Exhibit Item 1016 (b) (v)
FOURTH AMENDMENT TO
REVOLVING CREDIT, TERM LOAN, EQUIPMENT
ACQUISITION TERM LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO REVOLVING CREDIT, TERM LOAN, EQUIPMENT ACQUISITION
TERM LOAN AND SECURITY AGREEMENT (the "Amendment") is entered into as of July
__, 2005 to be effective as of the Fourth Amendment Effective Date (as defined
herein) by and between CAPITALSOURCE FINANCE LLC, a Delaware limited liability
company ("Agent"), the Lenders party thereto and each of ADVANCED
NUTRACEUTICALS, INC., a Texas corporation ("Parent"), BACTOLAC PHARMACEUTICAL
INC., a Delaware corporation ("Bactolac"), and NIB, INC. (f/k/a ANI
PHARMACEUTICALS, INC.), a Mississippi corporation ("NIB") and together with
Parent and Bactolac, each a "Borrower" and collectively, the "Borrowers").
Capitalized terms used and not defined herein shall have the meanings assigned
to such terms in the Agreement.
A. WHEREAS, Agent, Lenders and Borrowers are parties to that certain
Revolving Credit, Term Loan, Equipment Acquisition Term Loan and Security
Agreement dated as of March 21, 2003 as amended by a First Amendment dated as of
December 31, 2003, a Second Amendment dated March 23, 2004 and a Third Amendment
dated January 6, 2005 (as heretofore and hereafter amended, supplemented,
modified and/or restated from time to time, collectively the "Agreement"),
pursuant to which the Lenders made Advances and Loans to the Borrowers;
B. WHEREAS, Borrowers have requested that Agent and Lenders agree to permit
Parent to purchase shares of its capital stock at a maximum price of $4.50 per
share and $4,500,000 in the aggregate for all shares so purchased pursuant to a
Tender Offer (as hereinafter defined);
C. WHEREAS, in connection with the Tender Offer Borrowers have requested,
among other things that: (i) the Term Lenders agree to fund the Term Loan up to
$4,000,000; and (ii) the Lenders agree to extend the Maturity Date of the Loans,
in each case, to provide financing for ongoing working capital and to pay
expenses related to the Tender Offer, and the Term Lenders and Lenders, as
applicable, have agreed to do so, subject to the terms and conditions of this
Amendment; and
D. WHEREAS, Borrowers have agreed with Agent and Lenders that, in
connection with the Tender Offer and the transactions contemplated thereby,
other specified terms of the Agreement shall be amended as provided herein.
NOW, THEREFORE, in consideration of the terms and conditions, premises and
the other mutual covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency are hereby acknowledged, the parties
hereto agree as follows:
SECTION 1. Amendments. The sections, definitions, schedules, annexes and
exhibits, as applicable, of and to the Agreement referenced and/or set forth
below are hereby amended as of the Fourth Amendment Effective Date as follows:
(a) Amendments to Revolving Loans.
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(i) Section 2.3 of the Agreement is amended: (a) to delete "two
percent (2.00%)" and to substitute "one half of one percent (0.50%)" in
place thereof; and (b) to delete "six and one half of one percent (6.50%)"
and to substitute "six and one quarter of one percent (6.25%)" in place
thereof.
(ii) Section 2.5 of the Agreement is amended to delete the phrase
"five (5) Business Day clearance charge" and to substitute the phrase
"three (3) Business Day clearance charge" in place thereof.
(b) Amendments to Term Loan.
------------------------
(i) The first "WHEREAS" clause in the recitals to the Agreement is
deleted in the entirety and the following is substituted in place thereof:
"WHEREAS, Borrowers have requested that Lenders make available to Borrowers
(i) a revolving credit facility (the "Revolving Facility") in a maximum
principal amount at any time outstanding of up to Two Million Dollars
($2,500,000) (the "Facility Cap"), and (ii) on the Tender Offer Borrowing
Date, a term loan (the "Term Loan") in an aggregate maximum principal
amount of up to Four Million Dollars ($4,000,000), the proceeds of which
Revolving Facility and Term Loan shall be used solely (i) by Borrowers to
finance the working capital needs of Borrowers in connection with their
nutraceutical vitamin liquid and powder based products business (the
"Business"); and (ii) by the Parent to fund the Tender Offer Transaction,
in each case (i) and (ii), subject to the terms and conditions contained in
this Agreement;
(ii) Section 2.6 is deleted in the entirety and the following is
substituted in place thereof:
"2.6 Term Loan. Subject to and upon the terms and conditions set forth in
this Agreement, each Term Lender agrees to loan to the Borrowers pursuant
to a single drawing on the Tender Offer Borrowing Date its Pro Rata Share
of the Term Loan, which, in the aggregate, equals an original principal
amount of up to Four Million Dollars ($4,000,000), which shall be secured
by all of the Collateral. The Term Loan is not a revolving credit facility
and may not be drawn, repaid and redrawn. Any repayments of principal on
the Term Loan shall be applied to permanently reduce such Term Loan. The
obligations of the Term Lenders hereunder are several and not joint or
joint and several. On the Tender Offer Borrowing Date, Borrowers
irrevocably authorize Agent and Term Lenders to disburse the proceeds of
the Term Loan, in an amount necessary to fund solely the Tender Offer
Transaction, to the applicable account(s) of Borrowers set forth on
Schedule 2.4, in all cases for credit to Borrowers (or to such other
account as to which the Borrowers shall instruct Agent in writing) via
Federal funds wire transfer no later than 3:00 p.m. (New York City time)."
(iii) Section 2.7(a) of the Agreement is amended: (a) to delete "four
and three quarters of one percent (4.75%)" and to substitute "three percent
(3.0%)" in place thereof; (b) to delete "nine and one quarter of one
percent (9.25%)" and to substitute "eight and three quarters of one percent
(8.75%)" in place thereof; and (c) to delete the date "April 1, 2003" and
to substitute "September 1, 2005" in place thereof.
(iv) Section 2.8 of the Agreement is deleted in the entirety and the
following is substituted in place thereof:
"2.8. Repayment of Term Loan; Maturity.
(a) Payment of the outstanding principal balance under the Term Loan (in
addition to the interest payments in Section 2.7) and all other amounts (other
than interest) outstanding under the Term Loan shall be made on each of the
quarterly payment dates indicated below in the amounts set forth below:
Payment Dates Payment
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On each of September, 1, 2005, December 1, 2005,
March 1, 2006 and June 1, 2006 $250,000
On each of September 1, 2006, December 1, 2006,
March 1, 2007 and June 1, 2007 $312,500
On each of September 1, 2007, December 1, 2007,
March 1, 2008 and June 1, 2008 $437,500
(b) The unpaid principal amount of the Term Loan and all other Obligations
under the Term Loan shall be due and payable in full, and the Term Notes shall
mature, if not earlier in accordance with this Agreement, on the Maturity Date."
(c) Amendments to Equipment Acquisition Term Loan. The Borrowers, Agent and
Lenders agree that on the Fourth Amendment Effective Date, the Equipment
Acquisition Term Loan that was previously extended to Borrowers and which has a
balance of zero dollars ($0), shall terminate and the Borrowers shall no longer
be entitled to request Draws thereunder and the Equipment Acquisition Term
Lenders shall no longer have any obligation to make any Equipment Acquisition
Term Loans. The Borrowers, Agent and Lenders further agree that the Equipment
Acquisition Term Note shall be deemed cancelled as of the Fourth Amendment
Effective Date, and shall be returned to the Borrowers as soon as practicable.
The termination of the Equipment Acquisition Term Loan shall not affect the
Borrowers' duties, obligations and covenants under the Agreement, which shall
remain in effect until the Obligations are repaid in accordance with the
Agreement. In furtherance of the foregoing:
(i) The second "WHEREAS" clause in the recitals to the Agreement is
deleted in the entirety.
(ii) The third "WHEREAS" clause in the recitals to the Agreement is
amended to delete the phrase "Equipment Acquisition Term Loan" set forth
therein.
(iii) Section 2.9 of the Agreement is deleted in the entirety and the
following is substituted in place thereof: "2.9 Intentionally Omitted."
(iv) Section 2.10 of the Agreement is deleted in the entirety and the
following is substituted in place thereof: "2.10 Intentionally Omitted."
(v) Section 2.11 of the Agreement is deleted in the entirety and the
following is substituted in place thereof: "2.11 Intentionally Omitted."
(vi) Section 2.14(b) of the Agreement is amended to delete the phrase
"fourth, to the principal payments due under the Equipment Acquisition Term
in the inverse order of their maturities; and fifth to the principal amount
of the Revolving Loans" set forth therein and to substitute the following
in place thereof: "and fourth to the principal amount of the Revolving
Loans".
(vii) Section 2.17(d) of the Agreement is amended to delete the third
sentence set forth therein.
(viii) Section 2.21 of the Agreement is amended to delete the phrase
"the Equipment Acquisition Term Loan" set forth therein each time it
appears therein.
(ix) Section 4.1 of the Agreement is amended to delete the phrase "to
fund the initial Draw under the Equipment Acquisition Term Loan (the
"Initial Draw")" set forth therein.
(x) Section 4.1(a) of the Agreement is amended to delete the phrase
"and a Draw Notice for the Initial Draw under the Equipment Acquisition
Term Loan" set forth therein.
(xi) Section 4.1(d) of the Agreement is amended to delete the phrase
"and the date of funding of the Initial Draw under the Equipment
Acquisition Term Facility" set forth therein.
(xii) Section 4.1(f) of the Agreement is amended to delete the phrase
"and/or Initial Draw" set forth therein.
(xiii) Section 4.2 of the Agreement is amended to delete the phrase
"and/or to fund any Draw under the Equipment Acquisition Term Loan
(including, without limitation, the Initial Draw)" set forth therein.
(xiv) Section 4.2(a) of the Agreement is amended to delete: (a) the
phrase "and (ii) in the case of a Draw, a Draw Notice with necessary
supporting documentation" set forth therein; and (b) the word "Draws" set
forth therein.
(xv) Section 4.2(b) of the Agreement is amended to delete: (a) the
phrase ", and/or funding of the Draw" set forth therein; and (b) the phrase
"and/or Draw" set forth therein.
(xvi) Section 4.2(c) of the Agreement is amended to delete the phrase
", Term Loan, or Draw," set forth therein and to substitute the following
in place thereof: "or Term Loan,".
(xvii) Article V of the Agreement is amended to delete the phrase "the
date of the funding of the Term Loan and the date of any Draw on the
Equipment Acquisition Term Loan as follows:" set forth therein and to
substitute the following in place thereof: "and the date of funding of the
Term Loan as follows:".
(xviii) Section 5.23 of the Agreement is amended to delete the phrase
"and/or the funding of any Draw" set forth therein.
(xix) Section 6.2 of the Agreement is amended to delete the phrase
"Equipment Acquisition Term Loan" set forth therein.
(xx) Section 6.11 of the Agreement is amended to delete the phrase ",
the Term Loan and the Equipment Acquisition Term Loan" and the following is
substituted in place thereof: "and the Term Loan".
(xxi) Section 7.8 of the Agreement is amended to delete the phrase
"other than Eligible Equipment the purchase of which was financed through
an Equipment Acquisition Term Loan" set forth therein.
(xxii) Section 9.1 of the Agreement is amended to delete the phrase
"the Maximum Equipment Acquisition Term Loan Amount, the Equipment
Percentage" set forth therein.
(xxiii) Section 10.5 of the Agreement is amended to delete the phrase
"and Equipment Acquisition Term Lenders" set forth therein.
(xxiv) Section 12.3 of the Agreement is amended to delete the second
sentence set forth therein and to substitute the following in place
thereof:
"Any Term Lender which has exercised its right to set off or otherwise
has received any payment on account of the Obligations shall, to the
extent the amount of any such set off or payment exceeds its Pro Rata
Share of payments obtained by all of the Term Lenders, on account of
such Obligations, purchase for cash (and the other Term Lenders shall
sell) participations in each such other Term Lender's Pro Rata Share of
Obligations as would be necessary to cause such Term Lender to share
such excess with each other Term Lenders, in accordance with their
respective Pro Rata Shares; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from
such purchasing Term Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery."
(xxv) Exhibit B (Form of Draw Notice) is deleted in the entirety.
(xxvi) All references to the Equipment Acquisition Term Loan in the
Loan Documents shall be deemed deleted in the entirety.
(d) Amendments to Permit Tender Offer Transaction.
(i) Section 5.13 of the Agreement is amended to delete the second
sentence set forth therein and to substitute the following in place
thereof:
"Each Borrower is and, after giving effect to the transactions
and the Indebtedness contemplated by the Loan Documents
(including, without limitation, the Term Loan that will be
made on the Tender Offer Borrowing Date), shall be solvent and
able to meet its obligations and liabilities as they become
due, and the assets of such Borrower, at a Fair Valuation,
exceed the total liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of such
Borrower, and no unreasonably small capital base with which to
engage in its anticipated business exists with respect to such
Borrower."
(ii) Section 5.14 of the Agreement is amended to add the following in
between the first and second sentences set forth therein:
"Borrowers shall deliver to Agent true and correct copies of
all Tender Offer Documents. No Tender Offer Document furnished
to Agent by or on behalf of any Borrower, nor any
representation or warranty made by any Borrower in any Tender
Offer Document, in any Loan Document or otherwise in
connection with any Tender Offer Document, contains any untrue
statement of material fact or omits to state any fact
necessary to make the factual statements therein taken as a
whole not materially misleading in light of the circumstances
under which it was furnished."
(iii) Section 7.5 of the Agreement is amended to delete subsection (b)
thereof and to substitute the following in place thereof:
"(b) apply any of its funds, property or assets to the
acquisition, redemption or other retirement of any capital
stock or other securities or interests or of any options to
purchase or acquire any of the foregoing (provided, however,
that (x) such Borrower may redeem its capital stock from
terminated employees, non-employee directors and consultants
pursuant to, but only to the extent required under, the terms
of the related employment or other compensation-related
agreements as long as no Default or Event of Default has
occurred and is continuing or would be caused by or result
therefrom and (y) Parent may consummate the Tender Offer
Transaction in accordance with the terms and conditions set
forth in this Agreement, which Tender Offer Transaction must
be fully consummated on or before December 31, 2005 and must
be on terms and conditions and pursuant to documentation
satisfactory to Agent in its Permitted Discretion),"
(iv) Section 7.7 of the Agreement is amended to delete the period at
the end of the last sentence set forth therein and to substitute the
following in place thereof:
" or (k) amend, modify, restate or change any term or
provision of any Tender Offer Document in a manner that would
be adverse to Agent or any Lender."
(v) Section 7.11 of the Agreement is deleted in the entirety and the
following is substituted in place thereof.
"7.11. Tender Offer.
(a) On the Tender Offer Borrowing Date: (i) all conditions precedent to
the consummation of the Tender Offer as set forth in the Tender Offer
Documents shall have been satisfied; and (ii) all consents and
approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities (including, without limitation, the Securities and
Exchange Commission and each applicable state securities authority)
required in order to make or consummate the Tender Offer in accordance
with the terms of the Tender Offer Documents and all applicable laws
shall have been complied with and all required consents shall have
been obtained, given, filed or taken and shall be in full force and
effect; and
(b) Within three (3) Business Days following the Tender Offer Borrowing
Date (or such longer period following the Tender Offer Borrowing Date
as shall be acceptable to the Agent in its sole discretion), the
Parent shall have: (i) utilized the proceeds from the Term Loan to
purchase all of Parent's Common Stock that is tendered, and not
theretofore withdrawn, pursuant to the Tender Offer (or such lesser
amount of shares as is specified by the Tender Offer Documents) in
accordance with the relevant requirements of the Tender Offer
Documents and all applicable laws; and (ii) immediately following such
purchase, retired all of the shares of Parent's Common Stock so
purchased."
(e) General Amendments.
(i) Excess Cash Flow Recapture. A new Section 2.14(c) is added to the
Agreement as follows:
"(d) On the day of delivery to Agent of Borrowers' annual audited financial
statements in accordance with the terms of this Agreement, but in any event
no later than the one-hundred fifteenth (115th) day after the end of each
fiscal year of Borrower (commencing with the fiscal year of Borrower ending
September 30, 2006), Borrower shall furnish to Agent a written calculation
of Excess Cash Flow for such fiscal year and deliver to Agent, for
distribution to Lenders, an amount equal to fifty percent (50%) of such
Excess Cash Flow, for application to the Loans and the other Obligations in
accordance with the following: first, to all then unpaid fees and expenses;
second, to all accrued and unpaid interest on the Loans; third, to the
principal payments due under the Term Loan in the inverse order of their
maturities; and fourth, to the principal amount of the Revolving Loans;
provided however, that the reduction of the principal balance of the Loans
shall not affect the amount or timing of principal payments (other than the
extent to which reductions have been made with respect to such principal
payments as allocated pursuant to this paragraph) required under this
Agreement until the balance of such Loans is reduced to zero."
(ii) Notes. Section 2.19 of the Agreement is deleted in the entirety
and the following is substituted in place thereof:
"2.19 Evidence of Loans.
(a) Each Lender shall maintain, in accordance with its usual practice,
electronic or written records evidencing the indebtedness and obligations
to such Lender resulting from each Loan made by such Lender from time to
time and the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(b) Agent shall maintain electronic or written records (the "Register") in
which it will record (i) the amount of each Loan made hereunder, the class
and type of each Loan made and any applicable interest rate periods, (ii)
the amount of any principal and/or interest due and payable and/or to
become due and payable from Borrowers to each Lender hereunder and (iii)
all amounts received by Agent hereunder from Borrowers and each Lender's
share thereof.
(c) The entries in the Register shall be prima facie evidence of the
existence and amounts of the obligations and indebtedness therein recorded;
provided, however, that the failure of Agent to maintain such records or
any error therein shall not in any manner affect the obligations of
Borrowers to repay the Loans or Obligations in accordance with their terms.
(d) Borrowers agrees that: (a) all references to "Notes" in the Loan
Documents shall mean all then existing Notes, if any, to the extent issued
(and not returned to Borrowers in reliance upon Section 2.19(c) above) as
the same may be amended, supplemented, modified, divided and/or restated
and in effect from time to time; (b) all references to any returned
"Revolving Notes" in the Loan Documents shall be deemed to refer to the
Revolving Loans (without duplication of such term); and (c) all references
to any returned "Term Notes" in the Loan Documents shall be deemed to refer
to the Term Loans (without duplication of such term); and
(e) Borrowers agree that:
(i) upon written notice by Agent to Borrowers that a new promissory
note or other evidence of indebtedness is requested by Agent (for
itself or on behalf of any Lender) to evidence the Loans and other
Obligations owing or payable to, or to be made by, such Lender,
Borrowers promptly shall (and in any event within three (3) Business
Days of any such request) execute and deliver to Agent an appropriate
Note or Notes in form and substance reasonably satisfactory to Agent
and Borrowers, payable to the order of such Lender in a principal
amount equal to the amount of the Loans owing or payable to such
Lender; and
(ii) upon Agent's written request (for itself or on behalf of any
Lender), and in any event within three (3) Business Days of any such
request, Borrowers shall execute and deliver to Agent new Notes and/or
split or divide the Notes, or any of them, in exchange for the then
existing subject Notes, in such smaller amounts or denominations as
Agent or such Lender shall specify; provided, that the aggregate
principal amount of such new, split or divided Notes shall not exceed
the aggregate principal amount of the Notes outstanding at the time
such request is made; and provided, further, that such Notes that are
replaced shall then be deemed no longer outstanding hereunder and
replaced by such new Notes and returned to Borrowers within a
reasonable period of time after Agent's receipt of the replacement
Notes."
(iii) Section 13.11 of the Agreement is deleted in the entirety and
the following is substituted in place thereof:
"13.11 Release of Collateral. Subject to Section 12.3, promptly
following full performance and satisfaction and indefeasible payment
in full in cash of all Obligations and the termination of this
Agreement and the execution and delivery of a written release by the
Borrowers of all claims against Agent and Lenders, and so long as no
suits, actions, proceedings, or claims are pending or threatened
against any Indemnified Person asserting any damages, losses or
liabilities that are indemnified liabilities hereunder, then the Liens
created hereby shall terminate and Agent and Lenders shall execute and
deliver such documents, at Borrowers' expense, as are necessary to
release Lenders' Liens in the Collateral and shall return the
Collateral to Borrowers; provided, however, that the parties agree
that, notwithstanding any such termination or release or the
execution, delivery or filing of any such documents or the return of
any Collateral, if and to the extent that any such payment made or
received with respect to the Obligations is subsequently invalidated,
determined to be fraudulent or preferential, set aside, defeased or
required to be repaid to a trustee, debtor in possession, receiver,
custodian or any other Person under any Debtor Relief Law, common law
or equitable cause or any other law, then the Obligations intended to
be satisfied by such payment shall be revived and shall continue as if
such payment had not been received by Agent or any Lender and the
Liens created hereby shall be revived automatically without any action
on the part of any party hereto and shall continue as if such payment
had not been received by Agent or any Lender. Agent and Lenders shall
not be deemed to have made any representation or warranty with respect
to any Collateral so delivered except that such Collateral is free and
clear, on the date of such delivery, of any and all Liens arising from
such Person's own acts."
(f) Amendments to Fees. Section 3.1 of the Agreement is deleted and the
following is substituted in place thereof:
"3.1. Commitment Fee. On or before the Fourth Amendment Effective
Date, Borrowers shall pay to Agent, for the ratable benefit of Revolving
Lenders, a nonrefundable commitment fee equal to Thirty Seven Thousand Five
Hundred Dollars ($37,500). On or before the Fourth Amendment Effective
Date, Borrowers shall pay to Agent, for the ratable benefit of Term
Lenders, a nonrefundable commitment fee equal to Eighty Thousand Dollars
($80,000)."
(g) Amendments to Commitments and Financial Covenants.
(i) Schedule A of the Agreement is deleted in the entirety and
Schedule A attached hereto is substituted in place thereof.
(ii) Annex I of the Agreement is deleted in the entirety and Annex I
attached hereto is substituted in place thereof.
(h) Amendments to Definitions. Appendix A is amended as follows:
(i) The following definitions are added in the appropriate alphabetical
order:
(a) "Amended and Restated Disclosure Schedules" shall have the meaning
given such term in Section 3 of the Fourth Amendment.
(b) "Excess Cash Flow" shall mean, at any date of determination, without
duplication, an amount equal to the sum of (i) consolidated net income
or loss of Borrowers and their Subsidiaries for such period, plus (ii)
an amount equal to the amount of depreciation expenses, amortization
expense (including the amortization or impairment of goodwill to the
extent deducted in determining consolidated net income), accrued
non-cash interest expense, and all other non-cash charges deducted in
arriving at such consolidated net income or loss, plus (iii) an amount
equal to the aggregate net cash proceeds of the sale, lease, transfer
or other disposition of assets by the Borrowers their Subsidiaries
during such period to the extent not required to be applied to
mandatory prepayments or payments on the Loans and other than sales of
Inventory in the ordinary course of business, plus (iv) the amount of
any cash tax refunds received by Borrower and their Subsidiaries
during such period, less (v) an amount equal to the aggregate amount
of all prepayments of the Term Loan in excess of required repayments,
less (vi) an amount equal to Capital Expenditures of Borrowers and
their respective Subsidiaries for such period, less (vii) an amount
equal to the sum of all regularly scheduled payments and optional
and/or mandatory payments of principal on Indebtedness of Borrower and
their Subsidiaries actually made during such period.
(c) "Fourth Amendment" shall mean the Fourth Amendment to Revolving
Credit, Term Loan, Equipment Acquisition Term Loan and Security
Agreement entered into as of July __, 2005 by and between Agent and
Borrowers.
(d) "Fourth Amendment Effective Date" shall have the meaning given such
term in the Fourth Amendment.
(e) "Notice Regarding Notes" shall have the meaning provided in Section
2.19.
(f) "Register" shall have the meaning provided in Section 2.19.
(g) "Tender Offer" shall mean a tender offer with respect to the Parent's
Common Stock, pursuant to which Parent shall have offered, subject to
the terms and conditions contained in the Tender Offer Documents, to
purchase shares of the Parent's outstanding Common Stock at a maximum
price of $4.50 per share and $4,500,000 in the aggregate for all
shares so purchased from existing shareholders of the Parent on the
terms contemplated by the Tender Offer Documents.
(h) "Tender Offer Approval Date" shall mean the date upon which all of the
following conditions shall have been and shall continue to be
satisfied: (a) Parent shall have commenced a Tender Offer; (b) Parent
shall have obtained all consents, approvals, licenses, authorizations
and shall have made all filings, recordings and registrations with the
Securities and Exchange Commission and all applicable state securities
authorities which are necessary in accordance with applicable law for
the Tender Offer, or obtained a valid exemption therefrom; and (c)(i)
Parent shall have taken all action necessary for the valid execution,
delivery and performance of all Tender Offer Documents; (ii) each
Tender Offer Document shall be a legal, valid and binding obligation
of Parent, enforceable in accordance with its terms; and (iii) each
Tender Offer Document shall be in full force and effect.
(i) "Tender Offer Borrowing Date" shall mean the date occurring on or
within 10 Business Days following the date upon which all of the
following conditions have been and shall continue to be satisfied and
in any event on or before December 31, 2005: (a) the Tender Offer
Approval Date shall have occurred; and (b) all conditions set forth in
Section 3 of the Fourth Amendment shall have been satisfied.
(j) "Tender Offer Documents" shall mean all of the agreements and
documents governing, or relating to, the Tender Offer Transaction,
together with all schedules, exhibits, annexes, amendments,
supplements or modifications thereto.
(k) "Tender Offer Transaction" shall mean, collectively, (i) the
commencement of the Tender Offer, (ii) the purchase of shares of
Parent's Common Stock pursuant to the Tender Offer and in accordance
with the Tender Offer Documents, and (iii) the payment of all
reasonable fees and expenses in connection with the foregoing.
(ii) The following definitions are amended as follows:
(a) The definition of "Commitment" and "Commitments" is amended to delete
the phrase "(v) with respect to the Equipment Acquisition Term Loan,
as to any Equipment Acquisition Term Lender, the aggregate commitment
of such Equipment Acquisition Term Lender to fund the Equipment
Acquisition Term Loan, as set forth on Schedule A or in the most
recent Lender Addition Agreement executed by such Equipment
Acquisition Term Lender, (vi) as to all Equipment Acquisition Term
Lenders, the aggregate commitment of all Equipment Acquisition Term
Lenders to fund the Equipment Acquisition Term Loan, and (vii)" set
forth therein and to substitute the following in place thereof "and
(v)".
(b) The definition of "Loan" and "Loans" is amended to delete the phrase
"the Equipment Acquisition Term Loan and all Draws thereunder," set
forth therein.
(c) The definition of "Pro Rata Share" is amended to delete the phrase
"(c) with respect to matters relating to a particular Equipment
Acquisition Term Loan of a Equipment Acquisition Term Lender, the
percentage obtained by dividing (i) the aggregate amount of the
portion of the outstanding Equipment Acquisition Term Loan made by
such Lender by (ii) the aggregate amount of the outstanding Equipment
Acquisition Term Loan, and (d)" set forth therein and to substitute
the following in place thereof: "and (c)".
(d) The definition of "Requisite Lenders" is amended to delete the phrase
"(c) with respect to matters relating to Equipment Acquisition Term
Lenders, Equipment Acquisition Term Lenders holding or being
responsible for 51% of more of the sum of the outstanding Equipment
Acquisition Term Loan, and (d)" set forth therein and to substitute
the following in place thereof: " and (c)".
(e) The definition of "Term" is deleted in the entirety and the following
is substituted in place thereof:
"Term" shall mean the period commencing on the Closing Date and ending on
July ___, 2008 [date shall be three years from the closing date of this Fourth
Amendment].
(f) The definition of "Termination Fee" is deleted in the entirety and the
following is substituted in place thereof:
"Termination Fee" shall mean an amount equal to (i) three percent (3%)
of $4,000,000 if the event giving rise to the payment of the
Termination Fee occurs during the period from Fourth Amendment
Effective Date through the first anniversary of the Fourth Amendment
Effective Date and (ii) two percent (2%) of $4,000,000 if the event
giving rise to the payment of the Termination Fee occurs during the
period from the first anniversary of the Fourth Amendment Effective
Date up to the second anniversary of the Fourth Amendment Effective
Date.
(iii) The following definitions are deleted in the entirety:
(a) Draws;
(b) Draw Notice;
(c) Equipment Acquisition Term Lenders;
(d) Equipment Acquisition Term Loan;
(e) Equipment Acquisition Term Note;
(f) Initial Draw; and
(g) Maximum Equipment Acquisition Term Loan Amount.
SECTION 2. Fourth Amendment Effective Date. Upon receipt by Agent of each
of the following, this Amendment shall be deemed to be effective (the "Fourth
Amendment Effective Date"):
(a) An original of this Amendment duly executed by each Borrower, and Agent
shall have accepted and executed this Amendment;
(b) Evidence satisfactory to Agent that the Life Insurance Policy remains
in full force and effect and that the Collateral Assignment of Life Insurance
has been accepted by and duly recorded on the books and records of the insurance
company that issued the Life Insurance Policy;
(c) Agent shall have received all fees, charges and expenses due and
payable to Agent and Lenders pursuant to this Amendment;
(d) Agent shall have received a written opinion of counsel for the
Borrowers in form and content satisfactory to the Agent in its Permitted
Discretion, addressed to the Agent and its counsel, and covering such matters
related to the transactions contemplated hereby as the Agent may request
(including, without limitation, as to authority, existence, incumbency and
enforceability);
(e) Borrowers shall have delivered to Agent updated, true and accurate
amended and restated disclosure schedules to the Agreement (the "Amended and
Restated Disclosure Schedules"), which Amended and Restated Disclosure Schedules
shall be in form and substance satisfactory to Agent in its sole discretion; and
(f) Agent shall have received a certificate of the corporate secretary or
assistant secretary of each Borrower dated as of the date of this Amendment as
to the incumbency and signature of the Persons executing this Fourth Amendment
and the Loan Documents on behalf of such Borrower, in the form attached hereto
as Exhibit 2(f).
SECTION 3. Conditions Subsequent. Borrowers shall deliver to Agent the
following documents and other items, each, satisfactory (in form and substance,
as applicable) to Agent in Agent's sole discretion, duly executed where
appropriate by authorized representatives of Borrowers and all other parties
thereto, as the case may be, on or before the dates set forth below (any failure
by the Borrowers to fully and timely satisfy any of the conditions set forth
below shall constitute an Event of Default):
(a) On or before August 15, 2005, Borrowers shall deliver to Agent updated,
true and accurate disclosure schedules to the Agreement (the "Amended and
Restated Disclosure Schedules"), which Amended and Restated Disclosure Schedules
must be in form and substance satisfactory to Agent in its sole discretion.
Nothing herein or in the Amended and Restated Disclosure Schedules shall be
deemed to constitute a waiver of any breach or Default or Event of Default that
may arise as a result of the matters disclosed therein. In addition, the Amended
and Restated Disclosure Schedules may be amended or supplemented by Borrowers
upon delivery to Agent of such amendments or supplements and, except as
expressly provided otherwise in the Agreement, the written approval thereof by
Agent, provided that any such amendment or supplement to the schedules shall not
be deemed to constitute a waiver of any breach or Default or Event of Default
that may arise as a result of the matters disclosed therein.
(b) On the Tender Offer Borrowing Date, Borrowers shall deliver to Agent
all of the following:
(i) a Borrowing Certificate for the Term Loan in form and substance
satisfactory to Agent, and attached hereto as Exhibit 3(i) and all conditions to
lending set forth in Section 4.2 of this Agreement shall have been satisfied;
(ii) a written opinion of counsel for Borrowers in form and content
satisfactory to Agent in its Permitted Discretion, addressed to the Agent and
its counsel, and covering such matters related to the transactions contemplated
by the Tender Offer Transaction as the Agent may request, including, without
limitation, as to the following: (a) the validity and enforceability of all
Tender Offer Documents and the Tender Offer Transaction; (b) Parent's
receipt of all consents, approvals, licenses and authorizations and Parent's
filing of all recordings, registrations and documents with the Securities and
Exchange Commission and all applicable state securities authorities which are
necessary in accordance with applicable law for the Tender Offer Transaction (or
Parent's receipt of a valid exemption therefrom); (c) that all of the Tender
Offer Documents comply as to form in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended and the applicable rules and
regulations of the commission thereunder;
(iii) true and correct copies of the Tender Offer Documents, and all terms
and conditions thereof shall be satisfactory to the Agent; and
(iv) a compliance certificate of Borrowers' chief financial officer in form
satisfactory to Agent, together with such additional documents and information
as Agent may request, in its Permitted Discretion, stating that such person has
reviewed the relevant terms of the Loan Documents and that before and after
giving effect to the Tender Offer Borrowing Date and the Tender Offer
Transaction: (a) no Default or Event of Default has occurred or is continuing;
(b) Borrowers have Excess Availability plus unencumbered cash in deposit
accounts subject to Account Control Agreements in favor of Agent of at least
$1,000,000; (v) Borrowers have EBITDA for the twelve (12) consecutive months
ending on such date of at least $3,500,000; and (d) the representations and
warranties contained in the Loan Documents are true and correct in all material
respects.
SECTION 4. Agreement in Full Force and Effect as Amended. Except as
specifically amended hereby, the Agreement and other Loan Documents shall remain
in full force and effect and hereby are ratified and confirmed as so amended.
This Amendment shall not constitute a novation, satisfaction and accord, cure,
release and/or satisfaction of the Agreement and/or other Loan Documents, but
shall constitute an amendment thereof. The parties hereto agree to be bound by
the terms and conditions of the Agreement and Loan Documents as amended by this
Amendment, as though such terms and conditions were set forth herein and therein
in full. Each reference in the Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of similar import shall mean and be a reference to
the Agreement as amended by this Amendment, and each reference herein or in any
other Loan Document or any other document or instrument to the Agreement shall
mean and be a reference to the Agreement as amended and modified by this
Amendment. Each reference in the Agreement and/or other Loan Documents or any
other document or instrument to any Loan Documents or words of similar import
shall mean and be a reference to the Loan Documents as amended hereby.
SECTION 5. Representations.
Each Borrower hereby represents and warrants to Agent as follows as of the
date hereof, as of the Fourth Amendment Effective Date and as of the Tender
Offer Borrowing Date: (i) it is duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of organization; (ii) the execution,
delivery and performance by it of this Amendment to which it is a party are
within its powers, have been duly authorized, and do not contravene (A) its
articles of incorporation or other organizational documents, or (B) any
applicable law; (iii) no consent, license, permit, approval or authorization of,
or registration, filing or declaration with any Governmental Authority or other
Person is required in connection with the execution, delivery, performance,
validity or enforceability of this Amendment by or against it; (iv) this
Amendment has been duly executed and delivered by it; (v) this Amendment
constitutes its legal, valid and binding obligations enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity;
(vi) it is in compliance with all covenants and agreements in the Loan Documents
and it is not in default under the Agreement or any other Loan Document and no
Default or Event of Default exists, has occurred and is continuing or would
result by the execution, delivery or performance of this Amendment, including,
without limitation, any violation or breach of or Event of Default with respect
to Annex I of the Agreement, including as amended hereby, and (vii) the
representations and warranties contained in the Loan Documents are true and
correct in all material respects as of the date hereof and as of the Fourth
Amendment Effective Date as if made on the date hereof, except for such
representations and warranties limited by their terms to a specific date.
SECTION 6. EACH BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT IT HAS NO
DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR
NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF
ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES
OF ANY KIND OR NATURE FROM AGENT AND THE LENDERS. EACH BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT, THE LENDERS AND
EACH OF THEIR RESPECTIVE PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS
(COLLECTIVELY, THE "RELEASED PARTIES") FROM ALL POSSIBLE CLAIMS, DEMANDS,
ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES AND LIABILITIES WHATSOEVER,
WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR
UNSUSPECTED, FIXED, CONTINGENT OR CONDITIONAL, OR AT LAW OR IN EQUITY, IN ANY
CASE ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED THAT ANY BORROWER MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED
PARTIES, IF ANY, IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT,
TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND THAT ARISE FROM ANY
LOANS, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE AGREEMENT OR OTHER LOAN
DOCUMENTS, AND/OR NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT, INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING
OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE.
SECTION 7. Miscellaneous.
(a) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, be deemed to be an amendment or
modification of, or operate as a waiver of, any provision of the Agreement or
any other Loan Document or any right, power or remedy of Agent, nor constitute a
waiver of any provision of the Agreement or any other Loan Document, or any
other document, instrument and/or agreement executed or delivered in connection
therewith or of any Default or Event of Default under any of the foregoing, in
each case whether arising before or after the date hereof or as a result of
performance hereunder or thereunder. This Amendment shall not preclude the
future exercise of any right, remedy, power or privilege available to Agent
whether under the Agreement, other Loan Documents, at law or otherwise.
(b) This Amendment may be executed in any number of counterparts (including
by facsimile), and by the different parties hereto or thereto on the same or
separate counterparts, each of which shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement. Each party agrees that it will be bound by its own facsimile
signature and that it accepts the facsimile signature of each other party. The
descriptive headings of the various sections of this Amendment are inserted for
convenience of reference only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof or thereof. Whenever the context
and construction so require, all words herein in the singular number herein
shall be deemed to have been used in the plural, and vice versa, and the
masculine gender shall include the feminine and neuter and the neuter shall
include the masculine and feminine.
(c) This Amendment may not be changed, amended, restated, waived,
supplemented, discharged, canceled, terminated or otherwise modified orally or
by any course of dealing or in any manner other than as provided in the
Agreement or the applicable Loan Document. This Amendment shall be considered
part of the Agreement and shall be a Loan Document for all purposes under the
Agreement and other Loan Documents.
(d) This Amendment, the Agreement, and the Loan Documents constitute the
final, entire agreement and understanding between the parties with respect to
the subject matter hereof and thereof and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements between the parties, and
shall be binding upon and inure to the benefit of the successors and assigns of
the parties hereto and thereto. There are no unwritten oral agreements between
the parties with respect to the subject matter hereof and thereof. If any
provision of this Amendment is adjudicated to be invalid under applicable laws
or regulations, such provision shall be inapplicable to the extent of such
invalidity without affecting the validity or enforceability of the remainder of
this Amendment which shall be given effect so far as possible.
(e) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE AGREEMENT AND SHALL BE
SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE AGREEMENT.
(f) No Borrower may assign, delegate or transfer this Amendment or any of
its rights or obligations hereunder or thereunder and any delegation, transfer
or assignment in violation hereof shall be null and void. No rights are intended
to be created under this Amendment for the benefit of any third party donee,
creditor or incidental beneficiary of any Borrower or any other Person other
than Agent and each Lender. Nothing contained in this Amendment shall be
construed as a delegation to Agent of Borrowers' duties of performance,
including, without limitation, any duties under any account or contract in which
Agent has a security interest or Lien. This Amendment shall be binding upon
Borrowers and Agent and Lenders and their respective successors and permitted
assigns. Agent's and Lenders' ability to assign, sell or transfer all of any
part of this Amendment and shall be governed by the Agreement.
(g) Each Borrower hereby (i) consents to the execution and delivery of this
Amendment by the other Borrowers, (ii) agrees that this Amendment and shall not
limit or diminish the obligations of the subject Borrower under the Loan
Documents, (iii) reaffirms its obligations under each of the Loan Documents to
which it is a party, and (iv) agrees that each of such Loan Documents remain in
full force and effect and are hereby ratified and confirmed. All representations
and warranties made in this Amendment and shall survive the execution and
delivery of this Amendment and no investigation by Agent shall affect such
representations or warranties or the right of Agent to rely upon them.
(h) Each Borrower shall execute and deliver such other documents, certificates
and/or instruments and take such other actions as Agent may reasonably request
in order more effectively to consummate the transactions contemplated hereby.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
SIGNATURE PAGE TO
FOURTH AMENDMENT TO REVOLVING CREDIT, TERM LOAN, EQUIPMENT
ACQUISITION TERM LOAN AND SECURITY AGREEMENT
IN WITNESS WHEREOF, the parties have caused this Fourth Amendment To
Revolving Credit, Term Loan, Equipment Acquisition Term Loan And Security
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first written above to be effective on and as of the Fourth
Amendment Effective Date.
BORROWERS: ADVANCED NUTRACEUTICALS, INC.,
a Texas corporation
By:_________________________________
Name:
Title:
BACTOLAC PHARMACEUTICAL, INC.,
a Delaware corporation
By:_________________________________
Name:
Title:
NIB, INC. (f/k/a/ ANI PHARMACEUTICALS, INC.),
a Mississippi corporation
By:_________________________________
Name:
Title:
AGENT AND LENDER:
CAPITALSOURCE FINANCE LLC
By:_________________________________
Name:
Title:
SCHEDULE A
Lenders/Commitments
Revolving Lenders Revolving Commitment
--------------------------------------------------------------------------------
CapitalSource Finance LLC $2,500,000
0000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Corporate Finance Group, Portfolio Manager
Telephone: (000) 000-0000
FAX: (000) 000-0000
E-Mail: xxxxxxx@xxxxxxxxxxxxx.xxx
Wire Instructions:
Bank: Bank of America, Baltimore, MD
Account: 003930559738
ABA: 000000000
Account Name: CapitalSource Funding LLC
Reference: Advanced Nutraceuticals, Inc.
--------------------------------------------------------------------------------
Total: $2,500,000
================================================================================
Term Lenders Term Loan Commitment
--------------------------------------------------------------------------------
CapitalSource Finance LLC $4,000,000
0000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Corporate Finance Group, Portfolio Manager
Telephone: (000) 000-0000
FAX: (000) 000-0000
E-Mail: xxxxxxx@xxxxxxxxxxxxx.xxx
Wire Instructions:
Bank: Bank of America, Baltimore, MD
Account: 003930559738
ABA: 000000000
Account Name: CapitalSource Funding LLC
Reference: Advanced Nutraceuticals, Inc.
--------------------------------------------------------------------------------
Total: $4,000,000
================================================================================
ANNEX I
-------
FINANCIAL COVENANTS
-------------------
1) Fixed Charge Coverage Ratio
The Fixed Charge Coverage Ratio of the Borrowers for the twelve (12) month
period ending on any date set forth in the table below shall not be less than
the minimum ratio set forth in the table below opposite such date:
------------------------------------------------------------ ----------------
Date Minimum Ratio
------------------------------------------------------------ ----------------
December 31, 2005 1.30 to 1.00
------------------------------------------------------------ ----------------
March 31, 2006 1.30 to 1.00
------------------------------------------------------------ ----------------
June 30, 2006 1.30 to 1.00
------------------------------------------------------------ ----------------
September 30, 2006 1.30 to 1.00
------------------------------------------------------------ ----------------
December 31, 2006 1.40 to 1.00
------------------------------------------------------------ ----------------
March 31, 2007 1.40 to 1.00
------------------------------------------------------------ ----------------
June 30, 2007 1.40 to 1.00
------------------------------------------------------------ ----------------
September 30, 2007 1.40 to 1.00
------------------------------------------------------------ ----------------
December 31, 2007 and the last day of each
calendar 1.50 to 1.00 quarter thereafter
------------------------------------------------------------ ----------------
2) Senior Leverage Ratio
The Senior Leverage Ratio of the Borrowers for the twelve (12) month period
ending on any date set forth in the table below shall not be more than the ratio
set forth in the table below opposite such date:
----------------------------------------------------------------------------
Date Maximum Senior Leverage Ratio
----------------------------------------------------------------------------
December 31, 2005 2.00 to 1.00
----------------------------------------------------------------------------
March 31, 2006 2.00 to 1.00
----------------------------------------------------------------------------
June 30, 2006 1.75 to 1.00
----------------------------------------------------------------------------
----------------------------------------------------------------------------
September 30, 2006 1.75 to 1.00
----------------------------------------------------------------------------
December 31, 2006 1.50 to 1.00
----------------------------------------------------------------------------
March 31, 2007 1.50 to 1.00
----------------------------------------------------------------------------
June 30, 2007 1.25 to 1.00
----------------------------------------------------------------------------
September 30, 2007 1.25 to 1.00
----------------------------------------------------------------------------
December 31, 2007 and the last day of each
calendar 1.00 to 1.00 quarter thereafter
----------------------------------------------------------------------------
3) Capital Expenditure
Borrowers shall not permit Capital Expenditures in the aggregate to exceed
$600,000 in Borrowers' fiscal year ending September 30, 2005 and $400,000 in any
fiscal year of the Borrowers thereafter.
4) Minimum EBITDA
The EBITDA of the Borrowers on a consolidated basis for the twelve (12)
month period ending on any date set forth in the table below shall not be less
than the minimum amount set forth in the table below opposite such date:
-----------------------------------------------------------------------------
Date Minimum EBITDA
-----------------------------------------------------------------------------
December 31, 2005 $3,600,000
-----------------------------------------------------------------------------
March 31, 2006 $3,800,000
-----------------------------------------------------------------------------
June 30, 2006 $3,900,000
-----------------------------------------------------------------------------
September 30, 2006 $4,150,000
-----------------------------------------------------------------------------
December 31, 2006 $4,400,000
-----------------------------------------------------------------------------
March 31, 2007 $4,600,000
-----------------------------------------------------------------------------
June 30, 2007 $4,800,000
-----------------------------------------------------------------------------
September 30, 2007 $5,000,000
-----------------------------------------------------------------------------
December 31, 2007 $5,100,000
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
March 31, 2008 $5,200,000
-----------------------------------------------------------------------------
June 30, 2008 and the last day of each
calendar quarter $5,300,000 thereafter
-----------------------------------------------------------------------------
5) Defined Terms
For purposes of the covenants set forth in this Annex I, the terms listed
below shall have the following meanings:
"Capital Expenditures" shall mean for Borrowers, on a consolidated basis,
the sum (without duplication) of all expenditures (whether paid in cash or
accrued as liabilities) that are or are required to be treated as capital
expenditures under GAAP.
"EBITDA" shall mean for Borrowers, on a consolidated basis, the sum,
without duplication, of the following: Net Income determined in accordance with
GAAP, plus, (a) Interest Expense, (b) taxes on income, (c) depreciation expense,
(d) amortization expense, (e) all other non-cash and/or non-recurring charges
and expenses approved by Agent in its Permitted Discretion, excluding accruals
for cash expenses made in the ordinary course of business, and (f) loss from any
sale of assets, other than sales in the ordinary course of business, less (x)
gain from any sale of assets, other than sales in the ordinary course of
business, and (y) all non-cash and/or non-recurring income, all of the foregoing
determined in accordance with GAAP.
"Fixed Charge Coverage Ratio" shall mean, for Borrowers on a consolidated
basis, at any date of determination, the ratio of (a) EBITDA, minus non-financed
Capital Expenditures, minus income taxes paid in cash, to (b) Fixed Charges, for
the twelve (12) months then ending taken as one accounting period.
"Fixed Charges" shall mean, the sum of the following for Borrowers, on a
consolidated basis: (a) Total Debt Service, (b) dividends and/or distributions
paid in cash, and (c) cash paid for stock repurchases and/or redemptions (other
than up to $4,500,000 paid by Parent pursuant to the Tender Offer Transaction).
"Interest Expense" shall mean total interest expense generated during the
period in question (including attributable to conditional sales contracts,
Capital Leases and other title retention agreements in accordance with GAAP) of
Borrowers on a consolidated basis with respect to all outstanding Indebtedness
including accrued interest and interest paid in kind and capitalized interest
but excluding commissions, discounts and other fees owed with respect to letters
of credit and bankers' acceptance financing, and net costs under Interest Rate
Agreements.
"Interest Rate Agreement" shall mean any interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to hedge the
position with respect to interest rates.
"Net Income" shall mean the net income (or loss) of Borrowers on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP; provided, that there shall be excluded (i)
the income (or loss) of any Person in which any other Person (other than
Borrowers) has a joint interest, except to the extent of the amount of dividends
or other distributions actually paid to a Borrower by such Person during such
period, (ii) the income (or loss) of any Person accrued prior to the date it
becomes a Borrower or is merged into or consolidated with a Borrower or that
Person's assets are acquired by a Borrower, (iii) the income of any Subsidiary
of Borrowers to the extent that the declaration or payment of dividends or
similar distributions of that income by that Subsidiary is not at the time
permitted by operation of the terms of the charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (iv) compensation expense resulting from the issuance of
capital stock, stock options or stock appreciation rights issued to former or
current employees, including officers, of a Borrower, or the exercise of such
options or rights, in each case to the extent the obligation (if any) associated
therewith is not expected to be settled by the payment of cash by a Borrower or
any Affiliate thereof, and (v) compensation expense resulting from the
repurchase of capital stock, options and rights described in clause (iv) of this
definition of Net Income.
"Senior Debt" shall mean, at any date of determination, the total
Indebtedness of Borrowers, on a consolidated basis, under the Loan Documents.
"Senior Debt Leverage Ratio" shall mean, for Borrowers on a consolidated
basis, at any date of determination, the ratio of (i) Senior Debt outstanding on
such date, to (ii) EBITDA for the applicable period then ending taken as one
accounting period.
"Total Debt" shall mean, at any date of determination, the total
Indebtedness of Borrowers on a consolidated basis, including, without
limitation, all Indebtedness under the Loan Documents and all accrued interest
on the foregoing (including, without limitation, all interest paid in kind) and
all Capital Leases, but excluding current operating liabilities. For all
purposes of this Agreement, the term "Total Debt" shall be calculated to include
(i.e., not net of) discounts, deductions or allocations relating or applicable
to or arising from any equity or equity participation or fees, whether under
GAAP or otherwise.
"Total Debt Service" shall mean the sum of (i) scheduled or other required
payments of principal on Total Debt (excluding the repayment of the note due to
Xx. Xxxxx so long as such repayment occurs on or immediately after the Closing
Date as permitted hereunder), (ii) any other cash fees due or payable with
respect to, in connection with or on Total Debt, and (iii) cash Interest
Expense.
