THE OUTSTANDING EQUITY INTERESTS HAVING ORDINARY VOTING POWER TO
ELECT A MAJORITY OF THE BOARD OF
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DIRECTORS, BOARD OF GOVERNORS OR COMPARABLE GOVERNING BODY OF SUCH ENTITY
(IRRESPECTIVE OF WHETHER OR NOT AT THE TIME EQUITY INTERESTS OF SUCH ENTITY
SHALL OR MIGHT HAVE VOTING POWER UPON THE OCCURRENCE OF ANY CONTINGENCY) IS AT
THE TIME DIRECTLY OR INDIRECTLY OWNED BY THE BORROWER, BY THE BORROWER AND ONE
OR MORE OTHER SUBSIDIARIES, OR BY ONE OR MORE OTHER SUBSIDIARIES.
(T)
"TANGIBLE NET WORTH" MEANS THE AGGREGATE
OF THE CONSOLIDATED CAPITAL STOCK, PAID IN SURPLUS AND RETAINED EARNINGS OF THE
BORROWER AND MEDACQUISITION (EXCLUDING STOCK OF THE BORROWER HELD BY THE
BORROWER OR MEDACQUISITION), DETERMINED AND COMPUTED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED FROM YEAR TO YEAR,
LESS THE BOOK VALUE OF ALL ASSETS OF THE BORROWER AND MEDACQUISITION THAT WOULD
BE TREATED AS INTANGIBLES UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
INCLUDING WITHOUT LIMITATION, SUCH ITEMS AS GOODWILL, TRADEMARKS, TRADENAMES,
SERVICE MARKS, COPYRIGHTS, PATENTS, LICENSES, INTERNET DOMAIN NAMES, UNIFORM
RESOURCE LOCATORS, AND WEBSITE CONTRACTS AND REGISTRATION RIGHTS AND LESS THE
BOOK VALUE OF ALL OBLIGATIONS OWED TO THE BORROWER OR MEDACQUISITION BY ANY OF
ITS AFFILIATES.
(U)
"VALUE OF ELIGIBLE ACCOUNTS RECEIVABLE"
MEANS THE AGGREGATE NET UNPAID AMOUNT THEN DUE AND OWING UNDER ALL DOMESTIC
ACCOUNTS RECEIVABLE OF THE BORROWER AND MEDACQUISITION THAT: (I) ARISE FROM THE
SALE OF FINISHED GOODS CONSTITUTING PART OF INVENTORY IN THE ORDINARY COURSE OF
BUSINESS OF THE BORROWER OR MEDACQUISITION; (II) ARE EQUAL TO OR LESS THAN 90
DAYS OLD; (III) ARE NOT OWED BY AN AFFILIATE OF THE BORROWER OR MEDACQUISITION;
(IV) ARE SUBJECT TO A PERFECTED SECURITY INTEREST IN FAVOR OF ONLY THE BANK AS
REQUIRED BY THIS AGREEMENT; (V) ARE NOT SUBJECT TO DISPUTE BY THE ACCOUNT
DEBTOR; (VI) ARE NOT OWED BY AN ACCOUNT DEBTOR AS TO WHICH ANY BANKRUPTCY,
RECEIVERSHIP OR
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SIMILAR INSOLVENCY PROCEEDING IS PENDING; AND (VII) ARE NOT OWED BY THE UNITED
STATES GOVERNMENT OR AN AGENCY OF THE UNITED STATES GOVERNMENT; PROVIDED,
HOWEVER, THAT NO OBLIGATIONS OF ANY ACCOUNT DEBTOR TO THE BORROWER OR
MEDACQUISITION SHALL BE INCLUDED IN THIS COMPUTATION IF MORE THAN 10% OF SUCH
ACCOUNT DEBTOR'S TOTAL OBLIGATIONS TO THE BORROWER AND MEDACQUISITION ARE MORE
THAN 90 DAYS OLD.
(UP TO $500,000.00 OF ACCOUNTS RECEIVABLE OWED BY MEDTRONIC,
INC. THAT ARE NOT MORE THAN 90 DAYS OLD MAY BE INCLUDED IN THE VALUE OF ELIGIBLE
ACCOUNTS RECEIVABLE NOTWITHSTANDING THE APPLICATION OF THE 10% CROSS-AGING RULE
STATED ABOVE.
IN THE EVENT THAT ANY OTHER WELL-ESTABLISHED AND CREDITWORTHY
CUSTOMER OF THE BORROWER OR MEDACQUISITION BECOMES SUBJECT TO THE 10%
CROSS-AGING RULE STATED ABOVE, THE BANK WILL NEGOTIATE IN GOOD FAITH FOR AN
ADJUSTMENT TO THE CROSS-AGING RULE COMPARABLE TO THE ADJUSTMENT STATED ABOVE FOR
MEDTRONIC, INC.)
(V)
"VALUE OF ELIGIBLE INVENTORY" MEANS AN
AMOUNT EQUAL TO THE LESSER OF COST OR FAIR MARKET VALUE OF THE BORROWER'S AND
MEDACQUISITION'S INVENTORY THAT IS SUBJECT TO A PERFECTED SECURITY INTEREST IN
FAVOR