Exhibit 10.7
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SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
AMONG
FLEET NATIONAL BANK,
SEPRACOR INC.
AND
BIOSPHERE MEDICAL, INC.
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Dated as of December 22, 1999
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SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
Dated as of December 22, 1999
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as
of December 22, 1999, by and among SEPRACOR INC., a Delaware corporation having
its chief executive office at 000 Xxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
(the "BORROWER"), BIOSPHERE MEDICAL, INC., a Delaware corporation having its
chief executive office at 000 Xxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
("BIOSPHERE, collectively with the Borrower, the "CREDIT PARTIES") and FLEET
NATIONAL BANK (the "BANK"), having its office at Xxx Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
This Agreement amends, restates and supersedes the Amended and Restated
Revolving Credit Agreement dated as of December 31, 1996 as amended to date (the
"PRIOR CREDIT AGREEMENT") by and among the Borrower, Sepracor Securities
Corporation and Fleet National Bank, pursuant to which the Bank agreed to
establish a Revolving Line of Credit and make Revolving Credit Loans (the "PRIOR
LOANS") to the Borrower.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
All capitalized terms used in this Agreement or in the Notes or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
ACCOUNT AND ACCOUNT RECEIVABLE. Include all rights to payment for goods
sold or leased or for services rendered, all sums of money or other proceeds due
or becoming due thereon, all instruments pertaining thereto, all guaranties and
security therefor, and all goods giving rise thereto and the rights pertaining
to such goods, including the right of stoppage in transit, and all related
insurance.
AFFILIATE. As applied to any Person, a spouse or relative of such
Person, any member, director or officer of such Person, any corporation,
association, firm or other entity of which such Person is a member, director or
officer, and any other Person directly or indirectly controlling, controlled by
or under direct or indirect common control with such Person.
AGREEMENT. This Second Amended and Restated Revolving Credit Agreement,
as the same may be supplemented, amended or restated from time to time.
ALTERNATIVE CURRENCY. The lawful currency of a foreign country which
may be established as an alternate currency by mutual agreement entered into
between the Bank and the Credit Parties hereafter as confirmed in writing, so
long as any such currency is freely transferable, convertible into Dollars and
traded on the inter-bank currency deposits market in which the Bank customarily
funds foreign currency loans.
ALTERNATIVE CURRENCY COMMITMENT. A commitment, to the extent mutually
agreed by the Bank and the Credit Parties, for (i) the exchange, for future
delivery, of an Alternative Currency into Dollars or Dollars into an Alternative
Currency or (ii) the purchase, for future delivery, of an Alternative Currency
with Dollars or Dollars with an Alternative Currency, in accordance with the
Bank's prevailing customs and practices.
ALTERNATIVE CURRENCY EQUIVALENT. The amount in Alternative Currency of
Dollars at the quoted spot rate at which the Bank's principal office in the
United States offers to exchange such Alternative Currency for Dollars at 11:00
a.m. (Boston time) two (2) Business Days prior to the date on which such
equivalent is determined.
AUTHORIZED OFFICER. The president, chief financial officer or senior
vice president finance and administration of the Borrower.
AVAILABLE AGGREGATE REVOLVING COMMITMENT. The excess, if any, of (1)
the Revolving Commitment Amount MINUS (2) the LC Exposure.
BANK. See Preamble.
BIOSPHERE. See Preamble.
BIOSPHERE LOAN SUBLIMIT A sublimit of the Revolving Commitment Amount
equal to $2,000,000, as such amount may be reduced from time to time pursuant to
Section 2.3.
BIOSPHERE LOANS. Revolving Loans made by the Bank to Biosphere.
BIOSPHERE NOTE. The Promissory Note dated the date hereof made by
Biosphere payable to the order of the Bank in the original principal amount of
$2,000,000.
BORROWER. See Preamble.
BUSINESS DAY. Any day other than a Saturday, Sunday or legal holiday on
which banks in Boston, Massachusetts are open for the conduct of a substantial
part of their commercial banking business.
CANADIAN INDEBTEDNESS. The indebtedness of the Borrower's wholly-owned
Canadian subsidiary, Sepracor Canada Limited, to certain Canadian investors in
the maximum principal amount of 4,891,000 Canadian Dollars which is guaranteed
by the Borrower.
CAPITAL EXPENDITURE. Any payment made directly or indirectly for the
purpose of acquiring or constructing fixed assets, real property or equipment
which in accordance with GAAP would be added as a debit to the fixed asset
account of the Person making such
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expenditure, including, without limitation, amounts paid or payable under any
conditional sale or other title retention agreement or under any lease or other
periodic payment arrangement which is of a nature that payment obligations of
the lessee or obligor thereunder would be required by GAAP to be capitalized and
shown as liabilities on the balance sheet of such lessee or obligor.
CAPITAL LEASE. Any lease of property (real, personal or mixed) which,
in accordance with GAAP, should be capitalized on the lessee's balance sheet or
for which the amount of the asset and liability thereunder as if so capitalized
should be disclosed in a note to such balance sheet.
CASH EQUIVALENT AMOUNT. The sum of the following, without duplication,
none of which may be subject to any Encumbrances except for Encumbrances in
favor of the Bank or any of its Affiliates: (1) cash held by the Borrower in the
United States and at the Bank, PLUS (2) Qualified Investments of the Borrower
held in the United States and Canada, PLUS (3) Net Outstanding Amount of
Accounts of the Borrower.
CLOSING DATE. December 22, 1999
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
CONTROLLED GROUP. All trades or businesses (whether or not
incorporated) under common control that, together with the Credit Parties, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
CORPORATE AFFILIATE. As applied to any Person, any corporation,
association, firm or other entity directly or indirectly controlling, controlled
by or under direct or indirect common control with such Person.
CORPORATE SERVICES AGREEMENT. The Corporate Services Agreement between
the Borrower and each of its Subsidiaries, each as originally executed and
delivered to the Bank.
CREDIT PARTIES. See Preamble.
DEFAULT. Any event or condition that, with the giving of notice or
lapse of time, or both, would constitute an Event of Default.
DOLLARS or $. The lawful currency of the United States of America.
DOLLAR EQUIVALENT. The amount in Dollars of any Alternative Currency at
the quoted spot rate at which the Bank's principal office in the United States
offers to exchange Dollars for such Alternative Currency at 11:00 a.m. (Boston
time) two (2) Business Days prior to the date on which such equivalent is to be
determined.
EBITDA. For any period, operating income for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) for such period (calculated before taxes, Interest
Expense, depreciation, amortization, other non-cash income (other than
receivables arising in the ordinary course of business) or charges accrued for
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such period) and (except to the extent received or paid in cash by the Borrower)
income or loss attributable to equity in Affiliates for such period, excluding
(i) any extraordinary and unusual gains or losses during such period, and (ii)
the proceeds of insurance and asset sales received by the Borrower or any of its
Subsidiaries during such period.
ENCUMBRANCES. See Section 6.4.
ENVIRONMENTAL LAWS. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, rules,
ordinances, policies and rules or common law (whether now existing or hereafter
enacted or promulgated), of all governmental agencies, bureaus or departments
which may now or hereafter have jurisdiction over the Borrower or any of its
Subsidiaries and all applicable judicial and administrative and regulatory
decrees, judgments and orders, including common law rulings and determinations,
relating to injury to, or the protection of, real or personal property or human
health or the environment, including, without limitation, all requirements
pertaining to reporting, licensing, permitting, investigation, remediation and
removal of emissions, discharges, releases or threatened releases of Hazardous
Materials, chemical substances, pollutants or contaminants whether solid, liquid
or gaseous in nature, into the environment or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of such Hazardous Materials, chemical substances, pollutants or
contaminants.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
EVENT OF DEFAULT. Any event described in Section 8.1.
FDA. See Section 4.19.
FIXED CHARGE COVERAGE RATIO. As at any date, the ratio of (a) EBITDA
for the period of four fiscal quarters ending on or most recently ended prior to
such date to (b) the sum, for the Borrower and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP) of (i) all
regularly scheduled payments of principal of any Indebtedness (including the
principal component of any payments in respect of Capital Leases) for such
period plus, (ii) all Interest Expense for such period, plus (iii) the aggregate
amount of all Non-Financed Capital Expenditures made during such period
(excluding payment of Capital Leases to the extent included in principal
payments or Interest Expense for such period).
GAAP. Generally accepted accounting principles as defined by the United
States Financial Accounting Standards Board, as from time to time in effect.
GUARANTIES. As applied to the Credit Parties and their Subsidiaries,
all guarantees, endorsements or other contingent or surety obligations with
respect to obligations of others whether or not reflected on the consolidated
balance sheet of the Credit Parties and their Subsidiaries, including any
obligation to furnish funds, directly or indirectly (whether by virtue of
partnership arrangements, by agreement to keep-well or otherwise), through the
purchase of goods, supplies or services, or by way of stock purchase, capital
contribution, advance or loan, or
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to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person or entity.
GUARANTY AGREEMENT. The Guaranty Agreement executed and delivered by
the Borrower on the date hereof in favor of the Bank guarantying the Biosphere
Loans.
HAZARDOUS MATERIAL. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
ET SEQ.) and any applicable local statutes and the regulations promulgated
thereunder; (iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of any foreign country, the United States, any state
of the United States, or any political subdivision thereof to the extent any of
the foregoing has or had jurisdiction over the Borrower; or (iv) without
limitation, which contains gasoline, diesel fuel or other petroleum products,
asbestos or polychlorinated biphenyls ("PCB's").
INDEBTEDNESS. As applied to the Credit Parties and their Subsidiaries,
(i) any and all obligations for borrowed money or other extensions of credit
whether or not secured or unsecured, absolute or contingent, including, without
limitation, Capital Leases, unmatured reimbursement obligations with respect to
letters of credit or guarantees issued for the account of or on behalf of the
Credit Parties and their Subsidiaries and all obligations representing the
deferred purchase price of property, other than accounts payable arising in the
ordinary course of business, (ii) all obligations evidenced by bonds, notes,
debentures or other similar instruments, (iii) all obligations secured by any
mortgage, pledge, security interest or other lien on property owned or acquired
by the Credit Parties or any Subsidiary of a Credit Party whether or not the
obligations secured thereby shall have been assumed, (iv) that portion of all
obligations arising under Capital Leases that is required to be capitalized on
the consolidated balance sheet of the Credit Parties and their Subsidiaries, (v)
all Guaranties, and (vi) all obligations that are immediately due and payable
out of the proceeds of or production from property now or hereafter owned or
acquired by the Credit Parties or any Subsidiary of a Credit Party.
INTEREST EXPENSE. For any period, the sum for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest paid or payable during
such period by the Borrower and its Subsidiaries in respect of Indebtedness for
borrowed money plus (b) all fees, including Letter of Credit fees and expenses,
incurred hereunder during such period.
INVESTMENT. As applied to the Borrower and its Subsidiaries, the
purchase or acquisition of any share of capital stock, partnership interest,
evidence of indebtedness or other equity security of any other Person or entity,
any loan, advance or extension of credit to, or contribution to the capital of,
any other Person or entity, any real estate held for sale or investment, any
commodities futures contracts held other than in connection with bona fide
hedging transactions,
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any other investment in any other Person or entity, and the making of any
commitment or acquisition of any option to make an Investment.
LC EXPOSURE. At any time, the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time PLUS (b) the aggregate amount
of all payments made by the Bank pursuant to Letters of Credit which have not
yet been reimbursed by or on behalf of the Credit Parties.
LETTERS OF CREDIT. Letters of credit previously and hereafter issued by
the Bank for the account of a Credit Party in accordance with the provisions of
Section 2.5 hereof, or drafts accepted under any agreement for banker's
acceptances entered into by a Credit Party with the Bank.
LOAN ACCOUNT. The account on the books of the Bank in which will be
recorded Revolving Loans made by the Bank to the Credit Parties pursuant to this
Agreement, payments made on such Revolving Loans and other appropriate debits
and credits as provided by this Agreement.
LOAN DOCUMENTS. See Section 7.2.
MATERIAL LICENSES. See Section 4.11.
MONEY MARKETS. See Section 8.10.
NET OUTSTANDING AMOUNT OF ACCOUNTS. As of any date, the net amount of
Accounts Receivable of the Borrower outstanding on such date after (a)
eliminating from the aggregate amount of outstanding Accounts (i) such Accounts
past due under the original terms of sale more than sixty (60) days, (ii) any
Account owed by any account debtor whose principal place of business or chief
executive office is not within the United States or the District of Columbia
("FOREIGN ACCOUNT DEBTORS"), (iii) such Accounts due from Affiliates or
Subsidiaries of the Borrower, (iv) such Accounts for services not yet rendered
or goods not yet delivered, and (v) such Accounts representing obligations in
respect of any joint venture interest owned by the Borrower and in respect of
royalties and license fees payable to the Borrower by any such joint venture or
any joint venture therein, and (b) deducting from the aggregate face amount of
the remaining Accounts Receivable of the Borrower (i) net offsets from accounts
owing from account debtors, other than foreign account debtors, which maintain
both receivable and payable balances with the Borrower, (ii) the aggregate
amount of outstanding claims asserted by account debtors, other than foreign
account debtors, against the Borrower and (iii) all payments, adjustments, and
credits applicable thereto and all amounts due thereon considered by the Bank to
be difficult to collect or uncollectible by reason of return, rejection,
repossession, loss or damage of or to the merchandise giving rise thereto, a
merchandise or other dispute, insolvency of the account debtor or any other
reason, all as determined by the Bank in its sole and reasonable discretion,
which determination shall be final and binding upon the Borrower.
NON-FINANCED CAPITAL EXPENDITURES. For any period, all Capital
Expenditures made by the Borrower and its Subsidiaries during such period that
have not been funded, directly or indirectly, with the proceeds of purchase
money financing (including, without limitations, Capital Leases) other than the
proceeds of Revolving Loans.
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NOTES. Collectively, the Sepracor Note and the Biosphere Note.
NOTICE OF BORROWING. See Section 2.1(b).
OBLIGATIONS. Any and all obligations of the Credit Parties to the Bank
of every kind and description (i) hereunder and under the Notes and (ii) under
Alternative Currency Commitments and under any and all documents pertaining
thereto whether direct or indirect, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising, regardless
of how they arise or by what agreement or instrument, if any, and including
obligations to perform acts and refrain from taking action as well as
obligations to pay money.
ORIGINAL CURRENCY. See Section 8.10.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
PERMITTED ENCUMBRANCES. See Section 6.4.
PERSON. A corporation, an association, a partnership, a limited
liability company or partnership, a joint venture, an organization, a business,
an individual, a government or political subdivision thereof or a governmental
agency.
PLAN. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Credit Parties or
any member of the Controlled Group for employees of the Credit Parties or any
member of the Controlled Group or (ii) if such Plan is established, maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which the Credit Parties
or any member of the Controlled Group is then making or accruing an obligation
to make contributions or has within the preceding five Plan years made
contributions.
PRIME RATE. The rate of interest announced from time to time by the
Bank at its office in Boston, Massachusetts as its prime rate.
PRIOR CREDIT AGREEMENT. See Preamble.
PRIOR LOANS. See Preamble.
QUALIFIED INVESTMENTS. As applied to the Borrower, Investments in (i)
notes, bonds or other obligations of the United States of America or any agency
thereof that as to principal and interest constitute direct obligations of or
are guaranteed by the United States of America; (ii) certificates of deposit or
other deposit instruments or accounts of banks or trust companies organized
under the laws of the United States or any state thereof that have capital and
surplus of at least $100,000,000, (iii) commercial paper issued by companies
organized under the laws of the United States or any state thereof and that is
rated not less than prime-two or A-2 or their equivalents by Xxxxx'x Investors
Service, Inc. or Standard & Poor's Corporation, respectively, or their
successors, (iv) mutual or closed end funds that invest solely in Investments
described in
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clauses (i) through (iii) of this definition and (v) any repurchase agreement
secured by any one or more of the foregoing.
RESTRICTED PAYMENTS. (a) Any dividend or other distribution, direct or
indirect, on or on account of any shares of any class of stock of any Credit
Party now or hereafter outstanding and (b) any redemption, purchase or other
acquisition, direct or indirect, of any shares of any class of stock of Credit
Party now or hereafter outstanding or of any warrants or rights to purchase any
such stock (including without limitation the repurchase of any such stock or
warrant or any refund of the purchase price thereof in connection with the
exercise by the holder thereof of any right of rescission or similar remedies
with respect thereto) and (c) any payment of principal of, premium, if any, or
interest on, or otherwise in respect of any Subordinated Indebtedness.
REVOLVING COMMITMENT AMOUNT. Twenty-five Million Dollars ($25,000,000)
or any lesser amount, including zero, resulting from a termination or reduction
of such amount in accordance with Section 2.3 or Section 7.2.
REVOLVING CREDIT PERIOD. The period beginning on the date hereof and
extending through and including the Revolving Credit Termination Date.
REVOLVING CREDIT TERMINATION DATE. December 31, 2001 or such earlier
date on which the commitment to make Revolving Loans is terminated or the
Revolving Commitment Amount is reduced to zero in accordance with the terms of
this Agreement.
REVOLVING LOANS. Loans made pursuant to Section 2.1(a) that utilize the
Revolving Commitment Amount including, without limitation, all Biosphere Loans.
SECOND CURRENCY. See Section 8.10.
SEPRACOR NOTE. The Promissory Note dated the date hereof made by the
Borrower payable to the order of the Bank in the original principal amount of
$25,000,000.
SUBORDINATED INDEBTEDNESS. (a) the existing Indebtedness of the Credit
Parties which is designated as "Subordinated Indebtedness" in SCHEDULE 6.1
attached hereto, and (b) any other Indebtedness of the Credit Parties consented
to in writing by the Bank which matures in its entirety later than the Notes and
by its terms (or by the terms of the instrument under which it is outstanding
and to which appropriate reference is made in the instrument evidencing such
Subordinated Indebtedness) is made subordinate and junior in right of payment to
the Notes and to the Credit Parties' other obligations to the Bank hereunder by
provisions reasonably satisfactory in form and substance to the Bank and its
counsel.
SUBORDINATED NOTES. The Borrower's (i) $165,000,000 6 1/4% Convertible
Subordinated Debentures due 2005 issued by the Borrower pursuant to an Indenture
dated February 5, 1998 from the Borrower to Chase Manhattan Bank, and (ii)
$300,000,000 7.00% Convertible Subordinated Debentures due 2005 issued pursuant
to an Indenture dated December 15, 1998 by the Borrower to Chase Manhattan Bank.
SUBSIDIARY. Any corporation, association, limited liability company,
joint stock company, business trust or other similar organization of which 50%
or more of the ordinary
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voting power for the election of a majority of the members of the board of
directors or other governing body of such entity is held or controlled by any
Credit Party or their Subsidiaries; or any other such organization the
management of which is directly or indirectly controlled by any Credit Party or
a Subsidiary of any Credit Party through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which any
Credit Party has, at least, a 50% ownership interest.
TANGIBLE CAPITAL BASE. At any date as of which the amount thereof shall
be determined, the stockholders' equity of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP PLUS the outstanding
principal amount of any Subordinated Indebtedness MINUS the sum of any amounts
attributable to (a) goodwill, (b) intangible items such as unamortized debt
discount and expense, patents, trade and service marks and names, copyrights and
research and development expenses except prepaid expenses, (c) all reserves not
already deducted from assets, (d) any write-up in the book value of assets
resulting from any revaluation thereof subsequent to the date of the financial
statements referred to in Section 4.6 and (e) any and all items included as
assets on the consolidated balance sheet of the Borrower and its Subsidiaries if
and to the extent such items consist of the equity in Subsidiaries or other
joint ventures holdings or similar Investments.
TECHNOLOGY TRANSFER AGREEMENTS. The Technology Transfer and License
Agreements dated as of January 1, 1994 between the Borrower and each of its
Subsidiaries each as originally executed and delivered to the Bank.
TOTAL LIABILITIES. Any and all liabilities of the Credit Parties and
their Subsidiaries on a consolidated basis determined in accordance with GAAP.
U.S. SUBSIDIARY. With respect to any Person, each of such Person's
Subsidiaries organized, and having a principal place of business located in the
United States.
VERSICOR. Versicor Inc., a Delaware corporation, a Subsidiary of the
Borrower and an Affiliate of Biosphere.
1.2 ACCOUNTING TERMS. All terms of an accounting character shall have
the meanings assigned thereto by GAAP applied on a basis consistent with the
financial statements referred to in Section 4.6 of this Agreement, modified to
the extent, but only to the extent, that such meanings are specifically modified
herein.
1.3 MULTIPLE BORROWERS. All Obligations are several (and not joint)
between the Borrower and Biosphere except that the Borrower is guarantying the
Biosphere Loans. All representations and covenants shall apply and be applied to
the Borrower (and not Biosphere). The Credit Parties hereby designate the
Borrower to act on behalf of the Credit Parties for all purposes under this
Agreement, including, without limitation, reduction of the Revolving Commitment
Amount and the Biosphere Sublimit. Notice when given to the Borrower shall be
sufficient notice to the Credit Parties. Any document delivered to the Borrower
shall be considered delivered to each of the Borrower and Biosphere. Any Event
of Default by the Borrower shall be an Event of Default by the Credit Parties.
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SECTION 2
DESCRIPTION OF CREDIT
2.1 THE REVOLVING LOANS.
(a) Upon the terms and subject to the conditions of this
Agreement, and in reliance upon the representations, warranties and covenants of
the Credit Parties made herein, the Bank agrees to make Revolving Loans to the
Borrower and Biosphere Loans to Biosphere, in each case in Dollars, pursuant to
Notices of Borrowing as delivered by the Credit Parties to the Bank from time to
time, from and after the Closing Date and during the Revolving Credit Period;
PROVIDED, that (1) the aggregate principal amount of Revolving Loans outstanding
at any time shall not exceed the Available Aggregate Revolving Commitment at
such time, (2) the sum of the aggregate principal amount of Biosphere Loans
outstanding at such time PLUS Biosphere LC Exposure shall not exceed the
Biosphere Sublimit at such time and (3) at the time a Credit Party requests a
Revolving Loan or a Letter of Credit and after giving effect to the making
thereof there has not occurred and is not continuing any Default or Event of
Default. The Credit Parties agree that it shall be an Event of Default if at any
time the debit balance of the Loan Account shall exceed the Available Aggregate
Revolving Commitment or the aggregate principal amount of Biosphere Loans plus
Biosphere LC Exposure exceeds the Biosphere Sublimit unless, in each case, the
Credit Parties shall, upon demand by the Bank, pay, within two (2) Business
Days, cash to the Bank to be credited to the Loan Account in such amount as
shall be necessary to eliminate any such the excess.
(b) Prior to 12:00 noon (Boston time) on the Revolving Loan
request date, (1) with respect to all Revolving Loans (except for Biosphere
Loans), an Authorized Officer and (2) with respect to Biosphere Loans, the Chief
Financial Officer of Biosphere and the Senior Vice President, Finance and
Administration of the Borrower, shall, subject to the notice requirements for
LIBOR Loans as set forth in Section 2.3(a), notify the Bank in writing or by
telephone confirmed by (i) telex, (ii) telecopy or (iii) other facsimile
transmission, on the same day as the telephonic request (the "NOTICE OF
BORROWING"), of the proposed date of borrowing and the principal amount
requested. No Notice of Borrowing shall be revocable by any Credit Party. No
Notice of Borrowing for a Biosphere Loan shall be effective unless the Bank
shall have received, on or prior to the date of such Notice of Borrowing, a
certificate of the secretary of Biosphere with respect to resolutions of the
Board of Directors authorizing such Biosphere Loan or granting authority to
certain officers of Biosphere to request Biosphere Loans pursuant to the terms
hereof.
(c) The Bank shall enter the Revolving Loans as debits in the
Loan Account. The Bank shall also record in the Loan Account all payments made
by the Credit Parties on account of the Revolving Loans, and may also record
therein, in accordance with customary accounting practices, other debits and
credits, and all interest, fees, charges and expenses chargeable to the Credit
Parties under this Agreement. The debit balance of the Loan Account shall
reflect the amount of the Credit Parties' Obligations to the Bank from time to
time by reason of the Revolving Loans (including Biosphere Loans) and other
appropriate charges hereunder. Periodically, the Bank shall render a statement
of account showing as of its date the debit balance of the Loan Account which,
unless within thirty (30) days of such date notice to the
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contrary is received by the Bank from the Credit Parties, absent manifest error,
shall be considered correct and accepted by each of the Credit Parties and
conclusively binding upon both Credit Parties.
(d) Subject to the terms and conditions of this Agreement, the
Bank shall make each Revolving Loan on the effective date specified therefor by
crediting the amount of such Revolving Loan to the applicable Credit Party's
demand deposit account with the Bank.
2.2 FEES. The Borrower shall pay to the Bank during the Revolving
Credit Period a commitment fee computed at the rate of one quarter of one
percent (0.25%) per annum on the average daily amount of the unborrowed portion
of the Revolving Commitment Amount during each quarter or portion thereof;
provided, that LC Exposure shall be deemed borrowed. Commitment fees shall be
payable quarterly in arrears, on the first day of January, April, July and
October of each year beginning on April 1, 2000, and on the last day of the
Revolving Credit Period.
2.3 REDUCTION OF REVOLVING COMMITMENT AMOUNT/BIOSPHERE SUBLIMIT. The
Borrower may from time to time by written notice delivered to the Bank by the
Borrower at least five Business Days prior to the date of the requested
reduction or termination, reduce by integral multiples of Five Hundred Thousand
Dollars ($500,000) any unborrowed portion of the Revolving Commitment Amount by
integral multiples of One Hundred Thousand Dollars ($100,000) any unborrowed
portion of the Biosphere Sublimit or, subject to the prior payment in full of
any Biosphere Loans, together with all interest and fees accrued thereon,
terminate the Biosphere Sublimit; provided that if the Borrower shall cease to
own directly at least 51% of the outstanding capital stock of Biosphere, then
the Biosphere Sublimit shall be terminated automatically, and all Biosphere
Loans, together with all interest and fees accrued thereon, shall be immediately
due and payable in full. No reduction of the Revolving Commitment Amount or the
Biosphere Sublimit shall be subject to reinstatement.
2.4 THE NOTES.
(a) The Revolving Loans (except the Biosphere Loans) shall be
evidenced by the Sepracor Note substantially in the form of EXHIBIT A-1 hereto
and the Biosphere Loans shall be evidenced by the Biosphere Note, substantially
in the form of EXHIBIT A-2 hereto, each of which is payable to the order of the
Bank and with a final maturity on the Revolving Credit Termination Date. The
Notes shall be dated on or before the date of the first Revolving Loan and shall
have the blanks therein appropriately completed.
(b) The Bank shall, and is hereby irrevocably authorized (but
not required) by the Credit Parties to, enter on the schedule forming a part of
each Note or otherwise in its records appropriate notations evidencing the date
and the amount of each Revolving Loan, the interest rate applicable thereto and
the date and amount of each payment of principal made by the applicable Credit
Party with respect thereto; and in the absence of manifest error, such notations
shall constitute conclusive evidence thereof. The Bank is hereby irrevocably
authorized by the Credit Parties to attach to and make a part of each Note a
continuation of any such schedule as and when required. No failure on the part
of the Bank to make any notation as provided in this
11
subsection (b) shall in any way affect any Revolving Loan or Biosphere Loan or
the rights or obligations of the Bank or any Credit Party with respect thereto.
2.5 LETTERS OF CREDIT. Upon the request of a Credit Party (and if
Biosphere, subject to the requirements of Section 2.1(b)(2)), the Bank shall
issue such Letters of Credit as such Credit Party may request, PROVIDED that
such Letters of Credit shall not be issued unless and until such Credit Party
has completed and executed such application as the Bank may require from time to
time and such other agreements evidencing Letters of Credit as the Bank shall
request from time to time (consistent with the Bank's usual practice), and
PROVIDED FURTHER that, each Letter of Credit shall be subject to customary fees
relating to issuance, negotiation, settlement, amendment and other similar fees
and charges as agreed by the Bank and such Credit Party. All Letters of Credit
shall expire no later than five (5) Business Days prior to the Revolving Credit
Termination Date. Letters of Credit issued hereunder shall constitute
utilization of the Revolving Commitment Amount and the Biosphere Sublimit, as
applicable.
2.6 CAPITAL REQUIREMENTS. If after the date hereof, the Bank shall have
determined that the adoption or implementation of any applicable law, rule or
regulation regarding capital requirements for banks or bank holding companies,
or any change therein (including, without limitation, any change according to a
prescribed schedule of increasing requirements, whether or not known on the date
hereof), 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 the Bank with any
request or directive of such entity regarding capital adequacy (whether or not
having the force of law) has the effect of reducing the return on the Bank's
capital to a level below that which the Bank could have achieved (taking into
consideration the Bank's policies with respect to capital adequacy immediately
before such adoption, implementation, change or compliance and assuming that the
Bank's capital was fully utilized prior to such adoption, implementation, change
or compliance) but for such adoption, implementation, change or compliance as a
consequence of its Commitment to make Revolving Loans hereunder by any amount
deemed by the Bank to be material, the Credit Parties shall pay to the Bank as
an additional fee from time to time on demand such amount as the Bank shall have
determined to be necessary to compensate it for such reduction. The
determination by the Bank of such amount, if done on the basis of any reasonable
averaging and attribution methods, shall in the absence of manifest error be
conclusive, and at the Borrower's request, the Bank shall demonstrate the basis
of such determination.
2.7 PAYMENTS AND PREPAYMENTS OF THE REVOLVING LOANS. On at least two
(2) Banking Days prior written notice to the Bank with respect to Revolving
Loans subject to an exercised LIBOR Option and on at least one (1) Banking Day
prior written notice to the Bank with respect to all other Revolving Loans, the
Credit Parties may, at their option, prepay the Notes in whole at any time or in
part from time to time without penalty or premium; PROVIDED, that any prepayment
of any LIBOR Portion shall be made together with the applicable LIBOR Premium.
Any interest accrued on the amounts so prepaid to the date of such payment must
be paid at the time of any such payment. No prepayment of the Revolving Loans
shall affect the Revolving Commitment Amount or the Biosphere Sublimit or impair
any Credit Party's right to borrow as set forth in Section 2.1. On the Revolving
Credit Termination Date, the Borrower shall repay all outstanding Revolving
Loans and the Sepracor Note, and Biosphere shall repay all outstanding
12
Biosphere Loans and the Biosphere Note together with all unpaid interest thereon
and all fees and other amounts due hereunder with respect to the Revolving
Loans.
2.8 METHOD OF PAYMENT. All payments and prepayments of principal and
all payments of interest shall be made by the Credit Parties to the Bank at Xxx
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 in immediately available funds, on
or before 11:00 a.m. on the due date thereof, free and clear of, and without any
deduction or withholding for, any taxes or other payments. The Bank may, and
each Credit Party hereby authorizes the Bank to, debit the amount of any payment
not made by such time to the demand deposit account of such Credit Party with
the Bank.
2.9 OVERDUE PAYMENTS.
(a) Upon the occurrence and during the continuance of an Event
of Default, interest on the outstanding principal amount of the Notes and (to
the extent permitted by law) on accrued but unpaid interest shall thereafter be
payable on demand at a rate per annum equal to two percent (2%) above the
interest rate otherwise in effect with respect to such Revolving Loans. Upon the
cure of an Event of Default and the payment of interest at the default rate
through the date of such cure, the interest rate shall revert to that provided
for in Section 2.10.
(b) If a payment of principal or interest hereunder is not
made in full within 10 days of date when due, the applicable Credit Party will
pay to the Bank a late fee equal to three percent (3%) of the amount of such
payment. Nothing in the preceding sentence shall affect the Bank's right to
exercise any of its rights or remedies, including those provided in Section 7.2,
if an Event of Default has occurred.
2.10 HOLIDAYS. If any payment required by this Agreement becomes due on
a day that is not a Business Day such payment may be made on the next succeeding
Business Day, and such extension shall be included in computing interest in
connection with such payment.
2.11 INTEREST. Each Note shall bear interest on the unpaid principal
amount thereof until paid in full at the rate or rates per annum determined (on
the basis of the actual number of days elapsed over a 360-day year) and payable
as follows:
(a) The rate of interest for any portion of the outstanding
principal amount of the Revolving Loans which is not then subject to an
exercised LIBOR Option under Section 2.12 of this Agreement shall be computed at
the Prime Rate.
(b) The rate for any LIBOR Portion of the Revolving Loans
shall be computed at a rate equal to three-quarters percent (0.75%) above the
applicable LIBOR Rate.
(c) Interest on each Note shall be payable monthly in arrears
on the first Business Day of each month, commencing on January 1, 2000 and, in
addition, interest on any LIBOR Portion of the Revolving Loans in respect of any
LIBOR Period shall also be payable on the last day of such LIBOR Period and on
the last day of the third month for each LIBOR Portion with a 180-day LIBOR
Period and at maturity (whether by acceleration or otherwise). The rate of
interest payable on any portion of the outstanding principal balance of any
Revolving
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Loan which is not then subject to a LIBOR Option shall take effect
simultaneously with the corresponding change in the Prime Rate.
2.12 CERTAIN LIBOR PROVISIONS.
(a) LIBOR OPTION. Subject to the provisions of this Section 2,
each Credit Party shall have the right to have the interest on all or any
portion of the principal amount of any Revolving Loan based on a LIBOR Rate.
(b) CERTAIN DEFINITIONS. As used herein, the following terms
have the following respective meanings:
BANKING DAY. (i) When used with respect to the LIBOR Option, a day on
which transactions may be effected in deposits of U.S. dollars in the London
interbank foreign currency deposits market and on which banks may conduct
business in London, England and Boston, Massachusetts and (ii) when used with
respect to the other provisions of this Agreement, any day excluding Saturday
and Sunday and excluding any other day which shall be in Boston, Massachusetts,
a legal holiday or a day on which banking institutions are authorized by law to
close.
BOARD. The Board of Governors of the Federal Reserve System of the
United States.
LEGAL REQUIREMENT. Any requirement imposed upon the Bank by any law of
the United States of America or the United Kingdom or by any regulation, order,
interpretation, ruling or official directive (whether or not having the force of
law) of the Board, the Bank of England or any other board, central bank or
governmental or administrative agency, institution or authority of the United
States of America, the United Kingdom or any political subdivision of either
thereof.
LIBOR OPTION. The option granted pursuant to this Section 2 to have the
interest on all or a portion of the principal amount of the Revolving Loans
based on a LIBOR Rate.
LIBOR PERIOD. Any period, as provided below in this Section 2.12, of
30, 60, 90 or 180 days, commencing on any Banking Day; PROVIDED, however, that
no LIBOR Period with respect to any LIBOR Portion of any Revolving Loan shall
extend beyond the maturity date of the Notes. If any LIBOR Period so selected
would otherwise end on a date which is not a Banking Day, such LIBOR Period
shall instead end on the next preceding or succeeding Banking Day as determined
by the Bank in accordance with the then current banking practice in London. Each
determination by the Bank of any LIBOR Period shall, in the absence of manifest
error, be conclusive, and at any Credit Party's request the Bank shall
demonstrate the basis for such determination.
LIBOR PORTION. That portion of the Revolving Loans specified in a LIBOR
Request, (i) which is not less than Five Hundred Thousand Dollars ($500,000),
(ii) which is an integral multiple of Ten Thousand Dollars ($10,000), (iii)
which does not exceed the outstanding balance of the Revolving Loan not already
subject to an exercised LIBOR Option, (iv) which, as of the date of the LIBOR
Request specifying such LIBOR Portion, has met the conditions for basing
14
interest on the LIBOR Rate in Section 2.13 of this Agreement and (v) the LIBOR
Period of which has commenced and not terminated.
LIBOR PREMIUM. With respect to the prepayment of any LIBOR Portion of
any Revolving Loan, whether voluntary or as a result of acceleration, an amount
equal to the product of (i) the excess, if any, of the rate of interest on the
principal amount so prepaid over the rate of interest on debt securities issued
by the Treasury of the United States of America on a date approximating the date
of payment of such principal amount and having a maturity date approximating the
last Banking Day of the applicable LIBOR Period, multiplied by (ii) the
principal amount so prepaid, multiplied by (iii) a fraction, the numerator of
which is the number of days remaining in the related LIBOR Period and the
denominator of which is 360.
LIBOR RATE. With respect to any LIBOR Portion for the related LIBOR
Period, an interest rate per annum (rounded upwards, if necessary, to the next
higher 1/8 of 1%) equal to the product of (a) the Base LIBOR Rate (as
hereinafter defined) and (b) Statutory Reserves. For purposes of this
definition, the term "BASE LIBOR RATE" shall mean the rate (rounded to the
nearest 1/8 of 1% or, if there is no nearest 1/8 of 1%, the next higher 1/8 of
1%) at which deposits of U.S. dollars approximately equal in principal amount to
the LIBOR Portion and for a maturity equal to the applicable LIBOR Period are
offered to the Bank in the London interbank foreign currency deposits market at
approximately 11:00 a.m., London time, two (2) Banking Days prior to the
commencement of such LIBOR Period, for delivery on the first day of such LIBOR
Period. Each determination by the Bank of any LIBOR Rate shall, in the absence
of manifest error, be conclusive, and at any Credit Party's request, the Bank
shall demonstrate the basis for such determination.
LIBOR REQUEST. Notice in writing (or by telephonic communications
confirmed by telex, telecopy or other facsimile transmission on the same day as
the telephone request) from Biosphere with respect to Biosphere Loans or from
the Borrower with respect to all other Revolving Loans, to the Bank requesting
that interest on a LIBOR Portion be based on the LIBOR Rate, specifying: (i) the
first day of the LIBOR Period, (ii) the length of the LIBOR Period consistent
with the definition of that term and (iii) a dollar amount of the LIBOR Portion
consistent with the definition of that term.
STATUTORY RESERVES. A fraction, the numerator of which is the number
one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including, without limitation, any marginal,
special, emergency or supplemental reserves), expressed as a decimal,
established by the Board and any other banking authority to which the Bank is
subject for Eurocurrency Liabilities (as defined in Regulation D of the Board).
Such reserve percentages shall include, without limitation, those imposed under
such Regulation D. LIBOR Portions of the Revolving Loans shall be deemed to
constitute Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration, exceptions
or offsets which may be available from time to time to the Bank under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
TAX. In relation to any LIBOR Portion and the applicable LIBOR Rate,
any tax, levy, impost, duty, deduction, withholding or other charges of whatever
nature required by any Legal
15
Requirement (i) to be paid by the Bank and/or (ii) to be withheld or deducted
from any payment otherwise required hereby to be made by any Credit Party to the
Bank, PROVIDED that the term "Tax" shall not include any taxes imposed upon the
net income of the Bank by the United States of America or any political
subdivision thereof (including state and local governmental authorities).
2.13 CONDITIONS FOR BASING INTEREST ON THE LIBOR RATE. Upon the
condition that:
(a) The Bank shall have received a LIBOR Request from the
Borrower or Biosphere, as applicable, prior to noon at least two (2) Banking
Days prior to the first day of the LIBOR Period requested;
(b) There shall have occurred no change in applicable law
which would make it unlawful for the Bank to obtain deposits of U.S. dollars in
the London interbank foreign currency deposits market;
(c) As of the date of the LIBOR Request and the first day of
the LIBOR Period, there shall exist no Event of Default, nor any Default, which
has not been waived by the Bank;
(d) The Bank shall not have determined in good faith that it
is unable to determine the LIBOR Rate in respect of the requested LIBOR Period
or that it is unable to obtain deposits of U.S. dollars in the London interbank
foreign currency deposits market in the applicable amounts and for the requested
LIBOR Period; and
(e) As of the first date of the LIBOR Period specified in such
LIBOR Request, and after having given effect thereto, there shall be no more
than an aggregate of four (4) LIBOR Portions outstanding;
then interest on the LIBOR Portion requested during the LIBOR Period requested
will be at the applicable LIBOR Rate.
2.14 INDEMNIFICATION FOR FUNDING AND OTHER LOSSES. Each LIBOR Request
shall be irrevocable and binding on the applicable Credit Party. Without
limiting the generality of Section 2.15, the Credit Parties shall indemnify the
Bank against any loss or expense incurred by the Bank as a result of any failure
on the part of any Credit Party to fulfill, on or before the date specified in
any LIBOR Request, the applicable conditions set forth in this Agreement,
including, without limitation, any loss (including loss of anticipated profits)
or expense incurred by reason of the liquidation or redeployment of deposits or
other funds acquired by the Bank to fund or maintain the requested LIBOR Portion
when interest on such LIBOR Portion, as a result of such failure on the part of
the Credit Parties, is not based on the applicable LIBOR for the requested LIBOR
Period. The Bank shall determine the amount of such loss or expense incurred by
it, and absent manifest error such determination shall be conclusive, and at any
Credit Party's request the Bank shall demonstrate the basis for such
determination.
2.15 CHANGE IN APPLICABLE LAWS, REGULATIONS, ETC. If any Legal
Requirement shall make it unlawful for the Bank to fund through the purchase of
U.S. dollar deposits any LIBOR Portion, or otherwise to give effect to its
obligations as contemplated hereby, or shall impose on
16
the Bank any costs based on or measured by the excess above a specified level of
the amount of a category of deposits or other liabilities of the Bank, which
includes deposits by reference to which the LIBOR Rate is determined as provided
herein or a category of extensions of credit or other assets of the Bank which
includes any LIBOR Portion, or shall impose on the Bank any restrictions on the
amount of such a category of liabilities or assets which the Bank may hold, (a)
the Bank may by notice thereof to the Credit Parties terminate the LIBOR Option,
(b) any LIBOR Portion subject thereto shall immediately bear interest thereafter
at the rate provided for in Section 2.10.(a), and (c) the Credit Parties shall
indemnify the Bank against any loss, penalty or expense incurred by the Bank by
reason of the liquidation or redeployment of deposits or other funds acquired by
the Bank to fund or maintain such LIBOR Portion, as provided in Section 2.14.
2.16 TAXES. It is the understanding of the Credit Parties and the Bank
that the Bank shall receive payments of amounts of principal of and interest on
the Revolving Loans with respect to the LIBOR Portions from time to time subject
to a LIBOR Option free and clear of, and without deduction for, any Taxes. If
(a) the Bank shall be subject to any such Tax in respect of any such LIBOR
Portion or part thereof or (b) the Credit Parties shall be required to withhold
or deduct any such Tax from any such amount, and (c) such Tax shall not have
existed as of the date of the applicable LIBOR Request, the LIBOR applicable to
such LIBOR Portion shall be adjusted by the Bank to reflect all additional costs
incurred by the Bank in connection with the payment by the Bank or the
withholding by the Credit Parties of such Tax and the Credit Parties shall
provide the Bank with a statement detailing the amount of any such Tax actually
paid by the Credit Parties. Determination by the Bank of the amount of such
costs shall, in the absence of manifest error, be conclusive, and at any Credit
Party's request, the Bank shall demonstrate the basis of such determination. If
after any such adjustment, any part of any Tax paid by any Bank is subsequently
recovered by the Bank, the Bank shall reimburse the Credit Parties to the extent
of the amount so recovered. A certificate of an officer of the Bank setting
forth the amount of such recovery and the basis therefor shall, in the absence
of manifest error, be conclusive.
SECTION 3
CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN. The obligation of
the Bank to make its initial Revolving Loans, to issue Letters of Credit is
subject to the condition precedent that the Bank shall have received, in form
and substance satisfactory to the Bank and its counsel, the following:
(a) this Agreement, duly executed by the Credit Parties;
(b) the Sepracor Note, duly executed by the Borrower;
(c) the Biosphere Note, duly executed by Biosphere;
(d) the Guaranty Agreement duly executed by the Borrower;
17
(e) a certificate of the Secretary or an Assistant Secretary
of the Borrower with respect to resolutions of its Board of Directors
authorizing the execution and delivery of this Agreement, the Notes, and
identifying the officer(s) authorized to execute, deliver and take all other
actions required under this Agreement, and providing specimen signatures of such
officers;
(f) a certificate signed by an Authorized Officer, certifying
that the conditions of Section 3.2.(b) have been fulfilled;
(g) the certificate of incorporation of the Borrower and all
amendments and supplements thereto, filed in the office of the Secretary of
State of the State of Delaware, each certified by said Secretary of State as
being a true and correct copy thereof;
(h) the bylaws of the Borrower and all amendments and
supplements thereto, certified by the Secretary or an Assistant Secretary as
being a true and correct copy thereof;
(i) a certificate of the Secretary of State of the State of
Delaware, as to legal existence and good corporate standing of the Borrower in
such state and listing all documents on file in the office of said Secretary of
State;
(j) a certificate of the Secretary or an Assistant Secretary
of Biosphere with respect to resolutions of the Board of Directors authorizing
the execution and delivery of this Agreement, the Biosphere Note, and
identifying the officer(s) authorized to execute, deliver and take all other
actions required under this Agreement, and providing specimen signatures of such
officers;
(k) a certificate signed by a principal officer of Biosphere,
certifying that the conditions of Section 3.2.(b) have been fulfilled;
(l) the certificate of incorporation of Biosphere and all
amendments and supplements thereto, filed in the office of the Secretary of
State of the State of Delaware, each certified by said Secretary of State as
being a true and correct copy thereof;
(m) the bylaws of Biosphere and all amendments and supplements
thereto, certified by the Secretary or an Assistant Secretary as being a true
and correct copy thereof;
(n) a certificate of the Secretary of State of the State of
Delaware, as to legal existence and good corporate standing of Biosphere in such
state and listing all documents on file in the office of said Secretary of
State;
(o) Lien searches against each Credit Party in all appropriate
state filing offices and in the United States Patent and Trademark Office and
the United States Copyright Office;
(p) if necessary, UCC-3 Termination Statements and other
appropriate lien discharge documentation terminating all liens except those
consisting of Permitted Encumbrances.
18
(q) a certificate signed by an Authorized Officer, certifying
that there has been no material adverse change in the condition (financial or
otherwise), operations, properties, assets, liabilities or earnings of the
Credit Parties since the date of its most recent financial statement;
(r) an opinion addressed to it from Xxxx and Xxxx LLP, counsel
to the Credit Parties, in form and substance satisfactory to the Bank and its
counsel; and
(s) such other documents, and completion of such other
matters, as counsel for the Bank may deem reasonably necessary or appropriate.
Notwithstanding the foregoing, the obligations of the Bank to make
Revolving Loans or Biosphere Loans or issue Letters of Credit hereunder shall
not become effective unless each of the foregoing conditions is satisfied (or
waived) at or prior to 12:00 p.m. on January 7, 2000 (and in the event such
conditions are not so satisfied or waived, the Revolving Commitment Amount (and
the Biosphere Sublimit) shall terminate).
3.2 CONDITIONS PRECEDENT TO ALL REVOLVING LOANS. The obligation of the
Bank to make each Revolving Loan, including the initial Revolving Loan, or
continue or convert the Revolving Loans to loans of another type, is further
subject to the following conditions:
(a) timely receipt by the Bank of a Notice of Borrowing as
provided in Section 2.1;
(b) the representations and warranties contained in Section 4
shall be true and accurate in all material respects on and as of the date of
such Notice of Borrowing and on the effective date of the making, continuation
or conversion of each Revolving Loan as though made at and as of each such date
(except to the extent that such representations and warranties expressly relate
to an earlier date), and no Default or Event of Default shall have occurred and
be continuing, or would result from such Revolving Loan;
(c) the resolutions referred to in Sections 3.1.(d) and 3.1(i)
shall remain in full force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Bank, would make
it illegal or against the policy of any governmental agency or authority for the
Bank to make Revolving Loans hereunder.
The making of each Revolving Loan shall be deemed to be a
representation and warranty by the Credit Parties on the date of the making,
continuation or conversion of such Revolving Loan as to the accuracy of the
facts referred to in subsection (b) of this Section 3.2.
SECTION 4
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make
the Revolving Loans hereunder, issue Letters of Credit, the Borrower represents
and warrants to the Bank that:
19
4.1 ORGANIZATION AND QUALIFICATION. Each of the Credit Parties and
their Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as now
conducted and as presently contemplated and (c) is duly qualified and in good
standing as a foreign corporation and is duly authorized to do business in each
jurisdiction where the nature of its properties or business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the financial condition, operations, properties or
business.
4.2 CORPORATE AUTHORITY. The execution, delivery and performance of
this Agreement, the Notes, and the transactions contemplated hereby are within
the corporate power and authority of the Credit Parties, as applicable, and the
execution, delivery and performance of the Notes are within the corporate power
and authority of the Credit Parties, as applicable, and have been authorized by
all necessary corporate proceedings, and do not and will not (a) require any
consent or approval of the stockholders of the Credit Parties, (b) contravene
any provision of the charter documents or by-laws of the Credit Parties or any
law, rule or regulation applicable to any Credit Party, (c) contravene any
provision of, or constitute an event of default or event that, but for the
requirement that time elapse or notice be given, or both, would constitute an
event of default under, any other agreement, instrument, order or undertaking
binding on any Credit Party, or (d) result in or require the imposition of any
Encumbrance on any of the properties, assets or rights of any Credit Party.
4.3 VALID OBLIGATIONS. This Agreement, the Notes, and all of their
respective terms and provisions are the legal, valid and binding obligations of
the Credit Parties, as applicable, each enforceable in accordance with their
respective terms except as limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors' rights
generally, and except as the remedy of specific performance or of injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
4.4 CONSENTS OR APPROVALS. The execution, delivery and performance of
this Agreement, the Notes, and the transactions contemplated herein do not
require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party.
4.5 TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each of the Credit
Parties and their Subsidiaries has good and marketable title to all of the
properties, assets and rights of every name and nature now purported to be owned
by it, including, without limitation, such properties, assets and rights as are
reflected in the financial statements referred to in Section 4.6 (except such
properties, assets or rights as have been disposed of in the ordinary course of
business since the date thereof), free from all Encumbrances except Permitted
Encumbrances hereto, and, except as so disclosed, free from all defects of title
that might materially adversely affect such properties, assets or rights, taken
as a whole.
4.6 FINANCIAL STATEMENTS. The Borrower has furnished the Bank the
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of December 31, 1998, and the related consolidated and
consolidating statements of income, changes in stockholders' equity and cash
flow for the fiscal year then ended, and related footnotes, audited and
certified by
20
PriceWaterhouseCoopers. The Borrower has also furnished the foregoing unaudited
financial statements to the Bank for the nine-month period ending September 30,
1999 and financial projections for the 1999 fiscal year prepared by the
Borrower. All such financial statements, except for such projections, were
prepared in accordance with GAAP applied on a consistent basis throughout the
periods specified and present fairly the financial position of the Borrower and
its Subsidiaries as of such date and the results of the operations of the
Borrower and its Subsidiaries for such period. The projections were prepared in
good faith and based on assumptions which were reasonable when made. There are
no liabilities, contingent or otherwise, not disclosed in such financial
statements that involve a material amount.
4.7 CHANGES. Since the date of the financial statements for the
three-month period ending September 30, 1999 referred to in Section 4.6, there
have been no changes in the assets, liabilities, financial condition, business
or prospects of the Borrower or any of its Subsidiaries other than changes in
the ordinary course of business, the effect of which has not, in the aggregate,
been materially adverse.
4.8 DEFAULTS. As of the date hereof, no Default or Event of Default
exists.
4.9 TAXES. The Borrower and each Subsidiary has filed all federal,
state and other tax returns required to be filed, and all taxes, assessments and
other governmental charges due from the Borrower and each Subsidiary have been
fully paid. The Borrower and each Subsidiary have established on their books
reserves adequate for the payment of all federal, state and other tax
liabilities.
4.10 MATERIAL AGREEMENTS. As of the Closing Date, SCHEDULE 4.10 hereto
accurately and completely lists all material leases, management, stockholder,
partnership, joint venture, stock redemption or retirement, employment
(including severance), non-competition and related agreements, if any, which are
presently in effect in connection with the conduct of business of the Borrower
and its Subsidiaries.
4.11 MATERIAL LICENSES. As of the Closing Date, SCHEDULE 4.11 hereto
accurately and completely lists all material licenses and related agreements, if
any, which are presently in effect in connection with the conduct of business of
the Borrower and its Subsidiaries (the "MATERIAL LICENSES"), and all such
Material Licenses are in full force and effect.
4.12 LITIGATION. Except as set forth in SCHEDULE 4.12 hereto, there is
no litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of any Credit Party's or any Credit Party's Subsidiary's officers,
threatened, against any Credit Party or any such Subsidiary that, if adversely
determined, could result in a material judgment not fully covered by insurance,
could result in a forfeiture of all or any substantial part of the property of
the Credit Parties or their Subsidiaries, or could otherwise have a material
adverse effect on the assets, business or prospects of the Credit Parties or any
Subsidiary.
4.13 USE OF PROCEEDS.
(a) The Credit Parties will not, directly or indirectly, use
any part of the proceeds of any of the Revolving Loans (i) for the purpose of
making any Restricted Payment which is prohibited by Section 6.8 hereof, (ii)
for the purpose of purchasing or carrying any
21
margin stock within the meaning of Regulations U and X (12 C.F.R. Part 221 and
224) of the Board, or (iii) for any other purpose which would violate any
provision of any other applicable statute, regulation, order or restriction.
(b) The proceeds of the Revolving Loans shall be used
exclusively for the working capital purposes of the Credit Parties and for
acquisitions permitted hereunder.
4.14 EXISTING INDEBTEDNESS. SCHEDULE 6.1 hereto accurately and
completely lists all existing Indebtedness of the Credit Parties and their
Subsidiaries as of the date hereof.
4.15 EXISTING INVESTMENTS. SCHEDULE 4.15 hereto accurately and
completely lists the record owner, location and any relevant account numbers of
all depository and operating accounts and marketable securities owned by the
Credit Parties and their Subsidiaries as of the date hereof.
4.16 SUBSIDIARIES. As of the date hereof, all the Subsidiaries of the
Credit Parties are listed in SCHEDULE 4.16 hereto. The Borrower or a Subsidiary
of the Borrower is the owner, free and clear of all liens and encumbrances,
except as expressly provided in such schedule, of all of the issued and
outstanding stock of each Subsidiary. All shares of such stock have been validly
issued and are fully paid and nonassessable, and no rights to subscribe to any
additional shares have been granted, and no options, warrants or similar rights
are outstanding.
4.17 INVESTMENT COMPANY ACT. Neither Credit Party nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended.
4.18 COMPLIANCE WITH ERISA. The Credit Parties and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan.
4.19 FDA COMPLIANCE, ETC. Without limiting the scope of Section 4.2,
the Credit Parties and their Subsidiaries are in compliance in all material
respects with all applicable foreign and federal and state laws and regulations,
including all material rules, regulations and administrative orders of the
United States Food and Drug Administration (the "FDA") and of foreign
authorities with jurisdiction over the Credit Parties and their Subsidiaries.
The Credit Parties and their Subsidiaries are in compliance in all material
respects with all of the applicable provisions of the Food, Drug and Cosmetic
Act, as amended.
4.20 ENVIRONMENTAL MATTERS.
(a) The Credit Parties and their Subsidiaries have obtained
all permits, licenses and other authorizations which are required under all
Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not have a material adverse effect on the
business, financial condition or operations of the Credit Parties and their
Subsidiaries. The Credit Parties and their Subsidiaries are in compliance with
the terms and conditions of all such permits, licenses and authorizations, and
are also in compliance with all
22
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a material
adverse effect on the business, financial condition or operations of the Credit
Parties and their Subsidiaries.
(b) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Credit Parties or any of its Subsidiaries, which could materially
adversely affect the properties, business, prospects, operating results or
condition (financial or otherwise) of the Credit Parties, to have any permit,
license or authorization required in connection with the conduct of its business
or with respect to any Environmental Laws, including, without limitation,
Environmental Laws relating to the generation, treatment, storage, recycling,
transportation, disposal or release of any Hazardous Materials.
(c) To the best of each Credit Party's knowledge no oral or
written notification of a release of a Hazardous Material, which could
materially adversely affect the properties, business, prospects, operating
results or condition (financial or otherwise) of any Credit Party, has been
filed by or on behalf of any Credit Party or any Subsidiary of a Credit Party
and no property now or previously owned, leased or used by any Credit Party or
any Subsidiary of a Credit Party is listed or proposed for listing on the
National Priorities List under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or on any similar state list
of sites requiring investigation or clean-up.
(d) There are no liens or encumbrances arising under or
pursuant to any Environmental Laws on any of the real property or properties
owned, leased or used by any Credit Party or any Subsidiary of a Credit Party
and no governmental actions have been taken or are in process which could
subject any of such properties to such liens or encumbrances or, as a result of
which any Credit Party or any Subsidiary of a Credit Party would be required to
place any notice or restriction relating to the presence of Hazardous Materials
at any property owned by it in any deed to such property.
(e) Neither any Credit Party nor any Subsidiary of a Credit
Party nor, to the best knowledge of any Credit Party, any previous owner,
tenant, occupant or user of any property owned, leased or used by any Credit
Party or any Subsidiary of a Credit Party (i) engaged in or permitted any
operations or activities upon or any use or occupancy of such property, or any
portion thereof, for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal (whether legal or illegal, accidental or intentional) of any
Hazardous Materials on, under, in or about such property, except to the extent
commonly used in day-to-day operations of such property and in such case only in
compliance with all Environmental Laws, or (ii) transported any Hazardous
Materials to, from or across such property except to the extent commonly used in
day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws, except, in the case of both clause (i) and clause (ii)
above, where so doing would not have a material adverse affect on the business,
prospects, operating results or condition (financial or
23
otherwise) of any Credit Party; nor to the best knowledge of any Credit Party
have any Hazardous Materials migrated from other properties upon, about or
beneath such property, nor, to the best knowledge of any Credit Party, are any
Hazardous Materials presently constructed, deposited, stored or otherwise
located on, under, in or about such property except to the extent commonly used
in day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws.
SECTION 5
AFFIRMATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder, issue Letters
of Credit or any Revolving Loan or other Obligation hereunder remains
outstanding, the Borrower covenants as follows:
5.1 FINANCIAL STATEMENTS AND OTHER REPORTING REQUIREMENTS. The Credit
Parties shall furnish to the Bank:
(a) as soon as available to each Credit Party and its
Subsidiaries, but in any event within 90 days after the end of each of fiscal
year, the consolidated and consolidating balance sheet of each Credit Party and
its Subsidiaries as of the end of, and the related consolidated and
consolidating statement of income, changes in stockholders' equity and cash flow
for, such year, audited and certified by PriceWaterhouseCoopers (or other
independent nationally recognized certified public accountants reasonably
acceptable to the Bank) in the case of such consolidated statements, and
certified by an Authorized Officer in the case of such consolidating statements;
and, concurrently with such financial statements, a copy of said certified
public accountants' management report and a written statement by such
accountants that, in the making of the audit necessary for their report and
opinion upon such financial statements they have obtained no knowledge of any
Default or Event of Default or, if in the opinion of such accountants any such
Default or Event of Default exists, they shall disclose in such written
statement the nature and status thereof;
(b) as soon as available to the Borrower, but in any event
within 45 days after the end of each fiscal quarter, the consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of the end
of, and the related consolidated and consolidating statements of income for, the
period then ended, certified by an Authorized Officer but subject, however, to
normal, recurring year-end adjustments;
(c) as soon as available to the Borrower, but in any event
concurrently with the delivery of each financial statement of the Borrower
pursuant to subsection 5.1.(a), a copy of each so-called management letter
submitted to the Borrower or any of its Subsidiaries by independent certified
public accountants in connection with each annual audit of the books of the
Borrower and its Subsidiaries by such accountants or in connection with any
interim audit thereof pertaining to any phase of the business of the Borrower or
any such Subsidiary;
(d) concurrently with the delivery of each financial statement
of the Borrower pursuant to subsections 5.1.(a) and 5.1.(b) and at any time
reasonably requested by the Bank, a
24
completed compliance certificate substantially in the form of EXHIBIT C hereto
signed on behalf of the Borrower by an Authorized Officer;
(e) as soon as available to the Borrower and its Subsidiaries,
but in any event within 90 days after the end of each fiscal year, projections
for the Borrower and its consolidated Subsidiaries on a consolidating and
consolidated basis for the current fiscal year, including projected balance
sheets, income statements, cash flow statements and such other statements as the
Bank may reasonably request and in form and substance satisfactory to the Bank,
all prepared in good faith and based on assumptions which were reasonable when
made;
(f) if and when the Borrower gives or is required to give
notice to the PBGC of any "Reportable Event" (as defined in Section 4043 of
ERISA) with respect to any Plan that might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that any member of the Controlled
Group or the plan administrator of any Plan has given or is required to give
notice of any such Reportable Event, a copy of the notice of such Reportable
Event given or required to be given to the PBGC;
(g) immediately upon becoming aware of the existence of any
condition or event that constitutes a Default or Event of Default, written
notice thereof specifying the nature and duration thereof and the action being
or proposed to be taken with respect thereto;
(h) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries of which it has
notice, the outcome of which would or might have a materially adverse effect on
the assets, business or prospects of the Borrower or the Borrower and its
Subsidiaries on a consolidated basis, written notice thereof and the action
being or proposed to be taken with respect thereto;
(i) promptly upon becoming aware of any investigative
proceedings by a governmental agency or authority commenced or threatened
against the Borrower or any of its Subsidiaries regarding any potential
violation of Environmental Laws or any spill, release, discharge or disposal of
any Hazardous Material, written notice thereof and the action being or proposed
to be taken with respect thereto; and
(j) promptly after the same become available, (i) copies of
all proxy statements and annual, quarterly and interim reports (excluding
reports in respect of the beneficial ownership of officers, directors and
certain other shareholders on Forms 3, 4 and 5 promulgated under the Securities
Exchange Act of 1934, as amended) as the Borrower shall send to shareholders or
as the Borrower may file with the Securities and Exchange Commission or any
governmental authority at any time having jurisdiction over the Borrower and
(ii) with respect to Biosphere, copies of all annual reports as Biosphere shall
send to shareholders; and
(k) from time to time, such other financial data and
information about the Borrower or its Subsidiaries including, without
limitation, a current aging of Accounts, as the Bank may reasonably request.
5.2 CONDUCT OF BUSINESS. Each of the Borrower and its Subsidiaries
shall:
25
(a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets (including, without limitation, the
Food, Drug and Cosmetic Act, and all regulations promulgated by the FDA, all
Environmental Laws and ERISA), and shall maintain and keep in full force and
effect all licenses and permits necessary in any material respect to the proper
conduct of its business;
(b) maintain its corporate existence; and
(c) with respect to the Borrower, maintain its business in
developing and commercializing improved chemical entities and related products
and services and transacting related business; and with respect to Biosphere,
maintain its business in developing and commercializing its business related to
intracorporeal and "on-line" extracorporeal therapies.
5.3 MAINTENANCE AND INSURANCE. Each of the Credit Parties and their
Subsidiaries shall maintain and keep its properties in good repair, working
order and condition, and from time to time make all needful improvements thereto
so that its business may be properly and advantageously conducted at all times.
The Credit Parties will maintain or cause to be maintained on all insurable
properties now or hereafter owned by the Credit Parties insurance against loss
or damage by fire or other casualty to the extent customary with respect to like
properties of companies conducting similar businesses and will maintain or cause
to be maintained, products liability, public liability and workmen's
compensation insurance insuring the Credit Parties to the extent customary with
respect to companies conducting similar businesses and, upon request, will
furnish to the Bank satisfactory evidence of the same.
5.4 TAXES. The Credit Parties shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any Subsidiary of a
Credit Party or their properties on or prior to the time when they become due;
PROVIDED that this covenant shall not apply to any tax, assessment or charge
that is being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been established and are being
maintained in accordance with GAAP.
5.5 INSPECTION BY THE BANK. Each Credit Party shall permit the Bank or
its designees, at any reasonable time, and upon reasonable notice (or if a
Default or Event of Default shall have occurred and is continuing, at any time
and without prior notice), to (i) visit and inspect the properties of each
Credit Party and its Subsidiaries, (ii) examine and make copies of and take
abstracts from the books and records of each Credit Party and its Subsidiaries
and (iii) discuss the affairs, finances and accounts of each Credit Party and
its Subsidiaries with their appropriate officers, employees and accountants. In
handling such information the Bank shall exercise the same degree of care that
it exercises with respect to its own proprietary information of the same types
to maintain the confidentiality of any non-public information thereby received
or received pursuant to Section 5 except that disclosure of such information may
be made (i) to the subsidiaries or affiliates of the Bank in connection with
their present or prospective business relations with any Credit Party and its
Subsidiaries if such subsidiaries agree in advance to be bound by the same
confidentiality provisions of the Bank as set forth in this Section 5.5, (ii)
to prospective transferees or purchasers of an interest in the Revolving
Loans if they agree in advance to be bound by the same confidentiality
obligations of the Bank as set forth in this
26
Section 5.5, (iii) as required by law, regulation, rule or order, subpoena,
judicial order or similar order and (iv) as may be required in connection
with the examination, audit or similar investigation of the Bank.
5.6 MAINTENANCE OF BOOKS AND RECORDS. Each Credit Party and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with GAAP consistently
applied and applicable law.
5.7 MAINTENANCE OF ACCOUNTS. The Credit Parties and each of their U.S.
Subsidiaries will maintain its principal depository and operating accounts with
the Bank at all times (except for Versicor which may maintain its principal
depository and operating accounts in California so long as its principal place
of business is located in California) and shall maintain in such accounts
sufficient funds to make all principal and interest payments when due.
5.8 [RESERVED].
5.9 MINIMUM LIQUIDITY RATIO. At the end of each fiscal quarter, the
Cash Equivalent Amount of the Borrower shall be equal to or greater than 150% of
its Total Liabilities.
5.10 MINIMUM TANGIBLE CAPITAL BASE. The Borrower shall maintain at all
times a Tangible Capital Base of not less than $50,000,000.
5.11 MINIMUM CASH OR EQUIVALENTS/FIXED CHARGE COVERAGE RATIO. The
Borrower shall maintain at all times (a) a Cash Equivalent Amount of not less
than $50,000,000 or (b) a Fixed Charge Coverage Ratio of not less than 1.50 to
1.00.
5.12 FURTHER ASSURANCES. At any time and from time to time the Credit
Parties shall, and shall cause each of their Subsidiaries to, execute and
deliver such further instruments and take such further action as may reasonably
be requested by the Bank to effect the purposes of this Agreement and the Note.
SECTION 6
NEGATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder, issue Letters
of Credit or any Revolving Loan or other Obligation hereunder remains
outstanding, the Borrower covenants as follows:
6.1 INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries
shall create, incur, assume, guarantee or be or remain liable with respect to
any Indebtedness other than the following:
(a) Indebtedness of the Borrower or any of its Subsidiaries
(including Biosphere) to the Bank or any of its Affiliates;
27
(b) Indebtedness existing as of the date hereof and disclosed
in SCHEDULE 6.1 hereto and Guaranties disclosed on SCHEDULE 6.2 hereto and any
refinancing of such Indebtedness in amounts not exceeding the principal amount
thereof and on terms (including without limitation any subordination terms
applicable thereto) which are substantially the same as the terms of the
refinanced Indebtedness;
(c) Indebtedness of the Borrower to or from its Subsidiaries
in the aggregate principal amount outstanding at any time not in excess of
$20,000,000; PROVIDED that no Default shall exist and be continuing or caused
thereby at the time of incurrence of such Indebtedness;
(d) Indebtedness secured by Permitted Encumbrances under
Section 6.2(c);
(e) Indebtedness not in excess of 4,891,000 Canadian Dollars
in respect of Sepracor Canada Limited's obligation with respect to the Canadian
Indebtedness and the Borrower's guaranty of the Canadian Indebtedness and any
refinancing of such Indebtedness in amounts not exceeding the principal amount
thereof and on terms which are substantially the same terms as the terms of the
refinanced indebtedness;
(f) Indebtedness in respect of Capital Leases and purchase
money financing for tangible property used in the Borrower's business in the
aggregate principal amount outstanding at any time not in excess of $15,000,000
LESS, with respect to Biosphere, any indebtedness in respect of Capital Leases
and purchase money financing for tangible property used in their businesses; and
6.2 CONTINGENT LIABILITIES. Neither the Borrower nor any of its
Subsidiaries shall create, incur, assume or remain liable with respect to any
Guaranties other than the following:
(a) Guaranties in favor of the Bank or any of its Affiliates;
and
(b) Guaranties disclosed in SCHEDULE 6.2 hereto or in the
financial statements referred to in Section 4.6.
6.3 SALE AND LEASEBACK. Neither the Borrower nor any of its
Subsidiaries shall enter into any arrangement, directly or indirectly, whereby
it shall sell or transfer any property owned by it in order to lease such
property or lease other property that the Borrower or any such Subsidiary
intends to use for substantially the same purpose as the property being sold or
transferred.
6.4 ENCUMBRANCES. Neither the Borrower nor any of its Subsidiaries
shall create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or encumbrance, including the lien or retained
security title of a conditional vendor upon or with respect to any of its
property or assets ("ENCUMBRANCES"), or assign or otherwise convey any right to
receive income, including the sale or discount of accounts receivable with or
without recourse, except the following ("PERMITTED ENCUMBRANCES"):
(a) Encumbrances in favor of the Bank or any of its
Affiliates;
28
(b) Encumbrances existing as of the date hereof and disclosed
in SCHEDULE 6.4 hereto and securing any refinancing of Indebtedness PROVIDED
that such refinancing is permitted pursuant to Section 6.1(b);
(c) Encumbrances for purchase money obligations or Capital
Leases permitted pursuant to Section 6.1(d); PROVIDED that such Encumbrances
shall not attach to property and assets of the Borrower or any Subsidiary not
purchased with the proceeds of such purchase money obligations;
(d) liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4; and
(e) landlords' and lessors' liens in respect of rent not in
default or liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business.
6.5 LINES OF BUSINESS. Neither the Borrower nor any Subsidiary will
engage in any line of business if as a result thereof the business of the
Borrower and its Subsidiaries taken as a whole would be materially different
from what it was on the date hereof.
6.6 MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS. Neither the
Borrower nor any of its Subsidiaries shall, without the prior written consent of
the Bank, sell, lease or otherwise dispose of assets or properties, other than
sales or leases of inventory in the ordinary course of business; or liquidate,
merge or consolidate into or with any other Person or entity, PROVIDED that any
Subsidiary of a Credit Party may merge or consolidate into or with (i) the
Borrower if no Default or Event of Default has occurred and is continuing or
would result from such merger and if the Borrower is the surviving company or
(ii) any other wholly-owned Subsidiary of the Borrower.
Notwithstanding the foregoing provisions of this section, the Borrower
or any Subsidiary may acquire (whether by way of purchase of assets or stock, by
merger or consolidation or otherwise) all or substantially all of the assets
located in or capital stock of any Person engaged primarily in the same line of
business as the Borrower or any Subsidiaries; PROVIDED that (a) no Default shall
exist at the time of such acquisition or shall be caused thereby in the
foreseeable future and (b) after giving effect to such acquisition the Borrower
shall be in compliance with all the provisions of Sections 5.9 through 5.11 and
the Borrower shall have delivered to the Bank a Compliance Certificate
demonstrating such compliance on a pro forma basis.
Notwithstanding any provision of this Agreement to the contrary, the
Credit Parties may license and exploit any rights to their intellectual
property, including, without limitation, all
29
patents, patent applications, trademarks, service marks, and tradenames, in
arms-length transactions for fair market value, without the consent of the Bank.
6.7 ADDITIONAL STOCK ISSUANCE. The Borrower shall not permit any of its
Subsidiaries to issue any additional shares of such Subsidiary's capital stock
or other equity securities, any options therefor or any securities convertible
thereto other than to the Borrower; PROVIDED, that such Subsidiaries may issue
additional shares of its capital stock if after any such issuance the Borrower
or such Subsidiary has 50% or more of the ordinary voting power for the election
of a majority of the members of the board of directors or other governing body
of such entity or the Borrower or such Subsidiary has, at least, a 50% ownership
interest.
6.8 RESTRICTED PAYMENTS. Neither the Borrower nor its Subsidiaries will
directly or indirectly declare, order, pay or make any Restricted Payment or set
aside any sum or property therefore if at the time of such proposed action or
immediately after giving effect thereto, any condition or event shall exist
which constitutes a Default or an Event of Default and unless such Restricted
Payment is expressly permitted by this Section 6.8; provided that nothing herein
shall be deemed to prohibit the making of any dividend or distribution by any
Subsidiary to a Credit Party.
Subject to the foregoing, the Borrower may (a) make any scheduled
payment of principal or interest on Subordinated Notes issued and outstanding on
the date of this Agreement in accordance with the subordination provisions for
such subordinated notes, (b) make payments under any Corporate Services
Agreement, (c) make distributions of shares of its capital stock as stock splits
or stock dividends, and (d) make any other Restricted Payment in addition to
those referred to in the previous clause; PROVIDED, that in the last event the
Borrower shall have received the prior written consent of the Bank to such
proposed Restricted Payment.
The amount involved in any Restricted Payment declared, ordered, paid,
made or set apart in property shall be deemed to be the greater of the fair
market value thereof at the time of such distribution or payment (or the date of
such transaction, as the case may be), as determined in good faith by the
Borrower, or the net book value thereof on the books of the Borrower as at such
time.
6.9 TRANSACTIONS WITH AFFILIATES. Except for the Borrower's
Subsidiaries on the date hereof so long as they remain Subsidiaries of the
Borrower, the Credit Parties will not, and will not permit any Corporate
Affiliate to, directly or indirectly, enter into any lease or other transaction
with any shareholder or with any Affiliate of the Borrower or such shareholder,
on terms that are less favorable to the Borrower or such Subsidiary than those
which might be obtained at the time from Persons who are not a shareholder or an
Affiliate. Notwithstanding the preceding sentence, the Borrower may (1) sublease
its facilities to Biosphere, Versicor and Hemasure; (2) enter into and perform
the Corporate Services Agreements, the Technology Transfer Agreements and the
Cross License Agreement, (3) enter into an amended and restated cross license
agreement replacing the Cross License Agreement if such amended and restated
agreement is in form and substance acceptable to the Bank and its counsel and
(4) engage in transactions expressly permitted by Sections 6.1, 6.6 and 6.7.
30
6.10 INVESTMENTS. Neither the Credit Parties nor any of their
Subsidiaries shall make or maintain any Investments other than (i) existing and
additional Investments in Subsidiaries on the date hereof so long as they remain
Subsidiaries of Sepracor, (ii) Qualified Investments and (iii) acquisitions
permitted under Section 6.6 and (iv) Investments consisting of foreign deposit
accounts used for ordinary course working capital purposes of the Credit Parties
or their Subsidiaries; PROVIDED, that the aggregate balance of foreign deposit
accounts of the Borrower and its Subsidiaries shall not at any time exceed
$10,000,000.
6.11 ERISA. Neither the Credit Parties nor any member of the Controlled
Group shall permit any Plan maintained by it to (i) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code, (ii) incur any
"accumulated funding deficiency" (as defined in Section 302 of ERISA) whether or
not waived, or (iii) terminate any Plan in a manner that could result in the
imposition of a lien or encumbrance on the assets of the Credit Parties or any
of their Subsidiaries pursuant to Section 4068 of ERISA.
6.12 OBSERVANCE OF SUBORDINATION PROVISIONS, ETC. The Credit Parties
will not make, or cause or permit to be made, any payments in respect of any
Subordinated Indebtedness in contravention of the subordination and other
payment provisions contained in the evidence of such Subordinated Indebtedness
or in contravention of any written agreement pertaining thereto, nor will the
Credit Parties (a) amend, modify or change in any manner any of such
subordination or other payment provisions without the prior written consent of
the Bank or (b) amend, modify or change in any manner adverse to the interests
of the Bank any of the other provisions set forth in the agreements under which
such Subordinated Indebtedness is outstanding or contained in the evidence of
such Subordinated or other Indebtedness.
6.13 RESTRICTIVE AGREEMENTS. No Credit Party will directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of any Credit Party to create, incur or permit to exist any Lien upon any of its
property or assets; PROVIDED that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (iii) the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.
SECTION 7
DEFAULTS
7.1 EVENTS OF DEFAULT. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Credit Parties shall fail to pay when due (i) any
amount of principal of any Revolving Loans, or (ii) any amount of interest
thereon; or
(b) the Credit Parties shall fail to pay within three (3) days
after receipt of notice from the Bank any fees or expenses payable hereunder or
under any Note; or
31
(c) the Credit Parties shall fail to perform any term,
covenant or agreement contained in Sections 5 (except Section 5.3) or 6; or
(d) the Credit Parties shall fail to perform any term,
covenant or agreement (other than those referred to above in this Section 7.1)
contained in this Agreement and such default shall continue for twenty (20)
days; or
(e) any representation or warranty of any Credit Party made in
this Agreement or in the Notes, or any Credit Parties in any other documents or
agreements executed in connection with the transactions contemplated by this
Agreement or in any certificate delivered hereunder shall prove to have been
false in any material respect upon the date when made or deemed to have been
made; or
(f) the failure to pay at maturity, or within any applicable
period of grace, any obligations of the Borrower in excess of One Million
Dollars ($1,000,000) in the aggregate for borrowed monies or advances, or for
the use of real or personal property, or fail to observe or perform any term,
covenant or agreement evidencing or securing such obligations, the result of
which failure is to permit the holder or holders of such indebtedness to cause
such indebtedness to become due prior to its stated maturity upon delivery of
required notice, if any; or
(g) the Borrower shall default in any payment due on any
Indebtedness in respect of borrowed money, any Capital Lease or the deferred
purchase price of property with an outstanding principal amount in excess of One
Million Dollars ($1,000,000) and such default shall continue for more than the
period of grace, if any, specified therein and shall not have been waived
pursuant thereto; or
(h) the Borrower or any Subsidiary of the Borrower shall (i)
apply for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar official of itself or of all
or a substantial part of its property, (ii) be generally not paying its debts as
such debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding, as debtor, under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, or any other
law providing for the relief of debtors, (vi) fail to contest in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Federal Bankruptcy Code or other law, (vii) take
any action under the laws of its jurisdiction of incorporation or organization
similar to any of the foregoing, or (viii) take any corporate action for the
purpose of effecting any of the foregoing; or
(i) a proceeding or case shall be commenced, without the
application or consent of the Borrower or any Subsidiary of the Borrower in any
court of competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets, or (iii) similar relief in respect
of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 60 days; or an order
32
for relief shall be entered in an involuntary case under the Federal Bankruptcy
Code, against the Borrower or any Subsidiary of the Borrower; or action under
the laws of the jurisdiction of incorporation or organization of the Borrower or
any Subsidiary of the Borrower similar to any of the foregoing shall be taken
with respect to the Borrower or any Subsidiary of the Borrower and shall
continue unstayed and in effect for any period of 60 days; or
(j) a judgment or order for the payment of money shall be
entered against the Borrower by any court, or a warrant of attachment or
execution or similar process shall be issued or levied against property of the
Borrower, that in the aggregate exceeds One Million Dollars ($1,000,000) in
value and such judgment, order, warrant or process shall continue undischarged
or unstayed for 45 days; or
(k) the Borrower or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of One Hundred
Thousand Dollars ($100,000) that it shall have become liable to pay to the PBGC
or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
Plans shall be filed under Title IV of ERISA by the Borrower, any member of the
Controlled Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans against
the Borrower and such proceedings shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
(l) any Person or "group" (within the meaning of Section 13(d)
and 14(d)(2) of the Securities and Exchange Act of 1934, as amended) shall
beneficially own or control in excess of 50% of the issued and outstanding
shares of the capital stock of the Borrower having ordinary voting power to
elect a majority of the board of directors of the Borrower; or
(m) the termination, expiration or non-renewal of any license
or other Material Agreement which termination, expiration or non-renewal has a
material adverse effect on the existing business or prospects of the Borrower.
7.2 REMEDIES. Upon the occurrence of an Event of Default described in
Sections 7.1.(h) and 7.1.(i), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the Bank's option and upon the Bank's
declaration:
(a) the Bank's commitment to make any further Revolving Loans
hereunder or to issue Letters of Credit, generally, shall terminate;
(b) the unpaid principal amount of the Revolving Loans
together with accrued interest and all other Obligations hereunder shall become
immediately due and payable, including the unpaid principal amount of any
Revolving Loan subject to an exercised LIBOR Option together with accrued
interest thereon and the related LIBOR Premium in the same manner as though the
Credit Parties had exercised their right to prepayment pursuant to Section
33
2.7 of this Agreement, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived; and
(c) the Bank may exercise any and all rights it has under this
Agreement, the Notes or any other documents or agreements executed in connection
herewith, or at law or in equity, and proceed to protect and enforce the Bank's
rights by any action at law, in equity or other appropriate proceeding.
(d) Upon the occurrence of any Event of Default and at any
time thereafter (unless such Event of Default shall theretofore have been
remedied), at the Bank's option: (i) the Bank shall thereupon be relieved of all
of its obligations to make any Revolving Loans hereunder; (ii) the unpaid
principal amount of the Notes together with accrued interest thereon and all
other Obligations shall become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived;
and (iii) the Bank may exercise any and all rights it has under this Agreement,
the Notes, or any other documents or agreements executed in connection with the
transactions contemplated by this Agreement (the "LOAN DOCUMENTS"), or by law or
equity, and proceed to protect and enforce the Bank's rights by any action at
law, suit in equity or other appropriate proceeding, whether for specific
performance or for an injunction against a violation of any covenant contained
herein or in any Loan Document or in aid of the exercise of any power granted
hereby or thereby or by law.
SECTION 8
MISCELLANEOUS
8.1 NOTICES. Unless otherwise specified herein, all notices hereunder
to any party hereto shall be in writing and shall be deemed to have been given
when delivered by hand, or three (3) days after being properly deposited in the
mails certified, return receipt requested, or when sent by electronic facsimile
transmission, or when delivered to the telegraph company or overnight courier,
the next business day following addressed to such party at its address indicated
below:
If to the Credit Parties, at
Sepracor Inc.
000 Xxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Senior Vice President Finance and Administration
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
If to the Bank, at
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
34
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
or at any other address specified by such party in writing.
8.2 EXPENSES. The Credit Parties will pay on demand all expenses of the
Bank in connection with the preparation, waiver or amendment of this Agreement,
the Notes, or other documents executed in connection therewith, or the
administration, default or collection of the Revolving Loans or other
Obligations or in connection with the Bank's exercise, preservation or
enforcement of any of its rights, remedies or options thereunder, including,
without limitation, reasonable fees and disbursements of outside legal counsel
or accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with any travel or other costs
relating to any appraisals or examinations conducted in connection with the
Obligations and the amount of all such expenses shall, until paid, bear interest
at the rate applicable to principal hereunder for Revolving Loans not subject to
a LIBOR Option (including any default rate).
8.3 SET-OFF. Regardless of other means of obtaining repayment of the
Obligations, any deposits, balances or other sums credited by or due from the
head office of the Bank or any of its branch offices to the Credit Parties may,
at any time and from time to time after the occurrence of an Event of Default
hereunder, without notice to the Credit Parties or compliance with any other
condition precedent now or hereafter imposed by statute, rule of law, or
otherwise (all of which are hereby expressly waived) be set off, appropriated,
and applied by the Bank against any and all Obligations of the Credit Parties to
the Bank or any of its affiliates in such manner as the head office of the Bank
or any of its branch offices in their sole discretion may determine, and the
Credit Parties each hereby grant the Bank a continuing security interest in such
deposits, balances or other sums for the payment and performance of all such
obligations.
8.4 TERM OF AGREEMENT. This Agreement shall continue in force and
effect so long as the Bank has any commitment to make Revolving Loans hereunder
or any Revolving Loan or any Obligation hereunder shall be outstanding.
8.5 NO WAIVERS. No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Note or under any other
documents or agreements executed in connection herewith shall operate as a
waiver thereof; nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein and in the Notes provided are
cumulative and not exclusive of any rights or remedies otherwise provided by
agreement or law.
8.6 GOVERNING LAW; JURISDICTION. This Agreement and the Notes shall be
deemed to be contracts made under seal and shall be construed in accordance with
and governed by the laws of Massachusetts (without giving effect to any
conflicts of laws provisions contained therein). The Credit Parties, to the
extent that they may lawfully do so, hereby consent to the jurisdiction of the
courts of the Commonwealth of Massachusetts and the United States District Court
for the District of Massachusetts, as well as to the jurisdiction of all courts
to which an appeal may be
35
taken from such courts, for the purpose of any suit, action or other proceeding
arising out of any of its obligations hereunder or with respect to the
transactions contemplated hereby, and expressly waives any and all objections it
may have as to venue in any such courts. The Credit Parties further agree that a
summons and complaint commencing an action or proceeding in any of such courts
shall be properly served and shall confer personal jurisdiction if served
personally or by certified mail to it at its address provided in Section 8.1 of
this Agreement or as otherwise provided under the laws of the Commonwealth of
Massachusetts.
8.7 AMENDMENTS. Neither this Agreement nor the Notes nor any provision
of this Agreement or thereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Bank and, in the case of
amendments, by the Credit Parties.
8.8 BINDING EFFECT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Credit Parties and the Bank and their respective successors and
assigns; PROVIDED that the Credit Parties may not assign or transfer their
rights or obligations hereunder.
(b) ASSIGNMENTS BY THE BANK. From and after the date hereof,
the Bank may at any time assign all, or a proportionate part of all, of its
rights, interests and duties with respect to the Revolving Commitment Amount and
the Notes (1) to any one or more of its Affiliates without the consent or
approval of the Credit Parties or (2) to one or more banks or other financial
institutions with the consent of the Credit Parties which consent shall not be
unreasonably withheld (each assignee under clauses (1) and (2), an "Assignee"),
in each case on such terms, as between the Bank and each of its Assignees, as
the Bank may think fit, and such Assignee shall assume such rights, interests
and duties pursuant to an instrument executed by such Assignee and the Bank, and
for this purpose the Bank may make available to each of its potential Assignees
such information relating to the Credit Parties, this Agreement and the
transactions contemplated hereby as the Bank may think necessary or desirable,
which information shall be held by each potential Assignee strictly in
confidence. Upon execution and delivery of such an instrument and payment by
such Assignee to the Bank of an amount equal to the purchase price agreed
between the Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights, interests and duties of a Bank with a
Revolving Commitment Amount and Revolving Loan as set forth in such instrument
of assumption, and the Bank shall be released from its obligations hereunder to
a corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this paragraph
(b), the Bank and the Credit Parties shall make appropriate arrangements so
that, if required, a new Note or Notes are issued to the Assignee.
(c) PARTICIPATIONS BY THE BANK. From and after the date
hereof, the Bank shall be at liberty to offer the participations in the
Revolving Commitment Amount and the Notes to one or more banks or other
financial institutions on such terms as the Bank may think fit, and for this
purpose the Bank may make available to each of its potential participants such
information relating to the Credit Parties, this Agreement and the transactions
contemplated hereby as the Bank may think necessary or desirable, which
information shall be held by each potential participant strictly in confidence;
PROVIDED, that the Bank shall not offer any participations to foreign banks or
financial institutions without the prior written consent of the Credit Parties;
36
PROVIDED FURTHER, that the Bank shall retain the sole right to consent to
amendments to, or waivers of, the provisions of this Agreement and the Notes and
the sole right and responsibility to enforce the obligations of the Credit
Parties hereunder and under the Notes; PROVIDED FURTHER, that the Bank may agree
with each of its participants that the Bank will not agree, without the consent
of the participant, to any amendment or waiver of any provision of this
Agreement which would increase or otherwise change such Revolving Commitment
Amount or reduce the principal of or rate of interest on the Revolving Loans
subject to such participation, or postpone the date fixed for any payment of
principal or of interest on any Revolving Loans.
8.9 CURRENCY CONVERSION. If, for the purpose of obtaining or enforcing
judgment in any court or for any other purpose hereunder it is necessary to
convert an amount due hereunder in the currency in which it is due (the
"ORIGINAL CURRENCY") into another currency (the "SECOND CURRENCY") the rate of
exchange applied shall be that at which, in accordance with normal banking
procedures, the Bank could purchase, in the United States money market or the
United States foreign exchange market (the "MONEY MARKETS"), as the case may be,
the Original Currency with the Second Currency on the Business Day on which
judgment is given or the amount is due. The Borrower agrees that its obligations
in respect of any amounts due from it to the Bank, in the Original Currency
hereunder shall, notwithstanding any judgment expressed or payment made in the
Second Currency, be discharged only to the extent that on the Business Day
following receipt of any sums so paid or adjudged to be due hereunder in the
Second Currency, the Bank may, in accordance with normal banking procedure
purchase, in the appropriate Money Market, the Original Currency with the amount
of the Second Currency so paid or so adjudged to be due; and if the amount of
the Original Currency so purchased is less than the amount originally due in the
Original Currency, the Borrower agrees as a separate obligation, and
notwithstanding any such payment or judgment to indemnify the Bank.
8.10 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
8.11 PARTIAL INVALIDITY. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
8.12 CAPTIONS. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
8.13 WAIVER OF JURY TRIAL. THE BANK AND THE CREDIT PARTIES AGREE THAT
NEITHER OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT
OF, THIS AGREEMENT, ANY RELATED INSTRUMENTS, OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE BANK AND THE
CREDIT PARTIES, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER
THE BANK NOR THE CREDIT
37
PARTIES HAVE AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
8.14 ENTIRE AGREEMENT. This Agreement, the Notes and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto and supersede any prior agreement or understanding, written or
oral, with respect to the matters contained herein and therein.
38
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
SEPRACOR INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
Finance and Administration
BIOSPHERE MEDICAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President and Chief
Financial Officer
FLEET NATIONAL BANK
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Vice President
39
EXHIBIT A-1
FORM OF
SEPRACOR INC.
PROMISSORY NOTE
December 22, 1999
$25,000,000 Boston, Massachusetts
For value received, the undersigned hereby promises to pay to FLEET
NATIONAL BANK (the "BANK"), or order, at the head office of the Bank at Xxx
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, the principal amount of TWENTY-FIVE
MILLION DOLLARS ($25,000,000) or such lesser amount as shall equal the principal
amount outstanding hereunder on December 31, 2001 or such earlier date as
provided in the Agreement (as defined below) in lawful money of the United
States of America and in immediately available funds, and to pay interest on the
unpaid principal balance hereof from time to time outstanding, at said office
and in like money and funds, for the period commencing on the date hereof until
paid in full, at the rates per annum and on the dates provided in the Agreement.
Upon the occurrence and during the continuance of an Event of Default,
interest on the unpaid principal amount hereof and (to the extent permitted by
law) on unpaid interest shall thereafter be payable on demand at a rate per
annum equal to two percent (2%) above the interest rate otherwise in effect with
respect to such Revolving Loans. Upon the cure of an Event of Default and the
payment of interest at the default rate through the date of such cure, the
interest rate shall revert to that provided for in the Agreement.
If the entire amount of any required principal and/or interest is not
paid in full within ten (10) days after the same is due, the undersigned shall
pay to the Bank a late fee equal to three percent (3%) of the required payment.
Nothing in the preceding sentence shall affect the Bank's rights to exercise any
of its rights and remedies provided in the Agreement (as defined below) if an
Event of Default (as defined in the Agreement) has occurred.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of a certain Second Amended and Restated Revolving
Credit Agreement dated as of December 22, 1999, by and among the undersigned,
Biosphere Medical, Inc. and the Bank (herein, as the same may from time to time
be amended or extended, referred to as the "AGREEMENT"), but neither this
reference to the Agreement nor any provision thereof shall affect or impair the
absolute and unconditional obligation of the undersigned makers of this Note to
pay the principal of and interest on this Note as herein provided.
In case an Event of Default (as defined in the Agreement) shall occur,
the aggregate unpaid principal of and accrued interest on this Note shall become
or may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The undersigned may at its option prepay all or any part of the
principal of this Note before maturity upon the terms provided in the Agreement,
and this Note is subject to mandatory prepayment in certain circumstances, which
repayment shall in certain cases require the payment of a premium and in certain
cases not require the payment of a premium.
The undersigned makers hereby waive presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.
This instrument shall have the effect of an instrument executed under
seal and shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
SEPRACOR INC.
By:_________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
Finance and Administration
2
SCHEDULE I TO PROMISSORY NOTE
AMOUNT OF
REVOLVING INTEREST AMOUNT NOTATION
DATE LOAN RATE PAID MADE BY
3
EXHIBIT A-2
FORM OF
BIOSPHERE MEDICAL, INC.
PROMISSORY NOTE
December 22, 1999
$2,000,000 Boston, Massachusetts
For value received, the undersigned hereby promises to pay to FLEET
NATIONAL BANK (the "BANK"), or order, at the head office of the Bank at Xxx
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, the principal amount of TWO MILLION
DOLLARS ($2,000,000) or such lesser amount as shall equal the principal amount
outstanding hereunder on December 31, 2001 or such earlier date as provided in
the Agreement (as defined below) in lawful money of the United States of America
and in immediately available funds, and to pay interest on the unpaid principal
balance hereof from time to time outstanding, at said office and in like money
and funds, for the period commencing on the date hereof until paid in full, at
the rates per annum and on the dates provided in the Agreement.
Upon the occurrence and during the continuance of an Event of Default,
interest on the unpaid principal amount hereof and (to the extent permitted by
law) on unpaid interest shall thereafter be payable on demand at a rate per
annum equal to two percent (2%) above the interest rate otherwise in effect with
respect to such Revolving Loans. Upon the cure of an Event of Default and the
payment of interest at the default rate through the date of such cure, the
interest rate shall revert to that provided for in the Agreement.
If the entire amount of any required principal and/or interest is not
paid in full within ten (10) days after the same is due, the undersigned shall
pay to the Bank a late fee equal to three percent (3%) of the required payment.
Nothing in the preceding sentence shall affect the Bank's rights to exercise any
of its rights and remedies provided in the Agreement (as defined below) if an
Event of Default (as defined in the Agreement) has occurred.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of a certain Second Amended and Restated Revolving
Credit Agreement dated as of December 22, 1999, by and among Sepracor, the
undersigned and the Bank (herein, as the same may from time to time be amended
or extended, referred to as the "AGREEMENT"), but neither this reference to the
Agreement nor any provision thereof shall affect or impair the absolute and
unconditional obligation of the undersigned makers of this Note to pay the
principal of and interest on this Note as herein provided.
In case an Event of Default (as defined in the Agreement) shall occur,
the aggregate unpaid principal of and accrued interest on this Note shall become
or may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The undersigned may at its option prepay all or any part of the
principal of this Note before maturity upon the terms provided in the Agreement,
and this Note is subject to mandatory prepayment in certain circumstances, which
repayment shall in certain cases require the payment of a premium and in certain
cases not require the payment of a premium.
The undersigned makers hereby waive presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.
This instrument shall have the effect of an instrument executed under
seal and shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
BIOSPHERE MEDICAL, INC.
By:___________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President and Chief
Financial Officer
2
SCHEDULE I TO PROMISSORY NOTE
AMOUNT OF
REVOLVING INTEREST AMOUNT NOTATION
DATE LOAN RATE PAID MADE BY
3
EXHIBIT B
COMPLIANCE CERTIFICATE
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President
Re: Sepracor Inc. Obligations under Second Amended and Restated Revolving
Credit Agreement dated as of December 22, 1999
Ladies and Gentlemen:
As required by Section 5.1(c) of the Second Amended and Restated
Revolving Credit Agreement dated as of December 22, 1999 (the "CREDIT
AGREEMENT") by and among Sepracor Inc. and Biosphere Medical, Inc.
(collectively, the "CREDIT PARTIES") and Fleet National Bank (the "BANK"), a
review of the activities of the Borrower for the fiscal year and/or fiscal
quarter ending ___________, _____ (the "FISCAL PERIOD") has been made under my
supervision to determine whether the Credit Parties have performed and/or
maintained all of their respective obligations under the Credit Agreement. Based
upon such review, I hereby certify to you, as an Authorized Officer of the
Borrower, that the Credit Parties have performed and maintained all such
obligations under the Credit Agreement, the Notes and the Loan Documents for the
Fiscal Period and, to the best of my knowledge, no event has occurred that
constitutes a Default or an Even of Default as defined in the Credit Agreement.
Other capitalized terms used herein without definition have the same meanings as
in the Credit Agreement.
As required by Section [5.1(a)][5.1(b)] of the Credit Agreement
financial statements of the Credit Parties (the "FINANCIAL STATEMENTS") for the
Fiscal Period and other information required by such sections accompany this
certificate. The Financial Statements present fairly the financial position of
the Credit Parties as of the date thereof and the statements of operation of the
Credit Parties for the Fiscal Period covered thereby.
I further certify to you, as an Authorized Officer of the Borrower,
that the figures set forth below accurately represent amounts required to be
calculated under the various provisions or covenants of the Credit Agreement
indicated, each as of the last day of the Fiscal Period unless otherwise
indicated.
Dated:___________________ ______________________________________________
Title:
I. SECTION 5.9 - MINIMUM LIQUIDITY RATIO
---------------------------------------------------------------------------- ----------------------------------------
A. TOTAL LIABILITIES
---------------------------------------------------------------------------- ----------------------------------------
(1) Total Liabilities $
---------------------------------------------------------------------------- ----------------------------------------
B. MINIMUM CASH OR EQUIVALENTS
---------------------------------------------------------------------------- ----------------------------------------
QUALIFIED INVESTMENTS HELD IN THE U.S.
---------------------------------------------------------------------------- ----------------------------------------
(2) Obligations of the United States of America held in $
the U.S.
---------------------------------------------------------------------------- ----------------------------------------
(3) Certificates of deposit, other deposit instruments, $
bank accounts held in the U.S.
---------------------------------------------------------------------------- ----------------------------------------
(4) Commercial Paper held in the U.S. (see definition of $
Qualified Investments)
---------------------------------------------------------------------------- ----------------------------------------
(5) Mutual/closed end funds that invest only in $
investments set forth in clauses (2) through (4)
---------------------------------------------------------------------------- ----------------------------------------
(6) Repurchase agreements secured by any one or more of $
the foregoing held in the U.S.
---------------------------------------------------------------------------- ----------------------------------------
(7) Qualified Investments: (sum of 2 through 6) $
---------------------------------------------------------------------------- ----------------------------------------
NET OUTSTANDING AMOUNT OF BASE ACCOUNTS
---------------------------------------------------------------------------- ----------------------------------------
(8) Base Accounts $
---------------------------------------------------------------------------- ----------------------------------------
(9) Ineligible as of ________________1
---------------------------------------------------------------------------- ----------------------------------------
(i) over 60 days from invoice date $
---------------------------------------------------------------------------- ----------------------------------------
(ii) Accounts outside of US $
---------------------------------------------------------------------------- ----------------------------------------
--------------------
(1) Ineligible calculated monthly
2
(iii) Accounts due from Affiliates $
---------------------------------------------------------------------------- ----------------------------------------
(iv) Prepayments $
---------------------------------------------------------------------------- ----------------------------------------
(v) Uninvoiced Accounts $
---------------------------------------------------------------------------- ----------------------------------------
(vi) Joint venture accounts $
---------------------------------------------------------------------------- ----------------------------------------
(10) Ineligible Accounts (sum of 16(i) through (v)) $
---------------------------------------------------------------------------- ----------------------------------------
(11) Contra Account offsets $
---------------------------------------------------------------------------- ----------------------------------------
(12) Net Outstanding Amount of Base Accounts $
(8 - 10 - 11)
---------------------------------------------------------------------------- ----------------------------------------
(13) CASH EQUIVALENT AMOUNT
---------------------------------------------------------------------------- ----------------------------------------
(14) Unencumbered Cash held in the United States $
---------------------------------------------------------------------------- ----------------------------------------
(15) Qualified Investments (from (14)) $
---------------------------------------------------------------------------- ----------------------------------------
(16) Net Outstanding Amount of Base Accounts (from (19)) $
---------------------------------------------------------------------------- ----------------------------------------
(17) Actual Cash Equivalent Amount (13 + 14 + 15) $
-
---------------------------------------------------------------------------- ----------------------------------------
C. LIQUIDITY RATIO
---------------------------------------------------------------------------- ----------------------------------------
(14) Actual Liability Ratio (13/1) %
---------------------------------------------------------------------------- ----------------------------------------
Required Minimum Liquidity Ratio: 150%
---------------------------------------------------------------------------- ----------------------------------------
II. SECTION 5.10 - MINIMUM TANGIBLE CAPITAL BASE
---------------------------------------------------------------------------- ----------------------------------------
(1) Stockholders' equity $
---------------------------------------------------------------------------- ----------------------------------------
(2) Subordinated Indebtedness $
---------------------------------------------------------------------------- ----------------------------------------
(3) Goodwill $
---------------------------------------------------------------------------- ----------------------------------------
(4) Intangible items $
---------------------------------------------------------------------------- ----------------------------------------
(5) Reserves not already deducted from assets $
---------------------------------------------------------------------------- ----------------------------------------
3
(6) Write-ups from revaluations $
---------------------------------------------------------------------------- ----------------------------------------
(7) Equity in Subsidiaries or joint ventures $
---------------------------------------------------------------------------- ----------------------------------------
(8) Actual Tangible Capital Base $
(1 + 2) - (sum of 3 through 7)
---------------------------------------------------------------------------- ----------------------------------------
Required Minimum Tangible Capital Base: $ 50,000,000
---------------------------------------------------------------------------- ----------------------------------------
III. A. MINIMUM CASH OR EQUIVALENT (from I.B) $
---------------------------------------------------------------------------- ----------------------------------------
Required Minimum Cash Equivalent $ 50,000,000
---------------------------------------------------------------------------- ----------------------------------------
B. FIXED CHANGE COVERAGE RATIO
---------------------------------------------------------------------------- ----------------------------------------
EBITDA
---------------------------------------------------------------------------- ----------------------------------------
(1) Operating Income $
---------------------------------------------------------------------------- ----------------------------------------
(2) Add Backs
---------------------------------------------------------------------------- ----------------------------------------
(i) Taxes $
---------------------------------------------------------------------------- ----------------------------------------
(ii) Interest Expense $
---------------------------------------------------------------------------- ----------------------------------------
(iii) Depreciation/Amortization $
---------------------------------------------------------------------------- ----------------------------------------
(iv) Non-Cash Income $
---------------------------------------------------------------------------- ----------------------------------------
(v) Losses from Equity in $
Affiliates
---------------------------------------------------------------------------- ----------------------------------------
(vi) Extraordinary and Unusual $
Losses
---------------------------------------------------------------------------- ----------------------------------------
(vii) Total $
---------------------------------------------------------------------------- ----------------------------------------
(3) Exclusions $
---------------------------------------------------------------------------- ----------------------------------------
(i) Income from Equity in $
Affiliates
---------------------------------------------------------------------------- ----------------------------------------
(ii) Extraordinary and Unusual $
Gains
---------------------------------------------------------------------------- ----------------------------------------
(iii) Proceeds of Insurance and $
---------------------------------------------------------------------------- ----------------------------------------
4
asset sales
---------------------------------------------------------------------------- ----------------------------------------
(iv) Total
---------------------------------------------------------------------------- ----------------------------------------
(4) EBITDA ((1) + (2) - (3)) $
---------------------------------------------------------------------------- ----------------------------------------
FIXED CHARGES
---------------------------------------------------------------------------- ----------------------------------------
(i) Interest Expense $
---------------------------------------------------------------------------- ----------------------------------------
(ii) Non-Financed Capital $
Expenditures
---------------------------------------------------------------------------- ----------------------------------------
(5) Total Fixed Charges ((i) + (ii)) $
---------------------------------------------------------------------------- ----------------------------------------
(6) Actual Fixed Charge Coverage ____:1
Ratio (4 /5)
---------------------------------------------------------------------------- ----------------------------------------
Required Fixed Charge Coverage Ratio 1.5 to 1
---------------------------------------------------------------------------- ----------------------------------------
Dated:___________________, _____ _______________________________________
Title:
5
EXHIBIT C
GUARANTY AGREEMENT
THIS AGREEMENT, dated as of December __, 1999, by SEPRACOR, INC., a
Delaware corporation (the "Guarantor"), to FLEET NATIONAL BANK (the "Secured
Party").
W I T N E S S E T H
WHEREAS, Biosphere Medical, Inc., a Delaware corporation (the
"Company"), the Guarantor and the Secured Party have entered into a Second
Amended and Restated Revolving Credit Agreement dated as of the date hereof (as
amended from time to time, the "Credit Agreement") pursuant to which the Secured
Party has agreed, subject to the terms and conditions set forth therein, to make
certain revolving loans to the Company (collectively, the "Biosphere Loans"),
such Biosphere Loans to be evidenced by the Company's Promissory note in the
original principal amount of $2,000,000 payable to the order of the Secured
Party (as amended or supplemented from time to time, the "Note"); and
WHERES, the Guarantor owns a majority of the outstanding capital stock
of the Company and the making of the Biosphere Loans will therefore be
beneficial to the Guarantor; and
WHEREAS, the obligation of the Secured Party to make the Biosphere
Loans is subject to the condition, among others, that the Guarantor shall
execute and deliver this Guaranty Agreement;
NOW, THEREFORE, in consideration of the willingness of the Secured
Party to make the Biosphere Loans to the Company, and for other good and
valuable consideration, receipt of which is hereby acknowledged by the
Guarantor, the Guarantor hereby agrees as follows:
1. GUARANTEED OBLIGATIONS. The Guarantor does hereby irrevocably and
unconditionally guarantee the due and punctual payment and performance by the
Company of the following obligations to the Secured Party (individually, a
"Guaranteed Obligation" and collectively the "Guaranteed Obligations"):
(a) Principal of and premium, if any, and interest on the
Note; and
(b) Any and all other obligations of the Company to the
Secured Party under the Credit Agreement or under any agreement or instrument
relating thereto, all as amended from time to time.
2. DEMAND BY SECURED PARTY. Upon failure by the Company punctually to
pay or perform any Guaranteed Obligation when due, after the expiration of any
applicable grace period, the Secured Period may make demand upon the Guarantor
for the payment or performance of such Guaranteed Obligation and the Guarantor
binds and obliges itself to make such payment or performance forthwith upon such
demand.
3. WAIVER OF DEMANDS, NOTICES, DILIGENCE, ETC. The Guarantor hereby
assents to all of the terms and conditions of the Guaranteed Obligations and
waives: (a) demand for the payment of the principal of any Guaranteed Obligation
or of any claim for interest or any part of any thereof (other than the demand
provided for in Section 2 hereof); (b) notice of the occurrence of a default or
an event of default under any Guaranteed Obligation; (c) protest of the
nonpayment of the principal of any Guaranteed Obligation or of any claim for
interest or any part thereof: (d) notice of presentment, demand and protest; (e)
notice of acceptance of any guaranty herein provided for or of the terms and
provisions thereof or hereof by the Secured Party; (f) notice of any indulgences
or extensions granted to the Company or any successor to the Company or any
person or party which shall have assumed the obligations of the Company; (g) any
requirement of diligence or promptness on the part of the Secured Party in the
enforcement of any of its rights under the provisions of any Guaranteed
Obligation or this Guaranty Agreement; (h) any enforcement of any Guaranteed
Obligation; (i) any right which the Guarantor might have to require the Secured
Party to proceed against any other guarantor of the Guaranteed Obligations or to
realize on any collateral security therefor; and (j) any and all notices of
every kind and description which may be required to be given by an statute or
rule of law in any jurisdiction. The waivers set forth in this Section 3 shall
be effective notwithstanding the fact that the Company ceases to exist by reason
of its liquidation, merger, consolidation or otherwise.
4. OBLIGATIONS OF GUARANTOR UNCONDITIONAL. The obligations of the
Guarantor under this Guaranty Agreement shall be unconditional, irrespective of
the validity, regularity or enforceability of any Guaranteed Obligation, and
shall not be affected by any action taken under any Guaranteed Obligation in the
exercise of any right or remedy therein conferred, or by any failure or omission
on the part of the Secured Party to enforce any right given thereunder or
hereunder or any remedy conferred thereby or hereby, or by any waiver of any
term, covenant, agreement or condition of any Guaranteed Obligation or this
Guaranty Agreement, or by any release of any security or any other guaranty at
any time existing for the benefit of any Guaranteed Obligation, or by the merger
or consolidation of the Company, or by sale, lease or
2
transfer by the Company to any person of any or all of its properties, or by any
action of the Secured Party granting indulgence or extension to, or waiving or
acquiescing in any default, the Company or any successor to the Company or any
person or party which shall have assumed its obligations, or by reason of any
disability or other defense of the Company or any successor to the Company, or
by any modification, alteration, or by any circumstance whatsoever (with or
without notice to or knowledge of the Guarantor) which may or might in any
manner or to any extent vary the risk of the Guarantor hereunder, it being the
purpose and intent of the Guarantor that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances
and shall not be discharged except by payment or performance as herein provided,
and then only to the extent of such payment or performance.
5. SUBORDINATION OF CLAIMS OF GUARANTOR. Any claims against the Company
to which the Guarantor may be or become entitled (including, without limitation,
claims by subrogation or otherwise by reason of any payment or performance by
the Guarantor in satisfaction and discharge, in whole or in part, of its
obligations under this Guaranty Agreement) shall be and hereby are made subject
and subordinate to the prior payment or performance in full of the Guaranteed
Obligations.
6. REINSTATEMENT. This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time any amount received by the
Secured Party in respect of the Guaranteed Obligations is rescinded or must
otherwise be restored by the Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or the Guarantor or
upon the appointment of an intervenor or conservator of, or trustee or similar
official for, the Company or the Guarantor or any substantial part of any of
their respective properties, or otherwise, all as though said payments had not
been made.
7. NOTICES. Except as otherwise provided herein, all notices to the
Guarantor or the Secured Party shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes hereof if personally
delivered or mailed by certified mail, return receipt requested, as follows:
(a) if to the Guarantor:
Sepracor Inc.
000 Xxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Senior Vice President
with a copy to:
Xxxx X. Xxxxx, Esquire
Xxxx & Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
3
(b) if to the Secured Party:
Fleet National Bank
000 Xxxxxxx Xxxxxx
Mail Stop: MA BOS 01-08-06
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President
with a copy to:
Xxxxxx Xxxxxxx, Esquire
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
or at such other address as the party to whom such notice or demand is directed
may have designated in writing to the other party hereto. A notice shall be
deemed to have been given upon the earlier to occur of (i) three (3) days after
the date on which it is deposited in the U.S. mails or (ii) receipt by the party
to whom such notice is directed.
8. MISCELLANEOUS. This Guaranty Agreement shall inure to the benefit of
and be binding upon the Secured Party and the Guarantor and their respective
successors and assigns, and the term "Secured Party" shall be deemed to include
any other holder or holders of any of the Guaranteed Obligations. In case any
provision in this Guaranty Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby. This Guaranty Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. The Guarantor agrees, as principal
obligor and not as guarantor, to pay to the Secured Party, all reasonable costs
and expenses (including court costs and reasonable attorneys' fees and
disbursements) incurred or expended by the Secured Party in connection with the
enforcement of this Guaranty Agreement.
9. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. This Guaranty
Agreement, including the validity hereof and the rights and obligations of the
parties hereunder, shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts. The Guarantor, to the extent that it
may lawfully do so, hereby consents to the jurisdiction of the courts of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts, as well as to the jurisdiction of all courts to which
an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of its obligations hereunder or with respect
to the transactions contemplated hereby, and expressly waives any and all
objections it may have as to venue in any such courts. The Guarantor further
agrees that a summons and complaint commencing an action or proceeding in any of
such courts shall be properly served and shall confer personal jurisdiction if
served
4
personally or by certified mail to it at its address provided in Section 7 of
this Guaranty Agreement or as otherwise provided under the law of the
Commonwealth of Massachusetts. The Guarantor irrevocably waives all right to a
trial by jury in any suit, action or other proceeding instituted by or against
it in respect of its obligations hereunder or the transactions contemplated
hereby.
IN WITNESS WHEREOF, the parties have executed this Guaranty Agreement
as a sealed instrument as of the date first above written.
SEPRACOR INC.
By ___________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
The foregoing Guaranty
Agreement is hereby
accepted:
FLEET NATIONAL BANK
By ___________________________________
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Vice President
5
TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS................................................................................1
1.1 Definitions....................................................................................1
1.2 Accounting Terms..............................................................................10
1.3 Multiple Borrowers............................................................................10
SECTION 2 DESCRIPTION OF CREDIT.....................................................................10
2.1 The Revolving Loans...........................................................................10
2.2 Fees..........................................................................................11
2.3 Reduction of Revolving Commitment Amount/Biosphere Sublimit...................................12
2.4 The Notes.....................................................................................12
2.5 Letters of Credit.............................................................................12
2.6 Capital Requirements..........................................................................12
2.7 Payments and Prepayments of the Revolving Loans...............................................13
2.8 Method of Payment.............................................................................13
2.9 Overdue Payments..............................................................................13
2.10 Holidays......................................................................................14
2.11 Interest......................................................................................14
2.12 Certain LIBOR Provisions......................................................................14
2.13 Conditions for Basing Interest on the LIBOR Rate..............................................16
2.14 Indemnification for Funding and Other Losses..................................................17
2.15 Change in Applicable Laws, Regulations, etc...................................................17
2.16 Taxes.........................................................................................17
SECTION 3 CONDITIONS OF LOANS.......................................................................18
3.1 Conditions Precedent to Initial Revolving Loan................................................18
3.2 Conditions Precedent to all Revolving Loans...................................................20
SECTION 4 REPRESENTATIONS AND WARRANTIES............................................................20
4.1 Organization and Qualification................................................................20
4.2 Corporate Authority...........................................................................20
4.3 Valid Obligations.............................................................................21
4.4 Consents or Approvals.........................................................................21
4.5 Title to Properties; Absence of Encumbrances..................................................21
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4.6 Financial Statements..........................................................................21
4.7 Changes.......................................................................................21
4.8 Defaults......................................................................................22
4.9 Taxes.........................................................................................22
4.10 Material Agreements...........................................................................22
4.11 Material Licenses.............................................................................22
4.12 Litigation....................................................................................22
4.13 Use of Proceeds...............................................................................22
4.14 Existing Indebtedness.........................................................................22
4.15 Existing Investments..........................................................................22
4.16 Subsidiaries..................................................................................23
4.17 Investment Company Act........................................................................23
4.18 Compliance with ERISA.........................................................................23
4.19 FDA Compliance, Etc...........................................................................23
4.20 Environmental Matters.........................................................................23
SECTION 5 AFFIRMATIVE COVENANTS.....................................................................24
5.1 Financial Statements and other Reporting Requirements.........................................25
5.2 Conduct of Business...........................................................................26
5.3 Maintenance and Insurance.....................................................................27
5.4 Taxes.........................................................................................27
5.5 Inspection by the Bank........................................................................27
5.6 Maintenance of Books and Records..............................................................27
5.7 Maintenance of Accounts.......................................................................27
5.9 Minimum Liquidity Ratio.......................................................................28
5.10 Minimum Tangible Capital Base.................................................................28
5.11 Minimum Cash or Equivalents/Fixed Charge Coverage Ratio.......................................28
5.12 Further Assurances............................................................................28
SECTION 6 NEGATIVE COVENANTS........................................................................28
6.1 Indebtedness..................................................................................28
6.2 Contingent Liabilities........................................................................29
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TABLE OF CONTENTS
(CONTINUED)
PAGE
6.3 Sale and Leaseback............................................................................29
6.4 Encumbrances..................................................................................29
6.5 Lines of Business.............................................................................30
6.6 Merger; Consolidation; Sale or Lease of Assets................................................30
6.7 Additional Stock Issuance.....................................................................30
6.8 Restricted Payments...........................................................................30
6.9 Transactions with Affiliates..................................................................31
6.10 Investments...................................................................................31
6.11 ERISA.........................................................................................31
6.12 Observance of Subordination Provisions, etc...................................................31
6.13 Restrictive Agreements........................................................................32
SECTION 7 DEFAULTS..................................................................................32
7.1 Events of Default.............................................................................32
7.2 Remedies......................................................................................34
SECTION 8 MISCELLANEOUS..............................................................................35
8.1 Notices.......................................................................................35
8.2 Expenses......................................................................................36
8.3 Set-Off.......................................................................................36
8.4 Term of Agreement.............................................................................36
8.5 No Waivers....................................................................................36
8.6 Governing Law; Jurisdiction...................................................................36
8.7 Amendments....................................................................................37
8.8 Binding Effect of Agreement; Assignments; Participations......................................37
8.9 Currency Conversion...........................................................................38
8.10 Counterparts..................................................................................38
8.11 Partial Invalidity............................................................................38
8.12 Captions......................................................................................38
8.13 WAIVER OF JURY TRIAL..........................................................................38
8.14 Entire Agreement..............................................................................38
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PAGE
EXHIBITS AND SCHEDULES
Exhibit A-1 Sepracor Promissory Note
Exhibit A-2 Biosphere Promissory Note
Exhibit B Compliance Certificate
Exhibit C Guaranty Agreement
Schedule 4.10 Material Agreements
Schedule 4.11 Material Licenses
Schedule 4.12 Litigation
Schedule 4.15 Investments
Schedule 4.16 Subsidiaries
Schedule 6.1 Indebtedness
Schedule 6.2 Guaranties
Schedule 6.4 Encumbrances
-i-
