EXECUTION COPY
FIRST AMENDMENT TO CREDIT AGREEMENT
Dated as of December 1, 2003
with respect to that certain
CREDIT AGREEMENT
Dated as of March 28, 2002
among
aaiPHARMA INC.
as Borrower
CERTAIN OF THE SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO
as Guarantors
THE OTHER LENDERS
FROM TIME TO TIME PARTY HERETO
and
BANK OF AMERICA, N.A.
as Administrative Agent
-------------------------------------------------
BANC OF AMERICA SECURITIES LLC
and
WACHOVIA CAPITAL MARKETS, LLC
as Joint Lead Arrangers
BANC OF AMERICA SECURITIES LLC,
WACHOVIA CAPITAL MARKETS, LLC
and
CIBC WORLD MARKETS CORP.
as Joint Book Managers
CIBC INC.
as Syndication Agent
WACHOVIA BANK, NATIONAL ASSOCIATION
as Documentation Agent
FIRST AMENDMENT
TO
CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of December 1, 2003, is entered into by and among aaiPHARMA INC., a Delaware
corporation (the "Borrower"), the Guarantors signatory hereto, the Lenders
signatory hereto and BANK OF AMERICA, N.A., as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent").
RECITALS
A. The Borrower, the Guarantors, the Lenders and the
Administrative Agent are party to that certain Credit Agreement dated as of
March 28, 2002 (as previously amended and modified, the "Existing Credit
Agreement"). Unless otherwise defined herein or the context otherwise requires,
terms used in this Amendment, including its preamble and recitals, have the
meanings provided in the Existing Credit Agreement.
B. The Borrower has requested certain modifications to the
Existing Credit Agreement, including the replacement of the remaining Term Loan
with a new $160 million term loan.
C. Such modifications require the consent of the Lenders and of
the New Lenders (as defined below).
D. The Lenders and the New Lenders have consented to the
requested modifications on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
I. AMENDMENTS TO CREDIT AGREEMENT
Subject to the satisfaction of the conditions precedent set forth in
Section 4 in Article III hereof, the Lenders hereby agree that from and after
the First Amendment Effective Date (as defined below), (i) the Existing Credit
Agreement is amended in its entirety to read in the form of such Credit
Agreement attached hereto as Exhibit A to this Amendment (the "Amended Credit
Agreement") and (ii) the other schedules and exhibits attached hereto shall be
deemed to amend and replace the corresponding schedules and exhibits to the
Existing Credit Agreement in their entirety.
II. NEW LENDERS
From and after the First Amendment Effective Date, by execution of this
Amendment, each Person identified as a "Lender" on the signature pages hereto
that is not already a Lender under the Existing Credit Agreement (a "New
Lender") hereby acknowledges, agrees and confirms that, by its execution of this
Amendment, such Person will be deemed to be a party to the Amended Credit
Agreement and a "Lender" for all purposes of the Amended Credit Agreement, and
shall have all of the obligations of a Lender thereunder as if it had executed
the Amended Credit Agreement. Such Person hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Lenders contained in the Amended Credit Agreement.
III. MISCELLANEOUS
1. Representations and Warranties. Each of the Credit Parties
represents and warrants to the Lenders and the Administrative Agent as follows:
(i) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and delivered
by such Credit Party and constitutes such Credit Party's legal, valid
and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be limited (x) by general principles
of equity and conflicts of laws (whether enforcement is sought by
proceedings in equity or at law) or by principles of good faith and
fair dealing or (y) by bankruptcy, reorganization, insolvency,
moratorium or other laws of general application relating to or
affecting the enforcement, of creditors' rights.
(iii) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by such Credit Party of this Amendment (except
for those which have been obtained on or prior to the First Amendment
Effective Date and filings and other actions to perfect the Liens
created by the Collateral Documents).
(iv) The execution and delivery of this Amendment does not
diminish or reduce its obligations under the Credit Documents
(including, without limitation, in the case of each Guarantor, such
Guarantor's guaranty pursuant to Section 4 of the Existing Credit
Agreement) in any manner, except as specifically set forth herein and
in the Amended Credit Agreement.
(v) Such Credit Party has no claims, counterclaims,
offsets, or defenses to the Credit Documents and the performance of its
obligations thereunder, or if such Credit Party has any such claims,
counterclaims, offsets, or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby
waived,
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relinquished and released in consideration of the Lenders' execution
and delivery of this Amendment.
(vi) The representations and warranties of the Credit
Parties set forth in Section 6 of the Existing Credit Agreement, after
giving effect to the schedule amendments described in Article I hereof,
are true and correct in all material respects as of the date hereof
(except those that expressly relate to an earlier date, in which case
such representations and warranties are true and correct in all
material respects as of such earlier date) and all of the provisions of
the Credit Documents, except as amended hereby, are in full force and
effect.
(vii) Subsequent to the execution and delivery of this
Amendment and after giving effect hereto, no unwaived event has
occurred and is continuing on the date hereof which constitutes a
Default or an Event of Default.
2. Liens. Each Credit Party affirms the liens and security
interests created and granted by it in the Credit Documents (including, but not
limited to, the Pledge Agreement and the Security Agreement) and agrees that
this Amendment shall in no manner adversely affect or impair such liens and
security interests.
3. Effect of Amendment; Consent to Amendment of Other Loan
Documents; Waiver of Technical Event of Default. Except as expressly modified
and amended in this Amendment, in the amendment to the Security Agreement
executed concurrently herewith and in the amendments to certain of the Mortgage
Documents executed concurrently herewith, all of the terms, provisions and
conditions of the Credit Documents shall remain unchanged and in full force and
effect. By their signature hereto, each Lender hereby (a) consents to the
amendments to the aforementioned Collateral Documents and authorizes the
Administrative Agent to execute each such amendment, (b) consents to and
authorizes the Administrative Agent to execute any modifications or addenda to
that certain Agreement on the Creation of a Pledge Over Shares dated June 28,
2002 among the Borrower and the Administrative Agent that the Administrative
Agent deems necessary in connection with this Amendment to preserve its
perfected security interest, for the benefit of the Lenders, in 65% of the
Borrower's equity interests in Applied Analytical Industries Deutschland GmbH
and (c) waives any Default or Event of Default that may exist pursuant to the
Borrower's failure to comply with Sections 4(i) and 5(j) and (k) of the Security
Agreement in connection with timely notifying the Administrative Agent of (i)
modifications and notices with respect to certain Specified Assigned Agreements
and (ii) new trademarks and patents. The Credit Documents and any and all other
documents heretofore, now or hereafter executed and delivered pursuant to the
terms of the Existing Credit Agreement are hereby amended so that any reference
to the Existing Credit Agreement shall mean a reference to the Amended Credit
Agreement.
4. Condition Precedent. This Amendment shall become effective as
of the date first above written (the "First Amendment Effective Date") when, and
only when, each of the following conditions shall have been satisfied (it being
understood that the satisfaction of one or more of the following conditions may
occur concurrently with the effectiveness of this Amendment):
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(a) Execution of Counterparts of Amendment. The
Administrative Agent shall have received counterparts of this
Amendment, which collectively shall have been duly executed on behalf
of the Borrower, each of the Guarantors, the Lenders under the Existing
Credit Agreement (determined as of the point in time at which each of
the other conditions precedent set forth in this Part III, Section 4
has been satisfied and after giving effect to clause (q) below) and
each of the New Lenders.
(b) Execution of New Term Loan Notes. Each New Lender
requesting a promissory note shall have received a promissory note
representing such New Lender's commitment which shall have been duly
executed on behalf of the Borrower and dated the First Amendment
Effective Date.
(c) Corporate Documents. The Administrative Agent shall
have received the following:
(i) Resolutions. Copies of resolutions of the
Board of Directors of each Credit Party approving and adopting
this Amendment, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party to be
true and correct and in force and effect as of the First
Amendment Effective Date.
(ii) Good Standing. Copies of certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
have a Material Adverse Effect.
(iii) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the First Amendment
Effective Date.
(d) Opinion of Counsel. The Administrative Agent shall
have received an opinion of Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A., acting
as counsel to each of the Credit Parties and a legal opinion of
in-house counsel for the Credit Parties with respect to various
corporate and organizational matters for each Credit Party; each in
form and substance satisfactory to the Administrative Agent, together
with such opinions of special and local counsel for the Credit Parties
as may reasonably be requested by counsel for the Administrative Agent
(including, without limitation, satisfactory opinions with respect to
the amendments to the Mortgage Instruments).
(e) Collateral. The Administrative Agent shall have
received (i) duly executed notices of grant of security interest in the
form required by the Security Agreement as are necessary, in the
Administrative Agent's sole discretion, to perfect the Administrative
Agent's security interest in the new Collateral resulting from the Elan
Transaction, (ii) fully executed and notarized amendments to each
existing Mortgage Instrument, in form and substance acceptable to the
Administrative Agent; (iii) an update or endorsement of the
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Mortgage Policies, in form and substance acceptable to the
Administrative Agent, with respect to each amendment to an existing
Mortgage Instrument and (iv) any other documents, or evidence of the
completion of any other actions, reasonably requested by the
Administrative Agent with respect to the Collateral.
(f) Consents. Receipt by the Administrative Agent of
evidence that all governmental, shareholder and material third party
consents (including Xxxx-Xxxxx-Xxxxxx clearance and any necessary
clearance from the FDA and/or other applicable regulatory bodies) and
approvals necessary in connection with the Elan Transaction (as defined
in the Amended Credit Agreement) and expiration of all applicable
waiting periods without any action being taken by any authority that
could reasonably be expected to restrain, prevent or impose any
material adverse conditions on the Elan Transaction or that could
reasonably be expected to seek or threaten any of the foregoing, and no
law or regulation shall be applicable which in the reasonable judgment
of the Administrative Agent could reasonably be expected to have such
effect.
(g) Consummation of Elan Transaction. The Elan
Transaction shall have been consummated in all material respects in
accordance with the terms of the Elan Transaction Documents (as defined
in the Amended Credit Agreement) and in material compliance with
applicable law and regulatory approvals, all material conditions
precedent to the obligations of the buyer under the Elan Transaction
Purchase Agreement (as defined in the Existing Credit Agreement as
amended hereby) shall have been satisfied or waived with the prior
written consent of the Administrative Agent, CIBC Inc., as Syndication
Agent, and Wachovia Bank, National Association, as Documentation Agent.
Subsequent to October 22, 2003, the Elan Transaction Documents shall
not have been altered, amended or otherwise changed or supplemented in
any material respect or any material condition therein waived, without
the prior written consent of the Administrative Agent. In connection
with the closing of the Elan Transaction pursuant to the Elan
Transaction Documents, the Manufacturing Agreement with Xxxxxx
Laboratories, Inc. that must be assigned to the Borrower as a condition
precedent to the Borrower's obligation to consummate the Elan
Transaction shall have been amended, on or prior to the date of such
assignment, so as to extend the duration of such agreement (on terms
substantially similar to those in place prior to such amendment) to at
least September 28, 2005.
(h) Officer's Certificates. The Administrative Agent
shall have received a certificate or certificates executed by an
Executive Officer of the Borrower as of the First Amendment Effective
Date, in form and substance satisfactory to the Administrative Agent,
stating that (i) each Credit Party is in compliance with all existing
material financial obligations, (ii) all material governmental,
shareholder and third party consents and approvals, if any, with
respect to the Credit Documents and the transactions contemplated
thereby have been obtained, (iii) no action, suit, investigation or
proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to affect any
Credit Party or any transaction contemplated by the Credit Documents,
if such action, suit, investigation or proceeding would reasonably be
expected to have a Material Adverse Effect, (iv) the transactions
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contemplated by the Elan Transaction Purchase Agreement have been
consummated in all material respects contemporaneously with funding of
the New Term Loan in accordance with the terms thereof and (v)
immediately after giving effect to the Elan Transaction, (A) no Default
or Event of Default exists and (B) all representations and warranties
contained herein and in the other Credit Documents are true and correct
in all material respects (except those that expressly relate to an
earlier date, in which case such representations and warranties are
true and correct in all material respects as of such earlier date).
(i) Solvency. The Administrative Agent shall have
received a certificate executed by an Executive Officer of the Borrower
as of the First Amendment Effective Date, in form and substance
satisfactory to the Administrative Agent, regarding the Solvency of
each of the Credit Parties on a consolidated basis (after giving effect
to the Elan Transaction and the incurrence of Indebtedness related
thereto).
(j) Fees and Expenses. The payment by the Credit Parties
to the Lenders and the Administrative Agent of all fees and expenses
relating to the Amendment and the Credit Agreement which are due and
payable on the First Amendment Effective Date, including, without
limitation, payment by the Borrower (i) to the Administrative Agent, on
behalf of each Lender with a Revolving Commitment party to the Existing
Credit Agreement who executes this Amendment on or before 10:00 A.M.
Eastern Standard Time on November 26, 2003, of an amendment fee equal
to 0.25% of the sum of each such Lender's Revolving Commitment prior to
giving effect to transactions contemplated hereby, (ii) on the date
hereof, of all reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the preparation, execution and
delivery of this Amendment, including without limitation the reasonable
fees and expenses of Xxxxx & Xxx Xxxxx PLLC, special counsel to the
Arranger and the Administrative Agent and (iii) of the other respective
fees set forth in the respective fee letters executed by and among the
Borrower and the agents and arrangers set forth on the cover page to
this Amendment.
(k) Additional Financial Information. The Administrative
Agent shall have received consolidated financial statements of the
Borrower and its subsidiaries for the fiscal year ended December 31,
2002 and for the fiscal quarter ended June 30, 2003 and, if available,
September 30, 2003 and a pro forma consolidated balance sheet, as of a
recent date prior to the First Amendment Effective Date, giving effect
to the Elan Transaction and the transactions contemplated hereby and
reflecting estimated purchase price accounting adjustments, all in form
and substance reasonably satisfactory to the Administrative Agent.
Additionally, the Administrative Agent shall have received (i) the
audited financial statements relating to the Elan Pain Products in the
form required to be disclosed by the Securities and Exchange Commission
for the fiscal year ended December 31, 2002 and the six months ended
June 30, 2003 and, if available, any subsequent periods and (ii)
unaudited financial statements on a monthly basis relating to the Elan
Pain Products beginning with July 2003 and ending with the month
immediately preceding the First Amendment Effective Date, to the extent
available.
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(l) Litigation, Etc. There shall not exist (a) any order,
decree, judgment, ruling or injunction which restrains the consummation
of the Elan Transaction in the manner contemplated by the Elan
Transaction Documents, or (b) any pending (excluding litigation
currently pending and disclosed in filings with the Securities and
Exchange Commission prior to the date hereof to the extent described
therein so long as there has been no materially adverse development in
any such litigation since the date hereof) or threatened action, suit,
investigation or proceeding, which would reasonably be expected to
materially and adversely affect the Borrower or its subsidiaries, any
transaction contemplated hereby or in the Credit Documents or the
ability of the Borrower and its subsidiaries or any other Guarantor to
perform its obligations under the Credit Documents or the ability of
the Lenders to exercise their rights thereunder.
(m) No Material Adverse Change. There shall not have
occurred a material adverse change since December 31, 2002 in the
business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of the Borrower or the
Elan Pain Products, in the case of the Borrower together with its
Subsidiaries taken as a whole, or in the facts and information
regarding such entities and assets as represented to date; provided
that the entry into the marketplace of a generic equivalent to the
Roxicodone Elan Pain Product shall not be deemed such a material
adverse change unless the impact of such entry as compared to the
impact already accounted for in the Borrower's projections constitutes
a material adverse change in the business, assets, liabilities (actual
or contingent), operations, condition (financial or otherwise) or
prospects of the Borrower and its subsidiaries taken as a whole.
(n) Minimum Credit Ratings. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to
it, evidence that the Borrower's senior secured debt rating for the
credit facilities evidenced by the Existing Credit Agreement as amended
hereby has been reaffirmed (via a conference call update or meeting) at
(i) "B2" (with an outlook of "stable") or higher by Xxxxx'x and (ii)
"B+" (with an outlook of "stable") or higher by S&P.
(o) Minimum EBITDA. The Borrower's financial statements
for the four fiscal quarters ended as of September 30, 2003 shall
evidence a minimum Consolidated EBITDA (as defined in the Amended
Credit Agreement), determined on a Pro Forma Basis (as defined in the
Amended Credit Agreement) after giving effect to the Elan Transaction,
of not less than $115.0 million.
(p) Maximum Total Leverage Ratio. As of September 30,
2003, the Borrower shall have a Total Leverage Ratio (as defined in the
Amended Credit Agreement), determined on a Pro Forma Basis (as defined
in the Amended Credit Agreement) after giving effect to the Elan
Transaction, of not greater than 3.25:1.0.
(q) Prepayment of Existing Term Loan. The Borrower shall
have prepaid (or concurrently with the effectiveness hereof, shall
prepay) the remaining principal balance of the Term Loan, together with
all accrued interest and any breakage costs, in full.
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5. Construction. This Amendment is a Credit Document executed
pursuant to the Existing Credit Agreement and shall (unless otherwise expressly
indicated therein) be construed, administered and applied in accordance with the
terms and provisions of the Existing Credit Agreement as amended hereby.
6. Counterparts. This Amendment may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of
which taken together shall constitute one and the same instrument.
7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
8. Binding Effect. This Amendment, the Existing Credit Agreement
as amended hereby and the other Credit Documents embody the entire agreement
between the parties and supersede all prior agreements and understandings, if
any, relating to the subject matter hereof. These Credit Documents represent the
final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. Except as
expressly modified and amended in this Amendment, all the terms, provisions and
conditions of the Credit Documents shall remain unchanged and shall continue in
full force and effect.
9. Severability. If any provision of this Amendment is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: aaiPHARMA INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
GUARANTORS: APPLIED ANALYTICAL INDUSTRIES
LEARNING CENTER, INC.
AAI TECHNOLOGIES, INC.
AAI DEVELOPMENT SERVICES, INC. (f/k/a
AAI INTERNATIONAL, INC.)
AAI PROPERTIES, INC.
KANSAS CITY ANALYTICAL SERVICES, INC.
AAI DEVELOPMENT SERVICES, INC. (f/k/a
AAI INTERNATIONAL CLINICAL TRIALS,
INC. f/k/a MEDICAL & TECHNICAL RESEARCH
ASSOCIATES, INC.)
AAI JAPAN, INC.
aaiPHARMA LLC (f/k/a NEOSAN
PHARMACEUTICALS, INC.)
By: /s/ Xxxxxxx X. Xxxxx, Jr.
------------------------------------
Name: Xxxxxxx X. Xxxxx, Jr.
Title: Vice President
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
in its capacity as Administrative Agent
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
LENDERS: BANK OF AMERICA, N.A.,
individually in its capacity as a Lender
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
WACHOVIA BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxx XxXxxxx
------------------------------------
Name: Xxxxx XxXxxxx
Title: Associate
CIBC INC.
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Executive Director
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Lindsay Rheama
---------------------------------
Name: Lindsay Rheama
Title: Duly Authorized Signatory
CAROLINA FIRST BANK
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Executive Vice President
NEW LENDER:
EXHIBIT A
CREDIT AGREEMENT
Dated as of March 28, 2002, as amended
among
aaiPHARMA INC.
as Borrower
CERTAIN OF THE SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO
as Guarantors
THE OTHER LENDERS
FROM TIME TO TIME PARTY HERETO
and
BANK OF AMERICA, N.A.
as Administrative Agent
------------------------------------------------------
BANC OF AMERICA SECURITIES LLC
as Sole Lead Arranger and Sole Book Manager
FIRST UNION SECURITIES, INC. d/b/a WACHOVIA SECURITIES
and
CIBC WORLD MARKETS CORP.
as Co-Syndication Agents
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Documentation Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS........................................................................................... 1
1.1 Definitions.................................................................................... 1
1.2 Computation of Time Periods.................................................................... 35
1.3 Accounting Terms............................................................................... 35
SECTION 2 CREDIT FACILITIES..................................................................................... 36
2.1 Revolving Loans................................................................................ 36
2.2 Swing Line Loans Subfacility................................................................... 38
2.3 New Term Loan.................................................................................. 39
2.4 Letter of Credit Subfacility................................................................... 42
2.5 Increase in Revolving Commitments.............................................................. 48
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................ 49
3.1 Default Rate................................................................................... 49
3.2 Extension and Conversion....................................................................... 50
3.3 Prepayments.................................................................................... 50
3.4 Termination and Reduction of Revolving Committed Amount........................................ 54
3.5 Fees........................................................................................... 55
3.6 Capital Adequacy............................................................................... 56
3.7 Limitation on Eurodollar Loans................................................................. 57
3.8 Illegality..................................................................................... 57
3.9 Requirements of Law............................................................................ 57
3.10 Treatment of Affected Loans.................................................................... 59
3.11 Taxes.......................................................................................... 59
3.12 Compensation................................................................................... 61
3.13 Pro Rata Treatment............................................................................. 62
3.14 Sharing of Payments............................................................................ 63
3.15 Payments, Computations, Etc.................................................................... 64
3.16 Evidence of Debt............................................................................... 66
3.17 Mandatory Assignment........................................................................... 67
SECTION 4 GUARANTY.............................................................................................. 67
4.1 The Guaranty................................................................................... 67
4.2 Obligations Unconditional...................................................................... 68
4.3 Reinstatement.................................................................................. 69
4.4 Certain Additional Waivers..................................................................... 69
4.5 Remedies....................................................................................... 69
4.6 Rights of Contribution......................................................................... 70
4.7 Guarantee of Payment; Continuing Guarantee..................................................... 71
SECTION 5 CONDITIONS............................................................................................ 71
5.1 Closing Conditions............................................................................. 71
5.2 Conditions to all Extensions of Credit......................................................... 77
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SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................ 77
6.1 Financial Condition............................................................................ 77
6.2 No Material Change............................................................................. 79
6.3 Organization and Good Standing................................................................. 79
6.4 Power; Authorization; Enforceable Obligations.................................................. 79
6.5 No Conflicts................................................................................... 79
6.6 No Default..................................................................................... 80
6.7 Ownership of Properties........................................................................ 80
6.8 Indebtedness................................................................................... 80
6.9 Litigation..................................................................................... 80
6.10 Taxes.......................................................................................... 81
6.11 Compliance with Law............................................................................ 81
6.12 ERISA.......................................................................................... 81
6.13 Corporate Structure; Capital Stock, etc........................................................ 83
6.14 Governmental Regulations, Etc.................................................................. 83
6.15 Purpose of Loans and Letters of Credit......................................................... 84
6.16 Environmental Matters.......................................................................... 84
6.17 Intellectual Property.......................................................................... 85
6.18 Solvency....................................................................................... 85
6.19 Investments.................................................................................... 85
6.20 Business Locations............................................................................. 86
6.21 Disclosure..................................................................................... 86
6.22 No Burdensome Restrictions..................................................................... 86
6.23 Brokers' Fees.................................................................................. 86
6.24 Labor Matters.................................................................................. 86
6.25 Nature of Business............................................................................. 86
6.26 Transactions with Affiliates................................................................... 87
6.27 Tax Shelter Regulations........................................................................ 87
SECTION 7 AFFIRMATIVE COVENANTS................................................................................. 88
7.1 Information Covenants.......................................................................... 88
7.2 Preservation of Existence and Franchises....................................................... 92
7.3 Books and Records.............................................................................. 92
7.4 Compliance with Law............................................................................ 92
7.5 Payment of Taxes and Other Claims.............................................................. 92
7.6 Insurance...................................................................................... 93
7.7 Maintenance of Property........................................................................ 93
7.8 Use of Proceeds................................................................................ 94
7.9 Audits/Inspections............................................................................. 94
7.10 Financial Covenants............................................................................ 94
7.11 Additional Guarantors.......................................................................... 96
7.12 Pledged Assets................................................................................. 96
7.13 Post-Closing Deliveries and Actions............................................................ 97
7.14 Interest Rate Protection....................................................................... 98
ii
SECTION 8 NEGATIVE COVENANTS.................................................................................... 99
8.1 Indebtedness................................................................................... 99
8.2 Liens.......................................................................................... 101
8.3 Nature of Business............................................................................. 103
8.4 Consolidation, Merger, Dissolution, etc........................................................ 103
8.5 Asset Dispositions............................................................................. 104
8.6 Investments.................................................................................... 104
8.7 Restricted Payments............................................................................ 108
8.8 Other Indebtedness............................................................................. 109
8.9 Transactions with Affiliates................................................................... 109
8.10 Fiscal Year; Organizational Documents.......................................................... 110
8.11 Limitation on Restricted Actions............................................................... 110
8.12 Ownership of Subsidiaries...................................................................... 110
8.13 Sale Leasebacks................................................................................ 111
8.14 Capital Expenditures........................................................................... 111
8.15 No Further Negative Pledges.................................................................... 111
SECTION 9 EVENTS OF DEFAULT..................................................................................... 112
9.1 Events of Default.............................................................................. 112
9.2 Acceleration; Remedies......................................................................... 114
SECTION 10 AGENCY PROVISIONS.................................................................................... 115
10.1 Appointment and Authorization of Administrative Agent.......................................... 115
10.2 Delegation of Duties........................................................................... 116
10.3 Liability of Administrative Agent.............................................................. 116
10.4 Reliance by Administrative Agent............................................................... 117
10.5 Notice of Default.............................................................................. 117
10.6 Credit Decision; Disclosure of Information by Administrative Agent............................. 118
10.7 Indemnification of Administrative Agent........................................................ 118
10.8 Administrative Agent in its Individual Capacity................................................ 119
10.9 Successor Administrative Agent................................................................. 119
10.10 Administrative Agent May File Proofs of Claim.................................................. 120
10.11 Collateral and Guaranty Matters................................................................ 121
10.12 Other Agents; Lead Managers.................................................................... 122
SECTION 11 MISCELLANEOUS........................................................................................ 122
11.1 Notices and Other Communications; Facsimile Copies............................................. 122
11.2 Right of Set-Off; Adjustments.................................................................. 123
11.3 Successors and Assigns......................................................................... 123
11.4 No Waiver; Remedies Cumulative................................................................. 127
11.5 Expenses; Indemnification...................................................................... 127
11.6 Amendments, Waivers and Consents............................................................... 128
11.7 Counterparts................................................................................... 131
11.8 Headings....................................................................................... 131
11.9 Survival....................................................................................... 131
11.10 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial......................... 131
iii
11.11 Severability................................................................................... 132
11.12 Entirety....................................................................................... 132
11.13 Binding Effect; Termination.................................................................... 133
11.14 Confidentiality................................................................................ 133
11.15 Source of Funds................................................................................ 134
11.16 Regulation D................................................................................... 135
11.17 Conflict....................................................................................... 135
11.18 USA Patriot Act Notice......................................................................... 135
SCHEDULES
Schedule 1.1 Excluded Property
Schedule 2.1(a) Lenders
Schedule 2.4(a) Existing Letters of Credit
Schedule 6.3 Organization and Good Standing
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.7 Ownership of Properties
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13A Description of Corporate Capital and Ownership Structure
Schedule 6.13B Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Real Properties
Schedule 6.20(b) Tangible Personal Property Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places of Business
Schedule 6.24 Labor Matters
Schedule 6.26 Affiliate Transactions
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.2 Liens
Schedule 8.6 Investments
Schedule 8.7 Restricted Payments
Schedule 8.9 Transactions with Affiliates
Schedule 8.11 Limitation on Restricted Actions
Schedule 8.13 Potential Sale Leasebacks
Schedule 11.1 Certain Addresses for Notices
iv
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.2(b) Form of Swing Line Loan Request
Exhibit 2.2(e) Form of Swing Line Note
Exhibit 2.3(f) Form of New Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.11 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment and Assumption Agreement
v
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of March 28, 2002 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
is by and among aaiPHARMA INC., formerly Applied Analytical Industries, Inc., a
Delaware corporation (the "Borrower"), the Guarantors (as defined herein), the
Lenders (as defined herein) from time to time party hereto and BANK OF AMERICA,
N.A. ("Bank of America"), as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower and the Guarantors have requested the Lenders to
provide senior credit facilities to the Borrower in the aggregate principal
amount of up to, initially, $175,000,000 and, as of the First Amendment
Effective Date (as defined herein), $245,000,000; and
WHEREAS, the Lenders have agreed to make the requested senior credit
facilities available to the Borrower on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"aaiPharma LLC" means aaiPharma LLC, a Delaware limited
liability company, formerly known as NeoSan Pharmaceuticals, Inc., a
Delaware corporation, together with any permitted successors and
assigns.
"Acquisition", by any Person, means the acquisition by such
Person of all of the Capital Stock, all or substantially all of the
Property or all or substantially all of the intellectual property
rights to a pharmaceutical product or product line of another Person,
whether or not involving a merger or consolidation with such other
Person.
"Act" shall have the meaning assigned to such term in Section
11.18.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding ten percent (10%) or more of the Voting
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agency Services Address" means Bank of America, N.A., 000 X.
Xxxxx Xxxxxx, XX0-000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or such
other address as may be identified by written notice from the
Administrative Agent to the Borrower.
"Administrative Agent" shall have the meaning assigned to such
term in the heading hereof, together with any permitted successors or
assigns.
"Agent-Related Persons" means the Administrative Agent
(including any successor administrative agent), together with its
Affiliates (including, in the case of Bank of America in its capacity
as the Agent, Banc of America Securities LLC), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Applicable Lending Office" means, for each Lender, the office
of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower
by written notice as the office by which its Eurodollar Loans are made
and maintained.
"Applicable Percentage" means (a) for purposes of calculating
the applicable interest rate for any day for Revolving Loans, the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(a) or the applicable rate of the Letter of Credit Fee for any day
for purposes of Section 3.5(c), the appropriate applicable percentage
corresponding to the relevant Total Leverage Ratio set forth below:
2
FOR REVOLVING LOANS
FOR
PRICING TOTAL LEVERAGE EURODOLLAR BASE RATE UNUSED FOR LETTER OF
LEVEL RATIO LOANS LOANS FEE CREDIT FEES
-----------------------------------------------------------------------------------
1 Greater than 3.50% 2.50% 0.50% 3.50%
3.75:1.0
2 Less than or 3.25% 2.25% 0.50% 3.25%
equal to
3.75:1.0, but
greater than
3.25:1.0
3 Less than or 3.00% 2.00% 0.50% 3.00%
equal to
3.25:1.0, but
greater than
2.75:1.0
4 Less than or 2.50% 1.50% 0.50% 2.50%
equal to
2.75:1.0, but
greater than
2.25:1.0
5 Less than or 2.00% 1.00% 0.50% 2.00%
equal to 2.25:1.0
and (b) for purposes of calculating the applicable interest rate for
any day for the New Term Loan, the appropriate applicable percentage
corresponding to the Debt Rating in effect from time to time as
described below:
PRICING
LEVEL DEBT RATING FOR EURODOLLAR LOANS FOR BASE RATE LOANS
---------------------------------------------------------------------------------------
I < or = B from S&P or
< or = B2 from Xxxxx'x 3.25% 2.25%
II > or = B+ from S&P and
> or = B1 from Xxxxx'x 3.00% 2.00%
3
The Applicable Percentages (other than those for the New Term
Loan) shall be determined and adjusted quarterly on the date (each a
"Calculation Date") five Business Days after the date by which the
Credit Parties are required to provide the officer's certificate in
accordance with the provisions of Section 7.1(c) for the most recently
ended fiscal quarter of the Consolidated Parties; provided, however,
that (i) the initial Applicable Percentages (other than for the New
Term Loan) shall be based on Pricing Level 3 (as shown above) and shall
remain at Pricing Level 3 until the Calculation Date for the fiscal
quarter of the Consolidated Parties ending on December 31, 2003, on and
after which time the Applicable Percentages shall be determined by the
Total Leverage Ratio as of the last day of the most recently ended
fiscal quarter of the Consolidated Parties preceding the applicable
Calculation Date; and (ii) if the Credit Parties fail to provide the
officer's certificate to the Agency Services Address as required by
Section 7.1(c) for the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding the applicable
Calculation Date, the Applicable Percentage from such Calculation Date
shall be based on Pricing Level 1 until such time as an appropriate
officer's certificate is provided, whereupon the Pricing Level shall be
determined by the Total Leverage Ratio as of the last day of the most
recently ended fiscal quarter of the Consolidated Parties preceding
such Calculation Date.
The Applicable Percentage for the New Term Loan shall be
determined and adjusted on the date (each a "New Term Loan Calculation
Date") one Business Day after the date on which the Borrower's Debt
Rating is upgraded or downgraded in a manner which requires a change in
the then applicable Pricing Level set forth above; provided, however,
that the initial Applicable Percentage for the New Term Loan shall be
based on Pricing Level I until the first New Term Loan Calculation Date
to occur subsequent to the Closing Date. Each Applicable Percentage
shall be effective from one New Term Loan Calculation Date until the
next New Term Loan Calculation Date.
"Application Period" means, in respect of any Asset
Disposition, the period of 180 days (or such earlier date as provided
for reinvestment of the proceeds thereof under the documents evidencing
or governing any Subordinated Indebtedness) following the consummation
of such Asset Disposition; provided that such 180 day period may be
extended for not more than an additional 90 days if (i) the applicable
Credit Party is diligently pursuing a specific Eligible Reinvestment in
good faith but can not complete such Eligible Reinvestment within the
initial 180 day period and (ii) the Borrower is not otherwise in
Default.
"Approved Fund" means any Person (other than a natural Person)
that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
or an Affiliate of an entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its
capacity as sole lead arranger and sole book manager.
4
"Asset Disposition" means any disposition (including pursuant
to a Sale and Leaseback Transaction) of any or all of the Property
(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, licensing, transfer or
otherwise, but other than pursuant to any casualty or condemnation
event; provided, however, that an Equity Issuance shall not constitute
an Asset Disposition.
"Asset Disposition Prepayment Event" means, with respect to
any Asset Disposition other than an Excluded Asset Disposition, the
failure of the Credit Parties to apply (or cause to be applied) the Net
Cash Proceeds of such Asset Disposition to Eligible Reinvestments
during the Application Period for such Asset Disposition.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit 11.3.
"Availability" means, as of any date of determination, (i) the
Revolving Committed Amount as of such date minus (ii) the aggregate
principal amount of outstanding Revolving Loans and Swing Line Loans on
such date minus (iii) LOC Obligations outstanding on such date.
"Bank of America" means Bank of America, N.A. and its
successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following: (i) the entry of a decree or order
for relief by a court or governmental agency in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or the appointment by a court or governmental
agency of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or the ordering of the winding up or
liquidation of its affairs by a court or governmental agency; or (ii)
the commencement against such Person of an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or of any case, proceeding or other action for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed for a period of sixty (60)
consecutive days, or the repossession or seizure by a creditor of such
Person of a substantial part of its Property; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent
to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment of or the taking possession by
a receiver, liquidator, assignee, secured creditor, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general
5
assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" means, for any day, a fluctuating rate per annum
equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and
(b) the Prime Rate in effect on such day.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Brethine Product" means the intangible assets, assumed
customer orders and specified inventory of Novartis Pharmaceuticals
Corporation and/or its subsidiaries associated with the following
terbutaline sulfate products marketed and sold for use in conducting
business in the United States and Puerto Rico under the trademark
"Brethine(R)", in all dosage strengths: (i) Brethine(R) tablets and
(ii) Brethine(R) intravenous ampules.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, except that,
when used in connection with a Eurodollar Loan, such day shall also be
a day on which dealings between banks are carried on in Dollar deposits
in London, England.
"Businesses" means, at any time, a collective reference to the
businesses operated by the Consolidated Parties at such time.
"Calculation Date" shall have the meaning assigned to such
term in the definition of Applicable Percentage.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is required to be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person (other than cash performance bonuses
and similar compensation arrangements not constituting equity).
6
"Cash Equivalents" means, as at any date, (a) securities
issued or directly and fully guaranteed or insured by the United States
or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition,
(b) Dollar denominated time deposits and certificates of deposit of (i)
any Lender, (ii) any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 or (iii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Xxxxx'x is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each
case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase agreements
entered into by any Person with a bank or trust company (including any
of the Lenders) or recognized securities dealer having capital and
surplus in excess of $500,000,000 for direct obligations issued by or
fully guaranteed by the United States in which such Person shall have a
perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at
least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and at
least 95% of the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events: (a) the
sale, lease, transfer or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Borrower and its Subsidiaries
taken as a whole to any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act), (b) any
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act) other than Xxxxxxxxx X. Xxxxxxxx or his
Related Parties, shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise control
over, 35% or more of the outstanding Voting Stock of the Borrower, (c)
Continuing Directors shall fail to constitute a majority of the members
of the board of directors of the Borrower or (d) the occurrence of a
"Change of Control" (or any comparable term) under, and as defined in,
the documents evidencing or governing any Subordinated Indebtedness. As
used herein, "beneficial ownership" shall have the meaning provided in
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as
7
in effect from time to time. References to sections of the Code shall
be construed also to refer to any successor sections.
"Collateral" means a collective reference to all real and
personal Property (other than Excluded Property) with respect to which
Liens in favor of the Administrative Agent are purported to be granted
pursuant to and in accordance with the terms of the Collateral
Documents.
"Collateral Documents" means a collective reference to the
Pledge Agreement, the Security Agreement and the Mortgage Instruments.
"Commitment" means (i) with respect to each Lender, the
Revolving Commitment of such Lender and the New Term Loan Commitment of
such Lender, (ii) with respect to the Swing Line Lender, the Swing Line
Committed Amount and (iii) with respect to the Issuing Lender, LOC
Commitments.
"Consolidated Capital Expenditures" means, as of any date for
the applicable period ending on such date with respect to the
Consolidated Parties on a consolidated basis, all capital expenditures,
as determined in accordance with GAAP; provided, however, that
Consolidated Capital Expenditures shall not include Eligible
Reinvestments made with proceeds of any Involuntary Disposition or
Permitted Asset Disposition.
"Consolidated Cash Taxes" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, the aggregate of all taxes, as
determined in accordance with GAAP, to the extent the same are paid in
cash during such period.
"Consolidated EBITDA" means, as of any date, for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, the sum of (a) Consolidated Net
Income, plus (b) an amount which, in the determination of Consolidated
Net Income, has been deducted for (i) Consolidated Interest Expense,
(ii) income, value-added, franchise and similar taxes, (iii)
depreciation and amortization expense, (iv) any other non-cash expenses
or charges (including non-cash amortization or write-offs of financing
costs), (v) non-recurring cash charges and costs, not to exceed
$1,000,000 in the aggregate for all periods, arising in connection with
the Elan Transaction, and (vi) non-recurring cash charges and costs
recognized in connection with Permitted Acquisitions and Asset
Dispositions permitted under this Credit Agreement, to the extent such
charges and costs are approved by the Administrative Agent and, if such
charges and costs would exceed $3,000,000 in the aggregate for any
period of four fiscal quarters (exclusive of charges and costs added
back pursuant to clause (v) above), by the Required Lenders, minus (c)
non-cash gains included in Consolidated Net Income minus (d)
non-recurring cash gains included in Consolidated Net Income, to the
extent such non-recurring cash gains exceed $3,000,000 in the aggregate
for any period of four fiscal quarters.
8
"Consolidated Interest Expense" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, interest expense paid in cash
(including the amortization of debt discount and premium, the interest
component under Capital Leases and all unused fees and similar ongoing
fees), as determined in accordance with GAAP.
"Consolidated Net Income" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, net income (excluding extraordinary
items) after interest expense, income, value-added, franchise and
similar taxes and depreciation and amortization, all as determined in
accordance with GAAP.
"Consolidated Parties" means a collective reference to the
Borrower and its Subsidiaries, and "Consolidated Party" means any one
of them.
"Consolidated Scheduled Funded Debt Payments" means, as of any
date for the applicable period ending on such date with respect to the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness (including the implied
principal component of payments due on Capital Leases and Synthetic
Leases, but excluding voluntary prepayments or mandatory prepayments
required pursuant to Section 3.3), as determined in accordance with
GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Continuing Director" means, as of any date of determination,
any member of the board of directors of the Borrower who (x) was a
member of the board of directors of the Borrower as of the Closing Date
or (y) was nominated for election or elected to such board of directors
with the approval of a majority of the Continuing Directors who were
members of such board at the time of such nomination or election.
"Contractual Obligation" means, with respect to a Person, any
provision of (i) any security issued by such Person, including
provisions contained in the articles or certificate of incorporation or
bylaws or other organizational or governing documents of such Person,
or (ii) any agreement, franchise, license, lease, permit, undertaking,
contract, indenture, mortgage, deed of trust or other instrument or
understanding to which such Person is a party or by which it or any of
its assets or property is bound.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, each Joinder Agreement, the Fee Letters and the
Collateral Documents (in each
9
case as the same may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time), and "Credit Document"
means any one of them.
"Credit Facilities" means the credit facilities evidenced by
this Credit Agreement.
"Credit Parties" means a collective reference to the Borrower
and the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender and the Swing Line Lender) and the Administrative Agent,
whenever arising, under this Credit Agreement, the Notes, the
Collateral Documents or any of the other Credit Documents (including,
but not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code)
and (ii) all liabilities and obligations, whenever arising, owing under
any Hedging Agreement from any Credit Party to any counterparty that
is, at the time of execution of such Hedging Agreement, a Lender or an
Affiliate of a Lender.
"Darvon Product" means all right, title and interest in the
United States and United States territorial rights to the Darvon-N(R),
Darvon (R), Darvocet-N(R) branded product lines and certain related
assets acquired by aaiPharma LLC from Xxx Xxxxx and Company pursuant to
the Darvon Purchase Agreement.
"Darvon Purchase Agreement" means that certain Asset Purchase
Agreement by and among Xxx Lilly and Company and aaiPharma LLC, dated
as of February 18, 2002, as amended.
"Darvon Transaction" means the Borrower's acquisition of the
Darvon Product from Xxx Xxxxx and Company and/or its subsidiaries
pursuant to the Darvon Transaction Documents.
"Darvon Transaction Documents" shall have the meaning assigned
to such term in Section 5.1(j).
"Debt Issuance" means the issuance by any Consolidated Party
of any Indebtedness of the type referred to in clause (a) or (b) of the
definition thereof set forth in this Section 1.1.
"Debt Issuance Prepayment Event" means the receipt by any
Consolidated Party of proceeds from any Debt Issuance other than an
Excluded Debt Issuance.
"Debt Rating" means the long-term senior secured debt rating
assigned by S&P and Moody's, respectively, to the Credit Facilities.
10
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, as
determined by the Administrative Agent, (a) has failed to make a Loan
or purchase a Participation Interest required pursuant to the term of
this Credit Agreement within one Business Day of when due, (b) other
than as set forth in (a) above, has failed to pay to the Administrative
Agent or any Lender an amount owed by such Lender pursuant to the terms
of this Credit Agreement within one Business Day of when due, unless
such amount is subject to a good faith dispute or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency
proceeding or with respect to which (or with respect to any of the
assets of which) a receiver, trustee or similar official has been
appointed.
"Dollars" and "$" means dollars in lawful currency of the
United States.
"Domestic Subsidiary" means any direct or indirect Subsidiary
of the Borrower which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"Elan Pain Products" means all right, title and interest in
the United States and United States territorial rights to the
Roxicodone, Oramorph SR, Roxanol and Duraclon product lines and certain
related assets acquired by the Borrower from Elan Pharma International
Limited and Elan Pharmaceuticals, Inc. pursuant to the Elan Transaction
Purchase Agreement.
"Elan Transaction" means the Borrower's acquisition of the
Elan Pain Products from Elan Pharma International Limited and Elan
Pharmaceuticals, Inc. pursuant to the Elan Transaction Documents.
"Elan Transaction Documents" means, collectively, the Elan
Transaction Purchase Agreement (including all schedules and exhibits
thereto) and the Transaction Documents defined and referred to therein.
"Elan Transaction Purchase Agreement" means that certain Asset
Purchase Agreement by and among the Borrower, Elan Pharma International
Limited and Elan Pharmaceuticals, Inc., dated as of October 22, 2002,
as amended.
"Eligible Assignee" means (i) a Lender, (ii) an Affiliate of a
Lender, (iii) an Approved Fund and (iv) any other Person (other than a
natural Person) approved by the Administrative Agent and, unless a
Default or Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or
delayed), provided, however, that neither the Borrower nor an Affiliate
of the Borrower shall qualify as an Eligible Assignee.
11
"Eligible Reinvestment" means (i) any acquisition (whether or
not constituting a capital expenditure, but not constituting an
Acquisition) of assets or any business (or any substantial part
thereof) used or useful in the same or a similar line of business as
the Borrower and its Subsidiaries were engaged in on the Closing Date
(or any reasonable extensions or expansions thereof) and (ii) any
Permitted Acquisition.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws (including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Resource Conservation and Recovery Act of
1976, the Toxic Substances Control Act, the Water Pollution Control
Act, the Clean Air Act and the Hazardous Materials Transportation Act),
regulations, ordinances, rules, judgments, orders, decrees, permits,
licenses, agreements or other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or land,
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party
to any Person of (a) shares of its Capital Stock, (b) any shares of its
Capital Stock pursuant to the exercise of options or warrants, (c) any
shares of its Capital Stock pursuant to the conversion of any debt
securities to equity or (d) any options or warrants relating to its
Capital Stock. The term "Equity Issuance" shall not be deemed to
include any Asset Disposition.
"Equity Issuance Prepayment Event" means the receipt by any
Consolidated Party of proceeds from any Equity Issuance other than an
Excluded Equity Issuance.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes any
Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Consolidated Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or
the termination of a Multiple Employer Plan; (iii) the distribution of
a notice of intent to terminate or the actual termination of a Plan
pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution
of proceedings to
12
terminate or the actual termination of a Plan by the PBGC under Section
4042 of ERISA; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or
partial withdrawal of any Consolidated Party or any ERISA Affiliate
from a Multiemployer Plan; (vii) the conditions for imposition of a
lien under Section 302(f) of ERISA exist with respect to any Plan; or
(viii) the adoption of an amendment to any Plan requiring the provision
of security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect
to any Eurodollar Loan, a rate per annum determined by the
Administrative Agent to be equal to the quotient obtained by dividing
(a) the Interbank Offered Rate by (b) 1 minus the Eurodollar Reserve
Percentage.
"Eurodollar Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day,
whether or not applicable to any Lender, under regulations issued from
time to time by the Board of Governors of the Federal Reserve System
for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate
Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Event of Default" shall have the meaning assigned to such
term in Section 9.1.
"Excess Cash Flow" means, with respect to any fiscal year
period of the Consolidated Parties on a consolidated basis, an amount
equal to (a) Consolidated EBITDA minus (b) Consolidated Capital
Expenditures that are not financed minus (c) Consolidated Interest
Expense minus (d) Consolidated Cash Taxes minus (e) Consolidated
Scheduled Funded Debt Payments minus (f) the amount of any voluntary
and mandatory prepayments (other than mandatory prepayments required
pursuant to Section 3.3(b)(vi)) of the New Term Loan or (to the extent
accompanied by a reduction in the Revolving Committed Amount) the
Revolving Loans minus (g) the amount of royalties paid during such
fiscal year period minus (h) optional and mandatory prepayments
permitted to be paid under this Credit Agreement on other Indebtedness
permitted to be incurred under this Credit Agreement (to the extent
accompanied by a concurrent commitment reduction), minus (i) the
aggregate cash portion of the purchase price of any Permitted
Acquisition or of any Investment permitted under Section 8.6(n), in
each case that is not financed by the applicable Consolidated Party,
minus (j) earnout and contingent payments related to Permitted
Acquisitions that are paid in cash, minus (k) cash indemnity payments
made to the sellers in connection with Permitted Acquisitions, minus
(l) all non-cash deferred tax credits included in the determination of
Consolidated EBITDA, minus (m) all amounts paid in respect of
13
covenants not to compete, consulting agreements and other affiliated
contracts in connection with Permitted Acquisitions, minus (n) the
amount of all transaction fees and expenses incurred by the
Consolidated Parties in connection with a Permitted Acquisition, Asset
Disposition or an Investment permitted under Section 8.6, minus (o) the
amount of all non-recurring cash charges and costs to the extent added
back to Consolidated EBITDA, in each case with respect to clauses (j) -
(o), to the extent such amounts would otherwise be included as Excess
Cash Flow, and plus (p) non-recurring cash gains in excess of
$3,000,000.
"Excess Proceeds" shall have the meaning assigned to such term
in Section 7.6(b).
"Excluded Asset Disposition" means, with respect to any
Consolidated Party, any Asset Disposition consisting of (i) the sale,
lease, license, transfer or other disposition of Property in the
ordinary course of such Consolidated Party's business (including
without limitation, the sale, lease, license or transfer of
intellectual property, know-how, developed pharmaceutical products,
drug delivery technologies and pharmaceutical product development,
research and testing results in the ordinary course of such
Consolidated Party's business; provided, however, that it is expressly
understood and agreed that any sale, lease, transfer or other
disposition of any of the Brethine Product, the Darvon Product, the
MVI/Aquasol Product or the Elan Pain Products, other than in connection
with sales of inventory related thereto in the ordinary course of
business, shall not constitute an Excluded Asset Disposition), (ii) the
sale, lease, license, transfer or other disposition of machinery and
equipment no longer used or useful in the conduct of such Consolidated
Party's business, (iii) any sale, lease, license, transfer or other
disposition of Property by such Consolidated Party to any Credit Party,
provided that the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the
Administrative Agent may request so as to cause the Credit Parties to
be in compliance with the terms of Section 7.12 after giving effect to
such transaction, (iv) any Involuntary Disposition by such Consolidated
Party, (v) any Asset Disposition by such Consolidated Party
constituting a Permitted Investment, (vi) if such Consolidated Party is
not a Credit Party, any sale, lease, license, transfer or other
disposition of Property by such Consolidated Party to any Consolidated
Party that is not a Credit Party, (vii) the settlement or write-offs of
accounts receivable in the ordinary course of business consistent with
past practices, and (viii) the sale, lease, license or other
disposition of Property in exchange transactions in which a
Consolidated Party receives consideration with a fair market value at
least equal (as determined by the Borrower's board of directors unless
an appraisal is required pursuant to clause (d) in the proviso below)
to the fair market value of the Property sold, leased, licensed or
otherwise disposed of, which consideration consists of Property that is
used or useful in the same or a similar line of business as the
Consolidated Parties were engaged in on the Closing Date (or any
reasonable extension thereof); provided that (a) if the disposing
Consolidated Party is a Credit Party, a Credit Party shall be the party
receiving the Property comprising such consideration, (b) with respect
to the consideration received, the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as
the Administrative Agent may request so as to cause the Credit Parties
to be in compliance with the terms of Section 7.12 after giving effect
to such transaction, (c) if
14
Property being disposed of constitutes Collateral, the Property
received as consideration shall also become Collateral in accordance
with Section 7.12 and (d) if Property being disposed of in any such
transaction has a fair market value in excess of $5,000,000, then,
prior to the consummation of such transaction, the Borrower shall
either (x) deliver to the Administrative Agent an appraisal of the
Property to be received as consideration demonstrating that the fair
market value of such Property is at least equal to the fair market
value of the Property being disposed of, such appraisal to be from an
appraiser, and in a form, reasonably acceptable to the Administrative
Agent, or (y) have received the prior consent of the Required Lenders.
"Excluded Debt Issuance" means any Debt Issuance permitted by
Section 8.1.
"Excluded Equity Issuance" means (i) any Equity Issuance by
any Consolidated Party to any Credit Party, (ii) any Equity Issuance by
the Borrower to the seller of a business or product line acquired in a
Permitted Acquisition, (iii) any Equity Issuance by the Borrower the
proceeds of which are used (or are to be used) to finance a Permitted
Acquisition, or (iv) any Equity Issuance (or portion thereof) the Net
Cash Proceeds of which are used (or are to be used) by any Consolidated
Party to (a) make the MVI Payment, (b) repurchase Senior Subordinated
Notes pursuant to the equity clawback provisions of Section 3.07(b) of
the Senior Subordinated Note Indenture or (c) purchase Senior
Subordinated Notes on the open market, provided that (I) such Equity
Issuance was consummated within the three-month period immediately
prior to the date such Net Cash Proceeds are so applied, (II) the Net
Cash Proceeds of such Equity Issuance (or portion thereof) are
deposited in a cash collateral account maintained by the Administrative
Agent for the benefit of the Lenders pursuant to documentation
satisfactory to the Administrative Agent or applied temporarily to
reduce the Revolving Loans, (III) the provisions of Section 8.7 have
been complied with and (IV) such Net Cash Proceeds are actually applied
to the MVI Payment, 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 Senior Subordinated
Notes on the open market, as applicable.
"Excluded Property" means, with respect to any Consolidated
Party, including any Person that becomes a Consolidated Party after the
Closing Date as contemplated by Section 7.11, (i) any real or personal
Property of such Consolidated Party (whether owned or leased) which is
located outside of the United States, (ii) any owned real Property of
such Consolidated Party located within the United States which has a
net book value of less than $1,000,000, provided that the aggregate net
book value of all real Property of all of the Consolidated Parties
excluded pursuant to this clause (ii) shall not exceed $3,000,000,
(iii) the leased real Property described on Schedule 1.1 and any other
leased real Property of such Credit Party located within the United
States which, at the written request of the Borrower, the
Administrative Agent has agreed in writing in its reasonable discretion
is not material, (iv) any leased personal Property of such Consolidated
Party, (v) any personal Property of such Consolidated Party (including,
without limitation, motor vehicles) in respect of which perfection of a
Lien is not either (A) governed by the Uniform Commercial Code or (B)
effected by appropriate evidence of
15
the Lien being filed in either the United States Copyright Office or
the United States Patent and Trademark Office, (vi) any Property of
such Consolidated Party which, subject to the terms of Section 8.11 and
Section 8.15, is subject to a Lien of the type described in Section
8.2(g) pursuant to documents which prohibit such Consolidated Party
from granting any other Liens in such Property and (vii) Intellectual
Property in jurisdictions other than the United States of America
(which shall be deemed to include, without limitation, the territories
and possessions thereof).
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, executive vice
president, chief financial officer, controller or treasurer of such
Person.
"Existing Letters of Credit" means the letters of credit
outstanding on the Closing Date and identified on Schedule 2.4(a).
"Existing Loan Agreement" means that certain Second Amended
and Restated Loan Agreement, dated as of August 17, 2001, by and among
the Borrower, the Guarantors, Bank of America, as a lender and as
administrative agent, Banc of America Mezzanine Capital LLC and First
Union National Bank, as amended by that certain First Amendment to
Second Amended and Restated Loan Agreement dated as of December 13,
2001, and as further amended by that certain Second Amendment to Second
Amended and Restated Loan Agreement dated as of February 25, 2002.
"Extension of Credit" means, as to any Lender, the making of a
Loan by such Lender (or a participation therein by a Lender) or the
issuance of, or participation in, a Letter of Credit by such Lender.
"FDA" means the United States Food and Drug Administration, or
any successor agency thereof.
"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 upwards to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers
on such day, as published by the Federal Reserve Bank 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.
16
"Fee Letters" means (i) that certain letter agreement, dated
as of October 20, 2003, among the Arranger, Bank of America and the
Borrower, as amended, modified, restated or supplemented from time to
time and (ii) that certain letter agreement dated as of October 20,
2003 among the Arranger, Bank of America, Wachovia Capital Markets,
LLC, Wachovia Bank, National Association, CIBC World Markets Corp.,
CIBC Inc. and the Borrower, as amended, modified, restated or
supplemented from time to time.
"Fees" means all fees payable pursuant to Section 3.5.
"First Amendment" means that certain First Amendment to Credit
Agreement dated as of December 1, 2003 among the Borrower, the
Guarantors, the Lenders party thereto and Bank of America, N.A., as
Administrative Agent.
"First Amendment Effective Date" means December 1, 2003.
"Fixed Charge Coverage Ratio" means, as of the end of any
fiscal quarter of the Consolidated Parties for the four fiscal quarter
period (except as set forth below) ending on such date with respect to
the Consolidated Parties on a consolidated basis, the ratio of (a) the
sum of (i) Consolidated EBITDA for such period minus (ii) Consolidated
Capital Expenditures for such period minus (iii) Consolidated Cash
Taxes for such period to (b) the sum of (i) Consolidated Interest
Expense for such period plus (ii) Consolidated Scheduled Funded Debt
Payments for such period; provided, however, that (A) as of March 31,
2004, such ratio shall be calculated only for the one fiscal quarter
period ending as of such date, (B) as of June 30, 2004, such ratio
shall be calculated only for the two fiscal quarter period ending as of
such date and (C) as of September 30, 2004, such ratio shall be
calculated only for the three fiscal quarter period ending as of such
date.
"Foreign Subsidiary" means any direct or indirect Subsidiary
of the Borrower which is not a Domestic Subsidiary.
"Fully Satisfied" means, with respect to the Credit Party
Obligations as of any date, that, as of such date, (a) all principal of
and interest accrued to such date which constitute Credit Party
Obligations shall have been irrevocably paid in full in cash, (b) all
fees, expenses and other amounts then due and payable which constitute
Credit Party Obligations shall have been irrevocably paid in cash, (c)
all outstanding Letters of Credit shall have been (i) terminated, (ii)
fully irrevocably cash collateralized or (iii) secured by one or more
letters of credit on terms and conditions, and with one or more
financial institutions, reasonably satisfactory to the Issuing Lender
and (d) the Commitments shall have been expired or terminated in full.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest
payments are customarily made, including, without limitation, all
convertible debt securities (to the extent not converted to equity),
(c) all obligations of such Person under conditional
17
sale or other title retention agreements relating to Property purchased
by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or
assumed as the deferred purchase price of Property or services
purchased by such Person due and payable prior to the final Maturity
Date (other than (i) accrued expenses (including salaries, accrued
vacation and other compensation), trade debt or other accounts payable
and other current liabilities (including royalty and licensing fees)
incurred in the ordinary course of business and due within six months
of the incurrence thereof and (ii) such deferred purchase price
obligations owing with respect to the purchase of the MVI/Aquasol
Product) which would appear as liabilities on a balance sheet of such
Person, (e) the implied principal component of all obligations of such
Person under Capital Leases, (f) the maximum amount of all performance
and standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed); provided,
however, there shall be excluded from this amount the reimbursement
obligations with respect to undrawn standby letters of credit in an
aggregate amount up to (but not exceeding) $1,000,000, (g) all
preferred Capital Stock issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise)
subject to mandatory sinking fund payments, redemption or other
acceleration (other than as a result of a Change of Control or an Asset
Disposition that does not in fact result in a redemption of such
preferred Capital Stock) at any time prior to the final Maturity Date,
(h) the principal portion of all obligations of such Person under
Synthetic Leases, (i) all obligations of such Person to repurchase any
securities issued by such Person at any time prior to the final
Maturity Date which repurchase obligations are related to the issuance
thereof, including, without limitation, obligations commonly known as
residual equity appreciation potential shares, (j) the aggregate amount
of uncollected accounts receivable of such Person subject at such time
to a sale of receivables (or similar transaction) to the extent such
transaction is effected with recourse to such Person (whether or not
such transaction would be reflected on the balance sheet of such Person
in accordance with GAAP), (k) all Funded Indebtedness of others secured
by (or for which the holder of such Funded Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, Property owned or
acquired by such Person, whether or not the obligations secured thereby
have been assumed, (l) all Guaranty Obligations of such Person with
respect to Funded Indebtedness of another Person and (m) the Funded
Indebtedness of any partnership or unincorporated joint venture in
which such Person is a general partner or a joint venturer to the
extent such Indebtedness is recourse to such Person.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3 (except, in respect of Synthetic Leases, as otherwise
treated herein).
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body (including, without limitation, the FDA and the HHS).
18
"Guarantors" means each of the Persons identified as a
"Guarantor" on the signature pages hereto and each Person which may
hereafter execute a Joinder Agreement pursuant to Section 7.11,
together with their successors and permitted assigns, and "Guarantor"
means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations 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 of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof; provided,
however, that with respect to the Borrower and its Subsidiaries, the
term Guaranty Obligations shall not include endorsements for collection
or deposit in the ordinary course of business. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set
forth therein) be deemed to be an amount equal to the amount required
to be recorded under Regulation S-X of the Securities Act.
"Hedging Agreement" means (a) any and all rate swap
transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price
or bond index swaps or options or forward bond or forward bond price or
forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any
options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b)
any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"),
including any such obligations or liabilities under any Master
Agreement.
"HHS" means the United States Department of Health and Human
Services, or any successor agency thereof.
19
"HHS Regulation" means any rule, regulation or administrative
order promulgated or issued by the HHS.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such
Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person (other than accrued expenses (including salaries, accrued
vacation and other compensation), trade debt and other accounts payable
and other current liabilities (including royalty and licensing fees)
incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a
balance sheet of such Person in accordance with GAAP, (e) all payment
or purchase obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (f) the implied principal
component of all obligations of such Person under Capital Leases that
are required to be recorded in accordance with GAAP, (g) net
termination obligations of such Person under Hedging Agreements
(calculated on any date as if the Hedging Agreement was terminated on
such date), (h) the maximum amount of all performance and standby
letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (i) all preferred Capital
Stock issued by such Person and which by the terms thereof could be (at
the request of the holders thereof or otherwise) subject to mandatory
sinking fund payments, redemption or other acceleration (other than as
a result of a Change of Control or an Asset Disposition that does not
in fact result in a redemption of such preferred Capital Stock) at any
time prior to the final Maturity Date, (j) the principal portion of all
obligations of such Person under Synthetic Leases, (k) all obligations
of such Person to repurchase any securities issued by such Person at
any time prior to the final Maturity Date which repurchase obligations
are related to the issuance thereof, including, without limitation,
obligations commonly known as residual equity appreciation potential
shares, (l) the aggregate amount of uncollected accounts receivable of
such Person subject at such time to a sale of receivables (or similar
transaction) to the extent such transaction is effected with recourse
to such Person (whether or not such transaction would be reflected on
the balance sheet of such Person in accordance with GAAP), (m) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (n) all Guaranty
Obligations of such Person with respect to Indebtedness of another
Person and (o) the Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint
venturer to the extent such Indebtedness is recourse to such Person.
"Indemnified Liabilities" shall have the meaning assigned to
such term in Section 11.5(b).
20
"Indemnitees" shall have the meaning assigned to such term in
Section 11.5(b).
"Interbank Offered Rate" means for any Interest Period with
respect to any Eurodollar 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 (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 Eurodollar Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America'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.
"Interest Coverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the four fiscal quarter period
(except as set forth below) ending on such date with respect to the
Consolidated Parties on a consolidated basis, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period; provided, however, that (i) as of March 31,
2004, such ratio shall be calculated only for the one fiscal quarter
period ending as of such date, (ii) as of June 30, 2004, such ratio
shall be calculated only for the two fiscal quarter period ending as of
such date and (iii) as of September 30, 2004, such ratio shall be
calculated only for the three fiscal quarter period ending as of such
date.
"Interest Payment Date" means (a) as to Base Rate Loans and
Swing Line Loans, the last Business Day of each March, June, September
and December, the date of repayment of principal of such Loan and the
Maturity Date and (b) as to Eurodollar Loans, the last day of each
applicable Interest Period, the date of repayment of principal of such
Loan and the Maturity Date, and in addition where the applicable
Interest Period for a Eurodollar Loan is greater than three months,
then also the date three months from the beginning of the Interest
Period and each three months thereafter.
21
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as a Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date and (c)
where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"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 Consolidated 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
Guaranty Obligations (including any support for a letter of credit
issued on behalf of such Person) incurred for the benefit of such
Person and any Asset Disposition to such Person for consideration less
than the fair market value of the Property disposed in such
transaction, but excluding any Restricted Payment to such Person.
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
Guaranty 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 Guaranty Obligation.
"Involuntary Disposition" means any loss of, damage to or
destruction of, or any condemnation or other taking for public use of,
any Property of any Consolidated Party.
"Involuntary Disposition Prepayment Event" means, with respect
to any Involuntary Disposition, the failure of the Credit Parties to
apply (or cause to be applied) an amount equal to the Excess Proceeds
of such Involuntary Disposition, if any, to make Eligible Reinvestments
(including but not limited to the repair or replacement of the Property
affected by such Involuntary Disposition) within the period of 180 days
following the date of receipt of such Excess Proceeds, subject to the
terms and conditions of Section 7.6(b) and provided that such 180 day
period may be extended for not more than an additional 180 days if (1)
the applicable Credit Party is diligently pursuing such Eligible
22
Reinvestment in good faith, but can not complete such Eligible
Reinvestment within the initial 180 days and (2) the Borrower is not
otherwise in Default.
"Issuing Lender" means Bank of America.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.11 hereto, executed and delivered by a new
Guarantor in accordance with the provisions of Section 7.11.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto or to the First Amendment, and any Person
which may become a Lender by way of assignment in accordance with the
terms hereof, together with their successors and permitted assigns.
Solely for purposes of Sections 3.15(b) and 4.1, the term "Lender"
shall include, with respect to any Hedging Agreement entered into by a
Credit Party, any counterparty that is, at the time of execution of
such Hedging Agreement, a Lender or an Affiliate of a Lender.
"Letter of Credit" means any Existing Letter of Credit and any
letter of credit issued by the Issuing Lender for the account of the
Borrower in accordance with the terms of Section 2.4.
"Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(b)(i).
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans, the New Term Loan
and/or the Swing Line Loans (or a portion of any Revolving Loan, New
Term Loan or Swing Line Loan bearing interest at the Adjusted Base Rate
or the Adjusted Eurodollar Rate and referred to as a Base Rate Loan or
a Eurodollar Loan), individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender
to issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.4
23
"LOC 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.
"LOC 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 Issuing Lender but not
theretofore reimbursed by the Borrower.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Consolidated Parties taken as a
whole, (ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (iii)
the material rights and remedies of the Administrative Agent and the
Lenders under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means (i) as to the Revolving Loans, Letters
of Credit (and the related LOC Obligations), March 28, 2007 and (ii) as
to the New Term Loan, December 1, 2009.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgage Instruments" shall have the meaning assigned such
term in Section 5.1(e).
"Mortgage Policies" shall have the meaning assigned such term
in Section 5.1(e).
"Mortgaged Properties" shall have the meaning assigned such
term in Section 5.1(e).
"Multiemployer Plan" means a Plan which is a "multiemployer
plan" as defined in Sections 3(37) or 4001(a)(3) of ERISA.
24
"Multiple Employer Plan" means a Plan (other than a
Multiemployer Plan) which any Consolidated Party or any ERISA Affiliate
and at least one employer other than the Consolidated Parties or any
ERISA Affiliate are contributing sponsors.
"MVI/Aquasol Product" means the intangible assets, assumed
contracts and specified inventory of AstraZeneca AB and/or its
subsidiaries associated with the products sold under the registered or
unregistered trademarks MVI-12, MVI-Pediatric, Aquasol A, Aquasol E and
any "reformulated" MVI-12 for use in conducting business in the United
States acquired by aaiPharma LLC pursuant to the MVI/Aquasol Purchase
Agreement.
"MVI/Aquasol Purchase Agreement" means that certain Asset
Purchase Agreement by and between AstraZeneca AB and NeoSan
Pharmaceuticals Inc., dated as of July 26, 2001, as amended.
"MVI/Aquasol Transaction" means the Borrower's acquisition of
the MVI/Aquasol Product from AstraZeneca AB and/or its subsidiaries
pursuant to the MVI/Aquasol Purchase Agreement.
"MVI Payment" means the payment due in 2004 pursuant to the
MVI/Aquasol Purchase Agreement and with respect to the MVI/Aquasol
Product not to exceed $33,500,000.
"Net Cash Proceeds" means the aggregate cash or Cash
Equivalents proceeds received by any Consolidated Party in respect of
any Asset Disposition, Equity Issuance, Debt Issuance or Involuntary
Disposition, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, underwriting discounts
and commissions and sales commissions), (b) income or transfer taxes
paid or payable as a result thereof, (c) in the case of any Asset
Disposition, (i) the amount necessary to retire any Indebtedness
secured by a Permitted Lien required to be paid in connection with such
Asset Disposition on the related Property and (ii) reasonable reserves
for indemnification obligations in an aggregate amount not to exceed
$5,000,000 during the term hereof and (d) in the case of any
Involuntary Disposition, the amount necessary to retire any
Indebtedness secured by a Permitted Lien required to be paid in
connection with such Involuntary Disposition; it being understood that
"Net Cash Proceeds" shall include, without limitation, any cash or Cash
Equivalents received upon the sale or other disposition of any non-cash
consideration received by any such Consolidated Party in any Asset
Disposition, Equity Issuance, Debt Issuance or Involuntary Disposition.
"New Term Loan" shall have the meaning assigned to such term
in Section 2.3(a).
"New Term Loan Calculation Date" shall have the meaning
assigned to such term in the definition of Applicable Percentage.
"New Term Loan Commitment" means, with respect to each Lender,
the commitment of such Lender to make its portion of the New Term Loan
in a principal
25
amount equal to such Lender's New Term Loan Percentage (if any) of the
New Term Loan Committed Amount.
"New Term Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.3(a).
"New Term Loan Percentage" means, for any Lender, the
percentage identified as its New Term Loan Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"New Term Note" shall have the meaning assigned to such term
in Section 2.3(f).
"North Carolina Mortgaged Property" means those certain
parcels of real Property owned by the Borrower, located in Wilmington,
North Carolina and commonly referred to as 0000 Xxxxx 00xx Xxxxxx and
0000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxx Xxxxx Xxxxxxxx 00000.
"Note" or "Notes" means the Revolving Notes, the New Term
Notes and/or the Swing Line Note, individually or collectively, as
appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i) or Section 2.3(b).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11(b).
"Participant" shall have the meaning assigned to such term in
Section 11.3(d).
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.4, Swing Line Loans as provided in Section 2.2 or in any
other Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Acquisition" means the Darvon Transaction, the Elan
Transaction and any other Acquisition by the Borrower or any Subsidiary
of the Borrower permitted pursuant to the terms of Section 8.6(m)
26
"Permitted Asset Disposition" means (i) any Asset Disposition
permitted by Section 8.5 and (ii) any Excluded Asset Disposition.
"Permitted Investments" means, at any time, Investments by the
Consolidated Parties permitted to exist at such time pursuant to the
terms of Section 8.6.
"Permitted Liens" means, at any time, Liens in respect of
Property of the Consolidated Parties permitted to exist at such time
pursuant to the terms of Section 8.2.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date to be executed in favor of the Administrative Agent by
each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"Prime Rate" means, for any day, the per annum rate of
interest rate in effect for such day as publicly announced from time to
time by Bank of America as its "prime rate." Such rate is a rate set by
Bank of America based upon various factors including Bank of America's
costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in
such rate announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such
change.
"Principal Amortization Payment" means a principal payment on
the New Term Loan as set forth in Section 2.3(d).
"Principal Amortization Payment Date" means the date a
Principal Amortization Payment is due.
"Product Acquisition" means an Acquisition by a Consolidated
Party of the intellectual property rights to a pharmaceutical product
or product line.
"Pro Forma Basis" means, for purposes of calculating
(utilizing the principles set forth in the second paragraph of Section
1.3) compliance with each of the financial covenants set forth in
Section 7.10(a)-(e) in respect of a proposed transaction, that such
transaction shall be deemed to have occurred as of the first day of the
relevant calculation period used in calculating such financial
covenants as of the most recently ended fiscal
27
quarter preceding the date of such transaction with respect to which
the Administrative Agent has received the Required Financial
Information. As used herein, "transaction" shall mean (i) any
incurrence or assumption of Indebtedness as referred to in Section
8.1(n), (ii) any Acquisition as referred to in Section 8.6(m), or (iii)
the making of (x) the MVI Payment or (y) purchases of Senior
Subordinated Notes, in each case pursuant to Section 8.7. In connection
with any calculation of the financial covenants set forth in Section
7.10(a)-(e) upon giving effect to a transaction on a Pro Forma Basis:
(A) for purposes of any such calculation in respect of
any incurrence or assumption of Indebtedness as
referred to in Section 8.1(n), any Indebtedness which
is retired in connection with such transaction shall
be excluded and deemed to have been retired as of the
first day of the applicable period;
(B) for purposes of any such calculation in respect of
any Acquisition as referred to in Section 8.6(m):
(a) in the case of an Acquisition by a
Consolidated Party other than a Product
Acquisition, (1) any Indebtedness incurred
by any Consolidated Party in connection with
such transaction (x) shall be deemed to have
been incurred as of the first day of the
applicable period and (y) if such
Indebtedness has a floating or formula rate,
shall have an implied rate of interest for
the applicable period for purposes of this
definition determined by utilizing the rate
which is or would be in effect with respect
to such Indebtedness as at the relevant date
of determination, (2) income statement items
(whether positive or negative) attributable
to the Person or Property acquired shall be
included beginning as of the first day of
the applicable period and (3) pro forma
adjustments may be included to the extent
that such adjustments would be permitted
under GAAP and give effect to events that
are (x) directly attributable to such
transaction, (y) expected to have a
continuing impact on the Consolidated
Parties and (z) factually supportable; and
(b) in the case of a Product Acquisition, (1)
any Indebtedness incurred by any
Consolidated Party in connection with such
transaction (x) shall be deemed to have been
incurred as of the first day of the
applicable period and (y) if such
Indebtedness has a floating or formula rate,
shall have an implied rate of interest for
the applicable period for purposes of this
definition determined by utilizing the rate
which is or would be in effect with respect
to such Indebtedness as at the relevant date
of determination, (2) income statement items
(whether positive or negative) attributable
to the Person, Property or product acquired
shall be included to the extent
28
of (x) historical revenues, (y) historical
SG&A items and (z) contracted manufacturing
costs, and (3) such calculation shall
include any increased sales and marketing
costs that are projected to result from such
Product Acquisition (as determined by the
Borrower in good faith and based upon
assumptions believed to be reasonable); and
(C) for purposes of any such calculation in connection
with (x) the making of the MVI Payment or (y)
purchases of Senior Subordinated Notes, any
Indebtedness incurred (or to be incurred) by any
Consolidated Party in connection with such payment or
repurchases shall be deemed to have been incurred as
of the first day of the applicable period.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Administrative Agent
in connection with (i) any incurrence or assumption of Indebtedness as
referred to in Section 8.1(n), (ii) any Acquisition as referred to in
Section 8.6(m) or (iii) the making of the MVI Payment, or purchases of
Senior Subordinated Notes, as referred to in Section 8.7, as
applicable, and containing reasonably detailed calculations, upon
giving effect to the applicable transaction on a Pro Forma Basis, of
the Total Leverage Ratio, the Senior Leverage Ratio, the Interest
Coverage Ratio, the Fixed Charge Coverage Ratio and/or the minimum
Consolidated EBITDA, as applicable, as of the most recent fiscal
quarter end preceding the date of the applicable transaction with
respect to which the Administrative Agent shall have received the
Required Financial Information.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Real Properties" means, at any time, a collective reference
to each of the facilities and real properties owned, leased or operated
by the Consolidated Parties at such time.
"Register" shall have the meaning assigned to such term in
Section 11.3(c).
"Regulation D, T, U, or X" means Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"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.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
29
"Required Financial Information" means, with respect to the
applicable date, (i) the financial statements of the Consolidated
Parties required to be delivered pursuant to Section 7.1(a) or (b) for
the fiscal period or quarter ending as of such date, and (ii) the
certificate of an Executive Officer of the Borrower required by Section
7.1(c) to be delivered with the financial statements described in
clause (i) above.
"Required Lenders" means, at any time, Lenders (other than
Defaulting Lenders) holding in the aggregate at least a majority of (i)
the unfunded Commitments (and Participation Interests therein) and the
outstanding Loans (and Participation Interests therein) or (ii) if all
of the Commitments have been terminated, the outstanding Loans and
Participation Interests.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, including without limitation the FDA and the HHS, in each
case applicable to or binding upon such Person or to which any of its
material property is subject.
"Restricted Payment" means (i) any dividend or other payment
or distribution, direct or indirect, on account of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding (including without limitation any payment in connection
with any dissolution, merger, consolidation or disposition involving
any Consolidated Party), or to the holders, in their capacity as such,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding (other than dividends or distributions
payable in Capital Stock of the applicable Person and dividends or
distributions payable (directly or indirectly through Subsidiaries) to
any Credit Party), (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding,
(iv) any payment of the deferred purchase price of Property acquired
pursuant to the MVI/Aquasol Purchase Agreement, including without
limitation the MVI Payment, and (v) any payment or prepayment of
principal of, or premium, if any, on (including any redemption,
purchase, retirement, defeasance, sinking fund or similar payment with
respect to) the Senior Subordinated Notes, including without limitation
any repurchase of Senior Subordinated Notes pursuant to the equity
clawback provisions of Section 3.07(b) of the Senior Subordinated Note
Indenture.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage (if
any) of the Revolving Committed Amount (i) to make Revolving Loans in
accordance with the provisions of Section 2.1(a) and (ii) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section 2.4(c).
30
"Revolving Commitment Percentage" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" shall have the meaning assigned
to such term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" shall have the meaning assigned to such term
in Section 2.1(e).
"Royalties" means, for any fiscal quarter of the Consolidated
Parties, the aggregate royalties and licensing fees, net of associated
taxes, received by the Consolidated Parties in connection with
contracts related to U.S. Patents for omeprazole and fluoxetine
hydrochloride Form A.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement
pursuant to which any Consolidated Party, directly or indirectly,
becomes liable as lessee, guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capital Lease, of any Property
(a) which such Consolidated Party has sold or transferred (or is to
sell or transfer) to a Person which is not a Consolidated Party or (b)
which such Consolidated Party intends to use for substantially the same
purpose as any other Property which has been sold or transferred (or is
to be sold or transferred) by such Consolidated Party to another Person
which is not a Consolidated Party in connection with such lease.
"Securities Act" means the Securities Act of 1933, as amended,
and all regulations issued pursuant thereto.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, and all regulations issued pursuant thereto.
"Security Agreement" means the security agreement dated as of
the Closing Date to be executed in favor of the Administrative Agent by
each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"Senior Indebtedness" means all Funded Indebtedness other than
Subordinated Indebtedness.
31
"Senior Leverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the four quarter period (except
as set forth below) ending on such date with respect to the
Consolidated Parties on a consolidated basis, the ratio of (a) Senior
Indebtedness of the Consolidated Parties on a consolidated basis on the
last day of such period to (b) Consolidated EBITDA for such period;
provided, however, that (i) as of March 31, 2004, Consolidated EBITDA
shall be determined based upon the sum of (A) the product of (x)
Consolidated EBITDA, less non-recurring cash gains included in the
calculation of Consolidated EBITDA, for the one fiscal quarter period
ending as of such date, times (y) 4 plus (B) non-recurring cash gains
included in the calculation of Consolidated EBITDA for such fiscal
period, (ii) as of June 30, 2004, Consolidated EBITDA shall be
determined based upon the sum of (A) the product of (x) Consolidated
EBITDA, less non-recurring cash gains included in the calculation of
Consolidated EBITDA, for the two fiscal quarter period ending as of
such date, times (y) 2 plus (B) non-recurring cash gains included in
the calculation of Consolidated EBITDA for such fiscal period and (ii)
as of September 30, 2004, Consolidated EBITDA shall be determined based
upon the sum of (A) the product of (x) Consolidated EBITDA, less
non-recurring cash gains included in the calculation of Consolidated
EBITDA, for the three fiscal quarter period ending as of such date,
times (y) 4/3 plus (B) non-recurring cash gains included in the
calculation of Consolidated EBITDA for such fiscal period.
"Senior Subordinated Note" means any one of the 11% Senior
Subordinated Notes due 2010, issued by the Borrower in favor of the
Senior Subordinated Noteholders pursuant to the Senior Subordinated
Note Indenture, as such Senior Subordinated Notes may be amended,
modified, restated or supplemented and in effect from time to time in
accordance with the terms hereof.
"Senior Subordinated Note Indenture" means the Indenture,
dated as of the Closing Date, by and among the Borrower and the Trustee
for the Senior Subordinated Noteholders, as the same may be amended,
modified, restated or supplemented and in effect from time to time in
accordance with the terms hereof.
"Senior Subordinated Noteholder" means any one of the holders
from time to time of the Senior Subordinated Notes.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to pay
its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature in their ordinary course, (iii) such Person is
not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the
32
industry in which such Person is engaged or is to engage, (iv) the fair
value of the Property of such Person is greater than the total amount
of liabilities, including, without limitation, contingent liabilities,
of such Person and (v) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become
absolute and matured. In computing the amount of contingent liabilities
at any time, it is intended that such liabilities will be computed at
the amount which, in light of all the facts and circumstances existing
at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subordinated Indebtedness" means any Indebtedness of the
Borrower evidenced by the Senior Subordinated Notes and the Senior
Subordinated Notes Indenture and any other Indebtedness of the Borrower
which by its terms is subordinated to the Credit Party Obligations in a
manner and to an extent acceptable to the Administrative Agent and the
Required Lenders.
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or
classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether
or not at such time, any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association,
joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock.
"Swing Line Committed Amount" means FIVE MILLION DOLLARS
($5,000,000.00).
"Swing Line Lender" means Bank of America.
"Swing Line Loans" means the loans made by the Swing Line
Lender pursuant to Section 2.2.
"Swing Line Loan Note" means the promissory note of the
Borrower in favor of the Swing Line Lender evidencing the Swing Line
Loans provided pursuant to Section 2.2, as such promissory note may be
amended, modified, supplemented, extended, renewed or replaced from
time to time in and as evidenced by the form of Exhibit 2.2(e).
"Swing Line Loan Request" means a request by the Borrower for
a Swing Line Loan in substantially the form of Exhibit 2.2(b).
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease
under GAAP.
33
"Taxes" shall have the meaning assigned to such term in
Section 3.11(a).
"Total Leverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the four fiscal quarter period
(except as set forth below) ending on such date with respect to the
Consolidated Parties on a consolidated basis, the ratio of (a) Funded
Indebtedness of the Consolidated Parties on a consolidated basis on the
last day of such period to (b) Consolidated EBITDA for such period;
provided, however, that (i) as of March 31, 2004, Consolidated EBITDA
shall be determined based upon the sum of (A) the product of (x)
Consolidated EBITDA, less non-recurring cash gains included in the
calculation of Consolidated EBITDA, for the one fiscal quarter period
ending as of such date, times (y) 4 plus (B) non-recurring cash gains
included in the calculation of Consolidated EBITDA for such fiscal
period, (ii) as of June 30, 2004, Consolidated EBITDA shall be
determined based upon the sum of (A) the product of (x) Consolidated
EBITDA, less non-recurring cash gains included in the calculation of
Consolidated EBITDA, for the two fiscal quarter period ending as of
such date, times (y) 2 plus (B) non-recurring cash gains included in
the calculation of Consolidated EBITDA for such fiscal period and (iii)
as of September 30, 2004, Consolidated EBITDA shall be determined based
upon the sum of (A) the product of (x) Consolidated EBITDA, less
non-recurring cash gains included in the calculation of Consolidated
EBITDA, for the three fiscal quarter period ending as of such date,
times (y) 4/3 plus (B) non-recurring cash gains included in the
calculation of Consolidated EBITDA for such fiscal period.
"TROL" means that certain tax retention operating lease, dated
as of October 2, 1998 among the Borrower, First Security Bank, N.A., as
Owner Trustee under the AAI Realty Trust 1998-1, the lenders and
holders from time to time party thereto, and NationsBank, N.A. (now
known as Bank of America, N.A.) as Agent, as amended, modified,
restated or supplemented from time to time.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(a).
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily averages sum for such period of (i) the
outstanding aggregate principal amount of all Revolving Loans plus (ii)
the outstanding aggregate principal amount of all LOC Obligations.
"Voting Stock" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
34
"Wholly Owned Subsidiary" means any Person 100% of whose
Voting Stock is at the time owned by the Borrower directly or
indirectly through other Persons 100% of whose Voting Stock is at the
time owned, directly or indirectly, by the Borrower.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis; provided, however, that calculations of the implied principal component
of all obligations under any Synthetic Lease or the implied interest component
of any rent paid under any Synthetic Lease shall be made by the Borrower in
accordance with accepted financial practice and consistent with the terms of
such Synthetic Lease. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, in connection with, or prior to, the delivery of the first
financial statements pursuant to Section 7.1, consistent with the financial
statements as at December 31, 2001); provided, however, if (a) the Credit
Parties shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Administrative Agent or the Required
Lenders shall so object in writing within 60 days after delivery of such
financial statements, then such calculations shall be made on a basis consistent
with the most recent financial statements delivered by the Credit Parties to the
Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made under the financial covenants set
forth in Section 7.10 (including without limitation for purposes of the
definition of "Pro Forma Basis" set forth in Section 1.1 unless otherwise
provided in such definition), (i) after consummation of any Asset Disposition
(A) income statement items (whether positive or negative) and capital
expenditures attributable to the Property disposed of shall be excluded to the
extent relating to any period occurring prior to the date of such transaction
and (B) Indebtedness which is retired shall be excluded and deemed to have been
retired as of the first day of the applicable period and (ii) after consummation
of any Acquisition (other than the Elan Transaction) (A) historical income
statement items (whether positive or negative) and capital expenditures
attributable to the Person or Property acquired shall, to the extent not
otherwise included in such income statement items for the Consolidated Parties
in accordance with GAAP or in accordance with any defined terms set forth in
Section 1.1, be included to the extent relating to any period applicable in such
calculations, (B) to the extent not retired in connection with such Acquisition,
Indebtedness of the Person or Property acquired shall be deemed to have been
incurred as of the first day of the
35
applicable period and (C) pro forma adjustments may be included to the extent
that such adjustments would be permitted under GAAP and give effect to items
that are (x) directly attributable to such transaction, (y) expected to have a
continuing impact on the Consolidated Parties and (z) factually supportable.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Commitment. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower such Lender's Revolving Commitment Percentage
of revolving credit loans requested by the Borrower in Dollars
("Revolving Loans") from time to time from the Closing Date until the
Maturity Date, or such earlier date as the Revolving Commitments shall
have been terminated as provided herein; provided, however, that the
sum of the aggregate outstanding principal amount of Revolving Loans
plus the aggregate amount of Swing Line Loans outstanding plus the
outstanding LOC Obligations shall not exceed EIGHTY-FIVE MILLION
DOLLARS ($85,000,000.00) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 3.4, the "Revolving
Committed Amount"); provided, further, with regard to each Lender
individually, such Lender's outstanding Revolving Loans plus its
Participation Interests in Letters of Credit or LOC Obligations plus
its Participation Interests in Swing Line Loans shall not exceed such
Lender's Revolving Commitment Percentage of the Revolving Committed
Amount. Revolving Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrower may request; provided,
however, that no more than 10 Eurodollar Loans which are Revolving
Loans shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end
of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Revolving Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall
request a Revolving Loan borrowing by written notice (or
telephonic notice promptly confirmed in writing) to the
Administrative Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of
Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested
36
borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing
shall be comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested,
the Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period
of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base
Rate Loan hereunder. The Administrative Agent shall give
notice to each affected Lender promptly upon receipt of each
Notice of Borrowing pursuant to this Section 2.1(b)(i), the
contents thereof and each such Lender's share of any borrowing
to be made pursuant thereto.
(ii) Minimum Amounts. Except for Revolving Loans
made for the purpose of reimbursing the Issuing Lender in
respect of a drawing under a Letter of Credit pursuant to
Section 2.4(e) or Swing Line Loans pursuant to Section 2.2(d),
each Eurodollar Loan or Base Rate Loan that is a Revolving
Loan shall be in a minimum aggregate principal amount of
$1,000,000 and integral multiples of $100,000 in excess
thereof (or the remaining amount of the Revolving Committed
Amount, if less).
(iii) Advances. Except for Revolving Loans made
for the purpose of reimbursing the Issuing Lender in respect
of a drawing under a Letter of Credit pursuant to Section
2.4(e) or Swing Line Loans pursuant to Section 2.2(d), each
Lender will make its Revolving Commitment Percentage of each
Revolving Loan borrowing available to the Administrative Agent
for the account of the Borrower as specified in Section
3.15(a), or in such other manner as the Administrative Agent
may specify in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice
of Borrowing in Dollars and in funds immediately available to
the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) Repayment. The Borrower hereby promises to pay the
principal amount of all outstanding Revolving Loans in full on the
Maturity Date, unless accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of Base
Rate Loans, such Base Rate Loans shall bear interest at a per
annum rate equal to the Adjusted Base Rate.
37
(ii) Eurodollar Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Adjusted Eurodollar Rate.
The Borrower hereby promises to pay interest on Revolving Loans in
arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
(e) Revolving Notes. The Borrower hereby agrees that,
upon the request to the Administrative Agent by any Lender, the
Borrower will execute and deliver to such Lender a promissory note
evidencing the Revolving Loans of such Lender, substantially in the
form of Exhibit 2.1(e), with appropriate insertions as to date and
principal amount (a "Revolving Note").
2.2 SWING LINE LOANS SUBFACILITY.
(a) Swing Line Loans. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, the Swing Line Lender hereby agrees, to make loans (each
a "Swing Line Loan" and collectively, the "Swing Line Loans") to the
Borrower, in Dollars, at any time and from time to time, during the
period from and including the Effective Date to but not including the
Maturity Date (or such earlier date if the Commitments have been
terminated as provided herein); provided that (i) the aggregate
principal amount of the Swing Line Loans outstanding at any one time
shall not exceed the Swing Line Committed Amount and (ii) the aggregate
amount of outstanding Swing Line Loans plus the aggregate amount of
outstanding Revolving Loans plus LOC Obligations shall not exceed the
Revolving Committed Amount. Subject to the terms of this Credit
Agreement, the Borrower may borrow, repay and reborrow Swing Line
Loans.
(b) Borrowing Procedures. By no later than 1:00 p.m. on
the date of the requested borrowing of Swing Line Loans, the Borrower
shall provide telephone notice to the Swing Line Lender, followed
promptly by a written Swing Line Loan Request in the form of Exhibit
2.2(b) (which maybe submitted by telecopy) setting forth (i) the amount
of the requested Swing Line Loan and (ii) the date of the requested
Swing Line Loan and complying in all respects with Section 5.2. The
Swing Line Lender shall initiate the transfer of funds representing the
Swing Line Loan advance to the Borrower by 3:00 p.m. on the Business
Day of the requested borrowing.
(c) Minimum Amounts. Each Swing Line Loan shall be in a
minimum amount of the lesser of $100,000 (and in integral multiples of
$25,000 in excess thereof) or the remaining amount available under the
Swing Line Committed Amount.
(d) Repayment and Participations of Swing Line Loans. The
Swing Line Loans shall bear interest at a rate mutually agreeable to
the Swing Line Lender and the Borrower at the time of the borrowing of
such Swing Line Loan, but in no event shall such rate exceed the
Adjusted Base Rate. The Borrower agrees to repay all Swing Line Loans
immediately upon the existence of a Default or Event of Default or
otherwise within three Business Days
38
of demand therefor by the Swing Line Lender. If the Borrower does not
immediately notify the Swing Line Lender that the Borrower intends to
otherwise repay such Swing Line Loan, the Borrower shall be deemed to
have requested a Revolving Loan advance comprised solely of Base Rate
Loans in the amount of such Swing Line Loans; provided, however, that
any such demand shall be deemed to have been given one Business Day
prior to the Maturity Date and on the date of the occurrence of any
Event of Default described in Section 9.1 and upon acceleration of the
indebtedness hereunder and the exercise of remedies in accordance with
the provisions of Section 9.2. Each Lender hereby irrevocably agrees to
make its pro rata share of each such Revolving Loan in the amount, in
the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of such borrowing may not comply with
the minimum amount for advances of Revolving Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) failure of any such request or deemed request for a
Revolving Loan to be made by the time otherwise required hereunder, (v)
whether the date of such borrowing is a date on which Revolving Loans
are otherwise permitted to be made hereunder or (vi) any termination of
the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower or
any other Credit Party), then each Lender hereby agrees that it shall
forthwith purchase (as of the date such borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on
or after such date and prior to such purchase) from the Swing Line
Lender such Participation Interests in the outstanding Swing Line Loans
as shall be necessary to cause each such Lender to share in such Swing
Line Loans ratably based upon its Revolving Commitment Percentage of
the Revolving Committed Amount (determined before giving effect to any
termination of the Commitments pursuant to Section 3.4), provided that
(A) all interest payable on the Swing Line Loans shall be for the
account of the Swing Line Lender until the date as of which the
respective Participation Interest is purchased and (B) at the time any
purchase of Participation Interests pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay to the
Swing Line Lender, interest on the principal amount of Participation
Interests purchased for each day from the date of demand thereof, at a
rate equal to, if paid within two Business Days of such date, the
Federal Funds Rate, and thereafter at a rate equal to the Base Rate
plus two percent (2%) per annum.
(e) Swing Line Loan Note. The Swing Line Loans made by
the Swing Line Lender shall be evidenced by a duly executed promissory
note of the Borrower to the Swing Line Lender in substantially the form
of Exhibit 2.2(e).
2.3 NEW TERM LOAN.
(a) New Term Commitment. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein each Lender severally agrees to make
available to the Borrower on the First Amendment Effective Date such
Lender's New Term Loan Percentage of a term loan in Dollars (the "New
Term Loan"; each
39
component thereof may be referred to herein as a "New Term Loan") in
the aggregate principal amount of ONE HUNDRED SIXTY MILLION DOLLARS
($160,000,000.00) (the "New Term Loan Committed Amount"). The New Term
Loan may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request; provided, however,
that no more than 6 Eurodollar Loans which are Loans under the New Term
Loan shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end
of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Amounts repaid on the New Term Loan may not be
reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an
appropriate Notice of Borrowing to the Administrative Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) or such later time as
the Administrative Agent and the Borrower shall agree on the First
Amendment Effective Date, with respect to the portion of the New Term
Loan initially consisting of a Base Rate Loan, or on the third Business
Day prior to the First Amendment Effective Date, with respect to the
portion of the New Term Loan initially consisting of one or more
Eurodollar Loans. Such Notice of Borrowing shall be irrevocable and
shall specify (i) that the funding of the New Term Loan is requested
and (ii) whether the funding of the New Term Loan shall be comprised of
Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Period(s) therefor. If the
Borrower shall fail to deliver such Notice of Borrowing to the
Administrative Agent by 11:00 A.M. (Charlotte, North Carolina time) on
the third Business Day prior to the First Amendment Effective Date,
then the full amount of the New Term Loan shall be disbursed on the
First Amendment Effective Date as a Base Rate Loan. Each Lender shall
make its New Term Loan Percentage of the New Term Loan available to the
Administrative Agent for the account of the Borrower at the office of
the Administrative Agent specified in Schedule 11.1, or at such other
office as the Administrative Agent may designate in writing, by 1:00
P.M. (Charlotte, North Carolina time) on the First Amendment Effective
Date in Dollars and in funds immediately available to the
Administrative Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate
Loan that is part of the New Term Loan shall be in an aggregate
principal amount that is not less than $1,000,000 (or the then
remaining principal balance of the New Term Loan, if less).
(d) Repayment of New Term Loan. The Borrower hereby
promises to pay the outstanding principal amount of the New Term Loan
in consecutive quarterly installments commencing March 31, 2004 as
follows (as such installments may hereafter be adjusted as a result of
prepayments made pursuant to Section 3.3), in each case unless
accelerated sooner pursuant to Section 9.2:
40
NEW TERM LOAN PRINCIPAL
PRINCIPAL AMORTIZATION PAYMENT DATES AMORTIZATION PAYMENT
-------------------------------------------------------------------
March 31, 2004 $ 2,000,000
June 30, 2004 $ 2,000,000
September 30, 2004 $ 2,000,000
December 31, 2004 $ 2,000,000
March 31, 2005 $ 4,000,000
June 30, 2005 $ 4,000,000
September 30, 2005 $ 4,000,000
December 31, 2005 $ 4,000,000
March 31, 2006 $ 6,000,000
June 30, 2006 $ 6,000,000
September 30, 2006 $ 6,000,000
December 31, 2006 $ 6,000,000
March 31, 2007 $ 8,000,000
June 30, 2007 $ 8,000,000
September 30, 2007 $ 8,000,000
December 31, 2007 $ 8,000,000
March 31, 2008 $10,000,000
June 30, 2008 $10,000,000
September 30, 2008 $10,000,000
December 31, 2008 $10,000,000
March 31, 2009 $10,000,000
June 30, 2009 $10,000,000
September 30, 2009 $10,000,000
Maturity Date $10,000,000 or, if different, the
remaining principal amount of the
New Term Loan
(e) Interest. Subject to the provisions of Section 3.1,
the New Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the
New Term Loan shall be comprised in whole or in part of Base
Rate Loans, such Base Rate Loans shall bear interest at a per
annum rate equal to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the
New Term Loan shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Adjusted Eurodollar Rate.
The Borrower hereby promises to pay interest on the New Term Loan in
arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
41
(f) New Term Notes. The Borrower hereby agrees that, upon
the request to the Administrative Agent by any Lender, the Borrower
will execute and deliver to such Lender a promissory note evidencing
the New Term Loans of such Lender, substantially in the form of Exhibit
2.3(f), with appropriate insertions as to date and principal amount (a
"New Term Note").
2.4 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. The Existing Letters of Credit have
previously been issued by the Issuing Lender 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 Lenders set
forth in this Section 2.4, the Issuing Lender agrees to issue, and each
Lender severally agrees to participate in the issuance by the Issuing
Lender of, standby and trade Letters of Credit in Dollars from time to
time from the Closing Date until the date thirty (30) days prior to the
Maturity Date as the Borrower may request, in a form acceptable to the
Issuing Lender; provided, however, that (i) the LOC Obligations
outstanding shall not at any time exceed TWO MILLION FIVE HUNDRED
THOUSAND DOLLARS ($2,500,000) (the "LOC Committed Amount") and (ii) the
sum of the aggregate outstanding principal amount of Revolving Loans
plus LOC Obligations plus Swing Line Loans outstanding shall not at any
time exceed the Revolving Committed Amount. No Letter of Credit shall
(x) have an original expiry date more than one year from the date of
issuance (provided that any such Letter of Credit may contain customary
"evergreen" provisions pursuant to which the expiry date is
automatically extended by a specific time period unless the Issuing
Lender gives notice to the beneficiary of such Letter of Credit at
least a specified time period prior to the expiry date then in effect)
or (y) as originally issued or as extended, have an expiry date
extending beyond the date thirty (30) days prior to the Maturity Date.
Each Letter of Credit shall comply with the related LOC 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 pursuant
hereto, and from and after the Closing Date shall be subject to and
governed by the terms and conditions hereof. The Issuing Lender 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 Issuing Lender from issuing
such Letter of Credit, or any Requirement of Law applicable to the
Issuing Lender or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the Issuing Lender shall prohibit, or request that the Issuing Lender
refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the Issuing Lender
with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Lender is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Issuing Lender any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing
Lender in good xxxxx xxxxx material to it or (B) the issuance of such
Letter of Credit would violate one or more policies of the Issuing
Lender applicable to all applicants for letters of credit of the
Issuing Lender generally.
42
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing
Lender, 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 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) Participation. Each Lender, upon issuance of a Letter
of Credit, shall be deemed to have purchased without recourse a
Participation Interest from the Issuing Lender 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 (based on the respective Revolving Commitment Percentages of
the Lenders) and shall absolutely, unconditionally and irrevocably
assume and be obligated to pay to the Issuing Lender 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 Lender's Participation Interest in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Lender shall
pay to the Issuing Lender its pro rata share of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) below. The obligation of each Lender to so reimburse the
Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided. Until each Lender funds its Revolving Loan
advance pursuant to this Section 2.4(c) to reimburse the Issuing Lender
for any amount drawn under any Letter of Credit, interest in respect of
such Lender's pro rata share of such amount shall be solely for the
account of the Issuing Lender. If any Lender fails to make available to
the Administrative Agent for the account of the Issuing Lender any
amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.4(c), the Issuing Lender shall be entitled
to recover from such 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 Issuing Lender at a rate per annum equal
to the Federal Funds Rate from time to time in effect. A certificate of
the Issuing Lender submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (c) shall be
conclusive absent manifest error.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower
and the Administrative Agent. Unless the Borrower shall immediately
notify the Issuing Lender that the Borrower intends to
43
otherwise reimburse the Issuing Lender for such drawing, the Borrower
shall be deemed to have requested that the Lenders make a Revolving
Loan in the amount of the drawing as provided in subsection (e) below
on the related Letter of Credit, the proceeds of which will be used to
satisfy the related reimbursement obligations. The Borrower promises to
reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Revolving Loan obtained hereunder
or otherwise) in same day funds. If the Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the Borrower
promises to pay the Issuing Lender interest on the unreimbursed amount
of such drawing on demand at a per annum rate equal to the Adjusted
Base Rate plus 2%. The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to
payment the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of
Credit drawn upon or any other Person, including without limitation any
defense based on any failure of the Borrower or any other Credit Party
to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Administrative Agent will
promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Administrative Agent
for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's pro rata share of such
unreimbursed drawing. Such payment shall be made on the day such notice
is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time), and
otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender
shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from
the date of such drawing until such Lender pays such amount to the
Issuing Lender in full at a rate per annum equal to, if paid within two
(2) Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each
Lender's obligation to make such payment to the Issuing Lender, and the
right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default
or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
Lender to the Issuing Lender, such Lender shall, automatically and
without any further action on the part of the Issuing Lender or such
Lender, acquire a Participation Interest in an amount equal to such
payment (excluding the portion of such payment constituting interest
owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower with
respect thereto.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse
44
a drawing under a Letter of Credit, the Administrative Agent shall give
notice to the Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan
advance comprised of Base Rate Loans (or Eurodollar Loans to the extent
the Borrower has complied with the procedures of Section 2.1(b)(i) with
respect thereto) shall be immediately made to the Borrower by all
Lenders (notwithstanding any termination of the Commitments pursuant to
Section 9.2) pro rata based on the respective Revolving Commitment
Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2) and the
proceeds thereof shall be paid directly to the Issuing Lender through
the Administrative Agent for application to the respective LOC
Obligations. Each such 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 advances of
Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 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 the Borrower or any other Credit Party), then each such Lender
hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such Participation Interests in the
outstanding LOC Obligations as shall be necessary to cause each such
Lender to share in such LOC Obligations ratably (based upon the
respective Revolving Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to
Section 9.2)), provided that at the time any purchase of Participation
Interests pursuant to this sentence is actually made, the purchasing
Lender shall be required to pay to the Issuing Lender, to the extent
not paid to the Issuing Lender by the Borrower in accordance with the
terms of subsection (d) above, interest on the principal amount of
Participation Interests purchased for each day from and including the
day upon which such borrowing would otherwise have occurred to but
excluding the date of payment for such Participation Interests, at the
rate equal to, if paid within two (2) Business Days of the date of the
Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
(f) Designation of Consolidated Parties as Account
Parties. Notwithstanding anything to the contrary set forth in this
Credit Agreement, including without limitation Section 2.4(a), a Letter
of Credit issued hereunder may be issued for the account of any
Subsidiary of the Borrower, provided that the Borrower shall be the
actual account party for all purposes of this Credit Agreement for such
Letter of Credit the Borrower's
45
reimbursement obligations hereunder with respect to such Letter of
Credit shall not be affected.
(g) Renewal, Extension. The renewal or extension of any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may
have the Letters of Credit be subject to The Uniform Customs and
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) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under
this Section 2.4, the Borrower hereby agrees to pay, and
protect, indemnify and save each Lender harmless from and
against, any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that such Lender may incur or be subject to
as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or (B) the failure of such Lender to
honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Lenders
(including the Issuing Lender), the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. No Lender (including the Issuing
Lender) shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
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 Lender, including, without
limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
46
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith, shall not put such Lender under any resulting
liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify each Lender
(including the Issuing Lender) against any and all risks
involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of
itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable
for any failure by such Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such
Lender.
(iv) Nothing in this subsection (i) is intended
to limit the reimbursement obligations of the Borrower
contained in subsection (d) above. The obligations of the
Borrower under this subsection (i) shall survive the
termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall
in any way affect or impair the rights of the Lenders
(including the Issuing Lender) to enforce any right, power or
benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (i), the Borrower shall have no
obligation to indemnify any Lender (including the Issuing
Lender) in respect of any liability incurred by such Lender
(A) arising solely out of the gross negligence or willful
misconduct of the Issuing Lender, as determined by a court of
competent jurisdiction, or (B) caused by the Issuing Lender's
failure to pay under any Letter of Credit after presentation
to it of a request strictly complying with the terms and
conditions of such Letter of Credit, as determined by a court
of competent jurisdiction, unless such payment is prohibited
by any law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 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 2.4 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section
2.4 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(k) Conflict with LOC Documents. In the event of any
conflict between this Credit Agreement and any letter of credit
application, this Credit Agreement shall control.
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(l) Cash Collateral. Upon the request of the
Administrative Agent, if, as of the Maturity Date for Letters of
Credit, any Letter of Credit may for any reason remain outstanding and
partially or wholly undrawn, the Borrower shall immediately Cash
Collateralize the then outstanding LOC 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 Issuing Lender and the
other Lenders, as collateral for the LOC Obligations, cash or deposit
account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the Issuing Lender (which
documents are hereby consented to by the Lenders). Derivatives of such
term have corresponding meanings. The Borrower hereby grants to the
Administrative Agent, for the benefit of the Issuing Lender and the
other 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.
2.5 INCREASE IN REVOLVING COMMITMENTS.
(a) Provided there exists no Default or Event of Default, upon
notice to the Administrative Agent (which shall promptly notify the Lenders),
the Borrower may from time to time, request an increase in the Revolving
Committed Amount; provided, however, that the maximum amount of the Revolving
Committed Amount after giving effect to any such increase shall not exceed
$100,000,000. The aggregate amount of any individual increase hereunder shall be
in a minimum amount of $5,000,000, or such lesser amount as may be necessary to
increase the Revolving Committed Amount to the maximum $100,000,000, and in
integral multiples of $1,000,000 in excess thereof. To achieve the full amount
of a requested increase, the Borrower may solicit increased Revolving
Commitments from existing Lenders and also invite additional Eligible Assignees
to become Lenders; provided, however, that no existing Lender shall be obligated
to accept an increase in its Revolving Commitment pursuant to this Section 2.5
unless it specifically consents to such increase in writing. Any Lender or
Eligible Assignee agreeing to increase its existing Revolving Commitment or
provide a new Revolving Commitment pursuant to this Section 2.5 shall, in
connection therewith, deliver to the Administrative Agent a new commitment
agreement in form and substance satisfactory to the Administrative Agent and its
counsel.
(b) If the Revolving Committed Amount is increased in accordance
with this Section, the Administrative Agent and the Borrower shall determine the
effective date (the "Increase Effective Date") and the final allocation of such
increase. The Administrative Agent shall promptly notify the Borrower and the
Lenders of the final allocation of such increase and the Increase Effective Date
and Schedule 2.1(a) hereto shall be deemed amended to reflect such increase and
final allocation. As a condition precedent to such increase, in addition to any
deliveries pursuant to subsection (a) above, the Borrower shall deliver to the
Administrative Agent each of the following in form and substance satisfactory to
the Administrative Agent: (1) a
48
certificate of each Credit Party dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by an Executive Officer of such Credit
Party (i) certifying and attaching the resolutions adopted by such Credit Party
approving or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Section 6 and the other Credit
Documents are true and correct in all material respects on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct in all material respects as of such earlier date, and except that
for purposes of this Section 2.5, the representations and warranties contained
in Section 6.1 shall be deemed to refer to the most recent statements furnished
pursuant to Section 7.1, and (B) no Default or Event of Default exists; (2) a
statement of reaffirmation from each Credit Party pursuant to which each such
Credit Party ratifies this Agreement and the other Credit Documents and
acknowledges and reaffirms that, after giving effect to such increase, it is
bound by all terms of this Agreement and the other Credit Documents (including,
but not limited to, the granting of Liens under the Collateral Documents); (3)
if the increase is being provided by an existing Lender, and such Lender is then
in possession of a Revolving Note, a revised Revolving Note in favor of such
Lender reflecting such Lender's Revolving Commitment after giving effect to such
increase; and (4) if the increase is being provided by a new Lender, a Revolving
Note in favor of such Lender if so requested by such Lender. The Borrower shall
prepay any Revolving Loans outstanding on the Increase Effective Date (and pay
any additional amounts required pursuant to Section 3.12), by requesting a new
Loan or otherwise, to the extent necessary to keep the outstanding Revolving
Loans ratable with respect to any revised Revolving Commitments arising from any
nonratable increase in the Revolving Commitments under this Section.
(c) This Section shall supersede any provisions in Sections 3.14
or 11.6 to the contrary.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, (i) the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall at the discretion of the Required Lenders (or automatically if
the Event of Default is pursuant to Section 9.1(f)) bear interest, payable on
demand, at a per annum rate 2% greater than the rate which would otherwise be
applicable (or if no rate is applicable, whether in respect of interest, fees or
other amounts, then the Adjusted Base Rate plus 2%) and (ii) the Letter of
Credit Fee shall accrue at a per annum rate 2% greater than the rate which would
otherwise be applicable.
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3.2 EXTENSION AND CONVERSION.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) Loans extended as, or converted
into, Eurodollar Loans shall be subject to the terms of the definition of
"Interest Period" set forth in Section 1.1 and shall be in such minimum amounts
as provided in, with respect to Revolving Loans, Section 2.1(b)(ii) with respect
to Swing Line Loans, Section 2.2(c) or with respect to the New Term Loan,
Section 2.3(c) (iii) no more than 10 Eurodollar Loans which are Revolving Loans
and 6 Eurodollar Loans which are Loans under the New Term Loan shall be
outstanding hereunder at any time (it being understood that, for purposes
hereof, Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period) and (iv) any request for
extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the Borrower by
giving a Notice of Extension/Conversion (or telephonic notice promptly confirmed
in writing) to the office of the Administrative Agent specified in Schedule
11.1, or at such other office as the Administrative Agent may designate in
writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate
Loan, and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section 3.2, or any such conversion or extension is not permitted or
required by this Section 3.2, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time; provided,
however, that each partial prepayment of Loans shall be in a minimum
principal amount of $1,000,000 and integral multiples of $100,000 in
excess thereof and subject to the foregoing terms, amounts prepaid
under this Section 3.3(a) shall be applied as the Borrower may elect;
provided that if the Borrower shall fail to specify with respect to any
voluntary prepayment, such voluntary prepayment shall be applied first
pro rata to the remaining principal installments of the New Term Loan
then to the Revolving Loans (without any corresponding reduction in the
Revolving Committed Amount unless so requested by the Borrower), in
each case first to Base Rate
50
Loans and then to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 3.3(a) shall be subject
to Section 3.12, but otherwise without premium or penalty, and shall be
accompanied by interest on the principal amount prepaid through the
date of prepayment.
(b) Mandatory Prepayments.
(i) (A) Revolving Committed Amount. If at
any time, the sum of the aggregate
outstanding principal amount of Revolving
Loans plus the aggregate outstanding
principal amount of Swing Line Loans plus
LOC Obligations shall exceed the Revolving
Committed Amount, the Borrower, within two
(2) Business Days, shall prepay the Loans
and/or cash collateralize the LOC
Obligations in an amount sufficient to
eliminate such excess (such prepayment to be
applied as set forth in clause (vii) below).
(B) LOC Committed Amount. If at any
time, the sum of the aggregate principal
amount of LOC Obligations shall exceed the
LOC Committed Amount, the Borrower
immediately shall cash collateralize the LOC
Obligations in an amount sufficient to
eliminate such excess (such prepayment to be
applied as set forth in clause (vii) below).
(ii) (A) Asset Dispositions. Immediately
upon the occurrence of any Asset Disposition
Prepayment Event, the Borrower shall prepay
the Loans and/or cash collateralize the LOC
Obligations in an aggregate amount equal to
100% of the Net Cash Proceeds of the related
Asset Disposition not applied (or caused to
be applied) by the Credit Parties during the
related Application Period to make Eligible
Reinvestments as contemplated by the terms
of Section 8.5(f) (such prepayment to be
applied as set forth in clause (vii) below);
provided, however, that no prepayment shall
be required under this clause (ii)(A) to the
extent the Net Cash Proceeds of the related
Asset Disposition not applied (or caused to
be applied) by the Credit Parties during the
related Application Period to make Eligible
Reinvestments as contemplated by the terms
of Section 8.5(f) do not exceed (a) with
respect to any individual Asset Disposition,
$500,000 and (b) with respect to all Asset
Dispositions consummated in a given fiscal
year, $2,000,000.
(B) Involuntary Dispositions.
Immediately upon the occurrence of an
Involuntary Disposition Prepayment Event,
the Borrower shall prepay the Loans and/or
cash collateralize the LOC Obligations in an
aggregate amount equal to 100% of the Excess
Proceeds (such prepayment to be applied as
set forth in clause (vii) below).
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(iii) Debt Issuances. Promptly, but in any event
within five (5) Business Days, upon the occurrence of
a Debt Issuance Prepayment Event, the Borrower shall
prepay the Loans and/or cash collateralize the LOC
Obligations in an aggregate amount equal to 100% of
the Net Cash Proceeds of the related Debt Issuance
(such prepayment to be applied as set forth in clause
(vii) below).
(iv) Equity Issuances. Promptly, but in any event
within five (5) Business Days, upon the occurrence of
an Equity Issuance Prepayment Event, the Borrower
shall prepay the Loans and/or cash collateralize the
LOC Obligations in an aggregate amount equal to (A)
100% of the Net Cash Proceeds of the related Equity
Issuance if the Total Leverage Ratio as of the end of
the most recently ended fiscal quarter for which the
Required Financial Information has been delivered is
equal to or greater than 3.50:1.0, (B) 75% of the Net
Cash Proceeds of the related Equity Issuance if the
Total Leverage Ratio as of the end of such preceding
fiscal quarter is less than 3.50:1.0 but equal to or
greater than 2.50:1.0, and (C) 50% of the Net Cash
Proceeds of the related Equity Issuance if the Total
Leverage Ratio as of the end of the most recently
ended fiscal quarter for which the Required Financial
Information has been delivered is less than 2.50:1.0
(such prepayment to be applied as set forth in clause
(vii) below).
(v) Royalties. Within forty-five (45) days after
the end of each fiscal quarter, the Borrower shall
prepay the Loans and/or cash collateralize the LOC
Obligations in an aggregate amount equal to (A) if
the Total Leverage Ratio as of the end of such
preceding fiscal quarter is equal to or greater than
3.25:1.0, 75% of the Royalties for such fiscal
quarter most recently ended, (B) if the Total
Leverage Ratio as of the end of such preceding fiscal
quarter is less than 3.25:1.0 but equal to or greater
than 2.50:1.0, 25% of the Royalties for such fiscal
quarter most recently ended and (C) if the Total
Leverage Ratio as of the end of such preceding fiscal
quarter is less than 2.50:1.0, 0% of the Royalties
for such fiscal quarter most recently ended (such
prepayment to be applied as set forth in clause (vii)
below).
(vi) Excess Cash Flow. Within ninety (90) days
after the end of each fiscal year, the Borrower shall
prepay the Loans and/or cash collateralize the LOC
Obligations in an amount equal to (A) if the Total
Leverage Ratio as of the end of such preceding fiscal
year is equal to or greater than 3.25:1.0, 75% of
Excess Cash Flow for such prior fiscal year, (B) if
the Total Leverage Ratio as of the end of such
preceding fiscal year is less than 3.25:1.0 but equal
to or greater than 2.50:1.0, 25% of Excess Cash Flow
for such prior fiscal year and (C) if the Total
Leverage Ratio as of the end of such preceding fiscal
year is less than 2.50:1.0, 0% of Excess Cash Flow
for such
52
prior fiscal year (such prepayment to be applied as
set forth in clause (vii) below).
(vii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section
3.3(b) shall be applied as follows:
(A) with respect to all amounts prepaid
pursuant to Section 3.3(b)(i)(A), first to
Swing Line Loans and then to Revolving Loans
and (after all Revolving Loans and Swing
Line Loans have been repaid) to a cash
collateral account in respect of LOC
Obligations;
(B) with respect to all amounts prepaid
pursuant to Section 3.3(b)(i)(B), to a cash
collateral account in respect of LOC
Obligations;
(C) with respect to all amounts prepaid
pursuant to Section 3.3(b)(iii), (iv) or
(vi), first to the New Term Loan (credited
first, with respect to prepayments pursuant
to clause (vi) above only, to installments
due in the next succeeding six months (to
the extent requested by the Borrower) and
then, with respect to all other amounts, pro
rata with respect to each remaining
installment of principal), then, after the
New Term Loan is paid in full, to the Swing
Line Loans, then, after the Swing Line Loans
are paid in full, to the Revolving Loans
and, finally (after all Revolving Loans and
Swing Line Loans have been repaid), to a
cash collateral account in respect of LOC
Obligations; and
(D) with respect to all amounts prepaid
pursuant to Section 3.3(b)(ii) or (v), pro
rata to (x) the New Term Loan (credited
first, with respect to prepayments pursuant
to clause (v) above only, to installments
due in the next succeeding six months (to
the extent requested by the Borrower) and
then, with respect to all other amounts, pro
rata with respect to each remaining
installment of principal) and (y) the
Revolving Loans and Swing Line Loans, with
outstanding Swing Line Loans prepaid first
and then Revolving Credit Loans prepaid
second, and (after all Revolving Loans and
Swing Line Loans have been repaid) to a cash
collateral account in respect of LOC
Obligations (with, in the case of
prepayments applied to the Revolving Loans
pursuant to clause (ii) above, and only if
an Event of Default has occurred, a
corresponding permanent reduction in the
Revolving Committed Amount; provided,
however, that, on the 360th day following
the receipt by a Consolidated Party of the
Net Cash Proceeds that gave rise to such
prepayment, there shall be a permanent
reduction in the Revolving Committed Amount
that corresponds to a prepayment applied
pursuant to Section 3.3(b)(ii)
53
and clause (y) above (to the extent that no
prior permanent reduction of the Revolving
Committed Amount has occurred) if, on such
360th day, such Net Cash Proceeds have not
been applied toward Eligible Reinvestments).
Within the parameters of the applications set forth
above, prepayments shall be applied first to Base
Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities. All prepayments
under this Section 3.3(b) shall be subject to Section
3.12, but otherwise without premium or penalty, and
shall be accompanied by interest on the principal
amount prepaid through the date of prepayment.
(viii) Prepayment Account. If the Borrower is
required to make a mandatory prepayment of Eurodollar
Loans under this Section 3.3(b), the Borrower shall
have the right, in lieu of making such prepayment in
full, to deposit an amount equal to such mandatory
prepayment with the Administrative Agent in a cash
collateral account maintained (pursuant to
documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and
control of the Administrative Agent. Any amounts so
deposited shall be held by the Administrative Agent
as collateral for the prepayment of such Eurodollar
Loans and shall be applied to the prepayment of the
applicable Eurodollar Loans at the end of the current
Interest Periods applicable thereto. At the request
of the Borrower, amounts so deposited shall be
invested by the Administrative Agent in Cash
Equivalents maturing prior to the date or dates on
which it is anticipated that such amounts will be
applied to prepay such Eurodollar Loans; any interest
earned on such Cash Equivalents will be for the
account of the Borrower and the Borrower will deposit
with the Administrative Agent the amount of any loss
on any such Cash Equivalents to the extent necessary
in order that the amount of the prepayment to be made
with the deposited amounts shall not be reduced.
(c) Hedging Agreements. No repayment or prepayment
pursuant to this Section 3.3 shall affect the obligations of any Credit
Party under any Hedging Agreement.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT.
(a) Voluntary Reductions. The Borrower may from time to
time permanently reduce or terminate the Revolving Committed Amount in
whole or in part (in minimum aggregate amounts of $1,000,000 or in
integral multiples of $100,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount))
upon five Business Days' prior written notice to the Administrative
Agent; provided, however, no such termination or reduction shall be
made which would cause the sum of the aggregate outstanding principal
amount of Revolving Loans plus the aggregate amount of outstanding
Swing Line Loans plus LOC Obligations to exceed the Revolving Committed
54
Amount, unless, concurrently with such termination or reduction, the
Revolving Loans are repaid to the extent necessary to eliminate such
excess. The Administrative Agent shall promptly notify each affected
Lender of receipt by the Administrative Agent of any notice from the
Borrower pursuant to this Section 3.4(a).
(b) New Term Loan Commitments. The New Term Loan
Commitment of each Lender, if any, shall automatically terminate at
such time as such Lender shall have made available to the Borrower such
Lender's share of the New Term Loan.
(c) Mandatory Reductions. The Revolving Committed Amount
automatically shall be permanently reduced from time to time in
accordance with the terms of Section 3.3(b)(vii).
(d) Maturity Date. Unless terminated sooner pursuant to
Section 3.4(a) or Section 9.2, the Revolving Commitments of the Lenders
and the LOC Commitment of the Issuing Lender shall automatically
terminate on the Maturity Date.
(e) General. The Borrower shall pay to the Administrative
Agent for the account of the Lenders in accordance with the terms of
Section 3.5(a), on the date of each termination or reduction of the
Revolving Committed Amount, the Unused Fee accrued through the date of
such termination or reduction on the amount of the Revolving Committed
Amount so terminated or reduced.
3.5 FEES.
(a) Unused Fee. In consideration of the Revolving
Commitments of the Lenders hereunder, the Borrower promises to pay to
the Administrative Agent for the account of each Lender a fee (the
"Unused Fee") on the Unused Revolving Committed Amount computed at a
per annum rate for each day during the applicable Unused Fee
Calculation Period (hereinafter defined) at a rate equal to the
Applicable Percentage in effect from time to time. The Unused Fee shall
commence to accrue on the Closing Date and shall be due and payable in
arrears thereafter on the last Business Day of each March, June,
September and December (and on any date that the Revolving Committed
Amount is reduced and on the Maturity Date) for the immediately
preceding quarter (or portion thereof) (each such quarter or portion
thereof for which the Unused Fee is payable hereunder being herein
referred to as an "Unused Fee Calculation Period"), beginning with the
first of such dates to occur after the Closing Date.
(b) Administrative Agent's Fees. The Borrower promises to
pay to the Administrative Agent, for its own account, an annual
administrative fee as agreed to between the Borrower and the
Administrative Agent in that certain fee letter referenced in clause
(i) of the definition of the term "Fee Letters."
55
(c) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In
consideration of the issuance of Letters of Credit hereunder,
the Borrower promises to pay to the Administrative Agent for
the account of each Lender a fee (the "Letter of Credit Fee")
on such Lender's Revolving Commitment Percentage 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 the Applicable Percentage for Letter of Credit Fees. 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).
(ii) Issuing Lender Fees. In addition to the
Letter of Credit Fee payable pursuant to clause (i) above, the
Borrower promises to pay to the Administrative Agent for the
account of the Issuing Lender without sharing by the other
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
Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit.
3.6 CAPITAL ADEQUACY.
If any Lender has reasonably determined, after the date hereof, that
the adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
within thirty (30) days of notice from such Lender to the Borrower (such notice
to include reasonable detail as to such change), the Borrower shall be obligated
to pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction; provided that the Borrower shall not be obligated to
reimburse any Lender for such increase or reduction for any period ninety (90)
days prior to such Lender providing notice if such Lender was aware of the
circumstances that existed
56
which would cause such increase or reduction during such ninety (90) day
prior-period. Each determination by any such Lender of amounts owing under this
Section shall if made in good faith, absent manifest error, be conclusive and
binding on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Administrative Agent determines (which
determination if made in good faith shall be conclusive absent manifest
error) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination
if made in good faith shall be conclusive absent manifest error) and
notify the Administrative Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, Continue Eurodollar Loans, or to
Convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Eurodollar Loans or Convert such Eurodollar
Loans into Base Rate Loans in accordance with the terms of this Credit
Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable
law, rule, or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
57
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect
to any Eurodollar Loans, its Notes, or its obligation to make
Eurodollar Loans, or change the basis of taxation of any
amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of
any Eurodollar Loans (other than taxes imposed on the overall
net income of such Lender by the jurisdiction in which such
Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Eurodollar Reserve Percentage utilized in the
determination of the Adjusted Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Commitment of such
Lender hereunder; or
(iii) shall impose on such Lender (or its
Applicable Lending Office) or the London interbank market any
other condition affecting this Credit Agreement or its Notes
or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender within thirty (30) days of notice from such Lender to the Borrower
(such notice to include reasonable detail as to such change) such amount or
amounts as will compensate such Lender for such increased cost or reduction. If
any Lender requests compensation by the Borrower under this Section 3.9, the
Borrower may, by notice to such Lender (with a copy to the Administrative
Agent), suspend the obligation of such Lender to make or Continue Eurodollar
Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 3.10 shall be applicable); provided that such suspension
shall not affect the right of such Lender to receive the compensation so
requested. Each Lender shall promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Lender to compensation pursuant to this Section 3.9 and
will designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 3.9 shall furnish to the Borrower and
the Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive, if made in good
faith, in the absence of manifest error. In determining such amount, such Lender
may use any reasonable averaging and attribution methods.
(b) The Borrower shall not be required to compensate a Lender
pursuant to this Section 3.9 for any increased costs or reductions incurred more
than 90 days prior to the date that such Lender notifies the 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
58
change of law giving rise to such increased costs or reductions is retroactive,
then such 90-day period referred to above shall be extended to include the
period of retroactive effect thereof.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.7, 3.8 or 3.9 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a Conversion, on such earlier date as such Lender may specify to the
Borrower with a copy to the Administrative Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.7, 3.8 or 3.9 hereof that gave rise to such Conversion no longer
exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of principal that
would otherwise be applied to such Lender's Eurodollar Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued
by such Lender as Eurodollar Loans shall be made or Continued instead
as Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.7, 3.8 or 3.9 hereof that
gave rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by any Credit Party to or for
the account of any Lender or the Administrative Agent hereunder or
under any other Credit Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender
and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, (i) by the jurisdiction under the laws
of which such Lender (or its Applicable Lending Office) or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof or (ii) by reason of any present or former
connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision thereof, other
59
than such a connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced this Credit Agreement or the
Notes (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter
referred to as "Taxes"). If any Credit Party shall be required by law
to deduct any Taxes from or in respect of any sum payable under this
Credit Agreement or any other Credit Document to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.11) such Lender or the Administrative Agent receives an amount equal
to the sum it would have received had no such deductions been made,
(ii) such Credit Party shall make such deductions, (iii) such Credit
Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and
(iv) such Credit Party shall furnish to the Administrative Agent, at
its address referred to in Section 11.1, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Credit Agreement or any other Credit Document
or from the execution or delivery of, or otherwise with respect to,
this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section
3.11) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto. This indemnification shall
be made within thirty (30) days from the date the Administrative Agent
or such Lender, or the case may be, makes written demand therefor.
(d) Each Lender that is not a United States person under
Section 7701(a)(30) of the Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to the date
on which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long as such Lender remains lawfully
able to do so), shall provide the Borrower and the Administrative Agent
with (i) Internal Revenue Service Form W-8 BEN or W-8 ECI, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces
to zero the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Credit Agreement
is effectively connected with the conduct of a trade or business in the
United States, (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, and/or (iii) any other form or certificate required by any
taxing authority (including any certificate required by Sections 871(h)
and 881(c) of the Internal Revenue Code), certifying that such Lender
is entitled to an
60
exemption from tax on payments pursuant to this Credit Agreement or any
of the other Credit Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Administrative Agent with the
appropriate form pursuant to Section 3.11(d) (unless such failure is
due to a change in treaty, law, or regulation occurring subsequent to
the date on which a form originally was required to be provided), such
Lender shall not be entitled to indemnification under Section 3.11(a)
or 3.11(b) with respect to Taxes imposed by the United States;
provided, however, that should a Lender, which is otherwise exempt from
withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If any Credit Party is required to pay additional
amounts to or for the account of any Lender pursuant to this Section
3.11, then such Lender will agree to use reasonable efforts to change
the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Without prejudice to the survival of any other
agreement of the Credit Parties hereunder, the agreements and
obligations of the Credit Parties contained in this Section 3.11 shall
survive the repayment of the Loans, the LOC Obligations and other
obligations under the Credit Documents and the termination of the
Commitments hereunder.
3.12 COMPENSATION.
Upon demand of any Lender (with a copy to the Administrative Agent)
from time to time, the Borrower shall promptly compensate such Lender for and
hold such Lender harmless from any loss, cost or expense incurred by it as a
result of:
(i) any Continuation, Conversion, payment or prepayment
of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);
(ii) any failure by the Borrower (for a reason other than
the failure of such Lender to make a Loan) to prepay, borrow, Continue
or Convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or
(iii) any assignment of a Eurodollar Loan on a day other
than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 3.17;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
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For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.12, each Lender shall be deemed to have funded each Eurodollar
Loan made by it at the Interbank Offered Rate for such Loan by a matching
deposit or other borrowing in the applicable offshore Dollar interbank market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Loan was in fact so funded. The covenants of the Borrower set forth
in this Section 3.12 shall survive the repayment of the Loans, the LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan (other than Swing Line Loans), each
payment or (subject to the terms of Section 3.3) prepayment of
principal of any Loan (other than Swing Line Loans) or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans (other than Swing Line Loans) or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of Unused Fees, each payment of the Letter of Credit Fee, each
reduction of the Revolving Committed Amount and each conversion or
extension of any Loan (other than Swing Line Loans), shall be allocated
pro rata among the Lenders in accordance with the respective principal
amounts of their outstanding Loans of the applicable type and
Participation Interests in Loans of the applicable type and Letters of
Credit.
(b) Swing Line Loans. The Swing Line Lender shall
receive, for its own account, all payments or prepayments of principal
and interest with respect to the Swing Line Loans; provided, however,
upon the funding of the Participants' participation interests with
respect to a Swing Line Loan pursuant to Section 2.2(d), such
Participants shall be entitled to receive their pro rata share of any
payment or prepayment of principal and interest with respect to such
Swing Line Loan.
(c) Advances.
(i) No Lender shall be responsible for the
failure or delay by any other Lender in its obligation to make
its ratable share of a borrowing hereunder; provided, however,
that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its
obligations hereunder.
(ii) Unless the Borrower or any Lender has
notified the Administrative Agent prior to the date any
payment is required to be made by it to the Administrative
Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent
may assume that the Borrower or such Lender, as the case may
be, has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to
the extent that such
62
payment was not in fact made to the Administrative Agent in
immediately available funds, then:
(A) if the Borrower failed to make such
payment, each Lender shall forthwith on
demand repay to the Administrative Agent the
portion of such assumed payment that was
made available to such Lender in immediately
available funds, together with interest
thereon in respect of each day from and
including the date such amount was made
available by the Administrative Agent to
such Lender to the date such amount is
repaid to the Administrative Agent in
immediately available funds, at the Federal
Funds Rate from time to time in effect; and
(B) if any Lender failed to make such
payment, such Lender shall forthwith on
demand pay to the Administrative Agent the
amount thereof in immediately available
funds, together with interest thereon for
the period from the date such amount was
made available by the Administrative Agent
to the Borrower to the date such amount is
recovered by the Administrative Agent (the
"Compensation Period") at a rate per annum
equal to the Federal Funds Rate from time to
time in effect. If such Lender does not pay
such amount forthwith upon the
Administrative Agent's demand therefor, the
Administrative Agent may make a demand
therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative
Agent, together with interest thereon for
the Compensation Period at a rate per annum
equal to the rate of interest applicable to
the applicable Borrowing.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights that
the Administrative Agent or the Borrower may have against any Lender as
a result of any default by such Lender hereunder. A notice of the
Administrative Agent to any Lender with respect to any amount owing
under this subsection (c) shall be conclusive, absent manifest error.
The obligations of the Lenders hereunder to make Revolving
Loans and to fund participations in Letters of Credit and Swing Line
Loans are several and not joint. The failure of any Lender to make any
Revolving Loan or to fund any such participation on any date required
hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible
for the failure of any other Lender to so make its Revolving Loan or
purchase its participation.
3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender
63
under this Credit Agreement through the exercise of a right of setoff, banker's
lien or counterclaim, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
in excess of its pro rata share of such payment as provided for in this Credit
Agreement, such Lender shall promptly purchase from the other Lenders a
Participation Interest in such Loans, LOC Obligations and other obligations in
such amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all Lenders share such payment in accordance with
their respective ratable shares as provided for in this Credit Agreement. The
Lenders further agree among themselves that if payment to a Lender obtained by
such Lender through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise be
restored, each Lender which shall have shared the benefit of such payment shall,
by repurchase of a Participation Interest theretofore sold, return its share of
that benefit (together with its share of any accrued interest payable with
respect thereto) to each Lender whose payment shall have been rescinded or
otherwise restored. The Borrower agrees that any Lender so purchasing such a
Participation Interest may, to the fullest extent permitted by law, exercise all
rights of payment, including setoff, banker's lien or counterclaim, with respect
to such Participation Interest as fully as if such Lender were a holder of such
Loan, LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender shall fail to remit to the Administrative Agent or any other Lender
an amount payable by such Lender to the Administrative Agent or such other
Lender pursuant to this Credit Agreement on the date when such amount is due,
such payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to the
Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.14 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders under this Section 3.14 to share in the benefits of
any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Generally. Except as otherwise specifically provided
herein, all payments hereunder shall be made to the Administrative
Agent in Dollars in immediately available funds, without condition or
deduction for any counterclaim, defense, recoupment or setoff of any
kind, at the Administrative Agent's office specified in Schedule 11.1
not later than 2:00 P.M. (Charlotte, North Carolina time) on the date
when due. Payments received after such time shall be deemed to have
been received on the next succeeding Business Day. The Administrative
Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account
of the Borrower or any other Credit Party maintained with the
Administrative Agent (with notice to the Borrower or such other Credit
Party). The Borrower shall, at the time it makes any payment under this
Credit Agreement, specify to the Administrative Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that
it fails so to specify, or if such
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application would be inconsistent with the terms hereof, the
Administrative Agent shall distribute such payment to the Lenders in
such manner as the Administrative Agent may determine to be appropriate
in respect of obligations owing by the Borrower hereunder, subject to
the terms of Section 3.13(a)). The Administrative Agent will distribute
such payments to such Lenders, if any such payment is received prior to
2:00 P.M. (Charlotte, North Carolina time) on a Business Day in like
funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such Lenders
on the next succeeding Business Day. Whenever any payment hereunder
shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such
extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next
preceding Business Day. Except as expressly provided otherwise herein,
all computations of interest and fees shall be made on the basis of
actual number of days elapsed over a year of 360 days, except with
respect to computation of interest on Base Rate Loans and Swing Line
Loans which shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(b) Allocation of Payments After Acceleration.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after acceleration of the Credit Party Obligations pursuant
to Section 9.2, all amounts collected or received by the Administrative
Agent or any Lender on account of the Credit Party Obligations or any
other amounts outstanding under any of the Credit Documents or in
respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation reasonable
attorneys' fees) of the Administrative Agent in connection
with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the
Administrative Agent with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the
Administrative Agent or the Swing Line Lender;
THIRD, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with
enforcing its rights under the Credit Documents or otherwise
with respect to the Credit Party Obligations owing to such
Lender;
FOURTH, to the payment of all of the Credit Party
Obligations consisting of accrued fees and interest (including
Credit Party Obligations consisting of scheduled or periodic
payments with respect to Hedging Agreements);
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FIFTH, to the payment of the outstanding principal
amount of the Credit Party Obligations (including the cash
collateralization of the outstanding LOC Obligations) and any
Credit Party Obligations consisting of termination or other
payments with respect to Hedging Agreements;
SIXTH, to all other Credit Party Obligations and
other obligations which shall have become due and payable
under the Credit Documents or otherwise and not repaid
pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to
whomever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category, (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Credit Party Obligations held by such Lender bears to
the aggregate then outstanding Credit Party Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from
time to time for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above
in the manner provided in this Section 3.15(b).
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Credit Agreement. Each
Lender will make reasonable efforts to maintain the accuracy of its
account or accounts and to promptly update its account or accounts from
time to time, as necessary.
(b) The Administrative Agent shall maintain the Register
pursuant to Section 11.3(c), and a subaccount for each Lender, in which
Register and subaccounts (taken together) shall be recorded (i) the
amount, type and Interest Period of each such Loan hereunder, (ii) the
amount of any principal or interest due and payable or to become due
and payable to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder from or for the account
of any Credit Party and each Lender's share thereof. The Administrative
Agent will make reasonable efforts to maintain the accuracy of the
subaccounts referred to in the preceding sentence and to promptly
update such subaccounts from time to time, as necessary.
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(c) The entries made in the accounts, Register and
subaccounts maintained pursuant to clause (b) of this Section 3.16
(and, if consistent with the entries of the Administrative Agent,
clause (a)) shall be prima facie evidence of the existence and amounts
of the obligations of the Credit Parties therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to
maintain any such account, such Register or such subaccount, as
applicable, or any error therein, shall not in any manner affect the
obligation of the Credit Parties to repay the Credit Party Obligations
owing to such Lender.
3.17 MANDATORY ASSIGNMENT.
In the event (a) any Lender delivers to the Borrower any notice in
accordance with Section 3.6, 3.8, 3.9, or 3.11, (b) any Lender defaults in its
obligations to fund a Revolving Loan pursuant to this Credit Agreement, or (c)
any Lender (a "Non-Consenting Lender") refuses to consent to an amendment,
modification or waiver of this Credit Agreement that, pursuant to Section 11.6,
requires 100% of the Lenders or 100% of the Lenders with Credit Party
Obligations directly affected, then, provided that no Default or Event of
Default has occurred and is continuing at such time, the Borrower may, at its
own expense (such expense to include any transfer fee payable to the
Administrative Agent under Section 11.3(b)), and in its sole discretion 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 11.3(b)), all
or part of its interests, rights and obligations under this Credit Agreement to
any assignee which shall assume such assigned obligations, provided that (i)
such assignee shall be an Eligible Assignee, (ii) such assignment shall not
conflict with any law, rule or regulation or order of any court or other
Governmental Authority, (iii) the Borrower 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 3.6, 3.8, 3.9, or 3.11) and (iv) 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 Borrower also requires each other Lender that is a
Non-Consenting Lender to assign its interests, rights and obligations under this
Credit Agreement.
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Administrative Agent as hereinafter provided, as primary obligor and not as
surety, the prompt payment of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) strictly in accordance with the
terms thereof. The Guarantors hereby further agree that if any of the Credit
Party Obligations are not paid in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration,
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as a mandatory cash collateralization or otherwise), the Guarantors will,
jointly and severally, promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Credit Party Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) in accordance
with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor under this Credit Agreement and the other Credit Documents shall be
limited to an aggregate amount equal to the largest amount that would not render
such obligations subject to avoidance under Section 548 of the Bankruptcy Code
or any comparable provisions of any applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Credit Party Obligations have been Fully Satisfied. Without
limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following
shall not alter or impair the liability of any Guarantor hereunder which shall
remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to
any Guarantor, the time for any performance of or compliance with any
of the Credit Party Obligations shall be extended, or such performance
or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of
any of the Credit Documents, any Hedging Agreement between any Credit
Party and any Lender, or any Affiliate of a Lender, or any other
agreement or instrument referred to in the Credit Documents or such
Hedging Agreements shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations
shall be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement between any Credit
Party and any Lender, or any Affiliate of a Lender, or any other
agreement or instrument referred to in the Credit Documents or such
Hedging Agreements shall be
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waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole
or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of
the Credit Party Obligations shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be
determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Guarantor) or shall be subordinated
to the claims of any Person (including, without limitation, any
creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement between any Consolidated Party and
any Lender, or any Affiliate of a Lender, or any other agreement or instrument
referred to in the Credit Documents or such Hedging Agreements, or against any
other Person under any other guarantee of, or security for, any of the Credit
Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Credit Party Obligations, except through the
exercise of rights of subrogation pursuant to Section 4.2 and through the
exercise of rights of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Credit Party Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
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Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Collateral Documents and that the
Lenders may exercise their remedies thereunder in accordance with the terms
thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the Credit Party Obligations until such time
as the Credit Party Obligations have been Fully Satisfied, and none of the
Guarantors shall exercise any right or remedy under this Section 4.6 against any
other Guarantor until such Credit Party Obligations have been Fully Satisfied.
For purposes of this Section 4.6, (a) "Excess Payment" shall mean the amount
paid by any Guarantor in excess of its Pro Rata Share of any Credit Party
Obligations; (b) "Pro Rata Share" shall mean, for any Guarantor in respect of
any payment of Credit Party Obligations, the ratio (expressed as a percentage)
as of the date of such payment of Credit Party Obligations of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of all of the Credit Parties exceeds the amount of all of the debts
and liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Credit Parties hereunder) of
the Credit Parties; provided, however, that, for purposes of calculating the Pro
Rata Shares of the Guarantors in respect of any payment of Credit Party
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (c) "Contribution Share" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Credit Parties other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Credit Parties) of the Credit Parties other than the maker of
such Excess Payment; provided, however, that, for purposes of calculating the
Contribution Shares of the
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Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Credit Party
Obligations. Notwithstanding the foregoing, all rights of contribution against
any Guarantor shall terminate from and after such time, if ever, that such
Guarantor shall be relieved of its obligations pursuant to Section 8.5.
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement on
the Closing Date and to make the initial Loans or the Issuing Lender to issue
the initial Letters of Credit, whichever shall occur first, shall be subject to
satisfaction of the following conditions:
(a) Executed Credit Documents. Receipt by the
Administrative Agent of duly executed copies of: (i) this Credit
Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) the Fee
Letters and (v) all other Credit Documents.
(b) Corporate Documents. Receipt by the Administrative
Agent of the following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the
Board of Directors of each Credit Party approving and adopting
the Credit Documents to which it is a party, the
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transactions contemplated therein and authorizing execution
and delivery thereof, certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in
force and effect as of the Closing Date.
(iv) Good Standing. Copies of certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
have a Material Adverse Effect.
(v) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the Closing Date.
(c) Opinions of Counsel. The Administrative Agent shall
have received, in each case dated as of the Closing Date and in form
and substance reasonably satisfactory to the Administrative Agent:
(i) a legal opinion of Xxxxxxxx Xxxxxxxx &
Xxxxxx, outside counsel for the Credit Parties;
(ii) a legal opinion of in-house counsel for the
Credit Parties with respect to various corporate and
organizational matters for each Credit Party; and
(iii) a legal opinion of special local North
Carolina counsel for the Credit Parties for the North Carolina
Mortgaged Property.
(d) Personal Property Collateral. The Administrative
Agent shall have received:
(i) updated searches of Uniform Commercial Code
filings in the jurisdiction of the chief executive office of
each Credit Party, the jurisdiction of organization or
incorporation of each Credit Party and each jurisdiction where
any Collateral is located or where a filing would need to be
made in order to perfect the Administrative Agent's security
interest in the Collateral, copies of the financing statements
on file in such jurisdictions and evidence that no Liens exist
other than Permitted Liens;
(ii) duly executed UCC financing statements (or
amendments, if appropriate) for each appropriate jurisdiction
as is necessary, in the Administrative Agent's sole
discretion, to perfect the Administrative Agent's security
interest in the Collateral;
(iii) searches of ownership of, and Liens on,
intellectual property of each Credit Party in the appropriate
governmental offices;
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(iv) all certificates evidencing any certificated
Capital Stock pledged to the Administrative Agent pursuant to
the Pledge Agreement, together with duly executed in blank,
undated stock powers attached thereto (unless, with respect to
the pledged Capital Stock of any Foreign Subsidiary, such
stock powers are deemed unnecessary by the Administrative
Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person);
(v) duly executed notices of grant of security
interest in the form required by the Security Agreement as are
necessary, in the Administrative Agent's sole discretion, to
perfect the Administrative Agent's security interest in the
Collateral;
(vi) all instruments and chattel paper in the
possession of any of the Credit Parties, together with
allonges or assignments as may be necessary or appropriate to
perfect the Administrative Agent's security interest in the
Collateral; and
(vii) duly executed consents as are necessary, in
the Administrative Agent's reasonable discretion, to perfect
the Administrative Agent's security interest in the
Collateral.
(e) Real Property Collateral. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to
the Administrative Agent:
(i) fully executed and notarized mortgages,
deeds of trust or deeds to secure debt or amendments to such
existing documents, as the Administrative Agent may deem
appropriate (each, as the same may be amended, modified,
restated or supplemented from time to time, a "Mortgage
Instrument" and collectively the "Mortgage Instruments")
encumbering the fee interest and/or leasehold interest of any
Credit Party in each of the Real Properties (other than
Excluded Properties) designated in Schedule 6.20(a) (each a
"Mortgaged Property" and collectively the "Mortgaged
Properties");
(ii) an update of the ALTA mortgagee title
insurance policies issued by Commonwealth Land Title Company
of North Carolina (the "Mortgage Policies"), in amounts not
less than the respective amounts designated in Schedule
6.20(a) with respect to the North Carolina Mortgaged Property
(other than leasehold sites), assuring the Administrative
Agent that each of the Mortgage Instruments creates a valid
and enforceable first priority mortgage lien on the applicable
Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policies
shall otherwise be in form and substance reasonably
satisfactory to the Administrative Agent and shall include
such endorsements as are reasonably requested by the
Administrative Agent;
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(iii) for all real properties other than leasehold
properties, evidence as to (A) whether any Mortgaged Property
is in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards (a "Flood
Hazard Property") and (B) if any Mortgaged Property is a Flood
Hazard Property, (1) whether the community in which such
Mortgaged Property is located is participating in the National
Flood Insurance Program, (2) the applicable Credit Party's
written acknowledgment of receipt of written notification from
the Administrative Agent (a) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (b) as to
whether the community in which each such Flood Hazard Property
is located is participating in the National Flood Insurance
Program and (3) copies of insurance policies or certificates
of insurance of the Consolidated Parties evidencing flood
insurance satisfactory to the Administrative Agent and naming
the Administrative Agent as sole loss payee on behalf of the
Lenders;
(f) Senior Subordinated Notes. The gross proceeds
beneficially received by the Borrower (excluding any original issue
discount and before taking into account any underwriters' discount)
from the issuance by the Borrower of the Senior Subordinated Notes on
terms satisfactory to the Administrative Agent and the Lenders shall be
at least $175,000,000. The Administrative Agent shall have received a
copy certified by an Executive Officer of the Borrower as true and
complete of the Senior Subordinated Note Indenture, as originally
executed and delivered, together with all exhibits and schedules
thereto.
(g) Availability. After giving effect to the Darvon
Transaction, including the initial Loans made hereunder on the Closing
Date, Availability shall be no less than $20,000,000.
(h) Evidence of Insurance. Receipt by the Administrative
Agent of copies of insurance policies or certificates of insurance of
the Consolidated Parties evidencing liability and casualty insurance
meeting the requirements set forth in the Credit Documents, including,
but not limited to, naming the Administrative Agent as additional
insured (in the case of liability insurance) or loss payee (in the case
of hazard insurance) on behalf of the Lenders.
(i) Consents. Receipt by the Administrative Agent of
evidence that all governmental, shareholder and material third party
consents (including Xxxx-Xxxxx-Xxxxxx clearance) and approvals
necessary or desirable in connection with the Darvon Transaction and
expiration of all applicable waiting periods without any action being
taken by any authority that could restrain, prevent or impose any
material adverse conditions on the Darvon Transaction or that could
seek or threaten any of the foregoing, and no law or regulation shall
be applicable which in the judgment of the Administrative Agent could
have such effect.
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(j) Consummation of Darvon Transaction. The
Administrative Agent's satisfactory review of the Darvon Purchase
Agreement (including all schedules and exhibits thereto and, if
applicable, any contemplated seller financing and/or third-party
service or supply agreement) (collectively, the "Darvon Transaction
Documents") regarding the acquisition of the Darvon Product which shall
provide for an aggregate purchase price not in excess of $211.4
million. The Darvon Transaction shall have been consummated in
accordance with the terms of the Darvon Transaction Documents and in
material compliance with applicable law and regulatory approvals, all
material conditions precedent to the obligations of the buyer under the
Darvon Purchase Agreement shall have been satisfied and the
Administrative Agent shall be satisfied that after giving effect to the
Darvon Transaction, including the application on the Closing Date of
the proceeds of the related financings and equity contributions, the
Consolidated Parties shall have no Indebtedness except for Indebtedness
permitted under Section 8.1. Subsequent to February 18, 2002, the
Darvon Transaction Documents shall not have been altered, amended or
otherwise changed or supplemented in any material respect or any
material condition therein waived, without the prior written consent of
the Administrative Agent.
(k) Officer's Certificates. The Administrative Agent
shall have received a certificate or certificates executed by an
Executive Officer of the Borrower as of the Closing Date, in form and
substance satisfactory to the Administrative Agent, stating that (A)
each Credit Party is in compliance with all existing material financial
obligations, (B) all material governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit Documents
and the transactions contemplated thereby have been obtained, (C) no
action, suit, investigation or proceeding is pending or threatened in
any court or before any arbitrator or governmental instrumentality that
purports to affect any Credit Party or any transaction contemplated by
the Credit Documents, if such action, suit, investigation or proceeding
would reasonably be expected to have a Material Adverse Effect, (D) the
transactions contemplated by the Darvon Purchase Agreement have been
consummated contemporaneously with funding of the Facilities hereunder
in accordance with the terms thereof and (E) immediately after giving
effect to the Darvon Transaction, (1) no Default or Event of Default
exists and (2) all representations and warranties contained herein and
in the other Credit Documents are true and correct in all material
respects.
(l) Solvency. The Administrative Agent shall have
received a certificate executed by an Executive Officer of the Borrower
as of the Closing Date, in form and substance satisfactory to the
Administrative Agent, regarding the Solvency of each of the Credit
Parties on a consolidated basis.
(m) Fees and Expenses. Payment by the Credit Parties to
the Lenders and the Administrative Agent of all fees and expenses
relating to the Credit Facilities which are due and payable on the
Closing Date, including, without limitation, payment of the respective
fees set forth in the Fee Letters.
(n) Additional Financial Information. The Administrative
Agent shall have received and, in each case been satisfied with, (i) a
closing balance sheet as of a recent
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date giving effect to the Darvon Transaction and the transactions
contemplated hereby and reflecting estimated purchase price accounting
adjustments, all in form and substance satisfactory to the
Administrative Agent, (ii) all financial information reasonably
requested by the Administrative Agent with respect to the Darvon
Product for the month ending February 28, 2002, and (iii) all financial
statements and audits referred to in Section 6.1(a).
(o) Litigation, Etc. There shall not exist (a) any order,
decree, judgment, ruling or injunction which restrains the consummation
of the Darvon Transaction in the manner contemplated by the Darvon
Transaction Documents, and (b) any pending or threatened action, suit,
investigation or proceeding, which, if adversely determined, could
materially and adversely affect the Borrower or its subsidiaries, any
transaction contemplated hereby or the ability of the Borrower and its
subsidiaries or any other Guarantor to perform its obligations under
the documentation for the Credit Facilities or the ability of the
Lenders to exercise their rights thereunder.
(p) No Material Adverse Change. There shall not have
occurred a material adverse change since December 31, 2001 in the
business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of the Borrower or the
Darvon Product, in the case of the Borrower together with its
Subsidiaries taken as a whole, or in the facts and information
regarding such entities and assets as represented to date.
(q) Termination of Prior Financings. The obligations of
the Lenders (as defined in the Existing Loan Agreement) under the
Existing Loan Agreement shall have been (or will be upon the initial
borrowing hereunder and the application of the proceeds thereof)
terminated and the obligations of the Borrower (as defined in the
Existing Loan Agreement) thereunder shall have been (or will be upon
such borrowing and application of proceeds) paid in full and fully
satisfied, except for those obligations that by their terms survive
termination of the Existing Loan Agreement. The obligations of the
lenders and the holders (and any other parties from time to time party
to the TROL) under the TROL have been (or will be upon the initial
borrowing hereunder and the application of the proceeds thereof)
terminated and the obligations of the Borrower (as defined in the TROL)
thereunder shall have been (or will be upon such borrowing and
application of proceeds) paid in full and fully satisfied, except for
those obligations that by their terms survive termination of the TROL.
(r) Other. Receipt by the Lenders of such other
documents, instruments, agreements or information as reasonably
requested by any Lender, including, but not limited to, information
regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Consolidated Parties.
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5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extent any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of
any Revolving Loan, or any portion of the New Term Loan, an appropriate
Notice of Borrowing or Notice of Extension/Conversion, (ii) in the case
of any Swing Line Loan, an appropriate Swing Line Loan Request and
(iii) in the case of any Letter of Credit, the Issuing Lender shall
have received an appropriate request for issuance in accordance with
the provisions of Section 2.4(b).
(b) The representations and warranties set forth in
Section 6 shall, subject to the limitations set forth therein, be true
and correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(c) No Default or Event of Default shall exist and be
continuing either immediately prior to or immediately after giving
effect thereto; and
(d) Immediately after giving effect to the making of such
Loan, in the case of a request for a Revolving Loan, (and the
application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate outstanding
principal amount of Revolving Loans plus the aggregate outstanding
principal amount of Swing Line Loans plus the LOC Obligations shall not
exceed the Revolving Committed Amount and (ii) the LOC Obligations
shall not exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
pursuant to Section 2.4(b) shall constitute a representation and warranty by the
Credit Parties of the correctness of the matters specified in subsections (b),
(c) and (d) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and
each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated and unaudited consolidating
balance sheets and income statements of the Consolidated Parties for
the fiscal years ended December 31, 2000 and December 31, 2001
(including the notes thereto) (i) have been audited (with respect to
such consolidated statements) by Ernst & Young LLP, (ii) have been
prepared in accordance
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with GAAP consistently applied throughout the periods covered thereby
and (iii) present fairly in all material respects (on the basis
disclosed in the footnotes to such financial statements) the
consolidated and consolidating financial condition, results of
operations and cash flows (consolidated only) of the Consolidated
Parties as of such date and for such periods. The unaudited interim
balance sheets of the Consolidated Parties as at the end of, and the
related unaudited interim statements of earnings and of cash flows for
each fiscal month ended after December 31, 2001 and prior to the
Closing Date (i) have been prepared in accordance with GAAP (except for
the omission of footnotes and subject to year end audit adjustment)
consistently applied throughout the periods covered thereby and (ii)
present fairly the consolidated and consolidating financial condition,
results of operations and cash flows (consolidated only) of the
Consolidated Parties as of such date and for such periods. During the
period from December 31, 2001 to and including the Closing Date, there
has been no sale, transfer or other disposition by any Consolidated
Party of any material part of the business or property of the
Consolidated Parties, taken as a whole, and no purchase or other
acquisition (other than (x) the Darvon Transaction and (y) the
acquisition from Aesgen, Inc. of the generic injectable vitamin D
nutritional product the Borrower intends to market under the brand name
Aquasol D, in each of cases (x) and (y) as described in the Offering
Memorandum relating to the Senior Subordinated Notes) by any of them of
any business or property (including any Capital Stock of any other
Person) material in relation to the consolidated financial condition of
the Consolidated Parties, taken as a whole, in each case, which is not
reflected in the foregoing financial statements or in the notes thereto
and has not otherwise been disclosed in writing to the Lenders on or
prior to the Closing Date. As of the Closing Date, the Borrower and its
Subsidiaries have no material liabilities (contingent or otherwise)
that are not reflected in the foregoing financial statements or in the
notes thereto, other than the Indebtedness evidenced by the Senior
Subordinated Notes and this Credit Agreement.
(b) The pro forma consolidated balance sheet of the
Consolidated Parties as of a recent date preceding the First Amendment
Effective Date giving effect to the Elan Transaction in accordance with
the terms of the Elan Transaction Purchase Agreement and reflecting
estimated purchase accounting adjustments was, as of the date of such
balance sheet, based upon reasonable assumptions made known to the
Lenders and upon information not known to be incorrect or misleading in
any material respect.
(c) The financial statements delivered pursuant to
Section 7.1(a) and (b) have been prepared in accordance with GAAP
(except as may otherwise be permitted under Section 7.1(a) and (b)) and
present fairly in all material respects (in the case of such statements
delivered pursuant to Section 7.1(a), on the basis disclosed in the
footnotes to such financial statements) the consolidated and
consolidating financial condition, results of operations and cash flows
of the Consolidated Parties as of such date and for such periods.
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6.2 NO MATERIAL CHANGE.
Since December 31, 2002, there has been no development or event
relating to or affecting a Consolidated Party which has had or would reasonably
be expected to have a Material Adverse Effect.
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not have or would not reasonably be
expected to have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate or other
necessary action to authorize the borrowings and other extensions of credit on
the terms and conditions of this Credit Agreement and to authorize the
execution, delivery and performance of the Credit Documents to which it is a
party. No consent or authorization of, filing with, notice to or other similar
act by or in respect of, any Governmental Authority or any other Person is
required to be obtained or made by or on behalf of any Credit Party in
connection with the borrowings or other extensions of credit hereunder, with the
execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party or with the consummation of the
Elan Transaction, except for (i) consents, authorizations, notices and filings
described in Schedule 6.4, all of which have been obtained or made or have the
status described in such Schedule 6.4 and (ii) filings and other actions to
perfect the Liens created by the Collateral Documents. This Credit Agreement has
been, and each other Credit Document to which any Credit Party is a party will
be, duly executed and delivered on behalf of the Credit Parties. This Credit
Agreement constitutes, and each other Credit Document to which any Credit Party
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of such Credit Party enforceable against such party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law) or by
principles of good faith and fair dealing.
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and
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provisions thereof by such Credit Party will (a) violate or conflict with any
provision of its articles or certificate of incorporation or bylaws or other
organizational or governing documents of such Person, (b) violate, contravene or
materially conflict with any Requirement of Law or any other law, regulation
(including, without limitation, Regulation U, Regulation X, the FDA Regulations
or the HHS Regulations), order, writ, judgment, injunction, decree or permit
applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any material indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound, except in the case of clauses
(b) and (c) where such violations or conflicts would not be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default exists except as previously disclosed in
writing to the Lenders.
6.7 OWNERSHIP OF PROPERTIES.
Except as set forth in Schedule 6.7, each Consolidated Party (i) holds
interests as lessee under valid leases in full force and effect with respect to
all material leased real and personal property used in connection with its
business, (ii) possesses or has rights to use licenses, patents, copyrights,
trademarks, service marks, trade names and other assets sufficient to enable it
to continue to conduct its business substantially as heretofore conducted and
without any material conflict with the rights of others, and (iii) has good
title to all of its other properties and assets reflected in the most recent
financial statements referred to in Section 6.1(c) (except as sold or otherwise
disposed of since the date thereof in the ordinary course of business and except
those properties which would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect), in each case under (i), (ii) and
(iii) above free and clear of all Liens other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no material Indebtedness.
6.9 LITIGATION.
Except as disclosed in Schedule 6.9, there does not exist (i) any
order, decree, judgment, ruling or injunction which restrains the consummation
of the acquisition of the Elan Pain Products in the manner contemplated by the
Elan Transaction Purchase Agreement or (ii) any pending or
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threatened action, suit or legal, equitable, arbitration or administrative
proceeding against any Consolidated Party which would be reasonably expected to
have a Material Adverse Effect.
6.10 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (Federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply would not reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the immediately preceding
sentence, each Consolidated Party (i) is in compliance with all terms and
provisions of FDA Regulations and the HHS Regulations and (ii) has not received
any notice or other correspondence from the FDA with respect to such
Consolidated Party's failure to comply with current good manufacturing practices
as determined by the FDA or any other potential or actual noncompliance of such
Consolidated Party with FDA rules and regulations in each case in clauses (i)
and (ii) above, unless such non-compliance would not reasonably be expected to
have a Material Adverse Effect.
6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto and
except as would not reasonably be expected to have a Material Adverse Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no ERISA Event
has occurred, and, to the knowledge of the Executive Officers of the
Credit Parties, no event or condition has occurred or exists as a
result of which any ERISA Event could reasonably be expected to occur,
with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the
Code, whether or not waived, has occurred with respect to any
applicable Plan; (iii) each Plan has been maintained, operated, and
funded in compliance with its own terms and in compliance with the
provisions of ERISA, the Code, and any other applicable Federal or
state laws; and (iv) no Lien in favor of the PBGC or a Plan has arisen,
and, to the knowledge of the Executive Officers of the Credit Parties,
no event or condition has occurred or exists as a result of which, such
a Lien is reasonably likely to arise on account of any Plan.
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(b) The actuarial present value of all "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or
not vested, under each Single Employer Plan, as of the last annual
valuation date prior to the date on which this representation is made
or deemed made (determined, in each case, in accordance with Financial
Accounting Standards Board Statement 87, utilizing the actuarial
assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value
of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA
Affiliate has incurred, or, to the knowledge of the Executive Officers
of the Credit Parties, could be reasonably expected to incur, any
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither any Consolidated Party nor any ERISA Affiliate
would become subject to any withdrawal liability under ERISA if any
Consolidated Party or any ERISA Affiliate were to withdraw completely
from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this
representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the knowledge of the Executive
Officers of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) To the knowledge of the Executive Officers of the
Credit Parties, no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected or may subject any Consolidated Party or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability.
(e) Neither any Consolidated Party nor any ERISA
Affiliates has any liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA
and Section 4980B of the Code apply has been administered in compliance
with such sections.
(f) Neither the execution and delivery of this Credit
Agreement nor the consummation of the financing transactions
contemplated thereunder will involve any transaction which is subject
to the prohibitions of Sections 404, 406 or 407 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975
of the Code. The representation by the Credit Parties in the preceding
sentence is made in reliance upon and subject to the accuracy of the
Lenders' representation in Section 11.15 with respect to their source
of funds and is subject, in the event that the source of the funds used
by the Lenders in connection with this transaction is an insurance
company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995),
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compliance with the regulations issued under Section 401(c)(1)(A) of
ERISA, or the issuance of any other prohibited transaction exemption or
similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan" within
the meaning of Section 4975(e)(1) of the Code.
6.13 CORPORATE STRUCTURE; CAPITAL STOCK, ETC.
The corporate ownership structure of the Consolidated Parties as of the
First Amendment Effective Date after giving effect to the Elan Transaction is as
described in Schedule 6.13A. Set forth on Schedule 6.13B is a complete and
accurate list as of the First Amendment Effective Date with respect to the
Borrower and each of its direct and indirect Subsidiaries of (i) jurisdiction of
incorporation, (ii) number of shares of each class of Capital Stock outstanding,
(iii) number and percentage of outstanding shares of each class owned (directly
or indirectly) by the Consolidated Parties and (iv) number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and all other similar rights with respect thereto as of the Closing
Date. The outstanding Capital Stock of all such Persons is validly issued, fully
paid and non-assessable and is owned by the Consolidated Parties, directly or
indirectly, in the manner set forth on Schedule 6.13B on the First Amendment
Effective Date, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in Schedule 6.13B on the First Amendment Effective Date, neither the Borrower
nor any of its Subsidiaries has outstanding any securities convertible into or
exchangeable for its Capital Stock nor does any such Person have outstanding any
rights to subscribe for or to purchase or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its Capital Stock.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act, the Securities Exchange Act or any of Regulations U and
X. If requested by any Lender or the Administrative Agent, the Borrower
will furnish to the Administrative Agent and each Lender a statement,
in conformity with the requirements of FR Form U-1 referred to in
Regulation U, that no part of the Letters of Credit or proceeds of the
Loans will be used, directly or indirectly, for the purpose of "buying"
or "carrying" any "margin stock" within the meaning of Regulations U
and X, or for the purpose of purchasing or carrying or trading in any
securities.
(b) None of the Consolidated Parties is (i) an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended, (ii) a "holding company" as defined in, or otherwise subject
to regulation under, the Public Utility Holding Company Act of 1935, as
amended or (iii) subject to regulation under any other Federal or state
statute or regulation which limits its ability to incur Indebtedness.
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6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower (a) to effect the Darvon Transaction and the Elan Transaction, (b) to
pay fees and expenses related to the Darvon Transaction, the Elan Transaction
and transactions contemplated to occur on or prior to the Closing Date by the
Credit Documents, (c) to refinance the outstanding principal amount of existing
Indebtedness of the Borrower (including the Existing Loan Agreement, the TROL
and the term loan advanced on the Closing Date hereunder, which has been
replaced by the New Term Loan), (d) for Permitted Acquisitions, (e) so long as
the conditions in Section 8.7 have each been satisfied, to fund all or a portion
of the MVI Payment and/or to make repurchases of Senior Subordinated Notes as
permitted hereunder and (f) to provide for working capital and general corporate
purposes of the Borrower and its Subsidiaries. The Letters of Credit shall be
used only for or in connection with appeal bonds, reimbursement obligations
arising in connection with surety and reclamation bonds, reinsurance, domestic
or international trade transactions and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
Except as could not reasonably be expected to have a Material Adverse
Effect or as disclosed and described in Schedule 6.16 attached hereto:
(a) Each of the Real Properties and all operations at the
Real Properties are in compliance with all applicable Environmental
Laws, there is no violation of any Environmental Law with respect to
the Real Properties or the Businesses, and there are no conditions
relating to the Real Properties or the Businesses that could give rise
to liability under any applicable Environmental Laws.
(b) None of the Real Properties contains, or to the
Credit Parties' knowledge has previously contained, any Materials of
Environmental Concern at, on or under the Real Properties in amounts or
concentrations that constitute or constituted a violation of, or could
give rise to liability under, Environmental Laws.
(c) No Consolidated Party has received any written or
verbal notice of, or inquiry from any Governmental Authority regarding,
any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Real Properties or the
Businesses, nor does any Executive Officer of any Credit Party have
knowledge or reason to believe that any such notice will be received or
is being threatened.
(d) To the knowledge of the Credit Parties, Materials of
Environmental Concern have not been transported or disposed of from the
Real Properties, or generated, treated, stored or disposed of at, on or
under any of the Real Properties or any other location, in each case by
or on behalf of any Consolidated Party in violation of, or in a manner
that could give rise to liability under, any applicable Environmental
Law.
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(e) No judicial proceeding or governmental or
administrative action is pending or, to the best knowledge of the
Executive Officers of the Credit Parties, threatened, under any
Environmental Law to which any Consolidated Party is or will be named
as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Consolidated Parties, the Real Properties or the
Businesses.
(f) To the knowledge of the Credit Parties, there has
been no release, or threat of release, of Materials of Environmental
Concern at or from the Real Properties, or arising from or related to
the operations (including, without limitation, disposal) of any
Consolidated Party in connection with the Real Properties or otherwise
in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, service marks, trade names, trade dress, patents, copyrights,
technology, know-how and processes (the "Intellectual Property") necessary for
each of them to conduct its business as currently conducted except for those the
failure to own or have such legal right to use could not have a Material Adverse
Effect. Set forth on Schedule 6.17 is a list, as of the First Amendment
Effective Date, of all Intellectual Property registered or pending registration
with the United States Copyright Office or the United States Patent and
Trademark Office and owned by each Consolidated Party or that any Consolidated
Party has the right to use. Except as provided on Schedule 6.17, as of the First
Amendment Effective Date, no claim has been asserted and is pending by any
Person challenging or questioning the use of the Intellectual Property or the
validity or effectiveness of the Intellectual Property, nor does any Credit
Party know of any such claim, and, to the knowledge of the Executive Officers of
the Credit Parties, the use of the Intellectual Property by any Consolidated
Party or the granting of a right or a license in respect of the Intellectual
Property from any Consolidated Party does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, none of the Intellectual Property (other than Intellectual Property in
jurisdictions other than the United States) of the Consolidated Parties is
subject to any licensing agreement or similar arrangement except as set forth on
Schedule 6.17.
6.18 SOLVENCY.
The Credit Parties are Solvent on a consolidated basis.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
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6.20 BUSINESS LOCATIONS.
Set forth on Schedule 6.20(a) is a list of all Real Properties located
in the United States as of the Closing Date. Set forth on Schedule 6.20(b) is a
list of all locations where any tangible personal property of a Consolidated
Party is located as of the Closing Date. Set forth on Schedule 6.20(c) is the
chief executive office, jurisdiction of incorporation or formation and principal
place of business of each Consolidated Party as of the Closing Date.
6.21 DISCLOSURE.
Neither this Credit Agreement, nor any other Credit Document, nor any
Darvon Transaction Document, nor any Elan Transaction Document, nor any
financial statements delivered to the Lenders, nor any other document,
certificate or statement furnished to the Lenders by or on behalf of any
Consolidated Party in connection with the transactions contemplated hereby, in
each case when furnished, taken as a whole contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein or herein not materially misleading.
6.22 NO BURDENSOME RESTRICTIONS.
No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
6.23 BROKERS' FEES.
No Consolidated Party has any obligation to any Person in respect of
any finder's, broker's, investment banking or other similar fee in connection
with any of the transactions contemplated under the Credit Documents other than
to the Administrative Agent, Lenders and their Affiliates in connection
therewith.
6.24 LABOR MATTERS.
Except as set forth on Schedule 6.24, there are no collective
bargaining agreements or Multiemployer Plans covering the employees of a
Consolidated Party as of the Closing Date and none of the Consolidated Parties
has suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the five years preceding the Closing Date or, to the extent
occurring after the Closing Date, that could reasonably be expected to have a
Material Adverse Effect.
6.25 NATURE OF BUSINESS.
As of the Closing Date, the Consolidated Parties are engaged in the
business of specialty pharmaceutical services with comprehensive drug
development capabilities with focus in
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fee-for-service pharmaceutical services, drug product sales, pharmaceutical
product development, pharmaceutical product manufacturing and product life cycle
management and ancillary businesses.
6.26 TRANSACTIONS WITH AFFILIATES.
Except as set forth on Schedule 6.26 or disclosed in filings with the
Securities and Exchange Commission, there are no material Contractual
Obligations of the Borrower or any of its Subsidiaries to any of the officers,
directors, managers, shareholders, members, employees, Affiliates or their
respective Affiliates, of the Borrower or any of its Subsidiaries other than (i)
for payment of salary for services rendered, (ii) for reimbursement for
reasonable expenses incurred on behalf of the Borrower or its Subsidiaries,
(iii) for standard employee benefits made generally available to all employees
of the Borrower (including stock option agreements outstanding under any stock
option plan approved by the Board of Directors of the Borrower, (iv) pursuant to
any of the Credit Documents and (v) between or among Consolidated Parties.
Except as set forth on Schedule 6.26 or disclosed in filings with the Securities
and Exchange Commission, none of the officers, directors, managers,
shareholders, members, employees, Affiliates, or their respective Affiliates, of
the Borrower or any of its Subsidiaries has incurred Indebtedness to the
Borrower (other than intercompany Indebtedness permitted under Section 8.1) or
has any direct or indirect ownership interest in any Person with which the
Borrower is affiliated or, to the Borrower's best knowledge, with which the
Borrower or any of its Subsidiaries has a business relationship except that such
Person may own stock in publicly traded companies. Other than as set forth on
Schedule 6.26 or disclosed in filings with the Securities and Exchange
Commission, no officer, director, manager, shareholder, member, employee,
Affiliate (other than Consolidated Parties), or any of their respective
Affiliates of the Borrower or any of its Subsidiaries, is, directly or
indirectly, interested in any material Contractual Obligation with the Borrower.
Except as may be expressly disclosed in notes to the financial statements
delivered pursuant to Section 7.1 hereof or otherwise permitted under Section
8.1, the Borrower is not a guarantor or indemnitor of any Indebtedness of any
other Person.
6.27 TAX SHELTER REGULATIONS.
The Borrower does not intend to treat the Loans and/or Letters of
Credit and related transactions as being a "reportable transaction" (within the
meaning of Treasury Regulation section 1.6011-4). If the Borrower determines to
take any action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. The Borrower acknowledges that the Administrative
Agent and/or one or more of the Lenders may treat the Loans and/or Letters of
Credit as part of a transaction that is subject to Treasury Regulation section
1.6011-4 or section 301.6112-1, and the Administrative Agent and such Lender or
Lenders, as applicable, may file such IRS forms or maintain such lists and other
records as they may determine is required by such Treasury Regulations.
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SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that until such time as
this Credit Agreement has been terminated in accordance with the terms of
Section 11.13:
7.1 INFORMATION COVENANTS.
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Consolidated Parties, either (i) a copy of a report on Form 10-K,
or any successor form, and any amendments thereto, filed by the
Borrower with the Securities and Exchange Commission with respect to
the immediately preceding fiscal year or (ii) a consolidated and
consolidating balance sheet and income statement of the Consolidated
Parties as of the end of such fiscal year, together with related
consolidated statements of stockholders' equity and cash flows for such
fiscal year, in each case setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited (except as to consolidating statements) by independent
certified public accountants of recognized national standing reasonably
acceptable to the Administrative Agent and whose opinion shall be to
the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or
qualified as to the status of the Consolidated Parties as a going
concern or any other material qualifications or exceptions.
(b) Quarterly Financial Statements. As soon as available,
and in any event within 45 days after the close of each of the first
three fiscal quarters of each fiscal year of the Consolidated Parties
(and, in addition, within 45 days after the close of the fiscal quarter
ending December 31, 2001), either (i) a copy of a report on Form 10-Q,
or any successor form, and any amendments thereto, filed by the
Borrower with the Securities and Exchange Commission with respect to
the immediately preceding fiscal quarter or (ii) an unaudited
consolidated and consolidating balance sheet and income statement of
the Consolidated Parties as of the end of such fiscal quarter, together
with related consolidated statements of stockholders' equity and cash
flows for such fiscal quarter, in each case setting forth in
comparative form consolidated and consolidating figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and 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 Consolidated Party, but only if such
product accounts for 7% or more of net revenues of the Borrower 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 Administrative Agent, and accompanied by a
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certificate of an Executive Officer of the Borrower to the effect that
such quarterly financial statements fairly present in all material
respects the financial condition of the Consolidated Parties and have
been prepared in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments and to the absence of
footnotes required by GAAP.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above
(other than the financial statements referenced in the first
parenthetical to Section 7.1(b)), a certificate of an Executive Officer
of the Borrower substantially in the form of Exhibit 7.1(c), stating
that no Default or Event of Default exists, or if any Default or Event
of Default does exist, specifying the nature and extent thereof and
what action the Credit Parties propose to take with respect thereto,
and demonstrating compliance with (i) certain of the mandatory
prepayment requirements contained in Section 3.3(b), (ii) the
applicable reporting requirements contained in Section 7.1(l) and (m),
(iii) the financial covenants contained in Section 7.10 and (iv)
certain of the negative covenant provisions contained in Sections
8.6(m) and 8.7, in each case as of the end of the fiscal period
referred to above; provided that any such certificate that is delivered
at the time of delivery of the financial statements provided in Section
7.1(a) above shall also demonstrate compliance with certain of the
negative covenant provisions contained in Sections 8.1, 8.2, 8.5, 8.6,
8.7, 8.13 and 8.14, in each case as of the end of the fiscal period
referred to above.
(d) Annual Business Plan and Budgets. As soon as
available and in any event prior to the end of the first month of each
fiscal year of the Borrower, beginning with the fiscal year ending
December 31, 2002, an annual business plan and budget of the
Consolidated Parties containing, among other things, pro forma
financial statements for such fiscal year (including a breakdown by
fiscal quarter).
(e) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section 7.1(a),
a certificate of the accountants conducting the annual audit stating
that they have reviewed this Credit Agreement as it relates to
accounting and other financial matters and stating further whether, in
the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof, provided that such
accountants shall not be liable by reason of any failure to obtain
knowledge of any such Default or Event of Default that would not be
disclosed in the course of their audit examination.
(f) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by
independent accountants to any Consolidated Party in connection with
any annual, interim or special audit of the books of such Person.
(g) Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy
89
statements, notices and reports as any Consolidated Party shall send to
its shareholders or to a holder of any Indebtedness owed by any
Consolidated Party in its capacity as such a holder and (ii) upon the
request of the Administrative Agent, all material reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(h) Notices. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Administrative Agent immediately of (i) the occurrence of
an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, (ii) the occurrence of
any of the following with respect to any Consolidated Party (A) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against such Person which if adversely determined would be
reasonably likely to have a Material Adverse Effect or (B) the
institution of any proceedings against such Person with respect to, or
the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any Federal,
state or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which would be reasonably likely
to have a Material Adverse Effect and (iii) any notices or other
correspondence delivered to a Consolidated Party by the FDA, with
respect to such Consolidated Party's failure to comply with current
good manufacturing practices as determined by the FDA or any other
potential or actual noncompliance of a Consolidated Party with FDA
rules and regulations, in each case where such failure or noncompliance
would be reasonably likely to have a Material Adverse Effect.
(i) ERISA. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Administrative Agent promptly (and in any event within
five Business Days) of: (i) any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or would be
reasonably likely to lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Credit
Parties or any ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any Consolidated Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
that could have a Material Adverse Effect, together with a description
of any such event or condition or a copy of any such notice and a
statement by an Executive Officer of the Borrower briefly setting forth
the details regarding such event, condition, or notice, and the action,
if any, which has been or is being taken or is proposed to be taken by
the Credit Parties with respect thereto. Promptly upon request, the
Credit Parties shall furnish the Administrative Agent and the Lenders
with such additional information concerning any Plan
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as may be reasonably requested, including, but not limited to, copies
of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(j) Environmental. Upon the reasonable written request of
the Administrative Agent, the Credit Parties will furnish or cause to
be furnished to the Administrative Agent, at the Credit Parties'
expense, a report of an environmental assessment of reasonable scope,
form and depth, (including, where appropriate, invasive soil or
groundwater sampling) by a consultant reasonably acceptable to the
Administrative Agent as to the nature and extent of the presence of any
Materials of Environmental Concern on any Real Properties (as defined
in Section 6.16) and as to the compliance by any Consolidated Party
with Environmental Laws at such Real Properties. If the Credit Parties
fail to deliver such an environmental report within seventy-five (75)
days after receipt of such written request then the Administrative
Agent may arrange for same, and the Consolidated Parties hereby grant
to the Administrative Agent and their representatives access to the
Real Properties (to the extent such Consolidated Party has rights
thereto) pursuant to a reasonable access agreement, to reasonably
undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling; provided that, so long as no Default or
Event of Default exists, the Borrower's consent shall be required prior
to any invasive testing, such consent not to be unreasonably withheld).
The reasonable cost of any assessment arranged for by the
Administrative Agent pursuant to this provision will be payable by the
Credit Parties on demand and added to the obligations secured by the
Collateral Documents.
(k) Additional Patents and Trademarks. At the time of
delivery of the financial statements and reports provided for in
Section 7.1(a) and in addition to the reporting required in Section
5(j) and (k) of the Security Agreement, a report signed by an Executive
Officer of the Borrower setting forth (i) a list of registration
numbers for all patents, trademarks, service marks, trade names and
copyrights awarded to any Credit Party since the last day of the
immediately preceding fiscal year and (ii) a list of all patent
applications, trademark applications, service xxxx applications, trade
name applications and copyright applications submitted by any Credit
Party since the last day of the immediately preceding fiscal year and
the status of each such application, all in such form as shall be
reasonably satisfactory to the Administrative Agent.
(l) Excess Cash Flow, Etc. Within 90 days after the end
of each fiscal year of the Borrower, a certificate containing
information regarding (i) the calculation of Excess Cash Flow for such
prior fiscal year and (ii) the amount of all Asset Dispositions (other
than any Excluded Asset Disposition), Equity Issuances and Acquisitions
that occurred during such prior fiscal year.
(m) Royalties. Within 45 days after the end of each
fiscal quarter of the Borrower, a certificate containing information
regarding the amount of all Royalties received during such prior fiscal
quarter.
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(n) IRS Form 8886. After the Borrower has notified the
Administrative Agent of any intention by the Borrower to treat the
Loans and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4) and upon filing with the Internal Revenue Service, a
duly completed copy of IRS Form 8886 or any successor form.
(o) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of any Consolidated Party as the
Administrative Agent or the Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary not prohibited by Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority except to the extent the failure to do so would not be
reasonably likely to have a Material Adverse Effect.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in all material
respects in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property (including, without limitation, the FDA Regulations and the HHS
Regulations) if noncompliance with any such law, rule, regulation, order or
restriction would reasonably be expected to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER CLAIMS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent and (b) all lawful claims (including claims
for labor, materials and supplies) which, if unpaid, might give rise to a Lien
upon any of its properties; provided, however, that no Consolidated Party shall
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith by appropriate proceedings and as to which
adequate reserves therefor have been established in accordance with GAAP, unless
the failure to make any such payment (i) could give rise to an immediate right
to
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foreclose on a Lien securing such amounts or (ii) would reasonably be expected
to have a Material Adverse Effect.
7.6 INSURANCE.
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities and with such
deductibles or self-insurance retentions as are in accordance with
normal industry practice. The Administrative Agent shall be named as
loss payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or
by independent instruments furnished to the Administrative Agent, that
it will give the Administrative Agent thirty (30) days prior written
notice before any such policy or policies shall be altered or canceled.
The present insurance coverage of the Consolidated Parties as of the
First Amendment Effective Date is outlined as to carrier, policy
number, expiration date, type and amount on Schedule 7.6.
(b) In the event that the Consolidated Parties receive
Net Cash Proceeds in excess of (x) with respect to any single
occurrence, $500,000 and (y) with respect to all such occurrences in
any fiscal year, $2,000,000 in the aggregate ("Excess Proceeds") on
account of Involuntary Dispositions, the Credit Parties shall, within
the period of 180 days following the date of receipt of such Excess
Proceeds, apply (or cause to be applied) an amount equal to such Excess
Proceeds to (i) make Eligible Reinvestments (including but not limited
to the repair or replacement of the related Property) or (ii) prepay
the Loans (and cash collateralize LOC Obligations) in accordance with
the terms of Section 3.3(b)(ii)(B); provided, however, that such 180
day period may be extended for not more than an additional 180 days if
(i) the applicable Credit Party is diligently pursuing such Eligible
Reinvestment in good faith, but can not complete such Eligible
Reinvestment within the initial 180 days and (ii) the Borrower is not
otherwise in Default. All insurance proceeds shall be subject to the
security interest of the Administrative Agent (for the ratable benefit
of the Lenders) under the Collateral Documents. Pending final
application of any Excess Proceeds, the Credit Parties may apply such
Excess Proceeds to temporarily reduce the Revolving Loans or to make
Permitted Investments.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to, to
the extent consistent with ordinary prudent business practices, maintain and
preserve its properties and equipment material to the conduct of its business in
good repair, working order and condition, normal wear and tear and Involuntary
Dispositions excepted, and will make, or cause to be made, in such properties
and equipment from time to time all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses;
provided, however, a Credit Party may discontinue
93
the operation or maintenance of a property or piece of equipment if the
discontinuance (i) is desirable to the conduct of such Credit Party's business
and (ii) does not materially adversely affect the business of the Credit Parties
on a consolidated basis.
7.8 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
7.9 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Administrative Agent or any Lender (at such Lender's own cost),
including, without limitation, independent accountants, agents, attorneys, and
appraisers to visit and inspect its property, including its books and records,
its accounts receivable and inventory, its facilities and its other business
assets, and to make photocopies or photographs thereof and to write down and
record any information such representative obtains and shall permit the
Administrative Agent or its representatives to investigate and verify the
accuracy of information provided to the Lenders and to discuss all such matters
with the officers, employees and representatives of such Person. The Credit
Parties agree that the Administrative Agent, and its representatives, may, after
the occurrence and during the continuation of an Event of Default, conduct an
audit of the Collateral, at the expense of the Credit Parties.
7.10 FINANCIAL COVENANTS.
(a) Senior Leverage Ratio. The Senior Leverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties set
forth below, commencing with the fiscal quarter ending on March 31,
2004, shall be less than or equal to:
Fiscal Quarters Ending Ratio
---------------------- -----
March 31, 2004 through September 30, 2004 2.00 to 1.0
December 31, 2004 through September 30, 2005 1.75 to 1.0
December 31, 2005 through September 30, 2006 1.25 to 1.0
December 31, 2006 and thereafter 1.00 to 1.0
(b) Total Leverage Ratio. The Total Leverage Ratio, as of
the last day of each fiscal quarter of the Consolidated Parties set
forth below, commencing with the fiscal quarter ending on March 31,
2004, shall be less than or equal to equal to:
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Fiscal Quarters Ending Ratio
---------------------- -----
March 31, 2004 through September 30, 2004 4.00 to 1.0
December 31, 2004 through September 30, 2005 3.75 to 1.0
December 31, 2005 through September 30, 2006 3.00 to 1.0
December 31, 2006 and thereafter 2.00 to 1.0
(c) Interest Coverage Ratio. The Interest Coverage Ratio,
as of the last day of each fiscal quarter of the Consolidated Parties
set forth below, commencing with the fiscal quarter ending on March 31,
2004, shall be greater than or equal to:
Fiscal Quarters Ending Ratio
---------------------- -----
March 31, 2004 through September 30, 2004 3.25 to 1.0
December 31, 2004 through September 30, 2005 3.50 to 1.0
December 31, 2005 and thereafter 4.00 to 1.0
(d) Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties set forth below, commencing with the fiscal
quarter ending on March 31, 2004, shall be greater than or equal to:
Fiscal Quarters Ending Ratio
---------------------- -----
March 31, 2004 through September 30, 2007 1.50 to 1.0
December 31, 2007 through September 30, 2008 2.00 to 1.0
December 31, 2008 and thereafter 2.50 to 1.0
(e) Minimum Consolidated EBITDA. Consolidated EBITDA, as
of the last day of each fiscal quarter of the Consolidated Parties set
forth below and in each case measured for the four quarter period
(except as set forth below) ending on such date, commencing with the
fiscal quarter ending on December 31, 2003, shall not be less than:
Minimum
Fiscal Quarters Ending Consolidated EBITDA
---------------------- -------------------
December 31, 2003 through March 31, 2004 $80,000,000
June 30, 2004 through September 30, 2004 $85,000,000
December 31, 2004 through September 30, 2005 $90,000,000
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December 31, 2005 through September 30, 2006 $100,000,000
December 31, 2006 through September 30, 2007 $115,000,000
December 31, 2007 through September 30, 2008 $130,000,000
December 31, 2008 and thereafter $150,000,000
; provided, however, that (i) as of March 31, 2004, Consolidated EBITDA
shall be determined based upon the sum of (A) the product of (x)
Consolidated EBITDA, less non-recurring cash gains included in the
calculation of Consolidated EBITDA, for the one fiscal quarter period
ending as of such date, times (y) 4 plus (B) non-recurring cash gains
included in the calculation of Consolidated EBITDA for such fiscal
period, (ii) as of June 30, 2004, Consolidated EBITDA shall be
determined based upon the sum of (A) the product of (x) Consolidated
EBITDA, less non-recurring cash gains included in the calculation of
Consolidated EBITDA, for the two fiscal quarter period ending as of
such date, times (y) 2 plus (B) non-recurring cash gains included in
the calculation of Consolidated EBITDA for such fiscal period and (ii)
as of September 30, 2004, Consolidated EBITDA shall be determined based
upon the sum of (A) the product of (x) Consolidated EBITDA, less
non-recurring cash gains included in the calculation of Consolidated
EBITDA, for the three fiscal quarter period ending as of such date,
times (y) 4/3 plus (B) non-recurring cash gains included in the
calculation of Consolidated EBITDA for such fiscal period.
7.11 ADDITIONAL GUARANTORS.
As soon as practicable and in any event within 30 days after any Person
becomes a direct or indirect domestic Subsidiary of any Credit Party, the Credit
Parties shall (i) provide the Administrative Agent with written notice thereof
and shall cause such Person to execute a Joinder Agreement in substantially the
same form as Exhibit 7.11, (ii) deliver such other documentation as the
Administrative Agent may reasonably request in connection with the foregoing,
including, without limitation, favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the Joinder Agreement) and other items of the types
required to be delivered pursuant to Section 5.1(b), all in form, content and
scope reasonably satisfactory to the Administrative Agent and (iii) otherwise
comply with Section 7.12 in respect of such Person. Notwithstanding the
foregoing, the parties hereto agree the Credit Parties shall not be required to
comply with the terms of this Section 7.11 with respect to any (a) Subsidiary
with assets of less than $100,000 until the time such Subsidiary acquires assets
worth $100,000 or more and (b) to the extent the Borrower is in compliance with
Section 7.13, Scarlet Holding Corporation.
7.12 PLEDGED ASSETS.
Subject to the provisions of Section 7.13 , each Credit Party will (i)
cause all of its owned and leased real and personal Property other than Excluded
Property to be subject at all times to first priority, perfected and, in the
case of owned real Property, title insured Liens in favor of the
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Administrative Agent to secure the Credit Party Obligations pursuant to the
terms and conditions of the Collateral Documents or, with respect to any such
Property acquired subsequent to the Closing Date, such other additional security
documents as the Administrative Agent shall reasonably request, subject in any
case to Permitted Liens and (ii) deliver such other documentation as the
Administrative Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 financing statements, real
estate title insurance policies, surveys, environmental reports, landlord's
waivers, certified resolutions and other organizational and authorizing
documents of such Person, favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above and the perfection of the
Administrative Agent's liens thereunder) and other items of the types required
to be delivered pursuant to Section 5.1(d) and (e), all in form, content and
scope reasonably satisfactory to the Administrative Agent. Without limiting the
generality of the above, the Credit Parties will cause (A) 100% of the issued
and outstanding Capital Stock of each Domestic Subsidiary and (B) 65% (or such
greater percentage that, due to a change in an applicable Requirement of Law
after the date hereof, (1) would 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 and (2) would 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)) in
each Foreign Subsidiary owned directly by the Borrower or a Domestic Subsidiary
to be subject at all times to a first priority, perfected Lien in favor of the
Administrative Agent pursuant to the terms and conditions of the Collateral
Documents or such other security documents as the Administrative Agent shall
reasonably request; provided, however, this requirement shall not apply to any
Foreign Subsidiary if such Foreign Subsidiary (i) is currently being liquidated,
and such liquidation is completed on or prior to December 31, 2002 or (ii) has
assets less than $250,000.
7.13 POST-CLOSING DELIVERIES AND ACTIONS.
(a) On or before January 31, 2004 (or such later date as the
Administrative Agent may reasonably agree to if the Credit Parties are
diligently pursuing such items in good faith), the Credit Parties agree to
provide the Administrative Agent with (i) an amendment to the existing pledge
agreement (pursuant to an appropriate pledge agreement(s) satisfactory in form
and substance to the Administrative Agent) of 65% (or such greater percentage
that, due to a change in an applicable Requirement of Law after the date hereof,
(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 Administrative Agent,
which shall cover the enforceability and perfection of the Administrative
Agent's security interest in each such pledged shares of the German Subsidiary
and (iii) certificates evidencing any such certificated Capital Stock, together
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with duly executed in blank, undated stock powers attached thereto (unless, such
stock powers are deemed unnecessary by the Administrative Agent in its
reasonable discretion under the law of the jurisdiction of such German
Subsidiary).
(b) On or before January 31, 2004 (or such later date as the
Administrative Agent may reasonably agree to if the Credit Parties are
diligently pursuing such items in good faith), the Credit Parties agree to
provide the Administrative Agent with evidence reasonably satisfactory to the
Administrative Agent of the assignment, registration of assignment and
registration of name change with the United States Patent and Trademark Office
of certain patents and trademarks that constitute Collateral as the
Administrative Agent may require.
(c) On or before January 31, 2004 (or such later date as the
Administrative Agent may reasonably agree to if the Credit Parties are
diligently pursuing such items in good faith), the Credit Parties agree to merge
Scarlet Holding Corporation into the Borrower or another Credit Party (with the
Borrower or such Credit Party as the surviving Person).
7.14 INTEREST RATE PROTECTION.
THE CREDIT PARTIES SHALL MAINTAIN, AT ALL
TIMES COMMENCING 90 DAYS AFTER THE FIRST
AMENDMENT EFFECTIVE DATE, PROTECTION AGAINST
FLUCTUATIONS IN FLOATING INTEREST RATES (a)
PURSUANT TO ONE OR MORE HEDGING AGREEMENTS
REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND (b) PROVIDING
COVERAGE IN A NOTIONAL AMOUNT SUCH THAT
APPROXIMATELY 50% OR MORE OF THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT (WITHOUT
DUPLICATION) OF THE INDEBTEDNESS OF THE
CONSOLIDATED PARTIES THAT QUALIFIES AS
FUNDED INDEBTEDNESS UNDER CLAUSES (a), (b),
(e), (f), (h) OR (m) OF THE DEFINITION OF
SUCH TERM), TO THE EXTENT, IN THE CASE OF
CLAUSE (m), SUCH FUNDED INDEBTEDNESS IS OF
THE TYPE REFERRED TO IN ONE OR MORE OF THE
OTHER CLAUSES OF THE DEFINITION OF FUNDED
INDEBTEDNESS REFERENCED HEREIN, IS SUBJECT,
PURSUANT TO ONE OR MORE APPLICABLE HEDGING
AGREEMENTS OR OTHERWISE, TO A FIXED INTEREST
RATE.
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SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that until such time as
this Credit Agreement has been terminated in accordance with the terms of
Section 11.13:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set
forth in Schedule 8.1 (and renewals, refinancings and extensions
thereof on terms and conditions not materially less favorable to such
Person than such existing Indebtedness and in a principal amount not in
excess of the amount shown on such schedule);
(c) purchase money Indebtedness (including obligations in
respect of Capital Leases or Synthetic Leases) hereafter incurred by
the Borrower or any of its Subsidiaries to finance the purchase of
fixed assets provided that (i) the total of all such Indebtedness for
all such Persons taken together shall not exceed an aggregate principal
amount of $10,000,000 at any one time outstanding; (ii) such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(d) obligations of the Borrower in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) intercompany Indebtedness and Guarantees permitted
under Section 8.6; provided that, with respect to an intercompany
Indebtedness in excess of $1,000,000 owed to a Credit Party, the Credit
Parties will use commercially reasonable efforts to cause such
Indebtedness to be promptly evidenced by a promissory note that has
been pledged and delivered to the Administrative Agent pursuant to the
Security Agreement, unless and to the extent the Borrower has
determined in good faith that compliance with this proviso would
subject the Borrower or any Consolidated Party to a material adverse
tax consequence or would violate an applicable Requirement of Law.
(f) Indebtedness evidenced by the Senior Subordinated
Notes in an aggregate principal amount not to exceed $175,000,000 at
any one time outstanding;
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(g) Guaranty Obligations of Indebtedness and Operating
Leases permitted hereunder;
(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 (i) owed in connection with
the MVI/Aquasol Transaction (including the MVI Payment), (ii) owed in
connection with the acquisition of substantially all of the assets of
the Pharmaceutical Education and Development Foundation of the Medical
University of South Carolina, (iii) owed in connection with the
acquisition of the generic injectable vitamin D nutritional product
acquired from Aesgen, Inc., or (iv) issued, incurred or assumed after
the Closing Date by a Consolidated Party to sellers in connection with
Permitted Acquisitions in an aggregate principal amount for this clause
(iv) together with Indebtedness permitted pursuant to Section 8.1(i)
below, not exceeding $15,000,000 in the aggregate principal amount
outstanding at any time;
(i) Indebtedness incurred or assumed by a Consolidated
Party as a result of Permitted Acquisitions (A) that is either (x)
unsecured or (y) secured only by collateral consisting of intellectual
property or property, plant and equipment of the acquired business or
entity that was provided by such business or entity prior to the
consummation of any such Permitted Acquisition, and (B) that was not
incurred in anticipation of any such Permitted Acquisition, not
exceeding, together with Indebtedness permitted under Section
8.1(h)(iv) above, $15,000,000 in the aggregate principal amount
outstanding at any time; provided that any such Indebtedness, to the
extent secured, shall be permitted under this clause (i) only for a
period of 60 days following the closing of the relevant Permitted
Acquisition (i.e., such Indebtedness must be repaid or refinanced with
other Indebtedness permitted under this Credit Agreement) unless the
Administrative Agent shall have agreed in writing (1) to an extension
of such initial 60-day period and such extension period has not yet
expired or (2) that such Indebtedness is on more favorable terms to the
Consolidated Parties than any available refinancing and that the
continued existence of such Indebtedness, and the Liens serving as
security therefor, are not materially adverse to the Lenders;
(j) Indebtedness in respect of performance bonds and
surety or appeal bonds entered into by a Consolidated Party 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 three (3) Business Days of
incurrence;
(l) Indebtedness represented by letters of credit in
order to provide security for workers' compensation claims, payment
obligations in connection with self-insurance programs or similar
requirements, entered into by a Consolidated Party in the ordinary
course of business; provided that the aggregate amount of all such
Indebtedness permitted under this clause (l) plus all LOC Obligations
outstanding under this Credit Agreement does not exceed $2,500,000 at
any one time;
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(m) endorsements in the ordinary course of business of
negotiable instruments for deposit or collection; and
(n) other Indebtedness hereafter incurred by the Borrower
or any of its Subsidiaries not to exceed an aggregate principal amount
of $5,000,000 at any one time outstanding; provided that any
Indebtedness incurred in excess of $1,000,000 pursuant to this
subclause (n) shall be permitted only if (A) the loan documentation
with respect to such Indebtedness shall not contain covenants or
default provisions relating to any Consolidated Party that are more
restrictive than the covenants and default provisions contained in the
Credit Documents, (B) the Borrower shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect on a Pro Forma Basis to the incurrence of such
Indebtedness and to the concurrent retirement of any other Indebtedness
of any Consolidated Party, the Credit Parties would be in compliance
with the financial covenants set forth in Section 7.10(a)-(e) and (C)
such Indebtedness is permitted under the Senior Subordinated Note
Indenture.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or hereafter acquired, except for:
(a) Liens in favor of the Administrative Agent to secure
the Credit Party Obligations;
(b) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or levies not
more than 30 days past due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves determined
in accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not more than 30 days past due and are
unfiled and no other action has been taken to enforce the same or are
being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof);
(d) Liens (other than Liens created or imposed under
ERISA the creation or incurrence of which would result in an Event of
Default under Section 9.1(i)) incurred or deposits made by any
Consolidated Party in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of
social security, or
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to secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money);
(e) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
secured shall, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have
been discharged within 60 days after the expiration of any such stay;
provided further, that if such judgments or attachments do not
constitute an Event of Default under Section 9.1(h), such Liens shall
be permitted so long as they are being contested in good faith by
appropriate proceedings;
(f) easements, rights-of-way, restrictions (including
zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended purposes;
(g) Liens on Property of any Person securing purchase
money Indebtedness (including Capital Leases and Synthetic Leases) of
such Person permitted under Section 8.1(c), provided that any such Lien
attaches to such Property concurrently with or within 90 days after the
acquisition thereof;
(h) leases or subleases granted to others not interfering
in any material respect with the business of any Consolidated Party;
(i) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Credit Agreement;
(j) Liens deemed to exist in connection with Investments
in repurchase agreements permitted under Section 8.6;
(k) normal and customary rights of setoff upon deposits
of cash in favor of banks or other depository institutions;
(l) Liens of a collection bank arising under Section
4-210 of the Uniform Commercial Code on items in the course of
collection;
(m) Liens of sellers of goods to the Borrower and any of
its Subsidiaries arising under Article 2 of the Uniform Commercial Code
or similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
(n) Liens existing as of the Closing Date and set forth
on Schedule 8.2; provided that (i) no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date and (ii) the principal amount of the
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Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced other than in accordance with Section 8.1(b);
(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;
(p) Liens on intellectual property or property plant and
equipment of an acquired business, product or entity for Indebtedness
permitted under Section 8.1(i), but only to the extent, and for so long
as, such Indebtedness is permitted to be secured under the terms of
Section 8.1(i); and
(q) other Liens securing obligations of the Consolidated
Parties that do not exceed $1,000,000 in aggregate principal amount at
any one time outstanding, provided the book value of the Property
subject to such Liens does not exceed $1,000,000 in the aggregate
amount outstanding at any time.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to materially
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Except in connection with a Permitted Asset Disposition, the Credit
Parties will not permit any Consolidated Party to enter into any transaction of
merger or consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that, notwithstanding the foregoing
provisions of this Section 8.4 but subject to the terms of Sections 7.11 and
7.12, (a) the Borrower may merge or consolidate with any of its Subsidiaries,
provided that (i) the Borrower shall be the continuing or surviving corporation
and (ii) the Administrative Agent has agreed (pursuant to a writing dated as of
a recent date prior to such transaction) that such Subsidiary is not a material
Subsidiary, (b) any Credit Party other than the Borrower may merge or
consolidate with any other Credit Party other than the Borrower, (c) any
Consolidated Party which is not a Credit Party may be merged or consolidated
with or into any Credit Party (other than the Borrower), provided that such
Credit Party shall be the continuing or surviving corporation, (d) any
Consolidated Party which is not a Credit Party may be merged or consolidated
with or into any other Consolidated Party which is not a Credit Party, (e) any
Subsidiary of the Borrower may merge with any Person that is not a Credit Party
in connection with an Asset Disposition permitted under Section 8.5, (f) the
Borrower or any Subsidiary of the Borrower may merge with any Person other than
a Consolidated Party in connection with a Permitted Acquisition, provided that,
if such transaction involves the Borrower, (i) the Borrower shall be the
continuing or surviving corporation and (ii) the Person acquired pursuant to
such Permitted Acquisition shall be engaged in a business that is substantially
similar to the business then engaged in by the Borrower (excluding the business
of its Subsidiaries) and (g) any Wholly Owned Subsidiary of the Borrower may
dissolve, liquidate or wind up its affairs at any time, provided that (i) such
dissolution, liquidation or winding up, as applicable, would not be reasonably
likely to have a Material Adverse Effect and (ii) unless the
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Administrative Agent has agreed (pursuant to a writing dated as of a recent date
prior to such transaction) that such Subsidiary is not a material Subsidiary,
the recipient of the assets of such Subsidiary shall be a Consolidated Party
other than the Borrower.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition other than an Excluded Asset Disposition unless (a) not less
than seventy-five percent (75%) of the consideration paid in connection
therewith shall be cash or Cash Equivalents, such payment to be contemporaneous
with consummation of such transaction, and the total consideration paid shall be
in an amount not less than the fair market value of the Property disposed of,
(b) if such transaction is a Sale and Leaseback Transaction, such transaction is
not prohibited by the terms of Section 8.13, (c) such transaction does not
involve the sale or other disposition of a minority equity interest in any
Consolidated Party, (d) such transaction does not involve a sale or other
disposition of receivables other than receivables owned by or attributable to
other Property concurrently being disposed of in a transaction otherwise
permitted under this Section 8.5, (e) any of the following is true: (i) such
transaction constitutes a Sale and Leaseback Transaction set forth on Schedule
8.13, (ii) the aggregate net book value of all of the assets sold or otherwise
disposed of by the Consolidated Parties in all such transactions after the
Closing Date, together with all Sale and Leaseback Transactions permitted under
Section 8.13(c), shall not exceed $10,000,000 in the aggregate for any calendar
year, or (iii) such transaction constitutes a disposition of a Hedging Agreement
that will not result in the violation of Section 7.14, (f) the Credit Parties
shall, within the Application Period, apply (or cause to be applied) an amount
equal to the Net Cash Proceeds of such Asset Disposition to (i) make Eligible
Reinvestments or (ii) prepay the Loans (and cash collateralize LOC Obligations)
in accordance with the terms of Section 3.3(b)(ii)(A) and (g) such Asset
Disposition is permitted under the Senior Subordinated Note Indenture. Pending
final application of the Net Cash Proceeds of any Asset Disposition, the
Consolidated Parties may apply such Net Cash Proceeds to temporarily reduce the
Revolving Loans or to make Investments in Cash Equivalents.
Upon a sale or other disposition of assets or the sale of Capital Stock
of a Consolidated Party permitted by this Section 8.5, the Administrative Agent
shall (to the extent applicable) deliver to the Credit Parties, upon the Credit
Parties' request and at the Credit Parties' expense, such documentation as is
reasonably necessary to evidence the release of the Administrative Agent's
security interest, if any, in such assets or Capital Stock, including, without
limitation, amendments or terminations of UCC financing statements, if any, the
return of stock certificates, if any, and the release of such Consolidated Party
from all of its obligations, if any, under the Credit Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make any
Investments, except for:
(a) Investments consisting of cash and Cash Equivalents;
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(b) Investments consisting of accounts receivable
created, acquired or made by any Consolidated Party in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms, extensions of trade credit in the ordinary
course of business and prepaid expenses in the ordinary course of
business;
(c) Investments consisting of Capital Stock, obligations,
securities or other property received by any Consolidated Party in
settlement of accounts receivable or other indebtedness (created in the
ordinary course of business) from bankrupt obligors;
(d) Investments existing as of the Closing Date and set
forth in Schedule 8.6;
(e) to the extent not prohibited by any applicable
Requirement of Law (including, but not limited to, the Xxxxxxxx-Xxxxx
Act of 2002), Investments consisting of advances or loans to directors,
officers, employees, agents, customers or suppliers that do not exceed
$1,000,000 in the aggregate at any one time outstanding;
(f) Investments in the Borrower or any Credit Party;
(g) Investments in Foreign Subsidiaries in an aggregate
principal amount (excluding Investments of such type set forth in
Schedule 8.6) not to exceed $12,500,000 at any time outstanding;
(h) 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;
(i) any Eligible Reinvestment of the proceeds of any
Involuntary Disposition as contemplated by Section 7.6(b) or of any
Asset Disposition as contemplated by Section 8.5(g); or
(j) Investments consisting of Hedging Agreements and
Guaranty Obligations, in each case permitted by Section 8.1;
(k) Investments consisting of the receipt of non-cash
consideration in an Excluded Asset Disposition (other than pursuant to
clause (v) of the definition of such term);
(l) Investments consisting of Indebtedness permitted by
Sections 8.1(h) and (i);
(m) Investments consisting of the Darvon Transaction, to
the extent such Acquisition is consummated on the Closing Date, the
Elan Transaction, to the extent such Acquisition is consummated on the
First Amendment Effective Date, or any other Acquisition by the
Borrower or any Subsidiary of the Borrower, provided that, with respect
to any such other Acquisition:
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(i) the Property acquired (or the Property of
the Person acquired) in such Acquisition is used or useful in
the same or a similar line of business as the Borrower and its
Subsidiaries were engaged in on the Closing Date (or any
reasonable extensions or expansions thereof);
(ii) the Administrative Agent shall have received
all items in respect of the Capital Stock or Property acquired
in such Acquisition required to be delivered by the terms of
Section 7.11 and/or Section 7.12;
(iii) in the case of an Acquisition of the Capital
Stock of another Person, the board of directors (or other
comparable governing body) of such other Person shall have
duly approved such Acquisition;
(iv) the Borrower shall have delivered to the
Administrative Agent (A) a Pro Forma Compliance Certificate
demonstrating that, upon giving effect to such Acquisition on
a Pro Forma Basis, the Credit Parties would be in compliance
with the financial covenants set forth in Section 7.10(a)-(e)
and (B) a certificate of an Executive Officer of the Borrower,
which:
(x) in the case of an Acquisition by a
Consolidated Party other than a Product Acquisition,
(1) demonstrates that, upon giving effect to such
Acquisition, at least 90% of Consolidated EBITDA for
the most recently ended fiscal year period for each
of the Consolidated Parties and the acquired Person
or Property (in the aggregate) preceding the date of
such Acquisition with respect to which the
Administrative Agent shall have received the Required
Financial Information has been audited in accordance
with GAAP, in the case of the Borrower, as required
by Section 7.1(a) and, in the case of the acquired
Person or Property, by an independent certified
public accountants of recognized national standing
reasonably acceptable to the Administrative Agent
(whose opinion shall not be limited as to the scope
or qualified as to going concern status or any other
material qualifications or exceptions) and (2) to the
extent that audited financial information for the
acquired Person or Property is required under the
terms of the foregoing clause (1), certifies that the
quarterly financial statements with respect to the
Person or Property acquired for each fiscal quarter
period ending after the date of the last audit and
immediately prior to the date of such Acquisition
have been prepared in accordance with GAAP (subject
to audit adjustments and the absence of footnotes)
and reviewed by independent certified public
accountants of recognized national standing
reasonably acceptable to the Administrative Agent;
and
(y) in the case of a Product
Acquisition, certifies that the financial information
and/or projections for the acquired Person or
Property used in preparing the Pro Forma Compliance
Certificate have been prepared in good faith based
upon assumptions believed to be reasonable;
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(v) the representations and warranties made by
the Credit Parties in any Credit Document shall be true and
correct in all material respects at and as if made as of the
date of such Acquisition (after giving effect thereto) except
to the extent such representations and warranties expressly
relate to an earlier date;
(vi) if such transaction involves the purchase of
an interest in a partnership between the Borrower (or a
Subsidiary of the Borrower) as a general partner and entities
unaffiliated with the Borrower or such Subsidiary as the other
partners, such transaction shall be effected by having such
equity interest acquired by a corporate holding company
directly or indirectly wholly-owned by the Borrower newly
formed for the sole purpose of effecting such transaction;
(vii) after giving effect to such Acquisition,
there shall be at least $7,500,000 of availability existing
under the Revolving Committed Amount;
(viii) the aggregate consideration (including cash
and non-cash consideration, deferred purchase price
installments due and payable on or prior to, but not after,
the final Maturity Date and earnout payments due and payable
on or prior to, but not after, the final Maturity Date (with
the value of any such non-cash consideration, deferred
purchase price installments and earnout payments being
calculated in good faith by the Borrower at the time of such
Acquisition in consultation with the Administrative Agent and
set forth in a certificate delivered to the Administrative
Agent), and any assumption of Indebtedness, but excluding
consideration consisting of royalties based upon a percentage
of sales or other similar percentage of sales arrangements,
consideration consisting of any Capital Stock of the Borrower
issued to the seller of the Capital Stock or Property acquired
in such Acquisition and consideration consisting of the
proceeds of any Equity Issuance by the Borrower consummated
subsequent to the Closing Date and the proceeds of any Asset
Disposition, Excluded Asset Disposition or Involuntary
Disposition consummated subsequent to the Closing Date) paid
by the Consolidated Parties for Acquisitions occurring after
the Closing Date shall not exceed $30,000,000 for all
Acquisitions in any fiscal year (excluding consideration in
connection with any Acquisitions consummated prior to the
First Amendment Effective Date) or $20,000,000 for any one
Acquisition; provided, however, that if, after giving effect
to any such Acquisition on a Pro Forma Basis, the Senior
Leverage Ratio would be less than 1.0 to 1.0 as of the most
recently ended fiscal quarter preceding the date of such
transaction with respect to which the Administrative Agent has
received the Required Financial Information, as demonstrated
in the Pro Forma Compliance Certificate delivered pursuant to
clause (m)(iv)(A) above, then the fiscal year aggregate
consideration limitation referenced above shall be $40,000,000
rather than $30,000,000; and
(ix) in the case of an Acquisition by the
Borrower, the Person or assets of such Acquisition shall be
engaged in, or shall consist of, a business that is
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substantially similar to the business then engaged in by the
Borrower (excluding the business of its Subsidiaries).
(n) Other Investments not to exceed, in the aggregate,
$5,000,000 in any fiscal year.
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends or other distributions payable
to any Credit Party (directly or indirectly through Subsidiaries) and (b) as
permitted by Section 8.6, Section 8.8(d) or Section 8.9 (other than pursuant to
clause (e) of Section 8.9), provided that notwithstanding the foregoing, so long
as (x) such payments are permitted under the Senior Subordinated Note Indenture
and (y) no Event of Default exists after giving effect to such payment, (i) the
Borrower or aaiPharma LLC may make purchases of shares pursuant to the stock
purchase program described on Schedule 8.7, (ii) the Borrower or aaiPharma LLC
may make the payments due pursuant to the MVI/Aquasol Purchase Agreement (other
than the MVI Payment), (iii) the Borrower or aaiPharma LLC may make the MVI
Payment so long as after giving effect to the MVI/Payment, (A) the Borrower
shall be in compliance on a Pro Forma Basis with the leverage financial
covenants in this Credit Agreement, (B) the Borrower shall have delivered a Pro
Forma Compliance Certificate demonstrating that, upon giving effect to the MVI
Payment on a Pro Forma Basis, the Credit Parties would be in compliance with the
financial covenants set forth in Section 7.10(a) and (b) and (C) the Borrower
shall have minimum Availability of $10,000,000, and (iv) the Borrower 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 that portion of Net Cash
Proceeds of an Equity Issuance that is not required to be applied as a mandatory
prepayment hereunder (or used for another purpose other than a temporary
reduction of the Loans prior to such purchase, repurchase or redemption) in
accordance with Section 3.3(b) and only after any mandatory prepayments relating
to such Equity Issuance and required to be made pursuant to Section 3.3(b) have
been made, or (2) otherwise, in an aggregate amount not to exceed $10,000,000 in
any period of four consecutive fiscal quarters and $30,000,000 on and after the
First Amendment Effective Date, but only with that portion of Excess Cash Flow
and/or Royalties for any period that is not required to be applied as a
mandatory prepayment hereunder in accordance with Section 3.3(b), only after any
mandatory prepayments relating to Excess Cash Flow and/or Royalties and required
to be made pursuant to Section 3.3(b) have been made and provided that the
Borrower has already delivered its reporting of Excess Cash Flow and/or
Royalties for such period in accordance with Section 7.1, in each of cases (1)
and (2) so long as after giving effect to any such purchases, repurchases or
redemptions, (A) the Borrower shall be in compliance on a Pro Forma Basis with
the leverage financial covenants in this Credit Agreement, (B) the Borrower
shall have delivered a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such repurchases on a Pro Forma Basis, the Credit Parties would
be in compliance with the financial covenants set forth in Section 7.10(a) and
(b) and (C) the Borrower shall have minimum Availability of $22,000,000;
provided, however, that for each $5,000,000 increase in the Revolving
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Committed Amount pursuant to Section 2.5, there shall be a corresponding
$1,000,000 increase in the minimum Availability required pursuant to this clause
(C).
8.8 OTHER INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to:
(a) after the issuance thereof, amend or modify any of
the terms of any Subordinated Indebtedness of such Consolidated Party
if such amendment or modification would (i) add or change any terms in
a manner materially adverse to such Consolidated Party or to the
Lenders, (ii) shorten the final maturity or average life to maturity
thereof, (iii) require any payment thereon to be made sooner than
originally scheduled, (iv) increase the interest rate or fees
applicable thereto or (v) change any subordination provision thereof in
a manner materially adverse to the Lenders;
(b) make interest or any other payments in respect of any
Subordinated Indebtedness in violation of the applicable subordination
provisions;
(c) make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment in respect of any
Subordinated Indebtedness (except as permitted under clause (d) below);
or
(d) make (or give any notice with respect thereto) any
redemption, acquisition for value or defeasance (including without
limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due),
refund, refinance or exchange of any Subordinated Indebtedness;
provided, however, that (i) the Consolidated Parties may exchange the
Senior Subordinated Notes issued on the Closing Date for new Senior
Subordinated Notes with substantially identical terms that will be
registered under the Securities Act solely in connection with the
exchange offer contemplated under the Senior Subordinated Note
Indenture and consummated in accordance with the terms of the
Registration Rights Agreement (as defined in the Senior Subordinated
Note Indenture, and as in effect on the Closing Date) and (ii) the
Borrower may make purchases, repurchases and redemptions of Senior
Subordinated Notes to the extent such transaction is permitted under
Section 8.7; or
(e) designate any Indebtedness of such Consolidated
Party, other than Indebtedness arising under the Credit 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.
8.9 TRANSACTIONS WITH AFFILIATES.
Except as disclosed on Schedule 8.9 or disclosed in documents filed
with the Securities and Exchange Commission, the Credit Parties will not permit
any Consolidated Party to enter into or permit to exist any transaction or
series of transactions with any officer, director, shareholder,
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Subsidiary or Affiliate of such Person other than (a) advances of working
capital to any Credit Party, (b) transfers of cash and assets to any Credit
Party, (c) intercompany transactions expressly permitted by this Credit
Agreement, (d) normal compensation and reimbursement of expenses of officers and
directors and (e) except as otherwise specifically limited in this Credit
Agreement, other transactions which are entered into in the ordinary course of
such Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length transaction
with a Person other than an officer, director, shareholder, Subsidiary or
Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or, except pursuant to a merger or consolidation permitted under
Section 8.4 or where such amendment, modification or change would not materially
adversely affect any Lender, amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) or
bylaws (or other similar document).
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions to any Credit Party on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness or other obligation owed to
any Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its Property to any Credit Party, or (e) act as a
Credit Party and pledge its assets (other than Excluded Property) pursuant to
the Credit Documents or any renewals, refinancings, exchanges, refundings or
extension thereof, except (in respect of any of the matters referred to in
clauses (a)-(d) above) for such encumbrances or restrictions existing under or
by reason of (i) this Credit Agreement and the other Credit Documents, (ii) the
Senior Subordinated Note Indenture and the Senior Subordinated Notes, in each
case as in effect as of the Closing Date, (iii) applicable law, (iv) any
document or instrument governing Indebtedness incurred pursuant to Section
8.1(c) or 8.1(i), provided that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith, (v)
any Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (vi) customary restrictions and
conditions contained in any agreement relating to the sale of any Property
permitted under Section 8.5 pending the consummation of such sale, or (vii)
items set forth on Schedule 8.11.
8.12 OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Borrower or any Wholly Owned Subsidiary of the
Borrower) to own any Capital Stock of any Subsidiary of the Borrower, except (A)
to qualify directors where required by applicable law or to satisfy other
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requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries, (B) as a result of or in connection with a dissolution,
merger, consolidation or disposition of a Subsidiary not prohibited by Section
8.4 or Section 8.5 or (C) the minority interests in the Chinese Subsidiaries as
set forth on Schedule 6.13B, (ii) permit any Subsidiary of the Borrower to issue
or have outstanding any shares of preferred Capital Stock or (iii) permit,
create, incur, assume or suffer to exist any Lien on any Capital Stock of any
Subsidiary of the Borrower, except for Permitted Liens.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit any Consolidated Party to enter into
any Sale and Leaseback Transaction other than (a) those existing as of the
Closing Date and set forth on Schedule 8.1), (b) those set forth on Schedule
8.13 and (c) additional transactions where the aggregate net book value of all
of the assets sold or otherwise disposed of by the Consolidated Parties in all
such transactions after the Closing Date, together with all Asset Dispositions
permitted under Section 8.5(e), shall not exceed $10,000,000 in the aggregate
for any calendar year.
8.14 CAPITAL EXPENDITURES.
The Credit Parties will not permit Consolidated Capital Expenditures
for any fiscal year to exceed $20,000,000 per annum, plus the unused amount
available for Consolidated Capital Expenditures under this Section 8.14 for the
immediately preceding fiscal year (excluding any carry forward available from
any prior fiscal year); provided, however, that with respect to any fiscal year,
Consolidated Capital Expenditures made during such fiscal year shall be deemed
to be made first with respect to the applicable limitation for such fiscal year
and then with respect to any carry-forward from the immediately preceding fiscal
year.
8.15 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not permit any Consolidated Party to enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the existence of any Lien upon any of its Property in favor of the
Administrative Agent (for the benefit of the Lenders) for the purpose of
securing the Credit Party Obligations, whether now owned or hereafter acquired,
or requiring the grant of any security for any obligation if such Property is
given as security for the Credit Party Obligations, except (a) in connection
with any document or instrument governing Indebtedness incurred pursuant to
Section 8.1(c), provided that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith, (b)
in connection with any Permitted Lien or any document or instrument governing
any Permitted Lien, provided that any such restriction contained therein relates
only to the asset or assets subject to such Permitted Lien and (c) pursuant to
customary restrictions and conditions contained in any agreement relating to the
sale of any Property permitted under Section 8.5, pending the consummation of
such sale.
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SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence and during the
continuance of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Loans or any reimbursement obligations
arising from drawings under Letters of Credit, or
(ii) default, and such default shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Loans or any reimbursement obligations
arising from drawings under Letters of Credit or of any Fees
or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
deemed to have been made; or
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections 7.2,
7.8, 7.10, 7.11, 7.12 or 7.13 or Section 8;
(ii) default in the due performance or observance
of any term, covenant or agreement contained in Sections
7.1(a), (b) or (c) and such default shall continue unremedied
for a period of at least 5 days after the earlier of an
Executive Officer of a Credit Party becoming aware of such
default or notice thereof by the Administrative Agent; or
(iii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b), (c)(i) or (c)(ii) of this
Section 9.1) contained in this Credit Agreement or any other
Credit Document and such default shall continue unremedied for
a period of at least 30 days after the earlier of an Executive
Officer of a Credit Party becoming aware of such default or
notice thereof by the Administrative Agent; or
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(d) Other Credit Documents. Except as a result of or in
connection with a dissolution, merger or disposition of a Subsidiary
not prohibited by Section 8.4 or Section 8.5, any Credit Document shall
fail to be in full force and effect or to give the Administrative Agent
and/or the Lenders the Liens, rights, powers and privileges purported
to be created thereby, or any Credit Party shall so state in writing;
or
(e) Guaranties. Except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary not
prohibited by Section 8.4 or Section 8.5, the guaranty given by any
Guarantor hereunder (including any Person after the Closing Date in
accordance with Section 7.11) or any provision thereof shall cease to
be in full force and effect, or any Guarantor (including any Person
after the Closing Date in accordance with Section 7.11) hereunder or
any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty, or any
Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur
with respect to any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period
with respect thereto, if any) of any material obligation or
condition of any contract or lease material to the
Consolidated Parties taken as a whole if such default could
reasonably be expected to have a Material Adverse Effect; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in
excess of $5,000,000 in the aggregate for the Consolidated
Parties taken as a whole, (A) either (1) a default in any
payment shall occur and continue (beyond the applicable grace
period with respect thereto, if any) with respect to any such
Indebtedness, or (2) a default in the observance or
performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or exist,
the effect of which default or other event or condition is to
cause, or permit, the holder or holders of such Indebtedness
(or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of
time is required), any such Indebtedness to become due prior
to its stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties involving a
liability of $5,000,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
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acknowledged coverage and has the ability to perform) and any such
judgments or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if
such event or condition could involve possible taxes, penalties, and
other liabilities in an aggregate amount in excess of $5,000,000: (i)
any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not
waived, shall exist with respect to any Plan, or any lien shall arise
on the assets of any Consolidated Party or any ERISA Affiliate in favor
of the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to
a Single Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in the termination of such Plan
for purposes of Title IV of ERISA; (iii) an ERISA Event shall occur
with respect to a Multiemployer Plan or Multiple Employer Plan, which
is, in the reasonable opinion of the Administrative Agent, likely to
result in (A) the termination of such Plan for purposes of Title IV of
ERISA, or (B) any Consolidated Party or any ERISA Affiliate incurring
any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency (within
the meaning of Section 4245 of ERISA) of such Plan; or (iv) any
prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject any Consolidated Party or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability;
(j) Senior Subordinated Debt Documentation. (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 Debt, (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 or (iv) 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; or
(k) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent may or, upon the request and direction of the Required
Lenders, shall, by written notice to the Credit Parties take any of the
following actions:
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(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid Credit Party
Obligations (excluding any Credit Party Obligations relating to a
Hedging Agreement) to be due, whereupon the same shall be immediately
due and payable without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower hereby promises to pay, upon receipt of such notice) to the
Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then, without the
giving of any notice or other action by the Administrative Agent or the Lenders,
(i) the Commitments automatically shall terminate, (ii) all of the outstanding
Credit Party Obligations (excluding any Credit Party Obligations relating to a
Hedging Agreement) automatically shall immediately become due and payable, and
(iii) the Borrower automatically shall be obligated (and hereby promises) to pay
to the Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent drawings
under all then outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably (subject to Section
10.9) appoints, designates and authorizes the Administrative Agent to
take such action on its behalf under the provisions of this Credit
Agreement and each other Credit Document and to exercise such powers
and perform such duties as are expressly delegated to it by the terms
of this Credit Agreement or any other Credit Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary
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contained elsewhere herein or in any other Credit Document, the
Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Administrative
Agent have or be deemed to have any fiduciary relationship with any
Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Credit Agreement or any other Credit Document or otherwise exist
against the Agent. Without limiting the generality of the foregoing
sentence, the use of the term "Administrative Agent" herein and in the
other Credit Documents with reference to the Administrative Agent is
not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship
between independent contracting parties.
(b) The Issuing Lender shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents
associated therewith until such time (and except for so long) as the
Administrative Agent may agree at the request of the Required Lenders
to act for the Issuing Lender with respect thereto; provided, however,
that the Issuing Lender shall have all of the benefits and immunities
(i) provided to the Administrative Agent in this Section 10 with
respect to any acts taken or omissions suffered by the Issuing Lender
in connection with Letters of Credit issued by it or proposed to be
issued by it and the application and agreements for letters of credit
pertaining to the Letters of Credit as fully as if the term
"Administrative Agent" as used in this Section 10 included the Issuing
Lender with respect to such acts or omissions, and (ii) as additionally
provided herein with respect to the Issuing Lender.
10.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Credit Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.
10.3 LIABILITY OF ADMINISTRATIVE AGENT.
No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Credit
Agreement or any other Credit Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) be responsible in any manner to
any Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Credit Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Credit Agreement or any other Credit Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Credit
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Agreement or any other Credit Document, or for any failure of any Credit Party
or any other party to any Credit Document to perform its obligations hereunder
or thereunder. No Agent-Related Person shall be under any obligation to any
Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Credit
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Affiliate thereof.
10.4 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, electronic mail message, statement or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Credit
Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified
in failing or refusing to take any action under any Credit Document
unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Credit Agreement or any other Credit Document
in accordance with a request or consent of the Required Lenders or all
the Lenders, if required hereunder, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the
Lenders and participants. Where this Credit Agreement expressly permits
or prohibits an action unless the Required Lenders otherwise determine,
the Administrative Agent shall, and in all other instances, the
Administrative Agent may, but shall not be required to, initiate any
solicitation for the consent or a vote of the Lenders. All telephonic
notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto
hereby consents to such recording.
(b) For purposes of determining compliance with the
conditions specified in Section 5.1, each Lender that has signed this
Credit Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either
sent by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to a Lender.
10.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the
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Lenders, unless the Administrative Agent shall have received written notice from
a Lender or the Borrower referring to this Credit Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". The Administrative Agent will notify the Lenders of its receipt of any
such notice. The Administrative Agent shall take such action with respect to
such Default or Event of Default as may be directed by the Required Lenders in
accordance with Section 9.2; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
10.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties and their respective Subsidiaries, and
all applicable Requirements of Law relating to the transactions contemplated
hereby, and made its own decision to enter into this Credit Agreement and to
extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Credit Agreement and the other Credit Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent herein, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Credit Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
10.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Agent-Related
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Person, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans, except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders, or of all Lenders if unanimous direction is required hereunder, shall
be deemed to constitute gross negligence or willful misconduct for purposes of
this Section. Without limitation of the foregoing, each Lender shall reimburse
the Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including reasonable attorneys fees and the allocated
costs of internal counsel) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Credit Agreement, any other Credit Document, or any document contemplated
by or referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive termination of the Commitments, the payment of all
Credit Party Obligations hereunder and the resignation or replacement of the
Administrative Agent.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding any Credit Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Credit Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, Bank of America shall have the same rights and
powers under this Credit Agreement as any other Lender and may exercise such
rights and powers as though it were not the Administrative Agent or the Issuing
Lender, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders; provided that any such resignation by Bank of
America shall also constitute its resignation as Issuing Lender and Swing Line
Lender. If the Administrative Agent resigns under this Credit Agreement, the
Required Lenders shall appoint from among the Lenders a successor administrative
agent for the Lenders which successor administrative agent shall be consented to
by the Borrower at all times other than during the existence of an Event of
Default (which consent of the Borrower shall not be unreasonably withheld or
delayed). If no successor
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administrative agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower, a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent, Issuing Lender and Swing Line Lender, and the terms "Administrative
Agent", "Issuing Lender" and "Swing Line Lender" shall mean such successor
administrative agent, issuing lender and swing line lender and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated and the retiring Issuing Lender's and Swing Line Lender's
rights, powers and duties as such shall be terminated, without any other or
further act or deed on the part of such retiring Issuing Lender or Swing Line
Lender, or any other Lender, other than the obligation of the successor Issuing
Lender to issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring Issuing Lender to effectively assume the
obligations of the retiring Issuing Lender with respect to such Letters of
Credit. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 10 and Sections 11.4 and
11.9 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Credit Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent's notice
of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
10.10 ADMINISTRATIVE 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 CREDIT PARTY, THE
ADMINISTRATIVE AGENT (IF THE PRINCIPAL OF
ANY LOAN OR LOC OBLIGATION SHALL THEN BE DUE
AND PAYABLE AS HEREIN EXPRESSED OR BY
DECLARATION OR OTHERWISE BUT IRRESPECTIVE OF
WHETHER THE ADMINISTRATIVE AGENT SHALL HAVE
MADE ANY DEMAND ON THE BORROWER) 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, LOC
Obligations and all other Credit Party 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 Lenders and the
Administrative
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Agent (including any claim for amounts due the Lenders and the
Administrative Agent under Sections 3.5 and 11.5) 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
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
amounts due the Administrative Agent under Sections 3.5 and 11.5.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the Credit
Party Obligations or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.
10.11 COLLATERAL AND GUARANTY MATTERS.
The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion,
(a) to release any Lien on any property granted to or
held by the Administrative Agent under any Credit Document (i) upon
termination of the Commitments and payment in full of all Credit Party
Obligations (other than contingent indemnification obligations) and the
expiration or termination of all Letters of Credit, (ii) that is sold
or to be sold as part of or in connection with any sale permitted
hereunder or under any other Credit Document, or (iii) subject to
Section 11.6, if approved, authorized or ratified in writing by the
Required Lenders;
(b) to subordinate any Lien on any property granted to or
held by the Administrative Agent under any Credit Document to the
holder of any Lien on such property that is permitted by Section
8.2(g); and
(c) to release any Guarantor from its obligations
hereunder if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent's authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations hereunder pursuant to this Section 10.11.
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10.12 OTHER AGENTS; LEAD MANAGERS.
None of the Lenders identified on the facing page or signature pages of
this Credit Agreement as a "Co-Syndication Agent", "Sole Lead Arranger and Sole
Book Manager" or "Documentation Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Credit Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders 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 so identified in deciding to enter into this Credit
Agreement or in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
11.1 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission or attachment to an electronic mail). All
such written notices shall be mailed, faxed or delivered to the applicable
address, facsimile number or (subject to subsection (c) below) electronic mail
address, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, the Administrative Agent, the
Issuing Lender or the Swing Line Lender, to the address, facsimile
number, electronic mail address or telephone number specified for such
Person on Schedule 11.1 or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by
such party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile
number, electronic mail address or telephone number specified in its
Administrative Questionnaire (which information shall be obtained by
the Borrower from the Administrative Agent in the case of any such
notice to be delivered by the Borrower) or to such other address,
facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the Borrower, the
Administrative Agent, the Issuing Lender and the Swing Line Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered;
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provided, however, that notices and other communications to the Administrative
Agent, the Issuing Lender and the Swing Line Lender pursuant to Section 2 shall
not be effective until actually received by such Person. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Credit
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable law, have the
same force and effect as manually-signed originals and shall be binding on all
Consolidated Parties, the Administrative Agent and the Lenders. The
Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet
and intranet websites may be used only to distribute routine communications,
such as financial statements and other information as provided in Section 7.1,
and to distribute Credit Documents for execution by the parties thereto, and may
not be used for any other purpose.
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to 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 Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Credit Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the
Credit Parties may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each
Lender and no Lender may assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions or paragraph (b) of this Section, (ii)
by way of participation in accordance with the provisions of paragraph
(d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this
Section (and any other attempted assignment or
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transfer by any Credit Party or by any Lender without such consent
shall be null and void). Nothing in this Credit Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted
hereby, Participants to the extent provided in paragraph (d) of this
Section and, to the extent expressly contemplated hereby, the
Indemnified Parties) any legal or equitable right, remedy or claim
under or by reason of this Credit Agreement.
(b) Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under
this Credit Agreement (including all or a portion of its Commitment and
the Loans (including for purposes of this subsection (b), its
Participation Interests) at the time owing to it); provided that (i)
except in the case of an assignment of the entire remaining amount of
the assigning Lender's Commitment and the Loans at the time owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund with respect to a Lender, the aggregate amount of
the Commitment (which for this purpose includes Loans outstanding
thereunder) or principal outstanding balance of the New Term Loan of
the assigning Lender subject to each such assignment, determined as of
the date the Assignment and Assumption Agreement with respect to such
assignment is delivered to the Administrative Agent, shall not be less
than $2,000,000 in the case of any assignment of a Revolving
Commitment, or $1,000,000, in the case of any assignment of a New Term
Loan, unless each of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or
delayed); (ii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and
obligations under this Credit Agreement with respect to the Loans or
the Commitments assigned, except that this clause (ii) shall not (x)
apply to rights in respect of outstanding Swing Line Loans or (y)
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate tranches on a non-pro rata basis; (iii) any
assignment of a Revolving Commitment must be approved by the
Administrative Agent, the Issuing Lender and the Swing Line Lender
unless the Person that is the proposed assignee is itself a Lender with
a Revolving Commitment (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to
each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption Agreement, together with a processing and
recordation fee of $3,500 (except in connection with assignments to
Affiliates), and the Eligible Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative
Questionnaire. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c), from and after the
effective date specified in each Assignment and Assumption Agreement,
the Eligible Assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption
Agreement, have the rights and obligations of a Lender under this
Credit Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption
Agreement, be released from its obligations under this Credit Agreement
(and, in the case of an Assignment and Assumption Agreement covering
all of the assigning Lender's rights and obligations under this Credit
Agreement, such Lender shall cease to be a party hereto but shall
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continue to be entitled to the benefits of Sections 3.11, 3.12 and
11.5). Upon request, the Borrower (at its expense) shall execute and
deliver new or replacement Notes to the assigning Lender and the
assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Credit Agreement that does not comply with this
subsection shall be treated for purposes of this Credit Agreement as a
sale by such Lender of a participation in such rights and obligations
in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at is address
referred to in Section 11.1 a copy of each Assignment and Assumption
Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and
principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, and the Credit Parties, the
Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Credit Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection
by the Credit Parties and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Any Lender may, without the consent of, or notice to,
the Credit Parties or the Administrative Agent, sell participations to
one or more banks or other entities (a "Participant") in all or a
portion of such Lender's rights and/or obligations under this Credit
Agreement (including all or a portion of its Commitments and/or the
Loans (including such Lender's Participation Interests) owing to it);
provided that (i) such Lender's obligations under this Credit Agreement
shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations and (iii) the Credit Parties, the Administrative Agent 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 Credit Agreement. Any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Credit Agreement and to approve
any amendment, modification or waiver of any provision of this Credit
Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to
any amendment, waiver or other modification that would (i) postpone any
date upon which any payment of money is scheduled to be paid to such
Participant, (ii) reduce the principal, interest, fees or other amounts
payable to such Participant, (iii) except as the result of or in
connection with a dissolution, merger or disposition of a Consolidated
Party not prohibited by Section 8.4 or 8.5, release all or
substantially all of the Guarantors from their obligations under the
Credit Documents or (iv) except as the result of or in connection with
an Asset Disposition not prohibited by Section 8.5, release all or
substantially all of the Collateral. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.6, 3.9, 3.11 and 3.12 to the same extent as
if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section. To the extent
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permitted by law, each Participant also shall be entitled to the
benefits of Section 11.2 as though it were a Lender, provided such
Participant agrees to be subject to Section 3.14 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any
greater payment under Section 3.6, 3.7 or 3.11 than the applicable
Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower's prior
written consent. A Participant that is not a United States person under
Section 7701(a)(30) of the Code shall not be entitled to the benefits
of Section 3.11 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit
of the Borrower, to comply with Section 3.11(d) as though it were a
Lender.
(f) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Credit
Agreement (including under its Notes, if any) to secure obligations of
such Lender, including any pledge or assignment to secure obligations
to a Federal Reserve Bank; provided that no such pledge or assignment
shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) If the consent of the Borrower to an assignment or to
an Eligible Assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment threshold
specified in clause (i) of the proviso to the first sentence of Section
11.3(b)), the Borrower shall be deemed to have given its consent five
Business Days after the date notice thereof has been delivered by the
assigning Lender (through the Administrative Agent) and actually
received by the Borrower and its counsel pursuant to Section 11.1,
unless such consent is expressly refused by the Borrower prior to such
fifth Business Day.
(h) Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, (i)
upon five Business Days' notice to the Borrower, terminate its Swing
Line Commitment and (ii) upon 30 days' notice to the Borrower and the
Lenders, resign as Issuing Lender. In the event of any such termination
of its Swing Line Commitment or resignation as Issuing Lender, the
Borrower shall be entitled to appoint from among the Lenders a
successor Swing Line Lender or Issuing Lender hereunder; provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the termination of Bank of America's Swing Line Commitment
or the resignation of Bank of America as Issuing Lender, as the case
may be. If Bank of America terminates its Swing Line Commitment, it
shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding
as of the effective date of such termination, including the right to
require the Lenders to make Revolving Loans or fund their Participation
Interests in outstanding Swing Line Loans pursuant to Section 2.2(d).
Bank of America shall retain all the rights and obligations of the
Issuing Lender hereunder with respect to all Letters of Credit
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outstanding as of the effective date of its resignation as Issuing
Lender and all LOC Obligations with respect thereto (including the
right to require the Lenders to make Revolving Loans or fund their
Participation Interests pursuant to Section 2.4).
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Credit Parties to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Credit Parties jointly and severally agree to pay
on demand reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the syndication, preparation,
negotiation, execution, delivery, administration, modification, and
amendment of this Credit Agreement, the other Credit Documents, and the
other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto and with respect to advising
the Administrative Agent as to its rights and responsibilities under
the Credit Documents. The Credit Parties further jointly and severally
agree to pay on demand reasonable out-of-pocket costs and expenses of
the Administrative Agent and the Lenders, if any (including, without
limitation, reasonable attorneys' fees and expenses), in connection
with any work-out or restructuring relating to the Credit Facilities or
any enforcement (whether through negotiations, legal proceedings, or
otherwise) of any of the Credit Documents. The foregoing costs and
expenses shall include all reasonable, out-of-pocket search, filing,
recording, title insurance and appraisal charges to the extent
permitted by this Credit Agreement (including Section 7.9 and Section
7.12 hereof) and fees and taxes related thereto, and other reasonable,
out-of-pocket expenses incurred by the Administrative Agent and the
cost of independent public accountants and other outside experts
reasonably retained by the Administrative Agent to the extent permitted
by this Credit Agreement (including Section 7.9 and Section 7.12
hereof). All amounts due under this Section 11.5 shall be payable
within ten Business Days after demand therefor. The agreements in this
Section shall survive the termination of the Commitments and repayment
of all other Credit Party Obligations.
(b) Whether or not the transactions contemplated hereby
are consummated, the Borrower agrees to indemnify, save and hold
harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents
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and attorneys-in-fact (collectively the "Indemnitees") from and
against: (i) any and all obligations, damages, penalties, claims,
demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than the Administrative Agent or any
Lender) relating directly or indirectly to an obligation, damage,
penalty, claim, demand, action or cause of action that such Person
asserts or may assert against any Credit Party, any Affiliate of any
Credit Party or any of their respective officers or directors; (ii) any
and all obligations, damages, penalties, claims, demands, actions or
causes of action that may at any time (including at any time following
repayment of the Credit Party Obligations and the resignation or
removal of the Administrative Agent or the replacement of any Lender)
be asserted or imposed against any Indemnitee, arising out of or
relating to, the Credit Documents, any predecessor Credit Documents,
the Commitments, the use or contemplated use of the proceeds of any
Extension of Credit, or the relationship of any Credit Party, the
Administrative Agent and the Lenders under this Credit Agreement or any
other Credit Document; (iii) any administrative or investigative
proceeding by any Governmental Authority arising out of or related to
an obligation, damage, penalty, claim, demand, action or cause of
action described in subsection (i) or (ii) above; and (iv) any and all
liabilities (including liabilities under indemnities), losses,
reasonable out-of-pocket costs or expenses (including reasonable fees
and costs of counsel) that any Indemnitee suffers or incurs as a result
of the assertion of any foregoing obligation, damage, penalty, claim,
demand, action, cause of action or proceeding, or as a result of the
preparation of any defense in connection with any foregoing claim,
demand, action, cause of action or proceeding, in all cases, whether or
not arising out of the negligence of an Indemnitee, and whether or not
an Indemnitee is a party to such claim, demand, action, cause of action
or proceeding (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that no Indemnitee shall be entitled to
indemnification for (A) any claim caused by its own gross negligence or
willful misconduct or (B) for any loss asserted against it by another
Indemnitee. The agreements in this Section shall survive the
termination of the Commitments and repayment of all the other Credit
Party Obligations.
(c) Without prejudice to the survival of any other
agreement of the Credit Parties hereunder, the agreements and
obligations of the Credit Parties contained in this Section 11.5 shall
survive the repayment of the Credit Party Obligations and the
termination of the Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, each of the Credit Parties
party thereto and the Required Lenders, provided, however, that:
(a) without the consent of each Lender affected thereby,
neither this Credit Agreement nor any other Credit Document may be
amended, changed, waived, discharged or terminated so as to
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(i) extend any Commitment or the final maturity
of any Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit, or
extend or waive any Principal Amortization Payment of any
Loan, or any portion thereof (it being understood and agreed
that a waiver of any condition precedent set forth in Section
5.2 or of any Default or Event of Default or mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(ii) reduce the rate or extend the time of
payment of interest on any Loan or of any reimbursement
obligation, or any portion thereof, arising from drawings
under Letters of Credit (other than as a result of waiving the
applicability of any post-default increase in interest rates)
or of any Fees,
(iii) reduce or waive the principal amount of any
Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that
a waiver of any condition precedent set forth in Section 5.2
or of any Default or Event of Default or mandatory reduction
in the Commitments shall not constitute a change in the terms
of any Commitment of any Lender),
(v) except as the result of or in connection
with an Asset Disposition not prohibited by Section 8.5,
release all or substantially all of the Collateral,
(vi) except as the result of or in connection
with a dissolution, merger or disposition of a Consolidated
Party not prohibited by Section 8.4 or Section 8.5, release
the Borrower or substantially all of the other Credit Parties
from its or their obligations under the Credit Documents,
(vii) amend, modify or waive any provision of
Section 3.13,
(viii) amend, modify or waive any provision of this
Section 11.6,
(ix) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders, or
(x) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit
Parties of any of its or their rights and obligations under
(or in respect of) the Credit Documents except as permitted
thereby;
(b) without the consent of Lenders (other than Defaulting
Lenders) holding in the aggregate at least a majority of the
outstanding New Term Loan (and Participation
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Interests therein), (i) Section 3.15 may not be amended, changed,
waived, discharged or terminated so as to alter the manner of
application of any payment in respect of the Credit Party Obligations
or proceeds of Collateral and (ii) Section 3.3(b)(vii) may not be
amended, changed, waived, discharged or terminated so as to alter the
manner of application of proceeds of any mandatory prepayment required
by Section 3.3(b)(ii), (iii), (iv), (v) or (vi) hereof;
(c) without the consent of the Administrative Agent, no
provision of Section 10 may be amended, changed, waived, discharged or
terminated; and
(d) without the consent of the Swing Line Lender, no
provision of Section 2.2 may be amended, changed, waived, discharged or
terminated; and
(e) without the consent of the Issuing Lender, no
provision of Section 2.4 may be amended, changed, marked, discharged or
terminated; and
(f) without the consent of Lenders (other than Defaulting
Lenders) holding in the aggregate at least a majority of the Revolving
Commitments, the Credit Agreement may not be amended or modified so as
to waive any Default or Event of Default for purposes of Section
5.2(c).
For the avoidance of doubt and notwithstanding any provision to the
contrary contained in this Section 11.6, this Credit Agreement may be amended
(or amended and restated) with the written consent of the Credit Parties and the
Required Lenders (x) to increase the aggregate Commitments of the Lenders, (y)
to add one or more additional tranches of Loans to the Credit Agreement and to
permit the extensions of credit from time to time outstanding thereunder and the
accrued interest and fees in respect thereof (collectively, the "Additional
Extensions of Credit") to share ratably in the benefits of this Agreement and
other Credit Documents with the other then outstanding Credit Party Obligations
and (z) to include appropriately the Lenders holding such credit facilities in
any determination of the Required Lenders; provided, however, that no such
amendment shall permit the Additional Extensions of Credit to share ratably with
or with preference to the New Term Loan in the application of mandatory
prepayments without the consent of Lenders (other than Defaulting Lenders)
holding in the aggregate at least a majority of the outstanding New Term Loan
(and participations therein), or otherwise to share ratably with or with
preference to the Revolving Loans (and participations in any Swing Line Loans
and any LOC Obligations) without the consent of the Lenders holding a majority
of the outstanding Revolving Loans (and participations in any Swing Line Loans
and any LOC Obligations).
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender; provided that such Defaulting
Lender shall be treated ratably with the other Lenders under the terms of such
amendment, waiver or consent.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any
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bankruptcy reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code
supersedes the unanimous consent provisions set forth herein and (y) the
Required Lenders shall determine whether or not to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency proceeding and such
determination shall be binding on all of the Lenders.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed shall be an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Credit Agreement to produce or account for more than one such
counterpart for each of the parties hereto. Delivery by facsimile by any of the
parties hereto of an executed counterpart of this Credit Agreement shall be as
effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 HEADINGS.
The headings of the sections hereof are provided for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive until this Credit Agreement shall be terminated in
accordance with the terms of Section 11.13(b). Such representations and
warranties have been or will be relied upon by the Administrative Agent and each
Lender, regardless of any investigation made by the Administrative Agent or any
Lender or on their behalf and notwithstanding that the Administrative Agent or
any Lender may have had notice or knowledge of any Default at the time of any
Extension of Credit, and shall continue in full force and effect as long as any
Loan or any other Credit Party Obligation hereunder shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the
courts of the State of New York in New York County, or of the United
States
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for the Southern District of New York, and, by execution and delivery
of this Credit Agreement, each of the Credit Parties hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Credit Parties further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3)
days after such mailing. Nothing herein shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) EACH PARTY TO THIS CREDIT AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings,
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oral or written, if any, including any commitment letters or correspondence
relating to the Credit Documents or the transactions contemplated herein and
therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such
time on or after the Closing Date when it shall have been executed by
each Credit Party and the Administrative Agent, and the Administrative
Agent shall have received copies hereof (telefaxed or otherwise) which,
when taken together, bear the signatures of each Lender, and thereafter
this Credit Agreement shall be binding upon and inure to the benefit of
each Credit Party, the Administrative Agent and each Lender and their
respective successors and assigns.
(b) The term of this Credit Agreement shall be until the
Credit Party Obligations are Fully Satisfied.
(c) Each of the Credit Parties hereby acknowledges and
agrees that it has no claims, counterclaims, offsets, or defenses to
the Credit Documents and the performance of its obligations thereunder,
or if such Credit Party has any such claims, counterclaims, offsets, or
defenses to the Credit Documents or any transaction related to the
Credit Documents, the same are hereby waived, relinquished and released
in consideration of the Lenders' execution and delivery of this Credit
Agreement.
11.14 CONFIDENTIALITY.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Credit
Agreement; (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Credit Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section 11.14, to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Credit Agreement or
(ii) any direct or indirect contractual counterparty or prospective counterparty
(or such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to Credit Party
Obligations; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 11.14 or (ii) becomes available to the Administrative Agent or any
Lender on a nonconfidential basis from a source other than the Consolidated
Parties; or (i) to the National Association of Insurance Commissioners or any
other similar organization or any nationally recognized rating agency that
requires access to information about a Lender's or its Affiliates' investment
portfolio in connection with ratings issued with respect to such Lender or its
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Affiliates. For the purposes of this Section, "Information" means all
information received from the Credit Parties relating to the Consolidated
Parties or their business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Consolidated Parties; provided that, in the case of
information received from the Consolidated Parties after the date hereof, such
information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 11.14 shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding anything herein to the
contrary, "Information" shall not include, and the Borrower, the other
Consolidated Parties, the Administrative Agent, each Lender and the respective
Affiliates of each of the foregoing (and the respective partners, directors,
officers, employees, agents, advisors and other representatives of each of the
foregoing and their Affiliates) may disclose to any and all Persons, without
limitation of any kind (a) any information with respect to the U.S. federal and
state income tax treatment of the transactions contemplated hereby and any facts
that may be relevant to understanding such tax treatment, which facts shall not
include for this purpose the names of the parties or any other Person named
herein, or information that would permit identification of the parties or such
other Persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or facts, and (b) all
materials of any kind (including opinions or other tax analyses) relating to
such tax treatment or facts that are provided to any of the Persons referred to
above.
The Borrower will not, and will not permit any of its Subsidiaries to,
issue any press release or other public disclosure using the name General
Electric Capital Corporation ("GE") or any of its affiliates without at least
two (2) Business Days' prior written notice to, and the prior written consent of
GE, except (i) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process (in which event Borrower will still use
commercially reasonable efforts to consult with GE prior to such disclosure) and
(ii) in connection with the Borrower's required filings with the Securities and
Exchange Commission.
The Borrower consents to the publication by any agent of a tombstone or
other advertising material relating to the financing transactions contemplated
by this Credit Agreement, and agrees that any agent may provide to industry
trade organizations information necessary and customary for inclusion in league
table measurements.
11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to
any separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
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(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this clause (b), all employee benefit plans maintained by
the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 REGULATION D.
Each of the Lenders hereby represents and warrants to the Borrower that
it is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires or loans on
the ordinary course of business and that it will make or acquire Loans for its
own account in the ordinary course of business.
11.17 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.18 USA PATRIOT ACT NOTICE.
Each Lender and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
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