FINANCING AGREEMENT
Financing Agreement, dated as of April 23, 2004, by and among
aaiPharma Inc., a Delaware corporation (the "Parent"), Applied Analytical
Industries Learning Center, Inc., a Delaware corporation ("Applied Analytical"),
AAI Technologies, Inc., a Delaware corporation ("AAI Technologies"), AAI
Properties, Inc., a North Carolina corporation ("AAI Properties"), AAI Japan,
Inc., a Delaware corporation ("AAI Japan"), Kansas City Analytical Services,
Inc., a Kansas corporation ("Analytical Services"), AAI Development Services,
Inc., a Massachusetts corporation ("AAI Development-MA"), aaiPharma LLC, a
Delaware limited liability company ("Pharma LLC") and AAI Development Services,
Inc., a Delaware corporation ("AAI Development-DE", and together with Parent,
Applied Analytical, AAI Technologies, AAI Properties, AAI Japan, Analytical
Services, AAI Development-MA and Pharma LLC, each a "Borrower" and collectively,
the "Borrowers"), the financial institutions from time to time party hereto
(each a "Lender" and collectively, the "Lenders"), Silver Point Finance, LLC, a
Delaware limited liability company ("Silver Point"), as collateral agent for the
Lenders (in such capacity, and any successor in such capacity, the "Collateral
Agent"), and Bank of America, N.A. ("Bank of America"), as administrative agent
for the Lenders (in such capacity, and any successor in such capacity, the
"Administrative Agent" and together with the Collateral Agent, each an "Agent"
and collectively, the "Agents").
RECITALS
The Borrowers have asked the Lenders to extend credit to the
Borrowers consisting of (a) a term loan in the aggregate principal amount of
$125,000,000 and (b) a revolving credit facility in an aggregate principal
amount not to exceed $15,000,000 at any time outstanding, which will include a
subfacility for the issuance of letters of credit. The proceeds of the term loan
and the loans made under the revolving credit facility shall be used to,
together with the Net Cash Proceeds (as hereinafter defined) from the MVI Sale
(as hereinafter defined), (i) refinance existing indebtedness of the Borrowers,
(ii) fund the interest payment (and any default interest payable thereon) due
and payable by the Parent on April 1, 2004, in respect of its Senior
Subordinated Notes (as hereinafter defined), (iii) provide for general working
capital and general corporate purposes of the Borrowers and (iv) to pay fees and
expenses related to this Agreement and the transactions contemplated hereby. The
letters of credit will be used for general working capital and general corporate
purposes. The Lenders are severally, and not jointly, willing to extend such
credit to the Borrowers subject to the terms and conditions hereinafter set
forth.
In consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the
following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of such
terms:
"Account Debtor" means each debtor, customer or obligor in any
way obligated on or in connection with any Account Receivable.
"Account Receivable" means, with respect to any Person, any
and all rights of such Person to payment for goods sold and/or services
rendered, including accounts, general intangibles and any and all such rights
evidenced by chattel paper, instruments or documents, whether due or to become
due and whether or not earned by performance, and whether now or hereafter
acquired or arising in the future, and any supporting obligations in respect of
the foregoing and any proceeds arising from or relating to the foregoing.
"Acquisition" means the acquisition of (i) all of the Capital
Stock of any Person, (ii) all or substantially all of the assets of any Person
or (iii) all or substantially all of the intellectual property rights to a
pharmaceutical product or product line of any Person, whether or not involving a
merger or consolidation with such Person.
"Action" has the meaning specified therefor in Section 12.12.
"Administrative Agent" has the meaning specified therefor in
the preamble hereto.
"Administrative Agent's Account" means an account at a bank
designated by the Administrative Agent from time to time as the account into
which the Loan Parties shall make all payments to the Administrative Agent for
the benefit of the Agents, L/C Issuer and the Lenders under this Agreement and
the other Loan Documents.
"Administrative Borrower" has the meaning specified therefor
in Section 12.16.
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
any Agent, the L/C Issuer or any Lender be considered an "Affiliate" of any Loan
Party.
"After Acquired Property" has the meaning specified therefor
in Section 7.01(o).
"Agent" has the meaning specified therefor in the preamble
hereto.
"Agent-Related Persons" means the Administrative Agent and the
Collateral Agent, together with their Affiliates (including, in the case of Bank
of America in its capacity as the Administrative Agent, the Arranger), and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agreement" means this Financing Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
- 2 -
"Annualized" means, for any amount to be calculated as at the
end of any fiscal quarter of the Parent and its Subsidiaries during the period
from July 1, 2004 through June 30, 2005, the product of (a) the aggregate amount
for the period from July 1, 2004 through the end of such fiscal quarter divided
by the number of fiscal quarters elapsed during the period from July 1, 2004
through the end of such fiscal quarter times (b) 4.
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) during the period of time from and after
the Effective Date up to the date that is the 9 month anniversary of the
Effective Date, 3% times the sum of (i) the amount of the reduction of the Total
Revolving Credit Commitment on such date plus (ii) the principal amount of the
Term Loan prepaid on such date, (b) during the period of time from and including
the date that is the 9 month anniversary of the Effective Date up to the date
that is the 18 month anniversary of the Effective Date, 1.5% times the sum of
(i) the amount of the reduction of the Total Revolving Credit Commitment on such
date plus (ii) the principal amount of the Term Loan prepaid on such date, and
(c) during the period of time from and including the date that is the 18 month
anniversary of the Effective Date up to the date that is the 21 month
anniversary of the Effective Date, 0.75% times the sum of (i) the amount of the
reduction of the Total Revolving Credit Commitment on such date plus (ii) the
principal amount of the Term Loan prepaid on such date.
"Arranger" means Banc of America Securities LLC, in its
capacity as sole lead arranger and sole book manager.
"Assignment and Acceptance" means an assignment and acceptance
entered into by an assigning Lender and an assignee, and accepted by the
Collateral Agent (and the Administrative Agent, if applicable), in accordance
with Section 12.07 hereof and substantially in the form of Exhibit G hereto or
such other form acceptable to the Collateral Agent.
"Authorized Officer" means, with respect to any Person, the
chief executive officer, chief operating officer, chief financial officer,
president, executive vice president, controller or treasurer of such Person.
"Availability" means, at any time, the difference between (i)
the Total Revolving Credit Commitment and (ii) the sum of (A) the aggregate
outstanding principal amount of all Revolving Loans and (B) all Letter of Credit
Obligations.
"Bank" means Bank of America, its successors or any other bank
designated by the Administrative Agent to the Administrative Borrower from time
to time.
"Bank of America" has the meaning specified therefor in the
preamble hereto.
"Bankruptcy Code" means the United States Bankruptcy Code (11
U.S.C. Section 101, et seq.), as amended, and any successor statute.
"Board" means the Board of Governors of the Federal Reserve
System of the United States.
- 3 -
"Board of Directors" means, with respect to any Person, the
board of directors (or comparable managers) of such Person or any committee
thereof duly authorized to act on behalf of the board.
"Borrower" has the meaning specified therefor in the preamble
hereto.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or the state where the
Payment Office is located are authorized or required to close, except that, if a
determination of a Business Day shall relate to a LIBOR Rate Loan, the term
"Business Day" also shall exclude any day on which banks are closed for dealings
in Dollar deposits in the London interbank market.
"Capital Expenditures" means, with respect to any Person for
any period, the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in "property, plant and equipment" or in a similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period.
"Capital Guideline" means any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy, capital ratios, capital
requirements, the calculation of a bank's capital or similar matters, or (ii)
affecting the amount of capital required to be obtained or maintained by any
Lender, any Person controlling any Lender, or the L/C Issuer or the manner in
which any Lender, any Person controlling any Lender, or the L/C Issuer allocates
capital to any of its contingent liabilities (including letters of credit),
advances, acceptances, commitments, assets or liabilities.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Capitalized Lease" means, with respect to any Person, any
lease of real or personal property by such Person as lessee which is (i)
required under GAAP to be capitalized on the balance sheet of such Person or
(ii) a transaction of a type commonly known as a "synthetic lease" (i.e. a lease
transaction that is treated as an operating lease for accounting purposes but
with respect to which payments of rent are intended to be treated as payments of
principal and interest on a loan for Federal income tax purposes).
"Capitalized Lease Obligations" means, with respect to any
Person, obligations of such Person and its Subsidiaries under Capitalized
Leases, and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash and Cash Equivalents" means all cash and any presently
existing or hereafter arising deposit account balances, certificates of deposit
or other financial instruments properly classified as cash equivalents under
GAAP.
"Change in Law" has the meaning specified therefor in Section
4.05(a).
- 4 -
"Change of Control" means each occurrence of any of the
following:
(a) the acquisition, directly or indirectly, by any
person or group (within the meaning of Section 13(d)(3) of the Exchange Act)
other than a Permitted Holder of beneficial ownership of more than 33% of the
aggregate outstanding voting power of the Capital Stock of the Parent;
(b) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Parent (together with any new directors whose election by such
Board of Directors or whose nomination for election by the shareholders of the
Parent was approved by a vote of at least a majority the directors of the Parent
then still in office who were either directors at the beginning of such period,
or whose election or nomination for election was previously approved) cease for
any reason to constitute a majority of the Board of Directors of the Parent;
(c) except as otherwise permitted by Section 7.02(c), the
Parent shall cease to have beneficial ownership (as defined in Rule 13d-3 under
the Exchange Act) of 100% of the aggregate voting power of the Capital Stock
(other than directors' qualifying shares) of each other Loan Party, free and
clear of all Liens (other than Permitted Liens);
(d) (i) any Loan Party consolidates or amalgamates with
or merges into another entity or conveys, transfers or leases all or
substantially all of its property and assets to another Person, except as
otherwise permitted in Section 7.02(c)(i), or (ii) any entity consolidates or
amalgamates with or merges into any Loan Party in a transaction pursuant to
which the outstanding voting Capital Stock of such Loan Party is reclassified or
changed into or exchanged for cash, securities or other property, other than any
such transaction described in this clause (ii) in which either (A) in the case
of any such transaction involving the Parent, no person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) other than a Permitted Holder
has, directly or indirectly, acquired beneficial ownership of more than 33% of
the aggregate outstanding voting Capital Stock of the Parent or (B) in the case
of any such transaction involving a Loan Party other than the Parent, the Parent
has direct or indirect beneficial ownership of 100% of the aggregate voting
power of all Capital Stock (other than director's qualifying shares) of the
resulting, surviving or transferee entity; or
(e) a "Change of Control" under the Subordinated Note
Indenture.
"Collateral" means all of the property and assets and all
interests therein and proceeds thereof now owned or hereafter acquired by any
Person upon which a Lien is granted or purported to be granted by such Person as
security for all or any part of the Obligations. For the avoidance of doubt,
Collateral shall not include the assets (other than the Capital Stock of any
first-tier Foreign Subsidiary) of any Foreign Subsidiary.
"Collateral Agent" has the meaning specified therefor in the
preamble hereto.
"Collateral Agent Advances" has the meaning specified therefor
in Section 10.08(a).
- 5 -
"Collection Account" and "Collection Accounts" have the
meanings specified therefor in Section 8.01(a).
"Commitments" means, with respect to each Lender, such
Lender's Revolving Credit Commitment and Term Loan Commitment.
"Consent Solicitation" means the solicitation of consents
relating to the Senior Subordinated Notes made pursuant to the Revised Consent
Solicitation Statement, dated as of April 19, 2004.
"Consolidated EBITDA" means, with respect to any Person for
any period, the Consolidated Net Income of such Person and its Subsidiaries for
such period, plus (i) without duplication, the sum of the following amounts of
such Person and its Subsidiaries for such period and to the extent deducted in
determining Consolidated Net Income of such Person for such period: (A)
Consolidated Net Interest Expense, (B) income, value-added, franchise and other
similar tax expense, (C) depreciation expense, and (D) amortization expense, (E)
any other non-cash charges, expenses and losses, (F) the Specified Costs and
Expenses, (G) non-recurring cash charges and costs, not to exceed $300,000 in
the aggregate, arising in connection with the Special Committee Investigation
and the retention of FTI Consulting, Inc., and (H) other non-recurring cash
charges and costs incurred in connection with Acquisitions and Dispositions
permitted under this Agreement (including Acquisitions and Dispositions
permitted as a result of being approved by the Required Lenders), to the extent
such charges and costs are approved by the Agents.
"Consolidated Net Income" means, with respect to any Person
for any period, the net income (loss) of such Person and its Subsidiaries for
such period, determined on a consolidated basis and in accordance with GAAP, but
excluding from the determination of Consolidated Net Income (without
duplication) (a) any non-cash extraordinary or non-recurring gains or losses or
non-cash gains or losses from Dispositions, (b) non-cash restructuring charges,
and (c) non-cash effects of discontinued operations.
"Consolidated Net Interest Expense" means, with respect to any
Person for any period, gross interest expense of such Person and its
Subsidiaries for such period determined on a consolidated basis and in
accordance with GAAP (including, without limitation, interest expense paid to
Affiliates of such Person), less (i) the sum of (A) interest income for such
period and (B) gains for such period on Hedging Agreements (to the extent not
included in interest income above and to the extent not deducted in the
calculation of gross interest expense), plus (ii) the sum of (A) losses for such
period on Hedging Agreements (to the extent not included in gross interest
expense) and (B) the upfront costs or fees for such period associated with
Hedging Agreements (to the extent not included in gross interest expense), in
each case, determined on a consolidated basis and in accordance with GAAP.
"Consolidated Net Operating Cash Flow" means, with respect to
any Person and its Subsidiaries for any period, "Operating Cash" as calculated
in a manner consistent with the weekly projected sources and uses in the form
attached hereto as Schedule 7.01(a)(vi); provided, that, for purposes of this
calculation, "Operating Cash" shall exclude the Net Cash Proceeds of the MVI
Sale and any Specified Costs and Expenses.
- 6 -
"Consolidated Total Senior Indebtedness" means, with respect
to any Person at any date, all Indebtedness (other than Subordinated
Indebtedness) of such Person and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing or
intended to guarantee any Indebtedness ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, (i) the direct or indirect guaranty, endorsement
(other than for collection or deposit in the ordinary course of business) or
co-making by such Person of the obligation of a primary obligor, (ii) the
obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) any
obligation of such Person, whether or not contingent, (A) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (B) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (C) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (D) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term
"Contingent Obligation" shall not include any product warranties extended in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation with respect to which such Contingent Obligation is made (or, if
less, the maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
"Current Value" has the meaning specified therefor in Section
7.01(o).
"Default" means an event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Disclosed Events" means, collectively, (i) the events set
forth in the section entitled "Developments Affecting aaiPharma" in the Consent
Solicitation and (ii) the events set forth in Schedule 1.01(D).
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Person or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (other than
property or assets sold or otherwise disposed of on the Effective Date in
connection with the MVI Sale), whether now owned or hereafter acquired, to any
other Person, in each case, whether or not the consideration therefor consists
of cash, securities or other assets owned by the acquiring Person, excluding the
sales, transfers or other dispositions set forth in Section 7.02(c)(ii)(A), (B),
(D), (E), (G) and (H). Notwithstanding the foregoing, (x) Investments permitted
by Section 7.02(e) and (y) Extraordinary Receipts shall not constitute
"Dispositions" under this Agreement.
- 7 -
"Dollar," "Dollars" and the symbol "$" each means lawful money
of the United States of America.
"Domestic Subsidiary" means a Subsidiary organized under the
laws of the United States, any of the states thereof or the District of
Columbia.
"Effective Date" means the date, on or before April 23, 2004,
on which all of the conditions precedent set forth in Section 5.01 are satisfied
or waived and the initial Loans are made and/or the initial Letters of Credit
are issued.
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter or other communication from any
Person or Governmental Authority involving violations of Environmental Laws or
Releases of Hazardous Materials (i) from any assets, properties or businesses
owned or operated by any Loan Party or any of its Subsidiaries or any
predecessor in interest; (ii) from adjoining properties or businesses; or (iii)
onto any facilities which received Hazardous Materials generated by any Loan
Party or any of its Subsidiaries or any predecessor in interest.
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601, et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), the
Federal Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C.
Section 651 et seq.), as such laws may be amended or otherwise modified from
time to time, and any other present or future federal, state, local or foreign
statute, ordinance, rule, regulation, order, judgment, decree, permit, license
or other binding determination of any Governmental Authority imposing liability
or establishing standards of conduct for protection of the environment or other
government restrictions relating to the protection of the environment or the
Release, deposit or migration of any Hazardous Materials into the environment.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts and consultants
and costs of investigations and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any environmental
condition or a Release of Hazardous Materials from or onto (i) any property
presently or formerly owned by any Loan Party or any of its Subsidiaries or (ii)
any facility which received Hazardous Materials generated by any Loan Party or
any of its Subsidiaries.
- 8 -
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Equity Issuance" means any issuance by any Loan Party or any
of its Subsidiaries to any Person of (a) any shares of its Capital Stock
(whether pursuant to the exercise of options or warrants or the conversion of
any debt securities to equity or otherwise) or (b) any options or warrants
relating to its Capital Stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue
Code.
"Event of Default" means any of the events set forth in
Section 9.01.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to the result of (i) Availability
plus (ii) unrestricted Cash and Cash Equivalents; provided, that, from and after
the date that the condition subsequent set forth in Section 5.03(h) is satisfied
by the Borrowers, such Cash and Cash Equivalents are subject to a control
agreement in favor of the Collateral Agent minus (iii) the aggregate amount, if
any, of all trade payables of the Parent and its Subsidiaries (aged in excess of
60 days past the invoice due date with respect thereto) and all book overdrafts
in excess of their historical practices with respect thereto, in each case as
determined by the Collateral Agent in its reasonable business judgment.
"Excess Cash Flow" means, with respect to any Person for any
period, (i) Consolidated Net Income of such Person and its Subsidiaries for such
period, plus (ii) all non-cash items of such Person and its Subsidiaries
deducted in determining Consolidated Net Income for such period, less (iii)
without duplication, the sum of (A) all non-cash items of such Person and its
Subsidiaries added to the calculation of Consolidated Net Income for such
period, (B) all optional and mandatory cash principal prepayments and all
scheduled principal payments on the Loans made during such period (but, in the
case of the Revolving Loans, only to the extent that the Total Revolving Credit
Commitment is permanently reduced by the amount of such payments), and all
mandatory cash principal prepayments and all scheduled cash principal payments
on other Indebtedness of such Person or any of its Subsidiaries during such
period to the extent such other Indebtedness is permitted to be incurred, and
such payments are permitted to be made, under this Agreement, (C) the cash
portion of Capital Expenditures made by such Person and its Subsidiaries during
such period to the extent permitted to be made under this Agreement, and (D) the
amount of royalties paid by such Person or its Subsidiaries during such period
(to the extent included as an expense in the calculation of net income).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
- 9 -
"Excluded Equity Issuance" means (i) any Equity Issuance by
the Parent to a Seller in connection with a Permitted Acquisition, (ii) any
Equity Issuance by the Parent, the proceeds of which are used (or are to be
used) within 60 days of receipt thereof by the Parent of the Net Cash Proceeds
of such Equity Issuance to finance a Permitted Acquisition, (iii) any Equity
Issuance by the Parent pursuant to any stock option plan or stock incentive plan
approved by the Board of Directors of the Parent, or (iv) any Equity Issuance
(or portion thereof) by the Parent, the Net Cash Proceeds of which are used (or
are to be used) to (a) repurchase Senior Subordinated Notes pursuant to the
equity clawback provisions of Section 3.07(b) of the Senior Subordinated Note
Indenture or (b) purchase Senior Subordinated Notes on the open market, provided
that (w) upon the consummation of such Equity Issuance, the Agents receive a
certificate from an Authorized Officer of the Parent certifying that the Net
Cash Proceeds of such Equity Issuance shall be so applied within 90 days of the
date of such Equity Issuance, (x) the Net Cash Proceeds of such Equity Issuance
(or portion thereof) are deposited in a cash collateral account maintained by
the Collateral Agent for the benefit of the Agents, the L/C Issuer and the
Lenders pursuant to documentation satisfactory to the Collateral Agent until so
applied, (y) the provisions of Section 3.07(b) of the Senior Subordinated Notes
Indenture are complied with, and (z) such Net Cash Proceeds are actually applied
to the repurchase of Senior Subordinated Notes pursuant to the equity clawback
provisions of Section 3.07(b) of the Senior Subordinated Note Indenture, or the
purchase of Senior Subordinated Notes on the open market, as applicable, within
such period of time.
"Existing Credit Facility" means that certain Credit
Agreement, dated as of March 28, 2002, by and among the Parent, the guarantor
subsidiaries named therein, Bank of America, as administrative agent, and the
other lenders named therein, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, restated, supplemented or otherwise modified from time to
time prior to the Effective Date.
"Existing Lenders" means the lenders party to the Existing
Credit Facility.
"Existing Letters of Credit" means the letter(s) of credit
outstanding on the Effective Date and identified on Schedule 3.01.
"Extraordinary Receipts" means any cash received by the Parent
or any of its Subsidiaries not in the ordinary course of business (and not
consisting of proceeds described in Section 2.05(c)(iii) or (iv) hereof),
including, without limitation, (i) foreign, United States, state or local tax
refunds (excluding 50% of the United States tax refunds received in the Fiscal
Year ending December 31, 2004), (ii) pension plan reversions, (iii) proceeds of
insurance, (iv) judgments, proceeds of settlements or other consideration of any
kind in connection with any cause of action, (v) condemnation awards (and
payments in lieu thereof), (vi) indemnity payments and (vii) any purchase price
adjustments or deferred purchase price payments (including, without limitation,
in the form of royalties and licensing fees) received in connection with any
purchase agreement (it being understood that royalties and progress payments
received by the Parent or any of its Subsidiaries in the ordinary course of
business and royalties received by the Parent on the Effective Date in
connection with the MVI Sale shall not constitute "Extraordinary Receipts").
- 10 -
"Facility" means each parcel of real property identified on
Schedule 6.01(o) that is owned by a Loan Party as of the Effective Date,
including, without limitation, the land on which such facility is located, all
buildings and other improvements thereon, all fixtures located at or used in
connection with such facility, all whether now or hereafter existing.
"FDA" means the United States Food and Drug Administration and
any successor agency.
"FDA Notice" has the meaning set forth in Section 6.01(ll).
"FDA Regulation" means any rule, regulation or administrative
order promulgated or issued by the FDA.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to a whole multiple of 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
Bank of America on such day on such transactions as determined by the
Administrative Agent.
"Fee Letter" means that certain fee letter, dated as of the
Effective Date, by and among the Borrowers and the Agents, in form and substance
satisfactory to the Agents.
"Field Survey and Audit" means a field survey and audit of the
Loan Parties and an appraisal of the Collateral performed by auditors, examiners
and/or appraisers selected by the Collateral Agent, at the sole cost and expense
of the Borrowers.
"Final Maturity Date" means April 21, 2006, or such earlier
date on which any Loan shall become due and payable in accordance with the terms
of this Agreement and the other Loan Documents.
"Financial Statements" means the audited consolidated balance
sheet of the Parent and its Subsidiaries for the Fiscal Year ended December 31,
2002, and the related consolidated statement of operations, shareholders' equity
and cash flows for the Fiscal Year then ended.
"Fiscal Year" means the fiscal year of the Parent and its
Subsidiaries ending on December 31st of each year.
"Fixed Charge Coverage Ratio" means, with respect to any
Person for any period, the ratio of (i) Consolidated EBITDA of such Person and
its Subsidiaries for such period, to (ii) the sum of (A) all principal of
Indebtedness of such Person and its Subsidiaries scheduled to be paid or prepaid
during such period to the extent there is an equivalent permanent reduction in
the commitments thereunder, plus (B) Consolidated Net Interest Expense of such
Person and its Subsidiaries for such period, plus (C) income, value-added,
franchise and other similar taxes paid
- 11 -
or payable by such Person and its Subsidiaries during such period, plus (D) cash
dividends or distributions paid by such Person and its Subsidiaries (other than,
in the case of any Loan Party and its Subsidiaries, dividends or distributions
paid by such Loan Party or any of its Subsidiaries to any other Loan Party or
any of its Subsidiaries) during such period, plus (E) Capital Expenditures made
by such Person and its Subsidiaries during such period. In determining the Fixed
Charge Coverage Ratio for a particular period (w) pro forma effect will be given
to: (1) the incurrence, repayment or retirement of any Indebtedness by such
Person and its Subsidiaries since the first day of such period as if such
Indebtedness was incurred, repaid or retired on the first day of such period and
(2) the acquisition (whether by purchase, merger or otherwise) or disposition
(whether by sale, merger or otherwise) of any property or assets acquired or
disposed of by such Person and its Subsidiaries since the first day of such
period, as if such acquisition or disposition occurred on the first day of such
period; (x) interest on Indebtedness bearing a floating interest rate will be
computed as if the rate at the time of computation had been the applicable rate
for the entire period; (y) if such Indebtedness bears, at the option of such
Person and its Subsidiaries, a fixed or floating rate of interest, interest
thereon will be computed by applying, at the option of such Person, either the
fixed or floating rate; and (z) the amount of Indebtedness under a revolving
credit facility will be computed based upon the average daily balance of such
Indebtedness during such period.
"Food and Drug Act" means the Federal Food, Drug and Cosmetic
Act, 21 USC Section 1 et seq. and any successor act.
"Foreign Subsidiary" means a Subsidiary organized under the
laws of a jurisdiction other than the United States, any of the states thereof
or the District of Columbia.
"Funding Losses" has the meaning set forth in Section
2.09(b)(ii).
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States, applied on a consistent basis,
provided that for the purpose of Section 7.03 hereof and the definitions used
therein, "GAAP" shall mean generally accepted accounting principles in effect on
the date hereof and consistent with those used in the preparation of the
Financial Statements, provided, further, that if there occurs after the date of
this Agreement any change in GAAP that affects in any respect the calculation of
any covenant contained in Section 7.03 hereof, the Collateral Agent and the
Administrative Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 7.03 hereof shall be
calculated as if no such change in GAAP has occurred.
"Government Acts" has the meaning specified therefor in
Section 3.01(i)(i).
"Governmental Authority" means any nation or government, any
Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
- 12 -
"Guarantor" means each Person which guarantees, pursuant to
Section 7.01(b) or otherwise, all or any part of the Obligations.
"Guaranty" means each guaranty, substantially in the form of
Exhibit A, made by any Guarantor in favor of the Collateral Agent for the
benefit of the Agents, L/C Issuer and the Lenders pursuant to Section 7.01(b) or
otherwise.
"Hazardous Material" means (a) any element, compound or
chemical that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous
substance or chemical, hazardous waste, special waste, or solid waste under
Environmental Laws or that is likely to cause immediately, or at some future
time, harm to or have an adverse effect on, the environment or risk to human
health or safety, including, without limitation, any pollutant, contaminant,
waste, hazardous waste, toxic substance or dangerous good which is defined or
identified in any Environmental Law and which is present in the environment in
such quantity or state that it violates any Environmental Law; (b) petroleum and
its refined products; (c) polychlorinated biphenyls; (d) any substance
exhibiting a hazardous waste characteristic, including, without limitation,
corrosivity, ignitability, toxicity or reactivity as well as any radioactive or
explosive materials; and (e) any raw materials, building components (including,
without limitation, asbestos-containing materials) and manufactured products
containing hazardous substances listed or classified as such under Environmental
Laws.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"HHS" means the United States Department of Health and Human
Services, or any successor agency thereof.
"HHS Regulation" means any rule, regulation or administrative
order promulgated or issued by the HHS.
"Highest Lawful Rate" means, with respect to any Agent, the
L/C Issuer or any Lender, the maximum non-usurious interest rate, if any, that
at any time or from time to time may be contracted for, taken, reserved, charged
or received on the Obligations under laws applicable to such Agent, the L/C
Issuer or such Lender which are currently in effect or, to the extent allowed by
law, under such applicable laws which may hereafter be in effect and which allow
a higher maximum non-usurious interest rate than applicable laws now allow.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than (x) accrued expenses (including salaries, accrued vacation
and other compensation), trade payables, other accounts payable, royalty and
licensing fee payables and other similar payment obligations incurred in the
ordinary
- 13 -
course of such Person's business and not outstanding for more than 90 days after
the date created and (y) contingent obligations for the deferred purchase price
of property that mature or become fixed based upon the financial performance of
the property acquired and that have not matured or become fixed); (iii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments or upon which interest payments are customarily made; (iv)
all reimbursement, payment or other obligations and liabilities of such Person
created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person (other
than customary reservations of rights (other than retentions of title) under
agreements with suppliers entered into in the ordinary course of business); (v)
all Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (vii) the net termination
obligations, calculated on any date, on a basis satisfactory to the Collateral
Agent and in accordance with accepted practice as if the Hedging Agreement was
terminated on such date, of such Person under Hedging Agreements; (viii) all
monetary obligations under any receivables factoring, receivable sales or
similar transactions and all monetary obligations under any synthetic lease, tax
ownership/operating lease, off-balance sheet financing or similar financing;
(ix) all Contingent Obligations; (x) liabilities incurred under Title IV of
ERISA with respect to any plan (other than a Multiemployer Plan) covered by
Title IV of ERISA and maintained for employees of such Person or any of its
ERISA Affiliates; (xi) withdrawal liability incurred under ERISA by such Person
or any of its ERISA Affiliates with respect to any Multiemployer Plan; and (xii)
all obligations referred to in clauses (i) through (xi) of this definition of
another Person secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien upon property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness. The Indebtedness of any Person shall
include the Indebtedness of any partnership of or joint venture in which such
Person is a general partner or a joint venturer.
"Indemnified Matters" has the meaning specified therefor in
Section 12.15.
"Indemnitees" has the meaning specified therefor in Section
12.15.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Intercompany Subordination Agreement" means an Intercompany
Subordination Agreement, in form and substance satisfactory to the Collateral
Agent, made by each Loan Party in favor of the Collateral Agent for the benefit
of the Agents, L/C Issuer and the Lenders.
"Interest Period" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Reference Rate Loan to
a LIBOR Rate Loan) and ending 1, 2, 3 or 6 months thereafter; provided, however,
that (a) if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e) below) to the
next succeeding Business Day, (b) interest shall accrue at the applicable rate
- 14 -
based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (c) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (d) with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, 3 or 6 months after the date on which the Interest Period
began, as applicable, and (e) Borrowers (or Administrative Borrower on behalf
thereof) may not elect an Interest Period which will end after the Final
Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended (or any successor statute thereto) and the regulations
thereunder.
"Inventory" means, with respect to any Person, all goods and
merchandise of such Person, including, without limitation, all raw materials,
work-in-process, packaging, supplies, materials and finished goods of every
nature used or usable in connection with the shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired, and
all such other property the sale or other disposition of which would give rise
to an Account Receivable or cash.
"Investment" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets (other than equipment, Inventory, supplies or other
property in the ordinary course of business and other than any acquisition of
assets constituting a Capital Expenditure), Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests or other
securities of such other Person, (b) any deposit with, or advance, loan or other
extension of credit to, such Person (other than security deposits under a lease,
deposits made in connection with the purchase of equipment, inventory and
supplies in the ordinary course of business) or (c) any other capital
contribution to or investment in such Person, including, without limitation, any
Contingent Obligations (including any support for a letter of credit issued on
behalf of such Person) incurred for the benefit of such Person and any
Disposition to such Person for consideration less than fair market value of the
property disposed in such transaction, but excluding any payment to such Person
permitted by Section 7.02(h). Investments which are capital contributions or
purchases of Capital Stock which have a right to participate in the profits of
the issuer thereof shall be valued at the amount actually contributed or paid to
purchase such Capital Stock as of the date of such contribution or payment.
Investments which are loans, advances, extensions of credit or Contingent
Obligations shall be valued at the principal amount of such loan, advance or
extension of credit outstanding as of the date of determination or, as
applicable, the principal amount of the loan or advance outstanding as of the
date of determination actually guaranteed by such Contingent Obligation.
"ISP98" has the meaning specified therefor in Section 3.01(h).
"L/C Issuer" means the Bank or such other bank as the
Administrative Agent may select in its sole and absolute discretion.
- 15 -
"Lease" means any lease of real property to which any Loan
Party or any of its Subsidiaries is a party as lessor or lessee.
"Lender" has the meaning specified therefor in the preamble
hereto.
"Letter of Credit" means any Existing Letter of Credit and any
letter of credit issued by the L/C Issuer for the account of a Borrower in
accordance with the terms of Section 3.01(a).
"Letter of Credit Application" has the meaning specified
therefor in Section 3.01(b).
"Letter of Credit Committed Amount" has the meaning specified
therefor in Section 3.01(a).
"Letter of Credit Documents" means, 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 (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"Letter of Credit Fee" has the meaning specified therefor in
Section 3.02(a).
"Letter of Credit Obligations" means, at any time, without
duplication, the sum of (i) the maximum 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 (ii) the aggregate amount of all drawings under
Letters of Credit honored by the L/C Issuer but not theretofore reimbursed by
the Borrowers.
"Leverage Ratio" means, with respect to any Person and its
Subsidiaries for any period, the ratio of (i) Consolidated Total Senior
Indebtedness as of the end of such period to (ii) Consolidated EBITDA of such
Person and its Subsidiaries for such period; provided, that for any period
ending from and after the July 1, 2004 through June 30, 2005, for purposes of
this definition of Leverage Ratio, Consolidated EBITDA shall be calculated on an
Annualized basis.
"Liabilities" has the meaning specified therefor in Section
2.07.
"LIBOR" means for any Interest Period with respect to a LIBOR
Rate Loan:
(a) the rate per annum equal to the rate determined by
the Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
- 16 -
(b) if the rate referenced in the preceding clause (a)
does not appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the Administrative
Agent to be the offered rate on such other page or other service that displays
an average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
or
(c) if the rates referenced in the preceding clauses (a)
and (b) are not available, the rate per annum determined by the Administrative
Agent as the rate of interest at which deposits in Dollars for delivery on the
first day of such Interest Period in same day funds in the approximate amount of
the LIBOR Rate Loan being made, continued or converted by the Reference Bank and
with a term equivalent to such Interest Period would be offered by the Reference
Bank's London Branch to major banks in the London interbank eurodollar market at
their request at approximately 4:00 p.m. (London time) two Business Days prior
to the first day of such Interest Period.
"LIBOR Deadline" has the meaning set forth in Section
2.09(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit
E.
"LIBOR Option" has the meaning set forth in Section 2.09(a).
"LIBOR Rate" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by the Administrative Agent (rounded
upwards if necessary, to the next 1/100%) by dividing (a) LIBOR for such
Interest Period by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage. At no time shall the LIBOR Rate be less than 2.00%.
"LIBOR Rate Loan" means each portion of a Loan that bears
interest at a rate determined by reference to the LIBOR Rate.
"Licensing Agreements" means each of the licensing agreements
constituting a Material Contract set forth on Schedule 1.01(B) hereto between
any Loan Party or any of its Subsidiaries and any licensor with respect to the
rights to manufacture, sell and/or distribute Inventory.
"Lien" means any mortgage, deed of trust, pledge, lien
(statutory or otherwise), security interest, charge or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any Capitalized
Lease and any assignment, deposit arrangement or financing lease intended as, or
having the effect of, security.
"Loan" means the Term Loan or any Revolving Loan made by an
Agent or a Lender to the Borrowers pursuant to ARTICLE II hereof.
"Loan Account" means an account maintained hereunder by the
Administrative Agent on its books of account at the Payment Office, and with
respect to the Borrowers, in which
- 17 -
the Borrowers will be charged with all Loans made to, and all other Obligations
incurred by, the Borrowers.
"Loan Document" means this Agreement, the Fee Letter, any
Guaranty, any Security Agreement, any Pledge Agreement, any Mortgage, any Letter
of Credit Application, any UCC Filing Authorization Letter, the Intercompany
Subordination Agreement, the Senior Subordinated Note Intercreditor Agreement
and any other agreement, instrument, certificate, report and other document
executed and delivered pursuant hereto or thereto or otherwise evidencing or
securing any Loan, any Letter of Credit Obligation or any other Obligation.
"Loan Party" means any Borrower and any Guarantor.
"Lockbox Bank" has the meaning specified therefor in Section
8.01(a).
"Lockboxes" has the meaning specified therefor in Section
8.01(a).
"Material Adverse Effect" means a material adverse effect on
any of (i) the operations, business, assets, properties, condition (financial or
otherwise) or prospects of the Loan Parties taken as a whole, (ii) the ability
of any Loan Party to perform any of its obligations under any Loan Document to
which it is a party, (iii) the legality, validity or enforceability of this
Agreement or any other Loan Document, (iv) the rights and remedies of any Agent,
the L/C Issuer or any Lender under any Loan Document, or (v) the validity,
perfection or priority of a Lien in favor of the Collateral Agent for the
benefit of the Agents, the L/C Issuer and the Lenders on any of the Collateral
with an aggregate value in excess of $500,000; provided that the existence of
the facts and the occurrence of the Disclosed Events shall not have a Material
Adverse Effect unless one or more of the Disclosed Events, either individually
or taken as a whole, has an effect on the operations, business, assets,
properties, condition (financial or otherwise) or prospects of the Loan Parties,
taken as a whole, such that, in the Collateral Agent's reasonable business
judgment, there is reasonably expected to be a material adverse deviation by the
Loan Parties from the financial projections set forth in Schedule 1.01(C)
hereto; provided, further, that, when comparing actual financial performance for
any period to the projections set forth on Schedule 1.01(C) for such period, the
actual financial performance shall be determined without giving effect to the
Specified Costs and Expenses.
"Material Contract" means, with respect to any Person, (i)
each contract or agreement to which such Person or any of its Subsidiaries is a
party involving aggregate consideration payable to or by such Person or such
Subsidiary of $500,000 per year or more (other than purchase orders in the
ordinary course of the business of such Person or such Subsidiary and other than
contracts that by their terms may be terminated by such Person or Subsidiary in
the ordinary course of its business upon less than 60 days' notice without
penalty or premium) and (ii) all other contracts or agreements material to the
business, operations, condition (financial or otherwise), performance, prospects
or properties of such Person and its Subsidiaries, taken as a whole.
"Moody's" means Xxxxx'x Investors Service, Inc. and any
successor thereto.
"Mortgage" means a mortgage (including, without limitation, a
leasehold mortgage), deed of trust or deed to secure debt, in form and substance
reasonably satisfactory to
- 18 -
the Collateral Agent, made by a Loan Party in favor of the Collateral Agent for
the benefit of the Agents, the L/C Issuer and the Lenders, securing the
Obligations and delivered to the Collateral Agent pursuant to Section 5.01(d),
Section 7.01(b), Section 7.01(o) or otherwise.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) years.
"MVI Sale" means the sale of the Parent's M.V.I. and Aquasol
product business to Mayne Pharma (USA) Inc. pursuant to the terms of the MVI
Sale Agreement.
"MVI Sale Agreement" means, collectively, the Asset Purchase
Agreement, dated as of February 27, 2004 among the Parent, Pharma LLC and Mayne
Pharma (USA) Inc. and the other agreements listed on Schedule 1.01(E).
"Net Cash Proceeds" means, (i) with respect to any Disposition
by any Person or any of its Subsidiaries, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting
therefrom only (A) the amount of any Indebtedness secured by any Lien permitted
by Section 7.02(a) on any asset (other than Indebtedness assumed by the
purchaser of such asset) which is required to be, and is, repaid in connection
with such Disposition (other than Indebtedness under this Agreement), (B) costs
and expenses related thereto incurred by such Person or such Subsidiary in
connection therewith (including, without limitation, legal, accounting and
investment banking fees, and underwriting discounts and commissions), (C)
transfer taxes paid to any taxing authorities by such Person or such Subsidiary
in connection therewith, (D) net income taxes to be paid in connection with such
Disposition (after taking into account any tax credits or deductions and any tax
sharing arrangements) and (E) reasonable reserves for indemnification
obligations in connection with such Disposition in an aggregate amount not to
exceed $500,000 during the term of this Agreement, (ii) with respect to the
issuance or incurrence of any Indebtedness by any Person or any of its
Subsidiaries, or the sale or issuance by any Person or any of its Subsidiaries
of any shares of its Capital Stock, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting
therefrom only (A) costs and expenses related thereto incurred by such Person or
such Subsidiary in connection therewith (including, without limitation, legal,
accounting and investment banking fees, and underwriting discounts and
commissions), (B) transfer taxes paid by such Person or such Subsidiary in
connection therewith and (C) net income taxes to be paid in connection therewith
(after taking into account any tax credits or deductions and any tax sharing
arrangements), and (iii) with respect to any Extraordinary Receipts received by
any Person or any of its Subsidiaries, the aggregate amount of cash received
(directly or indirectly) from time to time by or on behalf of such Person or
such Subsidiary in connection therewith, after deducting therefrom only (A)
reasonable expenses related to the collection thereof incurred by such Person or
such Subsidiary and (B) net income taxes to be paid in connection with such
Extraordinary Receipts (after taking into account any tax credits or deductions
and any tax sharing arrangements); in the case of each of clauses (i), (ii) and
(iii), to the extent, but only to the extent, that the amounts so deducted are
- 19 -
(x) actually paid to a Person that, except in the case of reasonable
out-of-pocket expenses, is not an Affiliate of such Person or any of its
Subsidiaries and (y) properly attributable to such transaction or to the asset
that is the subject thereof, as the case may be.
"Non-Consenting Lender" has the meaning specified therefor in
Section 12.07(j).
"Notice of Borrowing" has the meaning specified therefor in
Section 2.02(a).
"Obligations" means all present and future indebtedness,
obligations, and liabilities of each Loan Party to the Agents, the L/C Issuer
and the Lenders arising under this Agreement or any other Loan Document, whether
or not the right of payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured, unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 9.01. Without limiting the generality of the foregoing, the Obligations
of each Loan Party under the Loan Documents include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by such Person under the Loan Documents,
(b) the obligation of such Person to reimburse any amount in respect of any of
the foregoing that any Agent, the L/C Issuer or any Lender (in its sole
discretion) may elect to pay or advance on behalf of such Person in accordance
with the terms of the Loan Documents, (c) any Hedging Agreement of the Borrower
to which a Lender or Agent-Related Person is a party, and (d) all obligations
under any Treasury Management Agreement between any Loan Party and any
Agent-Related Person.
"Operating Lease Obligations" means all obligations for the
payment of rent for any real or personal property under leases or agreements to
lease, other than Capitalized Lease Obligations.
"Parent" has the meaning specified therefor in the preamble
hereto.
"Participant Register" has the meaning specified therefor in
Section 12.07(g).
"Participation Interest" means a purchase by a Revolving Loan
Lender of a participation in Letters of Credit or Letter of Credit Obligations
as provided in Section 3.01.
"Payment Office" means the Administrative Agent's office
located at One Independence Center, 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, or at such other office or offices of the Administrative Agent as may be
designated in writing from time to time by the Administrative Agent to the
Collateral Agent and the Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
- 20 -
"Permitted Acquisition" means any Acquisition by a Loan Party
or any wholly-owned Subsidiary of a Loan Party to the extent that each of the
following conditions shall have been satisfied:
(a) the aggregate Purchase Price (net of the Net
Cash Proceeds applied from any Excluded Equity Issuances) for all Permitted
Acquisitions since the Effective Date would not exceed $5,000,000, individually,
or $15,000,000 in the aggregate during the term of this Agreement as a result of
the consummation of the proposed Acquisition,
(b) the aggregate Purchase Price (net of the Net
Cash Proceeds applied from any Excluded Equity Issuance) for all Permitted
Acquisitions during any 6 consecutive month period shall not exceed $5,000,000;
(c) no Default or Event of Default shall have
occurred and be continuing or would result from the consummation of the proposed
Acquisition,
(d) Excess Availability shall not be less than
$20,000,000 both immediately before and immediately after giving effect to such
Acquisition;
(e) to the extent the Acquisition will be
financed in whole or in part with the proceeds of any Loan, the conditions set
forth in Section 5.02 shall have been satisfied;
(f) the Borrowers shall have furnished to the
Agents at least 10 Business Days prior to the consummation of such Acquisition
(1) a term sheet and/or commitment letter (setting forth in reasonable detail
the terms and conditions of such Acquisition) and, at the request of any Agent,
such other information and documents that any Agent may reasonably request,
including, without limitation, executed counterparts of the respective
agreements, instruments or other documents pursuant to which such Acquisition is
to be consummated (including, without limitation, any related management,
non-compete, employment, option or other material agreements), any schedules to
such agreements, instruments or other documents and all other material ancillary
agreements, instruments or other documents to be executed or delivered in
connection therewith, (2) pro forma quarterly balance sheets, income statements
and statements of cash flows of the Parent and its Subsidiaries for the
immediately succeeding 12 month period after giving effect to the consummation
of any Acquisition with an aggregate Purchase Price in excess of $2,500,000 that
conform to the standards set forth in Section 6.01(g)(ii), (3) a certificate of
the chief financial officer of the Parent, demonstrating on a pro forma basis
compliance with all covenants set forth in Section 7.03 hereof after the
consummation of such Acquisition, and (4) copies of such other agreements,
instruments or other documents (including, without limitation, the Loan
Documents required by Section 7.01(b)) as any Agent shall reasonably request;
(g) the agreements, instruments and other
documents referred to in paragraph (b) above shall provide that (1) neither the
Loan Parties nor any of their Subsidiaries shall, in connection with such
Acquisition, assume or remain liable in respect of any Indebtedness of the
Seller or Sellers (except for Permitted Indebtedness), and (2) all property to
be so acquired in connection with such Acquisition shall be free and clear of
any and all Liens,
- 21 -
except for Permitted Liens (and if any such property is subject to any Lien not
permitted by this clause (2) then concurrently with such Acquisition such Lien
shall be released);
(h) the Subsidiary to be acquired or formed, or
the assets to be acquired, as the case may be, as a result of such Acquisition
shall be engaged in the same business as, or shall be useful in the business of,
as the case may be, the Loan Parties and such Subsidiary will be a direct
wholly-owned Subsidiary of, or the assets to be acquired will be owned by, as
the case may be, a Loan Party;
(i) such Acquisition shall be effected in such a
manner so that the acquired Capital Stock or assets are owned either by a Loan
Party or a wholly-owned Subsidiary of a Loan Party and, if effected by merger or
consolidation involving a Loan Party, such Loan Party shall be the continuing or
surviving Person; and
(j) any such Subsidiary (and its equityholders)
shall execute and deliver the agreements, instruments and other documents
required by Section 7.01(b).
"Permitted Holder" means Xxxxxxxxx X. Xxxxxxxx and any of his
Related Parties.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to any Agent and any Lender
under this Agreement and the other Loan Documents;
(b) any other Indebtedness listed on Schedule 7.02(b),
and the extension of maturity, refinancing or modification of the terms thereof;
provided, however, that (i) such extension, refinancing or modification is
pursuant to terms that are not less favorable to the Loan Parties and the
Lenders than the terms of the Indebtedness being extended, refinanced or
modified, provided, that any such extension, refinancing or modification may
provide for a market rate of interest and (ii) after giving effect to such
extension, refinancing or modification, the amount of such Indebtedness is not
greater than the amount of Indebtedness outstanding immediately prior to such
extension, refinancing or modification;
(c) Indebtedness evidenced by Capitalized Lease
Obligations entered into in order to finance Capital Expenditures made by the
Loan Parties in accordance with the provisions of Section 7.02(g), which
Indebtedness, when aggregated with the principal amount of all Indebtedness
incurred under this clause (c) and clause (d) of this definition, does not
exceed $5,000,000 at any time outstanding;
(d) Indebtedness permitted by clause (e) of the
definition of "Permitted Lien";
(e) Indebtedness permitted under Section 7.02(e);
(f) obligations of the Parent in respect of Hedging
Agreements entered into with any Agent-Related Person and with the prior written
consent of each Agent in order to manage existing or anticipated interest rate
or exchange rate risks and not for speculative purposes;
- 22 -
(g) Subordinated Indebtedness (including the Indebtedness
evidenced by the Senior Subordinated Notes in an aggregate principal amount not
to exceed $175,000,000 at any one time outstanding);
(h) unsecured Indebtedness in the form of seller notes,
seller earn-outs or similar deferred or contingent purchase price payments to
the extent such Indebtedness is issued, incurred or assumed after the Effective
Date by a Loan Party to Sellers in connection with Permitted Acquisitions in an
aggregate principal amount for this clause (h) not exceeding $7,500,000 in the
aggregate principal amount outstanding at any time;
(i) Contingent Obligations with respect to any
Indebtedness described in this definition;
(j) Indebtedness in respect of performance bonds and
surety or appeal bonds entered into in the ordinary course of business;
(k) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is satisfied within 3 Business Days of incurrence;
(l) endorsements in the ordinary course of business of
negotiable instruments for deposit or collection; and
(m) after the date that the condition subsequent set
forth in Section 5.03(j) is satisfied, other Indebtedness hereafter incurred by
the Parent or any of its Subsidiaries not to exceed an aggregate principal
amount of $3,000,000 at any one time outstanding; provided that any Indebtedness
incurred pursuant to this subclause (m) shall be permitted only if (i) the loan
documentation with respect to such Indebtedness shall not contain covenants or
default provisions relating to the Parent or any of its Subsidiaries that are
more restrictive than the covenants and default provisions contained in the Loan
Documents, (ii) the Administrative Borrower shall have delivered to the
Collateral Agent a certificate demonstrating that, upon giving effect on a pro
forma basis to the incurrence of such Indebtedness, the Loan Parties would be in
compliance with the financial covenants set forth in Section 7.03 and (iii) such
Indebtedness is permitted under the Senior Subordinated Note Indenture.
"Permitted Investments" means (i) marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case, maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Xxxxx'x or A-1 by Standard & Poor's; (iii)
certificates of deposit maturing not more than 270 days after the date of issue,
issued by commercial banking institutions and money market or demand deposit
accounts maintained at commercial banking institutions, each of which is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000; (iv) repurchase agreements
having maturities of not more than 90 days from the date of acquisition which
are entered into with major money center banks included in the commercial
- 23 -
banking institutions described in clause (iii) above and which are secured by
readily marketable direct obligations of the United States Government or any
agency thereof, (v) money market accounts maintained with mutual funds having
assets in excess of $2,500,000,000; and (vi) tax exempt securities rated A or
higher by Xxxxx'x or A+ or higher by Standard & Poor's.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges
the payment of which is not required under Section 7.01(c);
(c) (i) Liens imposed by law or pursuant to customary
reservations of rights (other than retentions of title), such as landlords',
carriers', warehousemen's, mechanics', materialmen's and other similar Liens
arising in the ordinary course of business and securing obligations (other than
Indebtedness for borrowed money) that are not overdue by more than 30 days or
are being contested in good faith and by appropriate proceedings promptly
initiated and diligently conducted, and a reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor
(and as to which the assets or property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof) or (ii) Liens
constituting rights of return in the ordinary course of the business of, and
consistent with the industry practices of, the Loan Parties and their
Subsidiaries, to the extent that the exercise of such rights could not
reasonably be expected to have a Material Adverse Effect;
(d) Liens described on Schedule 7.02(a); provided, that
(i) no such Lien shall at any time be extended to cover any additional property
not subject thereto on the Effective Date and (ii) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed, refunded or
refinanced other than in accordance with clause (b) of the definition of
Permitted Indebtedness;
(e) (i) purchase money Liens on equipment acquired or
held by any Loan Party or any of its Subsidiaries in the ordinary course of its
business to secure the purchase price of such equipment or Indebtedness incurred
solely for the purpose of financing the acquisition of such equipment or (ii)
Liens existing on such equipment at the time of its acquisition; provided,
however, that (A) no such Lien shall extend to or cover any other property of
any Loan Party or any of its Subsidiaries and (B) the aggregate principal amount
of Indebtedness secured by any or all such Liens shall not exceed at any one
time outstanding $5,000,000;
(f) Liens (other than Liens created or imposed under
ERISA the creation or incurrence of which would result in an Event of Default
under Section 9.01(q) or (r)), deposits and pledges of cash securing (i)
obligations incurred in respect of workers' compensation, unemployment insurance
or other forms of governmental insurance or benefits, (ii) the performance of
bids, tenders, leases, contracts (other than for the payment of money) and
statutory obligations or (iii) obligations on surety or appeal bonds, but only
to the extent such Liens, deposits or pledges are made or otherwise arise in the
ordinary course of business and secure obligations not past due;
- 24 -
(g) easements, zoning restrictions and similar
encumbrances on real property and minor irregularities in the title thereto that
(i) in the case of any Facility, are exceptions to the Title Insurance Policy
with respect to such Facility, as accepted by the Agents or (ii) in the case of
any real property, do not (A) secure obligations for the payment of money or (B)
materially impair the value of such property or its use by any Loan Party or any
of its Subsidiaries in the normal conduct of such Person's business;
(h) Liens on real property or equipment securing
Indebtedness permitted by subsection (c) of the definition of Permitted
Indebtedness;
(i) Liens resulting from any judgment or award so long as
such judgment or award does not constitute an Event of Default under Section
9.01(k);
(j) Liens securing the Senior Subordinated Notes,
provided that such Liens are subject to the Senior Subordinated Note
Intercreditor Agreement;
(k) leases or subleases granted to others not interfering
in any material respect with the business of any Loan Party;
(l) any interest of title of a lessor under, and Liens
arising from Uniform Commercial Code financing statements (or equivalent
filings, registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Agreement;
(m) normal and customary rights of setoff upon deposits
of cash in favor of banks or other depository institutions;
(n) Liens of a collection bank arising under Section
4-210 of the Uniform Commercial Code on items in the course of collection;
(o) Liens in favor of customs and revenue authorities
arising as a matter of law to secure non-delinquent customs duties in connection
with the importation of goods; and
(p) after the date that the condition subsequent set
forth in Section 5.03(j) is satisfied, other Liens securing obligations of the
Loan Parties and their Subsidiaries that do not exceed $500,000 in aggregate at
any time outstanding.
"Person" means an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"Plan" means any Employee Plan or Multiemployer Plan.
"Pledge Agreement" means a Pledge and Security Agreement made
by a Loan Party in favor of the Collateral Agent for the benefit of the Agents,
the L/C Issuer and the Lenders, substantially in the form of Exhibit C, securing
the Obligations and delivered to the Collateral Agent.
- 25 -
"Post-Default Rate" means a rate of interest per annum equal
to the rate of interest otherwise in effect from time to time pursuant to the
terms of this Agreement plus 2%, or, if a rate of interest is not otherwise in
effect, the Reference Rate plus 7.25%.
"Product Recall Notice" means any written notice from the FDA
stating that any product or product line of any Loan Party or any of its
Subsidiaries has been or will be recalled.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make
Revolving Loans and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's Revolving
Credit Commitment, by (ii) the Total Revolving Credit Commitment, provided,
that, if the Total Revolving Credit Commitment has been reduced to zero, the
numerator shall be the aggregate unpaid principal amount of such Lender's
Revolving Loans (including Collateral Agent Advances) and its interest in the
Letter of Credit Obligations and the denominator shall be the aggregate unpaid
principal amount of all Revolving Loans (including Collateral Agent Advances)
and Letter of Credit Obligations,
(b) with respect to a Lender's obligation to make the
Term Loan and receive payments of interest, fees, and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's Term Loan
Commitment, by (ii) the Total Term Loan Commitment, provided that if the Total
Term Loan Commitment has been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender's portion of the Term Loan and
the denominator shall be the aggregate unpaid principal amount of the Term Loan,
and
(c) with respect to all other matters (including, without
limitation, the indemnification obligations arising under Section 10.05), the
percentage obtained by dividing (i) the sum of such Lender's Revolving Credit
Commitment and the unpaid principal amount of such Lender's portion of the Term
Loan, by (ii) the sum of the Total Revolving Credit Commitment and the aggregate
unpaid principal amount of the Term Loan, provided, that, if such Lender's
Revolving Credit Commitment shall have been reduced to zero, such Lender's
Revolving Credit Commitment shall be deemed to be the aggregate unpaid principal
amount of such Lender's Revolving Loans (including Collateral Agent Advances)
and its interest in the Letter of Credit Obligations and if the Total Revolving
Credit Commitment shall have been reduced to zero, the Total Revolving Credit
Commitment shall be deemed to be the aggregate unpaid principal amount of all
Revolving Loans (including Collateral Agent Advances) and Letter of Credit
Obligations.
"Purchase Price" means, with respect to any Acquisition, an
amount equal to the sum of (i) the aggregate consideration, whether cash or
property or securities (but excluding the fair market value of any Capital Stock
of any Loan Party issued in connection with such Acquisition), paid or delivered
by the Parent in connection with such Acquisition, plus (ii) the aggregate
amount of Indebtedness assumed, but excluding consideration consisting of
royalties based upon a percentage of sale or other similar percentage of sale
arrangements.
"Rating Agencies" has the meaning specified therefor in
Section 2.07.
- 26 -
"Reference Bank" means Bank of America, its successors or any
other commercial bank designated by the Administrative Agent to the
Administrative Borrower from time to time.
"Reference Rate" means the greater of (x) the rate of interest
publicly announced by the Reference Bank in New York, New York from time to time
as its reference rate, base rate or prime rate and (y) the Federal Funds Rate
plus 0.50%. The reference rate, base rate or prime rate is determined from time
to time by the Reference Bank as a means of pricing some loans to its borrowers
and neither is tied to any external rate of interest or index nor necessarily
reflects the lowest rate of interest actually charged by the Reference Bank to
any particular class or category of customers. Each change in the Reference Rate
shall be effective from and including the date such change is publicly announced
as being effective. At no time shall the Reference Rate be less than 4.00%.
"Reference Rate Loan" means a Loan bearing interest calculated
based upon the Reference Rate.
"Register" has the meaning specified therefor in Section
12.07(d).
"Registered Loan" has the meaning specified therefor in
Section 12.07(d).
"Regulation T", "Regulation U" and "Regulation X" mean,
respectively, Regulations T, U and X of the Board or any successor, as the same
may be amended or supplemented from time to time.
"Related Fund" means, with respect to any Person, an Affiliate
of such Person, or a fund or account managed by such Person or an Affiliate of
such Person.
"Related Parties" means, with respect to an individual,
spouses, lineal ancestors or descendants, natural or adopted, and spouses of
lineal ancestors or descendants, or trusts for the sole benefit of any of such
Persons.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, seeping,
migrating, dumping or disposing of any Hazardous Material (including the
abandonment or discarding of barrels, containers and other closed receptacles
containing any Hazardous Material) into the indoor or outdoor environment,
including, without limitation, the movement of Hazardous Materials through or in
the ambient air, soil, surface or ground water, or property.
"Remedial Action" means all actions taken to (i) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment; (ii) prevent
or minimize a Release or threatened Release of Hazardous Materials so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
perform any other actions authorized by 42 U.S.C. Section 9601.
- 27 -
"Reportable Event" means an event described in Section 4043 of
ERISA (other than an event not subject to the provision for 30-day notice to the
PBGC under the regulations promulgated under such Section).
"Required Lenders" means Lenders whose Pro Rata Shares
aggregate at least 50.1%.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Revolving Credit Commitment" means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans to the Borrowers
in the amount set forth opposite such Lender's name in Schedule 1.01(A) hereto,
as such amount may be terminated or reduced from time to time in accordance with
the terms of this Agreement.
"Revolving Loan" means a loan made by a Lender to the
Borrowers pursuant to Section 2.01(a)(i).
"Revolving Loan Lender" means a Lender with a Revolving Credit
Commitment.
"SEC" means the Securities and Exchange Commission or any
other similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect from time to time.
"Securitization" has the meaning specified therefor in Section
2.07.
"Securitization Parties" has the meaning specified therefor in
Section 2.07.
"Security Agreement" means a Security Agreement made by a Loan
Party in favor of the Collateral Agent for the benefit of the Agents, the L/C
Issuer and the Lenders, substantially in the form of Exhibit B, securing the
Obligations and delivered to the Collateral Agent.
"Seller" means any Person that sells Capital Stock or other
property or assets to a Loan Party or a Subsidiary of a Loan Party in a
Permitted Acquisition.
"Senior Subordinated Note" means any one of the 11% Senior
Subordinated Notes due 2010, issued by the Parent in favor of the Senior
Subordinated Noteholders pursuant to the Senior Subordinated Note Indenture.
- 28 -
"Senior Subordinated Note Indenture" means the Indenture,
dated as of March 28, 2002, by and among the Parent and the Trustee for the
Senior Subordinated Noteholders, as amended by the Supplemental Indenture dated
as of April 20, 2004.
"Senior Subordinated Note Intercreditor Agreement" means the
Intercreditor Agreement, dated as of the Effective Date, between the Collateral
Agent and the Trustee under the Senior Subordinated Note Indenture in its
capacity as collateral agent thereunder and acknowledged by the Borrowers.
"Senior Subordinated Noteholder" means any one of the holders
from time to time of the Senior Subordinated Notes."
"Settlement Period" has the meaning specified therefor in
Section 2.02(d)(i).
"Silver Point" has the meaning specified therefor in the
preamble hereto.
"Solvent" means, with respect to any Person on a particular
date, that on such date (i) the fair value of the property of such Person is not
less than the total amount of the liabilities of such Person, (ii) 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 existing
debts as they become absolute and matured, (iii) 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, (iv) 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
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Special Committee Investigation" means the investigation by
the independent committee consisting of all of the non-employee members of the
Administrative Borrower's Board of Directors, assisted by King & Spalding LLP
and Deloitte & Touche USA LLP, with respect to unusual sales in the Loan
Parties' Brethine and Darvocet product lines during the second half of Fiscal
Year 2003 and the other matters within the scope of the inquiry of such
independent committee.
"Specified Costs and Expenses" means the non-recurring cash
costs and expenses set forth on Schedule 1.01(F).
"Standard & Poor's" means Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Subordinated Indebtedness" means Indebtedness of any Loan
Party the terms of which are satisfactory to the Collateral Agent and the
Required Lenders which has been expressly subordinated in right of payment to
all Indebtedness of such Loan Party under the Loan Documents (i) by the
execution and delivery of a subordination agreement, in form and substance
satisfactory to the Collateral Agent and the Required Lenders, or (ii) otherwise
on terms and conditions (including, without limitation, subordination
provisions, payment terms,
- 29 -
interest rates, covenants, remedies, defaults and other material terms)
satisfactory to the Collateral Agent and the Required Lenders.
"Subsidiary" means, with respect to any Person at any date,
any corporation, limited or general partnership, limited liability company,
trust, estate, association, joint venture or other business entity (i) the
accounts of which would be consolidated with those of such Person in such
Person's consolidated financial statements if such financial statements were
prepared in accordance with GAAP or (ii) of which more than 50% of (A) the
outstanding Capital Stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such Person, (B) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (C) in the case of a trust, estate, association, joint
venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
Person.
"Taxes" has the meaning specified therefor in Section 2.08(a).
"Term Loan" means, collectively, the loans made by the Term
Loan Lenders to the Borrowers on the Effective Date pursuant to Section
2.01(a)(ii).
"Term Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make the Term Loan to the Borrowers in the amount
set forth in Schedule 1.01(A) hereto, as the same may be terminated or reduced
from time to time in accordance with the terms of this Agreement.
"Term Loan Lender" means a Lender with a Term Loan Commitment.
"Term Loan Obligations" means any Obligations with respect to
the Term Loan (including without limitation, the principal thereof, the interest
thereon, and the fees and expenses specifically related thereto).
"Termination Event" means (i) a Reportable Event with respect
to any Employee Plan, (ii) any event that causes any Loan Party or any of its
ERISA Affiliates to incur liability under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Internal Revenue Code, (iii) the filing of a notice of intent to terminate
an Employee Plan or the treatment of an Employee Plan amendment as a termination
under Section 4041 of ERISA, (iv) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (v) any other 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 Employee Plan.
"Title Insurance Policy" means a mortgagee's loan policy, in
form and substance satisfactory to the Collateral Agent, together with all
endorsements made from time to time thereto, issued by or on behalf of a title
insurance company reasonably satisfactory to the Collateral Agent, insuring the
Lien created by a Mortgage in an amount and on terms reasonably satisfactory to
the Collateral Agent, delivered to the Collateral Agent.
- 30 -
"Total Commitment" means the sum of the Total Revolving Credit
Commitment and the Total Term Loan Commitment.
"Total Revolving Credit Commitment" means the sum of the
amounts of the Lenders' Revolving Credit Commitments.
"Total Term Loan Commitment" means the sum of the amounts of
the Lenders' Term Loan Commitments.
"Transferee" has the meaning specified therefor in Section
2.08(a).
"Treasury Management Agreement" means any agreement governing
the provision of treasury or cash management services, including deposit
accounts, funds transfer, automated clearinghouse, zero balance accounts,
returned check concentration, controlled disbursement, lockbox, account
reconciliation and reporting.
"UCC Filing Authorization Letter" means a letter duly executed
by each Loan Party authorizing the Collateral Agent to file appropriate
financing statements on Form UCC-1 without the signature of such Loan Party in
such office or offices as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests purported to be created by
each Security Agreement, each Pledge Agreement and each Mortgage.
"UCP" has the meaning specified therefor in Section 3.01(h).
"Uniform Commercial Code" has the meaning specified therefor
in Section 1.03.
"Unused Line Fee" has the meaning specified therefor in
Section 2.06(a).
"WARN" has the meaning specified therefor in Section 6.01(z).
Section 1.02 Terms Generally. The definitions of terms herein
shall apply equally to 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".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any right or interest in or to
assets and properties of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible. References in this Agreement to
"determination" by any Agent include good faith estimates by such Agent (in
- 31 -
the case of quantitative determinations) and good faith beliefs by such Agent
(in the case of qualitative determinations).
Section 1.03 Accounting and Other Terms. Unless otherwise
expressly provided herein, each accounting term used herein shall have the
meaning given it under GAAP applied on a basis consistent with those used in
preparing the Financial Statements. All terms used in this Agreement which are
defined in Article 8 or Article 9 of the Uniform Commercial Code as in effect
from time to time in the State of New York (the "Uniform Commercial Code") and
which are not otherwise defined herein shall have the same meanings herein as
set forth therein, provided that terms used herein which are defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
shall continue to have the same meaning notwithstanding any replacement or
amendment of such statute except as any Agent may otherwise determine.
Section 1.04 Time References. Unless otherwise indicated
herein, all references to time of day refer to Eastern Standard Time or Eastern
daylight saving time, as in effect in New York City on such day. For purposes of
the computation of a period of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding"; provided, however, that with respect to a
computation of fees or interest payable to any Agent, any Lender or the L/C
Issuer, such period shall in any event consist of at least one full day.
ARTICLE II
THE LOANS
Section 2.01 Commitments. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth:
(i) each Revolving Loan Lender
severally agrees to make Revolving Loans to the Borrowers at any time and from
time to time from the Effective Date to the Final Maturity Date, or until the
earlier reduction of its Revolving Credit Commitment to zero in accordance with
the terms hereof, in an aggregate principal amount of Revolving Loans at any
time outstanding not to exceed the amount of such Lender's Revolving Credit
Commitment; and
(ii) each Term Loan Lender severally
agrees to make the Term Loan to the Borrowers on the Effective Date, in an
aggregate principal amount not to exceed the amount of such Lender's Term Loan
Commitment.
(b) Notwithstanding the foregoing:
(i) The aggregate principal amount of
Revolving Loans outstanding at any time to the Borrowers shall not exceed the
difference between (A) the Total Revolving Credit Commitment and (B) the
aggregate Letter of Credit Obligations. The Revolving Credit Commitment of each
Lender shall automatically and permanently be reduced to zero on the Final
Maturity Date. Within the foregoing limits, the Borrowers may borrow, repay and
reborrow, on or after the Effective Date and prior to the Final Maturity Date,
subject to the terms, provisions and limitations set forth herein.
- 32 -
(ii) The aggregate principal amount of
the Term Loan made on the Effective Date shall not exceed the Total Term Loan
Commitment. Any principal amount of the Term Loan which is repaid or prepaid may
not be reborrowed.
Section 2.02 Making the Loans. (a) The Administrative Borrower
shall give the Administrative Agent prior telephonic notice (immediately
confirmed in writing, in substantially the form of Exhibit D hereto (a "Notice
of Borrowing")), not later than (x) in the case of a borrowing consisting of a
Reference Rate Loan, 11:00 a.m. (New York City time) on the borrowing date of
the proposed Reference Rate Loan, and (y) in the case of a borrowing consisting
of LIBOR Rate Loans, 11:00 a.m. (New York City time) on a date that is three (3)
Business Days prior to the date of the proposed borrowing. Such Notice of
Borrowing shall be irrevocable and shall specify (i) the principal amount of the
proposed Loan (which, in the case of a LIBOR Rate Loan, must be in a minimum
amount of $1,000,000 and in integral multiples of $100,000 in excess thereof),
(ii) whether such Loan is requested to be a Reference Rate Loan or a LIBOR Rate
Loan and, in the case of a LIBOR Rate Loan, the initial Interest Period with
respect thereto, (iii) in the case of Loans requested on the Effective Date,
whether such Loan is requested to be a Revolving Loan or the Term Loan, (iv) the
use of the proceeds of such proposed Loan, and (v) the proposed borrowing date,
which must be a Business Day, and, with respect to the Term Loan, must be the
Effective Date. The Administrative Agent and the Lenders may act without
liability upon the basis of written, telecopied or telephonic notice believed by
the Administrative Agent in good faith to be from the Administrative Borrower
(or from any Authorized Officer thereof designated in writing purportedly from
the Administrative Borrower to the Administrative Agent). Each Borrower hereby
waives the right to dispute the Administrative Agent's record of the terms of
any such telephonic Notice of Borrowing. The Administrative Agent and each
Lender shall be entitled to rely conclusively on any Authorized Officer's
authority to request a Loan on behalf of the Borrowers until the Administrative
Agent receives written notice to the contrary. The Administrative Agent and the
Lenders shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing. Notwithstanding anything to the contrary
herein, all Loans made on the Effective Date shall be Reference Rate Loans.
Thereafter all or any portion of the Loans may be converted into LIBOR Rate
Loans in accordance with the terms of Section 2.09.
(b) Each Notice of Borrowing pursuant to this
Section 2.02 shall be irrevocable and the Borrowers shall be bound to make a
borrowing in accordance therewith. Each Revolving Loan shall be made in a
minimum amount of $500,000 and shall be in an integral multiple of $50,000.
(c) (i) Except as otherwise provided in
this subsection 2.02(c), all Loans under this Agreement shall be made by the
Lenders simultaneously and proportionately to their Pro Rata Shares of the Total
Revolving Credit Commitment and the Total Term Loan Commitment, as the case may
be, it being understood that no Lender shall be responsible for any default by
any other Lender in that other Lender's obligations to make a Loan requested
hereunder, nor shall the Commitment of any Lender be increased or decreased as a
result of the default by any other Lender in that other Lender's obligation to
make a Loan requested hereunder, and each Lender shall be obligated to make the
Loans required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.
- 33 -
(ii) Notwithstanding any other provision
of this Agreement, and in order to reduce the number of fund transfers among the
Borrowers, the Agents and the Lenders, the Borrowers, the Agents and the Lenders
agree that the Administrative Agent may (but shall not be obligated to), and the
Borrowers and the Lenders hereby irrevocably authorize the Administrative Agent
to, fund, on behalf of the Revolving Loan Lenders, Revolving Loans pursuant to
Section 2.01, subject to the procedures for settlement set forth in subsection
2.02(d); provided, however, that (a) the Administrative Agent shall in no event
fund any such Revolving Loans if the Administrative Agent shall have received
written notice from the Collateral Agent or the Required Lenders on the Business
Day prior to the date of the proposed Revolving Loan that one or more of the
conditions precedent contained in Section 5.02 will not be satisfied at the time
of the proposed Revolving Loan, and (b) the Administrative Agent shall not
otherwise be required to determine that, or take notice whether, the conditions
precedent in Section 5.02 have been satisfied. If either (x) the Administrative
Borrower gives a Notice of Borrowing requesting a Revolving Loan that is a LIBOR
Rate Loan or (y) the Administrative Agent elects not to fund a requested
Revolving Loan that is a Reference Rate Loan on behalf of such Revolving Loan
Lenders, then promptly after receipt of the Notice of Borrowing requesting such
Revolving Loan, the Administrative Agent shall notify each Revolving Loan Lender
of the specifics of the requested Revolving Loan and that it will not fund the
requested Revolving Loan on behalf of the Revolving Loan Lenders. If the
Administrative Agent notifies the Revolving Loan Lenders that it will not fund a
requested Revolving Loan on behalf of the Revolving Loan Lenders, each Revolving
Loan Lender shall make its Pro Rata Share of the Revolving Loan available to the
Administrative Agent, in immediately available funds, in the Administrative
Agent's Account no later than 3:00 p.m. (New York City time) (provided that the
Administrative Agent requests payment from such Revolving Loan Lender not later
than 1:00 p.m. (New York City time)) on the date of the proposed Revolving Loan.
The Administrative Agent will make the proceeds of such Revolving Loans
available to the Borrowers on the day of the proposed Revolving Loan by causing
an amount, in immediately available funds, equal to the proceeds of all such
Revolving Loans received by the Administrative Agent in the Administrative
Agent's Account or the amount funded by the Administrative Agent on behalf of
the Revolving Loan Lenders to be deposited in an account designated by the
Administrative Borrower.
(iii) If the Administrative Agent has
notified the Revolving Loan Lenders that the Administrative Agent, on behalf of
the Revolving Loan Lenders, will fund a particular Revolving Loan pursuant to
subsection 2.02(c)(ii), the Administrative Agent may assume that each such
Revolving Loan Lender has made such amount available to the Administrative Agent
on such day and the Administrative Agent, in its sole discretion, may, but shall
not be obligated to, cause a corresponding amount to be made available to the
Borrowers on such day. If the Administrative Agent makes such corresponding
amount available to the Borrowers and such corresponding amount is not in fact
made available to the Administrative Agent by any such Revolving Loan Lender,
the Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Revolving Loan Lender together with interest thereon, for
each day from the date such payment was due until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate for three Business Days
and thereafter at the Reference Rate. During the period in which such Revolving
Loan Lender has not paid such corresponding amount to the Administrative Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the amount so advanced by the Administrative Agent to the
Borrowers shall, for all purposes hereof, be a Revolving Loan made
- 34 -
by the Administrative Agent for its own account. Upon any such failure by a
Revolving Loan Lender to pay the Administrative Agent, the Administrative Agent
shall promptly thereafter notify the Administrative Borrower of such failure and
the Borrowers shall immediately pay such corresponding amount to the
Administrative Agent for its own account.
(iv) Nothing in this subsection 2.02(c)
shall be deemed to relieve any Revolving Loan Lender from its obligations to
fulfill its Revolving Credit Commitment hereunder or to prejudice any rights
that the Administrative Agent or the Borrowers may have against any Revolving
Loan Lender as a result of any default by such Revolving Loan Lender hereunder.
(d) (i) With respect to each LIBOR Rate
Loan, on the first and the last date of each Interest Period, and with respect
to all periods for which the Administrative Agent, on behalf of the Revolving
Loan Lenders, has funded Revolving Loans that are Reference Rate Loans pursuant
to subsection 2.02(c), on Friday of each week, or if the applicable Friday is
not a Business Day, then on the following Business Day, or such shorter period
as the Administrative Agent may from time to time select (any such Interest
Period, week or shorter period being herein called a "Settlement Period"), the
Administrative Agent shall notify each Revolving Loan Lender of the unpaid
principal amount of the Revolving Loans outstanding as of the last day of each
such Settlement Period. In the event that such amount is greater than the unpaid
principal amount of the Revolving Loans outstanding on the last day of the
Settlement Period immediately preceding such Settlement Period (or, if there has
been no preceding Settlement Period, the amount of the Revolving Loans made on
the date of such Revolving Loan Lender's initial funding), each Revolving Loan
Lender shall promptly (and in any event not later than 2:00 p.m. (New York City
time) if the Administrative Agent requests payment from such Lender not later
than 12:00 noon (New York City time) on such day) make available to the
Administrative Agent its Pro Rata Share of the difference in immediately
available funds. In the event that such amount is less than such unpaid
principal amount, the Administrative Agent shall promptly pay over to each
Revolving Loan Lender its Pro Rata Share of the difference in immediately
available funds. In addition, if the Administrative Agent shall so request at
any time when a Default or an Event of Default shall have occurred and be
continuing, or any other event shall have occurred as a result of which the
Administrative Agent shall determine that it is desirable to present claims
against the Borrowers for repayment, each Revolving Loan Lender shall promptly
remit to the Administrative Agent or, as the case may be, the Administrative
Agent shall promptly remit to each Revolving Loan Lender, sufficient funds to
adjust the interests of the Revolving Loan Lenders in the then outstanding
Revolving Loans to such an extent that, after giving effect to such adjustment,
each such Revolving Loan Lender's interest in the then outstanding Revolving
Loans will be equal to its Pro Rata Share thereof. The obligations of the
Administrative Agent and each Revolving Loan Lender under this subsection
2.02(d) shall be absolute and unconditional. Each Revolving Loan Lender shall
only be entitled to receive interest on its Pro Rata Share of the Revolving
Loans which have been funded by such Revolving Loan Lender.
(ii) In the event that any Revolving
Loan Lender fails to make any payment required to be made by it pursuant to
subsection 2.02(d)(i), the Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Revolving Loan Lender together
with interest thereon, for each day from the date such payment was due
- 35 -
until the date such amount is paid to the Administrative Agent, at the Federal
Funds Rate for three Business Days and thereafter at the Reference Rate. During
the period in which such Revolving Loan Lender has not paid such corresponding
amount to the Administrative Agent, notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, the amount so advanced
by the Administrative Agent to the Borrowers shall, for all purposes hereof, be
a Revolving Loan made by the Administrative Agent for its own account. Upon any
such failure by a Revolving Loan Lender to pay the Administrative Agent, the
Administrative Agent shall promptly thereafter notify the Administrative
Borrower of such failure and the Borrowers shall immediately pay such
corresponding amount to the Administrative Agent for its own account. Nothing in
this subsection 2.02(d)(ii) shall be deemed to relieve any Revolving Loan Lender
from its obligation to fulfill its Revolving Credit Commitment hereunder or to
prejudice any rights that the Administrative Agent or the Borrowers may have
against any Revolving Loan Lender as a result of any default by such Revolving
Loan Lender hereunder.
Section 2.03 Repayment of Loans; Evidence of Debt. (a) The
outstanding principal of all Revolving Loans shall be due and payable on the
Final Maturity Date.
(b) The outstanding principal of the Term Loan
shall be repaid in full on the earlier of (i) if Excess Availability is less
than $10,000,000 on such date, the date of the termination of the Total
Revolving Credit Commitment and (ii) the Final Maturity Date.
(c) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the Indebtedness of
the Borrowers to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(d) The Administrative Agent shall maintain
accounts in which it shall record (i) the amount of each Loan made hereunder,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrowers to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(e) The entries made in the accounts maintained
pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence
of the existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrowers to repay the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it
be evidenced by a promissory note. In such event, the Borrowers shall execute
and deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) in
a form furnished by the Collateral Agent and reasonably acceptable to the
Administrative Borrower. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 12.07) be represented by one or more promissory notes in such form
payable to the order of the payee
- 36 -
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).
Section 2.04 Interest. (a) Revolving Loans. Each Revolving
Loan that is a Reference Rate Loan shall bear interest on the principal amount
thereof from time to time outstanding, from the date of such Loan until such
principal amount becomes due, at a rate per annum equal to the Reference Rate
plus 5.25%. Each Revolving Loan that is a LIBOR Rate Loan shall bear interest on
the principal amount thereof from time to time outstanding, from the date of
such Loan until such principal amount is repaid, at a rate per annum equal to
the LIBOR Rate plus 6.25%.
(b) Term Loan. Each portion of the Term Loan
that is a Reference Rate Loan shall bear interest on the principal amount
thereof from time to time outstanding, from the date of such Loan until such
principal amount is repaid, at a rate per annum equal to the Reference Rate plus
5.25%. Each portion of the Term Loan that is a LIBOR Rate Loan shall bear
interest on the principal amount thereof from time to time outstanding, from the
date of such Loan until such principal amount is repaid, at a rate per annum
equal to the LIBOR Rate plus 6.25%.
(c) Default Interest. To the extent permitted by
law, upon the occurrence and during the continuance of an Event of Default, at
the election of the Collateral Agent or the Required Lenders, the principal of,
and all accrued and unpaid interest on, all Loans, fees, indemnities or any
other Obligations of the Loan Parties under this Agreement and the other Loan
Documents, shall bear interest, from the date such Event of Default occurred
until the date such Event of Default is cured or waived in writing in accordance
herewith, at a rate per annum equal at all times to the Post-Default Rate.
(d) Interest Payment. Interest on each Loan
shall be payable monthly, in arrears, on the first day of each month, commencing
on the first day of the month following the month in which such Loan is made and
at maturity (whether upon demand, by acceleration or otherwise). Interest at the
Post-Default Rate shall be payable on demand. Each Borrower hereby authorizes
the Administrative Agent to, and the Administrative Agent may, from time to
time, charge the Loan Account pursuant to Section 4.02 with the amount of any
interest payment due hereunder.
(e) General. All computations of interest for
Reference Rate Loans shall be made on the basis of a year of 365 or 366 days, as
the case may be, and the actual number of days elapsed. All other computations
of interest shall be made on the basis of a 360-day year and the actual number
of days elapsed (which results in more interest being paid than if computed on
the basis of a 365-day year).
Section 2.05 Reduction of Commitment; Prepayment of Loans.
(a) Reduction of Commitments.
(i) Revolving Credit Commitments. The
Total Revolving Credit Commitment shall terminate on the Final Maturity Date.
The Borrowers may reduce the Total Revolving Credit Commitment to an amount
(which may be zero) not less than the sum of
- 37 -
(A) the aggregate unpaid principal amount of all Revolving Loans then
outstanding, (B) the aggregate principal amount of all Revolving Loans not yet
made as to which a Notice of Borrowing has been given by the Administrative
Borrower under Section 2.02, (C) the Letter of Credit Obligations at such time
and (D) the stated amount of all Letters of Credit not yet issued as to which a
request has been made and not withdrawn. Each such reduction (w) shall be in an
amount which is an integral multiple of $1,000,000 (unless the Total Revolving
Credit Commitment in effect immediately prior to such reduction is less than
$1,000,000), (x) shall be made by providing not less than five (5) Business
Days' prior written notice to the Administrative Agent, (y) shall be irrevocable
and (z) shall be accompanied by the payment of the Applicable Prepayment
Premium, if any, payable in connection with such reduction of the Total
Revolving Credit Commitment. Once reduced, the Total Revolving Credit Commitment
may not be increased. Each such reduction of the Total Revolving Credit
Commitment shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share thereof.
(ii) Term Loan. The Total Term Loan
Commitment shall terminate at 5:00 p.m. (New York City time) on the Effective
Date.
(b) Optional Prepayment.
(i) Revolving Loans. The Borrowers may
at any time and from time to time, prepay the principal of any Revolving Loan,
in whole or in part. Each prepayment made pursuant to this clause (b)(i) made in
connection with a reduction of the Total Revolving Credit Commitment pursuant to
clause (a)(i) above shall be accompanied by the payment of the Applicable
Prepayment Premium, if any, payable in connection with such reduction of the
Total Revolving Credit Commitment.
(ii) Term Loan. The Borrowers may, at
any time and from time to time, upon at least 3 Business Days' prior written
notice to the Administrative Agent, prepay the principal of the Term Loan, in
whole or in part. Each prepayment made pursuant to this clause (b)(ii) shall be
accompanied by the payment of (A) accrued interest to the date of such payment
on the amount prepaid and (B) the Applicable Prepayment Premium, if any, payable
in connection with such prepayment of the Term Loan.
(iii) Prepayment In Full. The Borrowers
may, upon at least 3 Business Days prior written notice to the Administrative
Agent, terminate this Agreement by paying to the Administrative Agent, in cash,
the Obligations (including either (A) providing cash collateral to be held by
the Administrative Agent for the benefit of the L/C Issuer and the other
Revolving Loan Lenders in an amount equal to 110% of the aggregate undrawn
amount of all outstanding Letters of Credit or (B) causing the original Letters
of Credit to be returned to the L/C Issuer), in full, together with the
Applicable Prepayment Premium, if any. If the Administrative Borrower has sent a
notice of termination pursuant to this clause (iii), then the Lenders'
obligations to extend credit hereunder shall terminate on the date set forth as
the date of termination of this Agreement in such notice and the Borrowers shall
be obligated to repay the Obligations (including either (A) providing cash
collateral to be held by the Administrative Agent for the benefit of the L/C
Issuer and the other Revolving Loan Lenders in an amount equal to 110% of the
aggregate undrawn amount of all outstanding Letters of Credit or (B) causing the
- 38 -
original Letters of Credit to be returned to the L/C Issuer), in full, together
with the Applicable Prepayment Premium, if any, on the date set forth as the
date of termination of this Agreement in such notice.
(c) Mandatory Prepayment.
(i) The Borrowers will immediately
prepay the outstanding principal amount of the Term Loan in the event that (A)
the Total Revolving Credit Commitment is terminated for any reason and (B)
Excess Availability on the date of the termination of the Total Revolving Credit
Commitment is less than $10,000,000.
(ii) Within 10 days of delivery to the
Agents and the Lenders of audited annual financial statements pursuant to
Section 7.01(a)(i), commencing with the delivery to the Agents and the Lenders
of the financial statements for the Fiscal Year ended December 31, 2004 or, if
such financial statements are not delivered to the Agents and the Lenders on the
date such statements are required to be delivered pursuant to Section
7.01(a)(i), ten (10) days after the date such statements are required to be
delivered to the Agents and the Lenders pursuant to Section 7.01(a)(i), the
Borrowers shall prepay the outstanding principal amount of the Loans in
accordance with Section 2.05(d) in an amount equal to 50% of the Excess Cash
Flow of the Parent and its Subsidiaries for such Fiscal Year.
(iii) Within 3 days of any Disposition by
any Loan Party pursuant to Section 7.02(c)(ii), the Borrowers shall prepay the
outstanding principal amount of the Loans in accordance with Section 2.05(d) in
an amount equal to 100% of the Net Cash Proceeds received by such Person in
connection with such Disposition to the extent that the aggregate amount of Net
Cash Proceeds received by all Loan Parties (and not paid to the Administrative
Agent as a prepayment of the Loans) shall exceed for all such Dispositions
$1,000,000 in any Fiscal Year (provided that the aggregate amount of Net Cash
Proceeds not subject to prepayment pursuant to this clause (iii), when taken
together with the aggregate amount of Extraordinary Receipts not subject to
prepayment pursuant to clause (v) below shall not exceed $3,000,000 in the
aggregate during the term of this Agreement). Nothing contained in this clause
(iii) shall permit any Loan Party or any of its Subsidiaries to make a
Disposition of any property other than in accordance with Section 7.02(c)(ii).
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing on the date such Person receives Net Cash Proceeds in connection
with a Disposition of equipment, such Net Cash Proceeds (in an aggregate amount
not to exceed $1,000,000 in any Fiscal Year) received by such Person may, at the
option of the Borrowers, be applied to acquire replacement equipment for the
equipment so disposed of, provided, that (x) until so applied, such Net Cash
Proceeds shall either be (1) deposited into a cash collateral account with a
commercial bank designated by the Collateral Agent (and when so deposited such
Net Cash Proceeds shall constitute Collateral for the Obligations then
outstanding and shall remain in such cash collateral account until such Net Cash
Proceeds are applied in accordance with either of clauses (y) or (z) of this
clause (iii)) or (2) upon notification by the Administrative Borrower to the
Agents, applied to the Revolving Loans (and concurrently with such application
to the Revolving Loans, the Administrative Agent shall, at the direction of the
Collateral Agent, establish and maintain a corresponding reserve to Availability
in the amount so applied, which reserve shall be released at such time as the
Borrowers re-borrow funds in such amount to be used in accordance with either of
clauses (y) or
- 39 -
(z)(2) of this clause (iii)), (y) such Net Cash Proceeds must be applied and
such equipment must be replaced within 90 days after the date of receipt
thereof, and (z) upon (1) the occurrence and during the continuance of an Event
of Default or (2) the expiration of such 90 day period, such Net Cash Proceeds,
if not so applied, shall be applied to the prepayment of the Loans in accordance
with Section 2.05(d).
(iv) Within 3 days of the issuance or
incurrence by any Loan Party or any of its Subsidiaries of any Indebtedness
permitted under clause (g) of the definition of Permitted Indebtedness (other
than any such Indebtedness owing by any Loan Party or any of its Subsidiaries to
any other Loan Party or any of its Subsidiaries), and in any event within 1
Business Day thereafter, the Borrowers shall prepay the outstanding amount of
the Loans in accordance with Section 2.05(d) in an amount equal to 100% of the
Net Cash Proceeds received by such Person in connection therewith. Promptly upon
the sale or issuance by any Loan Party or any of its Subsidiaries of any shares
of its Capital Stock (other than an Excluded Equity Issuance), and in any event
within 1 Business Day thereafter, the Borrowers shall prepay the outstanding
amount of the Loans in accordance with Section 2.05(d) in an amount equal to 75%
of the Net Cash Proceeds received by such Person in connection therewith. The
provisions of this subsection (iv) shall not be deemed to be implied consent to
any such issuance, incurrence or sale otherwise prohibited by the terms and
conditions of this Agreement.
(v) Within 3 days of the receipt by any
Loan Party or any of its Subsidiaries of any Extraordinary Receipts in excess of
$1,000,000 in any Fiscal Year (provided that the aggregate amount of
Extraordinary Receipts not subject to prepayment pursuant to this clause (v),
when taken together with the aggregate amount of Net Cash Proceeds not subject
to prepayment pursuant to clause (iii) above shall not exceed $3,000,000 in the
aggregate during the term of this Agreement), the Borrowers shall prepay the
outstanding principal of the Loans in accordance with Section 2.05(d) in an
amount equal to 100% of the Net Cash Proceeds of such Extraordinary Receipts.
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing on the date such Person receives Extraordinary Receipts consisting
of insurance proceeds from one or more policies covering, or proceeds from any
judgment, settlement, condemnation or other cause of action in respect of, the
loss, damage, taking or theft of any real property or equipment having an
aggregate market value of less than $3,500,000, such Extraordinary Receipts (in
an amount not to exceed $3,500,000) received by such Person may, at the option
of the Borrowers, be applied to repair or restore such real property or
equipment or acquire replacement real property or equipment for the real
property or equipment so lost, damaged or stolen or other real property or
equipment used or useful in the business of such Person for the real property or
equipment so lost, damaged or stolen, provided, that (x) until so applied, such
Extraordinary Receipts shall either be (1) deposited into a cash collateral
account with a commercial bank designated by the Collateral Agent (and when so
deposited such Extraordinary Receipts shall constitute Collateral for the
Obligations then outstanding and shall remain in such cash collateral account
until such Extraordinary Receipts are applied in accordance with either of
clauses (y) or (z) of this clause (v)) or (2) upon notification by the
Administrative Borrower to the Agents, applied to the Revolving Loans (and
concurrently with such application to the Revolving Loans, the Administrative
Agent shall, at the direction of the Collateral Agent, establish and maintain a
corresponding reserve to Availability in the amount so applied, which reserve
shall be released at such time as the Borrowers re-borrow funds in such amount
to be applied in accordance with either of clauses (y) or (z)(2) of this clause
(v)),
- 40 -
(y) such Extraordinary Receipts must be applied and such real property or
equipment must be repaired, restored or replaced within 180 days after the date
of receipt thereof, and (z) upon (1) the occurrence and during the continuance
of an Event of Default or (2) the expiration of such 180 day period, such
Extraordinary Receipts, if not so applied, shall be applied to the prepayment of
the Loans in accordance with Section 2.05(d).
(d) Application of Payments. So long as no Event
of Default shall have occurred and be continuing, each prepayment pursuant to
subsections (c)(ii), (c)(iii), (c)(iv) and (c)(v) above shall be applied as
follows:
(i) if the proceeds are from any
Disposition of any Account Receivable or Inventory or any Extraordinary Receipts
arising from an insurance policy or condemnation award solely with respect to
Accounts Receivable or Inventory, such proceeds shall be applied, first, ratably
to the Revolving Loans, until paid in full, second, to the Term Loan, until paid
in full, and third, ratably to all other Obligations, until paid in full;
(ii) if the proceeds are from any
Disposition of any other assets of the Loan Parties not described in clauses (i)
or (iii) of this Section 2.05(d), such proceeds shall be applied, first, to the
Term Loan, until paid in full, second, ratably to the Revolving Loans, until
paid in full, and third, ratably to all other Obligations, until paid in full;
(iii) if the proceeds are from a
Disposition of all or substantially all of the assets or Capital Stock of any
Person or any Extraordinary Receipts arising from insurance or casualty which
Disposition or proceeds of insurance or casualty includes both (x) Accounts
Receivable or Inventory and (y) other assets, such proceeds shall be applied as
follows: (1) an amount equal to the net book value of such Accounts Receivable
and Inventory (determined at the time of such Disposition or event resulting in
such insurance or casualty proceeds) shall be applied ratably to the Revolving
Loans, until paid in full, and (2) the remaining proceeds shall be applied,
first, to the Term Loan, until paid in full, second, ratably to the Revolving
Loans, until paid in full, and third, ratably to all other Obligations, until
paid in full;
(iv) if the proceeds are from Excess
Cash Flow pursuant to Section 2.05(c)(ii), such proceeds shall be applied,
first, to the Term Loan, until paid in full, second, ratably to the Revolving
Loans, until paid in full, and third, ratably to all other Obligations, until
paid in full; and
(v) if the proceeds are from any event
set forth in Section 2.05(c)(iv) or (c)(v) (to the extent not applied pursuant
to clauses (i) or (iii) of this Section 2.05(d)), such proceeds shall be
applied, first, to the Term Loan, until paid in full, second, ratably to the
Revolving Loans, until paid in full, and third, ratably to all other
Obligations, until paid in full.
Notwithstanding anything to the contrary contained in this Section 2.05(d),
after the occurrence and during the continuance of an Event of Default, all
prepayments of the Loans pursuant to Section 2.05(c) shall be applied in
accordance with Section 4.04(b).
- 41 -
(e) Interest and Fees. Any prepayment made
pursuant to this Section 2.05 shall be accompanied by (i) in the case of any
prepayment made pursuant to this Section 2.05 other than prepayments made
pursuant to subsection (c)(ii) of this Section 2.05, (A) accrued interest on the
principal amount being prepaid to the date of prepayment and (B) if such
prepayment would reduce the amount of the outstanding Loans to zero at a time
when the Total Revolving Credit Commitment has been terminated, such prepayment
shall be accompanied by the payment of all fees accrued to such date pursuant to
Section 2.06 and (ii) in the case of any prepayment made pursuant to Section
2.05(a) (excluding the first sentence thereof), any Applicable Prepayment
Premium.
(f) Cumulative Prepayments. Except as otherwise
expressly provided in this Section 2.05, payments with respect to any subsection
of this Section 2.05 are in addition to, but without duplication of, payments
made or required to be made under any other subsection of this Section 2.05.
Section 2.06 Fees.
(a) Unused Line Fee. From and after the
Effective Date and until the Final Maturity Date, the Borrowers shall pay to the
Administrative Agent for the account of the Revolving Loan Lenders, in
accordance with their Pro Rata Shares, an unused line fee (the "Unused Line
Fee"), which shall accrue at the rate per annum of 1.00% on the excess, if any,
of the Total Revolving Credit Commitment over the sum of the average principal
amount of all Revolving Loans and Letter of Credit Obligations outstanding from
time to time and shall be payable quarterly in arrears on the last Business Day
of each calendar quarter commencing on June 30, 2004.
(b) Fee Letter Fees. The Borrowers shall pay to
the Administrative Agent, as and when due and payable under the terms of the Fee
Letter, the fees set forth in the Fee Letter.
Section 2.07 Securitization. The Loan Parties hereby
acknowledge that the Lenders and their Affiliates may sell or securitize the
Loans (a "Securitization") through the pledge of the Loans as collateral
security for loans to the Lenders or their Affiliates or through the sale of the
Loans or the issuance of direct or indirect interests in the Loans, which loans
to the Lenders or their Affiliates or direct or indirect interests will be rated
by Xxxxx'x, Standard & Poor's or one or more other rating agencies (the "Rating
Agencies"). The Loan Parties shall cooperate with the Lenders and their
Affiliates to effect the Securitization including, without limitation, by (a)
amending this Agreement and the other Loan Documents, and executing such
additional documents, as reasonably requested by the Lenders in connection with
the Securitization, provided that (i) any such amendment or additional
documentation does not impose costs in excess of $25,000 on the Loan Parties and
(ii) any such amendment or additional documentation does not adversely affect
the rights, or increase the obligations (other than ministerial obligations), of
the Loan Parties under the Loan Documents or change or affect in a manner
adverse to the Loan Parties the financial terms of the Loans, (b) providing such
information as may be reasonably requested by the Lenders in connection with the
rating of the Loans or the Securitization, and (c) providing in connection with
any rating of the Loans a certificate (i) agreeing to indemnify the Agents, the
Lenders and their Affiliates, any of the
- 42 -
Rating Agencies, or any party providing credit support or otherwise
participating in the Securitization (collectively, the "Securitization Parties")
for any losses, claims, damages or liabilities (the "Liabilities") to which the
Agents, the Lenders, their Affiliates or such Securitization Parties may become
subject insofar as the Liabilities arise out of or are based upon a violation of
the representation set forth in Section 6.01(p) hereof, and such indemnity shall
survive any transfer by the Lenders or their successors or assigns of the Loans
and (ii) agreeing to reimburse the Agents, the Lenders and their Affiliates for
any legal or other expenses reasonably incurred by such Persons in connection
with defending the Liabilities.
Section 2.08 Taxes. (a) Any and all payments by any Loan Party
hereunder shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on the net
income of any Agent, any Lender or the L/C Issuer (or any transferee or assignee
thereof, including a participation holder (any such entity, a "Transferee")) (i)
by the jurisdiction in which such Person is organized or has its principal
lending office or any political subdivision thereof or (ii) by reason of any
present or former connection between such Agent or such Lender or the L/C Issuer
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision thereof, other than such a connection arising in whole or
in part (and to the extent arising) from such Agent or such Lender or the L/C
Issuer having executed, delivered or performed its obligations or received a
payment under, or enforced this Agreement or any other Loan Document (all such
nonexcluded taxes, levies, imposts, deductions, charges withholdings and
liabilities with respect to payments by any Loan Party hereunder, collectively
or individually, "Taxes"). If any Loan Party shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder to any Agent, any
Lender or the L/C Issuer (or any Transferee), (i) the sum payable shall be
increased by the amount (an "additional amount") necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.08) such Agent, such Lender or the L/C Issuer (or
such Transferee) shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) such Loan Party shall make such
deductions and (iii) such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Loan Party agrees to pay
to the relevant Governmental Authority in accordance with applicable law any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement ("Other Taxes"). Each Loan Party shall deliver to each Agent,
each Lender and the L/C Issuer official receipts in respect of any Taxes or
Other Taxes payable hereunder promptly after payment of such Taxes or Other
Taxes.
(c) The Loan Parties hereby jointly and
severally indemnify and agree to hold each Agent, each Lender and the L/C Issuer
harmless from and against Taxes and Other Taxes (including, without limitation,
Taxes and Other Taxes imposed on any amounts payable under this Section 2.08)
paid by such Person, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Such indemnification shall be paid within 10 days from the
date on which any such Person makes written demand therefore specifying in
reasonable detail the nature and amount of such Taxes or Other Taxes.
- 43 -
(d) Each Lender (or Transferee) that is
organized under the laws of a jurisdiction other than the United States, any
State thereof or the District of Columbia (a "Non-U.S. Lender") shall deliver to
the Agents and the Administrative Borrower two properly completed and duly
executed copies of either U.S. Internal Revenue Service Form W-8BEN or Form
W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8BEN, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8,
a certificate representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Parent and is not a controlled foreign corporation related to the Parent (within
the meaning of Section 864(d)(4) of the Internal Revenue Code)), in each case
claiming complete exemption from U.S. Federal withholding tax on payments by the
Loan Parties under this Agreement. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or before
the date, if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms within 20 days after receipt of a
written request therefor from the Administrative Borrower or any Agent.
Notwithstanding any other provision of this Section 2.08, a Non-U.S. Lender
shall not be required to deliver after the date hereof any form pursuant to this
Section 2.08 that such Non-U.S. Lender is not legally able to deliver.
(e) The Loan Parties shall not be required to
indemnify any Non-U.S. Lender, or pay any additional amounts to any Non-U.S.
Lender, in respect of United States Federal withholding tax pursuant to this
Agreement to the extent that (i) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a Transferee that is
a participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending Office, the
date such Non-U.S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this clause (i) shall not apply to the extent the
indemnity payment or additional amounts any Transferee or any Lender (or
Transferee) through a New Lending Office, would be entitled to receive (without
regard to this clause (i)) do not exceed the indemnity payment or additional
amounts that the Person making the assignment, participation or transfer to such
Transferee or such Lender (or Transferee) making the designation of such New
Lending Office, would have been entitled to receive in the absence of such
assignment, participation, transfer or designation, (ii) the obligation to pay
such additional amounts would not have arisen but for a failure by such Non-U.S.
Lender to comply with the provisions of clause (d) above, or (iii) any of the
representations or certifications made by a Non-U.S. Lender pursuant to clause
(d) above are incorrect at the time a payment hereunder is made, other than by
reason of any change in treaty, law or regulation having effect after the date
such representations or certifications were made.
(f) Any Agent, any Lender or the L/C Issuer (or
Transferee) claiming any indemnity payment or additional payment amounts payable
pursuant to this Section 2.08 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
reasonably requested in writing by the Administrative Borrower or to
- 44 -
change the jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amount which may thereafter accrue, would not
require such Agent, such Lender or the L/C Issuer (or Transferee) to disclose
any information such Agent, such Lender or the L/C Issuer (or Transferee) deems
confidential and would not, in the reasonable determination of such Agent, such
Lender or the L/C Issuer (or Transferee), be otherwise disadvantageous to such
Agent, such Lender or the L/C Issuer (or Transferee).
(g) If any Agent or any Lender or the L/C Issuer
(or any Transferee) receives a refund of a tax for which a payment has been made
by the Loan Parties pursuant to this Agreement, which refund in the sole
judgment of such Agent or such Lender or the L/C Issuer (or Transferee) is
attributable to such payment made by the Loan Parties, then such Agent or such
Lender or the L/C Issuer (or Transferee) shall reimburse the Loan Parties for
such amount. Nothing contained in this clause (g) shall require any Agent or any
Lender or the L/C Issuer (or Transferee) to make available to any Loan Party or
any other Person any of its tax returns (or any other information that it deems
to be confidential in its sole discretion).
(h) The obligations of the Loan Parties under
this Section 2.08 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
Section 2.09 LIBOR Option. (a) In lieu of having interest
charged at the rate based upon the Reference Rate, the Borrowers shall have the
option (the "LIBOR Option") to have interest on all or a portion of the Loans be
charged at a rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate
Loans shall be payable in accordance with Section 2.04(d). On the last day of
each applicable Interest Period, unless the Administrative Borrower properly has
exercised the LIBOR Option with respect thereto, the interest rate applicable to
such LIBOR Rate Loan automatically shall convert to the rate of interest then
applicable to Reference Rate Loans of the same type hereunder. At any time that
an Event of Default has occurred and is continuing, the Borrowers no longer
shall have the option to request that Loans bear interest at the LIBOR Rate.
(b) (i) The Administrative Borrower may, at
any time and from time to time, so long as no Event of Default has occurred and
is continuing, elect to exercise the LIBOR Option by notifying Administrative
Agent prior to 11:00 a.m. (New York time) at least 3 Business Days prior to the
commencement of the proposed Interest Period (the "LIBOR Deadline"). Notice of
the Administrative Borrower's election of the LIBOR Option for a permitted
portion of the Loans and an Interest Period pursuant to this Section shall be
made by delivery to the Administrative Agent of a LIBOR Notice received by the
Administrative Agent before the LIBOR Deadline, or by telephonic notice received
by the Administrative Agent before the LIBOR Deadline (to be confirmed by
delivery to the Administrative Agent of a LIBOR Notice received by
Administrative Agent prior to 5:00 p.m. (New York time) on the same day).
Promptly upon its receipt of each such LIBOR Notice, the Administrative Agent
shall provide a copy thereof to each of the Lenders having a Revolving Credit
Commitment.
(ii) Each LIBOR Notice shall be
irrevocable and binding on the Borrowers. In connection with each LIBOR Rate
Loan, each Borrower shall indemnify, defend,
- 45 -
and hold the Agents and the Lenders harmless against any loss, cost, or expense
incurred by any Agent or any Lender as a result of (A) the payment of any
principal of any LIBOR Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (B)
the conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (C) the failure to borrow, convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, and expenses, collectively, "Funding
Losses"). Funding Losses shall, with respect to any Agent or any Lender, be
deemed to equal the amount determined by such Agent or such Lender to be the
excess, if any, of (1) the amount of interest that would have accrued on the
principal amount of such LIBOR Rate Loan had such event not occurred, at the
LIBOR Rate that would have been applicable thereto, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period therefor), minus (2) the amount of interest
that would accrue on such principal amount for such period at the interest rate
which such Agent or such Lender would be offered were it to be offered, at the
commencement of such period, Dollar deposits of a comparable amount and period
in the London interbank market. A certificate of an Agent or a Lender delivered
to the Administrative Borrower setting forth any amount or amounts that such
Agent or such Lender is entitled to receive pursuant to this Section 2.09 shall
be conclusive absent manifest error.
(iii) The Borrowers shall have not more
than 8 LIBOR Rate Loans in effect at any given time. The Borrowers only may
exercise the LIBOR Option for LIBOR Rate Loans of at least $1,000,000 and
integral multiples of $100,000 in excess thereof.
(c) The Borrowers may prepay LIBOR Rate Loans at
any time; provided, however, that in the event that LIBOR Rate Loans are prepaid
on any date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by the Administrative Agent of proceeds of Collateral in accordance
with Section 4.04 or for any other reason, including early termination of the
term of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold
the Agents and the Lenders and their participants harmless against any and all
Funding Losses in accordance with clause (b) above.
(d) (i) The LIBOR Rate shall be adjusted by
the Administrative Agent with respect to any Lender on a prospective basis to
take into account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased costs due to
changes in applicable law occurring subsequent to the commencement of the then
applicable Interest Period, including changes in tax laws (except changes of
general applicability in corporate income tax laws) and changes in the reserve
requirements imposed by the Board of Governors of the Federal Reserve System (or
any successor), excluding the Reserve Percentage, which additional or increased
costs would increase the cost of funding loans bearing interest at the LIBOR
Rate. In any such event, the affected Lender shall give the Administrative
Borrower and the Administrative Agent notice of such a determination and
adjustment and the Administrative Agent promptly shall transmit the notice to
each other Lender and, upon its receipt of the notice from the affected Lender,
the Administrative Borrower may, by notice to such affected Lender (A) require
such Lender to furnish to the Administrative Borrower a
- 46 -
statement setting forth the basis for adjusting such LIBOR Rate and the method
for determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans
with respect to which such adjustment is made (together with any amounts due
under clause (b)(ii) above).
(ii) In the event that any change in
market conditions or any law, regulation, treaty, or directive, or any change
therein or in the interpretation of application thereof, shall at any time after
the date hereof, in the reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue
such funding or maintaining, or to determine or charge interest rates at the
LIBOR Rate, such Lender shall give notice of such changed circumstances to the
Administrative Agent and the Administrative Borrower and the Administrative
Agent promptly shall transmit the notice to each other Lender and (A) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Loans that are Reference Rate Loans, and (B) the Borrowers shall not be entitled
to elect the LIBOR Option until such Lender determines that it would no longer
be unlawful or impractical to do so.
(e) Anything to the contrary contained herein
notwithstanding, neither any Agent, nor any Lender, nor any of their
participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Section shall apply as if each Lender or its
participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.
ARTICLE III
LETTERS OF CREDIT
Section 3.01 Letters of Credit. (a) The Existing Letters of
Credit have previously been issued by the L/C Issuer and, subject to the terms
and conditions hereof and in reliance upon the representations and warranties
set forth herein and the agreements of the other Revolving Loan Lenders set
forth in this Article III, the L/C Issuer agrees to issue, and each Revolving
Loan Lender severally agrees to participate in the issuance by the L/C Issuer
of, standby and trade Letters of Credit in Dollars from time to time from the
Effective Date until the date thirty (30) days prior to the Final Maturity Date
as the Administrative Borrower may request, in a form acceptable to the L/C
Issuer; provided, however, that (i) the Letter of Credit Obligations outstanding
shall not at any time exceed Two Million Five Hundred Thousand Dollars
($2,500,000) (the "Letter of Credit Committed Amount") and (ii) the sum of the
aggregate outstanding principal amount of Revolving Loans plus Letter of Credit
Obligations outstanding shall not at any time exceed the Total Revolving Credit
Commitment. No Letter of Credit shall (x) have an original expiry date more than
one hundred and eighty (180) days from the date of issuance or (y) as originally
issued or as extended, have an expiry date extending beyond the date thirty (30)
days prior to the Final Maturity Date. Each Letter of Credit shall comply with
the related Letter of Credit Documents. The issuance date of each Letter of
Credit shall be a Business Day. All Existing Letters of Credit shall be deemed
to have been issued
- 47 -
pursuant hereto, and from and after the Effective Date shall be subject to and
governed by the terms and conditions hereof. The L/C Issuer shall be under no
obligation to issue any Letter of Credit if (A) any order, judgment or decree of
any Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any requirement
of law applicable to the L/C Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Effective Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Effective Date and which the L/C Issuer in good xxxxx xxxxx
material to it or (B) the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer applicable to all applicants for letters of
credit of the L/C Issuer generally.
(b) The request for the issuance of a Letter of
Credit (the "Letter of Credit Application") shall be submitted by the
Administrative Borrower to the L/C Issuer, with a copy to the Administrative
Agent, at least three (3) Business Days prior to the requested date of issuance.
The Administrative Agent will, at least quarterly and more frequently upon
request, disseminate to each of the Revolving Loan 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
prior report, and including therein, among other things, the beneficiary, the
face amount and the expiry date, as well as any payment or expirations which may
have occurred.
(c) Each Revolving Loan Lender, upon issuance of
a Letter of Credit, shall be deemed to have purchased without recourse a
Participation Interest from the L/C Issuer in such Letter of Credit (including
each Existing Letter of Credit) and the obligations arising thereunder and any
Collateral relating thereto, in each case, in an amount equal to its Pro Rata
Share of the obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the L/C Issuer
through the Administrative Agent and discharge when due, its Pro Rata Share of
the obligations arising under such Letter of Credit (including each Existing
Letter of Credit). Without limiting the scope and nature of each Revolving Loan
Lender's Participation Interest in any Letter of Credit, to the extent that the
L/C Issuer has not been reimbursed as required hereunder or under any such
Letter of Credit, each such Revolving Loan Lender shall pay to the L/C Issuer
its Pro Rata Share of such unreimbursed drawing in same day funds on the day of
notification by the L/C Issuer of an unreimbursed drawing pursuant to the
provisions of Section 3.01(d) below. The obligation of each Revolving Loan
Lender to so reimburse the L/C Issuer 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 Borrowers to reimburse the L/C Issuer under any
Letter of Credit, together with interest as hereinafter provided. Until each
Revolving Loan Lender funds its Revolving Loan advance pursuant to this Section
3.01(c) to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Revolving Loan Lender's Pro Rata Share of
such amount shall be solely for the account of the L/C Issuer. If any Revolving
Loan Lender fails to make available to the Administrative Agent for the account
of the L/C Issuer any amount required to be paid by
- 48 -
such Revolving Loan Lender pursuant to the foregoing provisions of this Section
3.01(c), the L/C Issuer shall be entitled to recover from such Revolving Loan
Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the Federal Funds Rate from time to time in effect. A
certificate of the L/C Issuer submitted to any Revolving Loan Lender (through
the Administrative Agent) with respect to any amounts owing under this clause
(c) shall be conclusive absent manifest error.
(d) In the event of any drawing under any Letter
of Credit, the L/C Issuer will promptly notify the Administrative Borrower and
the Administrative Agent. Unless the Administrative Borrower shall immediately
notify the L/C Issuer that the Administrative Borrower intends to otherwise
reimburse the L/C Issuer for such drawing, the Administrative Borrower shall be
deemed to have requested that the Revolving Loan Lenders make a Revolving Loan
in the amount of the drawing as provided in Section 3.01(e) below on the related
Letter of Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. The Borrowers promise to reimburse the L/C Issuer on
the day of drawing under any Letter of Credit (either with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds. If the
Borrowers shall fail to reimburse the L/C Issuer as provided hereinabove, the
Borrowers promise to pay the L/C Issuer interest on the unreimbursed amount of
such drawing on demand at a per annum rate equal to the Reference Rate plus
7.25%. The Borrowers' reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment any Borrower may claim or have against the
L/C Issuer, the Administrative Agent, the Revolving Loan Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including,
without limitation, any defense based on any failure of a Borrower or any other
Loan Party to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Administrative Agent will promptly
notify the other Revolving Loan Lenders of the amount of any unreimbursed
drawing and each Revolving Loan Lender shall promptly pay to the Administrative
Agent for the account of the L/C Issuer in Dollars and in immediately available
funds, the amount of such Revolving Loan Lender's Pro Rata Share of such
unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Revolving Loan Lender from the L/C Issuer if such notice is
received at or before 2:00 p.m. (New York City time), and otherwise such payment
shall be made at or before 12:00 noon (New York City time) on the Business Day
next succeeding the day such notice is received. If such Revolving Loan Lender
does not pay such amount to the L/C Issuer in full upon such request, such
Revolving Loan Lender shall, on demand, pay to the Administrative Agent for the
account of the L/C Issuer interest on the unpaid amount during the period from
the date of such drawing until such Revolving Loan Lender pays such amount to
the L/C Issuer in full at a rate per annum equal to, if paid within two (2)
Business Days of the date that such Revolving Loan Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Rate and thereafter at a rate equal to the Reference Rate. Each Revolving Loan
Lender's obligation to make such payment to the L/C Issuer, and the right of the
L/C Issuer to receive the same, shall be absolute and unconditional, shall not
be affected by any circumstance whatsoever and 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 Borrowers
hereunder and shall be made without any offset, abatement, withholding or
reduction whatsoever.
- 49 -
Simultaneously with the making of each such payment by a Revolving Loan Lender
to the L/C Issuer, such Revolving Loan Lender shall, automatically and without
any further action on the part of the L/C Issuer or such Revolving Loan Lender,
acquire a Participation Interest in an amount equal to such payment (excluding
the portion of such payment constituting interest owing to the L/C Issuer) in
the related unreimbursed drawing portion of the Letter of Credit Obligation and
in the interest thereon and in the related Letter of Credit Documents, and shall
have a claim against the Borrowers with respect thereto.
(e) On any day on which the Administrative
Borrower shall have requested, or been deemed to have requested, a Revolving
Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent
shall give notice to the Revolving Loan Lenders that a Revolving Loan has been
requested or deemed requested by the Administrative Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a Revolving
Loan comprised of Reference Rate Loans shall be immediately made to the
Borrowers by all Revolving Loan Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.01) based on the respective Pro Rata Shares of
the Revolving Loan Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 9.01) and the proceeds thereof shall be
paid directly to the L/C Issuer through the Administrative Agent for application
to the respective Letter of Credit Obligations. Each such Revolving Loan Lender
hereby irrevocably agrees to make its Pro Rata Share 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 Revolving
Loans otherwise required hereunder, (ii) whether any conditions specified in
Sections 5.02 or 5.03 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request for
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, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to any
Borrower or any other Loan Party), then each such Revolving Loan 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
Borrowers on or after such date and prior to such purchase) from the L/C Issuer
such Participation Interests in the outstanding Letter of Credit Obligations as
shall be necessary to cause each such Revolving Loan Lender to share in such
Letter of Credit Obligations ratably (based upon the respective Pro Rate Shares
of the Revolving Loan Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.01)), provided that at the
time any purchase of Participation Interests pursuant to this sentence is
actually made, the purchasing Revolving Loan Lender shall be required to pay to
the L/C Issuer, to the extent not paid to the L/C Issuer by the Borrowers in
accordance with the terms of Section 3.01(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 of the Revolving Loan advance, the
Federal Funds Rate, and thereafter at a rate equal to the Reference Rate.
- 50 -
(f) Notwithstanding anything to the contrary set
forth in this Agreement, including without limitation Section 3.01(a), a Letter
of Credit issued hereunder may be issued for the account of any Subsidiary of a
Borrower, provided that such Borrower shall be the actual account party for all
purposes of this Agreement for such Letter of Credit and such request shall not
affect the Borrowers' reimbursement obligations hereunder with respect to such
Letter of Credit shall not be affected.
(g) 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) The L/C Issuer may have the Letters of
Credit be subject to The Uniform Customs and Practice for Documentary Credits
(the "UCP") or the International Standby Practices 1998 (the "ISP98"), in either
case as published as of the date of issue by the International Chamber of
Commerce, in which case the UCP or the ISP98, as applicable, may be incorporated
therein and deemed in all respects to be a part thereof.
(i) (i) In addition to their other obligations
under this Section 3.01, the Borrowers hereby agree to pay, and protect,
indemnify and save each Revolving Loan Lender harmless from and against, any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that such Revolving Loan 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 Revolving Loan 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 Borrowers and the
Revolving Loan Lenders (including the L/C Issuer), the Borrowers shall assume
all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. No Revolving Loan Lender (including the L/C Issuer) 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 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 in cipher; (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
Revolving Loan Lender, including, without limitation, any Government Acts. None
of the above shall affect, impair, or prevent the vesting of the L/C Issuer's
rights or powers hereunder.
(iii) In furtherance and extension and
not in limitation of the specific provisions hereinabove set forth, any action
taken or omitted by any Revolving Loan Lender (including the L/C Issuer), under
or in connection with any Letter of Credit or the related certificates, if taken
or omitted in good faith, shall not put such Revolving Loan Lender under
- 51 -
any resulting liability to the Borrowers or any other Loan Party. It is the
intention of the parties that this Agreement shall be construed and applied to
protect and indemnify each Revolving Loan Lender (including the L/C Issuer)
against any and all risks involved in the issuance of the Letters of Credit, all
of which risks are hereby assumed by the Borrowers (on behalf of itself and each
of the other Loan Parties), including, without limitation, any and all
Government Acts. No Revolving Loan Lender (including the L/C Issuer) shall, in
any way, be liable for any failure by such Revolving Loan 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 Revolving Loan Lender.
(iv) Nothing in this Section 3.01(i) is
intended to limit the reimbursement obligations of the Borrowers contained in
Section 3.01(d) above. The obligations of the Borrowers under this Section
3.01(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 Revolving Loan Lenders (including the L/C Issuer) to
enforce any right, power or benefit under this Agreement.
(v) Notwithstanding anything to the
contrary contained in this Section 3.01(i), the Borrowers shall have no
obligation to indemnify any Revolving Loan Lender (including the L/C Issuer) in
respect of any liability incurred by such Revolving Loan Lender (A) arising
solely out of the gross negligence or willful misconduct of the L/C Issuer, as
finally determined by a court of competent jurisdiction, or (B) caused by the
L/C Issuer'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.
(j) It is expressly understood and agreed that
the obligations of the L/C Issuer hereunder to the Revolving Loan Lenders are
only those expressly set forth in this Agreement and that the L/C Issuer shall
be entitled to assume that the conditions precedent set forth in Sections 5.02
and, if applicable, Section 5.03 have been satisfied unless it shall have
acquired actual knowledge that any such condition precedent has not been
satisfied; provided, however, that nothing set forth in this Section 3.01 shall
be deemed to prejudice the right of any Revolving Loan Lender to recover from
the L/C Issuer any amounts made available by such Revolving Loan Lender to the
L/C Issuer pursuant to this Section 3.01 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 L/C
Issuer.
(k) In the event of any conflict between this
Agreement and any Letter of Credit Application, this Agreement shall control.
(l) Upon the request of the Administrative
Agent, if, as of the Final Maturity Date for Letters of Credit, any Letter of
Credit may for any reason remain outstanding and partially or wholly undrawn,
the Borrowers shall immediately Cash Collateralize the then outstanding Letter
of Credit Obligations (in an amount equal to such outstanding amount determined
as of the date of such borrowing or the expiry date, as the case may be). For
purposes hereof, "Cash Collateralize" means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the L/C Issuer and the
other Revolving Loan Lenders, as
- 52 -
collateral for the Letter of Credit Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Revolving Loan Lenders). Derivatives of such term have corresponding
meanings. Each Borrower hereby grants to the Administrative Agent, for the
benefit of the L/C Issuer and the other Revolving Loan Lenders, a security
interest in all such cash, deposit accounts and all balances therein and all
proceeds of the foregoing. Cash collateral shall be maintained in blocked,
non-interest bearing deposit accounts at Bank of America.
Section 3.02 Letter of Credit Fees.
(a) Letter of Credit Issuance Fee. In
consideration of the issuance of Letters of Credit hereunder, the Borrowers
promise to pay to the Administrative Agent for the account of each Revolving
Loan Lender a fee (the "Letter of Credit Fee") on such Revolving Loan Lender's
Pro Rata Share of the average daily maximum amount available to be drawn under
each such Letter of Credit computed at a per annum rate for each day from the
date of issuance to the date of expiration equal to 5.5%. The 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 a portion
thereof).
(b) L/C Issuer Fees. In addition to the Letter
of Credit Fee payable pursuant to clause (a) above, the Borrowers promise to pay
to the Administrative Agent for the account of the L/C Issuer without sharing by
the other Revolving Loan Lenders (i) a letter of credit fronting fee of 0.125%
on the average daily maximum amount available to be drawn under each Letter of
Credit (other than the Existing Letters of Credit except in connection with
renewals, modifications or extensions of the Existing Letters of Credit)
computed at a per annum rate for each day from the date of issuance to the date
of expiration (which fronting fee shall be payable quarterly in arrears on the
first Business Day following the last Business Day of each March, June,
September and December for the immediately preceding quarter (or a portion
thereof)) and (ii) the customary charges from time to time of the L/C Issuer
with respect to the issuance, amendment, transfer, administration, cancellation
and conversion of, and drawings under, such Letters of Credit.
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 Audit and Collateral Monitoring Fees. The
Borrowers acknowledge that pursuant to Section 7.01(f), representatives of the
Collateral Agent may visit any or all of the Loan Parties and/or conduct audits,
inspections, appraisals, valuations and/or field examinations of any or all of
the Loan Parties or the Collateral at any time and from time to time in a manner
so as to not unduly disrupt the business of the Loan Parties. The Borrowers
agree to pay (i) $1,500 per day per examiner plus the examiner's out-of-pocket
costs and reasonable expenses incurred in connection with all such visits,
audits, inspections, appraisals, valuations and field examinations and (ii) the
actual out-of-pocket cost of all visits, audits, inspections, appraisals,
valuations and field examinations conducted by a third party on behalf of the
Collateral Agent. Notwithstanding the foregoing, if no Default or Event of
Default shall
- 53 -
have occurred and be continuing, the Borrowers shall not be obligated to pay the
fees, costs and expenses for more than (x) prior to the date that the condition
subsequent set forth in Section 5.03(j) is satisfied, 1 such audit, inspection
and/or field examination (in the aggregate) of the Loan Parties during each
fiscal quarter of the Parent and its Subsidiaries, (y) after the date that the
condition subsequent set forth in Section 5.03(j) is satisfied, 2 such audits,
inspections and/or field examinations (in the aggregate) of the Loan Parties
during each 12 month period during the term of this Agreement, and (z) in any
case, 2 such appraisals or valuations of the Collateral during each 12 month
period during the term of this Agreement.
Section 4.02 Payments; Computations and Statements. (a) The
Borrowers will make each payment under this Agreement not later than 12:00 noon
(New York City time) on the day when due, in lawful money of the United States
of America and in immediately available funds, to the Administrative Agent's
Account. All payments received by the Administrative Agent after 12:00 noon (New
York City time) on any Business Day will be credited to the Loan Account on the
next succeeding Business Day. All payments shall be made by the Borrowers
without set-off, counterclaim, deduction or other defense to the Agents, the L/C
Issuer and the Lenders. Except as provided in Section 2.02, after receipt, the
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal ratably to the Lenders in accordance with
their Pro Rata Shares and like funds relating to the payment of any other amount
payable to any Agent or Lender to such Agent or Lender, in each case to be
applied in accordance with the terms of this Agreement, provided that the
Administrative Agent will cause to be distributed all interest and fees received
from or for the account of the Borrowers not less than once each month and in
any event promptly after receipt thereof. The Lenders and the Borrowers hereby
authorize the Administrative Agent to, and the Administrative Agent shall, at
the direction of the Collateral Agent, from time to time, charge the Loan
Account of the Borrowers with any amount due and payable by the Loan Parties
under any Loan Document. Each of the Lenders and the Borrowers agrees that the
Administrative Agent, at the direction of the Collateral Agent, shall have the
right to make such charges whether or not any Default or Event of Default shall
have occurred and be continuing or whether any of the conditions precedent in
Section 5.02 have been satisfied. Any amount charged to the Loan Account of the
Borrowers shall be deemed a Revolving Loan hereunder made by the Revolving Loan
Lenders to the Borrowers, funded by the Administrative Agent on behalf of the
Revolving Loan Lenders and subject to Section 2.02 of this Agreement. The
Lenders and the Borrowers confirm that any charges which the Administrative
Agent may so make to the Loan Account of the Borrowers as herein provided will
be made as an accommodation to the Borrowers and solely at the Collateral
Agent's discretion as communicated to the Administrative Agent. Whenever any
payment to be made under any such Loan Document shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be. All computations of
interest for Reference Rate Loans shall be made on the basis of a year of 365 or
366 days, as the case may be, and the actual number of days elapsed. All other
computations of interest shall be made on the basis of a 360-day year and the
actual number of days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Each determination by the
Administrative Agent of an interest rate or fees hereunder shall be conclusive
and binding for all purposes in the absence of manifest error.
- 54 -
(b) The Administrative Agent shall provide the
Administrative Borrower, promptly upon the request of the Administrative
Borrower after the end of any calendar month, a summary statement (in the form
from time to time used by the Administrative Agent) of the opening and closing
daily balances in the Loan Account of the Borrowers during such month, the
amounts and dates of all Loans made to the Borrowers during such month, the
amounts and dates of all payments on account of the Loans to the Borrowers
during such month and the Loans to which such payments were applied, the amount
of interest accrued on the Loans to the Borrowers during such month, any Letters
of Credit issued by the L/C Issuer for the account of the Borrowers during such
month, specifying the face amount thereof, the amount of charges to the Loan
Account and/or Loans made to the Borrowers during such month to reimburse the
Revolving Loan Lenders for drawings made under Letters of Credit, and the amount
and nature of any charges to the Loan Account made during such month on account
of fees, commissions, expenses and other Obligations. All entries on any such
statement shall be presumed to be correct and, thirty (30) days after the same
is sent, shall be final and conclusive absent manifest error or objection by the
Administrative Borrower prior to such date.
Section 4.03 Sharing of Payments, Etc. Except as provided in
Section 2.02 hereof, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Obligation in excess of its ratable share of payments on account
of similar obligations obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in such similar obligations
held by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender of any interest or other
amount paid by the purchasing Lender in respect of the total amount so
recovered). The Borrowers agree that any Lender so purchasing a participation
from another Lender pursuant to this Section 4.03 may, to the fullest extent
permitted by law, exercise all of its rights (including the Lender's right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrowers in the amount of such participation.
Section 4.04 Apportionment of Payments. Subject to Section
2.02 hereof and to any written agreements among the Agents and/or the Lenders:
(a) All payments of principal and interest in
respect of outstanding Loans, all payments in respect of the Letters of Credit,
all payments of fees (other than the fees set forth in Section 2.06 hereof, fees
with respect to Letters of Credit provided for in Section 3.02(b), and the audit
and collateral monitoring fee provided for in Section 4.01) and all other
payments in respect of any other Obligations, shall be allocated by the
Administrative Agent among such of the Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided herein
or, in respect of payments not made on account of Loans or Letter of Credit
Obligations, as designated by the Person making payment when the payment is
made.
- 55 -
(b) After the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall, upon the
direction of the Collateral Agent or the Required Lenders, apply all payments in
respect of any Obligations and all proceeds of the Collateral, subject to the
provisions of this Agreement, (i) first, ratably to pay the Obligations in
respect of any fees, expense reimbursements, indemnities and other amounts then
due to the Agents or the L/C Issuer, until paid in full; (ii) second, ratably to
pay the Obligations in respect of any fees and indemnities then due to the
Lenders, until paid in full; (iii) third, to pay interest due in respect of
Collateral Agent Advances, until paid in full; (iv) fourth, ratably to pay
interest due in respect of the Loans and Obligations consisting of scheduled or
periodic payments with respect to Hedging Agreements or Treasury Management
Agreements, until paid in full; (v) fifth, to pay principal of Collateral Agent
Advances, until paid in full; (vi) sixth, ratably to pay principal of the Loans
and Letter of Credit Obligations (or, to the extent such Obligations are
contingent, to provide cash collateral in respect of such Obligations) and
Obligations consisting of termination or other payments with respect to Hedging
Agreements or Treasury Management Agreements, until paid in full; and (vii)
seventh, to the ratable payment of all other Obligations then due and payable.
(c) In each instance, so long as no Event of
Default has occurred and is continuing, Section 4.04(b) shall not be deemed to
apply to any payment by the Borrowers specified by the Administrative Borrower
to the Administrative Agent to be for the payment of Term Loan Obligations then
due and payable under any provision of this Agreement or the prepayment of all
or part of the principal of the Term Loan in accordance with the terms and
conditions of Section 2.05.
(d) For purposes of Section 4.04(b), "paid in
full" means payment of all amounts owing under the Loan Documents according to
the terms thereof, including loan fees, service fees, professional fees,
interest (and specifically including interest accrued after the commencement of
any Insolvency Proceeding), default interest, interest on interest, and expense
reimbursements, in each case, whether or not the same would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding.
(e) In the event of a direct conflict between
the priority provisions of this Section 4.04 and other provisions contained in
any other Loan Document, it is the intention of the parties hereto that both
such priority provisions in such documents shall be read together and construed,
to the fullest extent possible, to be in concert with each other. In the event
of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the
terms and provisions of this Section 4.04 shall control and govern.
Section 4.05 Increased Costs and Reduced Return. (a) If any
Lender, any Agent or the L/C Issuer shall have determined that, after the
Effective Date, the adoption or implementation of, or any change in, any law,
rule, treaty or regulation, or any policy, guideline or directive of, or any
change in, the interpretation or administration thereof by, any court, central
bank or other administrative or Governmental Authority, or compliance by any
Lender, any Agent or the L/C Issuer or any Person controlling any such Lender,
any such Agent or the L/C Issuer with any directive of, or guideline from, any
central bank or other Governmental Authority or the introduction of, or change
in, any accounting principles applicable to any Lender, any Agent or the L/C
Issuer or any Person controlling any such Lender, any such Agent
- 56 -
or the L/C Issuer (in each case, whether or not having the force of law) (each a
"Change in Law"), shall (i) subject such Lender, such Agent or the L/C Issuer,
or any Person controlling such Lender, such Agent or the L/C Issuer to any tax,
duty or other charge with respect to any LIBOR Rate Loan made by such Lender or
such Agent or any Letter of Credit issued by the L/C Issuer, or change the basis
of taxation of payments to such Lender, such Agent or the L/C Issuer or any
Person controlling such Lender, such Agent or the L/C Issuer of any amounts
payable hereunder in respect of LIBOR Rate Loans (except for taxes on the
overall net income of such Lender, such Agent or the L/C Issuer or any Person
controlling such Lender, such Agent or the L/C Issuer), (ii) impose, modify or
deem applicable any reserve, special deposit or similar requirement (other than
the Reserve Percentage) against any LIBOR Rate Loan, any Letter of Credit or
against assets of or held by, or deposits with or for the account of, or credit
extended by, such Lender, such Agent or the L/C Issuer or any Person controlling
such Lender, such Agent or the L/C Issuer or (iii) impose on such Lender, such
Agent or the L/C Issuer or any Person controlling such Lender, such Agent or the
L/C Issuer any other condition regarding any LIBOR Rate Loan or Letter of
Credit, and the result of any event referred to in clauses (i), (ii) or (iii)
above shall be to increase the cost to such Lender, such Agent or the L/C Issuer
of making any LIBOR Rate Loan, issuing, guaranteeing or participating in any
Letter of Credit, or agreeing to make any Loan or issue, guaranty or participate
in any Letter of Credit, or to reduce any amount received or receivable by such
Lender, such Agent or the L/C Issuer hereunder in respect of LIBOR Rate Loans or
Letters of Credit , then, within 10 days of demand by such Lender, such Agent or
the L/C Issuer, the Borrowers shall pay to such Lender, such Agent or the L/C
Issuer such additional amounts as will compensate such Lender, such Agent or the
L/C Issuer for such increased costs or reductions in amount.
(b) If any Lender, any Agent or the L/C Issuer
shall have determined that any Change in Law after the Effective Date either (i)
affects or would affect the amount of capital required or expected to be
maintained by such Lender, such Agent or the L/C Issuer or any Person
controlling such Lender, such Agent or the L/C Issuer, and such Lender, such
Agent or the L/C Issuer determines that the amount of such capital is increased
as a direct or indirect consequence of any Loans made or maintained, Letters of
Credit issued or any guaranty or participation with respect thereto, such
Lender's, such Agent's or the L/C Issuer's or such other controlling Person's
other obligations hereunder, or (ii) has or would have the effect of reducing
the rate of return on such Lender's, such Agent's or the L/C Issuer's such other
controlling Person's capital to a level below that which such Lender, such Agent
or the L/C Issuer or such controlling Person could have achieved but for such
circumstances as a consequence of any Loans made or maintained, Letters of
Credit issued, or any guaranty or participation with respect thereto or any
agreement to make Loans, to issue Letters of Credit or such Lender's, such
Agent's or the L/C Issuer's or such other controlling Person's other obligations
hereunder (in each case, taking into consideration, such Lender's, such Agent's
or the L/C Issuer's or such other controlling Person's policies with respect to
capital adequacy), then, within 10 days of demand by such Lender, such Agent or
the L/C Issuer, the Borrowers shall pay to such Lender, such Agent or the L/C
Issuer from time to time such additional amounts as will compensate such Lender,
such Agent or the L/C Issuer for such cost of maintaining such increased capital
or such reduction in the rate of return on such Lender's, such Agent's or the
L/C Issuer's or such other controlling Person's capital.
- 57 -
(c) All amounts payable under this Section 4.05
shall bear interest from the date that is 10 days after the date of demand by
any Lender, any Agent or the L/C Issuer until payment in full to such Lender,
such Agent or the L/C Issuer at the Reference Rate. A certificate of such
Lender, such Agent or the L/C Issuer claiming compensation under this Section
4.05, specifying the event herein above described and the nature of such event
shall be submitted by such Lender, such Agent or the L/C Issuer to the
Administrative Borrower, setting forth the additional amount due and an
explanation of the calculation thereof, and such Lender's, such Agent's or the
L/C Issuer's reasons for invoking the provisions of this Section 4.05, and shall
be final and conclusive absent manifest error.
(d) The Borrowers shall not be required to
compensate a Lender pursuant to this Section 4.05 for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender
notifies the Administrative Borrower of the change of law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided, that, if the change of law giving rise to such
increased costs or reductions is retroactive, then such 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
Section 4.06 Joint and Several Liability of the Borrowers. (a)
Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agents, the L/C Issuer and the Lenders
under this Agreement and the other Loan Documents, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations. Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 4.06), it being the
intention of the parties hereto that all of the Obligations shall be the joint
and several obligations of each of the Borrowers without preferences or
distinction among them. If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms thereof, then
in each such event, the other Borrowers will make such payment with respect to,
or perform, such Obligation. Subject to the terms and conditions hereof, the
Obligations of each of the Borrowers under the provisions of this Section 4.06
constitute the absolute and unconditional, full recourse Obligations of each of
the Borrowers, enforceable against each such Person to the full extent of its
properties and assets, irrespective of the validity, binding effect or
enforceability of this Agreement, the other Loan Documents or any other
circumstances whatsoever.
(b) The provisions of this Section 4.06 are made
for the benefit of the Agents, the Lenders and their successors and assigns, and
may be enforced by them from time to time against any or all of the Borrowers as
often as occasion therefor may arise and without requirement on the part of the
Agents, the Lenders or such successors or assigns first to marshal any of its or
their claims or to exercise any of its or their rights against any of the other
Borrowers or to exhaust any remedies available to it or them against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations
- 58 -
hereunder or to elect any other remedy. The provisions of this Section 4.06
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied.
(c) Each of the Borrowers hereby agrees that it
will not enforce any of its rights of contribution or subrogation against the
other Borrowers with respect to any liability incurred by it hereunder or under
any of the other Loan Documents, any payments made by it to the Agents or the
Lenders with respect to any of the Obligations or any Collateral, until such
time as all of the Obligations have been paid in full in cash. Any claim which
any Borrower may have against any other Borrower with respect to any payments to
the Agents or the Lenders hereunder or under any other Loan Documents are hereby
expressly made subordinate and junior in right of payment, without limitation as
to any increases in the Obligations arising hereunder or thereunder, to the
prior payment in full in cash of the Obligations.
ARTICLE V
CONDITIONS TO LOANS
Section 5.01 Conditions Precedent to Effectiveness. This
Agreement shall become effective as of the Business Day (the "Effective Date")
when each of the following conditions precedent shall have been satisfied in a
manner reasonably satisfactory to the Collateral Agent (and if so indicated
below, the Administrative Agent):
(a) Payment of Fees, Etc. The Borrowers shall
have paid on or before the date of this Agreement all fees, costs, expenses and
taxes then payable pursuant to Section 2.06 and Section 12.04.
(b) Representations and Warranties; No Event of
Default. The following statements shall be true and correct: (i) the
representations and warranties contained in ARTICLE VI and in each other Loan
Document are true and correct on and as of the Effective Date as though made on
and as of such date, except to the extent that any such representation or
warranty expressly relates solely to an earlier date (in which case such
representation or warranty shall be true and correct on and as of such earlier
date) and (ii) no Default or Event of Default shall have occurred and be
continuing on the Effective Date or would result from this Agreement or the
other Loan Documents becoming effective in accordance with its or their
respective terms.
(c) Legality. The making of the initial Loans or
the issuance of any initial Letters of Credit shall not contravene any law, rule
or regulation applicable to any Agent, any Lender or the L/C Issuer.
(d) Delivery of Documents. The Collateral Agent
shall have received on or before the Effective Date the following, each in form
and substance reasonably satisfactory to the Collateral Agent (and in the case
of items (i), (xi) and (xx) below, the Administrative Agent) and, unless
indicated otherwise, dated the Effective Date:
(i) the Fee Letter;
(ii) a Security Agreement, duly executed
by each Loan Party;
- 59 -
(iii) a Pledge Agreement, duly executed
by each Loan Party, together with the original stock certificates (to the extent
certificated) representing all (or, in the case of a first-tier Foreign
Subsidiary of any Loan Party, 65%) of the common stock of such Loan Party's
subsidiaries and all intercompany promissory notes of such Loan Parties,
accompanied by undated stock powers executed in blank and other proper
instruments of transfer;
(iv) a Mortgage duly executed by each
applicable Loan Party, with respect to each Facility;
(v) evidence of the recording of the
Mortgage in such office or offices as may be necessary or, in the reasonable
business judgment of the Collateral Agent, desirable to perfect the Lien
purported to be created thereby or to otherwise protect the rights of the
Agents, the L/C Issuer and the Lenders thereunder;
(vi) the Intercompany Subordination
Agreement;
(vii) the Senior Subordinated Note
Intercreditor Agreement;
(viii) a UCC Filing Authorization Letter,
duly executed by each Loan Party, together with (A) appropriate financing
statements on Form UCC-1 duly filed in such office or offices as may be
necessary or, in the reasonable business judgment of the Collateral Agent,
desirable to perfect the security interests purported to be created by each
Security Agreement, each Pledge Agreement and each Mortgage and (B) evidence
satisfactory to the Collateral Agent of the filing of such UCC-1 financing
statements;
(ix) certified copies of request for
copies of information on Form UCC-11, listing all effective financing statements
which name as debtor any Loan Party and which are filed in the offices referred
to in paragraph (viii) above, together with copies of such financing statements,
none of which, except as otherwise agreed in writing by the Collateral Agent,
shall cover any of the Collateral and the results of searches for any tax Lien
and judgment Lien filed against such Person or its property, which results shall
not show any such Liens, except Permitted Liens;
(x) a copy of the resolutions of each
Loan Party, certified as of the Effective Date by an Authorized Officer thereof,
authorizing (A) the borrowings hereunder and the transactions contemplated by
the Loan Documents to which such Loan Party is or will be a party, and (B) the
execution, delivery and performance by such Loan Party of each Loan Document to
which such Loan Party is or will be a party and the execution and delivery of
the other documents to be delivered by such Person in connection herewith and
therewith;
(xi) a certificate of an Authorized
Officer of each Loan Party, certifying the names and true signatures of the
representatives of such Loan Party authorized to sign each Loan Document to
which such Loan Party is or will be a party and the other documents to be
executed and delivered by such Loan Party in connection herewith and therewith,
together with evidence of the incumbency of such authorized officers;
- 60 -
(xii) a certificate of the appropriate
official(s) of the state of organization and each state of foreign qualification
of each Loan Party certifying as of a recent date not more than 30 days prior to
the Effective Date as to the subsistence in good standing of such Loan Party in
such states;
(xiii) a true and complete copy of the
charter, certificate of formation, certificate of limited partnership or other
publicly filed organizational document of each Loan Party certified as of a
recent date not more than 30 days prior to the Effective Date by an appropriate
official of the state of organization of such Loan Party which shall set forth
the same complete name of such Loan Party as is set forth herein and the
organizational number of such Loan Party, if an organized number is issued in
such jurisdiction;
(xiv) a copy of the charter and by-laws,
limited liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party, together with
all amendments thereto, certified as of the Effective Date by an Authorized
Officer of such Loan Party;
(xv) (A) an opinion of in-house counsel
for the Loan Parties and of Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A., counsel to the
Loan Parties, substantially in the form of Exhibit F and as to such other
matters as the Collateral Agent may reasonably request including, without
limitation, that the Loans made pursuant to this Agreement constitute "Permitted
Debt", "Senior Debt" and "Designated Senior Debt" under the Senior Subordinated
Note Indenture or some derivation thereof reasonably satisfactory to the Agents;
(xvi) a certificate of an Authorized
Officer of each Loan Party, certifying as to the matters set forth in subsection
(b) of this Section 5.01;
(xvii) a copy of (A) the Financial
Statements and (B) the financial projections described in Section 6.01(g)(ii)
hereof, certified as of the Effective Date by an Authorized Officer of the
Parent as complying with the representations and warranties set forth in Section
6.01(g)(ii);
(xviii) a certificate of the chief
financial officer of the Parent, certifying that the Borrowers on a consolidated
basis are Solvent;
(xix) evidence of the insurance coverage
required by Section 7.01 and the terms of each Security Agreement and each
Mortgage and such other insurance coverage with respect to the business and
operations of the Loan Parties as the Collateral Agent may reasonably request,
in each case, where requested by the Collateral Agent, with such endorsements as
to the named insureds or loss payees thereunder as the Collateral Agent may
request and providing that such policy may be terminated or canceled (by the
insurer or the insured thereunder) only upon 30 days' prior written notice to
the Collateral Agent and each such named insured or loss payee, together with
evidence of the payment of all premiums due in respect thereof for such period
as the Collateral Agent may request;
(xx) a certificate of an Authorized
Officer of the Administrative Borrower, certifying the names and true signatures
of the persons that are authorized to provide
- 61 -
Notices of Borrowing, Letter of Credit Applications, LIBOR Notices and all other
notices under this Agreement and the other Loan Documents;
(xxi) copies of the Senior Subordinated
Note Indenture (including the Consent Solicitation and the Supplemental
Indenture (as defined in the Consent Solicitation and which shall be consistent
with the terms of the Consent Solicitation and otherwise in form and substance
satisfactory to the Collateral Agent)), the Senior Subordinated Notes, the MVI
Sale Agreement and the other Material Contracts as in effect on the Effective
Date, certified as true and correct copies thereof by an Authorized Officer of
the Administrative Borrower, together with a certificate of an Authorized
Officer of the Administrative Borrower stating that (A) the Senior Subordinated
Note Indenture, the Senior Subordinated Notes and the MVI Sale Agreement remain
in full force and effect and that none of the Loan Parties has breached or
defaulted in any of its obligations thereunder except, in the case of the Senior
Subordinated Note Indenture, as disclosed in the Consent Solicitation and cured
by the Supplemental Indenture (as defined in the Consent Solicitation) and the
payment on the Effective Date of the interest payment due and payable by the
Parent on April 1, 2004, in respect of its Senior Subordinated Notes and (B)
such other Material Contracts remain in full force and effect and that none of
the Loan Parties has breached or defaulted in any of its material obligations
thereunder;
(xxii) evidence of the payment in full of
all Indebtedness under the Existing Credit Facility, together with a termination
and release agreement with respect to the Existing Credit Facility and all
related documents, duly executed by the Loan Parties and the Existing Lenders,
together with a satisfaction of mortgage for each mortgage filed by the Existing
Lenders on each Facility, a termination of security interest in intellectual
property for each assignment for security recorded by the Existing Lenders at
the United States Patent and Trademark Office and covering any intellectual
property of the Loan Parties, and UCC-3 termination statements for all UCC-1
financing statements filed by the Existing Lenders and covering any portion of
the Collateral;
(xxiii) a certificate of an Authorized
Officer of the Parent, certifying that attached thereto are complete and correct
copies of the MVI Sale Agreement; and
(xxiv) such other agreements, instruments,
approvals, opinions and other documents, each satisfactory to the Collateral
Agent in form and substance, as the Collateral Agent may reasonably request.
(e) Consummation of the MVI Sale. Concurrently
with the making of the initial Loans, (i) the Parent shall have sold its M.V.I.
and Aquasol product business to Mayne Pharma (USA) Inc. in accordance with the
MVI Sale Agreement (no provision of which shall have been amended or otherwise
modified or waived without the prior written consent of the Agents) for Net Cash
Proceeds of not less than $63,500,000 (including the royalties payable in
connection therewith but before taxes, fees and expenses), (ii) the Net Cash
Proceeds of the MVI Sale shall have been delivered to the Administrative Agent
for application in accordance with Section 6.01(t) and (iii) each of the parties
to the MVI Sale Agreement shall have fully performed all of the obligations to
be performed by it on or prior to the Effective Date thereunder.
- 62 -
(f) Approvals. Except as set forth in Section
4(l) of the Security Agreement, all consents, authorizations and approvals of,
and filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Loans or the conduct of the Loan Parties' business shall have been obtained
and shall be in full force and effect.
(g) Proceedings; Receipt of Documents. All
proceedings in connection with the making of the initial Loans or the issuance
of the initial Letters of Credit and the other transactions contemplated by this
Agreement and the other Loan Documents, and all documents incidental hereto and
thereto, shall be satisfactory to the Collateral Agent and its counsel, and the
Collateral Agent and such counsel shall have received all such information and
such counterpart originals or certified or other copies of such documents as the
Collateral Agent or such counsel may reasonably request.
(h) Senior Subordinated Note Indenture. (A) The
Loan Parties shall have obtained the irrevocable "Consents" (as defined in the
Consent Solicitation) of the requisite Senior Subordinated Note Holders under
the Consent Solicitation, and the "Supplemental Indenture" and the "Proposed
Amendments" (as such terms are defined in the Consent Solicitation) shall have
become effective, and (B) the Collateral Agent shall be satisfied in its
reasonable business judgment that the Indebtedness and Liens incurred under this
Agreement and the other Loan Documents are permitted under the Senior
Subordinated Note Indenture.
Section 5.02 Conditions Precedent to All Loans and Letters of
Credit. The obligation of any Agent or any Lender to make any Loan or of the L/C
Issuer to issue any Letter of Credit after the Effective Date is subject to the
fulfillment, in a manner reasonably satisfactory to the Administrative Agent, as
certified to by the Administrative Borrower in the applicable Notice of
Borrowing, of each of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall
have paid all fees, costs, expenses and taxes then payable by the Borrowers
pursuant to this Agreement and the other Loan Documents, including, without
limitation, Section 2.06 and Section 12.04 hereof.
(b) Representations and Warranties; No Event of
Default. The following statements shall be true and correct, and the submission
by the Administrative Borrower to the Administrative Agent of a Notice of
Borrowing with respect to each such Loan, and the Borrowers' acceptance of the
proceeds of such Loan, or the submission by the Borrowers of a Letter of Credit
Application with respect to a Letter of Credit, and the issuance of such Letter
of Credit, shall each be deemed to be a representation and warranty by each Loan
Party on the date of such Loan or the date of issuance of such Letter of Credit
that: (i) the representations and warranties contained in ARTICLE VI and in each
other Loan Document are true and correct on and as of such date as though made
on and as of such date, except to the extent that any such representation or
warranty expressly relates solely to an earlier date (in which case such
representation or warranty shall be true and correct on and as of such earlier
date), (ii) at the time of and after giving effect to the making of such Loan
and the application of the proceeds thereof or at the time of issuance of such
Letter of Credit, no Default or Event of Default has occurred and is continuing
or would result from the making of the Loan to be made, or the issuance of
- 63 -
such Letter of Credit to be issued, on such date and (iii) the conditions set
forth in this Section 5.02 have been satisfied as of the date of such request.
(c) Legality. The making of such Loan or the
issuance of such Letter of Credit shall not contravene any law, rule or
regulation applicable to any Agent, any Lender or the L/C Issuer.
(d) Notices. The Administrative Agent shall have
received (i) a Notice of Borrowing pursuant to Section 2.02 hereof, (ii) a
Letter of Credit Application pursuant to Section 3.01, hereof, if applicable,
and (iii) a LIBOR Notice pursuant to Section 2.09 hereof, if applicable.
(e) Delivery of Documents. The Collateral Agent
shall have received such other agreements, instruments, approvals, opinions and
other documents, each in form and substance reasonably satisfactory to the
Collateral Agent, as the Collateral Agent may reasonably request.
(f) Proceedings; Receipt of Documents. All
proceedings in connection with the making of such Loan or the issuance of such
Letter of Credit and the other transactions contemplated by this Agreement and
the other Loan Documents, and all documents incidental hereto and thereto, shall
be reasonably satisfactory to the Collateral Agent and its counsel, and the
Collateral Agent and such counsel shall have received all such information and
such counterpart originals or certified or other copies of such documents, in
form and substance reasonably satisfactory to the Collateral Agent, as the
Collateral Agent or such counsel may reasonably request.
Section 5.03 Conditions Subsequent to Effectiveness. The
obligation of the Agents or any Lender to maintain the Loans and Letters of
Credit after the Effective Date is subject to the fulfillment, on or before the
applicable date thereto (unless the Borrowers are diligently pursuing the
satisfaction of such condition subsequent and such date is extended in writing
by the Collateral Agent in its sole discretion), of each condition subsequent
set forth below (the failure by Borrowers to so perform or cause to be performed
constituting an Event of Default):
(a) within 60 days of the Effective Date, the
Collateral Agent shall have received a Title Insurance Policy with respect to
each Mortgage;
(b) within 60 days of the Effective Date, the
Collateral Agent shall have received an ALTA survey of each Facility, in form
and substance satisfactory to the Collateral Agent, certified to the Collateral
Agent and to the issuer of each Title Insurance Policy;
(c) within 60 days of the Effective Date, the
Collateral Agent shall have received a satisfactory ASTM 1527-00 Phase I
Environmental Site Assessment ("Phase I ESA") (and, if requested by the
Collateral Agent based upon the results of such Phase I ESA, an ASTM 1527-00
Phase II Environmental Site Assessment within 30 days of the date of such
request) of each Facility, in form and substance and by an independent firm
satisfactory to the Collateral Agent;
- 64 -
(d) the Borrowers shall use commercially
reasonable efforts to deliver to the Collateral Agent, within 60 days of the
Effective Date, a copy of each letter issued by the applicable State
Governmental Authority, evidencing each Facility's compliance with all
applicable building codes, fire codes, other health and safety rules and
regulations, parking, density and height requirements and other building and
zoning laws (it being understood that in the event the Borrowers are unable to
obtain any such letter or such letter discloses a material impairment of the use
of such Facility, the Administrative Agent shall, at the direction of the
Collateral Agent using its reasonable discretion, establish such reserves
against Availability as the Collateral Agent deems reasonably necessary with
respect to such Facility);
(e) the Borrowers shall use commercially
reasonable efforts to deliver to the Collateral Agent, within 30 days of the
Effective Date, a landlord waiver, in form and substance reasonably satisfactory
to the Collateral Agent, executed by each landlord with respect to each of the
Leases set forth on Schedule 5.03(e) (it being understood that in the event the
Borrowers are unable to obtain any such landlord waiver, the Administrative
Agent shall, at the direction of the Collateral Agent using its reasonable
discretion, establish such reserves against Availability as the Collateral Agent
deems reasonably necessary with respect to the Collateral at such location);
(f) the Borrowers shall use commercially
reasonable efforts to deliver to the Collateral Agent, within 30 days of the
Effective Date, a collateral access agreement, in form and substance reasonably
satisfactory to the Collateral Agent, executed by each Person who possesses
Collateral of any Loan Party with a book value in an aggregate amount in excess
of $250,000 (it being understood that in the event the Borrowers are unable to
obtain any such collateral access agreement, the Administrative Agent shall, at
the direction of the Collateral Agent using its reasonable discretion, establish
such reserves against Availability as the Collateral Agent deems reasonably
necessary with respect to the Collateral in the possession of such Person);
(g) the Borrowers shall use commercially
reasonable efforts to deliver to the Collateral Agent, within 60 days of the
Effective Date, a Mortgage with respect to the leased real property located at
0000 Xxxxx Xxxxx, Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, together a Title
Insurance Policy covering such real property, a current ALTA survey thereof and
a surveyor's certificate, in each case, in form and substance satisfactory to
the Collateral Agent;
(h) within 30 days of the Effective Date, the
Collateral Agent shall have received such depository account, blocked account,
lockbox account and similar agreements and other documents, each in form and
substance reasonably satisfactory to the Agents, as the Agents may reasonably
request with respect to the Borrowers' domestic cash management system (other
than with respect to fiduciary accounts of the Loan Parties and deposit accounts
of the Loan Parties exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of the salaried
employees of the Loan Parties);
(i) within 45 days of the Effective Date, the
Collateral Agent shall have received (i) an appropriate pledge agreement
satisfactory in form and substance to the Collateral Agent with respect to a
pledge of 65% (or such greater percentage that, due to a
- 65 -
change in applicable law after the Effective Date, (A) could not reasonably be
expected to cause the undistributed earnings of Applied Analytical Industries
Deutschland GmbH (the "German Subsidiary") as determined for United Stated
federal income tax purposes to be treated as a deemed dividend of the German
Subsidiary's United States parent or (B) could not reasonably be expected to
cause any material adverse tax consequences) of the Capital Stock of the German
Subsidiary, (ii) a legal opinion of foreign counsel of the German Subsidiary in
a form satisfactory to the Collateral Agent, which shall cover the
enforceability and perfection of the Collateral Agent's security interest in
such pledged shares of the German Subsidiary and (iii) certificates evidencing
any such certificated Capital Stock, if any, together with duly executed in
blank, undated stock powers attached thereto (unless, such stock powers are
deemed unnecessary by the Collateral Agent in its reasonable discretion under
the law of the jurisdiction of such German Subsidiary);
(j) on or before September 30, 2004, the
Collateral Agent shall have received either (i) a copy of a report on Form 10-K,
or any successor form, and any amendments thereto, filed by the Parent with the
SEC with respect to the Fiscal Year ended December 31, 2003, or (ii)
consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and retained earnings and consolidated and
consolidating statements of cash flows of the Parent and its Subsidiaries as at
the end of December 31, 2003, which are prepared in accordance with the
requirements set forth in Section 7.01(a)(ii); and
(k) within 45 days of the Effective Date,
evidence satisfactory to the Collateral Agent of the release of all Liens of the
Existing Lenders on the Capital Stock of the German Subsidiary (it being
understood that until released, any such Liens shall be deemed Permitted Liens
under this Agreement to the extent that such Liens do not secure any obligations
for the payment of money).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties. Each Loan Party
hereby represents and warrants to the Agents, the Lenders and the L/C Issuer as
follows:
(a) Organization, Good Standing, Etc. Each Loan
Party (i) is a corporation, limited liability company or limited partnership
duly organized, validly existing and in good standing under the laws of the
state or jurisdiction of its organization other than to the extent that the
failure to be in good standing in such state or jurisdiction could not
reasonably be expected to have a Material Adverse Effect, (ii) has all requisite
power and authority to conduct its business as now conducted and as presently
contemplated and, in the case of the Borrowers, to make the borrowings
hereunder, and to execute and deliver each Loan Document to which it is a party,
and to consummate the transactions contemplated thereby, and (iii) is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary other than in
such jurisdictions where the failure to be so qualified and in good standing
could not reasonably be expected to have a Material Adverse Effect.
- 66 -
(b) Authorization, Etc. The execution, delivery
and performance by each Loan Party of each Loan Document to which it is or will
be a party, (i) have been duly authorized by all necessary action, (ii) do not
and will not contravene its charter or by-laws, its limited liability company or
operating agreement or its certificate of partnership or partnership agreement,
as applicable, or any applicable law, the Senior Subordinated Note Indenture or
any material term of any Material Contract, (iii) do not and will not result in
or require the creation of any Lien (other than pursuant to any Loan Document)
upon or with respect to any of its properties, and (iv) do not and will not
result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to its operations or any of its properties.
(c) Governmental Approvals. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority is required in connection with the due execution, delivery and
performance by any Loan Party of any Loan Document to which it is or will be a
party except as set forth in Section 4(l) of the Security Agreement.
(d) Enforceability of Loan Documents. This
Agreement is, and each other Loan Document to which any Loan Party is or will be
a party, when delivered hereunder, will be, a legal, valid and binding
obligation of such Person, enforceable against such Person in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditor's rights generally.
(e) Subsidiaries. Schedule 6.01(e) is a complete
and correct description of the name, jurisdiction of incorporation and ownership
of the outstanding Capital Stock of such Subsidiaries of the Parent in existence
on the date hereof. All of the issued and outstanding shares of Capital Stock of
such Subsidiaries have been validly issued and are fully paid and nonassessable,
and the holders thereof are not entitled to any preemptive, first refusal or
other similar rights. Except as indicated on such Schedule and as otherwise
permitted by Section 7.02(c)(i), all such Capital Stock is owned by the Parent
or one or more of its wholly-owned Subsidiaries, free and clear of all Liens
(other than Permitted Liens). There are no outstanding debt or equity securities
of the Parent or any of its Subsidiaries and no outstanding obligations of the
Parent or any of its Subsidiaries convertible into or exchangeable for, or
warrants, options or other rights for the purchase or acquisition from the
Parent or any of its Subsidiaries, or other obligations of any Subsidiary to
issue, directly or indirectly, any shares of Capital Stock of any Subsidiary of
the Parent.
(f) Litigation; Commercial Tort Claims. Except
as set forth in Schedule 6.01(f), (i) there is no pending or, to the best
knowledge of any Loan Party, threatened action, suit or proceeding affecting any
Loan Party or any of its properties before any court or other Governmental
Authority or any arbitrator that (A) if such action, suit or proceeding could
reasonably be expected to be adversely determined, could reasonably be expected
to have a Material Adverse Effect or (B) relates to this Agreement or any other
Loan Document or any transaction contemplated hereby or thereby and (ii) as of
the Effective Date, none of the Loan Parties holds any commercial tort claims in
respect of which a claim has been filed in a court of law or a written notice by
an attorney has been given to a potential defendant.
- 67 -
(g) Financial Condition.
(i) Except to the extent set forth in
Schedule 6.01(g)(i), to the best knowledge of the Parent's management, as of the
Effective Date, the Financial Statements, copies of which have been delivered to
each Agent and each Lender, fairly present in all material respects the
consolidated financial condition of the Parent and its Subsidiaries as at the
respective dates thereof and the consolidated results of operations of the
Parent and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since the Effective Date no event or
development has occurred that has had or could reasonably be expected to have a
Material Adverse Effect.
(ii) The Parent has heretofore furnished
to each Agent and each Lender (A) projected quarterly balance sheets, income
statements and statements of cash flows of the Parent and its Subsidiaries for
the period from March 31, 2004, through December 31, 2005, and (B) projected
annual balance sheets, income statements and statements of cash flows of the
Parent and its Subsidiaries for the Fiscal Years ending in 2004 through 2005,
which projected financial statements shall be updated from time to time pursuant
to Section 7.01(a)(vi). Such projections when delivered will be, prepared in
good faith by the management of the Parent, based on assumptions believed by the
management of the Parent to be reasonable at the time made and upon information
believed by the management of the Parent to have been accurate based upon the
information available to the management of Parent at the time such projections
were furnished.
(h) Compliance with Law, Etc. No Loan Party is
in violation of (i) its organizational documents, (ii) except as set forth on
Schedule 6.01(h), any material law, rule, regulation (including, without
limitation, the FDA Regulations and the HHS Regulations), judgment or order of
any Governmental Authority applicable to it or any of its property or assets
(other than immaterial violations for which no penalty or fine in excess of
$250,000 is payable, or which are being contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting
from such violation and with respect to which adequate reserves have been set
aside for the payment of any penalty or fine arising therefrom in accordance
with GAAP), or (iii) the Senior Subordinated Note Indenture or any material term
of any Material Contract, and no Default or Event of Default has occurred and is
continuing.
(i) ERISA. Except as set forth on Schedule
6.01(i), (i) each Employee Plan is in substantial compliance with ERISA and the
Internal Revenue Code, (ii) no Termination Event has occurred nor is reasonably
expected to occur with respect to any Employee Plan, (iii) the most recent
annual report (Form 5500 Series) with respect to each Employee Plan, including
any required Schedule B (Actuarial Information) thereto, copies of which have
been filed with the Internal Revenue Service and, if requested by any Agent
pursuant to Section 7.01(a)(x), delivered to the Agents, is complete and correct
in all material respects and fairly presents the funding status of such Employee
Plan, and since the date of such report there has been no material adverse
change in such funding status, (iv) copies of each agreement entered into with
the PBGC, the U.S. Department of Labor or the Internal Revenue Service with
respect to any Employee Plan have been delivered to the Agents, (v) no Employee
Plan had an accumulated or waived funding deficiency or permitted decrease which
would create a deficiency in its funding standard account or has applied for an
extension of any amortization
- 68 -
period within the meaning of Section 412 of the Internal Revenue Code at any
time during the previous 60 months, and (vi) no Lien imposed under the Internal
Revenue Code or ERISA exists or is likely to arise on account of any Employee
Plan within the meaning of Section 412 of the Internal Revenue Code. Except as
set forth on Schedule 6.01(i), no Loan Party or any of its ERISA Affiliates has
incurred any withdrawal liability under ERISA with respect to any Multiemployer
Plan, or is aware of any facts indicating that it or any of its ERISA Affiliates
may in the future incur any such withdrawal liability. No Loan Party or any of
its ERISA Affiliates nor any fiduciary of any Employee Plan has (i) engaged in a
nonexempt prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code, (ii) failed to pay any required installment or other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such required installment or payment, (iii) engaged in a
transaction within the meaning of Section 4069 of ERISA or (iv) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. There are no pending or, to the best knowledge of any Loan Party,
threatened claims, actions, proceedings or lawsuits (other than claims for
benefits in the normal course) asserted or instituted against (i) any Employee
Plan or its assets, (ii) any fiduciary with respect to any Employee Plan, or
(iii) any Loan Party or any of its ERISA Affiliates with respect to any Employee
Plan, in each case, that could reasonably be expected to result in a liability
to any Loan Party or any of its ERISA Affiliates in an amount in excess of
$500,000. Except as required by Section 4980B of the Internal Revenue Code, no
Loan Party or any of its ERISA Affiliates maintains an employee welfare benefit
plan (as defined in Section 3(1) of ERISA) which provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of any Loan Party or any of its ERISA Affiliates or coverage
after a participant's termination of employment.
(j) Taxes, Etc. All Federal, state and local tax
returns and other reports required by applicable law to be filed by any Loan
Party have been filed, or extensions have been obtained, and all taxes,
assessments and other governmental charges imposed upon any Loan Party or any
property of any Loan Party and which have become due and payable on or prior to
the date hereof have been paid, except (i) as of the Effective Date, for amounts
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof on the
Financial Statements in accordance with GAAP and (ii) after the Effective Date,
as permitted by Section 7.01(c).
(k) Regulations T, U and X. No Loan Party is or
will be engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation T, U or
X), and no proceeds of any Loan will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
(l) Nature of Business. No Loan Party is engaged
in any business other than specialty pharmaceutical services with comprehensive
drug development capabilities with focus in fee-for-service pharmaceutical
services, drug product sales, pharmaceutical product development, pharmaceutical
product manufacturing and product life cycle management and ancillary
businesses.
- 69 -
(m) Adverse Agreements, Etc. No Loan Party is a
party to any agreement or instrument, or subject to any charter, limited
liability company agreement, partnership agreement or other corporate,
partnership or limited liability company restriction or any judgment, order,
regulation, ruling or other requirement of a court or other Governmental
Authority, which has, or in the future could reasonably be expected to have, a
Material Adverse Effect.
(n) Permits, Etc. Each Loan Party has, and is in
compliance with, all permits, licenses, authorizations, approvals, entitlements
and accreditations required for such Person lawfully to own, lease, manage or
operate, or to acquire, each business currently owned, leased, managed or
operated, or to be acquired, by such Person except for such non-compliance and
such permits, licenses, authorizations, entitlements and accelerations, as to
which (individually or in the aggregate) a Loan Party or its Subsidiary's
failure to maintain or so comply could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. No condition
exists or event has occurred which, in itself or with the giving of notice or
lapse of time or both, would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such permit, license, authorization, approval,
entitlement or accreditation, and there is no claim that any thereof is not in
full force and effect.
(o) Properties.(i) Each Loan Party has good and
marketable title to, valid leasehold interests in, or valid licenses to use, all
property and assets material to its business, free and clear of all Liens,
except Permitted Liens. All such properties and assets are in good working order
and condition, ordinary wear and tear excepted.
(ii) Schedule 6.01(o) sets forth a
complete and accurate list, as of the Effective Date, of the location, by state
and street address, of all real property owned or leased by each Loan Party and
identifies the interest (fee or leasehold) of such Loan Party therein. As of the
Effective Date, each Loan Party has valid leasehold interests in the Leases
described on Schedule 6.01(o) to which it is a party. True, complete and correct
copies of each such Lease have been delivered to the Collateral Agent prior to
the Effective Date. Schedule 6.01(o) sets forth with respect to each such Lease,
the commencement date, termination date, renewal options (if any) and annual
base rents. Each such Lease that is a Material Contract is valid and enforceable
in accordance with its terms and is in full force and effect (except to the
extent that any such Lease is terminated by a Loan Party or any of its
Subsidiaries upon a determination by such Person in its reasonable business
judgment that such Lease is no longer material and useful to the conduct of the
business of the Parent and its Subsidiaries, taken as a whole). No consent or
approval of any landlord or other third party in connection with any such Lease
is necessary for any Loan Party to enter into and execute the Loan Documents to
which it is a party, except as set forth on Schedule 6.01(o). To the best
knowledge of any Loan Party, no other party to any such Lease is in default of
its obligations thereunder, and no Loan Party (or any other party to any such
Lease) has at any time delivered or received any notice of default which remains
uncured under any such Lease and, as of the Effective Date, no event has
occurred which, with the giving of notice or the passage of time or both, would
constitute a default under any such Lease.
(p) Full Disclosure. To the best knowledge of
management of each Loan Party, (i) all written information and other materials,
other than the projections referred to
- 70 -
below, concerning the Loan Parties and their Subsidiaries (collectively, the
"Information") which has been, or is hereafter, made available by, or on behalf
of the Loan Parties when furnished was, or delivered will be, when considered as
a whole, complete and correct in all material respects and, to the best
knowledge of management of the Loan Parties, does not, or will not when
delivered, when taken as a whole, contain any untrue statement of material fact,
or, when taken as a whole, omit to state a material fact necessary in order to
make the statements contained therein not misleading in light of the
circumstances under which such statements has been made and (ii) all financial
projections concerning the Loan Parties and their Subsidiaries that have been or
are hereafter made available to the Lenders were, or when delivered will be,
prepared in good faith on the basis of (A) assumptions believed by the
management of the Loan Parties to be reasonable and (B) information believed by
the management of the Loan Parties to have been accurate based upon the
information available to the management of the Loan Parties at the time such
projections were furnished to the Lenders.
(q) Intentionally Omitted.
(r) Environmental Matters. Except as set forth
on Schedule 6.01(r), (i) the operations of each Loan Party are in material
compliance with all Environmental Laws; (ii) there has been no Release at any of
the properties owned or operated by any Loan Party or a predecessor in interest,
or at any disposal or treatment facility which received Hazardous Materials
generated by any Loan Party or any predecessor in interest which could
reasonably be expected to have a Material Adverse Effect; (iii) no Environmental
Action has been asserted against any Loan Party or any predecessor in interest
nor does any Loan Party have knowledge or notice of any threatened or pending
Environmental Action against any Loan Party or any predecessor in interest which
could reasonably be expected to have a Material Adverse Effect; (iv) no
Environmental Actions have been asserted against any facilities that may have
received Hazardous Materials generated by any Loan Party or any predecessor in
interest which could reasonably be expected to have a Material Adverse Effect;
(v) no property now or formerly owned or operated by a Loan Party has been used
as a treatment or disposal site for any Hazardous Material other than in
material compliance with Environmental Laws; (vi) no Loan Party has failed to
report to the proper Governmental Authority any Release which is required to be
so reported by any Environmental Laws which could reasonably be expected to have
a Material Adverse Effect; (vii) each Loan Party holds all licenses, permits and
approvals required under any Environmental Laws in connection with the operation
of the business carried on by it, except for such licenses, permits and
approvals as to which a Loan Party's failure to maintain or comply with could
not reasonably be expected to have a Material Adverse Effect; and (viii) no Loan
Party has received any notification pursuant to any Environmental Laws that (A)
any work, repairs, construction or Capital Expenditures are required to be made
in respect as a condition of continued compliance with any Environmental Laws,
or any license, permit or approval issued pursuant thereto or (B) any license,
permit or approval referred to above is about to be reviewed, made, subject to
limitations or conditions, revoked, withdrawn or terminated, in each case,
except as could not reasonably be expected to have a Material Adverse Effect.
This Section 6.01(r) contains the sole representations and warranties of the
Loan Parties with regard to matters arising under Environmental Laws.
(s) Insurance. Each Loan Party keeps its
property adequately insured and maintains (i) insurance to such extent and
against such risks, including fire, as is customary
- 71 -
with companies in the same or similar businesses, (ii) workmen's compensation
insurance in the amount required by applicable law, (iii) public liability
insurance, which shall include product liability insurance, in the amount
customary with companies in the same or similar business against claims for
personal injury or death on properties owned, occupied or controlled by it, and
(iv) such other insurance as may be required by law or as may be reasonably
required by the Collateral Agent (including, without limitation, against
larceny, embezzlement or other criminal misappropriation). Schedule 6.01(s) sets
forth a list of all insurance maintained by each Loan Party on the Effective
Date.
(t) Use of Proceeds. The proceeds of the Loans
shall be used to, together with the Net Cash Proceeds from the MVI Sale, (a)
refinance existing Indebtedness of the Loan Parties under the Existing Credit
Facility, (b) fund the interest payment owing by the Parent in respect of its
Senior Subordinated Notes, (c) provide for ongoing working capital and general
corporate purposes of the Loan Parties, and (d) to pay for fees, costs and
expenses incurred in connection with the transactions contemplated hereby.
(u) Solvency. After giving effect to the
transactions contemplated by this Agreement and before and after giving effect
to each Loan and Letter of Credit, the Loan Parties on a consolidated basis are
Solvent.
(v) Location of Bank Accounts. Schedule 6.01(v)
sets forth a complete and accurate list as of the Effective Date of all deposit,
checking and other bank accounts, all securities and other accounts maintained
with any broker dealer and all other similar accounts maintained by each Loan
Party, together with a description thereof (i.e., the bank or broker dealer at
which such deposit or other account is maintained and the account number and the
purpose thereof).
(w) Intellectual Property. Except as set forth
on Schedule 6.01(w), each Loan Party owns or licenses or otherwise has the right
to use all licenses, permits, patents, patent applications, trademarks,
trademark applications, service marks, tradenames, copyrights, copyright
applications, franchises, authorizations, non-governmental licenses and permits
for intellectual property rights and other intellectual property rights that are
necessary for the operation of its business, without infringement upon or
conflict with the rights of any other Person with respect thereto, except for
such infringements and conflicts which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. Set forth on
Schedule 6.01(w) is a complete and accurate list as of the Effective Date of all
such material licenses, permits, patents, patent applications, registered
trademarks, trademark applications, registered service marks, tradenames,
registered copyrights, and copyright applications of each Loan Party. No slogan
or other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by any Loan Party
infringes upon or conflicts with any rights owned by any other Person, and no
claim or litigation regarding any of the foregoing is pending or threatened,
except for such infringements, conflicts, claims and litigation which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. To the best knowledge of each Loan Party, no patent, invention,
device, application, principle or any statute, law, rule, regulation, standard
or code is pending or proposed, which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
- 72 -
(x) Material Contracts. Set forth on Schedule
6.01(x) is a complete and accurate list as of the Effective Date of all Material
Contracts (other than the Loan Documents) of each Loan Party, showing the
parties and subject matter thereof and amendments and modifications thereto.
Each such Material Contract (i) is in full force and effect and is binding upon
and enforceable against each Loan Party that is a party thereto and, to the best
knowledge of such Loan Party, all other parties thereto in accordance with its
terms (except to the extent that any such Material Contract is terminated by a
Loan Party or any of its Subsidiaries upon a determination by such Person in its
reasonable business judgment that such Material Contract is no longer material
and useful to the conduct of the business of the Parent and its Subsidiaries,
taken as a whole), (ii) has not been otherwise amended or modified (other than
in accordance with Section 7.02(s)), and (iii) is not in default in any material
respect due to the action of any Loan Party or, to the best knowledge of any
Loan Party, any other party thereto.
(y) Holding Company and Investment Company Acts.
None of the Loan Parties is (i) a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended, or (ii)
an "investment company" or an "affiliated person" or "promoter" of, or
"principal underwriter" of or for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
(z) Employee and Labor Matters. Except as could
not reasonably be expected to have a Material Adverse Effect, there is (i) no
unfair labor practice complaint pending or, to the best knowledge of any Loan
Party, threatened against any Loan Party before any Governmental Authority and
no grievance or arbitration proceeding pending or, to the best knowledge of any
Loan Party, threatened against any Loan Party which arises out of or under any
collective bargaining agreement, (ii) no strike, labor dispute, slowdown,
stoppage or similar action or grievance pending or, to the best knowledge of any
Loan Party, threatened against any Loan Party or (iii) to the best knowledge of
any Loan Party, no union representation question existing with respect to the
employees of any Loan Party and no union organizing activity taking place with
respect to any of the employees of any Loan Party. No Loan Party or any of its
ERISA Affiliates has incurred any liability or obligation under the Worker
Adjustment and Retraining Notification Act ("WARN") or similar state law, which
remains unpaid or unsatisfied. The hours worked and payments made to employees
of any Loan Party have not been in violation of the Fair Labor Standards Act or
any other applicable legal requirements, except to the extent such violations
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. All material payments due from any Loan Party on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of such Loan Party.
(aa) Customers and Suppliers. Except as set forth
on Schedule 6.01(aa), there exists no actual or, to the best knowledge of any
Loan Party, threatened termination, cancellation or limitation of, or adverse
modification to or change in, the business relationship between (i) any Loan
Party, on the one hand, and any customer or any group thereof, on the other
hand, whose agreements with any Loan Party are individually or in the aggregate
material to the business or operations of the Loan Parties (taken as a whole),
or (ii) any Loan Party, on the one hand, and any material supplier thereof, on
the other hand whose agreements with any Loan Party are individually or in the
aggregate material to the business or operations of
- 73 -
the Loan Parties (taken as a whole); and there exists no present state of facts
or circumstances that could give rise to or result in any such termination,
cancellation, limitation, modification or change that, individually or in the
aggregate, would be material to the business or operations of the Loan Parties
(taken as a whole).
(bb) No Bankruptcy Filing. No Loan Party is
contemplating either an Insolvency Proceeding or the liquidation of all or a
major portion of such Loan Party's assets or property, and no Loan Party has any
knowledge of any Person contemplating an Insolvency Proceeding against it.
(cc) Interrelated Business. The Loan Parties make
up a related organization of various entities constituting a single economic and
business enterprise so that the Loan Parties share an identity of interests such
that any benefit received by any one of them benefits the others. From time to
time each Loan Party may render services to or for the benefit of the other Loan
Parties, purchase or sell and supply goods to or from or for the benefit of the
others, make loans, advances and provide other financial accommodations to or
for the benefit of the other Loan Parties (including inter alia, the payment by
such Loan Party of creditors of the other Loan Parties and guarantees by such
Loan Party of indebtedness of the other Loan Parties and provides
administrative, marketing, payroll and management services to or for the benefit
of the other Loan Parties). The Loan Parties have the same chief executive
office, centralized accounting and legal services, certain common officers and
directors and, except to the extent set forth in Schedule 6.01(cc), generally do
not provide consolidating financial statements to creditors.
(dd) Name; Jurisdiction of Organization;
Organizational ID Number; Chief Place of Business; Chief Executive Office; FEIN.
Schedule 6.01(dd) sets forth a complete and accurate list as of the date hereof
of (i) the exact legal name of each Loan Party, (ii) the jurisdiction of
organization of each Loan Party, (iii) the organizational identification number
of each Loan Party (or indicates that such Loan Party has no organizational
identification number), (iv) each place of business of each Loan Party, (v) the
chief executive office of each Loan Party and (vi) the federal employer
identification number of each Loan Party.
(ee) Tradenames. Schedule 6.01(ee) hereto sets
forth a complete and accurate list as of the Effective Date of all tradenames,
business names or similar appellations used by each Loan Party or any of its
divisions or other business units during the past five years.
(ff) Locations of Collateral. There is no
location at which any Loan Party has any Collateral (except for Inventory in
transit) other than (i) those locations listed on Schedule 6.01(ff), (ii) any
other locations in the United States for which such Loan Party has provided
notice to the Agents in accordance with Section 7.01(l) and, if necessary, a
written subordination or waiver or collateral access agreement in accordance
with Section 7.01(m) and (iii) any other locations at which any Loan Party has
Collateral with a fair market value of less than $50,000, individually for any
location, and $500,000, for all such locations. Schedule 6.01(ff) hereto
contains a true, correct and complete list, as of the Effective Date, of the
legal names and addresses of each warehouse at which Collateral of each Loan
Party is stored. None of the receipts received by any Loan Party from any
warehouse states that the goods
- 74 -
covered thereby are to be delivered to bearer or to the order of a named Person
or to a named Person and such named Person's assigns.
(gg) Security Interests. Each Security Agreement
creates in favor of the Collateral Agent, for the benefit of the Agents, the L/C
Issuer and the Lenders, a legal, valid and enforceable security interest in the
Collateral secured thereby. Upon the filing of the UCC-1 financing statements
described in Section 5.01(d)(vi) and the recording of the Collateral Assignments
for Security referred to in each Security Agreement in the United States Patent
and Trademark Office and the United States Copyright Office, as applicable, such
security interests in and Liens on the Collateral granted thereby shall be
perfected, first priority security interests, and no further recordings or
filings are or will be required in connection with the creation, perfection or
enforcement of such security interests and Liens, except as set forth in Section
4(l) of the Security Agreement.
(hh) MVI Sale. The Parent has delivered to the
Agents a complete and correct copy of the MVI Sale Agreement, including all
schedules and exhibits thereto. The MVI Sale Agreement sets forth the entire
agreement and understanding of the parties thereto relating to the subject
matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby. The
execution, delivery and performance of the MVI Sale Agreement has been duly
authorized by all necessary action (including, without limitation, the obtaining
of any consent of stockholders or other holders of Capital Stock required by law
or by any applicable corporate or other organizational documents) on the part of
each such Person. No authorization or approval or other action by, and no notice
to filing with or license from, any Governmental Authority is required for
either such transaction other than such as have been obtained on or prior to the
Effective Date. The MVI Sale Agreement is the legal, valid and binding
obligation of the parties thereto, enforceable against such parties in
accordance with its terms.
(ii) Consummation of the MVI Sale. All conditions
precedent to the MVI Sale Agreement have been fulfilled or (with the prior
written consent of the Agents and the Required Lenders) waived, the MVI Sale
Agreement has not been amended or otherwise modified, and there has been no
breach of any material term or condition of the MVI Sale Agreement.
(jj) Senior Subordinated Note Indenture. The
Borrowers incurring Indebtedness from (i) the Loans made by the Agents and the
Lenders to the Borrowers on and after the Effective Date and (ii) the issuance
of Letters of Credit, in each case, subject to the limitations set forth in this
Agreement, does not conflict with or result in a default under the Senior
Subordinated Note Indenture.
(kk) Obligations as Senior Debt.
(i) This Agreement constitutes a Credit
Facility (as defined in the Senior Subordinated Note Indenture). The Obligations
constitute Permitted Debt (as defined in the Senior Subordinated Note
Indenture), Senior Debt (as defined in the Senior Subordinated Note Indenture)
and Designated Senior Debt (as defined in the Senior Subordinated Note
Indenture). The Collateral Agent's Liens on the Collateral constitute Permitted
Liens (as defined
- 75 -
in the Senior Subordinated Note Indenture). All of the Obligations (and the
Agents, the L/C Issuer and the Lenders) are entitled to the benefits of each of
the subordination and other provisions contained in the Senior Subordinated Note
Indenture which are available in respect of Senior Indebtedness and Designated
Senior Debt (and to the holders thereof), and each of such subordination and
other provisions is in full force and effect and enforceable in accordance with
its terms.
(ii) Each Loan Party hereby acknowledges
that the Agents, the L/C Issuer and the Lenders are entering into this
Agreement, and extending their Commitments, in reliance upon this clause (kk)
and the subordination provisions of the Senior Subordinated Note Indenture.
(ll) FDA Compliance; Notices, etc. Except as set
forth in Schedule 6.01(ll) hereto, each Loan Party and each of its Subsidiaries
are, and the products sold by each Loan Party and each of its Subsidiaries are,
in compliance with all current applicable statutes, rules, regulations,
guidelines, policies, orders or directives administered or issued by the FDA and
the Food and Drug Act, except (i) where in such Person's reasonable opinion,
such Person and its Subsidiaries will not ultimately be found by the FDA or
under the Food and Drug Act to be out of compliance with such statutes, rules,
regulations, guidelines, policies, orders or directives, (ii) where failure to
so comply could not reasonably be expected to have a Material Adverse Effect, or
(iii) with respect to any FDA Form 483-s or warning letters issued by the FDA or
pursuant to the Food and Drug Act (the foregoing, together with any such notices
as any Loan Party or any of its Subsidiaries may at any time hereafter receive,
collectively, the "FDA Notices"), so long as such Person is diligently pursuing
corrective action with respect to the same.
(mm) Schedules. All of the information which is
required to be scheduled to this Agreement is set forth on the Schedules
attached hereto, is correct and accurate and does not omit to state any
information material thereto.
(nn) Representations and Warranties in Documents;
No Default. All representations and warranties set forth in this Agreement and
the other Loan Documents are true and correct in all respects at the time as of
which such representations were made and on the Effective Date. No Event of
Default has occurred and is continuing and no condition exists which constitutes
a Default or an Event of Default.
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
Section 7.01 Affirmative Covenants. So long as any principal
of or interest on any Loan, Letter of Credit Obligation or any other Obligation
(whether or not due) shall remain unpaid or any Lender shall have any Commitment
hereunder, each Loan Party will, unless the Required Lenders shall otherwise
consent in writing:
- 76 -
(a) Reporting Requirements. Furnish to each
Agent and each Lender:
(i) as soon as available and in any
event within 45 days after the end of each fiscal quarter of the Parent and its
Subsidiaries commencing with the first fiscal quarter of the Parent and its
Subsidiaries ending after the date that the Borrowers have satisfied the
condition subsequent set forth in Section 5.03(j), either (A) a copy of a report
on Form 10-Q, or any successor form, and any amendments thereto, filed by the
Parent with the SEC with respect to the immediately preceding fiscal quarter or
(B) consolidated and consolidating balance sheets, consolidated and
consolidating statements of operations and retained earnings and consolidated
and consolidating statements of cash flows of the Parent and its Subsidiaries as
at the end of such quarter, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the figures for the corresponding
date or period of the immediately preceding Fiscal Year, all in reasonable
detail (and to include, in the case of the consolidated statements of
stockholders' equity and cash flows, revenue and volume data for any products
acquired and/or marketed by a Loan Party or any of its Subsidiaries to the
extent that such product accounts for 7% or more of net revenues of the Parent
and its Subsidiaries on a consolidated basis) by product line (to the extent
available and in any event including profit and loss information by product line
to the gross margin level) and reasonably acceptable to the Collateral Agent and
certified by an Authorized Officer of the Parent as fairly presenting, in all
material respects, the financial position of the Parent and its Subsidiaries as
of the end of such quarter and the results of operations and cash flows of the
Parent and its Subsidiaries for such quarter, in accordance with GAAP applied in
a manner consistent with that of the most recent audited financial statements of
the Parent and its Subsidiaries furnished to the Agents and the Lenders, subject
to the absence of footnotes and normal year-end adjustments;
(ii) as soon as available, and in any
event within 90 days after the end of each Fiscal Year of the Parent and its
Subsidiaries, commencing with Fiscal Year ending December 31, 2004, either (A) a
copy of a report on Form 10-K, or any successor form, and any amendments
thereto, filed by the Parent with the SEC with respect to the immediately
preceding Fiscal Year or (B) consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and retained earnings
and consolidated and consolidating statements of cash flows of the Parent and
its Subsidiaries as at the end of such Fiscal Year, setting forth in each case
in comparative form the figures for the corresponding date or period set forth
in the financial statements for the immediately preceding Fiscal Year, all in
reasonable detail and prepared in accordance with GAAP, and accompanied by a
report and an unqualified opinion, prepared in accordance with generally
accepted auditing standards, of independent certified public accountants of
recognized standing selected by the Parent and reasonably satisfactory to the
Collateral Agent (which opinion shall be without (A) a "going concern" or like
qualification or exception, (B) any qualification or exception as to the scope
of such audit, or (C) any qualification which relates to the treatment or
classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which
would be to cause any noncompliance with the provisions of Section 7.03),
together with a written statement of such accountants (1) to the effect that, in
making the examination necessary for their certification of such financial
statements, they have not obtained any knowledge of the existence of an Event of
Default or a Default under Section 7.03 and (2) if
- 77 -
such accountants shall have obtained any knowledge of the existence of an Event
of Default or such Default, describing the nature thereof;
(iii) as soon as available, and in any
event within 30 days after the end of each fiscal month of the Parent and its
Subsidiaries commencing with the first fiscal month of the Parent and its
Subsidiaries ending after the Effective Date, internally prepared consolidated
and consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements
of cash flows as at the end of such fiscal month, and for the period commencing
at the end of the immediately preceding Fiscal Year and ending with the end of
such fiscal month, all in reasonable detail and certified by an Authorized
Officer of the Parent as fairly presenting, in all material respects, the
financial position of the Parent and its Subsidiaries as at the end of such
fiscal month and the results of operations, retained earnings and cash flows of
the Parent and its Subsidiaries for such fiscal month, in accordance with GAAP
applied in a manner consistent with that of the most recent audited financial
statements furnished to the Agents and the Lenders, subject to the absence of
footnotes and normal year-end adjustments and subject to the results of the
Special Committee Investigation;
(iv) (A) simultaneously with the
delivery of the financial statements of the Parent and its Subsidiaries required
by clauses (i) and (ii) of this Section 7.01(a), a certificate of an Authorized
Officer of the Parent (1) stating that such Authorized Officer has reviewed the
provisions of this Agreement and the other Loan Documents and has made or caused
to be made under his or her supervision a review of the condition and operations
of the Parent and its Subsidiaries during the period covered by such financial
statements with a view to determining whether the Parent and its Subsidiaries
were in compliance with all of the provisions of this Agreement and such Loan
Documents at the times such compliance is required hereby and thereby, and that
such review has not disclosed, and such Authorized Officer has no knowledge of,
the existence during such period of an Event of Default or Default or, if an
Event of Default or Default existed, describing the nature and period of
existence thereof and the action which the Parent and its Subsidiaries propose
to take or have taken with respect thereto and (2) attaching a schedule showing
the calculations of the financial covenants specified in Section 7.03, and
(B) within 5 days after the
end of each of the periods referred to in Section 7.03(a), a certificate of an
Authorized Officer of the Parent certifying that the Loan Parties are in
compliance with the covenant contained in Section 7.03(a), together with a
schedule showing the calculation of Consolidated Net Operating Cash Flow for
such period;
(v) (A) as soon as available and
in any event within 15 days after the end of each fiscal month of the Parent and
its Subsidiaries commencing with the first fiscal month of the Parent and its
Subsidiaries ending after the Effective Date, reports in form and detail
satisfactory to the Collateral Agent and certified by an Authorized Officer of
the Administrative Borrower as being accurate and complete (1) listing all
Accounts Receivable of the Loan Parties as of such day (including an aging
thereof) and such other information with respect to such Accounts Receivable as
the Collateral Agent may reasonably request and (2) listing all accounts payable
of the Loan Parties as of each such day (including an aging
- 78 -
thereof) and such other information with respect to such accounts payable as the
Collateral Agent may reasonably request, and
(B) as soon as available and
in any event within 15 days after the end of each fiscal quarter of the Parent
and its Subsidiaries commencing with the first fiscal quarter of the Parent and
its Subsidiaries ending after the Effective Date, reports in form and detail
satisfactory to the Collateral Agent and certified by an Authorized Officer of
the Administrative Borrower as being accurate and complete listing all Inventory
of the Loan Parties as of each such day, and containing a breakdown of such
Inventory in a form reasonably satisfactory to the Collateral Agent and such
other information with respect to such Inventory as the Collateral Agent may
reasonably request;
(vi) (A) as soon as available and
in any event not later than the end of each Fiscal Year, financial projections,
supplementing and superseding the financial projections referred to in Section
6.01(g)(ii)(A), prepared on a monthly basis and otherwise in form and substance
reasonably satisfactory to the Collateral Agent, for the immediately succeeding
Fiscal Year for the Parent and its Subsidiaries, (B) as soon as available and in
any event not later than July 31st of each year, financial projections,
supplementing and superseding the financial projections referred to in Section
6.01(g)(ii)(B), prepared on a monthly basis and otherwise in form and substance
reasonably satisfactory to the Collateral Agent, for the remaining six-month
period in such Fiscal Year, (C) on Wednesday of each week, commencing with the
first Wednesday following the Effective Date, a rolling 8 week cash flow
projection of the Parent and its Subsidiaries, in the form of the cash flow
projections set forth in Schedule 7.01(a)(vi), updating the prior cash flow
projection delivered pursuant to this clause (C) for the prior week, showing
actual performance and any variances of actual performance from projected
performance; all such financial projections to be prepared in good faith on the
basis of (1) assumptions believed by the management of the Parent to be
reasonable and (2) information believed by the management of the Parent to have
been accurate based upon the information available to the management of the
Parent at the time such projections are furnished to the Agents and the Lenders;
(vii) promptly after submission to any
Governmental Authority, to the fullest extent permitted by applicable law, all
documents and information furnished to such Governmental Authority (other than
to the extent that provision of such documents or information to the Agents and
the Lenders would invalidate any privileged status granted by such Governmental
Authority with respect to such documents or information, in which case, the Loan
Parties shall furnish a summary of the documents or information so provided that
does not invalidate such privilege) in connection with any investigation of any
Loan Party other than routine inquiries by such Governmental Authority;
(viii) promptly, and in any event within 5
Business Days after the occurrence of an Event of Default or Default or the
occurrence of any event or development that could reasonably be expected to have
a Material Adverse Effect, the written statement of an Authorized Officer of the
Administrative Borrower setting forth the details of such Event of Default or
Default or other such event or development and the action which the affected
Loan Party proposes to take with respect thereto;
- 79 -
(ix) promptly, and in any event within 5
Business Days after any Loan Party knows or has reason to know of any material
violation, claim, complaint, charge or receipt of any material violation, claim,
complaint or charge of or under the Food and Drug Act or any material applicable
statutes, rules, regulations, guidelines, policies orders or directives
administered or issued by the FDA, including without limitation receipt by any
Loan Party or any of its Subsidiaries of any Product Recall Notice, or any other
FDA Notice or amendment to a previous Product Recall Notice or FDA Notice, a
statement of an Authorized Officer of the Administrative Borrower setting forth
the details of such occurrence and the actions, if any, which such Loan Party
proposes to take with respect thereto, and in the case of a written document
evidencing such event, together with a true, correct and complete copy of such
Product Recall Notice, FDA Notice or amendment or other notice, as the case may
be.
(x) (A) promptly and in any event
within 10 Business Days after any Loan Party or any ERISA Affiliate thereof
knows or has reason to know that (1) any Reportable Event with respect to any
Employee Plan has occurred, (2) any other Termination Event with respect to any
Employee Plan has occurred, or (3) an accumulated funding deficiency has been
incurred or an application has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including installment
payments) or an extension of any amortization period under Section 412 of the
Internal Revenue Code with respect to an Employee Plan, a statement of an
Authorized Officer of the Administrative Borrower setting forth the details of
such occurrence and the action, if any, which such Loan Party or such ERISA
Affiliate proposes to take with respect thereto, (B) promptly and in any event
within 10 Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate thereof from the PBGC, copies of each notice received by any Loan
Party or any ERISA Affiliate thereof of the PBGC's intention to terminate any
Plan or to have a trustee appointed to administer any Plan, (C) promptly and in
any event within 10 Business Days after the filing thereof with the Internal
Revenue Service if requested by any Agent, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each
Employee Plan and Multiemployer Plan, (D) promptly and in any event within 10
Business Days after any Loan Party or any ERISA Affiliate thereof knows or has
reason to know that a required installment within the meaning of Section 412 of
the Internal Revenue Code has not been made when due with respect to an Employee
Plan, (E) promptly and in any event within 10 Business Days after receipt
thereof by any Loan Party or any ERISA Affiliate thereof from a sponsor of a
Multiemployer Plan or from the PBGC, a copy of each notice received by any Loan
Party or any ERISA Affiliate thereof concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of ERISA,
and (F) promptly and in any event within 10 Business Days after any Loan Party
or any ERISA Affiliate thereof sends notice of a plant closing or mass layoff
(as defined in WARN) to employees, copies of each such notice sent by such Loan
Party or such ERISA Affiliate thereof;
(xi) promptly after the commencement
thereof but in any event not later than 5 Business Days after service of process
with respect thereto on, or the obtaining of knowledge thereof by, any Loan
Party, notice of each action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any arbitrator which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect;
- 80 -
(xii) promptly, and in any event within 5
Business Days after execution, receipt or delivery thereof, copies of any
material notices that any Loan Party executes or receives in connection with the
Senior Subordinated Note Indenture or any other Material Contract;
(xiii) promptly, and in any event within 5
Business Days after execution, receipt or delivery thereof, copies of any
material notices that any Loan Party executes or receives in connection with the
sale or other Disposition of the Capital Stock (other than pursuant to a stock
option plan or stock incentive plan approved by the Board of Directors of the
Parent) of, or all or substantially all of the assets of, any Loan Party;
(xiv) promptly after the sending or
filing thereof, copies of all statements, reports and other information any Loan
Party sends to any holders of its Indebtedness (other than intercompany
Indebtedness, Capitalized Lease Obligations and purchase money Indebtedness) or
its securities or files with the SEC or any national (domestic or foreign)
securities exchange;
(xv) promptly upon receipt thereof,
copies of all financial reports (including, without limitation, management
letters), if any, submitted to any Loan Party by its auditors in connection with
any annual or interim audit of the books thereof; and
(xvi) promptly upon request, such other
information concerning the condition or operations, financial or otherwise, of
any Loan Party as any Agent may from time to time may reasonably request.
(b) Additional Guaranties and Collateral
Security. Cause:
(i) each Domestic Subsidiary of any
Loan Party not in existence on the Effective Date, to execute and deliver to the
Collateral Agent promptly and in any event within 10 Business Days (or, in the
case of clause (D) below, 15 Business Days) after the formation, acquisition or
change in status thereof (A) a Guaranty guaranteeing the Obligations, (B) a
Security Agreement, (C) if such Subsidiary has any Subsidiaries, a Pledge
Agreement together with (x) certificates, if any, evidencing all (or, in the
case of a first-tier Foreign Subsidiary of such Subsidiary, 65%) (or such
greater percentage that, due to a change in applicable law after the Effective
Date, (1) could not reasonably be expected to cause the undistributed earnings
of such Foreign Subsidiary as determined for United States federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary's United
States parent or (2) could not reasonably be expected to cause any material
adverse tax consequences) of the issued and outstanding Capital Stock entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of
the issued and outstanding Capital Stock not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) of the Capital Stock of any Person
owned by such Subsidiary, (y) undated stock powers executed in blank with
signature guaranteed, and (z) such opinion of counsel and such approving
certificate of such Subsidiary as the Collateral Agent may reasonably request in
respect of complying with any legend on any such certificate or any other matter
relating to such shares, (D) one or more Mortgages creating on any real property
of such Subsidiary with a fair market value in excess of $500,000 (which, in the
case of a leasehold interest in real property, shall be on a commercially
reasonable efforts basis),
- 81 -
a perfected, first priority Lien on such real property, a Title Insurance Policy
covering such real property, a current ALTA survey thereof and a surveyor's
certificate, each in form and substance satisfactory to the Collateral Agent,
together with such other agreements, instruments and documents as the Collateral
Agent may require whether comparable to the documents required under Section
7.01(o) or otherwise, and (E) such other agreements, instruments, approvals,
legal opinions or other documents reasonably requested by the Collateral Agent
in order to create, perfect, establish the first priority of or otherwise
protect any Lien purported to be covered by any such Security Agreement, Pledge
Agreement or Mortgage or otherwise to effect the intent that such Subsidiary
shall become bound by all of the terms, covenants and agreements contained in
the Loan Documents and that substantially all property and assets of such
Subsidiary shall become Collateral for the Obligations; and
(ii) each owner of the Capital Stock of
any such Domestic Subsidiary to execute and deliver promptly and in any event
within 10 Business Days after the formation or acquisition of such Subsidiary a
Pledge Agreement, together with (A) certificates evidencing all of the Capital
Stock of such Subsidiary, (B) undated stock powers or other appropriate
instruments of assignment executed in blank with signature guaranteed, (C) such
opinion of counsel and such approving certificate of such Subsidiary as the
Collateral Agent may reasonably request in respect of complying with any legend
on any such certificate or any other matter relating to such shares and (D) such
other agreements, instruments, approvals, legal opinions or other documents
reasonably requested by the Collateral Agent relating to such shares.
(c) Compliance with Laws, Etc. Comply, and cause
each of its Subsidiaries to comply, with all applicable material laws, rules,
regulations (including, without limitation, the FDA Regulations and the HHS
Regulations), orders, judgments and awards (including any settlement of any
claim that, if breached, could give rise to any of the foregoing), other than
any non-compliance for which no penalty or fine in excess of $250,000 is
payable, or which is being contested in good faith by proper proceedings which
stay the imposition of any penalty, fine or Lien resulting from such
non-compliance and with respect to which adequate reserves have been set aside
for the payment of any penalty or fine arising therefrom in accordance with
GAAP.
(d) Preservation of Existence, Etc. Maintain and
preserve, and cause each of its Subsidiaries to (i) maintain and preserve, (A)
its existence and (B) its other rights and privileges other than such rights and
privileges the failure to so maintain and preserve could not reasonably be
expect to have a Material Adverse Effect, and (ii) become or remain, and cause
each of its Subsidiaries to become or remain, duly qualified and in good
standing in each jurisdiction in which the character of the properties owned or
leased by it or in which the transaction of its business makes such
qualification necessary other than in such jurisdictions where the failure to be
so qualified and in good standing could not reasonably be expected to have a
Material Adverse Effect.
(e) Keeping of Records and Books of Account.
Keep, and cause each of its Subsidiaries to keep, adequate records and books of
account, with complete entries made to permit the preparation of financial
statements in accordance with GAAP.
- 82 -
(f) Inspection Rights. Permit, and cause each of
its Subsidiaries to permit, the agents and representatives of any Agent at any
time and from time to time during normal business hours, and, so long as no
Default or Event of Default shall have occurred and be continuing, upon
reasonable prior notice and in a manner that does not materially interfere with
the business or operations of the Loan Parties, to examine and make copies of
and abstracts from its records and books of account, to visit and inspect its
properties, to verify materials, leases, notes, accounts receivable, deposit
accounts and its other assets, to conduct audits, physical counts, valuations,
appraisals, Phase I Environmental Site Assessments (and, if reasonably requested
by the Collateral Agent based upon the results of any such Phase I Environmental
Site Assessment, a Phase II Environmental Site Assessment) or examinations and
to discuss its affairs, finances and accounts with any of its directors,
officers, managerial employees, independent accountants or any of its other
representatives. In furtherance of the foregoing, each Loan Party hereby
authorizes its independent accountants, and the independent accountants of each
of its Subsidiaries, to discuss the affairs, finances and accounts of such
Person (independently or together with representatives of such Person) with the
agents and representatives of any Agent in accordance with this Section 7.01(f).
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, all of
its properties which are material to its business in good working order and
condition, ordinary wear and tear excepted, and comply, and cause each of its
Subsidiaries to comply, at all times with the provisions of all leases material
to its business to which it is a party as lessee or under which it occupies
property, so as to prevent any loss or forfeiture thereof or thereunder.
(h) Maintenance of Insurance. Maintain, and
cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations (including, without limitation,
comprehensive general liability, hazard, rent and business interruption
insurance) with respect to its properties (including all real properties leased
or owned by it) and business, in such amounts and covering such risks as is
required by any Governmental Authority having jurisdiction with respect thereto
or as is carried generally in accordance with sound business practice by
companies in similar businesses similarly situated and in any event in amount,
adequacy and scope reasonably satisfactory to the Collateral Agent. All policies
covering the Collateral are to be made payable to the Collateral Agent for the
benefit of the Agents, the L/C Issuer and the Lenders, as its interests may
appear, in case of loss, under a standard non-contributory "lender" or "secured
party" clause and are to contain such other provisions as the Collateral Agent
may reasonably require to fully protect the Lenders' interest in the Collateral
and to any payments to be made under such policies. All certificates of
insurance are to be delivered to the Collateral Agent within 10 Business Days
after receipt thereof and the policies are to be premium prepaid, with the loss
payable and additional insured endorsement in favor of the Collateral Agent and
such other Persons as the Collateral Agent may designate from time to time, and
shall provide for not less than 30 days' prior written notice to the Collateral
Agent of the exercise of any right of cancellation. If any Loan Party or any of
its Subsidiaries fails to maintain such insurance, the Collateral Agent may
arrange for such insurance, but at the Borrowers' expense and without any
responsibility on the Collateral Agent's part for obtaining the insurance, the
solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims. Upon the occurrence and during the continuance of an Event
of Default, the Collateral Agent shall have the sole right, in the name of the
Lenders, any Loan Party and its
- 83 -
Subsidiaries, to file claims under any insurance policies, to receive, receipt
and give acquittance for any payments that may be payable thereunder, and to
execute any and all endorsements, receipts, releases, assignments, reassignments
or other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.
(i) Obtaining of Permits, Etc. Obtain, maintain
and preserve, and cause each of its Subsidiaries to obtain, maintain and
preserve, and take all necessary action to timely renew, all permits, licenses,
authorizations, approvals, entitlements and accreditations which are necessary
or useful in the proper conduct of its business other than those permits,
licenses, authorizations, approvals, entitlements and accreditations the lack of
which could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
(j) Environmental. (i) Keep any property either
owned or operated by it or any of its Subsidiaries free of any Environmental
Liens; (ii) comply, and cause each of its Subsidiaries to comply, in all
material respects with Environmental Laws and provide to the Collateral Agent
any documentation of such compliance which the Collateral Agent may reasonably
request; (iii) provide the Agents written notice within 5 Business Days of any
notice of Release of a Hazardous Material in excess of any reportable quantity
from or onto property at any time owned or operated by it or any of its
Subsidiaries and take any Remedial Actions required to xxxxx said Release; and
(iv) provide the Agents with written notice promptly and in any event within 10
Business Days of the receipt of any of the following: (A) notice that an
Environmental Lien has been filed against any property of any Loan Party or any
of its Subsidiaries; (B) commencement of any Environmental Action or notice that
an Environmental Action will be filed against any Loan Party or any of its
Subsidiaries; and (C) notice of a violation, citation or other administrative
order which could have a Material Adverse Effect. This Section 7.01(j) and
Section 7.02(r) contain the sole covenants of each Loan Party with regard to
matters arising under Environmental Laws.
(k) Further Assurances. Take such action and
execute, acknowledge and deliver, and cause each of its Subsidiaries to take
such action and execute, acknowledge and deliver, at its sole cost and expense,
such agreements, instruments or other documents as any Agent may reasonably
require from time to time in order (i) to carry out more effectively the
purposes of this Agreement and the other Loan Documents, (ii) to subject to
valid and perfected first priority Liens (subject only to Permitted Liens) any
of the Collateral or any other property of any Loan Party and its Subsidiaries
(to the extent consistent with the terms of this Agreement and the other Loan
Documents), (iii) to establish and maintain the validity and effectiveness of
any of the Loan Documents and the validity, perfection and priority of the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer and confirm unto each Agent, each Lender and the L/C Issuer the
rights now or hereafter intended to be granted to it under this Agreement or any
other Loan Document. In furtherance of the foregoing, to the maximum extent
permitted by applicable law, each Loan Party (i) authorizes each Agent to
execute any such agreements, instruments or other documents in such Loan Party's
name and to file such agreements, instruments or other documents in any
appropriate filing office, (ii) authorizes each Agent to file any financing
statement required hereunder or under any other Loan Document, and any
continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of such Loan Party, and (iii) ratifies the
filing of
- 84 -
any financing statement, and any continuation statement or amendment with
respect thereto, filed without the signature of such Loan Party prior to the
date hereof.
(l) Change in Collateral; Collateral Records.
(i) Give the Collateral Agent not less than 10 days' prior written notice of any
change in the location of any Collateral (other than Collateral in transit),
other than with respect to (A) locations set forth on Schedule 6.01(ff) and (B)
locations of any Collateral with an aggregate fair market value of less than
$50,000, individually for any location, and $500,000, for all such locations,
(ii) advise the Collateral Agent promptly, in sufficient detail, of any material
adverse change relating to the type, quantity or quality of the Collateral or
the Lien granted thereon and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of
the Agents, the L/C Issuer and the Lenders from time to time, solely for the
Collateral Agent's convenience in maintaining a record of Collateral, such
written statements and schedules as the Collateral Agent may reasonably require,
designating, identifying or describing the Collateral.
(m) Landlord Waivers; Collateral Access
Agreements. (i) At any time any Collateral with a book value in excess of
$250,000 (when aggregated with all other Collateral at the same location) is
located on any real property of a Loan Party (whether such real property is now
owned or is acquired after the Effective Date) which is not owned by a Loan
Party, use commercially reasonable efforts to obtain written subordinations or
waivers, in form and substance reasonably satisfactory to the Collateral Agent,
of all present and future Liens to which the owner or lessor of such premises
may be entitled to assert against the Collateral (it being understood that in
the event the Loan Parties are unable to obtain any such written subordination
or waiver the Administrative Agent shall, at the direction of the Collateral
Agent using its reasonable discretion, establish such reserves against
Availability as the Collateral Agent deems necessary with respect to any such
Collateral); and
(ii) At any time any Collateral with a
book value in excess of $250,000 (when aggregated with all other Collateral at
the same location) is located on any premises not owned by a Loan Party, use
commercially reasonable efforts to, obtain written access agreements, in form
and substance reasonably satisfactory to the Collateral Agent, providing access
to Collateral located on such premises in order to remove such Collateral from
such premises during an Event of Default (it being understood that in the event
the Loan Parties are unable to obtain any such written access agreements, the
Administrative Agent shall, at the direction of the Collateral Agent using its
reasonable discretion, establish such reserves against Availability as the
Collateral Agent deems necessary with respect to any such Collateral).
(n) Subordination. Cause all Indebtedness and
other obligations now or hereafter owed by it to any other Loan Party or any of
its Subsidiaries to be Subordinated Indebtedness.
(o) After Acquired Real Property. Upon the
acquisition by it or any of its Domestic Subsidiaries after the date hereof of
any interest (whether fee or leasehold) in any real property (wherever located)
(each such interest being an "After Acquired Property") (x) with a Current Value
(as defined below) in excess of $250,000 in the case of a fee interest, or (y)
requiring the payment of annual rent exceeding in the aggregate $100,000 in the
case of
- 85 -
leasehold interest, promptly so notify the Collateral Agent, setting forth with
specificity a description of the interest acquired, the location of the real
property, any structures or improvements thereon and, in the case of a fee
interest in After Acquired Property, either an appraisal or such Loan Party's
good-faith estimate of the current value of such After Acquired Property (for
purposes of this Section, the "Current Value"). The Collateral Agent shall
notify such Loan Party whether it intends to require a Mortgage and the other
documents referred to below or in the case of leasehold, a leasehold Mortgage or
landlord's waiver (pursuant to Section 7.01(m) hereof). Within 15 Business Days
of receipt of such notice requesting a Mortgage, the Person which has acquired
such After Acquired Property shall furnish to the Collateral Agent the
following, each in form and substance satisfactory to the Collateral Agent: (i)
a Mortgage with respect to such After Acquired Property and related assets
located at the After Acquired Property (which, in the case of a leasehold
interest in After Acquired Property, shall be on a commercially reasonable
efforts basis), each duly executed by such Person and in recordable form; (ii)
evidence of the recording of the Mortgage referred to in clause (i) above in
such office or offices as may be necessary or, in the opinion of the Collateral
Agent, desirable to create and perfect a valid and enforceable first priority
lien on the property purported to be covered thereby or to otherwise protect the
rights of the Agents, the L/C Issuer and the Lenders thereunder, (iii) a Title
Insurance Policy, (iv) a survey of such After Acquired Property, certified to
the Collateral Agent and to the issuer of the Title Insurance Policy by a
licensed professional surveyor reasonably satisfactory to the Collateral Agent,
(v) Phase I Environmental Site Assessments with respect to such After Acquired
Property, certified to the Collateral Agent by a company reasonably satisfactory
to the Collateral Agent, (vi) in the case of a leasehold interest, a certified
copy of the lease between the landlord and such Person with respect to such real
property in which such Person has a leasehold interest, and (vii) such other
documents or instruments (including opinions of counsel) as the Collateral Agent
may reasonably require. The Borrowers shall pay all fees and expenses, including
reasonable attorneys' fees and expenses, and all title insurance charges and
premiums, in connection with each Loan Party's obligations under this Section
7.01(o).
(p) Fiscal Year. Cause the Fiscal Year of the
Parent and its Subsidiaries to end on December 31st of each calendar year unless
the Agents consent to a change in such Fiscal Year (and appropriate related
changes to this Agreement).
(q) Payments Current. Make (i) all royalty and
other payments due and payable under each Licensing Agreement prior to the time
when the other party thereto may terminate any such Licensing Agreement and (ii)
all deferred payments when due in connection with any Acquisition, in each case,
except for payments contested in good faith and with respect to which adequate
reserves have been set aside for the payment thereof in accordance with GAAP.
(r) FTI. Continue the retention of FTI
Consulting, Inc. pursuant to the letter agreement dated March 19, 2004, between
FTI Consulting, Inc. and the Parent until such time as the Borrowers shall have
received an unqualified financial audit report for the Fiscal Year ended
December 31, 2003 and the Parent has filed the related Form 10-K with the SEC.
Section 7.02 Negative Covenants. So long as any principal of
or interest on any Loan, Letter of Credit Obligation or any other Obligation
(whether or not due) shall remain
- 86 -
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer
to exist, or permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any Lien upon or with respect to any of its properties, whether now
owned or hereafter acquired; file or suffer to exist under the Uniform
Commercial Code or any similar law or statute of any jurisdiction, a financing
statement (or the equivalent thereof) that names it or any of its Subsidiaries
as debtor; sign or suffer to exist any security agreement authorizing any
secured party thereunder to file such financing statement (or the equivalent
thereof); sell any of its property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable) with recourse to it or any of its
Subsidiaries or assign or otherwise transfer, or permit any of its Subsidiaries
to assign or otherwise transfer, any account or other right to receive income;
other than, as to all of the above, Permitted Liens. For the avoidance of doubt,
this Section 7.02(a) does not prohibit an assignment or transfer permitted by
Section 7.02(c)(ii).
(b) Indebtedness. Create, incur, assume,
guarantee or suffer to exist, or otherwise become or remain liable with respect
to, or permit any of its Subsidiaries to create, incur, assume, guarantee or
suffer to exist or otherwise become or remain liable with respect to, any
Indebtedness other than Permitted Indebtedness.
(c) Fundamental Changes; Dispositions. Wind-up,
liquidate or dissolve, or merge, consolidate or amalgamate with any Person, or
convey, sell, lease or sublease, transfer or otherwise dispose of, whether in
one transaction or a series of related transactions, all or any part of its
business, property or assets, whether now owned or hereafter acquired (or agree
to do any of the foregoing), or purchase or otherwise acquire, whether in one
transaction or a series of related transactions, all or substantially all of the
assets of any Person (or any division thereof) (or agree to do any of the
foregoing), or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that
(i) (A) any Borrower may be merged into
or consolidated with, or may convey, sell or transfer all of its business,
property or assets to, another Borrower and (B) any direct or indirect
wholly-owned Subsidiary of any Loan Party (other than a Borrower) may be merged
into, or may convey, sell or transfer all of its business, property or assets
to, such Loan Party or another direct or indirect wholly-owned Subsidiary of
such Loan Party, or may consolidate with, or may convey, sell or transfer all of
its business, property or assets to, another direct or indirect wholly-owned
Subsidiary of such Loan Party, or may be liquidated with its assets contributed
to such Loan Party or another direct or indirect wholly-owned Subsidiary of such
Loan Party, so long as (1) no other provision of this Agreement would be
violated thereby, (2) such Loan Party gives the Agents at least 20 days' prior
written notice of such merger or consolidation, (3) no Default or Event of
Default shall have occurred and be continuing either before or after giving
effect to such transaction, (4) the Lenders' rights in any Collateral,
including, without limitation, the existence, perfection and priority of any
Lien thereon, are not adversely affected by such merger or consolidation and (5)
if either Subsidiary is a Loan Party, the surviving Subsidiary, if any, is
joined as a Loan Party hereunder and is a party to a Security Agreement and the
Capital Stock of which Subsidiary is the subject of a
- 87 -
Pledge Agreement, in each case, which is in full force and effect on the date of
and immediately after giving effect to such merger or consolidation;
(ii) any Loan Party and its Subsidiaries
may (A) sell Inventory in the ordinary course of business, (B) sell or license
intellectual property, know-how, developed pharmaceutical products, drug
delivery technologies and pharmaceutical product development, research and
testing results in the ordinary course of business, (C) dispose of equipment in
the ordinary course of business, (D) sell, lease, license or otherwise transfer
property or assets to any Loan Party, provided that the Loan Parties shall cause
to be executed and delivered such documents, instruments and certificates in
connection therewith as the Collateral Agent may reasonably request, (E) sell,
lease, license or otherwise transfer property or assets in exchange transactions
in which a Loan Party or any of its Subsidiaries receives consideration with a
fair market value at least equal (as determined by the Parent's board of
directors) to the fair market value of the property or assets sold, leased,
licensed or otherwise transferred, which consideration consists of property or
assets that are used or useful in the same or a similar line of business as the
Loan Parties; provided that (1) if the transferring Person is a Loan Party, a
Loan Party shall be the party receiving the property or assets comprising such
consideration, (2) with respect to the consideration received, the Loan Parties
shall cause to be executed and delivered such documents, instruments and
certificates in connection therewith as the Collateral Agent may reasonably
request, (3) if the property or assets being transferred constitutes Collateral,
the property or assets received as consideration shall also become Collateral in
accordance with Section 7.01(k) and the terms of Security Agreement and (4) if
the property or assets being transferred in any such transaction has a fair
market value in excess of $1,000,000, then, prior to the consummation of such
transaction, the Administrative Borrower shall have received the prior consent
of the Required Lenders, (F) sell or otherwise dispose of other property or
assets for cash in an aggregate amount not less than the fair market value of
such property or assets, (G) in the case of any direct or indirect Foreign
Subsidiary of any Loan Party, sell, lease, license or otherwise transfer
property or assets to any other direct or indirect wholly-owned Foreign
Subsidiary of any Loan Party, and (H) make Investments permitted by Section
7.02(e); provided that the Net Cash Proceeds of such Dispositions (x) in the
case of clauses (C) and (F) above, do not exceed $2,000,000 in the aggregate
during the term of this Agreement and (y) in the case of clauses (C) and (F),
are paid to the Administrative Agent for the benefit of the Agents, the L/C
Issuer and the Lenders if required pursuant to the terms of Section
2.05(c)(iii); and
(iii) any Loan Party may purchase or
otherwise acquire, whether in one transaction or a series of related
transactions, all or substantially all of the assets or Capital Stock of any
Person (or any division thereof) in connection with a Permitted Acquisition.
(d) Change in Nature of Business. Make, or
permit any of its Subsidiaries to make, any change in the nature of its business
as described in Section 6.01(l).
(e) Loans, Advances, Investments, Etc. Make or
commit or agree to make any loan, advance, guarantee of obligations, other
extension of credit or capital contributions to, or hold or invest in or commit
or agree to hold or invest in, or purchase or otherwise acquire or commit or
agree to purchase or otherwise acquire any shares of the Capital Stock, bonds,
notes, debentures or other securities of, or make or commit or agree to make any
- 88 -
other investment in, any other Person, or purchase or own any futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or permit any
of its Subsidiaries to do any of the foregoing, except for: (i) Investments
existing on the date hereof, as set forth on Schedule 7.02(e) hereto, but not
any increase in the amount thereof as set forth in such Schedule or any other
modification of the terms thereof, (ii) loans, advances or other Investments by
(A) a Loan Party or a Foreign Subsidiary to or in a Loan Party, in each case,
made in the ordinary course of business, and (B) a Loan Party to or in a Foreign
Subsidiary made in the ordinary course of business and not exceeding in the
aggregate for all Loan Parties and Foreign Subsidiaries at any one time
outstanding $1,000,000 (excluding advances of payroll in the ordinary course of
business), (iii) loans and advances by a Loan Party or any of its Subsidiaries
to its officers, directors, employees, agents, customers or suppliers for
moving, entertainment, travel and other expenses in the ordinary course of
business and not exceeding in the aggregate for all Loan Parties and their
Subsidiaries at any one time outstanding $750,000, (iv) Permitted Investments,
(v) Investments consisting of Capital Stock, obligations, securities or other
property received by any Loan Party in settlement of accounts receivable or
other Indebtedness (created in the ordinary course of business) from bankrupt
obligors, (vi) Investments consisting of equity securities listed on the New
York Stock Exchange, the American Stock Exchange or the National Association of
Securities Dealers Automated Quotations system, provided that the purchase price
paid for all such equity securities held at any time shall not exceed $250,000,
(vii) Investments consisting of Indebtedness permitted by Section 7.02(b),
(viii) Permitted Acquisitions and (ix) other Investments by a Loan Party or any
of its Subsidiaries in an aggregate amount for all Loan Parties and their
Subsidiaries not to exceed $1,500,000 at any time.
(f) Lease Obligations. Create, incur or suffer
to exist, or permit any of its Subsidiaries to create, incur or suffer to exist,
any obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than (A) Capitalized Lease Obligations which would not cause the
aggregate amount of all obligations under Capitalized Leases entered into after
the Effective Date owing by all Loan Parties and their Subsidiaries in any
Fiscal Year to exceed the amounts set forth in subsection (g) of this Section
7.02, and (B) Operating Lease Obligations which would not cause the aggregate
amount of all Operating Lease Obligations owing by all Loan Parties and their
Subsidiaries in any Fiscal Year to exceed $6,000,000.
(g) Capital Expenditures. Make or commit or
agree to make, or permit any of its Subsidiaries to make or commit or agree to
make, any Capital Expenditure (by purchase or Capitalized Lease) that would
cause the aggregate amount of all Capital Expenditures made by the Loan Parties
and their Subsidiaries to exceed $12,000,000 in any Fiscal Year.
(h) Restricted Payments. (i) Declare or pay any
dividend or other distribution, direct or indirect, on account of any Capital
Stock of any Loan Party or any of its Subsidiaries, now or hereafter
outstanding, (ii) make any repurchase, redemption, retirement, defeasance,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any Capital Stock of any Loan Party or any direct or indirect
parent of any Loan Party, now or hereafter outstanding, (iii) make any payment
to retire, or to obtain the surrender
- 89 -
of, any outstanding warrants, options or other rights for the purchase or
acquisition of shares of any class of Capital Stock of any Loan Party, now or
hereafter outstanding, (iv) return any Capital Stock to any shareholders or
other equity holders of any Loan Party or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (v) pay any
management fees or any other fees or expenses (including the reimbursement
thereof by any Loan Party or any of its Subsidiaries) pursuant to any
management, consulting or other services agreement (other than employment or
consulting agreements with shareholders or other equity holders of any Loan
Party or any of its Subsidiaries that are approved by the Board of Directors of
the Parent) to any of the shareholders or other equityholders of any Loan Party
or any of its Subsidiaries or other Affiliates, or to any other Subsidiaries or
Affiliates of any Loan Party; provided, however, (A) any Subsidiary of any
Borrower may pay dividends to such Borrower or any wholly-owned Subsidiary of
such Borrower and (B) the Parent may pay dividends in the form of common Capital
Stock, provided that, at the election of the Collateral Agent, which the
Collateral Agent may and, upon the direction of the Required Lenders, shall make
by notice to the Administrative Borrower, no such payment shall be made if an
Event of Default shall have occurred and be continuing or would result from the
making of any such payment.
(i) Federal Reserve Regulations. Permit any Loan
or the proceeds of any Loan under this Agreement to be used for any purpose that
would cause such Loan to be a margin loan under the provisions of Regulation T,
U or X of the Board.
(j) Transactions with Affiliates. Enter into,
renew, extend or be a party to, or permit any of its Subsidiaries to enter into,
renew, extend or be a party to, any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of
any kind) with any Affiliate, except (i) in the ordinary course of business in a
manner and to an extent consistent with past practice and necessary or desirable
for the prudent operation of its business, for fair consideration and on terms
no less favorable to it or its Subsidiaries than would be obtainable in a
comparable arm's length transaction with a Person that is not an Affiliate
thereof, (ii) transactions with another Loan Party, (iii) intercompany
transactions among the Loan Parties and their Subsidiaries expressly permitted
by this Agreement, (iv) compensation and benefits to officers and directors to
the extent approved by the Board of Directors of the Parent (or a committee of
independent members thereof), and (v) the transactions set forth on Schedule
7.02(j).
(k) Limitations on Dividends and Other Payment
Restrictions Affecting Subsidiaries. Create or otherwise cause, incur, assume,
suffer or permit to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary of any Loan Party (i)
to pay dividends or to make any other distribution on any shares of Capital
Stock of such Subsidiary owned by any Loan Party or any of its Subsidiaries,
(ii) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party
or any of its Subsidiaries, (iii) to make loans or advances to any Loan Party or
any of its Subsidiaries or (iv) to transfer any of its property or assets to any
Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do
any of the foregoing; provided, however, that nothing in any of clauses (i)
through (iv) of this Section 7.02(k) shall prohibit or restrict compliance with:
- 90 -
(A) this Agreement and the
other Loan Documents;
(B) any agreements in effect
on the date of this Agreement and described on Schedule 7.02(k);
(C) any applicable law, rule
or regulation (including, without limitation, applicable currency control laws
and applicable state corporate statutes restricting the payment of dividends in
certain circumstances);
(D) in the case of clause (iv)
any agreement setting forth customary restrictions on the subletting, assignment
or transfer of any property or asset that is a lease, license, conveyance or
contract of similar property or assets; or
(E) in the case of clause (iv)
any agreement, instrument or other document evidencing a Permitted Lien (or the
Indebtedness secured thereby) from restricting on customary terms the transfer
of any property or assets subject thereto.
(l) Limitation on Issuance of Capital Stock.
Permit any Subsidiary of the Parent to issue or sell or enter into any agreement
or arrangement for the issuance and sale of any shares of its Capital Stock, any
securities convertible into or exchangeable for its Capital Stock or any
warrants.
(m) Modifications of Indebtedness,
Organizational Documents and Certain Other Agreements; Etc.
(i) Amend, modify or otherwise change
(or permit the amendment, modification or other change in any manner of) any of
the provisions of any of its or its Subsidiaries' Indebtedness or of any
instrument or agreement (including, without limitation, any purchase agreement,
indenture, loan agreement or security agreement) relating to any such
Indebtedness if such amendment, modification or change would shorten the final
maturity or average life to maturity of, or require any payment to be made
earlier than the date originally scheduled on, such Indebtedness, would increase
the interest rate applicable to such Indebtedness, would change the
subordination provisions, if any, of such Indebtedness in a manner adverse to
the Lenders, or would otherwise be adverse to the Lenders or the issuer of such
Indebtedness in any respect, provided, that, notwithstanding the foregoing, the
Loan Parties may amend, modify or otherwise change (or permit the amendment,
modification or other change in any manner of) any of the provisions of any of
the Indebtedness permitted under clause (m) of the definition of Permitted
Indebtedness to the extent that after giving effect to such amendment,
modification or change, such Indebtedness continues to be permitted under clause
(m) of the definition of Permitted Indebtedness;
(ii) except for the Obligations, make
any voluntary or optional payment, prepayment, redemption, defeasance, sinking
fund payment or other acquisition for value of any of its or its Subsidiaries'
Indebtedness (including, without limitation, by way of depositing money or
securities with the trustee therefor before the date required for the purpose of
paying any portion of such Indebtedness when due), or refund, refinance, replace
or exchange any other Indebtedness for any such Indebtedness (except, in the
case of any refund, refinance, replacement or exchange, to the extent such
Indebtedness is otherwise expressly permitted by the
- 91 -
definition of "Permitted Indebtedness"), make any payment, prepayment,
redemption, defeasance, sinking fund payment or repurchase of any Subordinated
Indebtedness in violation of the subordination provisions thereof or any
subordination agreement with respect thereto, or make any payment, prepayment,
redemption, defeasance, sinking fund payment or repurchase of any Indebtedness
as a result of any asset sale, change of control, issuance and sale of debt or
equity securities or similar event, or give any notice with respect to any of
the foregoing; provided that notwithstanding the foregoing, so long as no
Default or Event of Default exists immediately before or immediately after
giving effect to such payment, the Parent may make purchases, repurchases or
redemptions of Senior Subordinated Notes (1) on the open market or pursuant to
the equity clawback provisions of Section 3.07(b) of the Senior Subordinated
Note Indenture, but only with the Net Cash Proceeds of an Excluded Equity
Issuance or (2) otherwise, in an aggregate amount not to exceed $2,500,000 in
any period of four consecutive fiscal quarters and $5,000,000 on and after the
Effective Date, but only with that portion of Excess Cash Flow for any period
that is not required to be applied as a mandatory prepayment hereunder in
accordance with Section 2.05(c)(ii) and only after any mandatory prepayments
relating to Excess Cash Flow required to be made pursuant to Section 2.05(c)(ii)
have been made, in each of cases (1) and (2) so long as after giving effect to
any such purchases, repurchases or redemptions, (x) the Parent shall be in
compliance on a pro forma basis with the financial covenants in this Agreement
and (y) the Parent shall have Excess Availability of not less than $20,000,000,
(iii) designate any Indebtedness of such
Loan Party, other than Indebtedness arising under the Loan Documents, as
"Designated Senior Debt" (or any like term) under the Senior Subordinated Note
Indenture or any other indenture or other documentation for any Subordinated
Indebtedness;
(iv) amend, modify or otherwise change
its name, jurisdiction of organization, organizational identification number or
FEIN, except that a Loan Party may (A) change its name, jurisdiction of
organization, organizational identification number or FEIN in connection with a
transaction permitted by Section 7.02(c) and (B) change its name upon at least
30 days prior written notice by the Administrative Borrower to the Agents of
such change and so long as, at the time of such written notification, such
Person provides any financing statements or fixture filings necessary to perfect
and continue perfected the Collateral Agent's Liens; or
(v) amend, modify or otherwise change
its certificate of incorporation or bylaws (or other similar organizational
documents), including, without limitation, by the filing or modification of any
certificate of designation, or any agreement or arrangement entered into by it,
with respect to any of its Capital Stock (including any shareholders'
agreement), or enter into any new agreement with respect to any of its Capital
Stock, except any such amendments, modifications or changes or any such new
agreements or arrangements pursuant to this clause (v) that either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(n) Investment Company Act of 1940. Engage in
any business, enter into any transaction, use any securities or take any other
action or permit any of its Subsidiaries to do any of the foregoing, that would
cause it or any of its Subsidiaries to become subject to the
- 92 -
registration requirements of the Investment Company Act of 1940, as amended, by
virtue of being an "investment company" or a company "controlled" by an
"investment company" not entitled to an exemption within the meaning of such
Act.
(o) Compromise of Accounts Receivable.
Compromise or adjust any Account Receivable (or extend the time of payment
thereof) or grant any discounts, allowances or credits or permit any of its
Subsidiaries to do so other than in the ordinary course of its business and
consistent with industry practice.
(p) Properties. Permit any property (other than
property with an aggregate fair market value of less than $500,000) to become a
fixture with respect to real property or to become an accession with respect to
other personal property with respect to which real or personal property the
Collateral Agent does not have a valid and perfected first priority Lien or has
not received a written subordination or waiver in accordance with Section
7.01(m)(i).
(q) ERISA. (i) Engage, or permit any ERISA
Affiliate to engage, in any transaction described in Section 4069 of ERISA; (ii)
engage, or permit any ERISA Affiliate to engage, in any prohibited transaction
described in Section 406 of ERISA or 4975 of the Internal Revenue Code for which
a statutory or class exemption is not available or a private exemption has not
previously been obtained from the U.S. Department of Labor; (iii) adopt or
permit any ERISA Affiliate to adopt any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA or
applicable law; (iv) fail to make any contribution or payment to any
Multiemployer Plan which it or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto; or (v) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other payment.
(r) Environmental. Permit the use, handling,
generation, storage, treatment, Release or disposal of Hazardous Materials at
any property owned or leased by it or any of its Subsidiaries, except in
compliance in all material respects with Environmental Laws.
(s) Certain Agreements. Agree to (i) any
amendment or other change to or waiver of any of its rights under the Senior
Subordinated Note Indenture or the Consent Solicitation or (ii) any material
amendment or other material change to or material waiver of any of its rights
under any other Material Contract that is materially adverse to the Agents, the
L/C Issuer and the Lenders.
(t) Excess Cash. From and after the date that
the Borrowers satisfy the condition subsequent set forth in Section 5.03(h),
accumulate or maintain cash in bank accounts (in excess of checks outstanding
against such accounts and amounts necessary to meet minimum balance
requirements), cash equivalents or Permitted Investments of the Loan Parties and
their Subsidiaries in an aggregate amount in excess of $2,000,000 (excluding
amounts deposited into accounts subject to a control agreement in favor of the
Collateral Agent, fiduciary accounts of the Parent or any of its Subsidiaries
and deposit accounts exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of a
- 93 -
Loan Party's or any of its Subsidiaries' salaried employees) for a period of
more than 3 consecutive Business Days.
Section 7.03 Financial Covenants. So long as any principal of
or interest on any Loan, Letter of Credit Obligation or any other Obligation
(whether or not due) shall remain unpaid or any Lender shall have any Commitment
hereunder, each Loan Party shall not, unless the Required Lenders shall
otherwise consent in writing:
(a) Consolidated Net Operating Cash Flow. Permit
Consolidated Net Operating Cash Flow of the Parent and its Subsidiaries (i) for
the period from the Effective Date through and including May 29, 2004, to be
less than $(16,000,000) or (ii) for the period from the Effective Date through
and including June 30, 2004, to be less than $(16,000,000).
(b) Leverage Ratio. Permit the Leverage Ratio of
the Parent and its Subsidiaries as of the end of each period of four (4)
consecutive fiscal quarters of the Parent and its Subsidiaries for which the
last quarter ends on a date set forth below to be greater than the applicable
ratio set forth below:
Fiscal Quarter End Leverage Ratio
------------------ --------------
September 30, 2004 2.40:1.00
December 31, 2004 2.40:1.00
March 31, 2005 2.30:1.00
June 30, 2005 2.25:1.00
September 30, 2005 2.25:1.00
December 31, 2005 2.05:1.00
March 31, 2006 2.00:1.00
June 30, 2006 1.90:1.00
(c) Fixed Charge Coverage Ratio. Permit the
Fixed Charge Coverage Ratio of the Parent and its Subsidiaries as at the end of
each period set forth below to be less than the applicable ratio set forth
below:
Period Fixed Charge Coverage Ratio
------ ---------------------------
The 1 fiscal quarter period
ending September 30, 2004 1.15:1.00
The 2 fiscal quarter period
ending December 31, 2004 1.15:1.00
The 3 fiscal quarter period
ending March 31, 2005 1.20:1.00
- 94 -
The 4 fiscal quarter period 1.25:1.00
ending June 30, 2005
The 4 fiscal quarter period 1.30:1.00
ending September 30, 2005
The 4 fiscal quarter period 1.35:1.00
ending December 31, 2005
The 4 fiscal quarter period 1.45:1.00
ending March 31, 2006
The 4 fiscal quarter period 1.50:1.00
ending June 30, 2006
(d) Excess Availability. Permit Excess Availability
at any time to be less than an amount equal to the sum of (i) (A) prior to the
date of the termination of the Total Revolving Credit Commitment for any reason,
$7,500,000, and (B) thereafter, $10,000,000 and (ii) 50% times the amount of
Specified Costs and Expenses incurred in excess of $2,500,000.
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 8.01 Collection of Accounts Receivable; Management of
Collateral. (a) Within 30 days of the Effective Date, the Loan Parties shall
assist the Administrative Agent in (i) establishing, and, during the term of
this Agreement, maintaining one or more lockboxes in the name of the
Administrative Agent and identified on Schedule 8.01 hereto (collectively, the
"Lockboxes") with the financial institutions set forth on Schedule 8.01 hereto
or such other financial institutions selected by the Loan Parties and acceptable
to the Administrative Agent in its sole discretion (each being referred to as a
"Lockbox Bank"), and (ii) establishing, and during the term of this Agreement,
maintaining an account (a "Collection Account" and, collectively, the
"Collection Accounts") in the name of the Administrative Agent with each Lockbox
Bank. The Loan Parties shall irrevocably instruct their Account Debtors, with
respect to Accounts Receivable of the Loan Parties, to remit all payments to be
made by checks or other drafts to the Lockboxes and to remit all payments to be
made by wire transfer or by Automated Clearing House, Inc. payment as directed
by the Administrative Agent and shall instruct each Lockbox Bank to deposit all
amounts received in its Lockbox to the Collection Account at such Lockbox Bank
on the day received or, if such day is not a Business Day, on the next
succeeding Business Day. Until the Administrative Agent has advised the Loan
Parties to the contrary after the occurrence and during the continuance of an
Event of Default, the Loan Parties may and will enforce, collect and receive all
amounts owing on the Accounts Receivable of the Loan Parties for the
Administrative Agent's benefit and on the Administrative Agent's behalf, but at
the Loan Parties' expense; such privilege shall terminate, at the election of
any Agent, upon the occurrence and during the continuance of an Event of
Default. All checks, drafts, notes, money orders, acceptances, cash and other
evidences of Indebtedness received directly by the Loan Parties from any of
their Account Debtors, as proceeds from Accounts Receivable of the Loan Parties,
or as
- 95 -
proceeds of any other Collateral, shall be held by the Loan Parties in trust for
the Agents, the L/C Issuer and the Lenders and upon receipt be deposited by the
Loan Parties in original form and no later than the next Business Day after
receipt thereof into a Collection Account. The Loan Parties shall not commingle
such collections with the Loan Parties' own funds or the funds of any of their
Subsidiaries or Affiliates or with the proceeds of any assets not included in
the Collateral. Prior to the occurrence of an Event of Default, all funds
received in the Collection Accounts shall be processed by the respective Lockbox
Banks in accordance with the instructions of officers or agents of the Borrowers
in accordance with prior practice. After the occurrence and during the
continuance of an Event of Default, the Collateral Agent may give notice to the
respective Lockbox Banks that all funds received in the Collection Account shall
be sent by wire transfer or Automated Clearing House, Inc. payment to the
Administrative Agent's Account for application at the end of each Business Day
to reduce the then outstanding Obligations, conditional upon final payment to
the Administrative Agent. No checks, drafts or other instruments received by the
Administrative Agent shall constitute final payment to the Administrative Agent
unless and until such checks, drafts or instruments have actually been
collected.
(b) After the occurrence and during the continuance
of an Event of Default, the Collateral Agent or its designee may, and at the
request of the Required Lenders, the Collateral Agent shall, send a notice of
assignment and/or notice of the Collateral Agent's security interest to any and
all Account Debtors or third parties holding or otherwise concerned with any of
the Collateral, and thereafter the Collateral Agent or its designee shall have
the sole right to collect the Accounts Receivable and/or take possession of the
Collateral and the books and records relating thereto. The Loan Parties shall
not, without prior written consent of the Collateral Agent, grant any extension
of time of payment of any Account Receivable, compromise or settle any Account
Receivable for less than the full amount thereof, release, in whole or in part,
any Person or property liable for the payment thereof, or allow any credit or
discount whatsoever thereon, except, in the absence of a continuing Event of
Default, as permitted by Section 7.02(o).
(c) Each Loan Party hereby appoints the Collateral
Agent or its designee on behalf of the Collateral Agent as the Loan Parties'
attorney-in-fact with power exercisable during the continuance of an Event of
Default to endorse any Loan Party's name upon any notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Accounts
Receivable, to sign any Loan Party's name on any invoice or xxxx of lading
relating to any of the Accounts Receivable, drafts against Account Debtors with
respect to Accounts Receivable, assignments and verifications of Accounts
Receivable and notices to Account Debtors with respect to Accounts Receivable,
to send verification of Accounts Receivable, and to notify the Postal Service
authorities to change the address for delivery of mail addressed to any Loan
Party to such address as the Collateral Agent or such designee may designate and
to do all other acts and things necessary to carry out this Agreement. All acts
of said attorney or designee are hereby ratified and approved, and said attorney
or designee shall not be liable for any acts of omission or commission (other
than acts of omission or commission constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction), or for any error of judgment or mistake of fact or law not
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction; this power being coupled with an
interest is irrevocable until all of the
- 96 -
Loans, Letter of Credit Obligations and other Obligations under the Loan
Documents are paid in full and all of the Loan Documents are terminated.
(d) Nothing herein contained shall be construed to
constitute any Agent as agent of any Loan Party for any purpose whatsoever, and
the Agents shall not be responsible or liable for any shortage, discrepancy,
damage, loss or destruction of any part of the Collateral wherever the same may
be located and regardless of the cause thereof (other than from acts of omission
or commission constituting gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction). The Agents shall not,
under any circumstance or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Accounts Receivable or any instrument received in
payment thereof or for any damage resulting therefrom (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction). The
Agents, by anything herein or in any assignment or otherwise, do not assume any
of the obligations under any contract or agreement assigned to any Agent and
shall not be responsible in any way for the performance by any Loan Party of any
of the terms and conditions thereof.
(e) If any Account Receivable includes a charge for
any tax payable to any Governmental Authority, each Agent is hereby authorized
(but in no event obligated) in its discretion to pay the amount thereof to the
proper taxing authority for the Loan Parties' account and to charge the Loan
Parties therefor. The Loan Parties shall notify the Agents if any Account
Receivable includes any taxes due to any such Governmental Authority and, in the
absence of such notice, the Agents shall have the right to apply the full
proceeds of such Account Receivable and shall not be liable for any taxes that
may be due by reason of the sale and delivery creating such Account Receivable.
(f) Notwithstanding any other terms set forth in the
Loan Documents, the rights and remedies of the Agents, the L/C Issuer and the
Lenders herein provided, and the obligations of the Loan Parties set forth
herein, are cumulative of, may be exercised singly or concurrently with, and are
not exclusive of, any other rights, remedies or obligations set forth in any
other Loan Document or as provided by law.
Section 8.02 Accounts Receivable Documentation. The Loan
Parties will at such intervals as the Collateral Agent may reasonably require,
execute and deliver confirmatory written assignments of the Accounts Receivable
to the Agents and furnish such further schedules and/or information as any such
Agent may reasonably require relating to the Accounts Receivable. In addition,
the Loan Parties shall notify the Agents of any non-compliance in respect of the
representations, warranties and covenants contained in Section 8.03. The items
to be provided under this Section 8.02 are to be in form reasonably satisfactory
to the Collateral Agent and are to be executed and delivered to the Agents from
time to time solely for their convenience in maintaining records of the
Collateral. The Loan Parties' failure to give any of such items to the Agents
shall not affect, terminate, modify or otherwise limit the Collateral Agent's
Lien on the Collateral. The Loan Parties shall not re-date any invoice or sale
or make sales on extended dating beyond that customary in the Loan Parties'
industry, and shall not re-xxxx any Accounts Receivable, except in the ordinary
course of business, without promptly disclosing the same to the Agents and
providing the Agents with a copy of such re-billing, identifying the
- 97 -
same as such. If the Loan Parties become aware of anything materially
detrimental to any of the Loan Parties' material customers' credit, the Loan
Parties will promptly advise the Agents thereof.
Section 8.03 Status of Accounts Receivable and Other
Collateral. With respect to Collateral of any Loan Party at the time the
Collateral becomes subject to the Collateral Agent's Lien, each Loan Party
covenants, represents and warrants: (a) such Loan Party shall be the sole owner,
free and clear of all Liens (except for Permitted Liens), and shall be fully
authorized to sell, transfer, pledge and/or grant a security interest in each
and every item of said Collateral; (b) to the best knowledge of any Loan Party,
each Account Receivable with an invoice amount in excess of $250,000 shall be a
good and valid account representing a bona fide indebtedness incurred or an
amount owed by the Account Debtor therein named; (c) none of the transactions
underlying or giving rise to any Account Receivable shall violate any applicable
state or federal laws or regulations, and all documents relating thereto shall
be legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms; (d) no agreement under which any
deduction or offset of any kind, other than normal trade discounts, may be
granted or shall have been made by such Loan Party at or before the time such
Account Receivable is created; (e) all agreements, instruments and other
documents relating to any Account Receivable shall be true and correct and in
all material respects what they purport to be; (f) such Loan Party shall
maintain books and records pertaining to said Collateral in such detail, form
and scope as the Agents shall reasonably require; (g) such Loan Party shall
promptly notify the Collateral Agent if any Account Receivable with an invoice
amount in excess of $250,000 arises out of contracts with any Governmental
Authority, and will execute any instruments and take any steps required by the
Collateral Agent in order that all monies due or to become due under any such
contract shall be assigned to the Collateral Agent and notice thereof given to
such Governmental Authority under the Federal Assignment of Claims Act or any
similar state or local law; (h) such Loan Party will, immediately upon learning
thereof, report to the Agents any material loss or destruction of, or
substantial damage to, any of the Collateral, and any other matters affecting
the value, enforceability or collectibility of any of the Collateral with a
value in excess of $250,000; (i) if any amount payable under or in connection
with any Account Receivable with an invoice amount in excess of $250,000 is
evidenced by a promissory note or other instrument, such promissory note or
instrument shall be immediately pledged, endorsed, assigned and delivered to the
Collateral Agent for the benefit of the Agents, the L/C Issuer and the Lenders
as additional Collateral; (j) such Loan Party shall conduct a physical count of
its Inventory at such intervals as any Agent reasonably may request (but, absent
an Event of Default, (x) prior to the date that the Borrowers satisfy the
condition subsequent set forth in Section 5.03(j), not more than 1 time in any
fiscal quarter of the Parent and its Subsidiaries and (y) thereafter, not more
than 2 times in any 12 month period during the term of this Agreement) and such
Loan Party shall promptly supply the Agents with a copy of such count
accompanied by a report of the value (based on the lower of cost (on a first in
first out basis) and market value) of such Inventory; and (k) such Loan Party is
not and shall not be entitled to pledge any Agent's or any Lender's credit on
any purchases or for any purpose whatsoever.
Section 8.04 Collateral Custodian. Upon the occurrence and
during the continuance of any Default or Event of Default, the Collateral Agent
or its designee may at any time and from time to time employ and maintain on the
premises of any Loan Party a custodian selected by the Collateral Agent or its
designee who shall have full authority to do all acts
- 98 -
necessary to protect the Agents' and the Lenders' interests. Each Loan Party
hereby agrees to, and to cause its Subsidiaries to, cooperate with any such
custodian and to do whatever the Collateral Agent or its designee may reasonably
request to preserve the Collateral. All costs and expenses incurred by the
Collateral Agent or its designee by reason of the employment of the custodian
shall be the responsibility of the Borrowers and charged to the Loan Account.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.01 Events of Default. If any of the following Events
of Default shall occur and be continuing:
(a) any Borrower shall fail to pay any principal of
or interest on any Loan, any Collateral Agent Advance, or any fee, indemnity or
other amount payable under this Agreement or any other Loan Document when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise);
(b) any representation or warranty made or deemed
made by or on behalf of any Loan Party or by any officer of the foregoing under
or in connection with any Loan Document shall have been incorrect in any
material respect when made or deemed made;
(c) any Loan Party shall:
(i) fail to perform or comply with any
covenant or agreement contained in Section 5.03, Sections 7.01(a)(viii),
7.01(c), 7.01(d)(i)(A), 7.01(f), 7.01(h) (other than with respect to the
delivery of insurance policies thereunder), 7.01(n) or 7.01(p), Section 7.02,
Section 7.03 (other than Section 7.03(a)) or Article VIII, or any Loan Party
shall fail to perform or comply with any covenant or agreement contained in any
Security Agreement to which it is a party, any Pledge Agreement to which it is a
party, or any Mortgage to which it is a party;
(ii) fail to perform or comply with any
covenant or agreement contained in Sections 7.01(a) (other than clause
(a)(viii)), 7.01(g), 7.01(i), 7.01(j), 7.01(k), 7.01(l), 7.01(o) or 7.01(q), and
such failure continues for 5 Business Days;
(iii) fail to perform or comply with any
covenant or agreement contained in Sections 7.01(b), 7.01(d)(i)(B), 7.01(d)(ii),
7.01(e), 7.01(h) (with respect to the delivery of insurance policies thereunder)
or 7.01(m) and such failure continues for 10 Business Days; or
(iv) (A) fail to comply with Section
7.03(a)(i) and Consolidated Net Operating Cash Flow for the period from the
Effective Date through and including June 10, 2004, is less than $(16,000,000)
or (B) fail to comply with Section 7.03(a)(ii) and Consolidated Net Operating
Cash Flow for the period from the Effective Date through and including July 14,
2004, is less than $(16,000,000);
- 99 -
(d) any Loan Party shall fail to perform or comply
with any other term, covenant or agreement contained in any Loan Document to be
performed or observed by it and, except as set forth in subsections (a), (b) and
(c) of this Section 9.01, such failure continues for 15 Business Days;
(e) any Loan Party or any of its Subsidiaries shall
fail to pay any of its Indebtedness (excluding Indebtedness evidenced by this
Agreement) in excess of $750,000, or any payment of principal, interest or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness, or any other default under any agreement or
instrument relating to any such Indebtedness, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case, prior to the stated
maturity thereof;
(f) any Loan Party or any of its Subsidiaries (i)
shall institute any proceeding or voluntary case seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for any
such Person or for any substantial part of its property, (ii) shall be generally
not paying its debts as such debts become due or shall admit in writing its
inability to pay its debts generally, (iii) shall make a general assignment for
the benefit of creditors, or (iv) shall take any action to authorize or effect
any of the actions set forth above in this subsection (f);
(g) any proceeding shall be instituted against any
Loan Party or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, custodian or
other similar official for any such Person or for any substantial part of its
property, and either such proceeding shall remain undismissed or unstayed for a
period of 45 days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against any such Person or
the appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property) shall occur;
(h) any provision of any Loan Document shall at any
time for any reason (other than pursuant to the express terms thereof) cease to
be valid and binding on or enforceable against any Loan Party intended to be a
party thereto, or the validity or enforceability thereof shall be contested by
any party thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Loan Party shall
deny
- 100 -
in writing that it has any liability or obligation purported to be created under
any Loan Document;
(i) any Security Agreement, any Pledge Agreement, any
Mortgage or any other security document, after delivery thereof pursuant hereto,
shall for any reason fail or cease to create a valid, perfected and first
priority Lien in favor of the Collateral Agent for the benefit of the Agents,
the L/C Issuer and the Lenders on any Collateral purported to be covered
thereby, except to the extent permitted by the terms of any Loan Document;
(j) except to the extent permitted by the terms of
any Loan Document, any bank (other than any Agent) at which any deposit account,
blocked account, or lockbox account of any Loan Party containing deposits in
excess of $100,000 is maintained shall fail to comply with any of the terms of
any deposit account, blocked account, lockbox account or similar agreement to
which such bank is a party or any securities intermediary, commodity
intermediary or other financial institution at any time in custody, control or
possession of any investment property of any Loan Party shall fail to comply
with any of the terms of any investment property control agreement to which such
Person is a party;
(k) one or more judgments, orders or awards (or any
settlement of any claim that, if breached, could result in a judgment, order or
award) for the payment of money exceeding $750,000 in the aggregate shall be
rendered against any Loan Party or any of its Subsidiaries and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced by
any creditor upon any such judgment, order, award or settlement, or (ii) there
shall be a period of 20 consecutive days after entry thereof during which a stay
of enforcement of any such judgment, order, award or settlement, by reason of a
pending appeal or otherwise, shall not be in effect; provided, however, that any
such judgment, order, award or settlement shall not give rise to an Event of
Default under this subsection (k) if and for so long as (A) the amount of such
judgment, order, award or settlement is covered by a valid and binding policy of
insurance between the defendant and the insurer covering full payment thereof
and (B) such insurer has been notified, and has not disputed the claim made for
payment, of the amount of such judgment, order, award or settlement;
(l) the Loan Parties and their Subsidiaries are
enjoined, restrained or in any way prevented by the order of any court or any
Governmental Authority from conducting all or any material part of their
business, taken as a whole, for more than fifteen (15) days;
(m) any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty which causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities at any
facility of any Loan Party, if any such event or circumstance could reasonably
be expected to have a Material Adverse Effect;
(n) any cessation of a substantial part of the
business of the Loan Parties and their Subsidiaries, taken as a whole, for a
period which materially and adversely affects the ability of such Person to
continue its business on a profitable basis;
- 101 -
(o) the loss, suspension or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by any Loan Party
or any of its Subsidiaries, if such loss, suspension, revocation or failure to
renew could reasonably be expected to have a Material Adverse Effect;
(p) the indictment of any Loan Party or any of its
Subsidiaries under any criminal statute, or commencement of criminal or civil
proceedings against any Loan Party, pursuant to which statute or proceedings the
penalties or remedies sought or available include forfeiture to any Governmental
Authority of any material portion of the property of the Loan Parties and their
Subsidiaries, taken as whole;
(q) any Loan Party or any of its ERISA Affiliates
shall have made a complete or partial withdrawal from a Multiemployer Plan, and,
as a result of such complete or partial withdrawal, any Loan Party or any of its
ERISA Affiliates incurs a withdrawal liability in an annual amount exceeding
$500,000; or a Multiemployer Plan enters reorganization status under Section
4241 of ERISA, and, as a result thereof any Loan Party's or any of its ERISA
Affiliates' annual contribution requirements with respect to such Multiemployer
Plan increases in an annual amount exceeding $500,000;
(r) any Termination Event with respect to any
Employee Plan shall have occurred, and, 30 days after notice thereof shall have
been given to any Loan Party by any Agent, (i) such Termination Event (if
correctable) shall not have been corrected, and (ii) the then current value of
such Employee Plan's vested benefits exceeds the then current value of assets
allocable to such benefits in such Employee Plan by more than $500,000 (or, in
the case of a Termination Event involving liability under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971
or 4975 of the Internal Revenue Code, the liability is in excess of such
amount);
(s) any Loan Party or any of its Subsidiaries shall
be liable for any Environmental Liabilities and Costs the payment of which could
reasonably be expected to have a Material Adverse Effect;
(t) any Loan Party or any of its Subsidiaries shall
(i) receive a Product Recall Notice or (ii) fail to be in substantial compliance
with the Food and Drug Act and all current applicable statutes, rules,
regulations, guidelines, policies, orders or directives administered or issued
by the FDA, to the extent that such failure could reasonably be expected to (a)
have a Material Adverse Effect or (b) result in or account for a 10% or greater
decrease in the Parent's and its Subsidiaries' total sales from the preceding
Fiscal Year;
(u) (i) there shall occur and be continuing any
"Event of Default" (or any comparable term) under, and as defined in the
documents evidencing or governing any Subordinated Indebtedness, (ii) any of the
Obligations for any reason shall cease to be "Designated Senior Debt" (or any
comparable term) under, and as defined in the documents evidencing or governing
any Subordinated Indebtedness, (iii) any Indebtedness other than the Obligations
shall constitute "Designated Senior Debt" (or any comparable term) under, and as
defined in, the Senior Subordinated Note Indenture or any other documents
evidencing or governing any Subordinated Indebtedness, (iv) any holder of
Subordinated Indebtedness shall fail to perform or comply with any
- 102 -
of the subordination provisions of the documents evidencing or governing such
Subordinated Indebtedness, or (v) the subordination provisions of the documents
evidencing or governing any Subordinated Indebtedness shall, in whole or in
part, terminate, cease to be effective or cease to be legally valid, binding and
enforceable against any holder of the applicable Subordinated Indebtedness;
(v) a Change of Control shall have occurred; or
(w) an event or development occurs which could
reasonably be expected to have a Material Adverse Effect;
then, and in any such event, the Collateral Agent may, and
shall at the request of the Required Lenders, by notice to the Administrative
Borrower, (i) terminate or reduce all Commitments, whereupon all Commitments
shall immediately be so terminated or reduced, (ii) declare all or any portion
of the Loans and Obligations then outstanding to be due and payable, whereupon
all or such portion of the aggregate principal of all Loans and Obligations, all
accrued and unpaid interest thereon, all fees and all other amounts payable
under this Agreement and the other Loan Documents shall become due and payable
immediately, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by each Loan Party and (iii) exercise
any and all of its other rights and remedies under applicable law, hereunder and
under the other Loan Documents; provided, however, that upon the occurrence of
any Event of Default described in subsection (f) or (g) of this Section 9.01
with respect to any Loan Party, without any notice to any Loan Party or any
other Person or any act by any Agent, the L/C Issuer or any Lender, all
Commitments shall automatically terminate and all Loans and Obligations then
outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement and the other Loan Documents shall
become due and payable automatically and immediately, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by each
Loan Party. Subject to Section 4.04(b), the L/C Issuer may, after the occurrence
and during the continuation of any Event of Default, require the Borrowers to
deposit with the Administrative Agent with respect to each Letter of Credit then
outstanding cash in an amount equal to 110% of the greatest amount for which
such Letter of Credit may be drawn. Such deposits shall be held by the
Administrative Agent as security for, and to provide for the payment of, the
Letter of Credit Obligations.
ARTICLE X
AGENTS
Section 10.01 Appointment. (a) Each Lender (and each
subsequent maker of any Loan by its making thereof) hereby irrevocably appoints
and authorizes the Administrative Agent and the Collateral Agent to perform the
duties of each such Agent as set forth in this Agreement including: (i) to
receive on behalf of each Lender any payment of principal of or interest on the
Loans outstanding hereunder and all other amounts accrued hereunder for the
account of the Lenders and paid to such Agent, and, subject to Section 2.02 of
this Agreement, to distribute promptly to each Lender its Pro Rata Share of all
payments so received; (ii) to distribute to each Lender copies of all material
notices and agreements received by such Agent and not required to be delivered
to each Lender pursuant to the terms of this Agreement,
- 103 -
provided that the Agents shall not have any liability to the Lenders for any
Agent's inadvertent failure to distribute any such notices or agreements to the
Lenders; (iii) to maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Loans, and
related matters and to maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Collateral and
related matters; (iv) to execute or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to this Agreement or any other Loan Document; (v) to make the Loans and
Collateral Agent Advances, for such Agent or on behalf of the applicable Lenders
as provided in this Agreement or any other Loan Document; (vi) to perform,
exercise, and enforce any and all other rights and remedies of the Lenders with
respect to the Loan Parties, the Obligations, or otherwise related to any of
same to the extent reasonably incidental to the exercise by such Agent of the
rights and remedies specifically authorized to be exercised by such Agent by the
terms of this Agreement or any other Loan Document; (vii) to incur and pay such
fees necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to this Agreement or any other Loan Document; and
(viii) subject to Section 10.03 of this Agreement, to take such action as such
Agent deems appropriate on its behalf to administer the Loans and the Loan
Documents and to exercise such other powers delegated to such Agent by the terms
hereof or the other Loan Documents (including, without limitation, the power to
give or to refuse to give notices, waivers, consents, approvals and instructions
and the power to make or to refuse to make determinations and calculations)
together with such powers as are reasonably incidental thereto to carry out the
purposes hereof and thereof. As to any matters not expressly provided for by
this Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Loans), the Agents 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, and such
instructions of the Required Lenders shall be binding upon all Lenders and all
makers of Loans; provided, however, that the L/C Issuer shall not be required to
refuse to honor a drawing under any Letter of Credit and the Agents shall not be
required to take any action which, in the reasonable opinion of any Agent,
exposes such Agent to liability or which is contrary to this Agreement or any
other Loan Document or applicable law.
(b) The L/C Issuer shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents associated
therewith, and the L/C Issuer shall have all of the benefits and immunities (i)
provided to the Agents in this Article X with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent", "Collateral Agent" or "Agents" as used in this Article X
and in the definition of "Agent-Related Person" included the L/C Issuer with
respect to such acts or omissions, and (ii) as additionally provided herein with
respect to the L/C Issuer.
Section 10.02 Nature of Duties. The Agents shall have no
duties or responsibilities except those expressly set forth in this Agreement or
in the other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document,
- 104 -
express or implied, is intended to or shall be construed to impose upon the
Agents any obligations in respect of this Agreement or any other Loan Document
except as expressly set forth herein or therein. Each Lender shall make its own
independent investigation of the financial condition and affairs of the Loan
Parties in connection with the making and the continuance of the Loans hereunder
and shall make its own appraisal of the creditworthiness of the Loan Parties and
the value of the Collateral, and the Agents shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
their possession before the initial Loan hereunder or at any time or times
thereafter, provided that, upon the reasonable request of a Lender, each Agent
shall provide to such Lender any documents or reports delivered to such Agent by
the Loan Parties pursuant to the terms of this Agreement or any other Loan
Document. If any Agent seeks the consent or approval of the Required Lenders to
the taking or refraining from taking any action hereunder, such Agent shall send
notice thereof to each Lender. Each Agent shall promptly notify each Lender any
time that the Required Lenders have instructed such Agent to act or refrain from
acting pursuant hereto.
Section 10.03 Rights, Exculpation, Etc. No Agent-Related
Person shall be liable for any action taken or omitted to be taken by them under
or in connection with this Agreement or the other Loan Documents, except for
their own gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. Without limiting the generality
of the foregoing, the Agent-Related Persons (i) may treat the payee of any Loan
as the owner thereof until the Collateral Agent receives written notice of the
assignment or transfer thereof, pursuant to Section 12.07 hereof, signed by such
payee and in form satisfactory to the Collateral Agent; (ii) may consult with
legal counsel (including, without limitation, counsel to any Agent or counsel to
the Loan Parties), independent public accountants, and other experts selected by
any of them and shall not be liable for any action taken or omitted to be taken
in good faith by any of them in accordance with the advice of such counsel or
experts; (iii) make no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, certificates, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Person, the existence
or possible existence of any Default or Event of Default, or to inspect the
Collateral or other property (including, without limitation, the books and
records) of any Person; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall not be deemed to
have made any representation or warranty regarding the existence, value or
collectibility of the Collateral, the existence, priority or perfection of the
Collateral Agent's Lien thereon, or any certificate prepared by any Loan Party
in connection therewith, nor shall the Agents be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The Agent-Related Persons shall not be liable for any apportionment or
distribution of payments made in good faith pursuant to Section 4.04, and if any
such apportionment or distribution is subsequently determined to have been made
in error the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount which
they are determined to be entitled. The Agent-Related Persons may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of this
- 105 -
Agreement or of any of the other Loan Documents the Agent-Related Persons are
permitted or required to take or to grant, and if such instructions are promptly
requested, the Agent-Related Persons shall be absolutely entitled to refrain
from taking any action or to withhold any approval under any of the Loan
Documents until they shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against any Agent-Related Person as a result of such
Agent-Related Person acting or refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of the
Required Lenders.
Section 10.04 Reliance. Each Agent shall be entitled to rely
upon any written notices, statements, certificates, orders or other documents or
any telephone message believed by it in good faith to be genuine and correct and
to have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
Section 10.05 Indemnification. To the extent that any
Agent-Related Person or the L/C Issuer is not reimbursed and indemnified by any
Loan Party, the Lenders will reimburse and indemnify such Agent-Related Person
and the L/C Issuer from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against such Agent or the L/C Issuer in any way
relating to or arising out of this Agreement or any of the other Loan Documents
or any action taken or omitted by such Agent-Related Person or the L/C Issuer
under this Agreement or any of the other Loan Documents, in proportion to each
Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 10.08; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
liability resulted from such Agent-Related Person's or the L/C Issuer's gross
negligence or willful misconduct. The obligations of the Lenders under this
Section 10.05 shall survive the payment in full of the Loans and the termination
of this Agreement.
Section 10.06 Agents Individually. With respect to its Pro
Rata Share of the Total Commitment hereunder and the Loans made by it, each
Agent shall have and may exercise the same rights and powers hereunder and is
subject to the same obligations and liabilities as and to the extent set forth
herein for any other Lender or maker of a Loan. The terms "Lenders" or "Required
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include each Agent in its individual capacity as a Lender or one of
the Required Lenders. Each Agent and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with any Borrower as if it were not acting as an Agent pursuant hereto
without any duty to account to the other Lenders.
Section 10.07 Successor Agent. (a) Each Agent may resign from
the performance of all its functions and duties hereunder and under the other
Loan Documents at any time by giving at least thirty (30) Business Days' prior
written notice to the Administrative Borrower and each Lender. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to clauses (b) and (c) below or as otherwise provided
- 106 -
below. Any resignation by Bank of America as Administrative Agent shall also
constitute its resignation as L/C Issuer.
(b) Upon any such notice of resignation, the Required
Lenders shall appoint a successor Agent; provided, that, so long as no Event of
Default shall have occurred and be continuing, if such successor Agent is not
the other Agent hereunder (or any of its Affiliates or Related Funds), such
appointment shall be made with the consent of the Administrative Borrower (which
consent shall not be unreasonably withheld, delayed or conditioned). Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any Agent's resignation hereunder as an
Agent, the provisions of this ARTICLE X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the retiring Agent, with
the consent of the other Agent shall then appoint a successor Agent who shall
serve as an Agent until such time, if any, as the Required Lenders, with the
consent of the other Agent, appoint a successor Agent as provided above;
provided, that, so long as no Event of Default shall have occurred and be
continuing, if such successor Agent is not the other Agent hereunder (or any of
its Affiliates or Related Funds), such appointment shall be made with the
consent of the Administrative Borrower (which consent shall not be unreasonably
withheld, delayed or conditioned).
(d) In the case of the resignation of the
Administrative Agent from the performance of all its functions and duties
hereunder and under the other Loan Documents, if no successor Administrative
Agent accepts appointment as Administrative Agent within said thirty (30)
Business Day period, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Collateral Agent shall perform
all of the duties of the Administrative Agent hereunder until such time, if any,
as a successor Administrative Agent is appointed in accordance with this Section
10.07.
Section 10.08 Collateral Matters.
(a) The Collateral Agent may from time to time make
such disbursements and advances ("Collateral Agent Advances") which the
Collateral Agent, in its reasonable business judgment, deems necessary or
desirable to preserve, protect, prepare for sale or lease or dispose of the
Collateral or any portion thereof, to enhance the likelihood or maximize the
amount of repayment by the Borrowers of the Loans, Letter of Credit Obligations
and other Obligations or to pay any other amount chargeable to the Borrowers
pursuant to the terms of this Agreement, including, without limitation, costs,
fees and expenses as described in Section 12.04. The Collateral Agent Advances
shall be repayable on demand and be secured by the Collateral and shall bear
interest at a rate per annum equal to the rate of interest then applicable to
the Loans, except that no such Collateral Agent Advance shall be eligible to be
a LIBOR Rate Loan. The Collateral Agent Advances shall constitute Obligations
hereunder which may be charged to the Loan Account in accordance with Section
4.02. The Collateral Agent
- 107 -
shall notify the Administrative Agent, each Lender and the Administrative
Borrower in writing of each such Collateral Agent Advance, which notice shall
include a description of the purpose of such Collateral Agent Advance. Without
limitation to its obligations pursuant to Section 10.05, each Lender agrees that
it shall make available to the Collateral Agent, upon the Collateral Agent's
demand, in Dollars in immediately available funds, the amount equal to such
Lender's Pro Rata Share of each such Collateral Agent Advance. If such funds are
not made available to the Collateral Agent by such Lender, the Collateral Agent
shall be entitled to recover such funds on demand from such Lender, together
with interest thereon for each day from the date such payment was due until the
date such amount is paid to the Collateral Agent, at the Federal Funds Rate for
three Business Days and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the
Collateral Agent, at its option and in its discretion, to release any Lien
granted to or held by the Collateral Agent upon any Collateral upon termination
of the Total Commitment and payment and satisfaction of all Loans, Letter of
Credit Obligations, and all other Obligations which have matured and which the
Collateral Agent has been notified in writing are then due and payable; or
constituting property being sold or disposed of in compliance with the terms of
this Agreement and the other Loan Documents; or constituting property in which
the Loan Parties owned no interest at the time the Lien was granted or at any
time thereafter; or (subject to Section 12.02) if approved, authorized or
ratified in writing by the Required Lenders; or to subordinate any Lien on any
property granted to the Collateral Agent to the holder of any Lien on such
property permitted by clauses (e) or (h) of the definition of Permitted Liens.
Upon request by the Collateral Agent at any time, the Lenders will confirm in
writing the Collateral Agent's authority to release particular types or items of
Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Collateral
Agent's authority to act without any specific or further authorization or
consent by the Lenders (as set forth in Section 10.08(b)), each Lender agrees to
confirm in writing, upon request by the Collateral Agent, the authority to
release Collateral conferred upon the Collateral Agent under Section 10.08(b).
Upon receipt by the Collateral Agent of confirmation from the Lenders of its
authority to release any particular item or types of Collateral, and upon prior
written request by any Loan Party, the Collateral Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Collateral Agent
for the benefit of the Agents, the L/C Issuer and the Lenders upon such
Collateral; provided, however, that (i) the Collateral Agent shall not be
required to execute any such document on terms which, in the Collateral Agent's
reasonable business judgment, would expose the Collateral Agent to liability or
create any obligations or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Lien upon (or
obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
(d) The Collateral Agent shall have no obligation
whatsoever to any Lender to assure that the Collateral exists or is owned by the
Loan Parties or is cared for, protected or insured or has been encumbered or
that the Lien granted to the Collateral Agent pursuant to this Agreement or any
other Loan Document has been properly or sufficiently or lawfully created,
perfected, protected or enforced or is entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to
- 108 -
continue exercising, any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 10.08 or in any other Loan
Document, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, the Collateral Agent may act in any
manner it may deem appropriate, in its sole discretion, given the Collateral
Agent's own interest in the Collateral as one of the Lenders and that the
Collateral Agent shall have no duty or liability whatsoever to any other Lender,
except as otherwise provided herein.
Section 10.09 Agency for Perfection. Each Agent and each
Lender hereby appoints each other Agent and each other Lender as agent and
bailee for the purpose of perfecting the security interests in and liens upon
the Collateral in assets which, in accordance with Article 9 of the Uniform
Commercial Code, can be perfected only by possession or control (or where the
security interest of a secured party with possession or control has priority
over the security interest of another secured party) and each Agent and each
Lender hereby acknowledges that it holds possession of or otherwise controls any
such Collateral for the benefit of the Agents, the L/C Issuer and the Lenders as
secured party. Should the Administrative Agent, the L/C Issuer or any Lender
obtain possession or control of any such Collateral, the Administrative Agent,
the L/C Issuer or such Lender shall notify the Collateral Agent thereof, and,
promptly upon the Collateral Agent's request therefor shall deliver possession
or control of such Collateral to the Collateral Agent or in accordance with the
Collateral Agent's instructions. In addition, the Collateral Agent shall also
have the power and authority hereunder to appoint such other sub-agents as may
be necessary or required under applicable state law or otherwise to perform its
duties and enforce its rights with respect to the Collateral and under the Loan
Documents. Each Loan Party by its execution and delivery of this Agreement
hereby consents to the foregoing.
Section 10.10 Senior Subordinated Note Intercreditor
Agreement. The Administrative Agent and each Lender hereby grants to the
Collateral Agent all requisite authority to enter into or otherwise become bound
by the Senior Subordinated Note Intercreditor Agreement and to bind the
Administrative Agent and the Lenders thereto by the Collateral Agent's entering
into or otherwise becoming bound thereby, and no further consent or approval on
the part of the Administrative Agent or any Lender is or will be required in
connection with the performance of the Senior Subordinated Note Intercreditor
Agreement.
Section 10.11 Other Agents; Arrangers and Manager. None of the
Lenders or other Persons identified on the facing page or signature pages of
this Agreement as a "syndication agent," "documentation agent," "co-agent,"
"book manager," "lead manager," "arranger," "lead arranger," or "co-arranger"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.
Section 10.12 Collateral Agent May File Proofs of Claim. In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Borrower, the Collateral
- 109 -
Agent (irrespective of whether the principal of any Loan or Letter of Credit
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether the Collateral Agent shall have made
any demand on the Borrowers) shall be entitled and empowered, by intervention in
such proceeding or otherwise
(a) to file and prove a claim for the whole amount of
the principal and interest owing and unpaid in respect of the Loans, Letter of
Credit Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to have the
claims of the Agents, the Lenders and the L/C Issuer (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Agents,
the Lenders and the L/C Issuer and their respective agents and counsel and all
other amounts due the Agents, the Lenders and the L/C Issuer under Sections
2.06, 3.02 and 12.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
the Administrative Agent, each Lender and the L/C Issuer to make such payments
to the Collateral Agent and, in the event that the Collateral Agent shall
consent to the making of such payments directly to the Administrative Agent, the
Lenders and the L/C Issuer, to pay to the Collateral Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Collateral Agent and its agents and counsel, and any other amounts due the
Collateral Agent under Sections 2.06, 3.02 and 12.04.
Nothing contained herein shall be deemed to authorize the Collateral Agent to
authorize or consent to or accept or adopt on behalf of the Administrative
Agent, any Lender or the L/C Issuer any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of the
Administrative Agent, any Lender or the L/C Issuer or to authorize the
Collateral Agent to vote in respect of the claim of the Administrative Agent,
any Lender or the L/C Issuer in any such proceeding.
ARTICLE XI
[INTENTIONALLY OMITTED]
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices, Etc. All notices and other
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered, if to any Loan Party, at the following address:
aaiPharma Inc.
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
- 110 -
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
if to the Administrative Agent, to it at the following
addresses:
for payments and requests for credit extensions:
Bank of America, N.A.
Mail Code: NC1-001-15-04
One Independence Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
for copies of executed Assignment and Acceptances:
Bank of America, N.A.
Mail Code: NC1-001-15-01
One Independence Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: GCIB Xxxxxxxxxx Xxxx
Telephone:
Telecopier:
payment instructions:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
ABA#: 000-000-000
Account #: 000-000-000-0000
Attention: Credit Services
Ref: aaiPharma
- 111 -
for all other notices:
Bank of America, N.A.
Mail Code: CA5-701-05-19
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
if to the Collateral Agent, to it at the following address:
Silver Point Finance, LLC
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
with copies to:
in the case of any Agent:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
in the case of the Administrative Agent:
Xxxxx & Xxx Xxxxx, PLLC
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: C. Xxxxx XxXxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
if to the L/C Issuer, to it at the following address:
Bank of America, N.A.
Mail Code: CA9-703-19-23
000 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
- 112 -
with a copy to:
Xxxxx & Xxx Xxxxx, PLLC
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: C. Xxxxx XxXxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed, when received or three days after deposited in the
mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered, upon delivery, except that notices
to any Agent or the L/C Issuer pursuant to ARTICLE II, ARTICLE III or Section
12.07 shall not be effective until received by such Agent or the L/C Issuer, as
the case may be.
Section 12.02 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders or by the Collateral Agent with the consent
of the Required Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given, provided,
however, that no amendment, waiver or consent shall (i) increase the Commitment
of any Lender, reduce the principal of, or interest on, the Loans or Obligations
payable to any Lender (provided that only the consent of the Required Lenders
shall be required to waive the applicability of any post-default increase in
interest rates), reduce the amount of any fee payable for the account of any
Lender, or postpone or extend any date fixed for any payment of principal of, or
interest or fees on, the Loans or Letter of Credit Obligations payable to any
Lender, in each case without the written consent of such Lender, (ii) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans that is required for the Lenders or any of them to take any action
hereunder, (iii) amend the definition of "Required Lenders" or "Pro Rata Share",
(iv) release all or a substantial portion of the Collateral or subordinate any
Lien granted in favor of the Collateral Agent for the benefit of the Lenders
(except as otherwise provided in this Agreement and the other Loan Documents),
or release any Borrower or any Guarantor, or (v) amend, modify or waive Section
4.04 or this Section 12.02 of this Agreement, in each case, without the written
consent of each Lender. Notwithstanding the foregoing (a) no amendment, waiver
or consent shall, unless in writing and signed by an Agent, affect the rights or
duties of such Agent (but not in its capacity as a Lender) under this Agreement
or the other Loan Documents and (b) no amendment, waiver or consent shall,
unless in writing and signed by the L/C Issuer, affect the rights or duties of
the L/C Issuer (but not in its capacity as a Lender) under this Agreement or the
other Loan Documents.
Section 12.03 No Waiver; Remedies, Etc. No failure on the part
of any Agent, the L/C Issuer or any Lender to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any right under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right. The rights and remedies of the Agents, the L/C Issuer and
the
- 113 -
Lenders provided herein and in the other Loan Documents are cumulative and are
in addition to, and not exclusive of, any rights or remedies provided by law.
The rights of the Agents, the L/C Issuer and the Lenders under any Loan Document
against any party thereto are not conditional or contingent on any attempt by
the Agents, the L/C Issuer and the Lenders to exercise any of their rights under
any other Loan Document against such party or against any other Person.
Section 12.04 Expenses; Taxes; Attorneys' Fees. The Borrowers
will pay on demand, all out-of-pocket costs and expenses incurred by or on
behalf of each Agent (and, in the case of clauses (c) through (m) below, each
Lender), regardless of whether the transactions contemplated hereby are
consummated, including, without limitation, reasonable out-of-pocket fees,
costs, client charges and expenses of counsel for each Agent (and, in the case
of clauses (c) through (m) below, each Lender), accounting, due diligence,
periodic field audits, physical counts, valuations, investigations, searches and
filings, monitoring of assets, appraisals of Collateral, title searches and
reviewing environmental assessments, miscellaneous disbursements, examination,
travel, lodging and meals (it being understood that, to the extent applicable
with respect to visits, audits, inspections, valuations and field examinations,
the limitations set forth in Section 4.01 shall apply to this Section 12.04),
arising from or relating to: (a) the negotiation, preparation, execution,
delivery, performance and administration of this Agreement and the other Loan
Documents (including, without limitation, the preparation of any additional Loan
Documents pursuant to Section 7.01(b) or the review of any of the agreements,
instruments and documents referred to in Section 7.01(f) and the use of
Intralinks or other similar information transmission systems in connection with
the Loan Documents), (b) any requested amendments, waivers or consents to this
Agreement or the other Loan Documents whether or not such documents become
effective or are given, (c) the preservation and protection of any of the
Lenders' rights under this Agreement or the other Loan Documents, (d) the
defense of any claim or action asserted or brought against any Agent, the L/C
Issuer or any Lender by any Person that arises from or relates to this
Agreement, any other Loan Document, the Agents' or the Lenders' claims against
any Loan Party, or any and all matters in connection therewith, (e) the
commencement or defense of, or intervention in, any court proceeding arising
from or related to this Agreement or any other Loan Document, (f) the filing of
any petition, complaint, answer, motion or other pleading by any Agent, the L/C
Issuer or any Lender, or the taking of any action in respect of the Collateral
or other security, in connection with this Agreement or any other Loan Document,
(g) the protection, collection, lease, sale, taking possession of or liquidation
of, any Collateral or other security in connection with this Agreement or any
other Loan Document, (h) any attempt to enforce any Lien or security interest in
any Collateral or other security in connection with this Agreement or any other
Loan Document, (i) any attempt to collect from any Loan Party, (j) all
liabilities and costs arising from or in connection with the past, present or
future operations of any Loan Party involving any damage to real or personal
property or natural resources or harm or injury alleged to have resulted from
any Release of Hazardous Materials on, upon or into such property, (k) any
Environmental Liabilities and Costs incurred in connection with the
investigation, removal, cleanup and/or remediation of any Hazardous Materials
present or arising out of the operations of any facility owned or operated by
any Loan Party, (l) any Environmental Liabilities and Costs incurred in
connection with any Environmental Lien, or (m) the receipt by any Agent, the L/C
Issuer or any Lender of any advice from professionals with respect to any of the
foregoing. Without limitation of the foregoing or any other provision of any
Loan Document: (x) the Borrowers agree to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or hereafter
determined by any Agent, the L/C
- 114 -
Issuer or any Lender to be payable in connection with this Agreement or any
other Loan Document, and the Borrowers agree to save each Agent and each Lender
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such taxes, fees or impositions, (y) the Borrowers agree to pay all broker
fees that may become due in connection with the transactions contemplated by
this Agreement and the other Loan Documents, and (z) if the Borrowers fail to
perform any covenant or agreement contained herein or in any other Loan
Document, any Agent may itself perform or cause performance of such covenant or
agreement, and the expenses of such Agent incurred in connection therewith shall
be reimbursed on demand by the Borrowers.
Section 12.05 Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default, any Agent, the L/C Issuer or any Lender
may, and is hereby authorized to, at any time and from time to time, without
notice to any Loan Party (any such notice being expressly waived by the Loan
Parties) and to the fullest extent permitted by law, set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other Indebtedness at any time owing by such Agent, the L/C Issuer
or such Lender to or for the credit or the account of any Loan Party against any
and all obligations of the Loan Parties either now or hereafter existing under
any Loan Document, irrespective of whether or not such Agent, the L/C Issuer or
such Lender shall have made any demand hereunder or thereunder and although such
obligations may be contingent or unmatured. Each Agent and each Lender agrees to
notify such Loan Party promptly after any such set-off and application made by
such Agent, the L/C Issuer or such Lender provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Agents, the L/C Issuer and the Lenders under this Section 12.05 are in
addition to the other rights and remedies (including other rights of set-off)
which the Agents, the L/C Issuer and the Lenders may have under this Agreement
or any other Loan Documents of law or otherwise.
Section 12.06 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
Section 12.07 Assignments and Participations.
(a) This Agreement and the other Loan Documents shall
be binding upon and inure to the benefit of each Loan Party and each Agent and
each Lender and their respective successors and assigns; provided, however, that
none of the Loan Parties may assign or transfer any of its rights hereunder
without the prior written consent of each Lender and any such assignment without
the Lenders' prior written consent shall be null and void.
(b) Each Lender may assign to one or more other
lenders or other entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments, the Loans made by it and its Pro Rata Share of Letter of Credit
Obligations); provided, however, that (i) such assignment is in an amount which
is at least $5,000,000 or a multiple of $1,000,000 in excess thereof (or the
remainder of such Lender's Commitment) (except such minimum amount shall not
apply to an assignment by a Lender to (x) an Affiliate of such Lender or a
Related Fund of such Lender or (y) a group of new
- 115 -
Lenders, each of whom is an Affiliate or Related Fund of each other to the
extent the aggregate amount to be assigned to all such new Lenders is at least
$5,000,000 or a multiple of $1,000,000 in excess thereof), (ii) the parties to
each such assignment shall execute and deliver to the Collateral Agent (and, in
the case of an assignment by a Lender of all or a portion of its Revolving
Credit Commitment and its Revolving Loans, the Administrative Agent), for its
acceptance, an Assignment and Acceptance, together with any promissory note
subject to such assignment and such parties shall deliver to the Collateral
Agent a processing and recordation fee of $5,000 (except the payment of such fee
shall not be required in connection with an assignment by a Lender to an
Affiliate of such Lender or Related Fund of such Lender), (iii) except as
provided in Section 12.07(b)(iv), any such assignment shall be made with the
written consent of (x) in the case of an assignment by a Lender to one or more
other lenders or other entities of all or a portion of its Term Loan Commitment
and the Term Loan made by it, the Collateral Agent and (y) in the case of an
assignment by a Lender to one or more other lenders or other entities of all or
a portion of its Revolving Credit Commitment and the Revolving Loans made by it,
each Agent, in each case, which consent shall not be unreasonably withheld, and
(iv) no written consent of any Agent shall be required in connection with any
assignment by a Lender to an Affiliate of such Lender or a Related Fund of such
Lender. Upon such execution, delivery and acceptance, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least three Business Days after the delivery thereof to the
Collateral Agent (and the Administrative Agent, if applicable) (or such shorter
period as shall be agreed to by the Collateral Agent (and the Administrative
Agent, if applicable) and the parties to such assignment), (A) the assignee
thereunder shall become a "Lender" hereunder and, in addition to the rights and
obligations hereunder held by it immediately prior to such effective date, have
the rights and obligations hereunder that have been assigned to it pursuant to
such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto). The Collateral Agent shall provide to the Administrative
Agent and the Parent a copy of any Assignment and Acceptance accepted by it
under this Section 12.07(b). Notwithstanding anything contained to the contrary
in this Section 12.07(b) or any Assignment and Acceptance, the Administrative
Agent shall not be required to recognize any assignee lender as a Lender under
this Agreement until the second Business Day following the date of its receipt
of a copy of such Assignment and Acceptance from the Collateral Agent in
accordance with Section 12.01. Notwithstanding anything contained to the
contrary in this Section 12.07(b), a Lender may assign any or all of its rights
under the Loan Documents to an Affiliate of such Lender or a Related Fund of
such Lender without delivering an Assignment and Acceptance to the Collateral
Agent (and the Administrative Agent, if applicable); provided, that (x) the
Borrowers and the Agents may continue to deal solely and directly with such
assigning Lender in connection with the interest so assigned until such Lender
and its assignee shall have executed and delivered an Assignment and Acceptance
to the Collateral Agent (and the Administrative Agent, if applicable) for
recordation and (y) the failure of such assigning Lender to deliver an
Assignment and Acceptance to the Collateral Agent (and the Administrative Agent,
if applicable) or any other Person shall not affect the legality, validity or
binding effect of such assignment.
- 116 -
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto; (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or any of its Subsidiaries or the
performance or observance by any Loan Party of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement and the other
Loan Documents, together with such other documents and information it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the assigning Lender, any Agent or any Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents; (v) such assignee appoints and
authorizes the Agents to take such action as agents on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agents by the terms hereof and thereof, together with such
powers as are reasonably incidental hereto and thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.
(d) The Collateral Agent shall, on behalf of the
Borrowers, maintain, or cause to be maintained at the Payment Office, a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amount of the Loans (the "Registered
Loans") and Letter of Credit Obligations owing to each Lender from time to time.
Other than in connection with an assignment by a Lender to an Affiliate of such
Lender or a Related Fund of such Lender, the entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents and the Lenders shall 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 Administrative
Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice. In the case of any assignment by a Lender to an
Affiliate of such Lender or a Related Fund of such Lender, and which assignment
is not recorded in the Register, the assigning Lender shall maintain a
comparable register.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with any promissory
notes subject to such assignment, the Collateral Agent shall, if the Collateral
Agent (and the Administrative Agent, if applicable) consents to such assignment
and if such Assignment and Acceptance has been completed (i) accept such
Assignment and Acceptance and (ii) record the information contained therein in
the Register.
- 117 -
(f) A Registered Loan (and the registered note, if
any, evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each registered
note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the registration of assignment or sale of
any Registered Loan (and the registered note, if any, evidencing the same), the
Agents shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
(g) In the event that any Lender sells participations
in a Registered Loan, such Lender shall maintain a register on which it enters
the name of all participants in the Registered Loans held by it (the
"Participant Register"). A Registered Loan (and the registered note, if any,
evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(h) Any foreign Person who purchases or is assigned
or participates in any portion of such Registered Loan shall comply with Section
2.08(d).
(i) Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of its Commitments, the Loans made by it
and its Pro Rata Share of the Letter of Credit Obligations); provided, that (i)
such Lender's obligations under this Agreement (including without limitation,
its Commitments hereunder) and the other Loan Documents shall remain unchanged;
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, and the Borrowers, the Agents and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents; and (iii) a participant shall not be entitled to
require such Lender to take or omit to take any action hereunder except (A)
action directly effecting an extension of the maturity dates or decrease in the
principal amount of the Loans or Letter of Credit Obligations, (B) action
directly effecting an extension of the due dates or a decrease in the rate of
interest payable on the Loans or the fees payable under this Agreement, or (C)
actions directly effecting a release of all or a substantial portion of the
Collateral or any Loan Party (except as set forth in Section 10.08 of this
Agreement or any other Loan Document). The Loan Parties agree that each
participant shall be entitled to the benefits of Section 2.08 and Section 4.05
of this Agreement with respect to its participation in any portion of the
Commitments and the Loans as if it was a Lender.
- 118 -
(j) In the event (i) any Lender delivers to the
Administrative Borrower any notice in accordance with Section 2.08(c), 2.09(d),
or 4.05(b), (ii) any Lender defaults in its obligations to fund a Revolving Loan
pursuant to this Agreement, or (iii) any Lender (a "Non-Consenting Lender")
refuses to consent to an amendment, modification or waiver of this Agreement
that, pursuant to Section 12.02, requires the consent of all of the Lenders or
all of the Lenders directly affected thereby, then, provided that no Default or
Event of Default has occurred and is continuing at such time, the Borrowers may,
at their own expense (such expense to include any transfer fee payable to the
Collateral Agent under Section 12.07(b)), require such Lender to transfer and
assign in whole or in part, without recourse (in accordance with and subject to
the terms and conditions of Section 12.07), all or part of its interests, rights
and obligations under this Agreement to any assignee which shall assume such
assigned obligations, provided that (A) such assignee shall be acceptable to the
Collateral Agent (and in the case of an assignment of a Revolving Credit
Commitment or Revolving Loans, the Administrative Agent), (B) such assignment
shall not conflict with any law, rule or regulation or order of any court or
other Governmental Authority, (C) the Borrowers or such assignee shall have paid
to the assigning Lender in immediately available funds the principal of and
interest accrued to the date of such payment on the Loans made by it hereunder
and all other amounts owed to it hereunder (including, without limitation, any
amounts owing pursuant to Section 3.08(c), 2.09(d), or 4.05(b)) and (D) in the
event such Lender is a Non-Consenting Lender, each assignee shall consent, at
the time of such assignment, to each matter in respect of which such Lender was
a Non-Consenting Lender and the Borrowers also require each other Lender that is
a Non-Consenting Lender to assign its interests, rights and obligations under
this .
Section 12.08 Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Agreement by telecopier or electronic transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement. Any party delivering an executed counterpart of this Agreement
by telecopier or electronic transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND
VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN THE
COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
LOAN PARTY
- 119 -
HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY
HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS
ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01
AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME
EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. THE LOAN PARTIES AGREE THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS, THE L/C
ISSUER AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY
IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY
LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH
AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT,
THE L/C ISSUER OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY
AGENT, THE L/C ISSUER OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION,
PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN
PARTY HEREBY ACKNOWLEDGES THAT THIS
- 120 -
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS, THE L/C ISSUER AND THE
LENDERS ENTERING INTO THIS AGREEMENT.
Section 12.12 Consent by the Agents, the L/C Issuer and
Lenders. Except as otherwise expressly set forth herein or in any other Loan
Document to the contrary, if the consent, approval, satisfaction, determination,
judgment, acceptance or similar action (an "Action") of any Agent, the L/C
Issuer or any Lender shall be permitted or required pursuant to any provision
hereof or any provision of any other agreement to which any Loan Party is a
party and to which any Agent, the L/C Issuer or any Lender has succeeded
thereto, such Action shall be required to be in writing and may be withheld or
denied by such Agent, the L/C Issuer or such Lender, in its sole discretion,
with or without any reason, and without being subject to question or challenge
on the grounds that such Action was not taken in good faith.
Section 12.13 No Party Deemed Drafter. Each of the parties
hereto agrees that no party hereto shall be deemed to be the drafter of this
Agreement.
Section 12.14 Reinstatement; Certain Payments. If any claim is
ever made upon any Agent, any Lender or the L/C Issuer for repayment or recovery
of any amount or amounts received by such Agent, such Lender or the L/C Issuer
in payment or on account of any of the Obligations, such Agent, such Lender or
the L/C Issuer shall give prompt notice of such claim to each other Agent and
Lender and the Administrative Borrower, and if such Agent, such Lender or the
L/C Issuer repays all or part of such amount by reason of (i) any judgment,
decree or order of any court or administrative body having jurisdiction over
such Agent, such Lender or the L/C Issuer or any of its property, or (ii) any
good faith settlement or compromise of any such claim effected by such Agent,
such Lender or the L/C Issuer with any such claimant, then and in such event
each Loan Party agrees that (A) any such judgment, decree, order, settlement or
compromise shall be binding upon it notwithstanding the cancellation of any
Indebtedness hereunder or under the other Loan Documents or the termination of
this Agreement or the other Loan Documents, and (B) it shall be and remain
liable to such Agent, such Lender or the L/C Issuer hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by such Agent, such Lender or the L/C Issuer.
Section 12.15 Indemnification.
(a) General Indemnity. In addition to each Loan
Party's other Obligations under this Agreement, each Loan Party agrees to,
jointly and severally, defend, protect, indemnify and hold harmless each Agent,
each Lender and the L/C Issuer and all of their respective officers, directors,
employees, attorneys, consultants and agents (collectively called the
"Indemnitees") from and against any and all losses, damages, liabilities,
obligations, penalties, fees, reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees, costs and expenses) incurred by such
Indemnitees, whether prior to or from and after the Effective Date, whether
direct, indirect or consequential, as a result of or arising from or relating to
or in connection with any of the following: (i) the negotiation, preparation,
execution or performance or enforcement of this Agreement, any other Loan
Document or of any other document executed in connection with the transactions
contemplated by this Agreement, (ii) any Agent's or any Lender's furnishing of
funds to the Borrowers or the L/C Issuer's issuing of Letters of Credit for the
account of the Borrowers under this Agreement or the other Loan
- 121 -
Documents, including, without limitation, the management of any such Loans, or
the Letter of Credit Obligations, (iii) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, or (iv) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto (collectively, the "Indemnified Matters");
provided, however, that the Loan Parties shall not have any obligation to any
Indemnitee under this subsection (a) for any Indemnified Matter caused by the
gross negligence or willful misconduct of such Indemnitee, as determined by a
final judgment of a court of competent jurisdiction.
(b) Environmental Indemnity. Without limiting Section
12.15(a) hereof, each Loan Party agrees to, jointly and severally, defend,
indemnify, and hold harmless the Indemnitees against any and all Environmental
Liabilities and Costs, arising out of (i) any Releases or threatened Releases
(x) at any property presently or formerly owned or operated by any Loan Party or
any Subsidiary of any Loan Party, or any predecessor in interest, or (y) of any
Hazardous Materials generated and disposed of by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (ii) any
violations of Environmental Laws; (iii) any Environmental Action relating to any
Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest;
(iv) any personal injury (including wrongful death) or property damage (real or
personal) arising out of exposure to Hazardous Materials used, handled,
generated, transported or disposed by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; and (v) any breach of any warranty
or representation regarding environmental matters made by the Loan Parties in
Section 6.01(r) or the breach of any covenant made by the Loan Parties in
Section 7.01(j). Notwithstanding the foregoing, the Loan Parties shall not have
any obligation to any Indemnitee under this subsection (b) regarding any
potential environmental matter covered hereunder which is caused by the gross
negligence or willful misconduct of such Indemnitee, as determined by a final
judgment of a court of competent jurisdiction.
(c) The indemnification for all of the foregoing
losses, damages, fees, costs and expenses of the Indemnitees are chargeable
against the Loan Account. To the extent that the undertaking to indemnify, pay
and hold harmless set forth in this Section 12.15 may be unenforceable because
it is violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. The indemnities set forth in this Section
12.15 shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.
Section 12.16 Parent as Agent for Borrowers. Each Borrower
hereby irrevocably appoints Parent as the borrowing agent and attorney-in-fact
for the Borrowers (the "Administrative Borrower") which appointment shall remain
in full force and effect unless and until the Agents shall have received prior
written notice signed by all of the Borrowers that such appointment has been
revoked and that another Borrower has been appointed Administrative Borrower.
Each Borrower hereby irrevocably appoints and authorizes the Administrative
Borrower (i) to provide to the Agents and receive from the Agents all notices
with respect to Loans obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement and (ii) to take such action as
the Administrative Borrower deems appropriate on its
- 122 -
behalf to obtain Loans and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement. It is understood
that the handling of the Loan Account and Collateral of the Borrowers in a
combined fashion, as more fully set forth herein, is done solely as an
accommodation to the Borrowers in order to utilize the collective borrowing
powers of the Borrowers in the most efficient and economical manner and at their
request, and that neither the Agents, the L/C Issuer nor the Lenders shall incur
liability to the Borrowers as a result hereof. Each of the Borrowers expects to
derive benefit, directly or indirectly, from the handling of the Loan Account
and the Collateral in a combined fashion since the successful operation of each
Borrower is dependent on the continued successful performance of the integrated
group. To induce the Agents, the L/C Issuer and the Lenders to do so, and in
consideration thereof, each of the Borrowers hereby jointly and severally agrees
to indemnify the Indemnitees and hold the Indemnitees harmless against any and
all liability, expense, loss or claim of damage or injury, made against such
Indemnitee by any of the Borrowers or by any third party whosoever, arising from
or incurred by reason of (a) the handling of the Loan Account and Collateral of
the Borrowers as herein provided, (b) the Agents, the L/C Issuer and the Lenders
relying on any instructions of the Administrative Borrower, or (c) any other
action taken by any Agent, the L/C Issuer or any Lender hereunder or under the
other Loan Documents. Notwithstanding the foregoing, the Loan Parties shall not
have any obligation to any Indemnitee under this Section 12.16 for any
liability, expense, loss or claim of damage or injury which is caused by the
gross negligence or willful misconduct of such Indemnitee, as determined by a
final judgment of a court of competent jurisdiction.
Section 12.17 Records. The unpaid principal of and interest on
the Loans, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitments, and the accrued
and unpaid fees payable pursuant to Section 2.06 hereof, including, without
limitation, the Applicable Prepayment Premium, the Letter of Credit Fee, the
Unused Line Fee and the fees set forth in the Fee Letter, shall at all times be
ascertained from the records of the Agents, which shall be conclusive and
binding absent manifest error.
Section 12.18 Binding Effect. This Agreement shall become
effective when it shall have been executed by each Loan Party, each Agent, the
L/C Issuer and each Lender and when the conditions precedent set forth in
Section 5.01 hereof have been satisfied or waived in writing by the Agents, and
thereafter shall be binding upon and inure to the benefit of each Loan Party,
each Agent, the L/C Issuer and each Lender, and their respective successors and
assigns, except that the Loan Parties shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of the
Agents, the L/C Issuer and each Lender, and any assignment by any Lender shall
be governed by Section 12.07 hereof.
Section 12.19 Interest. It is the intention of the parties
hereto that each Agent and each Lender shall conform strictly to usury laws
applicable to it. Accordingly, if the transactions contemplated hereby or by any
other Loan Document would be usurious as to any Agent, the L/C Issuer or any
Lender under laws applicable to it (including the laws of the United States of
America and the State of New York or any other jurisdiction whose laws may be
mandatorily applicable to such Agent, the L/C Issuer or such Lender
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document or any agreement entered into in connection with or
- 123 -
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to any Agent,
the L/C Issuer or any Lender that is contracted for, taken, reserved, charged or
received by such Agent, the L/C Issuer or such Lender under this Agreement or
any other Loan Document or agreements or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if
theretofore paid shall be credited by such Agent, the L/C Issuer or such Lender
on the principal amount of the Obligations (or, to the extent that the principal
amount of the Obligations shall have been or would thereby be paid in full,
refunded by such Agent, the L/C Issuer or such Lender, as applicable, to the
Borrowers); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Agent, the L/C Issuer or
any Lender may never include more than the maximum amount allowed by such
applicable law, and excess interest, if any, provided for in this Agreement or
otherwise shall be canceled automatically by such Agent, the L/C Issuer or such
Lender, as applicable, as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Agent, the L/C Issuer or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Agent, the L/C Issuer or such Lender
to the Borrowers). All sums paid or agreed to be paid to any Agent, the L/C
Issuer or any Lender for the use, forbearance or detention of sums due hereunder
shall, to the extent permitted by law applicable to such Agent, the L/C Issuer
or such Lender, be amortized, prorated, allocated and spread throughout the full
term of the Loans until payment in full so that the rate or amount of interest
on account of any Loans hereunder does not exceed the maximum amount allowed by
such applicable law. If at any time and from time to time (x) the amount of
interest payable to any Agent, the L/C Issuer or any Lender on any date shall be
computed at the Highest Lawful Rate applicable to such Agent, the L/C Issuer or
such Lender pursuant to this Section 12.19 and (y) in respect of any subsequent
interest computation period the amount of interest otherwise payable to such
Agent, the L/C Issuer or such Lender would be less than the amount of interest
payable to such Agent, the L/C Issuer or such Lender computed at the Highest
Lawful Rate applicable to such Agent, the L/C Issuer or such Lender, then the
amount of interest payable to such Agent, the L/C Issuer or such Lender in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Agent, the L/C Issuer or
such Lender until the total amount of interest payable to such Agent, the L/C
Issuer or such Lender shall equal the total amount of interest which would have
been payable to such Agent, the L/C Issuer or such Lender if the total amount of
interest had been computed without giving effect to this Section 12.19.
For purposes of this Section 12.19, the term "applicable law"
shall mean that law in effect from time to time and applicable to the loan
transaction between the Borrowers, on the one hand, and the Agents, the L/C
Issuer and the Lenders, on the other, that lawfully permits the charging and
collection of the highest permissible, lawful non-usurious rate of interest on
such loan transaction and this Agreement, including laws of the State of New
York and, to the extent controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations does
not include the right to accelerate any interest that has not accrued as of the
date of acceleration.
- 124 -
Section 12.20 Confidentiality. Each Agent and each Lender
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with its customary procedures for handling
confidential information of this nature and in accordance with safe and sound
practices of comparable commercial finance companies, any non-public information
supplied to it by the Loan Parties pursuant to this Agreement or the other Loan
Documents which is identified in writing by the Loan Parties as being
confidential at the time the same is delivered to such Person (and which at the
time is not, and does not thereafter become, publicly available or available to
such Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any Agent, the L/C Issuer or any Lender (it being understood that
such Person will be informed of the confidential nature of such information and
instructed to keep it confidential), (iii) to examiners, auditors, accountants
or Securitization Parties, (iv) in connection with any litigation to which any
Agent, the L/C Issuer or any Lender is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first agrees, in writing,
to be bound by confidentiality provisions similar in substance to this Section
12.20. Each Agent, the L/C Issuer and each Lender agrees that, upon receipt of a
request or identification of the requirement for disclosure pursuant to clause
(iv) hereof, it will make reasonable efforts to keep the Loan Parties informed
of such request or identification; provided that each Loan Party acknowledges
that each Agent and each Lender may make disclosure as required or requested by
any Governmental Authority having or asserting jurisdiction over such Agent, the
L/C Issuer or Lender or representative thereof and that each Agent and each
Lender may be subject to review by Securitization Parties or other regulatory
agencies and may be required to provide to, or otherwise make available for
review by, the representatives of such parties or agencies any such non-public
information (it being understood that such Person will be informed of the
confidential nature of such information and instructed to keep it confidential).
Section 12.21 Integration. This Agreement, together with the
other Loan Documents, reflects the entire understanding of the parties with
respect to the transactions contemplated hereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the date hereof.
Section 12.22 USA Patriot Act Notice.
Each Lender, the Collateral Agent (for itself and not on
behalf of any Lender) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), it is required to obtain, verify and record information that identifies
the Borrowers, which information includes the name and address of the Borrowers
and other information that will allow such Lender, the Collateral Agent or the
Administrative Agent, as applicable, to identify the Borrowers in accordance
therewith.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 125 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWERS:
AAIPHARMA INC.
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Executive Vice President and Chief
Financial Officer
APPLIED ANALYTICAL INDUSTRIES LEARNING
CENTER, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx
Vice President
AAI TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Vice President
AAI PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Vice President
AAI JAPAN, INC.
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Vice President
S-1
KANSAS CITY ANALYTICAL SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Vice President
AAI DEVELOPMENT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Vice President
AAIPHARMA LLC
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Vice President
AAI DEVELOPMENT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx, Jr.
-----------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Vice President
S-2
COLLATERAL AGENT:
SILVER POINT FINANCE, LLC,
as Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
Assistant Vice President
S-3
LENDERS:
BANK OF AMERICA, N.A.,
as a Lender and as L/C Issuer
By: /s/ Xxxx Bleu
-----------------------------------------
Xxxx Bleu
Senior Vice President
SEA PINES FUNDING LLC,
as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxxx
Vice President
TRS THEBE LLC,
as a Lender
By: /s/ Xxxxxxx X'Xxxxxx
-----------------------------------------
Xxxxxxx X'Xxxxxx
Vice President
SIL LOAN FUNDING LLC,
as a Lender
By: /s/ Xxxxx Xxxxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxxxx
Attorney-In-Fact
SPCP GROUP LLC,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
S-4
FINANCING AGREEMENT
DATED AS OF APRIL 23, 2004
BY AND AMONG
AAIPHARMA,
AS PARENT,
AND
EACH SUBSIDIARY OF PARENT LISTED AS A BORROWER ON THE SIGNATURE
PAGES HERETO,
AS BORROWERS,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
AS LENDERS,
SILVER POINT FINANCE, LLC,
AS COLLATERAL AGENT,
BANK OF AMERICA, N.A.
AS ADMINISTRATIVE AGENT
AND
BANC OF AMERICA SECURITIES LLC,
as
SOLE LEAD ARRANGER AND SOLE BOOK MANAGER
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS; CERTAIN TERMS............................................... 1
Section 1.01 Definitions........................................................ 1
Section 1.02 Terms Generally.................................................... 31
Section 1.03 Accounting and Other Terms......................................... 32
Section 1.04 Time References.................................................... 32
ARTICLE II THE LOANS................................................................ 32
Section 2.01 Commitments........................................................ 32
Section 2.02 Making the Loans................................................... 33
Section 2.03 Repayment of Loans; Evidence of Debt............................... 36
Section 2.04 Interest........................................................... 37
Section 2.05 Reduction of Commitment; Prepayment of Loans....................... 37
Section 2.06 Fees............................................................... 42
Section 2.07 Securitization..................................................... 42
Section 2.08 Taxes.............................................................. 43
Section 2.09 LIBOR Option....................................................... 45
ARTICLE III LETTERS OF CREDIT........................................................ 47
Section 3.01 Letters of Credit.................................................. 47
Section 3.02 Letter of Credit Fees.............................................. 53
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION.................................... 53
Section 4.01 Audit and Collateral Monitoring Fees............................... 53
Section 4.02 Payments; Computations and Statements.............................. 54
Section 4.03 Sharing of Payments, Etc........................................... 55
Section 4.04 Apportionment of Payments.......................................... 55
Section 4.05 Increased Costs and Reduced Return................................. 56
Section 4.06 Joint and Several Liability of the Borrowers....................... 58
ARTICLE V CONDITIONS TO LOANS...................................................... 59
Section 5.01 Conditions Precedent to Effectiveness.............................. 59
Section 5.02 Conditions Precedent to All Loans and Letters of Credit............ 63
Section 5.03 Conditions Subsequent to Effectiveness............................. 64
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................... 66
Section 6.01 Representations and Warranties..................................... 66
ARTICLE VII COVENANTS OF THE LOAN PARTIES............................................ 76
Section 7.01 Affirmative Covenants.............................................. 76
Section 7.02 Negative Covenants................................................. 86
Section 7.03 Financial Covenants................................................ 94
ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND
OTHER COLLATERAL......................................................... 95
Section 8.01 Collection of Accounts Receivable; Management of Collateral........ 95
-i-
Section 8.02 Accounts Receivable Documentation.................................. 97
Section 8.03 Status of Accounts Receivable and Other Collateral................. 98
Section 8.04 Collateral Custodian............................................... 98
ARTICLE IX EVENTS OF DEFAULT........................................................ 99
Section 9.01 Events of Default.................................................. 99
ARTICLE X AGENTS.................................................................. 103
Section 10.01 Appointment....................................................... 103
Section 10.02 Nature of Duties.................................................. 104
Section 10.03 Rights, Exculpation, Etc.......................................... 105
Section 10.04 Reliance.......................................................... 106
Section 10.05 Indemnification................................................... 106
Section 10.06 Agents Individually............................................... 106
Section 10.07 Successor Agent................................................... 106
Section 10.08 Collateral Matters................................................ 107
Section 10.09 Agency for Perfection............................................. 109
Section 10.10 Senior Subordinated Note Intercreditor Agreement.................. 109
Section 10.11 Other Agents; Arrangers and Manager............................... 109
Section 10.12 Collateral Agent May File Proofs of Claim......................... 109
ARTICLE XI [Intentionally Omitted]................................................. 110
ARTICLE XII MISCELLANEOUS........................................................... 110
Section 12.01 Notices, Etc...................................................... 110
Section 12.02 Amendments, Etc................................................... 113
Section 12.03 No Waiver; Remedies, Etc.......................................... 113
Section 12.04 Expenses; Taxes; Attorneys' Fees.................................. 114
Section 12.05 Right of Set-off.................................................. 115
Section 12.06 Severability...................................................... 115
Section 12.07 Assignments and Participations.................................... 115
Section 12.08 Counterparts...................................................... 119
Section 12.09 GOVERNING LAW..................................................... 119
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE............. 119
Section 12.11 WAIVER OF JURY TRIAL, ETC......................................... 120
Section 12.12 Consent by the Agents, the L/C Issuer and Lenders................. 121
Section 12.13 No Party Deemed Drafter........................................... 121
Section 12.14 Reinstatement; Certain Payments................................... 121
Section 12.15 Indemnification................................................... 121
Section 12.16 Parent as Agent for Borrowers..................................... 122
Section 12.17 Records........................................................... 123
Section 12.18 Binding Effect.................................................... 123
Section 12.19 Interest.......................................................... 123
Section 12.20 Confidentiality................................................... 125
Section 12.21 Integration....................................................... 125
Section 12.22 USA Patriot Act Notice............................................ 125
-ii-
SCHEDULE AND EXHIBITS
Schedule 1.01(A) Lenders and Lenders' Commitments
Schedule 1.01(B) Licensing Agreements
Schedule 1.01(C) Projections
Schedule 1.01(D) Disclosed Events
Schedule 1.01(E) MVI Sale Agreements
Schedule 1.01(F) Specified Costs and Expenses
Schedule 3.01 Existing Letters of Credit
Schedule 5.03(e) Material Leases
Schedule 6.01(e) Subsidiaries
Schedule 6.01(f) Litigation; Commercial Tort Claims
Schedule 6.01(g)(i) Financial Condition
Schedule 6.01 (h) Compliance With Laws
Schedule 6.01(i) ERISA
Schedule 6.01(o) Real Property
Schedule 6.01(r) Environmental Matters
Schedule 6.01(s) Insurance
Schedule 6.01(v) Bank Accounts
Schedule 6.01(w) Intellectual Property
Schedule 6.01(x) Material Contracts
Schedule 6.01(aa) Customers and Suppliers
Schedule 6.01(cc) Consolidating Financial Statements
Schedule 6.01(dd) Name; Jurisdiction of Organization;
Organizational ID Number; Chief Place of
Business; Chief Executive Office; FEIN
Schedule 6.01(ee) Tradenames
Schedule 6.01(ff) Collateral Locations
Schedule 6.01(ll) FDA and Other Governmental Notices
Schedule 7.01(a)(vi) Sources and Uses
Schedule 7.01(c) Compliance With Laws
Schedule 7.02(a) Existing Liens
Schedule 7.02(b) Existing Indebtedness
Schedule 7.02(e) Existing Investments
Schedule 7.02(j) Transactions With Affiliates
Schedule 7.02(k) Limitations on Dividends and Other Payment
Restrictions
Schedule 8.01 Lockbox Banks and Lockbox Accounts
Exhibit A Form of Guaranty
Exhibit B Form of Security Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Notice of Borrowing
Exhibit E Form of LIBOR Notice
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Assignment and Acceptance
-iii-
