Exhibit 10.30
REVOLVING CREDIT AND SECURITY
AGREEMENT
THIS REVOLVING CREDIT AND
SECURITY AGREEMENT (the
“Agreement” ) dated as of February 5, 2004, is
entered into by and among BOSTON BIOMEDICA, INC ., a
Massachusetts corporation (“ Biomedica ”),
BBI BIOTECH RESEARCH LABORATORIES, INC. a Massachusetts
corporation (“ Biotech ”), BBI SOURCE
SCIENTIFIC, INC. a Massachusetts corporation (“
Source ”), and BBI BIOSEQ, INC. a Massachusetts
corporation (“ Bioseq ”; individually and
collectively, the “Borrower” ), and
CAPITALSOURCE FINANCE LLC , a Delaware limited liability
company (the “Lender” ).
WHEREAS, Borrower has requested that
Lender make available to Borrower a revolving credit facility (the
“Revolving Facility” ) in a maximum principal
amount at any time outstanding of up to Two Million Five Hundred
Thousand Dollars ($2,500,000) (the “Facility
Cap” ), the proceeds of which shall be used by Borrower
to finance leasehold improvements at its Frederick and
Gaithersburg, Maryland facilities, lab improvements for its West
Bridgewater, Massachusetts location and for its 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. The Revolving Facility is a revolving credit
facility, which may be drawn, repaid and redrawn, from time to time
as permitted under this Agreement. Any determination as to
whether there is Availability for Advances shall be made by Lender
in its Permitted Discretion and is final and binding upon
Borrower. 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 Eighty-Five percent (85%) 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
by payor class based upon Borrower’s actual recent collection
history for each such payor class (i.e., commercial contracts,
government agency, etc.) in a manner consistent with Lender’s
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 by Lender’s underwriting practices and
procedures in its sole credit judgment. Also, Lender shall
have the right to establish from time to time, in its sole credit
judgment, 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. As of the Closing Date, Lender’s review has
determined the liquidity factors to be the following:
Biomedica - 95%, Biotech - 100%, and Source - 96%.
2.2
The Note; Maturity
(a) All Advances under the Revolving
Facility shall be evidenced by the Note, payable to the order of
Lender, duly executed and delivered by Borrower and dated the
Closing Date, 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 15 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
“Revolving Facility Maturity Date” ).
2.3
Interest
Interest on outstanding Advances
under the Note shall be payable monthly in arrears on the first day
of each calendar month at an annual rate of Prime Rate plus
3.00%,
provided , however , that, notwithstanding any
provision of any Loan Document, the Prime Rate shall be not less
than 4.00%, 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 in Section
2.5 and Section 2.6 , commencing March 1, 2004, 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
(a)
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 4:00 p.m. (Eastern Standard Time) at least
two (2) but not more than four (4) Business Days before the
proposed borrowing date of such requested Advance (the
“Borrowing Date” ), a completed Borrowing
Certificate and relevant supporting documentation listed on
Schedule 2.4 in a form 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 .
(b)
Each time a request for an Advance is made, and, in any event and
regardless of whether an Advance is being requested, on the first
and third Tuesday of each month 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 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.
(c)
On each Borrowing Date, Borrower irrevocably authorizes Lender to
disburse the proceeds of the requested Advance to the appropriate
Borrower’s account(s) as set forth on Schedule 2.4 ,
in all cases for credit to the appropriate Borrower (or to such
other account as to which the appropriate Borrower shall instruct
Lender) via Federal funds wire transfer no later than
4:00 p.m. (Eastern Standard 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
acceptable to Lender (each, a “Lockbox Bank” ),
and shall execute with each Lockbox Bank one or more agreements
acceptable to Lender (individually and collectively, the
“Lockbox Agreement” ), and such other agreements
related thereto as Lender may require. Lender hereby
acknowledges that Fleet Bank is an acceptable Lockbox Bank as of
the Closing Date. Each Borrower shall ensure that all
collections of their respective Accounts are paid and delivered
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” ). 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
provided that such amounts shall first be
applied to pay any amounts then due. To the extent that any
Accounts are collected by any Borrower or any other cash payments
received by any Borrower are not sent directly to the appropriate
Lockbox Account but are received by any 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 five Business Day
clearance period. If as the result of collections of Accounts
and/or any other cash payments received by any Borrower pursuant to
this Section 2.5 a credit balance exists with respect to the
Concentration Account, such credit balance shall not accrue
interest in favor of a Borrower, but shall be promptly transferred
to the appropriate Borrower upon such Borrower’s written
request. 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, each 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 Permitted 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. All 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 U.S. 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 5:00 p.m.
(Eastern Standard 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 on the date due, 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 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 actually expended by
Lender as a result of any Borrower’s or any Guarantor’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, each
Borrower hereby grants to Lender a continuing security interest 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 ”), which
security interest is intended to be a first priority security
interest:
(i)
all of such Borrower’s present and future Inventory, now
owned or hereafter acquired;
(ii)
all of such Borrower’s present and future Accounts and all of
the following solely to the extent related to such Accounts:
contract rights, Permits, General Intangibles, Chattel Paper,
Documents, Instruments, Deposit Accounts (which shall include the
Lockbox Accounts), Letter-of-Credit Rights, Supporting Obligations,
rights to the payment of money or other forms of consideration of
any kind, now owned or hereafter acquired;
(iii)
all of such Borrower’s present and future Government
Contracts and rights thereunder and the related Government Accounts
and proceeds thereof, now or hereafter owned or acquired by such
Borrower; provided , however , that Lender shall not
have a security interest in any rights under any Government
Contract of such Borrower or in the related Government Account
where the taking of such security interest would be a violation of
an express prohibition contained in the Government Contract (for
purposes of this limitation, the fact that a Government Contract is
subject to, or otherwise refers to, Title 31, § 203
or Title 41, § 15 of the United States Code shall
not be deemed an express prohibition against assignment thereof) or
is prohibited by applicable law;
(iv)
All Books and Records, whether now owed or hereafter acquired;
and
(v)
any and all additions and accessions 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 Intangible does not directly relate to the
Accounts; or (ii) (A) 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 (B) 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 directly related to the Accounts
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
which related to the Accounts that is otherwise excluded pursuant
to subsection (i) 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.”
(d)
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 and perfected first
priority Lien and security interest in the Collateral, subject to
no transfer or other restrictions or 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
continental United States.
(b)
Borrower shall keep 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. In addition, if Accounts of Borrower in an aggregate
face amount in excess of $10,000 become ineligible because they
fall within one of the specified categories of ineligibility set
forth in the definition of Eligible Receivables, Borrower shall
notify Lender of such occurrence on the first Business Day
following such occurrence and the Borrowing Base shall thereupon be
adjusted to reflect such occurrence. If requested by Lender,
Borrower shall execute and deliver to Lender formal written
assignments of all of its Accounts weekly or daily as Lender may
reasonably 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. Borrower shall cooperate fully with Lender in an
effort to facilitate and promptly conclude such verification
process.
(d)
To expedite collection, Borrower shall endeavor in the first
instance to make collection of its Accounts for Lender.
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 Permitted Discretion,
Lender will perform the searches described in clauses (i) and (ii)
below against Borrower and Guarantors (the results of which are to
be consistent with Borrower’s representations and warranties
under this Agreement), all at Borrower’s expense: (i) UCC
searches with the Secretary of State of the jurisdiction of
organization of each Borrower and Guarantor and the Secretary of
State and local filing offices of each jurisdiction where Borrower
and/or any Guarantors maintain their respective executive offices,
a place of business or assets; and (ii) judgment, federal tax lien
and corporate and partnership tax lien searches, in each
jurisdiction searched under clause (i) above.
(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 direct 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), 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 create and perfect Lender’s lien on any
collateral and effectuate the intentions of the Loan
Documents. At Lender’s request, Borrower shall
immediately deliver to Lender all items for which Lender must
receive possession to obtain a perfected security interest and all
notes, certificates, and documents of title, Chattel Paper,
warehouse receipts, Instruments, and any other similar instruments
constituting Collateral.
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: (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 or their 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 reasonably 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 any 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, 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
3.1
Commitment Fee
On or before the Closing Date,
Borrower shall pay to Lender 1% of the Facility Cap as a
nonrefundable commitment fee.
3.2
Unused Line Fee
Borrower shall pay to Lender monthly
an unused line fee (the “Unused Line Fee” ) in
an amount equal to 0.042% (per 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 day of each successive calendar
month (starting with the month in which the Closing Date
occurs).
3.3
Collateral Management Fee
Borrower shall pay Lender as
additional interest a monthly collateral management fee (the
“Collateral Management Fee” ) equal to 0.083%
per month calculated on the basis 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 day of each successive
calendar month (starting with the month in which the Closing Date
occurs).
3.4
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 3.4
shall control to the extent any other provision of any Loan
Document is inconsistent herewith.
3.5
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” ).
3.6
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 Borrowers’ 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, in the
reasonable judgment of Lender, of the following:
(a)
(i) 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 the other parties thereto, (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 Permitted
Discretion, Lender shall have received (i) a report of Uniform
Commercial Code financing statement, tax and judgment lien searches
performed with respect to each Borrower in each jurisdiction
determined by Lender in its Permitted Discretion, and such report
shall show no Liens on the Collateral (other than Permitted Liens),
(ii) each document (including, without limitation, any Uniform
Commercial Code financing statement) required by any Loan Document
or under law or requested by Lender to be filed, registered or
recorded to create in favor of Lender, a perfected first priority
security interest upon the Collateral, and (iii) evidence of
each such filing, registration or recordation and of the payment by
Borrower 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
each 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, and (iii) the written legal opinion
of counsel for Borrower, in form and substance satisfactory to
Lender and its counsel;
(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 each Borrower, in form and substance
satisfactory to Lender (each, a “Solvency
Certificate” ), certifying as to such Person’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 such Person, at a Fair Valuation, exceed the total
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person, and (B) no unreasonably
small capital base with which to engage in its anticipated business
exists with respect to such Person;
(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
each Borrower, and each such Person shall have demonstrated to
Lender’s satisfaction that (i) its operations comply, in
all respects deemed material by Lender, in its reasonable 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 reasonable judgment, and (iii) it has no
liability (whether contingent or otherwise) that is deemed material
by Lender, in its reasonable 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 Permitted
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 set forth
on Schedule 5.4 , 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 any Borrower or the
Collateral;
(h)
Borrower shall be in compliance with Section 6.5 , and
Lender shall have received original certificates of all insurance
policies of Borrower confirming that they are in effect and that
the premiums due and owing with respect thereto have been paid in
full and naming Lender as an additional insured, as such insurance
relates to the Collateral;
(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;
(j)
Lender shall have received, in form and substance satisfactory to
Lender, release and termination of any and all Liens, security
interest and/or Uniform Commercial Code financing statements in,
on, against or with respect to any of the Collateral (other than
Permitted Liens);
(k)
Borrower
shall have executed and filed IRS Form 8821 with the appropriate
office of the Internal Revenue Service;
(l)
Borrower shall provide evidence that it has engaged a nationally
recognized independent certified public accounting firm
satisfactory to Lender in its Permitted Discretion; and
(m)
Lender shall have received such other documents, certificates,
information or legal opinions as Lender may reasonably request, all
in form and substance reasonably satisfactory to Lender.
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, in the reasonable judgment of
Lender, 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 representations and warranties made by Borrower in or
pursuant to this Agreement (as updated from time to time by
Borrower) shall be accurate, before and after giving effect to such
Advance, 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 either the Availability or the
Facility Cap;
(d)
except as disclosed in the financial statements provided to the
Lender prior to the date of the requested Advance, 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 payable
to Lender on or prior to such date pursuant to the Loan
Documents.
V.
REPRESENTATIONS AND WARRANTIES
Each Borrower, jointly and
severally, represents and warrants as of the date hereof, the
Closing Date, and each Borrowing Date as follows:
5.1
Organization and Authority
Borrower is a corporationduly
organized, validly existing and in good standing 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 would
reasonably be likely 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. No Borrower is an “investment company”
registered or required to be registered under the Investment
Company Act of 1940, as amended, or is 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 each such Person and have been duly executed and delivered by or
on behalf of each such Person; (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
any such Person or any of their respective properties, or
(C) the certificate of incorporation or bylaws (or any other
equivalent governing agreement or document) of any such Person, or
any agreement between any such Person and its respective
stockholders, members, partners or equity owners or among any such
stockholders, members, partners or equity owners; (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 any such Person is a party, or by which the properties or
assets of such Person are bound; (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 any such
Person, 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).
5.3
Subsidiaries, Capitalization and Ownership
Interests
Except as listed on Schedule
5.3 , Borrower has no Subsidiaries.
Schedule 5.3 states the authorized and issued
capitalization of Borrower, the number and class of equity
securities and/or ownership, voting or partnership interests issued
and outstanding of Borrower and the record and beneficial owners
thereof (including options, warrants and other rights to acquire
any of the foregoing). The outstanding equity
securities and/or ownership, voting or partnership interests of
Borrower have been duly authorized and validly issued and are fully
paid and nonassessable, and each Person listed on
Schedule 5.3 owns beneficially and of record all the
equity securities and/or ownership, voting or partnership interests
it is listed as owning free and clear of any Liens other than Liens
created by the Security Documents. Schedule 5.3
also lists the directors, members, managers and/or partners of
Borrower. Except as listed on Schedule 5.3 , Borrower
does not own an interest in, participate in or engage in any joint
venture, partnership or similar arrangements with any
Person.
5.4
Properties
Borrower (i) (A) is the sole owner
and has good, valid and marketable title to, or (B) has a valid
leasehold interest in or license to, 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 material 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
assets or property with a value in excess of $50,000 that are
leased or licensed by, Borrower and all leases (including leases of
leased real property) covering or with respect to such properties
and assets. 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
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, (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 would reasonably be likely 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 would reasonably be likely to have a Material
Adverse Effect; or (iii) a party or subject to any agreement,
document or instrument with respect to, or obligation to pay any,
service fee or management fee with respect to, the ownership,
operation, leasing or performance of any of its business or any
facility, nor is there any manager with respect to any such
facility.
5.6
Litigation
There is no action, suit, proceeding
or investigation pending or, to their knowledge, threatened against
Borrower that (i) questions or could 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) would reasonably be likely to be or have, either individually
or in the aggregate, any Material Adverse Change or Material
Adverse Effect, or (iii) would reasonably be likely to result
in any Change of Control or other change in the current ownership,
control or management of Borrower. Borrower is not aware that
there is any basis for the foregoing. Borrower is not a party
or subject to any order, writ, injunction, judgment or decree of
any Governmental Authority. There is no action, suit,
proceeding or investigation initiated by Borrower currently
pending. Borrower has no existing accrued and/or unpaid
Indebtedness to any Governmental Authority or any other
governmental payor.
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 compliance by or liability
of Borrower under any Environmental Laws, (ii) which otherwise
deals with any Hazardous Substance or any Environmental Law, or
(iii) which seeks to suspend, revoke or terminate any license,
permit or approval 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 oral or
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 which
remains open pending tax examination or audit by the IRS, and (iii)
is not aware of any information that could give rise to an IRS tax
liability 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 with adequate reserves under GAAP, which
contested items 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; provided ,
however , that such monthly and/or quarterly statements may
not contain footnotes and are subject to year-end
adjustments. Borrower has no material obligations or
liabilities of any kind not disclosed in such financial information
or statements, and since the date of the most recent financial
statements submitted to Lender, there has not occurred any Material
Adverse Change, Material Adverse Effect or, to Borrower’s
knowledge, any other event or condition that would reasonably be
likely 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”), ERISA and Healthcare Laws, and (ii)
is not in violation of any order of any Governmental Authority or
other board or tribunal, except in the case of (i) and (ii) above
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 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 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 the Joint Commission on Accreditation of Healthcare
Organizations, the Food and Drug Administration, Drug Enforcement
Agency and State Boards of Pharmacy, and, to the best knowledge of
Borrower, there are no presently existing circumstances which
likely would result in material violations of the Healthcare
Laws.
5.11
Intellectual Property
Borrower owns or has the rights to
all patents, patent applications, trademarks, trademark
applications, service marks, registered copyrights, copyright
applications, copyrights, trade names, trade secrets, software or
licenses (collectively, the “Intellectual
Property” ) necessary for its business. Each
Borrower’s patents and registered trademarks are listed on
Schedule 5.11 .
5.12
Licenses and Permits; Labor
Borrower is in compliance with and
has all Permits and rights to 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 would reasonably be
likely to have a Material Adverse Effect or (ii) has not been
involved in any labor dispute, strike, walkout or union
organization which would reasonably be likely 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 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
in writing which would reasonably be likely to have a Material
Adverse Effect.
5.15
Existing Indebtedness; Investments, Guarantees and Certain
Contracts
Except as contemplated by the Loan
Documents 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, or (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 in connection with any items listed on
Schedule 5.15 and there has occurred no breach, default
or event of default under any document evidencin
