Exhibit
10.11
AMENDED AND RESTATED REVOLVING
CREDIT
AND SECURITY
AGREEMENT
THIS AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT (the “Agreement” ) dated as
of February 20, 2004, is entered into among AMERICASDOCTOR,
INC., a Delaware corporation, and AMERICASDOCTOR.COM
COORDINATOR SERVICES, INC. , a Delaware corporation
(individually and collectively, the “Borrower”
), and CAPITALSOURCE FINANCE LLC , a Delaware limited
liability company (“ Lender” ).
WHEREAS, Lender and Borrower and
AmericasDoctor Internet Operations, Inc. entered into that certain
Revolving Credit and Security Agreement dated as of March 15, 2002,
as amended by that certain First Amendment to Revolving Credit and
Security Agreement dated as of March 5, 2003, and as further
amended by that certain Limited Waiver Second Amendment to
Revolving Credit and Security Agreement dated as of November 12,
2003 (collectively, the “Loan Agreement”) , and
related documents and instruments executed in connection
therewith;
WHEREAS, Lender has agreed to
continue to make available to Borrower a revolving credit facility
(the “Revolving Facility” ) in a maximum
principal amount at any time outstanding of up to Six Million
Dollars ($6,000,000) (the “Facility Cap” ), the
proceeds of which shall be used by Borrower for refinancing
Borrower’s existing obligations and indebtedness and working
capital needs; and
WHEREAS, Lender is willing to make
the Revolving Facility available to Borrower upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of
the foregoing and for other good and valuable consideration, the
receipt and adequacy of which hereby are acknowledged, Borrower and
Lender hereby agree as follows:
I. DEFINITIONS
1.1 General Terms
For purposes of this Agreement, in
addition to the definitions above and elsewhere in this Agreement,
the terms listed in Appendix A hereto shall have the
meanings given such terms in Appendix A , which is
incorporated herein and made a part hereof. All capitalized terms
used which are not specifically defined shall have meanings
provided in Article 9 of the UCC in effect on the date hereof to
the extent the same are used or defined therein. Unless otherwise
specified herein or in Appendix A , any agreement or
contract referred to herein or in Appendix A shall mean such
agreement as modified, amended or supplemented from time to time.
Unless otherwise specified, as used in the Loan Documents or in any
certificate, report, instrument or other document made or delivered
pursuant to any of the Loan Documents, all accounting terms not
defined in Appendix A or elsewhere in this Agreement shall
have the meanings given to such terms in and shall be interpreted
in accordance with GAAP.
II. ADVANCES, PAYMENT AND
INTEREST
2.1 The Revolving
Facility
(a) Subject to the provisions of
this Agreement, Lender shall make Advances to Borrower under the
Revolving Facility from time to time during the Term; provided
that , notwithstanding any other provision of this Agreement,
the aggregate amount of all Advances at any one time outstanding
under the Revolving Facility shall not exceed either of (a) the
Facility Cap and (b) the Availability as defined below. The
Revolving Facility is a revolving credit facility, which may be
drawn, repaid and redrawn, from time to time as permitted under
this Agreement. Unless otherwise permitted by Lender, each Advance
shall be in an amount of at least $1,000. Subject to the provisions
of this Agreement, Borrower may request Advances under the
Revolving Facility up to and including the value, in U.S. Dollars,
of fifty percent (50%) of the Borrowing Base minus, if applicable,
amounts reserved pursuant to this Agreement (such calculated amount
being referred to herein as the “Availability”
). Advances under the Revolving Facility automatically shall be
made for the payment of interest on the Note and other Obligations
on the date when due to the extent available and as provided for
herein.
(b) Lender has established the
above-referenced advance rate for Availability and, in its sole
credit judgment, may further adjust the Availability and such
advance rate by applying percentages (known as “liquidity
factors”) to Eligible Receivables based upon Borrower’s
actual recent collection history in a manner consistent with
Lender’s generally applicable underwriting practices and
procedures, including without limitation Lender’s review and
analysis of, among other things, Borrower’s historical
returns, rebates, discounts, credits and allowances (collectively,
the “Dilution Items” ). Such liquidity factors
and the advance rate for Availability may be adjusted by Lender
throughout the Term as warranted in Lender’s sole credit
judgment, consistent with Lender’s generally applicable
underwriting practices and procedures. Also, Lender shall have the
right to establish from time to time, in its sole credit judgment,
consistent with its generally applicable lending practices,
reserves against the Borrowing Base, which reserves shall have the
effect of reducing the amounts otherwise eligible to be disbursed
to Borrower under the Revolving Facility pursuant to this
Agreement.
2.2 The Note;
Maturity
(a) All Advances under the Revolving
Facility shall be evidenced by a Note, payable to the order of
Lender, duly executed and delivered by Borrower, evidencing the
aggregate indebtedness of Borrower to Lender resulting from
Advances under the Revolving Facility, from time to time. Lender
hereby is authorized, but is not obligated, to enter the amount of
each Advance under the Revolving Facility and the amount of each
payment or prepayment of principal or interest thereon in the
appropriate spaces on the reverse of or on an attachment to the
Note. Lender will account to Borrower monthly with a statement of
Advances under the Revolving Facility and charges and payments made
pursuant to this Agreement, and in the absence of manifest error,
such accounting rendered by Lender shall be deemed final, binding
and conclusive unless Lender is notified by Borrower in writing to
the contrary within thirty (30) calendar days of Receipt of each
accounting, which notice shall be deemed an objection only to items
specifically objected to therein.
(b) All amounts outstanding under
the Note and other Obligations shall be due and payable in full, if
not earlier in accordance with this Agreement, on the earlier of
(i) the occurrence of an Event of Default if required pursuant
hereto or Lender’s demand upon an Event of Default, and (ii)
the last day of the Term (such earlier date being the
“Maturity Date” ).
2.3 Interest
Interest on outstanding Advances
under the Note shall be payable monthly in arrears on the first
Business Day of each calendar month at an annual rate of Prime Rate
plus 2.0%, provided ,
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however , that, notwithstanding any provision of any
Loan Document, the interest on outstanding Advances under the Note
shall be not less than 7.5%, in each case calculated on the basis
of a 360-day year and for the actual number of calendar days
elapsed in each interest calculation period. Interest accrued on
each Advance under the Note shall be due and payable on the first
day of each calendar month, in accordance with the procedures
provided for herein, commencing the month immediately following the
first Advance, and continuing until the later of the expiration of
the Term and the full performance and irrevocable payment in full
in cash of the Obligations and termination of this
Agreement.
2.4 Revolving Facility
Disbursements; Requirement to Deliver Borrowing
Certificate
So long as no Default or Event of
Default shall have occurred and be continuing, Borrower may give
Lender irrevocable written notice requesting an Advance under the
Revolving Facility by delivering to Lender not later than 11:00
a.m. (New York City time) at least two but not more than four
Business Days before the proposed borrowing date of such requested
Advance (the “Borrowing Date” ), a completed
Borrowing Certificate and relevant supporting documentation
reasonably satisfactory to Lender, which shall (i) specify the
proposed Borrowing Date of such Advance which shall be a Business
Day, (ii) specify the principal amount of such requested Advance,
and (iii) certify the matters contained in Section 4.2 .
Each time a request for an Advance is made, and, in any event and
regardless of whether an Advance is being requested, on the last
Business Day of each week during the Term (and more frequently if
Lender shall so request) until the Obligations are indefeasibly
paid in cash in full and this Agreement is terminated, Borrower
shall deliver to Lender a Borrowing Certificate as of the
immediately preceeding month end accompanied by a separate detailed
aging and categorizing of Borrower’s accounts receivable and
accounts payable and such other supporting documentation with
respect to the figures and information in the Borrowing Certificate
as Lender shall reasonably request from a credit or security
perspective or otherwise. On each Borrowing Date, Borrower
irrevocably authorizes Lender to disburse the proceeds of the
requested Advance to Borrower’s account(s) as set forth on
Schedule 2.4 , in all cases for credit to Borrower (or to
such other account as to which Borrower shall instruct Lender) via
Federal funds wire transfer no later than 4:00 p.m. (New York City
time).
2.5 Revolving Facility
Collections; Repayment; Borrowing Availability and
Lockbox
Each Borrower shall maintain one or
more lockbox accounts (individually and collectively, the
“Lockbox Account” ) with one or more banks
reasonably acceptable to Lender (each, a “Lockbox
Bank” ), and shall execute with each Lockbox Bank one or
more agreements reasonably acceptable to Lender (individually and
collectively, the “Lockbox Agreement” ), and
such other agreements related thereto as Lender may reasonably
require to perfect a security interest therein. Borrower shall
ensure that all collections of its Accounts and all other cash
payments received by Borrower are paid and delivered directly from
Account Debtors and other Persons into the appropriate Lockbox
Account. The Lockbox Agreements shall provide that the Lockbox
Banks immediately will transfer all funds paid into the Lockbox
Accounts into a depository account or accounts maintained by Lender
or an Affiliate of Lender at such bank as Lender may communicate to
Borrower from time to time (the “Concentration
Account” ) or such other account as directed by Borrower
in accordance with the terms and conditions of the Lockbox
Agreement. Notwithstanding and without limiting any other provision
of any Loan Document, Lender shall apply, on a daily basis, all
funds transferred into the Concentration Account pursuant to the
Lockbox Agreement and this Section 2.5 in such order and
manner as determined by Lender. To the extent that any Accounts
collections of Borrower or any other cash payments received by
Borrower are not sent directly to the appropriate Lockbox Account
but are
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received by Borrower or any of their Affiliates,
such collections and proceeds shall be held in trust for the
benefit of Lender and immediately remitted (and in any event within
two (2) Business Days), in the form received, to the appropriate
Lockbox Account for immediate transfer to the Concentration
Account. Borrower acknowledges and agrees that compliance with the
terms of this Section 2.5 is an essential term of this
Agreement. All funds transferred to the Concentration Account for
application to the Obligations under the Revolving Facility shall
be applied to reduce the Obligations under the Revolving Facility,
but, for purposes of calculating interest hereunder, shall be
subject to a seven Business Day clearance period. If as the result
of collections of Accounts and/or any other cash payments received
by Borrower pursuant to this Section 2.5 a credit balance
exists with respect to the Concentration Account, such credit
balance shall be immediately, and in any event within two (2)
Business Days, transferred to an account designated by Borrower
from time to time; provided that each such transfer will not
occur unless and until the earlier of (i) such additional amounts
exceed $25,000, or (ii) Borrower’s written request for such
transfer; and provided , further , that Lender shall
have the right in its sole discretion to apply collections and/or
any cash payments to reduce the Loan balance to zero. If
applicable, at any time prior to the execution of all or any of the
Lockbox Agreements and operation of all or any of the Lockbox
Accounts, Borrower and their Affiliates shall direct all
collections or proceeds it receives on Accounts or from other
Collateral to the accounts(s) and in the manner specified by Lender
in its reasonable discretion.
2.6 Promise to Pay; Manner of
Payment
Borrower absolutely and
unconditionally promises to pay principal, interest and all other
amounts payable hereunder, or under any other Loan Document,
without any right of rescission and without any deduction
whatsoever, including any deduction for any setoff, counterclaim or
recoupment, and notwithstanding any damage to, defects in or
destruction of the Collateral or any other event, including
obsolescence of any property or improvements. Any payments made by
Borrower (other than payments automatically paid through Advances
under the Revolving Facility as provided herein), shall be made
only by wire transfer on the date when due, without offset or
counterclaim, in Dollars, in immediately available funds to such
account as may be indicated in writing by Lender to Borrower from
time to time. Any such payment received after 2:00 p.m. (New York
City time) on the date when due shall be deemed received on the
following Business Day. Whenever any payment hereunder shall be
stated to be due or shall become due and payable on a day other
than a Business Day, the due date thereof shall be extended to, and
such payment shall be made on, the next succeeding Business Day,
and such extension of time in such case shall be included in the
computation of payment of any interest (at the interest rate then
in effect during such extension) and/or fees, as the case may
be.
2.7 Repayment of Excess
Advances
Any balance of Advances under the
Revolving Facility outstanding at any time in excess of the lesser
of the Facility Cap or the Availability shall be immediately due
and payable by Borrower without the necessity of any demand, at the
Payment Office, whether or not a Default or Event of Default has
occurred or is continuing and shall be paid in the manner specified
in Section 2.6 .
2.8 Payments by
Lender
Should any amount required to be
paid under any Loan Document be unpaid for more than three (3)
Business Days after the due date, such amount may be paid by
Lender, which payment shall be deemed a request for an Advance
under the Revolving Facility as of the date such payment is due,
and Borrower irrevocably authorizes disbursement of any such funds
to Lender by way of direct
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payment of the relevant amount, interest or
Obligations. No payment or prepayment of any amount by Lender or
any other Person shall entitle any Person to be subrogated to the
rights of Lender under any Loan Document unless and until the
Obligations have been fully performed and paid irrevocably in cash
and this Agreement has been terminated. Any sums reasonably
expended by Lender as a result of Borrower’s failure to pay,
perform or comply with any Loan Document or any of the Obligations
may be charged to Borrower’s account as an Advance under the
Revolving Facility and added to the Obligations.
2.9 Grant of Security Interest;
Collateral
(a) To secure the payment and
performance of the Obligations, Borrower hereby grants to Lender a
continuing first priority security interest (subject to Permitted
Liens, which in no case shall include or permit liens on Accounts
or proceeds thereof) in and Lien upon, and pledges to Lender, all
of its right, title and interest in and to the following
(collectively and each individually, the “ Collateral
”):
(i) all of such Borrower’s
tangible personal property, including without limitation all
present and future Inventory and Equipment, now owned or hereafter
acquired;
(ii) all of such Borrower’s
intangible personal property, including without limitation all
present and future Accounts, securities, contract rights, Permits,
General Intangibles, Chattel Paper, Documents, Instruments and
Deposit Accounts, Investment Property, Letter-of-Credit Rights,
Supporting Obligations, rights to the payment of money or other
forms of consideration of any kind, tax refunds, insurance
proceeds, now owned or hereafter acquired, and all intangible and
tangible personal property relating to or arising out of any of the
foregoing; and
(iii) any and all additions to any
of the foregoing, and any and all replacements, products and
proceeds (including insurance proceeds) of any of the
foregoing.
(b) Notwithstanding the foregoing
provisions of this Section 2.9 , such grant of a security
interest shall not extend to, and the term “Collateral”
shall not include, any General Intangibles of Borrower to the
extent that (i) such General Intangibles are not assignable or
capable of being encumbered as a matter of law or under the terms
of any license or other agreement applicable thereto (but solely to
the extent that any such restriction shall be enforceable under
applicable law) without the consent of the licensor thereof or
other applicable party thereto, and (ii) such consent has not been
obtained; provided , however , that the foregoing
grant of a security interest shall extend to, and the term
“Collateral” shall include, each of the following: (a)
any General Intangible which is in the nature of an Account or a
right to the payment of money or a proceed of, or otherwise related
to the enforcement or collection of, any Account or right to the
payment of money, or goods which are the subject of any Account or
right to the payment of money, (b) any and all proceeds of any
General Intangible that is otherwise excluded to the extent that
the assignment, pledge or encumbrance of such proceeds is not so
restricted, and (c) upon obtaining the consent of any such licensor
or other applicable party with respect to any such otherwise
excluded General Intangible, such General Intangible as well as any
and all proceeds thereof that might theretofore have been excluded
from such grant of a security interest and from the term
“Collateral.”
(c) Upon the execution and delivery
of this Agreement, and upon the proper filing of the necessary
financing statements, without any further action, Lender will have
a good, valid first priority (subject to Permitted Liens, which in
no case shall include or permit liens on Accounts or the proceeds
thereof) Lien and security interest in the Collateral, subject to
no transfer or other restrictions or
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Liens of any kind in favor of any other Person
except for Permitted Liens. No financing statement relating to any
of the Collateral is on file in any public office except those (i)
on behalf of Lender, and/or (ii) in connection with Permitted
Liens.
2.10 Collateral
Administration
(a) All Collateral (except Deposit
Accounts) will at all times be kept by Borrower at the locations
set forth on Schedule 5.18B hereto and shall not, without
thirty (30) calendar days prior written notice to Lender, be moved
therefrom, and in any case shall not be moved outside the United
States.
(b) Borrower shall keep commercially
reasonable accurate and complete records of its Accounts and all
payments and collections thereon and shall submit such records to
Lender on such periodic bases as Lender may reasonably request (but
unless an Event of Default has occurred and is continuing, not more
frequently than monthly). In addition, if (i) Accounts of Borrower
in an aggregate face amount in excess of $40,000 become ineligible
because they fall within one of the specified categories of
ineligibility set forth in the definition of Eligible Receivables
and (ii) Borrower has borrowed fifty percent (50%) or more of its
Availability and such amount is currently outstanding, then
Borrower shall notify Lender of such occurrence on the first
Business Day following Borrower’s knowledge thereof and the
Borrowing Base shall thereupon be adjusted to reflect such
occurrence. If requested by Lender after the occurrence and during
the continuance of an Event of Default, Borrower shall execute and
deliver to Lender formal written assignments of all of its Accounts
weekly or daily as Lender may request, including all Accounts
created since the date of the last assignment, together with copies
of claims, invoices and/or other information related thereto. To
the extent that collections from such assigned accounts exceed the
amount of the Obligations, such excess amount shall not accrue
interest in favor of Borrower, but shall be available to Borrower
upon Borrower’s written request.
(c) Whether or not an Event of
Default has occurred, any of Lender’s officers, employees,
representatives or agents shall have the right, at any time during
normal business hours, in the name of Lender, any designee of
Lender or Borrower, to verify the validity, amount or any other
matter relating to any Accounts of Borrower which, prior to the
occurrence or continuation of a Default or Event of Default shall
not include the right to contact Borrower’s customers or
account debtors. Borrower shall cooperate fully with Lender in an
effort to facilitate and promptly conclude such verification
process.
(d) Lender shall have the right at
all times after the occurrence and during the continuance of an
Event of Default to notify Account Debtors owing Accounts to
Borrower that their Accounts have been assigned to Lender and to
collect such Accounts directly in its own name and to charge
collection costs and expenses, including reasonable
attorney’s fees, to Borrower.
(e) As and when determined by Lender
in its sole discretion, Lender will perform the searches described
in clauses (i) and (ii) below against Borrower (the results of
which are to be consistent with Borrower’s representations
and warranties under this Agreement) once per calendar quarter
prior to the occurrence and continuation of any Default or Event of
Default at Borrower’s expense, and following the occurrence
and continuation of a Default or Event of Default, as often as
Lender reasonably shall deem appropriate, all at Borrower’s
expense: (i) UCC searches in the state of Borrower’s
formation; and (ii) judgment, federal tax lien and corporate and
partnership tax lien searches, in each jurisdiction searched under
clause (i) above.
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(f) Borrower (i) shall provide
prompt written notice to its current bank to transfer all items,
collections and remittances to the Concentration Account, (ii)
shall provide prompt written notice to each Account Debtor to make
payments to the appropriate Lockbox Account, and Borrower hereby
authorizes Lender, upon any failure to send such notices and
directions within ten (10) calendar days after the date of this
Agreement (or ten (10) calendar days after the Person becomes an
Account Debtor) after the occurrence and during the continuance of
an Event of Default, to send any and all similar notices and
directions to such Account Debtors, and (iii) shall do anything
further that may be lawfully required by Lender to secure Lender
and effectuate the intentions of the Loan Documents.
2.11 Power of
Attorney
Lender is hereby irrevocably made,
constituted and appointed the true and lawful attorney for Borrower
(without requiring any of them to act as such) with full power of
substitution to do the following upon the occurrence and during the
continuance of an Event of Default: (i) endorse the name of
Borrower upon any and all checks, drafts, money orders, and other
instruments for the payment of money that are payable to Borrower
and constitute collections on its Accounts; (ii) execute in the
name of Borrower any financing statements, schedules, assignments,
instruments, documents, and statements that it is or they or are
obligated to give Lender under any of the Loan Documents; and (iii)
do such other and further acts and deeds in the name of Borrower
that Lender may deem necessary or desirable to enforce any Account
or other Collateral or to perfect Lender’s security interest
or lien in any Collateral. In addition, if Borrower breaches its
obligation hereunder to direct payments of Accounts or the proceeds
of any other Collateral to the appropriate Lockbox Account, Lender,
as the irrevocably made, constituted and appointed true and lawful
attorney for Borrower pursuant to this paragraph, may, upon the
occurrence and continuation of an Event of Default by the signature
or other act of any of Lender’s officers or authorized
signatories (without requiring any of them to do so), direct any
federal, state or private payor or fiscal intermediary to pay
proceeds of Accounts or any other Collateral to the appropriate
Lockbox Account.
III. FEES AND OTHER CHARGES; ALLOCATION OF
PURCHASE PRICE
3.1 Commitment Fee
On or before the Closing Date,
Borrower shall pay to Lender 1.0% of $4,000,000 as a nonrefundable
commitment fee, which fee Lender acknowledges has been paid. On or
before the date of this Agreement, Borrower shall pay to Lender
1.0% of $2,000,000 as a non-refundable commitment fee.
3.2 Unused Line
Fee
Borrower shall pay to Lender an
unused line fee (the “Unused Line Fee” ) in an
amount equal to 0.042% (per month, prorated for partial months
where this Agreement is only effective for a portion of any such
month) of the difference derived by subtracting (i) the daily
average amount of the balances under the Revolving Facility
outstanding during the preceding month, from (ii) the Facility Cap.
The Unused Line Fee shall be payable monthly in arrears on the
first Business Day of each successive calendar month (starting with
the month in which the Closing Date occurs).
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3.3 Collateral Management
Fee
Borrower shall pay Lender as
additional interest a monthly collateral management fee (the
“Collateral Management Fee” ) equal to 0.10% of
the daily average amount of the balances under the Revolving
Facility outstanding during the preceding month. The Collateral
Management Fee shall be payable monthly in arrears on the first
Business Day of each successive calendar month (starting with the
month in which the Closing Date occurs).
3.4 Early Termination
Fees
If (i) Borrower terminates the
Revolving Facility under Section 11.1 hereof, (ii) Lender
demands upon the occurrence of an Event of Default or Borrower is
otherwise required to make payment in full of the Revolving
Facility and/or Obligations relating to the Revolving Facility upon
the occurrence of an Event of Default, (iii) a voluntary or
involuntary Change of Control occurs, (iv) any prepayment of the
Revolving Facility and/or Obligations occurs (other than reductions
to zero of the outstanding balance of the Revolving Facility
resulting from the ordinary course operation of the provisions of
Section 2.5 ), whether by virtue of Lender’s
exercising its right of set-off or otherwise, or (v) any
acceleration of the Obligations or cessation of lending and
termination of the commitment to lend occurs as a result of or
during a bankruptcy, reorganization or other proceeding or
liquidation or pursuant to any Debtor Relief Law (a
“termination”), then, at the effective date of any such
termination, Borrower shall pay Lender (in addition to the then
outstanding principal, accrued interest and other Obligations
relating to the Revolving Facility pursuant to the terms of this
Agreement and any other Loan Document), as yield maintenance for
the loss of bargain and not as a penalty, an amount equal to the
applicable Minimum Termination Fee.
3.5 Computation of Fees; Lawful
Limits
All fees hereunder shall be computed
on the basis of a year of 360 days and for the actual number of
days elapsed in each calculation period, as applicable. In no
contingency or event whatsoever, whether by reason of acceleration
or otherwise, shall the interest and other charges paid or agreed
to be paid to Lender for the use, forbearance or detention of money
hereunder exceed the maximum rate permissible under applicable law
which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. If, due to any circumstance
whatsoever, fulfillment of any provision hereof, at the time
performance of such provision shall be due, shall exceed any such
limit, then, the obligation to be so fulfilled shall be reduced to
such lawful limit, and, if Lender shall have received interest or
any other charges of any kind which might be deemed to be interest
under applicable law in excess of the maximum lawful rate, then
such excess shall be applied first to any unpaid fees and charges
hereunder, then to unpaid principal balance owed by Borrower
hereunder, and if the then remaining excess interest is greater
than the previously unpaid principal balance, Lender shall promptly
refund such excess amount to Borrower and the provisions hereof
shall be deemed amended to provide for such permissible rate. The
terms and provisions of this Section 3.5 shall control to
the extent any other provision of any Loan Document is inconsistent
herewith.
3.6 Default Rate of
Interest
Upon the occurrence and during the
continuation of an Event of Default, the Applicable Rate of
interest in effect at such time with respect to the Obligations
shall be increased by 3.0% per annum (the “Default
Rate” ).
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3.7 Acknowledgement of Joint and
Several Liability
Each Borrower acknowledges that it
is jointly and severally liable for all of the Obligations under
the Loan Documents. Each Borrower expressly understands, agrees and
acknowledges that (i) Borrowers are all affiliated entities by
common ownership, (ii) each Borrower desires to have the
availability of one common credit facility instead of separate
credit facilities, (iii) each Borrower has requested that Lender
extend such a common credit facility on the terms herein provided,
(iv) Lender will be lending against, and relying on a lien upon,
all of the Collateral even though the proceeds of any particular
loan made hereunder may not be advanced directly to a particular
Borrower, (v) each Borrower will nonetheless benefit by the making
of all such loans by Lender and the availability of a single credit
facility of a size greater than each could independently warrant,
and (vi) all of the representations, warranties, covenants,
obligations, conditions, agreements and other terms contained in
the Loan Documents shall be applicable to and shall be binding upon
each Borrower.
IV. CONDITIONS PRECEDENT
4.1 Conditions to Initial Advance
and Closing
The obligations of Lender to
consummate the transactions contemplated herein and to make the
initial Advance under the Revolving Facility (the “Initial
Advance” ) are subject to the satisfaction of the
following, all of which Lender acknowledges have been
satisfied:
(a) Borrower shall have delivered to
Lender (A) the Loan Documents to which it is a party, each duly
executed by an authorized officer of Borrower and in case of the
Lockbox Agreement, executed by Harris Trust and Savings Bank, and
(B) a Borrowing Certificate for the Initial Advance under the
Revolving Facility executed by an authorized officer of
Borrower;
(b) all in form and substance
satisfactory to Lender in its sole discretion, Lender shall have
received (i) a report of Uniform Commercial Code financing
statement, tax and judgment lien searches performed with respect to
Borrower in each jurisdiction determined by Lender in its sole
discretion, and such report shall show no Liens on the Collateral
(other than Permitted Liens), (ii) each document (including,
without limitation, any UCC financing statement) required by any
Loan Document or under law or reasonably requested by Lender to be
filed, registered or recorded to create in favor of Lender, a
perfected first priority security interest (subject to Permitted
Liens, which in no case shall include or permit liens on Accounts
or proceeds thereof) upon the Collateral, and (iii) evidence of
each such filing, registration or recordation and of the payment by
Borrower (or by Lender on Borrower’s behalf) of any necessary
fee, tax or expense relating thereto;
(c) Lender shall have received (i)
the Charter and Good Standing Documents, all in form and substance
acceptable to Lender, (ii) a certificate of the corporate secretary
or assistant secretary of Borrower dated the Closing Date, as to
the incumbency and signature of the Persons executing the Loan
Documents, in form and substance acceptable to Lender, (iii) the
written legal opinion of counsel for Borrower, in form and
substance satisfactory to Lender and its counsel; and (iv) a
certificate executed by an authorized officer of Borrower, which
shall constitute a representation and warranty by such Borrower as
of the Closing Date and the applicable Borrowing Date that the
conditions contained in this Agreement have been
satisfied;
9
(d) Lender shall have received a
certificate of the chief financial officer (or, in the absence of a
chief financial officer, the chief executive officer) of Borrower,
in form and substance satisfactory to Lender (each, a
“Solvency Certificate” ), certifying (i) the
solvency of Borrower after giving effect to the transactions and
the Indebtedness contemplated by the Loan Documents, and (ii) as to
Borrower’s financial resources and ability to meet its
obligations and liabilities as they become due, to the effect that
as of the Closing Date and the Borrowing Date for the Initial
Advance and after giving effect to such transactions and
Indebtedness: (A) the assets of Borrower, at a Fair Valuation,
exceed the total liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities) of Borrower, and (B) no
unreasonably small capital base with which to engage in its
anticipated business exists with respect to Borrower;
(e) Lender shall have completed
examinations, the results of which shall be satisfactory in form
and substance to Lender, of the Collateral, the financial
statements and the books, records, business, obligations, financial
condition and operational state of Borrower, and Borrower shall
have demonstrated to Lender’s satisfaction that (i) its
operations comply, in all respects deemed material by Lender, in
its sole judgment, with all applicable federal, state, foreign and
local laws, statutes and regulations, (ii) its operations are not
the subject of any governmental investigation, evaluation or any
remedial action which could result in any expenditure or liability
deemed material by Lender, in its sole judgment, and (iii) it has
no liability (whether contingent or otherwise) that is deemed
material by Lender, in its sole judgment;
(f) Lender shall have received all
fees, charges and expenses payable to Lender on or prior to the
Closing Date pursuant to the Loan Documents;
(g) all in form and substance
satisfactory to Lender in its sole discretion, Lender shall have
received such consents, approvals and agreements, including,
without limitation, any applicable Landlord Waivers and Consents
with respect to any and all leases at locations where Borrower
maintains its financial and corporate books and records, as
specified on Schedule 5.4 , which may be delivered
post-closing, as set forth on Schedule 6.8 hereto, from such
third parties as Lender and its counsel shall determine are
necessary or desirable with respect to (i) the Loan Documents
and/or the transactions contemplated thereby, and/or (ii) claims
against Borrower or the Collateral;
(h) Borrower shall be in compliance
with Section 6.5 , and Lender shall have received (i)
certified copies of all such insurance policies, and (ii) original
certificates of such insurance policies confirming that they are in
effect and that the premiums due and owing with respect thereto
have been paid in full;
(i) all corporate and other
proceedings, documents, instruments and other legal matters in
connection with the transactions contemplated by the Loan Documents
(including, but not limited to, those relating to corporate and
capital structures of Borrower) shall be satisfactory to Lender;
and
(j) Lender shall have received a
signed IRS Form 8821 for each Borrower and such other documents,
certificates, information or legal opinions as Lender may
reasonably request, all in form and substance reasonably
satisfactory to Lender, which shall be delivered post-closing, as
set forth on Schedule 6.8 hereto within the time therein
provided.
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4.2 Conditions to Each
Advance
The obligations of Lender to make
any Advance (including, without limitation, the Initial Advance)
are subject to the satisfaction of the following additional
conditions precedent:
(a) Borrower shall have delivered to
Lender a Borrowing Certificate for the Advance executed by an
authorized officer of Borrower, which shall constitute a
representation and warranty by Borrower as of the Borrowing Date of
such Advance that the conditions contained in this Section
4.2 have been satisfied;
(b) each of the representation and
warranties made by Borrower in or pursuant to this Agreement shall
be accurate, before and after giving effect to such Advance, as if
made on the date of such Advance notwithstanding any provision in
Section V hereof limiting representations or warranties to
the Closing Date or the date hereof, and no Default or Event of
Default shall have occurred or be continuing or would exist after
giving effect to the Advance under the Revolving Facility on such
date;
(c) immediately after giving effect
to the requested Advance, the aggregate outstanding principal
amount of Advances under the Revolving Facility shall not exceed
the lesser of the Availability and the Facility Cap;
(d) except as disclosed in the
historical financial statements, there shall be no liabilities or
obligations with respect to Borrower of any nature whatsoever
which, either individually or in the aggregate, would reasonably be
likely to have a Material Adverse Effect; and
(e) Lender shall have received all
fees, charges and expenses due and payable to Lender on or prior to
such date pursuant to the Loan Documents.
4.3 Conditions to This
Agreement
The obligations of Lender to enter
into this Agreement are subject to the satisfaction of the
following additional conditions precedent:
(a) Borrower shall have delivered to
Lender an additional Note representing the increased Facility Cap
executed by an authorized officer of Borrower;
(b) Lender shall have received a
signed IRS Form 8821 for each Borrower in form and substance
reasonably satisfactory to Lender;
(c) Lender shall have received
certificates of insurance evidencing the designation of Lender as
loss payee and additional insured in accordance with Section
6.5 hereto, which shall be delivered post-closing as set forth
in Schedule 6.8 hereto within the time therein
provided;
(d) Lender shall have received a
certificate of the corporate secretary or assistant secretary of
Borrower dated the date hereof, as to the incumbency and signature
of the Persons executing this Agreement and any other Loan
Documents to be executed in connection herewith, in form and
substance acceptable to Lender, that there has been no change in
the Borrower’s charter documents provided on the Closing
Date, and certifying all resolutions necessary or appropriate from
each Borrower approving the transactions contemplated hereby;
and
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(e) Lender shall have received all
fees, charges and expenses payable to Lender on or prior to the
date hereof pursuant to the Loan Documents.
V. REPRESENTATIONS AND WARRANTIES
Borrower, jointly and severally,
represents and warrants as of the date hereof, and each Borrowing
Date as follows:
5.1 Organization and
Authority
Borrower is a corporation duly
organized, validly existing and in good standing, except as set
forth on Schedule 5.1 , under the laws of its state of
formation. Borrower (i) has all requisite corporate power and
authority to own its properties and assets and to carry on its
business as now being conducted and as contemplated in the Loan
Documents, (ii) is duly qualified to do business in every
jurisdiction in which failure so to qualify could reasonably be
expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority (A) to execute, deliver and perform
the Loan Documents to which it is a party, (B) to borrow hereunder,
(C) to consummate the transactions contemplated under the Loan
Documents, and (D) to grant the Liens with regard to the Collateral
pursuant to the Security Documents to which it is a party. Borrower
is not an “investment company” registered or required
to be registered under the Investment Company Act of 1940, as
amended, or controlled by such an “investment
company.”
5.2 Loan Documents
The execution, delivery and
performance by Borrower of the Loan Documents to which it is a
party, and the consummation of the transactions contemplated
thereby, (i) have been duly authorized by all requisite action of
Borrower and have been duly executed and delivered by or on behalf
of Borrower; (ii) do not violate any provisions of (A) applicable
law, statute, rule, regulation, ordinance or tariff, (B) any order
of any Governmental Authority binding on Borrower or any of its
properties, or (C) the certificate of incorporation or bylaws (or
any other equivalent governing agreement or document) of Borrower,
or any agreement between Borrower and its respective stockholders;
(iii) are not in conflict with, and do not result in a breach or
default of or constitute an event of default, or an event, fact,
condition or circumstance which, with notice or passage of time, or
both, would constitute or result in a conflict, breach, default or
event of default under, any indenture, agreement or other
instrument to which Borrower is a party, or by which the properties
or assets of Borrower are bound, the effect of which could
reasonably be expected to have a Material Adverse Effect; (iv)
except as set forth therein, will not result in the creation or
imposition of any Lien of any nature upon any of the properties or
assets of Borrower, and (v) except as set forth on Schedule
5.2 , do not require the consent, approval or authorization of,
or filing, registration or qualification with, any Governmental
Authority or any other Person. When executed and delivered, each of
the Loan Documents to which Borrower is a party will constitute the
legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, subject to the
effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors’ rights generally and to the effect of general
principles of equity which may limit the availability of equitable
remedies (whether in a proceeding at law or in equity).
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5.3 Subsidiaries, Capitalization
and Ownership Interests
Borrower has no Subsidiaries other
than as set forth on Schedule 5.3 . Schedule 5.3
states as of the date hereof, the authorized and issued
capitalization of Borrower, the number and class of equity
securities issued and outstanding of Borrower and the record owners
of two percent (2%) or more in the aggregate of all such equity
interests of Borrower (including options, warrants and other rights
to acquire any of the foregoing). The outstanding equity securities
of Borrower have been duly authorized and validly issued and are
fully paid and nonassessable. Schedule 5.3 also lists the
directors and officers of Borrower. Except as listed on Schedule
5.3 , Borrower does not own an interest or participate or
engage in any joint venture, partnership or similar arrangements
with any Person.
5.4 Properties
Borrower (i) is the sole owner and
has good, valid and marketable title to, or a valid leasehold
interest in, all of its properties and assets, including the
Collateral, whether personal or real, subject to no transfer
restrictions or Liens of any kind except for Permitted Liens, and
(ii) is in compliance in all material respects with each lease to
which it is a party or otherwise bound. Schedule 5.4 lists
all real properties (and their locations) owned or leased by or to,
and all other material assets or property that are leased or
licensed by, Borrower and all leases covering or with respect to
such properties and material assets as of the date hereof. Borrower
enjoys peaceful and undisturbed possession under all such leases
and such leases are all the leases necessary for the operation of
such properties and assets, are valid and subsisting and are in
full force and effect.
5.5 Other
Agreements
Except as set forth on Schedule
5.5 , Borrower is not (i) a party to any judgment, order or
decree or any agreement, document or instrument, or subject to any
restriction, which would materially adversely affect its ability to
execute and deliver, or perform under, any Loan Document or to pay
the Obligations and (ii) in default in the performance, observance
or fulfillment of any obligation, covenant or condition contained
in any agreement, document or instrument to which it is a party or
to which any of its properties or assets are subject, which
default, if not remedied within any applicable grace or cure period
could reasonably be expected to have a Material Adverse Effect, nor
is there any event, fact, condition or circumstance which, with
notice or passage of time or both, would constitute or result in a
conflict, breach, default or event of default under, any of the
foregoing which, if not remedied within any applicable grace or
cure period could reasonably be expected to have a Material Adverse
Effect.
5.6 Litigation
Except as set forth on Schedule
5.6 , there is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against Borrower that (i)
questions or could reasonably be expected to prevent the validity
of any of the Loan Documents or the right of Borrower to enter into
any Loan Document or to consummate the transactions contemplated
thereby, (ii) could reasonably be expected to be or have, either
individually or in the aggregate, any Material Adverse Change or
Material Adverse Effect, or (iii) could reasonably be expected to
result in any Change of Control. Borrower is not a party or subject
to any order, writ, injunction, judgment or decree of any
Governmental Authority that could reasonably be expected to have a
Material Adverse Effect. As of the Closing Date, there is no
action, suit, proceeding or investigation initiated by Borrower
pending. As of the Closing Date, Borrower does not have any
existing accrued and/or unpaid Indebtedness to any Governmental
Authority.
13
5.7 Hazardous
Materials
Borrower is in compliance in all
material respects with all applicable Environmental Laws. Borrower
has not been notified of any action, suit, proceeding or
investigation (i) relating in any way to failure to comply by or
liability of Borrower under any Environmental Laws, or (ii) which
seeks to suspend, revoke or terminate any license, permit or
approval of Borrower necessary for the generation, handling,
storage, treatment or disposal of any Hazardous
Substance.
5.8 Potential Tax Liability; Tax
Returns; Governmental Reports
(a) Except as disclosed in
Schedule 5.8 , Borrower (i) has not received any written
communication from the Internal Revenue Service with respect to any
investigation or assessment relating to the Borrower directly, or
relating to any consolidated tax return which was filed on behalf
of Borrower, (ii) is not aware of any year more than five years
past which remains open pending tax examination or audit by the
IRS, and (iii) is not aware of any information that could
reasonably be expected to give rise to an IRS tax investigation or
assessment.
(b) Borrower (i) has filed all
federal, state, foreign (if applicable) and local tax returns and
other reports which are required by law to be filed by Borrower,
and (ii) has paid all taxes, assessments, fees and other
governmental charges, including, without limitation, payroll and
other employment related taxes, in each case that are due and
payable, except only for items that Borrower is currently
contesting in good faith and that are described on Schedule
5.8 .
5.9 Financial Statements and
Reports
All financial statements and
financial information relating to Borrower that have been or may
hereafter be delivered to Lender by Borrower are accurate and
complete and have been prepared in accordance with GAAP
consistently applied with prior periods. Borrower has no material
obligations or liabilities of any kind not disclosed in such
financial information or statements that are required to be so
disclosed by GAAP consistently applied, and since the date of the
most recent financial statements submitted to Lender, there has not
occurred any Material Adverse Change or Material Adverse Effect or,
to Borrower’s knowledge, any other event or condition that
could reasonably be expected to have a Material Adverse
Effect.
5.10 Compliance with
Law
Borrower (i) is in compliance with
all laws, statutes, rules, regulations, ordinances and tariffs of
any Governmental Authority applicable to Borrower and/or
Borrower’s business, assets or operations, including, without
limitation, applicable requirements of the Standards for Privacy of
Individually Identifiable Health Information which were promulgated
pursuant to the Health Insurance Portability and Accountability Act
of 1996 (“HIPAA”) and ERISA, and (ii) is not in
violation of any order of any Governmental Authority or other board
or tribunal, except in each case where noncompliance or violation
could not reasonably be expected to have a Material Adverse Effect.
There is no event, fact, condition or circumstance which, with
notice or passage of time, or both, would constitute or result in
any noncompliance with, or any violation of, any of the foregoing,
in each case except where noncompliance or violation could not
reasonably be expected to have a Material Adverse Effect. Borrower
has not received any notice that Borrower is not in compliance in
any respect with any of the requirements of any of the foregoing.
Borrower has (a) not engaged in any Prohibited Transactions as
defined in Section 406 of ERISA and Section 4975 of the Internal
Revenue Code of
14
1986, as amended, and the rules and regulations
promulgated thereunder, (b) not failed to meet any applicable
minimum funding requirements under Section 302 of ERISA in respect
of its plans and no funding requirements have been postponed or
delayed, (c) no knowledge of any amounts due but unpaid to the
Pension Benefit Guaranty Corporation, or of any event or occurrence
which would cause the Pension Benefit Guaranty Corporation to
institute proceedings under Title IV of ERISA to terminate any of
the employee benefit plans, (d) no fiduciary responsibility under
ERISA for investments with respect to any plan existing for the
benefit of Persons other than its employees or former employees, or
(e) not withdrawn, completely or partially, from any multi-employer
pension plans so as to incur liability under the MultiEmployer
Pension Plan Amendments of 1980. With respect to Borrower, there
exists no event described in Section 4043 of ERISA, excluding
Subsections 4043(b)(2) and 4043(b)(3) thereof, for which the thirty
(30) day notice period contained in 12 C.F.R. § 2615.3 has not
been waived. Borrower has maintained in all material respects all
records required to be maintained by it by the Food and Drug
Administration, Drug Enforcement Agency and State Boards of
Pharmacy with jurisdiction over Borrower.
5.11 Intellectual
Property
Except as set forth on Schedule
5.11 as of the date hereof, Borrower does not own, license or
utilize, and is not a party to, any patents, patent applications,
trademarks, trademark applications, service marks, registered
copyrights, copyright applications, copyrights, trade names, trade
secrets, software or licenses (collectively, the
“Intellectual Property” ). Borrower has advised
Lender in writing of any additional registered copyrights it
owns.
5.12 Licenses and Permits;
Labor
Borrower is in compliance with and
has all Permits and Intellectual Property necessary or required by
applicable law or Governmental Authority for the operation of its
businesses. All of the foregoing are in full force and effect and
not in known conflict with the rights of others. Borrower is not
(i) in breach of or default under the provisions of any of the
foregoing, nor is there any event, fact, condition or circumstance
which, with notice or passage of time or both, would constitute or
result in a conflict, breach, default or event of default under,
any of the foregoing which, if not remedied within any applicable
grace or cure period could reasonably be expected to have a
Material Adverse Effect, (ii) a party to or subject to any
agreement, instrument or restriction that is so unusual or
burdensome that it could reasonably be expected to have a Material
Adverse Effect, and/or (ii) and has not been, involved in any labor
dispute, strike, walkout or union organization which could
reasonably be expected to have a Material Adverse Effect
5.13 No Default
There does not exist any Default or
Event of Default or any event, fact, condition or circumstance
which, with the giving of notice or passage of time or both, would
constitute or result in a Default or Event of Default.
5.14 Disclosure
No Loan Document nor any other
agreement, document, certificate, or statement furnished to Lender
by or on behalf of Borrower in connection with the transactions
contemplated by the Loan Documents, nor any representation or
warranty made by Borrower in any Loan Document, contains
15
any untrue statement of material fact or omits
to state any fact necessary to make the statements therein not
materially misleading. There is no fact known to Borrower which has
not been disclosed to Lender which Borrower reasonably believes is
likely to have a Material Adverse Effect.
5.15 Existing Indebtedness;
Investments, Guarantees and Certain Contracts
Except for Permitted Indebtedness,
as contemplated by the Loan Document or as otherwise set forth on
Schedule 5.15 , Borrower (i) has no outstanding
Indebtedness, (ii) is not subject or party to any mortgage, note,
indenture, indemnity or guarantee of, with respect to or evidencing
any Indebtedness of any other Person, and (iii) does not own or
hold any equity or long-term debt investments in, and does not have
any outstanding advances to or any outstanding guarantees for the
obligations of, or any outstanding borrowings from, any Person.
Borrower has performed all material obligations required to be
performed by Borrower pursuant to or connection with any items
listed on Schedule 5.15 and there has occurred no breach,
default or event of default under any document evidencing any such
items with respect to Indebtedness in excess of $100,000 or any
fact, circumstance, condition or event which, with the giving of
notice or passage of time or both, would constitute or result in a
breach, default or event of default thereunder.
5.16 Agreements Concerning
Officers, Directors, Competitors
Except as set forth on Schedule
5.16 , (i) there are no existing or proposed agreements,
arrangements, understandings or transactions between Borrower and
any of Borrower’s officers, directors (solely as of the date
hereof with respect to directors who also perform clinical
research), or 5% stockholders or Affiliates or any members of their
respective immediate families, and (ii) none of the foregoing
Persons are directly or indirectly, indebted to or have any direct
or indirect ownership, partnership or voting interest in, to
Borrower’s knowledge, any Person with which Borrower has a
business relationship or which competes with Borrower (except that
any such Persons may own stock in (but not exceeding two (2%)
percent of the outstanding capital stock of) any publicly traded
company that may compete with Borrower).
5.17 Insurance
Borrower has in full force and
effect such insurance policies as are customary and appropriate in
the judgment of management of the Company for its business and as
may be required pursuant to Section 6.5 hereof. All such
insurance policies as of the date hereof are listed and described
on Schedule 5.17 .
5.18 Names; Location of Offices,
Records and Collateral
During the preceding four years,
Borrower has not conducted business under or used any name (whether
corporate, partnership or assumed) other than as shown on
Schedule 5.18A . To the best knowledge of Borrower, Borrower
is the sole owner of all of its names listed on Schedule
5.18A , and any and all business done and invoices issued in
such names are Borrower’s sales, business and invoices. Each
trade name of Borrower represents a division or trading style of
Borrower. Borrower maintains its principal places of business and
chief executive office only at the locations set forth on
Schedule 5.18B , and all Accounts of Borrower arise,
originate and are located, and all of the Collateral other than
Deposit Accounts and all books and records in connection therewith
or in any way relating thereto or evidence the Collateral other
than Deposit Accounts are located and unless Borrower provides at
least 30 calendar
16
days advance notice shall be only, in and at
such locations, except for Equipment and Inventory with an
estimated net book value not to exceed $50,000 located at physician
offices and other employee, agent or representative locations. All
of the Collateral other than Deposit Accounts is located only in
the United States.
5.19
Non-Subordination
The Obligations are not
contractually subordinated in any way to any other obligations of
Borrower or to the rights of any other Person.
5.20 Accounts
In determining which Accounts are
Eligible Receivables, Lender may rely on all statements and
representations made by Borrower with respect to any Account.
Unless otherwise indicated in writing to Lender, each Account of
Borrower (i) is genuine and in all respects what is purports to be
and is not evidenced by a judgment, (ii) arises out of a completed,
bona fide sale and delivery of goods or rendering of Services by
Borrower in the ordinary course of business and in accordance with
the terms and conditions of all purchase orders, contracts,
certifications, participations, certificates of need and other
documents relating thereto or forming a part of the contract
between Borrower and the Account Debtor, (iii) is for a liquidated
amount maturing as stated in a claim or invoice covering such sale
of goods or rendering of Services, a copy of which has been
furnished or is available to Lender, (iv) together with
Lender’s security interest therein, is not and will not be in
the future (by voluntary act or omission by Borrower), subject to
any material offset, lien, deduction, defense, dispute,
counterclaim or other adverse condition (other than in the ordinary
course of business), is absolutely owing to Borrower and is not
contingent in any respect or for any reason, (v) there are no
facts, events or occurrences which in any material way impair the
validity or enforceability thereof or tend to reduce the amount
payable thereunder from the face amount of the claim or invoice and
statements delivered to Lender with respect thereto, (vi) to the
best of Borrower’s knowledge, (A) the Account Debtor
thereunder had the capacity to contract at the time any contract or
other document giving rise thereto was executed and (B) such
Account Debtor is solvent, (vii) to Borrower’s knowledge,
there are no proceedings or actions which are threatened or pending
against any Account Debtor under any Account which is reasonably
expected to (A) be material and adverse to the business,
operations, properties, assets, liabilities or financial condition
of such Account Debtor or (B) materially impair the ability and
likelihood of such Account Debtor to pay such Eligible Receivables
in full, and (viii) has been billed and forwarded to the Account
Debtor for payment in accordance with applicable laws and is in
compliance and conformance with any requisite procedures,
requirements and regulations governing payment by such Account
Debtor with respect to such Account.
5.21 Healthcare
Without limiting or being limited by
any other provision of any Loan Document, Borrower has timely filed
or caused to be filed all material reports of every kind required
by law, agreement or otherwise necessary for the continued
operation of its business. There are no claims, actions or appeals
pending (and Borrower has not filed any claims or reports which
could reasonably result in any such claims, actions or appeals)
before any commission, board or agency or other Governmental
Authority except such as could not reasonably be expected to result
in a Material Adverse Effect.
17
5.22 Survival
Borrower makes the representations
and warranties contained herein with the knowledge and intention
that Lender is relying and will rely thereon. All such
representations and warranties will survive the execution and
delivery of this Agreement, and the making of the Advances under
the Revolving Facility.
VI. AFFIRMATIVE COVENANTS
Each Borrower, jointly and
severally, covenants and agrees that, until full performance and
satisfaction, and indefeasible payment in full in cash, of all the
Obligations and termination of this Agreement:
6.1 Financial Statements, Reports
and Other Information
(a) Financial Reports . In
addition to providing the Borrowing Certificate in accordance with
Section 2.4 , Borrower shall furnish to Lender (i) as soon
as available and in any event within ninety (90) calendar days
after the end of each fiscal year of Borrower, audited annual
consolidated financial statements of Borrower, including the notes
thereto, consisting of a consolidated balance sheet at the end of
such completed fiscal year and the related consolidated statements
of income, retained earnings, cash flows and owners’ equity
for such completed fiscal year, which financial statements shall be
prepared and certified without qualification, except for
Borrower’s fiscal year 2001 audit, which may be qualified, by
an independent certified public accounting firm satisfactory to
Lender and accompanied by related management letters, if available,
and (ii) as soon as available and in any event within thirty (30)
calendar days after the end of each calendar month, unaudited
consolidated and consolidating financial statements of Borrower
consisting of a balance sheet and statements of income, retained
earnings, cash flows and owners’ equity as of the end of the
immediately preceding calendar month. All such financial statements
shall be prepared in accordance with GAAP consistently applied with
prior periods. With each such financial statement, Borrower shall
also deliver a certificate of its chief financial officer stating
that (A) such person has reviewed the relevant terms of the Loan
Documents and the condition of Borrower, (B) no Default or Event of
Default has occurred or is continuing, or, if any of the foregoing
has occurred or is continuing, specifying the nature and status and
period of existence thereof and the steps taken or proposed to be
taken with respect thereto, and (C) Borrower is in compliance with
all financial covenants attached as Annex I hereto. Such
certificate shall be accompanied by the calculations necessary to
show compliance with the financial covenants in a form satisfactory
to Lender.
(b) Other Materials .
Borrower shall furnish to Lender as soon as available, and in any
event within ten (10) calendar days after the preparation or
issuance thereof or at such other time as set forth below: (i)
copies of such financial statements (other than those required to
be delivered pursuant to Section 6.1(a) ) prepared by, for
or on behalf of Borrower and any other notes, reports and other
materials related thereto, including, without limitation, any pro
forma financial statements, (ii) any reports, returns, information,
notices and other materials that relate to the material operations
of the Borrower’s business that Borrower sends to its
stockholders, (iii) within thirty (30) calendar days after the end
of each calendar month for such month, (A) a sales and collection
report and accounts receivable and accounts payable aging schedule,
including a report of sales, credits issued and collections
received, all such reports showing a reconciliation to the amounts
reported in the monthly financial statements, and (C) a report
listing ongoing clinical studies, (iv) promptly upon receipt
thereof, copies of any reports
18
submitted to Borrower by its independent
accountants in connection with any interim audit of the books of
Borrower and copies of each management control letter provided by
such independent accountants, and (v) such additional information,
documents, statements, reports and other materials as Lender may
reasonably request from a credit or security perspective or
otherwise from time to time.
(c) Notices . Borrower shall
promptly, and in any event within three (3) Business Days after
Borrower or any authorized officer of Borrower obtains knowledge
thereof, notify Lender in writing of (i) any pending or threatened
litigation, suit, investigation, arbitration, dispute resolution
proceeding or administrative proceeding brought or initiated by
Borrower or otherwise affecting or involving or relating to
Borrower or any of its property or assets to the extent (A) the
amount in controversy exceeds $100,000, or (B) to the extent any of
the foregoing seeks injunctive relief, (ii) any Default or Event of
Default, which notice shall specify the nature and status thereof,
the period of existence thereof and what action is proposed to be
taken with respect thereto, (iii) any other development, event,
fact, circumstance or condition that could reasonably be expected
to have a Material Adverse Effect, in each case describing the
nature and status thereof and the action proposed to be taken with
respect thereto, (iv) any notice received by Borrower from any
Account Debtor of a claim, suit or other action such Account Debtor
has, claims or has filed against Borrower, which includes an amount
in controversy in excess of $50,000, (v) any matter(s) reasonably
expected by Borrower to materially or adversely affect the value,
enforceability or collectability of any of the (A) Account
Collateral in existence at any one time, or (B) non-Account
Collateral involving claims or disputes in the amount of $40,000 or
more, singly or in the aggregate, in existence at any one time, and
(B) (vi) any notice given by Borrower to any other lender of
Borrower and shall furnish to Lender a copy of such notice, (vii)
receipt of any notice or request from any Governmental Authority or
governmental payor regarding any liability or claim of liability in
excess of $100,000, (viii) the termination of any Key Officer,
and/or (ix) if any Account becomes evidenced or secured by an
Instrument or Chattel Paper.
(d) Consents . Borrower shall
obtain and deliver from time to time all required consents,
approvals and agreements from such third parties as Lender shall
determine are necessary or desirable in its sole discretion and
that are satisfactory to Lender with respect to (i) the Loan
Documents and the transactions contemplated thereby, and (ii)
claims against Borrower or the Collateral, (iii) Landlord Waivers
and Consents with respect to leases for locations identified by
Borrower as those where corporate financial books and records are
kept.
(e) Operating Budget .
Borrower shall furnish to Lender on or prior to the Closing Date
and for each fiscal year of Borrower prior to the commencement of
such fiscal year, consolidated and consolidating month by month
projected operating budgets, annual projections, profit and loss
statements, balance sheets and cash flow reports of and for
Borrower for such upcoming fiscal year (including an income
statement for each month and a balance sheet as at the end of the
last month in each fiscal quarter), in each case prepared in
accordance with GAAP consistently applied with prior
periods.
6.2 Payment of
Obligations
Borrower shall make full and timely
indefeasible payment in cash of the principal of and interest on
the Loans, Advances and all other Obligations.
6.3 Conduct of Business and
Maintenance of Existence and Assets
Borrower shall (i) conduct its
business in accordance with good business practices customary to
the industry, (ii) engage principally in the same or similar lines
of business substantially as
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heretofore conducted, (iii) collect its Accounts
in the ordinary course of business, (iv) maintain all of its
material properties, assets and equipment used or useful in its
business in good repair, working order and condition
(norma
