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EXHIBIT 10.11
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CREDIT AGREEMENT
Dated as of June 26, 1997
among
XXXXXX INTERNATIONAL INC.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N.A.,
as Agent and Issuing Lender
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS.......................................................................................... 1
1.1 Definitions................................................................................... 1
1.2 Computation of Time Periods................................................................... 29
1.3 Accounting Terms.............................................................................. 29
1.4 Terms Generally............................................................................... 30
SECTION 2 CREDIT FACILITIES.................................................................................... 30
2.1 Revolving Loans............................................................................... 30
2.2 Letter of Credit Subfacility.................................................................. 32
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES....................................................... 37
3.1 Default Rate.................................................................................. 37
3.2 Extension and Conversion...................................................................... 38
3.3 Prepayments................................................................................... 39
3.4 Termination and Reduction of Commitments...................................................... 41
3.5 Fees.......................................................................................... 41
3.6 Increased Cost and Reduced Return............................................................. 42
3.7 Limitation on Types of Loans.................................................................. 44
3.8 Illegality.................................................................................... 44
3.9 Treatment of Affected Loans................................................................... 44
3.10 Taxes......................................................................................... 45
3.11 Compensation.................................................................................. 47
3.12 Pro Rata Treatment............................................................................ 47
3.13 Sharing of Payments........................................................................... 48
3.14 Payments, Computations, Etc................................................................... 48
3.15 Evidence of Debt.............................................................................. 50
SECTION 4 CONDITIONS........................................................................................... 51
4.1 Closing Conditions............................................................................ 51
4.2 Conditions to Extension of Credit for Purchase of U-Gene...................................... 56
4.3 Conditions to Extension of Credit for Purchase of gmi......................................... 57
4.4 Conditions to all Extensions of Credit........................................................ 60
SECTION 5 REPRESENTATIONS AND WARRANTIES....................................................................... 61
5.1 Financial Condition........................................................................... 61
5.2 No Material Change............................................................................ 62
5.3 Organization and Good Standing................................................................ 62
5.4 Power; Authorization; Enforceable Obligations................................................. 63
5.5 No Conflicts.................................................................................. 63
5.6 No Default.................................................................................... 63
5.7 Ownership of Assets........................................................................... 63
5.8 Indebtedness.................................................................................. 64
5.9 Litigation.................................................................................... 64
5.10 Taxes......................................................................................... 64
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5.11 Compliance with Law........................................................................... 64
5.12 ERISA......................................................................................... 64
5.13 Subsidiaries.................................................................................. 65
5.14 Governmental Regulations, Etc................................................................. 66
5.15 Purpose of Loans and Letters of Credit........................................................ 66
5.16 Environmental Matters......................................................................... 67
5.17 Intellectual Property......................................................................... 68
5.18 Solvency...................................................................................... 69
5.19 Investments................................................................................... 69
5.20 Location of Collateral........................................................................ 69
5.21 Disclosure.................................................................................... 69
5.22 No Burdensome Restrictions; Material Agreements............................................... 69
5.23 Labor Matters................................................................................. 70
5.24 Nature of Business............................................................................ 70
5.25 Representations and Warranties from Other Agreements.......................................... 70
5.26 Security Documents............................................................................ 71
5.27 Transactions with Affiliates.................................................................. 72
5.28 Ownership..................................................................................... 72
5.29 Insurance..................................................................................... 72
5.30 Certain Transactions.......................................................................... 73
SECTION 6 AFFIRMATIVE COVENANTS................................................................................ 73
6.1 Information Covenants......................................................................... 73
6.2 Preservation of Existence and Franchises...................................................... 76
6.3 Books and Records............................................................................. 76
6.4 Compliance with Law........................................................................... 76
6.5 Payment of Taxes and Other Indebtedness....................................................... 76
6.6 Insurance; Certain Proceeds................................................................... 77
6.7 Maintenance of Property....................................................................... 78
6.8 Performance of Obligations.................................................................... 78
6.9 Use of Proceeds............................................................................... 78
6.10 Audits/Inspections............................................................................ 79
6.11 Additional Credit Parties..................................................................... 79
6.12 Pledged Assets................................................................................ 80
6.13 Life Insurance................................................................................ 80
6.14 Payment of Indebtedness....................................................................... 81
SECTION 7 NEGATIVE COVENANTS................................................................................... 81
7.1 Indebtedness.................................................................................. 81
7.2 Liens......................................................................................... 82
7.3 Nature of Business............................................................................ 82
7.4 Consolidation, Merger, Dissolution, etc....................................................... 82
7.5 Asset Dispositions............................................................................ 84
7.6 Investments; Acquisitions..................................................................... 84
7.7 Restricted Payments........................................................................... 84
7.8 Prepayments of Indebtedness, etc.............................................................. 85
7.9 Transactions with Affiliates.................................................................. 85
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7.10 Fiscal Year; Organizational Documents......................................................... 86
7.11 Limitation on Restricted Actions.............................................................. 86
7.12 Ownership of Subsidiaries: Limitations on Borrower............................................ 86
7.13 Sale Leasebacks............................................................................... 87
7.14 Capital Expenditures.......................................................................... 87
7.15 No Further Negative Pledges................................................................... 87
7.16 Impairment of Security Interests.............................................................. 87
7.17 Sales of Receivables.......................................................................... 87
7.18 Financial Covenants........................................................................... 87
SECTION 8 EVENTS OF DEFAULT.................................................................................... 89
8.1 Events of Default............................................................................. 89
8.2 Acceleration; Remedies........................................................................ 92
SECTION 9 AGENCY PROVISIONS.................................................................................... 93
9.1 Appointment, Powers and Immunities............................................................ 93
9.2 Reliance by Agent............................................................................. 94
9.3 Defaults...................................................................................... 94
9.4 Rights as Lender.............................................................................. 95
9.5 Indemnification............................................................................... 95
9.6 Non-Reliance on Agent and Other Lenders....................................................... 95
9.7 Resignation of Agent.......................................................................... 96
SECTION 10 MISCELLANEOUS....................................................................................... 96
10.1 Notices....................................................................................... 96
10.2 Right of Set-Off.............................................................................. 97
10.3 Benefit of Agreement.......................................................................... 98
10.4 No Waiver; Remedies Cumulative................................................................100
10.5 Expenses; Indemnification.....................................................................100
10.6 Amendments, Waivers and Consents..............................................................101
10.7 Counterparts..................................................................................103
10.8 Headings......................................................................................103
10.9 Survival......................................................................................103
10.10 Governing Law; Submission to Jurisdiction; Venue..............................................103
10.11 Severability..................................................................................104
10.12 Entirety......................................................................................104
10.13 Binding Effect; Termination...................................................................104
10.14 Confidentiality...............................................................................105
10.15 Source of Funds...............................................................................105
10.16 Conflict......................................................................................106
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SCHEDULES
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Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 1.1C Existing Option Holders
Schedule 2.1(a) Commitments
Schedule 5.1 Liabilities
Schedule 5.4 Required Consents, Authorizations, Notices and Filings
Schedule 5.9 Litigation
Schedule 5.12 ERISA
Schedule 5.13 Subsidiaries
Schedule 5.16 Environmental Disclosures
Schedule 5.17 Intellectual Property
Schedule 5.20(a) Real Property Locations
Schedule 5.20(b) Collateral Locations
Schedule 5.20(c) Chief Executive Offices/Principal Places of Business
Schedule 5.22 Material Contracts
Schedule 5.23 Labor Matters
Schedule 5.26 Filing Locations
Schedule 5.28(a) Outstanding Warrants
Schedule 5.28(b) List of Shareholders of the Borrower
Schedule 7.1(b) Indebtedness
EXHIBITS
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Exhibit A Form of Pledge Agreement
Exhibit B Form of Security Agreement
Exhibit C Form of Indemnity, Subrogation and Contribution Agreement
Exhibit D Form of Intercompany Note
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Guarantee Agreement
Exhibit G Form of Notice of Borrowing
Exhibit H Form of Revolving Note
Exhibit I Form of Notice of Extension/Conversion
Exhibit J Form of Depository Bank Agreement
Exhibit K Form of Officer's Compliance Certificate
Exhibit L Form of Joinder Agreement
Exhibit M Form of Perfection Certificate
Exhibit N-1 Form of Opinion of General Counsel
Exhibit N-2 Form of Opinion of Foreign Counsel
Exhibit O Form of Permitted Tax Distribution Agreement
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CREDIT AGREEMENT dated as of June 26, 1997 (as amended, modified,
restated or supplemented from time to time, this "AGREEMENT"), among XXXXXX
INTERNATIONAL INC., an Ohio corporation (the "BORROWER"), the Lenders (as
defined herein) and NATIONSBANK, N. A., as Agent for the Lenders (in such
capacity, the "AGENT").
The Borrower has requested that the Lenders provide a credit facility
to the Borrower in the aggregate principal amount of up to $20,000,000 for the
purposes set forth in this Agreement below. The Lenders have agreed to make the
requested credit facility available to the Borrower on the terms and subject to
the conditions set forth in this Agreement below. Accordingly, the Borrower, the
Lenders and the Agent agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings specified below:
"ACQUIRING SUBSIDIARY" shall have the meaning assigned to that term in
Section 4.2(a).
"ACQUISITION AGREEMENTS" shall mean the U-Gene Acquisition Agreement
and the gmi Acquisition Agreement, or either of them.
"ADDITIONAL GUARANTOR" shall mean each Person that becomes a Domestic
Subsidiary of the Borrower after the Closing Date.
"ADJUSTED BASE RATE" shall mean the Base Rate PLUS 0.00%.
"ADJUSTED EURODOLLAR RATE" shall mean the Eurodollar Rate PLUS the
Applicable Percentage.
"AFFECTED LOANS" shall have the meaning assigned to that term in
Section 3.9.
"AFFECTED TYPE" shall have the meaning assigned to that term in Section
3.9.
"AFFILIATE" shall mean (a) with respect to any Person (including the
Credit Parties), any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person and
(b) with respect to the Credit Parties, any Person directly or indirectly owning
or holding five percent (5%) or more of the equity interest in such Person. For
purposes of this definition, "control" when used with respect to any Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
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"AGENCY SERVICES ADDRESS" shall mean NationsBank, N.A., NC1-001-15-04,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attn: Agency Services,
or such other address as may be identified by written notice from the Agent to
the Borrower.
"AGENT" shall have the meaning assigned to that term in the heading
hereof, together with its successors.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an Affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or such
other office of such Lender (or an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written notice in
accordance with the terms hereof as the office by which its Loans of such Type
are to be made and maintained.
"APPLICABLE PERCENTAGE" shall mean, for purposes of calculating (i) the
applicable interest rate for any day for any Eurodollar Loan, (ii) the
applicable rate of the Facility Fee for any day for purposes of Section 3.5(b)
and (iii) the applicable rate of the Standby Letter of Credit Fee for any day
for purposes of Section 3.5(c)(i), the appropriate applicable percentage set
forth in the table below corresponding to the Total Leverage Ratio as of the
most recent Calculation Date:
Applicable Applicable Percentage
Pricing Total Percentage For For Standby Letter of Applicable Percentage
Level Leverage Ratio Eurodollar Loans Credit Fees For Facility Fees
I Less than = 2.75 to 1.0 1.125% 1.125% 0.375%
II Less than = 3.75 to 1.0 but 1.625% 1.625% 0.375%
Greater than 2.75 to 1.0
III Less than = 4.75 to 1.0 but 2.000% 2.000% 0.500%
Greater than 3.75 1.0
IV Less than = 5.75 to 1.0 but 2.250% 2.250% 0.500%
Greater than 4.75 to 1.0
V Less than 5.75 to 1.0 2.375% 2.375% 0.625%
Each Applicable Percentage shall be determined and adjusted quarterly on the
date (each a "CALCULATION DATE") five (5) Business Days after the date by which
the Borrower is required to provide an officer's certificate in accordance with
the provisions of Section 6.1(c) for the most recently ended fiscal quarter of
the Borrower; PROVIDED, THAT (a) the Applicable Percentages to be used for the
period from the Closing Date through the Agent's receipt of the officer's
certificate in accordance with the provisions of Section 6.1(c) for the
Borrower's fiscal quarter ending June 30, 1997, shall be based on Pricing Level
IV (as shown above) and, thereafter, the Pricing Level shall be determined by
the Total Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrower preceding the applicable Calculation Date, and (b) if
the Borrower fails to provide the officer's certificate to the Agency Services
Address as required by Section 6.1(c) for the most recently ended fiscal
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quarter of the Borrower preceding the applicable Calculation Date, the
Applicable Percentage from such Calculation Date shall be based on Pricing Level
V (as shown above) until such time as an appropriate officer's certificate is
provided, whereupon the Pricing Level shall be determined by the Total Leverage
Ratio as of the last day of the most recently ended fiscal quarter of the
Borrower preceding such Calculation Date. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date. Any
adjustment in the Applicable Percentages shall be applicable to all Loans then
existing or subsequently made or issued.
"ASSET DISPOSITION" shall mean the disposition of any or all of the
assets of any Credit Party (including the Capital Stock of a Subsidiary),
whether by sale, lease (including any Sale and Leaseback Transaction), transfer,
Casualty, Condemnation or otherwise; PROVIDED THAT, the foregoing definition
shall not be deemed to imply that any such Asset Disposition is permitted under
this Agreement. The term "Asset Disposition" shall not include any Equity
Issuance.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and its assignee in the form of EXHIBIT E or such other
similar form as shall be approved by the Agent and the Borrower.
"BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"BANKRUPTCY EVENT" shall mean, with respect to any Person, the
occurrence of any of the following with respect to such Person: (a) a court or
governmental agency having jurisdiction in the premises shall enter a decree or
order for relief in respect of such Person in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its Property or ordering the winding up or liquidation of its affairs; or (b)
there shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and such involuntary case or other
case, proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (c) such Person shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its Property or make any general assignment for the benefit of creditors; or (d)
such Person shall be unable to, or shall admit in writing its inability to, pay
its debts generally as they become due.
"BASE RATE" shall mean, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one percent
(0.5%) and (b) the Prime Rate for such day. Any change in the Base Rate due to a
change in the Prime Rate or the Federal
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Funds Rate shall be effective on the effective date of such change in the Prime
Rate or Federal Funds Rate.
"BASE RATE LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate.
"BORROWER" shall mean the Person identified as such in the heading
hereof, together with its permitted successors and assigns.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; EXCEPT, THAT, when used in
connection with a Eurodollar Loan, such day shall also be a day on which
dealings between banks are carried on in U.S. dollar deposits in London,
England.
"CALCULATION DATE" shall have the meaning assigned to that term in the
definition of "Applicable Percentage" set forth in this Section 1.1.
"CAPITAL LEASE" shall mean, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" shall mean (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests, (e) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person and (f) all rights to purchase, warrants, options
and other securities exercisable for, exchangeable for or convertible into any
of the foregoing.
"CASH EQUIVALENTS" shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve (12) months from the date of acquisition, (b) U.S. dollar
denominated certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or the
equivalent thereof (any such bank being an "APPROVED BANK"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six (6) months of the date of acquisition, (d) repurchase
agreements with a bank or trust company (including any of the Lenders) or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of
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America in which the Borrower or any Subsidiary shall have a perfected first
priority security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations and (e) Investments, classified in accordance with GAAP
as current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
"CASUALTY" shall mean any casualty or other loss, damage or destruction
of any Property of any Credit Party.
"CHIEF FINANCIAL OFFICER" of any company shall mean the chief financial
officer, principal accounting officer or similar officer of such company.
"CHANGE OF CONTROL" shall mean any of the following events:
(a) prior to the successful consummation of a Qualified Initial
Public Offering: (i) any person or "group" (within the meaning
of Rule 13d-5 under the Securities and Exchange Act of 1934,
as amended), together with its Affiliates, other than the
Permitted Holders, shall beneficially own, directly or
indirectly, an amount of the outstanding Capital Stock of the
Borrower entitled to fifteen percent (15%) or more of the
Total Voting Power of the Borrower, (ii) the Permitted Holders
together cease to own shares of Capital Stock of the Borrower
representing at least eight-five percent (85%) of the Total
Voting Power of the Borrower or (iii) Xxxxxxx Xxxxxx Xxxxx and
Xxxxxxxxxxx X. Xxxxxx together cease to own shares of Capital
Stock of the Borrower representing at least 75% percent of the
Total Voting Power of the Borrower; and
(b) after the successful consummation of a Qualified Initial
Public Offering: (i) any person or "group" (within the meaning
of Rule 13d-5 under the Securities and Exchange Act of 1934,
as amended), together with its Affiliates, other than the
Permitted Holders, shall beneficially own, directly or
indirectly, an amount of Capital Stock of the Borrower
entitled to fifteen percent (15%) or more of the Total Voting
Power of the Borrower; (ii) the Permitted Holders collectively
cease to own shares of Capital Stock of the Borrower
representing at least thirty-three and one-third percent
(331/3%) of the Total Voting Power of the Borrower; (iii)
Xxxxxxx Xxxxxx Xxxxx and Xxxxxxxxxxx X. Xxxxxx together cease
to own shares of Capital Stock of the Borrower representing at
least 25% percent of the Total Voting Power of the Borrower;
or (iv) the Continuing Directors in office at any time shall
not constitute a majority of the Board of Directors of the
Borrower. For purposes of the foregoing, the term "Continuing
Directors" shall mean, at any date, an individual (A) who is a
member of the Board of Directors of the Borrower on the
Closing Date, or (B) who has been nominated to fill a vacancy
on the Board of Directors of the Borrower by a majority of the
Continuing Directors then in office.
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"CLOSING DATE" shall mean the date on which this Agreement is executed
and delivered by the parties hereto and the first Loans are made in accordance
with Section 4.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References to
sections of the Code shall be construed also to refer to any successor sections.
"COLLATERAL" shall mean all the collateral which is identified in, and
at any time is purported to be covered by, the Collateral Documents.
"COLLATERAL DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, the Perfection Certificate, the Depository Bank Agreements, the
Permitted Tax Distribution Agreements, the Life Insurance Assignment, and such
other documents executed and delivered in connection with the attachment and
perfection of the Agent's security interests and liens arising thereunder,
including UCC financing statements, patent and trademark filings and, with
respect to property acquired after the Closing Date and pledged by the Borrower
to the Agent pursuant to Section 6.11 or 6.12, such other additional security
documents as the Agent shall reasonably request (including, without limitation,
mortgages, deeds of trust and related documentation to the extent necessary to
perfect liens on real property interests as may be required pursuant to Section
6.11 or 6.12, all in form and substance reasonably acceptable to the Agent and
the Required Lenders).
"COMMITMENT" shall mean (a) with respect to each Lender, the Revolving
Commitment of such Lender and (b) with respect to the Issuing Lender, the LOC
Commitment.
"CONDEMNATION" shall mean any taking of Property, or any part thereof
or interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any public improvement or condemnation proceeding, or in
any other similar manner.
"CONDEMNATION AWARD" shall mean all proceeds of any Condemnation or
transfer in lieu thereof.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, the sum
of all amounts, in accordance with GAAP, that are included as additions to
property, plant and equipment and other capital expenditures on a consolidated
statement of cash flows for the Borrower and its Consolidated Subsidiaries
during such period (excluding the amounts under any Capital Lease).
Notwithstanding the foregoing, the term "Consolidated Capital Expenditures"
shall not include (a) capital expenditures in respect of the reinvestment of
Insurance Proceeds and Condemnation Awards received by the Borrower and its
Subsidiaries to the extent that such reinvestment is permitted under the Credit
Documents and (b) capital expenditures for Permitted Acquisitions.
"CONSOLIDATED CASH DIVIDENDS" shall mean, for any period, the aggregate
amount of all dividends or distributions paid in cash in respect of Capital
Stock by the Borrower during such period (other than Permitted Tax
Distributions).
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"CONSOLIDATED CASH TAXES" shall mean (i) for any period that the
Borrower is an "S Corporation" treated as a pass-through entity for United
States federal income tax purposes, all Permitted Tax Distributions to the
extent the same are distributed in cash by the Borrower to the holders of its
Capital Stock during such period, and (ii) for any period from and after the
consummation of a Qualified Initial Public Offering or other effective
conversion of the Borrower to "C Corporation" status for United States federal
income tax purposes, the aggregate amount of all Federal, state, local and
foreign income, value added and similar taxes based upon income of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis in
accordance with GAAP, to the extent the same are paid in cash by the Borrower or
any of its Consolidated Subsidiaries during such period.
"CONSOLIDATED EBITDAR" shall mean, for any period, the sum of (a)
Consolidated Net Income for such period, PLUS (b) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(i) Consolidated Interest Expense (other than an extraordinary one-time charge
not to exceed $2,500,000 resulting from early extinguishment of Indebtedness
evidenced by the Subordinated Notes as permitted hereunder), (ii) Consolidated
Cash Taxes; (iii) depreciation and amortization expense, and (iv) Consolidated
Rent Expense MINUS (c) an amount which, in the determination of Consolidated Net
Income for such period, has been added for (i) interest income and (ii) any
non-cash income or non-cash gains, all as determined in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the gross
amount of interest expense of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, during such period,
including (a) the portion of any payments or accruals with respect to Capital
Leases that are allocable to interest expense in accordance with GAAP, (b) net
costs under Interest Rate Protection Agreements during such period and (c) all
fees, charges, discounts and other costs recognized in Borrower's Consolidated
Net Income in respect of Indebtedness during such period, but, in each case;
PROVIDED, THAT (i) all non-cash interest expense shall be excluded and (ii) any
interest on Indebtedness of another Person that is guaranteed by the Borrower or
any of its Consolidated Subsidiaries or secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) a Lien on, or payable out of the proceeds of the sale of or production from,
assets of the Borrower or any of its Consolidated Subsidiaries (whether or not
such guarantee or Lien is called upon) shall be included.
"CONSOLIDATED NET INCOME" shall mean, for any period, net income (or
loss) after taxes for such period of the Borrower and its Consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, for
such period; PROVIDED, THAT, there shall be excluded from such calculation of
net income (or loss) (a) the income of any Person in which any other Person
(other than the Borrower or any of its Subsidiaries) has any interest, except to
the extent of the amount of dividends or other distributions actually paid to
the Borrower or any of its Subsidiaries by such Person during such period, (b)
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries or the date such Person's assets are acquired by the
Borrower or any of its Subsidiaries, (c) the income of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of that income is not at the time permitted by
operation of
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the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary, (d)
except for purposes of Section 7.18(d), any after-tax gains attributable to
sales of assets out of the ordinary course of business and (e) except for
purposes of Section 7.18(d), to the extent not included in clauses (a) through
(d) above, any non-cash extraordinary gains or non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" shall mean, as of any date, shareholders'
equity or net worth of the Borrower and its Consolidated Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, excluding amounts
attributable to Disqualified Stock and the cumulative translation adjustment
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED RENT EXPENSE" shall mean, for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and the
Subsidiaries, determined on a consolidated basis in accordance with GAAP, for
such period with respect to Operating Leases.
"CONSOLIDATED SCHEDULED FUNDED DEBT PAYMENTS" shall mean, for any
period, with respect to the Borrower and its Consolidated Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal on Funded
Indebtedness for such period (including the principal component of payments due
on Capital Leases during such period); PROVIDED, THAT, Consolidated Scheduled
Funded Debt Payments shall not include voluntary prepayments of Funded
Indebtedness, mandatory prepayments required pursuant to Section 3.3 or other
mandatory prepayments of Funded Indebtedness.
"CONSOLIDATED SUBSIDIARIES" of any Person shall mean all subsidiaries
of such Person consolidated with such Person for financial reporting purposes in
accordance with GAAP.
"CREDIT DOCUMENTS" shall mean a collective reference to this Agreement,
the Notes, the LOC Documents, each Joinder Agreement, the Fee Letter, the
Collateral Documents, the Guarantee Agreement, the Indemnity, Subrogation and
Contribution Agreement, the Intercompany Notes, and all other related agreements
and documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and "CREDIT
DOCUMENT" shall mean any one of them.
"CREDIT OBLIGATIONS" shall mean, without duplication, (a) all of the
obligations of the Credit Parties to the Lenders, the Issuing Lender and the
Agent, whenever arising, whether monetary or otherwise, under this Agreement,
the Notes, the Collateral Documents, the Guarantee Agreement or any of the other
Credit Documents (including, without limitation, principal obligations, interest
obligations (including any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and all fees, expenses,
indemnities and expense reimbursement obligations) and (b) all liabilities and
obligations, whenever arising, owing from the Borrower to any Lender, or any
Affiliate of a Lender, arising under any Lender Hedging Agreement.
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"CREDIT PARTIES" shall mean the Borrower and its Subsidiaries, and
"CREDIT PARTY" shall mean any one of them.
"DEBT ISSUANCE" shall mean the issuance of any Indebtedness for
borrowed money by any Credit Party; PROVIDED, THAT, the foregoing definition
shall not be deemed to imply that any such Debt Issuance is permitted under this
Agreement.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEPOSITORY BANK AGREEMENTS" shall mean each agreement between any
Credit Party and any bank or other depository institution in substantially the
form of EXHIBIT J hereto.
"DISQUALIFIED STOCK" of any Person shall mean (a) any Capital Stock of
such Person which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the happening
of any event or otherwise (i) matures or is mandatorily redeemable or subject to
any mandatory repurchase requirement, pursuant to a sinking fund obligation or
otherwise, (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock, (iii) is redeemable or subject to any
repurchase requirement exercisable at the option of the holder thereof, in whole
or in part, in each case on or prior to the first anniversary of the Maturity
Date (or, if earlier, the first anniversary of the date on which all the Credit
Obligations have been indefeasibly paid in full in cash and the Commitments have
been terminated) and (b) if such Person is a Subsidiary of the Borrower, any
Preferred Stock of such Person.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC SUBSIDIARY" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"ELIGIBLE ASSIGNEE" shall mean: (a) any Lender; (b) any Affiliate of a
Lender; and (c) any other commercial bank, financial institution or "accredited
investor" (as defined in Regulation D under the Securities Act of 1933, as
amended) approved by the Agent and, unless an Event of Default has occurred and
is continuing at the time any assignment is effected in accordance with Section
10.3(b), the Borrower, such approval not to be unreasonably withheld or delayed
by the Borrower and such approval to be deemed given by the Borrower if no
objection from the Borrower is received by the assigning Lender and the Agent
within five Business Days after notice of such proposed assignment has been
provided by the assigning Lender to the Borrower; PROVIDED, THAT, neither the
Borrower, any Affiliate of the Borrower nor any direct competitor of the
Borrower in the Borrower's business shall qualify as an Eligible Assignee.
"ENVIRONMENTAL LAWS" shall mean any and all applicable Federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions
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relating to the environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into the environment, including, ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes.
"EQUITY ISSUANCE" shall mean any issuance by any Credit Party of any
Capital Stock to any Person or the receipt by any such Person of a capital
contribution from any other Person, including the issuance of any of its Capital
Stock pursuant to the exercise of options or warrants or upon the conversion of
any debt securities to equity; PROVIDED, THAT, the foregoing definition shall
not be deemed to imply that any such issuance is permitted under this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, including the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA AFFILIATE" shall mean an entity which is under common control
with any Credit Party within the meaning of Section 4001(a)(14) of ERISA, or is
a member of a group which includes any Credit Party and which is treated as a
single employer under Sections 414(b) or (c) of the Code.
"ERISA EVENT" shall mean (a) with respect to any Plan, the occurrence
of a Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (b) the withdrawal by any Credit Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (c) the distribution of
a notice of intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA; (e) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (f) the complete or partial withdrawal of any Credit Party
or any ERISA Affiliate from a Multiemployer Plan; (g) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect to any
Plan; or (h) the adoption of an amendment to any Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.
"EURODOLLAR LOANS" shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any Interest
Period, the rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Agent to be equal to the quotient obtained by dividing
(a) the Interbank Offered Rate for such Eurodollar Loan for such Interest Period
by (b) 1 minus the Reserve Requirement for such Eurodollar Loan for such
Interest Period.
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"EVENT OF DEFAULT" shall have the meaning assigned to that term in
Section 8.1.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCLUDED ASSET DISPOSITIONS" shall mean (a) any Asset Disposition by
any Credit Party to the Borrower or any Guarantor if (i) the Credit Parties
shall cause to be executed and delivered such documents, instruments and
certificates as the Agent may request so as to cause the Credit Parties to be in
compliance with Section 6.12 after giving effect to such Asset Disposition and
(ii) after giving effect to such Asset Disposition, no Default or Event of
Default exists, (b) the liquidation of Cash Equivalents for the account of the
Borrower, (c) the disposition of worn-out, damaged or obsolete tangible assets,
so long as the fair market value (based on the good faith judgment of the
Borrower without the requirement of a third party appraisal) of all property
disposed of pursuant to this clause (c) does not exceed $250,000 in the
aggregate in any fiscal year, and (d) Asset Dispositions in the nature of
non-material Casualties that do not result in insurance proceeds or damage to
Collateral in excess of $250,000 in the aggregate in any fiscal year.
"FACILITY FEE" shall have the meaning assigned to that term in Section
3.5(b).
"FACILITY FEE CALCULATION PERIOD" shall have the meaning assigned to
that term in Section 3.5(b).
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; PROVIDED, THAT (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Agent (in its individual capacity) on such day on such transactions as
determined by the Agent.
"FEE LETTER" shall have the meaning assigned to that term in Section
3.5.
"FEES" shall mean all fees payable pursuant to Section 3.5.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of any reporting day, the
ratio of (a) Consolidated EBITDAR for the period of four consecutive fiscal
quarters of the Borrower ending on, or most recently preceding, such day, MINUS
Consolidated Capital Expenditures for such period, MINUS Consolidated Cash
Dividends for such period, to (b) the sum of (i) Consolidated Interest Expense
for such period PLUS, (ii) Consolidated Rent Expense for such period, PLUS (iii)
Consolidated Scheduled Funded Debt Payments for such period.
"FOREIGN SUBSIDIARY" shall mean, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such Person.
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"FUNDED INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (f), (g), (i), (k) and (l) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Indebtedness of another
Person of the type referred to in clause (a) above secured by (or for which the
holder of such Funded Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all Guaranty Obligations of
such Person with respect to Indebtedness of the type referred to in clause (a)
above of another Person and (d) Indebtedness of the type referred to in clause
(a) above of any partnership or unincorporated joint venture in which such
Person is general partner or for which such Person is otherwise legally
obligated or has a reasonable expectation of being liable with respect thereto.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis, subject to the terms of Section
1.3.
"GMI" shall mean Gesellschaft fur angewandte Mathematik und Informatik
mbh, a company based in Munich, Germany and organized under the laws of the
Federal Republic of Germany.
"GMI ACQUISITION" shall mean the acquisition of gmi by the Borrower in
accordance with the terms of the gmi Acquisition Agreement.
"GMI ACQUISITION AGREEMENT" shall mean the Share Purchase Agreement
dated June 26, 1997, between the Borrower and the gmi Shareholders.
"GMI LETTERS OF CREDIT" shall mean one or more Letters of Credit issued
hereunder in favor of the gmi Shareholders in an aggregate principal amount not
to exceed $8,500,000 and which have an expiry date of September 30, 1997.
"GMI SHAREHOLDERS" shall mean the owners and holders of 100% of the
issued and outstanding Capital Stock of gmi.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court or governmental agency, commission, board, bureau, authority,
instrumentality or judicial or regulatory body or entity.
"GUARANTEE AGREEMENT" shall mean the Guarantee Agreement dated as of
the Closing Date in the form of EXHIBIT F to be executed in favor of the Agent
by the Guarantors, as amended, modified, restated or supplemented from time to
time.
"GUARANTOR" shall mean all Domestic Subsidiaries of the Borrower
existing on the Closing Date and each Additional Guarantor which may thereafter
execute a Joinder Agreement, together with their successors and permitted
assigns.
"GUARANTY OBLIGATIONS" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of
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negotiable instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether direct or
indirect, and including any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or any Property constituting security therefor,
(b) to advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including keep well agreements,
maintenance agreements, comfort letters or similar agreements or arrangements)
for the benefit of any holder of Indebtedness of such other Person, (c) to lease
or purchase Property, securities or services primarily for the purpose of
insuring the holder of such Indebtedness against loss in respect thereof or (d)
to otherwise assure or hold harmless the holder of such Indebtedness against
loss in respect thereof. For purposes hereof, the amount of any Guaranty
Obligation shall (subject to any limitations set forth therein) be deemed to be
an amount equal to the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made.
"INDEBTEDNESS" of any Person shall mean (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, letters of credit (other than the gmi Letters of Credit),
notes or similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations of such
Person issued or assumed as the deferred purchase price of Property or services
purchased by such Person (other than trade debt incurred in the ordinary course
of business and due within six (6) months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (e) all obligations of
such Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person,
(h) the principal portion of all obligations of such Person under Capital
Leases, (i) all net obligations of such Person under Interest Rate Protection
Agreements or foreign currency exchange agreements, (j) the maximum amount of
all standby letters of credit issued or bankers' acceptances facilities created
for the account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (k) all Disqualified Stock of such
Person, and (l) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer.
"INDEMNIFIED PARTY" shall have the meaning assigned to that term in
Section 10.5(b).
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" shall mean the
Indemnity, Subrogation and Contribution Agreement dated as of the Closing Date
in the form of EXHIBIT C to be executed by the Guarantors, as amended, modified,
restated or supplemented from time to time.
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"INSURANCE PROCEEDS" shall mean all insurance proceeds (other than
business interruption insurance proceeds), damages, awards, claims and rights of
action with respect to any Casualty.
"INTELLECTUAL PROPERTY" shall have the meaning assigned to that term in
Section 5.17.
"INTERBANK OFFERED RATE" shall mean, for any Eurodollar Loan for any
Interest Period, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; PROVIDED, THAT, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"INTERCOMPANY NOTES" shall mean the promissory notes issued as
contemplated by clause (g) of the definition of Permitted Investments, in the
form attached hereto as EXHIBIT D.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor and
Subordination Agreement between the Borrower, the Agent, the Lenders and the
Subordinated Noteholders dated as of the Closing Date, as amended, modified,
restated or supplemented from time to time.
"INTEREST PAYMENT DATE" shall mean (a) as to Base Rate Loans, the last
Business Day of each March, June, September and December of each year during the
term of this Agreement and (b) as to Eurodollar Loans, the last day of each
applicable Interest Period for any such Loan and the Maturity Date, and in
addition, where the applicable Interest Period for any such Loan is greater than
three months, the date three months from the beginning of the Interest Period
and each three months thereafter and (c) as to all Loans, the Maturity Date of
such Loans.
"INTEREST PERIOD" shall mean as to Eurodollar Loans, a period of one
(1), two (2), three (3), six (6) or twelve (12) months' duration, as the
Borrower may elect (subject to availability) commencing, in each case, on the
date of the borrowing (including conversions and extensions thereof); PROVIDED,
THAT, (a) if any Interest Period would end on a day which is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
(except that in the case of Eurodollar Loans where the next succeeding Business
Day falls in the next succeeding calendar month, then on the next preceding
Business Day), (b) no Interest Period for any Loan shall extend beyond the
Maturity Date for such Loan and (c) in the case of Eurodollar Loans, where an
Interest Period begins on a day for which there is no numerically corresponding
day in the calendar month in which the Interest Period is to end, such Interest
Period shall end on the last Business Day of such calendar month.
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"INTEREST RATE PROTECTION AGREEMENT" shall mean any interest rate swap,
collar, cap or other arrangement requiring payments contingent upon interest
rates.
"INVESTMENT" in any Person shall mean (a) the acquisition (whether for
cash, Property, services, assumption of Indebtedness, securities or otherwise)
of assets, shares of Capital Stock, bonds, notes, debentures, partnership, joint
venture or other ownership interests or other securities of such other Person or
(b) any deposit with, or advance, loan or other extension of credit to, such
Person (other than deposits made in connection with the purchase of equipment or
other assets in the ordinary course of business) or (c) any other capital
contribution to or investment in such Person, including any Guaranty Obligations
(including any support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person.
"ISSUING LENDER" shall mean NationsBank, in its capacity as the issuer
of Letters of Credit, and its successors in such capacity.
"ISSUING LENDER FEES" shall have the meaning assigned to such term in
Section 3.5(c)(iii).
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of EXHIBIT L hereto, executed and delivered by an Additional Guarantor in
accordance with the provisions of Section 6.11.
"LENDER" shall mean any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their successors
and permitted assigns. Unless the context clearly indicates otherwise, the term
"Lenders" shall include the Issuing Lender.
"LENDER HEDGING AGREEMENTS" shall mean any Interest Rate Protection
Agreement or foreign currency exchange agreement between the Borrower or any of
its Subsidiaries and any Lender (or any Affiliate of a Lender).
"LENDING PARTY" shall have the meaning assigned to that term in Section
10.14.
"LETTER OF CREDIT" shall mean any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the terms of
Section 2.2.
"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
easement, assignment, deposit arrangement, restriction, restrictive covenant,
lease, sublease, option, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the Uniform
Commercial Code as adopted and in effect in the relevant jurisdiction or other
similar recording or notice statute, and any lease in the nature thereof).
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"LIFE INSURANCE ASSIGNMENT" shall mean an assignment of the Life
Insurance Policy, in form and substance satisfactory to the Agent, to be
executed in favor of the Agent for the benefit of the Secured Parties, as
amended, modified, restated or supplemented from time to time.
"LIFE INSURANCE POLICY" shall mean a life insurance policy covering the
life of Xxxxxxxxxxx X. Xxxxxx, to be paid after he is deceased, maintained at
all times on terms reasonably satisfactory to the Agent and the Required Lenders
and in a minimum amount equal to the lesser of (a) at least $10,000,000.00 and
(b) the then effective Revolving Committed Amount.
"LOAN" or "LOANS" shall mean the Revolving Loans, which may also be
referred to by Type as either Base Rate Loans or Eurodollar Loans. As the
context requires, a "Loan" of a particular Type refers to a portion of the total
outstanding Loans of such Type as to which a single Interest Period is in
effect.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time outstanding
(together with the amounts of any unreimbursed drawings thereon) of up to the
LOC Committed Amount.
"LOC COMMITTED AMOUNT" shall have the meaning assigned to that term in
Section 2.2.
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (a) the rights and obligations of
the parties concerned or at risk or (b) any collateral security for such
obligations.
"LOC OBLIGATIONS" shall mean the Borrower's reimbursement obligations
hereunder (actual or contingent) arising from drawings under Letters of Credit.
The amount of the LOC Obligations outstanding at any time equals the sum of (a)
the maximum aggregate amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding, assuming
compliance with all requirements for drawings referred to in such Letters of
Credit, PLUS (b) the aggregate amount of all drawings under Letters of Credit
honored by the Issuing Lender but not theretofore reimbursed by the Borrower.
The LOC Obligations of any Lender at any time shall mean its Revolving
Commitment Percentage of the aggregate LOC Obligations at such time.
"MANDATORY REDEEMABLE PREFERRED STOCK" shall mean Preferred Stock
issued to the gmi Shareholders pursuant to the terms of the gmi Acquisition
Agreement that is convertible to common stock of the Borrower or Indebtedness of
the Borrower, in accordance with its terms.
"MATERIAL ADVERSE CHANGE" shall mean a material adverse change in (a)
the condition (financial or otherwise), operations, business, assets,
liabilities (actual or contingent),
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historical or projected revenues or cash flows, material relationships or
management of the Credit Parties taken as a whole, (b) the ability of any Credit
Party to perform any material obligation under the Credit Documents to which it
is a party or (c) the material rights and remedies of the Lenders under the
Credit Documents. In determining whether any individual event or occurrence of
the foregoing types would result in a Material Adverse Change, notwithstanding
that a particular event or occurrence does not itself have constitute such a
change, a Material Adverse Change shall be deemed to have occurred if the
cumulative effect of such event or occurrence and all other events or
occurrences of the foregoing types which have occurred would result in a
Material Adverse Change.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the condition (financial or otherwise), operations, business, assets,
liabilities (actual or contingent), historical or projected revenues or cash
flows, material relationships or management of the Credit Parties taken as a
whole, (b) the ability of any Credit Party to perform any material obligation
under the Credit Documents to which it is a party or (c) the material rights and
remedies of the Lenders under the Credit Documents. In determining whether any
individual event or occurrence of the foregoing types would result in a Material
Adverse Effect, notwithstanding that a particular event or occurrence does not
itself have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event or occurrence and all other
events or occurrences of the foregoing types which have occurred would result in
a Material Adverse Effect.
"MATERIAL CONTRACTS" shall have the meaning assigned to that term in
Section 5.22.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous, toxic, radioactive or explosive substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws, including
asbestos, polychlorinated biphenyls and ureaformaldehyde insulation and all
other substances or wastes of any nature regulated pursuant to any Environmental
Law.
"MATURITY DATE" shall mean June 26, 2000.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc., or any successor
to such company in the business of rating securities.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" shall mean a Plan which any Credit Party or
any ERISA Affiliate and at least one employer other than any Credit Party or any
ERISA Affiliate are contributing sponsors.
"NATIONSBANK" shall mean NationsBank, N. A. and its successors.
"NET CASH PROCEEDS" shall mean (a) with respect to any Asset
Disposition, (i) the gross amount of cash proceeds (including Insurance Proceeds
and Condemnation Awards in
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the case of any Casualty or Condemnation except to the extent and for as long as
such Insurance Proceeds or Condemnation Awards are Reinvestment Funds or unless
such Insurance Proceeds or Condemnation Awards are to be used for repair,
restoration or replacement pursuant to plans approved by the Required Lenders)
actually paid to or actually received by any Credit Party in respect of such
Asset Disposition (including cash proceeds subsequently received at any time in
respect of such Asset Disposition from non-cash consideration initially received
or otherwise), LESS (ii) the sum of (A) the amount, if any, of all taxes (other
than income taxes) and the Borrower's good-faith best estimate of all income
taxes or the amount of Permitted Tax Distributions relating thereto, as the case
may be (to the extent that such amount shall have been set aside for the purpose
of paying such taxes when due), and customary fees, brokerage fees, commissions,
costs and other expenses (other than those payable to any Credit Party or any
Affiliate of any such Person) that are incurred in connection with such Asset
Disposition and are payable by the seller or the transferor of the assets or
Property to which such Asset Disposition relates, but only to the extent not
already deducted in arriving at the amount referred to in clause (a)(i) above,
(B) appropriate amounts that must be set aside as a reserve in accordance with
GAAP against any liabilities associated with such Asset Disposition and (C) if
applicable, the amount of Indebtedness secured by a Permitted Lien that has been
repaid or refinanced as required in accordance with its terms with the proceeds
of such Asset Disposition; and (b) with respect to any Equity Issuance or Debt
Issuance, the gross amount of cash proceeds paid to or received by any Credit
Party in respect of such Equity Issuance or Debt Issuance, as the case may be
(including cash proceeds subsequently received at any time in respect of such
Equity Issuance or Debt Issuance from non-cash consideration initially received
or otherwise), net of underwriting discounts and commissions or placement fees,
investment banking fees, legal fees, consulting fees, accounting fees and other
customary fees and expenses directly incurred by any Credit Party in connection
therewith (other than those payable to any Credit Party or any Affiliate of any
such Person).
"NOTE" or "NOTES" shall mean the Revolving Notes.
"NOTICE OF BORROWING" shall mean a written notice of borrowing in
substantially the form of EXHIBIT G, as required by Section 2.1(b)(i).
"NOTICE OF EXTENSION/CONVERSION" shall mean the written notice of
extension or conversion in substantially the form of EXHIBIT I, as required by
Section 3.2.
"OPERATING LEASE" shall mean, as applied to any Person, any lease
(including leases which may be terminated by the lessee at any time) of any
Property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease.
"OPERATIVE DOCUMENTS" shall mean the Credit Documents, the Acquisition
Agreements, the Intercreditor Agreement, and the Subordinated Note Documents.
"OTHER TAXES" shall have the meaning assigned to such term in Section
3.10(b).
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"PARTICIPATION INTEREST" shall mean a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in Section 2.2
or in any Loans or other obligations as provided in Section 3.13.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"PERFECTION CERTIFICATE" shall mean a certificate from the Credit
Parties substantially in the form of EXHIBIT M hereto.
"PERMITTED ACQUISITION" shall mean (a) the U-Gene Acquisition;
PROVIDED, THAT, the terms of Section 4.2 have been met; (b) the gmi Acquisition;
PROVIDED, THAT, the terms of Section 4.3 have been met; and (c) if the
acquisitions described in clauses (a) and (b) of this definition and a Qualified
Initial Public Offering have been consummated, then an acquisition by the
Borrower or any Wholly Owned Domestic Subsidiary of the Borrower of the Capital
Stock or all or substantially all of the Property of another Person (including
by merger or consolidation or by incorporation of a new Subsidiary) for up to
the fair market value of the Capital Stock or Property acquired, PROVIDED, THAT,
(i) the Capital Stock or Property acquired in such acquisition relates directly
to the business of the Borrower or any of its Subsidiaries as existing on the
Closing Date, (ii) the liabilities (determined in accordance with GAAP and in
any event including contingent obligations) acquired by the Borrower and its
Subsidiaries on a consolidated basis in such acquisition and any Indebtedness
issued, incurred or assumed by the Borrower and its Subsidiaries on a
consolidated basis from such acquisition (as permitted hereunder) shall not in
the aggregate exceed $2,500,000, (iii) the Agent shall have received all items
in respect of the Capital Stock or Property acquired in such acquisition (and/or
the seller thereof) required to be delivered by the terms of Section 6.11 and/or
Section 6.12, (iv) in the case of an acquisition of the Capital Stock of another
Person, (A) except in the case of the incorporation of a new Subsidiary, the
board of directors (or other comparable governing body) of such other Person
shall have duly approved such acquisition and (B) the Capital Stock acquired
shall constitute 100% of the Total Voting Power and ownership interest of the
issuer thereof, (v) no Default or Event of Default shall have occurred and be
continuing immediately before or immediately after giving effect to such
acquisition and the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to such
acquisition on a Pro Forma Basis, the Borrower shall be in compliance with all
of the financial covenants set forth in Section 7.18 as of the last day of the
most recent period of four consecutive fiscal quarters of the Borrower which
precedes or ends on the date of such acquisition and with respect to which the
Agent has received the Required Financial Information, (vi) the representations
and warranties made by the Credit Parties in each Credit Document shall be true
and correct in all material respects as of the date of such acquisition (as if
made on such date after giving effect thereto) except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects at and as of such earlier date), (vii) after giving effect to
such acquisition, the Revolving Committed Amount shall be at least $1,500,000
greater than the sum of all Revolving Loans outstanding PLUS all LOC Obligations
outstanding and (viii) the aggregate consideration (including cash, assumption
of indebtedness and non-cash consideration) for any single acquisition (or
series of related acquisitions) shall not exceed $4,000,000 and the
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aggregate consideration (including cash, assumption of indebtedness and non-cash
consideration) for all such acquisitions occurring during any fiscal year of the
Borrower during the term hereof shall not exceed $15,000,000.
"PERMITTED DIVIDENDS" shall mean (i) for so long as the Borrower
remains a "S Corporation" for Federal income tax purposes, Permitted Tax
Distributions, (ii) for so long as the Borrower remains a "S Corporation" for
Federal income tax purposes, (A) the aggregate sum of $400,000 distributed to
the Permitted Holders during the first calendar quarter of 1997, (B) the
aggregate sum of $150,000 distributed or to be distributed to the Permitted
Holders during the second calendar quarter of 1997, and (C) an aggregate sum not
to exceed $150,000 to be distributed to the Permitted Holders during each
calendar quarter after the Closing Date, as long as such distributions are made
from Consolidated Net Income, less Permitted Tax Distributions, for such
quarterly period and (iii) at the time of a Qualified Initial Public Offering,
dividends in the aggregate sum not in excess of $700,000 to be distributed to
the Permitted Holders for the purpose of distributing earnings of the Borrower
on which the Permitted Holders have theretofore paid Stockholder Taxes. For
purposes of clause (ii)(C) above, the net earnings from which the quarterly
distribution may be made shall be computed on a cumulative basis each calendar
year, and any payment not permitted in an early quarter because of the earnings
limitations, may be made in a later quarter when and if cumulative earnings for
the current year are sufficient.
"PERMITTED HOLDERS" shall mean Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx X.
Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx X. Xxxxxxx, Xx., as Trustee of the Xxxxxx stock
trust and the Persons listed on Schedule 1.1C.
"PERMITTED INVESTMENTS" shall mean Investments which consist of (a)
cash held in a deposit account with the Agent or any other reputable bank or
other depository institution which has executed and delivered a Depository Bank
Agreement with the Agent; (b) Cash Equivalents subject to a perfected first
priority security interest of the Agent in favor of the Secured Parties; (c)
trade accounts receivable (and related notes and instruments) arising in the
ordinary course of business in accordance with customary trade terms; (d)
Investments existing as of the Closing Date and set forth in SCHEDULE 1.1A; (e)
Guaranty Obligations permitted by Section 7.1; (f) advances or loans to
directors, officers, employees, agents, customers or suppliers that do not
exceed $250,000 in the aggregate at any one time outstanding for all of the
Borrower and its Subsidiaries; (g) Investments by the Borrower or any
Wholly-Owned Subsidiary in Subsidiaries of the Borrower or by any Subsidiary in
the Borrower evidenced by Intercompany Notes pledged to the Agent for the
benefit of the Secured Parties; PROVIDED, THAT, (i) the aggregate principal
amount of such Intercompany Notes issued by Foreign Subsidiaries of the Borrower
to the Borrower or to any Domestic Subsidiary of the Borrower and outstanding at
any time shall not exceed $2,500,000 in the aggregate, (ii) no Investments shall
be made in the Capital Stock of any Foreign Subsidiary except as a Permitted
Acquisition; and (iii) Investments in a Wholly Owned Subsidiary are permitted
only so long as such person remains a Wholly Owned Subsidiary; or (h) Permitted
Acquisitions.
"PERMITTED LIENS" shall mean (a) Liens in favor of the Agent on behalf
of the Secured Parties; (b) Liens (other than Liens created or imposed under
ERISA) for taxes or other
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governmental charges, assessments or levies which are not yet due or being
contested in good faith by appropriate proceedings diligently pursued and for
which adequate reserves determined in accordance with GAAP have been established
(and as to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof); (c) statutory Liens of landlords
and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and
other Liens imposed by law or pursuant to customary reservations or retentions
of title arising in the ordinary course of business, PROVIDED, THAT, such Liens
secure only amounts which are not yet due and payable (or, if due and payable,
are unfiled and no other action has been taken to enforce the same) or are being
contested in good faith by appropriate proceedings diligently pursued and for
which adequate reserves determined in accordance with GAAP have been established
(and as to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof); (d) Liens (other than Liens
created or imposed under ERISA) incurred or deposits made by the Borrower or any
of its Subsidiaries in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of Indebtedness);
(e) Liens in connection with attachments or judgments (including judgment or
appeal bonds); PROVIDED, THAT, the judgments secured shall, within thirty (30)
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal (and shall have been discharged within thirty (30) days after the
expiration of any such stay); (f) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes; (g) Liens on
Property securing purchase money Indebtedness (including Capital Leases) to the
extent permitted under Section 7.1(c), PROVIDED, THAT, (i) any such Indebtedness
is incurred and such Lien attaches to such Property concurrently with or within
ninety (90) days after the acquisition thereof and (ii) such Indebtedness is not
secured by a Lien on any other assets; (h) any interest of title of a lessor
under, and Liens arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to, leases
(excluding Capital Leases) permitted by this Agreement; (i) Liens existing as of
the Closing Date and set forth on SCHEDULE 1.1B; PROVIDED, THAT (A) no such Lien
shall at any time be extended to or cover any Property other than the Property
subject thereto on the Closing Date and (B) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed, refunded or
refinanced; and (j) the second priority Liens held by the Subordinated
Noteholders as subject to the terms of the Intercreditor Agreement.
"PERMITTED TAX DISTRIBUTION AGREEMENT" shall mean an agreement between
the Borrower and a holder of Capital Stock of the Borrower substantially in the
form of EXHIBIT O attached hereto (as amended, modified, extended, renewed,
restated or replaced from time to time in accordance with its terms).
"PERMITTED TAX DISTRIBUTIONS" shall mean distributions by the Borrower
to the holders of its Capital Stock for Stockholder Taxes; PROVIDED, THAT, no
distribution for Stockholder Taxes shall be deemed permitted for purposes hereof
(A) unless and until each holder of Capital Stock of the Borrower shall have
executed and delivered to the Borrower a Permitted
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Tax Distribution Agreement and (B) after the occurrence of any Bankruptcy Event
relating to the Borrower.
"PERMITTED WARRANT NOTES" shall mean the promissory notes issuable
pursuant to the terms of the Warrants; PROVIDED, THAT, the terms of each such
promissory note shall provide that (a) interest will be payable solely in
additional notes of the same tenor and not in cash, (b) the stated maturity will
be at least one (1) year following the payment in full of all Credit
Obligations, (c) such note will be subordinated in right of payment to all
Credit Obligations pursuant to the Intercreditor Agreement, (d) such note, and
related agreements or instruments, shall not contain any financial covenants,
affirmative covenants, negative covenants or mandatory prepayment events or any
representations and warranties as to financial performance or operations, (e)
except for (i) cross-acceleration to the Subordinated Note Purchase Agreement
and (ii) default in payment at maturity, such note and other agreements and
instruments shall not contain any events of default and (f) all other terms of
such note or any related agreements or instruments shall be satisfactory to the
Required Lenders.
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority or any other entity.
"PLAN" shall mean any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which any Credit Party
or any ERISA Affiliate is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of the
Closing Date in the form of EXHIBIT A to be executed by the Permitted Holders
(other than those Permitted Holders that are listed on Schedule 1.1C hereto) in
favor of the Agent for the benefit of the Secured Parties, as amended, modified,
restated or supplemented from time to time.
"PRIME RATE" shall mean the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the lowest
rate of interest charged by NationsBank to its customers.
"PREFERRED STOCK", as applied to the Capital Stock of any person, shall
mean Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over the Capital Stock of any other class of
such person.
"PRO FORMA BASIS" shall mean that, for purposes of calculating
compliance in respect of any transaction with each of the financial covenants
set forth in Section 7.18 such transaction (and any other transaction which
occurred during the relevant four-fiscal quarter period) shall be deemed to have
occurred as of the first day of the most recent period of four consecutive
fiscal quarters of the Borrower preceding the date of such transaction with
respect to which the Agent has received the Required Financial Information. As
used in this
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definition, "transaction" shall mean (i) any incurrence or assumption of
Indebtedness (and the concurrent retirement of any other Indebtedness) as
referred to in Section 7.1(h)(i), (ii) any merger or consolidation as referred
to in Section 7.4(c), (iii) any Asset Disposition of a business or business unit
as referred to in Section 7.5(a) or (iv) any Permitted Acquisition referred to
in Section 7.6. With respect to any transaction of the type described in clause
(i) above regarding Indebtedness which has a floating or formula rate, the
implied rate of interest for such Indebtedness for the applicable period for
purposes of this definition shall be determined by utilizing the rate which is
or would be in effect with respect to such Indebtedness as at the relevant date
of determination. With respect to any transaction of the type described in
clause (ii) or (iv) above, any Indebtedness incurred by the Borrower or any of
its Subsidiaries in order to consummate such transaction (and any other
transaction which occurred during the relevant four-fiscal quarter period) (A)
shall be deemed to have been incurred on the first day of the relevant four
fiscal-quarter period and (B) if such Indebtedness has a floating or formula
rate, then the implied rate of interest for such Indebtedness for the applicable
period for purposes of this definition shall be determined by utilizing the rate
which is or would be in effect with respect to such Indebtedness as at the
relevant date of determination. In connection with any calculation of the
financial covenants set forth in Section 7.18 upon giving effect to a
transaction on a Pro Forma Basis for purposes of Section 7.1(h)(i), Section
7.4(c), Section 7.5 or Section 7.6, as applicable:
(A) for purposes of any such calculation in respect of any
incurrence or assumption of Indebtedness (and to the concurrent
retirement of any other Indebtedness) as referred to in Section
7.1(h)(i), any such Indebtedness which is retired shall be excluded and
deemed to have been retired as of the first day of the relevant four
fiscal quarter period;
(B) for purposes of any such calculation in respect of any
Asset Disposition of a business or business unit as referred to in
Section 7.5, (1) income statement items (whether positive or negative)
attributable to the Property disposed of in such Asset Disposition
shall be excluded to the extent relating to any period prior to the
date of such transaction and (2) any Indebtedness which is retired in
connection with such Asset Disposition shall be excluded and deemed to
have been retired as of the first day of the relevant four
fiscal-quarter period; and
(C) for purposes of any such calculation in respect of any
merger or consolidation as referred to in Section 7.4(c) or any
Permitted Acquisition as referred to in Section 7.6, (1) any
Indebtedness incurred by the Borrower or any of its Subsidiaries in
connection with such transaction shall be deemed to have been incurred
as of the first day of the relevant four fiscal-quarter period and (2)
income statement items (whether positive or negative) attributable to
the Property acquired in such transaction or to the Investment
comprising such transaction, as applicable, shall be included to the
extent relating to the relevant four fiscal-quarter period.
"PRO FORMA COMPLIANCE CERTIFICATE" shall mean a certificate of the
chief financial officer of the Borrower (as to which there shall be no
individual, as opposed to corporate, liability) delivered to the Agent in
connection with (a) any incurrence or assumption of Indebtedness (and the
concurrent retirement of any other Indebtedness) as referred to in
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Section 7.1(h)(i), (b) any merger or consolidation as referred to in Section
7.4(c), (c) any Asset Disposition as referred to in Section 7.5(a) or (d) any
Permitted Acquisition as referred to in Section 7.6, as applicable, and
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the Fixed Charge Coverage Ratio,
Senior Leverage Ratio and the Total Leverage Ratio as of the last day of the
most recent period of four consecutive fiscal quarters of the Borrower which
precede or end on the date of the applicable transaction and with respect to
which the Agent shall have received the Required Financial Information.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"QUALIFIED INITIAL PUBLIC OFFERING" shall mean an initial registered
public offering pursuant to an effective registration statement under the
Securities Act of 1933 covering the offer and sale of common stock of the
Borrower to the public of no more than 50% of the common stock of the Borrower,
underwritten by a nationally recognized investment banking firm, at a price per
share greater than or equal to $7.50, that generates gross cash proceeds to the
Borrower of at least $25,000,000.00.
"RECEIVABLES" shall mean all accounts receivable, receivables, and
obligations for payment created or arising from the sale of inventory or the
rendering of services in the ordinary course of business.
"REGISTER" shall have the meaning assigned to such term in Section
10.3(c).
"REGULATION G, T, U OR X" shall mean Regulation G, T, U or X,
respectively, 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.
"REINVESTMENT FUNDS" shall mean, with respect to any Insurance Proceeds
from a Casualty or any Condemnation Award from a Condemnation, that portion of
such funds as shall, according to a certificate of a Responsible Officer of the
Borrower delivered to the Agent within thirty (30) days after the occurrence of
such Casualty or Condemnation (and in any case prior to the receipt thereof by
any Credit Party), be reinvested in the repair, restoration or replacement of
the properties and assets that were the subject of such Casualty or
Condemnation; PROVIDED, THAT (a) the aggregate amount of such proceeds with
respect to any such event or series of related events shall not exceed
$5,000,000, (b) such certificate shall be accompanied by evidence reasonably
satisfactory to the Agent that any Property subject to such Casualty or
Condemnation has been or will be repaired, restored or replaced to its condition
immediately prior to such Casualty or Condemnation, (c) pending such
reinvestment, the entire amount of such proceeds shall be deposited in an
account with the Agent for the benefit of the Secured Parties, over which the
Agent shall have sole control and exclusive right of withdrawal, (d) from and
after the date of delivery of such certificate, the Borrower shall diligently
proceed, in a commercially reasonable manner, to complete the repair,
restoration or replacement of the Properties and assets that were the subject of
such Casualty or Condemnation as described in such certificate and (e) no
Default or Event of Default shall have occurred and be continuing; and PROVIDED
FURTHER that, if any of the
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foregoing conditions shall cease to be satisfied at any time, such funds shall
no longer be deemed Reinvestment Funds and such funds shall immediately be
applied to prepayment of the Credit Obligations in accordance with Section
3.3(b).
"RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles containing any Materials of Environmental Concern).
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice requirement has
been waived by regulation.
"REQUIRED FINANCIAL INFORMATION" shall mean, with respect to any
period, the financial statements of the Borrower with respect to such period as
required pursuant to Section 6.1(a) and 6.1(b).
"REQUIRED LENDERS" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent) and
holding in the aggregate more than fifty-one percent (51%) of the total of the
Revolving Commitments held by all such Lenders (or, if the Revolving Commitments
have been terminated in whole, the outstanding Revolving Loans and Participation
Interests in outstanding Letters of Credit). For purposes of the foregoing, (A)
the interest of any Lender holding a Loan in which any other Lender has a
Participation Interest pursuant to Section 3.13 shall be calculated net of all
such Participation Interests of other Lenders and (B) the Participation Interest
of any Lender pursuant to Section 3.13 in a Loan held by any other Lender shall
be counted as if such Lender holding such Participation Interest held a
proportionate part of the related Loan directly.
"REQUIREMENT OF LAW" shall mean, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation order, writ, judgment, injunction,
decree, permit or determination of an arbitrator or a court or other
Governmental Authority or other restriction imposed by any Governmental
Authority, in each case applicable to or binding upon such Person or to which
any of its Property is subject.
"RESERVE REQUIREMENT" shall mean, at any time, the maximum rate at
which reserves (including any marginal, special, supplemental, or emergency
reserves) are required to be maintained under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any successor)
by member banks of the Federal Reserve System against "Eurocurrency Liabilities"
(as such term is used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves required to
be maintained by such member banks with respect to (a) any category of
liabilities which includes deposits by reference to which the Eurodollar Rate is
to be determined or (b) any category of extensions of credit or other assets
which include Eurodollar Loans. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.
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"RESPONSIBLE OFFICER" shall mean, as to any Person, the president,
chief executive officer, chief operating officer, any financial officer, any
vice president, the Director of Mergers and Acquisitions, or the general counsel
of such Person (or, in the case of a partnership, of the managing general
partner of such Person). It is understood that any certificate delivered to the
Agent or the Lenders hereunder by a Responsible Officer shall be given by the
Person in his or her capacity an officer, and not in any individual capacity
that imparts personal liability to such Person.
"RESTRICTED PAYMENT" shall mean (i) any dividend or other distribution,
direct or indirect, on account of any class of Capital Stock of any Credit
Party, now or hereafter outstanding, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any class of Capital Stock of any Credit Party, now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire any class of
Capital Stock of any Credit Party, now or hereafter outstanding, and (iv) any
payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, the Subordinated Notes and the Permitted Warrant Notes.
"REVOLVING COMMITMENT" shall mean, with respect to any Lender, the
commitment of such Lender, in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, to (a) make Revolving Loans in accordance with the
provisions of Section 2.1(a) and (b) purchase Participation Interests in Letters
of Credit in accordance with the provisions of Section 2.2(c).
"REVOLVING COMMITMENT PERCENTAGE" shall mean, for any Lender, the
percentage, if any, identified as its Revolving Commitment Percentage on
SCHEDULE 2.1(a) (or in the Assignment and Acceptance pursuant to which such
Lender assumed its Revolving Commitment), as such percentage may be modified in
connection with any assignment made in accordance with the provisions of this
Agreement.
"REVOLVING COMMITTED AMOUNT" shall have the meaning assigned to that
term in Section 2.1(a).
"REVOLVING LOANS" shall have the meaning assigned to that term in
Section 2.1(a).
"REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes
of the Borrower in favor of each of the applicable Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division in the
business of rating securities.
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"SALE AND LEASEBACK TRANSACTION" shall mean any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to any Credit Party of any Property, whether owned by any Credit
Party as of the Closing Date or later acquired, which has been or is to be sold
or transferred by any Credit Party to such Person or to any other Person from
whom funds have been, or are to be, advanced by such Person on the security of
such Property.
"SECURED PARTIES" shall mean (a) the Lenders, (b) the Agent, in its
capacity as such under each Credit Document, (c) each Lender or Affiliate
thereof with which the Borrower or any of its Subsidiaries enters into a Lender
Hedging Agreement as permitted hereunder, in its capacity as a party to such
Lender Hedging Agreement, (d) the beneficiaries of each indemnification
obligation undertaken by any Credit Party under any Credit Document and (e) the
successors and permitted assigns of the foregoing.
"SECURITY AGREEMENT" shall mean the Pledge and Security Agreement dated
as of the Closing Date in the form of EXHIBIT B to be executed in favor of the
Agent for the benefit of the Secured Parties by each of the Domestic
Subsidiaries, as amended, modified, restated or supplemented from time to time.
"SELLER" shall mean each of the sellers under Acquisition Agreements.
"SENIOR LEVERAGE RATIO" shall mean, as of any reporting day, the ratio
of (a) the sum of (i) Funded Indebtedness of the Borrower and its Consolidated
Subsidiaries on a consolidated basis as of the last day of the period of four
(4) consecutive fiscal quarters of the Borrower ending on, or most recently
preceding, such day, less all outstanding and unpaid Indebtedness evidenced by
the Subordinated Note Documents as of such day, PLUS (ii) an amount equal to
Consolidated Rent Expense for such period multiplied by 8, to (b) Consolidated
EBITDAR for such period.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"SHAREHOLDER AGREEMENT" shall mean the Amended and Restated Xxxxxx
Stockholder Agreement dated June 25, 1997 and entered into by and among the
Permitted Holders (other than those Permitted Holders listed on Schedule 1.1C)
and the Subordinated Noteholders.
"SOLVENT" or "SOLVENCY" shall mean, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities as
they mature in their ordinary course, taking into account the timing of and
amounts of cash to be received by such Person and the timing of and amounts of
cash to be payable on or in respect of debts and liabilities of such Person,
(iii) such Person is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which such Person's Property
would constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged or is to
engage,
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(iv) the fair value of the Property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person and (v)
the present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts and liabilities as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in 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.
"STANDBY LETTER OF CREDIT FEE" shall have the meaning assigned to such
term in Section 3.5(c)(i).
"STOCKHOLDER TAXES" shall mean, so long as the Borrower remains an "S
Corporation" treated as a pass-through entity for United States Federal income
tax purposes, taxes for the holders of the Capital Stock of the Borrower arising
from their share of taxable income of the Borrower (excluding income from
dividends and distributions), calculated on a combined effective basis, as if
all stockholders were residents of Cincinnati, Ohio, so long as Xxxxxxx Xxxxxx
Xxxxx is a resident of Cincinnati, Ohio. However, during any period when Xxxxxxx
Xxxxxx Xxxxx is not a resident of Cincinnati, Ohio, taxes for the stockholders
of the Borrower shall be calculated at the highest applicable combined effective
Federal, state and local rates for any stockholder of the Borrower (the "HIGHEST
APPLICABLE EFFECTIVE RATE"); PROVIDED, THAT, the applicable combined effective
rate for Xxxxxxx Xxxxxx Xxxxx is at least 90% of the Highest Applicable
Effective Rate (or if not, at the lesser of (i) 120% of the applicable combined
effective rate for Xxxxxxx Xxxxxx Xxxxx and (ii) the Highest Applicable
Effective Rate). The rate or rates applied in the foregoing calculations shall
reflect whether any portion of the stockholders' share of taxable income is
ordinary income or capital gains.
"SUBORDINATED NOTE PURCHASE AGREEMENT" shall mean the Investment
Agreement dated as of June 26, 1997, by and among the Borrower and the
purchasers named therein, as in effect on the Closing Date.
"SUBORDINATED NOTES" shall mean the senior subordinated notes issued by
the Borrower in favor of the Subordinated Noteholders pursuant to the
Subordinated Note Purchase Agreement, as such Subordinated Notes may be amended,
modified, restated or supplemented and in effect from time to time.
"SUBORDINATED NOTE DOCUMENTS" shall mean the Subordinated Notes, the
Subordinated Note Purchase Agreement, the Warrants and the Permitted Warrant
Notes.
"SUBORDINATED NOTEHOLDERS" shall mean the holders from time to time of
the Subordinated Notes, or any of them.
"SUBSIDIARY" shall mean, as to any Person, (a) any corporation more
than 50% of whose Capital 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, 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 directly
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or indirectly through Subsidiaries, and (b) any partnership, association, joint
venture, limited liability company or other business entity in which such Person
directly or indirectly through Subsidiaries has more than 50% of the interest at
any time.
"TAXES" shall have the meaning assigned to such term in Section
3.10(a).
"TOTAL LEVERAGE RATIO" shall mean, as of any reporting day, the ratio
of (a) the sum of (i) Funded Indebtedness of the Borrower and its Consolidated
Subsidiaries on a consolidated basis as of the last day of the period of four
(4) consecutive fiscal quarters of the Borrower ending on, or most recently
preceding, such day, PLUS (ii) an amount equal to Consolidated Rent Expense for
such period multiplied by 8, PLUS (iii) to the extent not included in clause (i)
of this definition, an amount equal to the greater of (A) the liquidation value
of the Mandatory Redeemable Preferred Stock as of such day or (B) the aggregate
principal amount of Indebtedness that is issuable on conversion of such
Mandatory Redeemable Preferred Stock, to (b) Consolidated EBITDAR for such
period.
"TOTAL VOTING POWER" with respect to any Person on any date shall mean
the total number of votes which may be cast in the election of directors of such
Person at any meeting of stockholders of such Person if all securities entitled
to vote in the election of directors of such Person (on a fully diluted basis,
assuming the exercise, conversion or exchange of all rights, warrants, options
and securities outstanding on such date which are or may thereafter become
exercisable for, exchangeable for or convertible into, such voting securities)
were present and voted at such meeting (other than votes that may be cast only
upon the happening of a contingency).
"TYPE", with respect to a Loan, refers to whether such Loan is a
Eurodollar Loan or a Base Rate Loan.
"U-GENE" shall mean U-Gene Research B.V., a company based in Utrecht,
The Netherlands.
"U-GENE ACQUISITION AGREEMENT" shall mean the Stock Purchase Agreement
among the Borrower and the owners and holder of 100% of the issued and
outstanding Capital Stock of U-Gene.
"WARRANTS" shall mean the warrants issued pursuant to the Warrant
Agreement.
"WHOLLY OWNED SUBSIDIARY" of any Person shall mean any Subsidiary 100%
of whose Capital Stock (on a fully diluted basis) is at the time owned by such
Person directly or indirectly through other Wholly Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS. For purposes of computation of periods
of time hereunder, the word "from" shall mean "from and including" and the words
"to" and "until" each mean "to but excluding."
1.3 ACCOUNTING TERMS. Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates
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and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Agreement shall (except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with the most recent annual or
quarterly financial statements delivered pursuant to Section 6.1 (or, prior to
the delivery of the first financial statements pursuant to Section 6.1.
consistent with the financial statements as at December 31, 1996); PROVIDED,
THAT, if (i) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto after the Closing Date or
(ii) the Agent or the Required Lenders shall so object in writing within ninety
(90) days after delivery of such financial statements, then such calculations
shall be made on a basis consistent with the most recent financial statements
delivered by the Borrower to the Lenders as to which no such objection shall
have been made.
1.4 TERMS GENERALLY. The definitions in Section 1.1 shall apply equally
to both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". All references herein to
Sections, Exhibits and Schedules shall be deemed references to Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Unless otherwise expressly provided herein, the word "day" means a
calendar day.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS. (a) REVOLVING COMMITMENT. Subject to the terms and
conditions hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the Borrower
such Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("REVOLVING LOANS") from time to time from
the Closing Date until the Maturity Date, or such earlier date as the Revolving
Commitments shall have been terminated as provided herein; PROVIDED, THAT, the
sum of the aggregate principal amount of outstanding Revolving Loans PLUS the
aggregate amount of outstanding LOC Obligations shall not at any time exceed an
amount equal to the difference between (i) TWENTY MILLION AND NO/100 DOLLARS
($20,000,000.00) and (ii) the amount of Indebtedness that is outstanding and
unpaid from time to time pursuant to Section 7.1(g) (as such aggregate maximum
amount may be reduced from time to time as provided in Section 3.4, the
"REVOLVING COMMITTED AMOUNT"); PROVIDED, FURTHER, with regard to each Lender
individually, that such Lender's outstanding Revolving Loans PLUS Participation
Interests in outstanding LOC Obligations shall not at any time exceed such
Lender's Revolving Commitment Percentage of the Revolving Committed Amount.
Revolving Loans may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof; PROVIDED, THAT, no more
than six Eurodollar Loans shall be outstanding under this Agreement at any time.
For
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purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings of Eurodollar Loans may, in accordance with the provisions
hereof, be combined through extensions or conversions at the end of existing
Interest Periods to constitute a single new Eurodollar Loan with the same
Interest Period. Revolving Loans hereunder may be repaid and reborrowed in
accordance with the provisions of this Agreement.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing), in the form of a Notice of Borrowing
attached hereto as EXHIBIT G, to the Agent not later than 12:00 Noon
(Charlotte, North Carolina time) on the Business Day on the date of the
requested borrowing in the case of Base Rate Loans, and on the third
Business Day prior to the date of the requested borrowing in the case
of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is requested,
(B) the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed and (D) whether
the borrowing shall be comprised of Base Rate Loans, Eurodollar Loans
or a combination thereof, and if Eurodollar Loans are requested, the
Interest Period(s) therefor. If the Borrower shall fail to specify in
any such Notice of Borrowing (y) an applicable Interest Period in the
case of a Eurodollar Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, or (z) the Type of
Revolving Loan requested, then such notice shall be deemed to be a
request for a Base Rate Loan hereunder. The Agent shall give notice to
each Lender promptly upon receipt of each Notice of Borrowing pursuant
to this Section 2.1(b)(i), the contents thereof and each such Lender's
share of any borrowing to be made pursuant thereto.
(ii) MINIMUM AMOUNTS. Each Eurodollar Loan that comprises part
of the Revolving Loans shall be in a minimum aggregate principal amount
(for the applicable Lenders, collectively) of $500,000 and integral
multiples of $100,000 in excess thereof (or the then remaining amount
of the Revolving Committed Amount, if less). Each Base Rate Loan that
comprises part of the Revolving Loans shall be in a minimum aggregate
principal amount (for the applicable Lenders, collectively) of $100,000
and integral multiples of $100,000 in excess thereof (or the then
remaining amount of the Revolving Committed Amount if less).
(iii) ADVANCES. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Agent for
the account of the Borrower at the office of the Agent specified in
SCHEDULE 2.1(a), or in such other manner as the Agent may designate in
writing, by 3:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the amounts
made available to the Agent by the Lenders and in like funds as
received by the Agent.
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(c) REPAYMENT. The principal amount of all Revolving Loans shall be due
and payable in full on the Maturity Date, unless accelerated pursuant to Section
8.2.
(d) INTEREST. Subject to the provisions of Section 3.1,
(i) BASE RATE LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the
Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (and at such other times as may be specified herein).
(e) REVOLVING NOTES. The Revolving Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to such Lender in
substantially the form of EXHIBIT H and in a principal amount equal to such
Lender's Revolving Commitment Percentage of the Revolving Committed Amount.
2.2 LETTER OF CREDIT SUBFACILITY. (a) ISSUANCE. Subject to the terms
and conditions hereof and of the LOC Documents, if any, and any other terms and
conditions which the Issuing Lender may reasonably require and in reliance upon
the representations and warranties set forth herein, the Issuing Lender agrees
to issue, and each Lender severally agrees to participate on the terms set forth
in this Section 2.2 in the issuance by the Issuing Lender of, standby Letters of
Credit in Dollars from time to time from the Closing Date until the Maturity
Date as the Borrower may request, in a form acceptable to the Issuing Lender;
PROVIDED, THAT (i) the LOC Obligations outstanding shall not at any time exceed
NINE MILLION AND NO/100 DOLLARS ($9,000,000.00) (as reduced pursuant to Section
3.4(b)(ii)), the "LOC COMMITTED AMOUNT") and (ii) the sum of the aggregate
principal amount of outstanding Revolving Loans, PLUS the aggregate amount of
outstanding LOC Obligations outstanding shall not at any time exceed the
Revolving Committed Amount. No Letter of Credit shall (x) have an original
expiry date more than one year from the date of issuance or (y) as originally
issued or as extended, have an expiry date extending beyond the Maturity Date.
Each Letter of Credit shall comply with the related LOC Documents. The issuance
and expiry dates of each Letter of Credit shall each be a Business Day.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least three
(3) Business Days prior to the requested date of issuance. The Issuing Lender
will, at least quarterly and more frequently upon request, disseminate to each
of the affected Lenders a detailed report specifying the Letters of Credit which
are then issued and outstanding and any activity with respect thereto which may
have occurred since the date of the most recent prior report, and including
therein, among other things, the beneficiary, the face amount and the expiry
date, as well as any payments or expirations which may have occurred.
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(c) PARTICIPATION. Each Lender, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse from the Issuing Lender a
Participation Interest in such Letter of Credit and the obligations arising
thereunder and any collateral relating thereto, in each case in an amount equal
to its Revolving Commitment Percentage of the obligations under such Letter of
Credit and shall absolutely, unconditionally and irrevocably assume and be
obligated to pay to the Issuing Lender and discharge when due its Revolving
Commitment Percentage of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Lender's Participation Interest in
any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each such
Lender shall pay to the Issuing Lender its Revolving Commitment Percentage of
such unreimbursed drawing pursuant to subsection (d) below. The obligation of
each Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. The Borrower
promises to reimburse the Issuing Lender on the day of drawing under any Letter
of Credit (either with the proceeds of a Revolving Loan obtained as provided in
subsection (e) below or with funds from other sources) in same day funds. Unless
the Borrower shall immediately notify the Issuing Lender that the Borrower
intends to reimburse the Issuing Lender for such drawing from other sources of
funds, the Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan as provided in subsection (e) below in the amount of the drawing
on the related Letter of Credit and the proceeds of such Loan will be used to
reimburse the Issuing Lender for such drawing. If the Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the Adjusted Base
Rate PLUS 2%. The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any rights of
setoff, counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender, the Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including any defense based on
any failure of the Borrower or any other Credit Party to receive consideration
or the legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other affected Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly pay to the
Agent for the account of the Issuing Lender, in Dollars and in immediately
available funds, the amount of such Lender's Revolving Commitment Percentage of
such unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is received at or
before 2:00 P.M. (Charlotte, North Carolina time) and otherwise such payment
shall be made at or before 12:00 Noon (Charlotte, North Carolina time) on the
Business Day next succeeding the day such notice is received. If such Lender
does not pay such amount to the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date of such drawing
until such Lender pays such amount to the Issuing Lender in full at a rate per
annum equal to, if paid within two (2) Business Days of the date that such
Lender is required to
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make payment of such amount pursuant to the preceding sentence, the Federal
Funds Rate and, if paid, thereafter, the Base Rate. Each Lender's obligation to
make such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever, shall be satisfied without regard to the
termination of this Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Lender, such Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Lender, acquire a
Participation Interest in an amount equal to such payment (excluding the portion
of such payment constituting interest owing to the Issuing Lender) in the
unreimbursed drawn portion of the related Letter of Credit, in the interest on
the LOC Obligations in respect thereof and the related LOC Documents, and shall
have a claim against the Borrower with respect thereto.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Agent shall give notice to
the affected Lenders that a Revolving Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing under a Letter
of Credit, in which case a Revolving Loan advance comprised of Base Rate Loans
(or Eurodollar Loans to the extent the Borrower has complied with the procedures
of Section 2.1(b)(i) with respect thereto) shall be immediately made to the
Borrower by all Lenders (notwithstanding any termination of the Commitments
pursuant to Section 8.2) pro rata based on the respective Revolving Commitment
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 8.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the related LOC
Obligations. Each such Lender hereby irrevocably agrees to make its Revolving
Commitment Percentage of each such Revolving Loan immediately upon any such
request or deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 4 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure of any such request or deemed request for a Revolving Loan to be made by
the time otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(vi) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including as
a result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such 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 Issuing
Lender such Participation Interests in the outstanding LOC Obligations as shall
be necessary to cause each such Lender to share in such LOC Obligations ratably
based upon the respective Revolving Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 8.2), PROVIDED that at the time any purchase of Participation
Interests pursuant to this sentence is actually made, the
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purchasing Lender shall be required to pay to the Issuing Lender, to the extent
not paid to the Issuing Lender by the Borrower in accordance with the terms of
subsection (d) above, interest on the principal amount of Participation
Interests purchased for each day from and including the day upon which such
borrowing would otherwise have occurred to but excluding the date of payment for
such Participation Interests, at the rate equal to, if paid within two (2)
Business Days of the date on which the Revolving Loan advance was required, the
Federal Funds Rate, and, if paid thereafter, the Base Rate.
(f) DESIGNATION OF SUBSIDIARIES AS ACCOUNT PARTIES. Notwithstanding
anything to the contrary set forth in this Agreement, including Section 2.2(a),
a Letter of Credit issued hereunder may contain a statement to the effect that
such Letter of Credit is issued for the account of a Subsidiary of the Borrower,
PROVIDED that notwithstanding such statement, the Borrower shall be the actual
account party for all purposes of this Agreement for such Letter of Credit and
such statement shall not affect the Borrower's reimbursement obligations
hereunder with respect to such Letter of Credit.
(g) RENEWAL, EXTENSION. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(h) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practices for
Documentary Credits, as published as of the date of issue by the International
Chamber of Commerce (the "UCP"), in which case the UCP may be incorporated
therein and deemed in all respects to be a part thereof.
(i) INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to pay, and protect, indemnify and save
each Lender harmless from and against, any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that such Lender may incur or be subject to
as a consequence, direct or indirect, of (A) the issuance of any Letter
of Credit or (B) the failure of such Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"GOVERNMENT ACTS").
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary thereof.
No Lender (including the Issuing Lender) shall be responsible: (A) for
the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) for the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer
or assign any Letter of Credit or the rights or benefits thereunder or
proceeds
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thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be written; (D) for
any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from causes
beyond the control of such Lender, including any Government Acts. None
of the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
(iii) In furtherance and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any
Lender (including the Issuing Lender) under or in connection with any
Letter of Credit or the related certificates, if taken or omitted in
good faith, shall not put such Lender under any resulting liability to
the Borrower or any other Credit Party. It is the intention of the
parties that this Agreement shall be construed and applied to protect
and indemnify each Lender (including the Issuing Lender) against any
and all risks involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of itself and
each of the other Credit Parties), including any and all Government
Acts. No Lender (including the Issuing Lender) shall, in any way, be
liable for any failure by such Lender or anyone else to pay any drawing
under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of such Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i) shall
survive the termination of this Agreement. No act or omission of any
current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Lenders (including the Issuing
Lender) to enforce any right, power or benefit under this Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify any
Lender (including the Issuing Lender) in respect of any liability
incurred by such Lender (A) arising out of the gross negligence or
willful misconduct of such Lender, or (B) caused by such Lender's
failure to pay under any Letter of Credit after presentation to it of a
request strictly complying with the terms and conditions of such Letter
of Credit, as determined by a court of competent jurisdiction, unless
such payment is prohibited by any law, regulation, court order or
decree or such failure to pay is a result of any Government Act.
(j) RESPONSIBILITY OF ISSUING LENDER. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section 4
have been satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; PROVIDED, THAT, nothing set forth in
this Section 2.2 shall be deemed to prejudice the right of any Lender to recover
from the Issuing Lender any amounts made available by such Lender to the Issuing
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Lender pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(k) CONFLICT WITH LOC DOCUMENTS. In the event of any conflict between
this Agreement and any LOC Document (including any letter of credit
application), this Agreement shall control.
(l) CASH COLLATERAL. In the event that the Borrower is required
pursuant to the terms of this Agreement or any other Credit Document to cash
collateralize any LOC Obligations, the Borrower shall deposit in an account with
the Agent an amount in cash equal to 100% of such LOC Obligations. Such deposit
shall be held by the Agent as collateral for the payment and performance of the
LOC Obligations. The Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. The Agent will, at the
request of the Borrower, invest amounts on deposit in such account in Cash
Equivalents that mature prior to the last day of the applicable Interest Periods
of any Eurodollar Loans to be prepaid; PROVIDED, THAT (i) the Agent shall not be
required to make any investment that, in its sole judgment, would require or
cause the Agent to be in, or would result in any, violation of any law, statute,
rule or regulation (ii) such Cash Equivalents shall be subjected to a first
priority perfected security interest in favor of the Agent and (iii) if an Event
of Default shall have occurred and be continuing, the selection of such
investments shall be in the sole discretion of the Agent. The Borrower shall
indemnify the Agent for any losses relating to such investments. Other than any
interest or profits earned on such investments, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall be applied by the Agent to reimburse
the Issuing Lender immediately for drawings under Letters of Credit and, if the
maturity of the Loans has been accelerated, to satisfy the LOC Obligations. If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three (3) Business Days
after all Events of Default have been cured or waived. If the Borrower is
required to provide an amount of cash collateral hereunder pursuant to Section
3.3(b)(i), such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower upon demand; PROVIDED, THAT, after giving effect to
such return, (i) the sum of the aggregate amount of outstanding LOC Obligations,
PLUS the aggregate principal amount of outstanding Revolving Loans, shall not
exceed the aggregate Revolving Committed Amount and (ii) no Default or Event of
Default shall have occurred and be continuing. The Borrower hereby pledges and
assigns to the Agent, for its benefit and the benefit of the Lenders, the cash
collateral accounts established hereunder (and all monies and investments held
therein) to secure the Credit Obligations.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE. Upon the occurrence, and during the continuance, of
an Event of Default, the principal of and, to the extent permitted by law,
interest on the Loans and any other amounts owing hereunder or under the other
Credit Documents shall bear interest,
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payable on demand, at a per annum rate equal to (a) in the case of principal of
any Loan, the rate applicable to such Loan during such period pursuant to
Section 2, PLUS 2.00%, (b) in the case of interest on any Loan, the Adjusted
Base Rate for such Loan during such period PLUS 2.00% and (c) in the case of any
other amount, the Adjusted Base Rate for Revolving Loans during such period PLUS
2.00%.
3.2 EXTENSION AND CONVERSION. Subject to the terms of Section 4.4, the
Borrower shall have the option, on any Business Day, to extend existing Loans
into a subsequent permissible Interest Period or to convert Loans into Loans of
another Type; PROVIDED, THAT (i) except pursuant to in Section 3.8, Eurodollar
Loans may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "Interest Period" set forth in Section 1.1 and shall be in
such minimum amounts as provided in Section 2.1(b)(ii), (iv) the total number of
Eurodollar Loans outstanding at any time shall be no greater than the maximum
number provided in Section 2.1(a) (it being understood that, for purposes
hereof, Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings may, in accordance with the provisions hereof, be combined through
extensions or conversions at the end of existing Interest Periods to constitute
a single new Eurodollar Loan with the same Interest Period) and (v) any request
for extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
(1) month. Each such extension or conversion shall be effected by the Borrower
by giving a Notice of Extension/Conversion in the form of EXHIBIT I hereto (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in specified in SCHEDULE 2.1(a), or at such other office as the Agent
may designate in writing, prior to 12:00 Noon (Charlotte, North Carolina time)
on the Business Day of, in the case of the conversion of a Eurodollar Loan into
a Base Rate Loan, and on the third Business Day prior to, in the case of the
extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or conversion, specifying
the date of the proposed extension or conversion, the Loans to be so extended or
converted, the Types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified in Section
4.4. In the event the Borrower fails to request an extension or conversion of
any Eurodollar Loan in accordance with this Section 3.2, or any such requested
conversion or extension is not permitted by this Agreement, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion of any
Loan. Each extension or conversion shall be effected by each Lender and the
Agent by recording for the account of such Lender the new Loan of such Lender
resulting from such extension or conversion and reducing the Loan (or portion
thereof) of such Lender being extended or converted by an equivalent principal
amount. Accrued interest on a Loan (or portion thereof) being extended or
converted shall be paid by the Borrower (A) with respect to any Base Rate Loan
being converted to a
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Eurodollar Loan, on the last day of the first fiscal quarter of the Borrower
ending on or after the date of conversion and (B) otherwise, on the date of
extension or conversion.
3.3 PREPAYMENTS. (a) VOLUNTARY PREPAYMENTS. The Borrower shall have the
right to prepay Loans in whole or in part from time to time, subject to Section
3.11 but otherwise without premium or penalty; PROVIDED, THAT (i) each partial
prepayment of Eurodollar Loans shall be in a minimum principal amount of
$500,000 and integral multiples of $100,000 and each prepayment of Base Rate
Loans shall be in a minimum principal amount of $100,000 and integral multiples
of $100,000, and (ii) the Borrower shall have given prior written or telecopy
notice (or telephone notice promptly confirmed by written or telecopy notice) to
the Agent, in the case of a Base Rate Loan, by 12:00 Noon (Charlotte, North
Carolina time), on the date of prepayment and, in the case of a Eurodollar Loan,
by 11:00 A.M. (Charlotte, North Carolina time), at least three (3) Business Days
prior to the date of prepayment. Each notice of prepayment shall specify the
prepayment date, the principal amount to be prepaid, whether the Loan to be
prepaid is a Eurodollar Loan or Base Rate Loan and, in the case of a Eurodollar
Loan, the Interest Period of such Loan. Each notice of prepayment shall be
irrevocable and shall commit the Borrower to prepay such Loan by the amount
stated therein on the date stated therein. Subject to the foregoing terms,
amounts prepaid under this Section 3.3(a) shall be applied as the Borrower may
elect; PROVIDED, THAT, if the Borrower fails to specify the application of a
voluntary prepayment then such prepayment shall be applied first to Base Rate
Loans and then to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 3.3(a) shall be subject to
Section 3.11.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time, the sum of the
aggregate principal amount of outstanding Revolving Loans, PLUS the
aggregate amount of the outstanding LOC Obligations shall exceed the
Revolving Committed Amount, the Borrower immediately shall prepay,
within one day of such occurrence, the Revolving Loans and/or cash
collateralize the LOC Obligations pursuant to Section 2.2(l), in an
aggregate amount sufficient to eliminate such excess. Any payments
pursuant to this Section 3.3(b)(i) shall be applied as set forth in
clause (iv) below.
(ii) ASSET DISPOSITIONS. Immediately upon the occurrence of
any Asset Disposition (other than any Excluded Asset Disposition), the
Borrower shall prepay the Loans and/or cash collateralize the LOC
Obligations pursuant to Section 2.2(l) in an aggregate amount equal to
75% of the Net Cash Proceeds of the related Asset Disposition. Any
payments pursuant to this Section 3.3(b)(ii) shall be applied as set
forth in clause (iv) below).
(iii) DEBT ISSUANCES. Immediately upon the occurrence of any
Debt Issuance (other than Indebtedness permitted by Section 7.1(a)
through (g) inclusive), the Borrower shall prepay the Loans and/or cash
collateralize the LOC Obligations pursuant to Section 2.2(l) in an
aggregate amount equal to 75% of the Net Cash Proceeds of such Debt
Issuance. Any payments pursuant to this Section 3.3(b)(iii) shall be
applied as set forth in clause (iv) below.
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(iv) APPLICATION OF MANDATORY PREPAYMENTS. Prepayments shall
be applied first to Base Rate Loans and then, subject to subsection (v)
below, to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 3.3(b) shall be subject
to Section 3.11. All prepayments under this Section 3.3(b) shall be
accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
(v) PREPAYMENT ACCOUNTS. Amounts to be applied as provided in
subsection (iv) above to the prepayment of Loans shall be applied first
to reduce outstanding Base Rate Loans. Any amounts remaining after each
such application shall, at the option of the Borrower, be applied to
prepay Eurodollar Loans immediately and/or shall be deposited in a
separate Prepayment Account (as defined below) for the Loans. The Agent
shall apply any cash deposited in the Prepayment Account for any Loans
to prepay Eurodollar Loans on the last day of their respective Interest
Periods (or, at the direction of the Borrower, on any earlier date)
until all outstanding Loans have been prepaid or until all the
allocable cash on deposit in the Prepayment Account has been exhausted.
For purposes of this Agreement, the term "PREPAYMENT ACCOUNT" for any
Loans shall mean an account established by the Borrower with the Agent
and over which the Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal for application in
accordance with this subsection. The Agent will, at the request of the
Borrower, invest amounts on deposit in the Prepayment Account for any
Loans in Cash Equivalents that mature prior to the last day of the
applicable Interest Periods of the Eurodollar Loans to be prepaid;
PROVIDED, THAT (i) the Agent shall not be required to make any
investment that, in its sole judgment, would require or cause the Agent
to be in, or would result in any, violation of any law, statute, rule
or regulation (ii) such Cash Equivalents shall be subjected to a first
priority perfected security interest in favor of the Agent and (iii) if
an Event of Default shall have occurred and be continuing, the
selection of such investments shall be in the sole discretion of the
Agent. The Borrower shall indemnify the Agent for any losses relating
to the investments so that the amount available to prepay Eurodollar
Loans on the last day of the applicable Interest Periods is not less
than the amount that would have been available had no investments been
made pursuant thereto. Other than any interest or profits earned on
such investments, the Prepayment Accounts shall not bear interest.
Interest or profits, if any, on the investments in any Prepayment
Account shall accumulate in such Prepayment Account. If the maturity of
the Loans has been accelerated pursuant to Section 8.2, the Agent may,
in its sole discretion, apply all amounts on deposit in the Prepayment
Account for any Loans to satisfy any of the Credit Obligations related
to such Loans. The Borrower hereby pledges and assigns to the Agent,
for its benefit and the benefit of the Lenders, each Prepayment Account
established hereunder to secure the Credit Obligations related to such
Loans.
(vi) NOTICE. The Borrower shall give to the Agent and the
Lenders at least five (5) Business Days' prior written or telecopy
notice of each and every event or occurrence requiring a prepayment
under Section 3.3(b)(ii) and (iii), including the amount of Net Cash
Proceeds expected to be received therefrom and the expected schedule
for receiving such proceeds; PROVIDED, that in the case of any
prepayment
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event consisting of a Casualty or Condemnation, the Borrower shall give
such notice within five (5) Business Days after the occurrence of such
event.
3.4 TERMINATION AND REDUCTION OF COMMITMENTS. (a) VOLUNTARY REDUCTIONS.
The Borrower may from time to time permanently reduce or terminate the Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of $500,000
or in integral multiples of $100,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount)) upon five
(5) Business Days' prior written or telecopy notice to the Agent; PROVIDED,
THAT, no such termination or reduction shall be made which would cause the sum
at any time of the aggregate principal amount of outstanding Revolving Loans,
PLUS the aggregate amount of outstanding LOC Obligations to exceed the Revolving
Committed Amount as so terminated or reduced, unless, concurrently with such
termination or reduction, the Revolving Loans are repaid and, after the
Revolving Loans have been paid in full, the LOC Obligations are cash
collateralized to the extent necessary to eliminate such excess. The Agent shall
promptly notify each affected Lender of the receipt by the Agent of any notice
from the Borrower pursuant to this Section 3.4(a).
(b) MANDATORY REDUCTIONS.
(i) On any date that the Revolving Loans are required to be
prepaid and/or LOC Obligations are required to be cash collateralized
pursuant to the terms of Sections 3.3(b)(ii) or (iii) (or would be so
required if any Revolving Loans or LOC Obligations were outstanding),
the Revolving Committed Amount shall be automatically and permanently
reduced by the total amount of such required prepayments and cash
collateral (and, in the event that the amount of any payment referred
to in Sections 3.3(b)(ii) or (iii) which is allocable to the Credit
Obligations exceeds the amount of all outstanding Credit Obligations,
the Revolving Committed Amount shall be further reduced by 100% of such
excess).
(ii) On the date that is the earlier to occur of (A) September
30, 1997, (B) the occurrence of a Qualified Initial Public Offering,
(C) the closing of the gmi Acquisition and (D) any drawing on the gmi
Letters of Credit, the LOC Commitments and LOC Committed Amount shall
automatically and permanently be reduced to TWO MILLION AND No/100
DOLLARS ($2,000,000) and in connection therewith, the Borrower shall,
if necessary, cash collateralize LOC Obligations as required by Section
3.3(b)(i).
(c) MATURITY DATE. The Revolving Commitments of the Lenders and the LOC
Commitment of the Issuing Lender shall automatically terminate on the Maturity
Date.
(d) GENERAL. The Borrower shall pay to the Agent for the account of the
Lenders in accordance with the terms of Section 3.5(b), on the date of each
termination or reduction of the Revolving Committed Amount, the Facility Fee
accrued through the date of such termination or reduction on the amount of the
Revolving Committed Amount so terminated or reduced.
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3.5 FEES. (a) AGENT FEES. The Borrower agrees to pay to the Agent, for
its own account, the fees set forth in the fee letter dated June 5, 1997, as
amended by letter of even date herewith, among the Agent and the Borrower and in
the applicable provisions of the Commitment Letter dated June 5, 1997 among such
parties (together, the "FEE LETTER") in the amounts and on the dates provided in
the Fee Letter. Such fees shall be in addition to reimbursement of the Agent's
reasonable out-of-pocket expenses pursuant to Section 10.5 hereof.
(b) FACILITY FEE. In consideration of the Revolving Commitments of the
Lenders hereunder, the Borrower agrees to pay to the Agent for the account of
each Lender a fee (the "FACILITY FEE") on such Lender's Revolving Commitment
Percentage of the Revolving Committed Amount computed for each day during the
applicable Facility Fee Calculation Period at a per annum rate equal to the
Applicable Percentage in effect from time to time. The Facility Fee shall
commence to accrue on the Closing Date and shall be due and payable in arrears
on the last business day of each March, June, September and December (and any
date that the Revolving Committed Amount is reduced as provided in Section
3.4(a) or (b) and the Maturity Date) for the immediately preceding quarter or
portion thereof (each such quarter or portion thereof being herein referred to
as an "FACILITY FEE CALCULATION PERIOD"), beginning with the first of such dates
to occur after the Closing Date.
(c) LETTER OF CREDIT FEES.
(i) STANDBY LETTER OF CREDIT ISSUANCE FEE. In consideration of
the issuance of Letters of Credit hereunder, the Borrower promises to
pay to the Agent for the account of each Lender a fee (the "STANDBY
LETTER OF CREDIT FEE") on such Lender's Revolving Commitment Percentage
of the average daily maximum amount available to be drawn under each
such standby Letter of Credit computed at a per annum rate for each day
from the date of issuance to the date of expiration equal to the
Applicable Percentage. The Standby Letter of Credit Fee will be payable
quarterly in arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter (or
portion thereof), beginning with the first of such dates to occur after
the Closing Date.
(ii) ISSUING LENDER FEES. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (i) above, the Borrower promises
to pay to the Issuing Lender for its own account without sharing by the
other Lenders the letter of credit fronting and negotiation fees agreed
to by the Borrower and the Issuing Lender from time to time and the
customary charges from time to time of the Issuing Lender with respect
to the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit
(collectively, the "ISSUING LENDER FEES").
3.6 INCREASED COST AND REDUCED RETURN. (a) If, after the date hereof,
the adoption of any applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Applicable Lending Office)
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with any request or directive (whether or not having the force of law) of any
such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, any of its Notes, or its obligation to make
Eurodollar Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending Office) under this
Agreement or any of its Notes in respect of any Eurodollar Loans (other
than franchise taxes and taxes imposed on the overall net income, gross
receipts or revenues of such Lender by the jurisdiction in which such
Lender has its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, compulsory loan, or similar requirement
(other than the Reserve Requirement utilized in the determination of
the Adjusted Eurodollar Rate) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable Lending Office),
including any of the Commitments of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or on the London interbank market any other condition affecting
this Agreement or any of its Notes or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, extending, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Agreement or any of
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.6, the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
extend Loans of the Type with respect to which such compensation is requested,
or to convert Loans of any other Type into Loans of such Type, until the event
or condition giving rise to such request ceases to be in effect (in which case
the provisions of Section 3.9 shall be applicable); PROVIDED, THAT, such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from
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time to time upon demand the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.6 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 3.6 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3.7 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of
any Interest Period for any Eurodollar Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Adjusted Eurodollar Rate
will not adequately and fairly reflect the cost to the Lenders of
funding Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant amounts or periods, and so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional Eurodollar Loans,
extend Eurodollar Loans or to convert Base Rate Loans into Eurodollar Loans and
the Borrower shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Eurodollar Loans, either prepay such Loans or convert such
Loans into Base Rate Loans in accordance with the terms of this Agreement.
3.8 ILLEGALITY. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Loans hereunder, then such Lender
shall promptly notify the Borrower thereof and such Lender's obligation to make
or extend Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.9 shall be
applicable).
3.9 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to
make Eurodollar Loans or to extend, or to convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 3.6 or 3.8 hereof (Loans
of such Type being herein called "AFFECTED LOANS" and such Type being herein
called the "AFFECTED TYPE"), such Lender's Affected Loans shall be automatically
converted into Base Rate Loans on the last day(s) of the then current Interest
Period(s) for Affected Loans (or, in the case of a Conversion required by
Section 3.8 hereof, on such earlier date as such Lender may specify to the
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Borrower with a copy to the Agent) and, unless and until such Lender gives
notice as provided below that the circumstances specified in Section 3.6 or 3.8
hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or extended by such
Lender as Loans of the Affected Type shall be made or extended instead
as Base Rate Loans, and all Loans of such Lender that would otherwise
be converted into Loans of the Affected Type shall be converted instead
into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.6 or 3.8 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 3.9 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Commitments.
3.10 TAXES. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, EXCLUDING, in the case of each Lender and
the Agent, taxes imposed on its income, gross receipts and revenues and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or the Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "TAXES"). If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable under this
Agreement or any other Credit Document to any Lender or the Agent, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.10) such Lender or the Agent receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law, and (iv) the Borrower shall furnish to the Agent, at the office of the
Agent specified in SCHEDULE 2.1(A), the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies (including mortgage recording taxes and similar taxes)
which arise from any payment made
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under this Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Agreement or any other Credit
Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section 3.10) paid
by such Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, (ii) Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section 3.10(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 3.10(a) or
3.10(b) with respect to Taxes imposed by the United States; PROVIDED, THAT,
should a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 3.10, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the reasonable judgment of such Lender, is
not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
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(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 3.10 shall survive the termination of the Commitments and the
payment in full of the Notes.
3.11 COMPENSATION. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or extension of a Eurodollar Loan
for any reason (including the acceleration of the Loans pursuant to
Section 8.2) on a date other than the last day of the Interest Period
for such Loan; or
(b) any failure by the Borrower for any reason (including the
failure of any condition precedent specified in Section 4 to be
satisfied) to borrow, convert, extend, or prepay a Eurodollar Loan on
the date for such borrowing, conversion, extension, or prepayment
specified in the relevant notice of borrowing, prepayment, extension,
or conversion under this Agreement; or
(c) any breakage costs, charges or fees incurred by any Lender
during the period from the Closing Date through and including the date
that is 180 days from the Closing Date in respect of any Eurodollar
Loan on account to any sale or assignment of any portion of the Loans
on the Commitments to a financial institution such that the financial
institution is or will become a Lender hereunder.
3.12 PRO RATA TREATMENT. Except to the extent otherwise provided
herein:
(a) LOANS. Each Loan, each payment or prepayment of principal
of any Loan or reimbursement obligations arising from drawings under
Letters of Credit, each payment of interest on the Loans or
reimbursement obligations arising from drawings under Letters of
Credit, each payment of Facility Fees, each payment of the Standby
Letter of Credit Fee, each reduction of the Revolving Committed Amount
and each conversion or extension of any Loan, shall be allocated pro
rata among the Lenders in accordance with the respective principal
amounts of their outstanding Loans and Participation Interests.
(b) ADVANCES. No Lender shall be responsible for the failure
or delay by any other Lender in its obligation to make its ratable
share of a borrowing hereunder; PROVIDED, THAT, the failure of any
Lender to fulfill its obligations hereunder shall not relieve any other
Lender of its obligations hereunder. Unless the Agent shall have been
notified by any Lender prior to the date of any requested borrowing
that such Lender does not intend to make available to the Agent its
ratable share of such borrowing to be made on such date, the Agent may
assume that such Lender has made such amount available to the Agent on
the date of such borrowing, and the Agent in reliance upon such
assumption, may (in its sole discretion but without any obligation to
do so) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent, the
Agent shall be
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able to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent will promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Agent (and such payment by the Borrower shall be without prejudice to
Borrower's rights and remedies in respect to the defaulting Lenders).
The Agent shall also be entitled to recover from the 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 Agent to the Borrower to the date such corresponding
amount is recovered by the Agent at a per annum rate equal to (i) from
the Borrower, the applicable rate for the applicable borrowing pursuant
to the Notice of Borrowing and (ii) from a Lender, if paid within two
(2) Business Days of the date such corresponding amount was made
available by the Agent to the Borrower, the Federal Funds Rate and, if
paid thereafter, the Base Rate.
3.13 SHARING OF PAYMENTS. The Lenders agree among themselves that, in
the event that any Lender shall obtain payment in respect of any Loan, LOC
Obligation or any other obligation owing to such Lender under this Agreement
through the exercise of a right of setoff, banker's lien or counterclaim, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means (whether voluntarily or
involuntarily by set-off or otherwise), in excess of its pro rata share of such
payment as provided for in this Agreement, such Lender shall promptly purchase
from the other Lenders a Participation Interest in such Loan, LOC Obligation or
other obligation in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest pursuant to this Section 3.13 may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such Participation
Interest as fully as if such Lender were a holder of such Loan, LOC Obligations
or other obligation in the amount of such Participation Interest. Except as
otherwise expressly provided in this Agreement, if any Lender or the Agent shall
fail to remit to the Agent or any other Lender an amount payable by such Lender
or the Agent to the Agent or such other Lender pursuant to this Agreement on the
date when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Agent or such other Lender at a rate per annum equal to
the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.13 applies, such Lender shall, to the extent practicable,
exercise its
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rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 3.13 to share in the benefits of any recovery
on such secured claim.
3.14 PAYMENTS, COMPUTATIONS, ETC. (a) Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Agent in Dollars in
immediately available funds, without offset, deduction, counterclaim or
withholding of any kind, at the Agent's office specified in SCHEDULE 2.1(a) not
later than 2:00 P.M. (Charlotte, North Carolina time) on the date when due.
Payments received after such time shall be deemed to have been received on the
next succeeding Business Day. The Agent may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Borrower maintained with the Agent (with notice
to the Borrower). The Borrower shall, at the time it makes any payment under
this Agreement, specify to the Agent the Loans, LOC Obligations, Fees, interest
or other amounts payable by the Borrower hereunder to which such payment is to
be applied (and in the event that it fails so to specify, or if such application
would be inconsistent with the terms hereof, the Agent shall distribute such
payment to the Lenders in such manner as the Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder, subject
to the terms of Section 3.12(a)). The Agent will distribute such payments to
such Lenders, if any such payment is received prior to 12:00 Noon (Charlotte,
North Carolina time) on a Business Day in like funds as received prior to the
end of such Business Day and otherwise the Agent will distribute such payment to
such Lenders on the next succeeding Business Day. Whenever any payment hereunder
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 (subject to
accrual of interest and Fees for the period of such extension), except that in
the case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead be
made on the next preceding Business Day. Except as expressly provided otherwise
herein, all computations of interest and Fees shall be made on the basis of
actual number of days elapsed over a year of 360 days. Interest shall accrue
from and include the date of borrowing, but shall exclude the date of payment.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding any
other provisions of this Agreement to the contrary, after the occurrence and
during the continuance of an Event of Default, all amounts collected or received
by the Agent or any other Lender on account of the Credit Obligations or any
other amounts outstanding under any of the Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including reasonable attorneys' fees but excluding the
allocated cost of internal counsel) of the Agent in connection with
enforcing the rights of the Secured Parties under the Credit Documents
and any protective advances made by the Agent with respect to the
Collateral under or pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including reasonable attorneys' fees but excluding the
cost of internal counsel) of
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each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Obligations
owing to such Lender;
FOURTH, to the payment of all of the Credit Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Credit Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
SIXTH, to all other Credit Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whomever
may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
Participation Interest in LOC Obligations held by such Lender bears to the
aggregate amount of the then outstanding Loans and Participation Interests in
LOC Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Agent in a cash collateral account pursuant to Section
2.2(l) and applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FIFTH" and "SIXTH" above in the manner provided in this
Section 3.14(b). Notwithstanding the foregoing provisions of this Section
3.14(b), amounts on deposit in a cash collateral account pursuant to Section
2.2(l) upon the occurrence of any such Event of Default shall be applied, first,
to reimburse the Issuing Lender from time to time for any drawings under any
Letters of Credit and, second, following the expiration of all Letters of
Credit, to the other Credit Obligations in the manner provided in this Section
3.14(b).
3.15 EVIDENCE OF DEBT. (a) Each Lender shall maintain an account or
accounts evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section 10.3(c),
and a subaccount for each Lender, in which Register and subaccounts (taken
together) shall be recorded (i) the amount, type and Interest Period of each
such Loan hereunder, (ii) the
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amount of any principal or interest due and payable or to become due and payable
to each Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder from or for the account of the Borrower and each Lender's share
thereof. The Agent will make reasonable efforts to maintain the accuracy of the
subaccounts referred to in the preceding sentence and to promptly update such
subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.15 (and, if consistent
with the entries of the Agent, subsection (a)) shall be prima facie evidence of
the existence and amounts of the obligations of the Borrower therein recorded;
PROVIDED, THAT, the failure of any Lender or the Agent to maintain any such
account, such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of the Borrower to repay the Loans
made by such Lender in accordance with the terms hereof.
SECTION 4
CONDITIONS
4.1 CLOSING CONDITIONS. The obligations of the Lenders to make the
initial Loans under this Agreement and of the Issuing Lender to issue the
initial Letter of Credit (including, without limitation, the gmi Letters of
Credit) shall be subject to satisfaction of the following conditions (in form
and substance acceptable to the Agent and the Lenders):
(a) EXECUTED CREDIT DOCUMENTS. The Agent shall have received
duly executed copies of (i) this Agreement; (ii) the Notes; (iii) the
Collateral Documents and (iv) all other Operative Documents, each in
form and substance reasonably acceptable to the Lenders.
(b) CORPORATE DOCUMENTS. The Agent shall have received the
following:
(i) CHARTER DOCUMENTS. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) BYLAWS. A copy of the bylaws or regulations of
each Credit Party certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of
the Closing Date.
(iii) RESOLUTIONS. Copies of resolutions of the Board
of Directors of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing the execution, delivery
and performance thereof, certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in
full force and effect as of the Closing Date.
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(iv) GOOD STANDING. Copies of (A) certificates of
good standing, existence or the equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authority of its state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to be qualified to do business and in good
standing could have a Material Adverse Effect and (B) to the
extent available, a certificate indicating payment of all
corporate franchise taxes certified as of a recent date by the
appropriate governmental taxing authority of its state or
other jurisdiction of incorporation and each other
jurisdiction referred to in clause (A) above.
(v) INCUMBENCY. A certificate of each Credit Party as
to the incumbency and specimen signature of each officer
executing any Credit Document or any other document delivered
in connection herewith on behalf of such Credit Party,
certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Closing Date.
(c) FINANCIAL STATEMENTS. The Agent and the Lenders shall have
received and, in each case, be satisfied with (i) the consolidated
financial statements of the Borrower, U-Gene and gmi, including balance
sheets as of, and income statements and cash flow statements for the
fiscal years ended on, December 31 of each of 1995 and 1996, audited by
independent public accountants of recognized national standing and
prepared in conformity with GAAP, (ii) the consolidating unaudited
financial statements of the Borrower, its Subsidiaries, U-Gene and gmi,
including balance sheets as of, and income statements and cash flow
statements for the fiscal years ended on, December 31 of each of 1995
and 1996, (iii) the consolidated unaudited financial statements of the
Borrower, U-Gene and gmi, including balance sheets as of, and income
statements and cash flow statements for the fiscal quarter ended on,
March 31, 1997, (iv) interim unaudited quarterly financial statements
of the Borrower, its Subsidiaries, U-Gene and gmi for the period since
the last audited financial statements referred to in clause (i) above
through the last month prior to the Closing Date for which financial
information is available, (v) quarterly working capital detail for the
first projected year after the Closing Date, (vi) a pro forma
consolidated balance sheet of the Borrower and its Subsidiaries as of
the last month prior to the Closing Date for which financial
information is available giving effect to the transactions contemplated
by the Acquisition Agreements, and reflecting estimated purchase price
accounting adjustments, (vii) projections of the Borrower and its
Subsidiaries for each 12-month period through the 12-month period
ending December 31, 2000 and (viii) such other information relating to
the Borrower, its Subsidiaries, U-Gene and gmi as the Agent or the
Lenders may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein.
(d) OPINIONS OF COUNSEL. The Agent shall have received, in
each case dated as of the Closing Date:
(i) a legal opinion of Xxxxxxx, Xxxxxxxx & Xxxxxxx
P.L.L., general counsel for the Credit Parties, substantially
in the form of EXHIBIT N-1; and
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(ii) copies of the opinions to be delivered by
counsel to the Borrower pursuant to the Operative Documents
and the opinions to be delivered by counsel, including foreign
counsel, to any party to the Acquisition Agreements,
accompanied in each case by a letter from such counsel stating
that the Agent and the Lenders are entitled to rely on such
opinions as if they were addressed to the Agent.
(e) FEES AND EXPENSES. The Credit Parties shall have paid all
Fees and other fees and expenses owed by them to the Agent or any
Lender including payment to the Agent of the fees and reimbursement of
the expenses as set forth in the Fee Letter.
(f) PERSONAL PROPERTY COLLATERAL. The Agent shall have
received:
(i) searches of Uniform Commercial Code filings in
the jurisdiction of the chief executive office of each Credit
Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Agent's security interest in the Collateral, copies of the
financing statements on file in such jurisdictions and
evidence that no Liens exist other than Permitted Liens;
(ii) duly executed financing statements (Form UCC-1)
for each appropriate jurisdiction as is necessary, in the
Agent's sole discretion, to perfect the Agent's security
interest in the Collateral;
(iii) appropriate duly executed termination
statements (Form UCC-3) signed by all Persons disclosed as
secured parties in the jurisdictions referred to in clause (i)
above in form for filing under the Uniform Commercial Code of
such jurisdictions, except that no termination statement shall
be required as to any Permitted Liens;
(iv) searches of ownership of Intellectual Property
in the appropriate governmental offices;
(v) all stock certificates evidencing the Capital
Stock pledged to the Agent pursuant to the Security Agreement,
together with duly executed in blank undated stock powers
attached thereto (unless, with respect to the pledged Capital
Stock of any Foreign Subsidiary, such stock powers are deemed
unnecessary by the Agent in its sole discretion under the law
of the jurisdiction of incorporation of such Person);
(vi) such patent, trademark and copyright filings as
requested by the Agent in order to perfect the Agent's
security interest in the Collateral;
(vii) all instruments and chattel paper in the
possession of any of the Credit Parties, together with such
assignments as may be necessary or appropriate to perfect the
Agent's security interest in the Collateral;
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(viii) Depository Bank Agreements from each bank
where any Credit Party maintains a deposit account;
(ix) in the case of each lease of material personal
property under which any Credit Party is lessee, such estoppel
letters, consents and waivers from the lessors of such
personal property as may be required by the Agent, which
instruments shall be in form and substance satisfactory to the
Agent; and
(x) duly executed consents as are necessary, in the
Agent's sole discretion, to perfect the security interest of
the Secured Parties in the Collateral.
(g) PRIORITY OF LIENS. The Agent, on behalf of the Secured
Parties, shall hold a perfected, first priority Lien, subject to no
other Liens other than Permitted Liens, on all Collateral (except as
contemplated by Section 6.13).
(h) EVIDENCE OF INSURANCE. The Agent shall have received (i) a
report from the Borrower's independent insurance consultant, in form
and substance satisfactory to the Agent, to the effect that insurance
satisfying the requirements set forth in the Credit Documents is in
effect and (ii) satisfactory evidence of such insurance and the
endorsement thereof in accordance with the Credit Documents, including
a "standard" or "New York" lender's loss payable endorsement in the
name of the Agent on Accord Form 27.
(i) CORPORATE STRUCTURE. The ownership, capital, corporate,
tax, organizational and legal structure (including articles of
incorporation and bylaws, shareholder agreements and management) of the
Credit Parties shall be reasonably satisfactory to the Lenders.
(j) SUBORDINATED DEBT. (i) The Borrower and the Subordinated
Noteholders shall have executed, delivered and otherwise entered into
the Subordinated Note Documents on terms that are satisfactory to the
Agent, (ii) the Agent shall have received a copy, certified by a
Responsible Officer of the Borrower as true and complete, of the
Subordinated Note Documents so executed and delivered, (iii) no
amendment, waiver or modification thereof shall have been entered into
on or prior to the Closing Date which shall not have been approved by
each of the Lenders, and (iv) the Borrower, the Agent, the Lenders and
the Subordinated Noteholders shall have entered into an Intercreditor
Agreement on terms that are satisfactory to the Agent and the Lenders,
which terms include, among others, the unconditional obligation of the
Subordinated Noteholders to purchase the $5,000,000 of Subordinated
Notes of the Borrower relating to the gmi Acquisition upon and in the
event of a drawing on the gmi Letters of Credit.
(k) CONSENTS AND APPROVALS. The Borrower and the other Credit
Parties shall have obtained all governmental, shareholder and third
party consents and approvals necessary or, in the reasonable opinion of
the Agent, desirable in
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connection with the execution, delivery and performance of this
Agreement and the other Operative Documents (including the exercise of
remedies under the Collateral Documents), the other related financings
and transactions contemplated hereby and the continuing operations of
the Borrower and its Subsidiaries following the Closing Date, and all
applicable waiting periods (including any applicable waiting period
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976) shall
have expired, in each case without any action being taken by any
authority that could restrain, prevent or impose any material adverse
condition on the Credit Parties taken as a whole or such transactions
or that could seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the judgment of the Agent could
have such effect.
(l) MATERIAL ADVERSE EFFECT. From December 31, 1996 to the
Closing Date, nothing shall have occurred (and neither the Lenders nor
the Agent shall have become aware of any facts or circumstances not
previously known) which has, or could reasonably be expected to have, a
Material Adverse Effect.
(m) LITIGATION. There shall not exist any order, decree,
judgment, ruling or injunction or any pending or threatened action,
suit, investigation or proceeding that purports to affect the
transactions contemplated by the Acquisition Agreements, the Credit
Facilities or the other related financings or that could have a
Material Adverse Effect.
(n) OTHER INDEBTEDNESS. The Credit Parties shall have no
material liabilities (actual or contingent) or Preferred Stock other
than (i) the Indebtedness under the Credit Documents, (ii) Indebtedness
created and evidenced by the Subordinated Note Documents, (iii)
Indebtedness that is set forth on SCHEDULE 7.1(B) and satisfactory to
the Lenders, (iv) as disclosed in the most recent interim balance sheet
referred to in Section 5.1(a) and on SCHEDULE 5.1, and (v) for accounts
payable incurred in the ordinary course of business consistent with
past practice since the date of the most recent interim balance sheet
referred to in Section 5.1(a).
(o) EMPLOYMENT CONTRACTS. The Agent shall have received
employment contracts and/or noncompete agreements executed by Xxxxxxx
Xxxxxx Xxxxx and Xxxxxxxxxxx X. Xxxxxx, to be assigned for the benefit
of the Lenders.
(p) SOLVENCY OPINION. The Agent shall have received a
certificate of the Borrower in form and substance satisfactory to the
Agent, from the Chief Financial Officer of the Borrower, as to the
financial condition and solvency of each of the Borrower and its
Subsidiaries after giving effect to the transactions contemplated by
the Acquisition Agreements and the incurrence of the indebtedness and
guarantees related thereto (subject, in the case of each such
Subsidiary, to a guarantee limitation satisfactory to the Agent).
(q) CHANGE IN MARKET. There shall not exist any material
disruption of, or a material adverse change in, the market for
syndicated bank credit facilities or financial, banking or capital
market conditions.
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(r) OFFICER'S CERTIFICATES. The Agent shall have received a
certificate or certificates executed by a Responsible Officer of the
Borrower as of the Closing Date stating that (A) each Credit Party is
in compliance with all existing financial obligations, (B) conditions
set forth in subsections 4.1(e), (i),(j), (k), (l), (m) and (n) shall
have been satisfied, certified by a Responsible Officer of the Borrower
to be true and correct as of the Closing Date.
(s) OTHER. The Lenders shall have received such other
documents, instruments, agreements or information as reasonably
requested by any Lender, including information regarding litigation,
investigations and other proceedings, compliance with applicable laws,
regulations and consent orders, tax matters, accounting matters, labor
agreements and other employee-related matters, insurance coverage,
pension liabilities (actual or contingent) and other employee benefits,
real estate leases, material contracts and relationships, debt
agreements, transactions with Affiliates and former Affiliates,
property ownership, Capital Leases, trademarks, other proprietary
rights and related licenses, capital stock, options and warrants, and
contingent liabilities of the Credit Parties, U-Gene and gmi.
4.2 CONDITIONS TO EXTENSION OF CREDIT FOR PURCHASE OF U-GENE. The
obligations of each Lender to make any Loan or of the Issuing Lender to issue
any Letter of Credit for the acquisition of U-Gene are subject, in addition to
the satisfaction on the Closing Date of the conditions set forth in Section 4.1
and Section 4.4, to satisfaction of the following conditions:
(a) ACQUISITION AGREEMENT. A Wholly-Owned Domestic Subsidiary
of the Borrower (the "Acquiring Subsidiary") and U-Gene shall have
entered into the XXxxx Acquisition Agreement on terms satisfactory to
the Agent and the Lenders and there shall not have been any
modification, amendment, supplement or waiver to the U-Gene Acquisition
Agreement without the prior written consent of the Agent, including any
modification, amendment, supplement or waiver relating to the amount or
type of consideration to be paid in connection with the transactions
contemplated by the U-Gene Acquisition Agreement or the contents of any
disclosure schedules and exhibits. The conditions set forth in the
U-Gene Acquisition Agreement to the obligations of the Acquiring
Subsidiary shall have been satisfied (without any waiver or amendment
thereof) and the transactions contemplated by the U-Gene Acquisition
Agreement shall have been (or contemporaneously will be) consummated in
accordance with the terms of the U-Gene Acquisition Agreement and in
compliance with applicable laws, regulations and regulatory approvals
thereunder. The aggregate consideration paid by the Acquiring
Subsidiary (including purchase price, refinancing of existing
Indebtedness, and all transaction fees and expenses) shall not exceed
$16,500,000, and the Agent shall have received a final U-Gene
Acquisition Agreement, together with all exhibits and schedules
thereto, certified by an officer of the Borrower and the Acquiring
Subsidiary.
(b) OPINIONS OF COUNSEL. The Agent shall have received (i) an
opinion of counsel of each party to the U-Gene Acquisition Agreement,
accompanied by a letter from such counsel stating that the Agent and
the Lenders are entitled to rely on such opinion as if it were
addressed to the Agent, and (ii) a legal opinion of special foreign
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counsel to the Borrower and the Acquiring Subsidiary in The Netherlands
covering the pledge of the Capital Stock of U-Gene to be pledged
pursuant to the Security Agreement, Intercompany Notes to be pledged
pursuant to the Security Agreement and the Guarantee Agreement to be
executed on behalf of U-Gene pursuant to Section 6.11, which opinion
shall be substantially in the form of Exhibit N-2.
(c) MATERIAL COMPLIANCE. The Borrower and its Subsidiaries
shall be in compliance with all existing material financial obligations
after giving effect to the XXxxx Acquisition. The Borrower and U-Gene
shall have fully complied with the terms of Section 6.11.
(d) SUBORDINATED NOTES. The Borrower shall have received Net
Cash Proceeds from the sale of Subordinated Notes in an aggregate
principal amount of $5,000,000.00.
(e) GOVERNMENT CONSENTS. The Borrower and the other Credit
Parties shall have obtained all governmental, shareholder and third
party consents and approvals necessary or, in the reasonable opinion of
the Agent, desirable in connection with the transactions contemplated
by the U-Gene Acquisition Agreement and the related financings
(including the Credit Documents to be delivered by the Borrower, the
Acquiring Subsidiary and U-Gene pursuant to Section 6.11) and all
applicable waiting periods (including any applicable waiting period
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976) shall
have expired without any action being taken by any authority that could
restrain, prevent or impose any material adverse condition on the
Credit Parties taken as a whole or such transactions or that could seek
or threaten any of the foregoing, and no law or regulation shall be
applicable which in the judgment of the Agent could have such effect.
(f) MATERIAL ADVERSE EFFECT. No material adverse change shall
have occurred or become known since the date of the financial
statements relating to XXxxx and delivered to the Agent pursuant to
Section 4.1(c) in the condition (financial or otherwise), business,
assets, liabilities (actual or contingent), historical or projected
revenues or cash flows, operations, material relationships, management
or prospects of U-Gene or in the facts and information regarding U-Gene
as represented to the date hereof.
(g) OFFICER'S CERTIFICATE. The Agent shall have received a
certificate executed by a Responsible Officer of the Borrower stating
that: (i) the conditions set forth in the U-Gene Acquisition Agreement
shall have been satisfied (without any waiver or amendment thereof) and
the transactions contemplated by the U-Gene Acquisition Agreement have
been consummated in accordance with the terms thereof and (ii)
immediately after giving effect to the U-Gene Acquisition (A) each of
the Credit Parties is Solvent, (B) no Default or Event of Default
exists, (C) all representations and warranties contained herein and in
the other Credit Documents are true and correct in all material
respects, and (4) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 7.18.
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4.3 CONDITIONS TO EXTENSION OF CREDIT FOR PURCHASE OF GMI. (a) The
obligations of the Issuing Lender to issue the gmi Letters of Credit are
subject, in addition to the satisfaction of the conditions set forth in Section
4.1 and Section 4.4, to satisfaction of the following conditions:
(i) ACQUISITION AGREEMENT. The Acquiring Subsidiary and gmi
shall have entered into the gmi Acquisition Agreement on terms
satisfactory to the Agent and the Lenders and there shall not have been
any modification, amendment, supplement or waiver to the gmi
Acquisition Agreement without the prior written consent of the Agent,
including any modification, amendment, supplement or waiver relating to
the amount or type of consideration to be paid in connection with the
transactions contemplated by the gmi Acquisition Agreement or the
contents of any disclosure schedules and exhibits.
(ii) MATERIAL ADVERSE EFFECT. No material adverse change shall
have occurred or become known since the date of the financial
statements relating to gmi and delivered to the Agent pursuant to
Section 4.1(c) in the condition (financial or otherwise), business,
assets, liabilities (actual or contingent), historical or projected
revenues or cash flows, operations, material relationships, management
or prospects of gmi or in the facts and information regarding gmi as
represented to the date hereof.
(b) The obligations of each Lender to make any Loan or of the Issuing
Lender to issue any Letter of Credit (other than the gmi Letters of Credit), for
the purchase of gmi, are subject, in addition to the satisfaction of the
conditions set forth in Section 4.1 and 4.4, to satisfaction of the following
conditions:
(i) ACQUISITION AGREEMENT. The Acquiring Subsidiary and gmi
shall have entered into the gmi Acquisition Agreement on terms
satisfactory to the Agent and the Lenders and there shall not have been
any modification, amendment, supplement or waiver to the gmi
Acquisition Agreement without the prior written consent of the Agent,
including any modification, amendment, supplement or waiver relating to
the amount or type of consideration to be paid in connection with the
transactions contemplated by the gmi Acquisition Agreement or the
contents of any disclosure schedules and exhibits. The conditions set
forth in the gmi Acquisition Agreement to the obligations of the
Acquiring Subsidiary shall have been satisfied (without any waiver or
amendment thereof) and the transactions contemplated by the gmi
Acquisition Agreement shall have been consummated in accordance with
the terms of the gmi Acquisition Agreement and in compliance with
applicable laws, regulations and regulatory approvals thereunder. The
aggregate consideration paid by the Acquiring Subsidiary (including
purchase price, refinancing of existing Indebtedness, and all
transaction fees and expenses) shall not exceed $13,500,000, and the
Agent shall have received a final gmi Acquisition Agreement, together
with all exhibits and schedules thereto, certified by an officer of the
Borrower and the Acquiring Subsidiary.
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(ii) OPINION OF COUNSEL. The Agent shall have received (i) an
opinion of counsel of each party to the gmi Acquisition Agreement,
accompanied by a letter from such counsel stating that the Agent and
the Lenders are entitled to rely on such opinion as if it were
addressed to the Agent, and (ii) a legal opinion of special foreign
counsel to the Borrower and the Acquiring Subsidiary in Germany
covering the pledge of the Capital Stock of gmi to be pledged pursuant
to the Security Agreement, Intercompany Notes to be pledged pursuant to
the Security Agreement and the Guarantee Agreement to be executed on
behalf of gmi pursuant to Section 6.11, which opinion shall be
substantially in the form of Exhibit N-2.
(iii) MATERIAL COMPLIANCE. The Borrower and its Subsidiaries
shall be in compliance with all existing material financial obligations
after giving effect to the gmi Acquisition. The Borrower and gmi shall
have fully complied with the terms of Section 6.11.
(iv) QIPO. Unless a Qualified Initial Public Offering has
occurred prior to or concurrently with the gmi Acquisition, the
Borrower shall have received Net Cash Proceeds from the sale of
Subordinated Notes in an aggregate principal amount of $5,000,000.00
(in addition to the Indebtedness evidenced by Subordinated Notes
incurred by the Borrower in connection with the U-Gene Acquisition if
the U-Gene Acquisition has been previously consummated).
(v) GOVERNMENT CONSENTS. The Borrower and the other Credit
Parties shall have obtained all governmental, shareholder and third
party consents and approvals necessary or, in the reasonable opinion of
the Agent, desirable in connection with the transactions contemplated
by the gmi Acquisition Agreement and the related financings (including
the Credit Documents to be delivered by the Borrower, the Acquiring
Subsidiary and gmi pursuant to Section 6.11) and all applicable waiting
periods (including any applicable waiting period under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976) shall have
expired without any action being taken by any authority that could
restrain, prevent or impose any material adverse condition on the
Credit Parties taken as a whole or such transactions or that could seek
or threaten any of the foregoing, and no law or regulation shall be
applicable which in the judgment of the Agent could have such effect.
(vi) MATERIAL ADVERSE EFFECT. No material adverse change shall
have occurred or become known since the date of the financial
statements relating to gmi and delivered to the Agent pursuant to
Section 4.1(c) in the condition (financial or otherwise), business,
assets, liabilities (actual or contingent), historical or projected
revenues or cash flows, operations, material relationships, management
or prospects of gmi or in the facts and information regarding gmi as
represented to the date hereof.
(vii) OFFICER'S CERTIFICATE. The Agent shall have received a
certificate executed by a Responsible Officer of the Borrower stating
that: (i) the conditions set forth in the gmi Acquisition Agreement
shall have been satisfied (without any waiver or amendment thereof) and
the transactions contemplated by the gmi Acquisition
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Agreement have been consummated in accordance with the terms thereof
and (ii) immediately after giving effect to the gmi Acquisition (A)
each of the Credit Parties is Solvent, (B) no Default or Event of
Default exists, (C) all representations and warranties contained herein
and in the other Credit Documents are true and correct in all material
respects, and (4) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 7.18.
(viii) AVAILABILITY. After giving effect to the Loans made and
Letters of Credit issued hereunder, the U-Gene Acquisition and the gmi
Acquisition, the Revolving Committed Amount LESS the sum of (i) the
aggregate principal amount of outstanding Revolving Loans and (ii) the
aggregate principal amount of outstanding LOC Obligations, shall be
equal to at least $1,500,000.
4.4 CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligations of each
Lender to make any Loan (including the initial Loans), convert any existing Loan
into a Loan of another Type or extend any existing Loan into a subsequent
Interest Period and of the Issuing Lender to issue or extend any Letter of
Credit are subject, in addition to satisfaction on the Closing Date of the
conditions set forth in Section 4.1, to satisfaction on the date such Loan is
made, converted or extended or the date such Letter of Credit is issued or
extended, as applicable, to satisfaction of the following conditions:
(a) The Borrower shall have delivered (i) in the case of any
Revolving Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (ii) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance
or extension in accordance with the provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 5
shall be true and correct in all material respects as of such date
(except for those which expressly relate to an earlier date, in which
case such representations and warranties shall be true and correct in
all material respects on and as of such earlier date);
(c) There shall not have been commenced against any Credit
Party an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or any case,
proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
for the winding up or liquidation of its affairs, which involuntary
case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be
continuing either prior to the making, conversion or extension of such
Loan or the issuance or extension of such Letter of Credit or after
giving effect thereto; and
(e) Immediately after giving effect to the making, conversion
or extension of such Loan (and the application of the proceeds thereof)
or to the issuance or extension of such Letter of Credit, as
applicable, the aggregate principal amount of
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outstanding Revolving Loans and the aggregate principal amount of
outstanding LOC Obligations shall not exceed the limitations applicable
thereto set forth in Section 2.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for the issuance or extension of a Letter of Credit pursuant to
Section 2.2(b) shall constitute a representation and warranty by the Borrower of
the correctness of the matters specified in subsections (b), (c), (d) and (e)
above.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents to the Agent and each Lender that:
5.1 FINANCIAL CONDITION. (a) The audited consolidated and unaudited
consolidating balance sheets of the Borrower and its Subsidiaries as of December
31, 1996, and the audited consolidated and unaudited consolidating statements of
earnings and statements of cash flows of the Borrower and its Subsidiaries for
the years ended December 31, 1995 and December 31, 1996 have heretofore been
furnished to each Lender. Such financial statements (including the notes
thereto) (i) with respect to the consolidated statements only, have been audited
by a nationally recognized accounting firm reasonably acceptable to the Agent,
(ii) have been prepared in accordance with GAAP consistently applied throughout
the periods covered thereby and (iii) present fairly in all material respects
(on the basis disclosed in the footnotes to such financial statements) the
consolidated and consolidating financial condition, results of operations and
cash flows of the Borrower and its Subsidiaries as of such dates and for such
periods. The unaudited interim balance sheets of the Borrower and its
Subsidiaries as at the end of, and the related unaudited interim statements of
earnings and of cash flows for, each quarterly period ended after March 31, 1997
and prior to the Closing Date for which financial information is available have
heretofore been furnished to each Lender. Such interim financial statements for
each such period (i) have been prepared in accordance with GAAP consistently
applied throughout the periods covered thereby, except for the absence of
footnotes, and (ii) present fairly in all material respects the consolidated and
consolidating financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries as of such dates and for such periods, except for
recurring annual audit adjustments. During the period from December 31, 1996 to
and including the Closing Date, there has been no sale, transfer or other
disposition by any Credit Party of any material part of the business or property
of the Credit Parties, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial condition of
the Credit Parties, taken as a whole, in each case, which, is not reflected in
the foregoing financial statements or in the notes thereto. Except as disclosed
in SCHEDULE 5.1, the balance sheets and the notes thereto included in the
foregoing financial statements disclose all material liabilities, actual or
contingent, of the Borrower and its Subsidiaries as of the dates thereof.
(b) As of the Closing Date, the Credit Parties do not have any material
liabilities, actual or contingent, or Preferred Stock except (i) as disclosed in
the most recent interim balance sheet referred to in subsection (a) above, (ii)
for items disclosed in SCHEDULE 5.1,
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(iii) for accounts payable incurred in the ordinary course of business
consistent with past practice since the date of the most recent interim balance
sheet referred to in subsection (a) above and not in violation of the
Acquisition Agreements, (iv) Indebtedness under the Credit Documents and (v)
Indebtedness set forth on Schedule 7.1(b).
(c) The consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of the most recent fiscal quarter prior to the Closing Date for
which financial information is available, prepared on a pro forma basis giving
effect to the consummation of the transactions contemplated by the Acquisition
Agreements, have heretofore been furnished to each Lender. Such pro forma
balance sheet has been prepared in good faith by the Borrower (based on (i)
assumptions which are believed by the Borrower on the date hereof and on the
Closing Date to be reasonable and (ii) the best information available to the
Borrower as of the date of delivery thereof) accurately reflect all material
adjustments required to be made to give effect to the transactions contemplated
by the Acquisition Agreements, including estimated purchase price accounting
adjustments, and presents fairly on a pro forma basis the estimated consolidated
financial position of the Borrower and its Subsidiaries as of March 31, 1997,
assuming that the transactions contemplated by the Acquisition Agreements had
actually occurred on that date. None of the Credit Parties has any reason to
believe that such pro forma balance sheet is misleading in any material respect
in light of the circumstances existing at the time of the preparation thereof.
(d) The financial statements delivered to the Lenders pursuant to
Section 6.1(a) and (b), (i) have been prepared in accordance with GAAP (except
as may otherwise be permitted under Section 6.1(a) and (b)) and (ii) present
fairly (on the basis disclosed in the footnotes to such financial statements, if
any) the consolidated and consolidating financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries as of the
respective dates thereof and for the respective periods covered thereby.
5.2 NO MATERIAL CHANGE. Since December 31, 1996, (a) there has been no
development or event relating to or affecting a Credit Party which has had or
could reasonably be expected to have a Material Adverse Effect and (b) except
for Permitted Dividends, no dividends or other distributions have been declared,
paid or made upon the Capital Stock of any Credit Party nor has any of the
Capital Stock of any Credit Party been redeemed, retired, purchased or otherwise
acquired for value.
5.3 ORGANIZATION AND GOOD STANDING. Each of the Credit Parties (a) is
duly organized, validly existing and is in good standing (or the local law
equivalent, in the case of Foreign Subsidiaries) under the laws of the
jurisdiction of its incorporation or organization, (b) has the corporate or
other necessary power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged and (c) is duly qualified as a foreign
entity and in good standing (or the local law equivalent, in the case of Foreign
Subsidiaries) under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not reasonably be expected to have a
Material Adverse Effect.
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5.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each of the Credit
Parties has the corporate or other necessary power and authority, and the legal
right, to execute, deliver and perform the Operative Documents to which it is a
party, and in the case of the Borrower, to obtain extensions of credit
hereunder, and each Credit Party has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Agreement and to authorize the execution, delivery and
performance of the Operative Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Operative Documents to which such
Credit Party is a party, except for (i) consents, authorizations, notices and
filings disclosed in SCHEDULE 5.4, all of which have been (or will as of the
Closing Date) obtained or made, and (ii) filings to perfect the Liens created by
the Collateral Documents. This Agreement has been, and each other Operative
Document to which any Credit Party is a party will be, duly executed and
delivered on behalf of such Credit Party. This Agreement constitutes, and each
other Operative Document to which any Credit Party or Seller is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
such Credit Party and, to the knowledge of the Credit Parties, of the Seller,
enforceable against such Person 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 and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
5.5 NO CONFLICTS. Neither the execution and delivery by each Credit
Party of the Operative Documents to which it is a party, nor the consummation of
the transactions contemplated therein, nor performance of and compliance with
the terms and provisions thereof by such Credit Party, nor the exercise of
remedies by the Secured Parties under the Credit Documents, will (a) violate or
conflict with any provision of its articles or certificate of incorporation or
bylaws or other organizational or governing documents of such Person, (b)
violate, contravene or conflict with any Requirement of Law (including
Regulation U or Regulation X), applicable to it or its Properties, (c) violate,
contravene or conflict with contractual provisions of, cause an event of default
under, or give rise to material increased, additional, accelerated or guaranteed
rights of any Person under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, or (d) result in or require the creation of any Lien
(other than the Lien of the Collateral Documents) upon or with respect to its
Properties.
5.6 NO DEFAULT. No Credit Party is in default in any respect under any
loan agreement, indenture, mortgage, security agreement or other agreement
relating to Indebtedness or any other contract, lease, agreement or obligation
to which it is a party or by which any of its Properties is bound which default
could reasonably be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred or exists.
5.7 OWNERSHIP OF ASSETS. Each Credit Party is the owner of, and has
good and marketable title to, all of its respective assets, and none of such
assets is subject to any Lien other than Permitted Liens.
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5.8 INDEBTEDNESS. Except as permitted under Section 7.1, the Credit
Parties have no Indebtedness.
5.9 LITIGATION. Except as disclosed in SCHEDULE 5.9, there are no
actions, suits, investigations or legal, equitable, arbitration or
administrative proceedings pending for which service of process or other written
notice has been received or, to the knowledge of any Credit Party, threatened
against or affecting any Credit Party which could reasonably be expected to have
a Material Adverse Effect or which are pending or threatened as of the Closing
Date.
5.10 TAXES. Each Credit Party has filed, or caused to be filed, all
material tax returns (including Federal, state, local and foreign tax returns)
required to be filed and paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other material taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent or (ii) that are being contested in good
faith and by proper proceedings diligently pursued, and against which adequate
reserves are being maintained in accordance with GAAP. No Credit Party knows as
of the Closing Date of any pending investigation of such party by any taxing
authority or proposed tax assessments against it or any other Credit Party.
5.11 COMPLIANCE WITH LAW. Each Credit Party is in compliance with all
Requirements of Law (including Environmental Laws) applicable to it or to its
Properties, except for any such failure to comply which could not reasonably be
expected to have a Material Adverse Effect. No Requirement of Law could
reasonably be expected to cause a Material Adverse Effect. To the knowledge of
the Credit Parties, as of the Closing Date, none of the Credit Parties or any of
their respective material Properties or assets is subject to or in default with
respect to any judgment, writ, injunction, decree or order of any court or other
Governmental Authority. None of the Credit Parties has received any written
communication prior to the Closing Date from any Governmental Authority that
alleges that any of the Credit Parties is not in compliance in any material
respect with any Requirement of Law, except for allegations that have been
satisfactorily resolved and are no longer outstanding.
5.12 ERISA. Except as disclosed in SCHEDULE 5.12:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the knowledge of the Credit Parties, no event or
condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable Federal or state laws, and (iv) no Lien in favor of the PBGC
or a Plan has arisen or is reasonably likely to arise on account of any
Plan.
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(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, utilizing the actuarial assumptions used in
such Plan's most recent actuarial valuation report), did not exceed as
of such valuation date the fair market value of the assets of such
Plan.
(c) Neither any Credit Party nor any ERISA Affiliate has
incurred, or, to the knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither any Credit
Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Credit Party or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple
Employer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. Neither any Credit
Party nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the knowledge of the Credit
Parties, reasonably expected to be in reorganization, insolvent, or
terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Credit Party or any ERISA Affiliate to any liability
under Section 406, 409, 502(i) or 502(1) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
any Credit Party or any ERISA Affiliate has agreed or is required to
indemnify any Person against any such liability.
(e) Neither any Credit Party nor any ERISA Affiliate has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards
Board Statement 106.
5.13 SUBSIDIARIES. SCHEDULE 5.13 sets forth a complete and accurate
list of all Subsidiaries of the Borrower, discloses the jurisdiction of
incorporation of each such Subsidiary, the number of authorized shares of each
class of Capital Stock of each such Subsidiary, the number of outstanding shares
of each class of Capital Stock, the number and percentage of outstanding shares
of each class of Capital Stock of each such Subsidiary owned (directly or
indirectly) by any Person, and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect to Capital Stock of each such Subsidiary. All the
outstanding Capital Stock of each such Subsidiary is validly issued, fully paid
and non-assessable and is owned by the Borrower, directly or indirectly, free
and clear of all Liens (other than those arising under the Collateral
Documents). Other than as disclosed in SCHEDULE 5.13, no Credit Party has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for
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the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its Capital Stock.
5.14 GOVERNMENTAL REGULATIONS, ETC. (a) No part of the Letters of
Credit or proceeds of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any "margin stock" within the meaning of
Regulation G or Regulation U, or for the purpose of purchasing or carrying or
trading in any securities. If requested by any Lender or the Agent, the Borrower
will furnish to the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation U. No
indebtedness being reduced or retired out of the proceeds of the Loans was or
will be incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any "margin security" within the meaning
of Regulation T. "margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the Credit
Parties. None of the transactions contemplated by this Agreement (including the
direct or indirect use of the proceeds of the Loans) will violate or result in a
violation of the Securities Act of 1933, as amended, or the Exchange Act or
regulations issued pursuant thereto, or Regulation G, T, U or X.
(b) No Credit Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Investment Company Act
of 1940, each as amended. In addition, no Credit Party is (i) an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, (ii) controlled by such a company, or (iii) a "holding
company", a "subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal holder of Capital Stock
of any Credit Party is a director, executive officer or principal shareholder of
any Lender. For the purposes hereof the terms "director", "executive officer"
and "principal shareholder" (when used with reference to any Lender) have the
respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.
(d) Each Credit Party has obtained and holds in full force and effect
all material franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the ownership of its respective
Property and to the conduct of its respective businesses as presently conducted.
(e) Each Credit Party is current with all material reports and
documents, if any, required to be filed with any state or Federal securities
commission or similar agency and is in full compliance in all material respects
with all applicable rules and regulations of such commissions.
5.15 PURPOSE OF LOANS AND LETTERS OF CREDIT. The proceeds of the
Revolving Loans made on or after the Closing Date will be used to provide for:
(a) working capital requirements of the Borrower and its Subsidiaries; (b)
permitted Consolidated Capital
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Expenditures; (c) Permitted Acquisitions; and (d) for the general corporate
purposes of the Borrower and its Subsidiaries (including the payment of
reasonable expenses incurred in connection with the U-Gene Acquisition and the
gmi Acquisition and the satisfaction of existing Indebtedness on the Closing
Date).
5.16 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 5.16:
(a) Each of the facilities and properties owned, leased or
operated by the Credit Parties (the "COMPANY PROPERTIES") and all
operations at the Company Properties are in compliance in all material
respects with all applicable Environmental Laws, and there is no
violation of any Environmental Law with respect to the Company
Properties or the businesses operated by the Credit Parties (the
"BUSINESSES"), and there are no conditions or circumstances relating to
the Businesses or Company Properties or any former facilities,
properties or businesses of the Credit Parties that could give rise to
liability of any Credit Party under any applicable Environmental Laws
or under any agreement or other instrument pursuant to which any Credit
Party has agreed or is required to indemnify any Person against any
such liability.
(b) None of the Company Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Company Properties in amounts or concentrations that constitute or
constituted a violation of, or could give rise to liability of any
Credit Party under, Environmental Laws or under any agreement or other
instrument pursuant to which any Credit Party has agreed or is required
to indemnify any Person against any such liability.
(c) No Credit Party has received any written or verbal notice
of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Company Properties or the
Businesses, nor does any Credit Party have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Company Properties, or generated,
treated, stored or disposed of at, on or under any of the Company
Properties or any other location, in each case by or on behalf of any
Credit Party in violation of, or in a manner that could give rise to
liability of any Credit Party under, any applicable Environmental Law
or under any agreement or other instrument pursuant to which any Credit
Party has agreed or is required to indemnify any Person against any
such liability.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party,
threatened, under any Environmental Law to which any Credit Party is or
will be named as a party, nor are there any consent decrees, consent
orders, administrative orders, other decrees or orders or other
administrative or judicial requirements outstanding under any
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Environmental Law with respect to the Credit Parties, the Company
Properties or the Businesses.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Company Properties,
or arising from or related to the operations (including disposal) of
any Credit Party in connection with the Company Properties or otherwise
in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws or
under any agreement or other instrument pursuant to which any Credit
Party has agreed or is required to indemnify any Person against any
such liability.
5.17 INTELLECTUAL PROPERTY. Except as disclosed in SCHEDULE 5.17:
(a) Each Credit Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, service marks, proprietary techniques,
patents, patent applications, trade secrets, technology, know-how and processes
(the "INTELLECTUAL PROPERTY") necessary for each of them to conduct its business
as currently conducted except for those the failure to own or have such legal
right to use could not reasonably be expected to have a Material Adverse Effect.
SCHEDULE 5.17 sets forth a complete and accurate list of all material
Intellectual Property owned by each Credit Party ("MATERIAL OWNED INTELLECTUAL
PROPERTY") and a separate list of all material Intellectual Property that any
Credit Party has the right to use, but not ownership of ("MATERIAL LICENSED
INTELLECTUAL PROPERTY" and together with the Material Owned Intellectual
Property, the "MATERIAL INTELLECTUAL PROPERTY"). None of the Credit Parties has
granted any options, licenses or agreements of any kind relating to Material
Intellectual Property.
(b) No claim has been asserted and is pending by any Person challenging
or questioning the use, ownership or enforceability of any Material Intellectual
Property or the validity or effectiveness of any Material Intellectual Property,
nor does any Credit Party know of any such claim, and to the Credit Parties'
knowledge the use of the Material Intellectual Property by any Credit Party does
not infringe on the rights of any Person. None of the Credit Parties is in
breach of any material provision of any license, sublicense or other agreement
which relates to any of the Material Licensed Intellectual Property, and none of
the Credit Parties has taken any action which would impair or otherwise
adversely affect its rights in any of the Material Intellectual Property. All
the Material Owned Intellectual Property is valid and enforceable, except that,
with respect to the applications to register any unregistered Intellectual
Property (but not with respect to the underlying Intellectual Property rights
that are the subject of such applications), the Credit Parties only represent
and warrant (to Borrower's knowledge only with respect to Intellectual Property
it licenses) that such applications are pending and in good standing all without
challenge of any kind.
(c) The Material Owned Intellectual Property has been maintained in
confidence in accordance with protection procedures customarily used to protect
rights of like importance. No former or current members of management and key
personnel of each Credit Party, including all former and current employees,
agents, consultants and independent contractors who have contributed to or
participated in the conception and development of any of the Material Owned
Intellectual Property (collectively, "PERSONNEL"), have any claim against the
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Credit Parties in connection with such Person's involvement in the conception
and development of any Intellectual Property and no such claim has been asserted
or is threatened. None of the current officers and employees of any of the
Credit Parties has any patents issued or applications pending for any device,
process, design or invention of any kind now used or needed by any of the Credit
Parties in the furtherance of its business operations, which patents or
applications have not been assigned to the Credit Parties, with such assignment
duly recorded in the United States Patent Office. SCHEDULE 5.17 may be updated
from time to time by the Borrower by giving written notice thereof to the Agent.
5.18 SOLVENCY. Each Credit Party is and, after consummation of the
transactions contemplated by this Agreement (including the transactions
contemplated by the Acquisition Agreements), will be Solvent.
5.19 INVESTMENTS. All Investments of each Credit Party are Permitted
Investments.
5.20 LOCATION OF COLLATERAL. SCHEDULE 5.20(a) sets forth a complete and
accurate list of (i) all real property owned by the Credit Parties and (ii) all
real property leased by the Credit Parties for which annual rental payments
exceed $10,000 with respect to each such property, in each case with street
address, county, state and country where located. Set forth on SCHEDULE 5.20(b)
is a list of all locations where any tangible personal property of a Credit
Party (with a collective value in excess of $10,000) is located, including
county and state where located (including without limitation all depository
accounts of the Credit Parties). Set forth on SCHEDULE 5.20(c) is the chief
executive office and principal place of business of each Credit Party. SCHEDULE
5.20(a), 5.20(b) and 5.20(c) may be updated from time to time by the Borrower
giving written notice thereof to the Agent.
5.21 DISCLOSURE. Neither this Agreement nor any financial statements
delivered to the Lenders pursuant hereto nor any other document, certificate or
statement furnished to the Lenders by or on behalf of any Credit Party in
connection with the transactions contemplated hereby (other than final
projections) contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained therein or
herein not misleading. All financial projections that have been made available
to the Agent or the Lenders by any Credit Party or any representatives thereof
in connection with the transactions contemplated hereby have been prepared in
good faith based upon assumptions believed by the Credit Parties to be
reasonable.
5.22 NO BURDENSOME RESTRICTIONS; MATERIAL AGREEMENTS. No Credit Party
is a party to any agreement or instrument or subject to any other obligation or
any charter or corporate restriction or any provision of any applicable law,
rule or regulation which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. SCHEDULE 5.22 sets forth a complete
and accurate list of each agreement, contract, lease, license, commitment,
commercial arrangement or other instrument to which any Credit Party is a party
or by which it or any of its properties or assets are or may be bound as of the
Closing Date, after giving effect to the transactions contemplated by the
Acquisition Agreements, the loss of which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect
(collectively, the "MATERIAL CONTRACTS").
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(b) Except as set forth in SCHEDULE 5.22, after giving effect to the
transactions contemplated by the Acquisition Agreements, each Material Contract
will be in all material respects valid, binding and in full force and effect and
will be enforceable by the Borrower or the Subsidiary of the Borrower which is a
party thereto in accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting creditors' rights generally and general equitable principles (whether
in equity or at law). Except as set forth in SCHEDULE 5.22, after giving effect
to the transactions contemplated by the Acquisition Agreements, each of the
Borrower and the Subsidiaries will have performed in all material respects all
obligations required to be performed by it to date under the Material Contracts
and it will not be (with or without the lapse of time or the giving of notice,
or both) in breach or default in any material respect thereunder and, to the
knowledge of the Credit Parties, no other party to any of the Material Contracts
will be (with or without the lapse of time or the giving of notice, or both) in
breach or default in any material respect thereunder. After giving effect to the
transactions contemplated by the Acquisition Agreements, neither the Borrower
nor any of the Subsidiaries, nor, to the knowledge of the Borrower, any other
party to any Material Contract, will have given notice of termination of, or
taken any action inconsistent with the continuation of, any Material Contract.
Except as disclosed in SCHEDULE 5.22, none of such other parties will have any
presently exercisable right to terminate any Material Contract nor will any such
other party have any right to terminate any Material Contract on account of the
execution, delivery or performance of the Operative Documents, the collateral
assignment of such Material Contract to the Agent on behalf of the Lenders or
the consummation of the transactions contemplated by the Acquisition Agreements.
5.23 LABOR MATTERS. Except as disclosed in SCHEDULE 5.23, there are no
collective bargaining agreements or Multiemployer Plans covering the employees
of a Credit Party as of the Closing Date and none of the Credit Parties has
suffered any strike, walkout, work stoppage, unfair labor practice complaint or
other material labor difficulty within the five years prior to the Closing Date.
To the knowledge of the Credit Parties, as of the Closing Date, no union
representation question exists with respect to the employees of the Credit
Parties and no union organizing activities are taking place. The hours worked by
and payments made to employees of the Credit Parties have not been in violation
in any material respect of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. All payments due
from any Credit Party, or for which any claim may be made against any Credit
Party, on account of wages, employee health and welfare insurance or other
benefits, have been paid or accrued as a liability on the books of the Credit
Parties. The consummation of the transactions contemplated by the Acquisition
Agreements will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which any Credit Party is bound.
5.24 NATURE OF BUSINESS. As of the Closing Date, the Credit Parties are
engaged in the business of providing outsourced and clinical research and
products development services to pharmaceutical and biotechnology companies.
5.25 REPRESENTATIONS AND WARRANTIES FROM OTHER AGREEMENTS. As of the
Closing Date, each of the representations and warranties made in the Acquisition
Agreements by the
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parties thereto is true and correct in all material respects (to the knowledge
of the Borrower only, with respect to gmi and U-Gene shareholder representations
and warranties) and each of the representations and warranties made by any
Credit Party in the Operative Documents is true and correct in all material
respects.
5.26 SECURITY DOCUMENTS. (a) The Pledge Agreement is effective to
create in favor of the Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in 100% of the issued and
outstanding Capital Stock of the Borrower (on a fully diluted basis), and, when
such Collateral is delivered to the Agent, the Pledge Agreement will constitute
a fully perfected first priority Lien on, and security interest in, all right,
title and interest of the pledgors thereunder in such Collateral, in each case
prior and superior in right to any other Person. If, at any time prior to a
Qualified Initial Public Offering, any Permitted Holder that is listed on
Schedule 1.1C hereto shall exercise any option to purchase Capital Stock of the
Borrower, then contemporaneously with such exercise, the Borrower shall cause
such Permitted Holders to execute and deliver to the Agent, for the benefit of
the Secured Parties, a pledge agreement in substantially the form of Exhibit A
hereto from such exercising Permitted Holders so that the Agent, for the benefit
of the Secured Parties, at all times prior to a Qualified Initial Public
Offering holds 100% of the issued and outstanding Capital Stock of the Borrower
on a fully diluted basis.
(b) The Security Agreement is, and upon the Borrower's compliance with
Section 6.13, the Life Insurance Assignment will be, effective to create in
favor of the Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable first priority security interest in the Collateral (as
defined in the Security Agreement) and in the Life Insurance Policy,
respectively, and, when financing statements in appropriate form are filed in
the offices specified on Schedule 6 to the Perfection Certificate delivered
pursuant to the Security Agreement and the Pledged Securities are delivered to
the Agent, the Security Agreement and the Life Insurance Assignment shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the grantors thereunder in such of the Collateral in which a
security interest can be perfected under Article 8 or 9 of the Uniform
Commercial Code and in the Life Insurance Policy, respectively, in each case
prior and superior in right to any other Person, other than with respect to
Permitted Liens.
(c) When the Assignment of Patents and Trademarks, substantially in the
form of Exhibit A to the Security Agreement, is filed in the United States
Patent and Trademark Office and the Assignment of copyrights, substantially in
the form of Exhibit B to the Security Agreement is filed in the United States
Copyright Office, the Security Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the grantors
thereunder in the Intellectual Property covered in the Security Agreement, in
each case prior and superior in right to any other Person (it being understood
that subsequent recordings in the United States Patent and Trademark Office and
the United States Copyright Office may be necessary to perfect a lien on
registered trademarks, trademark applications and copyrights acquired by the
grantors after the Closing Date).
(d) The Agent, for the ratable benefit of the Secured Parties, will at
all times have the Liens provided for in the Collateral Documents and, subject
to the filing by the Agent of continuation statements to the extent required by
the Uniform Commercial Code, the
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Collateral Documents will at all times constitute a valid and continuing lien of
record and first priority perfected security interest in all the Collateral
referred to therein, except as priority may be affected by Permitted Liens. No
filings or recordings are required in order to perfect the security interests
created under the Collateral Documents, except for filings or recordings listed
on SCHEDULE 5.26. All such listed filings and recordings will have been made on
or prior to the Closing Date.
5.27 TRANSACTIONS WITH AFFILIATES. Except for agreements and
arrangements among the Borrower and its Wholly Owned Subsidiaries or among
Wholly Owned Subsidiaries of the Borrower, neither the Borrower nor any of its
Subsidiaries is, or will be immediately after giving effect to the transactions
contemplated by the Acquisition Agreements, a party to or engaged in any
transaction with, and none of the properties and assets of the Borrower or any
of its Subsidiaries is, or will be immediately after giving effect to the
transactions contemplated by the Acquisition Agreements, subject to or bound by,
(a) any Affiliate of any Credit Party or (b) any Seller or any of its
Affiliates.
5.28 OWNERSHIP. (a) The authorized Capital Stock of the Borrower
consists of 200,000 shares of the common stock, no par value, of which 100,000
shares are issued and outstanding on Closing Date. All of the outstanding shares
of the common stock of the Borrower have been duly and validly authorized and
issued, are fully paid and nonassessable, and were not issued in violation of
the preemptive rights of any stockholder. Except as set forth on SCHEDULE
5.28(a), there are no existing options, warrants, calls or commitments relating
to, or any securities or rights convertible into, exercisable for or
exchangeable for, any common stock of the Borrower. Other than lock-up
agreements to be entered into in connection with the Qualified Initial Public
Offering, the Shareholder's Agreement and the Warrants, there are no
shareholders agreements or other agreements pertaining to the ownership of the
common stock of the Borrower, including any agreement that would restrict the
right to dispose of such common stock and/or its right to vote such common
stock.
(b) SCHEDULE 5.28(b) sets forth a true and accurate list, as of the
Closing Date, of each holder of Capital Stock of the Borrower, indicating the
name of each such holder and the Capital Stock held by each such Person.
5.29 INSURANCE. The Credit Parties maintain policies of fire and
casualty, liability, business interruption and other forms of insurance in such
amounts, with such deductibles and against such risks and losses as are in
accordance with normal industry practice for the business and assets of the
Credit Parties. All such policies are in full force and effect, all premiums due
and payable thereon have been paid (other than retroactive or retrospective
premium adjustments that are not yet, but may be, required to be paid with
respect to any prior period under comprehensive general liability and workmen's
compensation insurance policies), and no notice of cancellation or termination
has been received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancellation. The
activities and operations of the Credit Parties have been conducted in a manner
so as to conform in all material respects to all applicable provisions of such
insurance policies.
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5.30 CERTAIN TRANSACTIONS. On the Closing Date, (i) the Acquisition
Agreements shall not have been amended or modified, nor any condition thereof
waived by the Borrower, without the prior written consent of the Agent, (ii) all
conditions to the obligations of the Borrower to consummate the transactions
contemplated by the U-Gene Acquisition Agreement shall have been satisfied,
(iii) all funds advanced and Letters of Credit issued on the Closing Date by the
Lenders will be used in accordance with Section 5.15, (iv) all funds advanced by
the Subordinated Noteholders will be used to consummate the U-Gene Acquisition
and (v) the transactions contemplated by the U-Gene Acquisition Agreement will
be consummated in accordance with the U-Gene Acquisition Agreement and all
applicable Requirements of Law. On the Closing Date, the Operative Documents
shall not have been amended or modified, nor any condition thereof waived by the
Borrower in a manner adverse in any material respect to the rights or interests
of the Lenders.
SECTION 6
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that so long as this Agreement
is in effect or any amounts payable hereunder or under any other Credit Document
shall remain outstanding and until all of the Commitments hereunder shall have
terminated and all Letters of Credit shall have expired or been cancelled:
6.1 INFORMATION COVENANTS. The Borrower will furnish, or cause to be
furnished, to the Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within ninety (90) days after the end of each fiscal year of
the Borrower, an audited consolidated and unaudited consolidating
balance sheet and income statement of the Borrower and its Consolidated
Subsidiaries, as of the end of such fiscal year, together with related
consolidated and consolidating statements of operations and retained
earnings and of cash flows for such fiscal year, setting forth in
comparative form consolidated and consolidating figures for the
preceding fiscal year, all such financial statements to be in
reasonable form and detail and, with respect to the consolidated
statements only, audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and
accompanied by, with respect to the consolidated statements, an opinion
of such accountants (which shall not be qualified or limited in any
material respect), and, with respect to the consolidating statement, a
certificate of the chief financial officer of the Borrower (as to which
certificate there shall be no individual, as opposed to corporate,
liability), to the effect that such financial statements have been
prepared in accordance with GAAP and fairly present in all material
respects the consolidated financial position and consolidated results
of operations and cash flows of the Borrower and its Consolidated
Subsidiaries in accordance with GAAP consistently applied (except for
changes with which such accountants concur).
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within forty-five (45) days after the end of each of the
first three fiscal quarters in
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each fiscal year of the Borrower, a consolidated and consolidating
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal quarter, together with related consolidated and
consolidating statements of operations and retained earnings and of
cash flows for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in comparative form consolidated and
consolidating figures for the corresponding period of the preceding
fiscal year, all such financial statements to be in reasonable form and
detail and reasonably acceptable to the Agent, and accompanied by a
certificate of the chief financial officer of the Borrower (as to which
certificate there shall be no individual, as opposed to corporate,
liability) to the effect that such quarterly financial statements have
been prepared in accordance with GAAP and fairly present in all
material respects the consolidated financial position and consolidated
results of operations and cash flows of the Borrower and its
Consolidated Subsidiaries in accordance with GAAP consistently applied,
subject to changes resulting from normal year-end audit adjustments.
(c) OFFICER'S CERTIFICATE. At the time of delivery of the
financial statements provided for in Sections 6.1(a) and 6.1(b) above,
a certificate of the chief financial officer of the Borrower (as to
which certificate there shall be no individual, as opposed to
corporate, liability) substantially in the form of EXHIBIT K (i)
demonstrating compliance with the financial covenants contained in
Section 7.18 by calculation thereof as of the end of each such fiscal
period, (ii) stating that no Default or Event of Default exists, or if
any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Borrower proposes to take with
respect thereto and (iii) stating whether, since the date of the most
recent financial statements delivered hereunder, there has been any
material change in the GAAP applied in the preparation of the financial
statements of the Borrower and its Consolidated Subsidiaries, and, if
so, describing such change.
(d) ANNUAL BUSINESS PLAN, BUDGETS AND PROJECTIONS. At least
ninety (90) days after the end of each fiscal year of the Borrower,
beginning with the fiscal year ending December 31, 1997, an annual
budget of the Borrower and its Consolidated Subsidiaries for the
current year. As of December 31 of each year, updated projected
financial statements (including balance sheets, income statements and
statements of cash flows) for the next three (3) fiscal years.
(e) COMPLIANCE WITH CERTAIN PROVISIONS OF THIS AGREEMENT.
Within ninety (90) days after the end of each fiscal year of the
Borrower, a certificate containing information regarding the amount of
Net Cash Proceeds from Asset Dispositions (other than Excluded Asset
Dispositions), Debt Issuances and Equity Issuances that were made
during the prior fiscal year.
(f) ACCOUNTANT'S CERTIFICATE. Within the period for delivery
of the annual financial statements provided for in Section 6.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Agreement and stating further whether, in the
course of their audit, they have become aware of any Default or Event
of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
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(g) AUDITOR'S REPORTS. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to any Credit Party in connection with any annual, interim
or special audit of the books of such Credit Party.
(h) REPORTS. Promptly upon transmission or receipt thereof,
(i) copies of all filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements, notices and
reports as any Credit Party shall send to its shareholders or to a
holder of any Indebtedness owed by any Credit Party in its capacity as
such a holder and (ii) upon the request of the Agent or the Required
Lenders, all reports and written information to and from the United
States Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.
(i) NOTICES. Upon obtaining knowledge thereof, the Borrower
will give written notice to the Agent immediately of (i) the occurrence
of any event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the
Borrower proposes to take with respect thereto, and (ii) the occurrence
of any of the following with respect to any Credit Party: (A) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against such Person which if adversely determined could
reasonably be expected to have a Material Adverse Effect and (B) the
institution of any proceedings against such Person with respect to, or
the receipt of notice by such Person of potential liability or
responsibility (direct or indirect) for violation, or alleged violation
of any Federal, state or local law, rule or regulation, including
Environmental Laws, the violation of which could have a Material
Adverse Effect.
(j) ERISA. The Borrower will give written notice to the Agent
promptly (and in any event within five (5) Business Days after any
officer of any Credit Party obtains knowledge thereof) of: (i) any
event or condition, including any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrower or
any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any Credit Party or any ERISA Affiliate is required to contribute
to each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto;
or (iv) any change in the funding status of any Plan that could have a
Material Adverse Effect, together with a description of any such event
or condition or a copy of any such notice and a statement by the chief
financial officer of the Borrower briefly setting forth the details
regarding such event, condition or notice and the action, if any, which
has been or is being taken or is proposed to be taken by the Borrower
with respect thereto. Promptly upon request,
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the Credit Parties shall furnish the Agent and the Lenders with such
additional information concerning any Plan as may be reasonably
requested, including copies of each annual report/return (Form 5500
series), as well as all schedules and attachments thereto required to
be filed with the Department of Labor and/or the Internal Revenue
Service pursuant to ERISA and the Code, respectively, for each "plan
year" (within the meaning of Section 3(39) of ERISA).
(k) ADDITIONAL PATENTS AND TRADEMARKS. At the time of delivery
of the financial statements and reports provided for in Section 6.1(a),
a report signed by the chief financial officer of the Borrower (as to
which certificate there shall be no individual, as opposed to
corporate, liability) setting forth (i) a list of registration numbers
for all patents, trademarks, service marks, tradenames and copyrights
awarded to any Credit Party since the last day of the immediately
preceding fiscal year of the Borrower and (ii) a list of all patent
applications, trademark applications, service xxxx applications, trade
name applications and copyright applications submitted by any Credit
Party since the last day of the immediately preceding fiscal year and
the status of each such application, all in such form as shall be
reasonably satisfactory to the Agent.
(l) OTHER INFORMATION. With reasonable promptness upon request
therefor, such other information regarding the business, properties or
financial condition of any Credit Party as the Agent or the Required
Lenders may reasonably request.
6.2 PRESERVATION OF EXISTENCE AND FRANCHISES. Except as a result of or
in connection with a dissolution, merger or disposition of a Subsidiary
permitted under Section 7.4 or Section 7.5 and the contemplated conversion of
the Borrower from an "S Corporation" to a "C Corporation" for Federal income tax
purposes, each of the Credit Parties will do all things necessary to preserve
and keep in full force and effect its existence, rights, franchises and
authority.
6.3 BOOKS AND RECORDS. Each of the Credit Parties will keep complete
and accurate books and records of its transactions in accordance with good
accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
6.4 COMPLIANCE WITH LAW. Each of the Credit Parties will comply with
all Requirements of Law applicable to it and its Property to the extent that
noncompliance with any such Requirement of Law could reasonably be expected to
have a Material Adverse Effect.
6.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS. Each of the Credit Parties
will pay and discharge (a) all material taxes, assessments and other
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its Properties, before they shall become delinquent, (b) all
material lawful claims (including claims for labor, materials and supplies)
which, if unpaid, might give rise to a Lien upon any of its Properties, and (c)
except as prohibited hereunder, all of its other Indebtedness as it shall become
due; PROVIDED, THAT, no Credit Party shall be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings
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diligently pursued and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) could give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) could reasonably be expected to have a Material Adverse Effect.
6.6 INSURANCE; CERTAIN PROCEEDS. (a) Each of the Credit Parties will at
all times maintain in full force and effect insurance (including domestic
worker's compensation insurance, liability insurance, casualty insurance and
business interruption insurance) in such amounts, covering such risks and
liabilities and with such deductibles or self-insurance retentions as are in
accordance with normal industry practice (or as are otherwise required by the
Collateral Documents). The Agent shall be named as loss payee or mortgagee, as
its interest may appear, with respect to all such property and casualty policies
and an additional insured with respect to all such other policies (other than
workers' compensation and employee health policies), and each provider of any
such insurance shall agree, by endorsement upon the policy or policies issued by
it or by independent instruments furnished to the Agent, that if the insurance
carrier shall have received written notice from the Agent of the occurrence of
an Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to the Credit Parties under such policies directly to the Agent (which
agreement shall be evidenced by a "standard" or "New York" lender's loss payable
endorsement in the name of the Agent on Accord Form 27) and that it will give
the Agent thirty (30) days' prior written notice before any such policy or
policies shall be altered or canceled, and that no act or default of any Credit
Party or any other Person shall affect the rights of the Agent or the Lenders
under such policy or policies.
(b) In case of any Casualty or Condemnation with respect to any
Property of any Credit Party or any part thereof, the Borrower shall promptly
give written notice thereof to the Agent generally describing the nature and
extent of such damage, destruction or taking. In such case the Borrower shall,
or shall cause such Credit Party to, promptly repair, restore or replace the
Property of such Credit Party which was subject to such Casualty or Condemnation
at such Credit Party's cost and expense, whether or not Insurance Proceeds or a
Condemnation Award, if any, received on account of such event shall be
sufficient for that purpose; PROVIDED, THAT, such Property need not be repaired,
restored or replaced to the extent the failure to make such repair, restoration
or replacement (i)(A) is desirable to the proper conduct of the business of such
Credit Party in the ordinary course and otherwise in the best interest of such
Credit Party and (B) would not materially impair the rights and benefits of the
Agent or the Secured Parties under the Collateral Documents or any other Credit
Document or (ii) the failure to repair, restore or replace the Property is
attributable to the application of the Insurance Proceeds from such Casualty or
the Condemnation Award from such Condemnation to payment of the Credit
Obligations in accordance with the provisions of Section 3.3(b). In the event a
Credit Party shall receive any Insurance Proceeds or Condemnation Awards, such
Credit Party will immediately pay over such proceeds to the Agent, for payment
on the Credit Obligations in accordance with Section 3.3(b) or, if such funds
constitute Reinvestment Funds, to be held by the Agent. The Agent agrees to
release such Insurance Proceeds or Condemnation Awards to the Borrower as needed
from time to time to pay for the replacement or restoration of the portion of
the Property subject to the Casualty or Condemnation, if, but only if, the
conditions set forth in the definition of "Reinvestment Funds" are satisfied at
the time of such request.
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(c) In connection with the covenants set forth in this Section 6.6, it
is understood and agreed that:
(i) none of the Agent, the Lenders or their respective agents
or employees shall be liable for any loss or damage insured by the
insurance policies required to be maintained under this Section 6.6, it
being understood that (A) the Credit Parties shall look solely to their
insurance companies or any other parties other than the aforesaid
parties for the recovery of such loss or damage and (B) such insurance
companies shall have no rights of subrogation against the Agent, the
Lenders or their agents or employees. If, however, the insurance
policies do not provide waiver of subrogation rights against such
parties, as required above, then each Credit Party hereby agrees, to
the extent permitted by law, to waive its right of recovery, if any,
against the Agent, the Lenders and their agents and employees;
(ii) Upon the occurrence of an Event of Default, the Credit
Parties will permit an insurance consultant retained by the Agent, at
the expense of the Borrower, to review from time to time the insurance
policies maintained by the Credit Parties; and
(iii) Upon the occurrence of an Event of Default, the Required
Lenders shall have the right to require the Credit Parties to keep
other insurance in such form and amount as the Agent or the Required
Lenders may reasonably request; PROVIDED, THAT, such insurance shall be
obtainable on commercially reasonable terms; and PROVIDED FURTHER,
THAT, the designation of any form, type or amount of insurance coverage
by the Agent or the Required Lenders under this Section 6.6 shall in no
event be deemed a representation, warranty or advice by the Agent or
the Lenders that such insurance is adequate for the purposes of the
business of the Credit Parties or the protection of their properties.
6.7 MAINTENANCE OF PROPERTY. Each of the Credit Parties will maintain
and preserve its properties and equipment material to the conduct of its
business in good repair, working order and condition, normal wear and tear and
Casualty and Condemnation excepted, and will make, or cause to be made, as to
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
6.8 PERFORMANCE OF OBLIGATIONS. Each of the Credit Parties will perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
6.9 USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
and will use the Letters of Credit solely for the purposes set forth in Section
5.15.
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6.10 AUDITS/INSPECTIONS. Upon reasonable notice and during normal
business hours, the Borrower will, and will cause each of its Subsidiaries to,
permit representatives appointed by the Agent or the Required Lenders, including
independent accountants, agents, employees, attorneys and appraisers, to visit
and inspect its Property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representatives obtain and shall permit the Agent or such
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees,
independent accountants, attorneys and representatives of the Credit Parties.
The Borrower agrees that the Agent, and its representatives, may conduct an
annual audit of the Collateral, at the expense of the Borrower upon the
occurrence of an Event of Default. The Borrower will direct all accountants and
auditors employed by it at any time during the term of this Agreement to exhibit
and deliver to the Agent and the Lenders, upon request, copies of any of the
financial statements, trial balances or other accounting records of any sort of
the Credit Parties in the accountant's or auditor's possession, and to disclose
to the Agent and the Lenders any information they may have concerning the
financial status and business operation of the Credit Parties. Upon request of
the Agent or the Required Lenders, the Borrower will authorize all Federal,
state and municipal authorities to furnish to the Lenders copies of reports or
examinations relating to the Credit Parties, whether made by any Credit Party or
otherwise.
6.11 ADDITIONAL CREDIT PARTIES. As soon as practicable and in any event
within thirty (30) days after any Person becomes a direct or indirect Domestic
Subsidiary of any Credit Party, the Borrower shall provide the Agent with
written notice thereof setting forth information in reasonable detail describing
all of the assets of such Person and shall (a) cause such Person to execute a
Joinder Agreement in substantially the same form as EXHIBIT L, (b) cause 100% of
the Capital Stock of such Person to be delivered to the Agent (together with
undated stock powers signed in blank) and to be subject at all times to a first
priority, perfected Lien in favor of the Agent pursuant to the Collateral
Documents, subject only to Permitted Liens, and (c) cause such Person to (i) if
such Person owns or leases any real property located in the United States of
America or, to the extent deemed to be material by the Agent or the Required
Lenders in its or their sole reasonable discretion, located elsewhere, deliver
to the Agent with respect to such real property documents, instruments and other
items deemed necessary by the Agent and the Required Lenders to create and
perfect mortgage liens thereon, all in form, content and scope satisfactory to
the Agent, and (ii) deliver such other documentation as the Agent may reasonably
request in connection with the foregoing, including appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder, all in form, content and scope
reasonably satisfactory to the Agent. As soon as practical and in any event
within thirty (30) days after any Person becomes a direct Foreign Subsidiary of
the Borrower or any Domestic Subsidiary of the Borrower, the Borrower or such
Domestic Subsidiary shall provide the Agent with written notice thereof and
shall cause sixty-five percent (65%) of such Person's Capital Stock (for so long
as the pledge of any greater percentage would have adverse tax consequences to
the Credit Parties), to be
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delivered to the Agent (together with undated stock powers signed in blank
unless such stock powers are deemed unnecessary by the Agent in its reasonable
discretion under the law of the jurisdiction of incorporation of such Person)
and to be subject at all times to a first priority, perfected Lien in favor of
the Agent pursuant to the Collateral Documents, subject only to Permitted Liens
and shall further deliver such other documentation as the Agent may reasonably
request in connection with the foregoing including appropriate UCC-1 financing
statements, certified resolutions and other organizational and authorizing
documents of such Person, favorable opinions of counsel to such Person which
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above and the perfection of the
Agent's liens thereunder, and shall include, without limitation, opinions of
counsel to the Borrower in The Netherlands and Germany related to U-Gene and gmi
to the extent reasonably required by the Agent), all in form, content and scope
reasonably satisfactory to the Agent.
6.12 PLEDGED ASSETS. (a) The Borrower will cause (i) all of its and its
Domestic Subsidiaries' owned and leased real properties, to the extent deemed to
be material by the Agent or the Required Lenders in its or their reasonable
discretion, and located in the United States and (ii) all of its and its
Domestic Subsidiaries' personal property located in the United States
(including, without limitation, all depository accounts), to be subject at all
times to first priority, perfected and, in the case of real property (whether
leased or owned), title insured Liens in favor of the Agent pursuant to the
Collateral Documents, subject in each case only to Permitted Liens. In
furtherance of the foregoing terms of this Section 6.12, the Borrower agrees to
promptly provide the Agent with written notice of the acquisition by, or the
entering into a lease by, the applicable Credit Party of any real property
having a market value greater than $100,000, setting forth in reasonable detail
the location and a description of the asset(s) so acquired. Without limiting the
generality of the above, the Credit Parties will cause 100% of the Capital Stock
in each of their direct or indirect Domestic Subsidiaries and 65% of the Capital
Stock in each of their direct Foreign Subsidiaries (for so long as the pledge of
any greater percentage would have adverse tax consequences to the Credit
Parties) to be subject at all times to a first priority, perfected Lien in favor
of the Agent pursuant to the terms and conditions of the Collateral Documents.
(b) If, subsequent to the Closing Date, a Credit Party (other than a
Foreign Subsidiary) shall (i) acquire any Intellectual Property, securities,
instruments, chattel paper or other personal property required to be delivered
to the Agent as Collateral hereunder or under any of the Collateral Documents or
(ii) acquire or lease any real property, the Borrower shall promptly (and in any
event within three (3) Business Days after any officer of such Credit Party
acquires knowledge of the same) notify the Agent of the same. Each of the Credit
Parties shall adhere to the covenants regarding the location of personal
property as set forth in the Security Agreement.
6.13 LIFE INSURANCE. The Borrower will maintain the Life Insurance
Policy at all times during the term of this Agreement and shall cause, within 30
days of the Closing Date, the same to be assigned to the Agent for the benefit
of the Secured Parties in a manner reasonably satisfactory to the Agent
(including, without limitation, the execution and delivery of the Life Insurance
Assignment).
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6.14 PAYMENT OF INDEBTEDNESS. Upon the consummation of the Qualified
Initial Public Offering, and as long as no Default or Event of Default shall
then exist, the Borrower shall use a portion of the proceeds thereof to repay
and prepay in its entirety the Indebtedness (i) evidenced and created by the
Subordinated Note Documents (other than Indebtedness that is or may be evidenced
by the Permitted Warrant Notes) and (ii) if then outstanding, the Indebtedness
created on conversion of the Mandatory Redeemable Preferred Stock.
SECTION 7
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding and until all of the Commitments
hereunder shall have terminated and all Letters of Credit shall have expired or
been cancelled:
7.1 INDEBTEDNESS. None of the Credit Parties will contract, create,
incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries in
existence on the Closing Date to the extent disclosed in Schedule
7.1(b) (but not including any renewal, refinancing or extension
thereof);
(c) purchase money Indebtedness (including Capital Leases)
incurred by the Borrower or any of its Subsidiaries after the Closing
Date to finance the purchase of fixed assets acquired after the Closing
Date; PROVIDED, THAT (i) the total of all such Indebtedness for the
Borrower and its Subsidiaries taken together shall not exceed an
aggregate principal amount of $3,000,000 at any time outstanding; (ii)
such Indebtedness when incurred shall not exceed the purchase price of
the asset(s) financed; and (iii) such Indebtedness is issued and any
Liens securing such Indebtedness are created at the time of, or within
ninety (90) days after, the acquisition of such assets and such
Indebtedness is not secured by a Lien on any other assets;
(d) obligations of the Borrower or any of its Subsidiaries in
respect of Lender Hedging Agreements entered into in order to limit
exposure to floating rate indebtedness or foreign currency fluctuation
and exchange rate risk of the Borrower or any of its Subsidiaries, and
not for speculative purposes;
(e) Intercompany Indebtedness arising out of loans and
advances permitted under Section 7.6;
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(f) Indebtedness arising under the Subordinated Note Documents
(but not any renewal, refinancing or extension thereof);
(g) Indebtedness incurred in connection with escrow
obligations related to the U-Gene Acquisition in a principal amount not
to exceed $1,700,000;
(h) in addition to the Indebtedness otherwise permitted by
this Section 7.1,
(i) other Indebtedness incurred after the Closing
Date by the Borrower or any of its Subsidiaries; PROVIDED,
THAT, (A) the loan documentation with respect to such
Indebtedness shall not contain covenants or default provisions
relating to any Credit Party that are more restrictive than
the covenants and default provisions contained in the Credit
Documents, (B) no Default or Event of Default shall have
occurred and be continuing immediately before or immediately
after giving effect to such incurrence and the Borrower shall
have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to
the incurrence of such Indebtedness and to the concurrent
retirement of any other Indebtedness of any Credit Party, the
Credit Parties shall be in compliance with all of the
financial covenants set forth in Section 7.18 and (C) the
aggregate principal amount of such Indebtedness PLUS the
aggregate principal amount of Indebtedness permitted pursuant
to clauses 7.1(b) and 7.1(c) above shall not exceed $4,500,000
at any time outstanding; and
(ii) Guaranty Obligations of any Credit Party (other
than the Borrower) with respect to any Indebtedness of the
Borrower permitted under this Section 7.1 (other than this
subparagraph (h)); and
(i) Indebtedness created on conversion of the Mandatory
Redeemable Preferred Stock; PROVIDED, THAT, (i) such Indebtedness is
unsecured, (ii) such Indebtedness does not exceed an aggregate
principal amount of $3,000,000, (iii) no portion of the principal
amount thereof is, by its terms, required to be paid, repaid or prepaid
prior to a date that is 60 days after the maturity date of the
Subordinated Notes, and (iv) such Indebtedness is fully subordinated to
the Credit Obligations pursuant to a written subordination agreement
that is in form and substance reasonably satisfactory to the Agent and
the Required Lenders.
7.2 LIENS. None of the Credit Parties will contract, create, incur,
assume or permit to exist any Lien with respect to any of its Property, whether
now owned or hereafter acquired, except for Permitted Liens.
7.3 NATURE OF BUSINESS. None of the Credit Parties will substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
7.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC. Except in connection with
an Asset Disposition permitted by the terms of Section 7.5, none of the Credit
Parties will enter into any transaction of merger or consolidation or liquidate,
wind up or dissolve itself (or suffer
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any liquidation or dissolution); PROVIDED, THAT, notwithstanding the foregoing
provisions of this Section 7.4:
(a) the Borrower may merge or consolidate with any of its
Wholly Owned Subsidiaries; PROVIDED, THAT (i) the Borrower shall be the
continuing or surviving corporation in such merger or consolidation,
(ii) the Credit Parties shall cause to be executed and delivered such
documents, instruments and certificates as the Agent may request so as
to cause the Credit Parties to be in compliance with the terms of
Section 6.12 after giving effect to such transaction and (iii) no
Default or Event of Default shall have occurred and be continuing
immediately before or immediately after giving effect to such
transaction;
(b) any Wholly Owned Subsidiary of the Borrower may merge or
consolidate with any other Wholly Owned Subsidiary of the Borrower;
PROVIDED, THAT (i) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may
request so as to cause the Credit Parties to be in compliance with the
terms of Section 6.12 after giving effect to such transaction, (ii) no
Default or Event of Default shall have occurred and be continuing
immediately before or immediately after giving effect to such
transaction and (iii) no merger or consolidation shall be permitted by
this clause (b) if a Foreign Subsidiary is the survivor of a merger or
consolidation between a Domestic and a Foreign Subsidiary;
(c) any Subsidiary of the Borrower may merge with any Person
other than a Credit Party in connection with a Permitted Acquisition if
(i) such Subsidiary shall be the continuing or surviving corporation in
such merger or consolidation, (ii) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as
the Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 6.12 after giving effect to such
transaction, (iii) no Default or Event of Default shall have occurred
and be continuing immediately before or immediately after giving effect
to such transaction and (iv) the Borrower shall have delivered to the
Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect on a Pro Forma Basis to such transaction, the Credit
Parties shall be in compliance with all of the financial covenants set
forth in Section 7.18 as of the last day of the most recent period of
four consecutive fiscal quarters of the Borrower which precedes or ends
on the date of such acquisition and with respect to which the Agent has
received the Required Financial Information; and
(d) any Wholly Owned Subsidiary of the Borrower may dissolve,
liquidate or wind up its affairs at any time; PROVIDED, THAT (i) the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request to cause the
Credit Parties to be in compliance with the terms of Section 6.12 after
giving effect to such transaction and (ii) no Default or Event of
Default shall have occurred and be continuing immediately before or
after giving effect to such transaction.
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7.5 ASSET DISPOSITIONS. (a) None of the Credit Parties will make any
Asset Disposition; PROVIDED, THAT, the foregoing provisions of this Section 7.5
shall not prohibit the following:
(i) any Asset Disposition by any Credit Party to the Borrower or any
Guarantor if (i) the Credit Parties shall cause to be executed and delivered
such documents, instruments and certificates as the Agent may request so as to
cause the Credit Parties to be in compliance with the terms of Section 6.12
after giving effect to such Asset Disposition and (ii) after giving effect such
Asset Disposition, no Default or Event of Default exists;
(ii) the sale of inventory in the ordinary course of business;
(iii) the liquidation or sale of Cash Equivalents for the account of
the Borrower;
(iv) the disposition of damaged, worn out or obsolete tangible assets,
so long as the fair market value (based on the good faith judgment of the
Borrower without the requirement of a third party appraisal) of all property
disposed of pursuant to this clause (iv) does not exceed $250,000 in the
aggregate in any fiscal year of the Borrower;
(v) any other Asset Disposition; provided that (A) the consideration
therewith is cash or Cash Equivalents; (B) if such transaction is a Sale and
Leaseback Transaction, such transaction is permitted by the terms of Section
7.13; (C) if such Asset Disposition is a Casualty or Condemnation, the Net Cash
Proceeds resulting therefrom are applied as required by this Agreement; (D) such
transaction does not involve the sale or other disposition of an equity interest
in any Credit Party; (E) the aggregate net book value of all of the assets sold
or otherwise disposed of by the Credit Parties in all such transactions in
reliance on this paragraph shall not exceed $250,000 in any fiscal year of the
Borrower during the term of this Agreement; and (F) no Default or Event of
Default shall have occurred and be continuing immediately before or immediately
after giving effect to such transaction; and
(b) Upon consummation of an Asset Disposition permitted by this Section
7.5, the Agent shall (to the extent applicable) deliver to the Borrower, upon
the Borrower's request and at the Borrower's expense, such documentation as is
reasonably necessary to evidence the release of the Agent's security interest,
if any, in the assets being disposed of, including amendments or terminations of
UCC financing statements, if any, the return of stock certificates, if any, and
the release of such Subsidiary from all of its obligations, if any, under the
Credit Documents.
7.6 INVESTMENTS; ACQUISITIONS. None of the Credit Parties will make any
Investment in, to or for the benefit of any Person or to purchase, lease or
otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other Person; PROVIDED, THAT, any Credit
Party may purchase inventory in the ordinary course of business and may make
Permitted Investments.
7.7 RESTRICTED PAYMENTS. None of the Credit Parties will, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except
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(a) dividends payable solely in common stock of such Person, (b) dividends or
other distributions payable to the Borrower or any Wholly Owned Subsidiary of
the Borrower, (c) repurchases of common stock of the Borrower from any employee
of the Credit Parties upon the termination of employment of such employee;
PROVIDED, THAT, the aggregate amount paid in all such repurchases shall not
exceed $100,000 in any fiscal year of the Borrower during the term of this
Agreement, (d) Permitted Dividends, (e) to make interest payments in respect of
the Subordinated Notes, and (f) upon consummation of the Qualified Initial
Public Offering, the prepayments required by Section 6.14; PROVIDED, THAT, in
each case as set forth in clauses (a) through (f) above, no Default or Event of
Default has occurred and is continuing at such time or would exist after giving
effect to such payment on a pro forma basis as if it had been made on the first
day of the most recently completed period of four consecutive fiscal quarters of
the Borrower.
7.8 PREPAYMENTS OF INDEBTEDNESS, ETC. None of the Credit Parties will
(a) after the issuance thereof, amend, waive or modify (or permit the amendment,
waiver or modification of) any of the terms, agreements, covenants or conditions
of or applicable to any Indebtedness issued by such Credit Party if such
amendment, waiver or modification would add or change any terms, agreements,
covenants or conditions in a manner adverse to any Credit Party, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, (b) if any Default or
Event of Default has occurred and is continuing or would exist after giving
effect to such payment on a pro forma basis as if it had been made on the first
day of the most recently completed period of four consecutive fiscal quarters of
the Borrower, directly or indirectly redeem, purchase, pay or prepay, retire,
defease or otherwise acquire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Indebtedness (other than Credit
Obligations), or set aside any funds for such purpose, whether such redemption,
purchase, prepayment, retirement or acquisition is made at the option of any
Credit Party or at the option of the holder thereof, and whether or not any such
redemption, purchase, prepayment, retirement or acquisition is required under
the term and conditions applicable thereto (including, without limitation, any
Indebtedness arising under the Subordinated Note Documents and Indebtedness, if
outstanding, created on conversion of the Mandatory Redeemable Preferred Stock),
(c) at any time prior to the consummation of a Qualified Initial Public
Offering, except to the extent permitted pursuant to Section 7.7(e), directly or
indirectly redeem, purchase, pay or prepay, retire, defease or otherwise acquire
for value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment, any Indebtedness (other than Credit Obligations), or set aside any
funds for such purpose, whether such redemption, purchase, prepayment,
retirement or acquisition is made at the option of any Credit Party or at the
option of the holder thereof, and whether or not any such redemption, purchase,
prepayment, retirement or acquisition is required under the term and conditions
applicable thereto (including, without limitation, any Indebtedness arising
under the Subordinated Note Documents and Indebtedness, if outstanding, created
on conversion of the Mandatory Redeemable Preferred Stock), or (d) release,
cancel, compromise or forgive in whole or in part the Indebtedness evidenced by
the Intercompany Notes.
7.9 TRANSACTIONS WITH AFFILIATES. None of the Credit Parties will enter
into or permit to exist any transaction or series of transactions with (a) any
officer, director,
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shareholder, Subsidiary or Affiliate of any Credit Party or (b) any Affiliate of
any such officer, director, shareholder, Subsidiary or Affiliate, other than (i)
transfers of assets to any Credit Party permitted by Section 7.5, (ii)
transactions expressly permitted by Section 7.1, Section 7.4, Section 7.5,
Section 7.6 or Section 7.7, (iii) normal compensation and reimbursement of
reasonable expenses of officers and directors, and (iv) other transactions which
are entered into in the ordinary course of such Person's business on terms and
conditions as favorable to such Person as would be obtainable by it in a
comparable arms'-length transaction with an independent, unrelated third party.
7.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS. None of the Credit Parties
will (a) change its fiscal year or (b) amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) in
any respect or amend, modify or change its bylaws (or other similar document) in
any manner adverse in any respect to the rights or interests of the Lenders or
(c) enter into any amendment, modification or waiver that is adverse in any
respect to the Lenders to (i) any Material Contract as in effect on the Closing
Date, (ii) the Acquisition Agreements as in effect on the Closing Date, (iii)
the Shareholder Agreement as in effect on the Closing Date or (iv) the Operative
Documents as in effect on the Closing Date. The Borrower will cause the Credit
Parties to promptly provide the Lenders with copies of all proposed amendments
to the foregoing documents and instruments as in effect as of the Closing Date.
7.11 LIMITATION ON RESTRICTED ACTIONS. None of the Credit Parties will,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions to any Credit Party on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness or other obligation owed to
any Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its properties or assets to any Credit Party or (e) act
as a Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Agreement
and the other Credit Documents, (ii) Operative Documents, (iii) applicable law,
(iv) any document or instrument governing Indebtedness incurred pursuant to
Section 7.1(c); PROVIDED, THAT, any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith (and
any renewals, refinancings, exchanges, refundings or extensions thereof, so long
as the terms of such encumbrances or restrictions are no more onerous than those
with respect to such Indebtedness upon the original incurrence thereof) or (v)
customary non-assignment provisions in any lease governing a leasehold interest.
7.12 OWNERSHIP OF SUBSIDIARIES: LIMITATIONS ON BORROWER.
Notwithstanding any other provisions of this Agreement to the contrary, the
Borrower will not (i) permit any Person (other than the Borrower or any Wholly
Owned Domestic Subsidiary of the Borrower) to own any Capital Stock of any
Subsidiary of the Borrower, (ii) permit any Subsidiary of the Borrower to issue
Capital Stock to any Person, except (A) the Borrower or any Wholly Owned
Domestic Subsidiary of the Borrower or (B) to qualify directors where required
by applicable law or to satisfy other requirements of applicable law with
respect to
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the ownership of Capital Stock of Foreign Subsidiaries or (iii) issue or permit
any Subsidiary of the Borrower to issue any shares of Disqualified Stock or
Preferred Stock other than the Mandatory Redeemable Preferred Stock.
7.13 SALE LEASEBACKS. None of the Credit Parties will, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed), whether now owned or hereafter
acquired, (a) which such Credit Party has sold or transferred or is to sell or
transfer to a Person which is not a Credit Party or (b) which such Credit Party
intends to use for substantially the same purpose as any other Property which
has been sold or is to be sold or transferred by such Credit Party to another
Person which is not a Credit Party in connection with such lease.
7.14 CAPITAL EXPENDITURES. The Borrower will not permit Consolidated
Capital Expenditures for any fiscal year of the Borrower to exceed
$4,500,000.00; PROVIDED, THAT, upon consummation of the Qualified Initial Public
Offering, this Section 7.14 shall no longer be effective.
7.15 NO FURTHER NEGATIVE PLEDGES. None of the Credit Parties will enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Agreement and the other Credit Documents, (b)
pursuant to the Subordinated Note Documents and (c) pursuant to any document or
instrument governing Indebtedness incurred pursuant to Section 7.1(c), PROVIDED
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith.
7.16 IMPAIRMENT OF SECURITY INTERESTS. None of the Credit Parties will
take or omit to take any action, which action or omission might or would have
the result of materially impairing the security interests in favor of the Agent
on behalf of the Secured Parties with respect to the Collateral, and none of the
Credit Parties will grant to any Person (other than the Secured Parties pursuant
to the Collateral Documents) any interest whatsoever in the Collateral, except
for Permitted Liens.
7.17 SALES OF RECEIVABLES. None of the Credit Parties will sell with
recourse, discount or otherwise sell or dispose of its notes or accounts
receivable.
7.18 FINANCIAL COVENANTS.
(a) FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the Fixed
Charge Coverage Ratio, as of the last day of any fiscal quarter of the Borrower,
to be less than the ratio specified for such fiscal quarter in the table set
forth below:
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Fixed Charge
From To and Including Coverage Ratio
---- ---------------- --------------
Closing Date June 30, 1997 1.15 to 1.00
July 1, 1997 September 30, 1997 1.10 to 1.00
October 1, 1997 Maturity Date 1.05 to 1.00
(b) TOTAL LEVERAGE RATIO. The Borrower will not permit the Total
Leverage Ratio, as of the last day of any fiscal quarter of the Borrower, to be
greater than the ratio specified for such fiscal quarter in the table set forth
below:
Total
From To and Including Leverage Ratio
---- ---------------- --------------
Closing Date June 30, 1997 6.40 to 1.00
July 1, 1997 December 31, 1997 5.40 to 1.00
January 1, 1998 December 31, 1998 5.25 to 1.00
January 1, 1999 June 30, 1999 4.75 to 1.00
July 1, 1999 Maturity Date 4.50 to 1.00
Notwithstanding the foregoing, at any time after the consummation of a Qualified
Initial Public Offering, the Borrower will not permit the Total Leverage Ratio,
as of the last day of any fiscal quarter of the Borrower, to be greater than
3.75 to 1.00.
(c) SENIOR LEVERAGE RATIO. The Borrower will not permit the Senior
Leverage Ratio as of the last day of any fiscal quarter of the Borrower, to be
greater than the ratio specified for such fiscal quarter in the table set forth
below:
Senior
From To and Including Leverage Ratio
---- ---------------- --------------
Closing Date June 30, 1997 5.35 to 1.00
July 1, 1997 December 31, 1997 4.25 to 1.00
January 1, 1998 December 31, 1998 4.00 to 1.00
January 1, 1999 June 30, 1999 3.75 to 1.00
July 1, 1999 Maturity Date 3.50 to 1.00
(d) CONSOLIDATED NET WORTH. The Borrower will not permit the
Consolidated Net Worth as of the last day of any fiscal quarter of the Borrower
after giving pro forma effect to the transaction contemplated hereby, to be less
than the "Minimum Compliance Level". The Minimum Compliance Level shall be, on
the Closing Date, an amount equal to $1,068,735 and shall be increased (A) as of
the last day of each fiscal quarter of the Borrower ending after the Closing
Date, commencing with the fiscal quarter ending June 30, 1997, by an amount
equal to the sum of (i) 50% of Consolidated Net Income (if positive) of the
Borrower for such fiscal quarter, and (ii) 95% of the Net Cash Proceeds of any
Equity Issuance (including a Qualified Initial Public Offering) by any Credit
Party during such fiscal quarter and (B) upon the consummation of the U-Gene
Acquisition and the gmi Acquisition, 95% of the Consolidated Net Worth (if any)
of each of U-Gene and gmi, respectively. The foregoing increases in the Minimum
Compliance Level shall be fully cumulative and no reduction in the Minimum
Compliance Level shall be made to reflect negative Net Income for any period.
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SECTION 8
EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "EVENT OF
DEFAULT"):
(a) PAYMENT. Any Credit Party shall:
(i) default in the payment when due of any principal
of any of the Loans or of any reimbursement obligations
arising from drawings under Letters of Credit when and as the
same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise; or
(ii) default, and such default shall continue
unremedied for three (3) or more Business Days, in the payment
when due of any interest on the Loans or on any reimbursement
obligations arising from drawings under Letters of Credit, or
of any Fees or other Credit Obligations or other amounts owing
hereunder, under any of the other Credit Documents or in
connection herewith or therewith;
(b) REPRESENTATIONS. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove to have
been false or misleading in any material respect on the date as of
which it was made, deemed to have been made or delivered; or
(c) COVENANTS. Any Credit Party shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 6.1(a),
(b), (c), (d), (f), (g) or (j), Sections 6.2, 6.9, 6.11, 6.13,
6.14 or Sections 7.1 through 7.18, inclusive;
(ii) default in the due performance or observance of
any term, covenant or agreement contained in Sections 6.1(e),
(h), (i), (k) and (l) and such default shall continue
unremedied for a period of at least five (5) Business Days
after the earlier of a Responsible Officer of a Credit Party
becoming aware of such default or notice thereof by the Agent
or the Required Lenders; or
(iii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b), (c)(i) or (c)(ii) of this
Section 8.1) contained in this Agreement, any of the other
Credit Documents or any Lender Hedging Agreements and such
default shall continue unremedied for a period of fifteen (15)
Business Days after the earlier of a Responsible Officer of a
Credit Party becoming aware of such default or notice thereof
by the Agent or the Required Lenders;
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(d) OTHER CREDIT DOCUMENTS. Except as applicable to a
Subsidiary of the Borrower as a result of or in connection with a
dissolution, merger or disposition of such Subsidiary permitted under
this Agreement, any Credit Document shall fail to be in full force and
effect or to give the Agent or any other Secured Party the Liens,
rights, powers and privileges purported to be created thereby, or any
Credit Party or any Person acting by or on behalf of any Credit Party
shall so state in writing;
(e) GUARANTEES. The Guarantee Agreement or any provision
thereof shall cease to be in full force and effect as to any Guarantor,
as applicable, and the Borrower or such Guarantor shall fail, within
thirty (30) days of notice by the Agent or the Required Lenders, to
replace such Guarantee Agreement or provision thereof with another
credit support agreement or acceptable substitute collateral reasonably
satisfactory to the Agent and the Required Lenders, or any Guarantor or
any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under any such guarantee
agreement, except as the result of a dissolution, merger or disposition
of such Guarantor permitted under this Agreement, 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 any such guarantee agreement;
(f) BANKRUPTCY, ETC. Any Bankruptcy Event shall occur with
respect to any Credit Party;
(g) DEFAULTS UNDER OTHER AGREEMENTS.
(i) Any Credit Party shall default in the performance
or observance (beyond the applicable grace period with respect
thereto, if any) of any material obligation or condition of
any contract, lease or other agreement material to the Credit
Parties, taken as a whole;
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under the Credit Documents) in excess
of $500,000 in the aggregate for the Credit Parties taken as a
whole, (A) any Credit Party shall default in any payment
(beyond the applicable grace period with respect thereto, if
any) with respect to any such Indebtedness, (B) any Credit
Party shall default in the observance or performance of any
other term, covenant, condition or agreement relating to such
Indebtedness or contained in any instrument or agreement
evidencing or securing such Indebtedness or relating thereto,
or any other event or condition shall occur or condition
exist, the effect of which default or other event or condition
is to cause, or permit the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders)
to cause (determined without regard to whether any notice or
lapse of time is required), any such Indebtedness (or any
portion thereof) to become due prior to its stated maturity,
(C) any such Indebtedness (or any portion thereof) shall be
declared due and payable, or shall be required to be prepaid
(other than by a regularly scheduled required payment) prior
to the stated maturity thereof or (D) any Credit Party shall
be required by the terms of such Indebtedness to offer to
prepay or
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repurchase such Indebtedness (or any portion thereof) prior to
the stated maturity thereof (except as contemplated by Section
6.14);
(h) JUDGMENTS. One or more judgments or decrees shall be
entered against one or more of the Credit Parties involving a liability
of $500,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier which has acknowledged
coverage and has the ability to perform) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within forty-five (45) days from the entry thereof, or
any action shall be legally taken by a judgment creditor to levy upon
assets or properties of any Credit Party to enforce any such judgment;
(i) ERISA. Any of the following events or conditions, if such
event or condition, together with all other such events or conditions,
could have a Material Adverse Effect: (i) any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, shall exist with
respect to any Plan, or any lien shall arise on the assets of any
Credit Party or any ERISA Affiliate in favor of the PBGC or a Plan;
(ii) an ERISA Event shall occur with respect to a Single Employer Plan,
which is, in the opinion of the Agent or the Required Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the opinion of the Agent
or the Required Lenders, likely to result in (A) the termination of
such Plan for purposes of Title IV of ERISA or (B) any Credit Party or
any ERISA Affiliate incurring any liability in connection with a
withdrawal from, reorganization of (within the meaning of Section 4241
of ERISA), or insolvency of (within the meaning of Section 4245 of
ERISA) such Plan; (iv) any prohibited transaction (within the meaning
of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Credit Party
or any ERISA Affiliate to any liability under Section 406, 409, 502(i)
or 502(1) of ERISA or Section 4975 of the Code or under any agreement
or other instrument pursuant to which any Credit Party or any ERISA
Affiliate has agreed or is required to indemnify any Person against any
such liability or (v) any other event or condition out of the ordinary
course of business shall occur or exist with respect to any Plan;
(j) OPERATIVE DOCUMENTS. There shall occur and be continuing
under any Operative Document any Event of Default (as defined therein);
(k) CHANGE OF CONTROL. There shall occur any Change of
Control;
(l) MATERIAL CONTRACTS. Any Material Contract shall be
declared by any Governmental Authority to be invalid or unenforceable
in whole or in part or shall for any other reason not be, or shall be
reasonably asserted by any Credit Party or any Person acting by or on
behalf of any Credit Party not to be, in full force and effect and
enforceable in accordance with its terms and such event or condition,
together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect;
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(m) ENVIRONMENTAL MATTERS. Either (i) any Credit Party shall
be liable, whether directly, indirectly through required
indemnification of any Person or otherwise, for the costs of
investigation and/or remediation of any Materials of Environmental
Concern originating from or affecting any property or properties,
whether or not owned, leased or operated by any Credit Party, which
liability, together with all other such liabilities, could reasonably
be expected to exceed $500,000 in the aggregate or require payments
exceeding $500,000 in any fiscal year of the Borrower or (ii) any
Federal, state, regional, local or other environmental regulatory
agency or authority shall commence an investigation or take any other
action that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect; or
(n) MATERIAL ADVERSE CHANGE. There shall occur any Material
Adverse Change; PROVIDED, THAT, this clause 8.1(n) shall become
ineffective, for purposes of this Agreement, upon the consummation of a
Qualified Initial Public Offering.
(o) GMI ACQUISITION. Any drawing under the gmi Letters of
Credit shall occur or Revolving Loans hereunder shall be deemed made
pursuant to the terms hereof and the conditions set forth in Section
4.3(b) have not been satisfied at the time thereof.
8.2 ACCELERATION; REMEDIES. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by the requisite Lenders (pursuant to the voting requirements of Section
10.6) or cured to the satisfaction of the requisite Lenders (pursuant to the
voting requirements of Section 10.6), the Agent may, and upon the request and
direction of the Required Lenders shall (subject to Section 9.1), by written
notice to the Borrower, take any or all of the following actions (without
prejudice to the rights of the Agent or any Lender to enforce its claims against
the Credit Parties, except as otherwise expressly provided for in this
Agreement):
(a) TERMINATION OF COMMITMENTS. Declare the Commitments
terminated, whereupon the Commitments shall be immediately terminated.
(b) ACCELERATION. Declare the unpaid principal of all Loans,
any reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid
Fees and other Credit Obligations and any and all other indebtedness or
obligations of any and every kind owing by any Credit Party to the
Agent and/or any of the Secured Parties under the Credit Documents to
be due whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived.
(c) CASH COLLATERAL. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 8.1(f), it will
immediately pay) to the Agent additional cash, to be held by the Agent,
in a cash collateral account pursuant to Section 2.2(l), in an amount
equal to the LOC Obligations (including the maximum aggregate amount
which is, or at any time thereafter may become, available to be drawn
under all Letters of Credit then outstanding) and terminate any Letter
of Credit which may be terminated in accordance with its terms.
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(d) ENFORCEMENT OF RIGHTS. Enforce any and all rights and
interests created and existing under the Credit Documents including all
rights and remedies existing under the Collateral Documents, all rights
and remedies against the Guarantors and all rights of set-off.
Notwithstanding the foregoing, if (x) an Event of Default specified in Section
8.1(f) or Section 8.1(k) shall occur, then the Commitments shall automatically
terminate and all Loans, all reimbursement obligations arising from drawings
under Letters of Credit, all accrued interest in respect thereof, all accrued
and unpaid Fees and other Credit Obligations and any and all other indebtedness
or obligations owing to the Agent and/or any of the Secured Parties under the
Credit Documents automatically shall immediately become due and payable without
the giving of any notice or other action by the Agent or the Lenders, and (y)
upon the request and at the direction of Lenders holding a majority of the
Credit Obligations, the Agent shall take the actions specified in Section 8.2(a)
and/or 8.2(c).
In case any one or more of the covenants and/or agreements set forth in this
Agreement or any other Credit Document shall have been breached by any Credit
Party, then the Agent may proceed to protect and enforce the Lenders' rights
either by suit in equity and/or by action at law, including an action for
damages as a result of any such breach and/or an action for specific performance
of any such covenant or agreement contained in this Agreement or such other
Credit Document. Without limitation of the foregoing, the Borrower agrees that
failure to comply with any of the covenants contained herein will cause
irreparable harm and that specific performance shall be available in the event
of any breach thereof. The Agent acting pursuant to this paragraph shall be
indemnified by the Borrower against all liability, loss or damage, together with
all reasonable costs and expenses related thereto (including reasonable legal
and accounting fees and expenses but excluding the fees and expenses of internal
legal counsel) in accordance with and subject to the limitations in Section
10.5.
SECTION 9
AGENCY PROVISIONS
9.1 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby irrevocably
appoints and authorizes the Agent to act as its administrative agent under this
Agreement and the other Credit Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Credit Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 9.5 and
the first two sentences of Section 9.6 hereof shall include its Affiliates and
its own and its Affiliates' officers, directors, employees, and agents): (a)
shall not have any duties or responsibilities except those expressly set forth
in this Agreement and the other Credit Documents and shall not be a trustee or
fiduciary for any Lender or other Secured Party; (b) shall not be responsible to
the Secured Parties for any recital, statement, representation or warranty
(whether written or oral) made in or in connection with any Credit Document or
any certificate or other document referred to or provided for in, or received by
any of them under, any Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Credit
Document, or any other document referred to or provided for therein or for any
failure by any Credit Party or any other Person to perform any of its
obligations
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thereunder; (c) shall not be responsible for or have any duty to ascertain,
inquire into or verify the performance or observance of any covenants or
agreements by any Credit Party or the satisfaction of any condition or the use
of the proceeds of the Loans or the use of the Letters of Credit or the
existence or possible existence of any Default or Event of Default or to inspect
the property (including the books and records) of any Credit Party or any of its
Subsidiaries or Affiliates; (d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Credit Document; and (e) shall
not be responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
generality of the foregoing, the Agent is hereby expressly authorized to execute
any and all documents (including releases) with respect to the Collateral and
the rights of the Lenders with respect thereto, as contemplated by and in
accordance with the provisions of this Agreement and the Collateral Documents.
The provisions of this Section 9 are solely for the benefit of the Agent and the
Lenders and none of the Credit Parties shall have any rights as a third party
beneficiary of the provisions hereof. In performing its functions and duties
under this Agreement and the other Credit Documents, the Agent shall act solely
as agent of the Lenders and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency or trust with or for any Credit
Party or any of their respective Affiliates.
9.2 RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing or other communication (including any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 10.3 hereof. As to
any matters not expressly provided for by this Agreement and the other Credit
Documents, the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders (or to the extent specifically provided in Section 10.6,
all the Lenders), and such instructions shall be binding on all of the Lenders;
PROVIDED, HOWEVER, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to any Credit
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
9.3 DEFAULTS. The Agent shall not be deemed to have knowledge or notice
of the occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to Section 9.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders, PROVIDED THAT, unless and until the Agent shall have received such
directions, the Agent may (but shall not
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be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.4 RIGHTS AS LENDER. With respect to its Commitments and the Loans
made by it, NationsBank (and any successor acting as Agent) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. NationsBank (and any successor
acting as Agent) and its Affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust or other
business with any Credit Party or any of its Subsidiaries or Affiliates as if it
were not acting as Agent, and NationsBank (and any successor acting as Agent)
and its Affiliates may accept fees and other consideration from any Credit Party
or any of its Subsidiaries or Affiliates for services in connection with this
Agreement or otherwise without having to account for the same to the Secured
Parties.
9.5 INDEMNIFICATION. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 10.5 hereof, but without limiting the
obligations of the Borrower under Section 10.5) ratably in accordance with their
respective Commitments (or, if the Commitments have expired or been terminated,
in accordance with the respective principal amounts of outstanding Loans and
Participation Interests of the Lenders), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees) or disbursements of any kind and nature
whatsoever that may at any time (including at any time following the final
payment of all of the obligations of the Borrower hereunder and under the other
Credit Documents) be imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising out of any Credit
Document or the transactions contemplated thereby or any action taken or omitted
by the Agent under any Credit Document; PROVIDED, THAT, no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs or expenses payable by the
Borrower under Section 10.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. The agreements contained
in this Section 9.5 shall survive payment in full of the Loans, the LOC
Obligations and all other amounts payable under the Credit Documents and the
termination of the Commitments hereunder.
9.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender expressly
acknowledges that the Agent has not made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of any Credit Party or any of their respective Affiliates, shall be
deemed to constitute any representation or warranty by the Agent to any Secured
Party. Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under the Credit
Documents. Except for notices, reports and other documents and information
expressly required
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to be furnished to the Lenders by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of any
Credit Party or any of their Affiliates that may come into the possession of the
Agent or any of its Affiliates.
9.7 RESIGNATION OF AGENT. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America having combined capital
and surplus of at least $100,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 9 shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
SECTION 10
MISCELLANEOUS
10.1 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (a) when delivered, (b) when transmitted via telecopy (or other
facsimile device) to the number set forth below, (c) on the Business Day
following the day on which the same has been delivered prepaid to a reputable
national overnight air courier service or (d) on the fifth Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address, in the
case of the Borrower and the Agent, set forth below, and, in the case of the
Lenders, set forth on SCHEDULE 2.1(A), or at such other address as such party
may specify by written notice to the other parties hereto:
if to the Borrower:
Xxxxxx International Inc.
000 Xxxxx Xxxxx
0xx & Xxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy to:
Xxxxxxx, Muething & Xxxxxxx P.L.L.
1800 Provident Tower
Xxx Xxxx 0xx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Fennebresque, Clark, Xxxxxxxx & Hay
NationsBank Corporate Center
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
10.2 RIGHT OF SET-OFF. Upon the occurrence and during the continuance
of an Event of Default, each Lender (and each of its Affiliates) is authorized
at any time and from time to time, to the fullest extent permitted by law,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special, time or demand, provisional or final)
and any other indebtedness at any time held or owing by such Lender (including
branches, agencies or Affiliates of such Lender wherever located) to or for the
credit or the account of any Credit Party against obligations and liabilities of
such Person to such Lender (and its Affiliates) hereunder, under the Notes,
under the other Credit Documents or otherwise, irrespective of whether such
Lender (or Affiliate) shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured. Any such set-off shall be deemed to have been made immediately upon
the occurrence of an Event of Default even though such charge is made or entered
on the books of such Lender subsequent thereto. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender
(or any of its Affiliates); PROVIDED, HOWEVER, that the failure to give such
notice shall not affect the validity of such set-off and application. Any Person
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purchasing a Participation Interest in the Loans and Commitments hereunder
pursuant to Section 2.5(c), 3.13 or 10.3(d) may exercise all rights of setoff
with respect to its Participation Interest as fully as if such Person were a
Lender hereunder. The rights of each Lender (and its Affiliates) under this
Section 10.2 are in addition to (and not in limitation of) any other rights and
remedies (including other rights of set-off) that such Lender may have under
applicable law or otherwise.
10.3 BENEFIT OF AGREEMENT. (a) GENERALLY. 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, that, the Borrower may
not assign or transfer any of its interests and obligations without prior
written consent of all the Lenders (and any such purported assignment or
transfer without such consent shall be void); PROVIDED FURTHER that the rights
of each Lender to transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth in this Section 10.3.
(b) ASSIGNMENTS. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Loans, its Notes and its Commitments);
PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) each such assignment shall be in an amount at least equal
to $5,000,000, except in the case of an assignment to another Lender or
any Affiliate of a Lender or an assignment of all of a Lender's rights
and obligations under this Agreement;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement and the other Credit Documents; and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance, together
with any Notes subject to such assignment and a processing fee of
$2,500 to be paid by the parties to such assignment.
Upon the later of (A) the execution, delivery and acceptance of such Assignment
and Acceptance and (B) the effective date specified in such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of such assignment, have the obligations, rights and benefits of a Lender under
this Agreement and the other Credit Documents and the assigning Lender shall, to
the extent of such assignment, relinquish its rights and be released from its
obligations under this Agreement and the other Credit Documents. Upon the
consummation of any assignment pursuant to this Section 10.3(b), the assignor,
the Agent and the Borrower shall make appropriate arrangements so that, if
required, new promissory notes reflecting such assignment are issued to the
assignor and the assignee in the amount of their respective interests and in
substantially the form of the original Notes (but with notation thereon that
such new Notes are given in substitution for and replacement of the original
Notes or any replacements thereof). If the assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall deliver to
the Borrower and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.10.
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(c) REGISTER. The Agent shall maintain at its address referred to in
SCHEDULE 2.1(A) a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amounts and Interest Periods
of the Loans of each Type owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Upon its receipt of an Assignment and
Acceptance executed by the parties thereto, together with any Notes subject to
such assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in accordance with the
applicable requirements hereof, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the parties thereto.
(d) PARTICIPATIONS. Each Lender may sell participations to one or more
Persons in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and its Loans); PROVIDED,
HOWEVER, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the provisions contained in Sections 3.6, 3.9, 3.10
and 3.11 and the right of set-off contained in Section 10.2 on the same basis as
if it were a Lender, (iv) the Borrower shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to its Loans, its Notes and its
Commitments (except for the obligations to such participant referred to in the
foregoing clause (iii)) and to approve any amendment, modification or waiver of
any provision of this Agreement (other than amendments, modifications or waivers
decreasing the amount of principal of or the rate at which interest is payable
on such Loans or Notes in which such participant is participating, extending any
scheduled principal payment date or scheduled interest payment date in respect
of such Loans or Notes in which such participant is participating, extending
such Commitments in which such participant is participating or, except as
expressly provided in the Credit Documents, releasing all or substantially all
the Collateral from the lien of the Collateral Documents or all or substantially
all the Guarantors from the Guarantee Agreement) (v) subparticipations by any
participant shall be prohibited, and (vi) each such participation shall be in an
amount at least equal to $5,000,000 except in the case of a participation to
another Lender or any Affiliate of a Lender or a participation of all of a
Lender's rights and obligations under this Agreement.
(e) REGULATORY MATTERS. Notwithstanding any other provision set forth
in this Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Lender from
its obligations hereunder.
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(f) CONFIDENTIALITY. Any Lender may furnish any information concerning
any Credit Party or any of its Subsidiaries or other Affiliates in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants), subject, however, to the
provisions of Section 10.14 hereof.
10.4 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Agent or any other Secured Party in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Agent or any other Secured Party and any of the Credit Parties 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 and remedies of the Agent and the
other Secured Parties hereunder and under the other Credit Documents are
cumulative and not exclusive of any rights or remedies which the Agent or any
other Secured Party would otherwise have at law or otherwise. No notice to or
demand on any Credit Party in any case shall entitle the Borrower or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the other
Secured Parties to any other or further action in any circumstances without
notice or demand except where notice or demand is required under the Credit
Documents.
10.5 EXPENSES; INDEMNIFICATION. (a) The Borrower agrees to pay within 5
business days all reasonable costs and expenses of the Agent actually incurred
in connection with the syndication, preparation, execution, delivery,
administration, modification and amendment of this Agreement, the other Credit
Documents and the other documents to be delivered hereunder, including the
reasonable fees and expenses of counsel for the Agent (but specifically
excluding the cost of internal counsel) with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under the Credit
Documents. The Borrower further agrees to pay within five (5) business days
after demand all costs and expenses of the Agent and the Lenders, if any
(including reasonable attorneys' fees and expenses but specifically excluding
the cost of internal counsel) actually incurred in connection with (i) the
enforcement (whether through negotiations, legal proceedings or otherwise) of
the Credit Documents and the other documents to be delivered hereunder and (ii)
any claim in respect of any of the Credit Obligations in any bankruptcy or
insolvency proceeding relating to any Credit Party.
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY") from
and against any and all claims, damages, losses, liabilities, reasonable costs
and expenses (including reasonable attorneys' fees) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including in connection with any
investigation, litigation or proceeding or preparation of defense in connection
therewith but specifically excluding the cost of internal counsel) (i) the
Credit Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans or of the Letters of Credit but
specifically excluding, except as otherwise expressly provided herein, any fees
or expenses by Lender in the participation of any of the Loans or (ii) the
presence or Release of any Materials of Environmental Concern at, under or from
any Property owned, operated or leased by any Credit Party, or the failure by
any Credit Party to comply with any Environmental Law, except
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to the extent such claim, damage, loss, liability, cost or expense results from
or is attributable to such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 10.5(b) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by any Credit Party, its directors, shareholders or creditors or an Indemnified
Party or any other Person or any Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated hereby are consummated. The
Borrower agrees not to assert any claim against the Agent, any Lender, any other
Secured Party, any of their Affiliates or any of their respective directors,
officers, employees, attorneys, agents and advisers, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans or of the
Letters of Credit.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 10.5 shall survive the payment in full of the Loans and all other
amounts payable under this Agreement.
10.6 AMENDMENTS, WAIVERS AND CONSENTS. Neither this Agreement nor any
other Credit Document nor any of the terms hereof or thereof may be amended,
modified or waived, unless such amendment, modification or waiver is in writing
entered into by, or approved in writing by, the Required Lenders and the
Borrower, PROVIDED, THAT, no such amendment, modification or waiver shall:
(a) extend the final maturity of any Loan or the time of payment of any
reimbursement obligation (or any portion thereof) arising from a drawing under a
Letter of Credit, without the prior written consent of each Lender holding a
Participation Interest in any such Letter of Credit;
(b) reduce the rate of interest applicable to any Credit Obligation
(other than as a result of waiving the applicability of any post-default
increase in interest rates), extend the time of payment of any interest thereon
(other than as a result of waiving any mandatory prepayment), reduce any Fees
payable hereunder or extend the time of payment of any Fees hereunder, without
the prior written consent of each Lender to whom such interest, Credit
Obligation or Fee is owed;
(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation (or any portion thereof) arising from a drawing under a
Letter of Credit, without the prior written consent of each Lender holding such
Loan or a Participation interest in such Letter of Credit;
(d) increase the Commitment of a Lender over the amount thereof in
effect or extend the date fixed for the termination of the Commitment of a
Lender (it being understood and agreed that a waiver of any Default or Event of
Default of any mandatory reduction in the Commitments shall not constitute an
increase in the terms of any Commitment of any Lender), without the prior
written consent of such Lender,
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(e) release all or substantially all of the Collateral from the Lien of
the Collateral Documents (except as expressly provided in the Credit Documents),
without the prior written consent of each Lender;
(f) release the Borrower or, except as expressly provided in the Credit
Documents, all or substantially all of the Guarantors from its or their
obligations under the Credit Documents, without the prior written consent of
each Lender;
(g) amend, modify or waive any provision of this Section 10.6 or
Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 8.1(a), 10.2, 10.3, 10.5 or
10.9, without the prior written consent of each Lender;
(h) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders, or otherwise change the percentage of the
Commitments, the percentage of the aggregate unpaid principal amount of the
Notes or the number of Lenders which shall be required for the Lenders or any of
them to take action under any provision of this Agreement or any other Credit
Document, without the prior written consent of each Lender;
(i) consent to the assignment or transfer by the Borrower or any
Guarantor of any of its rights and obligations under or in respect of the Credit
Documents (except as expressly provided in the Credit Documents), without the
prior written consent of each Lender;
(j) increase the total Commitments or otherwise increase the aggregate
principal amount of obligations which are secured by the Collateral, without the
prior written consent of each Lender;
(k) effect any waiver of the conditions to funding any Revolving Loan
or to issuing any Letter of Credit, without the prior written consent of Lenders
having in the aggregate at least a 66-2/3% of the outstanding principal amount
of Revolving Loans, LOC Obligations and Unused Revolving Credit Commitments;
(l) effect any waiver, amendment or modification of Section 7.8(a) with
respect to the subordination provisions of any Indebtedness, without the prior
written consent of each Lender;
(m) amend any provision of Section 9 or otherwise affect any rights or
duties of the Agent, without the prior written consent of the Agent; or
(n) amend any provision of Section 2.2 or otherwise affect any rights
or duties of the Issuing Lender, without the prior written consent of the
Issuing Lender.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding. The various
requirements of this
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Section 10.6 are cumulative. Each Lender and each holder of a Note shall be
bound by any waiver, amendment or modification authorized by this Section 10.6
regardless of whether its Note shall have been marked to make reference thereto,
and any consent by any Lender or holder of a Note pursuant to this Section 10.6
shall bind any Person subsequently acquiring a Note from it, whether or not such
Note shall have been so marked.
10.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart for each of the parties hereto. Delivery by facsimile by
any of the parties hereto of an executed counterpart of this Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered,
but the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability or binding effect of this Agreement.
10.8 HEADINGS. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
10.9 SURVIVAL. All indemnities set forth herein, including in Sections
2.2(i), 3.6, 3.10, 3.11, 9.5 and 10.5 and the undertakings set forth in Section
10.14, shall survive the execution and delivery of this Agreement, the making of
the Loans, the issuance of the Letters of Credit, the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder, and all representations and warranties
made by the Borrower and by the Lenders in Section 10.15 herein shall survive
delivery of the Notes, the making of the Loans hereunder and the issuance of the
Letters of Credit hereunder.
10.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND OTHER
THAN AS EXPRESSLY SET FORTH IN SUCH OTHER CREDIT DOCUMENTS) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN
ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO
SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE,
PUBLICATION NO. 500 AND, AS TO MATTERS NOT GOVERNED BY SUCH UNIFORM CUSTOMS, THE
LAWS OF THE STATE OF NORTH CAROLINA. 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 North Carolina in Mecklenburg County, or of the United States for
the Western District of North Carolina, and, by execution and delivery of this
Agreement, the Borrower hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the nonexclusive jurisdiction of
such courts. 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
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copies thereof by registered or certified mail, postage prepaid, to it at the
address set forth for notices pursuant to Section 10.1, such service to become
effective five (5) days after such mailing. Nothing herein shall affect the
right of the Agent or any Lender to serve process in any other manner permitted
by law or to commence legal proceedings or to otherwise proceed against any
Credit Party 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 subsection (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) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS AND
THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.11 SEVERABILITY. If any provision of any of the Credit Documents is
judicially determined to be illegal, invalid or unenforceable, such provision
shall be fully severable and the remaining provisions shall remain in full force
and effect and shall be construed without giving effect to the illegal, invalid
or unenforceable provisions. In such event, the parties hereto shall endeavor in
good-faith negotiations to replace any such invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
10.12 ENTIRETY. This Agreement, the other Credit Documents and the
Lender Hedging Agreements, if any, represent the entire agreement of the parties
hereto and thereto regarding the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, if any (including any
commitment letters or correspondence) relating to such subject matters. Nothing
in this Agreement or any other Credit Document, expressed or implied, is
intended to confer upon any party (other than the parties hereto and thereto and
the other Secured Parties) any rights, remedies, obligations or liabilities
under or by reason of this Agreement and the other Credit Documents.
10.13 BINDING EFFECT; TERMINATION. (a) This Agreement shall become
effective at such time on or after the Closing Date when it shall have been
executed by the Borrower and the Agent, and the Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Agreement shall be binding upon and inure to
the benefit of the Borrower, the Agent and each Lender and their respective
permitted successors and assigns.
(b) The term of this Agreement shall be until no Loans, LOC Obligations
or any other amounts payable hereunder or under any of the other Credit
Documents shall remain outstanding, no Letters of Credit shall be outstanding,
all of the Credit Obligations have been
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irrevocably satisfied in full and all of the Commitments hereunder shall have
expired or been terminated.
10.14 CONFIDENTIALITY. Each of the Agent and the Lenders (each, a
"LENDING PARTY") agrees, during the term of this Agreement and at all times
thereafter, to keep confidential any information furnished or made available to
it by any Credit Party pursuant to this Agreement that is marked confidential or
that is disclosed pursuant to written instructions from the Credit Party that
the confidentiality of such information must be maintained by the Lending
Parties; PROVIDED that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate of
any Lending Party, or any officer, director, employee, agent or advisor of any
Lending Party or Affiliate of any Lending Party, (b) as required by any law,
rule or regulation, (c) upon the order of any court or administrative agency,
(d) upon the request or demand of any regulatory agency or authority, (e) that
is or becomes available to the public or that is or becomes available to any
Lending Party other than as a result of a disclosure by any Lending Party
prohibited by this Agreement, (f) in connection with any litigation to which
such Lending Party or any of its Affiliates may be a party, (g) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Credit Document, (h) subject to provisions substantially similar to
those contained in this Section 10.14, to any actual or proposed participant or
assignee and (i) to the extent that the Borrower shall have consented in writing
to such disclosure. Nothing set forth in this Section 10.14 shall obligate the
Agent or any Lender to return any materials furnished by the Credit Parties.
10.15 SOURCE OF FUNDS. Each of the Lenders hereby represents and
warrants to the Borrower that at least one of the following statements is an
accurate representation as to the source of funds to be used by such Lender in
connection with the financing hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 10.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
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10.16 CONFLICT. To the extent that there is a conflict or inconsistency
between any provision hereof, on the one hand, and any provision of any other
Credit Document, on the other hand, this Agreement shall control.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
BORROWER: XXXXXX INTERNATIONAL INC.
-------- an Ohio corporation
By:/S/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name:Xxxxxxx X. Xxxxxx
------------------------------------
Title:Treasurer and CFO
-----------------------------------
LENDERS: NATIONSBANK, N. A.,
------- individually in its capacity as a
Lender and in its capacity as Agent and
Issuing Lender
By:/S/ Xxxxxx X. Xxxxx
--------------------------------------
Name:Xxxxxx X. Xxxxx
------------------------------------
Title:Senior VP
-----------------------------------
Applicable Lending Office:
107
