Exhibit 10.21
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TERM LOAN AGREEMENT
between
PHOENIX INTERNATIONAL LIFE SCIENCES (U.S.) INC.
and
BANQUE NATIONALE DE PARIS
Los Angeles Branch
Dated as of February 5, 1998
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS....................................................................................... 2
1.1 DEFINED TERMS............................................................................... 2
1.2 OTHER DEFINITIONAL PROVISIONS............................................................... 13
SECTION 2. AMOUNT AND TERMS OF LOANS; COMMITMENT AMOUNTS..................................................... 14
2.1 FACILITY A TERM LOAN........................................................................ 14
2.2 FACILITY B TERM LOAN; FACILITY B TERM LOAN
COMMITMENT.................................................................................. 15
2.3 OPTIONAL PREPAYMENTS........................................................................ 16
2.4 CONVERSION AND CONTINUATION OPTIONS......................................................... 17
2.5 MINIMUM AMOUNTS OF TRANCHES................................................................. 18
2.6 INTEREST RATES AND PAYMENT DATES............................................................ 18
2.7 COMPUTATION OF INTEREST AND FEES............................................................ 18
2.8 INABILITY TO DETERMINE INTEREST RATE........................................................ 18
2.9 PRO RATA TREATMENT AND PAYMENTS............................................................. 19
2.10 ILLEGALITY.................................................................................. 19
2.11 INCREASED COSTS............................................................................. 20
2.12 TAXES....................................................................................... 21
2.13 INDEMNITY................................................................................... 23
2.14 MITIGATION OF COSTS......................................................................... 23
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................................................... 23
3.1 FINANCIAL CONDITION......................................................................... 23
3.2 NO CHANGE................................................................................... 24
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.................................................... 24
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS................................................................................. 25
3.5 NO LEGAL BAR................................................................................ 25
3.6 NO MATERIAL LITIGATION...................................................................... 26
3.7 OWNERSHIP OF PROPERTY; LIENS; CONDITION OF
PROPERTIES.................................................................................. 26
3.8 INTELLECTUAL PROPERTY....................................................................... 26
3.9 TAXES....................................................................................... 26
3.10 FEDERAL REGULATIONS......................................................................... 27
3.11 ERISA....................................................................................... 27
3.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT................................................................................. 27
3.13 SUBSIDIARIES................................................................................ 28
3.14 PURPOSE OF LOANS............................................................................ 28
3.15 ENVIRONMENTAL MATTERS....................................................................... 28
3.16 ACCURACY AND COMPLETENESS OF INFORMATION.................................................... 29
3.17 REAL PROPERTY ASSETS........................................................................ 30
3.18 PERMITS, ETC................................................................................ 30
3.19 PATENTS, TRADEMARKS, ETC.................................................................... 30
3.20 COPYRIGHT ACT REQUIREMENTS.................................................................. 30
3.21 NATURE OF BUSINESS.......................................................................... 31
3.22 CAPITAL STOCK OF BORROWER AND ITS SUBSIDIARIES.............................................. 31
3.23 RANKING OF LOANS............................................................................ 31
3.24 EXECUTIVE OFFICES........................................................................... 31
3.25 INSOLVENCY.................................................................................. 31
3.26 LABOR MATTERS............................................................................... 32
3.27 CONDEMNATION................................................................................ 32
3.28 LEASES, LICENSES, PERMITS, SITE USE AGREEMENTS
AND OTHER OCCUPANCY AGREEMENTS.............................................................. 32
3.29 REPRESENTATIONS AND WARRANTIES IN ACQUISITION
AGREEMENT................................................................................... 32
SECTION 4. CONDITIONS PRECEDENT.............................................................................. 32
4.1 CONDITIONS TO CLOSING DATE.................................................................. 32
SECTION 5. AFFIRMATIVE COVENANTS............................................................................. 37
5.1 FINANCIAL STATEMENTS........................................................................ 37
5.2 CERTIFICATES; OTHER INFORMATION............................................................. 37
5.3 PAYMENT OF OBLIGATIONS...................................................................... 39
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE............................................ 39
5.5 MAINTENANCE OF PROPERTY; INSURANCE.......................................................... 39
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS................................................................................. 40
5.7 ENVIRONMENTAL LAWS.......................................................................... 41
5.8 USE OF PROCEEDS............................................................................. 41
5.9 COMPLIANCE WITH LAWS, ETC................................................................... 41
5.10 LEASE AND LICENSE APPROVALS................................................................. 42
5.11 ACQUISITION OF REAL PROPERTY IN FEE SIMPLE.................................................. 42
5.12 LEASES AND LICENSES......................................................................... 42
5.13 NOTICES..................................................................................... 43
5.14 EMPLOYEE CONTRACTS.......................................................................... 43
SECTION 6. NEGATIVE COVENANTS................................................................................ 43
6.1 LIMITATION ON FUNDAMENTAL CHANGES........................................................... 43
6.2 LIMITATION ON RESTRICTED PAYMENTS........................................................... 44
6.3 TRANSACTIONS WITH AFFILIATES................................................................ 44
6.4 FISCAL YEAR................................................................................. 44
6.5 UNFUNDED LIABILITIES........................................................................ 44
6.6 LINE OF BUSINESS............................................................................ 44
6.7 ASSET DISPOSITIONS.......................................................................... 45
6.8 LIMITATION ON LIENS......................................................................... 45
6.9 LIMITATION ON LOANS AND ADVANCES............................................................ 46
SECTION 7. EVENTS OF DEFAULT................................................................................. 46
SECTION 8. MISCELLANEOUS..................................................................................... 49
8.1 AMENDMENTS AND WAIVERS...................................................................... 49
8.2 NOTICES..................................................................................... 50
8.3 NO WAIVER; CUMULATIVE REMEDIES.............................................................. 50
8.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................................................. 50
8.5 PAYMENT OF EXPENSES AND TAXES............................................................... 50
8.6 SUCCESSORS AND ASSIGNS...................................................................... 51
8.7 COUNTERPARTS................................................................................ 51
8.8 SEVERABILITY................................................................................ 51
8.9 INTEGRATION................................................................................. 52
8.10 GOVERNING LAW............................................................................... 52
8.11 CLAIMS OR CONTROVERSIES SUBJECT TO JUDICIAL
REFERENCE................................................................................... 52
8.12 ACKNOWLEDGEMENTS............................................................................ 54
8.13 HEADINGS.................................................................................... 55
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8.14 CONFLICT OF TERMS........................................................................... 55
Exhibits
A-1 Form of Facility A Term Note
A-2 Form of Facility B Term Note
B Form of No Default/Representation Certificate
C Form of Continuation Notice
D Form of Closing Opinion
E Form of Borrower Security Agreement
F Form of Guarantees (U.S. and Canadian)
G Form of Mortgage
H Form of Environmental Compliance Agreement
Schedules
1 Borrower's Indebtedness
2 Borrower's Liens
3 Borrower's Permits and Approvals
4 Borrower's Real Property Assets
5 Borrower's Litigation Proceedings
6 Certain Environmental Matters
7 Regarding the Capital Stock of Borrower
8 Borrower Subsidiaries
9 Mortgages
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TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT, dated as of February 5, 1998, between PHOENIX
INTERNATIONAL LIFE SCIENCES (U.S.) INC., a Delaware corporation (the "BORROWER")
and BANQUE NATIONALE DE PARIS, Los Angeles Branch (the "LENDER").
RECITALS
A. The Borrower has entered into a Stock Purchase Agreement (such
Agreement, as it has been or may be amended or otherwise modified from time to
time, including, without limitation, by a letter agreement dated February 5,
1998, in accordance with the terms hereof, the "ACQUISITION AGREEMENT") dated as
of December 24, 1997 with Kuraya American Systems, Inc., identified as "Seller"
therein (the "SELLER"), pursuant to which the Borrower acquired on February 6,
1998 all of the issued and outstanding shares of IBRD-Rostrum Global Inc. (the
"IRG ACQUISITION"), which operates clinical research and clinical design
management services for the evaluation and certification of new pharmaceutical
products and which has its principal place of business in Irvine, California.
B. In connection with the IRG Acquisition, the Borrower requested that
the Lender make available a short term loan under a Demand Promissory Note dated
February 5, 1998 (the "Demand Note") in an amount equal to $25,440,000. Such
short term loan was made and it is the parties' intention that this term loan
facility shall amend and restate in its entirety the Demand Note and the
Collateral pledged to secure the Demand Note shall continue to secure the
Borrower's obligations hereunder. Such term loan facility would be available to
finance the IRG Acquisition and to pay closing and other costs related to the
IRG Acquisition.
C. The Lender is willing to make available such term loan on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings:
"ACCOUNTANTS": Ernst & Young LLP or such other firm of independent
certified public accountants or chartered accountants of recognized national
standing as shall be selected by the Borrower and satisfactory to the Lender.
"ACQUISITION AGREEMENT": as defined in Recital A hereto.
"AFFILIATE": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person or (b) any Person who is a
shareholder having control or a director, officer, or partner (i) of such
Person, (ii) of any Subsidiary of such Person or (iii) of any Person described
in the preceding clause (a). For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (i) vote securities
having 10% or more of the ordinary voting power for the election of directors of
such Person or (ii) direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGGREGATE TERM LOAN COMMITMENT": $25,440,000.
"AGREEMENT": this Term Loan Agreement, as amended, waived, supplemented
or otherwise modified from time to time.
"APPLICABLE LENDING OFFICE": for the Lender, its offices for LIBOR
Loans and Reference Rate Loans, specified on the signature pages hereof, any of
which offices may, upon 10 days' prior written notice to the Borrower, be
changed by the Lender.
"APPLICABLE LIBOR RATE MARGIN": with respect to the Loans which are
LIBOR Loans, for each Interest Period, the interest rate margin set forth below
opposite the applicable Facility for that Interest Period:
FACILITY MARGIN
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A .35%
B .40%
"ASSET DISPOSITION": the sale, sale and leaseback, transfer,
conveyance, exchange, long-term lease accorded sales treatment under GAAP or
similar disposition (including by means of a merger, consolidation,
amalgamation, joint venture or other substantive combination) of any of the
Properties, business or assets (other than marketable securities, including
"margin stock" within the meaning of Regulation U, liquid investments
and other financial instruments but, including, without
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limitation, the assignment of any lease, license or permit relating to the
Properties) of the Borrower or any of its Subsidiaries to any Person or Persons
other than to the Borrower or any of its Subsidiaries; PROVIDED that Asset
Dispositions shall not include sales in the ordinary course of business.
"BORROWER": as defined in the preamble hereto.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in the State of California are authorized or required by
law to close and which, in the case of a LIBOR Loan, is a Eurodollar Business
Day.
"CAPITALIZED LEASE OBLIGATIONS": obligations for the payment of rent
for any real or personal property under leases or agreements to lease that, in
accordance with GAAP, have been or should be capitalized on the books of the
lessee and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participation or other
equivalent (however designated) of capital stock of a corporation, any and all
equivalent ownership interest in a Person (other than a corporation), any and
all warrants, options or rights to purchase or any other securities convertible
into any of the foregoing.
"CLOSING DATE": the date on which the conditions set forth in Section
4.1 are satisfied and the Term Loan is made.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all of the property (tangible or intangible) purported to
be subject to the lien or security interest purported to be created by any
mortgage, deed of trust, security agreement, pledge agreement, assignment or
other security document heretofore or hereafter executed by the Borrower as
security for all or part of the Obligations.
"COLLATERAL DOCUMENTS": the Security Agreement, the Mortgages, all
notices of security interests in deposit accounts requested by the Lender
pursuant to the Security Agreement, Form UCC-1 Financing Statements and
amendments thereto and any other document encumbering the Collateral or
evidencing or perfecting a security interest therein for the benefit of the
Lender executed by the Borrower, as the same may be amended or modified from
time to time in accordance with the terms hereof.
"COMMONLY CONTROLLED ENTITY": as to any Person, an entity, whether or
not incorporated, which is under common control with such Person within the
meaning of Section 4001 of ERISA or is part
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of a group which includes such Person and which is treated as a single employer
under Section 414 of the Code.
"CONTINUATION NOTICE": a request for continuation or conversion of a
Loan as set forth in Section 2.4, substantially in the form of Exhibit C.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"DEFAULT": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"DEMAND NOTE": as defined in Recital B hereto.
"DOLLARS" and "$": dollars in lawful currency of the United
States.
"ENVIRONMENTAL COMPLIANCE AGREEMENT": the Environmental Compliance
Agreement dated as of the Closing Date made by the Borrower in favor of the
Lender, as it may be amended or modified in accordance with the terms hereof.
"ENVIRONMENTAL LAWS": any and all federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any governmental authority or Requirements of Law (including
common law) regulating, relating to or imposing liability or standards of
conduct concerning protection of human health or the environment, as now or at
any time hereafter in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE": as to any Person, each trade or business including
such Person, whether or not incorporated, which together with such Person would
be treated as a single employer under Section 4001(a)(14) of ERISA.
"EVENT OF DEFAULT": any of the events specified in Section 7, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both, and
all other conditions, have been satisfied.
"EURODOLLAR BUSINESS DAY": any day on which banks are open for dealings
in Dollar deposits in the London interbank market.
"EXCLUDED TAXES": all taxes imposed on or by reference to the net
income of the Lender or its Applicable Lending Office by any Governmental
Authority and all franchise taxes, taxes on doing
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business or taxes measured by capital or net worth imposed on the Lender or its
Applicable Lending Office by any Governmental Authority and any taxes imposed by
any Governmental Authority arising as a consequence of the failure of the Lender
to provide accurate documentation required to be provided by the Lender pursuant
to Section 2.12(b).
"FACILITY A TERM LOAN": a term loan made to the Borrower by the Lender
pursuant to the provisions of Section 2.1.
"FACILITY B TERM LOAN": a term loan made to the Borrower by the Lender
under the provisions of Section 2.2.
"FACILITY A TERM NOTE": as defined in Section 2.1(c) hereof.
"FACILITY B TERM NOTE": as defined in Section 2.2(c) hereof.
"FINANCIAL STATEMENTS": as defined in Section 3.1 hereof.
"FIXED RATE": the rate of interest per annum determined by the Lender
and accepted by the Borrower as at any date.
"FIXED RATE LOANS": Loans the rate of interest applicable to which is
based upon the Fixed Rate.
"GAAP": generally accepted accounting principles in the United States
in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any federal, state
or other political subdivision thereof and any federal, state or local entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing Person or (b) another Person (including,
without limitation, any bank under any letter of credit) which Person the
guaranteeing Person has agreed to reimburse or indemnify for undertaking such
obligation in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds for the purchase or payment of any such primary
obligation or to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation
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or (iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing Person shall be deemed to be the lesser of (a) an
amount equal to the stated or determinable (by the Borrower) amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing Person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing Person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"GUARANTEES": the guarantees, substantially in the form of Exhibit F,
made by each Guarantor in favor of the Lender, on the Closing Date, as the same
may be amended or modified from time to time in accordance with the terms
hereof.
"GUARANTORS": the Parent and IRG.
"INDEBTEDNESS": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property (other than such amounts which are contingent upon earnings
performance or similar circumstances) or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices) or which is evidenced by a note, bond,
debenture or similar instrument, including obligations under non-compete
agreements, (b) all obligations of such Person under Capitalized Lease
Obligations, (c) all obligations of such Person in respect of acceptances issued
or created for the account of such Person, (d) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, (e) all obligations
of such Person, whether absolute or contingent, in respect of letters of credit
opened for the account of such Person and (f) all Guarantee Obligations of such
Person in respect of any indebtedness, obligations or liabilities of any other
Person of the type referred to in clauses (a) through (e) of this definition.
"IRG": IBRD-Rostrum Global Inc., a Delaware corporation.
"IRG ACQUISITION": as defined in Recital A hereto.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
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"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": as defined in Section 3.8 hereof.
"INTERCREDITOR AGREEMENT": an intercreditor agreement dated as of
February 5, 1998 among the Lender, Banque Nationale de Paris (Canada) and Royal
Bank of Canada, the Borrower, IRG and the Parent all in form and substance
satisfactory to the Lender, as it may be amended or modified in accordance with
the terms hereof.
"INTEREST PAYMENT DATE": the first day of each calendar month while the
Loans are outstanding and the day on which the Loans become due and payable in
full and are paid or prepaid in full; provided, however, that if the Loans are
Fixed Rate Loans, the Interest Payment Date shall be each Reduction Date while
the Loans are outstanding and the day on which the Loans become due and payable
in full and are paid or prepaid in full.
"INTEREST PERIOD": with respect to any LIBOR Loan:
(a) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such LIBOR Loan and ending one, two,
three or six months thereafter, as selected by the Borrower in its notice of
borrowing or its Continuation Notice, as the case may be, given with respect
thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and ending one, two,
three or six months thereafter, as selected by the Borrower by irrevocable
notice to the Lender not less than three Eurodollar Business Days prior to the
last day of the then current Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a LIBOR Loan would
otherwise end on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond
the date final payment is due on the Loans shall end on the date of
such final payment; and
(iii) any Interest Period pertaining to a LIBOR Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day
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in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month.
"INVESTMENT COMPANY ACT": as defined in Section 3.12 hereof.
"LENDER": as defined in the preamble hereto.
"LETTERS OF CREDIT": collectively, a nontransferable letter of
undertaking for the benefit of the Lender issued by Banque Nationale de Paris
(Canada) in the face amount of $11,440,000 and a standby letter of credit for
the benefit of the Lender issued by the Royal Bank of Canada in the face amount
of $14,000,000, both in form and substance acceptable to the Lender, as they may
be amended or modified in accordance with the respective terms hereof and
thereof.
"LIBOR": with respect to each day during each Interest Period
pertaining to a LIBOR Loan, the rate of interest determined by the Lender to be
the rate per annum at which deposits in Dollars would be offered to the Lender
by leading banks in the London interbank market at or about 9:00 a.m., Los
Angeles time, two Eurodollar Business Days prior to the beginning of such
Interest Period, for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to the amount of
its LIBOR Loan to be outstanding during such Interest Period.
"LIBOR ADJUSTED RATE": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBOR
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1.00 - LIBOR Reserve Requirements
"LIBOR LOANS": Loans the rate of interest applicable to which is based
upon LIBOR.
"LIBOR RESERVE REQUIREMENTS": for any day as applied to a LIBOR Loan,
the aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such Federal Reserve System.
"LIEN": any mortgage, pledge, charge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), security interest
or other security agreement of any kind
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or nature whatsoever (including, without limitation, any conditional sale or
other title retention agreement, any Capitalized Lease Obligation having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing).
"LOAN": a Facility A Term Loan or a Facility B Term Loan, as
applicable; and "LOANS" means the aggregate of both the Facility A Term Loan and
the Facility B Term Loan outstanding at any given time.
"LOAN DOCUMENTS": this Agreement, the Notes, the Collateral Documents,
the Guarantees, the Environmental Compliance Agreement and any other agreement
executed by a Loan Party in connection therewith and herewith including, but not
limited to, UCC-1 Financing Statements, as such agreements and documents may be
amended, supplemented and otherwise modified from time to time in accordance
with the terms hereof.
"LOAN PARTIES": the Borrower and the Guarantors.
"MARGIN STOCK": as defined in Regulation U.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property or financial condition of the Borrower and its
Subsidiaries, taken as a whole, (b) the ability of the Borrower and its
Subsidiaries, taken as a whole, to perform their obligations under the Loan
Documents or (c) the validity or enforceability of the Loan Documents or the
rights or remedies of the Lender hereunder or thereunder.
"MATURITY": in respect of the Notes, the date they shall become due and
payable in full, whether at stated maturity, by acceleration or otherwise.
"MORTGAGES": such mortgages, deeds of trust, collateral assignments of
leases and collateral assignments of licenses and permits as may be made by the
Borrower in favor of the Lender in respect of the Properties owned by the
Borrower, substantially in the form of Exhibit G (with such changes as may be
necessary to reflect the leasehold nature of such Property, if applicable and if
requested by the Lender), securing the Obligations to the extent provided
therein, as the same may be amended or modified from time to time in accordance
with the terms hereof.
"MULTIEMPLOYER PLAN": a plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NOTE": the Facility A Term Note or the Facility B Term Note; and
"NOTES" means both the Facility A Term Note and Facility B Term Note.
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"OBLIGATIONS": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding and whether or not at a default rate) the Notes,
and all other obligations and liabilities of the Borrower and its Subsidiaries
to the Lender, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, the Notes, any other Loan Document
and any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all
reasonable fees and disbursements of counsel to the Lender that are required to
be paid by the Borrower and its Subsidiaries pursuant to the terms of this
Agreement) or otherwise.
"OCCUPANCY AGREEMENTS": as defined in Section 5.12.
"PARENT": Phoenix International Life Sciences Inc., a Canadian
corporation.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor thereto.
"PERSON": any individual, firm, partnership, joint venture,
corporation, association, business enterprise trust, unincorporated
organization, government or department or agency thereof or other entity,
whether acting in an individual, fiduciary or other capacity.
"PLAN": as to any Person, any plan (other than a Multiemployer Plan)
subject to Title IV of ERISA maintained for employees of such Person or any
ERISA Affiliate of such Person (and any such plan no longer maintained by such
Person or any of such Person's ERISA Affiliates to which such Person or any of
such Person's ERISA Affiliates has made or was required to make any
contributions within any of the five preceding years).
"PROPERTIES": the collective reference to the real and personal
property owned, leased or under license or permit, by the Borrower or any of its
Subsidiaries.
"REDUCTION DATES": the first day of each May, August, November and
February, commencing May 1, 1998 and continuing through November 1, 1999.
"REDUCTION INSTALLMENTS": the payments required under Sections 2.1(d)
and 2.2(d) hereof.
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"REFERENCE RATE": the rate of interest per annum publicly announced
from time to time by the Lender, at its Los Angeles Branch office as its
"Reference Rate". The Reference Rate is determined by the Lender from time to
time as a means of pricing credit extensions to some customers and is neither
directly tied to any external rate of interest or index nor necessarily the
lowest rate of interest charged by the Lender at any given time for any
particular class of customers or credit extensions. Any change in the applicable
interest rate due to a change in the Reference Rate shall be effective on the
effective date of such change in the Reference Rate.
"REFERENCE RATE LOANS": Loans the rate of interest applicable to which
is based upon the Reference Rate.
"REGULATION D": Regulation D of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"REORGANIZATION": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty-day notice period is
waived under PBGC regulations.
"REQUIREMENT OF LAW": as to any Person, the Articles of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule, order, judgment or regulation of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"RESPONSIBLE OFFICER": the chief executive officer, the president, any
senior vice president, treasurer or any vice president of the applicable Loan
Party, or, with respect to financial matters, the chief financial officer,
treasurer or controller of the applicable Loan Party, as applicable.
"RESTRICTED PAYMENTS": as defined in Section 6.2.
"SECURITY AGREEMENT": the Security Agreement dated as of the Closing
Date by the Borrower in favor of the Lender in respect of the tangible and
intangible personal property of the Borrower described therein, substantially in
form of Exhibit E hereto, as
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it may be amended or otherwise modified from time to time in accordance with the
terms hereof.
"SELLER": as defined in Recital A hereto.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, that:
(a) the present fair salable value of such Person's assets is
in excess of the total amount of the probable liability on such
Person's liabilities;
(b) such Person is able to pay its debts generally as they
become due; and
(c) such Person does not have unreasonably small capital to
carry on such Person's business as theretofore operated and all
businesses in which such Person is about to engage.
"SUBSIDIARY": as to any Person at any time of determination, a
corporation, partnership or other entity of which shares of stock or other
ownership interests having ordinary Voting Power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries or Subsidiaries, or both, by such Person. Unless
otherwise qualified, all references to a "subsidiary" or to "subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"TAXES": as defined in Section 2.12(a) hereof.
"TERMINATION EVENT": (a) a Reportable Event, (b) the institution of
proceedings to terminate a Single Employer Plan by the PBGC under Section 4042
of ERISA, (c) the appointment by the PBGC of a trustee to administer any Single
Employer Plan or (4) the existence of any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment by the PBGC of a trustee to administer, any
Single Employer Plan.
"TERM LOAN COMMITMENT": the commitment of the Lender to make Loans
hereunder through its Applicable Lending Office as set forth on the signature
pages hereof, as the same may be adjusted pursuant to the provisions hereof.
"TERM LOAN MATURITY DATE": February 5, 2000.
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"TRANCHE": the collective reference to LIBOR Loans the Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such LIBOR Loans shall originally have been made on the
same day).
"TRANSACTION COSTS": for any period, reasonable nonrecurring
out-of-pocket costs, fees and expenses (including reasonable attorneys' fees)
which are incurred by the Borrower and its Subsidiaries in connection with (a)
the negotiation, preparation and consummation of the transactions contemplated
under this Agreement and the Acquisition Agreement and (b) financing agreements
and proposed financing agreements related to this Agreement and the Acquisition
Agreement.
"TYPE": as to any Loan, its nature as a Reference Rate Loan, a LIBOR
Loan or a Fixed Rate Loan.
"U.S. PERSON": a citizen or resident of the United States, a
corporation, a partnership or other entity created or organized in or under any
laws of the United States or any State thereof, or any estate or trust that is
subject to Federal income taxation regardless of the source of its income.
"VOTING POWER": the aggregate number of votes of all classes of Capital
Stock of such Person which ordinarily has voting power for the election of
directors of such Person.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any other Loan Document or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein, in any other Loan Document, and in any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
not defined in Section 1.1 and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP. Unless otherwise provided herein, all financial calculations made
with respect to the Borrower for the purpose of determining compliance with the
terms of this Agreement shall be made on a consolidated basis.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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(e) References to agreements, other contractual instruments and other
documents include all subsequent amendments and other modifications to such
agreement and documents, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document.
SECTION 2. AMOUNT AND TERMS OF LOANS; COMMITMENT AMOUNTS
2.1 FACILITY A TERM LOAN. (a) Subject to the terms and conditions
hereof, the Lender agrees to make a term loan through its Applicable Lending
Office to the Borrower on the Closing Date in an aggregate principal amount
equal to $11,440,000 (the "FACILITY A TERM LOAN") for the sole purpose of
refinancing the Demand Note. After the funding of the Facility A Term Loan on
the Closing Date, the Commitment to make a Facility A Term Loan shall expire.
Facility A Term Loan may not be reborrowed if repaid or prepaid.
(b) Subject to Sections 2.8 and 2.10, the Facility A Term Loan may from
time to time be (i) LIBOR Loans, (ii) Reference Rate Loans, (iii) a combination
thereof or (iv) if adequate funding is available to the Lender, a Fixed Rate
Loan, as determined by the Borrower and notified to the Lender in accordance
with either Section 2.1(e) or 2.4. The Lender may make or maintain its Facility
A Term Loan to the Borrower by or through any Applicable Lending Office.
(c) The Facility A Term Loan made by the Lender to the Borrower shall
be evidenced by a promissory note of the Borrower, substantially in the form of
Exhibit A-1 (the "FACILITY A TERM NOTE"), with appropriate insertions therein,
payable to the order of the Lender and representing the obligation of the
Borrower to pay the aggregate unpaid principal amount of the Facility A Term
Loan made by the Lender to the Borrower pursuant to Section 2.1(a), with
interest thereon as prescribed in Sections 2.6 and 2.7. The Lender is hereby
authorized (but not required) to record the date and amount of each payment or
prepayment of principal of its Facility A Term Loan made to the Borrower, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of LIBOR Loans, the length of each Interest Period with
respect thereto, in the books and records of the Lender, and any such
recordation made as part of its normal lending practices shall constitute PRIMA
FACIE evidence of the accuracy of the information so recorded. The failure of
the Lender to make any such recordation or notation in the books and records of
the Lender (or any error in such recordation or notation) shall not affect the
obligations of the Borrower hereunder or under the Facility A Term Note. The
Facility A Term Note shall (i) be dated the Closing Date, (ii) provide for the
payment of interest in accordance with Sections 2.6 and 2.7 and (iii) be stated
to be payable in installments of principal in accordance with, and subject to
the provisions of Section 2.1(d).
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(d) On each Reduction Date, the Borrower shall repay the principal of
the Facility A Term Note in an aggregate amount equal to $437,500; provided,
that the outstanding Facility A Term Loan shall be due and payable on the Term
Loan Maturity Date.
(e) The Borrower shall give the Lender irrevocable written notice
(which notice must be received by the Lender, unless waived by the Lender prior
to 9:00 a.m., Los Angeles time, one Business Day prior to the Closing Date)
requesting that the Lender make the Facility A Term Loan on the Closing Date.
2.2 FACILITY B TERM LOAN; FACILITY B TERM LOAN COMMITMENT. (a) Subject
to the terms and conditions hereof, the Lender agrees to make a term loan
through its Applicable Lending Office to the Borrower on the Closing Date in an
aggregate principal amount equal to $14,000,000 (the "FACILITY B TERM LOAN") for
the sole purpose of refinancing the Demand Note. After the funding of the
Facility B Term Loan on the Closing Date, the Commitment to make a Facility B
Term Loan shall expire. Facility B Term Loan may not be reborrowed if repaid or
prepaid.
(b) Subject to Sections 2.8 and 2.10, the Facility B Term Loan may from
time to time be (i) LIBOR Loans, (ii) Reference Rate Loans, (iii) a combination
thereof or (iv) if adequate funding is available to the Lender, Fixed Rate
Loans, as determined by the Borrower and notified to the Lender in accordance
with either Section 2.2(e) or 2.4. The Lender may make or maintain its Facility
B Term Loan to the Borrower by or through any Applicable Lending Office.
(c) The Facility B Term Loan made by the Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit A-2 (the
"FACILITY B TERM NOTE"), with appropriate insertions therein, payable to the
order of the Lender and representing the obligation of the Borrower to pay the
aggregate unpaid principal amount of the Facility B Term Loan made by the Lender
to the Borrower pursuant to Section 2.2(a), with interest thereon as prescribed
in Sections 2.6 and 2.7. The Lender is hereby authorized (but not required) to
record the date and amount of each payment or prepayment of principal of its
Facility B Term Loan made to the Borrower, each continuation thereof, each
conversion of all or a portion thereof to another Type and, in the case of LIBOR
Loans, the length of each Interest Period with respect thereto, in the books and
records of the Lender, and any such recordation made as part of its normal
lending practices shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded. The failure of the Lender to make any such recordation
or notation in the books and records of the Lender (or any error in such
recordation or notation) shall not affect the obligations of the Borrower
hereunder or under the Facility B Term Note. The Facility B Term Note shall (i)
be dated the Closing Date, (ii) provide for the payment of interest in
accordance with Sections 2.6 and 2.7 and
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(iii) be stated to be payable in installments of principal in accordance with,
and subject to the provisions of, Section 2.2(d).
(d) On each Reduction Date, the Borrower shall repay the principal of
the Facility B Term Note in an aggregate amount equal to $437,500; PROVIDED,
that the outstanding Facility B Term Loan shall be due and payable on the Term
Loan Maturity Date.
(e) The Borrower shall give the Lender irrevocable written notice
(which notice must be received by the Lender, unless waived by the Lender, prior
to 9:00 a.m., Los Angeles time, one Business Day prior to the Closing Date)
requesting that the Lender make the Facility B Term Loan on the Closing Date.
2.3 OPTIONAL PREPAYMENTS. The Borrower may on the last day of any
applicable Interest Period with respect thereto or at any time subject to
compliance with Section 2.13, in the case of LIBOR Loans and/or Fixed Rate
Loans, or at any time and from time to time, in the case of Reference Rate
Loans, prepay the Loans, in whole or in part, upon at least three Business Days'
irrevocable written notice, in the case of LIBOR Loans and/or Fixed Rate Loans,
and upon at least one Business Day's irrevocable written notice, in the case of
Reference Rate Loans, from the Borrower to the Lender, specifying the date and
amount of prepayment and whether the prepayment is of LIBOR Loans, Reference
Rate Loans or a combination thereof or a Fixed Rate Loan, and, if of a
combination thereof, the amount allocable to each. If any such notice is given,
the amount specified in such notice shall be due and payable by the Borrower on
the date specified therein, together with accrued interest to such date on the
amount prepaid. Any such prepayment shall be applied against the Facility A Term
Loan and the Facility B Term Loan as set forth in Section 2.9. Partial
prepayments of the Loans shall be applied to the then outstanding Reduction
Installments in inverse order of maturity. Amounts prepaid on account of the
Loans may not be reborrowed. Partial prepayments of the Loans shall be in an
aggregate principal amount of $500,000 or whole multiples of $100,000 in excess
thereof.
In the case of any prepayment (whether voluntary or involuntary) of a
LIBOR Loan or a Fixed Rate Loan, in addition to the amounts payable pursuant to
Section 2.13, the Borrower shall also pay to the Lender a prepayment fee equal
to the surplus of (a) the interest which the prepaid Loan amount would have
produced, at the applicable interest rate on the date of prepayment, for the
period beginning on such prepayment date and ending on the Term Loan Maturity
Date over (b) the interest which the prepaid Loan amount would have produced,
for the same period, at the Lender's then-prevailing rate for term deposits of
the same amount and period, as determined by the Lender in its sole discretion.
Notwithstanding the foregoing, the prepayment fee payable to the Lender in the
case of any prepayment of a Fixed Rate Loan or a LIBOR Loan must be at least
equal to $150,000,
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together with the payment of all costs resulting from such prepayment, which
costs shall be determined by the Lender in its sole discretion at the time of
each prepayment (provided that if such prepayment occurs as a result of a public
offering or a private placement (whether debt or equity) of either the Borrower
or any of its Subsidiaries or Affiliates, no such prepayment fee shall be
required).
2.4 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert LIBOR Loans to Reference Rate Loans by the Borrower
giving the Lender at least two Business Days' prior irrevocable written notice
of such election pursuant to a Continuation Notice, PROVIDED that any such
conversion of LIBOR Loans may only be made on the last day of an Interest Period
with respect thereto. The Borrower may elect from time to time to convert
Reference Rate Loans to LIBOR Loans or a Fixed Rate Loan by the Borrower giving
the Lender at least three Eurodollar Business Days' prior irrevocable written
notice of such election pursuant to a Continuation Notice. Any such notice of
conversion to LIBOR Loans shall specify the length of the initial Interest
Period or Interest Periods therefor. Any such Fixed Rate Loan shall be for the
period beginning on the conversion date and ending on the Term Loan Maturity
Date and must be in an amount equal to the then-outstanding Loan amount for both
other or the Facility A Term Loan and the Facility B Term Loan. A Fixed Rate
Loan may not be converted to either Reference Rate Loans or LIBOR Loans. All or
any part of outstanding LIBOR Loans and Reference Rate Loans may be converted as
provided herein, PROVIDED that (i) any such conversion may only be made if,
after giving effect thereto, Section 2.5 shall not have been contravened, (ii)
no such Loan may be converted into a LIBOR Loan or a Fixed Rate Loan after the
date that is one month prior to the Term Loan Maturity Date and (iii) the
Borrower shall not have the right to elect to continue at the end of the
applicable Interest Period, or to convert to, a LIBOR Loan or a Fixed Rate Loan
if a Default shall have occurred and be continuing.
(b) Any LIBOR Loan may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving at
least three Eurodollar Business Days' prior irrevocable written notice to the
Lender, in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1.1, of the length of the next Interest Period to
be applicable to such LIBOR Loan, PROVIDED that no LIBOR Loan may be continued
as such (i) if, after giving effect thereto, Section 2.5 would be contravened,
(ii) after the date that is one month prior to the Term Loan Maturity Date or
(iii) if a Default shall have occurred and be continuing and PROVIDED, FURTHER,
that if the Borrower shall fail to give any required notice as described above
in this Section or if such continuation is not permitted pursuant to the
preceding proviso, such Loans shall be automatically converted to Reference Rate
Loans on the last day of such then-expiring Interest Period.
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2.5 MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and
continuations of the Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising such Tranche shall be equal to $500,000 or a whole multiple of
$100,000 in excess thereof, and, in any case, there shall not be more than ten
Tranches.
2.6 INTEREST RATES AND PAYMENT DATES.
(a) Each LIBOR Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBOR
Adjusted Rate, plus the Applicable LIBOR Rate Margin.
(b) Each Reference Rate Loan shall bear interest at a rate per annum
equal to the Reference Rate.
(c) Each Fixed Rate Loan shall bear interest at a rate per annum equal
to the Fixed Rate.
(d) If an Event of Default shall exist hereunder, at the option of the
Lender all amounts outstanding under the Notes shall bear interest at a rate per
annum which is the rate otherwise applicable under Sections 2.6(a), 2.6(b) and
2.6(c), plus 2% from the date of such Event of Default until the date such Event
of Default is cured or waived (after as well as before judgment).
(e) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (d) of this Section shall
be payable on demand.
2.7 COMPUTATION OF INTEREST AND FEES. Interest on Loans and all
Obligations shall be calculated on the basis of a 360-day year for the actual
days elapsed. Each determination of an interest rate by the Lender pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lender in the absence of manifest error.
2.8 INABILITY TO DETERMINE INTEREST RATE. In the event that
prior to the first day of any Interest Period:
(a) the Lender shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBOR Adjusted Rate for such Interest Period, or
(b) the LIBOR Adjusted Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to the Lender
(as conclusively certified by the Lender)
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of making or maintaining its affected Loans during such Interest Period;
the Lender shall give telecopy or telephonic notice thereof to the Borrower as
soon as practicable thereafter. If such notice is given (i) any LIBOR Loans
requested to be made on the first day of such Interest Period shall be made as
Reference Rate Loans and (ii) any outstanding LIBOR Loans shall be converted, on
the first day of such Interest Period, to Reference Rate Loans. Until such
notice has been withdrawn by the Lender, no further LIBOR Loans shall be made or
continued as such, nor shall the Borrower have the right to convert Reference
Rate Loans to LIBOR Loans.
2.9 PRO RATA TREATMENT AND PAYMENTS. Each payment (including each
prepayment) by the Borrower (a) on account of interest on the Loans shall be
made pro rata between the Facility A Term Loan and the Facility B Term Loan then
held by the Lender and (b) on account of principal of the Loans, (i) prior to
acceleration pursuant to Section 7 hereof, shall be applied equally between the
Facility A Term Loan and the Facility B Term Loan then held by the Lender and
(ii) subsequent to acceleration pursuant to Section 7 hereof, shall be applied
pro rata between the Facility A Term Loan and the Facility B Term Loan then held
by the Lender. All payments (including prepayments) to be made by the Borrower
hereunder and under the Notes, whether on account of principal, interest, fees
or otherwise, shall be made without set off or counterclaim and shall be made
prior to 10:00 a.m., Los Angeles time, on the due date thereof to the Lender to
such account as the Lender shall specify to the Borrower in writing, in Dollars
and in immediately available funds. All payments due to the Lender from the
Borrower hereunder shall be deemed paid when received by the Lender. If any
payment hereunder (other than payments on the LIBOR Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a LIBOR Loan becomes due and payable on a day other
than a Eurodollar Business Day, the maturity thereof shall be extended to the
next succeeding Eurodollar Business Day (and interest shall continue to accrue
thereon at the applicable rate) unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Eurodollar Business Day.
2.10 ILLEGALITY. Notwithstanding any other provision herein, if any
change after the Closing Date in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for the Lender or Applicable
Lending Office to maintain LIBOR Loans as contemplated by this Agreement, (a)
the commitment of the Lender hereunder to continue LIBOR Loans as such and to
convert Reference Rate Loans to LIBOR Loans shall forthwith be
suspended during such period of illegality and (b) the Loans of
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the Lender or Applicable Lending Office then outstanding as LIBOR Loans, if any,
shall be converted automatically to Reference Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a LIBOR Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to the Lender such amounts, if any,
as may be required pursuant to Section 2.13. To the extent that the Lender's
LIBOR Loans have been converted to Reference Rate Loans pursuant to this Section
2.10, all payments and prepayments of principal that otherwise would be applied
to the Lender's LIBOR Loans shall be applied instead to its Reference Rate
Loans.
2.11 INCREASED COSTS. (a) In the event that any change after the
Closing Date in any Requirement of Law or in the interpretation or application
thereof or compliance by the Lender with any request or directive (whether or
not having the force of law but, if not having such force, the compliance with
which is generally accepted and standard in the banking industry) from any
central bank or other Governmental Authority having jurisdiction or authority
over the Lender made subsequent to the Closing Date:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirements against assets held
by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of the Lender or Applicable
Lending Office which is not otherwise included in the determination
of the LIBOR Adjusted Rate hereunder; or
(ii) shall impose on the Lender or Applicable Lending Office any
other condition (other than with respect to a Tax matter or an Excluded
Tax matter);
and the result of any of the foregoing is to increase the cost to the Lender or
Applicable Lending Office, by an amount which the Lender reasonably deems to be
material, of converting into, continuing or maintaining LIBOR Loans or to reduce
any amount receivable hereunder in respect thereof then, in any such case, the
Borrower shall promptly pay to the Lender or Applicable Lending Office, upon the
demand of the Lender, any additional amounts necessary to compensate the Lender
for such increased cost or reduced amount receivable. If the Lender or any
Applicable Lending Office becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section submitted by the Lender or Applicable
Lending Office to the Borrower, which shall demonstrate in reasonable detail the
computation of such amounts, shall be conclusive evidence of the accuracy of the
information so recorded, absent manifest error.
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Requests by the Lender for compensation hereunder shall not be for a period more
than six months retroactive. This covenant shall survive the termination of this
Agreement and the payment of the Notes.
(b) If, after the date of this Agreement, the introduction of or any
change in any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, affects the amount of capital required or expected to be maintained by
the Lender and the Lender (taking into consideration the Lender's policies with
respect to capital adequacy) determines that the amount of capital maintained by
the Lender which is attributable to or based upon the Loans or this Agreement
must be increased as a consequence of such introduction or change by an amount
deemed by the Lender to be material, then, upon demand of the Lender, the
Borrower shall promptly pay to the Lender additional amounts sufficient to
compensate the Lender for the increased costs to such Lender of such increased
capital, without duplication of any adjustment in interest based on the LIBOR
Reserve Requirement. Any such demand shall be accompanied by a certificate of
the Lender setting forth in reasonable detail the computation of any such
increased costs, which certificate shall be conclusive, absent manifest error.
Requests by the Lender for compensation hereunder shall not be for a period more
than six months retroactive. This obligation of the Borrower under this Section
2.11(b) shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder in full.
2.12 TAXES. (a) All payments made by the Borrower in respect of the
Obligations shall be made free and clear of, and without deduction or
withholding (except to the extent required by law, in which case the following
sentence shall apply) for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any United States Governmental Authority or any political subdivision or
taxing authority thereof or therein, other than Excluded Taxes (all such
non-Excluded Taxes being hereinafter called "TAXES"). If any Taxes are required
to be withheld from any amounts payable to the Lender in respect of the
Obligations, the amounts so payable to the Lender shall be increased to the
extent necessary to yield to the Lender (after payment of all Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the other Loan Documents; provided, however,
that no increased amount shall be required to be paid to the Lender under this
sentence except to the extent that any change after the date hereof in any such
withholding requirement (other than a change occasioned by an action of the
Lender) results in an increase in the rate of such withholding from that in
effect as of the date
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hereof in respect of payments to the Lender. The Lender shall deliver to the
Borrower a certificate setting forth the amount of such Taxes, the calculation
of such Taxes and an explanation of the requirement therefor, all in reasonable
detail and such certificate shall be conclusive, absent manifest error. Whenever
any Taxes are payable by the Borrower, as promptly as possible thereafter, the
Borrower shall send to the Lender a copy of an original official receipt
received by the Borrower showing payment thereof or such other evidence of
payment reasonably satisfactory to the Lender. If the Borrower fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to the
Lender the required receipts or other required documentary evidence, the
Borrower shall indemnify the Lender for any incremental taxes, interest or
penalties (and related reasonable fees and expenses of counsel) that may become
payable by the Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
(b) The Lender agrees that it will deliver to the Borrower on or prior
to the Closing Date (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. The Lender also agrees to deliver to the Borrower two further copies of
the said Form 1001 or 4224, as applicable, and Form W-8 or W-9, or successor
applicable forms or other manner of certification as to such tax matters, as the
case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower, and such extensions or
renewals thereof as may reasonably be requested by the Borrower, unless in any
such case an event beyond the control of the Lender (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent the Lender from duly completing
and delivering any such form with respect to it and the Lender so advised the
Borrower. The Lender shall certify (i) in the case of a Form 1001 or a Form
4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax.
(c) The Borrower shall not be required to pay any additional amounts to
any Person in respect of United States withholding tax pursuant to Section
2.12(a) if the obligation to pay such additional amounts would not have arisen
but for a failure by such Person to comply with the requirements of Section
2.12(b) (including the accuracy of the certificate described in the final
sentence thereof).
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2.13 INDEMNITY. The Borrower agrees to indemnify the Lender and to hold
the Lender harmless from and to pay the Lender on demand the amount of any
reasonable liability, loss or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate the deposits from which such
funds were obtained (including reasonable fees and expenses of counsel) which
the Lender may sustain or incur (but without duplication of any amounts payable
pursuant to Section 2.3 hereof) as a consequence of (a) default by the Borrower
in payment when due of the principal amount of or interest on any LIBOR Loan or
any Fixed Rate Loan, (b) default by the Borrower in making a borrowing of,
conversion into or continuation of LIBOR Loans or Fixed Rate Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement, but only if the Lender has suffered actual loss,
liability or expense in reliance on such notice or (d) the making by the
Borrower of a prepayment or conversion of LIBOR Loans on a day which is not the
last day of an Interest Period with respect thereto, or of a prepayment of Fixed
Rate Loans on a day other than the Term Loan Maturity Date. The Lender's
certificate as to such liability, loss or expense shall be deemed conclusive,
absent manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
2.14 MITIGATION OF COSTS. If the Lender, by changing its Applicable
Lending Office or taking any other reasonable action, so long as making such
change or taking such other action is not disadvantageous to it in any
financial, regulatory or other respect, can mitigate any adverse effect on the
Borrower under Section 2.8, 2.10, 2.11 or 2.12, the Lender shall take such
action.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make the
Loans, the Borrower hereby represents and warrants to the Lender as to itself
and as to each Subsidiary other than IRG and, as to IRG, to Borrower's actual
knowledge and otherwise based solely on the representations of the Sellers set
forth in the Acquisition Agreement (including all exhibits) that:
3.1 FINANCIAL CONDITION. (a) The audited balance sheet of the Parent
and its Subsidiaries as at August 31, 1997, and the related audited statements
of income and of cash flows for the fiscal year ended on such date, certified by
the Accountants, copies of which have heretofore been furnished to the Lender
present fairly in all material respects the financial condition of the Parent
and its Subsidiaries as at such date, and the results of its operations and its
cash flows for the fiscal year then ended. All such financial statements (the
"FINANCIAL
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STATEMENTS"), including the related schedules and notes thereto, have been
prepared in accordance with generally accepted accounting principles in Canada
applied consistently throughout the periods involved (except as approved by such
Accountants or Responsible Officer, as the case may be, and as disclosed therein
and for the absence of notes). The Borrower does not have any, as of such date,
Guarantee Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange transaction,
which is not reflected in the foregoing statements or in the notes thereto and
which is material in relation to the financial condition of the Borrower at such
date. During the period from August 31, 1997 to and including the Closing Date,
there has been no sale, transfer or other disposition by the Borrower of any
material part of its business or property and no purchase or other acquisition
of any business or property (including any Capital Stock of any other Person),
other than the IRG Acquisition, material in relation to the financial condition
of the Borrower at August 31, 1997.
(b) The PRO FORMA balance sheet of the Borrower as at the Closing Date,
a copy of which has heretofore been furnished to the Lender, presents fairly, in
the opinion of the Borrower, the PRO FORMA financial condition of the Borrower
as at such date, subject to such accounting adjustments as may be customary in
acquisition transactions similar to the IRG Acquisition, subject to year-end
adjustments and changes resulting from audit.
3.2 NO CHANGE. Since August 31, 1997 no events have occurred which,
individually or in the aggregate, constitute a material adverse change in the
financial condition or business of the Borrower and its Subsidiaries taken as a
whole.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Borrower and each
Subsidiary, (a) is (or, when formed, will be) duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has (or, when formed, will have) the corporate, partnership or limited liability
company power, as the case may be, and authority, and the legal right, to own
and operate its Properties, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged and in which it proposes
to be engaged after the Closing Date, (c) is (or, when formed, will be) duly
qualified as a foreign entity and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification and (d) is (or, when formed, will
be) in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
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3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower and each of its Subsidiaries has the corporate, partnership or limited
liability company power, as the case may be, and authority, and the legal right,
to make, deliver and perform the Acquisition Agreement and the Loan Documents,
in each case, to which it is or will be a party, to borrow hereunder and to
consummate the IRG Acquisition under the Acquisition Agreement, and the
applicable Loan Party has taken all necessary corporate action to authorize (a)
the borrowings on the terms and conditions of this Agreement and the Notes, (b)
the execution, delivery and performance of the Acquisition Agreement and the
Loan Documents to which it is or will be a party and (c) the consummation of the
IRG Acquisition. Each Subsidiary has (or, when formed, will have) the corporate,
partnership or limited liability company power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is or will be
a party and has (or, when formed, will have) taken all corporate, partnership or
limited liability company action, as the case may be, to authorize the
execution, delivery and performance of such Loan Documents. Except as set forth
on Schedule 3, no consent or authorization of, filing with or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder, the consummation of the IRG
Acquisition or with the execution, delivery, performance, validity or
enforceability of this Agreement, the Notes, the other Loan Documents or the
Acquisition Agreement except for any consent, authorization, filing or other act
the failure to obtain or make which could not reasonably be expected to have a
Material Adverse Effect. This Agreement and the Acquisition Agreement have been,
and each of the Notes and the other Loan Documents to which the Borrower or any
Subsidiary is or will be a party will be, duly executed and delivered by it.
This Agreement and the Acquisition Agreement constitute, and each of the Notes
and the other Loan Documents when executed and delivered will constitute, a
legal, valid and binding obligation of the Borrower and each Subsidiary (to the
extent the Borrower or such Subsidiary is a party thereto) enforceable against
it in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
3.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement, the Notes, the other Loan Documents and the Acquisition Agreement,
the borrowings hereunder and the use of the proceeds thereof, and the
consummation of the IRG Acquisition will not violate any Requirement of Law or
Contractual Obligations of the Borrower or any Subsidiary which could reasonably
be expected to have a Material Adverse Effect and will not result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation,
except pursuant to the Loan Documents or
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except as otherwise permitted pursuant to Section 6.8, which Lien could
reasonably be expected to have a Material Adverse Effect.
3.6 NO MATERIAL LITIGATION. Except as set forth in Schedule 5, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any Subsidiary or against any of its or
their properties or revenues or by or against any "affiliated person" of the
Borrower or any Subsidiary, within the meaning of the Investment Company Act,
(a) on the Closing Date with respect to this Agreement, the Notes or the other
Loan Documents or the Acquisition Agreement or any of the transactions
contemplated hereby or thereby or (b) which could reasonably be expected to have
a Material Adverse Effect.
3.7 OWNERSHIP OF PROPERTY; LIENS; CONDITION OF PROPERTIES. (a) The
Borrower and each Subsidiary has (or, when formed, will have) good title in fee
simple to, a valid leasehold interest in or rights as a permittee or licensee
to, all of its real property, and good title to all of its other Property which
is material to its business, and to the best of the Borrower's current actual
knowledge, none of such Property is subject to any Lien except as permitted by
Section 6.8 or as set forth in the title endorsements and policies of title
insurance required to be delivered pursuant to Section 4.1.
(b) All of the Properties used or useful in the conduct of the
Borrower's business or the business of any Subsidiary are in good repair,
working order and condition (reasonable wear and tear excepted) and suitable
for use in the operation of its businesses currently conducted.
3.8 INTELLECTUAL PROPERTY. The Borrower and each Subsidiary owns, or is
licensed to use, all trademarks, trade names, patents and copyrights necessary
for the conduct of its business as currently conducted except for those the
failure to own or license which could not reasonably be expected to have a
Material Adverse Effect (the "INTELLECTUAL PROPERTY"). To the Borrower's
knowledge, no claim which could reasonably be expected to have a Material
Adverse Effect has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower or any
Subsidiary know of any valid basis for any such claim. To the Borrower's
knowledge, the use of such Intellectual Property by the Borrower and its
Subsidiaries, if any, does not infringe on the rights of any Person, nor, to the
Borrower's knowledge, does the use by other Persons of such Intellectual
Property infringe on the rights of the Borrower or any Subsidiary.
3.9 TAXES. Except as previously disclosed in writing to the Lender, the
Borrower and each Subsidiary has (or, when formed,
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will have) filed or caused to be filed all tax returns which are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any not yet delinquent or the amount or validity of which
are currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or such Subsidiary, as appropriate); and no tax Lien has
been filed, and no claim is being asserted with respect to any such tax, fee or
other charge which could reasonably be expected to have a Material Adverse
Effect.
3.10 FEDERAL REGULATIONS. No part of the proceeds of any Loans are
intended to be or will be used, directly or indirectly, for "purchasing" or
"carrying" any Margin Stock within the respective meanings of each of the quoted
terms under Regulation U or for any purpose which violates the provisions of the
Regulations of the Board of Governors of the Federal Reserve System. If
requested by the Lender, the Borrower will furnish to the Lender a statement to
the foregoing effect in conformity with the requirements of Form U-1 referred to
in Regulation U.
3.11 ERISA. No Reportable Event has occurred during the five-year
period prior to the date on which this representation is made with respect to
any Plan which has or would likely result in a Material Adverse Effect. Each
Plan has complied in all material respects with the applicable provisions of
ERISA and the Code. The present value of all accrued benefits under all Single
Employer Plans maintained by the Borrower, any Subsidiary, or any Commonly
Controlled Entity (based on those assumptions used to fund the Plans) did not,
as of the last annual valuation date prior to the date on which this
representation is made, exceed by an amount which could cause a Material Adverse
Effect the value of the assets of such Plans allocable to such accrued benefits.
Neither the Borrower, any Subsidiary, nor any Commonly Controlled Entity has had
a complete or partial withdrawal from any Multiemployer Plan which has or would
likely result in a Material Adverse Effect. The present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Borrower, each
Subsidiary, if any, and each Commonly Controlled Entity for post retirement
benefits (excluding benefits required by Section 4980B of the Code) to be
provided to their current and former employees under plans which are welfare
benefit plans (as defined in Section 3(a) of ERISA) does not, in the aggregate,
exceed by an amount which could cause a Material Adverse Effect the assets under
all such plans allocable to such benefits.
3.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
Neither the Borrower nor any Subsidiary is an "investment company", or a company
"controlled" by an "investment company",
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within the meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"). Neither the Borrower nor any Subsidiary is a "holding
company," or an "affiliate" of a "holding company" or a "subsidiary company" of
a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
3.13 SUBSIDIARIES. As of the Closing Date, the Borrower has those
Subsidiaries listed on Schedule 8 hereto.
3.14 PURPOSE OF LOANS. The proceeds of the Loans are intended to be and
shall be used by the Borrower solely to refinance the Demand Note.
3.15 ENVIRONMENTAL MATTERS. (a) To the Borrower's knowledge after
reasonable inquiry, with respect to the Properties:
(i) Such Properties and all operations at such Properties are
in compliance in all material respects with all applicable Environmental Laws,
and there is no contamination at, under or about such Properties, or violation
of any Environmental Law with respect to such Properties or the business
conducted at such Properties which involves a matter or matters which has caused
or are reasonably likely to cause a Material Adverse Effect.
(ii) The Borrower has not received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of such Properties or the business conducted at such Properties which involves a
matter or matters which has caused or are reasonably likely to cause a Material
Adverse Effect, nor does the Borrower have knowledge or reason to believe that
any such notice will be received or is being threatened except insofar as such
notice or threatened notice, or any aggregation thereof, does not involve a
matter or matters that is or are reasonably likely to cause a Material Adverse
Effect.
(iii) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of the Borrower,
threatened, under any Environmental Law to which the Borrower or any of its
Subsidiaries is named as a party with respect to such Properties or the business
conducted at such Properties which involves a matter or matters which has caused
or are reasonably likely to cause a Material Adverse Effect, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to such Properties or such business except
insofar as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to cause a Material Adverse
Effect.
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(b) To the Borrower's knowledge after reasonable inquiry, except to the
extent set forth in Schedule 6, with respect to the Properties acquired pursuant
to the IRG Acquisition:
(i) Neither the Seller nor the Borrower has generated, used,
transported, treated, stored, released or disposed of, or suffered or permitted
anyone else to generate, use, transport, treat, store, release or dispose of any
Hazardous Substance (as defined below) on or with respect to such Properties in
violation of any law.
(ii) There has not been any generation, use, transportation,
treatment, storage, release or disposal of any Hazardous Substance on or with
respect to such Properties which has created or might reasonably be expected to
create any liability under any law or which would require reporting to or
notification of any governmental entity.
(iii) No asbestos or polychlorinated biphenyl or underground
storage tank is contained in or located at such Properties.
(iv) Any Hazardous Substance handled or dealt with in any way
in connection with such Properties has been and is being handled or dealt with
in all respect in compliance with all applicable laws.
As used in this Section 3.16(b), "HAZARDOUS SUBSTANCE" means substances that are
defined or listed in, or otherwise classified pursuant to, any applicable laws
as "hazardous substances," "hazardous materials," "hazardous wastes" or "toxic
substances," or any other formulation intended to define, list or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity
or "EP toxicity," and petroleum and drilling fluids, produced waters and other
wastes associated with the exploration, development, or production of crude oil,
natural gas or geothermal energy.
3.16 ACCURACY AND COMPLETENESS OF INFORMATION. Unless otherwise
expressly indicated in writing to the Lender, the documents furnished and the
statements made in writing to the Lender by the Borrower in connection with the
negotiation, preparation or execution of this Agreement or any of the other Loan
Documents do not contain any untrue statement of fact material to the
creditworthiness of the Borrower or omit to state any such material fact
necessary in order to make the statements contained therein not misleading, in
either case which has not been corrected, supplemented or remedied by subsequent
documents furnished or statements made in writing to the Lender prior to the
date hereof. The projections and pro forma financial information contained in
such materials are based upon good faith estimates and assumptions believed by
the Borrower to be reasonable at the
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time made and as of the date of this Agreement, it being recognized that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results.
3.17 REAL PROPERTY ASSETS. Schedule 4 sets forth all real property
that, as of the Closing Date, is owned or leased by the Borrower and its
Subsidiaries, including all real property acquired in connection with the IRG
Acquisition.
3.18 PERMITS, ETC. Except as set forth on Schedule 3, the Borrower and
its Subsidiaries have (or, when formed, will have) all permits, licenses,
authorizations and approvals required for each of them lawfully to acquire, own,
lease, control, manage or operate their businesses as currently conducted,
except for such permits, licenses, authorizations or approvals required for the
lawful ownership, lease, control, management or operation of their businesses as
currently conducted, the failure to obtain or maintain which will not have a
Material Adverse Effect. Except as set forth on Schedule 5, no condition exists
or event has occurred which, in itself or with the giving of notice or lapse of
time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, license, authorization or approval required
for the lawful ownership, lease, control, management or operation of their
businesses as currently conducted, and, there is no claim that any thereof is
not in full force and effect, except for such of the immediately preceding
matters which are not likely or reasonably likely to cause a Material Adverse
Effect. Except as set forth on Schedule 5 and for such of the immediately
preceding matters and such of the following matters which are not reasonably
likely to cause a Material Adverse Effect, there are (a) no judgments, decrees
or orders issued, or to the Borrower's knowledge, threatened, by the any court
or regulatory Person with respect to the Borrower or any Subsidiary, (b) no
complaints, petitions, filings or other proceedings pending, or to the
Borrower's knowledge, threatened, before the any court or regulatory Person with
respect to the Borrower or any Subsidiary and (c) no events that have occurred
that could reasonably be expected to result in the imposition of any financial
penalty by the any court or regulatory Person upon the Borrower or any
Subsidiary.
3.19 PATENTS, TRADEMARKS, ETC. Schedules A, B and C to the Security
Agreement accurately and completely lists all material patents, trademarks,
service marks, trade names and copyrights owned by or licensed to the Borrower
and its Subsidiaries on the Closing Date.
3.20 COPYRIGHT ACT REQUIREMENTS. The Borrower and its Subsidiaries have
(or, when formed, will have) recorded or deposited with and paid to the United
States Copyright Office, the Registrar of Copyrights, the Patent and Trademark
Office and/or
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any other licensors of copyrighted materials, all notices, statements of
account, royalty fees and other documents and instruments required under the
terms and conditions of any patent, trademark, service xxxx, trade name and
copyright used in the operation of their businesses as currently conducted and
are not liable to any Person for copyright infringement under any law, rule,
regulation, contract or license as a result of their business operations, all
except to the extent that noncompliance with the preceding requirements would
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
3.21 NATURE OF BUSINESS. Neither the Borrower nor any of its
Subsidiaries is (or, when formed, will be) engaged in any material business
other than the ownership and provision of clinical research and clinical design
management services for the evaluation and certification of new pharmaceutical
products.
3.22 CAPITAL STOCK OF BORROWER AND ITS SUBSIDIARIES. The Parent is the
direct owner of all of the issued and outstanding Capital Stock of the Borrower
as of the Closing Date. All Capital Stock of the Borrower and its Subsidiaries
has been duly authorized and validly issued and is fully paid and
non-assessable. As of the Closing Date (a) no Capital Stock of the Borrower or
its Subsidiaries carries any preemptive rights, (b) neither the Borrower nor any
Subsidiary is obligated to redeem or repurchase any of its Capital Stock, (c) no
agreement, arrangement, or plan exists, except as has been disclosed in writing
to the Lender, which could directly or indirectly affect the capital structure
of the Borrower or its Subsidiaries and (d) there are no outstanding options,
rights or warrants for the acquisition by any Person, directly or indirectly, of
shares of the Capital Stock of the Borrower or its Subsidiaries.
3.23 RANKING OF LOANS. This Agreement and the other Loan Documents to
which the Borrower is a party, when executed, and the Loans, when borrowed are
and will be the direct and general obligations of the Borrower. The Borrower's
obligations hereunder and thereunder rank and will rank at least PARI PASSU in
priority of payment to all other Indebtedness of the Borrower.
3.24 EXECUTIVE OFFICES. The location of the Borrower's executive office
and principal place of business as of the Closing Date is 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000.
3.25 INSOLVENCY. After giving effect to the funding of Loans on the
Closing Date, the application of the proceeds of such Loans as provided herein,
consummation of the IRG Acquisition, and the payment of all estimated legal,
underwriting, investment banking, accounting and other fees related hereto and
thereto, the Borrower and each other Loan Party will be Solvent as of and on the
Closing Date.
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3.26 LABOR MATTERS. As of the Closing Date, there are no strikes or
other labor disputes against the Borrower or any Subsidiary pending, or to the
Borrower's knowledge, threatened against it or any Subsidiary.
3.27 CONDEMNATION. To the Borrower's knowledge no taking of any of the
Properties or any part thereof through eminent domain, conveyance in lieu
thereof, condemnation or similar proceeding is pending or, to the knowledge of
the Borrower, threatened by any Governmental Authority which would reasonably be
expected to have a Material Adverse Effect.
3.28 LEASES, LICENSES, PERMITS, SITE USE AGREEMENTS AND OTHER OCCUPANCY
AGREEMENTS. To the Borrower's knowledge, (a) true and complete copies of all
material leases, licenses, permits, site use agreements and any other type of
occupancy permit to which the Borrower or any Subsidiary is (or, when formed,
will be) a party have been delivered to the Lender and are in full force and
effect with no material defaults existing thereunder which individually or in
the aggregate would have a Material Adverse Effect and (b) as of the Closing
Date, all leases, licenses, permits, site use agreements and any other type of
occupancy permit necessary or useful in the operation of IRG will be held by the
Borrower or its Subsidiaries, except to the extent the failure to do so would
not result in a Material Adverse Effect.
3.29 REPRESENTATIONS AND WARRANTIES IN ACQUISITION AGREEMENT. As of the
Closing Date, the Lender has received a complete and correct copy of the
Acquisition Agreement (including all exhibits, schedules and disclosure letters
referred to therein or delivered pursuant thereto, if any) and all amendments
thereto, waivers relating thereto and other side letters or agreements affecting
the terms thereof. As of the Closing Date, the Acquisition Agreement has been
duly executed and delivered by the Borrower and, to the best of the Borrower's
knowledge, the Seller. To the Borrower's actual knowledge, the Seller has not
defaulted with respect to, and there has not occurred any event which with the
giving of notice or lapse of time would constitute a default by such Seller with
respect to, its representations, warranties or covenants in the Acquisition
Agreement, which default would reasonably be expected to cause a Material
Adverse Effect. There is no default by the Borrower with respect to, nor has
there occurred any event which with the giving of notice or lapse of time would
constitute a default by the Borrower with respect to, its representations,
warranties or covenants in the Acquisition Agreement, which default would
reasonably be expected to cause a Material Adverse Effect.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO CLOSING DATE. The agreement of the Lender to make the
Loans requested to be made by it on the Closing Date to refinance the Demand
Note, is subject to the satisfaction,
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immediately prior to or concurrently with the making of the Loans on the Closing
Date (except as otherwise expressly provided hereunder), of the following
conditions precedent:
(a) CREDIT AGREEMENT. The Lender shall have received this Agreement,
executed and delivered by an officer of the Borrower as of the Closing Date.
(b) OTHER LOAN DOCUMENTS. The Lender shall have received the Notes, the
Mortgages, the Guarantees, the Security Agreement and the Environmental
Compliance Agreement, in each case executed and delivered by an officer of the
relevant Loan Party.
(c) LETTERS OF CREDIT. The Lender shall have received the Letters of
Credit, in each case executed and delivered by Banque Nationale de Paris
(Canada) and the Royal Bank of Canada, as applicable.
(d) INTERCREDITOR AGREEMENT. The Lender shall have received the
Intercreditor Agreement, dated as of February 5, 1998, executed and delivered by
officers of all of the relevant parties thereto.
(e) INCUMBENCY CERTIFICATE. The Lender shall have received an
incumbency certificate of the Borrower, and each other Loan Party, dated the
Closing Date, executed by one of its Responsible Officers or its Secretary or
Assistant Secretary.
(f) CORPORATE PROCEEDINGS. The Lender shall have received a copy of the
resolutions of the Board of Directors of the Borrower and each other Loan Party
authorizing (i) the Loan Documents referred to in Sections 4.1(a) and 4.1(b) and
to which it is or will be a party, (ii) the borrowings contemplated under
Section 4.1 and (iii) the Acquisition Agreement, in each case certified by the
Secretary or an Assistant Secretary of the Borrower and each other Loan Party as
of the Closing Date, which certificate states that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and are in full
force and effect.
(g) ORGANIZATIONAL DOCUMENTS. The Lender shall have received copies of
the articles of incorporation and by-laws of the Borrower and each other Loan
Party, as of the Closing Date, certified as of the Closing Date as complete and
correct copies thereof by the Secretary or an Assistant Secretary of the
Borrower and each other Loan Party.
(h) COSTS. The Lender shall have received payment or evidence of
payment by the Borrower of all reasonable costs, expenses and taxes (including,
without limitation, those payable pursuant to Section 8.5) accrued and unpaid
and otherwise due and payable on or before the Closing Date by the Borrower
pursuant to this Agreement.
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(i) LEGAL OPINIONS. The Lender shall have received the following
executed legal opinions:
(i) the executed legal opinion of Xxxxxx Xxxxxxxx LLP,
counsel to the Borrower and the other Loan Parties substantially in the
form of Exhibit D hereto; and
(ii) the executed legal opinion of Pillsbury Madison &
Sutro LLP, counsel to the Lender, in form and substance satisfactory to
the Lender; and
(iii) such other legal opinions as the Lender may
reasonably request.
(j) ACQUISITION AGREEMENT. The Lender shall have received copies of the
Acquisition Agreement in form and substance reasonably satisfactory to the
Lender, certified as true and correct and in full force and effect by the
Borrower.
(k) RECORDING. The Lender shall have received as of the Closing Date
evidence of the recording, or of the provision acceptable to the Lender for the
recording, of the Mortgages and any other documents reasonably necessary to be
recorded in such office or offices as may be necessary or, in the reasonable
opinion of the Lender, desirable to perfect each Lien purported to be created
thereby or to otherwise protect the rights of the Lender thereunder and evidence
of the filing, or of provision acceptable to the Lender for the filing, of
appropriate financing statements on Form UCC-1, or amendments to existing
financing statements on Form UCC-2 (as the Lender may deem appropriate), naming
the Lender as secured party, duly executed by the applicable Loan Party under
the Security Agreement, in such office or offices as may be necessary or, in the
reasonable opinion of the Lender, desirable to perfect the security interests
purported to be created by any of the Collateral Documents, including as a
result of the IRG Acquisition.
(l) LIEN SEARCHES. The Lender shall have received certified copies of
requests for information from all relevant jurisdictions, listing all effective
financing statements which name the Borrower or its Subsidiaries, as applicable,
as debtor, together with copies of such financing statements, none of which,
except for Liens permitted by Section 6.8 or Liens otherwise agreed to in
writing by the Lender, shall cover any of the Collateral.
(m) GOOD STANDING CERTIFICATES. The Lender shall have received
certificates, each dated a recent date, of the Secretaries of State of the State
of California and Ohio and the California Franchise Tax Board, respectively,
certifying as to the existence and good standing of, and the payment of taxes
by, the Borrower and each Subsidiary in such state and listing all charter
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documents of the Borrower and each Subsidiary on file with such officials.
(n) ACQUISITION. The IRG Acquisition shall have been consummated in
accordance with the Acquisition Agreement, and the Lender shall have received
(i) a certificate of the Borrower signed by a Responsible Officer of the
Borrower to the effect that the transactions contemplated by the Acquisition
Agreement have been consummated without amendment, waiver or modification of the
terms thereof, except for amendments, waivers or modifications the effect of
which could not reasonably be expected to have a Material Adverse Effect, or
amendments, waivers or modifications agreed to in writing by the Lender and (ii)
copies of the legal opinions of counsel to the Seller and the Borrower delivered
pursuant to the Acquisition Agreement.
(o) NO DEFAULT/REPRESENTATIONS. No Default shall have occurred and be
continuing on the Closing Date or would occur after giving effect to the making
of the Loans requested to be made on the Closing Date or after giving effect to
the IRG Acquisition and the representations and warranties contained in this
Agreement and each other Loan Document, and the representations and warranties
contained in each certificate or other writing delivered to the Lender in
satisfaction of the conditions set forth in this Section 4.1 prior to or on the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date, shall be correct in all material respects on and as
of the Closing Date, and the Lender shall have received a certificate of the
Borrower to such effect in the form of Exhibit B, dated as of the Closing Date
and executed by a Responsible Officer of the Borrower.
(p) INSURANCE POLICIES. The Lender shall have received evidence that
the insurance policies provided for in Section 5.5 and in the other Loan
Documents (including but not limited to flood insurance) are in full force and
effect, certified by the insurance broker therefor, together with appropriate
evidence showing the Lender as an additional named insured or loss payee, as
appropriate, all in form and substance reasonably satisfactory to the Lender.
(q) OPERATIONAL CONSENTS. The Lender shall have received evidence, in
form and substance reasonably satisfactory to the Lender, that the Borrower and
its Subsidiaries have obtained all material consents and licenses, in each case
as required by law or necessary for the operation of the Borrower and its
Subsidiaries.
(r) TITLE POLICY AND ENDORSEMENTS. The Lender shall have received a
commitment for an ALTA Lender's policy of Title Insurance relating to the
Mortgages naming the Lender as the insured, in an amount, containing coverage
and otherwise in form and substance satisfactory to the Lender and subject only
to those exceptions permitted by the Lender and such other endorsements as
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the Lender shall reasonably request, in each case in form and substance
reasonably satisfactory to the Lender and subject only to those exceptions
permitted by the Lender.
(s) FLOOD PLAIN. The Borrower and its Subsidiaries shall have delivered
to the Lender, and the Lender shall have approved with respect to the Property
encumbered by the Mortgages, evidence whether such Property is located in an
area identified as a flood plain area as defined by the U.S. Department of
Housing and Urban Development pursuant to the Flood Disaster Protection Act of
1973.
(t) FINANCIAL STATEMENTS. The Lender shall have received the PRO FORMA
balance sheet referred to in Section 3.1(b).
(u) REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The following
statements shall be true and the Borrower's acceptance of the proceeds of such
Loan shall be deemed to be a representation and warranty of the Borrower on the
date of such Loan that:
(A) The representations and warranties contained in this
Agreement, each other Loan Document and each certificate or other
writing delivered to the Lenders in connection herewith are correct on
and as of such date in all material respects as though made on and as
of such date except to the extent that such representations and
warranties expressly relate to an earlier date; and
(B) No Default has occurred and is continuing or would
result from the making of the Loan to be made on such date.
(v) LEGALITY. The making of the Loan shall not contravene any law, rule
or regulation applicable to the Lender or the Borrower or any other Loan Party.
(w) BORROWING NOTICE. The Lender shall have received borrowing notices
pursuant to the provisions of this Agreement from the Borrower.
(x) ADDITIONAL PROCEEDINGS. The Lender shall have received such other
approvals, opinions and documents as it may reasonably request and all legal
matters incident to the making of the Loans shall be reasonably satisfactory to
the Lender.
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SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, so
long as any Note remains outstanding and unpaid or any other amount is owing to
the Lender hereunder:
5.1 FINANCIAL STATEMENTS. The Borrower shall furnish to the Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the audited consolidated and
unaudited consolidating balance sheets of the Parent and its consolidated
Subsidiaries as at the end of such year and the related statements of operations
and retained earnings, stockholders' equity and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, reported on without a "going concern" or like qualification or exception,
or other qualification arising out of the scope of the audit, by the
Accountants; and
(b) as soon as available, but in any event not later than 60 days after
the end of each fiscal quarter of the Borrower, the unaudited consolidated and
consolidating balance sheets of the Parent and its consolidated Subsidiaries as
at the end of such quarter and the related unaudited statements of operations,
retained earnings, stockholders' equity and of cash flows for such quarter and
the portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer of the Borrower as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with
generally accepted accounting principles in Canada applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by the Accountants or Responsible Officer, as the case may be, and
disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. The Borrower shall:
(a) furnish to the Lender concurrently with the delivery of the
financial statements referred to in Section 5.1(b) a certificate of a
Responsible Officer of the Borrower stating that, to the best of such Officer's
knowledge, the Borrower and its Subsidiaries during such period have observed or
performed in all material respects all of their agreements, and satisfied in all
material respects every condition, contained in this Agreement and the other
Loan Documents to which the Borrower or any Subsidiary is a party to be
observed, performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default except as specified in such certificate;
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(b) furnish to the Lender within five Business Days after the same are
filed, copies of all financial statements and reports which the Borrower or any
Subsidiary may make to, or file with, the Securities and Exchange Commission or
any successor or analogous Governmental Authority;
(c) furnish to the Lender as soon as available and in any event not
later than August 31 of each fiscal year of the Borrower, a copy of the
projected monthly cash flow and the annual operating budget for the Borrower and
its Subsidiaries for the following fiscal year;
(d) furnish to the Lender as soon as possible and in any event within
five Business Days after a Responsible Officer has knowledge of the occurrence
of a Default or, in the good faith determination of a Responsible Officer of the
Borrower, a Material Adverse Effect, the written statement by a Responsible
Officer of the Borrower, setting forth the details of such Default or Material
Adverse Effect and the action which the Borrower proposes to take with respect
thereto;
(e) furnish to the Lender (i) as soon as possible and in any event
within five days after the Borrower knows or has reason to know that any
Termination Event with respect to any Plan has occurred, a statement of a
Responsible Officer of the Borrower describing such Termination Event and the
action, if any, which the Borrower proposes to take with respect thereto, (ii)
promptly and in any event within five Business Days after receipt thereof by the
Borrower, any Subsidiary or any of its or their ERISA Affiliates from the PBGC,
copies of each notice received by the Borrower, any Subsidiary or any of its or
their ERISA Affiliates of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan, (iii) promptly and in any event
within five Business Days after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Single Employer Plan maintained for or
covering employees of the Borrower or any of its Subsidiaries if the present
value of the accrued benefits under the Plan exceeds its assets by an amount
which could cause a Material Adverse Effect and (iv) promptly and in any event
within five Business Days after receipt thereof by the Borrower, any Subsidiary
or any of its or their ERISA Affiliates from a sponsor of a Multiemployer Plan
or from the PBGC, a copy of each notice received by the Borrower, any Subsidiary
or any of its ERISA Affiliates concerning the imposition or amount of withdrawal
liability under Section 4202 of ERISA or indicating that such Multiemployer Plan
may enter reorganization status under Section 4241 of ERISA;
(f) furnish to the Lender promptly after the commencement thereof, but
in any event not later than five Business Days after service of process with
respect thereto on, or the obtaining of knowledge by, the Borrower, notice of
each action, suit or
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proceeding before any court or governmental authority or other regulatory body
or any arbitrator as to which there is a reasonable possibility of a
determination that would have a Material Adverse Effect;
(g) furnish to the Lender promptly such additional financial and other
information as the Lender may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause each of
its Subsidiaries to, pay, discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all its obligations of
whatever nature, except where the failure to so satisfy such obligations would
not have a Material Adverse Effect or except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or such Subsidiary, as applicable.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Subject to
Section 6.6 and except as otherwise permitted pursuant to Section 6.1, the
Borrower shall continue, and shall cause each Subsidiary to continue, to engage
in business of the same general type as conducted by the Borrower or such
Subsidiary as of the Closing Date or as of the date of the formation of such
Subsidiary, as applicable, and preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to maintain all rights,
registrations, licenses, privileges and franchises necessary or desirable in the
normal conduct of its business, (except to the extent that a failure to maintain
such rights, registrations, licenses, privileges and franchises would not have a
Material Adverse Effect) and comply with all Contractual Obligations and
Requirements of Law (except to the extent that failure to comply therewith would
not, in the aggregate, have a Material Adverse Effect).
5.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) The Borrower shall, and
shall cause each of its Subsidiaries to, keep all property useful or necessary
in its business in good working order and condition (ordinary wear and tear
excepted); maintain with financially sound and reputable insurance companies or
associations insurance on such of its property in at least such amounts and
against such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to the Lender,
upon written request, full information as to the insurance carried. All such
policies of insurance shall contain an endorsement, in form and substance
reasonably satisfactory to the Lender in its sole discretion, showing the Lender
as additional insured or loss payee, as appropriate, or as its interests appear.
Such endorsement, or an independent instrument furnished to the Lender, shall
provide that the insurance companies will give the Lender at least 30 days'
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prior written notice before any such policy or policies of insurance shall be
altered or canceled. All policies of insurance required to be maintained under
this Agreement shall be in customary form and with insurers recognized as
adequate by the Lender in its reasonable judgment and all such policies shall be
in such amounts as shall be customary for similar companies in the same or
similar business in the same geographical area. The Borrower shall deliver to
the Lender insurance certificates certified by the Borrower's insurance brokers,
as to the existence and effectiveness of each policy of insurance and evidence
of payment of all premiums then due and payable therefor. In addition, the
Borrower shall notify the Lender promptly of any occurrence causing a material
loss of any insured Property and the estimated (or actual, if available) amount
of such loss. Further, the Borrower shall maintain all insurance required under
the other Loan Documents.
(b) Each policy for liability insurance shall provide for all losses to
be paid on behalf of the Lender and the Borrower, as their respective interests
may appear, and each policy for property damage insurance shall, to the extent
applicable to equipment and inventory, provide for all losses to be paid
directly to the Lender.
(c) Reimbursement under any liability insurance maintained by the
Borrower or any Subsidiary pursuant to this Section 5.5 may be paid directly to
the Person who shall have incurred liability covered by such insurance. In the
case of any loss involving damage to equipment or inventory as to which Section
5.5(d) is not applicable, the Borrower will make or cause to be made the
necessary repairs to or replacements of such equipment or inventory, and any
proceeds of insurance maintained by the Borrower pursuant to this Section 5.5
shall be paid by the Lender to the Borrower, upon presentation of invoices and
other evidence of obligations, as reimbursement for the costs of such repairs or
replacements.
(d) Upon the actual or constructive total loss of any equipment or
inventory during the continuance of a Default, all insurance proceeds in respect
of such equipment or inventory shall be paid to the Lender and applied in
repayment of the Loans; provided that if no Event of Default or Default has
occurred and is continuing, such proceeds shall be paid to the Borrower to
repurchase replacements of such equipment or inventory.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The
Borrower shall, and shall cause each Subsidiary to, keep proper books of records
and account in which full, true and correct entries in conformity with GAAP and
all Requirements of Law shall be made of all material dealings and transactions
in relation to its business and activities; and upon reasonable notice and at
such reasonable times during usual business hours, permit representatives of the
Lender to visit and inspect any of
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its properties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with the Chief Financial Officer of the Borrower
and its Subsidiaries and with its Accountants (provided that the Borrower may,
if it so chooses, be present at or participate in any such discussion).
5.7 ENVIRONMENTAL LAWS. The Borrower shall, and shall cause each of its
Subsidiaries to:
(i) Comply with, and ensure compliance by all tenants and subtenants,
if any, with, all applicable Environmental Laws and obtain and comply in all
material respects with any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to the
extent that failure to do so could not be reasonably expected to have a Material
Adverse Effect;
(ii) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings; and
(iii) Defend, indemnify and hold harmless the Lender, and its
employees, agents, officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of the
Borrower, each Subsidiary or the Borrower's or such Subsidiary's interest in
Properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorneys' and
consultants' fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. This indemnity shall continue in full force and effect
and survive the termination of this Agreement and payment of the Notes.
5.8 USE OF PROCEEDS. The Borrower will use the proceeds of the Loans as
set forth in Section 3.14, and not for the purchasing or carrying of any Margin
Stock.
5.9 COMPLIANCE WITH LAWS, ETC. Except as set forth in Section 5.7
relating specifically to Environmental Laws, the Borrower shall comply in all
material respects with all applicable
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laws, rules, regulations and orders except where noncompliance would not
reasonably be expected to have a Material Adverse Effect, such compliance to
include, without limitation (a) paying before the same become delinquent all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any of its Properties and (b) paying all lawful
claims which if unpaid might become a Lien upon any of its Properties; PROVIDED,
HOWEVER, that the Borrower shall not be required to pay and discharge or to
cause to be paid and discharged any such tax, assessment, charge, levy or claim
so long as (i) the validity or applicability thereof is being contested in good
faith by appropriate proceedings or the failure to pay such tax, assessment,
charge, levy or claim would not have a Material Adverse Effect and (ii) the
Borrower shall, to the extent required by GAAP, have set aside on its books
adequate reserves with respect thereto.
5.10 LEASE AND LICENSE APPROVALS. Except as set forth in Section
5.12(b), the Borrower shall notify the Lender of any leases, licenses, permits
or other Occupancy Agreements relating to real property or real property
interests that the Borrower or any Subsidiary executes or obtains which provide
for the payment of rent or license fees in excess of $1,000,000 in any fiscal
year. The Lender may request that any lease, license or other similar agreement
become part of the Collateral and the Borrower shall provide or cause to be
provided any and all Collateral Documents or other documents to be executed in
connection therewith requested by the Lender and provide the Lender with title
insurance (to the extent applicable) as a condition to approval.
5.11 ACQUISITION OF REAL PROPERTY IN FEE SIMPLE. The Borrower shall
promptly notify the Lender of any documents relating to any fee simple real
property interest acquired by the Borrower or any Subsidiary. The Lender may
request that any such fee simple real property interest of which it receives
such notice shall become part of the Collateral. The Borrower shall provide or
cause to be provided any and all information relating to a real property
interest which the Borrower or any Subsidiary desires to acquire and for which
it is required to provide notice and, if such real property interest shall
become Collateral, the Borrower shall execute any and all Collateral Documents
and other documents to be executed in connection therewith requested by the
Lender and shall provide the Lender with title insurance as a condition to
approval.
5.12 LEASES AND LICENSES. Unless such failure is not reasonably likely
to cause a Material Adverse Effect, the Borrower shall, and shall cause each
Subsidiary to, perform and carry out all of the leases, licenses, permits and
any other occupancy agreements relating to real property or real property
interests (the "OCCUPANCY AGREEMENTS") to be performed by the Borrower or
any Subsidiary and shall appear in and defend any action in which
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the validity of any of the Occupancy Agreements relating to any real property or
real property interests is at issue and shall commence and maintain any action
or proceeding necessary to establish or maintain the validity of any of such
Occupancy Agreements and to enforce the provisions thereof. The Borrower shall
provide to the Lender true, correct and complete copies of any information
relating to any of the Occupancy Agreements as the Lender may reasonably request
in writing. Unless such amendment or termination is not likely to cause a
Material Adverse Effect, the Borrower shall not, and shall not permit any
Subsidiary to, amend in a materially adverse manner or terminate any of such
Material Occupancy Agreements, without the prior written consent of the Lender,
which consent shall not be unreasonably withheld or delayed. The Borrower shall
immediately give notice to the Lender of any default by it or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other party to an
Occupancy Agreement, which causes or is reasonably likely to cause a Material
Adverse Effect. The Borrower shall not, and shall not permit any Subsidiary to,
execute any new Material Occupancy Agreements without giving prior or concurrent
notice to the Lender.
5.13 NOTICES. The Borrower will provide to the Lender, within five
Business Days following receipt by the Borrower, copies of all notices received
by the Borrower or any Subsidiary from the Internal Revenue Service or other
taxing authority relating to any dispute regarding deductions, audits or any
other material matter which, if adversely determined against the Borrower or
such Subsidiary, would have a Material Adverse Effect.
5.14 EMPLOYEE CONTRACTS. The Borrower shall give to the Lender prompt
notice of any material dispute arising out of, or material uncured default
occurring under, any employee contract of the Borrower or any Subsidiary if any
of such contracts shall be terminated or not renewed on substantially similar
terms.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, except
with the prior written consent of the Lender, and so long as any Note remains
outstanding and unpaid or any other amount is owing to the Lender hereunder:
6.1 LIMITATION ON FUNDAMENTAL CHANGES. The Borrower shall not, and
shall not permit any Subsidiary to, (a) amend its corporate charter or by-laws
in any way that would have a Material Adverse Effect, (b) permit (to the extent
within its control), vote to or for, or take any other action to commence or
acquiesce to any bankruptcy or similar proceeding, (c) enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution) except any merger, consolidation or
amalgamation between or among the Loan Parties; PROVIDED THAT such Loan Party
shall give the Lender
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thirty days' prior written notice thereof and shall comply with all reasonable
actions requested by the Lender to protect and maintain its security interests
and Liens granted pursuant to the Loan Documents or (d) except as permitted
hereby, convey, sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets other than in connection
with a consolidation of its operations, including without limitation a
discontinuation of operations in one or more locations so long as such
discontinuation does not affect a substantial portion of the Borrower's and its
Subsidiaries' business taken as a whole.
6.2 LIMITATION ON RESTRICTED PAYMENTS. The Borrower shall not declare
or pay any dividend in cash or in stock on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Borrower or any warrants or options to purchase
any such Capital Stock, whether now or hereafter outstanding (the foregoing
being "RESTRICTED PAYMENTS") other than (a) Restricted Payments in favor of a
Guarantor, and (b) other Restricted Payments in amounts not to exceed $1,000,000
in the aggregate in any twelve month period.
6.3 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
permit any Subsidiary to, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Subsidiary (other than wholly-owned Subsidiaries or
wholly-owned Subsidiaries of the Parent) or any other Affiliate, unless such
transaction (a) is otherwise permitted under this Agreement or (b) is in the
ordinary course of the Borrower's or such Subsidiary's business and is upon
terms no less favorable to the Borrower or such Subsidiary, than it would obtain
in a comparable arm's length transaction with a Person not an Affiliate.
6.4 FISCAL YEAR. The Borrower shall not permit the fiscal year of the
Borrower or any Subsidiary to end on a day other than August 31, except a change
may be made to conform the fiscal year end to the Parent's fiscal year end.
6.5 UNFUNDED LIABILITIES. The Borrower shall not permit to exist, at
any time, unfunded liabilities which, in the aggregate, for any and all Plans
maintained for or covering employees of the Borrower or any of its Subsidiaries
are an amount which has resulted or would likely result in a Material Adverse
Effect.
6.6 LINE OF BUSINESS. Neither the Borrower nor any of its Subsidiaries
shall engage in any material business other than the provisions of clinical
research and clinical design management services for the evaluation and
certification of new pharmaceutical products or services related thereto.
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6.7 ASSET DISPOSITIONS. Unless the consideration therefor is all cash
and the Borrower makes a mandatory prepayment of Loans outstanding hereunder
with such consideration, Borrower shall not make or permit any Asset Disposition
other than (a) such dispositions in connection with the consolidation of its
business as permitted pursuant to Section 6.1 hereof, and (b) unless otherwise
consented to by the Lender (which consent shall not be unreasonably withheld or
delayed), Asset Dispositions with respect to assets having a fair market value,
when taken together with the fair market value of assets disposed of by the
Parent and its other Subsidiaries, equals less than five percent (5%) of the
total assets of the Parent and all of its Subsidiaries in any fiscal year.
6.8 LIMITATION ON LIENS. The Borrower shall not, and shall not permit
any Subsidiary to, create, incur, assume or suffer to exist any Lien upon any of
its Property, assets or revenues, whether now owned or hereafter acquired,
except for:
(a) Liens created hereunder or under any of the other Loan Documents;
(b) Liens for taxes not yet delinquent or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or a Subsidiary, as
applicable, in conformity with GAAP;
(c) Liens created by operation of law not securing the payment of
Indebtedness from money borrowed or guaranteed, including carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which are not overdue for a period of
more than 45 days or which are being contested in good faith by appropriate
proceedings;
(d) Pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposit
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(e) Deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(f) Easements, rights of way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, would not cause a Material Adverse Effect;
(g) Liens in existence on the Closing Date listed on Schedule 2,
provided that no such Lien is spread to cover any
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additional property after the Closing Date and that the amount of Indebtedness
secured thereby is not increased; and (h) Liens securing capital expenditures
incurred by the Parent and all of its Subsidiaries not to exceed an aggregate
amount of $15,000,000 in fiscal year 1998 and of $10,000,000 in fiscal year
1999.
6.9 LIMITATION ON LOANS AND ADVANCES. The Borrower shall not, and shall
not permit any Subsidiary to, make any advance, loan, extension of credit or
capital contribution to any Person, except (a) extensions of trade credit in the
ordinary course of business; (b) advances to employees of the Borrower and its
Subsidiaries for travel, entertainment and relocation expenses in the ordinary
course of business; (c) loans to Affiliates or Subsidiaries; or (d) as
contemplated by the Acquisition Agreement.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal on any Note when due
or the Borrower shall fail to pay interest or any other amount payable hereunder
within three days after such amount becomes due; or
(b) Any representation or warranty made by any Loan Party herein or in
any other Loan Document, or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any other Loan Document shall prove to have been incorrect in
any material respect when made; or
(c) The Borrower shall default in the observance or performance of any
agreement contained in Section 5 or Section 6; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or the other Loan Documents
(other than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of twenty Business Days after the
earlier of (i) notice thereof from the Lender to the Borrower and (ii) actual
knowledge thereof by a senior officer of such Loan Party; or any provision of
any Loan Document shall at any time for any reason be declared null and void by
a court; or
(e) The validity or enforceability of any Loan Document shall at any
time be contested by any Loan Party in writing, or a proceeding shall be
commenced by any Loan Party or by any Governmental Authority or other Person
having jurisdiction over any Loan Party, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing
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that it has any liability or obligation purported to be created under any Loan
Document; or
(f) Any Guarantee or any Letter of Credit shall cease, for any reason
to be in full force and effect; or
(g) The Borrower or any Loan Party shall (i) default in any payment of
principal or interest, regardless of the amount, due in respect of any (A)
Indebtedness (other than the Notes), or (B) any Guarantee Obligation, if such
default is reasonably likely to cause a Material Adverse Effect or (ii) default
in the observance or performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, if the effect of such
default referred to in this clause (ii) is to cause, or to permit the holder
thereof to cause, such Indebtedness or Guarantee Obligation to become or be
declared due and payable prior to its stated maturity or the stated maturity of
any underlying obligation, as the case may be, and if the effect of such default
referred to in this clause (ii) is to cause a Material Adverse Effect; or
(h) (i) The Borrower or any other Loan Party shall commence any
voluntary case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Borrower or any
other Loan Party shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any other
Loan Party any involuntary case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment and (B) remains undismissed, undischarged,
unstayed or unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any other Loan Party any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) the Borrower or any other Loan Party shall take any action in
writing in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any other Loan Party shall generally not, or shall be
unable to, or shall admit in writing its inability to,
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pay its debts as they become due or there shall be a general assignment for the
benefit of creditors; or
(i) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan which would subject the Borrower or any Loan Party to any
tax, penalty, or other liabilities in the aggregate exceeding $1,000,000, (ii)
any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee would reasonably be expected to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA (other
than a standard termination) or (v) the Borrower or any Commonly Controlled
Entity would reasonably be expected to incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan;
and in each case regarding clauses (ii) through (v) above, such event or
condition, together with all other such events or conditions, if any, would
reasonably be expected to cause a Material Adverse Effect; or
(j) One or more judgments or decrees shall be entered against the
Borrower or any other Loan Party that in the aggregate are reasonably likely to
have a Material Adverse Effect, and that portion of such judgements or decrees
the failure to vacate, discharge, stay or bond pending appeal would be
reasonably likely to have a Material Adverse Effect shall not have been vacated,
discharged, stayed or bonded pending appeal within sixty days from the entry
thereof or in any event five days before the date of any sale pursuant to such
judgment or decree or any non-monetary judgment or order shall be entered
against the Borrower or any other Loan Party that is reasonably likely to have a
Material Adverse Effect and either (i) enforcement proceedings shall have been
commenced by any Person upon such judgment which has not been stayed pending
appeal or (ii) there shall be any period of ten consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) The Parent shall cease to own directly or indirectly and
beneficially 100% of the Capital Stock and Voting Power of the Borrower; or the
Borrower shall cease to own 100% of the Capital Stock and Voting Power of IRG;
or
(l) There shall occur any default in the material observance or
material performance of the Inter-Lender Agreement or either Letter of Credit or
the Inter-Lender Agreement or either Letter or
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Credit shall terminate or otherwise no longer be in full force and effect; or
(m) Any material provision of any Loan Document, after delivery thereof
pursuant to the provisions hereof, shall, for any reason other than pursuant to
the terms thereof or an act or omission by the Lender, cease to be valid or
enforceable in accordance with its terms and such cessation shall have a
Material Adverse Effect, or any security interest created under any Loan
Document shall for any reason other than pursuant to the terms thereof or an act
or omission by the Lender, cease to be a valid and perfected first priority
(except for any Lien or security interests permitted under any of the Loan
Documents or which have priority by operation of law) security interest or Lien
(except as otherwise stated or permitted herein or therein) in any material
portion of the Collateral or the Property purported to be covered thereby;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (h) above, automatically the Loans made to the Borrower hereunder
(with accrued interest thereon, including interest accrued after the filing of a
petition initiating any proceeding referred to in paragraph (h) above) and all
other Obligations shall immediately become due and payable, and (B) if such
event is any other Event of Default, the Lender may, by notice of default to the
Borrower, declare the Loans (with accrued interest thereon) and all other
Obligations under this Agreement and the Notes to be due and payable forthwith,
whereupon the same shall immediately become due and payable. In all cases the
Lender may enforce any or all of the Liens and security interests and other
rights and remedies created pursuant to any Loan Document or available at law or
in equity. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived by
the Borrower.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS AND WAIVERS. Neither this Agreement, nor any Note, nor
any other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section. With the prior written consent of the Lender and the Borrower (and, in
the case of any Loan Document other than this Agreement, the relevant Loan
Party), the Borrower may (or such Loan Party, as the case may be), from time to
time, enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purposes of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lender, the Borrower or any other Loan Party hereunder or thereunder or
waiving, on such terms and conditions as may be specified in such instrument,
any of the requirements of this Agreement or the Notes or the other Loan
Documents or any Default and its consequences. Any such
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waiver and any such amendment, supplement or modification shall apply equally to
the Lender and shall be binding upon the Borrower, the other Loan Parties, the
Lender and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Loan Parties and the Lender, shall be restored to their
former position and rights hereunder and under the outstanding Notes and any
other Loan Documents, and any Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default,
or impair any right consequent thereon.
8.2 NOTICES. All notices, requests and demands or other communications
to or upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or 3 days
after being deposited in the United States mail, certified and postage prepaid
and return receipt requested, or, in the case of telecopy notice, when received,
in each case addressed to the parties at their addresses as set forth on the
signature pages hereof or to such other address as may be hereafter notified by
the respective parties hereto; PROVIDED that any notice, request or demand to or
upon the Lender pursuant to Section 2.1, 2.2, 2.3 or 2.4 or any notice to the
Borrower pursuant to Section 7 shall not be effective until received.
8.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
8.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement (but shall not be deemed to be restated unless
otherwise expressly provided for).
8.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees, whether or not
the transactions contemplated hereby are consummated, (a) to pay or reimburse
the Lender for all its reasonable costs and out-of-pocket expenses incurred in
connection with the preparation and execution of, and any amendment, supplement
or modification to, this Agreement and the Notes and the other Loan Documents
and any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby (including the transactions to occur on the Closing Date),
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including, without limitation, the reasonable fees and disbursements of outside
counsel to the Lender and as to any amendment, supplement or modification to
this Agreement or any other Loan Document and the administration of the
transactions contemplated thereby, (b) after the occurrence and during the
continuance of a Default, to pay or reimburse the Lender, for all its reasonable
costs and out-of-pocket expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
"work-out" or of any insolvency or bankruptcy proceeding, including, without
limitation, reasonable legal fees and disbursements of outside counsel to the
Lender, (c) to pay, and indemnify and hold harmless Lender from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes (but not
including Excluded Taxes), if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the Notes, the other Loan Documents and any such other documents
and (d) to pay, and indemnify and hold harmless the Lender from and against, any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs (including, without limitation, the reasonable legal
fees and disbursements of outside counsel to the Lender), expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
Notes, the other Loan Documents or the use of the proceeds of the Loans and any
such other documents (all the foregoing, collectively, the "indemnified
liabilities"), PROVIDED, that the Borrower shall have no obligation hereunder to
the Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Lender or its agents or
attorneys-in-fact. The agreements in this Section shall survive repayment of the
Notes and all other amounts payable hereunder.
8.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Lender, all future holders of the
Notes and their respective successors and assigns, except that the Borrower may
not assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Lender. The Lender may assign
or participate its interest hereunder, without cost or expense to the Borrower
or any Loan Party.
8.7 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
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8.8 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 INTEGRATION. This Agreement, together with the other Loan
Documents, represents the entire agreement of the Borrower and the Lender with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Lender relative to the subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
8.10 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA (WITHOUT REFERENCE TO ITS CHOICE OF LAW RULES).
8.11 CLAIMS OR CONTROVERSIES SUBJECT TO JUDICIAL REFERENCE.
(a) SUBMISSION TO JUDICIAL REFERENCE. Any claim or controversy
alleged in or subject to a lawsuit between or among the parties to this
Agreement (collectively, the "Parties" and individually, a "Party") which
arises out of or relates to this Agreement, or any negotiations,
correspondence or communications, whether or not incorporated or integrated
into or relating to this Agreement, including but not limited to any claim or
controversy which arises out of or is based upon an alleged tort, shall, at
the written request of any Party, be determined by a reference in accordance
with California Code of Civil Procedure Sections 638 ET SEQ. In connection
with such reference, the Parties hereby expressly, intentionally and
deliberately waive any right they may otherwise have to trial by jury of such
claim or controversy.
(b) SELECTION OF REFEREE. Within 30 days after commencement by any
Party of any lawsuit subject to this Agreement, each Party shall provide the
other with a list of three potential referees acceptable to it. If the lists
have one or more referees in common, the person having the highest position
on each list shall be the referee hereunder. If such lists do not have a
common referee, the Parties shall select pursuant to the Commercial Rules of
the American Arbitration Association ("AAA") a single neutral referee and
submit by stipulation such referee to the court for an order of reference of
such claim or controversy. However, the referee selected must be a retired
state or federal court judge with at least five years of judicial experience
in civil matters. In the event that the Parties do not submit such
stipulation to the court within such 30 day period, any Party may move the
court pursuant to this Agreement for an order of reference of such claim or
controversy to a single neutral referee
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having such qualifications. The Parties shall equally bear the fees and expenses
of the referee unless the referee otherwise provides in the award.
(c) POWERS OF AND LIMITATIONS ON THE REFEREE. The Referee shall have
the powers provided by Title 9 of the California Code of Civil Procedure
Sections 1280 ET SEQ. (the "California Arbitration Act") and the Commercial
Rules of the AAA except as provided in this Agreement, including without
limitation the following:
(1) The referee shall determine all challenges to the legality
and/or enforceability of this Agreement.
(2) The referee shall apply the rules of evidence to the same extent
as they would be applied in a court of law.
(3) Subject to the provisions of this Agreement, the referee may
order any remedy or relief, including without limitation judicial
foreclosure, a deficiency judgment or equitable relief, and give effect to
all legal and equitable defenses, including without limitation statutes of
limitation, the statute of frauds, waiver and estoppel.
(4) The Parties shall have the right to conduct discovery with
respect to any dispute, controversy or issue arising out of or resulting from
this Agreement pursuant to the provisions of California Code of Civil
Procedure Section 1283.05, which provisions are incorporated herein by
reference and made a part hereof.
(5) The referee shall determine the time of the hearing. The hearing
shall take place in Los Angeles, California. The hearing must be commenced
within 60 days after completion of discovery, unless the referee grants a
continuance upon a showing of good cause by any Party. At least 14 days
before the date set for hearing, the Parties shall exchange copies of
exhibits to be offered as evidence, and lists of witnesses who will testify,
at such hearing. Once commenced, the hearing shall proceed day to day until
completed, unless the referee grants a continuance upon a showing of good
cause by any Party. Any Party may cause to be prepared, at its expense, a
written transcription or electronic recordation of such hearing.
(6) Any award by the referee shall be set forth in a statement of
decision supported by written findings of fact and conclusions of law which
the referee shall concurrently deliver to the Parties.
(7) The referee shall have the authority to award in the referee's
discretion reasonable attorneys' fees and costs to the prevailing party.
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(8) The provisions of California Civil Code Sections 47 ET SEQ.
shall apply to the judicial reference to the same extent as they would apply
to a judicial proceeding subject to such provisions.
(9) The laws of the State of California shall govern the judicial
reference pursuant to this Agreement.
(d) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No provision of
this Section 9.12 shall limit the right of either Party (i) to exercise any
self-help remedies in accordance with applicable law or seek specific
performance, (ii) to foreclose upon or sell any Collateral, by power of sale
or otherwise in accordance with applicable law, or (iii) to obtain or oppose
provisional remedies or necessary procedural orders from a court of competent
jurisdiction, including without limitation appointment of a receiver, before,
after or during the pendency of the judicial reference. The exercise of, or
opposition to, any such remedy does not waive the right of any Party to
judicial reference pursuant to this Agreement.
(e) MISCELLANEOUS. Judgment upon the award of the referee shall be
final and binding (subject to vacation or correction in the amounts set
forth, respectively, in California Code of Civil Procedure Sections 1286.2,
1286.4, 1286.6 and 1286.8) and may be entered in any court of competent
jurisdiction in accordance with California Code of Civil Procedure Sections
644 and 645 and no party shall take any action to contest such award or
judgment except as set forth above. In the event that multiple claims are
asserted, some of which are found not subject to this Agreement, the Parties
agree to stay the proceedings of the claims not subject to this Agreement
until all other claims are resolved in accordance with this Agreement. In the
event that claims are asserted against multiple parties, some of whom are not
subject to this Agreement, the Parties agree to sever the claims subject to
this Agreement and resolve them in accordance with this Agreement.
8.12 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) the Lender has no fiduciary relationship to the Borrower solely by
virtue of any of the Loan Documents, and the relationship pursuant to the Loan
Documents between the Lender, on one hand, and the Borrower on the other hand,
is solely that of creditor and debtor; and
(c) no joint venture exists among the Lender and the Borrower.
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8.13 HEADINGS. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
8.14 CONFLICT OF TERMS. Except as otherwise provided in this Agreement
or any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Los Angeles, California by their proper and duly
authorized officers as of the day and year first above written.
PHOENIX INTERNATIONAL LIFE SCIENCES
(U.S.) INC.
By: /s/ Xxxx-Xxxx Xxxxx
------------------------------
Name: Xxxx-Xxxx Xxxxx
------------------------
Title: Secretary and Treasurer
------------------------
Address for Notices:
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: ______________________
Telephone: (___) ________________
Facsimile: (___) ________________
BANQUE NATIONALE DE PARIS
Los Angeles Branch
By: /s/ Banque Nationale De Paris Signator
Name: _________________________
Title: ________________________
By: /s/ Banque Nationale De Paris Signator
Name: _________________________
Title: ________________________
Address for Notices:
Banque Nationale de Paris
000 Xx. Xxxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for
Reference Rate Loans:
000 Xx. Xxxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Applicable Lending Office for
LIBOR Loans:
000 Xx. Xxxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
