Exhibit (b)
December 23, 2003
VIRBAC S.A.
As Borrower
AND
BNP PARIBAS
As Mandated Arranger
AND
CREDIT AGRICOLE INDOSUEZ
As Co-Arranger
AND
BNP PARIBAS
Acting as Agent
AND
THE LENDERS
LINE OF CREDIT OF
100,000,000 EURO
TABLE OF CONTENTS:
1. Definitions..............................................................3
2. Credit...................................................................7
3. Initial Conditions Precedent.............................................7
4. Terms of Loans...........................................................8
5. Interests................................................................9
6. Commissions and Fees....................................................10
7. Voluntary Cancellation..................................................10
8. Repayment...............................................................11
9. Incidence of New Circumstances..........................................11
10. Market Disruption.......................................................12
11. Payments................................................................12
12. Representations and Warranties..........................................14
13. Undertakings............................................................17
14. Defaults................................................................21
15. Agent...................................................................22
16. Redistribution of Funds.................................................25
17. Obligation of Indemnity.................................................25
18. Duration................................................................25
19. Amendments..............................................................25
20. Transfers and Changes to the Parties....................................26
21. Syndication.............................................................26
22. Notifications...........................................................26
23. Non renunciation........................................................27
24. Independent Provisions..................................................27
25. Confidentiality.........................................................28
26. Governing Law and Enforcement...........................................28
1
EUR 100,000,000 CREDIT FACILITY
Amongst the undersigned:
VIRBAC, SA, with share capital of 10,892,940 Euro, with headquarters located at
0xxx Xxxxxx 2065M LID, 06516 Carros, registered under the number 417 350 311 RCS
Grasse, represented by Xx. Xxxxxx Garaudet, duly authorized by the President of
the Directoire as "Borrower;"
BNP PARIBAS, SA, with share capital of 1,806,343,230 Euro, with headquarters
located at 00 Xxxxxxxxx xxx Xxxxxxxx, 00000, Xxxxx, registered under the number
662 042 449 RCS Paris, represented by Xx. Xxxxxxx Xxxxxxx and Mr. Xxxx-Xxxxxx of
Varax, duly authorized, as "Mandated Arranger;"
CREDIT AGRICOLE INDOSUEZ, SA, with share capital of 1,140,802,623 Euro, with
headquarters located at 0 Xxxx xx Xxxxxxxxx Xxxx Xxxxxxx, 00000 Xxxxx la Defense
cedex, registered under the number 304 187 701 RCS Nanterre, represented by Xx.
Xxxxxxx Moulin and Mr. Eymeric of Kerhor, duly authorized, as "Co-arranger;"
BNP PARIBAS, SA with share capital of 1,806,343,230 Euro, with headquarters
located at 00 Xxxxxxxxx xxx Xxxxxxxx, 00000, Xxxxx, registered under the number
662 042 449 RCS Paris, represented by Xx. Xxxxxxx Xxxxxxx and Mr. Xxxx-Xxxxxx of
Varax, duly authorized, as" Agent;"
AND
The "Lenders" as designated by Appendix 1 (LIST OF LENDERS).
2
The Lenders are willing to put at the disposal of the Borrower, according to the
terms and conditions of the present Agreement, a revolving Line of Credit of up
to 100,000,000 EUR (one hundred million euros), designated to the partial
refinancing of existing indebtedness, as well as to the financing of the general
needs of the Borrower.
IT IS AGREED as follows:
1. Definitions
1.1 Definitions
"AGENT" is designated as BNP Paribas, in the role mandated to them by Article 15
(AGENT).
"UTILISATION REQUEST" means a notice substantially in the form set out in
Appendix 2 (UTILISATION REQUESTS).
"REFERENCE BANKS" means, in relation to EURIBOR, the principal office in Paris
for the following credit establishments: BNP Paribas, Credit Agricole Indosuez,
and the Deposit and Consignment Office, or any other credit establishment as
designated from an agreement between the Borrower, Agent, and the Majority
Lenders, in the case where one or more the above credit establishments can no
longer sufficiently fulfil its duties.
"EQUITY CAPITAL" means the sum of all the following accounts before the
distributions of profit during a financial year: (i) "Authorized Capital", (ii)
Premiums and Reserves", (iii) "Report a Nouveau", (iv) "Variations of
Conversion", (v) "Reserves of consolidation - share of the Group" and (vi)
"Result of the financial year - Share of the Group", such as they appear in the
Last Consolidated Annual Accounts or the Last Consolidated Semi-annual Accounts,
according to the case.
"CASH FLOW" means cash how determined in accordance with this Agreement from
the Last Consolidated Annual Accounts or the Last Consolidated Semi-annual
Accounts according to the case.
"EVENT OF DEFAULT" means any event or circumstance specified as such in Article
14 (EVENT OF DEFAULT).
"POTENTIAL EVENT OF DEFAULT" means any event susceptible to constitute and Event
of Default, after the reception of notification justifying the event to be
potentially in concordance with the circumstances specified in Article 14 (EVENT
OF DEFAULT).
"CERTIFICATE OF FINANCIAL RATIOS " indicates the Certificates of Financial
Rations given by the Borrower in accordance with the Paragraph 13.1.2
(ACCOUNTS).
"CHANGE OF CONTROL " means, throughout all Lines of Credit, (i) an action by the
Dick Family, which for any reason would cause them to hold 50% or less of voting
rights in the Borrower or (ii) any action by the Dick Family which result in
loss of control of the Borrower, in compliance with Article L.233-3 of the CODE
DE COMMERCE.
"CHANGE OF REGULATION" indicates
(a) the entry after the Signature Date, of a legislative
or lawful provision, or of a new directive or
recommendation;
(b) a modification made, after the Signature Date, to any
legislative or lawful provision, or with any
directive or recommendation or in the interpretation
which is made by it by any proper authority; or
(c) any recommendation or instruction emanating, after
the Signature Date, from a central bank (including
the European Central Bank) or from a tax authority,
monetarist or other proper authority or of any
association or professional organization whose Lender
is member, and in particular any recommendation or
instruction referring to the obligatory constitution
of reserves or deposits, with the maintenance of a
minimum level of own capital stocks, in the
conformity of tests of solvency or concerning the
methods which a Lender assigns its own capital stocks
to its engagements, such as any change of the
interpretation of such recommendations or
instructions.
3
"AGREEMENT" designates the present contract including all Appendices and future
established Amendments.
"INTEREST PAYMENT DATE" means the last day of each Interest Period, in
accordance with the stipulations of Paragraph 11.7 (BUSINESS DAY).
"DATE OF REDUCTION" means the dates indicated in the table in Paragraph 2.3
(REDUCTION OF THE LINE OF CREDIT).
"SIGNATURE DATE" indicates the date at which this present Agreement will be
signed.
"DATE OF DRAWING" indicates the day at which the Drawings will be drawn
presented in each Utilisation Request.
"TEST DATE" indicates the dates at which the Financial Ratios must be met such
as indicated in Paragraph 13.1.4 (FINANCIAL Obligations).
"TERMINATION DATE" is designated as the seventh (7th) anniversary after the
Signature Date.
"LAST ANNUAL CONSOLIDATED ACCOUNTS" means all the annual accounts (balance
sheets, income statement and appendices) consolidated by the Borrower for the
last closed financial year, audited and certified by the auditors.
"LAST SEMI-ANNUAL CONSOLIDATED ACCOUNTS" means all the consolidated accounts
audited by the Borrower relative to the last semi-annual period.
"FINANCIAL DEBT" indicates, for any Member of the Group, (i) the sum of the
loans financial debts, priority and subordinated, due in at least one year or
more, owing to or contracted with banks, credit institutions and other financial
creditors by the Members of the Group (including factoring with recourse,
transfers of credits carried out in accordance with the provisions of Articles
L.313-23 and L.313-35 of the Code monetaire et financier, the securitization and
share capital of the credits-bails nonreprocessed in the group accounts of the
Borrower and the financial hirings with option to buy with the exception of
computer equipment), (ii) any obligation of payment under bills of exchanges,
cash vouchers or other equivalent instruments issued for the account of a Member
of the Group, (ii) any obligation of payment resulting from a long term
financial instrument within the context of article L. 211-1 II off the Code
monetaire et financier, (iv) any obligation of the types of items (i) through
(iii) which would fall on a third party and which payment was guaranteed, in the
capacity of guarantor or client, by the Borrower and/or by any Member of the
Group with the maximum amount of the guaranteed amount or, of valuable security,
from the quota corresponding to the monetary value of the affected good under
such a guarantee.
"FIELD OF ACTIVITY" indicates the research, manufacture, purchase and sale of
products in relation to the medical field, and in particular of products of
veterinary use, dietetics, cosmetic and related, as well as the search and the
manufacture for raw materials of biological or chemical origin.
"EONIA" indicates that for any considered day, the European Overnight Index
Average, the interbank rate from day to day of any deposits, in Euros, and
published on page 247 of Telerate (or on such other page or service) around
seven am (7h00) (Brussels time) the following TARGET Business Day.
In case of the unavailability of these rates, the EONIA will be determined on
the base of the annual rate at which the deposits, in euros, from day to day for
the same amount as that of the payable sum concerned, are offered on the
interbank market by the first rank banks to the Banks of Reference. Each Bank of
Reference will have to indicate this rate at the request of the Agent. The rate
indicated will be the rate raised around eleven hours (11h00) (Paris time) the
following TARGET Business Day.
"BORROWER" means Virbac, S.A. unless it has ceased to be a Borrower in
accordance with Article 20 (CHANGES TO THE OBLIGOR).
4
"OUTSTANDING DEBT" indicates at a given date, the sum determined by the Agent
equal to the sum of (i) of the total amounts, in euros, of the non-reimbursed
Drawings and (ii) the total amount, in euros, of all the requested Drawings, and
not yet given to the Borrower at this date (given that if a Drawing occurred the
same day as a reimbursement, the outstanding debt would be the excess of the
Drawing amount over the amount of the reimbursement).
"EXISTING DEBT" indicates, that on November 30, 2003, the Financial Debts of the
Borrower and its Subsidiaries, of which the amounts are indicated in Appendix 3.
"COMMITMENT" means the amount of each Loan of each Lender, in accordance with
Appendix 1.
"AVAILABLE COMMITMENT" means at any moment, the amount in euros of the present
Commitment when reducing the Total Commitment by the outstanding debt.
"TOTAL COMMITMENTS" means the aggregate of all Commitments, 100,000,000 EURO
(one hundred million euros) at the Signature Date this Agreement.
"EURIBOR" means, in relation to any Loan in Euros, the applicable Screen Rate in
accordance with page 248 of Telerate at or around 11 am (Brussels time) the
second TARGET Business Day which precedes the first day of the Interest Period,
at which the deposits, in euros, are offered for a duration equivalent to the
concerned Interest Period.
In case of the unavailability of the EURIBOR, the conditions stipulated in
Article 10 (MARKET DISRUPTION) will be applicable. In the event that the
Interest Period does not correspond to a full month, the EURIBOR will be
determined by linear interpolation for a duration equal to a full month.
"EURO" or "EURO" or "EUR" means the currency created by the Treaty of the
European Union which took effect on January 1, 1999, establishing the currency
for the European Union.
"MATERIAL ADVERSE EVENT" means the discovery of an event or the incidence of an
event, in particular of a legislative, commercial, or financial nature, likely
(i) to have an unfavourable significant effect on the activity, the sales
turnover, credits, prospects or the legal or financial situation of the
Borrower, one of its Principal Subsidiary companies or the Group taken as a
whole; or (ii) to affect the ability of the Borrower to fulfil its obligations
hereunder.
"DICK FAMILY" indicates, together or separately, Xxx Xxxxxxxx Xxxx, and her four
children, Xxxx-Xxxxxx Xxxx, Xxxxx-Xxxxxx Xxxx, Xxxxxxx Xxxx and Xxxxxxxx Xxxx,
and any company of which they hold together or separately more than fifty
percent (50%) of the capital and the voting rights.
"SUBSIDIARY" indicates any existing or future entity, whose Borrower holds,
directly or indirectly, fifty percent (50%), or more, capital or voting rights.
"PRINCIPAL SUBSIDIARY" means (a) any Subsidiary which: (i) the amount of sales
represents 5% (five percent) or more of the number of consolidated sales of the
Group such as is shown in the Last Consolidated Annual Accounts; or (ii) the
turnover represents five percent (5%) or more of the consolidated turnover of
the Group such as is shown in the Last Consolidated Annual Accounts and (b) the
subsidiary companies of the Borrower designated in Appendix 7.1.
"CAPITAL STOCKS" indicates the sum (a) of the following entities (i) "Other
Capital stocks" and (ii) "Minority Interests" such as they appear in the Last
Consolidated Annual Accounts or the Last Consolidated Semi-annual Accounts, and
(b) of the Stockholders' equity.
"GROUP" designates the Borrower and its Subsidiary companies and "MEMBER OF THE
GROUP" designates the Borrower or one of its Subsidiary companies.
"BUSINESS DAY" indicates any whole day (except for Saturday and of Sunday) where
operations in Euros are carried out on the interbank market in Paris and during
which credit institutions are normally opened in Paris and which is also a
TARGET Business Day.
5
"TARGET BUSINESS DAY" indicates any whole day where the system "Trans-European
Automated Real-Time Gross Settlement Express Transfer" (TARGET) is open.
"MAJORITY LENDERS" designates one or more Lenders whose sum of Engagements
represents more than sixty six comma sixty six percent (66.66%) of the Total
Engagement.
"APPLICABLE MARGIN" means the applicable margin used for the calculation of
interests for the Line of Credit, in accordance with the stipulations of
Paragraph 5.3 (ADJUSTMENT OF THE APPLICABLE MARGIN).
"LINE OF CREDIT" indicates the opening of revolving credit of an initial amount
of 100,000,000 EUR (hundred million euros) granted to the Borrower by the
Lenders usable in accordance with the Utilisation Request.
"SYNDICATION PERIOD" indicates the two (2) month period after the Signature
Date.
"INTEREST PERIOD" means, in relation to a Loan, each period determined in
accordance with Article 5 (INTEREST PERIODS) and, in relation to an Unpaid Sum,
each period determined in accordance with Paragraph 5.6 (DEFAULT INTEREST).
"LENDERS" indicates BNP Paribas and Agricultural Credit Indosuez, or, any
assignee of the rights and obligations under this Contract having acquired
position of Lender after the Signature Date in accordance with the stipulations
of Article 20 (TRANSFER) of this Contract.
"COLLECTIVE PROCEEDINGS" indicates proceedings (i) to suspend all or a
substantial part of a party's payments or an announcement of its intention to
suspend all or a substantial part of its payments, or to declare a moratorium in
relation to its Financial Debts, (ii) to undertake negotiations with one or
several of its creditors in order to spread out the payment or the expiries
relating to a substantial part of its Financial Debts, (iii) to recognize before
a court a state of suspension of payments, (iv) to ask for the designation of a
conciliator within the allowances of Articles L.612-1 L.612-4, L.712-3 and
L.611-1 with L.611-6 of the Code de Commerce, (v) to be in a state of suspension
of the payments within the allowances of Article L.621-1 Code de Commerce and
jurisprudence in force, (vi) to be the subject of a legal judgement of
rectification, (vii) to be the subject of a judgement of bankruptcy pursuant to
Articles L.620- in L.628-3 of the Code du commerce, or (viii) in regard to in
particular any Subsidiary company registered out of France, to be the subject of
a procedure similar to the procedures aimed at in items (i) to (vii) above.
"FINANCIAL RATIOS" designates the Ratio of Gearing and Ratio of Leverage in
accordance to Paragraph 13.1.4 (FINANCIAL OBLIGATIONS).
"RATIO OF GEARING" has the definition which is given to it in Paragraph 13.1.4
(FINANCIAL OBLIGATIONS).
"RATIO OF LEVERAGE" has the definition which is given to it in Paragraph 13.1.4
(FINANCIAL OBLIGATIONS).
"FINANCIAL SECURITIES" indicates any financial security, namely any guarantee or
privilege, used as liability for present assets guaranteeing the execution of
any obligation contracted by Borrower or Subsidiary company (or by any third
whose Borrower or a Subsidiary company would guarantee the execution of the
obligations) or for the transfer of property as guarantee of any present assets
pertaining to the Borrower or a Subsidiary company in order to guarantee the
execution of any obligation contracted by the Borrower or a Subsidiary company
or a third party.
"EXISTING SECURITY INTEREST" means any Financial Security existing on the
credits, incomes or rights of the Borrower and the Subsidiary companies as well
as the guarantees, downstreams and guarantees granted by those at the Signature
Date, as described by Appendix 4 hereafter.
"DRAWING" indicates any use by the Borrower of the Line of Credit or, according
to the context, the amount not refunded of any Drawing carried out by the
Borrower.
"U.S.D."or "DOLLAR" indicates the currency used in the United States of America.
6
"VIRBAC CORP" indicates Virbac Corporation, a company of the United States of
America, whose registered office is located at 0000 Xxxxxxx Xxxxxxxxx, Xxxx
Xxxxx, Xxxxx, Xxx Xxxxxx Xxxxxx (US).
With the exception of any contrary stipulations, all references to time are
given in Paris time, and the references to Articles, Paragraphs and Appendices
are merely a guide for this Agreement.
2. Credit
2.1 Line of Credit
The Lenders extend to the Borrower from the Date of the Signature until the date
of full repayment, a line of credit of a maximum global amount of EUR
100,000,000 (one hundred million euros) usable in accordance with this
Agreement.
2.2 Purpose
This Line of Credit is to be used for the partial refinancing of Financial
Indebtedness as well as for the financing of investments for the general needs
of the Borrower. None of the Agent, the Mandated Arranger, the Co-Arranger, or
the Lenders is bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement.
2.3 Reductions to the Line of Credit
The amount of the line of credit provided by Paragraph 2.1 (LINE OF CREDIT),
will be automatically reduced as follows upon each Date of Reduction:
-------------------------------------------------------------------------------
REDUCTION DATE AMOUNT OF REDUCTION AMOUNT OF THE TOTAL COMMITMENT
(AFTER THE REDUCTION HOWEVER,
BEFORE ALL ANTICIPATED
RENUNCIATIONS)
-------------------------------------------------------------------------------
December 23, 2007 10,000,000 EURO 90,000,000 EURO
-------------------------------------------------------------------------------
December 23, 2008 10,000,000 EURO 80,000,000 EURO
-------------------------------------------------------------------------------
December 23, 2009 10,000,000 EURO 70,000,000 EURO
-------------------------------------------------------------------------------
December 23, 2010 70,000,000 EURO 0 EURO
-------------------------------------------------------------------------------
2.4 Participation of the Lenders
Conforming to the terms of this Agreement and under the conditions which are
stipulated herein, each Lender engages itself individually to participate, in
all extensions of credit pro rata in proportion to its Commitment. A default in
participation of one or more Lenders in any of the Drawings of Credit does not
in any case free any of the other Lenders, or the Borrower (for that which
concerns its obligations to the Lenders) from its own obligations.
2.5 Finance Parties' Rights and Obligations
2.5.1 Failure by a Party to perform its obligations under
this Agreement does not affect the obligations of any other Party under this
Agreement. No Party is responsible for the obligations of any other Party under
this Agreement.
2.5.2 The rights of each Party under or in connection with
this Agreement are separate and independent and any debt arising under this
Agreement to a Finance Party from another Party shall be a separate and
independent debt.
2.5.3 A Finance Party may, except as otherwise stated in this
Agreement, separately enforce its rights under this Agreement.
3. Initial Conditions Precedent
3.1 Preliminary Conditions at the Signature Date
7
No Borrower may deliver a Utilisation Request unless the Agent has received all
of the documents and other evidence listed in Appendix 5 (INITIAL CONDITIONS
PRECEDENT) in form and substance satisfactory to the Agent. The Agent shall
notify the Borrower and the Lenders promptly upon being so satisfied.
3.2 Further Conditions Precedent
The obligations of the Lenders pertaining to all Drawings are subject to the
conditions stipulated by this Agreement and specifically to the following
conditions which must be satisfied at both the date of a Utilisation Request as
well as date of Utilisation:
3.2.1 no Event of Default or Potential Event of Default is
continuing or would result from the proposed Loan and, in the case of any other
Loan, no Event of Default or Potential Event of Default is continuing or would
result from the proposed Loan;
3.2.2 that the outstanding debt does not at any time exceed
the amount of the Total Commitment, taking into account the maximum amount of
the Line of Credit subject to any reductions as discussed in Paragraph
2.3 (REDUCTIONS TO THE LINE OF CREDIT);
3.2.3 that not more than ten (10) Requests may be made on the
same day;
3.2.4 that the representations made and the warranties given
by Article 12 (REPRESENTATIONS AND WARRANTIES) will remain exact and that the
Commitments in accordance with Article 13 (COMMITMENTS) will be respected;
3.2.5 that the terms of the request are in accordance with
Article 4 (TERMS OF LOANS);
3.2.6 that the commissions and charges payable at the date of
Drawing, in accordance with Article 6 (COMMISSIONS AND CHARGES) have been paid.
4. Terms of Loans
All borrowings shall be made for an Interest Period in Euros. The terms
applicable to each Drawing are as follows:
4.1 Utilisation Request
Under the terms and conditions of this Agreement as well as the preceding
conditions in Article 3 (INITIAL CONDITIONS PRECEDENT), a loan will be put at
the disposition of the Borrower after the Agent receives the Utilisation
Request, in the form of Appendix 2 (UTILISATION REQUEST), at the latest by 11:00
am Paris time, 4 (four) Business Days before the Date of the Drawing, which
should be a Business Day.
All Utilisation Requests will irrevocably hold the Borrower to the terms of this
Agreement.
4.2 Amount of Each Loan
The amount of each Loan will be a minimum sum of 5,000,000 EURO (5 million
euros) and always as a whole number multiple of 1,000,000 EURO (a million
euros).
4.3 Duration of the Loan
4.3.1 Each Loan shall be made for an Interest Period of
either one (1), three (3), or six (6) months. All completed Drawings during the
Syndication Period shall have a maximum duration of one (1) month and expiration
date which shall not be later than the last day of the Syndication Period.
4.3.2 No Drawing can have an expiration date after the Final
Day of Repayment.
4.3.3 Each Drawing should terminate the last day of the
Interest Period and at the latest must terminate by the Final Day of Repayment.
4.4 Notification to the Lenders
8
The Agent will notify the Lenders of the terms of the Utilisation Request at
latest by 11:00 am, Paris Time, the Business Day following the date of receipt
of the Utilisation Request. Furthermore, under the stipulations of Article 3
(INITIAL CONDITIONS PRECEDENT), each Lender shall provide to the Agent, its
proportion of the Drawing, calculated pro-rata to its Commitments by the
established payment date for each Loan and in accordance with Article 11
(PAYMENTS).
5. Interests
5.1 Interest Rate
The applicable interest rate of each Drawing will be determined by the Agent,
definitively and without recourse from either Lenders or the Borrower (save in
case of manifest error) and will be equal to the EURIBOR rate calculated plus
the Applicable Margin at the Date of the Drawing.
Interest will be calculated for an exact number of days based upon a year of 360
(three hundred and sixty) days.
5.2 Notification of the Interest Rate
The Agent shall promptly notify the Lenders and the relevant Borrower of the
determination of an Interest Rate under this Agreement.
5.3 Adjustment of the Applicable Margin
The Applicable Margin shall be determined by reference to the Ratio of Leverage
shown in the most recent Certificate of Financial Ratios delivered by the
Borrower to the Agent with its most recent Annual Consolidated Accounts or
Semi-Annual Consolidated Accounts.
5.3.1 If at the end of the Interest Period, the ratios are
not met, the Agent will recalculate the Applicable Margin, beginning the day
after which the Agent had received the Certificate of Financial Ratios. The
Agent will then notify all Parties of the new Applicable Margin. Should the
ratios subsequently be met, the Applicable Margin will be recalculated using the
formula provided in Paragraph 5.3.1.
5.3.2 With the exception of the stipulations in Article 5.3
(ADJUSTMENT TO THE APPLICABLE MARGIN), the maximum Applicable Margin will be in
effect each time that an Event of Default or Event of Potential Default arises.
This Applicable Margin will remain in effect until the Borrower has demonstrated
to the Agent that it has remedied the Event of Default, under the approval of
the Majority of Lenders.
5.4 Payment
The applicable interests on a Drawing will be paid by the Borrower in Euros at
each Date of Payment of Drawing Interest to the Agent for the account of the
Lenders.
5.5 Effective Global Rate (Taux effectif globale)
The parties acknowledge that by virtue of certain characteristics of the
Agreement, notably the right of the Borrower to choose the duration of the
Interest Periods and of the variable nature of the EURIBOR rate, it is not
possible, at the Signature Date, to determine precisely the effective global
rate of the Drawings in accordance with Article L.313-4 ET SEQ. R 313-1 and
R313-2 of the CODE DE LA CONSOMMATION. However, the Borrower acknowledges that
it has received from the Agent a letter containing an indicative calculation of
the Effective Global Rate based on examples calculated on assumptions as to the
rate of the period and the duration of the period set out in the letter. The
Parties acknowledge that that letter forms part of this Agreement.
5.6 Default Interest
If a Borrower fails to pay any amount payable by it under this Agreement by the
due date, interest shall accrue to the fullest extent permitted by law on the
overdue amount from the due date up to the date of
9
actual payment (both before and after judgement) at a rate determined pursuant
to this Paragraph. The rate of applicable interest will be the sum of the
following rates as determined by the Agent: (i) the EONIA rate, (ii) two percent
(2%) per year, and (iii) the Applicable Margin.
Default interest will be (i) calculated based upon the exact number of accrued
days (with the year calculated as consisting of three hundred and sixty (360)
days), (ii) paid at the first demand of the Agent and, (iii) annually compounded
in accordance with Article 1154 of the Civil Code (Code civil).
The collection of default interest due for payment will not in any fashion
constitute the grant of delay in any other payments and Paragraph 14.1 (EVENT OF
DEFAULT) will remain completely applicable.
6. Commissions and Fees
6.1 Commission due to the Arranger
The Borrower will pay to the Mandated Arranger at the Signature Date, a
commission of which the amount will be determined by a separate act between the
Mandated Arranger and the Borrower.
6.2 Utilisation Commission
The Borrower will pay to the Agent starting from the Signature Date and ending
the Date of the Final Repayment, a Utilisation Commission, calculated on a day
to day basis on the outstanding debt, at a specified rate.
This commission will be calculated by the Agent on the base of the exact number
of days in the concerned period, based upon a year of three hundred sixty (360)
days. The commission will be due on a quarterly basis until the termination
date.
6.3 Non-Utilisation Commission
The Borrower will be pay to the Agent starting from the Signature Date and
lasting until the Final Date of Repayment, a non-utilisation commission,
calculated on a day to day basis on the amount of the Available Commitment at
the annual rate equal to a specified percentage of the Applicable Margin.
The Non-Utilisation Commission will be calculated by the Agent based upon the
number of exact days of the period, with a full year consisting of three hundred
and sixty (360) days. The commission will be due on a quarterly basis until the
termination date.
6.4 Fees
The Borrower will reimburse the Agent and the Lenders, upon presentation of
appropriate justification by the Agent, all the reasonable fees incurred by the
Agent in exercising or enforcing its rights in accordance with this Agreement.
6.5 Duties and Taxes
The Borrower will pay all stamp duties and/or registration fees as well as all
other duties in relation to this Agreement, and must compensate the Lenders for
all losses or costs which result from a late payment or failure of payment.
6.6 Added Value Tax (VAT)
All the commissions and fees collected pursuant to this Article 6 (COMMISSIONS
AND FEES) are deemed to be exclusive of any VAT which is chargeable on such
payments. If for any reason, the VAT was due or should be applicable to the
commissions and fees, it will be paid by the Borrower at the rate in force.
7. Voluntary Cancellation
The Company may, if it gives the Agent not less than five (5) Business Days (or
such shorter period as the Majority Lenders may agree) prior notice, cancel the
whole or any part, being a minimum amount of 5,000,000 EURO (five million euros)
[and always a whole number multiple of 1,000,000 (one million
10
euros)]. Any cancellation under this Article 7 (VOLUNTARY CANCELLATION) shall
reduce the Commitments of the Lenders rateably under the Facility. In addition
each cancellation will be irrevocable. The Non-Utilisation Commission in
accordance with Paragraph 6.3 (NON-UTILISATION COMMISSION) will remain intact
and effective for the trimester in which cancellation occurs.
8. Repayment
The Borrower will repay the entirety of each Drawing on the last day of the
Interest Period, applicable to each said Drawing. The amounts repaid, subject to
the terms of this Agreement, notably those of Paragraph 2.3 (REDUCTION OF THE
LINE OF CREDIT), may be reborrowed. Overall, the entirety of the Drawings should
be repaid by the Final Date of Repayment.
9. Incidence of New Circumstances
9.1 Base Commitment of the Lenders
The obligatory payment of the Lenders, under this Agreement, are subject to all
the credit, fiscal, monetary and professional regulations of which are
applicable at the Signature Date.
9.2 Illegality
If it becomes unlawful in any applicable jurisdiction for a Lender to perform
any of its obligations under this Agreement:
9.2.1 The Agent after notification from the relevant Lender
shall promptly notify the Borrower;
9.2.2 The Agent and the Borrower will consult each other and
try to find the best solution to the problem. If such a solution cannot be
found, each concerned Lender will explore the possibility of placing its
payments in another jurisdiction or ceding its rights deriving from the
Agreement to another financial establishment. It should be noted that the
Lenders concerned will not be obligated to take any measure if this measure
would have or could have, in its opinion, negative effects on its activities or
its own situation, or if this will reduce the yield of its participation or
create another supplementary expense;
9.2.3 In the absence of acceptable solutions for the
concerned parties, the Borrower will reimburse (in all measures permissible by
law) in at most thirty (30) days, in accordance with Paragraph 9.2.1, the
entirety of the participations of the Lenders as well as paying any eventual
cost of reinvestment of the funds;
9.2.4 The entirety of the Commitments of the Lenders for
which no solution was found will be terminated and the outstanding obligations
due to the of the Lenders concerned shall be payable, as well as the Utilisation
Commission and the Non-Utilisation Commission, in accordance to Article 6
(COMMISSIONS AND FEES) during the quarter in progress. This sum will calculated
on a prorata basis.
9.3 Increase in Costs
Should there be any of the following changes in cost:
(a) a reduction or limitation in the rate of return to any Lender under
this Agreement;
(b) an additional or increased cost of performance of its obligations
under this Agreement; or
(c) any tax is assessed on amounts due under this Agreement;
the measures in accordance to Paragraph 9.4 (MEASURES) will apply.
11
9.4 Measures
In case of one of the events described in Paragraph 9.3 (INCREASE IN COSTS):
9.4.1 The Lender concerned should immediately advise the
Agent by indicating the amount of the increase or of the reduction and the
amount of the corresponding indemnity;
9.4.2 The Agent will notify to the Borrower of this with the
least possible delay;
9.4.3 The Lender concerned will seek for, during a maximum of
thirty (30) days from the date of the notice, given by Paragraph 9.4.1, a
solution that will minimize the negative consequences of this event. The
solutions must not affect the interests of the Lender concerned. Furthermore,
amongst these solutions figures notably the possibility of placing its payments
in another jurisdiction or ceding its rights and obligations under this
Agreement to another financial establishment.
9.4.4 In the absence of a satisfactory solution for the
Lender concerned:
(a) The Borrower will be responsible for the amount upon presentation of
proper justification of the said increase or the said reduction,
justified and transmitted by a person authorized by the Lender
concerned; or
(b) The Borrower will have the right to reimburse at the date indicated in
its notification, the entirety of such Lenders sums which would be due
to it, in accordance with Paragraph 9.3 (INCREASE OF COSTS).
Furthermore, the Borrower will reimburse the Lender after the
presentation of proper justification, the eventual cost of
reinvestment of the funds at the date of anticipated repayment.
10. Market Disruption
A Market Disruption occurs if on a date of determination:
(a) The Agent receives notifications from a Lender or Lenders, whose
participations in a Loan exceed 66.66% (sixty-six point sixty-six
percent) of that Loan, that EURIBOR does not reflect its financing
costs; or
(b) The Agent receives notification of a rate of less than two Banks of
Reference.
In each of these cases, the Drawing concerned (the "DRAWING CONCERNED") will be
made for an Interest Period of thirty (30) days and the Agent, in consultation
with the Lenders and the Borrower will negotiate in order to agree to (i) an
Interest Rate, satisfactory to both the Lenders and the Borrower or (ii) the
acceptable terms for the Lenders and for the Borrower permitting them to finance
the Drawing Concerned.
In the absence of determining a satisfactory Interest Rate, or if there is a
delay of more than thirty (30) days after the aforementioned notification to the
Agent, the Agent will determine one or two Interest Rates applicable to the
participation of each Lender for the Drawing Concerned, and inform the Borrower
of this. The said Interest Rate will be applicable between all the Parties
beginning from the aforesaid Interest Period of thirty (30) days and will
correspond to the cost of financing the participation of each Lender in the
Drawing Concerned for the said Interest Period, as justified by the Lender. The
Borrower will pay to the Agent for the account of the Lenders interests on the
amount of participation of each of the Lenders for the Drawing Concerned at the
determined rate from the Applicable Margin. These interests shall be paid on the
last day of the aforementioned Interest Period of thirty (30) days.
All agreements between the Borrower and the Agent (with the approval of the
Majority Lenders) in the thirty (30) days following the date of the
aforementioned notification concerning the EURIBOR, will be completely
applicable, from the beginning and throughout the duration of this agreed upon
Interest Period.
11. Payments
11.1 Payments to the Borrower
All the payments to the Borrower pursuant to this Agreement will be made by the
Lenders concerned in the available funds the same day, ten (10) hours before the
Day of Payment, to the account of the Agent, at the financial institution which
the Agent will have designated beforehand.
12
The Agent will transfer the money to the Borrower's account with the Agent only
after it has verified that the entire sum has been successfully received into
its account.
11.2 Payments to the Lenders
All payments to the Lenders shall be made by the Borrower to the Agent for the
account of the Lenders, ten (10) hours before the Day of Payment, in all
available funds the same day. The Agent must designate its account to the
Borrower at least three (3) Business Days before the date of the concerned
payment.
The Agent will transfer the money to the Lenders only after it has verified that
that the entire sum has been successfully received into its account.
11.3 Final Payments
All payments as stipulated by this Agreement will be made in any available funds
and transferred at the pre-established date for the amount and on the date of
the said payment, and not anytime afterwards.
11.4 Taxes
The payment of the entire sum due from the Borrower to the Lenders pursuant to
this Agreement will be made free from all tax deductions that may occur now and
in the future. In a case where the payment of Interests or any other revenue
would cause a tax deduction or withholding tax, the Borrower shall agree, in
accordance with all legislative provisions, that the Lenders concerned will
receive the sum which they would have received in the absence of this deduction
or withholding. If this said legislature does not permit such an increase, the
Lenders concerned and the Borrower will consult each other during a period of up
to thirty (30) days to seek a solution acceptable to each Party concerned. If
agreement is not reached during this period, the Commitment of the Lenders
concerned will be terminated, the liabilities of the Lenders concerned will be
payable, and the Borrower will compensate the Lenders concerned for all cost of
reinvestment of the funds pertaining to this anticipated refinancing in
accordance with Article 17 (OBLIGATION OF INDEMNITY).
11.5 Set Offs
All payments to be made by the Borrower under this Agreement shall be calculated
and made without (and free and clear of any deduction for) set-off or counter
claim. A Lender may set off any matured obligation due from the Borrower under
this Agreement against any matured obligation owed by that Lender to that
Borrower, regardless of the place of payment, booking branch, or type of
payment.
11.6 Accounting
Each of the Lenders, will keep an accurate record of all its accounts including
all interests, commissions, and all other amounts due, which will be provided to
the Agent. Should there be any discrepancy between the accounts of the Agent and
the accounts of the Lender, the Agent's records will override the Lender's.
11.7 Business Days
All payments should be made on a Business Day. In case a payment would fall on a
date which is not a Business Day, the said payment will be made for the
following Business Day, as long as that new day is not in the next calendar
month or after the Date of Final Payment. If this does occur, the payment will
be due the preceding Business Day.
11.8 Partial Payments
If any payment received from the Borrower or any sum as a result of a forced
policy implementation of this Agreement is less than the amount due, the Agent
will apply the available sum as follows:
(a) towards the fees, charges and commissions due to the
Agent;
(b) towards the fees, charges, and commissions due to the
Lenders which had been mentioned beforehand to the
Agent;
13
(c) towards the payable interest as discussed in
Paragraph 5.6 (DEFAULT INTEREST);
(d) towards the sums due in accordance with Paragraph 6.5
(TAXES) and to Article 9 (INCIDENCE OF NEW
CIRCUMSTANCES);
(e) towards the interest and all other sums which those
in (a) through (d) above which do not otherwise
constitute a principal amount;
(f) towards the sum of any other principal amount payable
in respect of the Line of Credit.
11.9 Currency of Payment
If a sum of the Borrower with a Lender (the "LENDER CONCERNED") or by the Lender
Concerned with the Borrower under the Contract in a given currency (the
"CONTRACTUAL CURRENCY") has been suddenly converted into another currency (the
"CURRENCY OF THE PAYMENT"), in particular due to any decision of court, the
Borrower or the Lender Concerned will pay to the Lender Concerned or to the
Borrower, according to the case, the positive difference between the sum due
under this Agreement and the exchange-value in the Contractual Currency of the
sum received in the Currency of Payment. The applicable rate of exchange to
calculate the aforementioned exchange-value will be the rate on the first date,
after receipt of the payment concerned, for which the recipient of the payment
is able to obtain the Contractual Currency in exchange for the Currency of the
Payment.
This Paragraph 11.9 (CURRENCY OF PAYMENT) does not constitute an exemption from
the obligation for the Borrower to carry out Drawings in Euros in accordance
with Article 4 (TERMS OF DRAWINGS) and does not limit in any manner the
stipulations of Paragraph 11.3 (FINAL PAYMENTS).
12. Representations and Warranties
12.1 The Borrower acknowledges that each Lender has contracted it with and
is participating in the extension of credit to it on the basis of the
following representations and warranties.
12.1.1 Organization and Capacity
(a) The Borrower and its Subsidiaries are each corporations, duly
incorporated and validly existing under the law of its
jurisdiction of incorporation. The Borrower and each of its
Subsidiaries has the power to own its assets and carry on its
business as it is being conducted.
(b) To the knowledge of the Borrower, all authorisations,
licences, and agreements necessary to the Borrower and its
Subsidiaries have been obtained and are up to date.
Furthermore, there is no possibility of retractions and/or
modifications of these authorisations, licenses, and
agreements.
12.1.2 Authority
The Borrower has taken all necessary action to authorise its entry into,
performance and delivery of this Agreement and such authorisations have not been
revoked.
12.1.3 Absence of Conflict
The entry into, performance, and the transactions contemplated by this Agreement
does not and will not conflict with:
(a) its or any of its Subsidiaries' constitutional documents or any law or
regulation applicable to them; or
(b) any agreement or instrument binding upon it or any of its
Subsidiaries' assets.
14
12.1.4 Binding Obligations
Each of the commitments of the Borrower are and will remain valid and will be
enforceable in accordance with each one of its terms.
This Agreement does not require, according to the statutes and the regulation
applicable to the Borrower, any authorization or registration from any
governmental authority and requires no information or preliminary consultation
which would not have already previously been obtained.
12.1.5 No Proceedings Pending or Threatening
With the exception of pending litigation disclosed to the Lenders, to the
knowledge of the Borrower, there does not exist any litigation, arbitration, or
administrative proceedings before any court, arbitral body or agency against the
Borrower or any of its Subsidiaries, nor has any such proceeding been threatened
in writing which, individually or in the aggregate, seeks damages of a sum of
more than 200,000 EURO (two hundred thousand euros) against the Members of the
Group or the Group itself or (ii) seeks to prevent the execution or performance
of this Agreement.
12.1.6 Accuracy of Information
(a) All the information (which includes all the financial information and
all compatible documents) concerning the Group furnished to the Agent
or to the Lenders before the Date of the Signature as well as during
the period validated by this Agreement has been prepared with care and
attention. At the date of delivery of this information, with the
exception of the corporate accounts of Virbac Corp for the financial
years of 2001, 2002 and 2003, all information is accurate, exact and
conforms to the regulations which are applicable to them and to the
knowledge of the Borrower, do not contain false or ambiguous
information which could induce an error by/for the Agent and/or the
Lenders.
(b) With the exception of the matters disclosed to the Lenders concerning
the records for the financial years of 2001, 2002, and 2003 of Virbac
Corporation, the records of the Borrower and those of its Subsidiaries
were prepared in agreement with the principles and general practices
admissible in France and were certified by the auditors of the
concerned corporations.
12.1.7 Unconditional Obligations and Pari Passu Ranking
Payment obligations under this Agreement are unconditional obligations and rank
at least pari passu with the claims of all Borrower's other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred by law
applying to companies generally.
12.1.8 Members of the Group
Appendix 7 shows all the Members of the Group appearing at the time and date of
Signature and indicates the correct percentage of corporate capital for each
member.
12.1.9 Collective Proceedings
Neither the Borrower nor any of its Subsidiaries is party to any Collective
Proceedings.
12.1.10 Material Adverse Event
Except for the matters disclosed to the Lenders concerning Virbac Corporation,
no Material Adverse Event has occurred since the closing of the last accounting
period.
12.1.11 Compliance with Law
The Borrower and each of its Subsidiaries are in compliance with all applicable
legislation, regulation, and administration.
In particular, neither the Borrower nor any of its affiliates has been informed
by one of its lessors of the presence of asbestos or risks linked to the
asbestos in any of its facilities.
15
12.1.12 Environment
The Borrower and any of its Subsidiaries are in compliance with all the laws,
regulation, and applicable procedures in the domain of protecting and preserving
the environment and health, except for such non-compliance as would not result
in a Material Adverse Event.
The activities of the Borrower and any of its Subsidiaries are not and were
never a source of pollution, nor did they violate any laws or regulations
concerning the environment, except as would not result in a Material Adverse
Event.
12.1.13 Taxes
The Borrower and each of its Subsidiaries are up to date with all its tax
payments and are in compliance with all fiscal policy, French customs policy, as
well as any other country where they have exercised any activity. All taxable
returns of each of those of Members of the Group in France or in any other
country have been declared up to date.
12.1.14 Insurances
The Borrower and its Subsidiaries shall maintain all customary insurance
policies which are required in its business in order to cover any potential
risks.
Except for the events disclosed to the Lenders concerning the liability
insurance for the directors of the Group, no event likely to cause the policies'
cancellation or likely cause a reduction of guarantee has occurred.
12.1.15 The Absence of any Event of Default
There does not exist any Event of Default or any Potential Event of Default,
with the exception of those specific cases disclosed to the Lenders.
12.1.16 Existing Debt
At the date of the Signature, neither the Borrower nor any of its Subsidiaries
have any other Financial Indebtedness other than Existing Indebtedness.
12.1.17 Intellectual and Industrial Property
The Borrower and its Subsidiaries have regularly maintained the registration and
generally kept up the protection of the industrial and intellectual property of
which it is owner. Neither the Borrower nor any of its Subsidiaries is in
violation of its obligations with respect to any intellectual property rights in
a fashion which would be likely to result in a Material Adverse Event.
12.1.18 Absence of Immunity
Neither the Borrower nor its Subsidiaries, nor its actives are allowed any
immunity against any procedures, seizures, compensations, or other legal
procedures.
12.1.19 Financial Security
There exists no Financial Security other that as provided in (i) Paragraph
13.2.7 (FINANCIAL SECURITY) and (ii) Paragraph 13.2.8 (LOANS, BONDS AND
FINANCIAL SECURITIES OF VIRBAC CORP). At the Date of the Signature, there do not
exist any endorsements or securities allocated by the Borrower or one of its
Subsidiaries other than the already Existing Security Interests.
12.1.20 Commitments Omitted from the Balance Sheets
No Borrower and to the Borrower's knowledge, no Subsidiary of the Borrower has
any Commitments such as leasings, securities, guarantees, or contingent
liabilities which are omitted from or not recorded in the accounts provided to
the Agent.
16
12.2 Repetition
The Representations in Paragraph 12.1 are deemed to be made by each Borrower by
reference to the facts and circumstances then existing on the date of each
Utilisation Request and the first day of each Interest Period.
13. Undertakings
The undertakings in this Article 13 remain in force from the date of this
Agreement for so long as any amount is outstanding under this Agreement or any
Commitment is in force.
Save contrary stipulations, the Undertakings taken by the Borrower, according to
each case, will hold to both it and its Subsidiaries accountable to Article 1220
of the Civil Code (CODE CIVILE).
13.1 Financial Undertakings
13.1.1 Duration of Obligations
The Borrower adheres to abide by these Undertakings stipulated in the present
Article 13.1 (FINANCIAL COMMITMENTS) from the Date of the Signature of this
Agreement until the complete performance of all the obligations in this
Agreement.
13.1.2 Financial Statements
The Borrower shall supply to the Agent in sufficient copies for
all the Lenders:
(a) Annually
As soon as these copies become available and at the latest one
hundred twenty (120) days following the closure of its financial
years, the last Annual Consolidated Accounts of the Group, of the
Borrower, of Virbac Corp; and if requested by the Agent, the
annual audited company accounts of the Principal Subsidiaries.
These accounts will consist of a balance sheet, an account of the
company results and their corresponding appendices, and will be
accompanied by reports of the auditor about the legally required
accounts, together with a Certificate of Financial Ratios (in
accordance with Appendix 8B), which will be signed by a legal
representative of the Borrower or other authorized individual, as
well as certified by the auditor.
(b) Semi-Annually
As soon as these copies become available and at the latest one
hundred twenty (120) days following the closure of its financial
years, its last Semi-Annual Consolidated Accounts of the Group,
of the Borrower, of Virbac Corp; and if requested by the Agent,
the Semi-Annual Audited Company Accounts of the Principal
Subsidiaries.
These accounts will consist of a balance sheet, an account of the
company results and their corresponding appendices, and will be
accompanied by reports of the auditor about the legally required
accounts, as well as with a Certificate of Financial Ratios (in
accordance with Appendix 8B), which will be signed by a legal
representative of the Borrower or other authorized individual.
(c) Periodically
All the necessary information that the Agent can reasonably
demand from the Borrower.
13.1.3 Requirements as to Financial Statements
(a) The Borrower will submit its annual company and consolidated accounts
in conformity with the same accounting principles as those used for
the creation of the company and consolidated accounts of the previous
financial year, which should be, at the Signature Date,
17
for the financial year ending December 31, 2002. In case of a change
in the methods of accounting (and notably in case of the adoption of
the norms of "IAS" / "IFRS") the Borrower shall comply with the
applicable accounting and market regulations and clearly specifying
the adjustments which shall be made. The Borrower shall also submit a
copy of these modifications made to the Agent. Furthermore, in the
last case, the Agent and the Borrower will confer in order to adapt
the Financial Ratios and Definitions in Article 1 (DEFINITIONS), to
conform to the adopted modifications. In all cases, these
modifications must be approved by the Majority Lenders.
(b) The Borrower will keep together all the accounts of its entities
entering into the consolidation, in accordance to generally accepted
accounting principles.
13.1.4 Financial Obligations
The Borrower shall maintain the Financial Ratios set forth in the Agreement at
all times for each period of twelve (12) months concluding at each Test Date,
which shall be, the 30th of June and the 31st of December of each year with the
first Test Date being the 31st of December, 2003.
13.1.5 Miscellaneous Information
(a) The Borrower will inform the Agent of all changes to its auditors.
(b) The Borrower will provide all documentation requested by the Agent
(acting on instruction of the Majority Lenders), concerning the
payment of all taxes, social security contributions or any other
organizations of which the Members of the Group are a part.
(c) The Borrower will provide to the Agent with the Last Consolidated
Annual Accounts of the Group a list of collateral, endorsements, and
Financial Security accorded during the preceding financial year by the
Borrower and its Principal Subsidiaries. With each collateral,
endorsement, or security, the sum guaranteed should be accompanied
with a copy of the company documents authorising the collaterals,
endorsements, or guarantees.
(d) The Borrower will notify the Agent beforehand to all changes in the
date of the closure of the financial year of its companies and make
sure that this date stays fixed each year for both itself as well as
its Subsidiaries, with the sole exception if this change is absolutely
necessary. Should the dates of the closing of the financial year
change for the Borrower, it must be noted that the Test Date and if
the need arises, the level of Financial Ratios shall also be adjusted
accordingly with this new date.
(e) The Borrower will inform the Agent of all significant events which
concern either the Group or any Subsidiaries.
13.2 General Commitments
13.2.1 Utilisation of the Line of Credit
The Borrower will use the Line of Credit in concordance with its purpose
according to Article 2.2 (PURPOSE).
13.2.2 Important Information
The Borrower must:
(a) notify the Agent immediately of the occurrence of any Events of
Default, Potential Events of Default or Material Adverse Events,
as well as any significant breaches which would threaten its
financial performance of which it has knowledge. It must also
inform the Agent of any actions it will be taking in order to
ameliorate any such situation. No such notification shall be in
any case considered reason for a relinquishment of the Agent's or
Lenders' rights under this Agreement;
18
(b) confirm to the Agent that there currently exists no Events of
Default, Potential Events of Default or Material Adverse Events,
or significant breaches which would threaten its financial
performance or the activity of the Group. This request must be
based on reasonable motivation on the part of the Agent as well
as be in compliance with all applicable legal and financial
market regulations;
(c) notify the Agent immediately of any significant violation by any
Member of the Group or by any third party, under any contract, in
the event that this action could be susceptible to cause a
Material Adverse Event;
(d) notify the Agent immediately of any default under any agreement
carried out by Virbac Corp provided that (i) this event has
became public information or (ii) that Virbac Corp has given its
consent for it to do so;
(e) (i) notify the Agent immediately of all elements of new
information concerning judicial actions against Virbac Corp,
collective or individual, underway at the Signature Date or in
the future, concerning the events in relation to the actions
disclosed to the Lenders and (ii) give to the Agent upon its
request, all the information concerning any of these judicial
actions of which the Borrower has any knowledge, with the
exception of those that would breach any legal obligations;
(f) notify the Agent immediately of any potential incidence of
litigation and judicial proceedings or similar administrative
proceedings which could cause a Material Adverse Event;
(g) advise the Agent of all breaches on its part or to its knowledge,
on the part of one of the Subsidiaries, which may have a
financial impact on any of the concerned Parties (save non
significant breaches); and
(h) advise the Agent of any significant events concerning the
Borrower or any of its Subsidiaries.
13.2.3 Administration
The Borrower must notify the Agent of all suspension of work contracts or
modification in personnel including the President of the Board of Directors or
Board Chairman, and if need be, of those general directors and members of its
Board up to ten (10) days following the said modification (s), in the instances
where these changes become Public Information.
13.2.4 Insurance
The Borrower must support and maintain that its Subsidiaries subscribe and
maintain all necessary insurance policies in order to cover any potential risks
in their Field of Activity.
13.2.5 Compliance with Law
The Borrower must conform and oversee that all its Subsidiaries conform to the
laws and regulations of both France and any other country of business, which are
applicable to them.
13.2.6 Taxes
The Borrower must submit any declarations of a fiscal nature and pay on
deadline, all taxes for which it is responsible and cause its Subsidiaries to do
the same, with the exception of taxes (i) the Borrower and the Subsidiaries are
contesting in good faith or (ii) the payment of which has been suspended or
delayed by the relevant administrative body.
19
13.2.7 Financial Securities
The Borrower will not consent, to extend, or allow to subsist, and will not
allow any Subsidiary to consent to, extend, or allow to subsist, any Financial
Security, except those of Virbac Corp or those otherwise permitted by the
Agreement.
13.2.8 Loans, Bonds, and Collateral of Virbac Corp
The Borrower will not, in any form, lend money to Virbac Corp, nor guaranty, nor
grant a security interest in the Borrower's or its affiliates' assets as
security for Virbac Corp's obligations with the exception of (i) bank credits
and loans and (ii) guaranties and sureties given as a guaranty for Virbac Corp's
bank credits and loans and under the condition that the sum of (a) all credits
and loans from the Borrower. and affiliates to Virbac Corp and (b) all
guaranties and sureties given by the Borrower and its affiliates as security for
Virbac Corp's obligations shall not exceed $25,000,000 (twenty five million
USD).
13.2.9 Asset Transfers
No Borrower shall, and the Company shall ensure that no other Member of the
Group will, enter into a single transaction or a series of transactions (whether
related or not) and whether voluntary or involuntary to sell, lease, transfer or
otherwise dispose of any asset.
This does not apply to any sale, lease, transfer or other disposal:
(a) made in the ordinary course of business in amounts,
individually or in the aggregate, not exceeding the limit
specified in the Agreement;
(b) by one Member of the Group to another Member of the Group
(other than Virbac Corp);
(c) of assets where the proceeds are reinvested within one year
in assets necessary for the Group's business.
13.2.10 Reimbursement Based Upon Credit Rank
The Borrower agrees to abide by the standard procedure of reimbursement, where
senior Lenders will be reimbursed before junior Lenders, in accordance with all
standard regulations.
13.2.11 Change of Corporate Purpose and Activity of the
Borrower
The Borrower will not modify and will make sure that no Subsidiary will modify
its company purpose or its Field of Activity, such as exists at the Signature
Date, notably by dissolution, handovers, voluntary liquidations, or any other
means.
13.2.12 Change of Status
Except as required by law, the Borrower will not change important elements of
its corporate documents as in existence at the Signature Date (concerning
notably its legal form, company headquarters, company purpose, and company
decisions). It will also procure that its Subsidiaries do not modify any of the
above.
13.2.13 Reorganization
(a) The Borrower will not engage in any restructuring and will
not allow its Subsidiaries to do so either between the members of
its Group or with any other company.
(b) As an exception to Paragraph 13.2.13 (a), the Borrower can
proceed with reorganization operations between Members of the
Group as long as (i) the Borrower controls the surviving entity
and (ii) such an operation is not likely to cause a Material
Adverse Event or an Event of Default.
20
13.2.14 Fiscal Integration
The Borrower agrees to maintain the benefits from the system of fiscal
consolidation of the Group and will not modify principles of consolidation of
the Group in a fashion which would be susceptible to cause a Material Adverse
Event.
13.2.15 Authorizations
The Borrower will and will force its Subsidiaries to, obtain, make, and renew
all necessary registrations, authorizations, or subscriptions for the signature,
performance or validity of this Agreement.
13.2.16 Existence and Continuation of Activity
Except as required by law, the Borrower agrees to accomplish and make, and cause
its Subsidiaries to accomplish and make, all necessary actions in order to
continue their existence and to obtain or renew all authorizations, permits and
subscriptions, including all intellectual property and industrial rights,
necessary to their business.
13.2.17 Virbac Corp
The Borrower agrees to provide the company accounts of Virbac Corp duly audited
and certified by its auditors for the financial years of 2001, 2002, and 2003.
14. Defaults
14.1 Events of Default
In case of occurrence of any of the events described below, all the amounts due
to the Lenders pursuant to this Agreement, in principal, interest, commissions,
indemnities, fees, and additional expenses shall be immediately payable and the
entirety of the Commitments will be terminated, in each case, upon a decision of
the Majority Lenders:
14.1.1 The Borrower does not pay on the due date the amount
payable pursuant to the Agreement, unless its failure to pay is caused by
administrative or technical error in the transmission of the payment and the
payment is made within three (3) Business Days of its due date;
14.1.2 The Borrower does not comply with any provision of the
Agreement, other than those for payments, including without limitation, the
provisions in Paragraph 13 (UNDERTAKINGS). No Event of Default under Paragraph
14.1.2 will occur if the failure to comply is capable of remedy and is remedied
within five (5) Business Days of the Agent giving notice to the Borrower or the
Borrower becoming aware of the failure to comply;
14.1.3 Any representation or warranty made or deemed to be
made by the Borrower in the Agreement or any other document delivered by or on
behalf of the Borrower under or in connection with the Agreement is or proves to
have been incorrect or misleading in any material respect when made or deemed to
be made;
14.1.4 The occurrence of a Change in Control of the Borrower;
14.1.5 A person acting either alone or in company (in
accordance to Article L.233-10 of the CODE DE COMMERCE), other than those
controlling the Borrower (in accordance with Article L.233-3 of CODE DE
COMMERCE) at the Signature Date, takes over thirty-three point thirty-three
percent (33.33%) or more capital or rights of the Borrower;
14.1.6 The Borrower cedes all or part of its participation in
the capital stock of one of any of the Principal Subsidiaries and this cession
causes the Borrower to lose control (in regards to Article L.233-3 of CODE DE
COMMERCE) of the concerned Principal Subsidiary;
14.1.7 Any Financial Indebtedness of any member of the Group
(other than Virbac Corp), with a single or combined amount higher than 200,000
EURO (two hundred thousand euros) is not
21
reimbursed or honoured at the normal maturity date (or before any grace period
pre established within an applicable Agreement or all supplementary payment
delays as negotiated by the Borrower and the Subsidiary);
14.1.8 Any Financial Indebtedness of any member of the Group
(other than Virbac Corp), with a single or combined amount higher than 200,000
EURO (two hundred thousand euros) is declared to be or otherwise becomes due and
payable prior to its specified maturity date as a result of an Event of Default
(however described);
14.1.9 The Borrower ceases to posses full legal capacity and
the power of execution to fulfil the terms and conditions of the Agreement;
14.1.10 A decision or judgement occurs that contests the
validity of the signature or the performance of this Agreement
14.1.11 It becomes illegal for the Borrower to perform any of
the obligations stipulated in this Agreement;
14.1.12 The Borrower or a Subsidiary is the object of
Collective Proceedings;
14.1.13 Suspension of activities or dissolution of the Borrower
or a principal Subsidiary, save mergers authorized by the Agent or carried
through in accordance to Paragraph 13.2.13 (b);
14.1.14 Occurrence of any Material Adverse Event;
14.1.15 All or part of the assets of the Borrower or a
Subsidiary of a value equal to at least 100,000 EURO (one hundred thousand
euros) become part of a seizure or similar forced execution, which is not
withdrawn within thirty (30) days, unless the Borrower or Subsidiary has
successfully contested such a seizure in a court of law;
14.1.16 The auditors do not certify the consolidated and
corporate accounts of the Borrower;
14.1.17 Default in performance by the Borrower or one of the
Subsidiaries of any judicial decision or arbitral award;
14.1.18 Judicial actions, whether collective or individual,
against Virbac Corp due to the proceedings disclosed to the Lenders and in
progress at the Signature Date or in the future, that (i) carry demands of
injury, interests, or risks of fines against Virbac Corp of a total amount more
than or equal to $50,000,000 (fifty million USD) or (ii) obligate Virbac Corp to
payment of a total amount equal to or greater than $20,000,000 (twenty million
USD), including all attorney fees.
14.2 Indemnity
Borrower will compensate, after proper justification, the Agent for the account
of the Lenders, for all fees or losses incurred by the Agent or by the Lenders,
arising out of any of the foregoing events, including the cost of reinvesting
funds incurred due to any resulting prepayment.
14.3 The Agent and the Lenders
In the case where the Agent would declare the sums due in respect of this
Agreement payable in advance as a result of an Event of Default described in
Paragraph 14.1 (EVENT OF DEFAULT), the Agent must take all measures to negotiate
with the Borrower and more generally, oversee the repayment of the entire Loan,
in agreement with the guidelines put forth by the Majority Lenders. All the
Lenders will be held to the stipulations of this Paragraph 14.3 and no Lender
will engage in any action with the Borrower or a Member of the Group independent
of or conflicting with this Paragraph 14.3, without the consultation of the
entire group of Lenders.
22
15. Agent
15.1 Appointment of the Agent
Each Party appoints the Agent to act as its Agent under and in connection with
this Agreement. Each Party authorises the Agent to exercise the rights, powers,
authorities and discretions specifically given to the Agent under or in
connection with this Agreement together with any other incidental rights,
powers, authorities and discretions. Except as provided here, the Agent shall
not take any action in or refrain from any action without instruction from the
Majority Lenders.
15.2 Exclusion of Liability
The Agent will not be liable for any action taken by it under or in connection
with this Agreement, unless directly caused by its gross negligence or wilful
misconduct. The Agent also:
(a) can seek the services of an attorney or experts of its choice,
if it finds the need to for any general advice and counselling;
(b) may rely on any representation, notice, or document believed by
it to be genuine, correct, and appropriately authorised;
(c) will have no obligation for the performance of the Borrower's
obligations or the Borrower's legal or financial condition. The
Agent's duties under this Agreement are solely ministerial and
administrative in nature;
(d) will not be liable for any Event of Default by any of the
Parties;
(e) can abstain from taking any measures in order to protect or
process a forced execution of rights of a Lender stipulated in
the Agreement until it has been indemnified or guaranteed
against all costs, losses, and expenses that it may incur as a
result of this;
(f) will not be held accountable for the validity, execution,
delivery, legality, or character of any of the provisions in
this Agreement;
(g) will not be held accountable, nor will any of its personnel, for
the character and validity of any of the information delivered
to it from the Borrower, save in case of wilful misconduct;
(h) will not be responsible for a failure of the Borrower or any
Lender to duly and punctually perform its obligations under this
Agreement;
(i) will not be in any manner obligated to transmit to the Lenders
information concerning any of the Parties beyond that which is
in the terms of this Agreement;
(j) will not be required to hold its own initiative of recourse
against a defaulting Lender or against the Borrower;
(k) will not have any obligation to furnish to a Lender, either
after the conclusion of the Agreement or after its execution,
any information concerning the Borrower or its situation, except
for that provided under this Agreement;
(l) will not have any obligation to take into account or compensate
any sum, profit or asset received by it from its present
relations or future with the Borrower in regards to all sums
which will be due from the Borrower to the Agent or to any
Lender in accordance with this Agreement.
15.3 Declaration of the Lenders
Each Lender declares and individually guarantees to the Agent that it has made
and will make its own independent study of the situation of the Borrower
(without relying solely on the advice of the Agent). Therefore, the Agent will
not be held accountable to any of this information, whether furnished by the
Agent or any other Party.
23
15.4 Payments
15.4.1 The role of the Agent is limited to transferring to the
Borrower the sums received from the Lenders and to the Lenders the sums received
from the Borrower or from a third party. The Agent will not be required to
advance funds to the Borrower which it has not yet received from a Lender nor to
advance funds to a Lender which it has not yet received from the Borrower. In a
case where the Agent has advanced the funds to a party without receiving them
first, it will be reimbursed at its first request and compensated for all
documented costs.
15.4.2 The Agent will inform the Lenders by documentation of
successful receipt of the funds from the Borrower. The Agent will also
redistribute any funds received from the Borrower to the Lenders.
15.4.3 The Agent may, unless it has received a contrary
written request, treat all Lenders who make available a Drawing as the persons
who will be repaid this Drawing.
15.5 Renunciations and Modifications
15.5.1 The Agent may, with the consent of the Majority
Lenders, subject to the provisions of the following Paragraph, effect any
changes and modifications to the Agreement, in accordance with Article 19
(AMENDMENTS).
15.5.2 All the decisions and actions taken by the Agent, after
consultation with the Lenders, in accordance with the preceding Paragraph,
including decisions pursuant to Article 19 (AMENDMENTS) will be binding on the
Agent and the Lenders.
15.6 Repayment of fees and indemnity
The Borrower will reimburse the Agent, upon the presentation of valid
justification, for all the reasonable costs incurred by the Agent during its
mandate as Agent. If the Borrower does not reimburse the Agent, the Lenders will
reimburse it for such costs in proportion to their respective Commitments.
Moreover, the Lenders agree to reimburse the Agent, upon presentation of valid
documentation, for any reasonable costs incurred by the Agent during its mandate
as Agent.
15.7 Business with the Group
The Agent, if acting also as a Lender, shall have the same rights with respect
to the Borrower as all other Lenders and may accept deposits from, lend money
to, and generally conduct business and engage in any kind of banking business
with the Borrower without accounting to any Lender.
15.8 Separation of Roles
The Agent may act in relation to this Agreement through its personnel and
agents. If information is received by another division or department of the
Agent, it may be treated as confidential to that division or department and the
Agent shall not be deemed to have notice of it and information received by the
Agent an address other than the address in Article 22 (NOTIFICATIONS) will be
deemed not received by the Agent.
15.9 Resignation
The Agent may resign and appoint one of its affiliates as successor by giving
notice to the other Lenders at least sixty (60) days in advance. Alternatively,
the Agent may resign by giving notice to the other Lenders and the Borrower, in
which case the Majority Lenders may appoint a successor Agent, subject to the
reasonable consent of the Borrower. The retiring Agent shall, at its own cost,
make available to the successor Agent such documents and records and provide
such assistance as the successor Agent may reasonably request for the purpose of
performing its function as Agent under this Agreement. Upon the appointment of a
successor, the retiring Agent shall be discharged from any further obligation in
respect to this Agreement but shall remain entitled to the benefits of this
Paragraph. Its successor and each of the other Parties shall have the same
rights and obligations amongst themselves as they have had if such successor had
been an original Party.
24
16. Redistribution of Funds
16.1 If for any reason, except the cases described in Article 9 (INCIDENCE
OF NEW CIRCUMSTANCES) or in Paragraph 11.4 (TAXES), a Lender receives a
payment of any sum due under the terms of this Agreement exceeding the amount
which is owed it proportionally to the amounts due to the other Lenders, the
Agent will proceed or carry out as soon as possible the adjustments necessary
so that the surplus is distributed between all the Lenders in proportion to
the amounts which are respectively due to them. The Lenders having received
such a payment will have to transfer to the Agent the sums received in excess
in the two (2) Business Days following its receipt.
If after such a payment was restored by a Lender to the Agent and this last
already redistributed sum should have been allocated entirely to the Lender
having originally received it, each Lender with whom an unspecified part of it
had been distributed will transfer this sum at the request of the Agent to the
Lender concerned.
16.2 If a Lender tries to recover sums through legal proceedings which it
shall bring independently, after having advised the Agent of these
proceedings, the Agent will notify the other Lenders of its intention to
start the aforementioned proceedings and give them the opportunity to join
it. The sums thus recovered will be for the benefit only of the Lenders
having taken part in this proceeding who then will be by no means held
accountable to share these sums with the Lenders not having taken part in the
said proceedings.
17. Obligation of Indemnity
The Borrower shall on demand, within three (3) Business Days of demand,
indemnify the Agent for the account of the Lenders against any cost, loss or
liability incurred by the concerned Lenders as a result of:
(a) the occurrence of any Event of Default;
(b) a failure by a Party to pay any amount due under this
Agreement on its due date, including without limitation, any
cost, loss or liability;
(c) any payment of the outstanding debt other than at the
Interest Payment Date;
(d) the non-use of the corresponding funds, after the Borrower
presented a Utilisation Request.
18. Duration
The Commitments of the Borrower will be effective until:
(a) the Date of Final Payment; or
(b) the date at which all the sums due to the Lenders, in
accordance with this Agreement have been repaid.
19. Amendments
19.1 Subject to the provisions of Paragraph 19.2 below, the terms and
conditions of the Agreement can be modified by mutual agreement between the
Borrower and the Majority Lenders
19.2 No modification shall be made to the Agreement without the unanimous
consent of all the Lenders, if this modification or renunciation aims:
(a) to make a change to the Borrower;
(b) to increase or extend any Commitment;
(c) to postpone the due date of any amount due to the Lenders, to
reduce any amount due to the Lenders, or to change the currency
of payment;
(d) to change the Interest Rate or margin or any fees due to the
Lenders;
(e) to change the definition of Majority Lenders;
(f) to change the present Article 19 or Article 20 (CHANGES TO THE
PARTIES);
25
(g) to change any provision which expressly requires the consent of
all the Lenders.
19.3 An amendment or waiver which relates to the rights or obligations of
the Agent or the Arranger may not be effected without the consent of the
Agent or the Mandated Arranger.
20. Transfers and Changes to the Parties
20.1 Assignments and Transfers by the Borrower
The Borrower may not assign any of its rights or transfer any of its rights or
obligations under this Agreement.
20.2 Changes to the Lenders
Subject to this Article, any Lender (the "Existing Lender") may assign any of
its rights or transfer any of its rights (including such as relate to that
Lender's participation in each loan) and obligations, to another bank or
financial institution for a minimum amount of the transfer of 2,000,000 EURO
(two million euros).
20.3 Necessary terms of the assignment or transfer:
(a) The Agent must receive written confirmation of the transfer
in accordance with Appendix 9 (TRANSFER AGREEMENT) in form
and substance satisfactory to the Agent. The Date of the
Transfer must be at least ten (10) calendar days following
the Agent's receipt of this form;
(b) Except for a transfer to a Member of the transferring
Lender's Group, the Borrower must agree to the transfer by
submitting a written agreement to the Agent. The Borrower
cannot refuse the transfer without proper justification. The
Borrower has fifteen (15) days after the receipt of the
Transfer Agreement by the Agent to file a refusal;
(c) The Lender must pay a transfer fee to the Agent, in
accordance with Article 1690 of CODE CIVIL;
(d) A Lender may disclose to a potential assignee any information
received under this Agreement if the person to whom the
information is to be given has entered into a Confidentiality
Undertaking, in accordance with Article 25 (CONFIDENTIALITY).
21. Syndication
The Borrower commits itself to assisting the Mandated Arranger and the
Co-Arranger within the framework of the operations relating to the syndication
of the Line of Credit and the preparation of a memorandum of syndication. For
this purpose, the Borrower commits itself to give to the Arranger all
information which could be required by the Arranger for the development and
validation of the memorandum of syndication, as well as any briefings and
maintenance which would be required of it. The name of any financial institution
taking part in the syndication will be communicated beforehand within a
reasonable time to the Borrower and the aforementioned financial institution
invited to take part in the syndication will be held accountable to an
engagement of confidentiality.
22. Notifications
22.1 Method of Notification
Except as otherwise provided in this Agreement, or agreed by the concerned
Parties, all the communication amongst the Parties will be sent as follows:
22.1.1 Registered mail with delivery receipt request, if the letter concerns
an Event of Default or a Potential Event of Default;
22.1.2 By E-mail or telecopy for the general administrative purposes of this
Agreement;
22.1.3 By letter accompanied by any necessary originals in regards to
Paragraph 13.1.2 (a) and (b). A copy of the Certificate of Financial Ratios
should be sent to the Agent at the following address (or any substitute
address, if the Parties concerned are notified at least five (5) business
days in advance). The Agent is not accountable to verify the legitimacy of
any signatures within the documents;
26
-----------------------------------------------------------------------
FINANCIAL PARTIES ADDRESS AND INFORMATION
-----------------------------------------------------------------------
Borrower : Virbac S.A.
Virbac S.A.
1(ere) Avenue 2065M LID
00000 Xxxxxx XXXXXX
Tel : 00 00 00 00 00
Fax : 00 00 00 00 00
-----------------------------------------------------------------------
Agent : BNP Paribas
BNP Paribas
00, xxxxx xx Xxxxxx Xxxxx Xxxxxx
00000 Xxxxx Xxxxx 00 XXXXXX
Tel : 00 00 00 00 00/44 71
Fax : 00 00 00 00 00
-----------------------------------------------------------------------
Arranger : BNP Paribas
BNP Paribas
00, xxxxx xx Xxxxxx Xxxxx Xxxxxx
00000 Xxxxx Xxxxx 00 XXXXXX
Tel : 00 00 00 00 00
Fax : 00 00 00 00 00
-----------------------------------------------------------------------
Co-Arranger: Credit Agricole Indosuez
Credit Agricole Indosuez
Tel : 00 00 00 00 00
Fax : 00 00 00 00 00
Tel : 00 00 00 00 00
Fax : 00 00 00 00 00
-----------------------------------------------------------------------
Lenders To their respective addresses listed in
Appendix 1.
-----------------------------------------------------------------------
22.2 Delivery
Any communication made in accordance with the foregoing stipulations will be
deemed received:
22.2.1 if by way of regular mail, upon sending;
22.2.2 if by way of electronic mail, at the time of receipt;
22.2.3 if by way of registered letter with delivery return
receipt, upon the date shown on the return receipt;
22.2.4 if by way of fax, the Business Day in Paris of its
transmission, or if the fax is sent after 17:00 (Paris time), the following
Business Day in Paris.
23. Non renunciation
The rights of the Lenders in regards to the Agreement can be exercised at all
times. The delay or omission of exercising these rights is in no way to be
interpreted as a renunciation of these rights.
24. Independent Provisions
If the case arises that one of the provisions within this Agreement becomes
null, forbidden or without effect, the validity of the other provisions will
remain.
27
25. Confidentiality
Upon signature of this Agreement, all the Parties agree to abide by the
confidential nature of this Agreement, in regards to all information herein as
well as any operations it discusses (with the exception of the stipulations in
Article 20.2 (CHANGES TO THE LENDERS).
26. Governing Law and Enforcement
This Agreement is governed by French law. The Tribunal de Commerce de Paris
has exclusive jurisdiction to settle any dispute arising out of or in
connection with this Agreement including a dispute regarding the existence,
validity or termination of this Agreement.
Exeuted at Carros, December 23, 2003
In 7 original counterparts
28
BORROWER
Virbac S.A.
___________________________
AGENT
BNP Paribas
___________________________
LEAD ARRANGER
BNP PARIBAS
CO-ARRANGER
CREDIT AGRICOLE INDOSUEZ
LENDERS
BNP Paribas
___________________________
CREDIT AGRICOLE INDOSUEZ
