EXHIBIT 10.4
CONFIDENTIAL TREATMENT REQUESTED
SEC UNREDACTED COPY
Confidential Portions Of This Agreement Which Have Been Redacted
Are Marked With Brackets "[***]". The Omitted Material Has Been
Filed Separtely With The Securities And Exchange Commission.
CREDIT AGREEMENT
among
FIRST HORIZON PHARMACEUTICAL CORPORATION,
VARIOUS LENDERS,
BANK OF AMERICA, N.A.
as SYNDICATION AGENT,
LASALLE BANK NATIONAL ASSOCIATION,
as DOCUMENTATION AGENT
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
--------------------------------
Dated as of March 5, 2002
--------------------------------
DEUTSCHE BANC ALEX. XXXXX INC.,
as LEAD ARRANGER and BOOK MANAGER
CREDIT AGREEMENT, dated as of March 5, 2002, among FIRST HORIZON
PHARMACEUTICAL CORPORATION, a Delaware corporation (the "Borrower"), the Lenders
party hereto from time to time, BANK OF AMERICA, N.A., as Syndication Agent (in
such capacity the "Syndication Agent"), LASALLE BANK NATIONAL ASSOCIATION, as
Documentation Agent (in such capacity the "Documentation Agent") and BANKERS
TRUST COMPANY, as Administrative Agent (in such capacity, the "Administrative
Agent"). All capitalized terms used herein and defined in Section 11 are used
herein as therein defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Lenders are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01. The Commitments. (a) Subject to and upon the terms and conditions set
forth herein, each Lender with a Term Loan Commitment severally, but not
jointly, agrees to make a term loan or term loans (each a "Term Loan" and,
collectively, the "Term Loans") to the Borrower, which Term Loans (i) shall be
incurred pursuant to a single drawing on the Initial Borrowing Date, (ii) shall
be denominated in Dollars, (iii) except as hereinafter provided, shall, at the
option of the Borrower, be incurred and maintained as, and/or converted into,
Base Rate Loans or Eurodollar Loans, provided that (A) except as otherwise
specifically provided in Section 1.10(b), all Term Loans comprising the same
Borrowing shall at all times be of the same Type, and (B) unless either the
Administrative Agent otherwise agrees in its sole discretion or has determined
that the Syndication Date has occurred (at which time this clause (B) shall no
longer be applicable), Term Loans may only be incurred and maintained as Base
Rate Loans, and may not be converted into Eurodollar Loans, and (iv) shall be
made by each such Lender in that aggregate principal amount which does not
exceed the Term Loan Commitment of such Lender on the Initial Borrowing Date.
Once repaid, Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Lender with a Revolving Loan Commitment severally, but not jointly, agrees to
make, at any time and from time to time on or after the Initial Borrowing Date
and prior to the Revolving Loan Maturity Date, a revolving loan or revolving
loans (each a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans (i) shall be denominated in Dollars, (ii) shall,
at the option of the Borrower, be incurred and maintained as, and/or converted
into, Base Rate Loans or Eurodollar Loans, provided that (A) except as otherwise
specifically provided in Section 1.10(b), all Revolving Loans comprising the
same Borrowing shall at all times be of the same Type, and (B) unless either the
Administrative Agent otherwise agrees in its sole discretion or has determined
that the Syndication Date has occurred (at which time this clause (B) shall no
longer be applicable), Revolving Loans may only be incurred and maintained as
Base Rate Loans, and may not be converted into Eurodollar Loans, (iii) may be
repaid and reborrowed in accordance with the provisions hereof, and (iv) shall
not exceed for any such Lender at any time outstanding that aggregate principal
amount which, when added to the product of (x) such Lender's RL Percentage and
(y) the sum of (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time and (II) the aggregate principal amount of all Swingline
Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) then outstanding, equals the Revolving Loan Commitment of such Lender at
such time.
(c) Subject to and upon the terms and conditions set forth herein, the
Swingline Lender agrees to make, at any time and from time to time on or after
the Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving
loan or revolving loans (each a "Swingline Loan" and, collectively, the
"Swingline Loans") to the Borrower, which Swingline Loans (i) shall be incurred
and maintained as Base Rate Loans, (ii) shall be denominated in Dollars, (iii)
may be repaid and reborrowed in accordance with the provisions hereof, (iv)
shall not exceed in aggregate principal amount at any time outstanding, when
combined with the aggregate principal amount of all Revolving Loans then
outstanding and the aggregate amount of all Letter of Credit Outstandings at
such time, an amount equal to the Total Revolving Loan Commitment at such time,
and (v) shall not exceed in aggregate principal amount at any time outstanding
the Maximum Swingline Amount. Notwithstanding anything to the contrary contained
in this Section 1.01(c), (i) the Swingline Lender shall not be obligated to make
any Swingline Loans at a time when a Lender Default exists with respect to an RL
Lender unless the Swingline Lender has entered into arrangements satisfactory to
it and the Borrower to eliminate the Swingline Lender's risk with respect to the
Defaulting Lender's or Lenders' participation in such Swingline Loans, including
by cash collateralizing such Defaulting Lender's or Lenders' RL Percentage of
the outstanding Swingline Loans, and (ii) the Swingline Lender shall not make
any Swingline Loan after it has received written notice from the Borrower, any
other Credit Party or the Required Lenders stating that a Default or an Event of
Default exists and is continuing until such time as the Swingline Lender shall
have received written notice (A) of rescission of all such notices from the
party or parties originally delivering such notice or notices or (B) of the
waiver of such Default or Event of Default by the Required Lenders.
(d) On any Business Day, the Swingline Lender may, in its sole discretion,
give notice to the RL Lenders that the Swingline Lender's outstanding Swingline
Loans shall be funded with one or more Borrowings of Revolving Loans (provided
that such notice shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under Section 10.05 or upon the
exercise of any of the remedies provided in the last paragraph of Section 10),
in which case one or more Borrowings of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day by all RL Lenders pro rata based on each
such RL Lender's RL Percentage (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 10) and the proceeds thereof shall be applied directly by the Swingline
Lender to repay the Swingline Lender for such outstanding Swingline Loans. Each
RL Lender hereby irrevocably agrees to make Revolving Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified in writing
by the Swingline Lender notwithstanding (i) the amount of the Mandatory
2
Borrowing may not comply with the Minimum Borrowing Amount otherwise required
hereunder, (ii) whether any conditions specified in Section 6 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the
date of such Mandatory Borrowing, and (v) the amount of the Total Revolving Loan
Commitment at such time. In the event that any Mandatory Borrowing cannot for
any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to the Borrower), then each RL Lender hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to cause
the RL Lenders to share in such Swingline Loans ratably based upon their
respective RL Percentages (determined before giving effect to any termination of
the Revolving Loan Commitments pursuant to the last paragraph of Section 10),
provided that (x) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the respective
participation is required to be purchased and, to the extent attributable to the
purchased participation, shall be payable to the participant from and after such
date and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing RL Lender shall be required to pay the
Swingline Lender interest on the principal amount of participation purchased for
each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the interest rate otherwise applicable to Revolving Loans maintained as Base
Rate Loans hereunder for each day thereafter.
1.02. Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of Loans under a respective Tranche shall not be less than the
Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than (x)
three Borrowings of Term Loans maintained as Eurodollar Loans or (y) three
Borrowing of Revolving Loans maintained as Eurodollar Loans.
1.03. Notice of Borrowing. (a) Whenever the Borrower desires to incur (x)
Eurodollar Loans hereunder, it shall give the Administrative Agent at the Notice
Office at least three Business Days' prior notice of each Eurodollar Loan to be
incurred hereunder and (y) Base Rate Loans hereunder (excluding Swingline Loans
and Revolving Loans made pursuant to a Mandatory Borrowing), it shall give the
Administrative Agent at the Notice Office at least one Business Day's prior
notice of each Base Rate Loan to be incurred hereunder, provided that (in each
case) any such notice shall be deemed to have been given on a certain day only
if given before 12:00 Noon (New York time) on such day. Each such notice (each a
"Notice of Borrowing"), except as otherwise expressly provided in Section 1.10,
shall be irrevocable and shall be in writing, or by telephone promptly confirmed
in writing, in the form of Exhibit A-1, appropriately completed to specify: (i)
the aggregate principal amount of the Loans to be incurred pursuant to such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),
(iii) whether the Loans being incurred pursuant to such Borrowing shall
constitute Term Loans or Revolving Loans and (iv) whether the Loans being
incurred pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar
Loans, the initial Interest Period to be applicable thereto. The Administrative
3
Agent shall promptly give each Lender which is required to make Loans of the
Tranche specified in the respective Notice of Borrowing, notice of such proposed
Borrowing, of such Lender's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans hereunder,
the Borrower shall give the Swingline Lender no later than 1:00 P.M. (New York
time) on the date that a Swingline Loan is to be incurred, written notice or
telephonic notice promptly confirmed in writing of each Swingline Loan to be
incurred hereunder. Each such notice shall be irrevocable and specify in each
case (A) the date of Borrowing (which shall be a Business Day), and (B) the
aggregate principal amount of the Swingline Loans to be incurred pursuant to
such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice of any Borrowing or prepayment of Loans, the
Administrative Agent or the Swingline Lender, as the case may be, may act
without liability upon the basis of telephonic notice of such Borrowing or
prepayment, as the case may be, believed by the Administrative Agent or the
Swingline Lender, as the case may be, in good faith to be from the President,
the Vice President-Finance, the Chief Executive Officer, the Chief Financial
Officer, the Treasurer or any Assistant Treasurer of the Borrower, or from any
other authorized officer of the Borrower designated in writing by the Borrower
to the Administrative Agent as being authorized to give such notices, prior to
receipt of written confirmation. In each such case, the Borrower hereby waives
the right to dispute the Administrative Agent's or Swingline Lender's record of
the terms of such telephonic notice of such Borrowing or prepayment of Loans, as
the case may be, absent manifest error.
1.04. Disbursement of Funds. No later than 1:00 P.M. (New York time) on the
date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, no later than 4:00 P.M. (New York time) on the date specified pursuant to
Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than
1:00 P.M. (New York time) on the date specified in Section 1.01(d)), each Lender
with a Commitment of the respective Tranche will make available its pro rata
portion (determined in accordance with Section 1.07) of each such Borrowing
requested to be made on such date (or in the case of Swingline Loans, the
Swingline Lender will make available the full amount thereof). All such amounts
will be made available in Dollars and in immediately available funds at the
Payment Office, and the Administrative Agent will, except in the case of
Revolving Loans made pursuant to a Mandatory Borrowing, make available to the
Borrower at the Payment Office the aggregate of the amounts so made available by
the Lenders. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of any Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date of Borrowing
and the Administrative Agent may (but shall not be obligated to), in reliance
upon such assumption, make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay
4
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover on demand from
such Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Lender, the overnight Federal Funds
Rate for the first three days and at the interest rate otherwise applicable to
such Loans for each day thereafter and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined pursuant
to Section 1.08. Nothing in this Section 1.04 shall be deemed to relieve any
Lender from its obligation to make Loans hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any failure by
such Lender to make Loans hereunder.
1.05. Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Lender shall be evidenced in the Register
maintained by the Administrative Agent pursuant to Section 13.15 and shall, if
requested by such Lender, also be evidenced (i) in the case of Term Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-1, with blanks appropriately completed in conformity herewith
(each a "Term Note" and, collectively, the "Term Notes"), (ii) in the case of
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes"), and (iii) in the case of Swingline Loans, by a promissory
note duly executed and delivered by the Borrower substantially in the form of
Exhibit B-3, with blanks appropriately completed in conformity herewith (the
"Swingline Note").
(b) The Term Note issued to each Lender that has a Term Loan Commitment or
outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable to
such Lender or its registered assigns and be dated the Initial Borrowing Date
(or, if issued after the Initial Borrowing Date, be dated the date of issuance
thereof), (iii) be in a stated principal amount equal to the Term Loans made by
such Lender on the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, be in a stated principal amount equal to the outstanding Term
Loans of such Lender at such time) and be payable in the outstanding principal
amount of Term Loans evidenced thereby, (iv) mature on the Term Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Revolving Note issued to each Lender that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower,
(ii) be payable to such Lender or its registered assigns and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated
the date of the issuance thereof), (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Lender (or, if issued after the
termination thereof, be in a stated principal amount equal to the outstanding
5
Revolving Loans of such Lender at such time) and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01, and mandatory repayment as provided in Section
4.02, and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(d) The Swingline Note issued to the Swingline Lender shall (i) be executed
by the Borrower, (ii) be payable to the Swingline Lender or its registered
assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal
amount equal to the Maximum Swingline Amount and be payable in the outstanding
principal amount of the Swingline Loans evidenced thereby from time to time,
(iv) mature on the Swingline Expiry Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01,
and mandatory repayment as provided in Section 4.02, and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(e) Each Lender will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and prior to any transfer of any
of its Notes will endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in such notation shall not affect the Borrower's obligations in respect of
such Loans.
(f) Notwithstanding anything to the contrary contained above in this
Section 1.05 or elsewhere in this Agreement, Notes shall only be delivered to
Lenders which at any time specifically request the delivery of such Notes. No
failure of any Lender to request or obtain a Note evidencing its Loans to the
Borrower shall affect or in any manner impair the obligations of the Borrower to
pay the Loans (and all related Obligations) incurred by the Borrower which would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the various Credit Documents. Any Lender which does not
have a Note evidencing its outstanding Loans shall in no event be required to
make the notations otherwise described in preceding clause (e). At any time when
any Lender requests the delivery of a Note to evidence any of its Loans, the
Borrower shall promptly execute and deliver to the respective Lender the
requested Note in the appropriate amount or amounts to evidence such Loans.
1.06. Conversions. The Borrower shall have the option to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the outstanding principal amount of Loans (other than Swingline Loans which may
not be converted pursuant to this Section 1.06) made pursuant to one or more
Borrowings (so long as of the same Tranche) of one or more Types of Loans into a
Borrowing (of the same Tranche) of another Type of Loan, provided that, (i)
except as otherwise provided in Section 1.10(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
6
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) unless the Required Lenders otherwise
agree, Base Rate Loans may only be converted into Eurodollar Loans if no Default
or Event of Default is in existence on the date of the conversion, (iii) unless
the Administrative Agent otherwise agrees in its sole discretion or has
determined that the Syndication Date has occurred (at which time this clause
(iii) shall no longer be applicable), conversions of Base Rate Loans into
Eurodollar Loans shall be subject to the provisions of clause (B) of the proviso
in each of Sections 1.01(a)(iii) and 1.01(b)(ii), and (iv) no conversion
pursuant to this Section 1.06 shall result in a greater number of Borrowings of
Eurodollar Loans than is permitted under Section 1.02. Each such conversion
shall be effected by the Borrower by giving the Administrative Agent at the
Notice Office prior to 12:00 Noon (New York time) at least three Business Days'
prior notice (each a "Notice of Conversion/Continuation") in the form of Exhibit
A-2, appropriately completed to specify the Loans to be so converted, the
Borrowing or Borrowings pursuant to which such Loans were incurred and, if to be
converted into Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Loans. Upon any such conversion
the proceeds thereof will be deemed to be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Loans being
converted.
1.07. Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans
under this Agreement shall be incurred from the Lenders pro rata on the basis of
their Term Loan Commitments or Revolving Loan Commitments, as the case may be.
It is understood that no Lender shall be responsible for any default by any
other Lender of its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.
1.08. Interest. (a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Base Rate Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06 or 1.09, as applicable, at a rate per annum which
shall be equal to the sum of the relevant Applicable Margin plus the Base Rate,
each as in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Loan from the date of Borrowing thereof until the
earlier of (i) the maturity thereof (whether by acceleration or otherwise) and
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum which shall,
during each Interest Period applicable thereto, be equal to the sum of the
relevant Applicable Margin as in effect from time to time during such Interest
Period plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan shall, in each case, bear interest at a rate per annum
equal to the greater of (x) the rate which is 2% in excess of the rate then
borne by such Loans and (y) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans of the respective Tranche from time to time, and
all other overdue amounts payable hereunder and under any other Credit Document
shall bear interest at a rate per annum equal to the rate which is 2% in excess
of the rate applicable to Revolving Loans maintained at Base Rate Loans from
time to time. Interest that accrues under this Section 1.08(c) shall be payable
on demand.
7
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, (x) in arrears on each Scheduled Interest
Payment Date, (y) on the date of any repayment or prepayment in full of all
outstanding Base Rate Loans of any Tranche, and (z) at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand, and (ii) in
respect of each Eurodollar Loan, (x) on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period, and (y) on the date of any repayment or prepayment (on the
amount repaid or prepaid), at maturity (whether by acceleration or otherwise)
and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent shall
determine the Eurodollar Rate for each Interest Period applicable to the
respective Eurodollar Loans and shall promptly notify the Borrower and the
Lenders thereof. Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.
1.09. Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion/Continuation in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or prior to 12:00 Noon (New York time) on the third Business
Day prior to the expiration of an Interest Period applicable to such Eurodollar
Loan (in the case of any subsequent Interest Period), the Borrower shall have
the right to elect the interest period (each an "Interest Period") applicable to
such Eurodollar Loan, which Interest Period shall, at the option of the Borrower
(but otherwise subject to the provisions of clause (B) of the proviso in each of
Sections 1.01(a)(iii) and 1.01(b)(ii)), be (x) prior to the Term Loan
Satisfaction Date a one month period and (y) thereafter, a one, two, three or
six month period, provided that (in each case):
(i) all Eurodollar Loans comprising a Borrowing shall at all times have the
same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall commence on
the date of Borrowing of such Eurodollar Loan (including the date of any
conversion thereto from a Base Rate Loan) and each Interest Period occurring
thereafter in respect of such Eurodollar Loan shall commence on the day on which
the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would otherwise expire on
a day which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for a
Eurodollar Loan would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
8
(v) unless the Required Lenders otherwise agree, no Interest Period may be
selected at any time when a Default or an Event of Default is then in existence;
and
(vi) no Interest Period in respect of any Borrowing of any Tranche of Loans
shall be selected which extends beyond the Revolving Loan Maturity Date (or, in
the case of Term Loans, beyond the Term Loan Maturity Date).
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10. Increased Costs, Illegality, etc. (a) In the event that any Lender
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to any
such Lender's agreement to make or its making, funding or maintaining any
Eurodollar Loan because of (x) any change since the Effective Date in any
applicable law or governmental rule, regulation, order, guideline or request
(whether or not having the force of law) or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, order, guideline or request, such as, but not
limited to: (A) a change in the basis of taxation of payment to any Lender of
the principal of or interest on the Loans or the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or determined by
reference to, the net income or net profits of such Lender pursuant to the laws
of the jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein) or
(B) a change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the computation
of the Eurodollar Rate and/or (y) other circumstances arising since the
Effective Date affecting such Lender, the interbank Eurodollar market or the
position of such Lender in such market; or
(iii) at any time, that the making or continuance by such Lender or its
applicable lending office of any Eurodollar Loan has been made (x) unlawful by
any law or governmental rule, regulation or order, (y) impossible by compliance
by any Lender in good faith with any governmental request (whether or not having
force of law) or (z) impracticable as a result of a contingency occurring after
the Effective Date which materially and adversely affects the interbank
Eurodollar market;
9
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion/Continuation given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower agrees to pay to such Lender, upon such Lender's written demand
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as shall be required to compensate such Lender
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing in reasonable detail the basis for the calculation thereof, submitted to
the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding on all the parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 1.10(a)(ii), the Borrower may, and in the case of a
Eurodollar Loan affected by the circumstances described in Section 1.10(a)(iii),
the Borrower shall, either (x) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel such Borrowing by giving the
Administrative Agent telephonic notice (confirmed in writing) on the same date
that the Borrower was notified by the affected Lender or the Administrative
Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar
Loan is then outstanding, upon at least three Business Days' written notice to
the Administrative Agent, require the affected Lender to convert such Eurodollar
Loan into a Base Rate Loan, provided that, if more than one Lender is affected
at any time, then all affected Lenders must be treated the same pursuant to this
Section 1.10(b).
(c) If any Lender determines that after the Effective Date the introduction
of or any change in any applicable law or governmental rule, regulation, order,
guideline, directive or request (whether or not having the force of law)
concerning capital adequacy, or any change in interpretation or administration
thereof by the NAIC or any governmental authority, central bank or comparable
agency, or compliance therewith by such Lender (or its applicable lending
office) will have the effect of increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender based on the existence of such Lender's Commitments hereunder or its
obligations hereunder, then the Borrower agrees to pay to such Lender, upon its
written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such
Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Lender's determination of compensation owing under this
10
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall show in
reasonable detail the basis for calculation of such additional amounts.
1.11. Compensation. The Borrower agrees to compensate each Lender, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund its Eurodollar Loans but excluding loss of anticipated
profits) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, or continuance of, Eurodollar Loans does not occur on a
date or in the amount specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment or repayment
(including any prepayment or repayment made pursuant to Section 4.01, Section
4.02 or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date or in the amount specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any
other default by the Borrower to repay Eurodollar Loans when required by the
terms of this Agreement or any Note held by such Lender or (y) any election made
pursuant to Section 1.10(b).
1.12. Change of Lending Office. Each Lender agrees that on the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Sections 1.10, 2.06 and 4.04.
1.13. Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender
or otherwise defaults in its obligations to make Loans, (y) upon the occurrence
of an event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c), Section 2.06 or Section 4.04 with respect to any Lender which
results in such Lender charging to the Borrower increased costs materially in
excess of those being generally charged by the other Lenders or (z) in the case
of a refusal by a Lender to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders as (and to the extent) provided in Section
13.12(b), the Borrower shall have the right, if no Default or Event of Default
then exists (or, in the case of preceding clause (z), will exist immediately
after giving effect to such replacement), to replace such Lender (the "Replaced
Lender") with one or more other Eligible Transferees, none of whom shall
constitute a Defaulting Lender at the time of such replacement (collectively,
the "Replacement Lender") and each of whom shall be required to be reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Lender shall enter
11
into one or more Assignment and Assumption Agreements pursuant to Section
13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be paid
by the Replacement Lender and/or the Replaced Lender (as may be agreed to at
such time by and among the Borrower, the Replacement Lender and the Replaced
Lender)) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the Replaced Lender in respect thereof an amount equal to the sum of (I) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, (II) an amount equal to all Unpaid Drawings that
have been funded by (and not reimbursed to) such Replaced Lender, together with
all then unpaid interest with respect thereto at such time, and (III) an amount
equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender
pursuant to Section 3.01, (y) the Issuing Lender an amount equal to such
Replaced Lender's RL Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Lender to the Issuing Lender and (z) the Swingline Lender an
amount equal to such Replaced Lender's RL Percentage of any Mandatory Borrowing
to the extent such amount was not theretofore funded by such Replaced Lender to
the Swingline Lender and (ii) all obligations of the Borrower due and owing to
the Replaced Lender at such time (other than those specifically described in
clause (i) above in respect of which the assignment purchase price has been, or
is concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreement, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall
survive as to such Replaced Lender.
SECTION 2. Letters of Credit.
2.01. Letters of Credit. (a) Subject to and upon the terms and conditions
set forth herein, the Borrower may request that the Issuing Lender issue, at any
time and from time to time on and after the Initial Borrowing Date and prior to
the 60th day prior to the Revolving Loan Maturity Date, for the account of the
Borrower and for the benefit of (x) any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations, an
irrevocable standby letter of credit, in a form customarily used by the Issuing
Lender or in such other form as is reasonably acceptable to the Issuing Lender,
and (y) sellers of goods to the Borrower or any of its Subsidiaries, an
irrevocable trade letter of credit, in a form customarily used by the Issuing
Lender or in such other form as has been approved by the Issuing Lender (each
such letter of credit, a "Letter of Credit" and, collectively, the "Letters of
Credit"). All Letters of Credit shall be denominated in Dollars and shall be
issued on a sight basis only.
(b) Subject to and upon the terms and conditions set forth herein, the
Issuing Lender agrees that it will, at any time and from time to time on and
after the Initial Borrowing Date and prior to the 60th day prior to the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for account of the Borrower, one or more Letters of Credit
as are permitted to remain outstanding hereunder without giving rise to a
Default or an Event of Default, provided that the Issuing Lender shall not be
under any obligation to issue any Letter of Credit of the types described above
if at the time of such issuance:
12
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing Lender
from issuing such Letter of Credit or any requirement of law applicable to the
Issuing Lender or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing Lender is
not otherwise compensated hereunder) not in effect with respect to the Issuing
Lender on the date hereof, or any unreimbursed loss, cost or expense which was
not applicable or in effect with respect to the Issuing Lender as of the date
hereof and which the Issuing Lender reasonably and in good xxxxx xxxxx material
to it; or
(ii) the Issuing Lender shall have received from the Borrower, any other
Credit Party or the Required Lenders prior to the issuance of such Letter of
Credit notice of the type described in the second sentence of Section 2.03(b).
2.02. Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $5,000,000 or (y) when added to the sum of (I)
the aggregate principal amount of all Revolving Loans then outstanding and (II)
the aggregate principal amount of all Swingline Loans then outstanding, an
amount equal to the Total Revolving Loan Commitment at such time, and (ii) each
Letter of Credit shall by its terms terminate (x) in the case of standby Letters
of Credit, on or before the earlier of (A) the date which occurs 12 months after
the date of the issuance thereof (although any such standby Letter of Credit
shall be extendible for successive periods of up to 12 months, but, in each
case, not beyond the tenth Business Day prior to the Revolving Loan Maturity
Date, on terms acceptable to the Issuing Lender) and (B) ten Business Days prior
to the Revolving Loan Maturity Date, and (y) in the case of trade Letters of
Credit, on or before the earlier of (A) the date which occurs 180 days after the
date of issuance thereof and (B) 30 days prior to the Revolving Loan Maturity
Date provided, however, that maturities for any Letters of Credit issued
hereunder while any Term Loans are outstanding shall not extend beyond the tenth
Business Day prior to the Term Loan Maturity Date.
2.03. Letter of Credit Requests; Minimum Stated Amount. (a) Whenever the
Borrower desires that a Letter of Credit be issued for its account, the Borrower
shall give the Administrative Agent and the Issuing Lender at least five
Business Days' (or such shorter period as is reasonably acceptable to the
Issuing Lender) written notice thereof (including by way of facsimile). Each
notice shall be in the form of Exhibit C, appropriately completed (each a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower to the Lenders that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.02. Unless the Issuing Lender has received notice from the
Borrower, any other Credit Party or the Required Lenders before it issues a
Letter of Credit that one or more of the conditions specified in Section 5 or 6
are not then satisfied, or that the issuance of such Letter of Credit would
13
violate Section 2.02, then the Issuing Lender shall, subject to the terms and
conditions of this Agreement, issue the requested Letter of Credit for the
account of the Borrower in accordance with the Issuing Lender's usual and
customary practices. Upon the issuance of or modification or amendment to any
standby Letter of Credit, the Issuing Lender shall promptly notify the Borrower
and the Administrative Agent, in writing of such issuance, modification or
amendment and such notice shall be accompanied by a copy of such Letter of
Credit or the respective modification or amendment thereto, as the case may be.
Promptly after receipt of such notice the Administrative Agent shall notify the
Participants, in writing, of such issuance, modification or amendment. On the
first Business Day of each week, the Issuing Lender shall furnish the
Administrative Agent with a written (including via facsimile) report of the
daily aggregate outstandings of trade letters of credit for the immediately
preceding week. Notwithstanding anything to the contrary contained in this
Agreement, in the event that a Lender Default exists with respect to an RL
Lender, the Issuing Lender shall not be required to issue any Letter of Credit
unless the Issuing Lender has entered into arrangements satisfactory to it and
the Borrower to eliminate the Issuing Lender's risk with respect to the
participation in Letters of Credit by the Defaulting Lender or Lenders,
including by cash collateralizing such Defaulting Lender's or Lenders' RL
Percentage of the Letter of Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall not be less
than $100,000 or such lesser amount as is acceptable to the Issuing Lender.
2.04. Letter of Credit Participations. (a) Immediately upon the issuance by
the Issuing Lender of any Letter of Credit, the Issuing Lender shall be deemed
to have sold and transferred to each RL Lender, and each such RL Lender (in its
capacity under this Section 2.04, a "Participant") shall be deemed irrevocably
and unconditionally to have purchased and received from the Issuing Lender,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participant's RL Percentage, in such Letter of Credit, each
drawing or payment made thereunder and the obligations of the Borrower under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments or RL
Percentages of the Lenders pursuant to Section 1.13 or 13.04(b), it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings relating thereto, there shall be an automatic adjustment to the
participations pursuant to this Section 2.04 to reflect the new RL Percentages
of the assignor and assignee Lender, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the Issuing
Lender shall not have any obligation relative to the other Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the Issuing Lender under or in connection with any Letter
of Credit issued by it shall not create for the Issuing Lender any resulting
liability to the Borrower, any other Credit Party, any Lender or any other
Person unless such action is taken or omitted to be taken with gross negligence
or willful misconduct on the part of the Issuing Lender (as determined by a
court of competent jurisdiction in a final and non-appealable decision).
14
(c) In the event that the Issuing Lender makes any payment under any Letter
of Credit issued by it and the Borrower shall not have reimbursed such amount in
full to the Issuing Lender pursuant to Section 2.05(a), the Issuing Lender shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Issuing Lender the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative Agent so notifies, prior to 12:00 Noon (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to the Issuing Lender in Dollars
such Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its RL Percentage of the amount of such payment available to the Issuing
Lender, such Participant agrees to pay to the Issuing Lender, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Issuing Lender at the overnight
Federal Funds Rate for the first three days and at the interest rate applicable
to Revolving Loans that are maintained as Base Rate Loans for each day
thereafter. The failure of any Participant to make available to the Issuing
Lender its RL Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Issuing Lender its RL Percentage of any payment under any Letter of Credit
on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Issuing Lender such other Participant's RL Percentage of any such payment.
(d) Whenever the Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the Issuing Lender shall pay to each such
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) Upon the request of any Participant, the Administrative Agent shall
furnish to such Participant copies of any standby Letter of Credit issued by it
and such other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to the Issuing
Lender with respect to Letters of Credit shall be irrevocable and not subject to
any qualification or exception whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of the
other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which the
Borrower or any of its Subsidiaries may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Administrative Agent,
15
any Participant, or any other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower or any
Subsidiary of the Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05. Agreement to Repay Letter of Credit Drawings. (a) The Borrower agrees
to reimburse the Issuing Lender, by making payment to the Administrative Agent
in immediately available funds at the Payment Office, for any payment or
disbursement made by the Issuing Lender under any Letter of Credit issued by it
(each such amount, so paid until reimbursed, an "Unpaid Drawing"), not later
than one Business Day following receipt by the Borrower of notice of such
payment or disbursement (provided that no such notice shall be required to be
given if a Default or an Event of Default under Section 10.05 shall have
occurred and be continuing, in which case the Unpaid Drawing shall be due and
payable immediately without presentment, demand, protest or notice of any kind
(all of which are hereby waived by the Borrower)), with interest on the amount
so paid or disbursed by the Issuing Lender, to the extent not reimbursed prior
to 12:00 Noon (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but excluding the date such Issuing
Lender was reimbursed by the Borrower therefor at a rate per annum equal to the
Base Rate in effect from time to time plus the Applicable Margin as in effect
from time to time for Revolving Loans that are maintained as Base Rate Loans;
provided, however, to the extent such amounts are not reimbursed prior to 12:00
Noon (New York time) on the third Business Day following the receipt by the
Borrower of notice of such payment or disbursement or following the occurrence
of a Default or an Event of Default under Section 10.05, interest shall
thereafter accrue on the amounts so paid or disbursed by the Issuing Lender (and
until reimbursed by the Borrower) at a rate per annum equal to the Base Rate in
effect from time to time plus the Applicable Margin for Revolving Loans that are
maintained as Base Rate Loans as in effect from time to time plus 2%, with such
interest to be payable on demand. The Issuing Lender shall give the Borrower
prompt written notice of each Drawing under any Letter of Credit issued by it,
provided that the failure to give any such notice shall in no way affect, impair
or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to reimburse
the Issuing Lender with respect to drafts, demands and other presentations for
payment under Letters of Credit issued by it (each a "Drawing") (including, in
each case, interest thereon) shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or any Subsidiary of the Borrower may have or have
had against any Lender (including in its capacity as the Issuing Lender or as a
Participant), including, without limitation, any defense based upon the failure
16
of any drawing under a Letter of Credit to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse the Issuing Lender for any wrongful payment made by the
Issuing Lender under a Letter of Credit issued by it as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Issuing Lender (as determined by a court of competent jurisdiction in a final
and non-appealable decision).
2.06. Increased Costs. If at any time after the Effective Date, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any governmental authority charged with the interpretation or
administration thereof, or compliance by the Issuing Lender or any Participant
with any request or directive by the NAIC or by any such governmental authority
(whether or not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by the Issuing Lender or participated in by any
Participant, or (ii) impose on the Issuing Lender or any Participant any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to the
Issuing Lender or any Participant of issuing, maintaining or participating in
any Letter of Credit, or reduce the amount of any sum received or receivable by
the Issuing Lender or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of the Issuing
Lender or such Participant pursuant to the laws of the jurisdiction in which it
is organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the delivery of the
certificate referred to below to the Borrower by the Issuing Lender or any
Participant (a copy of which certificate shall be sent by the Issuing Lender or
such Participant to the Administrative Agent), the Borrower agrees to pay to the
Issuing Lender or such Participant such additional amount or amounts as will
compensate the Issuing Lender or such Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. The Issuing Lender or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.06, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by the Issuing Lender or such Participant
(a copy of which certificate shall be sent by the Issuing Lender or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the calculation of such additional amount or amounts necessary to
compensate the Issuing Lender or such Participant. The certificate required to
be delivered pursuant to this Section 2.06 shall, absent manifest error, be
final and conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01. Fees. (a) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting RL Lender a commitment commission (the
"Commitment Commission") for the period from and including the Effective Date to
and including the Revolving Loan Maturity Date (or such earlier date on which
the Total Revolving Loan Commitment has been terminated) computed at a rate per
annum equal to the Applicable Commitment Fee Percentage of the Unutilized
Revolving Loan Commitment of such Non-Defaulting RL Lender as in effect from
time to time. Accrued Commitment Commission shall be due and payable quarterly
in arrears on each Scheduled Interest Payment Date and on the date upon which
the Total Revolving Loan Commitment is terminated.
17
(b) The Borrower agrees to pay to the Administrative Agent for distribution
to each RL Lender (based on each such RL Lender's respective RL Percentage) a
fee in respect of each Letter of Credit (the "Letter of Credit Fee") for the
period from and including the date of issuance of such Letter of Credit to and
including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to the Applicable Margin then in effect with
respect to Revolving Loans that are maintained as Eurodollar Loans on the daily
Stated Amount of each such Letter of Credit. Accrued Letter of Credit Fees shall
be due and payable quarterly in arrears on each Scheduled Interest Payment Date
and on the first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Issuing Lender, for its own account,
a facing fee in respect of each Letter of Credit issued by it (the "Facing Fee")
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to 1/4 of 1% on the daily Stated Amount of
such Letter of Credit, provided that in any event the minimum amount of Facing
Fees payable in any twelve-month period for each Letter of Credit shall be not
less than $500, it being agreed that, on the day of issuance of any Letter of
Credit and on each anniversary thereof prior to the termination or expiration of
such Letter of Credit, if $500 will exceed the amount of Facing Fees that will
accrue with respect to such Letter of Credit for the immediately succeeding
twelve-month period, the full $500 shall be payable on the date of issuance of
such Letter of Credit and on each such anniversary thereof. Except as otherwise
provided in the proviso to the immediately preceding sentence, accrued Facing
Fees shall be due and payable quarterly in arrears on each Scheduled Interest
Payment Date and upon the first day on or after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to the Issuing Lender, for its own account,
upon each payment under, issuance of, or amendment to, any Letter of Credit
issued by it, such amount as shall at the time of such event be the
administrative charge and the reasonable expenses which the Issuing Lender is
generally imposing in connection with such occurrence with respect to letters of
credit.
(e) The Borrower agrees to pay to the Administrative Agent and its
affiliates such fees as have been or may be agreed to in writing from time to
time by the Borrower or any of its Subsidiaries and the Administrative Agent
and/or its respective affiliates.
3.02. Voluntary Termination of Unutilized Revolving Loan Commitments. (a)
Upon at least three Business Day's prior written notice to the Administrative
Agent at the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Lenders), the Borrower shall have the right, at any time
or from time to time, without premium or penalty to terminate the Total
Unutilized Revolving Loan Commitment in whole, or reduce it in part, pursuant to
this Section 3.02(a), in an integral multiple of $500,000 in the case of partial
reductions to the Total Unutilized Revolving Loan Commitment, provided that each
such reduction shall apply proportionately to permanently reduce the Revolving
Loan Commitment of each RL Lender.
18
(b) In the event of a refusal by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Lenders as (and to the extent) provided
in Section 13.12(b), the Borrower may, subject to its compliance with the
requirements of Section 13.12(b), upon five Business Days' prior written notice
to such Lender and the Administrative Agent at the Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Lenders)
terminate all of the Commitments of such Lender, so long as all Loans, together
with accrued and unpaid interest, Fees and all other amounts, owing to such
Lender are repaid concurrently with the effectiveness of such termination
pursuant to Section 4.01(b) (at which time Schedule I shall be deemed modified
to reflect such changed amounts) and such Lender's RL Percentage of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory to
the Administrative Agent and the Issuing Lender, and at such time, such Lender
shall no longer constitute a "Lender" for purposes of this Agreement, except
with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall
survive as to such repaid Lender.
3.03. Mandatory Reduction of Commitments. (a) The Total Commitment (and the
Commitments of each Lender) shall terminate in its entirety on (x) February 28,
2002 unless on or prior to such date the Acquisition Agreement has been entered
into, (y) the date which occurs 45 days after the date of execution of the
Acquisition Agreement, unless the Initial Borrowing Date shall have occurred and
(z) any time after the execution of the Acquisition Agreement and prior to the
consummation of the transaction, the Acquisition Agreement is terminated (other
than with respect to ongoing indemnities, confidentiality provisions and similar
provisions).
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Term Loan Commitment (and the Term Loan Commitment
of each Lender) shall terminate in its entirety on the Initial Borrowing Date
(after giving effect to the incurrence of Term Loans on such date).
(c) In addition to any mandatory commitment reductions pursuant to this
Section 3.03, the Total Term Loan Commitment shall be permanently reduced by the
amount, if any, of net cash proceeds received by the Borrower in connection with
any equity issuances, capital contribution and/or other junior financing after
January 28, 2002 and on or before the Initial Borrowing Date; provided that the
Total Term Loan Commitment (and the Term Loan Commitment of each Lender) shall
terminate in its entirety on the first date, if any, occurring after January 28,
2002 and on or prior to the Initial Borrowing Date upon which the aggregate net
cash proceeds received by the Borrower from one or more equity issuances,
capital contributions and/or other junior financing during such period equals or
exceeds $127,000,000.
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Revolving Loan Commitment shall terminate in its
entirety upon the earlier of (i) the Revolving Loan Maturity Date and (ii)
unless the Required Lenders otherwise agree in writing, the date on which a
Change of Control occurs.
(e) Each reduction to, or termination of, the Total Revolving Loan
Commitment shall be applied to proportionately reduce or terminate, as the case
may be, the Revolving Loan Commitment of each Lender with a Revolving Loan
Commitment.
19
(f) Each reduction to, or termination of, the Total Term Loan Commitment
shall be applied to proportionately reduce or terminate, as the case may be, the
Term Loan Commitment of each Lender with a Term Loan Commitment.
SECTION 4. Prepayments; Payments; Taxes.
4.01. Voluntary Prepayments. (a) The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 12:00 Noon (New York time) at the
Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans (or same day notice in the case of a prepayment of Swingline Loans)
and (y) at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Eurodollar Loans, which
notice (in each case) shall specify whether Term Loans, Revolving Loans or
Swingline Loans shall be prepaid, the amount of such prepayment and the Types of
Loans to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing
or Borrowings pursuant to which such Eurodollar Loans were made, and which
notice the Administrative Agent shall, except in the case of a prepayment of
Swingline Loans, promptly transmit to each of the Lenders; (ii) (x) each partial
prepayment of Term Loans pursuant to this Section 4.01(a) shall be in an
aggregate principal amount of at least $1,000,000 (or such lesser amount as is
acceptable to the Administrative Agent), (y) each partial prepayment of
Revolving Loans pursuant to this Section 4.01(a) shall be in an aggregate
principal amount of at least $500,000 (or such lesser amount as is acceptable to
the Administrative Agent) and (z) each partial prepayment of Swingline Loans
pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at
least $500,000 (or such lesser amount as is acceptable to the Administrative
Agent), provided that if any partial prepayment of Eurodollar Loans made
pursuant to any Borrowing shall reduce the outstanding principal amount of
Eurodollar Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto, then such Borrowing may not be
continued as a Borrowing of Eurodollar Loans (and same shall automatically be
converted into a Borrowing of Base Rate Loans) and any election of an Interest
Period with respect thereto given by the Borrower shall have no force or effect;
(iii) at the time of prepayment of Eurodollar Loans pursuant to this Section
4.01 on any date other than the last day of the Interest Period applicable
thereto, the Borrower shall pay the amounts required pursuant to Section 1.11;
and (iv) each prepayment pursuant to this Section 4.01(a) in respect of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans,
provided that at the Borrower's election in connection with any prepayment of
Revolving Loans pursuant to this Section 4.01(a), such prepayment shall not, so
long as no Default or Event of Default then exists, be applied to any Revolving
Loan of a Defaulting Lender.
(b) In the event of a refusal by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Lenders as (and to the extent) provided
in Section 13.12(b), the Borrower may, upon five Business Days' prior written
notice to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders) repay all
20
Loans, together with accrued and unpaid interest, Fees, and other amounts owing
to such Lender in accordance with, and subject to the requirements of, said
Section 13.12(b) so long as (I) all Commitments of such Lender are terminated
concurrently with such repayment pursuant to Section 3.02(b) (at which time
Schedule I shall be deemed modified to reflect the changed Commitments), (II)
such Lender's RL Percentage of all outstanding Letters of Credit is cash
collateralized in a manner satisfactory to the Administrative Agent and the
Issuing Lender and (III) the consents, if any, required under Section 13.12(b)
in connection with the repayment pursuant to this clause (b) have been obtained.
4.02. Mandatory Repayments. (a) On any day on which the sum of (I) the
aggregate outstanding principal amount of all Revolving Loans (after giving
effect to all other repayments thereof on such date), (II) the aggregate
outstanding principal amount of all Swingline Loans (after giving effect to all
other repayments thereof on such date) and (III) the aggregate amount of all
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment at
such time, the Borrower shall prepay on such day the principal of Swingline
Loans and, after all Swingline Loans have been repaid in full or if no Swingline
Loans are outstanding, Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of the Letter of Credit Outstandings
exceeds the Total Revolving Loan Commitment at such time, the Borrower shall pay
to the Administrative Agent at the Payment Office on such day an amount of cash
and/or Cash Equivalents equal to the amount of such excess (up to a maximum
amount equal to the Letter of Credit Outstandings at such time), such cash
and/or Cash Equivalents to be held as security for all obligations of the
Borrower to the Issuing Lender and the Lenders hereunder in a cash collateral
account to be established by the Administrative Agent.
(b) In addition to any other mandatory repayments pursuant to this Section
4.02, on the date on which the Borrower receives the Excess Inventory Refund, an
amount equal to 100% of such Excess Inventory Refund shall be applied on such
date as a mandatory prepayment of the principal of Swingline Loans and, after
all Swingline Loans have been repaid in full or if no Swingline Loans are
outstanding, Revolving Loans in an amount equal to such excess. If the Excess
Refund Amount exceeds the amount of outstanding Swingline Loans and Revolving
Loans, the Borrower shall pay to the Administrative Agent at the Payment Office
on such day an amount of cash and/or Cash Equivalents equal to the amount of
such excess (up to a maximum amount equal to the Letter of Credit Outstandings
at such time), such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Lender and the Lenders hereunder in a
cash collateral account to be established by and under the dominion and control
of the Administrative Agent. To the extent that the Excess Inventory Refund
exceeds the sum of (i) the aggregate principal amount of Swingline Loans and
Revolving Loans then outstanding and (ii) the amount required to cash
collateralize the then outstanding Letters of Credit as provided in the
immediately preceding sentence, such excess shall be applied as a mandatory
repayment of Term Loans in accordance with the requirements of Sections 4.02(h)
and (i).
(c) In addition to the mandatory repayments pursuant to this Section 4.02,
if on the Term Loan Satisfaction Date the aggregate principal amount of
outstanding Revolving Loans and Swingline Loans exceeds $5,000,000, the Borrower
shall make a mandatory repayment of outstanding Revolving Loans and/or Swingline
Loans in an amount equal to such excess in accordance with the requirements of
Section 4.02(h) and (i).
21
(d) In addition to any other mandatory repayments pursuant to this Section
4.02, on each date on or after the Initial Borrowing Date upon which the
Borrower or any of its Subsidiaries receives any cash proceeds from any capital
contribution or any sale or issuance of its equity, an amount equal to 100% of
the Net Equity Proceeds of such capital contribution or sale or issuance of
equity shall be applied on such date as a mandatory repayment of principal of
outstanding Loans in accordance with the requirements of Sections 4.02(h) and
(i).
(e) In addition to any other mandatory repayments pursuant to this Section
4.02, on each date on or after the Initial Borrowing Date upon which the
Borrower or any of its Subsidiaries receives any cash proceeds from any issuance
or incurrence by the Borrower or any of its Subsidiaries of Indebtedness for
borrowed money (other than Indebtedness for borrowed money permitted to be
incurred pursuant to Section 9.04 as in effect on the Effective Date), an amount
equal to 100% of the Net Debt Proceeds of the respective incurrence of
Indebtedness shall be applied on such date as a mandatory repayment of principal
of outstanding Loans in accordance with the requirements of Sections 4.02(h) and
(i).
(f) In addition to any other mandatory repayments pursuant to this Section
4.02, on each date on or after the Initial Borrowing Date upon which the
Borrower or any of its Subsidiaries receives any cash proceeds from any Asset
Sale, an amount equal to 100% of the Net Sale Proceeds therefrom shall be
applied on such date as a mandatory repayment of principal of outstanding Loans
in accordance with the requirements of Sections 4.02(h) and (i); provided,
however, that with respect to no more than $1,000,000 in the aggregate of cash
proceeds from Asset Sales in any fiscal year of the Borrower, the Net Sale
Proceeds therefrom shall not be required to be so applied on such date so long
as no Default and no Event of Default then exists and such Net Sale Proceeds
shall be used to purchase assets (other than working capital) used or to be used
in the businesses permitted pursuant to Section 9.14 within 90 days following
the date of such Asset Sale, and provided further, that if all or any portion of
such Net Sale Proceeds not required to be so applied as provided above in this
Section 4.02(e) are not so reinvested within such 90-day period (or such earlier
date, if any, as the Borrower or the relevant Subsidiary determines not to
reinvest the Net Sale Proceeds from such Asset Sale as set forth above), such
remaining portion shall be applied on the last day of such period (or such
earlier date, as the case may be) as provided above in this Section 4.02(f)
without regard to the preceding proviso.
(g) In addition to any other mandatory repayments pursuant to this Section
4.02, within 10 days following each date on or after the Initial Borrowing Date
upon which the Borrower or any of its Subsidiaries receives any cash proceeds
from any Recovery Event (other than Recovery Events where the Net Recovery Event
Proceeds therefrom do not exceed $1,000,000), an amount equal to 100% of the Net
Recovery Event Proceeds from such Recovery Event shall be applied within such
ten-day period as a mandatory repayment of principal of outstanding Loans in
accordance with the requirements of Sections 4.02(h) and (i); provided, however,
that so long as no Default or Event of Default then exists and such Net Recovery
Event Proceeds do not exceed $1,000,000, such Net Recovery Event Proceeds shall
not be required to be so applied within such ten-day period to the extent that
the Borrower has delivered a certificate to the Administrative Agent within such
ten-day period stating that such Net Recovery Event Proceeds shall be used to
replace or restore any properties or assets in respect of which such Net
22
Recovery Event Proceeds were paid within 180 days following the date of the
receipt of such Net Recovery Event Proceeds (which certificate shall set forth
the estimates of the Net Recovery Event Proceeds to be so expended); and
provided further, that if all or any portion of such Net Recovery Event Proceeds
not required to be so applied pursuant to the preceding proviso are not so used
within 180 days after the date of the receipt of such Net Recovery Event
Proceeds (or such earlier date, if any, as the Borrower or the relevant
Subsidiary determines not to reinvest the Net Recovery Event Proceeds relating
to such Recovery Event as set forth above), such remaining portion shall be
applied on the last day of such period (or such earlier date, as the case may
be) as provided above in this Section 4.02(g) without regard to the preceding
proviso.
(h) All repayments of Loans pursuant to Section 4.02(d), (e), (f) and (g)
shall be applied first to the prepayment of Term Loans and after all Term Loans
shall have been paid in full to the prepayment of Swingline Loans and after all
Swingline Loans shall have been repaid in full to the prepayment of Revolving
Loans. All prepayments of Loans of a Tranche pursuant to this Section 4.02 shall
be applied pro rata to the Loans in such Tranche.
(i) With respect to each repayment of Loans required by this Section 4.02,
the Borrower may designate the Types of Loans of the respective Tranche which
are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings of the respective Tranche pursuant to which such Eurodollar Loans
were made, provided that: (i) repayments of Eurodollar Loans pursuant to this
Section 4.02 may only be made on the last day of an Interest Period applicable
thereto unless all Eurodollar Loans of the respective Tranche with Interest
Periods ending on such date of required repayment and all Base Rate Loans of the
respective Tranche have been paid in full; (ii) if any repayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding
Eurodollar Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto, such Borrowing shall be
automatically converted into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans. In the absence of a designation by the Borrower as described
in the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion.
(j) In addition to any other mandatory repayments pursuant to this Section
4.02, (i) all then outstanding Term Loans shall be repaid in full on the Term
Loan Maturity Date, (ii) all then outstanding Revolving Loans shall be repaid in
full on the Revolving Loan Maturity Date, (iii) all then outstanding Swingline
Loans shall be repaid in full on the Swingline Expiry Date and (iv) unless the
Required Lenders otherwise agree in writing, all then outstanding Loans shall be
repaid in full on the date on which a Change of Control occurs.
4.03. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement and under any Note shall be
made to the Administrative Agent for the account of the Lender or Lenders
entitled thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office. Whenever any payment to be made hereunder or under any Note shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable at the applicable rate during
such extension.
4.04. Net Payments. (a) All payments made by the Borrower hereunder and
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
23
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Lender pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties, expenses or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, the
Borrower agrees to reimburse each Lender, upon the written request of such
Lender, for taxes imposed on or measured by the net income or net profits of
such Lender pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located and
for any withholding of taxes as such Lender shall determine are payable by, or
withheld from, such Lender, in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence. The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify and
hold harmless each Lender, and reimburse such Lender upon its written request
(within 10 days of such request), for the amount of any Taxes so levied or
imposed and paid by such Lender whether or not such Taxes were correctly or
legally imposed or asserted by the relevant governmental authority.
(b) Each Lender that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees
to deliver to the Borrower and the Administrative Agent on or prior to the
Effective Date or, in the case of a Lender that is an assignee or transferee of
an interest under this Agreement pursuant to Section 1.13 or 13.04(b) (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) (or successor forms) certifying to such Lender's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x)
a certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN (with respect to the
24
portfolio interest exemption) (or successor form) certifying to such Lender's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Lender agrees that from time to
time after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, such Lender will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax
treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or such Lender shall
immediately notify the Borrower and the Administrative Agent of its inability to
deliver any such Form or Certificate, in which case such Lender shall not be
required to deliver any such Form or Certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 4.04(a) to gross-up payments
to be made to a Lender in respect of income or similar taxes imposed by the
United States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 13.04(b), the Borrower
agrees to pay any additional amounts and to indemnify each Lender in the manner
set forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes that are effective after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
SECTION 5. Conditions Precedent to Credit Events on the Initial Borrowing
Date. The obligation of each Lender to make Loans, and the obligation of the
Issuing Lender to issue Letters of Credit, on the Initial Borrowing Date, is
subject at the time of the making of such Loans or the issuance of such Letters
of Credit to the satisfaction of the following conditions:
5.01. Effective Date; Notes. On or prior to the Initial Borrowing Date, (i)
the Effective Date shall have occurred and (ii) there shall have been delivered
to the Administrative Agent for the account of each of the Lenders that has
requested same the appropriate Term Note and/or Revolving Note executed by the
25
Borrower and, if requested by the Swingline Lender, the Swingline Note executed
by the Borrower, in each case in the amount, maturity and as otherwise provided
herein.
5.02. Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Borrower by the Chairman of the
Board, the Chief Executive Officer, the President or any Vice President of the
Borrower, certifying on behalf of the Borrower that all of the conditions in
Sections 5.05, 5.06, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12 and 6.01 have been
satisfied on such date.
5.03. Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received from Xxxxx, Xxxxxx, XxxXxx &
Xxxxxxxxxx, P.C., special counsel to the Credit Parties, an opinion addressed to
the Administrative Agent, the Collateral Agent and each of the Lenders and dated
the Initial Borrowing Date covering the matters set forth in Exhibit E and such
other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request.
5.04. Corporate Documents; Proceedings; etc. (a) On the Initial Borrowing
Date, the Administrative Agent shall have received a certificate from each
Credit Party, dated the Initial Borrowing Date, signed by the Chairman of the
Board, the Chief Executive Officer, the President or any Vice President of such
Credit Party, and attested to by the Secretary or any Assistant Secretary of
such Credit Party, in the form of Exhibit F with appropriate insertions,
together with copies of the certificate or articles of incorporation and by-laws
(or equivalent organizational documents), as applicable, of such Credit Party
and the resolutions of such Credit Party referred to in such certificate, and
each of the foregoing shall be in form and substance reasonably acceptable to
the Administrative Agent.
(b) On the Initial Borrowing Date, all corporate and legal proceedings and
all instruments and agreements in connection with the transactions contemplated
by this Agreement and the other Documents shall be reasonably satisfactory in
form and substance to the Administrative Agent, and the Administrative Agent
shall have received all information and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate,
limited liability company or governmental authorities.
5.05. Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Non-Compete Agreements; Collective Bargaining
Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements. On or
prior to the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent true and correct copies of the following documents:
(i) all Plans (and for each Plan that is required to file an annual report
on Internal Revenue Service Form 5500-series, a copy of the most recent such
report (including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information), and for each Plan that is a "single-employer plan,"
as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial
valuation therefor) and a summary or description of any other "employee benefit
26
plans," as defined in Section 3(3) of ERISA, and a summary or description of any
other material agreements, plans or arrangements, with or for the benefit of
current or former employees of the Borrower or any of its Subsidiaries or ERISA
Affiliates (provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in Section 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate, or reasonably available
thereto from the sponsor or trustee of any such Plan) (collectively, the
"Employee Benefits Plans");
(ii) all agreements entered into by the Borrower or any of its Subsidiaries
governing the terms and relative rights of its equity interests and any
agreements entered into by its shareholders relating to any such entity with
respect to its equity interests (collectively, the "Shareholders' Agreements");
(iii) all agreements with members of, or with respect to, the management of
the Borrower or any of its Subsidiaries which the Borrower reasonably believes
to be material to its or any of its Subsidiaries' business or operations
(collectively, the "Management Agreements");
(iv) all employment agreements entered into by the Borrower or any of its
Subsidiaries which the Borrower reasonably believes to be material to its or any
of its Subsidiaries' business or operations (collectively, the "Employment
Agreements");
(v) all non-compete agreements entered into by the Borrower or any of its
Subsidiaries which restrict the activities of the Borrower or any of its
Subsidiaries (collectively, the "Non-Compete Agreements");
(vi) all collective bargaining agreements applying or relating to any
employee of the Borrower or any of any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(vii) all tax sharing, tax allocation and other similar agreements entered
into by the Borrower or any of its Subsidiaries (collectively, the "Tax Sharing
Agreements"); and
(viii) all agreements evidencing or relating to Indebtedness of the
Borrower or any of its Subsidiaries which is to remain outstanding after giving
effect to the Transaction (the "Existing Indebtedness Agreements");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Non-Compete Agreements, Collective Bargaining
Agreements, Tax Sharing Agreements and Existing Indebtedness Agreements shall be
in form and substance reasonably satisfactory to the Administrative Agent and
shall be in full force and effect on the Initial Borrowing Date.
5.06. Consummation of the Acquisition. (a) On or prior to the Initial
Borrowing Date, there shall have been delivered to the Administrative Agent true
and correct copies of the Acquisition Agreement, certified as true and complete
by an officer of the Borrower, and all other Acquisition Documents, all of which
27
shall be in form and substance reasonably satisfactory to the Administrative
Agent. The Acquisition Agreement shall be in full force and effect and all of
the conditions precedent to the consummation of the Acquisition as set forth in
the Acquisition Agreement shall have been satisfied (and not waived, except with
consent of the Administrative Agent and the Required Lenders) to the reasonable
satisfaction of the Administrative Agent. The Acquisition shall have been
consummated in accordance with the terms and conditions of the Acquisition
Agreement and all applicable laws.
(b) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Administrative Agent true and correct copies of the
Distributorship Agreement, certified as true and complete by an officer of the
Borrower, which Distributorship Agreement shall be in form and substance
reasonably satisfactory to the Administrative Agent. The Distributorship
Agreement shall be in full force and effect and all of the conditions precedent
to the effectiveness of the Distributorship Agreement shall have been satisfied
(and not waived, except with consent of the Administrative Agent and the
Required Lenders) to the reasonable satisfaction of the Administrative Agent.
(c) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Administrative Agent true and correct copies of the Trademark
Purchase and Assignment Agreement which shall be in the form delivered to the
Administrative Agent prior to the Initial Borrowing Date, with any changes
thereto or waivers of the terms thereof to be in form and substance reasonably
satisfactory to the Administrative Agent. The Trademark Purchase and Assignment
Agreement shall be in full force and effect, and all of the conditions precedent
to the effectiveness of the Trademark Purchase and Assignment Agreement shall
have been satisfied (and not waived, except with consent of the Administrative
Agent and the Required Lenders) to the reasonable satisfaction of the
Administrative Agent..
5.07. Adverse Change, Approvals. (a) On or prior to the Initial Borrowing
Date, nothing shall have occurred (and neither the Administrative Agent nor any
Lender shall have become aware of any facts or conditions not previously known)
which the Administrative Agent or the Required Lenders shall determine has had,
or could reasonably be expected to have, (i) a Material Adverse Effect or (ii) a
material adverse effect on the Transaction.
(b) On or prior to the Initial Borrowing Date, all necessary governmental
(domestic and foreign) and third party approvals and/or consents in connection
with the Transaction, the other transactions contemplated hereby and the
granting of Liens under the Credit Documents shall have been obtained and remain
in effect, and all applicable waiting periods with respect thereto shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transaction or the other transactions contemplated by the
Documents or otherwise referred to herein or therein. On the Initial Borrowing
Date, there shall not exist any judgment, order, injunction or other restraint
issued or filed or a hearing seeking injunctive relief or other restraint
pending or notified prohibiting or imposing materially adverse conditions upon
the Transaction or the other transactions contemplated by the Documents or
otherwise referred to herein or therein.
5.08. Litigation. On the Initial Borrowing Date, no litigation by any
entity (private or governmental) shall be pending or threatened with respect to
(i) the Transaction, this Agreement, any other Document or any other
28
documentation executed in connection herewith and therewith or the transactions
contemplated hereby and thereby, or (ii) which any Agent or the Required Lenders
shall reasonably determine has had, or could reasonably be expected to have, a
Material Adverse Effect.
5.09. Subsidiaries Guaranty. On the Initial Borrowing Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered the Subsidiaries
Guaranty in the form of Exhibit L (as amended, modified, restated or
supplemented from time to time the "Subsidiaries Guaranty"), guarantying all of
the obligations of the Borrower as more fully provided therein, and the
Subsidiaries Guaranty shall be in full force and effect.
5.10. Pledge Agreement. On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Pledge Agreement in the
form of Exhibit G (as amended, modified or supplemented from time to time, the
"Pledge Agreement") and shall have delivered to the Collateral Agent, as Pledgee
thereunder, all of the Pledge Agreement Collateral, if any, referred to therein
and then owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledge Agreement Collateral and (y) together with
executed and undated endorsements for transfer in the case of equity interests
constituting certificated Pledge Agreement Collateral, along with evidence that
all other actions necessary or, in the reasonable opinion of the Collateral
Agent, desirable, to perfect the security interests purported to be created by
the Pledge Agreement have been taken and the Pledge Agreement shall be in full
force and effect.
5.11. Security Agreement. On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Security Agreement in the
form of Exhibit H (as amended, modified or supplemented from time to time, the
"Security Agreement") covering all of such Credit Party's Security Agreement
Collateral, together with:
(i) proper financing statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the Collateral
Agent, desirable, to perfect the security interests purported to be created by
the Security Agreement;
(ii) certified copies of requests for information or copies (Form UCC-11),
or equivalent reports as of a recent date, listing all effective financing
statements that name the Borrower or any of its Subsidiaries as debtor and that
are filed in the jurisdictions referred to in clause (i) above and in such other
jurisdictions in which Collateral is located on the Initial Borrowing Date,
together with copies of such other financing statements that name the Borrower
or any of its Subsidiaries as debtor (none of which shall cover any of the
Collateral except (x) to the extent evidencing Permitted Liens or (y) those in
respect of which the Collateral Agent shall have received termination statements
(Form UCC-3) or such other termination statements as shall be required by local
law fully executed for filing); and
(iii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Security Agreement have been taken, and
the Security Agreement shall be in full force and effect.
29
5.12. Existing Credit Agreement. On the Initial Borrowing Date, the total
commitments in respect of the Existing Credit Agreement shall have been
terminated, and all loans and notes (together with interest thereon) with
respect thereto shall have been repaid in full, all letters of credit issued
thereunder shall have been terminated and all other amounts (including premiums)
owing pursuant to the Existing Credit Agreement shall have been repaid in full
and all documents in respect of the Existing Credit Agreement and all guarantees
with respect thereto shall have been terminated (except as to indemnification
and similar provisions, which may survive to the extent provided therein) and be
of no further force and effect. In addition, all security interests in and Liens
on the assets of the Borrower and its Subsidiaries created pursuant to any
security documentation relating to the Existing Credit Agreement shall have been
terminated and released, and all such assets shall have been returned to the
Borrower or such Subsidiary. The Administrative Agent shall have received
evidence that the matters set forth in this Section 5.12 have been satisfied on
such date.
5.13. Financial Statements; Pro Forma Balance Sheet; Projections. (a) On or
prior to the Initial Borrowing Date, the Administrative Agent shall have
received true and correct copies of the historical financial statements, the Pro
Forma Financials and the Projections referred to in Sections 7.05(a) and (d),
which historical financial statements, pro forma financial statements and
Projections shall be in form and substance satisfactory to the Administrative
Agent and the Required Lenders.
(b) No later than five Business Days prior to the Initial Borrowing Date,
the Administrative Agent shall have received true and correct copies of the
audited, unaudited and pro forma consolidated financial statements of the
Borrower and its Subsidiaries (giving effect to the Acquisition and any other
significant transactions in the case of said pro forma financial statements)
meeting the requirements of Regulation S-X for registration statements (as if
such a registration statement for a debt issuance of the Borrower became
effective on the Initial Borrowing Date) on Form S-1 (the "Pro Forma
Financials") as at and for the twelve months ended December 31, 2001, which pro
forma financial statements shall demonstrate, to the Administrative Agent's
reasonable satisfaction, that (x) the pro forma Consolidated EBITDA for the
Borrower and its Subsidiaries the twelve months ended December 31, 2001 is at
least $52 million, and (y) the other covenants described herein shall been
satisfied on the Initial Borrowing Date and will be satisfied on a pro forma
basis after giving effect to the Transaction.
(c) No later than five Business Days before the Initial Borrowing Date, and
without duplication of the requirements of preceding clause (b), the
Administrative Agent shall have received the Pro Forma Financials (giving effect
to the Acquisition and any other significant transactions occurring during the
three-year period hereinafter referenced) for the three consecutive fiscal years
ended immediately prior to the Initial Borrowing Date, which Pro Forma
Financials shall be reported on to the reasonable satisfaction of the
Administrative Agent by Xxxxxx Xxxxxxxx and shall be in form and substance
satisfactory to the Administrative Agent and the Required Lenders.
(d) The Administrative Agent shall have received interim financial
statements for each month ended after the date of the last available quarterly
financial statements and prior to Initial Borrowing Date.
30
5.14. Updated Information for Sular and Furandantin. The Administrative
Agent shall have received and be satisfied with the updated financial
information relating to Sular and Furandantin including, without limitation, net
revenues and prescription information.
5.15. Business. During the period from the date hereof through the Initial
Borrowing Date, the Borrower and its Subsidiaries' business shall have been
operated in the ordinary course and there shall not have been sold any material
assets of such business other than in the ordinary course and consistent with
past practice.
5.16. Corporate and Capital Structure. On the Initial Borrowing Date, all
agreements relating to, and the corporate and capital structure of, the Borrower
and its Subsidiaries, and all organizational documents of the Borrower and its
Subsidiaries, in each case as the same will exist after giving effect to the
consummation of the Transaction, shall be reasonably satisfactory to the
Administrative Agent and the Required Lenders.
5.17. Solvency Certificate; Insurance Certificates. On the Initial
Borrowing Date, the Administrative Agent shall have received:
(i) a solvency certificate from the chief financial officer of the Borrower
in the form of Exhibit I; and
(ii) certificates of insurance complying with the requirements of Section
8.03 for the business and properties of the Borrower and its Subsidiaries, in
form and substance reasonably satisfactory to the Administrative Agent and
naming the Collateral Agent as an additional insured and/or as loss payee, and
stating that such insurance shall not be canceled or the amount of coverage
thereunder materially reduced without at least 30 days' prior written notice by
the insurer to the Collateral Agent.
5.18. Fees, etc. On the Initial Borrowing Date, the Borrower shall have
paid to the Administrative Agent and each Lender all costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses) and other
compensation contemplated hereby payable to the Administrative Agent or such
Lender to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The obligation of
each Lender to make Loans (including Loans made on the Initial Borrowing Date),
and the obligation of the Issuing Lender to issue Letters of Credit (including
Letters of Credit issued on the Initial Borrowing Date), is subject, at the time
of each such Credit Event (except as hereinafter indicated), to the satisfaction
of the following conditions:
6.01. Default; Representations and Warranties. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.02. Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (other than a Swingline Loan or a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received
31
a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the
making of each Swingline Loan, the Swingline Lender shall have received the
notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the Issuing Lender shall have received a Letter of Credit Request
meeting the requirements of Section 2.03(a).
6.03. No Excess Cash. The obligation of each Lender with a Revolving Loan
Commitment to make Revolving Loans shall be subject to the satisfaction of the
condition that at the time of each such making of a Revolving Loan and
immediately after giving effect thereto the Borrower and its Subsidiaries shall
not hold cash and Cash Equivalents in an aggregate amount (after giving effect
to the incurrence of such Credit Event and the application of proceeds therefrom
and any other cash or Cash Equivalents on hand (to the extent such proceeds
and/or other cash or Cash Equivalents are actually utilized by the Borrower
and/or any other Subsidiary of the Borrower on the respective date of incurrence
of the respective Credit Event for a permitted purpose other than an investment
in Cash Equivalents)) in excess of $5,000,000.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to the Administrative Agent and each
of the Lenders that all the conditions specified in Section 5 (with respect to
Credit Events on the Initial Borrowing Date) and in this Section 6 (with respect
to Credit Events on or after the Initial Borrowing Date) and applicable to such
Credit Event are satisfied as of that time. All of the Notes, certificates,
legal opinions and other documents and papers referred to in Section 5 and in
this Section 6, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the Lenders
and, except for the Notes, in sufficient counterparts or copies for each of the
Lenders and shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.
SECTION 7. Representations, Warranties and Agreements. In order to induce
the Lenders to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes the
following representations, warranties and agreements, in each case after giving
effect to the Transaction, all of which shall survive the execution and delivery
of this Agreement and the Notes and the making of the Loans and the issuance of
the Letters of Credit, with the occurrence of each Credit Event on or after the
Initial Borrowing Date being deemed to constitute a representation and warranty
that the matters specified in this Section 7 are true and correct in all
material respects on and as of the Initial Borrowing Date and on the date of
each such other Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
7.01. Organizational Status. Each of the Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, (ii) has the corporate,
partnership or limited liability company power and authority, as the case may
be, to own its property and assets and to transact the business in which it is
32
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the
ownership, leasing or operation of its property or the conduct of its business
requires such qualifications except for failures to be so qualified which,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
7.02. Power and Authority. Each Credit Party has the corporate, partnership
or limited liability company power and authority, as the case may be, to
execute, deliver and perform the terms and provisions of each of the Documents
to which it is party and has taken all necessary corporate, partnership or
limited liability company action, as the case may be, to authorize the
execution, delivery and performance by it of each of such Documents. Each Credit
Party has duly executed and delivered each of the Documents to which it is
party, and each of such Documents constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.03. No Violation. Neither the execution, delivery or performance by any
Credit Party of the Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any law,
statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of any Credit Party or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which any Credit Party or any of its Subsidiaries is
a party or by which it or any its property or assets is bound or to which it may
be subject, or (iii) will violate any provision of the certificate or articles
of incorporation, certificate of formation, limited liability company agreement
or by-laws (or equivalent organizational documents), as applicable, of any
Credit Party or any of its Subsidiaries.
7.04. Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (x) those
that have otherwise been obtained or made on or prior to the Initial Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date and
(y) filings which are necessary to perfect the security interests created under
the Security Documents, which filings will be made within ten days following the
Initial Borrowing Date), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to be obtained or made by, or
on behalf of, any Credit Party to authorize, or is required to be obtained or
made by, or on behalf of, any Credit Party in connection with, (i) the
execution, delivery and performance of any Document or (ii) the legality,
validity, binding effect or enforceability of any such Document.
7.05. Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections. (a)(i) The audited consolidated balance sheets of the Borrower and
its Subsidiaries for its fiscal years ended on December 31, 1999, December 31,
2000 and December 31, 2001, respectively, and the related audited consolidated
statements of income, cash flows and shareholders' equity of the Borrower and
its Subsidiaries for its fiscal years ended on such dates, copies of which have
33
been furnished to the Lenders prior to the Initial Borrowing Date, present
fairly in all material respects the consolidated financial position of the
Borrower and its Subsidiaries at the dates of such balance sheets and the
consolidated results of the operations of the Borrower and its Subsidiaries for
the periods covered thereby. All interim monthly financial statements furnished
prior to the Initial Borrowing Date pursuant to Section 5.13(d) present fairly
the consolidated results of the operations of the Borrower and its Subsidiaries
for the periods covered thereby. All of the foregoing historical financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied (except, in the case of the aforementioned
interim financial statements, for normal year-end audit adjustment and the
absence of footnotes).
(ii) The Pro Forma Financials of the Borrower for its fiscal years ended on
December 31, 1999, December 31, 2000 and December 31, 2001, a copy of which has
been furnished to the Lenders prior to the Effective Date, presents fairly in
all material respects the pro forma consolidated financial position and results
of operations of the Borrower for such twelve-month period and have been
prepared in accordance with Regulation S-X of the Securities Act.
(b) On and as of the Initial Borrowing Date and after giving effect to the
Transaction and to all Indebtedness (including the Loans) being incurred or
assumed and Liens created by the Credit Parties in connection therewith (i) the
sum of the assets, at a fair valuation, of the Borrower on a stand-alone basis
and of the Borrower and its Subsidiaries taken as a whole will exceed their
respective debts, (ii) each of the Borrower on a stand alone basis and the
Borrower and its Subsidiaries taken as a whole have not incurred and do not
intend to incur, and do not believe that they will incur, debts beyond their
respective ability to pay such debts as such debts mature, and (iii) the
Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a
whole will have sufficient capital with which to conduct their respective
businesses. For purposes of this Section 7.05(b), "debt" means any liability on
a claim, and "claim" means (a) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(c) Except as fully disclosed in the December 31, 2001 financial statements
delivered pursuant to Section 7.05(a), there were as of the Initial Borrowing
Date no liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which either individually or in the aggregate,
could reasonably be expected to be material to the Borrower or any of its
Subsidiaries. As of the Initial Borrowing Date, the Borrower knows of no
reasonable basis for the assertion against it or any of its Subsidiaries of any
liability or obligation of any nature whatsoever that is not fully disclosed in
the December 31, 2001 financial statements delivered pursuant to Section 7.05(a)
or referred to in the immediately preceding sentence which, either individually
or in the aggregate, could reasonably be expected to be material to the Borrower
or any of its Subsidiaries.
34
(d) The Projections delivered to the Administrative Agent and the Lenders
prior to the Initial Borrowing Date have been prepared in good faith and are
based on reasonable assumptions, and there are no statements or conclusions in
the Projections which are based upon or include information known to the
Borrower to be misleading in any material respect or which fail to take into
account material information known to the Borrower regarding the matters
reported therein. On the Initial Borrowing Date, the Borrower believes that the
Projections are reasonable and attainable, it being recognized by the Lenders,
however, that projections as to future events are not to be viewed as facts and
that the actual results during the period or periods covered by the Projections
may differ from the projected results.
(e) After giving effect to the Transaction (but for this purpose assuming
that the Transaction and the related financing had occurred prior to December
31, 2001), since December 31, 2001, there has been no Material Adverse Effect.
7.06. Litigation. There are no actions, suits or proceedings pending or, to
the best knowledge of the Borrower, threatened (i) with respect to the
Transaction or any Document or (ii) that could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.
7.07. True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Documents) for purposes of or in connection with
this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.
7.08. Use of Proceeds; Margin Regulations. (a) All proceeds of the Term
Loans will be used by the Borrower to finance the Acquisition and to make
payments owing under the Distributorship Agreement and the Trademark Purchase
and Assignment Agreement.
(b) All proceeds of the Revolving Loans and the Swingline Loans will be
used for the working capital and general corporate purposes of the Borrower and
its Subsidiaries; provided that up to, but no more than, $10,000,000 of
Revolving Loans and Swingline Loans in the aggregate may be used to effect the
Acquisition, to make payments owing under the Distributorship Agreement and the
Trademark Purchase and Assignment Agreement and to pay the fees and expenses
related to the Transaction.
(c) No part of any Credit Event (or the proceeds thereof) will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
7.09. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has timely filed or caused to be timely filed (taking into account
applicable extensions of time to file) with the appropriate taxing authority all
federal and state income tax returns and all other material tax returns,
35
domestic and foreign (the "Returns") required to be filed by, or with respect to
the income, properties or operations of, the Borrower and/or any of its
Subsidiaries. The Returns accurately reflect in all material respects all
liability for taxes of the Borrower and its Subsidiaries for the periods covered
thereby. Each of the Borrower and each of its Subsidiaries has paid all taxes
and assessments payable by it which have become due, other than those that are
being contested in good faith and adequately disclosed and fully provided for on
the financial statements of the Borrower and its Subsidiaries in accordance with
generally accepted accounting principles. There is no material action, suit,
proceeding, investigation, audit or claim now pending or, to the best knowledge
of the Borrower, threatened by any authority regarding any taxes relating to the
Borrower or any of its Subsidiaries. As of the Initial Borrowing Date, neither
the Borrower nor any of its Subsidiaries has entered into an agreement or waiver
or been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Borrower or
any of its Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of the Borrower or any of its
Subsidiaries not to be subject to the normally applicable statute of
limitations. Neither the Borrower nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code. Neither the Borrower nor any of its Subsidiaries has incurred, nor
will any of them incur, any material tax liability in connection with the
Transaction or any other transactions contemplated hereby (it being understood
that the representation contained in this sentence does not cover any future tax
liabilities of the Borrower or any of its Subsidiaries arising as a result of
the operation of their businesses in the ordinary course of business).
7.10. Compliance with ERISA. Schedule IV sets forth, as of the Initial
Borrowing Date, the name of each Plan. Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including, without limitation, ERISA and the Code; each
Plan (and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
and 501(a) of the Code; neither the Borrower nor any of its ERISA Affiliates has
ever maintained or contributed to, or had any obligation to contribute to (or
borne any liability with respect to) any "employee pension benefit plan," within
the meaning of Section 3(2) of ERISA, that is a "multiemployer plan," within the
meaning of Section 3(37) of ERISA, or that is subject to the minimum funding
standards of Section 412 of the Code or Section 302 of ERISA or subject to Title
IV of ERISA; neither the Borrower nor any of its ERISA Affiliates has ever
maintained or contributed to, or had any obligation to contribute to (or borne
any liability with respect to) any Foreign Pension Plan; all contributions
required to be made with respect to a Plan have been timely made; neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred
any material liability (including any indirect, contingent or secondary
liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4204 or 4212 of ERISA or Section 4975 of the Code or expects to incur any
such material liability under any of the foregoing sections with respect to any
Plan; no condition exists which presents a material risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a material
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, expected or
threatened; each group health plan (as defined in Section 607(1) of ERISA or
36
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of the Borrower, any Subsidiary of the Borrower, or any ERISA
Affiliate has at all times been operated in compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code, except
for any failure to so comply which could not, individually or in the aggregate,
reasonably be expected to result in a material liability of the Borrower or any
Subsidiary of the Borrower; no lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and the Borrower and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
7.11. The Security Documents. (a) The provisions of the Security Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all right,
title and interest of the Credit Parties in the Security Agreement Collateral
described therein, and the Collateral Agent, for the benefit of the Secured
Creditors, has (or within 10 days following the Initial Borrowing Date will
have) a fully perfected security interest in all right, title and interest in
all of the Security Agreement Collateral described therein, subject to no other
Liens other than Permitted Liens. The recordation of (x) the Grant of Security
Interest in U.S. Patents and (y) the Grant of Security Interest in U.S.
Trademarks in the respective form attached to the Security Agreement, in each
case in the United States Patent and Trademark Office, together with filings on
Form UCC-1 made pursuant to the Security Agreement, will create, as may be
perfected by such filings and recordation, a perfected security interest in the
United States trademarks and patents covered by the Security Agreement, and the
recordation of the Grant of Security Interest in U.S. Copyrights in the form
attached to the Security Agreement with the United States Copyright Office,
together with filings on Form UCC-1 made pursuant to the Security Agreement,
will create, as may be perfected by such filings and recordation, a perfected
security interest in the United States copyrights covered by the Security
Agreement.
(b) The security interests created under the Pledge Agreement in favor of
the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors,
constitute perfected security interests in the Pledge Agreement Collateral
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledge
Agreement Collateral under the Pledge Agreement other than with respect to that
portion of the Pledge Agreement Collateral constituting a "general intangible"
under the UCC.
7.12. Properties. All Real Property owned or leased by the Borrower or any
of its Subsidiaries as of the Initial Borrowing Date, and the nature of the
interest therein, is correctly set forth in Schedule III. Each of the Borrower
and each of its Subsidiaries has good and indefeasible title to all material
properties owned by it, including all material property reflected in the most
recent historical balance sheets referred to in Section 7.05(a) (except as sold
or otherwise disposed of since the date of such balance sheet in the ordinary
course of business or as permitted by the terms of this Agreement), free and
clear of all Liens, other than Permitted Liens.
37
7.13. Capitalization. On the Initial Borrowing Date, the authorized capital
stock of the Borrower consists of 40,000,000 shares of common stock, $0.001 par
value, of which 27,626,002 shares are issued and outstanding. All outstanding
shares of capital stock of the Borrower have been duly and validly issued and
are fully paid and non-assessable. The Borrower does not have outstanding any
capital stock or other securities convertible into or exchangeable for its
capital stock or any rights to subscribe for or to purchase, or any options for
the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
7.14. Subsidiaries. As of the Initial Borrowing Date, the Borrower has no
Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule V
correctly sets forth as of the Initial Borrowing Date, the percentage ownership
(direct or indirect) of the Borrower in each class of capital stock or other
equity of its Subsidiaries and also identifies the direct owner thereof.
7.15. Compliance with Statutes, etc. Each of the Borrower and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
7.16. Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.17. Public Utility Holdings Company Act. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holdings Company
Act of 1935, as amended.
7.18. Environmental Matters. (a) Each of the Borrower and each of its
Subsidiaries is in compliance with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the knowledge of the Borrower, threatened Environmental Claims
against the Borrower or any of its Subsidiaries or any Real Property owned,
leased or operated by the Borrower or any of its Subsidiaries (including any
such claim arising out of the ownership, lease or operation by the Borrower or
any of its Subsidiaries of any Real Property formerly owned, leased or operated
by the Borrower or any of its Subsidiaries but no longer owned, leased or
operated by the Borrower or any of its Subsidiaries). There are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of the Borrower or any of its Subsidiaries, or any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries (including
any Real Property formerly owned, leased or operated by the Borrower or any of
its Subsidiaries but no longer owned, leased or operated by the Borrower or any
of its Subsidiaries) or, to the knowledge of the Borrower, any property
adjoining or adjacent to any such Real Property that could be reasonably
expected (i) to form the basis of an Environmental Claim against the Borrower or
38
any of its Subsidiaries or any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries or (ii) to cause any Real Property owned,
leased or operated by the Borrower or any of its Subsidiaries to be subject to
any restrictions on the ownership, lease, occupancy or transferability of such
Real Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated, used, treated
or stored on, or transported to or from, or Released on or from, any Real
Property owned, leased or operated by the Borrower or any of its Subsidiaries
or, to the knowledge of the Borrower, any property adjoining or adjacent to any
Real Property, where such generation, use, treatment, storage, transportation or
Release has violated or could be reasonably expected to violate any applicable
Environmental Law or give rise to an Environmental Claim.
(c) Notwithstanding anything to the contrary in this Section 7.18, the
representations and warranties made in this Section 7.18 shall be untrue only if
the effect of any or all conditions, violations, claims, restrictions, failures
and noncompliances of the types described above could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
7.19. Labor Relations. Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect. There is
(i) no unfair labor practice complaint pending against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the knowledge of
the Borrower, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries and (iii) no union representation question exists with respect to
the employees of the Borrower or any of its Subsidiaries, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.
7.20. Intellectual Property, etc. Each of the Borrower and each of its
Subsidiaries owns or has the right to use all the patents, trademarks, permits,
domain names, service marks, trade names, copyrights, licenses, franchises,
inventions, trade secrets, proprietary information and know-how of any type,
whether or not written (including, but not limited to, rights in computer
programs and databases) and formulas, or rights with respect to the foregoing,
and has obtained assignments of all leases, licenses and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect.
7.21. Indebtedness. Schedule VII sets forth a true and complete list of all
Indebtedness (including Contingent Obligations) of the Borrower and its
Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding
after giving effect to the Transaction, in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any Credit
Party or any of its Subsidiaries which directly or indirectly guarantees such
debt.
39
7.22. Insurance. Schedule VIII sets forth a true and complete listing of
all insurance maintained by the Borrower and its Subsidiaries as of the Initial
Borrowing Date, with the amounts insured (and any deductibles) set forth
therein.
7.23. Representations and Warranties in Other Documents. All
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of the Initial Borrowing Date as if such representations or
warranties were made on and as of such date (it being understood and agreed that
any such representation or warranty which by its terms is made as of a specified
date shall be true and correct in all material respects as of such specified
date).
7.24. Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; etc. Schedule VI attached hereto
contains the exact legal name of the Borrower and each Subsidiary Guarantor, the
type of organization of the Borrower and each Subsidiary Guarantor, whether or
not the Borrower and each Subsidiary Guarantor is a registered organization, the
jurisdiction of organization of the Borrower and each Subsidiary Guarantor, and
the organizational identification number (if any) of the Borrower and each
Subsidiary Guarantor. To the extent that the Borrower or any Subsidiary
Guarantor does not have an organizational identification number on the date
hereof and later obtains one, the Borrower or such Subsidiary Guarantor shall
promptly thereafter notify the Collateral Agent of such organizational
identification number and shall take all actions reasonably satisfactory to the
Collateral Agent to the extent necessary to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby fully
perfected and in full force and effect.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in
each case together with interest thereon), Fees and all other Obligations (other
than indemnities described in Section 13.13 which are not then due and payable)
incurred hereunder and thereunder, are paid in full:
8.01. Information Covenants. The Borrower will furnish to each Lender:
(a) Monthly Reports. Within 30 days after the end of each fiscal month of
the Borrower (commencing with its fiscal month ending on February 28, 2002), the
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal month and the related consolidated statement of income and statement
of cash flows for such fiscal month and for the elapsed portion of the fiscal
year ended with the last day of such fiscal month, in each case setting forth
comparative figures for the corresponding fiscal month in the prior fiscal year
and comparable budgeted figures for such fiscal month as set forth in the
respective budget delivered pursuant to Section 8.01(e), all of which shall be
certified by the chief financial officer or the vice-president finance of the
Borrower that they fairly present in all material respects in accordance with
generally accepted accounting principles the financial condition of the Borrower
and its Subsidiaries as of the dates indicated and the results of their
operations for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes.
(b) Quarterly Financial Statements. Within 45 days after the close of each
of the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the related
40
consolidated statements of income and retained earnings and statement of cash
flows for such quarterly accounting period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly accounting period, in each
case setting forth comparative figures for the corresponding quarterly
accounting period in the prior fiscal year and comparable budgeted figures for
such quarterly accounting period as set forth in the respective budget delivered
pursuant to Section 8.01(e), all of which shall be certified by the chief
financial officer or the vice-president finance of the Borrower that they fairly
present in all material respects in accordance with generally accepted
accounting principles the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their operations for
the periods indicated, subject to normal year-end audit adjustments and the
absence of footnotes, and (ii) management's discussion and analysis of the
important operational and financial developments during such quarterly
accounting period.
(c) Annual Financial Statements. Within 90 days after the close of each
fiscal year of the Borrower, (i) the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statement of cash
flows for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified without qualification or going concern issues by
Xxxxxx Xxxxxxxx or other independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent, together
with a report of such accounting firm stating that in the course of its regular
audit of the financial statements of the Borrower and its Subsidiaries, which
audit was conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or an Event of Default
relating to financial or accounting matters which has occurred and is continuing
or, if in the opinion of such accounting firm such a Default or an Event of
Default has occurred and is continuing, a statement as to the nature thereof,
and (ii) management's discussion and analysis of the important operational and
financial developments during such fiscal year.
(d) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants and management's response thereto.
(e) Budgets. No later than 30 days following the first day of each fiscal
year of the Borrower, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income, sources and uses
of cash and balance sheets for the Borrower and its Subsidiaries on a
consolidated basis) (i) for each of the twelve months of such fiscal year
prepared in detail and (ii) for the two immediately succeeding fiscal years
prepared in summary form, in each case setting forth, with appropriate
discussion, the principal assumptions upon which such budget is based.
(f) Officer's Certificates. At the time of the delivery of the financial
statements provided for in Sections 8.01(a), (b) and (c), a compliance
certificate from the chief financial officer or the vice-president finance of
the Borrower in the form of Exhibit J certifying on behalf of the Borrower that,
(x) to such officer's best knowledge after due inquiry, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of Default
has occurred and is continuing, specifying the nature and extent thereof, which
certificate shall set forth in reasonable detail the calculations required to
41
establish whether the Borrower and its Subsidiaries were in compliance with the
provisions of Sections 4.02, 9.01(x), 9.01(xii), 9.02(iv), 9.04(ii), 9.05(v) and
9.07 through 9.10, inclusive, at the end of such fiscal month, quarter or year,
as the case may be and (y) (i) no changes are required to be made to any of
Schedule VI hereto, Annexes B, C, F, H, I, J and K of the Security Agreement or
Annexes A through F of the Pledge Agreement, in each case so as to make the
information set forth therein accurate and complete as of the date of such
certificate, or (ii) to the extent that such information is no longer accurate
and complete as of such date, list in reasonable detail all information
necessary to make such Schedule and all such Annexes accurate and complete (at
which time such Schedule and/or all such Annexes, as the case may be, shall be
deemed modifies to reflect such information) .
(g) Notice of Default, Litigation and Material Adverse Effect. Promptly,
and in any event within three Business Days after any officer of the Borrower or
any of its Subsidiaries obtains knowledge thereof, notice of (i) the occurrence
of any event which constitutes a Default or an Event of Default, (ii) any
litigation or governmental investigation or proceeding pending against the
Borrower or any of its Subsidiaries (x) which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or (y)
with respect to any Document, (iii) the occurrence of any event which
constitutes a default under, or causes the termination of, any material contract
of the Borrower or any of its Subsidiaries, including, without limitation the
Distributorship Agreement and the Acquisition Agreement or (iv) any other event,
change or circumstance that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports, if
any, which the Borrower or any of its Subsidiaries shall publicly file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders (or any trustee, agent or other representative therefor) of
its material Indebtedness pursuant to the terms of the documentation governing
0such Indebtedness.
(i) Environmental Matters. Promptly after any officer of the Borrower or
any of its Subsidiaries obtains knowledge thereof, notice of one or more of the
following environmental matters to the extent that such environmental matters,
either individually or when aggregated with all other such environmental
matters, could reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financed or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against the Borrower
or any of its Subsidiaries or any Real Property owned, leased or operated
by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries that
(a) results in noncompliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (b) could reasonably be expected
to form the basis of an Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries that could
42
reasonably be expected to cause such Real Property to be subject to any
restrictions on the ownership, lease, occupancy, use or transferability by
the Borrower or any of its Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; provided that in any event the Borrower shall
deliver to each Lender all notices received by the Borrower or any of its
Subsidiaries from any government or governmental agency under, or pursuant
to, CERCLA which identify the Borrower or any of its Subsidiaries as
potentially responsible parties for remediation costs or which otherwise
notify the Borrower or any of its Subsidiaries of potential liability under
CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto.
(j) Payments to either Xxxxx X.X. or AstraZeneca UK Limited. No later than
five days prior to making any payments to either AstraZeneca UK Limited or Xxxxx
X.X. pursuant to either Section 4.01 of the Acquisition Agreement or Section
9.7.1 of the Distributorship Agreement, the Borrower shall (i) give written
notice to the Administrative Agent that such payment will be made and (ii)
provide the Administrative Agent with a certificate from an officer of the
Borrower certifying that after giving pro forma effect to the contingent
payments to the Seller and/or Bayer, as the case may be, the Borrower will be in
compliance with Section 9.10.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request.
8.02. Books, Records and Inspections; Annual Meetings. (a) The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and accounts in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Administrative Agent or
any Lender to visit and inspect, under guidance of officers of the Borrower or
such Subsidiary, any of the properties of the Borrower or such Subsidiary, and
to examine the books of account of the Borrower or such Subsidiary and discuss
the affairs, finances and accounts of the Borrower or such Subsidiary with, and
be advised as to the same by, its and their officers and independent
accountants, all upon reasonable prior notice and at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or any such
Lender may reasonably request. If a Default or an Event of Default has occurred
and is continuing or if access is necessary to preserve or protect the
Collateral as determined by the Administrative Agent, the Borrower shall, and
shall cause each of its Subsidiaries to, provide such access to the
Administrative Agent at all times and without advance notice. Furthermore, so
long as any Default or Event of Default has occurred and is continuing, the
Borrower and each of its Subsidiaries shall provide the Administrative Agent
with access to their suppliers and customers.
43
(b) At a date to be mutually agreed upon between the Administrative Agent
and the Borrower occurring on or prior to the 120th day after the close of each
fiscal year of the Borrower, the Borrower will, at the request of the
Administrative Agent, hold a meeting with all of the Lenders at which meeting
will be reviewed the financial results of the Borrower and its Subsidiaries for
the previous fiscal year and the budgets presented for the current fiscal year
of the Borrower.
8.03. Maintenance of Property; Insurance. (a) The Borrower will, and will
cause each of its Subsidiaries to, (i) keep all property necessary to the
business of the Borrower and its Subsidiaries in good working order and
condition, ordinary wear and tear excepted, (ii) maintain with financially sound
and reputable insurance companies insurance on all such property and against all
such risks as is consistent and in accordance with industry practice for
companies similarly situated owning similar properties and engaged in similar
businesses as the Borrower and its Subsidiaries and (iii) furnish to the
Administrative Agent, upon its request therefor, full information as to the
insurance carried. In addition to the requirements of the immediately preceding
sentence, the Borrower will at all times cause insurance of the types described
in Schedule VIII to be maintained (with the same scope of coverage as that
described in Schedule VIII) at levels which are consistent with their practices
immediately before the Initial Borrowing Date. Such insurance shall include
physical damage insurance on all real and personal property (whether now owned
or hereafter acquired) on an all risk basis and business interruption insurance.
The provisions of this Section 8.03 shall be deemed supplemental to, but not
duplicative of, the provisions of any Security Documents that require the
maintenance of insurance. In addition to the foregoing, the Borrower
acknowledges and agrees that (x) the Administrative Agent has the right, on an
annual basis, to review the insurance then being maintained by the Borrower and
its Subsidiaries and to require the Borrower and its Subsidiaries to increase
their levels of coverage from that which then exists to the extent that the
Administrative Agent has a reasonable basis to require same and (y) they will,
within 30 days following such a request by the Administrative Agent, obtain such
increased insurance coverage.
(b) The Borrower will, and will cause each of its Subsidiaries to, at all
times keep its property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by the Borrower and/or such
Subsidiaries) (i) shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee and/or additional insured), (ii) shall state
that such insurance policies shall not be canceled without at least 30 days'
prior written notice thereof by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the other Secured
Creditors, and (iv) shall be deposited with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain
insurance in accordance with this Section 8.03, or if the Borrower or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Administrative Agent shall have the right (but shall
be under no obligation) to procure such insurance and the Borrower agrees to
reimburse the Administrative Agent for all reasonable costs and expenses of
procuring such insurance.
44
8.04. Existence; Franchises. The Borrower will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses, permits, copyrights, trademarks and patents; provided, however, that
nothing in this Section 8.04 shall prevent (i) sales of assets and other
transactions by the Borrower or any of its Subsidiaries in accordance with
Section 9.02 or (ii) the withdrawal by the Borrower or any of its Subsidiaries
of its qualification as a foreign corporation, partnership or limited liability
company, as the case may be, in any jurisdiction if such withdrawal could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.05. Compliance with Statutes, etc. The Borrower will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
8.06. Compliance with Environmental Laws. (a) The Borrower will comply, and
will cause each of its Subsidiaries to comply, with all Environmental Laws and
permits applicable to, or required by, the ownership, lease or use of its Real
Property now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries, except such noncompliances as could not, either individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect,
and will promptly pay or cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental
Laws. Neither the Borrower nor any of its Subsidiaries will generate, use,
treat, store, Release or dispose of, or permit the generation, use, treatment,
storage, Release or disposal of Hazardous Materials on any Real Property now or
hereafter owned, leased or operated by the Borrower or any of its Subsidiaries,
or transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except for Hazardous Materials generated, used, treated,
stored, Released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and as required in
connection with the normal operation, use and maintenance of the business or
operations of the Borrower or any of its Subsidiaries.
45
(b) (i) After the receipt by the Administrative Agent or any Lender of any
notice of the type described in Section 8.01(i), (ii) at any time that the
Borrower or any of its Subsidiaries are not in compliance with Section 8.06(a)
or (iii) in the event that any Event of Default is in existence, the Borrower
will provide, at the sole expense of the Borrower and at the request of the
Administrative Agent, an environmental site assessment report concerning any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with such Hazardous Materials on such Real Property. If the Borrower fails to
provide the same within 30 days after such request was made, the Administrative
Agent may order the same, the cost of which shall be borne by the Borrower, and
the Borrower shall grant and hereby grant to the Administrative Agent and the
Lenders and their respective agents access to such Real Property and
specifically grant the Administrative Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment at any reasonable time upon reasonable notice to the Borrower, all at
the sole expense of the Borrower.
8.07. ERISA. As soon as possible and, in any event, within ten (10) days
after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrower
will deliver to each of the Lenders a certificate of the chief financial officer
or the vice president-finance of the Borrower setting forth the full details as
to such occurrence and the action, if any, that the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given or filed by the Borrower, such Subsidiary, the
Plan administrator or such ERISA Affiliate to or with the PBGC or any other
governmental agency, or a Plan participant and any notices received by the
Borrower, such Subsidiary or such ERISA Affiliate from the PBGC or any other
government agency, or a Plan participant with respect thereto: that a Reportable
Event has occurred (except to the extent that the Borrower has previously
delivered to the Lenders a certificate and notices (if any) concerning such
event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect to such Plan within the
following 30 days; that an accumulated funding deficiency, within the meaning of
Section 412 of the Code or Section 302 of ERISA, has been incurred or an
application may be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made; that a Plan
has been or may be terminated, reorganized, partitioned or declared insolvent
under Title IV of ERISA; that a Plan has an Unfunded Current Liability; that
proceedings may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA; that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate will or may incur any material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code; or that the Borrower
or any Subsidiary of the Borrower may incur any material liability for retiree
benefits pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by the severance pay Plans of the Borrower or
any of its Subsidiaries or Section 601 of ERISA) or any Plan or any Foreign
Pension Plan. The Borrower will deliver to each of the Lenders copies of any
records, documents or other information that must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA. At the request of any
Lender, the Borrower will also deliver to such Lender a complete copy of the
annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Lenders
46
pursuant to the first sentence hereof, copies of annual reports and any records,
documents or other information required to be furnished to the PBGC, and any
material notices received by the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate with respect to any Plan or Foreign Pension Plan or received
from any governmental agency or plan administrator or sponsor or trustee with
respect to any multiemployer plan (as defined in Section 4001(a)(3) of ERISA),
shall be delivered to the Lenders no later than ten (10) days after the date
such records, documents and/or information has been furnished to the PBGC or any
other governmental agency or such notice has been received by the Borrower, the
respective Subsidiary or the ERISA Affiliate, as applicable. The Borrower will
ensure, and cause each of its applicable Subsidiaries to ensure, that all
Foreign Pension Plans administered by it or into which it makes payments obtains
or retains (as applicable) registered status under and as required by applicable
law and is administered in a timely manner in all respects in compliance with
all applicable laws except where the failure to do any of the foregoing could
not, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.08. End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i)
each of its, and each of its Subsidiaries', fiscal years to end on December 31
of each year and (ii) each of its, and each of its Subsidiaries', fiscal
quarters to end on dates which are consistent with a fiscal year end as
described above.
8.09. Performance of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, loan agreement or credit agreement and
each other agreement, contract or instrument by which it is bound, except such
non-performances as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
8.10. Payment of Taxes. The Borrower will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Borrower or any of its Subsidiaries not otherwise
permitted under Section 9.01(i); provided that neither the Borrower nor any of
its Subsidiaries shall be required to pay any such tax, assessment, charge, levy
or claim which is being contested in good faith and by proper proceedings if it
has maintained adequate reserves with respect thereto in accordance with
generally accepted accounting principles.
8.11. Use of Proceeds. The Borrower will use the proceeds of the Loans only
as provided in Section 7.08.
8.12. Additional Security; Further Assurances; etc. (a) The Borrower will,
and will cause each of the other Credit Parties that are Subsidiaries of the
Borrower to, grant to the Collateral Agent for the benefit of the Secured
Creditors security interests and Mortgages in such assets and properties of the
Borrower and such other Credit Parties that are Subsidiaries of the Borrower as
are not covered by the original Security Documents and as may be reasonably
requested from time to time by the Administrative Agent or the Required Lenders
(collectively, the "Additional Security Documents"). All such security interests
and Mortgages shall be granted pursuant to documentation reasonably satisfactory
47
in form and substance to the Administrative Agent and shall constitute valid and
enforceable perfected security interests and Mortgages superior to and prior to
the rights of all third Persons and subject to no other Liens except for
Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall have been paid in full.
(b) The Borrower will, and will cause each of the other Credit Parties that
are Subsidiaries of the Borrower to, at the expense of the Borrower, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports, landlord waivers, bailee
agreements, control agreements and other assurances or instruments and take such
further steps relating to the Collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, the
Borrower will, and will cause the other Credit Parties that are Subsidiaries of
the Borrower to, deliver to the Collateral Agent such opinions of counsel, title
insurance and other related documents as may be reasonably requested by the
Administrative Agent to assure itself that this Section 8.12 has been complied
with.
(c) If the Administrative Agent or the Required Lenders reasonably
determine that they are required by law or regulation to have appraisals
prepared in respect of any Real Property of the Borrower and its Subsidiaries
constituting Collateral, the Borrower will, at their own expense, provide to the
Administrative Agent appraisals which satisfy the applicable requirements of the
Real Estate Appraisal Reform Amendments of the Financial Institution Reform,
Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be
in form and substance reasonably satisfactory to the Administrative Agent.
(d) The Borrower agrees that each action required by clauses (a) through
(c) of this Section 8.12 shall be completed as soon as possible, but in no event
later than 75 days after such action is requested to be taken by the
Administrative Agent or the Required Lenders; provided that, in no event will
the Borrower or any of its Subsidiaries be required to take any action, other
than using its best efforts, to obtain consents from third parties with respect
to its compliance with this Section 8.12.
8.13. Ownership of Subsidiaries; etc. The Borrower will, and will cause
each of its Subsidiaries to, own 100% of the capital stock and other equity
interests of each of their Subsidiaries (other than directors' qualifying shares
to the extent required by applicable law).
8.14. Corporate Separateness. Each Credit Party will, and will cause each
of its Subsidiaries to, satisfy customary corporate, limited liability company
or partnership formalities, as the case may be, including the holding of regular
board of directors' and shareholders' meetings or action by directors or
shareholders without a meeting and the maintenance of corporate, limited
liability company or partnership, as the case may be, offices and records.
Finally, neither the Borrower nor any of its Subsidiaries will take any action,
or conduct its affairs in a manner which is likely to result in the corporate
48
limited liability company or partnership, as the case may be, existence of the
Borrower or any of its Subsidiaries being ignored, or in the assets and
liabilities of the Borrower or any of its Subsidiaries being substantively
consolidated with those of the Borrower and its other Subsidiaries in a
bankruptcy, reorganization or other insolvency proceeding.
8.15. Landlord Waivers. The Borrower will use its reasonable commercial
efforts to obtain and deliver to the Administrative Agent fully executed
landlord waivers, as requested by the Administrative Agent prior to the Initial
Borrowing Date, as promptly as possible after the Initial Borrowing Date.
SECTION 9. Negative Covenants. The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in
each case, together with interest thereon), Fees and all other Obligations
(other than any indemnities described in Section 13.13 which are not then due
and payable) incurred hereunder and thereunder, are paid in full:
9.01. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute; provided that the provisions of this
Section 9.01 shall not prevent the creation, incurrence, assumption or existence
of the following (Liens described below are herein referred to as "Permitted
Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or levies
not yet due or Liens for taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the Borrower or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's and mechanics' liens and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of the Borrower's or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of the Borrower or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are listed,
and the property subject thereto described, in Schedule IX but only to the
respective date, if any, set forth in such Schedule IX for the removal,
replacement and termination of any such Liens, plus renewals, replacements and
extensions of such Liens to the extent set forth on such Schedule IX, provided
that (x) the aggregate principal amount of the Indebtedness, if any, secured by
such Liens does not increase from that amount outstanding at the time of any
such renewal, replacement or extension and (y) any such renewal, replacement or
extension does not encumber any additional assets or properties of the Borrower
or any of its Subsidiaries;
49
(iv) Liens created pursuant to the Security Documents;
(v) licenses, sublicenses, leases or subleases granted to other Persons not
materially interfering with the conduct of the business of the Borrower or any
of its Subsidiaries;
(vi) Liens upon assets of the Borrower or any of its Subsidiaries subject
to Capitalized Lease Obligations to the extent such Capitalized Lease
Obligations are permitted by Section 9.04(ii), provided that (x) such Liens only
serve to secure the payment of Indebtedness arising under such Capitalized Lease
Obligation and (y) the Lien encumbering the asset giving rise to the Capitalized
Lease Obligation does not encumber any other asset of the Borrower or any
Subsidiary of the Borrower;
(vii) Liens placed upon equipment or machinery acquired after the Initial
Borrowing Date and used in the ordinary course of business of the Borrower or
any of its Subsidiaries and placed at the time of the acquisition thereof by the
Borrower or such Subsidiary or within 90 days thereafter to secure Indebtedness
incurred to pay all or a portion of the purchase price thereof or to secure
Indebtedness incurred solely for the purpose of financing the acquisition of any
such equipment or machinery or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount, provided that (x) the
Indebtedness secured by such Liens is permitted by Section 9.04(ii) and (y) in
all events, the Lien encumbering the equipment or machinery so acquired does not
encumber any other asset of the Borrower or such Subsidiary;
(viii) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case not
securing Indebtedness and not materially interfering with the conduct of the
business of the Borrower or any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into in the ordinary course of business;
(x) Liens arising out of the existence of judgments or awards in respect of
which the Borrower or any of its Subsidiaries shall in good faith be prosecuting
an appeal or proceedings for review and in respect of which there shall have
been secured a subsisting stay of execution pending such appeal or proceedings,
provided that the aggregate amount of all cash and the fair market value of all
other property subject to such Liens does not exceed $1,000,000 at any time
outstanding;
(xi) statutory and common law landlords' liens under leases to which the
Borrower or any of its Subsidiaries is a party;
(xii) Liens (other than Liens imposed under ERISA) incurred in the ordinary
course of business in connection with workers compensation claims, unemployment
insurance and social security benefits and Liens securing the performance of
bids, tenders, leases and contracts in the ordinary course of business,
statutory obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business and consistent with
50
past practice (exclusive of obligations in respect of the payment for borrowed
money), provided that the aggregate amount of all cash and the fair market value
of all other property subject to all Liens permitted by this clause (xii) shall
not at any time exceed $1,000,000; and
(xiii) Permitted Encumbrances.
In connection with the granting of Liens of the type described in clauses (vi)
and (vii) of this Section 9.01 by the Borrower of any of its Subsidiaries, the
Administrative Agent and the Collateral Agent shall be authorized to take any
actions deemed reasonably appropriate by it in connection therewith (including,
without limitation, by executing appropriate lien releases or lien subordination
agreements in favor of the holder or holders of such Liens, in either case
solely with respect to the item or items of equipment or other assets subject to
such Liens).
9.02. Consolidation, Merger, Purchase or Sale of Assets, etc. The Borrower
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any partnership, joint venture, or
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of all or any part of its property or assets, or enter into any
sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment in the
ordinary course of business) of any Person (or agree to do any of the foregoing
at any future time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may make sales of inventory
in the ordinary course of business;
(iii) Investments may be made to the extent permitted by Section 9.05;
(iv) the Borrower and its Subsidiaries may sell assets (other than the
capital stock or other equity interests of any Subsidiary), so long as (v) no
Default or Event of Default then exists or would result therefrom, (w) each such
sale is in an arm's-length transaction and the Borrower or the respective
Subsidiary receives at least fair market value (as determined in good faith by
the Borrower or such Subsidiary, as the case may be), (x) the consideration
received by the Borrower or such Subsidiary consists solely of cash and is paid
at the time of the closing of such sale, (y) the Net Sale Proceeds therefrom are
applied and/or reinvested as (and to the extent) required by Section 4.02(f) and
(z) the aggregate amount of the proceeds received from all assets sold pursuant
to this clause (iv) shall not exceed $1,000,000 in any fiscal year of the
Borrower;
(v) each of the Borrower and its Subsidiaries may lease (as lessee) or
license (as licensee) real or personal property (so long as any such lease or
license does not create a Capitalized Lease Obligation except to the extent
permitted by Section 9.04(iii));
(vi) each of the Borrower and its Subsidiaries may sell or discount, in
each case without recourse and in the ordinary course of business and for cash
at fair market value (as determined by the Borrower in good faith), accounts
receivable arising in the ordinary course of business, but only in connection
51
with the compromise or collection thereof and not as part of any financing
transaction, provided that the aggregate amount of such sales shall not exceed
$1,000,000 in any fiscal year of the Borrower;
(vii) each of the Borrower and its Subsidiaries may grant licenses,
sublicenses, leases or subleases to other Persons not materially interfering
with the conduct of the business of the Borrower or any of its Subsidiaries, in
each case so long as no such grant otherwise affects the Collateral Agent's
security interest in the asset or property subject thereto; and
(viii) the Acquisition shall be permitted in accordance with the terms of
the Acquisition Documents.
To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02 (other than to the Borrower or a Subsidiary
thereof), such Collateral shall be sold free and clear of the Liens created by
the Security Documents, and the Administrative Agent and the Collateral Agent
shall be authorized to take any actions deemed appropriate in order to effect
the foregoing.
9.03. Dividends. The Borrower will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that any Subsidiary of the Borrower
may pay cash Dividends to the Borrower or to any Wholly-Owned Subsidiary of the
Borrower.
9.04. Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other Credit
Documents; and
(ii) Indebtedness of the Borrower and its Subsidiaries evidenced by
Capitalized Lease Obligations (to the extent permitted pursuant to Section 9.07)
and purchase money Indebtedness described in Section 9.01(vii), provided that in
no event shall the sum of the aggregate outstanding principal amount of all
Capitalized Lease Obligations and purchase money Indebtedness permitted by this
clause (iii) exceed (x) at any time prior to the Term Loan Satisfaction Date
$1,000,000 or (y) at any time on or after the Term Loan Satisfaction Date,
$5,000,000.
9.05. Advances, Investments and Loans. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents
(each of the foregoing an "Investment" and, collectively, "Investments"), except
that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivable owing to any of them, if created or acquired in the ordinary course
52
[***] Confidential Treatment Requested
of business and payable or dischargeable in accordance with customary trade
terms of the Borrower or such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and Cash
Equivalents, provided that at any time Revolving Loans or Swingline Loans are
outstanding, the aggregate amount of cash and Cash Equivalents permitted to be
held by the Borrower and its Subsidiaries shall not exceed $5,000,000 for any
period of five consecutive Business Days;
(iii) the Borrower and its Subsidiaries may hold the Investments held by
them on the Initial Borrowing Date and described on Schedule X, provided that
any additional Investments made with respect thereto shall be permitted only if
permitted under the other provisions of this Section 9.05;
(iv) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and advances to their
officers and employees for moving, relocation and travel expenses and other
similar expenditures, in each case in the ordinary course of business in an
aggregate amount not to exceed $1,000,000 at any time (determined without regard
to any write-downs or write-offs of such loans and advances); and
(vi) the Borrower may make loans to [***], and to the extent required by,
the [***], so long as no Default or Event of Default exits both before and after
giving effect to such loans; provided that prior to the Term Loan Satisfaction
Date, the aggregate principal amount of such loans shall not exceed $[***] at
any time outstanding and provided further that the aggregate principal amount of
such loans shall at no time exceed the amount required to be made by the [***].
9.06. Transactions with Affiliates. The Borrowers will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions with any Affiliate of the Borrower or any of its
Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except that (i) Dividends may be paid to the extent provided in Section 9.03 and
(ii) customary fees may be paid to non-officer directors of the Borrower and its
Subsidiaries.
9.07. Capital Expenditures. (a) The Borrower will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, except that during
any fiscal year of the Borrower (taken as one accounting period), the Borrower
and its Subsidiaries may make Capital Expenditures so long as the aggregate
amount of all such Capital Expenditures does not exceed in any fiscal year of
the Borrower $500,000.
53
(b) In addition to the foregoing, at any time and from time to time after
the Term Loan Satisfaction Date, the Borrower and its Subsidiaries may make
additional Capital Expenditures, so long as the aggregate amount of Capital
Expenditures made by the Borrower and the Subsidiary pursuant to this clause (b)
does not exceed $1,000,000.
(c) In addition to the foregoing, the Borrower and its Subsidiaries may
make Capital Expenditures with the amount of Net Sale Proceeds received by the
Borrower or any of its Subsidiaries from any Asset Sale so long as such Net Sale
Proceeds are reinvested within 90 days following the date of such Asset Sale,
but only to the extent that such Net Sale Proceeds are not otherwise required to
be applied to repay Loans pursuant to Section 4.02(f).
(d) In addition to the foregoing, the Borrower or any of its Subsidiaries
may make Capital Expenditures with the amount of Net Recovery Event Proceeds
received by the Borrower or any of its Subsidiaries from any Recovery Event so
long as such Net Recovery Event Proceeds are used to replace or restore any
properties or assets in respect of which such Net Recovery Event Proceeds were
paid within 180 days following the date of receipt of such Net Recovery Event
Proceeds from such Recovery Event, but only to the extent that such Net Recovery
Event Proceeds are not otherwise required to be applied to repay Term Loans
pursuant to Section 4.02(g).
9.08. Consolidated Interest Coverage Ratio. The Borrower will not permit
the Consolidated Interest Coverage Ratio for any Test Period ending on or after
September 30, 2002 to be less than 5.00:1.00.
9.09. Minimum Consolidated EBITDA. (a) The Borrower will not permit
Consolidated EBITDA for any Interim Test Period ending on the last day of a
calendar month set forth below to be less than the amount set forth opposite
such fiscal month below:
Calendar Month Ended Amount
-------------------- ------
April 30, 2002 $ 6,864,000
May 31, 2002 $10,096,000
June 30, 2002 $12,993,000
July 31, 2002 $16,050,000
August 31, 2002 $20,089,000
(b) The Borrower will not permit Consolidated EBITDA for any Test Period
ending on the last day of a fiscal quarter of the Borrower set forth below to be
less than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter
Ending Closest To Amount
September 30, 2002 $23,566,000
December 31, 2002 $39,386,000
March 31, 2003 $48,303,000
54
[***] Confidential Treatment Requested
June 30, 2003 $50,959,000
September 30, 2003 $54,435,000
December 31, 2003 $53,616,000
March 31, 2004 $56,343,000
June 30, 2004 $58,994,000
September 30, 2004 $62,170,000
December 31, 2004 $66,505,000
9.10. Leverage Ratio. The Borrower will not permit the Leverage Ratio at
any time after September 30, 2002 to be greater than 1.00:1.00.
9.11. Modification of Certificate of Incorporation, By-Laws and Certain
Other Agreements, etc. The Borrower will not, and will not permit any of its
Subsidiaries to:
(i) amend, modify or change its certificate or articles of incorporation
(including, without limitation, by the filing or modification of any certificate
or articles of designation), certificate of formation, limited liability company
agreement or by-laws (or the equivalent organizational documents), as
applicable, or any agreement entered into by it with respect to its capital
stock or other equity interests (including any Shareholders' Agreement), or
enter into any new agreement with respect to its capital stock or other equity
interests, unless such amendment, modification, change or other action
contemplated by this clause (i) could not reasonably be expected to be adverse
to the interests of the Lenders in any material respect;
(ii) amend, modify or change any term or provision of the Acquisition
Agreement, the Distributorship Agreement, the Trademark Purchase and Assignment
Agreement or any of the [***] unless such amendment, modification or change is
approved in advance by the Administrative Agent and same could not reasonably be
expected to be adverse to the interests of the Lenders in any material respect;
or
(iii) make any voluntary, optional or mandatory payment or prepayment in
respect of any Indebtedness of the Borrower or its Subsidiaries, except as
otherwise permitted by this Agreement, or amend, modify, or permit the amendment
or modification of, any provision of any agreement evidencing any such
Indebtedness, except for such amendments or modifications that could not
reasonably be expected to be adverse to the interest of the Lenders in any
material respect.
9.12. Limitation on Certain Restrictions on Subsidiaries. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Subsidiary to (a) pay dividends or
make any other distributions on its capital stock or any other interest or
participation in its profits owned by the Borrower or any of its Subsidiaries,
or pay any Indebtedness owed to the Borrower or any of its Subsidiaries, (b)
55
make loans or advances to the Borrower or any of its Subsidiaries or (c)
transfer any of its properties or assets to the Borrower or any of its
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing any leasehold interest of the Borrower or any of its
Subsidiaries, (iv) except where the existence of such provision causes or may be
reasonably believed to cause a Material Adverse Effect, customary provisions
restricting assignment of any licensing agreement (in which the Borrower or any
of its Subsidiaries is the licensee) or other contract entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business, (v)
restrictions on the transfer of any asset pending the close of the sale of such
asset, and (vi) restrictions on the transfer of any asset subject to a Lien
permitted by Section 9.01(iii), (vi) or (vii).
9.13. Limitation on Issuance of Capital Stock. (a) The Borrower will not
issue (i) any preferred stock or other preferred equity interests , other than
Qualified Preferred Stock, or (ii) any redeemable common stock or other
redeemable common equity interests, other than common stock or other redeemable
common equity interests that is redeemable at the sole option of the Borrower or
such Subsidiary, as the case may be.
(b) The Borrower will not permit any of its Subsidiaries to issue any
capital stock or other equity interests (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock or other equity interests, except (i) for transfers and
replacements of then outstanding shares of capital stock or other equity
interests, (ii) for stock splits, stock dividends and issuances which do not
decrease the percentage ownership of the Borrower or any of its Subsidiaries in
any class of the capital stock or other equity interests of such Subsidiary,
(iii) to qualify directors to the extent required by applicable law or (iv) for
any issuance of stock or other equity interests by any Subsidiary of the
Borrower to the Borrower or a Wholly-Owned Subsidiary of the Borrower.
9.14. Business; etc. The Borrower will not, and will not permit any of its
Subsidiaries to, engage in any business other than the businesses engaged in by
Borrower and its Subsidiaries as of the Initial Borrowing Date and reasonable
extensions thereof.
9.15. Limitation on Creation of Subsidiaries. The Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Initial Borrowing Date any Subsidiary. The Borrower hereby acknowledges and
agrees that, to the extent the Required Lenders amend or waive the provisions of
this Section 9.15 to permit the Borrower to establish, create or acquire any new
Subsidiary after the Initial Borrowing Date, the Borrower will (i) pledge all of
the capital stock of such new Subsidiary to the Collateral Agent pursuant to the
terms and conditions of the Pledge Agreement, (ii) cause such new Subsidiary to
enter into the Subsidiaries Guaranty and to execute and deliver to the
Collateral Agent counterparts of the Security Agreement and Pledge Agreement,
(iii) to the extent required by Section 8.12, cause such new Subsidiary to enter
into such Additional Security Documents as the Administrative Agent or the
Required Lenders may require and (iv) cause such new Subsidiary to execute and
deliver all other relevant documentation (including opinions of counsel) of the
type described in Section 5 as such new Subsidiary would have had to deliver if
it were a Credit Party on the Initial Borrowing Date.
9.16. Change of Legal Names; Type of Organization (and Whether a Registered
Organization; Jurisdiction of Organization etc. Neither the Borrower nor any
56
Subsidiary Guarantor shall change its legal name, its type of organization, its
status as a registered organization (in the case of a registered organization),
its jurisdiction of organization, its location, or its organizational
identification number (if any), except that any such changes shall be permitted
(so long as such changes are not in violation of the applicable requirements of
the Security Documents and so long as same do not involve (x) a registered
organization ceasing to constitute same or (y) the Borrower or any Subsidiary
Guarantor changing its jurisdiction of organization or location from the United
States or a State thereof to a jurisdiction of organization or location, as the
case may be, outside the United States or a State thereof) if (i) it shall have
given to the Collateral Agent not less than 15 days' prior written notice of
each change to the information listed on Schedule VI (as adjusted for any
subsequent changes thereto previously made in accordance with this sentence),
together with a supplement to Schedule VI which shall correct all information
contained therein for the Borrower or the respective Subsidiary Guarantor, and
(ii) in connection with the respective such change or changes, it shall have
taken all action reasonably requested by the Collateral Agent to maintain the
security interests of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
SECTION 10. Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
10.01. Payments. The Borrower shall (i) default in the payment when due of
any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any interest on any Loan or Note, any Unpaid Drawing or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
10.02. Representations, etc. Any representation, warranty or statement made
or deemed made by any Credit Party herein or in any other Credit Document or in
any certificate delivered to the Administrative Agent or any Lender pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
10.03. Covenants. The Borrower or any of its Subsidiaries shall (i) default
in the due performance or observance by it of any term, covenant or agreement
contained in Section 8.01(g), 8.08, 8.11 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement or in any other Credit Document (other than those
set forth in Sections 10.01 and 10.02) and such default described in this clause
(ii) shall continue unremedied for a period of 30 days after written notice
thereof to the defaulting party by the Administrative Agent or the Required
Lenders; or
10.04. Default Under Other Agreements. (i) The Borrower or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in an instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
57
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity or (ii) any Indebtedness (other than the
Obligations) of the Borrower or any of its Subsidiaries shall be declared to be
(or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an Event of Default under this
Section 10.04 unless the aggregate principal amount of all Indebtedness as
described in preceding clauses (i) and (ii) is at least $1,000,000; or
10.05. Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate, limited liability company or similar action is
taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or the Borrower or any Subsidiary becomes unable or admits
in writing its inability or fails generally to pay its debts as they become due;
or
10.06. ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans, a "default" within the meaning of
58
Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any applicable
law, rule or regulation is adopted, changed or interpreted, or the
interpretation or administration thereof is changed, in each case after the date
hereof, by any governmental authority or agency or by any court (a "Change of
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law, with respect to or otherwise affecting any Plan; (b) there shall result
from any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, either individually and/or in
the aggregate, has had, or could reasonably be expected to have, in the opinion
of the Required Lenders, a Material Adverse Effect; or
10.07. Security Documents. Any of the Security Documents shall cease to be
in full force and effect, or shall cease to give the Collateral Agent for the
benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral, in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.01), and subject to no other Liens (except as
permitted by Section 9.01), or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document and such default
shall continue beyond the period of grace, if any, specifically applicable
thereto pursuant to the terms of such Security Document; or
10.08. Guaranties. Any Guaranty or any provision thereof shall cease to be
in full force or effect as to any Guarantor, or any Guarantor or any Person
acting for or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under the Guaranty to which it is a party or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Guaranty to which it is a party; or
10.09. Judgments. One or more judgments or decrees shall be entered against
the Borrower or any Subsidiary of the Borrower involving in the aggregate for
the Borrower and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments equals or exceeds $1,000,000; or
10.10. Change of Control. A Change of Control shall occur;
10.11. Equity Financing. The Borrower shall not have received Net Equity
Proceeds in an aggregate amount of at least $30,000,000 from one or more
issuances of equity after the Initial Borrowing Date and on or before the date
which occurs three calendar months after the Initial Borrowing Date or shall not
have applied same as a mandatory repayment of outstanding principal of Term
Loans; or
10.12. Distributorship Agreement. The Distributorship Agreement or any
provision thereof shall cease to be in full force or effect as to either Xxxxx
X.X. or the Borrower, or Xxxxx X.X. or the Borrower shall deny or disaffirm
their obligations under the Distributorship Agreement or Xxxxx X.X. or the
Borrower shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Distributorship Agreement;
59
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent may, or upon the written
request of the Required Lenders shall, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Lender or the holder of any Note to enforce its claims
against any Credit Party (provided that, if an Event of Default specified in
Section 10.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon all
Commitments of each Lender shall forthwith terminate immediately and any
Commitment Commission shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter of Credit
which may be terminated in accordance with its terms; (iv) direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower, it will pay) to the Collateral Agent at the Payment Office such
additional amount of cash or Cash Equivalents, to be held as security by the
Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrower and then outstanding; (v) enforce,
as Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents; and (vi) apply any cash collateral held by the
Administrative Agent pursuant to Section 4.02 to the repayment of the
Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01. Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined): "Acquisition" shall mean the
acquisition by the Borrower of AstraZeneca UK Limited's rights in, and relating
to, Sular (including without limitation all assets and licenses), a drug
manufactured by Xxxxx X.X.
"Acquisition Agreement" shall mean that certain Asset Purchase Agreement
dated as of February 12, 2002 by and between AstraZeneca UK Limited and the
Borrower as amended, modified or supplemented from time to time, in accordance
with the terms hereof and thereof.
"Acquisition Documents" shall mean the Acquisition Agreement and all other
agreements and documents relating to the Acquisition.
"Additional Security Documents" shall have the meaning provided in Section
8.12.
"Administrative Agent" shall mean BTCo, in its capacity as Administrative
Agent for the Lenders hereunder, and shall include any successor to the
Administrative Agent appointed pursuant to Section 12.09. Without limiting the
foregoing, it is understood and agreed that, for purposes of Section 12 and
13.01 of this Agreement, the term Administrative Agent shall also include (x)
60
BTCo in its capacity as Collateral Agent pursuant to the Security Documents and
(y) Deutsche Banc Alex. Xxxxx Inc. as Lead Arranger and Book Manager in
connection with this Agreement and the syndication hereof.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. For the purposes of Section 9.06, a Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities having ordinary
voting power for the election of directors (or equivalent governing body) of
such Person or (ii) to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that neither the
Administrative Agent nor any Lender (nor any Affiliate thereof) shall be
considered an Affiliate of the Borrower or any Subsidiary thereof.
"Agreement" shall mean this Credit Agreement, as modified, supplemented,
amended, restated (including any amendment and restatement hereof), extended or
renewed from time to time.
"Applicable Commitment Fee Percentage" shall mean (x) prior to the Term
Loan Satisfaction Date, 3/4 of 1% and (y) on and after the Term Loan
Satisfaction Date 1/2 of 1%.
"Applicable Margin" initially shall mean a percentage per annum equal to,
in the case of (x) Term Loans (A) maintained as Eurodollar Loans, 3.75% and (B)
maintained as Base Rate Loans, 2.75%; and (y) in the case of Revolving Loans
maintained as (A) Eurodollar Loans, 3.25% and (B) maintained as Base Rate Loans,
2.25%; provided that (x) each Applicable Margin as set forth above shall
increase by 0.50% on the three month anniversary of the Initial Borrowing Date
unless all Term Loans have theretofore been repaid in full and (y) after the
Term Loan Satisfaction Date, from and after any Start Date to and including the
corresponding End Date, the Applicable Margin for Revolving Loans shall be the
respective percentage per annum set forth below under the respective Type of
Loans and opposite the respective Level (i.e., Xxxxx 0, Xxxxx 0, Xxxxx 0 or
Level 4, as the case may be) indicated to have been achieved on the applicable
Test Date of such Start Date (as shown in the respective officer's certificate
delivered pursuant to Section 8.01(f) or the first proviso below):
------- -------------------------------------------- ---------------- ----------
Revolving Revolving
Loans Loans
maintained as maintained
Eurodollar as Base
Level Leverage Ratio Loans Rate Loans
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
1 Less than 1.75:1.00 2.75% 1.75%
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
2 Greater than or equal to 1.75:1.00 but 3.00% 2.00%
less than 2.25:1.00
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
3 Greater than or equal to 2.25:1.00 but 3.25% 2.25%
less than 2.75:1.00
------- -------------------------------------------- ---------------- ----------
------- -------------------------------------------- ---------------- ----------
4 Greater than or equal to 2.75:1.00 3.50% 2.50%
------- -------------------------------------------- ---------------- ----------
61
; provided, however, that if the Borrower fails to deliver the financial
statements required to be delivered pursuant to Section 8.01(b) or (c)
(accompanied by the officer's certificate required to be delivered pursuant to
Section 8.01(f) showing the applicable Leverage Ratio on the relevant Test Date)
on or prior to the respective date required by such Sections, then Level 4
pricing shall apply until such time, if any, as the financial statements
required as set forth above and the accompanying officer's certificate have been
delivered showing the pricing for the respective Margin Reduction Period is at
Level below Level 4 (it being understood that, in the case of any late delivery
of the financial statements and officer's certificate as so required, any
reduction in the Applicable Margin shall apply only from and after the date of
the delivery of the complying financial statements and officer's certificate);
provided further, that Level 4 pricing shall apply at all times when any Default
or Event of Default is in existence.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person (including by way of
redemption by such Person), other than to the Borrower or a Wholly-Owned
Subsidiary of the Borrower, of any asset (including, without limitation, any
capital stock or other securities of, or equity interests in, another Person)
other than sales of assets pursuant to Sections 9.02(ii) and 9.02(vi).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" shall mean, at any time, the higher of (i) the Prime Lending
Rate at such time and (ii) 1/2 of 1% in excess of the overnight Federal Funds
Rate at such time.
"Base Rate Loan" shall mean each Loan designated or deemed designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall mean First Horizon Pharmaceutical Corporation, a Delaware
corporation.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Lenders having Commitments of the respective Tranche (or
from the Swingline Lender in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same Interest Period, provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity, and
any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York, New York, a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
62
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to any Person, all
rental obligations of such Person which, under generally accepted accounting
principles, are or will be required to be capitalized on the books of such
Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (ii) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public instrumentality thereof maturing within six months from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Xxxxx'x, (iii) Dollar denominated
time deposits, certificates of deposit and bankers acceptances of any Lender or
any commercial bank having, or which is the principal banking subsidiary of a
bank holding company having, a long-term unsecured debt rating of at least "A"
or the equivalent thereof from S&P or "A2" or the equivalent thereof from
Xxxxx'x with maturities of not more than six months from the date of acquisition
by such Person, (iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (iii)
above, (v) commercial paper issued by any Person incorporated in the United
States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Xxxxx'x and in each case maturing not more than six
months after the date of acquisition by such Person, and (vi) investments in
money market funds substantially all of whose assets are comprised of securities
of the types described in clauses (i) through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same has been amended and may hereafter be
amended from time to time, 42 U.S.C. section 9601 et seq.
"Change of Control" shall mean (i) any "person" or "group" (as such terms
are used in Section 13(d) and 14(d) of the Exchange Act) (other than the
Permitted Holders) is or shall become the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
greater than 30% of the economic or voting interests in the Borrower's capital
stock, (ii) the Board of Directors of the Borrower shall cease to consist of a
majority of Continuing Directors or (iii) a "change of control" or similar event
shall occur as provided in any Qualified Preferred Stock or outstanding
Indebtedness (or the documentation governing the same).
"Change of Law" shall have the meaning provided in Section 10.06.
63
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10.
"Collateral Agent" shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.05.
"Commitment" shall mean any of the commitments of any Lender, i.e., either
a Term Loan Commitment or a Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in Section 3.01(a).
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income for
such period before deducting therefrom Consolidated Interest Expense for such
period (to the extent that such Consolidated Interest Expense was deducted in
arriving at Consolidated Net Income for such period) and provision for taxes
based on income that were included in arriving at Consolidated Net Income for
such period and without giving effect (x) to any extraordinary gains or any
extraordinary non-cash losses (except to the extent that any such extraordinary
non-cash losses will require a cash payment in a future period) and (y) to any
gains or losses from sales of assets other than from sales of inventory in the
ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT for
such period, adjusted by adding thereto the amount of all amortization of
intangibles and depreciation that were deducted in arriving at Consolidated Net
Income for such period.
"Consolidated Indebtedness" shall mean, at any time, the principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such time determined
on a consolidated basis.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the sum of the
total consolidated interest expense of the Borrower and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, (x) that portion of Capitalized Lease
64
Obligations of the Borrower and its Subsidiaries representing the interest
factor for such period and (y) the "deemed interest expense" (i.e., the interest
expense which would have been applicable if the respective obligations were
structured as on-balance sheet financing arrangements) with respect to all
Indebtedness of the Borrower and its Subsidiaries of the type described in
clause (viii) of the definition of Indebtedness contained herein for such
period.
"Consolidated Net Income" shall mean, for any period, the net income (or
loss) of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis (after any deduction for minority interests), provided that
(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Subsidiary of the Borrower or is accounted for by the Borrower by
the equity method of accounting shall be included only to the extent of the
payment of cash dividends or cash distributions by such other Person to the
Borrower or a Subsidiary thereof during such period, (ii) the net income of any
Subsidiary of the Borrower shall be excluded to the extent that the declaration
or payment of cash dividends or similar cash distributions by that Subsidiary of
that net income is not at the date of determination permitted by operation of
its charter or any agreement, instrument or law applicable to such Subsidiary
and (iii) the net income (or loss) of any other Person acquired by the Borrower
or a Subsidiary of the Borrower in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person as a result of such Person being a general partner of any other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Continuing Directors" shall mean the directors of the Borrower on the
Effective Date and each other director if such director's nomination for
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Note, the
Subsidiaries Guaranty and each Security Document.
65
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a Lender
Default is in effect.
"Distributorship Agreement" shall mean the Distributorship Agreement dated
as of December 12, 2001, by and between Xxxxx X.X. and the Borrower as amended,
modified or supplemented from time to time, in accordance with the terms hereof
and thereof.
"Dividend" shall mean, with respect to any Person, that such Person has
declared or paid a dividend, distribution or returned any equity capital to its
stockholders, partners or members or authorized or made any other distribution,
payment or delivery of property (other than common equity of such Person) or
cash to its stockholders, partners or members as such, or redeemed, retired,
purchased or otherwise acquired, directly or indirectly, for a consideration any
shares of any class of its capital stock or any partnership or membership
interests outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock or other equity
interests), or set aside any funds for any of the foregoing purposes, or shall
have permitted any of its Subsidiaries to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock or any partnership or
membership interests of such Person outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock or other equity interests). Without limiting the foregoing, "Dividends"
with respect to any Person shall also include all payments made or required to
be made by such Person with respect to any stock appreciation rights, plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Documents" shall mean the Credit Documents, the Acquisition Documents, the
Distributorship Agreement and the Trademark Purchase and Assignment Agreement.
"Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank, an
insurance company, a finance company, a financial institution, any fund that
invests in loans or any other "accredited investor" (as defined in Regulation D
of the Securities Act).
66
"Employee Benefit Plans" shall have the meaning provided in Section 5.05.
"Employment Agreements" shall have the meaning provided in Section 5.05.
"End Date" shall mean, for any Margin Reduction Period, the last day of
such Margin Reduction Period.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C.
section 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. section
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. section 2601 et seq.;
the Clean Air Act, 42 U.S.C. section 7401 et seq.; the Safe Drinking Water Act,
42 U.S.C. section 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. section
2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of
1986, 42 U.S.C. section 11001 et seq.; the Hazardous Material Transportation
Act, 49 U.S.C. section 1801 et seq.; the Occupational Safety and Health Act, 29
U.S.C. section 651 et seq.; and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan (other than a Swingline Loan)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class banks
in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period applicable to such Eurodollar Loan commencing two Business Days
thereafter as of 10:00 A.M. (New York time) on the applicable Interest
67
Determination Date, divided (and rounded upward to the nearest 1/16 of 1%) by
(b) a percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excess Inventory Refund" shall mean the amount of the purchase price to be
paid pursuant to the Acquisition Agreement to be refunded to the Borrower by
AstraZeneca UK Limited pursuant to Section 4.02 of the Acquisition Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder as from time to time in
effect.
"Existing Credit Agreement" shall mean the Amended and Restated Loan and
Security Agreement dated as of December 22, 1998, as amended to the Effective
Date, between the Borrower and LaSalle Bank National Association (f/k/a LaSalle
National Bank).
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.05.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
3.01.
"Foreign Exchange Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
"Foreign Pension Plan" shall mean each employee benefit plan, employment,
bonus, incentive, stock purchase and stock option plan, program, agreement or
arrangement; and each severance, termination pay, salary continuation,
retention, accrued leave, vacation, sick pay, sick leave, medical, life
insurance, disability, accident, profit-sharing, fringe benefit, pension,
deferred compensation or other retirement or superannuation plan, fund, program,
agreement, commitment or arrangement sponsored, established, maintained or
contributed to, or required to be contributed to, or with respect to which any
liability is borne, outside the fifty states of the United States of America, by
68
the Borrower or any of its Subsidiaries, including, without limitation, any such
plan, fund, program, agreement or arrangement sponsored by a government or
governmental entity.
"Guarantor" shall mean each Subsidiary Guarantor.
"Guaranty" shall mean the Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous waste," "hazardous materials," "extremely hazardous substances,"
"restricted hazardous waste," "toxic substances," "toxic pollutants,"
"contaminants," or "pollutants," or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or substance,
the exposure to, or Release of which is prohibited, limited or regulated by any
governmental authority.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit,
bankers' acceptances and similar obligations issued for the account of such
Person and all unpaid drawings in respect of such letters of credit, bankers'
acceptances and similar obligations, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person (provided that, if the Person has
not assumed or otherwise become liable in respect of such Indebtedness, such
Indebtedness shall be deemed to be in an amount equal to the fair market value
of the property to which such Lien relates as determined in good faith by such
Person), (iv) the aggregate amount of all Capitalized Lease Obligations of such
Person, (v) all obligations of such Person to pay a specified purchase price for
goods or services, whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vi) all Contingent Obligations of such Person, (vii) all
obligations under any Interest Rate Protection Agreement, any Other Hedging
Agreement or under any similar type of agreement and (viii) all monetary
obligations of such Person under (x) a so-called synthetic, off-balance sheet or
tax retention lease, or (y) an agreement for the use or possession of property
creating obligations that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would be characterized
as the indebtedness of such Person (without regard to accounting treatment).
Notwithstanding the foregoing, Indebtedness shall not include trade payables and
accrued expenses incurred by any Person in accordance with customary practices
and in the ordinary course of business of such Person.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Loans occurs.
69
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Interim Test Period" shall mean each period (taken as one accounting
period) beginning on March 1, 2002 and ending on the last day of April, May,
June, July or August of 2002.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Lender" shall mean BTCo or any Lender approved by the
Administrative Agent which has agreed to issue Letters of Credit under this
Agreement.
"L/C Supportable Obligations" shall mean (i) obligations of the Borrower or
any of its Subsidiaries with respect to workers compensation, surety bonds and
other similar statutory obligations and (ii) such other obligations of the
Borrower or any of its Subsidiaries as are reasonably acceptable to the Issuing
Lender and otherwise permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I, as
well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13 or
13.04(b).
"Lender Default" shall mean (i) the refusal (which has not been retracted)
or the failure of a Lender to make available its portion of any Borrowing
(including any Mandatory Borrowing) in violation of the requirements of this
Agreement or to fund its portion of any unreimbursed payment under Section
2.04(c) or (ii) a Lender having notified in writing the Borrower and/or the
Administrative Agent that such Lender does not intend to comply with its
obligations under Section 1.01(a), 1.01(b), 1.01(d) or 2.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount
of all Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
70
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the Test Period then most
recently ended; provided that if the Leverage Ratio is being determined at any
time prior to March 31, 2003 (and, as a result thereof, the respective Test
Period for determining Consolidated EBITDA is less than four fiscal quarters),
then for determining the Leverage Ratio, Consolidated EBITDA shall be annualized
by taking Consolidated EBITDA for the Test Period then most recently ended and
multiplying same by (x) two, if the respective Test Period ended on September
30, 2002 or (y) 4/3, if the respective Test Period ended on December 31, 2002.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan and each Swingline
Loan.
"Location" of any Person shall mean its location as determined pursuant to
Section 9-307 of the UCC (or any successor section thereof).
"Management Agreements" shall have the meaning provided in Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(d).
"Margin Reduction Period" shall mean each period which shall commence on
the date upon which the respective officer's certificate is delivered pursuant
to Section 8.01(f) (together with the related financial statements pursuant to
Section 8.01(b) or (c), as the case may be) and which shall end on the date of
actual delivery of the next officer's certificate pursuant to Section 8.01(f)
with respect to quarterly or annual financial statements delivered pursuant to
Section 8.01(b) or (c) (and related financial statements) or the latest date on
which such next officer's certificate (and related financial statements) is
required to be so delivered; it being understood that the first Margin Reduction
Period shall commence with the first delivery of an officer's certificate (and
related financial statements) as described above occurring on or after the Term
Loan Satisfaction Date.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean (i) a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or
(ii) a material adverse effect (x) on the rights or remedies of the Lenders or
the Administrative Agent hereunder or under any other Credit Document or (y) on
the ability of any Credit Party to perform its obligations to the Lenders or
Administrative Agent hereunder or under any other Credit Document.
"Maximum Swingline Amount" shall mean $2,500,000.
71
"Minimum Borrowing Amount" shall mean (i) for Term Loans, $5,000,000, (ii)
for Revolving Loans, $1,000,000, and (iii) for Swingline Loans, $500,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall mean a mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or
similar security instrument.
"Mortgage Policy" shall mean a mortgage title insurance policy or a binding
commitment with respect thereto.
"Mortgaged Property" shall mean any Real Property owned or leased by the
Borrower or any of its Subsidiaries which is encumbered (or required to be
encumbered) by a Mortgage.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or sale of
any equity by any Person or any capital contribution to such Person, the cash
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) received by such Person from the respective sale or
issuance of its equity or from the respective capital contribution.
"Net Recovery Event Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with such Recovery Event, including without limitation any such cash
proceeds received pursuant to insurance policies, as condemnation proceeds or
otherwise.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from such
Asset Sale, net of the reasonable costs of such Asset Sale (including fees and
commissions, payments of unassumed liabilities relating to any assets sold and
required payments of any Indebtedness (other than Indebtedness secured pursuant
to the Security Documents) which is secured by any assets sold pursuant to the
respective Asset Sale), and the incremental taxes paid or payable as a result of
such Asset Sale.
"Non-Compete Agreements" shall have the meaning provided in Section 5.05.
"Non-Defaulting Lender" and "Non-Defaulting RL Lender" shall mean and
include each Lender or RL Lender, as the case may be, other than a Defaulting
Lender.
72
[***] Confidential Treatment Requested
"Note" shall mean each Term Note, each Revolving Note and the Swingline
Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03(a).
"Notice of Conversion/Continuation" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative Agent located
at 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx City, New Jersey, 07302, Attention:
Xxxxx Xxxxx or such other office or person as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative Agent, the
Collateral Agent, the Issuing Lender, the Swingline Lender or any Lender
pursuant to the terms of this Agreement or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency values or
commodity prices.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent located
at 00 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx, 00000 or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"[***]" shall mean one or more documents evidencing loans from the Borrower
to [***], all of which documents shall be in form and substance satisfactory to
the Administrative Agent.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the Mortgage Policy delivered with
respect thereto, all of which exceptions must be acceptable to the
Administrative Agent in its reasonable discretion.
"Permitted Holders" shall mean Xxxx Xxxxxx, his decedents and members of
their immediate families.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
73
contribute of) the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate on or after the Initial Borrowing Date, and each such plan for the
five year period immediately following the latest date (whether before or after
the Initial Borrowing Date) on which the Borrower, a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.10.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in the
Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which the Administrative Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer by the Administrative Agent, which may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"Pro Forma Financials" shall have the meaning provided in Section 5.13(b).
"Projections" shall mean the projections that are contained in the
Confidential Information Memorandum dated February 2002 and that were prepared
by or on behalf of the Borrower in connection with the Transaction and delivered
to the Administrative Agent and the Lenders prior to the Initial Borrowing Date.
"Qualified Preferred Stock" shall mean any preferred stock of the Borrower
so long as the terms of such preferred stock (i) do not contain any mandatory
put, redemption, repayment, sinking fund or other similar provision prior to the
sixth anniversary of the Initial Borrowing Date, (ii) do not require cash
payments (of dividends or otherwise) at a time when such payment would be
prohibited or not permitted under this Agreement (as amended, modified,
supplemented, refinanced or replaced from time to time), (iii) do not contain
any covenants, (iv) do not grant the holders thereof any voting rights except
for (x) voting rights required to be granted to such holders under applicable
law and (y) limited customary voting rights on fundamental matters such as
mergers, consolidations, sales of substantially all of the assets of the
Borrower, or liquidations involving the Borrower, and (v) are otherwise
satisfactory to the Administrative Agent.
"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03.
"Register" shall have the meaning provided in Section 13.15.
74
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" shall mean actively or passively disposing, discharging,
injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, pouring, seeping, migrating or the like, into or upon any land or
water or air, or otherwise entering into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and RL Percentages of (x) outstanding
Swingline Loans and (y) Letter of Credit Outstandings) represent at least 50.1%
of the sum of (i) all outstanding Term Loans of Non-Defaulting Lenders and (ii)
the Total Revolving Loan Commitment less the Revolving Loan Commitments of all
Defaulting Lenders (or after the termination thereof, the sum of then total
outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL
Percentages of all Non-Defaulting Lenders of the total outstanding Swingline
Loans and Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time
as a result of assignments to or from such Lender pursuant to Section 1.13 or
13.04(b).
75
"Revolving Loan Maturity Date" shall mean the Term Loan Maturity Date;
provided that if , and only if, all principal of all Term Loans is repaid in
full from the proceeds of one or more equity issuances and/or other junior
financings (on terms acceptable to the Administrative Agent and the Required
Lenders) occurring on or prior to the Term Loan Maturity Date, then the
Revolving Loan Maturity Date shall at such time be changed to be the date which
occurs on the third anniversary of the Initial Borrowing Date.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Lender" shall mean each Lender with a Revolving Loan Commitment or with
outstanding Revolving Loans.
"RL Percentage" of any RL Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such RL Lender at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, provided that if the RL Percentage
of any RL Lender is to be determined after the Total Revolving Loan Commitment
has been terminated, then the RL Percentages of such RL Lender shall be
determined immediately prior (and without giving effect) to such termination.
"Scheduled Interest Payment Date" shall mean the last Business Day of (x)
each calendar month ended after the Initial Borrowing Date (beginning with March
2002) and on or before the Term Loan Satisfaction Date and (y) the last Business
Day of each of September, December, March and June ending after the Term Loan
Satisfaction Date.
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section 5.11.
"Security Agreement Collateral" shall mean all "Collateral" as defined in
the Security Agreement.
"Security Document" shall mean and include each of the Security Agreement,
the Pledge Agreement, each Mortgage and, after the execution and delivery
thereof, each Additional Security Document.
"Shareholders' Agreements" shall have the meaning provided in Section 5.05.
"Start Date" shall mean, with respect to any Margin Reduction Period, the
first day of such Margin Reduction Period.
76
"Stated Amount" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section 5.09.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower existing
on the Initial Borrowing Date or established, created or acquired after the
Initial Borrowing Date (unless the Required Banks, in their sole discretion have
waived in writing the requirement that any such Subsidiary become a Subsidiary
Guarantor). "Swingline Expiry Date" shall mean that date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Lender" shall mean BTCo.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall mean have the meaning provided in the first
paragraph of this Agreement.
"Syndication Date" shall mean that date upon which the Administrative Agent
determines in its sole discretion (and notifies the Borrower) that the primary
syndication of the credit facilities provided under the Agreement (and resultant
addition of Persons as Lenders pursuant to Section 13.04(b)) has been completed.
"Tax Sharing Agreements" shall have the meaning provided in Section 5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, for each Lender, the amount set forth
opposite such Lender's name in Schedule I directly below the column entitled
"Term Loan Commitment," as the same may be terminated pursuant to Sections 3.03
and/or 10.
77
"Term Loan Maturity Date" shall mean the six month anniversary of the
Initial Borrowing Date.
"Term Loan Satisfaction Date" shall mean the date on which (x) all Term
Loans shall have been paid in full or (y) the Total Term Loan Commitment shall
have been terminated pursuant to Section 3.03(c) prior to any incurrence of Term
Loans hereunder.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Date" shall mean, with respect to any Start Date, the last day of the
most recent fiscal quarter of the Borrower ended immediately prior to such Start
Date.
"Test Period" shall mean each period of four consecutive fiscal quarters of
the Borrower ended on the last day of any fiscal quarter of the Borrower (in
each case taken as one accounting period), beginning with its fiscal quarter
ended closest to September 30, 2002; provided that (x) with respect to the
Borrower's fiscal quarter ended closest to September 30, 2002, the "Test Period"
shall instead be the period of two consecutive fiscal quarters of the Borrower
then ended and (y) with respect to the Borrower's fiscal quarter ended closest
to December 31, 2002, the "Test Period" shall be the period of three consecutive
fiscal quarters of the Borrower then ended.
"Total Commitment" shall mean, at any time, the sum of the Commitments of
each of the Lenders at such time.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Lenders at such time.
"Total Term Loan Commitment" shall mean, at any time, the sum of the Term
Loan Commitments of each of the Lenders at such time.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the Total Revolving Loan Commitment then in
effect less (y) the sum of the aggregate principal amount of all Revolving Loans
and Swingline Loans then outstanding plus the aggregate amount of all Letter of
Credit Outstandings.
"Trademark Purchase and Assignment Agreement" shall mean the Trademark
Purchase and Assignment Agreement, dated as of December 13, 2001, by and between
Xxxxx X.X. and the Borrower as amended, modified or supplemented from time to
time, in accordance with the terms hereof and thereof.
"Tranche" shall mean the respective facility and commitments utilized in
making Loans hereunder, with there being three separate Tranches, i.e., Term
Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the Acquisition, (ii) the
entering into the Trademark Purchase and Assignment Agreement, (iii) the
entering into the Distribution Agreement, (iv) the entering into of the Credit
78
Documents and the incurrence of Loans on the Initial Borrowing Date and (v) the
payment of all fees and expenses in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the value of the accumulated plan benefits under the Plan determined on a
plan termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contribution).
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning provided in Section 2.05(a).
"Unutilized Revolving Loan Commitment" shall mean, with respect to any
Lender at any time, such Lender's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such Lender at such time and (ii) such Lender's RL Percentage of the
Letter of Credit Outstandings at such time.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose capital stock is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
SECTION 12. The Administrative Agent.
12.01 Appointment. The Lenders hereby irrevocably designate and appoint
BTCo as Administrative Agent (for purposes of this Section 12 and Section 13.01,
the term "Administrative Agent" also shall include (x) BTCo in its capacity as
Collateral Agent pursuant to the Security Documents and (y) Deutsche Banc
Alex.Xxxxx Inc., an affiliate of BTCo, in its capacity as Lead Arranger and Book
Manager in connection with this Agreement in the financings contemplated hereby)
to act as specified herein and in the other Credit Documents. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Administrative Agent to take
such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform any of its respective
duties hereunder by or through its officers, directors, agents, employees or
affiliates.
79
12.02. Nature of Duties. The Administrative Agent shall not have any duties
or responsibilities except those expressly set forth in this Agreement and in
the other Credit Documents. Neither the Administrative Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision). The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Lender or the holder
of any Note; and nothing in this Agreement or in any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
12.03. Lack of Reliance on the Administrative Agent. Independently and
without reliance upon the Administrative Agent, each Lender and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.
12.04. Certain Rights of the Administrative Agent. If the Administrative
Agent requests instructions from the Required Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Credit Document, the Administrative Agent shall be entitled to refrain from such
act or taking such action unless and until the Administrative Agent shall have
received instructions from the Required Lenders; and the Administrative Agent
shall not incur liability to any Lender by reason of so refraining. Without
limiting the foregoing, neither any Lender nor the holder of any Note shall have
any right of action whatsoever against the Administrative Agent as a result of
the Administrative Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders.
12.05. Reliance. The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
80
any Person that the Administrative Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Administrative Agent.
12.06. Indemnification. To the extent the Administrative Agent (or any
affiliate thereof) is not reimbursed and indemnified by the Borrower, the
Lenders will reimburse and indemnify the Administrative Agent (and any affiliate
thereof) in proportion to their respective "percentage" as used in determining
the Required Lenders (determined as if there were no Defaulting Lenders) for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the
Administrative Agent (or any affiliate thereof) in performing its duties
hereunder or under any other Credit Document or in any way relating to or
arising out of this Agreement or any other Credit Document or its syndication
efforts in connection herewith; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's (or such affiliate's) gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
12.07. The Administrative Agent in its Individual Capacity. With respect to
its obligation to make Loans, or issue or participate in Letters of Credit,
under this Agreement, the Administrative Agent shall have the rights and powers
specified herein for a "Lender" and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term
"Lender," "Required Lenders," "holders of Notes" or any similar terms shall,
unless the context clearly indicates otherwise, include the Administrative Agent
in its respective individual capacities. The Administrative Agent and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, investment banking, trust or other business with, or provide
debt financing, equity capital or other services (including financial advisory
services) to any Credit Party or any Affiliate of any Credit Party (or any
Person engaged in a similar business with any Credit Party or any Affiliate
thereof) as if they were not performing the duties specified herein, and may
accept fees and other consideration from any Credit Party or any Affiliate of
any Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
12.08. Holders. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09. Resignation by the Administrative Agent. (a) The Administrative
Agent may resign from the performance of all its respective functions and duties
hereunder and/or under the other Credit Documents at any time by giving 15
Business Days' prior written notice to the Lenders and, unless a Default or an
Event of Default under Section 10.05 then exists, the Borrower. Such resignation
shall take effect upon the appointment of a successor Administrative Agent
pursuant to clauses (b) and (c) below or as otherwise provided below.
81
(b) Upon any such notice of resignation by the Administrative Agent, the
Required Lenders shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower, which acceptance shall not be unreasonably withheld or delayed
(provided that the Borrower's approval shall not be required if an Event of
Default then exists).
(c) If a successor Administrative Agent shall not have been so appointed
within such 15 Business Day period, the Administrative Agent, with the consent
of the Borrower (which consent shall not be unreasonably withheld or delayed,
provided that the Borrower's consent shall not be required if an Event of
Default then exists), shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Lenders appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.
(e) Upon a resignation of the Administrative Agent pursuant to this Section
12.09, the Administrative Agent shall remain indemnified to the extent provided
in this Agreement and the other Credit Documents and the provisions of this
Section 12 shall continue in effect for the benefit of the Administrative Agent
for all of its actions and inactions while serving as the Administrative Agent.
12.10. The Syndication Agent and the Documentation Agent. Notwithstanding
any other provision of this Agreement or any provision of any other Credit
Document, the Syndication Agent and the Documentation Agent are named as such
for recognition purposes only, and in their respective capacities as such shall
have no powers, rights, duties, responsibilities or liabilities with respect to
this Agreement or the other Credit Documents or the transactions contemplated
hereby and thereby. Without limitation of the foregoing, neither the Syndication
Agent nor the Documentation Agent shall, solely by reason of this Agreement or
any other Credit Document, have any fiduciary relationship in respect of any
Lender or any other Person.
SECTION 13. Miscellaneous.
13.01. Payment of Expenses, etc. The Borrower hereby agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and disbursements of White & Case LLP and the
Administrative Agent's other counsel and consultants) in connection with the
preparation, execution, delivery and administration of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein and any amendment, waiver or consent relating hereto or thereto, of the
Administrative Agent in connection with its syndication efforts with respect to
this Agreement and of the Administrative Agent and, after the occurrence of an
Event of Default, each of the Lenders in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
82
referred to herein and therein or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings
(including, in each case without limitation, the reasonable fees and
disbursements of counsel and consultants for the Administrative Agent and, after
the occurrence of an Event of Default, counsel for each of the Lenders); (ii)
pay and hold the Administrative Agent and each of the Lenders harmless from and
against any and all present and future stamp, court, excise and other similar
documentary taxes, charges or similar levies with respect to the foregoing
matters (collectively, "Other Taxes"), and save the Administrative Agent and
each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to the Administrative Agent or such Lender) to pay such Other
Taxes; (iii) indemnify the Administrative Agent and each Lender for (a) the full
amount of Other Taxes paid by the Administrative Agent and/or such Lender, and
(b) any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Other Taxes were correctly or
legally imposed or asserted by the relevant governmental authority; and (iv)
indemnify the Administrative Agent and each Lender, and each of their respective
officers, directors, employees, representatives, agents, affiliates, trustees
and investment advisors from and hold each of them harmless against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
actual or prospective claim, investigation, litigation or other proceeding
(whether or not the Administrative Agent or any Lender is a party thereto and
whether or not such investigation, litigation or other proceeding is brought by
or on behalf of any Credit Party) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
the Transaction or any other transactions contemplated herein or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, or (b) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property at any time owned, leased or operated
by the Borrower or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials by the Borrower or
any of its Subsidiaries at any location, whether or not owned, leased or
operated by the Borrower or any of its Subsidiaries, the non-compliance by the
Borrower or any of its Subsidiaries with any Environmental Law (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Borrower, any of its Subsidiaries or
any Real Property at any time owned, leased or operated by the Borrower or any
of its Subsidiaries, including, in each case, without limitation, the reasonable
fees and disbursements of counsel and other consultants incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified (as determined by a court of competent jurisdiction in a final and
non-appealable decision)). To the extent that the undertaking to indemnify, pay
or hold harmless the Administrative Agent or any Lender set forth in the
83
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law. All amounts due under this Section 13.01 shall be payable
within ten days after demand therefor.
13.02. Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent and each Lender is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by the
Administrative Agent or such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of the Borrower or any of its Subsidiaries against and on account of the
Obligations and liabilities of the Credit Parties to the Administrative Agent or
such Lender under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations purchased by such
Lender pursuant to Section 13.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
13.03. Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to any Credit Party, at the address
specified opposite its signature below or in the other relevant Credit
Documents; if to any Lender, at its address specified on Schedule II; and if to
the Administrative Agent, at the Notice Office; or, as to any Credit Party or
the Administrative Agent, at such other address as shall be designated by such
party in a written notice to the other parties hereto and, as to each Lender, at
such other address as shall be designated by such Lender in a written notice to
the Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
13.04. Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of the Lenders and,
provided further, that, although any Lender may from time to time transfer,
assign or grant participations in its rights and/or obligations hereunder, such
84
Lender shall remain a "Lender" for all purposes hereunder (and may not transfer
or assign all or any portion of its Commitments hereunder except as provided in
Sections 1.13 and 13.04(b)) and the transferee, assignee or participant, as the
case may be, shall not constitute a "Lender" hereunder and, provided further,
that no Lender shall transfer or grant any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter
of Credit (unless such Letter of Credit is not extended beyond the Revolving
Loan Maturity Date) in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-Default increase in
interest rates) or reduce the principal amount thereof (it being understood that
any amendment or modification to the financial definitions in this Agreement or
to Section 13.07(a) shall not constitute a reduction in the rate of interest or
Fees payable hereunder), or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment (or the available portion
thereof) or Loan shall be permitted without the consent of any participant if
the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement, (iii) release all or substantially all of the
Collateral under all of the Security Documents (except (x) as expressly provided
in the Credit Documents and (y) any release after the Term Loan Satisfaction
Date as contemplated by Section 13.17) supporting the Loans or Letters of Credit
hereunder in which such participant is participating or, (iv) at any time prior
to the Term Loan Satisfaction Date, release any Subsidiary Guarantor from the
Subsidiaries Guaranty (except as expressly provided in the Credit Documents). In
the case of any such participation, the participant shall not have any rights
under this Agreement or any of the other Credit Documents (the participant's
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the participant
relating thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may (x) assign all or a portion of its Commitments
and related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Obligations) hereunder to (i)(A)
its parent company and/or any Affiliate of such Lender or (B) to one or more
other Lenders or any Affiliate of any such other Lender (provided that any fund
that invests in loans and is managed or advised by the same investment advisor
of another fund which is a Lender (or by an Affiliate of such investment
advisor) shall be treated as an Affiliate of such other Lender for the purposes
of this sub-clause (x)(i)(B)), or (ii) in the case of any Lender that is a fund
that invests in loans, any other fund that invests in loans and is managed or
advised by the same investment advisor of any Lender or by an Affiliate of such
investment advisor or (y) assign all, or if less than all, a portion equal to at
least $1,000,000 in the aggregate for the assigning Lender or assigning Lenders,
of such Commitments and related outstanding Obligations (or, if the Commitments
with respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that invests in loans and is managed or advised by the
same investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee), each of which assignees shall become a
party to this Agreement as a Lender by execution of an Assignment and Assumption
85
Agreement, provided that (i) at such time, Schedule I shall be deemed modified
to reflect the Commitments and/or outstanding Loans, as the case may be, of such
new Lender and of the existing Lenders, (ii) upon the surrender of the relevant
Notes by the assigning Lender (or, upon such assigning Lender's indemnifying the
Borrower for any lost Note pursuant to a customary indemnification agreement)
new Notes will be issued, at the Borrower's expense, to such new Lender and to
the assigning Lender upon the request of such new Lender or assigning Lender,
such new Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Loans, as the case may be, (iii) the consent of
the Administrative Agent shall be required in connection with any such
assignment pursuant to clause (y) above or any such assignment of Revolving Loan
Commitments pursuant to clause (x) above (which consents shall not be
unreasonably withheld or delayed), (iv) the consent of the Issuing Lender and
the Swingline Lender shall be required in connection with any such assignment of
Revolving Loan Commitments (which consents shall not be unreasonably withheld or
delayed), (v) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and (vi) no such transfer or assignment
will be effective until recorded by the Administrative Agent on the Register
pursuant to Section 13.15. To the extent of any assignment pursuant to this
Section 13.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments and outstanding Loans. At the
time of each assignment pursuant to this Section 13.04(b) to a Person which is
not already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall, to the extent legally entitled
to do so, provide to the Borrower the appropriate Internal Revenue Service Forms
(and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section
4.04(b). To the extent that an assignment of all or any portion of a Lender's
Commitments and related outstanding Obligations pursuant to Section 1.13 or this
Section 13.04(b) would, at the time of such assignment, result in increased
costs under Section 1.10, 2.06 or 4.04 from those being charged by the
respective assigning Lender prior to such assignment, then the Borrower shall
not be obligated to pay such increased costs (although the Borrower, in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and, with prior
notification to the Administrative Agent (but without the consent of the
Administrative Agent or the Borrower), any Lender which is a fund may pledge all
or any portion of its Loans and Notes to its trustee or to a collateral agent
providing credit or credit support to such Lender in support of its obligations
to its trustee or such collateral agent, as the case may be. No pledge pursuant
to this clause (c) shall release the transferor Lender from any of its
obligations hereunder.
13.05. No Waiver; Remedies Cumulative. No failure or delay on the part of
the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and the Administrative Agent, the Collateral Agent, the Issuing Lender or any
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
86
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender to
any other or further action in any circumstances without notice or demand.
13.06. Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, the Administrative Agent shall distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its pro rata share
of any such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Lenders
is in a greater proportion than the total of such Obligation then owed and due
to such Lender bears to the total of such Obligation then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Credit Party to
such Lenders in such amount as shall result in a proportional participation by
all the Lenders in such amount; provided that if all or any portion of such
excess amount is thereafter recovered from such Lenders, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
13.07. Calculations; Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders); provided that, except as otherwise specifically provided herein, all
computations of the Applicable Margin, and all computations and all definitions
(including accounting terms) used in determining compliance with Sections 9.07
through 9.10, inclusive, shall utilize generally accepted accounting principles
and policies in conformity with those used to prepare the historical financial
statements of the Borrower referred to in Section 7.05(a).
(b) All computations of interest, Commitment Commission and other Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day; except that in the
case of Letter of Credit Fees and Facing Fees, the last day shall be included)
occurring in the period for which such interest, Commitment Commission or Fees
are payable.
87
13.08. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN ANY MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, THE BORROWER HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK
PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
88
13.09. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10. Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which the Borrower, the Administrative Agent and each
of the Lenders shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at the Notice Office or, in the case of the Lenders, shall have given to
the Administrative Agent telephonic (confirmed in writing), written or telex
notice (actually received) at such office that the same has been signed and
mailed to it. The Administrative Agent will give the Borrower and each Lender
prompt written notice of the occurrence of the Effective Date.
13.11. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12. Amendment or Waiver; etc. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party hereto or thereto and
the Required Lenders, provided that no such change, waiver, discharge or
termination shall, without the consent of each Lender (other than a Defaulting
Lender) (with Obligations being directly affected in the case of following
clause (i)), (i) extend the final scheduled maturity of any Loan or Note or
extend the stated expiration date of any Letter of Credit beyond the Revolving
Loan Maturity Date, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with the waiver of applicability of any
post-default increase in interest rates), or reduce the principal amount thereof
(it being understood that any amendment or modification to the financial
definitions in this Agreement or to Section 13.07(a) shall not constitute a
reduction in the rate of interest or Fees for the purposes of this clause (i)),
(ii) release all or substantially all of the Collateral (except (x) as expressly
provided in the Credit Documents and (y) any release after the Term Loan
Satisfaction Date as contemplated by Section 13.17) under all the Security
Documents, (iii) at any time prior to the Term Loan Satisfaction Date, release
any Subsidiary Guarantor (except as expressly provided in the Credit Documents)
from the Subsidiaries Guaranty, (iv) amend, modify or waive any provision of
this Section 13.12 (except for technical amendments with respect to additional
extensions of credit pursuant to this Agreement which afford the protections to
89
such additional extensions of credit of the type provided to the Term Loans and
the Revolving Loan Commitments on the Effective Date), (v) reduce the percentage
specified in the definition of Required Lenders (it being understood that, with
the consent of the Required Lenders, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Effective Date) or (vi) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement; provided further, that no such change, waiver, discharge
or termination shall (1) increase the Commitments of any Lender over the amount
thereof then in effect without the consent of such Lender (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment shall not
constitute an increase of the Commitment of any Lender, and that an increase in
the available portion of any Commitment of any Lender shall not constitute an
increase of the Commitment of such Lender), (2) without the consent of the
Issuing Lender, amend, modify or waive any provision of Section 2 or alter its
rights or obligations with respect to Letters of Credit, (3) without the consent
of the Swingline Lender, alter the Swingline Lender's rights or obligations with
respect to Swingline Loans, (4) without the consent of Collateral Agent, amend,
modify or waive any provision relating to the rights or obligations of the
Collateral Agent or (5) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 12 or any other provision as same
relates to the rights or obligations of the Administrative Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Commitments and/or repay each Tranche of outstanding Loans of such
Lender in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless
the Commitments that are terminated, and Loans repaid, pursuant to preceding
clause (B) are immediately replaced in full at such time through the addition of
new Lenders or the increase of the Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Required Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto, provided further, that in any event the Borrower shall not have
the right to replace a Lender, terminate its Commitments or repay its Loans
solely as a result of the exercise of such Lender's rights (and the withholding
of any required consent by such Lender) pursuant to the second proviso to
Section 13.12(a).
13.13. Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14. Domicile of Loans. Each Lender may transfer and carry its Loans at,
to or for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
90
13.15. Register. The Borrower hereby designates the Administrative Agent to
serve as its agent, solely for purposes of this Section 13.15, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Lenders, the Loans made by each of the Lenders and each
repayment in respect of the principal amount of the Loans of each Lender.
Failure to make any such recordation, or any error in such recordation, shall
not affect the Borrower's obligations in respect of such Loans. With respect to
any Lender, the transfer of the Commitments of such Lender and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitments and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 13.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note (if any) evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Lender and/or the new Lender at the
request of any such Lender. The Borrower agrees to indemnify the Administrative
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.15.
13.16. Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Lender agrees that it will use its reasonable efforts not to
disclose without the prior consent of the Borrower (other than to its
affiliates, employees, auditors, advisors or counsel or to another Lender if
such Lender or such Lender's holding or parent company in its sole discretion
determines that any such party should have access to such information, provided
such Persons shall be subject to the provisions of this Section 13.16 to the
same extent as such Lender) any information with respect to the Borrower or any
of its Subsidiaries which is now or in the future furnished by or on behalf of
the Borrower or any of its Subsidiaries pursuant to this Agreement or any other
Credit Document which information is, at the time of its disclosure,
confidential and/or proprietary and clearly identified as such in writing,
provided that any Lender may disclose any such information (i) as has become
generally available to the public other than by virtue of a breach of this
Section 13.16(a) by the respective Lender, (ii) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (iii) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (iv) in order to
comply with any law, order, regulation or ruling applicable to such Lender, (v)
to the Administrative Agent or the Collateral Agent, (vi) to any direct or
indirect contractual counterparty in any swap, hedge or similar agreement (or to
any such contractual counterparty's professional advisor), so long as such
contractual counterparty (or such professional advisor) agrees to be bound by
the provisions of this Section 13.16 and (vii) to any prospective or actual
transferee or participant in connection with any contemplated transfer or
91
participation of any of the Notes or Commitments or any interest therein by such
Lender, provided that such prospective transferee agrees to be bound by the
confidentiality provisions contained in this Section 13.16.
(b) The Borrower hereby acknowledges and agrees that each Lender may share
with any of its affiliates, and such affiliates may share with such Lender, any
information related to the Borrower or any of its Subsidiaries (including,
without limitation, any non-public customer information regarding the
creditworthiness of the Borrower and its Subsidiaries), provided such Persons
shall be subject to the provisions of this Section 13.16 to the same extent as
such Lender.
13.17. Potential Restructuring of Sular Assets. The parties hereto
acknowledge that the Borrower has informed the Lenders that it may wish, after
the occurrence of the Term Loan Satisfaction Date, to transfer all or portions
of the "Sular"-related assets to one or more newly created, foreign Wholly-Owned
Subsidiaries. The assets to be so transferred may consist of (x) the rights
relating to Sular acquired pursuant to the Acquisition Agreement and/or (y) the
rights and obligations pursuant to the Distributorship Agreement and Trademark
Purchase and Assignment Agreement. The Administrative Agent and the Lenders
hereby agree that, so long as the Term Loan Satisfaction Date has in fact
occurred, and no Default or Event of Default exists hereunder, that they will
work in good faith with the Borrower to consent to transactions described above
so long as such transactions are structured in a manner which is reasonably
satisfactory to the Administrative Agent and the Required Lenders. In connection
with any transaction so approved by the Administrative Agent and the Required
Lenders, the parties hereto shall enter into such modifications to the Credit
Documents as the Administrative Agent and the Required Lenders determine are
reasonably necessary or desirable in connection with the transaction so
approved, it being understood and agreed by all parties hereto that the nature
of such modifications may require the consent of the Required Lenders pursuant
to Section 13.12(a).
92
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address
First Horizon Pharmaceutical FIRST HORIZON PHARMACEUTICAL CORPORATION
Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
By: /s/ Xxxxxxxx X. Xxxx
Title: Chief Executive Officer
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A.
Individually and as Syndication Agent
By: /s/ Xxxxx Xxxxxxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION,
Individually and as Documentation Agent
By: /s/ Xxxxxxx X'Xxxxx
Title: Assistant Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
Title: Duly Authorized Signatory
SCHEDULE I
COMMITMENTS
Term Loan Revolving Loan Total Commitment
Lender Commitment Commitment
Bankers Trust Company $51,800,000 $10,200,000 $62,000,000
Bank of America, N.A. $37,600,000 $7,400,000 $45,000,000
LaSalle Bank National Association $29,240,000 $5,760,000 $35,000,000
General Electric Capital Corporation $8,360,000 $1,640,000 $10,000,000
------------ ----------- ------------
TOTAL $127,000,000 $25,000,000 $152,000,000
SCHEDULE II
LENDER ADDRESSES
Lender Address
Bankers Trust Company 00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Bank of America, N.A. 000 Xxxxx Xxxxx Xxxxxx
Mailstop: NC1-007-17-11
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
LaSalle Bank National Association 000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
General Electric Capital Corporation 0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
SCHEDULE III
SCHEDULE III - REAL PROPERTY
Neither First Horizon nor its Subsidiary owns any Real Property. First Horizon
or its Subsidiary has entered into leases for Real Property as follows:
o Lease Agreement, dated June 28, 1998, with ASC North Xxxxxx Associates
Joint Venture, re: 000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Xxxxxx County.
o Lease, dated July 19, 1999, with EBC Park Forty Plaza, Inc., re:
Office No. 13A, North Carolina, Durham County
o Executive Service Agreement, dated July 16, 1999, with
InterOffice/Paradise Valley, re: office space @ 00000 X. Xxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000.
o Lease Agreement, dated January 10, 2002 re: 0000 Xxxxxx Xxxx, Xxxxxxx
Xxxxxx, Xxxxxxx.
SCHEDULE IV
SCHEDULE IV - PLANS
401(k) Profit Sharing Plan
SCHEDULE V
SCHEDULE V - SUBSIDIARIES
First Horizon Services, LLC, an Illinois limited liability company
SCHEDULE VI
SCHEDULE VI - LEGAL NAMES/TYPES OF ORGANIZATION
First Horizon Pharmaceutical Corporation, a Delaware corporation
First Horizon Services, LLC, an Illinois limited liability company
SCHEDULE VII
SCHEDULE VII - EXISTING INDEBTEDNESS
Below sets forth the Indebtedness of First Horizon. The roman numerals
correspond to the roman numerals set forth in the definition of "Indebtedness"
in the Credit Agreement.
(i) None
(ii) None
(iii)See attached list for all Indebtedness secured by any Lien.
(iv) None
(v) License Agreement, dated January 29, 1999, with American Home Products
Corporation
Manufacturing and Supply Agreement, dated April 23, 1999 with Mikart, Inc.
Manufacturing and Supply Agreement, dated January 31, 1999 with Mikart,
Inc.
Distribution Agreement with X. Xxxx-Xxxxxxx GmbH & Co., dated July 22, 1999
Distributorship Agreement by and between First Horizon Pharmaceutical
Corporation and Bayer, AG, dated December 12, 2001
Manufacturing and Supply Agreement by and between Horizon Pharmaceutical
Corporation and Anabolic Laboratories, Inc., dated June 1, 1999
Manufacturing and Supply Agreement between Xxxx-xxxx Pharmaceutical Corp.
and Atlantic Research and Development, Inc., dated December 29, 1997
Supply Agreement by and between Banner Pharmacaps Inc. and
Sanofi-Synthelabo Inc.
(vi) None
(vii)None
(viii)None
Liens
1. All Permitted Liens existing on the date of the Credit Agreement.
2. See following list:
------------------------------- --------------- ---------------------- -----------------------
Debtor Jurisdiction Secured Party Type of Filing
------------------------------- --------------- ---------------------- -----------------------
------------------------------- --------------- ---------------------- -----------------------
First Horizon Pharmaceutical Xxxxxx County State of Georgia and State FIFA for 2001
Corp. Xxxxxx County Property Taxes
GED Book 9633, Page 145
------------------------------- --------------- ---------------------- -----------------------
SCHEDULE VIII
SCHEDULE VIII - INSURANCE
See attached list.
SCHEDULE IX
SCHEDULE IX - EXISTING LIENS
1. All Permitted Liens existing on the date of the Credit Agreement.
2. See following list:
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Debtor Jurisdiction Secured Party Type of Filing Subject Property
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
First Horizon Xxxxxx County State of Georgia and State FIFA for 2001
Pharmaceutical Corp. Xxxxxx County Property Taxes
GED Book 9633, Page
145
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
SCHEDULE X
EXISTING INVESTMENTS
Cash 6,549,892
Cash Equivalents 51,217,242
Total 57,767,134
SECTION 1. Amount and Terms of Credit...............................1
1.01. The Commitments..........................................1
1.02. Minimum Amount of Each Borrowing.........................3
1.03. Notice of Borrowing......................................3
1.04. Disbursement of Funds....................................4
1.05. Notes....................................................5
1.06. Conversions..............................................6
1.07. Pro Rata Borrowings......................................7
1.08. Interest.................................................7
1.09. Interest Periods.........................................8
1.10. Increased Costs, Illegality, etc.........................9
1.11. Compensation............................................11
1.12. Change of Lending Office................................11
1.13. Replacement of Lenders..................................12
SECTION 2. Letters of Credit.......................................13
2.01. Letters of Credit.......................................13
2.02. Maximum Letter of Credit Outstandings; Final
Maturities...........................................13
2.03. Letter of Credit Requests; Minimum Stated Amount........14
2.04. Letter of Credit Participations.........................15
2.05. Agreement to Repay Letter of Credit Drawings............16
2.06. Increased Costs.........................................17
SECTION 3. Commitment Commission; Fees; Reductions of Commitment...18
3.01. Fees....................................................18
3.02. Voluntary Termination of Unutilized Revolving Loan
Commitments..........................................19
3.03. Mandatory Reduction of Commitments......................19
SECTION 4. Prepayments; Payments; Taxes............................20
4.01. Voluntary Prepayments...................................20
4.02. Mandatory Repayments....................................21
4.03. Method and Place of Payment.............................24
4.04. Net Payments............................................24
SECTION 5. Conditions Precedent to Credit Events on the
Initial Borrowing Date...............................26
5.01. Effective Date; Notes...................................26
5.02. Officer's Certificate...................................26
5.03. Opinions of Counsel.....................................27
5.04. Corporate Documents; Proceedings; etc...................27
5.05. Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Employment Agreements;
Non-Compete Agreements; Collective Bargaining
Agreements; Tax Sharing Agreements; Existing
Indebtedness Agreements..............................27
5.06. Consummation of the Acquisition.........................28
5.07. Adverse Change, Approvals...............................29
5.08. Litigation..............................................29
5.09. Subsidiaries Guaranty...................................30
5.10. Pledge Agreement........................................30
5.11. Security Agreement......................................30
5.12. Existing Credit Agreement...............................31
5.13. Financial Statements; Pro Forma Balance Sheet;
Projections..........................................31
5.14. Updated Information for Sular and Furandantin...........32
5.15. Business................................................32
5.16. Corporate and Capital Structure.........................32
5.17. Solvency Certificate; Insurance Certificates............32
5.18. Fees, etc...............................................32
SECTION 6. Conditions Precedent to All Credit Events...............33
6.01. Default; Representations and Warranties.................33
6.02. Notice of Borrowing; Letter of Credit Request...........33
6.03. No Excess Cash..........................................33
SECTION 7. Representations, Warranties and Agreements..............34
7.01. Organizational Status...................................34
7.02. Power and Authority.....................................34
7.03. No Violation............................................34
7.04. Approvals...............................................35
7.05. Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections.............................35
7.06. Litigation..............................................36
7.07. True and Complete Disclosure............................36
7.08. Use of Proceeds; Margin Regulations.....................37
7.09. Tax Returns and Payments................................37
7.10. Compliance with ERISA...................................38
7.11. The Security Documents..................................38
7.12. Properties..............................................39
7.13. Capitalization..........................................39
7.14. Subsidiaries............................................39
7.15. Compliance with Statutes, etc...........................40
7.16. Investment Company Act..................................40
7.17. Public Utility Holdings Company Act.....................40
7.18. Environmental Matters...................................40
7.19. Labor Relations.........................................41
7.20. Intellectual Property, etc..............................41
7.21. Indebtedness............................................41
7.22. Insurance...............................................41
7.23. Representations and Warranties in Other Documents.......42
7.24. Legal Names; Type of Organization (and Whether a
Registered Organization); Jurisdiction
of Organization; etc.................................42
SECTION 8. Affirmative Covenants...................................42
8.01. Information Covenants...................................42
8.02. Books, Records and Inspections; Annual Meetings.........46
8.03. Maintenance of Property; Insurance......................46
8.04. Existence; Franchises...................................47
8.05. Compliance with Statutes, etc...........................47
8.06. Compliance with Environmental Laws......................47
8.07. ERISA...................................................48
8.08. End of Fiscal Years; Fiscal Quarters....................50
8.09. Performance of Obligations..............................50
8.10. Payment of Taxes........................................50
8.11. Use of Proceeds.........................................50
8.12. Additional Security; Further Assurances; etc............50
8.13. Ownership of Subsidiaries; etc..........................51
8.14. Corporate Separateness..................................51
8.15. Landlord Waivers........................................51
SECTION 9. Negative Covenants......................................52
9.01. Liens...................................................52
9.02. Consolidation, Merger, Purchase or Sale of Assets, etc..54
9.03. Dividends...............................................55
9.04. Indebtedness............................................55
9.05. Advances, Investments and Loans.........................55
9.06. Transactions with Affiliates............................56
9.07. Capital Expenditures....................................57
9.08. Consolidated Interest Coverage Ratio....................57
9.09. Minimum Consolidated EBITDA.............................57
9.10. Leverage Ratio..........................................58
9.11. Modification of Certificate of Incorporation,
By-Laws and Certain Other Agreements, etc............58
9.12. Limitation on Certain Restrictions on Subsidiaries......59
9.13. Limitation on Issuance of Capital Stock.................59
9.14. Business; etc...........................................59
9.15. Limitation on Creation of Subsidiaries..................60
9.16. Change of Legal Names; Type of Organization
(and Whether a Registered Organization;
Jurisdiction of Organization etc.....................60
SECTION 10. Events of Default.......................................60
10.01. Payments................................................60
10.02. Representations, etc....................................61
10.03. Covenants...............................................61
10.04. Default Under Other Agreements..........................61
10.05. Bankruptcy, etc.........................................61
10.06. ERISA...................................................62
10.07. Security Documents......................................62
10.08. Guaranties..............................................63
10.09. Judgments...............................................63
10.10. Change of Control.......................................63
10.11. Equity Financing........................................63
10.12. Distributorship Agreement...............................63
SECTION 11. Definitions and Accounting Terms........................64
11.01. Defined Terms...........................................64
SECTION 12. The Administrative Agent................................83
12.01. Appointment.............................................83
12.02. Nature of Duties........................................84
12.03. Lack of Reliance on the Administrative Agent............84
12.04. Certain Rights of the Administrative Agent..............84
12.05. Reliance................................................85
12.06. Indemnification.........................................85
12.07. The Administrative Agent in its Individual Capacity.....85
12.08. Holders.................................................85
12.09. Resignation by the Administrative Agent.................86
12.10. The Syndication Agent and the Documentation Agent.......86
SECTION 13. Miscellaneous...........................................87
13.01. Payment of Expenses, etc................................87
13.02. Right of Setoff.........................................88
13.03. Notices.................................................88
13.04. Benefit of Agreement; Assignments; Participations.......89
13.05. No Waiver; Remedies Cumulative..........................91
13.06. Payments Pro Rata.......................................91
13.07. Calculations; Computations..............................92
13.08. GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL..........................92
13.09. Counterparts............................................93
13.10. Effectiveness...........................................93
13.11. Headings Descriptive....................................94
13.12. Amendment or Waiver; etc................................94
13.13. Survival................................................95
13.14. Domicile of Loans.......................................95
13.15. Register................................................95
13.16. Confidentiality.........................................96
13.17. Potential Restructuring of Sular Assets.................97
SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Real Property
SCHEDULE IV Plans
SCHEDULE V Subsidiaries
SCHEDULE VI Legal Names/Types of Organization
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Conversion/Continuation
EXHIBIT B-1 Term Note
EXHIBIT B-2 Revolving Note
EXHIBIT B-3 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of Xxxxx, Xxxxxx, MacKay & Xxxxxxxxxx, P.C.
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Security Agreement
EXHIBIT I Solvency of Certificate
EXHIBIT J Compliance Certificate
EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L Subsidiaries Guaranty
EXHIBIT M Joinder Agreement
1453997
