borrower under
or in connection with this Agreement or the other Loan Documents shall prove to
have been incorrect in any material respect when made; or
(c) BREACH OF CERTAIN COVENANTS
Borrower shall fail to perform or observe the covenants set forth in
Sections 5.10(d), 5.11 through 5.14 or 6.5 of this Agreement; or
(d) BREACH OF OTHER COVENANTS
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Guarantor or Borrower shall fail to perform or observe any other
covenant, obligation or term of any Loan Document and such failure shall remain
unremedied for thirty (30) days after written notice thereof shall have been
given to Borrower by Agent; or
(e) CROSS-DEFAULT
Borrower, any Subsidiary or Guarantor shall fail (i) to pay when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) any Indebtedness having an outstanding principal balance in the
aggregate in excess of Five Million Dollars ($5,000,000) (except the Loans) or
any interest or premium thereon and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness, or (ii) to perform any term or covenant on its
part to be performed under any agreement or instrument relating to any such
Indebtedness and required to be performed and such failure shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such failure to perform is to accelerate or to permit the
acceleration of the maturity of such Indebtedness; or
(f) VOLUNTARY BANKRUPTCY, ETC.
Borrower, any Subsidiary or Guarantor shall: (1) file a petition seeking
relief for itself under Title 11 of the United States Code, as now constituted
or hereafter amended, or file an answer consenting to, admitting the material
allegations of or otherwise not controverting, or fail timely to controvert a
petition filed against it seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended; or (2) file such petition or
answer with respect to relief under the provisions of any other now existing or
future applicable bankruptcy, insolvency, or other similar law of the United
States of America or any state thereof or of any other country or jurisdiction
providing for the reorganization, winding-up or liquidation of corporations or
an arrangement, composition, extension or adjustment with creditors; or
(g) INVOLUNTARY BANKRUPTCY, ETC.
An order for relief shall be entered against Borrower, any Subsidiary or
Guarantor under Title 11 of the United States Code, as now constituted or
hereafter amended, which order is not stayed; or upon the entry of an order,
judgment or decree by operation of law or by a court having jurisdiction in the
premises which is not stayed adjudging it a bankrupt or insolvent under, or
ordering relief against it under, or approving as properly filed a petition
seeking relief against it under the provisions of any other now existing or
future applicable bankruptcy, insolvency or other similar law of the United
States of America or any state thereof or of any other country or jurisdiction
providing for the reorganization, winding-up or liquidation of corporations or
any arrangement, composition, extension or adjustment with creditors, or
appointing a receiver, liquidator, assignee, sequestrator, trustee or custodian
of Borrower, any Subsidiary or Guarantor or of any substantial part of its
property, or ordering the reorganization, winding-up or liquidation of its
affairs, or upon the expiration of sixty (60) days after the filing of any
involuntary petition against it seeking any of the relief specified in Section
7.1(f) or this Section 7.1(g) without the petition being dismissed prior to that
time; or
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(h) INSOLVENCY, ETC.
Borrower, any Subsidiary or Guarantor shall (i) make a general
assignment for the benefit of its creditors or (ii) consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, or
custodian of all or a substantial part of the property of Borrower, any
Subsidiary or Guarantor, or (iii) admit its insolvency or inability to pay its
debts generally as they become due, or (iv) fail generally to pay its debts as
they become due, or (v) take any action (or suffer any action to be taken by its
directors or shareholders) looking to the dissolution or liquidation of
Guarantor or Borrower; or
(i) JUDGMENT
A final judgment or order which defeats the lien of Agent on any
Collateral valued at Five Hundred Thousand Dollars ($500,000) or more or
Borrower's rights therein shall be rendered against Borrower or any Subsidiary
and such judgment or order shall continue without being discharged, vacated,
bonded or execution thereon stayed pending appeal for a period of thirty (30)
consecutive days; or
(j) ERISA
Borrower or any member of the Controlled Group shall fail to pay when
due an amount or amounts aggregating in excess of Two Million Five Hundred
Thousand Dollars ($2,500,000) which it shall have become liable to pay to the
PBGC or to a Plan under Section 515 of ERISA or Title IV of ERISA; or notice of
intent to terminate a Plan or Plans (other than a multi-employer plan, as
defined in Section 4001(3) of ERISA), having aggregate Unfunded Vested
Liabilities in excess of Two Million Five Hundred Thousand Dollars ($2,500,000)
shall be filed under Title IV of ERISA by Borrower, any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate any such Plan
or Plans;
(k) INTEREST RATE SWAP AGREEMENT
The occurrence of any Event of Default, as that term is defined in the
Interest Rate Swap Agreement including all schedules thereto and agreements
incorporated therein by reference or relating thereto; or
(l) CHANGE IN OWNERSHIP
Borrower shall cease to be a wholly-owned subsidiary of Guarantor
without Majority Lenders' prior written consent.
SECTION 7.2 CONSEQUENCES OF DEFAULT
If any of the Events of Default described in Section 7.1(f) or Section
7.1(g) shall occur, the ▇▇▇▇▇▇▇ Commitment and the Revolving Commitment shall
immediately terminate, the principal of and the interest on the Loans and all
other sums payable by Borrower hereunder and under the Notes shall become
immediately due and payable, all without protest, presentment,
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notice or demand, all of which Borrower expressly waives. If any other Event of
Default shall occur and be continuing, then in any such case and at any time
thereafter so long as any such Event of Default shall be continuing, the
Majority Lenders, may direct Agent to immediately terminate the ▇▇▇▇▇▇▇
Commitment and Revolving Commitment and declare the principal of and the
interest on the Loans and the Notes and all other sums payable by Borrower
hereunder or under any Loan Document to be immediately due and payable,
whereupon the same shall become immediately due and payable all without protest,
presentment, notice, or demand, all of which Borrower expressly waives. Also,
regardless of whether Majority Lenders shall exercise their option to accelerate
pursuant to the preceding sentence, Agent shall at the request of the Majority
Lenders or may, unless otherwise instructed by the Majority Lenders, take such
other actions as are otherwise permitted by equity or law.
ARTICLE 8.
THE AGENT
SECTION 8.1 AUTHORIZATION AND ACTION
Each Lender hereby appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement. The duties of Agent shall be
mechanical and administrative in nature; Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender; and nothing in this
Agreement or the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon Agent any obligations in respect of this
Agreement or the other Loan Documents except as expressly set forth herein. As
to any matters not expressly provided for by this Agreement, including
enforcement or collection of the Loans, Agent shall not be required to exercise
any discretion or take any action except upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders and any holders
of any Note, provided that Agent shall not be required to take any action which
exposes Agent to personal liability or which is contrary to the Loan Documents
or applicable law and provided, further, that without the consent of all
Lenders, Agent may not be instructed nor shall Agent otherwise agree on behalf
of Lenders to change or modify the definition of "Majority Lenders", the timing
or rates of interest payments, or the timing or amounts of principal payments
due in respect of the ▇▇▇▇▇▇▇ Loans or the Revolving Loans, and provided,
further, that the terms of this Article 8 shall not be amended without the prior
written consent of Agent (acting for its own account). In the absence of
instructions from the Majority Lenders, Agent shall have authority (but no
obligation), in its sole discretion, to take or not to take any action, unless
this Agreement specifically requires the consent of all Lenders or the consent
of the Majority Lenders and any such action or failure to act shall be binding
on all Lenders and on all holders of the Notes. Each Lender and each holder of
any Note shall execute and deliver such additional instruments, including powers
of attorney in favor of Agent, as may be necessary or desirable to enable Agent
to exercise its powers hereunder.
SECTION 8.2 DUTIES AND OBLIGATIONS
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(a) Neither Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
any of them under or in connection with the Loans or this Agreement except for
its or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, Agent (i) may treat each Lender as the party
entitled to receive payments hereunder until Agent receives written notice of
the assignment of such Lender's interest herein signed by such Lender and made
in accordance with the terms hereof and a written agreement of the assignee that
it is bound hereby as it would have been had it been an original party hereto,
in each case in form satisfactory to Agent; (ii) may consult with legal counsel
(including counsel for Borrower or Guarantor), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
experts; (iii) makes no warranty or representation to any Lender and shall not
be responsible to any Lender for any statements, warranties or representations
made in or in connection with this Agreement, the other Loan Documents or in any
instrument or document furnished pursuant hereto or thereto; (iv) shall not have
any duty to ascertain or to inquire as to the performance of any of the terms,
covenants, or conditions of the Loan Documents on the part of Borrower or as to
the use of the proceeds of any Loan or as to the existence or possible existence
of any Default or Event of Default; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
effectiveness, or value of this Agreement or of any instrument or document
furnished pursuant hereto; (vi) may execute any of its duties by or through its
employees, other independent agents or attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agent or
attorney-in-fact that it selects with reasonable care; and (vii) shall incur no
liability under or in respect to this Agreement by acting upon any oral or
written notice, consent, certificate or other instrument or writing (which may
be by telegram, facsimile transmission, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties or by acting upon any
representation or warranty of Borrower or Guarantor made or deemed to be made
hereunder or in any other Loan Document.
(b) Agent will account to each Lender for its pro rata interest in
payments of principal of and interest on the Loans which are received by Agent
from Borrower or Guarantor or for the account of Borrower or Guarantor and will
promptly remit to Lenders entitled thereto all such payments. Agent will
transmit to each Lender copies of all documents received from Borrower pursuant
to the requirements of this Agreement other than documents which by the terms of
this Agreement Borrower is obligated to deliver directly to Lenders.
(c) Each assignee of a Lender organized outside of the United States
shall furnish to Agent in a timely fashion such documentation (including, but
not by way of limitation, IRS Forms Nos. 1001 and 4224) as may be required by
applicable law or regulation to establish such Lender's status for tax
withholding purposes.
SECTION 8.3 DEALINGS BETWEEN AGENT AND BORROWER
With respect to its pro rata interest in the Loans, Agent shall have the
same obligations, rights and powers under this Agreement and the other Loan
Documents as any other Lender and
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may exercise the same as though it were not the Agent, and the term "Lender"
shall unless otherwise expressly indicated include the Agent in its individual
capacity. Agent may accept deposits from, lend money to, act and generally
engage in any kind of business with Borrower, Guarantor and any person which may
do business with Borrower or Guarantor, all as if Agent were not the Agent
hereunder and without any duty to account therefor to Lender.
SECTION 8.4 LENDER CREDIT DECISION
Each Lender acknowledges that it has, independently and without reliance
upon Agent or any other Lender and based upon such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon Agent or any other Lender and based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 8.5 INDEMNIFICATION
Each Lender agrees to indemnify Agent (to the extent not reimbursed by
Borrower) ratably according to its pro rata interest in all Loans from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this Agreement or any
other Loan Document, except any such as result from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly on demand in proportion to its pro rata interest in all
Loans for any out-of-pocket expenses, including legal fees, incurred by Agent in
connection with the administration or enforcement of or the preservation of any
rights under this Agreement or any other Loan Document (to the extent that Agent
is not reimbursed for such expenses by Borrower or Guarantor).
SECTION 8.6 SUCCESSOR AGENT
Agent may give written notice of resignation at any time to Lenders and
Borrower and may be removed at any time with cause by the Majority Lenders. Upon
any such notice of resignation or removal, the Majority Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within thirty (30) days after Agent's giving of notice of resignation or the
Majority Lenders' removal of Agent, then Agent may on behalf of Lenders, appoint
a successor Agent, which shall be a bank organized under the laws of the United
States or of any state thereof, or any affiliate of such bank, and having a
combined capital and surplus of at least Five Hundred Million Dollars
($500,000,000). Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. Until the acceptance by such a successor Agent, the retiring
Agent shall continue as "Agent" hereunder. Notwithstanding any retiring Agent's
resignation or removal hereunder as Agent, the
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provisions of this Article 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
SECTION 8.7 AGENT'S FEE
Borrower agrees to pay to Agent for its own account an annual agency fee
equal to the lesser of (a) $3,000 for each Lender under this Agreement or (b)
$9,000. Such fee shall be payable on the date hereof and on each anniversary of
the date hereof so long as Agent or any Lender shall have any commitment under
the Loan Agreement and, until payment in full of each Loan, the Notes and
performance of all other obligations of Borrower under the Loan Agreement.
ARTICLE 9.
MISCELLANEOUS
SECTION 9.1 NO WAIVER; REMEDIES CUMULATIVE
No failure by Agent, any Lender or Borrower to exercise, and no delay in
exercising, any right, power or remedy under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy under this Agreement or any other Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy. The exercise of any right, power, or remedy shall
in no event constitute a cure or waiver of any Event of Default nor prejudice
any party's rights in the exercise of any powers hereunder or thereunder. The
rights and remedies provided herein and therein are cumulative and not exclusive
of any right or remedy provided by law.
SECTION 9.2 GOVERNING LAW
This Agreement and the other Loan Documents shall be governed by and
construed in accordance with the laws of the State of Washington (excluding its
conflict of laws rules) except in the case of the Security Documents, where the
location of Collateral requires that the creation, validity, perfection, or
enforcement of the security interests provided for herein be governed by the
laws of the jurisdiction where such Collateral is located.
SECTION 9.3 MANDATORY ARBITRATION
Any controversy or claim between or among the parties, arising out of or
relating to this Agreement or any other Loan Document and any claim based on or
arising from an alleged tort related thereto, shall at the request of either
party be determined by arbitration in Seattle, Washington. The arbitration shall
be conducted in accordance with the United States Arbitration Act (Title 9, U.S.
Code), notwithstanding any choice of law provision in this Agreement, and under
the Commercial Rules of the AAA. The arbitrator(s) shall give effect to statutes
of limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. No provision
of this Section 9.3 shall limit the right of either party to this Agreement to
exercise self-help remedies such as setoff, foreclosure against or sale of any
collateral or security, or to obtain provisional or ancillary remedies from a
court of competent
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jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy does not waive the right of either
party to resort to arbitration.
SECTION 9.4 CONSENT TO JURISDICTION
Each party hereto irrevocably submits to the nonexclusive jurisdiction
of any state or federal court sitting in Seattle, King County, Washington, in
any action or proceeding brought to enforce or otherwise arising out of or
relating to this Agreement or any other Loan Document and agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law. Nothing in this Section 9.4 shall impair the right of
any party to bring any action or proceeding hereunder in the courts of any other
jurisdiction.
SECTION 9.5 NOTICES
All notices and other communications provided for in this Agreement
shall be in writing and shall be mailed (with first class postage prepaid) or
sent or delivered by telex, facsimile transmission, telegram or cable to each
party at the address set forth under its name on the signature pages hereof, or
at such other address as shall be designated by such party in a written notice
to each other party. Except as otherwise specified all notices sent by mail, if
duly given, shall be effective three (3) Business Days after deposit into the
mails, all notices sent by a nationally recognized overnight courier service, if
duly given, shall be effective one (1) Business Day after delivery to such
courier service, and all other notices and communications if duly given or made
shall be effective upon receipt.
SECTION 9.6 SUBORDINATION OF SECURITY INTERESTS
Lenders hereby agree to authorize and instruct Agent to execute and
deliver to Borrower an intercreditor lien subordination agreement in the form of
Exhibit F attached hereto (an "Account Subordination Agreement") in favor of
third parties in respect of specific accounts receivable sold by Borrower or any
Subsidiary a party to a Security Document (each an "Account" and collectively,
the "Accounts"), provided that (a) the sale of such Accounts is expressly
permitted under Section 6.4(e), and (b) Borrower shall have delivered to Agent a
completed Account Subordination Agreement specifying (i) the name and address of
seller of the Accounts, (ii) the name and address of purchaser of the Accounts
and (iii) the name(s) of the obligor(s) on each Account and the date, number and
amount of the invoice giving rise to each Account. Each completed Account
Subordination Agreement delivered to Agent shall be deemed to constitute a
representation and warranty by Borrower that as of the date of the delivery of
such Account Subordination Agreement the statements set forth in Article 4
hereof are true and correct and that no Default or Event of Default has occurred
and is continuing or will occur as a result of the sale of the Accounts therein
specified.
SECTION 9.7 SUCCESSORS AND ASSIGNS
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(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective Successors and
assigns, except that Borrower may not assign or otherwise transfer any of its
rights or obligations under this Agreement without the prior written consent of
all Lenders.
(b) The parties hereto anticipate that Bank of America will
syndicate the ▇▇▇▇▇▇▇ Loans and the Revolving Loans by assigning (or selling
participation interests in) some or all of its pro rata interests in the ▇▇▇▇▇▇▇
Loans and the Revolving Loans to other financial institutions. Borrower agrees
to execute and deliver all such other instruments and perform all such other
acts as Bank of America may reasonably request to permit Bank of America to
effect such assignments or sales of participations.
(c) With notice to Agent, any Lender may at any time grant to one or
more banks or other institutions (each a "Participant") participating interests
in its pro rata interest in the Loan. In the event of any such grant by a Lender
of a participating interest to a Participant, such Lender shall remain
responsible for the performance of its obligations hereunder, and Borrower and
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement. Any agreement
pursuant to which any Lender may grant such a participating interest shall
provide that such Lender shall retain the sole right and responsibility to
enforce the obligations of Borrower hereunder including, without limitation, the
right to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such
Lender will not agree to any modification, amendment or waiver of this Agreement
if the effect thereof is to change or modify the timing, rates or amounts of
principal and interest payable hereunder. An assignment or other transfer which
is not permitted by subsection (d) or (e) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (c). Borrower hereby authorizes Agent
and each Lender to disclose financial and other information about Borrower,
Guarantor or the Loans to the Participants and bona fide potential Participants.
(d) Subject to the following, any Lender may at any time assign to
one or more banks or other institutions (each an "Assignee") all, or a
proportionate part, of its pro rata interest, rights and obligations in the
▇▇▇▇▇▇▇ Loans, the Revolving Loans and the Loan Documents. Such an assignment
shall be effective under this subsection (d) if and only if (i) Agent shall
consent to such assignment, which consent shall not be unreasonably withheld or
delayed, (ii) Borrower shall consent to such assignment, which consent shall not
be unreasonably withheld or delayed, (iii) where the assigning Lender is Bank of
America, after giving effect to such an assignment, Bank of America shall have a
total pro rata interest in all Loans of at least fifty-one percent (51%), (iv)
the Assignee shall assume all of the corresponding obligations pursuant to an
agreement in form and substance reasonably satisfactory to Agent; and (v) the
assigning Lender shall pay an administrative fee of $2,500 to Agent. Subject to
the foregoing, upon execution and delivery of such an assignment and assumption
agreement and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be a "Lender" under this Agreement and shall have
all the rights and obligations of a Lender as set forth in such instrument of
assumption, and the transferor Lender shall be released from its obligations
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hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (d), the transferor Lender, Agent and Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the first date on which
interest or fees are payable hereunder for its account, deliver to Borrower and
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.2(c). Borrower hereby
authorizes Agent and each Lender to disclose financial and other information
about Borrower, Guarantor, the ▇▇▇▇▇▇▇ Loans or the Revolving Loan to Assignees
and bona fide potential Assignees.
(e) Any Lender may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from its obligations hereunder.
SECTION 9.8 SEVERABILITY
Any provision of this Agreement or any other Loan Document which is
prohibited or unenforceable in any jurisdiction shall as to such jurisdiction be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
SECTION 9.9 SURVIVAL
All representations, warranties and indemnities of Borrower Agent or any
Lender shall survive the execution and delivery of this Agreement and the other
Loan Documents and the making of the Loans. Notwithstanding anything in this
Agreement or implied by law to the contrary, the indemnities of Borrower in
favor of Agent and Lenders, and the obligations of Borrower contained herein to
pay fees to, and expenses incurred by, Agent or any Lender shall survive the
payment of the Loans, the Notes and the termination of this Agreement.
SECTION 9.10 CONDITIONS NOT FULFILLED
If the ▇▇▇▇▇▇▇ Commitment or the Revolving Commitment is not borrowed,
owing to nonfulfillment of any condition precedent specified in Article 3, no
party hereto shall be responsible to any other party for any damage or loss by
reason thereof, except that Borrower shall in any event be liable to pay the
fees, Taxes, expenses and certain losses and costs for which it is obligated
hereunder, including the indemnities set forth in Section 2.8(c).
SECTION 9.11 ENTIRE AGREEMENT; AMENDMENT
This Agreement comprises the entire agreement of the parties and may not
be amended or modified except by written agreement of Borrower, Guarantor and
Agent acting with the consent of Majority Lenders (or where necessary all
Lenders) in accordance with the terms and
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conditions of Section 8.1. No provision of this Agreement may be waived except
in writing and then only in the specific instance and for the specific purpose
for which given.
SECTION 9.12 HEADINGS
The headings of the various provisions of this Agreement are for
convenience of reference only, do not constitute a part hereof, and shall not
affect the meaning or construction of any provision hereof.
SECTION 9.13 PREVAILING PARTY ATTORNEY'S FEES
If a final judgment is rendered in any judicial proceeding brought by
any party against any other party to enforce the provisions of this Agreement or
any other Loan Document, the party in whose favor such judgment is rendered
shall be entitled to recovery of its reasonable attorney's fees and costs.
SECTION 9.14 CONCERNING ORAL AGREEMENTS.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING PAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or agents thereunto duly authorized as of
the date first above written.
BORROWER: SPACELABS MEDICAL, INC., a California corporation
By
Its
Address:
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President & Corporate Controller
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
GUARANTOR: SPACELABS MEDICAL, INC., a Delaware corporation
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By
Its
Address:
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President & Corporate Controller
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS: BANK OF AMERICA, N.A., a national banking association
By
Its
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
WA1-102-12-06
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
U.S. BANK NATIONAL ASSOCIATION, a national
banking association
By
Its
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
AGENT: BANK OF AMERICA, N.A., a national banking association
By
Its
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
WA1-102-16-20
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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SCHEDULE 1
PREPAYMENT FEES
The amount of the fee to be paid pursuant to Section 2.9 shall depend on
the following:
(1) The amount by which interest rates have changed between the
Reference Date and the Prepayment Date. As used herein,
"Reference Date" shall mean the first day of an Applicable
Interest Period. As used herein, "Prepayment Date" shall mean the
date Borrower either voluntarily or involuntarily prepays an
Overnight Loan, an IBOR Rate Loan, a LIBOR Rate Loan or a Quoted
Rate Loan. Certain U.S. Treasury rates are used as a benchmark to
measure changes in interest rate levels.
(a) A "reference rate" equal to the average interest rate
yield at the Reference Date for U.S. Government Securities
having maturities equivalent to that of the applicable
Overnight Rate Loan, IBOR Rate Loan, LIBOR Rate Loan or
Quoted Rate Loan will be determined in the manner
described below for determining applicable rates but will
be established as of the Reference Date for the Applicable
Interest Period. This rate represents interest rate levels
at the time an Overnight Rate Loan, an IBOR Rate Loan, a
LIBOR Rate Loan or a Quoted Rate Loan is made or its
interest rate fixed.
(b) An "applicable rate," determined as described below,
represents interest rate levels as of the Prepayment Date.
(2) The amount of principal prepaid.
(3) A payment fee factor (see "payment fee factor schedule" below).
This factor represents the economic loss to a Lender resulting
from a one dollar payment if rates were to drop by one percent
from the time the rate was fixed.
CALCULATION OF PREPAYMENT FEE
If the reference rate is lower than or equal to the applicable rate,
there is no prepayment fee.
If the applicable rate is lower than the reference rate, the prepayment
fee shall be equal to the difference between the
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reference rate and the applicable rate (expressed as a decimal), multiplied
by the appropriate factor from the prepayment fee factor schedule, multiplied by
the principal amount of the LIBOR Rate Loan or Quoted Rate Loan which is
prepaid.
Example:
A LIBOR Rate Loan with principal of $850,000 is fully prepaid with 4
months remaining prior to the end of the Applicable Interest Period. A
reference rate of 10% was assigned to the LIBOR Rate Loan when the rate
was fixed. The applicable rate (as determined by current 4-month U.S.
Treasury rates) is 8.5%. Rates are therefore judged to have dropped by
1.5% since the rate was fixed, and a prepayment fee applies.
A prepayment fee factor of .37 is determined from the tables below, and
the prepayment fee is computed as follows:
Prepayment Fee = (.10-.085) x (.37) x ($850,000) = $4,717.50
APPLICABLE RATES
The applicable rate is equal to the average interest rate yield at the
time of prepayment for U.S. Government Securities having maturities equivalent
to the remaining portion of the Applicable Interest Period.
The applicable rate shall be determined from the Federal Reserve
Statistical Release (Publication H.15(519)) in the "This Week" (most recent
week) column under the heading U.S. Government Securities - Treasury Bills -
Secondary Market, interpolated to the nearest month.
Rates listed in the Federal Reserve Statistical Release for maturities
of less than one year are on a discount rate basis, and these rates shall be
converted to a coupon equivalent basis, based upon a 360-day year. The
Statistical Release published on Monday shall be used for calculation of
prepayment fees payable on the following Tuesday through the following Monday,
with appropriate adjustment if the day of publication changes.
PREPAYMENT FEE FACTOR SCHEDULES
Months Remaining in the
Applicable Interest Period for IBOR or LIBOR Rate Loans(1)
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0 1 2 3 4 5 6
--- --- --- --- --- --- ---
Factors 0 .09 .18 .28 .37 .46 .55
7 8 9 10 11 12
--- --- --- ---- ---- ----
Factors 64 .73 .82 .92 1.01 1.10
Months Remaining in the
Applicable Interest Period for Quoted Rate Loans(1)
0 3 6 9 12 24 36
--- --- --- --- ---- ---- ----
Factors 0 .30 .59 .86 1.15 2.2 3.3
48 60 84 120 240 360
---- ---- ---- ----- ----- -----
Factors 4.3 5.3 7.1 9.4 15.0 18.1
--------
(1) If the remaining Applicable Interest Period or time prior
to scheduled maturity is between any two time periods in the above schedules,
interpolate between the corresponding factors.
No Lender is required to actually reinvest the paid principal in any
U.S. Government Treasury obligations as a condition to receiving a prepayment
fee as calculated above.
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SCHEDULE 2
BORROWER AND SUBSIDIARY SCHEDULE
DATE OF JURISDICTION OF
INCORPORATION/ INCORPORATION/
NAME ORGANIZATION ORGANIZATION
---------------------------------------------------------------------------------------
E-Lifeclinic Corporation 5/9/00 Washington
Lifeclinic Holding Corporation 5/9/00 Washington
Lifeclinic Medical Data Corporation 5/9/00 Washington
▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corporation 11/19/99 Washington
Spacelabs Medical, Inc 8/20/58 California
Spacelabs ▇▇▇▇▇▇▇, Inc.. 4/28/93 Delaware
Intesys, Inc. 3/11/87 Delaware
Intesys Acquisition Corporation 10/1/84 Delaware
Shanghai ▇▇▇▇▇▇▇ Medical Instrument Co., Ltd. 12/28/95 China
SMD Software, L.L.C. 20/5/96 Washington
Spacelabs International, Inc. 1/27/86 Delaware
Spacelabs Medical AB 1/4/95 Sweden
Spacelabs Medical BV 10/17/95 The Netherlands
Spacelabs Medical GmbH 6/21/83 Germany
Spacelabs Medical Instruments (Tianjin) Co. Ltd. 2/6/95 China
Spacelabs Medical Limited 4/3/90 Hong Kong
Spacelabs Medical Ltd. 5/24/89 United Kingdom
Spacelabs Medical, Ltd. 9/12/96 Taiwan
Spacelabs Medical Private Limited. 6/4/98 India
Spacelabs Medical Products GmbH 1/5/93 Austria
Spacelabs Medical Products Ltd. ▇▇/▇/▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
(Spacelabs Produits Medicaux Ltee.)
Spacelabs Medical Products Pty. Ltd 7/21/89 Australia
Spacelabs Medical S.A. 3/13/96 Spain
Spacelabs Medical S.A. De C.V. 10/28/94 Mexico
Spacelabs Medical S.r.l. 3/7/96 Italy
Spacelabs Medical SARL 11/1/88 France
Spacelabs Medical Trading Company 6/26/92 Guam
Spacelabs (Singapore) Pte. Ltd. 3/3/90 Singapore
Vita-Stat Medical Services, Inc. 4/16/76 Florida
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SCHEDULE 3
PENDING LITIGATION