SIXTH AMENDED AND
RESTATED LOAN AGREEMENT
Wachovia Bank, National
Association
225 Water Street
Jacksonville, Florida 32202
(Hereinafter referred to as the “Bank”)
HOME DIAGNOSTICS, INC., a
Delaware corporation
2400 NW 55th Court
Fort Lauderdale, Florida 32202
(Hereinafter referred to as “Borrower”)
This Sixth Amended and Restated
Loan Agreement (“Agreement”) is entered into
April 30, 2009, by and between Bank and Borrower.
This Agreement applies to the
loan (the “Loan”) evidenced by that certain Sixth
Amended and Restated Revolving Promissory Note dated of even date
herewith (as the same my be amended, modified, restated or replaced
from time to time, the “Note”) and all Loan Documents.
The terms “Loan Documents” and
“Obligations,” as used in this Agreement, are defined
in the Note.
Relying upon the covenants,
agreements, representations and warranties contained in this
Agreement, Bank is willing to extend credit to Borrower upon the
terms and subject to the conditions set forth herein, and Bank and
Borrower agree as follows:
LINE OF CREDIT.
The purpose of the Loan is to provide
for the general corporate purposes of Borrower. To the extent the
making of Advances (as defined in the Note) is not governed by a
sweep agreement with the Bank, Bank may require a signed written
request for an Advance in form satisfactory to Bank, in which event
such request shall be delivered to Bank no later than 12:00 noon
(local time in Fort Lauderdale, Florida) on the date of the
requested Advance, and shall specify the date (which shall be a
Business Day) and the amount of the proposed Advance and provide
such other information as Bank may require. Bank’s acceptance
of such a request shall be indicated by its making the Advance
requested. Such an Advance shall be made available to Borrower in
immediately available funds at Bank’s address as set forth on
the front of this document. In no event shall Bank be obligated to
make any Advances under the Loan after April 29, 2010 (as same
may be renewed or extended by Bank in writing, the
“Termination Date”).
Bank shall have no obligation to
make an Advance under this Section if a Default has occurred or if
any event or condition exists, which but for the giving of notice
or the passage of time, or both, would constitute a Default under
any Loan Document.
REPRESENTATIONS.
Borrower represents that from the
date of this Agreement and until final payment in full of the
Obligations: Accurate Information. All information now and
hereafter furnished to Bank is and will be true, correct and
complete in all material respects. Any such information relating to
Borrower’s financial condition will accurately reflect
Borrower’s financial condition as of the date(s) thereof
(including all contingent liabilities of every type), and Borrower
further represents in all material respects that since the date(s)
of such documents, there has been no event that could be expected
to have a Material Adverse Effect on its financial condition.
Authorization; Non-Contravention. The execution, delivery
and performance by Borrower, of this Agreement and other Loan
Documents to which it is a party are within its power, have been
duly authorized as may be required and, if necessary, by making
appropriate filings with any governmental agency or unit and are
the legal, binding, valid and enforceable obligations of Borrower
in accordance with their respective terms, and do not
(i) contravene, or constitute (with or without the giving of
notice or lapse of time or both) a violation of any provision of
applicable law, a violation of the organizational documents of
Borrower, or a default under any agreement, judgment, injunction,
order, decree or other instrument binding upon or affecting
Borrower, (ii) result in the creation or imposition of any
lien (other than the lien(s) created by the Loan Documents) on any
of Borrower’s assets, or (iii) give cause for the
acceleration of any obligations of Borrower to any other creditor.
Asset Ownership. Borrower has good and marketable title to
all of the properties and assets reflected on the balance sheets
and financial statements supplied Bank by Borrower, and all such
properties and assets are free and clear of mortgages, security
deeds, pledges, liens, charges, and all other encumbrances, except
Permitted Liens and except as otherwise disclosed to Bank by
Borrower in writing and approved by Bank. “Permitted
Liens” means (a) liens for taxes and other statutory
liens, landlord’s liens and similar liens arising out of
operation of law so long as the obligations secured thereby are not
past due or are being contested and the proceedings contesting such
obligations have the effect of preventing the forfeiture or sale of
the property subject to such lien, and (b) liens described on
Exhibit A hereto, provided, however, that no debt not now
secured by such liens shall become secured by such liens hereafter
and such liens shall not encumber any other assets. To
Borrower’s knowledge, no default has occurred under any
Permitted Liens and no claims or interests adverse to
Borrower’s present rights in its properties and assets have
arisen. Discharge of Liens and Taxes. Borrower has duly
filed, paid and/or discharged all taxes or other claims that may
become a lien on any of its property or assets, except to the
extent that such items are being appropriately contested in good
faith and an adequate reserve for the payment thereof is being
maintained. Sufficiency of Capital. Borrower is not, and
after consummation of this Agreement and after giving effect to all
indebtedness incurred and liens created by Borrower in connection
with the Note and any other Loan Documents, will not be, insolvent
within the meaning of 11 U.S.C. § 101, as in effect from time
to time. Compliance with Laws. Borrower and any subsidiary
and affiliate of Borrower and any guarantor are in compliance in
all material respects with all federal, state and local laws, rules
and regulations applicable to its properties, operations, business,
and finances, including, without limitation, any federal or state
laws relating to liquor (including 18 U.S.C. § 3617, et seq.)
or narcotics (including 21 U.S.C. § 801, et seq.) and/or any
commercial crimes; all applicable federal, state and local laws and
regulations intended to protect the environment; and the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), if applicable. None of Borrower, or any
subsidiary or affiliate of Borrower or any guarantor is a
Sanctioned Person or has any of its assets in a Sanctioned Country
or does business in or with, or derives any of its operating income
from investments in or transactions with, Sanctioned Persons or
Sanctioned Countries in violation of economic sanctions
administered by OFAC. The proceeds from the Loan will not be used
to fund any operations in, finance any investments or activities
in, or make any payments to, a Sanctioned Person or a Sanctioned
Country. “OFAC” means the U.S. Department of the
Treasury’s Office of Foreign Assets Control.
“Sanctioned Country” means a country subject to a
sanctions program identified on the list maintained by OFAC and
available at
http://www.treas.gov/offices/enforcement/ofac/sanctions/, or as
otherwise published from time to time. “Sanctioned
Person” means (i) a person named on the list of
Specially Designated Nationals or Blocked Persons maintained by
OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/, or as otherwise
published from time to time, or (ii) (A) an agency of the
government of a Sanctioned Country, (B) an organization
controlled by a Sanctioned Country, or (C) a person resident
in a Sanctioned Country to the extent subject to a sanctions
program administered by OFAC. Organization and Authority.
Borrower is a corporation, duly created, validly existing and is in
good standing under the laws of the State of Delaware, and has all
material (i) powers, (ii) governmental licenses,
(iii) authorizations, (iv) consents and
(v) approvals required and authority to operate its business
as now conducted. Borrower is duly qualified to do business,
licensed and is in good standing in each jurisdiction where
qualification or licensing is required in order for it to conduct
business except where failure to be so qualified or in good
standing, in the aggregate, could have a material adverse effect on
the business, financial position, results of operations, or
properties of Borrower. No Litigation. With the
exception of any legal proceedings disclosed in the
Borrower’s Financial Statements, there are no pending suits,
claims or demands against Borrower that have not been disclosed to
Bank by Borrower in writing, and approved by Bank. With the
exception of any legal proceedings disclosed in the
Borrower’s Financial Statements, to the best of
Borrower’s knowledge, there are no threatened suits, claims
or demands against Borrower that have not been disclosed to Bank by
Borrower in writing, and approved by Bank. ERISA. Each
employee pension benefit plan, as defined in ERISA, maintained by
Borrower meets, as of the date hereof, the minimum funding
standards of ERISA and all applicable regulations thereto and
requirements thereof, and of the Internal Revenue Code of 1986, as
amended. No “Prohibited Transaction” or
“Reportable Event” (as both terms are defined by ERISA)
has occurred with respect to any such plan. Indemnity.
Borrower will indemnify Bank and its affiliates from and against
any losses, liabilities, claims, damages, penalties or fines
imposed upon, asserted or assessed against or incurred by Bank
arising out of the inaccuracy or breach of any of the
representations contained in this Agreement or any other Loan
Documents. Compliance with Health Care Laws. Borrower and
each subsidiary and affiliate of Borrower is in compliance with all
applicable “Health Care Laws”. As used herein,
“Health Care Laws” means all federal, state and local
laws, rules, regulations, interpretations, guidelines, ordinances
and decrees primarily relating to patient healthcare, any heath
care provider, medical assistance and cost reimbursement program,
now or any time hereafter in effect, including, but not limited to,
the Social Security Act, the Social Security Amendments of 1972,
the Medicare-Medicaid Anti-Fraud and Abuse Amendment of 1977 and
the Medicare and Medicaid Patient Program Protection Act of
1987.
AFFIRMATIVE
COVENANTS. Borrower
agrees that from the date hereof and until final payment in full of
the Obligations, unless Bank shall otherwise consent in writing,
Borrower will: Access to Books and Records. Allow
Bank, or its agents, during normal business hours, access to the
books, records and such other documents of Borrower as Bank shall
reasonably require, and allow Bank, at Borrower’s expense, to
inspect, audit and examine the same and to make extracts therefrom
and to make copies thereof. Business Continuity. Conduct its
business in substantially the same manner and locations as such
business is now and has previously been conducted. Certificate
of Full Compliance From Accountant. Deliver to Bank, with the
annual financial statements required herein, a certification by
Borrower’s independent certified public accountant that
Borrower is in full compliance with the Loan Documents.
Compliance with Other Agreements. Comply with all terms and
conditions contained in this Agreement, and any other Loan
Documents, and swap agreements, if applicable, as defined in the 11
U.S.C. § 101, as in effect from time to time. Estoppel
Certificate. Furnish, within 15 days after request by
Bank, a written statement duly acknowledged of the amount due under
the Loan and whether offsets or defenses exist against the
Obligations. Insurance . Maintain adequate insurance
coverage with respect to its properties and business against loss
or damage of the kinds and in the amounts customarily insured
against by companies of established reputation engaged in the same
or similar businesses including, without limitation, commercial
general liability insurance, workers compensation insurance, and
business interruption insurance; all acquired in such amounts and
from such companies as Bank may reasonably require. Maintain
Properties. Maintain, preserve and keep its property in good
repair, working order and condition, making all replacements,
additions and improvements thereto necessary for the proper conduct
of its business, unless prohibited by the Loan Documents.
Non-Default Certificate From Borrower. Deliver to Bank, with
the Financial Statements required below, a certificate signed by
Borrower, by a principal financial officer of Borrower warranting
that no “Default” as specified in the Loan Documents
nor any event which, upon the giving of notice or lapse of time or
both, would constitute such a Default, has occurred and
demonstrating Borrower’s compliance with the financial
covenants contained herein. Notice of Default and Other
Notices. (a) Notice of Default. Furnish to Bank
immediately upon becoming aware of the existence of any condition
or event which constitutes a Default (as defined in the Loan
Documents) or any event which, upon the giving of notice or lapse
of time or both, may become a Default, written notice specifying
the nature and period of existence thereof and the action which
Borrower is taking or proposes to take with respect thereto. (b)
Other Notices. Promptly notify Bank in writing of
(i) any material adverse change in its financial condition or
its business; (ii) any default under any material agreement,
contract or other instrument to which it is a party or by which any
of its properties are bound, or any acceleration of the maturity of
any indebtedness owing by Borrower; (iii) any material adverse
claim against or affecting Borrower or any part of its properties;
(iv) the commencement of, and any material determination in,
any material litigation with any third party or any material
proceeding before any governmental agency or unit affecting
Borrower; and (v) at least 30 days prior thereto, any
change in Borrower’s name or address as shown above, and/or
any change in Borrower’s structure. Other Financial
Information. Deliver promptly such other information regarding
the operation, business affairs, and financial condition of
Borrower which Bank may reasonably request. Payment of
Debts. Pay and discharge when due, and before subject to
penalty or further charge, and otherwise satisfy before maturity or
delinquency, all obligations, debts, taxes, and liabilities of
whatever nature or amount, except those which Borrower in good
faith disputes. Reports and Proxies. Deliver to Bank,
promptly, a copy of all financial statements, and the following
documents: (1) reports, (2) notices, and proxy
statements, sent by Borrower to stockholders, and (3) all
regular or periodic reports required to be filed by Borrower with
any governmental agency or authority. Compliance with Health
Care Laws. Borrower will and will cause each subsidiary and
affiliate of Borrower to comply with all applicable Health Care
Laws and regulations.
NEGATIVE COVENANTS.
Borrower agrees that from the
date hereof and until the later of the Termination Date or final
payment in full of the Obligations, unless Bank shall otherwise
consent in writing, Borrower will not: Change in Fiscal
Year. Change its fiscal year. Change of Control. Issue,
sell or otherwise dispose of any of its equity interests or other
securities, or rights, warrants or options to purchase or acquire
any such equity interests or securities that effectively creates a
“Change of Control” of Borrower or otherwise
participate in any change in the ownership of its equity interests
that effectively creates a Change of Control” of Borrower,
without the prior written consent of Bank. For purposes of this
section “Change of Control” shall mean a transaction in
which a person becomes the beneficial owner of securities acquired
directly from the Borrower in the amount of 50% or more of the
combined voting power of the Borrower’s then outstanding
securities. Encumbrances. Create, assume, or permit to exist
any mortgage, security deed, deed of trust, pledge, lien, charge or
other encumbrance on any of its assets, whether now owned or
hereafter acquired, other than Permitted Liens. Guarantees.
Guarantee or otherwise become responsible for obligations of any
other person or persons, other than the endorsement of checks and
drafts for collection in the ordinary course of business.
Cross Default. Default in payment or performance of any
obligation under any other loans, contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower
(“Affiliate” shall have the meaning as defined in 11
U.S.C. § 101, as in effect from time to time, except that
the term “Borrower” shall be substituted for the term
“Debtor” therein; “Subsidiary” shall mean
any corporation of which more than 50% of the issued and
outstanding voting stock is owned directly or indirectly by
Borrower), any general partner of or the holder(s) of the majority
ownership interests of Borrower with Bank or its affiliates.
Default on Other Contracts or Obligations. Default on any
contract with or obligation when due to a third party or default in
the performance of any obligation to a third party incurred for
money borrowed in excess of $1,000,000.00 in the aggregate with
respect to such contract or obligation. Government
Intervention. Permit the assertion or making of any seizure,
vesting or intervention by or under authority of any governmental
entity, as a result of which there is a Change of Control of
Borrower. Judgment Entered. Permit the entry of any monetary
judgment or the assessment against, the filing of any tax lien
against, or the issuance of any writ of garnishment or attachment
against any property of or debts due, which is not covered by
insurance, transferred to bond or satisfied within sixty
(60) days of filing. Prepayment of Other Debt. Retire
any long-term debt entered into prior to the date of this Agreement
at a date in advance of its legal obligation to do so.
Retire or Repurchase Capital Stock. Retire or otherwise
acquire any of its capital stock, other than pursuant to employee
compensation plans; provided that Borrower may spend up to
$5,500,000 in any calendar year to repurchase its own common stock.
Liquidation, Mergers, Consolidations and Dispositions of
Substantial Assets. During any fiscal year, dissolve or
liquidate, or become a party to any merger or consolidation, sell,
transfer, lease or otherwise dispose of, or agree or contract to
dissolve or liquidate, become a party to any merger or
consolidation, sell, transfer, lease or otherwise dispose of, all
or a “substantial part” of its property or assets,
except for the sale of inventory in the ordinary course of
business, or sell or dispose of any equity ownership interests in
any subsidiary. As used herein, “substantial part”
shall mean property or assets in an aggregate amount in excess of
the lower of (i) fifteen percent (15%) of Borrower’s
“Tangible Net Worth”, or (ii) ten percent (10%) of
Borrower’s “EBITDA” (as defined hereinbelow) for
such fiscal year. As used herein, “Tangible Net Worth”
shall mean “Total Assets” minus “Total
Liabilities”. As used herein, “Total Assets”
shall mean all assets appearing on the Borrower’s balance
sheet, less the aggregate amount of any intangible assets of
Borrower including, without limitation, goodwill, franchises,
licenses, patents, trademarks, trade names, copyrights, service
marks, and brand names. As used herein, “Total
Liabilities” shall mean all liabilities of Borrower,
including capitalized leases and all reserves for deferred taxes,
debt fully subordinated to Bank on terms and conditions acceptable
to Bank, and other deferred sums appearing on the liabilities side
of a balance sheet and all obligations as lessee under off-balance
sheet synthetic leases of Borrower, all in accordance with
generally accepted accounting principles applied on a consistent
basis. For purposes of this Section, Borrower may be permitted to
enter into a merger with another entity so long as, at the time of
such merger, no Default exists under the Loan, Borrower is the
surviving entity, and Borrower provides Bank with prior notice of
such merger, together with copies of all documents reasonbly
requested by Bank relating to such merger.
Acquisitions. Purchase or otherwise acquire the property,
stock or assets of any entity. Notwithstanding the foregoing,
Borrower may purchase or otherwise acquire the property, stock or
assets of any entity for an aggregate purchase price less than or
equal to twenty percent (20%) of Borrower’s
“EBITDA” (as defined hereinbelow) in the aggregate in
any fiscal year, provided that (i) no Default or condition
which, with the giving of notice or passage of time, or both, would
constitute a Default, has occurred under any Loan Document, and
(ii) after giving effect to such acquisition, no Default will
have occurred under any Loan Document. Notwithstanding the
foregoing or anything to the contrary contained herein, Borrower
may make purchases or acquisitions for an aggregate purchase price
in excess of twenty percent (20%) of Borrower’s
“EBITDA” in any fiscal year provided that (i) no
Default or condition which, with the giving of notice or passage of
time, or both, would constitute a Default,
