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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 14, 1995
CONMED CORPORATION
(Exact name of registrant as specified in its charter)
New York 0-16093 16-0977505
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
310 Broad Street, Utica, New York 13501
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(Address of principal executive offices) (Zip Code)
(315) 797-8375
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(Registrant's telephone number, including area code)
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(Former name or former address, if changes since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On March 14, 1995, the CONMED Corporation (CONMED) acquired Birtcher
Medical Systems, Inc. (Birtcher). Birtcher is a manufacturer and distributor of
electrosurgery equipment and supplies.
CONMED acquired Birtcher through a merger with a subsidiary of CONMED.
As a result of the merger, Birtcher became a wholly owned subsidiary of CONMED,
and each share of Birtcher common stock, no par value, was converted into one
twelfth (1/12) of a share of CONMED common stock, $.01 par value per share, and
each share of Series A Preferred Stock of Birtcher was converted into one half
(1/2) of a share of CONMED Common Stock. Approximately 1,080,000 shares of
CONMED Common Stock were issued to effect the merger.
In connection with the acquisition, CONMED entered into a revised Term
Loan Agreement with The Chase Manhattan Bank N.A. and Fleet Bank providing up to
$30,000,000 in credit facilities. Additionally, the Company entered into a
$10,000,000 Revolving Credit Agreement with the same banks. The Company has
utilized $20,000,000 of the Term Loan facility to refinance the Company's and
Birtcher's existing bank debt and to liquidate certain outstanding liabilities
of Birtcher.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
It is impracticable for the Registrant to provide at this time any of
the financial statements required by this item. The Registrant will file the
required financial statements as soon as practicable and, in any event, within
sixty (60) days after the required filing date of this report.
(b) Pro Forma Financial Information
See Item 7(a) above.
(c) Exhibits
1) Merger agreement among CONMED Corporation, CONMED Acquisition
Corporation and Birtcher Medical Systems, Inc.
2) Credit Agreement - Term Loan Facility among CONMED Corporation, the
Banks and The Chase Manhattan Bank, N.A. as Agent.
3) Credit Agreement - Revolving Credit Facility among CONMED
Corporation, the Banks and The Chase Manhattan Bank, N.A. as Agent.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONMED CORPORATION
By: /s/ Robert D. Shallish, Jr.
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Vice President-Finance
Dated: March 27, 1995
PLAN AND AGREEMENT OF MERGER
THIS PLAN AND AGREEMENT OF MERGER ("Agreement"), dated as of
December 5, 1994, is entered into by and among Birtcher Medical Systems, Inc., a
California corporation ("Birtcher"), CONMED Corporation, a New York corporation
("CONMED"), and CONMED Acquisition Corporation, a California corporation
("Subsidiary"). Birtcher and Subsidiary may sometimes be referred to herein as
the "Constituent Corporations." Subsidiary and CONMED may sometimes be referred
to herein collectively as the "CONMED Companies" or singularly as a "CONMED
Company." Birtcher and the CONMED Companies may sometimes be referred to herein
collectively as the "Corporations" or singularly as the "Corporation."
W I T N E S S E T H :
WHEREAS, the respective Corporations deem it advisable and in
the respective best interests of the Corporations and of their respective
stockholders that Subsidiary be merged with and into Birtcher pursuant to the
General Corporation Law of the State of California (the "California Act"), in a
transaction whereby (i) each of the shares of Common Stock, no par value, of
Birtcher ("Birtcher Common Stock") issued and outstanding at the Effective Time
will be cancelled and converted into the right to receive one twelfth (1/12) of
a share of Common Stock, $0.01 par value, of CONMED ("CONMED Common Stock") and
(ii) each of the shares of Series A Preferred Stock of Birtcher ("Birtcher
Preferred Stock") issued and outstanding at the Effective Time will be cancelled
and converted into the right to receive (i) one half (1/2) of a share of CONMED
Common Stock, such merger to be upon the additional terms and conditions
contained in this Agreement (the "Merger"); and
WHEREAS, the Corporations intend that the Merger will
constitute a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Corporations desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Merger;
NOW THEREFORE, in consideration of the premises and the mutual
agreements, promises and covenants herein contained, the Corporations hereby
agree in accordance with the California Act that the Constituent Corporations
shall be, at the "Effective Time" of this Agreement (as hereinafter defined in
Section 4.02), merged into a single corporation existing under the laws of the
State of California, to wit, Birtcher, one of the Constituent Corporations,
which shall be the surviving corporation (such corporation in its capacity as
such surviving corporation being hereinafter called the "Surviving Corporation")
and shall be a wholly-owned subsidiary of CONMED, and the Corporations hereby
adopt and agree to the following covenants, terms and conditions relating to the
Merger and the manner of carrying the same into effect.
ARTICLE I
ARTICLES OF INCORPORATION; BY-LAWS;
DIRECTORS AND OFFICERS; VACANCIES
1.01 Articles of Incorporation. The Articles of Incorporation
of Birtcher, as in effect at the Effective Time (other than as amended by this
Agreement), shall be the Articles of Incorporation of the Surviving Corporation
until changed as provided by law.
1.02 By-Laws. The By-Laws of Birtcher, as in effect at the
Effective Time, shall be the By-Laws of the Surviving Corporation until changed
as provided by law.
1.03 Directors. The directors of Subsidiary in office on the
Effective Time shall become on such date the directors of the Surviving
Corporation, each to hold office until his successor is elected and shall have
duly qualified.
1.04 Officers. The officers of Subsidiary in office at the
Effective Time shall become on such date the officers of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, until their successors
are elected and shall have qualified.
1.05 Vacancies. If, as of the Effective Time, a vacancy shall
exist on the Board of Directors or in any of the offices of the Surviving
Corporation by reason of death or inability to act, or for any other reason,
such vacancy may be filled in the manner provided in the By-Laws of the
Surviving Corporation.
ARTICLE II
STATUS AND CONVERSION OF SECURITIES
2.01 Authorized Capitalization of Surviving Corporation. The
total number of shares which the Surviving Corporation shall have authority to
issue shall be 1,000 shares of common stock, $0.01 par value.
2.02 Status and Conversion of Securities. The status of
outstanding capital stock of each of the Constituent Corporations and the manner
and basis of converting shares of capital stock of each of the Constituent
Corporations into or for shares of capital stock of the Surviving Corporation or
CONMED Common Stock at the Effective Time shall be as follows:
(a) Each share of Subsidiary Common Stock, as hereinafter
defined in Section 7.03, outstanding as of the Effective Time shall be
converted into one share of common stock, $0.01 par value, of the
Surviving Corporation.
(b) Each share of Birtcher Common Stock outstanding as of the
Effective Time (other than shares of Birtcher Common Stock owned by the
CONMED Entities (as hereinafter defined) and shares of Birtcher Common
Stock as to which statutory dissenter's rights are exercised) shall be
converted into one twelfth (1/12) of a share of CONMED Common Stock
(after giving effect to the three-for-two stock split in the form of a
stock dividend with respect to CONMED Common Stock, as set forth in
Section 8.09) to be represented by the certificate or certificates
representing the CONMED Common Stock; provided, however, that each
holder of Birtcher Common Stock entitled to receive a fractional share
of CONMED Common Stock, whether or not in addition to a whole number of
shares of CONMED Common Stock, shall receive cash in lieu of such
fractional share, the amount of such cash adjustment being equal to
such fractional proportion of the Last Sale Price (as defined below) of
a share of CONMED Common Stock on the Effective Date. The "Last Sale
Price" with respect to CONMED Common Stock is the last sale price, as
reported on the National Association of Securities Dealers Automated
Quotation National Market System ("NMS") (as reported by The Wall
Street Journal or, if not reported thereby, another authoritative
source) for such trading day.
(c) Each share of Birtcher Preferred Stock outstanding as of
the Effective Time (other than shares of Birtcher Preferred Stock owned
by the CONMED Entities and shares of Birtcher Preferred Stock as to
which statutory dissenter's rights are exercised) shall be converted
into (i) one half (1/2) of a share of CONMED Common Stock (after giving
effect to the three-for-two stock split in the form of a stock dividend
with respect to CONMED Common Stock, as set forth in Section 8.09) to
be represented by the certificate or certificates representing the
CONMED Common Stock and (ii) an amount of cash equal to all dividends
in arrears on such share of Birtcher Preferred Stock as of the
Effective Time (such payment being deemed to be a satisfaction and
discharge of all amounts due and payable with respect to the Birtcher
Preferred Stock); provided, however, that each holder of Birtcher
Preferred Stock entitled to receive a fractional share of CONMED Common
Stock, whether or not in addition to a whole number of shares of CONMED
Common Stock, shall receive cash in lieu of such fractional share, the
amount of such cash adjustment being equal to such fractional
proportion of the Last Sale Price of a share of CONMED Common Stock on
the Effective Date.
2.03 Existing Options and Warrants for Birtcher Stock. As of
the Effective Time, all of the options and warrants set forth on Schedule 2.03
hereto (collectively, the "Birtcher Options") shall be converted into options or
warrants to acquire CONMED Common Stock on the same terms and conditions as are
in effect immediately prior to the Merger as adjusted as set forth below. CONMED
shall grant to each holder of Birtcher Options a substitute option or warrant,
as applicable, giving the holder of such Birtcher Options the right to purchase
the number of whole shares of CONMED Common Stock, but not any fractional shares
or cash in lieu of fractional shares, as the holder of such Birtcher Options
would have received under Section 2.02(b) above had such Birtcher Options been
entirely vested and fully exercised, and the underlying shares of Birtcher
Common Stock been outstanding and held by such holder at the Effective Time, at
a purchase price per share equal to (i) twelve (12) multiplied by (ii) the
purchase price per share of Birtcher Common Stock set forth in such Birtcher
Options (with any fractional cent being rounded to the next higher full cent).
The remaining terms and conditions of the Birtcher Options shall remain
identical (subject to revisions required to reflect the substitution of CONMED
and Birtcher).
2.04 Exchange of Certificates and Related Matters. (a) After
the Effective Time, each holder of a certificate or certificates theretofore
representing outstanding shares of Birtcher Common Stock or Birtcher Preferred
Stock shall surrender the same to Registrar and Transfer Company, CONMED's stock
transfer agent (the "Exchange Agent"), and each holder shall upon such surrender
receive in exchange therefor a certificate or certificates representing the
number of full shares of CONMED Common Stock into which the shares of Birtcher
Common Stock or Birtcher Preferred Stock theretofore represented by the
certificate or certificates so surrendered shall have been converted pursuant to
the Merger, and cash (without interest thereon) in lieu of any fractional share
of CONMED Common Stock. As soon as practicable after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to send a notice and
transmittal form to each holder of record of certificates theretofore
representing shares of Birtcher Common Stock or Birtcher Preferred Stock
advising such holder of the procedure for surrendering to the Exchange Agent (or
such forwarding agents as may be appointed by the Exchange Agent) such
certificates for exchange.
(b) If any issuance of shares of CONMED Common Stock in
exchange for shares of Birtcher Common Stock or Birtcher Preferred Stock is to
be made to a person other than the person in whose name the certificate
theretofore representing such shares surrendered for exchange is registered, the
following shall be conditions of such exchange (i) that the certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer,
and (ii) that the person requesting such issuance shall either (a) pay to the
Exchange Agent any transfer or other taxes required by reason of the issuance of
shares to a person other than the registered holder of the certificate
surrendered, or (b) establish to the satisfaction of CONMED that such tax has
been paid or is not payable.
(c) After the Effective Time and until surrendered, each
certificate which theretofore represented outstanding shares of Birtcher Common
Stock or Birtcher Preferred Stock converted into shares of CONMED Common Stock
shall be deemed for all corporate purposes, other than the payment of dividends
and distributions, to evidence ownership of the number of full shares of CONMED
Common Stock into which such shares of Birtcher Common Stock or Birtcher
Preferred Stock were converted. No dividend or other distribution, if any,
payable to holders of CONMED Common Stock shall be paid to the holders of any
such certificates for shares of Birtcher Common Stock or Birtcher Preferred
Stock until such certificates are surrendered, but upon surrender of such
certificates, all such declared dividends and distributions, if any, shall be
paid to the holder of record of the full shares of CONMED Common Stock
represented by the certificate issued in exchange therefor, without interest.
(d) As of the Effective Time, the stock transfer books of
Birtcher will be closed and no further transfers shall be made thereon.
(e) All funds deposited with the Exchange Agent pursuant to
this Agreement, if any (together with any Interest or profits thereon), and not
paid against surrender to the Exchange Agent of certificates representing
Birtcher Common Stock or Birtcher Preferred Stock prior to the first anniversary
of the Effective Time shall be returned by the Exchange Agent to CONMED, and any
holder of Birtcher Common Stock or Birtcher Preferred Stock who has not
surrendered the certificates representing such shares to the Exchange Agent
prior to such time shall look, subject to applicable escheat and other laws, as
a general creditor, only to CONMED for payment.
(f) Shares of Birtcher Capital Stock as to which any
dissenters' or appraisal rights have been perfected or obtained under applicable
law shall not be converted in accordance with the provisions of this Article II
and the holders of such shares shall only have such rights as are specifically
granted by Chapter 13 of the California Act. If any holder of Birtcher Capital
Stock shall be entitled to require Birtcher to purchase his or her shares of
Birtcher Capital Stock for their "fair market value", as provided in Chapter 13
of the California Act, Birtcher shall give CONMED notice thereof and CONMED
shall have the right to participate in all negotiations and proceedings with
respect to any such demands. Birtcher shall not, except with the prior written
consent of CONMED, voluntarily make any payment with respect to, or settle or
offer to settle, any such demand for payment. If any holder of Birtcher Common
Stock shall fail to perfect or shall have effectively withdrawn or lost the
right to dissent, the Birtcher Capital Stock held by such Birtcher stockholder
shall thereupon be treated as provided in Section 2.02 hereof.
2.05 Undertaking of CONMED. CONMED shall, prior to the
Effective Time, take all necessary steps to be able, as of the Effective Time,
to issue shares of CONMED Common Stock and to pay cash for fractional shares to
the extent set forth in, and in accordance with the terms of, this Article II,
including without limitation, reserving for issuance a sufficient number of
shares of CONMED Common Stock.
ARTICLE III
[INTENTIONALLY OMITTED]
ARTICLE IV
APPROVALS; EFFECTIVE TIME; PROXY STATEMENT
4.01 Approvals. (a) A special meeting (the "Birtcher
Shareholders' Meeting") of the holders of shares of Birtcher Common Stock and
Birtcher Preferred Stock (all of the foregoing sometimes collectively referred
to as "Birtcher Capital Stock") shall be called to be held as soon as
practicable in accordance with the Articles of Incorporation and By-Laws of
Birtcher, the California Act, and the applicable rules and regulations of the
Securities and Exchange Commission (the "SEC") and the National Association of
Securities Dealers, Inc. ("NASD") to consider and vote upon the adoption of this
Agreement and approval of the Merger. In the event that such meeting is
adjourned, the record date fixed for such meeting shall be the record date for
any and all adjournments thereof. In connection with such meeting, Birtcher
shall submit this Agreement to the holders of shares of Birtcher Common Stock
and Birtcher Preferred Stock for all votes and approvals which are required in
connection with the execution, delivery and performance of this Agreement and
approval of the Merger under the California Act, Birtcher's Articles of
Incorporation and By-Laws, and the applicable rules and regulations of the SEC
and NASD.
(b) The CONMED Companies have submitted this Agreement to
their respective Boards of Directors, and to CONMED as the sole stockholder of
Subsidiary, for all approvals which are required in connection with the
execution, delivery and performance of this Agreement and adoption and approval
of the Merger under the California Act, the CONMED Companies' respective
articles or certificate of incorporation and by-laws, and the applicable rules
and regulations of the SEC and NASD ("CONMED Approval").
(c) If this Agreement and the Merger shall be adopted and
approved as provided in Section 4.01(a) hereof by the holders of the outstanding
shares of Birtcher Common Stock and Birtcher Preferred Stock (such occurrence
being referred to as the "Birtcher Approval"), and if the Merger is not
thereafter abandoned or this Agreement terminated as permitted by the provisions
of this Agreement, as soon as practicable after the satisfaction or waiver of
the other conditions precedent to consummation of the Merger, an appropriate
Certificate of Merger setting forth the information required by the California
Act and signed and verified on behalf of the Constituent Corporations (the
"Certified Agreement") shall be delivered to and filed with the Secretary of
State of California in accordance with the California Act, as soon as is
practicable after receipt of the Birtcher Approval.
4.02 Closing/Effective Time. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place as soon as
practicable after the satisfaction or waiver of the conditions set forth in
Article IX or at such other time and place as CONMED and Birtcher shall agree;
provided that the conditions set forth in Article IX shall have been satisfied
or waived prior to that time. Such Closing shall take place at the office of
Sullivan & Cromwell, 444 South Flower Street, Los Angeles, California 90071. The
date on which the Closing occurs is herein referred to as the "Closing Date."
The time at which the Merger shall become effective is herein referred to as the
"Effective Time" and the date on which the Merger shall become effective is
herein referred to as the "Effective Date." The date of filing of the Certified
Agreement with the Secretary of State of California is referred to herein as the
"Filing Date," which shall take place as soon as possible following the Closing
Date. The Effective Time shall in no event be later than the close of business
on the first business day following the Filing Date.
4.03 Registration Statement. Birtcher and CONMED shall jointly
prepare and CONMED shall file with the SEC a registration statement (such
registration statement as of the time such registration statement is declared
effective being hereinafter called the "Registration Statement") on Form S-4
under the Securities Act of 1933, as amended (the "Securities Act"), in order to
register (i) the shares of CONMED Common Stock into which shares of Birtcher
Common Stock and Birtcher Preferred Stock are to be converted pursuant to this
Agreement and (ii) the Birtcher Options (to the extent that the shares of CONMED
Common Stock underlying such Birtcher Options are not registered on a Form S-8
under the Securities Act) and also to serve as a prospectus/proxy statement to
be distributed in connection with the Birtcher Shareholders' Meeting. Promptly
after the Registration Statement is ordered effective, Birtcher shall
disseminate the definitive Prospectus/Proxy Statement (the "Prospectus/Proxy
Statement") included therein to holders of record of shares of Birtcher Capital
Stock as of the record date approved by Birtcher and CONMED. Birtcher shall use
its best efforts to assure that the date upon which mailing of the
Prospectus/Proxy Statement to its shareholders shall be completed (the "Mailing
Date") as soon thereafter as practicable.
ARTICLE V
CERTAIN EFFECTS OF THE MERGER
When the Merger becomes effective, the separate existence of
Subsidiary shall cease, Subsidiary shall be merged with and into Birtcher, and
the Surviving Corporation, without further action, shall possess all the rights,
privileges, immunities, powers and purposes of each of the Constituent
Corporations and shall be subject to all the duties and liabilities of a
corporation organized under the California Act; and all the property, real and
personal, including subscriptions to shares, causes of action and every other
asset of each of the Constituent Corporations, shall remain with and be vested
in the Surviving Corporation without further act or deed; and the Surviving
Corporation shall assume and be liable for all the liabilities, obligations and
penalties of each of the Constituent Corporations. Any claim existing or action
or proceeding pending by or against either Constituent Corporations may be
prosecuted as if the Merger had not taken place; neither the rights of creditors
nor any liens upon the property of either Constituent Corporation shall be
impaired by the Merger; and the title to any real estate or any interest in real
estate vested in either Constituent Corporation shall not revert or be in any
way impaired by reason of the Merger. At any time, or from time to time, after
the Effective Time, the officers of the Surviving Corporation, may in the name
of Birtcher, execute and deliver all such proper deeds, assignments and other
instruments and take or cause to be taken all such further or other action as
the Surviving Corporation may deem necessary or desirable in order to vest,
perfect or confirm in the Surviving Corporation title to and possession of all
of Birtcher's property, rights, privileges, immunities, powers and purposes, and
otherwise to carry out the purposes of this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BIRTCHER
As of the execution date hereof, Birtcher represents and
warrants that, except as otherwise disclosed in the disclosure letter, dated the
date hereof, from Birtcher to CONMED (the "Birtcher Disclosure Letter"), which
shall be accompanied by copies of all documents or agreements referred to
therein:
6.01 Organization. Birtcher is a corporation duly organized,
validly existing and in good standing under the laws of California, has all
necessary corporate powers to own its properties and to carry on its business as
now owned and operated by it, and is duly qualified to do business and is in
good standing in those jurisdictions in which the nature of Birtcher's business
or of its properties makes such qualification necessary except for those
jurisdictions where the failure to so qualify would not have a material adverse
effect on Birtcher's business.
6.02 Capital. The authorized capital stock of Birtcher as of
the date of this Agreement consists, subject to conversion of Birtcher Preferred
Stock into Birtcher Common Stock pursuant to the terms of the Certificate of
Determination, of (i) 50,000,000 shares of common stock, having no par value, of
which 10,164,139 are duly and validly issued and outstanding, and (ii) 9,000,000
shares of Preferred Stock, no par value, of which 505,000 shares are designated
Series A Preferred Stock, of which 465,399 shares are duly and validly issued
and outstanding. Each share of Birtcher Preferred Stock is convertible into
Birtcher Common Stock in the manner set forth in the Certificate of
Determination relating to the Birtcher Preferred Stock. All of the outstanding
Birtcher Capital Stock is validly issued, fully paid and nonassessable. The only
outstanding subscriptions, options, rights, warrants, convertible securities or
other agreements or commitments which obligate Birtcher to issue or to transfer
from treasury additional shares of Birtcher Common Stock or other securities are
the Birtcher Options set forth on Schedule 2.03 and the Birtcher Preferred
Stock.
6.03 Title to Assets. The Birtcher Companies, as hereinafter
defined, have good and indefeasible title to all of the assets and interests in
assets, whether real, personal, mixed, tangible or intangible, used in the
business of the Birtcher Companies, free and clear of restrictions on or
conditions to transfer or assignment, and free and clear of mortgages, liens,
pledges, charges, encumbrances, equities, claims, easements, rights-of-way,
covenants, conditions or restrictions, except for (i) those disclosed in
Birtcher's consolidated financial statements as of June 30, 1994, or otherwise
thereafter included in the Birtcher Statements (as hereinafter defined); (ii)
any lien for current taxes not yet due and payable; (iii) possible minor matters
which, in the aggregate, are not substantial in the present or intended use of
any of these assets and which do not materially impair business operations of
the respective Birtcher Company; or (iv) those assets that are held under any
lease, security agreement, conditional sales contract or other title retention
or security arrangement with those whose annual payments thereunder exceed
$5,000 singularly or $50,000 in the aggregate. All real property and tangible
personal property of each Birtcher Company is in good operating condition and
repair, ordinary wear and tear excepted. No officer, director or employee of any
Birtcher Company, nor any spouse, child or other relative of any of these
persons, owns or has any interest, directly or indirectly, in any of the real or
personal property owned by or leased to any Birtcher Company or any copyrights,
patents, trademarks, trade names or trade secrets licensed by any Birtcher
Company.
6.04 Subsidiaries. Birtcher does not own, directly or
indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, business, trust or other entity (such entities as are
described in the Birtcher Disclosure Letter are hereinafter referred to as the
"Birtcher Subsidiaries"). Each of the Birtcher Subsidiaries is a corporation
duly organized, validly existing, and in good standing (or equivalent status)
under the laws of its respective jurisdiction of organization as indicated on
the Birtcher Disclosure Letter, has all necessary corporate power to own its
properties and to operate its business as now owned and operated by it, and is
duly qualified to do business and is in good standing in those other
jurisdictions disclosed in the Birtcher Disclosure Letter. These are the only
jurisdictions in which the nature of the Birtcher Subsidiaries' businesses or of
their properties makes such qualification necessary except for those
jurisdictions where the failure to so qualify would not have a material adverse
effect on Birtcher's business. All the issued and outstanding shares of capital
stock of each of the Birtcher Subsidiaries are validly issued, fully paid, and
nonassessable, and are owned by Birtcher or one of the Birtcher Subsidiaries,
free and clear of all liens, encumbrances, security agreements, equities,
options, claims, charges and restrictions. Birtcher or the Birtcher Subsidiaries
owning such stock have full power to transfer these shares without obtaining the
consent or approval of any other person or governmental authority. There are no
outstanding subscriptions, options, rights, warrants, convertible securities or
other agreements or commitments obligating any of the Birtcher Subsidiaries to
issue or to transfer from treasury any additional shares of their capital stock
of any class. There are no outstanding contractual obligations of Birtcher or
any of the Birtcher Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding shares of capital stock or other ownership interests of Birtcher or
any of the Birtcher Subsidiaries.
6.05 SEC Filings; Financial Statements and Certain Periodic
Reports. Birtcher has previously furnished to CONMED true and complete copies of
Birtcher's Annual Reports on Form 10-K for fiscal years ended June 30, 1994,
1993 and 1992, in the case of the Form 10-K for the fiscal year ended June 30,
1994, as amended by the Form 10-K/A filed October 28, 1994 (the "Birtcher
10-Ks"), which contain consolidated balance sheets of Birtcher and the Birtcher
Subsidiaries as of June 30, 1994, 1993 and 1992, and the related consolidated
balance sheets, statements of operations, shareholders' equity and cash flow for
the three years ended on those dates (collectively, the "Birtcher Financial
Statements"), audited by Ernst & Young, L.L.P., Birtcher's independent public
accountants, whose reports with respect to such financial statements are
included in the Birtcher Financial Statements. In addition, Birtcher has
previously furnished to CONMED a true and complete copy of Birtcher's Report on
Form 10-Q for the fiscal quarter ended September 30, 1994 (the "9/30/94 10-Q")
together with unaudited consolidated balance sheets of Birtcher and the Birtcher
Subsidiaries as of October 31, 1994, and the related unaudited consolidated
statement of operations and cash flow for period ending on such dates (all of
the foregoing being referred to as the "Birtcher Unaudited Financial
Statements"). The Birtcher Financial Statements and the Birtcher Unaudited
Financial Statements (collectively, the "Birtcher Statements") have been
prepared in accordance with generally accepted accounting principles which have
been consistently applied by Birtcher throughout all of the periods indicated,
and fairly present the consolidated financial position of Birtcher and the
Birtcher Subsidiaries as of the respective dates of the balance sheets included
in the Birtcher Statements in all material respects, and the consolidated
results of their operations for the respective periods indicated in all material
respects. The Birtcher 10-Ks and 9/30/94 10-Q (the "Birtcher Reports") have been
prepared and filed with the SEC in accordance with all applicable laws, rules,
regulations, and requirements, and all of the information contained therein is
true, complete and correct in all material respects.
6.06 Absence of Changes. Since June 30, 1994, and except as
otherwise set forth in the Birtcher Reports, there has not been any of the
following acts or commitments:
(i) Transaction by Birtcher or any Birtcher Subsidiary
(collectively, the "Birtcher Companies" or singularly a "Birtcher
Company") except in accordance with prudent business standards;
(ii) Capital expenditure by a Birtcher Company exceeding
$5,000 singularly or $50,000 in the aggregate;
(iii) Material adverse change in the financial condition,
liabilities, assets, business or prospects of any Birtcher Company
(CONMED acknowledges that the operations of Birtcher have been
adversely affected by restraints on Birtcher's liquidity and is not
aware of any material adverse effect with respect to Birtcher between
September 30, 1994 and the date of this Agreement other than as may
have been disclosed to CONMED);
(iv) Destruction or damage to or loss of any asset of a
Birtcher Company (whether or not covered by insurance) which materially
and adversely affects the financial condition, business or prospects of
such Birtcher Company;
(v) Labor trouble or other event or condition of any character
materially and adversely affecting the financial condition, business,
assets or prospects of any Birtcher Company;
(vi) Change in accounting methods or practices (including,
without limitation, any change in depreciation or amortization policies
or rates) by any Birtcher Company;
(vii) Revaluation of any asset by any Birtcher Company;
(viii) Declaration setting aside or payment of a dividend or
other distribution in respect of the capital stock of any Birtcher
Company, or any direct or indirect redemption, purchase or other
acquisition by any Birtcher Company of any of its shares of capital
stock;
(ix) Increase in the salary or other compensation payable or
to become payable by any Birtcher Company to any of its present or
former officers, directors or employees, or the declaration, payment,
commitment or obligation of any kind for the payment, by any Birtcher
Company, of a bonus or other additional salary or compensation to any
such person, including the grant of any Birtcher Option or repricing of
the exercise price of any outstanding Birtcher Option;
(x) Sale or transfer of any asset by any Birtcher Company,
except for the sale of inventory in accordance with prudent business
standards;
(xi) Amendment or termination of any contract, agreement or
license to which any Birtcher Company is a party;
(xii) Loan by any Birtcher Company to any person or entity, or
guaranty by any Birtcher Company of any loan;
(xiii) Mortgage, pledge or other encumbrance of any asset of
any Birtcher Company;
(xiv) Waiver or release of any right or claim of any Birtcher
Company;
(xv) Other event or condition of any character that has or
might reasonably be expected to have a material and adverse effect on
the financial condition, business, assets or prospects of any Birtcher
Company;
(xvi) Except for the issuance of shares of Birtcher Common
Stock as a result of the exercise of Birtcher Options, the issuance,
sale or purchase by any Birtcher Company of any shares of its capital
stock of any class, or of any other of its securities, or options,
warrants or rights therefore;
(xvii) Amendment, termination, modification, withdrawal or
acceleration of any forbearance agreement or interim financing
arrangement of any Birtcher Company; or
(xviii) Agreement by any Birtcher Company to do any of the
things described in the preceding clauses (i) through (xvii).
6.07 Liabilities. No Birtcher Company has any liabilities,
obligations or commitments of any nature, whether accrued, absolute, contingent
or otherwise, and whether due or to become due (herein "Liabilities") except
Liabilities which are adequately disclosed or accrued against in the Birtcher
Statements or identified and reflected in the notes thereto.
6.08 Tax Matters. Within the times and in the manner
prescribed by law, each Birtcher Company, and any consolidated, combined,
unitary or aggregate group for tax purposes of which any Birtcher Company is or
has been a member, has timely has filed all foreign country, federal, state and
local tax returns ("Tax Returns") required by law, and has paid all taxes,
assessments and penalties due and payable ("Taxes") and has provided adequate
reserves in the Birtcher Statements for any Taxes that have not been paid but
are properly accruable under generally accepted accounting principles, whether
or not shown as being due on any returns. There are no present disputes as to
taxes of any nature allegedly due or payable by any Birtcher Company. Except to
the extent that the inaccuracy of any of the following, individually or in the
aggregate, is not reasonably likely to have a material adverse effect on
Birtcher's business, no claim for unpaid Taxes has become a lien or encumbrance
of any kind against the property asserted against any Birtcher Company; no audit
of any Tax Return of any Birtcher Company is being conducted by a tax authority;
and no extension of the statute of limitations on the assessment of any Taxes
has been granted by any Birtcher Company and is currently in effect. No Birtcher
Company has made an election under Section 341(f) of the Internal Revenue Code
of 1986, as amended (the "Code"). The Merger will not result in the disallowance
of any deduction for compensation paid or payable by any Birtcher Company under
Section 280G of the Code. Birtcher will have net operating loss carryovers
within the meaning of Section 172(c) of the Code of at least $10,000,000 as at
the Effective Time.
6.09 Real Property. Schedule 6.09 to this Agreement is a
complete and accurate legal description of each parcel of real property leased
to ("Birtcher Leased Real Property") any Birtcher Company. Birtcher does not own
any real property. Birtcher has previously furnished CONMED with a true and
correct list of the policies of title insurance issued to any Birtcher Company
for the Birtcher Leased Real Property. A copy of the lease for each of the
Birtcher Leased Real Property has been furnished to CONMED. All the leases
concerning the Birtcher Leased Real Property are valid and in full force, and
there does not exist any default by a Birtcher Company, or event that with
notice or lapse of time, or both, would constitute a default under any of these
leases. To the best of Birtcher's knowledge, there does not exist any default or
event that with notice or lapse of time, or both, would constitute a default
under any of the leases, by any person or entity other than a Birtcher Company
that is a party to any of such leases.
6.10 Zoning. The zoning, deed restriction or other land use
provisions or restrictions of each parcel of Birtcher Leased Real Property
permit the presently existing improvements and the continuation of the business
presently being conducted on such parcel.
6.11 Inventories. The inventories of raw materials, work in
process and finished goods (collectively called "Inventories") shown on the
Birtcher Unaudited Financial Statements, consist of items of a quality and
quantity useable and salable in the ordinary course of business by each Birtcher
Company, except for obsolete and slow moving items and items below standard
quality, all of which have been written down on the books of such Birtcher
Company to estimated net realizable value or have been provided for by adequate
reserves. All items included in the Inventories are the property of each
respective Birtcher Company and in their possession, except for inventory on
consignment at Birtcher's agent locations and sales made in accordance with
prudent business standards since September 30, 1994; for each of these sales
either the purchaser has made full payment or the purchaser's liability to make
payment is reflected in the books of such Birtcher Company. No items included in
the Inventories have been pledged as collateral or are held by any Birtcher
Company on consignment from others. The Inventories shown on all the
consolidated balance sheets included in the Birtcher Statements are based on
quantities determined by physical count or measurement, taken within the
preceding twelve months, and are valued at the lower of cost (determined on a
first-in, first-out basis) or market value and on a basis consistent with that
of prior years.
6.12 Other Property. All trucks, automobiles, machinery,
equipment, furniture, supplies, tools, dies, jigs, molds, patterns, drawings and
all other tangible personal property owned by, in the possession of, or used by
any Birtcher Company are located on a tract of the Birtcher Leased Real
Property. Each Birtcher Company owns or leases such tangible personal property
that is necessary for such Birtcher Company to conduct its respective business
as now conducted.
6.13 Accounts Receivable. All of the accounts receivable of
each Birtcher Company as set forth in the Birtcher Unaudited Financial
Statements dated as of September 30, 1994, and all accounts receivable of each
Birtcher Company created after that date, arose from valid sales in accordance
with prudent business practices. All accounts receivable shown in such Birtcher
Unaudited Financial Statements have been collected in full since that date, or
are collectible at their full amounts less any estimated allowance for doubtful
accounts and trade discounts, which allowance is determined in a manner
consistent with the manner used in the Birtcher Financial Statements.
6.14 Trade Names and Rights. Each Birtcher Company has
registered all trade names, trademarks, and service marks in all jurisdictions
necessary to evidence ownership thereof and to permit such Birtcher Company to
conduct its business in the way it is currently conducted, or otherwise has all
rights or licenses necessary to use the same. No Birtcher Company has infringed,
or is now infringing, on any trade name, trademark, or service mark belonging to
any other person, firm or corporation. Each Birtcher Company owns, or holds
adequate licenses or other rights to use, all trademarks, service marks and
trade names necessary for its business as now conducted by it, and its ownership
and use do not, and will not, conflict with, infringe on or otherwise violate
any rights of others.
6.15 Patents. Each Birtcher Company has all patents or patent
applications (the "Birtcher Patents") and copyrights (the "Birtcher Copyrights")
registered in all jurisdictions necessary to evidence ownership thereof and to
permit such Birtcher Company to conduct its business in the way it is currently
conducted, or otherwise has all rights or license necessary to use the same. The
Birtcher Patents and Birtcher Copyrights are valid and in full force and effect
and are not subject to any taxes, maintenance fees or actions that have not been
currently paid. There has not been any interference, action or other judicial,
arbitration or other adversary proceeding concerning the Birtcher Patents or the
Birtcher Copyrights. The manufacture, use, or sale of the inventions, models,
designs and systems covered by the Birtcher Patents or the Birtcher Copyrights
do not violate or infringe on any patent or any proprietary or personal right of
any person, firm or corporation; and one of the Birtcher Companies has infringed
or is now infringing on any patent or other right belonging to any person, firm
or corporation and none of the Birtcher Companies are subject to any claim for
such infringement.
6.16 Employee Benefit Plans. Schedule 6.16 is a true and
complete list of all pension, profit sharing, bonus, deferred compensation,
severance pay, retirement, insurance or other employee benefit plans (as such
term is defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, hereinafter referred to as "ERISA") or agreements (other than the
Birtcher Options and the plans creating same) binding upon any Birtcher Company
(collectively, the "Benefit Plans"). Birtcher has complied with the material
provisions of and has performed the material obligations required of it under
such Benefit Plans, and Birtcher is not in default under any provision thereof
in any manner which would permit any other party thereto to cancel or terminate
such Benefit Plan. Except as set forth in the Birtcher Statements, Birtcher has
not incurred any accumulated funding deficiency within the meaning of ERISA in
connection with any of its Benefit Plans. All of such Benefit Plans are fully
funded under the terms of such Benefit Plans and as required by ERISA, through
and including the date of this Agreement. All of Birtcher's employee pension or
profit sharing plans are qualified within the meaning of Section 401 of the
Code, or Birtcher is presently qualifying such plans and such plans are eligible
for qualification. None of the fiduciary responsibility provisions of Part 4,
Subtitle B, Title I of ERISA (and the equivalent provisions under the Code) have
been violated with respect to any such Benefit Plans, other than a violation
which would not subject any of the Birtcher Companies or their employees to
liability under Title I of ERISA. Birtcher has complied with all of the
reporting and disclosure requirements set forth in Part 1, Subtitle B, Title I
of ERISA in all material respects. In addition, (i) no Benefit Plan that is
subject to Title IV of ERISA has been terminated or partially terminated since
September 2, 1974, (ii) no proceeding has been initiated to terminate any such
Benefit Plan, (iii) no Birtcher Company has incurred or expected to incur any
liability to the Pension Benefit Guaranty Corporation, (iv) there has been no
"reportable event" within the meaning of Section 4043(b) of ERISA, (v) the
present value of accrued benefits under all benefit plans subject to Title IV of
ERISA did not exceed the market value of the assets of such plans as of the
close of the most recent plan year of such plans, and (vi) no Benefit Plan is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA. None of
the Birtcher Companies has any obligations for retiree health or life benefits
under any Benefit Plan.
6.17 Customers. No Birtcher Company is aware of any facts
evidencing that any of its significant customers intend to cease doing business
with such Birtcher Company, or materially alter the amount of the business that
such customers are presently doing with such Birtcher Company.
6.18 Employment Contracts. Set forth in the Birtcher
Disclosure Letter is a list of all employment contracts, collective bargaining
agreements, and agreements providing for director and officer indemnification or
other agreements or arrangements providing for employee remuneration or benefits
(other than the Birtcher Options or Benefit Plans) with any current or former
employees to which any Birtcher Company is a party or by which any Birtcher
Company is bound; all these contracts and arrangements are in full force and
effect, and no Birtcher Company, nor any other party, is in default under any of
them. There have been no claims of defaults and, to the best knowledge of the
Birtcher Companies, there are not facts or conditions which if continued, or on
notice, will result in a default under these contracts or arrangements. There is
no pending, or to the best of their knowledge threatened, labor dispute, strike
or work stoppage affecting or potentially affecting the business of any Birtcher
Company.
6.19 Insurance Policies. Each Birtcher Company maintains (i)
insurance on all its assets and businesses of a type customarily insured by
similar companies in the same industry, covering property damage and loss of
income by fire or other casualty, and (ii) adequate insurance protection against
all liabilities, claims and risks against which it is customary to insure,
including but not limited to product liability insurance. A list of all such
policies, together with a true and correct copy of each policy, has been
furnished to CONMED prior to the date of this Agreement.
6.20 Other Contracts. No Birtcher Company is a party to, nor
is its property bound by, any distributor's or manufacturer's representative or
agency agreement, any output or requirements agreement, any agreement not
entered into in accordance with prudent business standards, or any agreement
requiring the performance by any Birtcher Company of any obligation for a period
of time extending beyond one year from the date hereof or calling for
consideration of more than $5,000 per agreement or $50,000 in the aggregate.
There is no default or event which with notice or lapse of time, or both, would
constitute a default by any party to any of these agreements. No Birtcher
Company has received notice that any party to any of these agreements intends to
cancel or terminate any of these agreements or to exercise or not exercise any
options under any of these agreements. No Birtcher Company is a party to, nor is
any Birtcher Company's property bound by, any agreement which is materially
adverse to the business, properties or financial condition of such Birtcher
Company. No Birtcher Company is a party to any agreement which: (i) prohibits
such Birtcher Company from engaging in the business that it currently conducts,
or upon consummation of the Merger, will prohibit such Birtcher Company from
engaging in the business that it currently conducts, or (ii) will, upon
consummation of the Merger, prohibit any CONMED Company from engaging in any
business that such CONMED Company currently conducts.
6.21 Compliance with Laws. Each Birtcher Company has complied
with, and is not in violation of, applicable federal, state or local statutes,
laws and regulations (including, without limitation, any applicable building,
zoning or other law, ordinance or regulation) affecting its properties or the
operation of its business in any material way.
6.22 Litigation. There is no suit, action, arbitration or
legal, administrative or other proceeding or governmental investigation pending,
or to the best knowledge of the Birtcher Companies, threatened, against or
affecting any Birtcher Company, or any of their respective businesses, assets,
prospects or financial condition. The matters set forth in the Birtcher
Disclosure Letter, except as otherwise specifically indicated thereon, if
decided adversely to such Birtcher Company, will not result in a material
adverse change in the business, assets, prospects or financial condition of such
Birtcher Company. Birtcher has furnished or made available to CONMED copies of
all relevant court papers and other documents relating to the matters set forth
in the Birtcher Disclosure Letter. No Birtcher Company is in default with
respect to any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality.
6.23 No Breach or Violation. The consummation of the
transactions contemplated by this Agreement will not result in or constitute any
of the following: (i) a breach of any term or provision of this Agreement; (ii)
a default or an event that, with notice or lapse of time or both, would be a
default, breach or violation of the certificate or articles of incorporation or
bylaws of any Birtcher Company or any lease, license, promissory note,
conditional sales contract, commitment, indenture, mortgage, deed of trust or
other agreement, instrument or arrangement to which any Birtcher Company is a
party or by which any of them or the property of any of them is bound; (iii) an
event that would permit any party to terminate any agreement or to accelerate
the maturity of any indebtedness or other obligation of any Birtcher Company; or
(iv) the creation or imposition of any lien, charge or encumbrance on any of the
properties of any Birtcher Company.
6.24 Authority. Birtcher has the right, power, legal capacity
and authority to enter into and perform its obligations under this Agreement,
and no approvals or consents of any persons other than those of its shareholders
specified herein, declaration by the SEC of effectiveness of the Registration
Statement, and those listed in the Birtcher Disclosure Letter are necessary in
connection with it. The execution and delivery of this Agreement by Birtcher has
been duly authorized by its Board of Directors. This Agreement has been duly
executed and delivered by Birtcher and is a legal, valid and binding obligation
of Birtcher enforceable in accordance with its terms, except insofar as
enforcement may be limited by (a) bankruptcy, insolvency, reorganization or
moratorium or other similar laws relating to or affecting the enforcement of
creditors' rights generally, and (b) general principles of equity.
6.25 Interest in Customers, Suppliers and Competitors. No
officer or director of any Birtcher Company, nor any spouse or child of any of
them, has any direct or indirect interest in any competitor, supplier or
customer of any Birtcher Company or in any person from whom or to whom such
Birtcher Company leases any real or personal property, or in any other person
with whom such Birtcher Company is doing business.
6.26 Corporate Documents. Birtcher has furnished to CONMED for
its examination (i) true and correct copies of the certificate or articles of
incorporation and bylaws of each Birtcher Company, or equivalent documents, as
amended to date; (ii) true and correct copies of the contents of the minute book
of each Birtcher Company (including proceedings of audit and other committees),
each of which contain all records required to be set forth for all proceedings,
consents, actions and meetings of the shareholders and board of directors of
each Birtcher Company since January 1, 1988.
6.27 Permits. Each Birtcher Company has all permits, licenses,
franchises and other authorizations necessary to the conduct of the business of
such Birtcher Company in the manner and in the areas in which its business is
presently being conducted, and all such permits, licenses, franchises, and
authorizations are valid and in full force and effect. No Birtcher Company has
engaged in any activity which could cause the revocation or suspension of any
such permits, licenses, franchises, or authorizations and no actions or
proceedings looking to or contemplating revocation or suspension of any thereof
is pending or threatened. Birtcher has previously provided to CONMED a true and
complete list of all permits, licenses, franchises, and other authorizations
presently necessary to operate and conduct the business of each Birtcher
Company.
6.28 Personnel. Birtcher has previously furnished to CONMED a
true and complete list of the names and addresses of (i) all officers and
directors of each Birtcher Company, describing all remuneration or compensation
payable to each and (ii) all former officers and directors of each Birtcher
Company to whom a Birtcher Company has a remuneration or compensation
obligation, describing all remuneration or compensation payable to each.
6.29 Banking. Birtcher has previously furnished to CONMED a
true and complete list of the names and addresses of all banks or other
financial institutions in which any Birtcher Company has an account, deposit or
safe deposit box, with a full description of such accounts and the names of all
persons authorized to draw on these accounts or deposits or to access these
boxes.
6.30 Environmental. "Environmental Laws" means all federal,
state, and local environmental, land use, zoning, health, chemical use, safety
and sanitation laws, statutes, ordinances and codes relating to the protection
of the environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances. "Hazardous Substances" means, without limitation, radon, radioactive
materials, asbestos, urea formaldehyde form insulations, polychlorinated
biphenyls, benzene, hazardous materials, flammable explosives, hazardous wastes,
hazardous or toxic substances or related materials defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended [42
U.S.C. ss. 9601 et seq.], the Resource Conservation and Recovery Act, as amended
[42 U.S.C. ss. 6901 et seq.] or any other applicable Environmental Laws and the
regulations adopted pursuant thereto and other Environmental Laws governing
waste substances, and the rules, regulations, policies, guidelines,
interpretations, decisions, orders, and directives, whether proposed or
promulgated, of any governmental authority with respect thereto. For purposes of
this Section 6.30 and Section 8.11, the term "Birtcher Real Property" shall
include all real property previously owned by any Birtcher Company and the term
"Birtcher Leased Real Property" shall include all real property previously
leased by any Birtcher Company.
(i) No Birtcher Real Property, and to the best knowledge of
Birtcher, no Birtcher Leased Real Property or any real property
adjacent to a tract of Birtcher Real Property or Birtcher Leased Real
Property, has been or is being used for the storage, treatment,
generation, transportation, processing, handling or disposal of any
Hazardous Substance in violation of any Environmental Laws;
(ii) No release of a Hazardous Substance has occurred at any
Birtcher Real Property or, to the best knowledge of Birtcher, at any
Birtcher Leased Real Property or property adjacent to a tract of
Birtcher Real Property or Birtcher Leased Real Property;
(iii) No underground storage tanks are located on a tract of
Birtcher Real Property or, to the best knowledge of Birtcher, Birtcher
Leased Real Property;
(iv) There are no Hazardous Substances in or contaminating any
of the land, buildings, structures, or other improvements constituting
the Birtcher Real Property and, to the best knowledge of Birtcher, the
Birtcher Leased Real Property;
(v) There are no Hazardous Substances in concentrations that
exceed amounts permitted by Environmental Laws on any Birtcher Real
Property or, to the best knowledge of Birtcher, any Birtcher Leased
Real Property, or in any of the buildings, structures, or other
improvements on such Birtcher Real Property or, to the best knowledge
of Birtcher, Birtcher Leased Real Property; and
(vi) All permits required by Environmental Laws for the
continued use and operation of the Birtcher Real Property or Birtcher
Leased Real Property and the facilities located thereon (in the same
manner as such real property has been used and operated by each
Birtcher Company) have been obtained and are and have been complied
with in accordance with their terms.
6.31 No Severance Payments. None of the Birtcher Companies
will owe a severance payment or similar obligation to any of their respective
current or former employees, officers or directors as a result of the Merger or
the transactions contemplated by this Agreement, nor will any of such persons be
entitled to an increase in severance payments or other benefits as a result of
the Merger or the transactions contemplated by this Agreement in the event of
the subsequent termination of their employment.
6.32 FDA Matters. The Birtcher Companies are in full
compliance with all statutes, rules and regulations of the U.S. Food and Drug
Administration ("FDA") with respect to manufacturing, marketing and sale of all
of its products. The Birtcher Companies have all requisite FDA permits,
approvals or the like to sell or manufacture such products. There are not be any
pending or threatened actions or proceedings by the FDA which would prohibit or
impede the sale of any product currently manufactured or sold by any of the
Birtcher Companies into any market.
6.33 Registration Statement and Proxy Statement. When the
Registration Statement or any post-effective amendment thereto shall become
effective, and at all times subsequent to such effectiveness up to and including
the Effective Time, such Registration Statement and the Prospectus/Proxy
Statement and all amendments or supplements thereto, with respect to the form
thereof and to all information set forth therein, including the fairness opinion
of a financial advisor of Birtcher, which shall be attached as an appendix
thereto, (other than relating to CONMED and the CONMED Entities), (i) will
comply in all material respects with the requirements of the Securities Act and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
respectively, and the rules and regulations of the SEC thereunder, and (ii) will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements contained
therein not misleading.
6.34 Truth of Warranties and Representations. All of the
representations and warranties of Birtcher contained in this Agreement shall be
true as of the date of this Agreement and shall be deemed to have been made
again at and as of the Closing Date and the Effective Time, and shall then be
true in all respects.
6.35 Full Disclosure. None of the representations and
warranties made by Birtcher, or made in any certificate or memorandum furnished
or to be furnished by any Birtcher Company, or on behalf of any Birtcher
Company, contains or will contain any untrue statement of material fact, or
omits any material fact the omission of which would be misleading.
ARTICLE VII
REPRESENTATION AND WARRANTIES OF CONMED COMPANIES
The CONMED Companies represent and warrant that, except as
otherwise disclosed in the disclosure letter, dated the date hereof, from CONMED
to Birtcher (the "CONMED Disclosure Letter"), which shall be accompanied by
copies of all agreements or documents referred to therein:
7.01 Organization. CONMED is a corporation duly organized,
validly existing and in good standing under the laws of New York. Subsidiary is
a corporation duly organized, validly existing and in good standing under the
laws of California. Each CONMED Company has all necessary corporate powers to
own its properties and to carry on its businesses as now owned and operated by
it, and is duly qualified to do business and is in good standing in those
jurisdictions in which the nature of the CONMED Companies' business or of their
properties make such qualification necessary except for those jurisdictions
where the failure to so qualify would not have a material adverse effect on such
CONMED Companies' Business.
7.02 Capital of CONMED. The authorized capital stock of CONMED
consists of 20,000,000 shares of common stock, having a par value of $0.01 each,
of which 4,011,800 were issued and outstanding as of October 31, 1994, and
500,000 shares of Preferred Stock, no par value, none of which are issued or
outstanding. On November 22, 1994, the Board of Directors of CONMED approved a
three-for-two stock split in the form of a stock dividend with respect to CONMED
Common Stock, payable on December 27, 1994 to shareholders of record as of
December 8, 1994. All of the shares of CONMED Common Stock are validly issued,
fully paid and nonassessable. The only outstanding subscriptions, options,
rights, warrants, convertible securities or other agreements or commitments
which obligate CONMED to issue or to transfer from treasury additional shares of
CONMED Common Stock are described in the CONMED Disclosure Letter.
7.03 Capital of Subsidiary. The authorized capital stock of
Subsidiary consists of 1,000 shares of common stock, having a par value of $.01
each, of which 100 shares are issued and outstanding (collectively, the
"Subsidiary Common Stock") and owned of record by CONMED. All of the shares of
Subsidiary Common Stock are validly issued, fully paid and nonassessable. There
are no outstanding subscriptions, options, rights, warrants, convertible
securities or other agreements or commitments that obligate Subsidiary to issue
or to transfer from treasury additional shares of Subsidiary Common Stock.
7.04 Title to Assets. The CONMED Companies and the CONMED
Subsidiaries (as hereinafter defined) have good and indefeasible title to all
the assets and interests in assets, whether real, personal, mixed, tangible or
intangible, used in the business of the CONMED Companies and the CONMED
Subsidiaries (collectively, the "CONMED Entities" or singularly the "CONMED
Entity"). All these assets are free and clear of restrictions on or conditions
to transfer or assignment, and free and clear of mortgages, liens, pledges,
charges, encumbrances, equities, claims, easements, rights-of-way, covenants,
conditions or restrictions, except for (i) those disclosed in CONMED's
consolidated financial statements as of December 31, 1993, or otherwise
thereafter included in the CONMED Statements (as hereinafter defined); (ii) any
lien for current taxes not yet due and payable; and (iii) possible minor matters
which, in the aggregate, are not substantial in the present or intended use of
any of these assets and which do not materially impair business operations of
the respective CONMED Entity. All real property and tangible personal property
of each CONMED Entity is in good operating condition and repair, ordinary wear
and tear excepted. No officer, director or employee of any CONMED Entity, nor
any spouse, child or other relative of any of these persons, owns or has any
interest, directly or indirectly, in any of the real or personal property owned
by or leased to any CONMED Entity or any copyrights, patents, trademarks, trade
names or trade secrets licensed by any CONMED Entity.
7.05 Subsidiaries. The CONMED Companies do not own, directly
or indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, business, trust or other entity (such entities as are
described in the CONMED Disclosure Letter are hereinafter referred to as the
"CONMED Subsidiaries"). Each of the CONMED Subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws of its
respective jurisdictions of organization as indicated on the CONMED Disclosure
Letter, has all necessary corporate power to own its properties and to carry on
its business as now owned and operated by it, and is duly qualified to do
business and is in good standing in those other jurisdictions disclosed in the
CONMED Disclosure Letter. These are the only jurisdictions in which the nature
of the CONMED Subsidiaries' business or of their properties makes such
qualification necessary except for those jurisdictions where the failure to so
qualify would not have a material adverse effect on the business of such CONMED
Subsidiary. All the issued and outstanding shares of capital stock of the CONMED
Subsidiaries are validly issued, fully paid, and nonassessable, and are owned by
the CONMED Companies or one of the CONMED Subsidiaries, free and clear of all
liens, encumbrances, security agreements, equities, options, claims, charges and
restrictions. The CONMED Companies or the CONMED Subsidiaries owning such stock
have full power to transfer these shares without obtaining the consent or
approval of any other person or governmental authority. There are no outstanding
subscriptions, options, rights, warrants, convertible securities or other
agreements or commitments obligating any of the CONMED Subsidiaries to issue or
to transfer from treasury any additional shares of their capital stock of any
class. There are no outstanding contractual obligations of the CONMED Companies
or any of the CONMED Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding shares of capital stock or other ownership interests of the CONMED
Companies or any of the CONMED Subsidiaries.
7.06 SEC Filings; Financial Statements and Certain Periodic
Reports. The CONMED Companies have previously furnished to Birtcher true and
complete copies of CONMED's Annual Reports on Form 10-K for fiscal years ended
December 31, 1993, December 25, 1992 and December 26, 1991 (the "CONMED 10-Ks")
which contain consolidated balance sheets of CONMED as of December 31, 1993, and
the related consolidated balance sheets, statements of operations, shareholders'
equity and cash flow for the three years ended on such dates (collectively, the
"CONMED Financial Statements"), audited by Price Waterhouse LLP, CONMED's
independent public accountants, whose reports with respect to such financial
statements are included in the CONMED Financial Statements. In addition, CONMED
has previously furnished to Birtcher true and complete copies of CONMED's Report
on Form 10-Q for the fiscal quarter ended September 30, 1994, July 1, 1994 and
April 1, 1994 (the "1994 10-Qs") including unaudited consolidated balance sheets
of the CONMED Entities as of such dates and the related unaudited consolidated
statements of income and cash flow for each of such periods ending on those
dates (all of the foregoing being referred to as the "CONMED Unaudited Financial
Statements"). The CONMED Financial Statements and the CONMED Unaudited Financial
Statements (collectively, the "CONMED Statements") have been prepared in
accordance with generally accepted accounting principles consistently applied by
CONMED throughout all the periods indicated, and fairly present the financial
position of the CONMED Entities as of the respective dates of the balance sheets
included in the financial statements in all material respects, and the results
of its operations for the respective periods indicated in all material respects.
The CONMED 10-Ks and 1994 10-Qs (the "CONMED Reports") have been prepared and
filed with the SEC in accordance with all applicable laws and requirements, and
all of the information contained therein is true, complete and correct in all
material respects.
7.07 Absence of Changes. Since December 31, 1993, and except
as otherwise set forth or reflected in the CONMED Reports, there has not been
any:
(i) Transaction by any of the CONMED Entities except in the
ordinary course of business as conducted on that date;
(ii) Material adverse change in the financial condition,
liabilities, assets, business or prospects of any CONMED Entity;
(iii) Destruction, damage to or loss of any asset of a CONMED
Entity (whether or not covered by insurance) which materially and
adversely affects the financial condition, business or prospects of
such CONMED Entity;
(iv) Labor trouble or other event or condition of any
character materially and adversely affecting the financial condition,
business, assets or prospects of any CONMED Entity;
(v) Change in accounting methods or practices (including,
without limitation, any change in depreciation or amortization policies
or rates) by any CONMED Entity;
(vi) Revaluation of any asset by any CONMED Entity;
(vii) Declaration, setting aside or payment of a dividend or
other distribution in respect of the capital stock of any CONMED
Entity, or any direct or indirect redemption, purchase or other
acquisition by any CONMED Entity of any of its share of capital stock;
(viii) Mortgage, pledge or other encumbrances of any asset of
any CONMED Entity;
(ix) Other event or condition of any character that has or
might reasonably have a material and adverse effect on the financial
condition, business, assets or prospects of any CONMED Entity;
(x) Sale or transfer of any asset by any CONMED Entity, except
for the sale of inventory in the ordinary course of business;
(xi) Issuance or sale by any CONMED Entity of any shares of
its capital stock of any class, or of any other of its securities, or
options, warrants or rights therefor; or
(xii) Agreement by any CONMED Entity to do any of the things
described in the preceding clauses (i) through (xi).
7.08 Liabilities. No CONMED Entity has any material
liabilities, obligations or commitments of any nature, whether accrued absolute,
contingent or otherwise, and whether due or to become due (herein "Liabilities")
except (i) Liabilities which are adequately reflected or reserved against in the
CONMED Statements, and (ii) Liabilities which have been incurred in the ordinary
course of business and consistent with past practice since the date of the
CONMED Statements or identified and reflected in the notes thereto.
7.09 Tax Matters. Within the times and in the manner
prescribed by law, each CONMED Entity, and any consolidated, combined, unitary
or aggregate group for tax purposes of which any CONMED Entity is or has been a
member, has timely has filed all Tax Returns required by law, and has paid all
Taxes and has provided adequate reserves in the CONMED Statements for any Taxes
that have not been paid but are properly accruable under generally accepted
accounting principles, whether or not shown as being due on any returns. There
are no present disputes as to taxes of any nature allegedly due or payable by
any CONMED Entity. Except to the extent that the inaccuracy of any of the
following, individually or in the aggregate, is not reasonably likely to have a
material adverse effect on CONMED business, no claim for unpaid Taxes has become
a lien or encumbrance of any kind against the property asserted against any
CONMED Entity; no audit of any Tax Return of any CONMED Entity is being
conducted by a tax authority; and no extension of the statute of limitations on
the assessment of any Taxes has been granted by any CONMED Entity and is
currently in effect.
7.10 Employee Benefit Plans. The CONMED Entities have complied
with material provisions of and have performed the material obligations required
of them under all pension, profit sharing, bonus, deferred compensation,
severance pay, retirement, insurance or other employee benefit plans (as such
term is defined in Section 3(3) of ERISA) or agreements binding upon any of the
CONMED Entities (collectively, the "CONMED Benefit Plans"), and the CONMED
Entities are not in default under any provision thereof in any manner which
would permit any other party thereto to cancel or terminate such CONMED Benefit
Plan. Except as set forth in the CONMED Statements, the CONMED Entities have not
incurred any accumulated funding deficiency within the meaning of ERISA in
connection with any of its CONMED Benefit Plans. All of such CONMED Benefit
Plans are fully funded under the terms of such CONMED Benefit Plans and as
required by ERISA, through and including the date of this Agreement. All of the
CONMED Entities' employee pension or profit sharing plans are qualified within
the meaning of Code Section 401. None of the fiduciary responsibility provisions
of Part 4, Subtitle B, Title I of ERISA (and the equivalent provisions under the
Code) have been violated with respect to any such CONMED Benefit Plans, other
than a violation which would not subject any of the CONMED Entities or their
employees to liability under Title I of ERISA. The CONMED Entities have complied
with all of the reporting and disclosure requirements (including without
limitation the filing of annual reports and distribution of summary plan
descriptions) set forth in Part 1, Subtitle B, Title I of ERISA in all material
respects. In addition: (i) no CONMED Benefit Plan that is subject to Title IV of
ERISA has been terminated or partially terminated since September 2, 1974, no
proceeding has been initiated to terminate any such CONMED Benefit Plan, no
CONMED Entity has incurred or expects to incur any liability to the Pension
Benefit Guaranty Corporation, and there has been no "reportable event" within
the meaning of Section 4043(b) of ERISA; (ii) the present value of accrued
benefits under all CONMED Benefit Plans subject to Title IV of ERISA did not
exceed the market value of the assets of such plans as of the close of the most
recent plan year of such plans; and (iii) no CONMED Benefit Plan is a
"multi-employer plan" within the meaning of Section 4001(a)(3) of ERISA.
7.11 Customers. No CONMED Entity is aware of any facts
evidencing that any of its significant customers intend to cease doing business
with such CONMED Entity, or materially alter the amount of the business that
such customers are presently doing with such CONMED Entity.
7.12 Employment Contracts. All employment contracts and
collective bargaining agreements, and all pension, bonus, profit sharing, stock
option or other agreements providing for employee remuneration or benefits to
which any CONMED Entity is a party or by which any CONMED Entity is bound are in
full force and effect, and no CONMED Entity, nor any other party is in default
under any of them. There have been no claims of defaults and, to the best
knowledge of the CONMED Entities, there are no facts or conditions which if
continued, or on notice, will result in a default under these contracts or
arrangements. There is no pending, or to the best of their knowledge threatened,
labor dispute, strike or work stoppage affecting the business of any CONMED
Entity.
7.13 Insurance Policies. Each CONMED Entity maintains (i)
insurance on all its assets and businesses of a type customarily insured by
similar companies in the same industry, covering property damage and loss of
income by fire or other casualty, and (ii) adequate insurance protection against
all liabilities, claims and risks against which it is customary to insure,
including but not limited to product liability insurance.
7.14 Compliance with Laws. Each CONMED Entity has complied
with, and is not in violation of, applicable federal, state or local statutes,
laws and regulations (including, without limitation, any applicable building,
zoning or other law, ordinance or regulation) affecting its properties or the
operation of its businesses in any material way.
7.15 Litigation. There is no material suit, action,
arbitration or legal, administrative or other proceeding or governmental
investigation pending or to the best knowledge of the CONMED Entities
threatened, against or affecting any CONMED Entity, or any of their businesses,
assets, prospects or financial condition. The matters set forth in the CONMED
Disclosure Letter, except as otherwise specifically indicated thereon, if
decided adversely to such CONMED Entity, will not result in a material adverse
change in the business, assets, prospects or financial condition of such CONMED
Entity. No CONMED Entity is in default with respect to any order, writ,
injunction or decree of any federal, state, local or foreign court, department,
agency or instrumentality.
7.16 No Breach or Violation. The consummation of the
transactions contemplated by this Agreement will not result in or constitute any
of the following: (i) a breach of any term or provision of this Agreement; (ii)
a default or an event that, with notice or lapse of time or both, would be a
default, breach or violation of the certificate or articles of incorporation or
bylaws of any CONMED Entity or any lease, license, promissory note, conditional
sales contract, commitment, indenture, mortgage, deed of trust or other
agreement, instrument or arrangement to which any CONMED Entity is a party or by
which any of them or the property of any of them is bound; (iii) an event that
would permit any party to terminate any agreement or to accelerate the maturity
of any indebtedness or other obligation of any CONMED Entity; or (iv) the
creation or imposition of any lien, charge or encumbrance on any of the
properties of any CONMED Entity.
7.17 Authority. The CONMED Approval was obtained prior to the
date of this Agreement. The CONMED Entities have the right, power, legal
capacity and authority to enter into, and perform their respective obligations
under this Agreement, and no approvals or consents of any persons other than the
declaration by the SEC of effectiveness of the Registration Statement. This
Agreement has been duly executed and delivered by the CONMED Companies and is a
legal, valid and binding obligation of the CONMED Companies enforceable in
accordance with its terms, except insofar as enforcement may be limited by (a)
bankruptcy, insolvency, reorganization or moratorium or other similar laws
relating to or affecting the enforcement of creditors' rights generally, and (b)
general principles of equity.
7.18 Permits. Each CONMED Entity has all permits, licenses,
franchises and other authorizations necessary to the conduct of the business of
such CONMED Entity in the manner and in the areas in which they are presently
being conducted, all such permits, licenses, franchises, and authorizations are
valid and in full force and effect. No CONMED Entity has engaged in any activity
which could cause the revocation or suspension of any such permits, licenses,
franchises, or authorizations and no actions or proceedings looking to or
contemplating revocation or suspension of any thereof is pending or threatened.
7.19 Contracts. All contracts to which any of the CONMED
Entities is a party are in full force and effect and binding in accordance with
their respective terms, and none of such contracts precludes consummation of the
transactions as contemplated herein. In addition, no event has occurred or
condition exists which constitutes or which with notice or lapse of time, or
both, would constitute, a default, breach, or violation by any party thereto.
7.20 Birtcher Stock. None of the CONMED Entities owns any
Birtcher Capital Stock.
7.21 Leased Real Property. All the leases concerning each
parcel of real property leased to any CONMED Entity ("CONMED Leased Real
Property") are valid and in full force, and there does not exist any default by
a CONMED Company, or event that with notice or lapse of time, or both, would
constitute a default under any of these leases. To the best of the CONMED
Companies' knowledge, there does not exist any default or event that with notice
or lapse of time, or both, would constitute a default under any of the leases,
by any person or entity other than a CONMED Company that is a party to any of
such leases.
7.22 Zoning. The zoning, deed restriction or other land use
provisions or restrictions of each parcel of real property owned by any CONMED
Entity ("CONMED Real Property") or, to the best of the CONMED Companies'
knowledge, CONMED Leased Real Property permit the presently existing
improvements and the continuation of the business presently being conducted on
such parcel.
7.23 Environmental. No CONMED Real Property, and to the best
knowledge of the CONMED Companies, no CONMED Leased Real Property or any real
property adjacent to a tract of CONMED Real Property or CONMED Leased Real
Property, has been or is being used for the storage, treatment, generation,
transportation, processing, handling or disposal of any Hazardous Substance in
violation of any Environmental Laws;
(i) No CONMED Real Property, and to the best knowledge of
the CONMED Companies, no CONMED Leased Real Property or any real
property adjacent to a tract of CONMED Real Property or CONMED Leased
Real Property, has been or is being used for the storage, treatment,
generation, transportation, processing, handling or disposal of any
Hazardous Substance in violation of any Environmental Laws;
(ii) No release of a Hazardous Substance has occurred at any
CONMED Real Property or, to the best knowledge or the CONMED Companies,
at any CONMED Leased Real Property or property adjacent to a tract of
CONMED Real Property or CONMED Leased Real Property;
(iii) No underground storage tanks are located on a tract of
CONMED Real Property or, to the best knowledge of the CONMED Companies,
CONMED Leased Real Property;
(iv) There are no Hazardous Substances in or contaminating
any of the land, buildings, structures, or other improvements
constituting the CONMED Real Property and, to the best knowledge of the
CONMED Companies, the CONMED Leased Real Property;
(v) There are no Hazardous Substances in concentrations that
exceed amounts permitted by Environmental Laws on any CONMED Real
Property or, to the best knowledge of the CONMED Companies, any CONMED
Leased Real Property, or in any of the buildings, structures, or other
improvements on such CONMED Real Property or, to the best knowledge of
the CONMED Companies, CONMED Leased Real Property; and
(vi) All permits required by Environmental Laws for the
continued use and operation of the CONMED Real Property or CONMED
Leased Real Property and the facilities located thereon (in the same
manner as such real property has been used and operated by each CONMED
Entity) have been obtained and are and have been complied with in
accordance with their terms.
7.24 Trade Names and Rights. Each CONMED Entity has registered
all trade names, trademarks, and service marks in all jurisdictions necessary to
evidence ownership thereof and to permit such CONMED Entity to conduct its
business in the way it is currently conducted, or otherwise has all rights or
licenses necessary to use the same. No CONMED Entity has infringed, or is now
infringing, on any trade name, trademark, or service mark belonging to any other
person, firm or corporation. Each CONMED Entity owns, or holds adequate licenses
or other rights to use, all trademarks, service marks, and trade names necessary
for its business as now conducted by it, and its ownership and use do not, and
will not, conflict with, infringe on or otherwise violate any rights of others.
7.25 Patents. Each CONMED Entity has patents or patent
applications (the "CONMED Patents") and copyrights (the "CONMED Copyrights")
registered in all jurisdictions necessary to evidence ownership thereof and to
permit such CONMED Entity to conduct its business in the way it is currently
conducted, or otherwise has all rights or licenses necessary to use the name.
The CONMED Patents and CONMED Copyrights are valid and in full force and effect
and are not subject to any taxes, maintenance fees or actions that have not been
currently paid. There has not been any interference, action or other judicial,
arbitration or other adversary proceeding concerning the CONMED Patents or the
CONMED Copyrights. The manufacture, use, or sale of the inventions, models,
designs and systems covered by the CONMED Patents or the CONMED Copyrights do
not violate or infringe on any patent or any proprietary or personal right of
any person, firm or corporation; and none of the CONMED Entities has infringed
or is now infringing on any patent or other right belonging to any person, firm
or corporation.
7.26 FDA Matters. The CONMED Entities are in full compliance
with all statutes, rules and regulations of the FDA with respect to
manufacturing, marketing and sale of all of its products. The CONMED Entities
have all requisite FDA permits, approvals or the like to sell or manufacture
such products. There are not be any pending or threatened actions or proceedings
by the FDA which would prohibit or impede the sale of any product currently
manufactured or sold by any of the CONMED Entities into any market.
7.27 Registration Statement and Proxy Statement. When the
Registration Statement or any post-effective amendment thereto shall become
effective, and at all times subsequent to such effectiveness up to and including
the Effective Time, such Registration Statement and the Prospectus/Proxy
Statement and all amendments or supplements thereto, with respect to the form
thereof and to all information set forth therein (other than relating to
Birtcher and the Birtcher Companies), (i) will comply in all material respects
with the requirements of the Securities Act and the Exchange Act, respectively,
and the rules and regulations of the SEC thereunder and (ii) will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein not misleading.
7.28 Truth of Warranties and Representations. All of the
representations and warranties of the CONMED Companies contained in this
Agreement shall be true as of the date of this Agreement and shall be deemed to
have been made again at and as of the Closing Date and the Effective Time, and
shall then be true in all respects.
7.29 Full Disclosure. None of the representations and
warranties made by the CONMED Companies, or made in any certificate or
memorandum furnished or to be furnished by the CONMED Companies, or on their
behalf, contains or will contain any untrue statement of material fact, or omits
any material fact the omission of which would be misleading.
ARTICLE VIII
CERTAIN COVENANTS AND AGREEMENTS
OF THE CORPORATIONS
8.01 Investigations and Operation of Business of Birtcher.
Between the date of this Agreement and the Effective Time:
(a) Birtcher agrees to give to CONMED and its representatives
and agents full access to all the premises and books and records of each of the
Birtcher Companies, to cause the appropriate executive officers and other key
management personnel of each of the Birtcher Companies on a daily basis to
inform, and consult with, their designated counterparts at CONMED regarding all
aspects of Birtcher's business and operations, and to cause their officers to
promptly furnish to CONMED such financial and operating data and other
information as CONMED shall from time to time request with respect to the
business and properties of each of the Birtcher Companies; provided, however,
that any such investigation (i) shall be conducted in such manner as not to
interfere unreasonably with the operation of the businesses of the Birtcher
Companies and (ii) shall not affect any of the representations and warranties
hereunder. In the event the Merger is not consummated, CONMED will return all
documents, work papers and other material obtained from the Birtcher Companies
and their independent accountants in connection with the transactions
contemplated hereby and will hold such material and business information derived
therefrom confidential unless and until such material or the information
contained therein becomes part of the public domain or is obtained from other
sources.
(b) Except as otherwise specifically set forth herein, the
Birtcher Companies will use their diligent efforts to:
(i) preserve intact the business organization of the
Birtcher Companies, to keep available the services of the present
officers and employees of the Birtcher Companies and to preserve the
present relationships of the Birtcher Companies with persons having
significant business relations therewith;
(ii) conduct their businesses only in accordance with prudent
business standards;
(iii) maintain and keep their properties and equipment in good
repair, working order and condition, except for ordinary wear and tear;
(iv) keep in full force and effect insurance comparable in
amount and scope of coverage to that now maintained by them;
(v) perform in all material respects all of their obligations
under all contracts and commitments applicable to their businesses or
properties;
(vi) maintain their books of account and records in the usual
and regular manner;
(vii)comply with all laws and regulations applicable to them
and to the conduct of their businesses; and
(viii) advise CONMED promptly in writing of any material
adverse change in the financial condition, results of operations,
business or prospects of any of the Birtcher Companies and any event
which could reasonably be expected to result in such a change.
(c) Except for the matters identified under Section 8.01 of
the Birtcher Disclosure Letter, none of the Birtcher Companies will without the
prior written consent of CONMED (which consent shall be given or withheld, as
the case may be, within three business days of CONMED's receipt of Birtcher's
written request therefor):
(i) issue or commit to issue any capital stock or other
ownership interest, other than pursuant to the exercise of the
outstanding Birtcher Options;
(ii) grant, commit to grant, or amend any options, warrants,
convertible securities or other rights to subscribe for, purchase or
otherwise acquire any shares of its capital stock or other ownership
interest;
(iii) declare, set aside, or pay any dividend or distribution
with respect to the capital stock or other ownership interest of any of
the Birtcher Companies;
(iv) directly or indirectly redeem, purchase or otherwise
acquire or commit to acquire any capital stock or other ownership
interest of any of the Birtcher Companies or directly or indirectly
terminate or reduce or commit to terminate or reduce any bank line of
credit or the availability of any funds under any other loan or
financing agreement, except as specifically required by the terms of
such indebtedness;
(v) effect a split or reclassification of any capital stock of
any of the Birtcher Companies or a recapitalization of any of the
Birtcher Companies;
(vi) change the certificates or articles of incorporation,
bylaws or other governing instruments of any of the Birtcher Companies;
(vii)enter into any license agreement, or any research and
development agreements;
(viii) enter into any employment, consulting, agency,
distribution or service agreement, contract or commitment with any
person, or modify or cancel any such agreement, commitment or contract
in effect on the date hereof, containing an obligation to pay or accrue
any sum of money, provided that the foregoing restriction shall not
apply to any hiring by the Birtcher Companies of persons to replace
employees who have left the employ of such Birtcher Company in which no
employment agreement specifying a minimum term of employment is entered
into with such person;
(ix) enter into, modify or cancel, any agreement, contract or
commitment relating to capital expenditures containing an obligation to
pay or accrue any sum of money;
(x) enter into, modify or cancel, any agreement, contract,
indenture or other instrument relating to the borrowing of money or
other contracting or payment of indebtedness or the guarantee of any
obligation for the borrowing of money or other contracting or payment
of indebtedness;
(xi) enter into, modify or cancel, any lease of real or
personal property having a term of more than one year or containing an
obligation to pay or accrue any sum of money;
(xii) enter into, modify or cancel, any agreement contract or
commitment relating to the disposition or acquisition of any interest
in any business enterprise;
(xiii) enter into, modify or cancel any other agreement,
contract or commitment of any of the Birtcher Companies which is not
terminable without payment of any sum of money by such Birtcher
Company;
(xiv) merge or consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or
otherwise acquire, any business or any business organization or
division thereof, other than in connection with the Merger contemplated
hereby, or in accordance with Section 11.01(e) below;
(xv) amend any Benefit Plan, except as required by law or as
contemplated by this Agreement;
(xvi) settle or compromise any litigation involving a Birtcher
Company;
(xvii) voluntarily take any action which will result in the
representations contained in Article VI not being true and correct at
the Closing Date or Effective Time; or
(xviii) undertake any action or fail to take any action,
either of which may reasonably be expected to have an adverse effect on
the financial position of any of the Birtcher Companies.
(d) CONMED and Birtcher, as the case may be, shall promptly
notify the other of any action or inaction on the part of either of them or any
other person which shall render inaccurate any of the respective representations
and warranties contained herein.
8.02 Third Party Consents. Each Corporation shall use its
diligent efforts to obtain the respective consents or approvals of each third
party whose consent or approval is required for the consummation by the
Corporations of the transactions contemplated hereby.
8.03 Amendments of Prospectus/Proxy Statement. Each of CONMED
and Birtcher, promptly after becoming aware of any statement or omission which
renders its representation and warranty set forth in Sections 6.33 and 7.27,
respectively, not true and correct, will, after consultation with the other
party, amend, supplement or revise the Registration Statement and the definitive
Prospectus/Proxy Statement (and promptly furnish such amendment, supplement or
revision to the other party) to make such representation and warranty true and
correct in all material respects at all times up to and including the Effective
Time.
8.04 Additional Financial Statements. Prior to the Mailing
Date, within 20 days after the end of each calendar month Birtcher shall furnish
to CONMED its interim financial statements for each month ending prior to the
Effective Date. Not less than ten business days prior to the filing date of the
Registration Statement, CONMED may require Birtcher to use its best efforts to
cause Ernst & Young, L.L.P. to deliver to CONMED a report which shall contain
such data and analysis with respect to certain amounts, percentages, numerical
data and other financial information pertaining to the Birtcher Companies as set
forth in such interim financial statements, such report to contain such
financial information and related comfort of the type that is customary in
comfort letters delivered to an issuer or its underwriter in connection with the
offering or sale of securities of an underwritten offering of securities of such
issuer.
8.05 Consummation of the Merger. The Birtcher Companies will
not, directly or indirectly, initiate contact with, invite or solicit any person
or entity in an effort to solicit any takeover proposal, nor will the Birtcher
Companies authorize any officer, director or employee of any Birtcher Company,
or any investment banker, attorney, accountant or any representative retained by
the Birtcher Companies, to directly or indirectly initiate any such contact. As
used in this Section 8.05, "takeover proposal" shall mean any proposal for a
merger or other business combination involving any of the Birtcher Companies or
for the acquisition of a substantial equity interest in the Birtcher Companies
or a substantial portion of any of the Birtcher Companies' assets other than the
one contemplated by this Agreement. The Birtcher Companies will not cooperate or
negotiate with, or furnish or cause to be furnished any non-public information
concerning its business, properties or assets to, any person or entity in
connection with any takeover proposal unless (i) such person or entity makes a
bona fide written proposal with a reasonable probability of success that in the
good faith judgment of the Birtcher Board of Directors (after consultation with
Birtcher's financial advisor) is more favorable to the shareholders of Birtcher
than the Merger and (ii) the Birtcher Board of Directors determines that to
refuse to do so would violate such board's fiduciary duty to such shareholders.
The Birtcher Companies shall promptly notify CONMED orally of, and confirm in
writing, all relevant details relating to any takeover proposal which it may
receive. The Corporations will use their diligent efforts to consummate the
Merger by no later than March 1, 1995.
8.06 Listing of CONMED Common Stock. CONMED shall use its
diligent efforts to obtain, prior to the Closing Date, approval for the listing
on the NMS, subject to official notice of issuance, of the shares of CONMED
Common Stock and the CONMED Common Stock issuable by CONMED by reason of
assumption by CONMED of the Birtcher Options under Section 2.03 of this
Agreement.
8.07 Filings and Approvals. There shall have been obtained any
and all material permits, approvals and consents of securities or "blue sky"
commissions or other agencies or commissions of any jurisdiction that are
necessary so that the consummation of the Merger and the transactions
contemplated thereby will be in compliance with applicable laws.
8.08 Corporate Action. Each Corporation shall, prior to the
Effective Time, take all necessary action to perform its obligations under this
Agreement.
8.09 Adjustments of CONMED Common Stock. The conversion ratios
set forth herein are expressed to give effect to the three-for-two stock split
in the form of a stock dividend declared by the CONMED Board of Directors with
respect to CONMED Common Stock, payable on December 27, 1994 to shareholders of
record as of December 8, 1994. If CONMED shall further effect a split,
consolidation or reclassification of CONMED Common Stock outstanding after the
date hereof but before the Effective Time, holders of the Birtcher Capital Stock
shall have the right to receive in the Merger, and holders of Birtcher Options
shall be entitled to purchase, such number of shares of CONMED Common Stock as
they would have been entitled to receive or purchase, as the case may be, upon
such split, consolidation or reclassification had the Merger been effective
immediately prior to such split, consolidation or reclassification.
8.10 Cooperation; Satisfaction of Conditions. The Corporations
shall (a) give assistance, to the extent within their control, to each other in
the preparation of required filings and the seeking of required approvals in any
manner reasonably requested and (b) use their diligent efforts to pursue, to the
extent within their control, the satisfaction of all other conditions to the
consummation of the Merger. Upon the fulfillment of all the conditions precedent
to the obligations of the Corporations contained herein, the Corporations will,
forthwith cause to be executed and filed the Certified Agreement with the
Secretary of State of California with respect to the Merger.
8.11 Environmental Site Assessments. The CONMED Companies (by
their officers, employees and agents) at any time and from time to time may, but
shall not have the obligation to, contract for the services of persons (the
"Site Reviewers") to perform environmental site assessments ("Site Assessments")
on the Birtcher Real Property and the Birtcher Leased Real Property for the
purpose of determining whether there exists on the Birtcher Real Property or the
Birtcher Leased Real Property any environmental condition which could reasonably
be expected to result in any liability, cost or expense to the owner, occupier
or operator of such property arising under any state, federal or local law, rule
or regulation relating to Hazardous Substances, as defined in Section 6.30
hereof. The Site Assessments may be performed at any time or times, upon
reasonable notice, and under reasonable conditions established by Birtcher which
do not impede the performance of the Site Assessments. The Site Reviewers are
hereby authorized to enter upon the Birtcher Real Property and the Birtcher
Leased Real Property for such purposes. The Site Reviewers are further
authorized to perform both above and below the ground testing for environmental
damage or the presence of Hazardous Materials on the Birtcher Real Property and
the Birtcher Leased Real Property and such other tests on the Birtcher Real
Property and the Birtcher Leased Real Property as may be necessary to conduct
the Site Assessments in the reasonable opinion of the Site Reviewers. The
Birtcher Companies will supply to the Site Reviewers such historical and
operational information regarding Birtcher's activities on the Birtcher Real
Property and the Birtcher Leased Real Property as may be reasonably requested by
the Site Reviewers to facilitate the Site Assessments and will make available
for meetings with the Site Reviewers appropriate personnel having knowledge of
such matters. On request, the CONMED Companies shall make the results of such
Site Assessments fully available to Birtcher, which may at its election
participate under reasonable procedures in the direction of such Site
Assessments and the description of tasks of the Site Reviewers. The cost of
performing such Site Assessments shall be paid by CONMED. Regardless of whether
CONMED elects to have the Site Assessments performed, there shall be no effect
on the representation and warranty of Birtcher contained in Section 6.30 herein.
CONMED agrees that all Site Assessments shall be required to be completed no
later than December 31, 1994.
ARTICLE IX
CONDITIONS OF MERGER
9.01 Conditions of Obligations of the CONMED Companies. The
obligations of the CONMED Companies to effect the Merger shall be subject to the
following conditions:
(a) Representations and Warranties of Birtcher to be True;
Performance by Birtcher. The representations and warranties of Birtcher herein
contained shall be true and correct in all material respects at the Closing Date
with the same effect as though made at such time (except insofar as such
representations and warranties are given as of a particular date) except to the
extent waived hereunder or affected by the transactions contemplated or
permitted herein; the Birtcher Companies shall have performed in all material
respects all obligations and complied in all material respects with all
covenants and conditions required by this Agreement to be performed or complied
with by them at or prior to the Closing Date; and Birtcher shall have delivered
to CONMED a certificate of Birtcher in form and substance satisfactory to
CONMED, dated the Closing Date and signed by Birtcher's President, to the
knowledge of such officer after due inquiry, to all such effects.
(b) Registration and Listing of CONMED Common Stock. The
Registration Statement shall be effective under the Securities Act and other
applicable securities laws and shall not be the subject of any "stop order" or
threatened "stop order"; and the NASD shall have approved for listing, subject
to official notice of issuance, the shares of CONMED Common Stock and the shares
of CONMED Common Stock issuable by CONMED under the Birtcher Options to be
assumed pursuant to Section 2.03 of this Agreement.
(c) Approvals. The Birtcher Approval shall have occurred.
(d) No Legal Proceedings. No injunction shall have been
obtained, or no suit, action or other proceeding shall be pending before any
court or governmental agency, in which it is sought to restrain or prohibit the
consummation of the transactions contemplated hereby, or in which it is sought
to obtain damages in connection therewith, or involving a claim that the
consummation of the transactions contemplated hereby would result in a violation
of any law, decree or regulation of any government or agency thereof having
jurisdiction, which suit, action or other proceeding would, in the opinion of
independent counsel, acceptable to both parties, have a substantial likelihood
of success. There shall not have been enacted, voted or promulgated by any
legislative or administrative body having jurisdiction any legislation, ruling
or decree which in the reasonable judgment of CONMED would be materially
prejudicial to CONMED or Birtcher with respect to the transactions contemplated
by this Agreement.
(e) Comfort Letters of Ernst & Young. If requested by CONMED,
Ernst & Young, L.L.P. shall furnish CONMED with letters, dated the Mailing Date
and the Closing Date, in form and substance satisfactory to CONMED, with respect
to certain financial information regarding Birtcher in the form customarily
issued by accountants at such time in transactions of this type.
(f) Statutory Requirements. All statutory requirements for the
valid consummation by Birtcher of the transactions contemplated by this
Agreement shall have been fulfilled; all authorizations, consents and approvals
of all federal, state and local governmental agencies and authorities required
to be obtained in order to permit consummation by Birtcher of the transactions
contemplated by this Agreement and to permit the businesses presently carried on
by the Birtcher Companies to continue unimpaired immediately following the
Effective Time shall have been obtained and shall be in full force and effect.
(g) Opinion of Counsel of Birtcher. If requested by CONMED,
Riordan & McKinzie, counsel for Birtcher, shall provide to CONMED an opinion,
dated the Closing Date, as to the authorization, execution and delivery of this
Agreement, the effectiveness of the Merger, the receipt of all necessary
consents and approvals and such other matters as are usual and customary in
transactions similar to the Merger and is satisfactory to CONMED's counsel.
(h) Required Consents. Birtcher shall have obtained the
consent or approval of each person listed in the Birtcher Disclosure Letter
pursuant to Section 6.23 and CONMED shall have obtained the consent of each of
its lenders required under the terms of any applicable debt instruments related
to outstanding indebtedness as of the Closing Date.
(i) Legend. The transfer agent for CONMED Common Stock shall
have been instructed to place the following legend on each share certificate
representing shares of such stock issued to each shareholder of Birtcher who
under Rule 145 under the Securities Act may be deemed to be an affiliate of
Birtcher immediately prior to the Merger:
"The sale of the shares represented by this certificate is not
permitted unless effected in accordance with an exemption from
the registration requirements of the Securities Act of 1933,
as amended."
(j) Affiliate Agreements. Each Birtcher Affiliate who owns
shares of Birtcher Capital Stock at the Effective Time shall have entered into
an agreement in a form satisfactory to counsel for CONMED regarding such
Birtcher Affiliate's holding and sale of CONMED Common Stock received as a
result of the Merger and agreeing that in no event will any CONMED Common Stock
be sold, except in compliance with the applicable provisions of the Securities
Act and rules and regulations promulgated thereunder. CONMED shall not be
required to maintain the effectiveness of the Registration Statement for the
purpose of allowing resale of CONMED Common Stock by persons who may be
"affiliates" of Birtcher under Rule 145 promulgated under the Securities Act.
(k) Resignations of Directors and Officers. There shall have
been delivered to CONMED the immediately effective written resignations of all
of the directors of Birtcher and the Birtcher Companies and such officers of
Birtcher and the Birtcher Companies as CONMED shall request.
(l) Insurance. Birtcher shall have in full force and effect
policies of insurance from underwriters reasonably acceptable to CONMED covering
general liability, product liability, automobile liability and professional
liability providing coverage for such liabilities (i) in an amount at least
equal to the coverage available to Birtcher as of June 30, 1994 and (ii) through
at least June 30, 1995 other than insurance covering acts or omissions of
officers or directors of Birtcher.
(m) No Material Adverse Change. Except for matters of a
general economic or political nature, no event or series of events shall have
occurred between September 30, 1994 and the Closing Date, the effect of which is
or may reasonably be expected to be materially adverse to the business or
financial condition of any of the Birtcher Companies taken as a whole other than
the information already disclosed to CONMED by Birtcher pursuant to this
Agreement. As of the date of this Agreement, Birtcher is not aware of any such
event or series of events which would represent such a change from the
information already disclosed.
(n) Other Documents. CONMED shall have received from Birtcher
such other documents as it shall have reasonably requested.
(o) Corporate Approval. The execution and delivery of this
Agreement by Birtcher and the performance of its covenants and obligations under
it, shall have been duly authorized by all necessary corporate action, and
CONMED shall have received a copy of all resolutions of the Birtcher Board of
Directors pertaining to that authorization, certified by the secretary or
assistant secretary of Birtcher. Promptly upon the Birtcher Approval, CONMED
shall be furnished a copy of the resolutions adopted at the Birtcher
Shareholders' Meeting, certified by the secretary or assistant secretary of
Birtcher.
(p) Benefit Plans. All of the Benefit Plans shall have been
terminated on or prior to the Closing Date without any liability to Birtcher or
CONMED, except as disclosed in the Birtcher Disclosure Letter.
(q) Approval of Documents. The form and substance of all
certificates, instruments, opinions and other documents delivered to CONMED
under this Agreement shall be satisfactory in all reasonable respects to CONMED
and its counsel.
(r) Appraisal Rights. Holders of not more than 10% of the
Birtcher Common Stock and holders of not more than 20% of the Birtcher Preferred
Stock shall have exercised any appraisal or dissenter's rights to which they may
be entitled under the California Act.
To the extent permitted by applicable law or the terms of any agreement, CONMED
may waive any or all of the foregoing conditions in whole or in part only in
writing but without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by CONMED of any other conditions or of its
other rights or remedies, at law or in equity, if Birtcher shall be in default
of any of its representations, warranties or covenants under this Agreement.
9.02 Conditions of Obligations of Birtcher. The obligations of
Birtcher to effect the Merger shall be subject to the following conditions:
(a) Representations and Warranties of the CONMED Companies to
be True; Performance by CONMED Companies. The representations and warranties of
the CONMED Companies herein contained shall be true and correct in all material
respects at the Closing Date with the same effect as though made at such time
(except insofar as such representations and warranties are given as of a
particular date), except to the extent waived hereunder or affected by the
transactions contemplated or permitted herein; each CONMED Company shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with it prior to the Closing Date; and each CONMED Company
shall have delivered to Birtcher a certificate of each such CONMED Company in
form and substance satisfactory to Birtcher, dated the Closing Date and signed
by the President of each CONMED Company, to the knowledge of such officer after
due inquiry, to all such effects.
(b) Registration and Listing of CONMED Common Stock. The
Registration Statement shall be effective under the Securities Act and other
applicable securities laws and shall not be the subject of any "stop order" or
threatened "stop order"; and the NASD shall have approved for listing, subject
to official notice of issuance, the shares of CONMED Common Stock and the shares
of CONMED Common Stock issuable by CONMED under the Birtcher Options to be
assumed pursuant to Section 2.03 of this Agreement.
(c) Approvals. The Birtcher Approval and the CONMED Approval
shall have each occurred.
(d) No Legal Proceedings. No injunction shall have been
obtained, or no suit, action or other proceeding shall be pending before any
court or governmental agency, in which it is sought to restrain or prohibit the
consummation of the transactions contemplated hereby, or in which it is sought
to obtain damages in connection therewith, or involving a claim that the
consummation of the transactions contemplated hereby would result in a violation
of any law, decree or regulation of any government or agency thereof having
jurisdiction, which suit, action or other proceeding would in the opinion of
independent counsel, acceptable to both parties, have a substantial likelihood
of success. There shall have not been enacted, voted or promulgated by any
legislative or administrative body having jurisdiction any legislation, ruling
or decree which in the reasonable judgment of Birtcher would be materially
prejudicial to CONMED or Birtcher with respect to the transactions contemplated
by this Agreement.
(e) Statutory Requirements. All statutory requirements for the
valid consummation by the CONMED Companies of the transactions contemplated by
the Agreement shall have been fulfilled; all authorizations, consents and
approvals of all federal, state and local governmental agencies and authorities
required to be obtained in order to permit consummation by the CONMED Companies
of the transactions contemplated by this Agreement shall have been obtained and
shall be in full force and effect.
(f) No Material Adverse Change. Except for matters of a
general economic or political nature, no event or series of events shall have
occurred between October 31, 1994 and the Closing Date, the effect of which is
or may reasonably be expected to be materially adverse to the business or
financial condition of either of the CONMED Companies taken as a whole other
than the information already disclosed to Birtcher by the CONMED Companies
pursuant to this Agreement. As of the date of this Agreement, CONMED is not
aware of any such event or series of events which would represent such a change
from the information already disclosed.
(g) Corporate Approval. The execution and delivery of this
Agreement by each CONMED Company and the performance of its covenants and
obligation under it, shall have been duly authorized by all necessary corporate
action, and Birtcher shall have received a copy of all resolutions of the Board
of Directors of each CONMED Company and the resolutions of the Board of
Directors of each CONMED Company and the resolutions of the sole stockholder of
Subsidiary pertaining to that authorization, certified by the secretary or
assistant secretary of each CONMED Company.
(h) Approval of Documents. The form and substance of all
certificate, instruments, opinions and other documents delivered to Birtcher
under this Agreement shall be satisfactory (in their reasonable discretion) in
all reasonable respects to Birtcher and its counsel.
To the extent permitted by applicable law or the terms of any agreement,
Birtcher may waive any or all of the foregoing conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Birtcher of any other condition or of its other
rights or remedies, at law or in equity, if a CONMED Company shall be in default
of any of its representations, warranties or covenants under this Agreement.
ARTICLE X
INDEMNIFICATION; SURVIVAL
SECTION 10.01 Indemnification; Directors' and Officers'
Insurance. (a) For a period of three years from and after the Effective Time,
CONMED agrees to indemnify and advance costs and expenses (including reasonable
attorney fees, disbursements and expenses) and hold harmless each present and
former director and officer of Birtcher or its subsidiaries and each officer or
employee of Birtcher or its subsidiaries that is serving or has served as a
director of another entity expressly at Birtcher's request or direction,
determined as of the Effective Time (the "Indemnified Parties"), against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, settlements or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time, to the fullest extent that Birtcher would have been permitted under
California law and its articles of incorporation or by-laws in effect on the
date hereof to indemnify such person (and also advance expenses as incurred to
the fullest extent permitted under applicable law provided the person to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such person is not entitled to indemnification);
provided that any determination required by law to be made with respect to
whether an officer's or director's conduct complies with the standards set forth
under California law and Birtcher's articles of incorporation and by-laws shall
be made by independent counsel selected by the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification
under Section 10.1(a), upon learning of any such claim, action, suit, proceeding
or investigation, shall promptly notify CONMED thereof, but the failure to so
notify shall not relieve CONMED of any liability it may have to such Indemnified
Party if such failure does not materially prejudice the indemnifying party. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time) other than such as is described in
the Birtcher Statements, (i) CONMED shall have the right to assume the defense
thereof and CONMED shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that if
CONMED elects not to assume such defense or counsel for the Indemnified Parties
advises that there are issues which raise conflicts of interest between CONMED
and the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and CONMED shall pay the reasonable fees and expenses of
such counsel for the Indemnified Parties promptly as statements therefor are
received; provided, however, that CONMED shall be obligated pursuant to this
paragraph (b) to pay for only one firm of counsel for all Indemnified Parties in
any jurisdiction unless the use of one counsel for such Indemnified Parties
would present such counsel with a conflict of interest, (ii) the Indemnified
Parties will cooperate in the defense of any such matter and (iii) CONMED shall
not be liable for any settlement effected without its prior written consent
which shall not be unreasonably withheld; and provided further that CONMED shall
not have any obligation hereunder to any Indemnified Party when and if a court
of competent jurisdiction shall ultimately determine, and such determination
shall have become final and nonappealable, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
(c) For a period of three years after the Effective Time,
CONMED shall use all reasonable efforts to cause to be maintained in effect the
current policies of directors' and officers' liability insurance maintained by
Birtcher (provided that CONMED may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are
substantially no less advantageous to such directors and officers) with respect
to claims arising from facts or events which occurred before the Effective Time;
provided, however, that in no event shall CONMED be obligated to expend, in
order to maintain or provide insurance coverage pursuant to this Subsection
10.1(c), any amount per annum in excess of 200% of the amount of the annual
premiums paid as of the date hereof by Birtcher for such insurance (the "Maximum
Amount"). If the amount of the annual premiums necessary to maintain or procure
such insurance coverage exceeds the Maximum Amount, CONMED shall use all
reasonable efforts to maintain the most advantageous policies of directors' and
officers' insurance obtainable for an annual premium equal to the Maximum
Amount.
10.02 Survival of Representations and Warranties. All of the
representations and warranties made by any of the Corporations as contained in
Articles VI and VII hereof, except as otherwise specifically provided,
notwithstanding any investigation made by or on behalf of any of the
Corporations, shall expire immediately after the Closing.
ARTICLE XI
TERMINATION OF OBLIGATIONS AND WAIVERS
OF CONDITIONS; PAYMENT OF EXPENSES
11.01 Termination of Agreement and Abandonment of Merger.
Anything herein to the contrary notwithstanding, this Agreement and the Merger
contemplated hereby may be terminated at any time before the Effective Date,
whether before or after the Birtcher Approval or the CONMED Approval, as
follows, and in no other manner:
(a) Mutual Consent. By mutual written consent of Birtcher and
the CONMED Companies.
(b) Expiration Date. By either Birtcher or the CONMED
Companies if the Merger shall not have become effective by September 30, 1995
(which date may be extended by mutual agreement of the Corporations); provided,
however, that the Corporation seeking to terminate shall be in compliance with
Section 8.10.
(c) CONMED Companies' Option. By the Board of Directors of any
CONMED Company at any time after March 1, 1995, if, by that date, the conditions
set forth in Section 9.01 hereof shall not have been met.
(d) Birtcher's Option upon Non-Satisfaction of Conditions. By
the Board of Directors of Birtcher at any time after September 30, 1995, if, by
that date, the conditions set forth in Section 9.02 hereof shall not have been
met.
(e) Birtcher's or CONMED's Option upon Payment of Break-up
Fee. Notwithstanding any other provision of this agreement, Birtcher shall have
the right to consider bona fide written proposals with a reasonable probability
of success from other responsible entities or individuals concerning the sale of
all or a substantial part of Birtcher's stock, assets, business operations or
the like that are fully financed and in good faith judgment of the Birtcher
Board of Directors (after consultation with Birtcher's financial advisor) that
are more favorable to the shareholders of Birtcher than the Merger (such
potential transaction being hereinafter referred to as a "Birtcher Sale").
Notwithstanding anything to the contrary contained herein, Birtcher or CONMED
may terminate this Agreement and Birtcher may pursue such a Birtcher Sale
provided that concurrent with the earlier of such termination or prior to the
execution of any letter of intent or definitive documentation with respect to
such Birtcher Sale, Birtcher shall pay or cause to be paid (by the other party
to the Birtcher Sale or otherwise) to CONMED a cash fee of $1,000,000 as
liquidated damages in consideration for CONMED's time and internal and third
party costs and expenses associated therewith.
(f) CONMED Companies' Option upon Bankruptcy, Foreclosure or
Acceleration of Indebtedness. By the Board of Directors of any CONMED Company if
(i) there shall have been (a) the appointment or a receiver, trustee, custodian
or liquidator of any Birtcher Company or any of their respective properties, (b)
a general assignment for the benefit of creditors with respect to any Birtcher
Company, (c) with respect to any Birtcher Company, any filing of a voluntary or
involuntary petition in bankruptcy, seeking reorganization, or to effect a plan
or other arrangement with creditors or any other relief under the Bankruptcy
Reform Act, Title 11 of the United States Code, as amended or recodified from
time to time, or any other applicable state or federal law relating to
bankruptcy, reorganization, arrangement or any other relief to debtors, or (d)
an adjudication of bankruptcy with respect to any Birtcher Company, (ii) there
shall have been instituted any foreclosure proceeding with respect to any
material property or material asset of any Birtcher Company, or (iii) there
shall have been an acceleration of the amounts due or a demand for payment with
respect to the amounts payable under any indebtedness for money borrowed of any
Birtcher Company.
11.02 Payment of Expenses; Waiver of Conditions. In the event
that this Agreement shall be terminated pursuant to Section 11.01, all
obligations of the Corporations hereto under this Agreement shall terminate upon
termination of this Agreement (except the obligation to pay the fee set forth in
Section 11.01(e) and (f)) and there shall be no liability of any Corporation to
another (except by reason of default hereunder which has not been waived).
Absent such default, each Corporation will pay all costs and expenses incident
to its negotiation and preparation of this Agreement and all documents in
connection therewith and to its performance of and compliance with all
agreements and conditions contained herein or therein on its part to be
performed or complied with, including the fees, expenses and disbursements of
its counsel, its auditors and its investment bankers, provided, however, that
the cost of printing this Agreement and the Registration Statement, including
the Prospectus and definitive Proxy Statement, and any fees and expenses paid
for solicitation of proxies in connection with the Birtcher Shareholders'
Meeting, shall be borne equally by CONMED and Birtcher. If any of the conditions
specified in Section 9.01 has not been satisfied, to the extent permitted by
applicable law or the terms of any agreement, the CONMED Companies may
nevertheless at their election proceed with the transactions contemplated hereby
and, if any of the conditions specified in Section 9.02 has not been satisfied,
to the extent permitted by applicable law or the terms of any agreement,
Birtcher may nevertheless at its election proceed with the transactions
contemplated hereby. Any such election to proceed shall be evidenced by a
certificate executed on behalf of the electing party by its President.
11.03 Specific Performance. Each Corporation's obligations
under this Agreement are unique. If any Corporation should default in its
obligations under this Agreement, the Corporations each acknowledge that it
would be extremely impracticable to measure the resulting damages; accordingly,
the non-defaulting Corporation, in addition to any other available rights or
remedies, may sue in equity for specific performance, and the Corporations each
expressly waive the defense that a remedy in damage will be adequate.
Notwithstanding any breach or default by any of the Corporations of any of their
respective representations, warranties, covenants or agreements under this
Agreement, if the purchase and sale contemplated by it shall be consummated at
the Closing, each of the Corporations waives any rights that it may have to
rescind this Agreement or the transaction consummated by it; provided, however,
this waiver shall not effect any other rights or remedies available to the
Corporations under this Agreement or under the law.
ARTICLE XII
GENERAL
12.01 Amendments. Subject to applicable law, this Agreement
and any schedule and exhibit attached hereto, may be amended by an instrument in
writing signed by an authorized officer of each of the Corporations hereto upon
authorization by the Boards of Directors of the Corporations hereto before or
after the Birtcher Shareholders' Meeting at any time prior to the Effective
Time.
12.02 Schedules. Each Schedule delivered pursuant to the terms
of this Agreement is in writing and has been initialed by the Chairman of the
Board, the President or one of the Vice Presidents of the delivering
Corporation.
12.03 Further Instruments. Each Corporation agrees to execute
and deliver such instruments and take such other action as shall be reasonably
required, or as shall be reasonably requested by any other Corporation, in order
to carry out the transactions, agreements and covenants contemplated in this
Agreement, at or prior to the Effective Date.
12.04 Employee Benefits. Following the Merger, each of the
employees of Birtcher or any of the Birtcher Companies who continues to be
employed by CONMED or any of the CONMED Companies shall be entitled to receive
such benefits, including but not limited to health insurance and participation
in stock option and pension plans, as are from time to time generally available
to employees of the CONMED Companies of similar position or responsibility. Any
employee of Birtcher or any Birtcher Company who continues to be employed by
CONMED shall be credited for any service with Birtcher or such Birtcher Company
under any CONMED benefit plan, except that the date of commencement of service
with respect to any defined benefit or pension plan shall be the Closing Date.
12.05 Publicity. CONMED and Birtcher agree that all press
releases, announcements and other publicity concerning this Agreement and the
Merger shall be subject to the prior approval of both of them; provided,
however, that one party shall be permitted to issue a press release if in the
opinion of counsel to such party such press release is required in order to
maintain compliance with applicable federal or state laws or NASD rules or
by-laws so long as the press release is contemporaneously given to the other
party.
12.06 Brokerage Commissions and Other Fees. Birtcher hereby
represents and warrants that Birtcher has not incurred any liability for, and
does not know of any person or entity entitled to, any commission or finder's
fee in connection with this Agreement or the transactions contemplated herein,
other than the financial advisor retained by Birtcher to render a fairness
opinion in connection with the Merger. The CONMED Companies hereby represent and
warrant that the CONMED Companies have not incurred any liability for, and do
not know of any person or entity entitled to, any commission or finder's fee in
connection with this Agreement or the transactions contemplated herein.
12.07 Governing Law. This Agreement and the legal relations
between the Corporations shall be governing by and construed in accordance with
the laws of the State of New York.
12.08 Notices. Any notices or other communications required or
permitted hereunder shall be written and shall be deemed sufficiently given if
delivered personally or sent by registered mail or certified mail, postage
prepared, return receipt requested (such mailed notice to be effective on the
date such receipt is acknowledged) as follows:
If to the CONMED Companies:
CONMED Corporation
310 Broad Street
Utica, New York 13501
Attention: Eugene R. Corasanti
Chairman of the Board, Chief
Executive Officer and President
Copy to:
Robert E. Remmell
Steates Remmell Steates & Dziekan
Bankers Trust Building
185 Genesee Street
Utica, New York 13501
If to Birtcher:
Birtcher Medical Systems, Inc.
50 Technology Drive
Irvine, California 92718
Attention: David B. Jones
Chairman of the Board and
Chief Financial Officer
Copy to:
James W. Loss
Riordan & McKinzie
611 Anton Boulevard
Suite 1160
Costa Mesa, CA
or such other address as shall be furnished in writing by any of the parties.
12.09 No Assignment. This Agreement may not be assigned by
operation of law or otherwise.
12.10 Headings. The descriptive headings of the several
Articles, Sections and paragraphs of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
12.11 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the Corporations hereto and delivered to each of the other Corporations
hereto.
12.12 Waivers. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making the
waiver.
12.13 Costs. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing Corporation or Corporations shall
be entitled to recover reasonable attorneys' fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled.
12.14 Severability. If any provision of this Agreement shall,
for any reason, be held violative of any applicable law, and so much of said
Agreement is held to be unenforceable, then the invalidity of such specific
provision herein shall not be held to invalidate any other provision herein
which shall remain in full force and effect.
IN WITNESS WHEREOF, the Corporations have duly executed this
Agreement as of the date first above written.
CONMED CORPORATION
By: /s/ Eugene R. Corasanti
Eugene R. Corasanti,
Chairman of the Board,
Chief Executive Officer
and President
CONMED ACQUISITION CORPORATION
By: /s/ Eugene R. Corasanti
Eugene R. Corasanti,
Chairman of the Board,
Chief Executive Officer
and President
BIRTCHER MEDICAL SYSTEMS, INC.
By: /s/ David B. Jones
David B. Jones, Chairman of
the Board and Chief
Financial Officer
By: /s/ Kenneth C. Cleveland
Kenneth C. Cleveland
President and Chief
Executive Officer
CREDIT AGREEMENT - TERM LOAN FACILITY
dated as of March 8, 1995
among
CONMED CORPORATION
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS
Section 1.01 Definitions
Section 1.02 Accounting Terms
ARTICLE 2 THE CREDIT
Section 2.01 The Loans
Section 2.02 The Notes
Section 2.03 Purpose
Section 2.04 Borrowing Procedures
Section 2.05 Prepayments and Conversions
Section 2.06 Mandatory Prepayments
Section 2.07 Fixed Rate Loans - Interest Periods; Renewals
Section 2.08 Certain Notices
Section 2.09 Minimum Amounts
Section 2.10 Interest
Section 2.11 Fees
Section 2.12 Payments Generally
Section 2.13 Late Payment Fees
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs
Section 3.02 Limitation on Types of Loans
Section 3.03 Illegality
Section 3.04 Certain Conversions
Section 3.05 Certain Compensation
Section 3.06 HLT Classification
ARTICLE 4 COLLATERAL SECURITY
Section 4.01 Security
Section 4.02 Setoff
Section 4.03 Guaranties
ARTICLE 5 CONDITIONS PRECEDENT
Section 5.01 Documentary Conditions Precedent
Section 5.02 Additional Conditions Precedent
Section 5.03 Closing of the Acquisitions
Section 5.04 Deemed Representations
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
Section 6.01 Incorporation, Good Standing and
Due Qualification
Section 6.02 Corporate Power and Authority;
No Conflicts
Section 6.03 Legally Enforceable Agreements
Section 6.04 Litigation
Section 6.05 Financial Statements
Section 6.06 Ownership and Liens
Section 6.07 Taxes
Section 6.08 ERISA
Section 6.09 Subsidiaries and Ownership of Stock
Section 6.10 Credit Arrangements
Section 6.11 Operation of Business
Section 6.12 Hazardous Materials
Section 6.13 No Default on Outstanding Judgments
or Orders
Section 6.14 No Defaults on Other Agreements
Section 6.15 Labor Disputes and Acts of God
Section 6.16 Governmental Regulation
Section 6.17 Partnerships
Section 6.18 No Forfeiture
Section 6.19 Solvency
Section 6.20 Cash Available
ARTICLE 7 AFFIRMATIVE COVENANTS 30
Section 7.01 Maintenance of Existence
Section 7.02 Conduct of Business
Section 7.03 Maintenance of Properties
Section 7.04 Maintenance of Records
Section 7.05 Maintenance of Insurance
Section 7.06 Compliance with Laws
Section 7.07 Right of Inspection
Section 7.08 Reporting Requirements
Section 7.09 Guaranties
ARTICLE 8 NEGATIVE COVENANTS
Section 8.01 Debt
Section 8.02 Guaranties, Etc.
Section 8.03 Liens
Section 8.04 Leases
Section 8.05 Loans; Investments
Section 8.06 Dividends
Section 8.07 Sale of Assets
Section 8.08 Stock of Subsidiaries, Etc
Section 8.09 Transactions with Affiliates
Section 8.10 Mergers, Etc
Section 8.11 Acquisitions
Section 8.12 No Activities Leading to Forfeiture
Section 8.13 New Businesses
ARTICLE 9 FINANCIAL COVENANTS
Section 9.01 Minimum Working Capital
Section 9.02 Minimum Tangible Net Worth
Section 9.03 Leverage Ratio
Section 9.04 Cash Flow Coverage Ratio
Section 9.05 Limitation on Debt
ARTICLE 10 EVENTS OF DEFAULT
Section 10.01 Events of Default
Section 10.02 Remedies
ARTICLE 11 THE AGENT; RELATIONS AMONG BANKS AND BORROWER
Section 11.01 Appointment, Powers and Immunities
of Agent
Section 11.02 Reliance by Agent
Section 11.03 Defaults
Section 11.04 Rights of Agent as a Bank
Section 11.05 Indemnification of Agent
Section 11.06 Documents
Section 11.07 Non-Reliance on Agent and Other Banks
Section 11.08 Failure of Agent to Act
Section 11.09 Resignation or Removal of Agent
Section 11.10 Amendments Concerning Agency Function
Section 11.11 Liability of Agent
Section 11.12 Transfer of Agency Function
Section 11.13 Non-Receipt of Funds by the Agent
Section 11.14 Withholding Taxes
Section 11.15 Several Obligations and Rights of Banks
Section 11.16 Pro Rata Treatment of Loans, Etc
Section 11.17 Sharing of Payments Among Banks
ARTICLE 12 MISCELLANEOUS
Section 12.01 Amendments and Waivers
Section 12.02 Usury
Section 12.03 Expenses
Section 12.04 Survival
Section 12.05 Assignment; Participations
Section 12.06 Notices
Section 12.07 Jurisdiction; Immunities
Section 12.08 Table of Contents; Headings
Section 12.09 Severability
Section 12.10 Counterparts
Section 12.11 Integration
Section 12.12 Governing Law
Section 12.13 Confidentiality
Section 12.14 Treatment of Certain Information
EXHIBITS
Exhibit A Promissory Note
Exhibit B Authorization Letter
Exhibit C Guaranty
Exhibit D Security Agreement
Exhibit E Opinion of Counsel for Borrower
Exhibit F Opinion of Counsel for Each Third Party
Exhibit G Confidentiality Agreement
Exhibit H Borrowing Notice
SCHEDULES
Schedule I Subsidiaries of Borrower
Schedule II Credit Arrangements
Schedule III Hazardous Materials
<PAGE>
CREDIT AGREEMENT dated as of March 8, 1995 among CONMED
CORPORATION, a corporation organized under the laws of the State of New York
(the "Borrower"), each of the banks which is a signatory hereto (individually a
"Bank" and collectively the "Banks") and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association organized under the laws of the
United States of America, as agent for the Banks (in such capacity, together
with its successors in such capacity, the "Agent").
The Borrower desires that the Banks extend credit as provided
herein and the Banks are prepared to extend such credit. Specifically, the
Borrower desires to borrow, and the Banks desire to lend to the Borrower on a
term basis, the sum of $30,000,000 in the event that the Target Acquisition (as
defined herein) closes on or before May 1, 1995, or $20,000,000 if the Target
Acquisition does not close on or before such date. Accordingly, the Borrower,
the Banks and the Agent agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the
following terms have the following meanings (terms defined in the singular to
have a correlative meaning when used in the plural and vice versa):
"Account" means any right to payment for goods sold or leased
or for services rendered, which is not evidenced by an instrument or chattel
paper, whether or not it has been earned by performance, whether secured or
unsecured, now existing or hereafter arising, and the proceeds thereof.
"Acquisitions" means the Birtcher Acquisition and the Target
Acquisition.
"Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
any of its Subsidiaries; (b) which directly or indirectly beneficially owns or
holds 15% or more of any class of voting stock of the Borrower or any such
Subsidiary; (c) 15% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Borrower or such Subsidiary; or (d)
which is a partnership in which the Borrower or any of its Subsidiaries is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Agent's Office" means the principal office of Agent in
Syracuse, New York, presently located at One Lincoln Center, Syracuse, New York
13202.
"Agreement" means this Credit Agreement, as amended or
supplemented from time to time. References to Articles, Sections, Exhibits,
Schedules and the like refer to the Articles, Sections, Exhibits, Schedules and
the like of this Agreement unless otherwise indicated.
"Amortization Date" means the 1st day of each calendar
quarter, commencing on the first day of July, 1995 and ending on the Final
Maturity Date, provided that if any such day is not a Banking Day, such day
shall be the next succeeding Banking Day.
"Authorization Letter" means the letter agreement executed by
the Borrower in the form of Exhibit B.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York City and whenever such day relates
to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a day on
which dealings in Dollar deposits are also carried out in the London interbank
market.
"Birtcher" means Birtcher Medical Systems, Inc., a California
corporation.
"Birtcher Acquisition" means the merger of CONMED Acquisition
Corporation, a wholly-owned subsidiary of Borrower, with and into Birtcher
Medical Systems, Inc., with Birtcher becoming a wholly-owned subsidiary of
Borrower, pursuant to the Plan and Agreement of Merger.
"Capital Expenditures" means for any period, the Dollar amount
of gross expenditures (including obligations under Capital Leases) made for
fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto (but not repairs thereof) incurred during such period.
Assets acquired in the Acquisitions shall not be considered "Capital
Expenditures" for purposes of this Agreement.
"Capital Lease" means any lease which has been capitalized on
the books of the lessee in accordance with GAAP.
"Cash Flow" (as distinguished from Measured Cash Flow) means
the sum of the following measured on a consolidated basis for Borrower and any
Subsidiaries, for any twelve month period ending on the last day of each of
Borrower's fiscal quarters: (i) earnings before interest, taxes, depreciation,
and amortization, minus (ii) Capital Expenditures.
"Cash Flow Coverage Ratio" means the ratio of Measured Cash
Flow to Current Debt Service, measured on a consolidated basis for Borrower and
its Subsidiaries for any twelve month period ending on the last day of each of
Borrower's fiscal quarters.
"Chase" means The Chase Manhattan Bank, N.A.
"Closing Date" means the date this Agreement has been executed
by the Borrower, the Banks and the Agent.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all personal property of Borrower
and the Guarantors as set forth in Article 4 of this Agreement, together with
any other property of Borrower and the Guarantors in which the Banks hereafter
acquire a security interest or mortgage.
"Commitment" means, with respect to each Bank, the obligation
of such Bank to make its Loan under this Agreement in the principal amount
following:
If the Target Acquisition closes on or before May 1, 1995:
The Chase Manhattan Bank, N.A.: $20,000,000.00 or $11,250,000.00;1
Fleet Bank: $10,000,000.00 or $11,250,000.00;*
--------------------------------
Total: $30,000,000.00
If the Target Acquisition does not close on or before May 1,
1995:
The Chase Manhattan Bank, N.A.: $10,000,000
Fleet Bank: $10,000,000
Total: $20,000,000
"Consolidated Capital Expenditures" means Capital Expenditures
of the Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Current Assets" means Current Assets of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Current Liabilities" means Current Liabilities
of the Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts
are or are required to be consolidated with the accounts of the Borrower in
accordance with GAAP.
"Consolidated Tangible Net Worth" means Tangible Net Worth of
the Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Liabilities" means all liabilities of
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Credit AgreementRevolving Credit Facility" means the
Agreement of even date between Borrower and the Banks pursuant to which the
Banks have agreed to make Revolving Credit Loans to Borrower.
"Current Assets" means all assets of the Borrower treated as
current assets in accordance with GAAP.
"Current Debt Service" means current maturities of long term
Debt.
"Current Liabilities" means all liabilities of the Borrower
treated as current liabilities in accordance with GAAP, including without
limitation (a) all obligations payable on demand or within one year after the
date in which the determination is made and (b) installment and sinking fund
payments required to be made within one year after the date on which
determination is made, but excluding all such liabilities or obligations which
are renewable or extendable at the option of the Borrower to a date more than
one year from the date of determination.
"Debt" means, with respect to any Person: (a) indebtedness of
such Person for borrowed money; (b) indebtedness for the deferred purchase price
of property or services (except trade payables in the ordinary course of
business); (c) Unfunded Benefit Liabilities of such Person (if such Person is
not the Borrower, determined in a manner analogous to that of determining
Unfunded Benefit Liabilities of the Borrower); (d) the face amount of any
outstanding letters of credit issued for the account of such Person; (e)
obligations arising under acceptance facilities; (f) guaranties, endorsements
(other than for collection in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for payment, to supply
funds to invest in any Person, or otherwise to assure a creditor against loss;
(g) obligations secured by any Lien on property of such Person; and (h)
obligations of such Person as lessee under Capital Leases.
"Default" means any event which with the giving of notice or
lapse of time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any
Loan and, to the extent permitted by law, any other amount payable by the
Borrower under this Agreement or any Note that is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period from and including the due date, to, but excluding the date on which such
amount is paid in full equal to 2% above the Variable Rate as in effect from
time to time plus the Margin (if any) (provided that, if the amount so in
default is principal of a Fixed Rate Loan and the due date thereof is a day
other than the last day of the Interest Period therefor, the "Default Rate" for
such principal shall be, for the period from and including the due date and to
but excluding the last day of the Interest period therefor, 2% above the
interest rate for such Loan as provided in Section 2.09 hereof and, thereafter,
the Variable Rate plus 2% as provided for above in this definition).
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Drawdown Dates" means the closing dates of the Birtcher
Acquisition and the Target Acquisition, on which the Borrower shall make the
borrowings hereunder (which dates may not be later than the last day of the
Drawdown Period).
"Drawdown Period" means the period commencing on the date
hereof and ending on the Termination Date.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equipment" means goods other than Inventory which are used or
bought for use primarily in business, now existing or hereafter acquired, and
the proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, including any rules and regulations
promulgated thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Borrower is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which the Borrower is a member.
"Eurodollar Loan" (i.e., a "LIBOR" Loan") means any Loan when
and to the extent the interest rate therefor is determined on the basis of the
definition "Fixed Base Rate."
"Event of Default" has the meaning given such term in Section
10.01.
"Facility Documents" means this Agreement and the Exhibits and
Schedules hereto, the Notes, the Security Agreement, the Authorization Letter,
and the Guaranty.
"Final Maturity Date" means April 1, 2000, when the final
principal payment, all accrued interest, and any other amounts due under this
Agreement or the Note shall be due and payable in full.
"Fixed Base Rate" means with respect to any Interest Period
for a Fixed Rate Loan, i.e., for a Eurodollar Loan, the arithmetic mean, as
calculated by the Agent, of the respective rates per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) quoted at approxi mately 11:00 a.m. London
time by the principal London branch of the Reference Bank two Banking Days prior
to the first day of such Interest Period for the offering to leading banks in
the London interbank market of Dollar deposits in immediately available funds,
for a period, and in an amount, comparable to the Interest Period and principal
amount of the Eurodollar Loan which shall be made by such Reference Bank and
outstanding during such Interest Period.
"Fixed Rate" means, for any Fixed Rate Loan for any Interest
Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Agent to be equal to the quotient of (i) the
Fixed Base Rate for such Loan for such Interest Period, divided by (ii) one
minus the Reserve Requirement for such Loan for such Interest Period.
"Fixed Rate Loan" means any Eurodollar Loan.
"Fleet" means Fleet Bank.
"Forfeiture Proceeding" means any action, proceeding or
investigation affecting the Borrower or any of its Subsidiaries or Affiliates
before any court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investigation, which may result in an indictment of any of them or the seizure
or forfeiture of any of their property.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, applied on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 5.05 (except for changes concurred in by the Borrower's
independent certified public accountants).
"Guarantor" shall collectively mean all Subsidiaries and
Affiliates of Borrower now or hereafter existing and their respective successors
and assigns.
"Guaranty" means the guaranty in the form of Exhibit C to be
delivered by each Guarantor under the terms of this Agreement.
"Interest Period" means, with respect to any Fixed Rate Loan,
the period commencing on the date such Loan is made, converted from another
type of Loan or renewed, as the case may be, and ending, as the Borrower may
select pursuant to Section 2.07, on the numerically corresponding day in the
first, second, third, or sixth calendar month thereafter, provided that each
such Interest Period which commences on the last Banking Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.
"Inventory" means goods held for sale or lease or to be
furnished under contracts of service, or raw materials, work-in-process or
materials used or consumed in a business, now existing or hereafter arising, and
the proceeds thereof.
"Lending Office" means, for each Bank and for each type of
Loan, the lending office of such Bank (or of an affiliate of such Bank)
designated as such for such type of Loan on its signature page hereof or such
other office of such Bank (or of an affiliate of such Bank) as such Bank may
from time to time specify to the Agent and the Borrower as the office by which
its Loans of such type are to be made and maintained.
"Letter of Intent" means the non-binding letter of intent
(which has since been rescinded) between Borrower and Target dated November 9,
1994, a copy of which has been furnished to the Banks.
"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge, charge, conditional sale,
title retention agreement, financing lease or other encumbrance or similar right
of others, or any agreement to give any of the foregoing.
"Loan" means any loan made by a Bank pursuant to Section 2.01.
"Margin" means, for each Variable Rate Loan and Eurodollar
Loan the applicable margin on the following table, computed as of the date of
this Agreement based upon Borrower's financial statements for the immediately
preceding four Quarterly Dates for income statement items and the most recent
Quarterly Date for balance sheet items, and adjusted thereafter on each
Quarterly Date based on information for the immediately preceding four Quarterly
Dates for income statement items and the immediately preceding Quarterly Date
for balance sheet items.
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of Total Ratio_1.5 1.5 ratio_2.5 2.5 ratio_3.5 3.5 ratio_4.0 Ratio 4.0
Funded Debt to
Cash Flow
Applicable Margin - 112.5 basis 137.5 basis 162.5 basis 187.5 basis 250 basis
Fixed Rate Loans points points points points points
(Eurodollar)
Applicable Margin 0 12.5 basis 37.5 basis 62.5 basis 125 basis
Variable Rate points points points points
Loans (Prime)
</TABLE>
The foregoing notwithstanding, it is agreed that from the date of this Agreement
through March 31, 1996, the Applicable Margin for Fixed Rate Loans will be 162.5
basis points and the Applicable Margin for Variable Rate Loans will be 37.5
basis points.
"Measured Cash Flow" means the sum of the following measured
on a consolidated basis for Borrower and any Subsidiaries, for any twelve month
period ending on the last day of each of Borrower's fiscal quarters:
(a) net income, plus
(b) depreciation and all other non-cash charges to income not
affecting working capital, minus
(c) Capital Expenditures.
"Multiemployer Plan" means a Plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Note" means a promissory note of the Borrower in the form of
Exhibit A hereto evidencing the Loans made by a Bank hereunder.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Plan and Agreement of Merger" means the agreement among
Borrower, CONMED Acquisition Corporation and Birtcher Medical Systems, Inc.
dated as of December 5, 1994.
"Prime Rate" means that rate of interest from time to time
announced by the Reference Bank at its principal office as its prime commercial
lending rate.
"Principal Office" means the principal office of the Reference
Bank, presently located at 1 Chase Manhattan Plaza, New York, New York 10081.
"Quarterly Date" means the last day of each of Borrower's
fiscal quarters for so long as the Commitment and any Loans made pursuant to
this Agreement remain outstanding.
"Reference Bank" means The Chase Manhattan Bank, N.A.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulatory Change" means, with respect to any Bank, any
change after the date of this Agreement in United States federal, state,
municipal or foreign laws or regulations (including without limitation
Regulation D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks including such Bank of or
under any United States, federal, state, municipal or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Required Banks" means, at any time while no Loans are
outstanding, Banks having at least 75% of the aggregate amount of the
Commitments and, at any time while Loans are outstanding, Banks holding at least
75% of the aggregate principal amount of the Loans.
"Reserve Requirement" means, for any Interest Period for any
Fixed Rate Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000 against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change against (i) any category of liabilities which includes
deposits by reference to which the Fixed Base Rate for Eurodollar Loans is to be
determined as provided in the definition of "Fixed Base Rate" in this Section
1.01 or (ii) any category of extensions of credit or other assets which include
Eurodollar Loans.
"Revolving Credit Loans" means loans to Borrower made by the
Banks pursuant to the Credit Agreement-Revolving Credit Facility.
"Security Agreement" means the security agreement in the Form
of Exhibit D to be executed by Borrower and each Guarantor pursuant to Section
4.01 and 4.03 of this Agreement.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which at least a majority of the securities or
other ownership interests having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by such Person.
"Tangible Net Worth" means, at any date of determination
thereof, the excess of total assets over total liabilities, excluding, however,
from the determination of total assets: minority interests, if any, in
Subsidiaries and the book value of intangible assets including, but not limited
to, good will, organizational expenses, trademarks, trade names, licenses,
patents, covenants not to compete, and capitalized research and development
costs.
"Target" means the company identified in the Letter of Intent.
"Target Acquisition" means the purchase of substantially all
of the assets of Target by Borrower (or a wholly-owned subsidiary of Borrower)
on terms substantially similar (in the sole judgment of the Banks) to those set
forth in the Letter of Intent.
"Termination Date" means May 1, 1995.
"Third Party" means a Guarantor.
"Total Funded Debt" means, with respect to Borrower and any
Subsidiaries, all indebtedness (including current maturities) for money borrowed
which by its terms matures more than one year from the date as of which such
indebtedness is incurred, and any indebtedness for money borrowed maturing
within one year from such date which is renewable or extendable at the option of
the obligor to a date beyond one year from such date (whether or not theretofore
renewed or extended), including any such indebtedness renewable or extendable at
the option of the obligor under, or payable from the proceeds of other
indebtedness which may be incurred pursuant to, the provisions of any revolving
credit agreement or other similar agreement.
"Unfunded Benefit Liabilities" means, with respect to any
Plan, the amount (if any) by which the present value of all benefit liabilities
(within the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the
fair market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the Prime Rate for such
day.
"Variable Rate Loan" means any Loan when and to the extent the
interest rate for such Loan is determined in relation to the Variable Rate.
Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with GAAP. All terms relating to Collateral and not otherwise defined
herein shall have the meanings ascribed to them in the Uniform Commercial Code
of the State of New York.
ARTICLE 2. THE CREDIT.
Section 2.01. The Loans. (a) Subject to the terms and
conditions of this Agreement, each of the Banks severally agrees to make a loan
(the "Loans") to the Borrower on each Drawdown Date. The total principal amount
of Loans to be made on each Drawdown Date shall be as follows: (i) on the
closing date of the Birtcher Acquisition, $20,000,000; and (ii) on the closing
date of the Target Acquisition, $10,000,000. The amount of the Loan to be made
by each Bank on the applicable Drawdown Date shall be such Bank's pro rata share
(based upon the ratio of such Bank's Commitment to the total Commitments of all
Banks hereunder) of the total amount of Loans made by all Banks to Borrower on
such Drawdown Date. The Loans may be outstanding as Variable Rate Loans or Fixed
Rate Loans (each a "type" of Loan). The type of Loans of each Bank shall be made
and maintained at such Bank's Lending Office for such type of Loan.
(b) The principal of the Loans shall be due and payable in
quarterly installments, as nearly equal as possible, on each Amortization Date.
Interest on the Loans shall be due and payable as hereinafter provided.
(c) Any Term Loan borrowing under the existing Term Loan
Facility made within thirty days prior to the date of this Agreement shall be
deemed to be a Loan made pursuant to this Agreement.
Section 2.02. The Notes. The Loans of each Bank shall be
evidenced by a single promissory note in favor of such Bank in the form of
Exhibit A, dated the date of this Agreement, duly completed and executed by the
Borrower.
Section 2.03. Purpose. The Borrower shall use the proceeds of
the Loans to consummate the Birtcher Acquisition in accordance with the Plan and
Agreement of Merger, to consummate the Target Acquisition on terms substantially
similar (in the sole judgment of the Banks) to those set forth in the Letter of
Intent, to pay fees, commissions, and expenses related to the Acquisitions, to
repay existing debt of Borrower to the Banks pursuant to that certain "Credit
Agreement -- Term Loan Facility" and that certain "Credit Agreement -- Revolving
Credit Facility" each dated as of July 9, 1993, for working capital, and for
general corporate purposes. Such proceeds shall not be used for the purpose,
whether immediate, incidental or ultimate, of buying or carrying "margin stock"
within the meaning of Regulation U.
Section 2.04. Borrowing Procedures. The Borrower shall make
the borrowings hereunder on each of the Drawdown Dates and shall give the Agent
at least one Banking Day's notice of the date of each such borrowing (which
shall be a Banking Day) if such date is not the last day of the Drawdown Period.
Fixed Rate Loans shall require at least three Banking Days' prior notice. Not
later than 1:00 p.m. New York City time on the date of each such borrowing, each
Bank shall, through its Lending Office and subject to the conditions of this
Agreement, make the amount of the Loan to be made by it on such day available to
the Agent at the Agent's Office and in immediately available funds for the
account of the Borrower. The amount so received by the Agent shall, subject to
the conditions of this Agreement, be made available to the Borrower, in
immediately available funds, by the Agent crediting an account of the Borrower
designated by the Borrower and maintained with the Agent at the Agent's Office.
Section 2.05. Prepayments and Conversions. The Borrower shall
have the right to make prepayments of principal, or to convert one type of Loan
into another type of Loan, at any time or from time to time; provided that: (a)
the Borrower shall give the Agent notice of each such prepayment or conversion
as provided in Section 2.08; (b) Fixed Rate Loans may be prepaid or converted
only on the last day of an Interest Period for such Loans; and (c) pre-payments
shall be applied to the installments of principal in the inverse order of their
maturities. Amounts prepaid may not be reborrowed.
Section 2.06. Mandatory Prepayments. Anything herein to the
contrary notwithstanding, Borrower shall be obligated to make the following
prepayments ("Mandatory Prepayment") of amounts outstanding hereunder at the
times indicated below.
(a) 100% of the net proceeds in excess of $100,000 received by
Borrower from the sale or disposition of all or any part of the assets of
Borrower or its Subsidiaries (other than in the ordinary course of business),
upon Borrower's (or the Subsidiary's, as appropriate) receipt of such proceeds;
(b) 100% of all insurance proceeds received by Borrower which
are not reasonably promptly applied toward repair or replacement of the damaged,
destroyed or impaired property to which such proceeds relate, upon receipt by
Borrower of such proceeds; and
(c) 30% of the proceeds of the sale by Borrower of any equity
securities of Borrower (other than shares sold to employees pursuant to employee
stock option plans), upon receipt by Borrower of such proceeds.
Any Mandatory Payments shall be applied without penalty or
premium (other than costs associated with the mandatory prepayment of Fixed Rate
Loans on dates other than the last day of the Interest Period with respect to
each such Loan) as determined by the Banks in their sole discretion, provided
that amounts allocated to payments of principal and interest due hereunder shall
be allocated to such payments in their inverse order of maturity. Mandatory
Prepayments shall be divided among the Banks based upon each Bank's pro rata
share of the amounts outstanding hereunder at the time of the Mandatory
Prepayment.
Section 2.07. Fixed Rate Loans-Interest Periods; Renewals. (a)
In the case of each Fixed Rate Loan, the Borrower shall select an Interest
Period of any duration in accordance with the definition of Interest Period in
Section 1.01, subject to the following limitations: (i) no Interest Period may
extend beyond an Amortization Date unless, after giving effect thereto, the
aggregate principal amount of the Fixed Rate Loans having Interest Periods which
end after such Amortization Date shall be equal to or less than the principal
amount to be outstanding hereunder after such Amortization Date; (ii)
notwithstanding clause (i) above, no Interest Period shall have a duration less
than one month, and if any such proposed Interest Period would otherwise be for
a shorter period, such Interest Period shall not be available; (iii) if an
Interest Period would end on a day which is not a Banking Day, such Interest
Period shall be extended to the next Banking Day, unless such Banking Day would
fall in the next calendar month in which event such Interest Period shall end on
the immediately preceding Banking Day; (iv) only three Fixed Rate Interest
Periods may be outstanding at any one time.
(b) Upon notice to the Agent as provided in Section 2.08, the
Borrower may renew any Fixed Rate Loan on the last day of the Interest Period
therefor as the same type of Loan with an Interest Period of the same or
different duration in accordance with the limitations provided above. If the
Borrower shall fail to give notice to the Agent of such a renewal, such Fixed
Rate Loan shall automatically become a Variable Rate Loan on the last day of the
current Interest Period.
Section 2.08. Certain Notices. All notices by the Borrower to
the Agent pursuant to this Article 2 shall be given on a Banking Day and shall
be given first by telephone and confirmed by telecopier. Such notices shall be
irrevocable and shall be effective as of the date given only if the telecopy
confirmation is received by the Agent not later than 1:00 p.m. New York City
time. Where telecopy confirmation is received by the Agent after 1:00 p.m., the
notice shall be deemed to be given as of the next Banking Day. In the case of
borrowings and prepayments of, conversions into and renewals of (a) Variable
Rate Loans, such notices shall be given one Banking Day prior thereto; and (b)
in the case of Fixed Rate Loans, notices shall be given three Banking Days prior
thereto. Each notice shall specify the type of Loan to be borrowed, converted,
prepaid or renewed (and, in the case of a conversion, the type of Loans to
result from such conversion and, in the case of Fixed Rate Loans, the Interest
Period(s) therefor) and the date of the borrowing, prepayment, conversion or
renewal (which shall be a Banking Day). Each notice of reduction or termination
shall specify the amount of the Commitments to be reduced or terminated. Notices
shall be similar in form to the attached Exhibit I. The Agent shall promptly
notify the Banks of the contents of each such notice.
Section 2.09. Minimum Amounts. Except for prepayments or
conversions which result in the prepayment or conversion of a particular type or
conversions made pursuant to Section 3.04, each prepayment, conversion and
renewal of principal of the Loan of a particular type shall be in an amount at
least equal to $500,000 for each Bank (prepayments, conversions or renewals of
or into Loans of different types or, in the case of Fixed Rate Loans, having
different Interest Periods at the same time hereunder to be deemed separate
prepayments, conversions and renewals for the purposes of the foregoing, one for
each type of Interest Period). Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of Fixed Rate Loans having
concurrent Interest Periods shall be at least equal to $500,000 for each Bank.
Section 2.10. Interest. (a) Interest shall accrue on the
outstanding and unpaid principal amount of each Loan for the period from and
including the date of such Loan to but excluding the date such Loan is due at
the following rates per annum: (i) for a Variable Rate Loan, at a variable rate
per annum equal to the Variable Rate plus any Margin and (ii) for a Fixed Rate
Loan, at a fixed rate equal to the Fixed Rate plus the Margin. If the principal
amount of any Loan and any other amount payable by the Borrower hereunder or
under the Note shall not be paid when due (at stated maturity, by acceleration
or otherwise), interest shall accrue on such amount to the fullest extent
permitted by law from and including such due date to but excluding the date such
amount is paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall change
when the Variable Rate changes and interest on each such Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed. Interest on each Fixed Rate Loan shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Agent shall notify the Borrower and the Banks.
(c) Accrued interest shall be due and payable in arrears upon
any payment of principal or conversion and (i) for each Variable Rate Loan, on
each Amortization Date; (ii) for each Fixed Rate Loan, on the last day of the
Interest Period with respect thereto and, in the case of an Interest Period
greater than three months, at three-month intervals (determined on the same
basis as a three month Interest Period) after the first day of such Interest
Period; provided that interest accruing at the Default Rate shall be due and
payable from time to time on demand of the Agent.
Section 2.11. Fees. (a) The Borrower shall pay to the Agent
for the account of each Bank a commitment fee on the daily average unused
Commitment of such Bank for the period from and including the date hereof to the
earlier of the date the Commitments are terminated or the Termination Date at a
rate per annum equal to .375%, calculated on the basis of a year of 360 days for
the actual number of days elapsed. The accrued commitment fee shall be due and
payable when billed.
(b) The Borrower shall pay to the Agent as compensation for
its services hereunder an agency fee (in cash or such other type of compensation
as may be mutually agreed), in the amount (and on the dates) heretofore mutually
agreed.
Section 2.12. Payments Generally. All payments under this
Agreement or the Notes shall be made to the Agent in immediately available funds
not later than 1:00 p.m. New York City time on the relevant dates specified in
this Article 2, and each such payment made received by Agent after 1:00 p.m.
shall be deemed to have been made on the next succeeding Banking Day. The
Borrower shall, at the time of making each payment under this Agreement or the
Notes, specify to the Agent the principal or other amount payable by the
Borrower under this Agreement or the Notes to which such payment is to be
applied (and in the event that it fails to so specify, or if a Default or Event
of Default has occurred and is continuing, the Agent may apply such payment as
it may elect in its sole discretion (subject to Section 11.16)). Borrower shall
make all payments through its deposit account with Agent and Agent is hereby
authorized to deduct all payments due hereunder from this account. Except as
otherwise provided herein, if the due date of any payment under this Agreement
or the Notes would otherwise fall on a day which is not a Banking Day, such date
shall be extended to the next succeeding Banking Day and interest shall be
payable for any principal so extended for the period of such extension. Provided
the Agent receives payment in immediately available funds by 1:00 p.m. on a
Banking Day, Agent shall remit the portion of such payment due to each of the
Banks by wire transfer initiated prior to 3:00 p.m. on the same Banking Day. If
payment is not received on a Banking Day or by 1:00 p.m., Agent shall remit the
amount of such payment due Fleet by wire transfer on the next Banking Day.
Any Bank to which payment is due may (but shall not be
obligated to) debit the amount of any such payment which is not made by 4:00
p.m. on the first Banking Day after the due date to any ordinary deposit account
of the Borrower with such Bank and any Bank so doing shall promptly notify the
Agent.
Section 2.13. Late Payment Fees. (a) If Borrower fails to make
any payment when due, Agent, at the request of the Required Banks, may require
the payment of a late charge to be assessed each day on the amount overdue based
upon the following formulas:
(i) For overdue interest:
(Amount overdue) x 110% x (Prime Rate + 2%)
365
(ii) For overdue principal:
(Amount overdue) x 110% x (Prime Rate + 2%)
365
(b) Late charges may be added to the amount owing on any
future payment, and such assessment and/or collection of late charges shall in
no way impair the Banks' right to pursue any other rights or remedies they may
have upon default.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs. (a) The Borrower shall pay
directly to each Bank from time to time on demand such amounts as such Bank may
determine to be necessary to compensate it for any costs which such Bank
determines are attributable to its making or maintaining any Fixed Rate Loans
under this Agreement or its Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Bank hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Bank under this Agreement or its Note in respect of
any of such Loans (other than taxes imposed on the overall net income of such
Bank or of its Lending Office for any of such Loans by the jurisdiction in which
such Bank has its principal office or such Lending Office); or (ii) imposes or
modifies any reserve, special deposit, deposit insurance or assessment, minimum
capital, capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Bank (including any of such Loans or any deposits referred to in the definition
of "Fixed Base Rate" in Section 1.01); or (iii) imposes any other condition
affecting this Agreement or its Note (or any of such extensions of credit or
liabilities). Each Bank will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this Section 3.01(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. If any Bank requests
compensation from the Borrower under this Section 3.01(a), or under Section
3.01(c), the Borrower may, by notice to such Bank (with a copy to the Agent),
require that such Bank's Loans of the type with respect to which such
compensation is requested be converted in accordance with Section 3.04.
(b) Without limiting the effect of the foregoing provisions of
this Section 3.01, in the event that, by reason of any Regulatory Change, any
Bank either (i) incurs Additional Costs based on or measured by the excess above
a specified level of the amount of a category of deposits or other liabilities
of such Bank which includes deposits by reference to which the interest rate on
Eurodollar loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes Eurodollar
loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Bank so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such Bank
to make or renew, and to convert Loans of any other type into, Loans of such
type hereunder shall be suspended until the date such Regulatory Change ceases
to be in effect (and all Loans of such type held by such Bank then outstanding
shall be converted in accordance with Section 3.04).
(c) Without limiting the effect of the foregoing provisions of
this Section 3.01 (but without duplication), the Borrower shall pay directly to
each Bank from time to time on request such amounts as such Bank may determine
to be necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance by it or any of its affiliates pursuant to any
law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the
date of this Agreement or thereafter) of any court or governmental or monetary
authority of capital in respect of its Loans hereunder or its obligation to make
Loans hereunder (such compensation to include, without limitation, an amount
equal to any reduction in return on assets or equity of such Bank to a level
below that which it could have achieved but for such law, regulation,
interpretation, directive or request). Each Bank will notify the Borrower if it
is entitled to compensation pursuant to this Section 3.01(c) as promptly as
practicable after it determines to request such compensation.
(d) Determinations and allocations by a Bank for purposes of
this Section 3.01 of the effect of any Regulatory Change pursuant to subsections
(a) or (b), or of the effect of capital maintained pursuant to subsection (c),
on its costs of making or maintaining Loans or its obligation to make Loans, or
on amounts receivable by, or the rate of return to, it in respect of Loans or
such obligation, and of the additional amounts required to compensate such Bank
under this Section 3.01, shall be conclusive, provided that such determinations
and allocations are made on a reasonable basis.
Section 3.02. Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if:
(a) the Agent determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of "Fixed Base Rate" in Section 1.01 are not being provided
in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for any type of Fixed Rate Loans as provided in
this Agreement; or
(b) the Required Banks determine (which determination shall be
conclusive) and notify the Agent that the relevant rates of interest referred to
in the definition of "Fixed Base Rate" in Section 1.01 upon the basis of which
the rate of interest for any type of Fixed Rate Loans is to be determined do not
adequately cover the cost to the Banks of making or maintaining such Loans;
then the Agent shall give the Borrower and each Bank prompt notice thereof, and
so long as such condition remains in effect, the Banks shall be under no
obligation to make or renew Loans of such type or to convert Loans of any other
type into Loans of such type and the Borrower shall, on the last day(s) of the
then current Interest Period(s) for the outstanding Loans of the affected type,
either prepay such Loans or convert such Loans into another type of Loans in
accordance with Section 2.05.
Section 3.03. Illegality. Notwithstanding any other provision
in this Agreement, in the event that it becomes unlawful for any Bank or its
Lending Office to (a) honor its obligation to make or renew Eurodollar Loans
hereunder or convert Loans of any type into Loans of such type, or (b) maintain
Eurodollar Loans hereunder, then such Bank shall promptly notify the Borrower
thereof (with a copy to the Agent) and such Bank's obligation to make or renew
Eurodollar Loans and to convert other types of Loans into Loans of such type
hereunder shall be suspended until such time as such Bank may again make, renew,
or convert and maintain such affected Loans and such Bank's outstanding
Eurodollar Loans, as the case may be, shall be converted in accordance with
Section 3.04.
Section 3.04. Certain Conversions pursuant to Sections 3.01
and 3.03. If the Loans of any Bank of a particular type (Loans of such type
being herein called "Affected Loans" and such type being herein called the
"Affected Type") are to be converted pursuant to Section 3.01 or 3.03, such
Bank's Affected Loans shall be automatically converted into Variable Rate Loans
on the last day(s) of the then current Interest Period(s) for the Affected Loans
(or, in the case of a conversion required by Section 3.01(b) or 3.03, on such
earlier date as such Bank may specify to the Borrower with a copy to the Agent)
and, unless and until such Bank gives notice as provided below that the
circumstances specified in Section 3.01 or 3.03 which gave rise to such
conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been so
converted, all payments and prepayments of principal which would otherwise be
applied to such Bank's Affected Loans shall be applied instead to its Variable
Rate Loans;
(b) all Loans which would otherwise be made or renewed by such
Bank as Loans of the Affected Type shall be made instead as Variable Rate Loans
and all Loans of such Bank which would otherwise be converted into Loans of the
Affected Type shall be converted instead into (or shall remain as) Variable Rate
Loans; and
If such Bank gives notice to the Borrower (with a copy to the
Agent) that the circumstances specified in Section 3.01 or 3.03 which gave rise
to the conversion of such Bank's Affected Loans pursuant to this Section 3.04 no
longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type are outstanding,
such Bank's Variable Rate Loans shall be automatically converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Loans of
the Affected Type to the extent necessary so that, after giving effect thereto,
all Loans held by the Banks holding Loans of the Affected Type and by such Bank
are held pro rata (as to principal amounts, types and Interest Periods) in
accordance with their respective Commitments.
Section 3.05. Certain Compensation. The Borrower shall pay to
the Agent for the account of each Bank, upon the request of such Bank through
the Agent, such amount or amounts as shall be sufficient (in the reasonable
opinion of such Bank) to compensate it for any loss, cost or expense which such
Bank determines is attributable to:
(a) any payment, prepayment, conversion or renewal of a Fixed
Rate Loan made by such Bank on a date other than the last day of an Interest
Period for such Loan (whether by reason of acceleration, mandatory prepayment or
otherwise); or
(b) any failure by the Borrower to borrow, convert into or
renew a Fixed Rate Loan to be made, converted into or renewed by such Bank on
the date specified therefor in the relevant notice under Section 2.04, 2.05 or
2.07, as the case may be.
Without limiting the foregoing, such compensation shall
include an amount equal to the excess, if any, of: (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid,
converted or renewed or not borrowed, converted or renewed for the period from
and including the date of such payment, prepayment or conversion or failure to
borrow, convert or renew to but excluding the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or renew, to but excluding the last day of the Interest Period for such Loan
which would have commenced on the date specified therefor in the relevant
notice) at the applicable rate of interest for such Loan provided for herein;
over (ii) the amount of interest (as reasonably determined by such Bank) such
Bank would have bid in the London interbank market for Dollar deposits for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Bank as to the amounts payable pursuant to this
Section 3.05 shall be conclusive absent manifest error.
Section 3.06. HLT Classification. If, after the date hereof,
the Agent is advised by any Bank that such Bank has received notice from any
governmental authority, central bank or comparable agency having jurisdiction
over such Bank that the definition of highly leveraged transaction has been
modified with the result that its Loans hereunder are classified as a "highly
leveraged transaction" (an "HLT Classification") or if the Borrower takes any
action which causes this transaction to be subject to HLT Classification, the
Agent shall promptly give notice of such HLT Classification to the Borrower and
the other Banks and the Agent. The Banks and the Borrower shall commence
negotiations in good faith to agree on whether and, if so, the extent to which
commitment fees, interest rates and/or margins hereunder should be increased so
as to reflect such HLT Classification. If the Borrower and the Required Banks
fail to agree on such increases within 10 days after notice is given by the
Agent as provided above, then (i) the Agent, if requested by the Required Banks
shall, by notice to the Borrower immediately terminate the Commitments, and (ii)
the Borrower shall be obligated to prepay on the date of such termination of the
Commitments each outstanding Loan by paying the aggregate principal amount to be
prepaid together with all accrued interest thereon to the date of such
prepayment; provided that, if the Borrower prepays any Fixed Rate Loans pursuant
to this clause, the Borrower shall compensate the Banks for any resulting
funding losses. The Banks acknowledge that a HLT Classification is not a Default
or an Event of Default hereunder.
ARTICLE 4. COLLATERAL SECURITY.
Section 4.01. Security. As security for the payment of all
Loans made hereunder and for the obligations of each Guarantor under its
Guaranty, Borrower and the Guarantors hereby agree that the Banks shall at all
times have, pursuant to a security agreement executed concurrently herewith in
the form of Exhibit D, a continuing general security interest in all personal
property of Borrower and each Guarantor as more fully described in the Security
Agreement.
Section 4.02. Setoff. As additional collateral security for
the payment of the Notes and of any and all other obligations and liabilities of
Borrower and each Guarantor to the Banks hereunder, whether due or to become
due, direct or contingent, now existing or hereafter arising, and however
created or acquired, the Banks shall at all times have and are hereby given a
security interest in and a lien upon and right of offset against all moneys,
deposit balances, securities or other property or interest therein of Borrower
now or at any time after the date of this Loan Agreement held or received by or
for or left and each Guarantor in the possession or control of any of the Banks,
whether for safekeeping, custody, transmission, collection, pledge or for any
other or different purpose. The foregoing right of setoff shall at all times be
subject to the Banks' obligation to share payments as set forth in Section
11.17.
Section 4.03. Guaranties. Each Guarantor shall execute and
deliver a Guaranty to each of the Banks, and a Security Agreement granting the
Banks a security interest in all of the Guarantor's personal property as set
forth in Section 4.01.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.01. Documentary Conditions Precedent. The
obligations of the Banks to make the Loans are subject to the condition
precedent that the Agent and the Banks shall have received on or before the date
of such Loans each of the following, in form and substance satisfactory to the
Agent, the Banks, and their counsel:
(a) the Notes duly executed by the Borrower;
(b) the Authorization Letter duly executed by the Borrower;
(c) the Security Agreements and UCC-1 Financing Statements
duly executed by the Borrower and each Guarantor;
(d) the Guaranty duly executed by the Guarantor;
(e) a certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, attesting to all corporate action taken by
the Borrower, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant to this Agreement;
(f) a certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, certifying the names and true signatures
of the officers of the Borrower authorized to sign the Facility Documents to
which it is a party and the other documents to be delivered by the Borrower
under this Agreement;
(g) a certificate of a duly authorized officer of the
Borrower, dated the Closing Date, stating that the representations and
warranties in Article 6 are true and correct on such date as though made on and
as of such date and that no event has occurred and is continuing which
constitutes a Default or Event of Default;
(h) a favorable opinion of counsel for the Borrower, dated the
Closing Date, in substantially the form of Exhibit E and as to such other
matters as the Agent or any Bank may reasonably request;
(i) a certificate of the Secretary or Assistant Secretary of
each Third Party, dated the Closing Date, attesting to all corporate action
taken by the Third Party, including resolutions of its Board of Directors and
sole shareholder authorizing the execution, delivery and performance of the
Facility Documents to which it is a party;
(j) a certificate of the Secretary or Assistant Secretary of
each Third Party, dated the Closing Date, certifying the names and true
signatures of the officers of each Third Party authorized to sign the Facility
Documents to which it is a party;
(k) a favorable opinion of counsel for each Third Party dated
the Closing Date, in substantially the form of Exhibit F and as to such other
matters as the Agent or any Bank may reasonably request;
(l) a certificate of a duly authorized officer of each Third
Party, dated the Closing Date, stating that the representations and warranties
in the Facility Documents to which it is a party are true and correct on such
date as though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or Event of Default, and
(m) Certificates from the applicable Secretaries of State
showing Borrower and each Third Party to be corporations in good standing in the
States of their incorporation.
Section 5.02. Additional Conditions Precedent. The obligations
of the Banks to make any Loans shall be subject to the further conditions
precedent that on the date of such Loans:
(a) the following statements shall be true:
(i) the representations and warranties contained in Article 6
and in any other Facility Documents are true and correct on and as of the date
of such Loans as though made on and as of such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Loans.
(b) The Banks shall have reviewed, and shall be satisfied
with, the terms and conditions of, and the documentation relating to, the
Acquisitions and the other transactions contemplated hereby. The Banks shall
also have reviewed, and shall be satisfied with, the pro forma financial
statements for the combined operations of Borrower, Birtcher Medical Systems,
Inc. and Target as of the closing of each Acquisition.
(c) The Banks shall have reviewed, and shall be satisfied
with, the Borrower's projections and pro forma financial statements reflecting
the forecasted financial condition, income and expenses of the Borrower and its
Subsidiaries after giving effect to each Acquisition, the borrowings under this
Agreement, and any other transactions contemplated hereby, and the Banks'
continuing satisfaction with the condition (financial and other), operations,
assets, nature of assets, liabilities and prospects of the Borrower, Birtcher
Medical Systems, Inc., Target, and their respective Subsidiaries.
(d) The Banks shall have reviewed, and shall be satisfied with
(i) the Borrower's tax assumptions, and (ii) the corporate, organizational,
capital, and legal structure of the Borrower, Birtcher Medical Systems, Inc.,
Target and their respective Subsidiaries.
(e) The Banks shall be satisfied that the borrowings under
this Agreement and other funding for the Acquisitions are in full compliance
with all legal requirements, including without limitation Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System, and that the
Acquisitions are in compliance with all applicable legal requirements including,
if applicable, the Hart-Scott-Rodino Act, and all securities law requirements.
(f) The Banks shall be satisfied that the Borrower, Birtcher
Medical Systems, Inc.,Target, and their respective Subsidiaries comply in all
material respects with all applicable U.S. federal, state and local laws and
regulations, including all Environmental Laws.
(g) The Banks shall have reviewed, and shall be satisfied with
an environmental risk assessment (including the potential levels of
environmental liability set forth therein) with respect to Birtcher Medical
Systems, Inc.,Target, and their respective Subsidiaries.
(h) The Banks shall have reviewed, and shall be satisfied
with, the insurance program of the Borrower, Birtcher Medical Systems,
Inc.,Target, and their respective Subsidiaries.
(i) The Banks shall have reviewed, and shall be satisfied
with, all financial information concerning each Acquisition furnished to
Borrower pursuant to the agreements memorializing the Acquisitions.
(j) The Banks shall have reviewed, and shall be satisfied
with, information concerning any litigation relating to or arising out of either
of the Acquisitions or any of the other transactions contemplated by this
Agreement.
(k) the Agent shall have received such other approvals,
opinions or documents as the Agent or any Bank may reasonably request.
Section 5.03. Closing of the Acquisitions. The obligations of
the Banks to make any Loans hereunder shall be subject to the further conditions
precedent that (a) with respect to Loans to be made on the closing date of the
Birtcher Acquisition, all conditions to such Acquisition set forth in Article IX
of the Plan and Agreement of Merger shall have been satisfied and all deliveries
and payments to take place at the closing as specified in the Plan and Agreement
of Merger shall have taken place except for the delivery of funds to be provided
by the Banks pursuant to this Agreement and the commitments; and (b) with
respect to Loans to be made on the closing date of the Target, all conditions to
such Acquisition as the same may be set forth in a definitive asset purchase
agreement between Borrower and Target, on substantially the same terms (in the
sole judgment of the Banks) as those contained in the Letter of Intent, shall
have been satisfied and all deliveries and payments to take place at the closing
as may be specified in such agreement shall have taken place except for the
delivery of funds to be provided by the Banks pursuant to this Agreement and the
commitments. The fulfillment of these conditions precedent shall be demonstrated
to the satisfaction of Agent, the Banks, and their Counsel and Agent and the
Banks shall be entitled to receive such confirming certificates, legal opinions,
and documents as Agent or any Bank may reasonably request.
Section 5.04. Deemed Representations. Each notice of borrowing
hereunder and acceptance by the Borrower of the proceeds of such borrowing shall
constitute a representation and warranty that the statements contained in
Section 5.02(a) and 5.03 are true and correct both on the date of such notice
and, unless the Borrower otherwise notifies the Agent prior to such borrowing,
as of the date of such borrowing.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 6.01. Incorporation, Good Standing and Due
Qualification. Each of the Borrower and its Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its assets and to
transact the business in which it is now engaged or proposed to be engaged, and
is duly qualified as a foreign corporation and in good standing under the laws
of each other jurisdiction in which such qualification is required.
Section 6.02. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Borrower of the Facility Documents to
which it is a party have been duly authorized by all necessary corporate action
and do not and will not: (a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing, registration, consent or approval under, any law,
rule, regulation (including, without limitation, Regulation U), order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Borrower or any of its Subsidiaries or Affiliates; (d)
result in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected; (e) result in, or require, the creation or imposition of
any Lien , upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower; or (f) cause the Borrower (or any Subsidiary or
Affiliate, as the case may be) to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument.
Section 6.03. Legally Enforceable Agreements. Each Facility
Document to which the Borrower is a party is, or when delivered under this
Agreement will be, a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
Section 6.04. Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened, against or
affecting the Borrower or any of its Subsidiaries before any court, governmental
agency or arbitrator, which may, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties or business of
the Borrower or any such Subsidiary or of the ability of the Borrower to perform
its obligations under the Facility Documents to which it is a party.
Section 6.05. Financial Statements. The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as at December 30, 1994,
and the related consolidated income statement and statements of cash flows and
changes in stockholders' equity of the Borrower and its Consolidated
Subsidiaries for the fiscal year then ended, and the accompanying footnotes,
together with the opinion thereon, of Price Waterhouse LLP, independent
certified public accountants, copies of which have been furnished to each of the
Banks, are complete and correct and fairly present the financial condition of
the Borrower and its Consolidated Subsidiaries as at such date and the results
of the operations of the Borrower and its Consolidated Subsidiaries for the
periods covered by such statements, all in accordance with GAAP consistently
applied (subject to adjustments under Financial Accounting Standards 106 and
109). There are no liabilities of the Borrower or any of its Consolidated
Subsidiaries, fixed or contingent, which are material but are not reflected in
the financial statements or in the notes thereto, other than liabilities arising
in the ordinary course of business since December 30, 1994. No information,
exhibit or report furnished by the Borrower to the Banks in connection with the
negotiation of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not materially misleading. Since December 30, 1994, there has
been no material adverse change in the condition (financial or otherwise),
business, operations or prospects of the Borrower or any of its Subsidiaries.
Section 6.06. Ownership and Liens. Each of the Borrower and
its Consolidated Subsidiaries has title to, or valid leasehold interests in, all
of its properties and assets, real and personal, including the properties and
assets, and leasehold interests reflected in the financial statements referred
to in Section 6.05 (other than any properties or assets disposed of in the
ordinary course of business), and none of the properties and assets owned by the
Borrower or any of its Subsidiaries and none of its leasehold interests is
subject to any Lien, except as disclosed in such financial statements or as may
be permitted hereunder.
Section 6.07. Taxes. Each of the Borrower and its Subsidiaries
has filed all tax returns (federal, state and local) required to be filed and
has paid all taxes, assessments and governmental charges and levies thereon to
be due, including interest and penalties. The federal income tax liability of
the Borrower and its Subsidiaries has been audited by the Internal Revenue
Service and has been finally determined and satisfied for all taxable years up
to and including the taxable year ended in 1990.
Section 6.08. ERISA. Each Plan, and, to the best knowledge of
the Borrower, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law, and no event or condition is occurring or exists concerning which the
Borrower would be under an obligation to furnish a report to the Bank in
accordance with Section 7.08(h) hereof. The funded status of each Plan is as set
forth in Schedule IV.
Section 6.09. Subsidiaries and Ownership of Stock. Schedule I
is a complete and accurate list of the Subsidiaries of the Borrower, showing the
jurisdiction of incorporation or organization of each Subsidiary and showing the
percentage of the Borrower's ownership of the outstanding stock or other
interest of each such Subsidiary. All of the outstanding capital stock or other
interest of each such Subsidiary has been validly issued, is fully paid and
nonassessable and is owned by the Borrower free and clear of all Liens.
Section 6.10. Credit Arrangements. Schedule II is a complete
and correct list of all credit agreements, indentures, installment purchase
agreements, guaranties, Capital Leases and other investments, agreements and
arrangements presently in effect providing for or relating to extensions of
credit (including agreements and arrangements for the issuance of letters of
credit or for acceptance financing) in respect of which the Borrower or any of
its Subsidiaries is in any manner directly or contingently obligated; and the
maximum principal or face amounts of the credit in question, outstanding and
which can be outstanding, are correctly stated, and all Liens of any nature
given or agreed to be given as security therefor are correctly described or
indicated in such Schedule.
Section 6.11. Operation of Business. Each of the Borrower and
its Subsidiaries possesses all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, or rights thereto, necessary to conduct
its business substantially as now conducted and as presently proposed to be
conducted, and neither the Borrower nor any of its Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing.
Section 6.12. Hazardous Materials. The Borrower and each of
its Subsidiaries have obtained all permits, licenses and other authorizations
which are required under all Environmental Laws, except to the extent failure to
have any such permit, license or authorization would not have a material adverse
effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries. The Borrower and
each of its Subsidiaries are in compliance with the terms and conditions of all
such permits, licenses and authorizations, and are also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a material
adverse effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries.
In addition, except as set forth in Schedule III hereto:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Borrower or any of its Subsidiaries to have any permit, license
or authorization required in connection with the conduct of the business of the
Borrower or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, release or disposal, or any
release as defined in 42 U.S.C. ss. 9601(22) ("Release"), of any substance
regulated under Environmental Laws ("Hazardous Materials") generated by the
Borrower or any of its Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries has
handled any Hazardous Material, other than as a generator, on any property now
or previously owned or leased by the Borrower or any of its Subsidiaries to an
extent that it has, or may reasonably be expected to have, a material adverse
effect on the consolidated financial condition, operations, business or
prospects taken as a whole of the Borrower and its Consolidated Subsidiaries;
and
(i) no polychlorinated biphenyl is or has been present at any
property now or previously owned or leased by the Borrower or any of its
Subsidiaries;
(ii) no asbestos is or has been present at any property now or
previously owned or leased by the Borrower or any of its Subsidiaries;
(iii) there are no underground storage tanks for Hazardous
Materials, active or abandoned, at any property now or previously owned or
leased by the Borrower or any of its Subsidiaries; and
(iv) no Hazardous Materials have been Released, in a
reportable quantity, where such a quantity has been established by statute,
ordinance, rule, regulation or order, at, on or under any property now or
previously owned by the Borrower or any of its Subsidiaries.
(c) Neither the Borrower nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous Material to any
location which is listed on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), listed for possible inclusion on the National Priorities List by the
Environmental Protection Agency in the Comprehensive Environmental Response and
Liability Information System as provided by 40 C.F.R. ss. 300.5 ("CERCLIS") or
on any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to claims against the
Borrower or any of its Subsidiaries for clean-up costs, remedial work, damages
to natural resources or for personal injury claims, including, but not limited
to, claims under CERCLA.
(d) No Hazardous Material generated by the Borrower or any of
its Subsidiaries has been recycled, treated, stored, disposed of or released (as
defined in CERCLA) by the Borrower or any of its Subsidiaries at any location
other than those listed in Schedule III hereto.
(e) No oral or written notification of a Release of a
Hazardous material has been filed by or on behalf of the Borrower or any of its
Subsidiaries and no property now or previously owned or leased by the Borrower
or any of its Subsidiaries is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA, on CERCLIS or on any similar
state list of sites requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to any
Environmental Laws on any of the real property or properties owned or leased by
the Borrower or any of its Subsidiaries, and no government actions have been
taken or are in process which could subject any of such properties to such Liens
and neither the Borrower nor any of its Subsidiaries would be required to place
any notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.
(g) There have been no environmental investigations, studies,
audits, test, reviews or other analyses conducted by or which are in the
possession of the Borrower or any of its Subsidiaries in relation to any
property or facility now or previously owned or leased by the Borrower or any of
its Subsidiaries which have not been made available to the Banks.
Section 6.13. No Default on Outstanding Judgments or Orders.
Each of the Borrower and its Subsidiaries has satisfied all judgments and
neither the Borrower nor any of its Subsidiaries is in default with respect to
any judgment, writ, injunction, decree, rule or regulation of any court,
arbitrator or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or foreign.
Section 6.14. No Defaults on Other Agreements. Neither the
Borrower nor any of its Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction which could have a material adverse effect on
the business, properties, assets, operations or conditions, financial or
otherwise, of the Borrower or any of its Subsidiaries, or the ability of the
Borrower or any of its Subsidiaries to carry out its obligations under the
Facility Documents to which it is a party. Neither the Borrower nor any of its
Subsidiaries is in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a party.
Section 6.15. Labor Disputes and Acts of God. Neither the
business nor the properties of the Borrower or of any of its Subsidiaries are
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance), materially and
adversely affecting such business or properties or the operation of the Borrower
or such Subsidiary.
Section 6.16. Governmental Regulation. Neither the Borrower
nor any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Investment Company Act of 1940, the Interstate
Commerce Act, the Federal Power Act or any statute or regulation limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.
Section 6.17. Partnerships. Neither the Borrower nor any of
its Subsidiaries is a partner in any partnership.
Section 6.18. No Forfeiture. Neither the Borrower nor any of
its Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and no Forfeiture Proceeding against any of them is pending or
threatened.
Section 6.19. Solvency.
(a) The present fair saleable value of the assets of the
Borrower after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments hereunder exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of the Borrower and its
Subsidiaries as they mature.
(b) The property of the Borrower does not constitute
unreasonably small capital for the Borrower to carry out its business as now
conducted and as proposed to be conducted including the capital needs of the
Borrower.
(c) The Borrower does not intend to, nor does it believe that
it will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by the Borrower, and
of amounts to be payable on or in respect of debt of the Borrower). The cash
available to the Borrower after taking into account all other anticipated uses
of the cash of the Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Borrower when such amounts are required
to be paid.
(d) The Borrower does not believe that final judgments against
it in actions for money damages will be rendered at a time when, or in an amount
such that, the Borrower will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). The cash available to the Borrower after
taking into account all other anticipated uses of the cash of the Borrower
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section 6.19), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
Section 6.20. Cash Available. Borrower and its subsidiaries
own cash and cash equivalents (which shall include government bonds, investment
grade corporate debt instruments rated A or better, or bank repurchase
agreements of 30 days or less duration backed by direct obligations of the
United States of America or any agencies thereof) in the aggregate amount of at
least $1,000,000.
ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement, the Borrower shall:
Section 7.01. Maintenance of Existence. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence and good standing in the jurisdiction of its incorporation, and
qualify and remain qualified, and cause each of its Subsidiaries to qualify and
remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 7.02. Conduct of Business. Continue, and cause each of
its Subsidiaries to continue, to engage in an efficient and economical manner in
a business of the same general type as conducted by it on the date of this
Agreement.
Section 7.03. Maintenance of Properties. Maintain, keep and
preserve, and cause each of its Subsidiaries to maintain, keep and preserve, all
of its properties, (tangible and intangible) necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
Section 7.04. Maintenance of Records. Keep, and cause each of
its Subsidiaries to keep, adequate records and books of account, in which
complete entries will be made in accordance with GAAP, reflecting all financial
transactions of the Borrower and its Subsidiaries.
Section 7.05. Maintenance of Insurance. Maintain, and cause
each of its Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
Section 7.06. Compliance with Laws. Comply, and cause each of
its Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders (including, but not limited to, environmental laws,
rules, regulations, and orders), such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property.
Section 7.07. Right of Inspection. At any reasonable time and
from time to time, permit the Agent or any Bank or any agent or representative
thereof, to examine and make copies and abstracts from the records and books of
account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any such Subsidiary with any of their respective officers and directors and
the Borrower's independent accountants.
Section 7.08. Reporting Requirements. Furnish directly to each
of the Banks:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a consolidated and consolidating
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such fiscal year and a consolidated and consolidating income statement and
statements of cash flows and changes in stockholders' equity of the Borrower and
its Consolidated Subsidiaries for such fiscal year, all in reasonable detail and
stating in comparative form the respective consolidated and consolidating
figures for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP and as to the consolidated statements
accompanied by an opinion thereon acceptable to the Agent and each of the Banks
by Price Waterhouse or other independent accountants of national standing
selected by the Borrower;
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the Borrower,
a consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and a consolidated and
consolidating income statement and statements of cash flows and changes in
stockholders' equity, of the Borrower and its Consolidated Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, all in reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for the corresponding date and
period in the previous fiscal year and all prepared in accordance with GAAP and
certified by the chief financial officer of the Borrower (subject to year-end
adjustments);
(c) promptly upon receipt thereof, copies of any reports
submitted to the Borrower or any of its Subsidiaries by independent certified
public accountants in connection with examination of the financial statements of
the Borrower or any such Subsidiary made by such accountants;
(d) simultaneously with the delivery of the financial
statements referred to above, a certificate of the chief financial officer of
the Borrower (i) certifying that to the best of his knowledge no Default or
Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which is proposed to be taken with respect thereto, and (ii) with
computations demonstrating compliance with the covenants contained in Article 9;
(e) simultaneously with the delivery of the annual financial
statements referred to in Section 7.08(a), a certificate of the independent
public accountants who audited such statements to the effect that, in making the
examination necessary for the audit of such statements, they have obtained no
knowledge of any condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of any such
condition or event, specifying in such certificate each such condition or event
of which they have knowledge and the nature and status thereof;
(f) promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower or any of its Subsidiaries which, if determined adversely
to the Borrower or such Subsidiary, could have a material adverse effect on the
financial condition, properties, or operations of the Borrower or such
Subsidiary;
(g) as soon as possible and in any event within 10 days after
the occurrence of each Default or Event of Default a written notice setting
forth the details of such Default or Event of Default and the action which is
proposed to be taken by the Borrower with respect thereto;
(h) as soon as possible, and in any event within ten days
after the Borrower knows or has reason to know that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan have
occurred or exist, a statement signed by a senior financial officer of the
Borrower setting forth details respecting such event or condition and the
action, if any, which the Borrower or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Borrower or an ERISA Affiliate with respect to such event
or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA, with respect to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA including,
without limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall
be a reportable event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code) and any request for a waiver under Section
412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Borrower or an ERISA
Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has been taken by PBGC with
respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Borrower or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt of the Borrower or
any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA would result in the loss
of tax-exempt status of the trust of which such Plan is a part if the Borrower
or an ERISA Affiliate fails to timely provide security to the Plan in accordance
with the provisions of said Sections;
(vii) any event or circumstance exists which may reasonably be
expected to constitute grounds for the Borrower or any ERISA Affiliate to incur
liability under Title IV of ERISA or under Sections 412(c)(11) or 412(n) of the
Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of one or more Plans
increase after the date of this Agreement in an amount which is material in
relation to the financial condition of the Borrower and its Subsidiaries, on a
consolidated basis; provided, however, that such increase shall not be deemed to
be material so long as it does not exceed $300,000 during any consecutive one
year period.
(i) promptly after the request of any Bank, copies of each
annual report filed pursuant to Section 104 of ERISA with respect to each Plan
(including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Borrower or an ERISA
Affiliate;
(j) promptly after the furnishing thereof, copies of any
statement or report furnished to any other party pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Banks pursuant to any other clause of this Section 7.08;
(k) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which the Borrower or any
of its Subsidiaries sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements which the Borrower
or any such Subsidiary files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any national
securities exchange;
(l) promptly after the commencement thereof or promptly after
the Borrower knows of the commencement or threat thereof, notice of any
Forfeiture Proceeding;
(m) a quarterly report from Borrower's environmental counsel
on the status of environmental matters relating to Birtcher; and
(n) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its Subsidiaries
as the Agent or any Bank may from time to time reasonably request.
Section 7.09. Guaranties. Cause any subsidiary hereafter
created or acquired to execute and deliver a Guaranty.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement, the Borrower shall not:
Section 8.01. Debt. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt except:
(a) Debt of the Borrower under this Agreement or the Notes, or
under the Credit Agreement-Revolving Credit Facility and Notes issued pursuant
thereto;
(b) Debt described in Schedule II, including renewals,
extensions or refinancings thereof, provided that the principal amount thereof
does not increase;
(c) Debt of the Borrower subordinated on terms satisfactory to
the Banks to the Borrower's obligations under this Agreement and the Notes;
(d) Debt of the Borrower to any such Subsidiary or of any
Subsidiary to the Borrower or another such Subsidiary;
(e) accounts payable to trade creditors for goods or services
which are not aged more than 180 days from billing date and current operating
liabilities (other than for borrowed money) which are not more than 180 days
past due, in each case incurred in the ordinary course of business and paid
within the specified time, unless contested in good faith and by appropriate
proceedings;
(f) Debt in respect of letters of credit issued for the
account of the Borrower or any such Subsidiary in an aggregate face amount
outstanding at any time of up to $1,500,000;
(g) Debt of the Borrower or any such Subsidiary secured by
purchase money Liens permitted by Section 8.03; or
(h) Debt incurred by Borrower in an amount not to exceed
$1,100,000 to finance the purchase and improvement by Borrower of the former
Carl's Drug Company real property located at 5836 Success Drive, West Rome
Industrial Park, Rome, New York.
Section 8.02. Guaranties, Etc. Assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable, or permit
any of its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, asset, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.
Section 8.03. Liens. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(a) Liens in favor of the Agent on behalf of the Banks
securing the Loans hereunder;
(b) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) judgment and other similar Liens arising in connection
with court proceedings; provided that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of such a Subsidiary to the
Borrower or another such Subsidiary;
(i) Liens described in Schedule II including renewals,
extensions or refinancings of the obligations secured thereby, provided that the
principal amount does not increase and the Liens are not extended to other
property or obligations;
(j) a mortgage granted on the former Carl's Drug Company real
property located at 5836 Success Drive, West Rome Industrial Park, Rome, New
York to secure the debt referenced in Section 8.01(h); or
(k) purchase money Liens on any property hereafter acquired or
the assumption of any Lien on property existing at the time of such acquisition,
or a Lien incurred in connection with any conditional sale or other title
retention agreement or a Capital Lease; provided that:
(i) any property subject to any of the foregoing is acquired
by the Borrower or any such Subsidiary in the ordinary course of its business
and the Lien on any such property is created contemporaneously with such
acquisition;
(ii) the obligation secured by any Lien so created, assumed or
existing shall not exceed 100% of the lesser of cost or fair market value as of
the time of acquisition of the property covered thereby to the Borrower or such
Subsidiary acquiring the same;
(iii) each such Lien shall attach only to the property so
acquired and fixed improvements thereon;
(iv) the Debt secured by all such Liens shall not exceed
$200,000 at any time outstanding in the aggregate; and
(v) the obligations secured by such Lien are permitted by the
provisions of Section 8.01 and the related expenditure is permitted under
Section 9.03.
Section 8.04. Leases. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any obligation as lessee for the rental or hire of any real or personal
property, except: (a) leases existing on the date of this Agreement and any
extensions or renewals thereof; (b) leases (other than Capital Leases) which do
not in the aggregate require the Borrower and its Subsidiaries on a consolidated
basis to make payments (including taxes, insurance, maintenance and similar
expense which the Borrower or any Subsidiary is required to pay under the terms
of any lease) in any fiscal year of the Borrower in excess of $1,000,000; (c)
leases between the Borrower and any such Subsidiary or between any such
Subsidiaries; and (d) Capital Leases permitted by Section 8.03. Payments under
existing Birtcher leases (and renewals of same) for premises located at 50
Technology Drive and 15330 Barranca Parkway, Irvine, California shall be
disregarded in calculating Borrower's compliance with the limitations set forth
in subsection 8.04(b).
Section 8.05. Loans; Investments. Make, or permit any of its
Subsidiaries to make, any loan or advance to any Person, or purchase or
otherwise acquire, or permit any such Subsidiary to purchase or otherwise
acquire, any capital stock, assets, obligations or other securities of, make any
capital contribution to, or otherwise invest in, or acquire any interest in, any
Person, except: (a) direct obligations of the United States of America or any
agency thereof with maturities of five years or less from the date of
acquisition; (b) commercial paper of a domestic issuer rated at least "A-1" by
Standard & Poor's Corporation or "P-1" by Moody's Investors Service, Inc.; (c)
certificates of deposit with maturities of one year or less from the date of
acquisition issued by any commercial bank operating within the United States of
America having capital and surplus in excess of $750,000,000; (d) bank
repurchase agreements of 30 days or less duration backed by direct obligations
of the United States of America or any agencies thereof; and (e) for stock,
obligations or securities received in settlement of debts (created in the
ordinary course of business) owing to the Borrower or any such Subsidiary.
Section 8.06. Dividends. Without the consent of the Banks,
declare or pay any dividends, purchase, redeem, retire or otherwise acquire for
value any of its capital stock now or hereafter outstanding, or make any
distribution of assets to its stockholders as such whether in cash, assets or in
obligations of the Borrower, or allocate or otherwise set apart any sum for the
payment of any dividend or distribution on, or for the purchase, redemption or
retirement of any shares of its capital stock, or make any other distribution by
reduction of capital or otherwise in respect of any shares of its capital stock
or permit any of its Subsidiaries to purchase or otherwise acquire for value any
stock of the Borrower or another such Subsidiary, except that: (a) the Borrower
may declare and deliver dividends and make distributions payable solely in
common stock of the Borrower; and (b) the Borrower may purchase or otherwise
acquire shares of its capital stock by exchange for or out of the proceeds
received from a substantially concurrent issue of new shares of its capital
stock.
Section 8.07. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests); except: (a) for inventory
disposed of in the ordinary course of business; (b) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(c) that any such Subsidiary may sell, lease, assign, or otherwise transfer its
assets to the Borrower; and (d) Borrower may sell, lease, assign or otherwise
transfer assets to any Subsidiary so long as a Guaranty is in full force and
effect for such Subsidiary.
Section 8.08. Stock of Subsidiaries, Etc. Sell or otherwise
dispose of any shares of capital stock of any of its Subsidiaries, except in
connection with a transaction permitted under Section 8.10, or permit any such
Subsidiary to issue any additional shares of its capital stock, except
directors' qualifying shares.
Section 8.09. Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate or permit any of
its Subsidiaries to enter into any transaction, including, without limitation,
the purchase, sale or exchange of property or the rendering of any service, with
any Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than would
obtain in a comparable arm's length transaction with a Person not an Affiliate.
Section 8.10. Mergers, Etc. Merge or consolidate with, or
sell, assign, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person, or acquire all or substantially all
of the assets or the business of any Person (or enter into any agreement to do
any of the foregoing), or permit any of its Subsidiaries to do so except that:
(a) any such Subsidiary may merge into or transfer assets to the Borrower; and
(b) any Subsidiary may merge into or consolidate with or transfer assets to any
other Subsidiary.
Section 8.11. Acquisitions. Enter into any transaction (other
than the Birtcher Acquisition and the Target Acquisition) pursuant to which the
Borrower or any of its Subsidiaries (a) acquires equity securities (or warrants,
options or other rights to acquire such securities) of any corporation other
than the Borrower or any corporation which is not then a Subsidiary of the
Borrower, pursuant to a solicitation of tenders therefor, or in one or more
negotiated block, market or other transactions not involving a tender offer, or
a combination of any of the foregoing, or (b) makes any corporation a Subsidiary
of the Borrower, or causes any such corporation to be merged into the Borrower
or any of its Subsidiaries, in any case pursuant to a merger, purchase of assets
or any reorganization providing for the delivery or issuance to the holders of
such corporation's then outstanding securities, in exchange for such securities,
of cash or securities of the Borrower or any of its Subsidiaries, or a
combination thereof, or (c) purchases all or substantially all of the business
or assets of any corporation.
Section 8.12. No Activities Leading to Forfeiture. Neither the
Borrower nor any of its Subsidiaries or Affiliates shall engage in or propose to
be engaged in the conduct of any business or activity which could result in a
Forfeiture Proceeding.
Section 8.13. New Businesses. Engage in, or permit any
Subsidiary to engage in, any business other than those presently conducted.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement:
Section 9.01. Minimum Working Capital. The Borrower shall
maintain at all times an excess of Consolidated Current Assets over Consolidated
Current Liabilities of not less than the amounts listed on the following table
for the periods stated therein. For purposes of Sections 9.01 and 9.04 only,
Loans under the Credit Agreement-Revolving Credit Facility shall not be
considered as Current Liabilities.
<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Year Year Year Year Year Year
1995 1996 1997 1998 1999 2000
<C> <C> <C> <C> <C> <C> <C>
1st Quarter $15,000M $21,000M $28,000M $40,000M $40,000M $40,000M
2nd Quarter 15,000M 22,000M 31,000M 40,000M 40,000M -
3rd Quarter 15,000M 23,000M 34,000M 40,000M 40,000M -
4th Quarter 20,000M 25,000M 37,000M 40,000M 40,000M -
</TABLE>
Section 9.02. Minimum Tangible Net Worth. The Borrower shall
maintain at all times a Consolidated Tangible Net Worth of not less than the
amounts listed on the following table for the periods stated therein.
<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Year Year Year Year Year Year
1995 1996 1997 1998 1999 2000
<C> <C> <C> <C> <C> <C> <C>
1st Quarter $5,000M $21,000M $35,000M $45,000M $45,000M $45,000M
2nd Quarter 5,000M 24,000M 38,000M 45,000M 45,000M -
3rd Quarter 7,000M 27,000M 41,000M 45,000M 45,000M -
4th Quarter 18,000M 31,000M 45,000M 45,000M 45,000M -
</TABLE>
Section 9.03. Leverage Ratio. The Borrower shall maintain at
all times a ratio of Consolidated Total Liabilities to Consolidated Tangible Net
Worth of not greater than the amounts listed on the following table for the
periods stated therein.
<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Year
Year Year Year Year Year 2000
1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
1st Quarter 6.00:1.00 2.00:1.00 1.05:1.00 0.95:1:00 0.95:1.00 0.95:1.00
2nd Quarter 6.00:1.00 1.70:1.00 0.95:1.00 0.95:1.00 0.95:1.00 -
3rd Quarter 4.00:1.00 1.40:1.00 0.95:1.00 0.95:1.00 0.95:1.00 -
4th Quarter 2.40:1.00 1.25:1.00 0.95:1.00 0.95:1.00 0.95:1.00 -
</TABLE>
Section 9.04. Cash Flow Coverage Ratio. The Borrower shall
maintain at all times a Cash Flow Coverage Ratio of not less than 1.15:1.00
through June 30, 1995 and 1.25:1.0 thereafter.
Section 9.05. Limitation on Debt. The Borrower shall maintain
at all times a ratio of Total Funded Debt to Cash Flow of not more than 4.5:1.0.
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.01. Events of Default. Any of the following events
shall be an "Event of Default":
(a) the Borrower shall: (i) fail to pay the principal of any
Note under this Agreement or with respect to the Revolving Credit Facility Loans
as and when due and payable; or (ii) fail to pay interest on any Note under this
Agreement or with respect to the Revolving Credit Facility Loans or any fee or
other amount due hereunder as and when due and payable;
(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any other Facility Document or by any Third
Party in any Facility Document to which it is a party or which is contained in
any certificate, document, opinion, financial or other statement furnished at
any time under or in connection with any Facility Document shall prove to have
been incorrect in any material respect on or as of the date made or deemed made;
(c) the Borrower shall: (i) fail to perform or observe any
term, covenant or agreement contained in Section 2.03 or Articles 7, 8 or 9 or
elsewhere in this Agreement; or (ii) fail to perform or observe any term,
covenant or agreement on its part to be performed or observed (other than the
obligations specifically referred to elsewhere in this Section 10.01) in any
Facility Document and such failure shall continue for 30 consecutive days;
(d) the Borrower, any Third Party or any of their respective
Subsidiaries shall: (i) fail to pay any indebtedness, including but not limited
to indebtedness for borrowed money (other than the payment obligations described
in (a) above), of the Borrower, such Third Party or such Subsidiary, as the case
may be, or any interest or premium thereon, within 180 days of billing date in
the case of trade accounts payable, 180 days from the due date in the case of
other operating liabilities (other than for borrowed money), and within thirty
days of the date when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) for all other Debt; or (ii) fail to perform
or observe any term, covenant or condition on its part to be performed or
observed under any agreement or instrument relating to any such indebtedness,
when required to be performed or observed, if the effect of such failure to
perform or observe is to accelerate, or to permit the acceleration of, after the
giving of notice or passage of time, or both, the maturity of such indebtedness,
whether or not such failure to perform or observe shall be waived by the holder
of such indebtedness; or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) the Borrower, any Third Party or any of their respective
Subsidiaries: (i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become due; or (ii) shall
make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (iii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application filed or any
such proceeding shall have been commenced, against it, in which an adjudication
or appointment is made or order for relief is entered, and which petition,
application or proceeding remains undismissed for a period of 30 days or more;
or shall be the subject of any proceeding under which its assets may be subject
to seizure, forfeiture or divestiture (other than a proceeding in respect of a
Lien permitted under Section 8.03 (b)); or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (vi)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of 30 days or more;
(f) one or more judgments, decrees or orders for the payment
of money in excess of $100,000 in the aggregate shall be rendered against the
Borrower, any Third Party or any of their respective Subsidiaries and such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of 30 consecutive days without being vacated, discharged, satisfied or
stayed or bonded pending appeal;
(g) any event or condition shall occur or exist with respect
to any Plan or Multiemployer Plan concerning which the Borrower is under an
obligation to furnish a report to the Bank in accordance with Section 7.08(h)
hereof and as a result of such event or condition, together with all other such
events or conditions, the Borrower or any ERISA Affiliate has incurred or in the
opinion of the Bank is reasonably likely to incur a liability to a Plan, a
Multiemployer Plan, the PBGC, or a Section 4042 Trustee (or any combination of
the foregoing) which is material in relation to the financial position of the
Borrower and its Subsidiaries, on a consolidated basis; provided, however, that
any such amount shall not be deemed to be material so long as all such amounts
do not exceed in the aggregate during any consecutive one year period $500,000;
(h) The Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement in an amount which is material (as
specified in Section 10.01(g) hereof);
(i) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rules 13d-3 of
the Securities and Exchange commission under the Securities Exchange Act of
1934) of 5% or more of the outstanding shares of voting stock of the Borrower
unless such persons are qualified to file SEC Schedule 12G under SEC Rules
13d-1(b)(1) and 13d-2(b); or (ii) during any period of 12 consecutive months,
commencing before or after the date of this Agreement, individuals who at the
beginning of such 12-month period were directors of the Borrower cease for any
reason to constitute a majority of the board of directors of the Borrower unless
such persons are replaced as directors by persons nominated by the then current
board of directors;
(j) (A) any Forfeiture Proceeding shall have been commenced or
the Borrower shall have given any Bank written notice of the commencement of any
Forfeiture Proceeding as provided in Section 7.08(l) or (B) any Bank has a good
faith basis to believe that a Forfeiture Proceeding has been threatened or
commenced;
(k) any Guaranty shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the Guarantor, or the Guarantor shall revoke or terminate its
Guaranty with respect to future advances, deny it has any further liability or
obligation thereunder, or shall fail to perform its obligations thereunder; or
(l) any loss contingency for costs and expenses relating to
environmental remediation becomes accruable as a liability on the financial
statements of Borrower under Financial Accounting Standards Board Standard No.
5, and such liability exceeds either $5,000,000 in the aggregate, regardless of
when due and payable, or $750,000 if payable within one year.
Section 10.02. Remedies. If any Event of Default shall occur
and be continuing, the Agent shall, upon request of the Required Banks, by
notice to the Borrower, (a) declare the Commitments to be terminated, whereupon
the same shall forthwith terminate, and (b) declare the outstanding principal of
the Notes, all interest thereon and all other amounts payable under this
Agreement and the Notes to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided that, in the case
of an Event of Default referred to in Section 10.01(e) or Section 10.01(j)(A)
above, the Commitments shall be immediately terminated, and the Notes, all
interest thereon and all other amounts payable under this Agreement shall be
immediately due and payable without notice, presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
ARTICLE 11. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.
Section 11.01. Appointment, Powers and Immunities of Agent.
Each Bank hereby irrevocably (but subject to removal by the Required Banks
pursuant to Section 11.09) appoints and authorizes the Agent to act as its agent
hereunder and under any other Facility Document with such powers as are
specifically delegated to the Agent by the terms of this Agreement and any other
Facility Document, together with such other powers as are reasonably incidental
thereto. The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and any other Facility Document, and shall
not by reason of this Agreement be a trustee for any Bank. The Agent shall not
be responsible to the Banks for any recitals, statements, representations or
warranties made by the Borrower or any officer or official of the Borrower or
any other Person contained in this Agreement or any other Facility Document, or
in any certificate or other document or instrument referred to or provided for
in, or received by any of them under, this Agreement or any other Facility
Document, or for the value, legality, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Facility Document
or any other document or instrument referred to or provided for herein or
therein, for the perfection or priority of any collateral security for the Loans
or for any failure by the Borrower to perform any of its obligations hereunder
or thereunder. The Agent may employ agents and attorneys-in-fact and shall not
be responsible, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor any
of its directors, officers, employees or agents shall be liable or responsible
for any action taken or omitted to be taken by it or them hereunder or under any
other Facility Document or in connection herewith or therewith, except for its
or their own gross negligence or willful misconduct. The Borrower shall pay any
fee agreed to by the Borrower and the Agent with respect to the Agent's services
hereunder.
Section 11.02. Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication (including any
thereof by telephone, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Bank as the holder of the Loan made by it for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Agent signed by such Bank shall have been furnished to the Agent but the
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan from a Bank. As to any matters not expressly provided
for by this Agreement or any other Facility Document, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Banks, and such instructions
of the Required Banks and any action taken or failure to act pursuant thereto
shall be binding on all of the Banks and any other holder of all or any portion
of any Loan.
Section 11.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Banks) unless the Agent
has received notice from a Bank or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default." In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Banks (and shall give
each Bank prompt notice of each such non-payment). The Agent shall (subject to
Section 11.08) take such action with respect to such Default or Event of Default
which is continuing as shall be directed by the Required Banks; provided that,
unless and until the Agent shall have received such directions, the Agent may
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interest of
the Banks; and provided further that the Agent shall not be required to take any
such action which it determines to be contrary to law.
Section 11.04. Rights of Agent as a Bank. With respect to its
Commitment and the Loan made by it, the Agent in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its capacity as a Bank. The Agent and its affiliates may (without
having to account therefor to any Bank) accept deposits from, lend money to (on
a secured or unsecured basis), and generally engage in any kind of banking,
trust or other business with, the Borrower (and any of its affiliates) as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Banks. Although the
Agent and its affiliates may in the course of such relationships and
relationships with other Persons acquire information about the Borrower, its
Affiliates and such other Persons, the Agent shall have no duty to disclose such
information to the Banks.
Section 11.05. Indemnification of Agent. The Banks agree to
indemnify the Agent (to the extent not reimbursed under Section 12.03 or under
the applicable provisions of any other Facility Document, but without limiting
the obligations of the Borrower under Section 12.03 or such provisions), ratably
in accordance with the aggregate unpaid principal amount of the Loans made by
the Banks (without giving effect to any participations, in all or any portion of
such Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrower is obligated to pay under Section 12.03 or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Bank shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 11.06. Documents. The Agent will forward to each Bank,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
Section 11.07. Non-Reliance on Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any other Facility Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower of this Agreement
or any other Facility Document or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or any Subsidiary (or any of their Affiliates) which
may come into the possession of the Agent or any of its affiliates. The Agent
shall not be required to file this Agreement, any other Facility Document or any
document or instrument referred to herein or therein, for record or give notice
of this Agreement, any other Facility Document or any document or instrument
referred to herein or therein, to anyone.
Section 11.08. Failure of Agent to Act. Except for action
expressly required of the Agent hereunder, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall have received
further assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 11.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 11.09. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with or without cause by the
Required Banks; provided that the Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in New York, New York. The Required Banks or the retiring Agent, as
the case may be, shall upon the appointment of a successor Agent promptly so
notify the Borrower and the other Banks. 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 hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article 11 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent.
Section 11.10. Amendments Concerning Agency Function. The
Agent shall not be bound by any waiver, amendment, supplement or modification of
this Agreement or any other Facility Document which affects its duties hereunder
or thereunder unless it shall have given its prior consent thereto.
Section 11.11. Liability of Agent. The Agent shall not have
any liabilities or responsibilities to the Borrower on account of the failure of
any Bank to perform its obligations hereunder or to any Bank on account of the
failure of the Borrower to perform its obligations hereunder or under any other
Facility Document.
Section 11.12. Transfer of Agency Function. Without the
consent of the Borrower or any Bank, the Agent may at any time or from time to
time transfer its functions as Agent hereunder to any of its offices wherever
located, provided that the Agent shall promptly notify the Borrower and the
Banks thereof.
Section 11.13. Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Bank or the Borrower (either one as
appropriate being the "Payor") prior to the date on which such Bank is to make
payment hereunder to the Agent of the proceeds of a Loan or the Borrower is to
make payment to the Agent, as the case may be (either such payment being a
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
repay to the Agent the amount made available to it together with interest
thereon for the period from the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per annum equal to
the average daily Federal Funds Rate for such period.
Section 11.14. Withholding Taxes. Each Bank represents that it
is entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Bank's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Bank is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Bank will furnish to the Agent Form 4224
or Form 1001 of the Internal Revenue Service, or such other forms,
certifications, statements or documents, duly executed and completed by such
Bank as evidence of such Bank's exemption from the withholding of U.S. tax with
respect thereto. The Agent shall not be obligated to make any payments hereunder
to such Bank in respect of any Loan or such Bank's Commitment until such Bank
shall have furnished to the Agent the requested form, certification, statement
or document.
Section 11.15. Several Obligations and Rights of Banks. The
failure of any Bank to make any Loan to be made by it on the date specified
therefor shall not relieve any other Bank of its obligation to make its Loan on
such date, but no Bank shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and each Bank
shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Bank to be joined as an
additional party in any proceeding for such purpose.
Section 11.16. Pro Rata Treatment of Loans, Etc. Except to the
extent otherwise provided: (a) each borrowing under Section 2.04 shall be made
from the Banks, pro rata according to the amounts of their respective
Commitments; (b) each conversion under Section 2.05 of Loans of a particular
type (but not conversions provided for by Section 3.04), shall be made pro rata
among the Banks holding Loans of such type according to the respective principal
amounts of such Loans by such Banks; and (c) each pre-payment and payment of
principal of or interest on Loans of a particular type and a particular Interest
Period shall be made to the Agent for the account of the Banks holding Loans of
such type and Interest Period pro rata in accordance with the respective unpaid
principal amounts of such Loans of such Interest Period held by such Banks.
Section 11.17. Sharing of Payments Among Banks. If a Bank
shall obtain payment of any principal of or interest on any Loan made by it
through the exercise of any right of setoff, banker's lien, counterclaim, or by
any other means (including any payment obtained from or charged against any
Third Party), it shall promptly purchase from the other Banks participations in
(or, if and to the extent specified by such Bank, direct interests in) the Loans
made by the other Banks in such amounts, and make such other adjustments from
time to time as shall be equitable to the end that all the Banks shall share the
benefit of such payment (net of any expenses which may be incurred by such Bank
in obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans, on the Revolving Credit Loans and on other
Debt to any of the Banks permitted under Section 8.01(b), held by each of them
prior to such action. To such end the Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored. The Borrower agrees that any
Bank so purchasing a participation (or direct interest) in the Loans made by
other Banks may exercise all rights of setoff, banker's lien, counterclaim or
similar rights with respect to such participation (or direct interest). Nothing
contained herein shall require any Bank to exercise any such right or shall
affect the right of any Bank to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness of the Borrower.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in writing signed by the Borrower, the
Agent and the Required Banks, or by the Borrower and the Agent acting with the
consent of the Required Banks and any provision of this Agreement may be waived
by the Required Banks or by the Agent acting with the consent of the Required
Banks; provided that no amendment, modification or waiver shall, unless by an
instrument signed by all of the Banks or by the Agent acting with the consent of
all of the Banks: (a) increase or extend the term, or extend the time or waive
any requirement for the reduction or termination, of the Commitments, (b) extend
the date fixed for the payment of principal, interest or fees on any Loan, (c)
reduce the amount of any payment of principal thereof or the rate at which
interest is payable thereon or any fee payable hereunder, (d) alter the terms of
this Section 12.01, (e) amend the definition of the term "Required Banks" or (f)
waive any of the conditions precedent set forth in Article 5 hereof and
provided, further, that any amendment of Article 11 hereof or any amendment
which increases the obligations of the Agent hereunder shall require the consent
of the Agent. No failure on the part of the Agent or any Bank to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof or
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 12.02. Usury. Anything herein to the contrary
notwithstanding, the obligations of the Borrower under this Agreement and the
Notes shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
law applicable to a Bank limiting rates of interest which may be charged or
collected by such Bank.
Section 12.03. Expenses. The Borrower shall reimburse the
Agent and the Banks on demand for all costs, expenses, and charges (including,
without limitation, fees and charges of external legal counsel for the Agent and
each Bank and costs allocated by their respective internal legal departments)
incurred by the Agent or the Banks in connection with the preparation,
performance, or enforcement of this Agreement or the Notes. The Borrower agrees
to indemnify the Agent and each Bank and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them arising
out of or by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings)
relating to any actual or proposed use by the Borrower or any Subsidiary of the
proceeds of the Loans, including without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the negligence or willful
misconduct of the Person to be indemnified).
Section 12.04. Survival. The obligations of the Borrower under
Sections 3.01, 3.05 and 12.03 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 12.05. Assignment; Participations. (a) This Agreement
shall be binding upon, and shall inure to the benefit of, the Borrower, the
Agent, the Banks and their respective successors and assigns, except that the
Borrower may not assign or transfer its rights or obligations hereunder. Each
Bank may assign, or sell participations in, all or any part of the Loan to
another bank or other entity, in which event (i) in the case of an assignment,
upon notice thereof by the Bank to the Borrower with a copy to the Agent, the
assignee shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it were
a Bank hereunder; and (ii) in the case of a participation, the participant shall
have no rights under the Facility Documents and all amounts payable by the
Borrower under Article 3 shall be determined as if such Bank had not sold such
participation. The agreement executed by such Bank in favor of the participant
shall not give the participant the right to require such Bank to take or omit to
take any action hereunder except action directly relating to (i) the extension
of a payment date with respect to any portion of the principal, interest or fees
on any amount outstanding hereunder allocated to such participant, (ii) the
reduction of the principal amount outstanding hereunder, (iii) the reduction of
the rate of interest payable on such amount or any amount of fees payable
hereunder to a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with such Bank, or (iv)
the extension of the Final Maturity Date. Such Bank may furnish any information
concerning the Borrower in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and participants);
provided that such Bank shall require any such prospective assignee or such
participant (prospective or otherwise) to agree in writing to maintain the
confidentiality of such information. In connection with any assignment pursuant
to this paragraph (a), the assigning Bank shall pay the Agent an administrative
fee for processing such assignment in the amount of $2,500.
(b) In addition to the assignments and participations
permitted under paragraph (a) above, any Bank may assign and pledge all or any
portion of its Loans and Note to (i) any affiliate of such Bank or (ii) any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Bank from its obligations hereunder.
Section 12.06. Notices. Except as otherwise provided in this
Agreement, notices may be given by telecopy, overnight courier, or by regular
mail, telecopied or addressed to the intended recipient at its telecopy number
or address listed on the signature page of this Agreement. Notices shall be
effective: (a) if given by mail, 72 hours after deposit in the mails with first
class postage prepaid, addressed as aforesaid; (b) if given by telecopy, when
the telecopy is transmitted to the applicable telecopy number; and (c) if sent
by overnight courier, upon delivery; provided, however, that notices to the
Agent and the Banks shall be effective upon receipt. A party may change its
telecopy number or address for receipt of notices by written notice given in
accordance with this paragraph.
Section 12.07. JURISDICTION; IMMUNITIES; WAIVER OF RIGHT TO
JURY TRIAL. (a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN ONONDAGA OR ONEIDA
COUNTY OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, OR ANY OTHER FACILITY DOCUMENT, AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS
ADDRESS SPECIFIED IN SECTION 12.07 BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE
BORROWER AND THE BANKS FURTHER AGREE THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN ONONDAGA COUNTY. THE BORROWER WAIVES ANY RIGHT IT MAY
HAVE TO JURY TRIAL.
(b) Nothing in this Section 12.07 shall affect the right of
the Agent or any Bank to serve legal process in any other manner permitted by
law or affect the right of the Agent or any Bank to bring any action or
proceeding against the Borrower or its property in the courts of any other
jurisdictions.
(c) To the extent that the Borrower has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether from service or notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise) with respect to itself or its property,
the Borrower hereby irrevocably waives such immunity in respect of its
obligations under this Agreement and the Notes.
Section 12.08. Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for convenience only and
shall not affect the interpretation or construction of this Agreement.
Section 12.09. Severability. The provisions of this Agreement
are intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.10. Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
any such counterpart.
Section 12.11. Integration. The Facility Documents set forth
the entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
Section 12.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
Section 12.13. Confidentiality. Each Bank and the Agent agrees
(on behalf of itself and each of its affiliates, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with safe and sound banking practices, any nonpublic information
supplied to it by the Borrower pursuant to this Agreement which is identified by
the Borrower as being confidential at the time the same is delivered to the
Banks or the Agent, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Banks or the Agent, (iii) to
bank examiners, auditors or accountants, (iv) in connection with any litigation
to which any one or more of the Banks is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
Exhibit C hereto; provided, further, that, unless specifically prohibited by
applicable law or court order, each Bank shall, prior to disclosure thereof,
notify the Borrower of any request for disclosure of any such non-public
information (x) by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial condition of
such Bank by such governmental agency) or (y) pursuant to legal process; and
provided finally that in no event shall any Bank or the Agent be obligated or
required to return any materials furnished by the Borrower. The obligations of
each Bank under this Section 12.13 shall supersede and replace the obligations
of such Bank under the confidentiality letter in respect of this financing
signed and delivered by such Bank to the Borrower prior to the date hereof.
Section 12.14. Treatment of Certain Information. The Borrower
(a) acknowledges that services may be offered or provided to it (in connection
with this Agreement or otherwise) by each Bank or by one or more of their
respective subsidiaries or affiliates and (b) acknowledges that any information
delivered to each Bank or to its subsidiaries or affiliates regarding the
Borrower may be shared among the Bank and such subsidiaries and affiliates. This
Section 12.14 shall survive the repayment of the loans and the termination of
the Commitments.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CONMED CORPORATION
By:___________________________
Name: Joseph J. Corasanti
Title: Vice President
Address for Notices:
CONMED CORPORATION 310 Broad Street
Utica, New York 13501 Attn:
Eugene R. Corasanti, President
Telecopy: (315) 797-0321
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
Address for Notices:
THE CHASE MANHATTAN BANK, N.A.
P.O. Box 4911
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
<PAGE>
BANKS:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
Lending Office and Address for
Notices:
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
FLEET BANK
By:___________________________
Name: Bruce W. Goodnough
Title: Vice President
Lending Office and Address for
Notices:
268 Genesee Street
Utica, New York 13502
Attn: Bruce W. Goodnough
Telecopy: (315) 798-2736
CREDIT AGREEMENT - REVOLVING CREDIT FACILITY
dated as of March 8, 1995
among
CONMED CORPORATION
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS
Section 1.01 Definitions
Section 1.02 Accounting Terms
ARTICLE 2 THE CREDIT
Section 2.01 The Loans
Section 2.02 The Notes
Section 2.03 Purpose
Section 2.04 Borrowing Procedures
Section 2.05 Prepayments and Conversions
Section 2.06 Mandatory Prepayments
Section 2.07 Fixed Rate Loans-Interest Periods;
Renewals
Section 2.08 Changes of Commitment
Section 2.09 Certain Notices
Section 2.10 Minimum Amounts
Section 2.11 Interest
Section 2.12 Fees
Section 2.13 Payments Generally
Section 2.14 Late Payment Fees
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs
Section 3.02 Limitation on Types of Loans
Section 3.03 Illegality
Section 3.04 Certain Conversions
Section 3.05 Certain Compensation
Section 3.06 HLT Classification
ARTICLE 4 COLLATERAL SECURITY
Section 4.01 Collateral
Section 4.02 Setoff
Section 4.03 Guaranties
ARTICLE 5 CONDITIONS PRECEDENT
Section 5.01 Documentary Conditions Precedent
Section 5.02 Additional Conditions Precedent
Section 5.03 Term Loan Borrowings
Section 5.04 Deemed Representations
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
Section 6.01 Incorporation, Good Standing and Due
Qualification
Section 6.02 Corporate Power and Authority;
No Conflicts
Section 6.03 Legally Enforceable Agreements
Section 6.04 Litigation
Section 6.05 Financial Statements
Section 6.06 Ownership and Liens
Section 6.07 Taxes
Section 6.08 ERISA
Section 6.09 Subsidiaries and Ownership of Stock
Section 6.10 Credit Arrangements
Section 6.11 Operation of Business
Section 6.12 Hazardous Materials
Section 6.13 No Default on Outstanding Judgments
or Orders
Section 6.14 No Defaults on Other Agreements
Section 6.15 Labor Disputes and Acts of God
Section 6.16 Governmental Regulation
Section 6.17 Partnerships
Section 6.18 No Forfeiture
Section 6.19 Solvency
Section 6.20 Cash Available
ARTICLE 7 AFFIRMATIVE COVENANTS
Section 7.01 Maintenance of Existence
Section 7.02 Conduct of Business
Section 7.03 Maintenance of Properties
Section 7.04 Maintenance of Records
Section 7.05 Maintenance of Insurance
Section 7.06 Compliance with Laws
Section 7.07 Right of Inspection
Section 7.08 Reporting Requirements
Section 7.09 Cash Available
ARTICLE 8 NEGATIVE COVENANTS
Section 8.01 Debt
Section 8.02 Guaranties, Etc.
Section 8.03 Liens
Section 8.04 Leases
Section 8.05 Investments
Section 8.06 Dividends
Section 8.07 Sale of Assets
Section 8.08 Stock of Subsidiaries, Etc.
Section 8.09 Transactions with Affiliates
Section 8.10 Mergers, Etc.
Section 8.11 Acquisitions
Section 8.12 No Activities Leading to Forfeiture
ARTICLE 9 FINANCIAL COVENANTS
Section 9.01 Minimum Working Capital
Section 9.02 Minimum Tangible Net Worth
Section 9.03 Leverage Ratio
Section 9.04 Cash Flow Coverage Ratio
Section 9.05 Limitation on Debt
ARTICLE 10 EVENTS OF DEFAULT
Section 10.01 Events of Default
Section 10.02 Remedies
ARTICLE 11 THE AGENT; RELATIONS AMONG BANKS AND BORROWER
Section 11.01 Appointment, Powers and Immunities
of Agent
Section 11.02 Reliance by Agent
Section 11.03 Defaults
Section 11.04 Rights of Agent as a Bank
Section 11.05 Indemnification of Agent
Section 11.06 Documents
Section 11.07 Non-Reliance on Agent and Other Banks
Section 11.08 Failure of Agent to Act
Section 11.09 Resignation or Removal of Agent
Section 11.10 Amendments Concerning Agency Function
Section 11.11 Liability of Agent
Section 11.12 Transfer of Agency Function
Section 11.13 Non-Receipt of Funds by the Agent
Section 11.14 Withholding Taxes
Section 11.15 Several Obligations and Rights of Banks
Section 11.16 Pro Rata Treatment of Loans, Etc
Section 11.17 Sharing of Payments Among Banks
ARTICLE 12 MISCELLANEOUS
Section 12.01 Amendments and Waivers
Section 12.02 Usury
Section 12.03 Expenses
Section 12.04 Survival
Section 12.05 Assignment; Participations
Section 12.06 Notices
Section 12.07 Jurisdiction; Immunities
Section 12.08 Table of Contents; Headings
Section 12.09 Severability
Section 12.10 Counterparts
Section 12.11 Integration
Section 12.12 Governing Law
Section 12.13 Confidentiality
Section 12.14 Treatment of Certain Information
EXHIBITS
Exhibit A Promissory Note
Exhibit B Authorization Letter
Exhibit C Guaranty
Exhibit D Security Agreement
Exhibit E Opinion of Counsel for Borrower
Exhibit F Opinion of Counsel for Each Third Party
Exhibit G Confidentiality Agreement
Exhibit H Plan Funding Status
Exhibit I Borrowing Notice
SCHEDULES
Schedule I Subsidiaries of Borrower
Schedule II Credit Arrangements
Schedule III Hazardous Materials
<PAGE>
CREDIT
AGREEMENT dated as of March 8, 1995 among CONMED CORPORATION, a
corporation organized under the laws of the State of New York (the "Borrower"),
each of the banks which is a signatory hereto (individually a "Bank" and
collectively the "Banks") and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a
national banking association organized under the laws of the United States of
America, as agent for the Banks (in such capacity, together with its successors
in such capacity, the "Agent").
The Borrower desires that the Banks extend credit as provided herein
and the Banks are prepared to extend such credit. Accordingly, the Borrower, the
Banks and the Agent agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa):
"Account" means any right to payment for goods sold or leased or for
services rendered, which is not evidenced by an instrument or chattel paper,
whether or not it has been earned by performance, whether secured or unsecured,
now existing or hereafter arising, and the proceeds thereof.
"Acquisitions" means the Birtcher Acquisition and the Target
Acquisition. "Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
any of its Subsidiaries; (b) which directly or indirectly beneficially owns or
holds 15% or more of any class of voting stock of the Borrower or any such
Subsidiary; (c) 15% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Borrower or such Subsidiary; or (d)
which is a partnership in which the Borrower or any of its Subsidiaries is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Agent's Office" means the principal office of Agent in Syracuse, New
York, presently located at One Lincoln Center, Syracuse, New York 13202.
"Agreement" means this Credit Agreement, as amended or supplemented
from time to time. References to Articles, Sections, Exhibits, Schedules and the
like refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Authorization Letter" means the letter agreement executed by the
Borrower in the form of Exhibit B.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York City and whenever such day relates
to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a day on
which dealings in Dollar deposits are also carried out in the London interbank
market.
"Birtcher Acquisition" means the merger of CONMED Acquisition
Corporation, a wholly-owned subsidiary of Borrower, with and into Birtcher
Medical Systems, Inc., with Birtcher becoming a wholly-owned subsidiary of
Borrower, pursuant to the Plan and Agreement of Merger.
"Capital Expenditures" means for any period, the Dollar amount of gross
expenditures (including obligations under Capital Leases) made for fixed assets,
real property, plant and equipment, and all renewals, improvements and
replacements thereto (but not repairs thereof) incurred during such period.
Assets acquired in the Acquisitions shall not be considered "Capital
Expenditures" for purposes of this Agreement.
"Capital Lease" means any lease which has been capitalized on the books
of the lessee in accordance with GAAP.
"Cash Flow" (as distinguished from Measured Cash Flow) means the sum of
the following measured on a consolidated basis for Borrower and any
subsidiaries, for any twelve month period ending on the last day of Borrower's
fiscal quarters: (i) earnings before interest, taxes, depreciation, and
amortization, minus (ii) Capital Expenditures.
"Cash Flow Coverage Ratio" means the ratio of Measured Cash Flow to
Current Debt Service, measured on a consolidated basis for Borrower and its
Subsidiaries for any twelve month period ending on the last day of each of
Borrower's fiscal quarters.
"Chase" means The Chase Manhattan Bank, N.A.
"Closing Date" means the date this Agreement has been executed by the
Borrower, the Banks and the Agent.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means any and all personal property of Borrower and of the
Guarantors as set forth in Article 4 of the Security this Agreement, together
with any other property of Borrower and the Guarantors in which the Banks
hereafter acquire a security interest or mortgage.
"Commitment" means, with respect to each Bank, the obligation of such
Bank to make its Loan under this Agreement in the principal amount following, as
such amount may be reduced or otherwise modified from time to time: If the
Target Acquisition closes on or before May 1, 1995:
The Chase Manhattan Bank, N.A.: $ 5,000,000.00 or $3,750,000.001
Fleet Bank: $ 5,000,000.00 or $3,750,000.00*
--------------
Total: $10,000,000.00
If the Target Acquisition does not close on or before May 1, 1995:
The Chase Manhattan Bank, N.A.: $ 5,000,000.00
Fleet Bank: $ 5,000,000.00
--------------
Total: $10,000,000.00
"Consolidated Capital Expenditures" means Capital Expenditures of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Current Assets" means Current Assets of the Borrower and
its Consolidated Subsidiaries, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Current Liabilities" means Current Liabilities of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Borrower in accordance
with GAAP.
"Consolidated Tangible Net Worth" means Tangible Net Worth of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Liabilities" means the total liabilities of
Borrower and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP.
"Credit Agreement - Term Loan Facility" means the agree-ment of even
date between Borrower and the Banks under which the Banks have agreed to make
Term Loans to Borrower.
"Current Assets" means all assets of the Borrower treated as current
assets in accordance with GAAP.
"Current Debt Service" means current maturities of long term Debt.
"Current Liabilities" means all liabilities of the Borrower treated as
current liabilities in accordance with GAAP, including without limitation (a)
all obligations payable on demand or within one year after the date in which the
determination is made and (b) installment and sinking fund payments required to
be made within one year after the date on which determination is made, but
excluding all such liabilities or obligations which are renew-able or extendable
at the option of the Borrower to a date more than one year from the date of
determination.
"Debt" means, with respect to any Person: (a) indebtedness of such
Person for borrowed money; (b) indebtedness for the deferred purchase price of
property or services (except trade payables in the ordinary course of business);
(c) Unfunded Benefit Liabilities of such Person (if such Person is not the
Borrower, determined in a manner analogous to that of determining Unfunded
Benefit Liabilities of the Borrower); (d) the face amount of any outstanding
letters of credit issued for the account of such Person; (e) obligations arising
under acceptance facilities; (f) guaranties, endorsements (other than for
collection in the ordinary course of business) and other contingent obligations
to purchase, to provide funds for payment, to supply funds to invest in any
Person, or otherwise to assure a creditor against loss; (g) obligations secured
by any Lien on property of such Person; and (h) obligations of such Person as
lessee under Capital Leases.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount payable by the Borrower under this
Agreement or any Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period from and
including the due date, to, but excluding the date on which such amount is paid
in full equal to 2% above the Variable Rate as in effect from time to time plus
the Margin (if any) (provided that, if the amount so in default is principal of
a Fixed Rate Loan and the due date thereof is a day other than the last day of
the Interest Period therefor, the "Default Rate" for such principal shall be,
for the period from and including the due date and to but excluding the last day
of the Interest period therefor, 2% above the interest rate for such Loan as
provided in Section 2.10 hereof and, thereafter, the Variable Rate plus 2% as
provided for above in this definition).
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Drawdown Date" means the dates on which the Borrower makes the
borrowing hereunder (which date may not be later than the last day of the
Drawdown Period).
"Drawdown Period" means the period commencing on the date hereof and
terminating on the Termination Date.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equipment" means goods other than Inventory which are used or bought
for use primarily in business, now existing or hereafter acquired, and the
proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Borrower is a member, or (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Borrower is a member.
"Eurodollar Loan" (i.e., a "LIBOR Loan") means any Loan when and to the
extent the interest rate therefor is determined on the basis of the definition
"Fixed Base Rate."
"Event of Default" has the meaning given such term in Section 10.01.
"Facility Documents" means this Agreement and the Exhibits and
Schedules hereto, the Notes, the Security Agreement, the Authorization Letter,
and the Guaranty.
"Final Maturity Date" means April 1, 1998 when the final principal
payment, all accrued interest, and any other amounts due under this Agreement or
the Notes shall be due and payable in full.
"Fixed Base Rate" means with respect to any Interest Period for a Fixed
Rate Loan, i.e., for a Eurodollar Loan, the arithmetic mean, as calculated by
the Agent, of the respective rates per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) quoted at approxi mately 11:00 a.m. London time by the
principal London branch of the Reference Bank two Banking Days prior to the
first day of such Interest Period for the offering to leading banks in the
London interbank market of Dollar deposits in immediately available funds, for a
period, and in an amount, comparable to the Interest Period and principal amount
of the Eurodollar Loan which shall be made by such Reference Bank and
outstanding during such Interest Period.
"Fixed Rate" means, for any Fixed Rate Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Agent to be equal to the quotient of (i) the Fixed Base
Rate for such Loan for such Interest Period, divided by (ii) one minus the
Reserve Requirement for such Loan for such Interest Period.
"Fixed Rate Loan" means any Eurodollar Loan.
"Fleet" means Fleet Bank.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries or Affiliates before any
court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investigation, which may result in an indictment of any of them or the seizure
or forfeiture of any of their property.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 5.05 (except for changes concurred in by the Borrower's independent
certified public accountants).
"Guarantor" shall collectively mean all Subsidiaries and Affiliates of
Borrower now or hereafter existing and their respective successors and assigns.
"Guaranty" means the guaranty in the form of Exhibit C to be delivered
by the Guarantor under the terms of this Agreement.
"Interest Period" means, with respect to any Fixed Rate Loan, the
period commencing on the date such Loan is made, converted from another type of
Loan or renewed, as the case may be, and ending, as the Borrower may select
pursuant to Section 2.07, on the numerically corresponding day in the first,
second, third, or sixth calendar month thereafter, provided that each such
Interest Period which commences on the last Banking Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.
"Inventory" means goods held for sale or lease or to be furnished under
contracts of service, or raw materials, work-in-process or materials used or
consumed in a business, now existing or hereafter arising, and the proceeds
thereof.
"Lending Office" means, for each Bank and for each type of Loan, the
lending office of such Bank (or of an affiliate of such Bank) designated as such
for such type of Loan on its signature page hereof or such other office of such
Bank (or of an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.
"Letter of Intent" means the nonbinding letter of intent (which has
since been rescinded) between Borrower and Target dated November 9, 1994, a copy
of which has been furnished to the Banks.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loan" means any loan made by a Bank pursuant to Section 2.01.
"Margin" means for each Variable Rate Loan and Eurodollar Loan the
applicable margin on the following table, computed as of the date of this
Agreement based upon Borrower's financial statements for the immediately
preceding four Quarterly Dates for income statement items and the most recent
Quarterly Date for balance sheet items, and adjusted thereafter on each
Quarterly Date based on information for the immediately preceding four Quarterly
Dates for income statement items and the immediately preceding Quarterly Date
for balance sheet items.
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of Total Ratio_1.5 1.5 ratio_2.5 2.5 ratio_3.5 3.5 ratio_4.0 Ratio 4.0
Funded Debt to
Cash Flow
Applicable Margin - 100 basis 125 basis 150 basis 175 basis 225 basis
Fixed Rate Loans points points points points points
(Eurodollar)
Applicable Margin 0 0 25 basis 50 basis 100 basis
Variable Rate points points points
Loans (Prime)
</TABLE>
The foregoing notwithstanding, it is agreed that from the date of this
Agreement through March 31, 1996, the Applicable Margin for Fixed Rate Loans
will be 150 basis points and the Applicable Margin for Variable Rate Loans will
be 25 basis points.
"Measured Cash Flow" means the sum of the following measured on a
consolidated basis for Borrower and any Subsidiaries, for any twelve month
period ending on the last day of each of Borrower's fiscal quarters:
(a) net income, plus
(b) depreciation and all other non-cash charges to income not affecting
working capital, minus
(c) Capital Expenditures.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"Note" means a promissory note of the Borrower in the form of Exhibit A
hereto evidencing the Loans made by a Bank hereunder.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Plan and Agreement of Merger" means the agreement among Borrower,
CONMED Acquisition Corporation and Birtcher Medical Systems, Inc. dated as of
December 5, 1994.
"Prime Rate" means that rate of interest from time to time announced by
the Reference Bank at its principal office as its prime commercial lending rate.
"Principal Office" means the principal office of the Reference Bank,
presently located at 1 Chase Manhattan Plaza, New York, New York 10081.
"Quarterly Date" means the last day of each of Borrower's fiscal
quarters for so long as the Commitment and any Loans made pursuant to this
Agreement remain outstanding.
"Reference Bank" means The Chase Manhattan Bank, N.A.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Bank, any change after
the date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including without limitation Regulation D) or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including such Bank of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Required Banks" means, at any time while no Loans are outstanding,
Banks having at least 75% of the aggregate amount of the Commitments and, at any
time while Loans are outstanding, Banks holding at least 75% of the aggregate
principal amount of the Loans.
"Reserve Requirement" means, for any Interest Period for any Fixed Rate
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in New York City with deposits exceeding $1,000,000,000 against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the Fixed Base Rate for Eurodollar Loans is to be determined
as provided in the definition of "Fixed Base Rate" in this Section 1.01 or (ii)
any category of extensions of credit or other assets which include Eurodollar
Loans.
"Security Agreement" means the security agreement in the form of
Exhibit D to be executed by Borrower and each Guarantor pursuant to Sections
4.01 and 4.03 of this Agreement.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
"Tangible Net Worth" means, at any date of determination thereof, the
excess of total assets over total liabilities, excluding, however, from the
determination of total assets: minority interests, if any, in Subsidiaries and
the book value of intangible assets including, but not limited to, good will,
organizational expenses, trademarks, trade names, licenses, patents, covenants
not to compete, and capitalized research and development costs.
"Target" means the company identified in the Letter of Intent.
"Target Acquisition" means the purchase of substantially all of the
assets of Target by Borrower or a wholly-owned subsidiary of Borrower on terms
substantially similar (in the sole judgment of the Banks) to those set forth in
the Letter of Intent.
"Termination Date" means April 1, 1998; provided that if such date is
not a Banking Day, the Termination Date shall be the next succeeding Banking Day
(or, if such next succeeding Banking Day falls in the next calendar month, the
next preceding Banking Day).
"Term Loans" means loans to Borrower made by the Banks pursuant to the
Credit Agreement - Term Loan Facility.
"Third Party" means a Guarantor.
"Total Funded Debt" means, with respect to Borrower and any
Subsidiaries, all indebtedness (including current maturities) for money borrowed
which by its terms matures more than one year from the date as of which such
indebtedness is incurred, and any indebtedness for money borrowed maturing
within one year from such date which is renewable or extendable at the option of
the obligor to a date beyond one year from such date (whether or not theretofore
renewed or extended), including any such indebtedness renewable or extendable at
the option of the obligor under, or payable from the proceeds of other
indebtedness which may be incurred pursuant to, the provisions of any revolving
credit agreement or other similar agreement.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the Prime Rate for such day.
"Variable Rate Loan" means any Loan when and to the extent the interest
rate for such Loan is determined in relation to the Variable Rate.
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP. All terms relating to Collateral and not otherwise defined herein shall
have the meanings ascribed to them in the Uniform Commercial Code of the State
of New York.
ARTICLE 2. THE CREDIT.
Section 2.01. The Loans. (a) Subject to the terms and conditions of
this Agreement, each of the Banks severally agrees to make loans (the "Loans")
to the Borrower from time to time from and including the date hereof to and
including the Termination Date up to but not exceeding the aggregate principal
amount outstanding under its Commitment. The Loans may be outstanding as
Variable Rate Loans or Fixed Rate Loans (each a "type" of Loans). The type of
Loans of each Bank shall be made and maintained at such Bank's Lending Office
for such type of Loans.
(b) The Loans shall be due and payable on the Final Maturity Date.
Interest on the Loans shall be due and payable as hereinafter provided.
Section 2.02. The Notes. The Loans of each Bank shall be evidenced by a
single promissory note in favor of such Bank in the form of Exhibit A, dated the
date of this Agreement, duly completed and executed by the Borrower.
Section 2.03. Purpose. The Borrower shall use the proceeds of the
Loans to consummate the Birtcher Acquisition in accordance with the Plan and
Agreement or Merger, to consummate the Target Acquisition on terms substantially
similar (in the sole judgment of the Banks) to those set forth in the Letter of
Intent, to repay existing debt of Borrower to the Banks pursuant to that certain
"Credit Agreement-Term Loan Facility" and that certain "Credit Agreement --
Revolving Credit Facility" each dated as of July 9, 1993, to pay fees,
commissions, and expenses related to the Acquisitions, for working capital, and
for general corporate purposes. Such proceeds shall not be used for the purpose,
whether immediate, incidental or ultimate, of buying or carrying "margin stock"
within the meaning of Regulation U.
Section 2.04. Borrowing Procedures. The Borrower shall make the
borrowings hereunder not later than the last day of the Drawdown Period and
shall give the Agent at least one Banking Day's notice of the date of such
borrowing (which shall be a Banking Day if such day is not the last day of the
Drawdown Period) for a Variable Rate Loan and at least three Banking Days'
notice for a Fixed Rate Loan. Not later than 1:00 p.m. New York City time on the
date of such borrowing, each Bank shall, through its Lending Office and subject
to the conditions of this Agreement, make the amount of the Loan to be made by
it on such day available to the Agent at the Agent's Office and in immediately
available funds for the account of the Borrower. The amount so received by the
Agent shall, subject to the conditions of this Agreement, be made available to
the Borrower, in immediately available funds, by the Agent crediting an account
of the Borrower designated by the Borrower and maintained with the Agent at the
Agent's Office.
Section 2.05. Prepayments and Conversions. The Borrower shall have the
right to make prepayments of principal, or to convert one type of Loan into
another type of Loan, at any time or from time to time; provided that: (a) the
Borrower shall give the Agent notice of each such prepayment or conversion as
provided in Section 2.09; and (b) Fixed Rate Loans may be prepaid or converted
only on the last day of an Interest Period for such Loans. During the Drawdown
Period, Borrower may reborrow principal amounts prepaid provided that all
conditions precedent hereunder are satisfied and provided that the principal
amount outstanding from each Bank may not exceed the amount of its Commitment.
Section 2.06. Mandatory Prepayments. Anything herein to the contrary
notwithstanding, Borrower shall be obligated to make the following prepayments
("Mandatory Prepayments") of amounts outstanding hereunder at the times
indicated below, to the extent that any such amounts remain after application to
amounts outstanding under the Credit Agreement -- Term Loan Facility, as
provided in Section 2.06 of that Agreement:
(a) 100% of the net proceeds in excess of $100,000 received by Borrower
from the sale or disposition of all or any part of the assets of Borrower or its
subsidiaries (other than in the ordinary course of business), upon Borrower's
(or the Subsidiary's, as appropriate) receipt of such proceeds;
(b) 100% of all insurance proceeds received by Borrower which are not
reasonably promptly applied toward repair or replacement of the damaged,
destroyed, or impaired property to which such proceeds relate, upon receipt by
Borrower of such proceeds; and
(c) 30% of the proceeds of the sale by Borrower of any equity
securities of Borrower (other than shares sold to employees pursuant to employee
stock option plans), upon receipt by Borrower of such proceeds.
Any Mandatory Prepayments shall be applied without penalty or premium
(other than costs associated with the mandatory prepayment of Fixed Rate Loans
on dates other than the last day of the Interest Period with respect to each
such Loan) as determined by each Bank in its sole discretion. Mandatory
Prepayments shall be divided among the Banks based upon each Bank's pro rata
share of the amounts outstanding hereunder at the time of the Mandatory
Prepayment.
Section 2.07. Fixed Rate Loans - Interest Periods; Renewals. (a) In the
case of each Fixed Rate Loan, the Borrower shall select an Interest Period of
any duration in accordance with the definition of Interest Period in Section
1.01, subject to the following limitations: (i) no Interest Period may extend
beyond the Final Maturity Date; (ii) notwithstanding clause (i) above, no
Interest Period shall have a duration less than one month, and if any such
proposed Interest Period would otherwise be for a shorter period, such Interest
Period shall not be available; (iii) if an Interest Period would end on a day
which is not a Banking Day, such Interest Period shall be extended to the next
Banking Day, unless such Banking Day would fall in the next calendar month in
which event such Interest Period shall end on the immediately preceding Banking
Day; (iv) only three Fixed Rate Interest Periods may be outstanding at any one
time.
(b) Upon notice to the Agent as provided in Section 2.09, the Borrower
may renew any Fixed Rate Loan on the last day of the Interest Period therefor as
the same type of Loan with an Interest Period of the same or different duration
in accordance with the limitations provided above. If the Borrower shall fail to
give notice to the Agent of such a renewal, such Fixed Rate Loan shall
automatically become a Variable Rate Loan on the last day of the current
Interest Period.
Section 2.08. Changes of Commitments. The Borrower shall have the right
to reduce or terminate the amount of unused Commitments at any time or from time
to time, provided that: (a) the Borrower shall give notice of each such
reduction or termination to the Agent as provided in Section 2.09; and (b) each
partial reduction shall be pro rata for each Banks and shall be at least equal
to $250,000 for each Bank. The Commitments once reduced or terminated may not be
reinstated.
Section 2.09. Certain Notices. All notices by the Borrower to the Agent
pursuant to this Article 2 shall be given on a Banking Day and shall be given
first by telephone and confirmed by telecopier. Such notices shall be
irrevocable and shall be effective as of the date given only if the telecopy
confirmation is received by the Agent not later than 1:00 p.m. New York City
time. Where telecopy confirmation is received by the Agent after 1:00 p.m., the
notice shall be deemed to be given as of the next Banking Day. In the case of
borrowings and prepayments of, conversions into and renewals of (a) Variable
Rate Loans, such notices shall be given one Banking Day prior thereto; (b) and
in the case of Fixed Rate Loans such notices shall be given three Banking Days
prior thereto. Each notice shall specify the type of Loans to be borrowed,
converted, prepaid or renewed (and, in the case of a conversion, the type of
Loans to result from such conversion and, in the case of Fixed Rate Loans, the
Interest Period(s) therefor) and the date of the borrowing, prepayment,
conversion or renewal (which shall be a Banking Day). Each notice of reduction
or termination shall specify the amount of the Commitments to be reduced or
terminated. Notices shall be similar in form to the attached Exhibit I. The
Agent shall promptly notify the Banks of the contents of each such notice.
Section 2.10. Minimum Amounts. Except for borrowings which exhaust the
full remaining amounts of the Commitments, prepayments or conversions which
result in the prepayment or conversion of all Loans of a particular type or
conversions made pursuant to Section 3.04, each borrowing, prepayment,
conversion and renewal of principal the Loans of a particular type shall be in
an amount at least equal to $500,000 in the aggregate for each Bank (borrowings,
prepayments, conversions or renewals of or into Loans of different types or, in
the case of Fixed Rate Loans, having different Interest Periods at the same time
hereunder to be deemed separate borrowings, prepayments, conversions and
renewals for the purposes of the foregoing, one for each type of Interest
Period). Anything in this Agreement to the contrary notwithstanding, the
aggregate principal amount of Fixed Rate Loans having concurrent Interest
Periods shall be at least equal to $ 500,000 in the aggregate for each Bank.
Section 2.11. Interest. (a) Interest shall accrue on the outstanding
and unpaid principal amount of each Loan for the period from and including the
date of such Loan to but excluding the date such Loan is due at the following
rates per annum: (i) for a Variable Rate Loan, at a variable rate per annum
equal to the Variable Rate plus any Margin and (ii) for a Fixed Rate Loan, at a
fixed rate equal to the Fixed Rate plus the Margin. If the principal amount of
any Loan and any other amount payable by the Borrower hereunder or under the
Note shall not be paid when due (at stated maturity, by acceleration or
otherwise), interest shall accrue on such amount to the fullest extent permitted
by law from and including such due date to but excluding the date such amount is
paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall change when the
Variable Rate changes and interest on each such Loan shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed. Interest on
each Fixed Rate Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Borrower and the Banks.
(c) Accrued interest shall be due and payable in arrears upon any
payment of principal or conversion and (i) for each Variable Rate Loan, on the
first day of each calendar quarter commencing the first such date after such
Loan; (ii) for each Fixed Rate Loan, on the last day of the Interest Period with
respect thereto and, in the case of an Interest Period greater than three months
at three-month intervals (determined on the same basis as a three month Interest
Period) after the first day of such Interest Period; provided that interest
accruing at the Default Rate shall be due and payable from time to time on
demand of the Agent.
Section 2.12. Fees. (a) During the period from the date of this
Agreement through the earlier of the date the Commitments are terminated or
March 31, 1996, the Borrower shall pay to the Agent for the account of each Bank
a commitment fee on the daily average unused Commitment of such Bank equal to
three-eighths percent (.375%). Commencing April 1, 1996, the Borrower shall pay
to the Agent for the account of each Bank a commitment fee on the daily average
unused Commitment of such Bank for the period from and including April 1, 1996,
to the earlier of the date the Commitments are terminated or the Termination
Date, at a rate per annum equal to the amount on the following table computed as
of the date of this Agreement based upon Borrower's financial statements for the
immediately preceding four Quarterly Dates for income statement items and the
most recent Quarterly Date for balance sheet items, and adjusted thereafter on
each Quarterly Date based on information for the immediately preceding four
Quarterly Dates for income statement items and the immediately preceding
Quarterly Date for balance sheet items.
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of Total Ratio _ 1.5 1.5 Ratio _ 2.5 2.5 Ratio _ 3.5 3.5 Ratio _ 4.0 Ratio 4.0
Funded Debt to
Cash Flow
Commitment Fee .25% .375% .375% .375% .5%
</TABLE>
The commitment fee shall be calculated on the basis of a year of 360
days for the actual number of days elapsed. The accrued commitment fee shall be
due and payable in arrears upon any reduction or termination of the Commitments
and on the 1st day of each calendar quarter, commencing on July 1, 1995.
(b) The Borrower shall pay to the Agent an agency fee (in cash or such
other type of compensation as may be mutually agreed), in the amount (and on the
dates) heretofore mutually agreed.
Section 2.13. Payments Generally. All payments under this Agreement or
the Notes shall be made to the Agent in immediately available funds not later
than 1:00 p.m. New York City time on the relevant dates specified in this
Article 2, and such payment received by Agent after 1:00 p.m. shall be deemed to
have been made on the next succeeding Banking Day. The Borrower shall, at the
time of making each payment under this Agreement or the Notes, by telecopy
specify to the Agent the principal or other amount payable by the Borrower under
this Agreement or the Notes to which such payment is to be applied (and in the
event that it fails to so specify, or if a Default or Event of Default has
occurred and is continuing, the Agent may apply such payment as it may elect in
its sole discretion (subject to Section 11.16)). Borrower shall make all
payments through its deposit account with Agent and Agent is hereby authorized
to deduct all payments due hereunder from such account. Except as otherwise
provided herein, if the due date of any payment under this Agreement or the
Notes would otherwise fall on a day which is not a Banking Day, such date shall
be extended to the next succeeding Banking Day and interest shall be payable for
any principal so extended for the period of such extension. Provided the Agent
receives payment in immediately available funds by 1:00 p.m. on a Banking Day,
Agent shall remit the portion of such payment due to each of the Banks by wire
transfer initiated prior to 3:00 p.m. on the same Banking Day. If payment is not
received on a Banking Day or by 1:00 p.m., Agent shall remit the amount of such
payment due Fleet by wire transfer on the next Banking Day.
Any Bank may (but shall not be obligated to) debit the amount of any
such payment which is not made by 4:00 p.m. on the first Banking Day after the
due date to any ordinary deposit account of the Borrower with such Bank, and any
Bank so doing shall promptly notify the Agent.
Section 2.14. Late Payment Fees. (a) If Borrower fails to make any
payment when due, Agent, at the request of the Required Banks, may require the
payment of a late charge to be assessed each day on the amount overdue based
upon the following formulas:
(i) For overdue interest:
(Amount overdue) x 110% x (Prime Rate + 2%)
365
(ii) For overdue principal:
(Amount overdue) x 110% x (Prime Rate + 2%)
365
(b) Late charges may be added to the amount owing on any future
payment, and such assessment and/or collection of late charges shall in no way
impair the Banks' right to pursue any other rights or remedies they may have
upon default.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs. (a) The Borrower shall pay directly to
each Bank from time to time on demand such amounts as such Bank may determine to
be necessary to compensate it for any costs which such Bank determines are
attributable to its making or maintaining any Fixed Rate Loans under this
Agreement or its Note or its obligation to make any such Loans hereunder, or any
reduction in any amount receivable by such Bank hereunder in respect of any such
Loans or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Note in respect of any of such
Loans (other than taxes imposed on the overall net income of such Bank or of its
Lending Office for any of such Loans by the jurisdiction in which such Bank has
its principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Bank
(including any of such Loans or any deposits referred to in the definition of
"Fixed Base Rate" in Section 1.01); or (iii) imposes any other condition
affecting this Agreement or its Note (or any of such extensions of credit or
liabilities). Each Bank will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this Section 3.01(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. If any Bank requests
compensation from the Borrower under this Section 3.01(a), or under Section
3.01(c), the Borrower may, by notice to such Bank (with a copy to the Agent),
require that such Bank's Loans of the type with respect to which such
compensation is requested be converted in accordance with Section 3.04.
(b) Without limiting the effect of the foregoing provisions of this
Section 3.01, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
Eurodollar loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes Eurodollar
loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Bank so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such Bank
to make or renew, and to convert Loans of any other type into, Loans of such
type hereunder shall be suspended until the date such Regulatory Change ceases
to be in effect (and all Loans of such type held by such Bank then outstanding
shall be converted in accordance with Section 3.04).
(c) Without limiting the effect of the foregoing provisions of this
Section 3.01 (but without duplication), the Borrower shall pay directly to each
Bank from time to time on request such amounts as such Bank may determine to be
necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance by it or any of its affiliates pursuant to any
law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the
date of this Agreement or thereafter) of any court or governmental or monetary
authority of capital in respect of its Loans hereunder or its obligation to make
Loans hereunder (such compensation to include, without limitation, an amount
equal to any reduction in return on assets or equity of such Bank to a level
below that which it could have achieved but for such law, regulation,
interpretation, directive or request). Each Bank will notify the Borrower if it
is entitled to compensation pursuant to this Section 3.01(c) as promptly as
practicable after it determines to request such compensation.
(d) Determinations and allocations by a Bank for purposes of this
Section 3.01 of the effect of any Regulatory Change pursuant to subsections (a)
or (b), or of the effect of capital maintained pursuant to subsection (c), on
its costs of making or maintaining Loans or its obligation to make Loans, or on
amounts receivable by, or the rate of return to, it in respect of Loans or such
obligation, and of the additional amounts required to compensate such Bank under
this Section 3.01, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
Section 3.02. Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if:
(a) the Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "Fixed Base Rate" in Section 1.01 are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining the
rate of interest for any type of Fixed Rate Loans as provided in this Agreement;
or
(b) the Required Banks determine (which determination shall be
conclusive) and notify the Agent that the relevant rates of interest referred to
in the definition of "Fixed Base Rate" in Section 1.01 upon the basis of which
the rate of interest for any type of Fixed Rate Loans is to be determined do not
adequately cover the cost to the Banks of making or maintaining such Loans; then
the Agent shall give the Borrower and each Bank prompt notice thereof, and so
long as such condition remains in effect, the Banks shall be under no obligation
to make or renew Loans of such type or to convert Loans of any other type into
Loans of such type and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for the outstanding Loans of the affected type,
either prepay such Loans or convert such Loans into another type of Loans in
accordance with Section 2.05.
Section 3.03. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its Lending
Office to (a) honor its obligation to make or renew Eurodollar Loans hereunder
or convert Loans of any type into Loans of such type, or (b) maintain Eurodollar
Loans hereunder, then such Bank shall promptly notify the Borrower thereof (with
a copy to the Agent) and such Bank's obligation to make or renew Eurodollar
Loans and to convert other types of Loans into Loans of such type hereunder
shall be suspended until such time as such Bank may again make, renew, or
convert and maintain such affected Loans and such Bank's outstanding Eurodollar
Loans, as the case may be, shall be converted in accordance with Section 3.04.
Section 3.04. Certain Conversions pursuant to Sections 3.01 and 3.03.
If the Loans of any Bank of a particular type (Loans of such type being herein
called "Affected Loans" and such type being herein called the "Affected Type")
are to be converted pursuant to Section 3.01 or 3.03, such Bank's Affected Loans
shall be automatically converted into Variable Rate Loans on the last day(s) of
the then current Interest Period(s) for the Affected Loans (or, in the case of a
conversion required by Section 3.01(b) or 3.03, on such earlier date as such
Bank may specify to the Borrower with a copy to the Agent) and, unless and until
such Bank gives notice as provided below that the circumstances specified in
Section 3.01 or 3.03 which gave rise to such conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been so
converted, all payments and prepayments of principal which would otherwise be
applied to such Bank's Affected Loans shall be applied instead to its Variable
Rate Loans;
(b) all Loans which would otherwise be made or renewed by such Bank as
Loans of the Affected Type shall be made instead as Variable Rate Loans and all
Loans of such Bank which would otherwise be converted into Loans of the Affected
Type shall be converted instead into (or shall remain as) Variable Rate Loans;
and
If such Bank gives notice to the Borrower (with a copy to the Agent)
that the circumstances specified in Section 3.01 or 3.03 which gave rise to the
conversion of such Bank's Affected Loans pursuant to this Section 3.04 no longer
exist (which such Bank agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type are outstanding, such Bank's
Variable Rate Loans shall be automatically converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Loans of the Affected
Type to the extent necessary so that, after giving effect thereto, all Loans
held by the Banks holding Loans of the Affected Type and by such Bank are held
pro rata (as to principal amounts, types and Interest Periods) in accordance
with their respective Commitments.
Section 3.05. Certain Compensation. The Borrower shall pay to the Agent
for the account of each Bank, upon the request of such Bank through the Agent,
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense which such Bank determines
is attributable to:
(a) any payment, prepayment, conversion or renewal of a Fixed Rate Loan
made by such Bank on a date other than the last day of an Interest Period for
such Loan (whether by reason of acceleration, mandatory prepayment or
otherwise); or
(b) any failure by the Borrower to borrow, convert into or renew a
Fixed Rate Loan to be made, converted into or renewed by such Bank on the date
specified therefor in the relevant notice under Section 2.04, 2.05 or 2.07, as
the case may be.
Without limiting the foregoing, such compensation shall include an
amount equal to the excess, if any, of: (i) the amount of interest which
otherwise would have accrued on the principal amount so paid, prepaid, converted
or renewed or not borrowed, converted or renewed for the period from and
including the date of such payment, prepayment or conversion or failure to
borrow, convert or renew to but excluding the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or renew, to but excluding the last day of the Interest Period for such Loan
which would have commenced on the date specified therefor in the relevant
notice) at the applicable rate of interest for such Loan provided for herein;
over (ii) the amount of interest (as reasonably determined by such Bank) such
Bank would have bid in the London interbank market for Dollar deposits for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Bank as to the amounts payable pursuant to this
Section 3.05 shall be conclusive absent manifest error.
Section 3.06. HLT Classification. If, after the date hereof, the Agent
is advised by any Bank that such Bank has received notice from any governmental
authority, central bank or comparable agency having jurisdiction over such Bank
that the definition of highly leveraged transaction has been modified with the
result that its Loans hereunder are classified as a "highly leveraged
transaction" (an "HLT Classification") or if the Borrower takes any action which
causes this transaction to be subject to HLT Classification, the Agent shall
promptly give notice of such HLT Classification to the Borrower and the other
Banks and the Agent. The Banks and the Borrower shall commence negotiations in
good faith to agree on whether and, if so, the extent to which commitment fees,
interest rates and/or margins hereunder should be increased so as to reflect
such HLT Classification. If the Borrower and the Required Banks fail to agree on
such increases within 10 days after notice is given by the Agent as provided
above, then (i) the Agent, if requested by the Required Banks shall, by notice
to the Borrower immediately terminate the Commitments, and (ii) the Borrower
shall be obligated to prepay on the date of such termination of the Commitments
each outstanding Loan by paying the aggregate principal amount to be prepaid
together with all accrued interest thereon to the date of such prepayment;
provided that, if the Borrower prepays any Fixed Rate Loans pursuant to this
clause, the Borrower shall compensate the Banks for any resulting funding
losses. The Banks acknowledge that a HLT Classification is not a Default or an
Event of Default hereunder.
ARTICLE 4. COLLATERAL SECURITY.
Section 4.01 Security. As security for the payment of all Loans made
hereunder and for the obligations of each Guarantor under its Guaranty, Borrower
and the Guarantors hereby agree that the Banks shall at all times have, pursuant
to a Security Agreement executed concurrently herewith in the Form of Exhibit D,
a continuing general security interest in all personal property of Borrower and
each Guarantor as more described in the Security Agreement:
Section 4.02 Setoff. As additional collateral security for the payment
of the Notes and of any and all other obligations and liabilities of Borrower
and the each Guarantors to the Banks hereunder, whether due or to become due,
direct or contingent, now existing or hereafter arising, and however created or
acquired, the Banks shall at all times have and are hereby given a security
interest in and a lien upon and right of offset against all moneys, deposit
balances, securities or other property or interest therein of Borrower and the
each Guarantors now or at any time after the date of this Loan Agreement held or
received by or for or left in the possession or control of any of the Banks,
whether for safekeeping, custody, transmission, collection, pledge or for any
other or different purpose. The foregoing right of setoff shall at all times be
subject to the Banks' obligation to share payments as set forth in Section
11.17.
Section 4.03 Guaranties. Each Guarantor shall execute and deliver a
Guaranty to each of the Banks, and a Security Agreement granting the Banks a
security interest in all of the Guarantor's personal property as set forth in
Section 4.01.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.01. Documentary Conditions Precedent. The obligations of the
Banks to make the Loans constituting the initial borrowing hereunder are subject
to the condition precedent that the Agent and the Banks shall have received on
or before the date of such Loans each of the following, in form and substance
satisfactory to the Agent, the Banks, and their counsel:
(a) the Notes duly executed by the Borrower;
(b) the Authorization Letter duly executed by the Borrower;
(c) Security Agreements and UCC-1 Financing Statements duly executed by
the Borrower and each Guarantor;
(d) the Guaranty duly executed by each Guarantor;
(e) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, attesting to all corporate action taken by the
Borrower, including resolutions of its Board of Directors and sole shareholder
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party and each other document to be delivered pursuant to this
Agreement;
(f) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, certifying the names and true signatures of
the officers of the Borrower authorized to sign the Facility Documents to which
it is a party and the other documents to be delivered by the Borrower under this
Agreement;
(g) a certificate of a duly authorized officer of the Borrower, dated
the Closing Date, stating that the representations and warranties in Article 6
are true and correct on such date as though made on and as of such date and that
no event has occurred and is continuing which constitutes a Default or Event of
Default;
(h) a favorable opinion of counsel for the Borrower, dated the Closing
Date, in substantially the form of Exhibit E and as to such other matters as the
Agent or any Bank may reasonably request;
(i) a certificate of the Secretary or Assistant Secretary of each Third
Party, dated the Closing Date, attesting to all corporate action taken by the
Third Party, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party;
(j) a certificate of the Secretary or Assistant Secretary of each Third
Party, dated the Closing Date, certifying the names and true signatures of the
officers of each Third Party authorized to sign the Facility Documents to which
it is a party;
(k) a favorable opinion of counsel for each Third Party dated the
Closing Date, in substantially the form of Exhibit F and as to such other
matters as the Agent or any Bank may reasonably request;
(l) a certificate of a duly authorized officer of each Third Party,
dated the Closing Date, stating that the representations and warranties in the
Facility Documents to which it is a party are true and correct on such date as
though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or Event of Default, and
(m) Certificates from the applicable Secretaries of State showing
Borrower and each Third Party to be corporations in good standing in the States
of their incorporation.
Section 5.02. Additional Conditions Precedent. The obligations of the
Banks to make any Loans pursuant to a borrowing which increases the amount
outstanding hereunder (including the initial borrowing) shall be subject to the
further conditions precedent that on the date of such Loans:
(a) the following statements shall be true:
(i) the representations and warranties contained in Article 6 and in
any other Facility Document are true and correct on and as of
the date of such Loans as though made on and as of such date;
and
(ii) no Default or Event of Default has occurred and is continuing,
or would result from such Loans.
(b) The Banks shall have reviewed, and shall be satisfied with, the
terms and conditions of, and the documentation relating to, the Acquisitions,
and the other transactions contemplated hereby. The Banks shall also have
reviewed, and shall be satisfied with, the pro forma financial statements for
the combined operations of Borrower, Birtcher Medical Systems, Inc. and Target
as of the closing of each Acquisition.
(c) The Banks shall have reviewed, and shall be satisfied with, the
Borrower's projections and pro forma financial statements reflecting the
forecasted financial condition, income and expenses of the Borrower and its
Subsidiaries after giving effect to each Acquisition, the borrowings under this
Agreement, and any other transactions contemplated hereby, and the Bank's
continuing satisfaction with the condition (financial and other), operations,
assets, nature of assets, liabilities and prospects of the Borrower, Birtcher
Medical Systems, Inc.,Target, and their respective Subsidiaries.
(d) The Banks shall have reviewed, and shall be satisfied with, (i) the
Borrower's tax assumptions, and (ii) the corporate, organizational, capital, and
legal structure of the Borrower, Birtcher Medical Systems, Inc., Target and
their respective Subsidiaries.
(e) The Banks shall be satisfied that the borrowings under this
Agreement and other funding for the Acquisitions are in full compliance with all
legal requirements, including without limitation Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System, and that the Acquisitions
are in compliance with all applicable legal requirements including, if
applicable, the Hart-Scott-Rodino Act, and all securities law requirements.
(f) The Banks shall be satisfied that the Borrower, Birtcher Medical
Systems, Inc., Target, and their respective Subsidiaries comply in all material
respects with all applicable U.S. federal, state and local laws and regulations,
including all Environmental Laws.
(g) The Banks shall have reviewed, and shall be satisfied with, an
environmental risk assessment (including the potential levels of environmental
liability set forth therein) with respect to Birtcher Medical Systems, Inc.,
Target, and their respective Subsidiaries.
(h) The Banks shall have reviewed, and shall be satisfied with, the
insurance program of the Borrower, Birtcher Medical Systems, Inc., Target, and
their respective Subsidiaries.
(i) The Banks shall have reviewed, and shall be satisfied with, all
financial information concerning each Acquisition furnished to Borrower pursuant
to the agreements memorializing the Acquisitions.
(j) The Banks shall have reviewed, and shall be satisfied with,
information concerning any litigation relating to or arising out of either of
the Acquisitions or any of the other transactions contemplated by this
Agreement.
(k) the Agent shall have received such other approvals, opinions or
documents as the Agent or any Bank may reasonably request.
(k) uaranties to each Bank from each Subsidiary shall be in full force
and effect and unrevoked.
Section 5.03. Term Loan Borrowings. The obligations of the Banks to
make any Loans hereunder shall be subject to the further condition precedent
that Borrower shall have borrowed the full amount committed by the Banks under
the Credit Agreement - Term Loan Facility.
Section 5.04. Deemed Representations. Each notice of borrowing
hereunder and acceptance by the Borrower of the proceeds of such borrowing shall
constitute a representation and warranty that the statements contained in
Section 5.02(a) are true and correct both on the date of such notice and, unless
the Borrower otherwise notifies the Agent prior to such borrowing, as of the
date of such borrowing.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 6.01. Incorporation, Good Standing and Due Qualification. Each
of the Borrower and its Subsidiaries is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its assets and to transact the business
in which it is now engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required.
Section 6.02. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Borrower of the Facility Documents to
which it is a party have been duly authorized by all necessary corporate action
and do not and will not: (a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing, registration, consent or approval under, any law,
rule, regulation (including, without limitation, Regulation U), order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Borrower or any of its Subsidiaries or Affiliates; (d)
result in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected; (e) result in, or require, the creation or imposition of
any Lien upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower; or (f) cause the Borrower (or any Subsidiary or
Affiliate, as the case may be) to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument.
Section 6.03. Legally Enforceable Agreements. Each Facility Document to
which the Borrower is a party is, or when delivered under this Agreement will
be, a legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally.
Section 6.04. Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened, against or affecting
the Borrower or any of its Subsidiaries before any court, governmental agency or
arbitrator, which may, in any one case or in the aggregate, materially adversely
affect the financial condition, operations, properties or business of the
Borrower or any such Subsidiary or of the ability of the Borrower to perform its
obligations under the Facility Documents to which it is a party.
Section 6.05. Financial Statements. The consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as at December 30, 1994, and the
related consolidated income statement and statements of cash flows and changes
in stockholders' equity of the Borrower and its Consolidated Subsidiaries for
the fiscal year then ended, and the accompanying footnotes, together with the
opinion thereon, of Price Waterhouse LLP, independent certified public
accountants, copies of which have been furnished to each of the Banks, are
complete and correct and fairly present the financial condition of the Borrower
and its Consolidated Subsidiaries as at such date and the results of the
operations of the Borrower and its Consolidated Subsidiaries for the periods
covered by such statements, all in accordance with GAAP consistently applied
(subject to adjustments under Financial Accounting Standards 106 and 109). There
are no liabilities of the Borrower or any of its Consolidated Subsidiaries,
fixed or contingent, which are material but are not reflected in the financial
statements or in the notes thereto, other than liabilities arising in the
ordinary course of business since December 30, 1994. No information, exhibit or
report furnished by the Borrower to the Banks in connection with the negotiation
of this Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statements contained
therein not materially misleading. Since December 30, 1994, there has been no
material adverse change in the condition (financial or otherwise), business,
operations or prospects of the Borrower or any of its Subsidiaries.
Section 6.06. Ownership and Liens. Each of the Borrower and its
Consolidated Subsidiaries has title to, or valid leasehold interests in, all of
its properties and assets, real and personal, including the properties and
assets, and leasehold interests reflected in the financial statements referred
to in Section 6.05 (other than any properties or assets disposed of in the
ordinary course of business), and none of the properties and assets owned by the
Borrower or any of its Subsidiaries and none of its leasehold interests is
subject to any Lien, except as disclosed in such financial statements or as may
be permitted hereunder.
Section 6.07. Taxes. Each of the Borrower and its Subsidiaries has
filed all tax returns (federal, state and local) required to be filed and has
paid all taxes, assessments and governmental charges and levies thereon to be
due, including interest and penalties. The federal income tax liability of the
Borrower and its Subsidiaries has been audited by the Internal Revenue Service
and has been finally determined and satisfied for all taxable years up to and
including the taxable year ended in [1990].
Section 6.08. ERISA. Each Plan, and, to the best knowledge of the
Borrower, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law, and no event or condition is occurring or exists concerning which the
Borrower would be under an obligation to furnish a report to the Bank in
accordance with Section 7.08(h) hereof. The funded status of each Plan is as set
forth in Schedule IV.
Section 6.09. Subsidiaries and Ownership of Stock. Schedule I is a
complete and accurate list of the Subsidiaries of the Borrower, showing the
jurisdiction of incorporation or organization of each Subsidiary and showing the
percentage of the Borrower's ownership of the outstanding stock or other
interest of each such Subsidiary. All of the outstanding capital stock or other
interest of each such Subsidiary has been validly issued, is fully paid and
nonassessable and is owned by the Borrower free and clear of all Liens.
Section 6.10. Credit Arrangements. Schedule II is a complete and
correct list of all credit agreements, indentures, installment purchase
agreements, guaranties, Capital Leases and other investments, agreements and
arrangements presently in effect providing for or relating to extensions of
credit (including agreements and arrangements for the issuance of letters of
credit or for acceptance financing) in respect of which the Borrower or any of
its Subsidiaries is in any manner directly or contingently obligated; and the
maximum principal or face amounts of the credit in question, outstanding and
which can be outstanding, are correctly stated, and all Liens of any nature
given or agreed to be given as security therefor are correctly described or
indicated in such Schedule.
Section 6.11. Operation of Business. Each of the Borrower and its
Subsidiaries possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, necessary to conduct its business
substantially as now conducted and as presently proposed to be conducted, and
neither the Borrower nor any of its Subsidiaries is in violation of any valid
rights of others with respect to any of the foregoing.
Section 6.12. Hazardous Materials. The Borrower and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization would not have a material adverse
effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries. The Borrower and
each of its Subsidiaries are in compliance with the terms and conditions of all
such permits, licenses and authorizations, and are also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a material
adverse effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries.
In addition, except as set forth in Schedule III hereto:
(a) No notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or threatened by any
governmental or other entity with respect to any alleged failure by the Borrower
or any of its Subsidiaries to have any permit, license or authorization required
in connection with the conduct of the business of the Borrower or any of its
Subsidiaries or with respect to any generation, treatment, storage, recycling,
transportation, release or disposal, or any release as defined in 42 U.S.C. ss.
9601(22) ("Release"), of any substance regulated under Environmental Laws
("Hazardous Materials") generated by the Borrower or any of its Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries has handled any
Hazardous Material, other than as a generator, on any property now or previously
owned or leased by the Borrower or any of its Subsidiaries to an extent that it
has, or may reasonably be expected to have, a material adverse effect on the
consolidated financial condition, operations, business or prospects taken as a
whole of the Borrower and its Consolidated Subsidiaries; and
(i) no polychlorinated biphenyl is or has been present at any
property now or previously owned or leased by the Borrower or
any of its Subsidiaries;
(ii) no asbestos is or has been present at any property now or
previously owned or leased by the Borrower or any of its
Subsidiaries;
(iii) there are no underground storage tanks for Hazardous Materials,
active or abandoned, at any property now or previously owned or
leased by the Borrower or any of its Subsidiaries; and
(iv) no Hazardous Materials have been Released, in a reportable
quantity, where such a quantity has been established by statute,
ordinance, rule, regulation or order, at, on or under any
property now or previously owned by the Borrower or any of its
Subsidiaries.
(c) Neither the Borrower nor any of its Subsidiaries has transported or
arranged for the transportation of any Hazardous Material to any location which
is listed on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), listed
for possible inclusion on the National Priorities List by the Environmental
Protection Agency in the Comprehensive Environmental Response and Liability
Information System as provided by 40 C.F.R. ss. 300.5 ("CERCLIS") or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to claims against the
Borrower or any of its Subsidiaries for clean-up costs, remedial work, damages
to natural resources or for personal injury claims, including, but not limited
to, claims under CERCLA.
(d) No Hazardous Material generated by the Borrower or any of its
Subsidiaries has been recycled, treated, stored, disposed of or released (as
defined in CERCLA) by the Borrower or any of its Subsidiaries at any location
other than those listed in Schedule III hereto.
(e) No oral or written notification of a Release of a Hazardous
material has been filed by or on behalf of the Borrower or any of its
Subsidiaries and no property now or previously owned or leased by the Borrower
or any of its Subsidiaries is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA, on CERCLIS or on any similar
state list of sites requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to any Environmental
Laws on any of the real property or properties owned or leased by the Borrower
or any of its Subsidiaries, and no government actions have been taken or are in
process which could subject any of such properties to such Liens and neither the
Borrower nor any of its Subsidiaries would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any property
owned by it in any deed to such property.
(g) There have been no environmental investigations, studies, audits,
test, reviews or other analyses conducted by or which are in the possession of
the Borrower or any of its Subsidiaries in relation to any property or facility
now or previously owned or leased by the Borrower or any of its Subsidiaries
which have not been made available to the Banks.
Section 6.13. No Default on Outstanding Judgments or Orders. Each of
the Borrower and its Subsidiaries has satisfied all judgments and neither the
Borrower nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other governmental authority, commission, board,
bureau, agency or instrumentality, domestic or foreign.
Section 6.14. No Defaults on Other Agreements. Neither the Borrower nor
any of its Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter or
corporate restriction which could have a material adverse effect on the
business, properties, assets, operations or conditions, financial or otherwise,
of the Borrower or any of its Subsidiaries, or the ability of the Borrower or
any of its Subsidiaries to carry out its obligations under the Facility
Documents to which it is a party. Neither the Borrower nor any of its
Subsidiaries is in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a party.
Section 6.15. Labor Disputes and Acts of God. Neither the business nor
the properties of the Borrower or of any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties or the operation of the Borrower or such
Subsidiary.
Section 6.16. Governmental Regulation. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Power Act or any statute or regulation limiting its ability to
incur indebtedness for money borrowed as contemplated hereby.
Section 6.17. Partnerships. Neither the Borrower nor any of its
Subsidiaries is a partner in any partnership.
Section 6.18. No Forfeiture. Neither the Borrower nor any of its
Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and no Forfeiture Proceeding against any of them is pending or
threatened.
Section 6.19. Solvency.
(a) The present fair saleable value of the assets of the Borrower after
giving effect to all the transactions contemplated by the Facility Documents and
the funding of all Commitments hereunder exceeds the amount that will be
required to be paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Borrower and its Subsidiaries as they
mature.
(b) The property of the Borrower does not constitute unreasonably small
capital for the Borrower to carry out its business as now conducted and as
proposed to be conducted including the capital needs of the Borrower.
(c) The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower, and of
amounts to be payable on or in respect of debt of the Borrower). The cash
available to the Borrower after taking into account all other anticipated uses
of the cash of the Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Borrower when such amounts are required
to be paid.
(d) The Borrower does not believe that final judgments against it in
actions for money damages will be rendered at a time when, or in an amount such
that, the Borrower will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). The cash available to the Borrower after
taking into account all other anticipated uses of the cash of the Borrower
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section 6.19), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
Section 6.20. Cash Available. Borrower and its Subsidiaries own cash
and cash equivalents (which shall include government bonds, investment grade
corporate debt instruments rated A or better, or bank repurchase agreements of
30 days or less duration backed by direct obligations of the United States of
America or any agencies thereof) in the aggregate amount of at least $1,000,000.
ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower shall:
Section 7.01. Maintenance of Existence. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its corporate existence
and good standing in the jurisdiction of its incorporation, and qualify and
remain qualified, and cause each of its Subsidiaries to qualify and remain
qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 7.02. Conduct of Business. Continue, and cause each of its
Subsidiaries to continue, to engage in an efficient and economical manner in a
business of the same general type as conducted by it on the date of this
Agreement.
Section 7.03. Maintenance of Properties. Maintain, keep and preserve,
and cause each of its Subsidiaries to maintain, keep and preserve, all of its
properties, (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
Section 7.04. Maintenance of Records. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, in which complete
entries will be made in accordance with GAAP, reflecting all financial
transactions of the Borrower and its Subsidiaries.
Section 7.05. Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof.
Section 7.06. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders (including, but not limited to, environmental laws,
rules, regulations and orders), such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property.
Section 7.07. Right of Inspection. At any reasonable time and from time
to time, permit the Agent or any Bank or any agent or representative thereof, to
examine and make copies and abstracts from the records and books of account of,
and visit the properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their respective officers and directors and the
Borrower's independent accountants.
Section 7.08. Reporting Requirements. Furnish directly to each of the
Banks:
(a) as soon as available and in any event within 90 days after the end
of each fiscal year of the Borrower, a consolidated and consolidating balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated and consolidating income statement and statements
of cash flows and changes in stockholders' equity of the Borrower and its
Consolidated Subsidiaries for such fiscal year, all in reasonable detail and
stating in comparative form the respective consolidated and consolidating
figures for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP and as to the consolidated statements
accompanied by an opinion thereon acceptable to the Agent and each of the Banks
by Price Waterhouse or other independent accountants of national standing
selected by the Borrower;
(b) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and a consolidated and
consolidating income statement and statements of cash flows and changes in
stockholders' equity, of the Borrower and its Consolidated Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, all in reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for the corresponding date and
period in the previous fiscal year and all prepared in accordance with GAAP and
certified by the chief financial officer of the Borrower (subject to year-end
adjustments);
(c) promptly upon receipt thereof, copies of any reports submitted to
the Borrower or any of its Subsidiaries by independent certified public
accountants in connection with examination of the financial statements of the
Borrower or any such Subsidiary made by such accountants;
(d) simultaneously with the delivery of the financial statements
referred to above, a certificate of the chief financial officer of the Borrower
(i) certifying that to the best of his knowledge no Default or Event of Default
has occurred and is continuing or, if a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, and (ii) with computations
demonstrating compliance with the covenants contained in Article 9;
(e) simultaneously with the delivery of the annual financial statements
referred to in Section 7.08(a), a certificate of the independent public
accountants who audited such statements to the effect that, in making the
examination necessary for the audit of such statements, they have obtained no
knowledge of any condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of any such
condition or event, specifying in such certificate each such condition or event
of which they have knowledge and the nature and status thereof;
(f) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, affecting the
Borrower or any of its Subsidiaries which, if determined adversely to the
Borrower or such Subsidiary, could have a material adverse effect on the
financial condition, properties, or operations of the Borrower or such
Subsidiary;
(g) as soon as possible and in any event within 10 days after the
occurrence of each Default or Event of Default a written notice setting forth
the details of such Default or Event of Default and the action which is proposed
to be taken by the Borrower with respect thereto; (h) as soon as possible, and
in any event within ten days after the Borrower knows or has reason to know that
any of the events or conditions specified below with respect to any Plan or
Multiemployer Plan have occurred or exist, a statement signed by a senior
financial officer of the Borrower setting forth details respecting such event or
condition and the action, if any, which the Borrower or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any report or notice
required to be filed with or given to PBGC by the Borrower or an ERISA Affiliate
with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA,
with respect to a Plan, as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA including,
without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless
of the issuance of any waivers in accordance with Section 412(d)
of the Code) and any request for a waiver under Section 412(d)
of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by the Borrower
or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower or any
ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan by
the Borrower or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default)
or the receipt of the Borrower or any ERISA Affiliate of notice
from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it
intends to terminate or has terminated under Section 4041A of
ERISA;
(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against the Borrower or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA would
result in the loss of tax-exempt status of the trust of which
such Plan is a part if the Borrower or an ERISA Affiliate fails
to timely provide security to the Plan in accordance with the
provisions of said Sections;
(vii) any event or circumstance exists which may reasonably be
expected to constitute grounds for the Borrower or any ERISA
Affiliate to incur liability under Title IV of ERISA or under
Sections 412(c)(11) or 412(n) of the Code with respect to any
Plan; and
(viii)the Unfunded Benefit Liabilities of one or more Plans increase
after the date of this Agreement in an amount which is material
in relation to the financial condition of the Borrower and its
Subsidiaries, on a consolidated basis; provided, however, that
such increase shall not be deemed to be material so long as it
does not exceed $300,000 during any consecutive one year period.
(i) promptly after the request of any Bank, copies of each annual
report filed pursuant to Section 104 of ERISA with respect to each Plan
(including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Borrower or an ERISA
Affiliate;
(j) promptly after the furnishing thereof, copies of any statement or
report furnished to any other party pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be furnished to the
Banks pursuant to any other clause of this Section 7.08;
(k) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Borrower or any of its
Subsidiaries sends to its stockholders, and copies of all regular, periodic and
special reports, and all registration statements which the Borrower or any such
Subsidiary files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange;
(l) promptly after the commencement thereof or promptly after the
Borrower knows of the commencement or threat thereof, notice of any Forfeiture
Proceeding; and
(m) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as the Agent
or any Bank may from time to time reasonably request.
Section 7.09. Guaranties. Cause any Subsidiary hereafter created or
acquired to execute and deliver a Guaranty.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower shall not:
Section 8.01. Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt
except:
(a) Debt of the Borrower under this Agreement or the Notes, or under
the Credit Agreement - Term Loan Facility and Notes issued pursuant thereto;
(b) Debt described in Schedule II, including renewals, extensions or
refinancings thereof, provided that the principal amount thereof does not
increase;
(c) Debt of the Borrower subordinated on terms satisfactory to the
Banks to the Borrower's obligations under this Agreement and the Notes;
(d) Debt of the Borrower to any such Subsidiary or of any Subsidiary to
the Borrower or another such Subsidiary;
(e) accounts payable to trade creditors for goods or services which are
not aged more than 180 days from billing date and current operating liabilities
(other than for borrowed money) which are not more than 180 days past due, in
each case incurred in the ordinary course of business and paid within the
specified time, unless contested in good faith and by appropriate proceedings;
(f) Debt in respect of letters of credit issued for the account of the
Borrower or any such Subsidiary in an aggregate face amount outstanding at any
time of up to $1,500,000;
(g) Debt of the Borrower or any such Subsidiary secured by purchase
money Liens permitted by Section 8.03; or
(h) Debt incurred by Borrower in an amount not to exceed $1,100,000 to
finance the purchase and improvement by Borrower of the former Carl's Drug
Company real property located at 5836 Success Drive, West Rome Industrial Park,
Rome, New York.
Section 8.02. Guaranties, Etc. Assume, guarantee, endorse or otherwise
be or become directly or contingently responsible or liable, or permit any of
its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, asset, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.
Section 8.03. Liens. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(a) Liens in favor of the Agent on behalf of the Banks securing the
Loans hereunder;
(b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment insurance, social
security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) judgment and other similar Liens arising in connection with court
proceedings; provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of such a Subsidiary to the Borrower or
another such Subsidiary;
(i) Liens described in Schedule II including renewals, extensions or
refinancings of the obligations secured thereby, provided that the principal
amount does not increase and the Liens are not extended to other property or
obligations;
(j) a mortgage granted on the former Carl's Drug Company real property
located at 5836 Success Drive, West Rome Industrial Park, Rome, New York to
secure the debt referenced in Section 8.01(h); or
(k) purchase money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition, or
a Lien incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease; provided that:
(i) any property subject to any of the foregoing is acquired by the
Borrower or any such Subsidiary in the ordinary course of its
business and the Lien on any such property is created
contemporaneously with such acquisition;
(ii) the obligation secured by any Lien so created, assumed or
existing shall not exceed 100% of the lesser of cost or fair
market value as of the time of acquisi- tion of the property
covered thereby to the Borrower or such Subsidiary acquiring the
same;
(iii) each such Lien shall attach only to the property so acquired and
fixed improvements thereon;
(iv) the Debt secured by all such Liens shall not exceed $200,000 at
any time outstanding in the aggregate; and
(v) the obligations secured by such Lien are permitted by the
provisions of Section 8.01 and the related expenditure is
permitted under Section 9.03.
Section 8.04. Leases. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except: (a) leases existing on the date of this Agreement and any extensions or
renewals thereof; (b) leases (other than Capital Leases) which do not in the
aggregate require the Borrower and its Subsidiaries on a consolidated basis to
make payments (including taxes, insurance, maintenance and similar expense which
the Borrower or any Subsidiary is required to pay under the terms of any lease)
in any fiscal year of the Borrower in excess of $1,000,000; (c) leases between
the Borrower and any such Subsidiary or between any such Subsidiaries; and (d)
Capital Leases permitted by Section 8.03. Payments under existing Birtcher
Medical Systems, Inc. leases and renewals of same for premises located at 50
Technology Drive and 15330 Barranca Parkway, Irvine, California shall be
disregarded in calculating Borrower's compliance with the limitations set forth
in subsection 8.04(b).
Section 8.05. Loans; Investments. Make, or permit any of its
Subsidiaries to make, any loan or advance to any Person, or purchase or
otherwise acquire, or permit any such Subsidiary to purchase or otherwise
acquire, any capital stock, assets, obligations or other securities of, make any
capital contribution to, or otherwise invest in, or acquire any interest in, any
Person, except: (a) direct obligations of the United States of America or any
agency thereof with maturities of five years or less from the date of
acquisition; (b) commercial paper of a domestic issuer rated at least "A-1" by
Standard & Poor's Corporation or "P-1" by Moody's Investors Service, Inc.; (c)
certificates of deposit with maturities of one year or less from the date of
acquisition issued by any commercial bank operating within the United States of
America having capital and surplus in excess of $750,000,000; (d) bank
repurchase agreements of 30 days or less duration backed by direct obligations
of the United States of America or any agencies thereof; and (e) for stock,
obligations or securities received in settlement of debts (created in the
ordinary course of business) owing to the Borrower or any such Subsidiary.
Section 8.06. Dividends. Without the consent of the Banks, declare or
pay any dividends, purchase, redeem, retire or otherwise acquire for value any
of its capital stock now or hereafter outstanding, or make any distribution of
assets to its stockholders as such whether in cash, assets or in obligations of
the Borrower, or allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption or retirement of
any shares of its capital stock, or make any other distribution by reduction of
capital or otherwise in respect of any shares of its capital stock or permit any
of its Subsidiaries to purchase or otherwise acquire for value any stock of the
Borrower or another such Subsidiary, except that: (a) the Borrower may declare
and deliver dividends and make distributions payable solely in common stock of
the Borrower; and (b) the Borrower may purchase or otherwise acquire shares of
its capital stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital stock.
Section 8.07. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests); except: (a) for inventory
disposed of in the ordinary course of business; (b) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(c) that any such Subsidiary may sell, lease, assign, or otherwise transfer its
assets to the Borrower; and (d) Borrower may sell, lease, assign or otherwise
transfer assets to any Subsidiary so long as a Guaranty is in full force and
effect for such Subsidiary.
Section 8.08. Stock of Subsidiaries, Etc. Sell or otherwise dispose of
any shares of capital stock of any of its Subsidiaries, except in connection
with a transaction permitted under Section 8.10, or permit any such Subsidiary
to issue any additional shares of its capital stock, except directors'
qualifying shares.
Section 8.09. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate or permit any of its Subsidiaries
to enter into any transaction, including, without limitation, the purchase, sale
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Borrower's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary than would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
Section 8.10. Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or acquire all or substantially all of the
assets or the business of any Person (or enter into any agreement to do any of
the foregoing), or permit any of its Subsidiaries to do so except that: (a) any
such Subsidiary may merge into or transfer assets to the Borrower; and (b) any
Subsidiary may merge into or consolidate with or transfer assets to any other
Subsidiary.
Section 8.11. Acquisitions. Enter into any transaction (other than the
Birtcher Acquisition and the Target Acquisition) pursuant to which the Borrower
or any of its Subsidiaries (a) acquires equity securities (or warrants, options
or other rights to acquire such securities) of any corporation other than the
Borrower or any corporation which is not then a Subsidiary of the Borrower,
pursuant to a solicitation of tenders therefor, or in one or more negotiated
block, market or other transactions not involving a tender offer, or a
combination of any of the foregoing, or (b) makes any corporation a Subsidiary
of the Borrower, or causes any such corporation to be merged into the Borrower
or any of its Subsidiaries, in any case pursuant to a merger, purchase of assets
or any reorganization providing for the delivery or issuance to the holders of
such corporation's then outstanding securities, in exchange for such securities,
of cash or securities of the Borrower or any of its Subsidiaries, or a
combination thereof, or (c) purchases all or substantially all of the business
or assets of any corporation.
Section 8.12. No Activities Leading to Forfeiture. Neither the Borrower
nor any of its Subsidiaries or affiliates shall engage in or propose to be
engaged in the conduct of any business or activity which could result in a
Forfeiture Proceeding.
Section 8.13. New Businesses. Engage in, or permit any Subsidiary to
engage in, any business other than those presently conducted.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement:
Section 9.01. Minimum Working Capital. The Borrower shall maintain at
all times an excess of Consolidated Current Assets over Consolidated Current
Liabilities of not less than the amounts listed on the following table for the
periods stated therein.
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year Fiscal Year
1995 1996 1997 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1st Quarter $15,000M $21,000M $28,000M $40,000M
2nd Quarter $15,000M $22,000M $31,000M --------
3rd Quarter $15,000M $23,000M $34,000M --------
4th Quarter $20,000M $25,000M $37,000M --------
</TABLE>
For purposes of Sections 9.01 and 9.04 only, Loans under this Agreement
shall not be considered as Current Liabilities.
Section 9.02. Minimum Tangible Net Worth. The Borrower shall maintain
at all times a Consolidated Tangible Net Worth of not less than the amounts
listed on the following table for the periods stated therein.
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year Fiscal Year
1995 1996 1997 1998
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1st Quarter $ 5,000M $21,000M $35,000M $45,000M
2nd Quarter $ 5,000M $24,000M $38,000M --------
3rd Quarter $ 7,000M $27,000M $41,000M --------
4th Quarter $18,000M $31,000M $45,000M --------
</TABLE>
Section 9.03. Leverage Ratio. The Borrower shall maintain at all times
a ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth of
not greater than the amounts listed on the following table for these periods
stated therein.
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year Fiscal Year
1995 1996 1997 1998
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1st Quarter 6.00:1.00 2.00:1.00 1.05:1.00 0.95:1.00
2nd Quarter 6.00:1.00 1.70:1.00 0.95:1.00 ----
3rd Quarter 4.00:1.00 1.40:1.00 0.95:1.00 ----
4th Quarter 2.40:1.00 1.25:1.00 0.95:1.00 ----
</TABLE>
Section 9.04. Cash Flow Coverage Ratio. The Borrower shall maintain a
Cash Flow Coverage Ratio of not less than 1.15:1.00 through June 30, 1995 and
1.25:1.00 thereafter.
Section 9.05. Limitation on Debt. The Borrower shall maintain at all
times a ratio of Total Funded Debt to Cash Flow of not more than 4.5:1.00.
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.01. Events of Default. Any of the following events shall be
an "Event of Default":
(a) the Borrower shall: (i) fail to pay the principal of any Note under
this Agreement or with respect to the Term Loans as and when due and payable; or
(ii) fail to pay interest on any Note under this Agreement or with respect to
the Revolving Credit Facility Loans or any fee or other amount due hereunder as
and when due and payable;
(b) any representation or warranty made or deemed made by the Borrower
in this Agreement or in any other Facility Document or by any Third Party in any
Facility Document to which it is a party or which is contained in any
certificate, document, opinion, financial or other statement furnished at any
time under or in connection with any Facility Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
(c) the Borrower shall: (i) fail to perform or observe any term,
covenant or agreement contained in Section 2.03 or Articles 7, 8 or 9 or
elsewhere in this Agreement; or (ii) fail to perform or observe any term,
covenant or agreement on its part to be performed or observed (other than the
obligations specifically referred to elsewhere in this Section 10.01) in any
Facility Document and such failure shall continue for 30 consecutive days;
(d) the Borrower, any Third Party or any of their respective
Subsidiaries shall: (i) fail to pay any indebtedness, including but not limited
to indebtedness for borrowed money (other than the payment obligations described
in (a) above), of the Borrower, such Third Party or such Subsidiary, as the case
may be, or any interest or premium thereon, within 180 days of billing date in
the case of trade accounts payable, 180 days from the due date in the case of
other current operating liabilities (other than for borrowed money), and within
thirty days of the date when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) for all other Debt; or (ii) fail
to perform or observe any term, covenant or condition on its part to be
performed or observed under any agreement or instrument relating to any such
indebtedness, when required to be performed or observed, if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration
of, after the giving of notice or passage of time, or both, the maturity of such
indebtedness, whether or not such failure to perform or observe shall be waived
by the holder of such indebtedness; or any such indebtedness shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
(e) the Borrower, any Third Party or any of their respective
Subsidiaries: (i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become due; or (ii) shall
make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (iii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application filed or any
such proceeding shall have been commenced, against it, in which an adjudication
or appointment is made or order for relief is entered, and which petition,
application or proceeding remains undismissed for a period of 30 days or more;
or shall be the subject of any proceeding under which its assets may be subject
to seizure, forfeiture or divestiture (other than a proceeding in respect of a
Lien permitted under Section 8.03 (b)); or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (vi)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of 30 days or more;
(f) one or more judgments, decrees or orders for the payment of money
in excess of $100,000 in the aggregate shall be rendered against the Borrower,
any Third Party or any of their respective Subsidiaries and such judgments,
decrees or orders shall continue unsatisfied and in effect for a period of 30
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal;
(g) any event or condition shall occur or exist with respect to any
Plan or Multiemployer Plan concerning which the Borrower is under an obligation
to furnish a report to the Bank in accordance with Section 7.08(h) hereof and as
a result of such event or condition, together with all other such events or
conditions, the Borrower or any ERISA Affiliate has incurred or in the opinion
of the Bank is reasonably likely to incur a liability to a Plan, a Multiemployer
Plan, the PBGC, or a Section 4042 Trustee (or any combination of the foregoing)
which is material in relation to the financial position of the Borrower and its
Subsidiaries, on a consolidated basis; provided, however, that any such amount
shall not be deemed to be material so long as all such amounts do not exceed in
the aggregate during any consecutive one year period $500,000;
(h) The Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement in an amount which is material (as
specified in Section 10.01(g) hereof);
(i) (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rules 13d-3 of the
Securities and Exchange commission under the Securities Exchange Act of 1934) of
5% or more of the outstanding shares of voting stock of the Borrower unless such
persons are qualified to file SEC Schedule 12G under SEC Rules 13d-1(b)(1) and
13d-2(b); or (ii) during any period of 12 consecutive months, commencing before
or after the date of this Agreement, individuals who at the beginning of such
12-month period were directors of the Borrower cease for any reason to
constitute a majority of the board of directors of the Borrower unless such
persons are replaced as directors by persons nominated by the then current board
of directors;
(j) (A) any Forfeiture Proceeding shall have been commenced or the
Borrower shall have given any Bank written notice of the commencement of any
Forfeiture Proceeding as provided in Section 7.08(l) or (B) any Bank has a good
faith basis to believe that a Forfeiture Proceeding has been threatened or
commenced; or
(k) any Guaranty shall at any time after its execution and delivery and
for any reason cease to be in full force and effect or shall be declared null
and void, or the validity or enforceability thereof shall be contested by the
Guarantor, or the Guarantor shall revoke or terminate its Guaranty with respect
to future advances, or shall deny it has any further liability or obligation
thereunder, or shall fail to perform its obligations thereunder.
Section 10.02. Remedies. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Banks, by notice to
the Borrower, (a) declare the Commitments to be terminated, whereupon the same
shall forthwith terminate, and (b) declare the outstanding principal of the
Notes, all interest thereon and all other amounts payable under this Agreement
and the Notes to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that, in the case of an
Event of Default referred to in Section 10.01(e) or Section 10.01(j)(A) above,
the Commitments shall be immediately terminated, and the Notes, all interest
thereon and all other amounts payable under this Agreement shall be immediately
due and payable without notice, presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
ARTICLE 11. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.
Section 11.01. Appointment, Powers and Immunities of Agent. Each Bank
hereby irrevocably (but subject to removal by the Required Banks pursuant to
Section 11.09) appoints and authorizes the Agent to act as its agent hereunder
and under any other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Facility Document, and shall not by reason
of this Agreement be a trustee for any Bank. The Agent shall not be responsible
to the Banks for any recitals, statements, representations or warranties made by
the Borrower or any officer or official of the Borrower or any other Person
contained in this Agreement or any other Facility Document, or in any
certificate or other document or instrument referred to or provided for in, or
received by any of them under, this Agreement or any other Facility Document, or
for the value, legality, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or any other
document or instrument referred to or provided for herein or therein, for the
perfection or priority of any collateral security for the Loans or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. The Borrower shall pay any fee agreed to
by the Borrower and the Agent with respect to the Agent's services hereunder.
Section 11.02. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent may deem and treat each Bank as
the holder of the Loan made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof satisfactory to the Agent signed by
such Bank shall have been furnished to the Agent but the Agent shall not be
required to deal with any Person who has acquired a participation in any Loan
from a Bank. As to any matters not expressly provided for by this Agreement or
any other Facility Document, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Banks, and such instructions of the Required Banks and
any action taken or failure to act pursuant thereto shall be binding on all of
the Banks and any other holder of all or any portion of any Loan.
Section 11.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Banks) unless the Agent
has received notice from a Bank or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default." In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Banks (and shall give
each Bank prompt notice of each such non-payment). The Agent shall (subject to
Section 11.08) take such action with respect to such Default or Event of Default
which is continuing as shall be directed by the Required Banks; provided that,
unless and until the Agent shall have received such directions, the Agent may
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interest of
the Banks; and provided further that the Agent shall not be required to take any
such action which it determines to be contrary to law.
Section 11.04. Rights of Agent as a Bank. With respect to its
Commitment and the Loans made by it, the Agent in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its capacity as a Bank. The Agent and its affiliates may (without
having to account therefor to any Bank) accept deposits from, lend money to (on
a secured or unsecured basis), and generally engage in any kind of banking,
trust or other business with, the Borrower (and any of its affiliates) as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Banks. Although the
Agent and its affiliates may in the course of such relationships and
relationships with other Persons acquire information about the Borrower, its
Affiliates and such other Persons, the Agent shall have no duty to disclose such
information to the Banks.
Section 11.05. Indemnification of Agent. The Banks agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03 or under the
applicable provisions of any other Facility Document, but without limiting the
obligations of the Borrower under Section 12.03 or such provisions), ratably in
accordance with the aggregate unpaid principal amount of the Loans made by the
Banks (without giving effect to any participations, in all or any portion of
such Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrower is obligated to pay under Section 12.03 or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Bank shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 11.06. Documents. The Agent will forward to each Bank, promptly
after the Agent's receipt thereof, a copy of each report, notice or other
document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
Section 11.07. Non-Reliance on Agent and Other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any other
Facility Document. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any Subsidiary (or any of their Affiliates) which may come into the
possession of the Agent or any of its affiliates. The Agent shall not be
required to file this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 11.08. Failure of Agent to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 11.09. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with or without cause by the
Required Banks; provided that the Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in New York, New York. The Required Banks or the retiring Agent, as
the case may be, shall upon the appointment of a successor Agent promptly so
notify the Borrower and the other Banks. 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 hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article 11 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent.
Section 11.10. Amendments Concerning Agency Function. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Facility Document which affects its duties hereunder or
thereunder unless it shall have given its prior consent thereto.
Section 11.11. Liability of Agent. The Agent shall not have any
liabilities or responsibilities to the Borrower on account of the failure of any
Bank to perform its obligations hereunder or to any Bank on account of the
failure of the Borrower to perform its obligations hereunder or under any other
Facility Document.
Section 11.12. Transfer of Agency Function. Without the consent of the
Borrower or any Bank, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrower and the Banks
thereof.
Section 11.13. Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Bank or the Borrower (either one as appropriate
being the "Payor") prior to the date on which such Bank is to make payment
hereunder to the Agent of the proceeds of a Loan or the Borrower is to make
payment to the Agent, as the case may be (either such payment being a "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on demand, repay to
the Agent the amount made available to it together with interest thereon for the
period from the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the average
daily Federal Funds Rate for such period.
Section 11.14. Withholding Taxes. Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Bank's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Bank is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Bank will furnish to the Agent Form 4224
or Form 1001 of the Internal Revenue Service, or such other forms,
certifications, statements or documents, duly executed and completed by such
Bank as evidence of such Bank's exemption from the withholding of U.S. tax with
respect thereto. The Agent shall not be obligated to make any payments hereunder
to such Bank in respect of any Loan or such Bank's Commitment until such Bank
shall have furnished to the Agent the requested form, certification, statement
or document.
Section 11.15. Several Obligations and Rights of Banks. The failure of
any Bank to make any Loan to be made by it on the date specified therefor shall
not relieve any other Bank of its obligation to make its Loan on such date, but
no Bank shall be responsible for the failure of any other Bank to make a Loan to
be made by such other Bank. The amounts payable at any time hereunder to each
Bank shall be a separate and independent debt, and each Bank shall be entitled
to protect and enforce its rights arising out of this Agreement, and it shall
not be necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
Section 11.16. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided: (a) each borrowing under Section 2.04 shall be made from the
Banks, pro rata according to the amounts of their respective Commitments; (b)
each conversion under Section 2.05 of Loans of a particular type (but not
conversions provided for by Section 3.04), shall be made pro rata among the
Banks holding Loans of such type according to the respective principal amounts
of such Loans by such Banks; and (c) each prepayment and payment of principal of
or interest on Loans of a particular type and a particular Interest Period shall
be made to the Agent for the account of the Banks holding Loans of such type and
Interest Period pro rata in accordance with the respective unpaid principal
amounts of such Loans of such Interest Period held by such Banks.
Section 11.17. Sharing of Payments Among Banks. If a Bank shall obtain
payment of any principal of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means (including any payment obtained from or charged against any Third Party),
it shall promptly purchase from the other Banks participations in (or, if and to
the extent specified by such Bank, direct interests in) the Loans made by the
other Banks in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Banks shall share the benefit of
such payment (net of any expenses which may be incurred by such Bank in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans, on the Term Loans, and on other Debt to any
of the Banks permitted under Section 8.01(b), held by each of them prior to such
action. To such end the Banks shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. The Borrower agrees that any Bank so
purchasing a participation (or direct interest) in the Loans made by other Banks
may exercise all rights of setoff, banker's lien, counterclaim or similar rights
with respect to such participation (or direct interest). Nothing contained
herein shall require any Bank to exercise any such right or shall affect the
right of any Bank to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness of the Borrower.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the Borrower, the Agent and
the Required Banks, or by the Borrower and the Agent acting with the consent of
the Required Banks and any provision of this Agreement may be waived by the
Required Banks or by the Agent acting with the consent of the Required Banks;
provided that no amendment, modification or waiver shall, unless by an
instrument signed by all of the Banks or by the Agent acting with the consent of
all of the Banks: (a) increase or extend the term, or extend the time or waive
any requirement for the reduction or termination, of the Commitments, (b) extend
the date fixed for the payment of principal, interest or fees on any Loan, (c)
reduce the amount of any payment of principal thereof or the rate at which
interest is payable thereon or any fee payable hereunder, (d) alter the terms of
this Section 12.01, (e) amend the definition of the term "Required Banks" or (f)
waive any of the conditions precedent set forth in Article 5 hereof and
provided, further, that any amendment of Article 11 hereof or any amendment
which increases the obligations of the Agent hereunder shall require the consent
of the Agent. No failure on the part of the Agent or any Bank to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof or
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 12.02. Usury. Anything herein to the contrary notwithstanding,
the obligations of the Borrower under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Bank limiting rates of interest which may be charged or collected by such
Bank.
Section 12.03. Expenses. The Borrower shall reimburse the Agent and the
Banks on demand for all costs, expenses, and charges (including, without
limitation, fees and charges of external legal counsel for the Agent and each
Bank and costs allocated by their respective internal legal departments)
incurred by the Agent or the Banks in connection with the preparation,
performance, or enforcement of this Agreement or the Notes. The Borrower agrees
to indemnify the Agent and each Bank and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them arising
out of or by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings)
relating to any actual or proposed use by the Borrower or any Subsidiary of the
proceeds of the Loans, including without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the negligence or willful
misconduct of the Person to be indemnified).
Section 12.04. Survival. The obligations of the Borrower under Sections
3.01, 3.05 and 12.03 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 12.05. Assignment; Participations. (a) This Agreement shall be
binding upon, and shall inure to the benefit of, the Borrower, the Agent, the
Banks and their respective successors and assigns, except that the Borrower may
not assign or transfer its rights or obligations hereunder. Each Bank may
assign, or sell participations in, all or any part of the Loan to another bank
or other entity, in which event (i) in the case of an assignment, upon notice
thereof by the Bank to the Borrower with a copy to the Agent, the assignee shall
have, to the extent of such assignment (unless otherwise provided therein), the
same rights, benefits and obligations as it would have if it were a Bank
hereunder; and (ii) in the case of a participation, the participant shall have
no rights under the Facility Documents and all amounts payable by the Borrower
under Article 3 shall be determined as if such Bank had not sold such
participation. The agreement executed by such Bank in favor of the participant
shall not give the participant the right to require such Bank to take or omit to
take any action hereunder except action directly relating to (i) the extension
of a payment date with respect to any portion of the principal, interest or fees
on any amount outstanding hereunder allocated to such participant, (ii) the
reduction of the principal amount outstanding hereunder, (iii) the reduction of
the rate of interest payable on such amount or any amount of fees payable
hereunder to a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with such Bank, or (iv)
the extension of the Final Maturity Date. Such Bank may furnish any information
concerning the Borrower in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and participants);
provided that such Bank shall require any such prospective assignee or such
participant (prospective or otherwise) to agree in writing to maintain the
confidentiality of such information. In connection with any assignment pursuant
to this paragraph (a), the assigning Bank shall pay the Agent an administrative
fee for processing such assignment in the amount of $2,500.
(b) In addition to the assignments and participations permitted under
paragraph (a) above, any Bank may assign and pledge all or any portion of its
Loans and Note to (i) any affiliate of such Bank or (ii) any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Bank from its
obligations hereunder.
Section 12.06. Notices. Except as otherwise provided in this Agreement,
notices may be given by telecopy, overnight courier, or by regular mail,
telecopied or addressed to the intended recipient at its telecopy number or
address listed on the signature page of this Agreement. Notices shall be
effective: (a) if given by mail, 72 hours after deposit in the mails with first
class postage prepaid, addressed as aforesaid; (b) if given by telecopy, when
the telecopy is transmitted to the applicable telecopy number; and (c) if sent
by overnight courier, upon delivery; provided, however, that notices to the
Agent and the Banks shall be effective upon receipt. A party may change its
telecopy number or address for receipt of notices by written notice given in
accordance with this paragraph.
Section 12.07. JURISDICTION; IMMUNITIES; WAIVER OF RIGHT TO JURY TRIAL.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK
STATE OR UNITED STATES FEDERAL COURT SITTING IN ONONDAGA OR ONEIDA COUNTY OVER
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES, OR ANY OTHER FACILITY DOCUMENT, AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS ADDRESS
SPECIFIED IN SECTION 12.07 BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE
BORROWER AND THE BANKS FURTHER AGREE THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN ONONDAGA COUNTY. THE BORROWER WAIVES ANY RIGHT IT MAY
HAVE TO JURY TRIAL.
(b) Nothing in this Section 12.07 shall affect the right of the Agent
or any Bank to serve legal process in any other manner permitted by law or
affect the right of the Agent or any Bank to bring any action or proceeding
against the Borrower or its property in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement and the Notes.
Section 12.08. Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 12.09. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.10. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 12.11. Integration. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
Section 12.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 12.13. Confidentiality. Each Bank and the Agent agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement which is identified by
the Borrower as being confidential at the time the same is delivered to the
Banks or the Agent, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Banks or the Agent, (iii) to
bank examiners, auditors or accountants, (iv) in connection with any litigation
to which any one or more of the Banks is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
Exhibit C hereto; provided, further, that, unless specifically prohibited by
applicable law or court order, each Bank shall, prior to disclosure thereof,
notify the Borrower of any request for disclosure of any such non-public
information (x) by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial condition of
such Bank by such governmental agency) or (y) pursuant to legal process; and
provided finally that in no event shall any Bank or the Agent be obligated or
required to return any materials furnished by the Borrower. The obligations of
each Bank under this Section 12.13 shall supersede and replace the obligations
of such Bank under the confidentiality letter in respect of this financing
signed and delivered by such Bank to the Borrower prior to the date hereof.
Section 12.14. Treatment of Certain Information. The Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that any information delivered
to each Bank or to its subsidiaries or affiliates regarding the Borrower may be
shared among the Bank and such subsidiaries and affiliates. This Section 12.14
shall survive the repayment of the loans and the termination of the Commitments.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CONMED CORPORATION
By:___________________________
Name:_________________________
Title:________________________
<PAGE>
Address for Notices:
CONMED CORPORATION
310 Broad Street
Utica, New York 13501
Attn: Eugene R. Corasanti,
President
Telecopy: (315) 797-0321
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name:_________________________
Title:________________________
Address for Notices:
THE CHASE MANHATTAN BANK, N.A.
P.O. Box 4911
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
BANKS:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
<PAGE>
Lending Office and Address for
Notices:
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
FLEET BANK
By:___________________________
Name: Bruce W. Goodnough
Title: Vice President
Lending Office and Address for
Notices:
268 Genesee Street
Utica, New York 13502
Attn: Bruce W. Goodnough
Telecopy: (315) 798-2736
