Pro Forma and Other Calculations (a) For purposes of calculating the Fixed Charge Coverage Ratio, Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio and the Consolidated Total Debt to Consolidated EBITDA Ratio, Investments, acquisitions, dispositions, mergers, consolidations, and disposed operations (as determined in accordance with GAAP) that have been made by the Borrower or any Restricted Subsidiary during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the date of determination shall be calculated on a Pro Forma Basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations, and disposed operations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the Test Period. If, since the beginning of such period, any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation, or disposed operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio, Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio, Consolidated Senior Secured Debt to Consolidated EBITDA Ratio and Consolidated Total Debt to Consolidated EBITDA Ratio shall be calculated giving Pro Forma Effect thereto for such Test Period as if such Investment, acquisition, disposition, merger, consolidation, or disposed operation had occurred at the beginning of the Test Period. Notwithstanding anything to the contrary herein, with respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that does not require compliance with a financial ratio or test (including, without limitation, the Fixed Charge Coverage Ratio, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio and Consolidated Total Debt to Consolidated EBITDA Ratio) (any such amounts, the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with any such financial ratio or test (any such amounts, the “Incurrence Based Amounts”), it is understood and agreed that the Fixed Amounts (and any cash proceeds thereof) shall be disregarded in the calculation of the financial ratio or test applicable to the Incurrence Based Amounts in connection with such substantially concurrent incurrence, except that incurrences of Indebtedness and Liens constituting Fixed Amounts shall be taken into account for purposes of Incurrence Based Amounts other than Incurrence Based Amounts contained in Section 10.1 or Section 10.2.
(b) Whenever Pro Forma Effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower (and may include, for the avoidance of doubt and without duplication, cost savings, operating expense reductions, operating enhancements, revenue enhancements and cost synergies resulting from such Investment, acquisition, merger, or consolidation which is being given Pro Forma Effect that have been or are expected to be realized; provided that such costs savings, operating expense reductions, operating enhancements, revenue enhancements and cost synergies are made in compliance with the definition of Pro Forma Adjustment). If any Indebtedness bears a floating rate of interest and is being given Pro Forma Effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account for such entire period, any Hedging Obligation applicable to such Indebtedness with a remaining term of 12 months or longer, and in the case of any Hedging Obligation applicable to such Indebtedness with a remaining term of less than 12 months, taking into account such Hedging Obligation to the extent of its remaining term). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a Pro Forma Basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period (or, if lower, the greater of (i) maximum commitments under such revolving credit facilities as of the date of determination and (ii) the aggregate principal amount of loans outstanding under such a revolving credit facilities on such date). Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. In connection with any action being taken solely in connection with a Limited Condition Transaction, for purposes of:
(i) determining compliance with any provision of this Agreement which requires the calculation of the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio, Consolidated Senior Secured Debt to Consolidated EBITDA Ratio, Consolidated Total Debt to Consolidated EBITDA Ratio or the Fixed Charge Coverage Ratio;
(ii) determining the accuracy of representations and warranties in Section 8 and/or whether a Default or Event of Default shall have occurred and be continuing under Section 11; or
(iii) testing availability under baskets set forth in this Agreement (including baskets measured as a percentage of Consolidated EBITDA or Consolidated Total Assets); in each case, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted hereunder, shall be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (or, in respect of any transaction described in clause (b) of the definition of a Limited Condition Transaction, delivery of irrevocable notice or similar event) (the “LCT Test Date”), and if, after giving Pro Forma Effect to the Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they had occurred at the beginning of the most recent Test Period ending prior to the LCT Test Date, the Borrower could have taken such action on the relevant LCT Test Date in compliance with such ratio or basket, such ratio or basket shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower has made an LCT Election and any of the ratios or baskets for which compliance was determined or tested as of the LCT Test Date are exceeded as a result of fluctuations in any such ratio or basket, including due to fluctuations in Consolidated EBITDA of the Borrower or the Person subject to such Limited Condition Transaction, at or prior to the consummation of the relevant transaction or action, such baskets or ratios will not be deemed to have been exceeded as a result of such fluctuations. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio or basket availability with respect to the incurrence of Indebtedness or Liens, or the making of Restricted Payments, mergers, the conveyance, lease or other transfer of all or substantially all of the assets of the Borrower, the prepayment, redemption, purchase, defeasance or other satisfaction of Indebtedness, or the designation of an Unrestricted Subsidiary on or following the relevant LCT Test Date and prior to the earlier of (i) the date on which such Limited Condition Transaction is consummated or (ii) the date that the definitive agreement for such Limited Condition Transaction is terminated or expires (or, if applicable, the irrevocable notice or similar event is terminated or expires) without consummation of such Limited Condition Transaction, any such ratio or basket shall be calculated on a Pro Forma Basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated until such time as the applicable Limited Condition Transaction has actually closed or the definitive agreement with respect thereto has been terminated.
(c) Notwithstanding anything to the contrary in this Section 1.12 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into as discontinued operations, no Pro Forma Effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated.
(d) Any determination of Consolidated Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.
(e) Except as otherwise specifically provided herein, all computations of Excess Cash Flow, Consolidated Total Assets, Available Amount, Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio, Consolidated Senior Secured Debt to Consolidated EBITDA Ratio, Consolidated Total Debt to Consolidated EBITDA Ratio, the Fixed Charge Coverage Ratio and other financial ratios and financial calculations (and all definitions (including accounting terms) used in determining any of the foregoing) shall be calculated, in each case, with respect to the Borrower and the Restricted Subsidiaries on a consolidated basis.
(f) All leases of any Person that are or would be characterized as operating leases in accordance with GAAP as in effect on the Closing Date (whether or not such operating leases were in effect on such date) shall continue to be accounted for as operating leases (and not as Capital Leases) for purposes of this Agreement regardless of any change in GAAP following the Closing Date that would otherwise require such leases to be recharacterized as Capital Leases, to the extent that financial reporting shall not be affected hereby; provided, however, that, solely for the purposes of determining whether a lease constitutes Indebtedness for the purposes of Section 10.1(d), any obligations relating to a lease that was accounted for by the Borrower and/or its Subsidiaries as an operating lease as of the Closing Date and any similar lease entered into after the Closing Date shall be accounted for as an operating lease and not a Capitalized Lease Obligation for all purposes thereunder.
Field Examination and Other Fees Subject to any limitations set forth in Section 5.7(c), Borrowers shall pay to Agent, field examination, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows (i) a fee of $1,000 per day, per examiner, plus out-of-pocket expenses (including travel, meals, and lodging) for each field examination of any Loan Party or its Subsidiaries performed by or on behalf of Agent, and (ii) the fees, charges or expenses paid or incurred by Agent if it elects to employ the services of one or more third Persons to appraise the Collateral, or any portion thereof.
Financial Statements; Borrowing Base and Other Information The Borrowers will furnish to the Administrative Agent, and in the case of documents and information required to be delivered by the UAE Borrower and the Singapore Borrower, also to the UAE Administrative Agent and the Singapore Administrative Agent, as applicable:
(a) within 90 days after the end of each fiscal year of Holdings, its audited consolidated balance sheet and related statements of operations, partners’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing and acceptable to the Required Lenders (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants;
(b) within 45 days after the end of each of the first three fiscal quarters of Holdings (in the case of the fiscal year ending December 31, 2007) and each fiscal quarter for the fiscal year ending December 31, 2008 and each fiscal year of Holdings thereafter), commencing with the fiscal quarter ended June 30, 2007 (and as to which such financial statements may be delivered not later than 60 days after the end of such quarterly period), its consolidated and consolidating balance sheet and related statements of operations, partners’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year (compared to the financial statements of Edgen/Murray L.P. and its comparable subsidiary until the 2008 fiscal year), all certified by one of the Financial Officers of the Borrower Representative as presenting fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;
(c) within 30 days after the end of each fiscal month (other than for the third, sixth and ninth month of any fiscal year) (i) of the US Borrower, its consolidated balance sheet and related consolidated statements of operations and a schedule of distributions and Capital Expenditures as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of such period or periods of) the previous fiscal year and (ii) each of the UK Borrower, the UAE Borrower and the Singapore Borrower on an individual (non-consolidated) basis for each such Person, its balance sheet and related statements of operations and a schedule of distributions and Capital Expenditures, as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period of (or, in the case of the balance sheet, as of the end of such period or periods of) the previous fiscal year.
(d) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower Representative in substantially the form of Exhibit F (i) certifying, in the case of the financial statements delivered under clause (b), as presenting fairly in all material respects the financial condition and results of operations of each Borrower and its consolidated Subsidiaries on a consolidated and consolidating basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.13 and (iv) in the case of financial statements delivered under clause (a) only, stating whether any change in GAAP or in the application thereof has occurred since the date of the prior fiscal year’s audited financial statements and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(e) as soon as available, but in any event not more than 30 days prior to the end of each fiscal year of each Borrower, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow statement) of each Borrower for each month of the upcoming fiscal year (“Projections”) in form reasonably satisfactory to each Agent;
(f) as soon as available but in any event within 30 days of the end of each calendar month, and at such other times as may be requested by the Administrative Agent, as of the period then ended, a US Borrowing Base Certificate, a Canadian Borrowing Base Certificate, a UAE Borrowing Certificate, a Singapore Borrowing Base Certificate and a UK Borrowing Base Certificate, and supporting information in connection therewith, together with any additional reports with respect to the US Borrowing Base, Canadian Borrowing Base, UAE Borrowing Base Certificate, Singapore Borrowing Base Certificate or UK Borrowing Base as any Agent may reasonably request;
(g) as soon as available but in any event within 30 days of the end of each calendar month and at such other times as may be requested by the Administrative Agent, as of the period then ended, all delivered electronically in a text or Microsoft Excel formatted file acceptable to each Agent:
(i) a detailed aging of the Borrowers’ and Eligible Subsidiary’s Accounts (A) including all invoices aged by due date (with a report of any accounts on greater than 60 day terms) and (B) reconciled to the applicable Borrowing Base Certificate delivered as of such date prepared in a manner reasonably acceptable to the Administrative Agent together with a summary specifying the name and balance due for each Account Debtor;
(ii) a schedule detailing each Borrowers’ and each Eligible Subsidiary’s Inventory, in form satisfactory to the Administrative Agent, (A) by location (showing any Inventory located with a third party under any consignment, bailee arrangement, or warehouse agreement), by product category and by value on hand, which Inventory shall be valued at the lower of weighted-average cost or market and adjusted for Borrowing Base Reserves as the Administrative Agent has previously indicated to the Borrower Representative are deemed by the Administrative Agent to be appropriate, (B) including a report of any variances in excess of $50,000 and (C) reconciled to the applicable Borrowing Base Certificate delivered as of such date;
(iii) a worksheet of calculations prepared by the Borrowers to determine Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded from Eligible Accounts and Eligible Inventory and the reason for such exclusion;
(iv) a reconciliation of the Borrowers’ and Eligible Subsidiaries’ Accounts and Inventory between the amounts shown in the Borrowers’ and Eligible Subsidiary’s general ledger and financial statements and the reports delivered pursuant to clauses (i) and (ii) above; and
(v) a reconciliation of the loan balance per the Borrowers’ general ledger to the loan balance under this Agreement;
(h) as soon as available but in any event within 30 days of the end of each calendar month (as of the month then ended), an accounts payable forecast or aging consisting of a break down of accounts by due date in a form substantially similar to the form of accounts payable forecast provided to the Administrative Agent on or prior to the Closing Date;
(i) within 30 days of the end of each calendar month, a report listing all outstanding Swap Obligations as of the month then ended;
(j) promptly upon any Administrative Agent’s request:
(i) copies of invoices in connection with the invoices issued by the Borrowers in connection with any Accounts, credit memos, shipping and delivery documents, and other information related thereto;
(ii) copies of purchase orders, invoices, and shipping and delivery documents in connection with any Inventory purchased by any Loan Party;
(iii) a schedule detailing the balance of all intercompany accounts of the Loan Parties;
(iv) copies of each Borrower’s and each Eligible Subsidiary’s sales journal, cash receipts journal (identifying trade and non-trade cash receipts) and debit memo/credit memo journal; and
(v) a detailed listing of all advances of proceeds of Loans requested by the Borrower Representative for each Borrower during the immediately preceding calendar month and a detailed listing of all intercompany loans made by the Borrowers during such calendar month.
(k) as soon as possible and in any event within 30 days of filing thereof, copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue Service or the relevant tax authority of any foreign jurisdiction;
(l) within 30 days of each March 31 and September 30, an updated customer list for each Borrower and its Subsidiaries, which list shall state the customer’s name, mailing address and phone number and shall be certified as true and correct in all material respects by a Financial Officer of the applicable Borrower;
(m) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by any Loan Party or its Subsidiaries to its public shareholders generally, as the case may be;
(n) promptly upon the request of the Administrative Agent (or the Singapore Administrative Agent or the UAE Administrative agent with respect to Account Debtors of the Singapore Borrower and the Dubai Borrower), but not more than two times in any twelve (12) month period, a summary specifying the name, address and balance due for each Account Debtor; and
(o) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as any Agent may reasonably request. Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default or during any period in which the aggregate US Availability and Canadian Availability is less than $25,000,000 or UK Availability is less than $10,000,000, the Administrative Agent, in its sole discretion, may require the delivery of the reports, certificates and other documents required by Sections 5.01(f), (g), and (h) (with respect to the US Borrowers, UK Borrower or Canadian Borrower) more frequently than monthly, including weekly or daily, in which event, in the case of Borrowing Base Certificates, the applicable Borrowing Base would be adjusted immediately upon receipt of such certificates.
Administrative and Other Fees The Borrower agrees to pay the administrative and other fees of the Administrative Agent as provided in the Fee Letter and as may be otherwise agreed to in writing from time to time by the Borrower and the Administrative Agent.
Corrective and Other Allocations In the event of any allocation of Additional Book Basis Derivative Items or any Book-Down Event or any recognition of a Net Termination Loss, the following rules shall apply:
(A) Except as provided in Section 6.1(d)(xii)(B), in the case of any allocation of Additional Book Basis Derivative Items (other than an allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d) hereof) with respect to any Partnership property, the General Partner shall allocate such Additional Book Basis Derivative Items (1) to (aa) the holders of Incentive Distribution Rights and (bb) the General Partner in the same manner that the Unrealized Gain or Unrealized Loss attributable to such property is allocated pursuant to Section 5.5(d)(i) or Section 5.5(d)(ii) and (2) to all Unitholders, Pro Rata, to the extent that the Unrealized Gain or Unrealized Loss attributable to such property is allocated to any Unitholders pursuant to Section 5.5(d)(i) or Section 5.5(d)(ii).
(B) In the case of any allocation of Additional Book Basis Derivative Items (other than an allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d) hereof or an allocation of Net Termination Gain or Net Termination Loss pursuant to Section 6.1(c) hereof) as a result of a sale or other taxable disposition of any Partnership asset that is an Adjusted Property (“Disposed of Adjusted Property”), the General Partner shall allocate (1) additional items of income and gain (aa) away from the holders of Incentive Distribution Rights and the General Partner and (bb) to the Unitholders, or (2) additional items of deduction and loss (aa) away from the Unitholders and (bb) to the holders of Incentive Distribution Rights and the General Partner, to the extent that the Additional Book Basis Derivative Items allocated to the Unitholders exceed their Share of Additional Book Basis Derivative Items with respect to such Disposed of Adjusted Property. For this purpose, the Unitholders shall be treated as being allocated Additional Book Basis Derivative Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Unitholders under this Agreement (e.g., Additional Book Basis Derivative Items taken into account in computing cost of goods sold would reduce the amount of book income otherwise available for allocation among the Partners). Any allocation made pursuant to this Section 6.1(d)(xii)(B) shall be made after all of the other Agreed Allocations have been made as if this Section 6.1(d)(xii) were not in this Agreement and, to the extent necessary, shall require the reallocation of items that have been allocated pursuant to such other Agreed Allocations.
(C) In the case of any negative adjustments to the Capital Accounts of the Partners resulting from a Book-Down Event or from the recognition of a Net Termination Loss, such negative adjustment (1) shall first be allocated, to the extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as determined by the General Partner, that to the extent possible the aggregate Capital Accounts of the Partners will equal the amount that would have been the Capital Account balance of the Partners if no prior Book-Up Events had occurred, and (2) any negative adjustment in excess of the Aggregate Remaining Net Positive Adjustments shall be allocated pursuant to Section 6.1(c) hereof.
(D) In making the allocations required under this Section 6.1(d)(xii), the General Partner may apply whatever conventions or other methodology it determines will satisfy the purpose of this Section 6.1(d)(xii).
Notice of Litigation and Other Matters Prompt (but in no event later than ten (10) days after an officer of the Parent obtains knowledge thereof) telephonic and written notice of:
(i) the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before any arbitrator against or involving the Parent or any Subsidiary thereof or any of its properties, assets or businesses which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect;
(ii) any violation by the Parent or any Subsidiary thereof of any Applicable Law or any notice of any violation received by the Parent or any Subsidiary thereof from any Governmental Authority including, without limitation, any notice of violation of Environmental Laws, which in any such case could reasonably be expected to have a Material Adverse Effect;
(iii) any labor controversy that has resulted in, or threatens to result in, a strike or other work action against the Parent or any Subsidiary thereof or any contractor or any material development in any labor controversy which if adversely determined could reasonably be expected to have a Material Adverse Effect;
(iv) any attachment, judgment, lien, levy or order exceeding $1,000,000 that may be assessed against the Parent or any Subsidiary thereof (to the extent such attachment, judgment, lien, levy or order is not fully covered by insurance and with respect to which the applicable insurance carrier has not acknowledged that such attachment, judgment, lien, levy or order is fully covered by insurance);
(A) any Default or Event of Default or (B) any event which constitutes or which with the passage of time or giving of notice or both would constitute a default or event of default under any Material Contract to which the Parent or any Subsidiary thereof is a party or by which the Parent or any Subsidiary thereof or any of their respective properties may be bound which could reasonably be expected to have a Material Adverse Effect;
(A) any unfavorable determination letter from the Internal Revenue Service regarding the qualification of an Employee Benefit Plan under Section 401(a) of the Code (along with a copy thereof), (B) all notices received by the Parent or any ERISA Affiliate of the PBGC's intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (C) all notices received by the Parent or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA and (D) the Parent obtaining knowledge or reason to know that the Parent or any ERISA Affiliate has filed or intends to file a notice of intent to terminate any Pension Plan under a distress termination within the meaning of Section 4041(c) of ERISA; and
(vii) any event which makes any of the representations set forth in Section 9 inaccurate in any respect.
Reimbursement; Other Matters Except to the extent otherwise contemplated by this Agreement or any Ancillary Agreement, a Party providing Information or access to Information to the other Party under this Article VII shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees of such Party or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service with respect to the foregoing), as may be reasonably incurred in providing such Information or access to such Information.
Taxes and Other Impositions All ad valorem real property taxes, special taxes, possessory interest taxes, bonds and special lien assessments or other impositions of any kind with respect to the Project, the Project Site and the improvements thereon, charged to or imposed upon either Developer or the District or their respective interests or estates in the Project, shall at all times be paid by District. In the event any possessory interest tax is levied on Developer, its successors and assigns, by virtue of this Facilities Lease or the Site Lease, District shall pay such possessory interest tax directly, if possible, or shall reimburse Developer, its successors and assigns for the full amount thereof within forty-five (45) days after presentation of proof of payment by Developer.
Royalties and Other Payments 8.1 OUI will invoice the Licensee for the Signing Fee shortly after signature of this agreement and the Licensee must settle the invoice within [***] of receipt.
8.2 Subject to clause 8.3, the Licensee will pay to OUI a royalty equal to the applicable Royalty Rate on all Net Sales of Licensed Products for the duration of the agreement on the terms set out in clause 10.
8.3 Following expiration or revocation of the last Valid Claim covering a Licensed Product in a country in which the Licensed Product is Marketed and where there is being Marketed and sold by a third party in the normal course of business a product that, directly or indirectly, competes with the Licensed Product, the Step Down Rate (as defined below) shall apply on a country-by-country basis to the applicable Royalty Rate of such Licensed Products. For the purposes of this clause 8.3, the “Step Down Rate” shall be the percentage decrease of (a) [***] compared against (b) [***].
8.4 In the event that the royalties paid to OUI under clause 8.2 does not amount to at least the Minimum Sum, the Licensee must make up the difference between the royalties paid under clauses 8.2 and the Minimum Sum in each Licence Year where a Minimum Sum applies.
8.5 The Licensee will notify OUI as soon as possible after it or any sub-licensee achieves any Milestone, and pay to OUI the Milestone Fee in respect of each Milestone within [***] of the date on which each Milestone is achieved by the Licensee or a sub-licensee.
8.6 The Licensee will pay to OUI a royalty equal to the Fee Income Royalty Rate on any sublicensing fees that the Licensee receives for sublicensing the Licensed Technology with a third party. For the purposes of this clause 8.6, Sublicensing fees shall include upfront fees, milestone payments and other consideration received by the Licensee from such third party but shall exclude:
(a) royalties paid to the Licensee by a sub-licensee based on net sales of Licensed Products;
(b) milestone payments paid to the Licensee by a sub-licensee on a Milestone event; and
(c) any sums received that are to be used to fund research and/or development.
8.7 If the Licensee has to pay royalties to a third party (other than an Affiliate), for the right to make, have made, use or Market a Licensed Product, under a licence of Intellectual Property Rights without which the Licensed Technology cannot lawfully be exploited, then the Licensee will be entitled to deduct from all royalty payments due to OUI in respect of Net Sales of the Licensed Product under clause 8.2 an amount equal to [***] of the royalties actually paid to that third party, up to a maximum amount of [***] of the royalties due to OUI under clause 8.2.
8.8 Where a Licensed Product is sold as part of a combination product or co-packaged product, the Net Sales from the combination product or the co-packaged product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Sales of the combination product or the co-packaged product, during the applicable royalty reporting period, by the fraction: [***] Where A is the average sale price of the Licensed Product when sold separately in finished form, or if not sold separately, the market price of the Licensed Product if it were sold separately and B is the average sale price of the other product(s) included in the combination product or co-packaged product when sold separately in finished form, or if not sold separately, the aggregate market price of the other product(s) if it were sold separately in each case during the applicable royalty reporting period or, if sales of both the Licensed Product and the other product(s) did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred. In the event that such average sale price cannot be determined for the Licensed Product and any other product(s) included in the combination product or co-packaged product, then the Net Sales for the purposes of determining royalty payments for a combination product or a co-packaged product shall be referred to an independent expert for determination.
8.9 The Signing Fee and the Milestone Fee are non-refundable and will not be considered as an advance payment on royalties payable under clause 8.2. No part of the Minimum Sum will be refundable or applicable to succeeding Licence Years.
8.10 Licensed Products supplied for use in any clinical trial carried out by or on behalf of the Licensee or any of its sub-licensees shall not be deemed to be sales and shall not be included within any Net Sales calculation.
8.11 The Licensee or any of its sub-licensees may supply a commercially reasonable quantity of Licensed Products for promotional sampling provided that after Licensee commences commercial supply of Licensed Product, the number of Licensed Products supplied for promotional sampling shall not be greater than [***] of the total number of units of each Licensed Product sold leased or licensed by the Licensee in any Quarter following the Licensee receiving Marketing Authorization for the Licensed Product in any territory. Except as set out in this clause, the Licensee must not accept any non-monetary consideration when Marketing the Licensed Products or when issuing sub-licences of the Licensed Technology without the prior written consent of OUI, such consent not to be unreasonably withheld, conditioned or delayed. The Licensee may accept non-monetary consideration when Marketing the Licensed Products or when issuing sub-licences of the Licensed Technology provided either (a) [***] of such non-monetary consideration is able to be converted into cash within [***] of receipt from the Licensee to enable the Fee Income Royalty Rate to be paid to OUI in cash or (b) the Licensee covenants in writing to pay to OUI in cash, within [***] of receipt of the non-monetary consideration, the Fee Income Royalty Rate due to OUI.
8.12 The Licensee will make all payments in pounds sterling or any currency replacing pounds sterling in its entirety.
8.13 For the purposes of calculating any amount payable by the Licensee to OUI in a currency other than pounds sterling (or replacement currency), the Licensee shall apply an exchange rate equivalent to:
(a) the average of the applicable closing mid rates quoted by the Financial Times as published in London on the first Business Day of each month during the Quarter just closed; or
(b) for payments under clause 8.6 only, the first Business Day of the month in which the payment was received by the Licensee.
8.14 Where the Licensee has to withhold tax by law, the Licensee will deduct the tax, pay it to the relevant taxing authority, and supply OUI with a Certificate of Tax Deduction at the time of payment to OUI. Where such an issue arises, the Licensee will not be liable for any costs or penalties associated with late payment to OUI provided that the Licensee takes reasonable steps to ensure that any such matters are dealt with as expeditiously as reasonably possible.
8.15 In the event that full payment of any amount due from the Licensee to OUI under this agreement is not made by any of the dates stipulated, the Licensee shall be liable to pay interest on the amount unpaid at the rate of [***] per annum over the base rate for the time being of Barclays Bank plc. Such interest shall accrue on a daily basis from the date when payment was due until the date of actual payment of the overdue amount, whether before or after judgment, and shall be compounded quarterly.
8.16 If the Licensed Product is of a description covered by the Medicines Access Policy, the Licensee shall adhere to the requirements of the Medicines Access Policy. In particular in the event the Licensed Products can be used to ease the burden of illness in the developing world, the Marketing of Licensed Products will be managed in a manner that enables availability and accessibility at reasonable cost to the people most In need in the developing world.
Fees, Expenses and Other Payments (a) Except as otherwise provided in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred by the parties hereto shall be borne solely and entirely by the party which has incurred such costs and expenses (with respect to such party, its "Expenses"); provided that, except in the event that the payment provided in Section 8.5(b) becomes payable, if DOCP breaches any material term of this Agreement or if the Merger is not consummated, and this Agreement is thereafter terminated, and within one year of the date of such termination DOCP enters into an agreement respecting an Alternative Transaction, DOCP shall pay the reasonable fees and expenses of one firm of legal counsel advising the Management Investor, up to $50,000, plus 50% of any such fees in excess of $50,000, for the benefit of the Management Investor in connection with the transactions contemplated hereby.
(b) If (i) this Agreement shall be terminated by Buyer pursuant to Section 8.1(e) or by Buyer or DOCP pursuant to Section 8.1(f), or (ii) (A) after the date of this Agreement any person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act) shall have publicly made a proposal with respect to an Alternative Transaction, (B) the Offer shall have remained open until at least the scheduled expiration date immediately following the date such proposal is made, (C) the Minimum Condition shall not have been satisfied at the expiration of the Offer and (D) this Agreement shall thereafter be terminated pursuant to Section 8.1(d), then DOCP shall pay to Buyer $3,000,000 plus all Expenses of Buyer, CSX, NSC and the Management Investor as promptly as practicable but not later than two business days after termination of this Agreement (unless required simultaneously with termination under Section 8.1(f)) by wire transfer of immediately available funds to an account designated by Buyer.
