EXHIBIT 10.22
CREDIT AGREEMENT
DATED AS OF OCTOBER 20, 2005
AMONG
VALERA PHARMACEUTICALS, INC.,
AND
THE OTHER BORROWERS
FROM TIME TO TIME PARTY HERETO,
AS BORROWERS
AND
XXXXXXX XXXXX CAPITAL,
A DIVISION OF XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.,
AS ADMINISTRATIVE AGENT AND AS A LENDER
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
[XXXXXXX XXXXX LOGO]
---------------------
XXXXXXX XXXXX CAPITAL
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS.................................................... 1
Section 1.1 Certain Defined Terms................................ 1
Section 1.2 Accounting Terms and Determinations.................. 20
Section 1.3 Other Definitional Provisions........................ 20
Section 1.4 Funding and Settlement Currency...................... 21
ARTICLE 2 LOANS AND LETTERS OF CREDIT.................................... 21
Section 2.1 [Reserved]........................................... 21
Section 2.2 Revolving Loans...................................... 21
Section 2.3 Interest, Interest Calculations and Certain Fees..... 23
Section 2.4 Notes................................................ 24
Section 2.5 Letters of Credit and Letter of Credit Fees.......... 24
Section 2.6 General Provisions Regarding Payment; Loan Account... 26
Section 2.7 Maximum Interest..................................... 27
Section 2.8 Taxes................................................ 28
Section 2.9 Capital Adequacy..................................... 28
Section 2.10 Mitigation Obligations............................... 29
Section 2.11 Appointment of Borrower Representative............... 29
Section 2.12 Collections and Lockbox Account...................... 30
ARTICLE 3 REPRESENTATIONS AND WARRANTIES................................. 31
Section 3.1 Existence and Power.................................. 31
Section 3.2 Organization and Governmental Authorization; No
Contravention........................................ 32
Section 3.3 Binding Effect....................................... 32
Section 3.4 Capitalization....................................... 32
Section 3.5 Financial Information................................ 32
Section 3.6 Litigation........................................... 33
Section 3.7 Ownership of Property................................ 33
Section 3.8 No Default........................................... 33
Section 3.9 Labor Matters........................................ 33
Section 3.10 Regulated Entities................................... 33
Section 3.11 Margin Regulations................................... 33
Section 3.12 Compliance With Laws; Anti-Terrorism Laws;
Compliance with Products............................. 34
Section 3.13 Taxes................................................ 36
Section 3.14 Compliance with ERISA................................ 36
Section 3.15 Brokers.............................................. 37
Section 3.16 [RESERVED]........................................... 37
Section 3.17 Material Contracts................................... 37
Section 3.18 Compliance with Environmental Requirements; No
Hazardous Materials.................................. 38
Section 3.19 Intellectual Property................................ 39
Section 3.20 Real Property Interests.............................. 39
Section 3.21 Solvency............................................. 39
Section 3.22 Full Disclosure...................................... 39
Section 3.23 Interest Rate........................................ 39
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Section 3.24 Credit Card Issuers and credit Card Payment
Intermediaries....................................... 39
Section 3.25 Business and Assets of Irish Subsidiaries............ 40
ARTICLE 4 AFFIRMATIVE COVENANTS.......................................... 40
Section 4.1 Financial Statements and Other Reports............... 40
Section 4.2 Payment and Performance of Obligations............... 42
Section 4.3 Maintenance of Existence............................. 42
Section 4.4 Maintenance of Property; Payment of Taxes;
Insurance............................................ 42
Section 4.5 Compliance with Laws................................. 44
Section 4.6 Inspection of Property, Books and Records............ 44
Section 4.7 Use of Proceeds...................................... 45
Section 4.8 [Reserved]........................................... 45
Section 4.9 [Reserved.].......................................... 45
Section 4.10 Hazardous Materials; Remediation..................... 45
Section 4.11 [Reserved.].......................................... 45
Section 4.12 Further Assurances................................... 45
Section 4.13 Litigation; Events of Default........................ 47
Section 4.14 Updates of Representations........................... 47
Section 4.15 Power of Attorney.................................... 47
Section 4.16 Estoppel Certificates................................ 47
Section 4.17 Borrowing Base Collateral Administration............. 48
Section 4.18 Credit Card Contracts................................ 48
Section 4.19 Covenants Regarding Products and Compliance with
Required Permits..................................... 48
ARTICLE 5 NEGATIVE COVENANTS............................................. 49
Section 5.1 Debt................................................. 49
Section 5.2 Liens................................................ 49
Section 5.3 Contingent Obligations............................... 49
Section 5.4 Restricted Distributions............................. 50
Section 5.5 Restrictive Agreements............................... 50
Section 5.6 Payments and Modifications of Subordinated Debt...... 51
Section 5.7 Consolidations, Mergers and Sales of Assets.......... 51
Section 5.8 Purchase of Assets, Investments...................... 51
Section 5.9 Transactions with Affiliates......................... 52
Section 5.10 Modification of Organizational Documents............. 52
Section 5.11 Modification of Certain Agreements................... 52
Section 5.12 Fiscal Year.......................................... 53
Section 5.13 Conduct of Business.................................. 53
Section 5.14 Investor Fees........................................ 53
Section 5.15 Lease Payments....................................... 53
Section 5.16 Limitation on Sale and Leaseback Transactions........ 53
Section 5.17 Bank Accounts........................................ 53
Section 5.18 Compliance with Anti-Terrorism Laws.................. 53
Section 5.19 Valera Pharmaceuticals Ireland Limited............... 54
ARTICLE 6 FINANCIAL COVENANTS............................................ 54
Section 6.1 Fixed Charge Coverage Ratio.......................... 54
Section 6.2 Evidence of Compliance............................... 55
ARTICLE 7 CONDITIONS..................................................... 55
Section 7.1 Conditions to Closing................................ 55
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Section 7.2 Conditions to Each Loan, Support Agreement and
Lender Letter of Credit.............................. 55
Section 7.3 Searches............................................. 56
ARTICLE 8 REGULATORY MATTERS............................................. 56
Section 8.1 Representations and Warranties....................... 57
ARTICLE 9 [RESERVED]..................................................... 57
ARTICLE 10 SECURITY AGREEMENT............................................ 57
Section 10.1 Generally............................................ 57
Section 10.2 Representations and Warranties Regarding
Collateral........................................... 59
Section 10.3 Covenants Relating to Collateral..................... 61
Section 10.4 Borrowers to Remain Liable........................... 64
Section 10.5 UCC Remedies......................................... 64
ARTICLE 11 EVENTS OF DEFAULT............................................. 65
Section 11.1 Events of Default.................................... 65
Section 11.2 Acceleration and Suspension or Termination of
Revolving Loan Commitment............................ 69
Section 11.3 Cash Collateral...................................... 69
Section 11.4 Default Rate of Interest............................. 69
Section 11.5 Setoff Rights........................................ 69
Section 11.6 Application of Proceeds.............................. 70
Section 11.7 Waivers.............................................. 70
Section 11.8 Injunctive Relief.................................... 72
Section 11.9 Marshalling.......................................... 72
ARTICLE 12 EXPENSES AND INDEMNITY........................................ 72
Section 12.1 Expenses............................................. 72
Section 12.2 Indemnity............................................ 73
ARTICLE 13 ADMINISTRATIVE AGENT.......................................... 73
Section 13.1 Appointment and Authorization........................ 73
Section 13.2 Right to Perform, Preserve and Protect............... 74
ARTICLE 14 MISCELLANEOUS................................................. 74
Section 14.1 Survival............................................. 74
Section 14.2 No Waivers........................................... 74
Section 14.3 Notices.............................................. 74
Section 14.4 Severability......................................... 75
Section 14.5 Amendments and Waivers............................... 75
Section 14.6 Assignments; Participations.......................... 75
Section 14.7 Headings............................................. 76
Section 14.8 Confidentiality...................................... 76
Section 14.9 Waiver of Consequential and Other Damages............ 76
Section 14.10 GOVERNING LAW; SUBMISSION TO JURISDICTION............ 77
Section 14.11 WAIVER OF JURY TRIAL................................. 77
Section 14.12 Publication; Advertisement........................... 77
Section 14.13 Counterparts; Integration............................ 78
Section 14.14 No Strict Construction............................... 78
Section 14.15 Time................................................. 78
Section 14.16 Lender Approvals..................................... 78
Section 14.17 Confession of Judgment............................... 78
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Section 14.18 Waivers.............................................. 78
Section 14.19 Release of Administrative Agent and Lenders.......... 78
ARTICLE 15 JOINT AND SEVERAL LIABILITY; GUARANTOR PROVISIONS............. 79
Section 15.1 Joint and Several Obligations........................ 79
Section 15.2 Guarantor Provisions................................. 82
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of October 20, 2005 by and among VALERA
PHARMACEUTICALS, INC., a Delaware corporation ("Valera"), and any Subsidiaries
of Valera from time to time made party hereto as a borrower (Valera and such
Subsidiaries, each, individually as a Borrower and collectively as Borrowers),
the financial institutions or other entities from time to time parties hereto,
each as a Lender, and XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX
BUSINESS FINANCIAL SERVICES INC., individually as a Lender and as Administrative
Agents.
RECITALS
R-1 Borrowers have requested that Lender make available to Borrowers
revolving and/or letter of credit financing facilities as described herein.
R-2 Lender is willing to extend such credit to Borrowers under the terms
and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Lenders and Administrative
Agent agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS.
The following terms have the following meanings:
"ACCOUNT DEBTOR" means "account debtor", as defined in Article 9 of the
UCC, and any other obligor in respect of an Account.
"ACCOUNTS" means collectively (a) any right to payment of a monetary
obligation, whether or not earned by performance, (b) without duplication, any
"account" (as defined in the UCC), any accounts receivable (whether in the form
of payments for services rendered or goods sold, rents, license fees or
otherwise), any "health-care-insurance receivables" (as that term is defined in
the UCC), any "payment intangibles" (as that term is defined in the UCC) and all
other rights to payment and/or reimbursement of every kind and description,
whether or not earned by performance, (c) all accounts, "general intangibles"
(as that term is defined in the UCC) excluding Intellectual Property, rights,
remedies, Guarantees, "supporting obligations" (as that term is defined in the
UCC), "letter-of-credit rights" (as that term is defined in the UCC) and
security interests in respect of the foregoing, all rights of enforcement and
collection, all books and records evidencing or related to the foregoing, and
all rights under the Financing Documents in respect of the foregoing, (d) all
information and data (excluding Intellectual Property ) compiled or derived by
any Borrower or to which any Borrower is entitled in respect of or related to
the foregoing, and (e) all proceeds of any of the foregoing.
"ADMINISTRATIVE AGENT" means Xxxxxxx Xxxxx, in its capacity as
administrative agent for the Lenders hereunder, as such capacity is established
in, and subject to the provisions of, Article 13, and the successors of Xxxxxxx
Xxxxx in such capacity.
"AFFILIATE" means with respect to any Person (a) any Person that directly
or indirectly controls such Person, (b) any Person which is controlled by or is
under common control with such controlling Person, and (c) each of such Person's
(other than, with respect to any Lender, any Lender's) officers or directors (or
Persons functioning in substantially similar roles) and the spouses, parents,
descendants and siblings of such officers, directors or other Persons. As used
in this definition, the term "control" of a
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Person means the possession, directly or indirectly, of the power to vote five
percent (5%) or more of any class of voting securities of such Person or to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"AGREEMENT" means this Credit Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"ANTI-TERRORISM LAWS" means any Laws relating to terrorism or money
laundering, including Executive Order No. 13224 (effective September 24, 2001),
the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act,
and the Laws administered by OFAC.
"APPROVED GOODS AND SERVICES" means goods sold and/or services rendered by
Borrowers in the Ordinary Course of Business, in compliance with all Laws, and
consistent with the type of goods sold and/or services rendered by Borrowers
throughout all or substantially all of its business operations as of the Closing
Date.
"ASSET DISPOSITION" means any sale, lease, license, transfer, assignment
or other consensual disposition by any Credit Party of any material asset, or
any termination of any material leasehold estate of a Borrower or reduction in
the term of any leasehold estate of a Borrower, but excluding (a) dispositions
of Inventory in the Ordinary Course of Business, and (b) dispositions of Cash
Equivalents.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as the same may be amended, modified or supplemented from time to
time, and any successor statute thereto.
"BASE RATE" means a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to the rate of interest which is identified and
normally published by Bloomberg Professional Service Page BBAM 1 as the offered
rate for loans in United States dollars for the period of one (1) month under
the caption British Bankers Association LIBOR Rates as of 11:00 a.m. (London
time) as adjusted on a daily basis and effective on the second full Business Day
after each such day (unless such date is not a Business Day, in which event the
next succeeding Business Day will be used). If Bloomberg Professional Service
(or another nationally-recognized rate reporting source acceptable to
Administrative Agent) no longer reports the LIBOR or Administrative Agent
determines in good faith that the rate so reported no longer accurately reflects
the rate available to Administrative Agent in the London Interbank Market or if
such index no longer exists or if Page BBAM 1 no longer exists or accurately
reflects the rate available to Administrative Agent in the London Interbank
Market, Administrative Agent may select a reasonable replacement index or
replacement page, as the case may be.
"BASE RATE MARGIN" shall mean, initially, a percentage equal to (i) three
and three-quarters percent (3.75%), provided that such percentage shall be
reviewed (and if applicable, adjusted) monthly on the date (each such date, an
"INTEREST ADJUSTMENT DATE"), that is five (5) Business Days after the date upon
which Lender shall receive each set of the internally prepared monthly financial
statements for Borrowers and their Consolidated Subsidiaries required to be
delivered to Administrative Agent pursuant to Section 4.1(a)(ii) and the
accompanying financial covenant reporting and Compliance Certificate for the
monthly period covered by such monthly financial statements (collectively, each
such set of statements and reports, the "MONTHLY FINANCIAL STATEMENTS"), with
such adjustment being based on the Fixed Charge Coverage Ratio of Borrowers and
their Consolidated Subsidiaries measured for the rolling three fiscal month
period ending as of the last day of the fiscal month reported on in such Monthly
Financial Statements as follows:
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Fixed Charge Coverage Ratio Base Rate Margin
--------------------------- ----------------
Less Than 1.00:1.00 + 3.75%
Equal To or Greater Than 1.00:1.00 but
Less Than or Equal To 1.25:1.00 + 3.50%
Greater Than 1.25:1.00 + 3.25%
The first such review (and, if applicable, adjustment) of the Base Rate
Margin shall occur on the Interest Adjustment Date following the delivery of the
Monthly Financial Statements for the fiscal month ending as of the Fixed Charge
Coverage Ratio Measurement Start Date. Any adjustment of the Base Rate Margin
made on any Interest Adjustment Date shall be effective from and including such
Interest Adjustment Date and until (but not including) the next following
Interest Adjustment Date. Notwithstanding anything to the contrary contained in
the foregoing, if Administrative Agent shall make any downward adjustment in the
Base Rate Margin based on the Fixed Charge Coverage Ratio as shown on the
Monthly Financial Statements for the month of December in any fiscal year, but
the annual audited financial statements for the fiscal year ending as of that
December required under Section 4.1(a)(viii) when delivered to Lender shall show
that the Fixed Charge Coverage Ratio for the applicable rolling three month
fiscal period ending on the applicable December 31st as calculated on such
audited financial statements would not have entitled Borrowers to such downward
adjustment (and/or that the Base Rate Margin should actually have been
increased), then such downward adjustment in the Base Rate Margin shall be
deemed to have been void ab initio and the interest rates applicable to the
Loans shall be retroactively adjusted to reflect that no such reduction was ever
effective (and, if applicable, that instead the appropriate upward adjustment in
the Base Rate Margin was made), and any additional interest payable by Borrowers
as a result of such retroactive adjustment shall (as of the date of such
retroactive adjustment) be added to the outstanding interest that is accrued and
unpaid hereunder and shall be due and payable on the next regularly scheduled
interest payment date hereunder.
If Borrower fails to deliver any set of Monthly Financial Statements by
the last date permitted for such delivery under Section 4.1(b)(ii), the Base
Rate Margin shall be adjusted as of such last date to equal the highest
percentage provided for above until such time as Administrative Agent shall
receive such Monthly Financial Statements, at which time (subject at all times
to Lender's option under Section 11.4 hereof, which shall be independent of its
rights provided for herein) the Base Rate Margin shall be adjusted as otherwise
provided for in this definition. Notwithstanding anything to the contrary
contained in this definition or otherwise in this Agreement, no downward
adjustment in the Base Rate Margin shall occur if an Event of Default or Default
shall have occurred and be continuing as of any Interest Adjustment Date.
For the avoidance of doubt, the inclusion of a provision for a particular
Base Rate Margin percentage in the grid above which corresponds to a level of
Fixed Charge Coverage Ratio for Borrowers and their Consolidated Subsidiaries
that would constitute an Event of Default under Section 6.1 below shall not be
construed to limit or contradict in any way the provisions of such Section 6.1
and if at any time the Fixed Charge Coverage Ratio of Borrowers and their
Consolidated Subsidiaries is at a level that would both require an increase in
the Base Rate Margin under the provisions of this definition and permit the
imposition of default rates of interest under section 11.4, both the provisions
of this definition and Section 11.4 shall be simultaneously effective.
"BLOCKED PERSON" means any Person: (a) listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person
owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (c) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any
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transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or
conspires to commit or supports "terrorism" as defined in Executive Order No.
13224, or (e) a Person that is named a "specially designated national" or
"blocked person" on the most current list published by OFAC or other similar
list.
"BORROWERS" mean, collectively, Valera and each of its Subsidiaries from
time to time made party hereto. For the avoidance of doubt, as of the Closing
Date, the Irish Subsidiary is not a party hereto and is not a Borrower.
"BORROWER REPRESENTATIVE" means Valera, in its capacity as Borrower
Representative pursuant to the provisions of Section 2.11, or any successor
Borrower Representative selected by Borrowers and approved by Administrative
Agent.
"BORROWER'S ACCOUNT" means, with respect to any Borrower, the account
specified on the signature pages hereof below such Borrower's name into which
Loans for the benefit of such Borrower shall, absent other instructions, be
made, or such other account as Borrower Representative may specify by written
notice to Administrative Agent.
"BORROWING BASE" means:
(a) the product of (i) eighty-five percent (85%) multiplied by (ii)
the aggregate net amount at such time of the Eligible Accounts; minus
(b) the amount of any additional reserves and/or adjustments
provided for in this Agreement.
"BORROWING BASE CERTIFICATE" means a certificate, duly executed by a
Responsible Officer of Borrower Representative, appropriately completed and
substantially in the form of Exhibit C hereto.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which either the New York Stock Exchange is closed, or on which commercial banks
in Chicago and New York City are authorized by law to close.
"CAPITAL LEASE" of any Person means any lease of any property by such
Person as lessee which would, in accordance with GAAP, be required to be
accounted for as a capital lease on the balance sheet of such Person.
"CASH EQUIVALENTS" means any Investment in (a) direct obligations of the
United States or any agency thereof, or obligations guaranteed by the United
States or any agency thereof with a maturity date of no more than one (1) year
from the date of acquisition, (b) commercial paper with a duration of not more
than nine (9) months rated at least A-1 by Standard & Poor's Ratings Service and
P-1 by Xxxxx'x Investors Services, Inc., which is issued by a Person (other than
any Credit Party or an Affiliate of any Credit Party) organized under the laws
of any State of the United States or of the District of Columbia, (c) time
deposits, certificates of deposit and banker's acceptances with a duration of
not more than six (6) months issued by any office located in the United States
of any bank or trust company which is organized under the laws of the United
States or any State thereof, or is licensed to conduct a banking business in the
United States, and has capital, surplus and undivided profits aggregating at
least $500,000,000 and which issues (or the parent of which issues) certificates
of deposit or commercial paper with a rating described in clause (b) above, (d)
repurchase agreements and reverse repurchase agreements with a duration of not
more than 30 days with respect to securities described in clause (a) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (c) above, or (e) any money market or mutual fund which
invests only in the foregoing types of investments, has portfolio assets in
excess of $5,000,000,000 and is rated AAA by Standard & Poor's Ratings Service
and Aaa by Xxxxx'x Investors Services, Inc.
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"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"CHATTEL PAPER" means "chattel paper", as defined in Article 9 of the UCC.
"CLOSING CHECKLIST" means the closing checklist attached as Annex B to
this Agreement.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" means all property, now existing or hereafter acquired,
mortgaged or pledged to, or purported to be subjected to a Lien in favor of,
Administrative Agent, for the benefit of Administrative Agent and Lenders,
pursuant to this Agreement and the Security Documents, including, without
limitation, all of the Personal Property described in Article 10 of this
Agreement.
"COMMITMENT ANNEX" means Annex A to this Agreement.
"COMMITMENT EXPIRY DATE" means the second anniversary of the Closing Date.
"COMPLIANCE CERTIFICATE" means a certificate, duly executed by a
Responsible Officer of Borrower Representative, appropriately completed and
substantially in the form of Exhibit B hereto.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other Person
the accounts of which would be consolidated with those of a Borrower (or any
other Person, as the context may require hereunder) in its consolidated
financial statements if such statements were prepared as of such date.
"CONTINGENT OBLIGATION" means, with respect to any Person, any direct or
indirect liability of such Person: (a) with respect to any debt, lease, dividend
or other obligation of another Person (a "THIRD PARTY OBLIGATION") if the
purpose or intent of such Person incurring such liability, or the effect
thereof, is to provide assurance to the obligee of such Third Party Obligation
that such Third Party Obligation will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Third Party Obligation will be protected, in whole or in part, against loss with
respect thereto; (b) with respect to any undrawn portion of any letter of credit
issued for the account of such Person or as to which such Person is otherwise
liable for the reimbursement of any drawing; (c) under any swap contract or
other derivative obligation; (d) to make take-or-pay or similar payments if
required regardless of nonperformance by any other party or parties to an
agreement; or (e) for any obligations of another Person pursuant to any
Guarantee or pursuant to any agreement to purchase, repurchase or otherwise
acquire any obligation or any property constituting security therefor, to
provide funds for the payment or discharge of such obligation or to preserve the
solvency, financial condition or level of income of another Person. The amount
of any Contingent Obligation shall be equal to the amount of the obligation so
Guaranteed or otherwise supported or, if not a fixed and determinable amount,
the maximum amount so Guaranteed or otherwise supported.
"CONTROLLED GROUP" means all members of a group of corporations and all
members of a group of trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of
ERISA.
"COPYRIGHTS" means any copyrights, copyright registrations and copyright
applications, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
5
"CORRECTION" means repair, modification, adjustment, relabeling,
destruction or inspection (including patient monitoring) of a product without
its physical removal to some other location.
"CREDIT CARD" means collectively any bank or non-bank credit or debit
card, including without limitation all MasterCard or VISA bank credit or
debit cards or other bank or credit or debit cards issued through MasterCard
International, Inc, Visa, U.S.A., Inc. or Visa International and also all
non-bank credit or debit cards issued by American Express, American Express
Travel Related Services Company, Inc., Novus Services, Inc., Discover, Diners
Club or Xxxxx Xxxxxxx.
"CREDIT CARD CONTRACT" means either (x) a contract between any Borrower
and a Credit Card Issuer whereby the applicable Borrower(s) agree to accept the
credit card issued by that Credit Card Issuer as payment for debts owing to such
Borrower(s) and the applicable Credit Card Issuer agrees to make payment in cash
to Borrower(s) for such credit card payments accepted by Borrower(s); or (y) a
contract between any Credit Card Payment Intermediary and any Borrower(s)
whereby such Credit Card Payment Intermediary agrees to act as an intermediary
between the applicable Borrower(s) and any Credit Card Issuer(s) for processing
of credit card payments and/or collection of cash payments owing to Borrower(s).
"CREDIT CARD ISSUER" means any Person who is the issuer of a credit card,
or alternatively, any organization of member financial institutions that are the
issuers of credit cards, such as MasterCard International, Inc, Visa, U.S.A.,
Inc. or Visa International, in either case whose credit cards any Borrower
accepts as a method of payment of debts owing to such Borrower.
"CREDIT CARD PAYMENT INTERMEDIARY" means any Person who is a party to a
contract with any Borrower(s) whereby such Person agrees to act as a financial
intermediary between such Borrower(s) and any particular Credit Card Issuer(s)
for the processing of credit card payments accepted by Borrower(s) and/or the
collecting from the applicable Credit Card Issuers of cash payments owing to
such Borrower(s) in respect of such credit card payments.
"CREDIT EXPOSURE" means any period of time during which the Revolving Loan
Commitment is outstanding or any Loan, Reimbursement Obligation or other
Obligation remains unpaid or any Letter of Credit or Support Agreement remains
outstanding; provided, however, that no Credit Exposure shall be deemed to exist
solely due to the existence of contingent indemnification liability, absent the
assertion of a claim with respect thereto.
"CREDIT PARTY" means any Guarantor under a Financing Document Guarantee,
any Borrower and any Subsidiary of any Borrower, whether now existing or
hereafter acquired or formed; and "CREDIT PARTIES" means all such Persons,
collectively.
"DEA" means the Drug Enforcement Administration of the United States of
America and any successor agency thereof.
"DEBT" of a Person means at any date, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising and paid on a timely basis and
in the Ordinary Course of Business, (d) all Capital Leases of such Person, (e)
all non-contingent obligations of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit, banker's acceptance
or similar instrument, (f) all equity securities of such Person subject to
repurchase or redemption otherwise than at the sole option of such Person, (g)
all obligations secured by a Lien on any asset of such Person, whether or not
such obligation is otherwise an obligation of such Person, (h) "earnouts",
purchase price adjustments, profit sharing arrangements, deferred purchase money
amounts and similar payment obligations or continuing obligations of any nature
of such Person arising
6
out of purchase and sale contracts; (i) all Debt of others Guaranteed by such
Person; (j) off-balance sheet liabilities and/or pension plan liabilities; (k)
obligations arising under non-compete agreements; and (l) obligations arising
under bonus, deferred compensation, incentive compensation or similar
arrangements, other than those arising in the Ordinary Course of Business.
Without duplication of any of the foregoing, Debt of Borrowers shall include any
and all Loans and Letter of Credit Liabilities.
"DEFAULT" means any condition or event which with the giving of notice or
lapse of time or both would, unless cured or waived, become an Event of Default.
"DEPOSIT ACCOUNT" means a "deposit account" (as defined in Article 9 of
the UCC), investment account or other account in which funds are held or
invested for credit to or for the benefit of any Borrower.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means an agreement, in form and
substance satisfactory to Administrative Agent, among Administrative Agent, a
Borrower and each bank in which such Borrower maintains a Deposit Account, which
agreement provides that (a) such bank shall comply with instructions originated
by Administrative Agent directing disposition of the funds in such Deposit
Account without further consent by the applicable Borrower, and (b) such bank
shall agree that it shall have no Lien on, or right of setoff or recoupment
against, such Deposit Account or the contents thereof, other than in respect of
commercially reasonable fees and other items, in each such case expressly
consented to by Administrative Agent, and containing such other terms and
conditions as Administrative Agent may require, including as to any such
agreement pertaining to any Lockbox Account, providing that such bank shall
wire, or otherwise transfer, in immediately available funds, on a daily basis to
the Payment Account all funds received or deposited into such Lockbox or Lockbox
Account.
"DRUG APPLICATION" means a new drug application, an abbreviated drug
application, or a product license application for any Product, as appropriate,
as those terms are defined in the FDCA.
"EBITDA" has the meaning provided in the Compliance Certificate.
"ELIGIBLE ACCOUNTS" means, subject to the criteria below, an account
receivable of a Borrower, which was generated in the Ordinary Course of Business
from the sale of Products, which was generated originally in the name of the
Borrower and not acquired via assignment or otherwise, and which Administrative
Agent, in its good faith credit judgment and discretion, deems to be an Eligible
Account. (For the avoidance of doubt, no right of any Borrower to receive a
payment of money from a Credit Card Issuer and/or Credit Card Payment
Intermediary with respect to any credit card payment made to any Borrower by any
purchaser of goods or services shall be deemed to be an Eligible Account for any
purpose under this Agreement.) The net amount of Eligible Accounts at any time
shall be the face amount of such Eligible Accounts as originally billed minus
all cash collections and other proceeds of such Account received from or on
behalf of the Account Debtor thereunder (including without limitation all
payments on such Accounts made to Borrowers as credit card payments with respect
to which available and collected cash funds have not yet been received from the
applicable Credit Card Issuers and/or Credit Card Payment Intermediaries) as of
such date and any and all returns, rebates, discounts (which may, at
Administrative Agent's option, be calculated on shortest terms), credits,
allowances or excise taxes of any nature at any time issued, owing, claimed by
Account Debtors, granted, outstanding or payable in connection with such
Accounts at such time. Without limiting the generality of the foregoing, no
Account shall be an Eligible Account if:
(a) [reserved];
(b) the Account remains unpaid more than one hundred fifty (150)
days past the claim or invoice date but in no event more than one hundred sixty
(160) days after the applicable Products have been delivered;
7
(c) the Account is subject to any defense, set-off, recoupment,
counterclaim, deduction, discount, credit, chargeback, freight claim, allowance,
or adjustment of any kind (but only to the extent of such defense, set-off,
recoupment, counterclaim, deduction, discount, credit, chargeback, freight
claim, allowance, or adjustment), or the applicable Borrower is not able to
bring suit or otherwise enforce its remedies against the Account Debtor through
judicial process;
(d) if the Account arises from the sale of goods, any part of any
goods the sale of which has given rise to the Account has been returned,
rejected, lost, or damaged (but only to the extent that such goods have been so
returned, rejected, lost or damaged);
(e) if the Account arises from the sale of goods, the sale was not
an absolute, bona fide sale, or the sale was made on consignment or on approval
or on a sale-or-return or xxxx-and-hold or progress billing basis, or the sale
was made subject to any other repurchase or return agreement, or the goods have
not been shipped to the Account Debtor or its designee or the sale was not made
in compliance with applicable Laws;
(f) the Account represents the unpaid portion of an initial
Account/invoice on which partial payment has been made to the applicable
Borrower unless Borrower reasonably and in good faith expects that payment on
such partially-paid account will be made prior to the time such Account would
become ineligible under clause (b) above;
(g) the Account is subject to a Lien, or Administrative Agent does
not have a Lien on such Account;
(h) the Account is evidenced by Chattel Paper or an Instrument of
any kind, or has been reduced to judgment, unless such Chattel Paper or
Instrument has been delivered to Administrative Agent;
(i) the Account Debtor is an Affiliate or Subsidiary of a Credit
Party, or if the Account Debtor holds any Debt of a Credit Party (but only to
the extent of such Debt);
(j) more than fourteen percent (14%) of the aggregate balance of all
Accounts owing from the Account Debtor obligated on the Account are outstanding
more than one hundred eighty (180) days past their invoice date;
(k) without limiting the provisions of clause (j) above, fifty
percent (50%) or more of the aggregate unpaid Accounts from the Account Debtor
obligated on the Account are not deemed Eligible Accounts under this Agreement
for any reason;
(l) the total unpaid Accounts of the Account Debtor obligated on the
Account exceed fifteen percent (15%) (or, in the case of unpaid Accounts owing
from Xxxxx Medical Supply, twenty-five percent (25%)) of the net amount of all
Eligible Accounts owing from all Account Debtors (but only the amount of the
Accounts of such Account Debtor exceeding such 15% (or 25%, if applicable)
limitation shall be considered ineligible);
(m) any covenant, representation or warranty contained in the
Financing Documents with respect to such Account has been breached in any
respect;
(n) the Account is unbilled or has not been invoiced to the Account
Debtor in accordance with the procedures and requirements of the applicable
Account Debtor;
(o) the Account is an obligation of an Account Debtor that is the
Federal (or local) government or a political subdivision thereof, unless
Administrative Agent has agreed to the contrary in
8
writing and Administrative Agent has received from the Account Debtor the
acknowledgement of Administrative Agent's notice of assignment of such
obligation pursuant to this Agreement;
(p) the Account is an obligation of an Account Debtor that has
suspended business, made a general assignment for the benefit of creditors, is
unable to pay its debts as they become due or as to which a petition has been
filed (voluntary or involuntary) under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or the Account is an Account as
to which any facts, events or occurrences exist which would reasonably be
expected to impair the validity, enforceability or collectibility of such
Account or reduce the amount payable or delay payment thereunder;
(q) the Account Debtor has its principal place of business or
executive office outside the United States or the Account is payable in a
currency other than United States dollars;
(r) [RESERVED];
(s) the Account does not arise from the sale of Products;
(t) the Account includes late charges or finance charges (but only
such portion of the Account shall be ineligible);
(u) the Borrower owning such Account has not signed and delivered to
Administrative Agent notices, in the form requested by Administrative Agent,
directing the Account Debtors to make payment to the applicable Lockbox Account;
(v) the Account exceeds any credit limit established by
Administrative Agent in its reasonable discretion (in which case only such
excess shall be considered ineligible);
(w) the Account arises out of the sale of any Inventory upon which
any other Person holds, claims or asserts a Lien;
(x) [RESERVED]; and/or
(y) the Account or Account Debtor fails to meet such other
specifications and requirements which may from time to time be established by
Administrative Agent in its good faith credit judgment and discretion.
"ENVIRONMENTAL LAWS" means any and all Laws relating to the environment or
the effect of the environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Materials or wastes into the
environment, including ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, Hazardous
Materials or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as the
same may be amended, modified or supplemented from time to time, and any
successor statute thereto, and any and all rules or regulations promulgated from
time to time thereunder.
"ERISA PLAN" means any "employee benefit plan", as such term is defined in
Section 3(3) of ERISA (other than a Multiemployer Plan), which any Borrower
maintains, sponsors or contributes to, or, in the case of an employee benefit
plan which is subject to Section 412 of the Code or Title IV of ERISA, to which
any Borrower or any member of the Controlled Group may have any liability,
including any liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at
9
any time during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
"EVENT OF DEFAULT" has the meaning set forth in Section 11.1.
"FDA" means the Food and Drug Administration of the United States or any
successor entity thereto.
"FDCA" means the federal Food, Drug and Cosmetic Act, as amended, 21
U.S.C. Sections 301 et seq., and all regulations promulgated thereunder.
"FINANCING DOCUMENTS" means this Agreement, any Notes, the Security
Documents, any fee letter among Xxxxxxx Xxxxx and any of the Borrowers relating
to the transactions contemplated hereby, any Subordination Agreement, any
subordination or intercreditor agreement (other than the Subordination
Agreement) pursuant to which any Debt (other than the Subordinated Debt) and/or
any Liens securing such Debt is subordinated to all or any portion of the
Obligations and all other documents, instruments and agreements contemplated
herein or thereby and heretofore executed, executed concurrently herewith or
executed at any time and from time to time hereafter, as any or all of the same
may be amended, supplemented, restated or otherwise modified from time to time.
"FISCAL YEAR" means a fiscal year of Borrowers, ending on December 31 of
each calendar year.
"FINANCING DOCUMENTS GUARANTEE" means any agreement that may exist from
time to time pursuant to which any third party other than a Borrower shall
Guarantee the Obligations of the Borrowers under this Agreement and/or the other
Financing Documents.
"FIXED CHARGE COVERAGE RATIO" has the meaning provided in the Compliance
Certificate.
"FIXED CHARGE COVERAGE RATIO MEASUREMENT START DATE" means the last day of
December 2005.
"FOREIGN LENDER" has the meaning set forth in Section 2.8(c).
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances as of the date
of determination.
"GOOD MANUFACTURING PRACTICES" means current good manufacturing practices,
as set forth in 21 C.F.R. Parts 210 and 211.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any agency, department or Person
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any corporation or other Person
owned or controlled (through stock or capital ownership or otherwise) by any of
the foregoing, whether domestic or foreign.
"GUARANTEE" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase
10
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise), or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided, however, that the term Guarantee shall not include
endorsements for collection or deposit in the Ordinary Course of Business. The
term "GUARANTEE" used as a verb has a corresponding meaning.
"GUARANTOR" means any Credit Party that has executed or delivered, or
shall in the future execute or deliver, any Financing Document Guarantee of any
portion of the Obligations.
"HAZARDOUS MATERIALS" means (a) any "hazardous substance" as defined in
CERCLA, (b) any "hazardous waste" as defined by the Resource Conservation and
Recovery Act, (c) asbestos, (d) polychlorinated biphenyls, (e) petroleum, its
derivatives, by-products and other hydrocarbons, (f) mold, and (g) any other
pollutant, toxic, radioactive, caustic or otherwise hazardous substance
regulated under Environmental Laws.
"HAZARDOUS MATERIALS CONTAMINATION" means contamination (whether now
existing or hereafter occurring) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant
property by Hazardous Materials, or any derivatives thereof, or on or of any
other property as a result of Hazardous Materials, or any derivatives thereof,
generated on, emanating from or disposed of in connection with the relevant
property.
"HEALTHCARE LAWS" means all applicable Laws relating to the operation of
private label and other drug distributions, the possession, control,
warehousing, marketing, sale and distribution of pharmaceuticals, the operation
of medical or senior housing facilities (such as, but not limited to, nursing
homes, skilled nursing facilities, rehabilitation hospitals, intermediate care
facilities and adult care facilities), patient healthcare, patient healthcare
information, patient abuse, the quality and adequacy of medical care, rate
setting, equipment, personnel, operating policies, fee splitting, including,
without limitation, (a) all federal and state laws governing the sale and
distribution of drugs, biologicals and supplements, including the Controlled
Substances Act (21 U.S.C. Sections 801 et seq.), the Food, Drug and Cosmetic Act
of 1938 (21 U.S.S. Sections 801 et seq.), the Dietary Supplement Health and
Education Act (P.L. 103-417 (1994) and the Omnibus Budget and Reconciliation Act
of 1990 (P. L. 101-508 (1990)), and also the Generic Drug Enforcement Act of
1992, (b) all federal and state fraud and abuse laws, including, without
limitation, the federal Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(6)),
the Xxxxx Law (42 U.S.C. Section 1395nn), the civil False Claims Act (31 U.S.C.
Section 3729 et seq.), (c) TRICARE, (d) HIPAA, (e) Medicare, (f) Medicaid, (g)
quality, safety and accreditation standards and requirements of all applicable
state laws or regulatory bodies, (h) all laws, policies, procedures,
requirements and regulations pursuant to which Healthcare Permits are issued,
and (i) any and all other applicable health care laws, regulations, manual
provisions, policies and administrative guidance, each of (a) through (i) as may
be amended from time to time.
"HEALTHCARE PERMIT" means a Permit issued or required under Healthcare
Laws applicable to the business of any Borrower or any of its Subsidiaries or
necessary in the possession, ownership, warehousing, marketing, promoting, sale,
labeling, furnishing, distribution or delivery of goods or services under
Healthcare Laws applicable to the business of any Borrower or any of its
Subsidiaries.
"HIPAA" means the Health Insurance Portability and Accountability Act of
1996, as the same may be amended, modified or supplemented from time to time,
and any successor statute thereto, and any and all rules or regulations
promulgated from time to time thereunder.
"HIPAA COMPLIANT" shall mean that the applicable Person is in compliance
with each of the applicable requirements of the so-called "Administrative
Simplification" provisions of HIPAA, and is not and would not reasonably be
expected to become the subject of any civil or criminal penalty, process,
11
claim, action or proceeding, or any administrative or other regulatory review,
survey, process or proceeding (other than routine surveys or reviews conducted
by any government health plan or other accreditation entity) that would result
in any of the foregoing or that would reasonably be expected to adversely affect
such Person's business, operations, assets, properties or condition (financial
or otherwise), in connection with any actual or potential violation by such
Person of the provisions of HIPAA.
"INDEMNITEES" has the meaning set forth in Section 12.2.
"INSTRUMENT" means "instrument", as defined in Article 9 of the UCC.
"INTEREST ADJUSTMENT DATE" has the meaning set forth in the definition of
Base Rate Margin above.
"INTELLECTUAL PROPERTY" means, with respect to any Person, all Patents,
Trademarks, trade names, trade styles, trade dress, service marks, logos and
other business identifiers, Copyrights, technology, know-how and processes and
all applications and licenses therefor, used in or necessary for the conduct of
business by such Person.
"INTERCOMPANY LOANS" has the meaning set forth in Section 2.11.
"INVENTORY" has the meaning ascribed to it in the UCC.
"INVESTMENT" means any investment in any Person, whether by means of
acquiring (whether for cash, property, services, securities or otherwise) or
holding securities, capital contributions, loans, time deposits, advances,
Guarantees or otherwise. The amount of any Investment shall be the original cost
of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect thereto.
"INVESTOR" means each of the shareholders of Valera as of the Closing Date
as set forth on Schedule 3.4 as delivered by Borrowers on the Closing Date.
"IRISH SUBSIDIARY" means Valera Pharmaceuticals Ireland Limited, a
corporation organized under the laws of the Republic of Ireland and a direct and
Wholly-Owned Subsidiary of Valera.
"LAWS" means any and all federal, state, local and foreign statutes, laws,
judicial decisions, regulations, guidances, guidelines, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits, concessions,
grants, franchises, governmental agreements and governmental restrictions,
whether now or hereafter in effect, which are applicable to any Credit Party in
any particular circumstance. "LAWS" includes, without limitation, Healthcare
Laws.
"LC ISSUER" means one or more banks, trust companies or other Persons in
each case expressly identified by Administrative Agent from time to time, in its
sole discretion, as an LC Issuer for purposes of issuing one or more Letters of
Credit hereunder. Without limitation of Administrative Agent's discretion to
identify any Person as an LC Issuer, no Person shall be designated as an LC
Issuer unless such Person maintains reporting systems acceptable to
Administrative Agent with respect to letter of credit exposure and agrees to
provide regular reporting to Administrative Agent satisfactory to it with
respect to such exposure.
"LENDER" means each of (a) Xxxxxxx Xxxxx, (b) each other Person party
hereto in its capacity as a lender, (c) each other Person that becomes a party
hereto as Lender pursuant to Section 14.6, and (d) the respective successors of
all of the foregoing, and "Lenders" means all of the foregoing.
12
"LENDER LETTER OF CREDIT" means a Letter of Credit issued by an LC Issuer
that is also, at the time of issuance of such Letter of Credit, a Lender.
"LETTER OF CREDIT" means a standby letter of credit issued for the account
of any Borrower by an LC Issuer which expires by its terms within one year after
the date of issuance and in any event at least thirty (30) days prior to the
Commitment Expiry Date. Notwithstanding the foregoing, a Letter of Credit may
provide for automatic extensions of its expiry date for one or more successive
one (1) year periods provided that the LC Issuer that issued such Letter of
Credit has the right to terminate such Letter of Credit on each such annual
expiration date and no renewal term may extend the term of the Letter of Credit
to a date that is later than the thirtieth (30th) day prior to the Commitment
Expiry Date.
"LETTER OF CREDIT LIABILITIES" means, at any time of calculation, the sum
of (a) without duplication, the amount then available for drawing under all
outstanding Lender Letters of Credit and all Supported Letters of Credit, in
each case without regard to whether any conditions to drawing thereunder can
then be met, plus (b) without duplication, the aggregate unpaid amount of all
reimbursement obligations in respect of previous drawings made under all such
Lender Letters of Credit and Supported Letters of Credit.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement and the
other Financing Documents, any Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement relating to such asset.
"LITIGATION" means any action, suit or proceeding before any court,
mediator, arbitrator or Governmental Authority.
"LOAN ACCOUNT" has the meaning set forth in Section 2.6(b).
"LOANS" means the Revolving Loans.
"LOCKBOX" has the meaning set forth in Section 2.12.
"LOCKBOX ACCOUNT" means an account or accounts maintained at the Lockbox
Bank into which collections of Accounts are paid.
"LOCKBOX BANK" has the meaning set forth in Section 2.12.
"MARKET WITHDRAWAL" means a firm's Removal or Correction of a distributed
product which involves a minor violation that would not be subject to legal
action by the FDA or which involves no violation, e.g., normal stock rotation
practices, routine equipment adjustments and repairs, etc.
"MARGIN STOCK" has the meaning assigned thereto in Regulation U of the
Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), but, for
the avoidance of doubt, not including general domestic economic conditions or
conditions generally affecting businesses in the industry in which Borrower
operates, whether singly or in conjunction with any other event or events, act
or acts, condition or conditions, occurrence or occurrences, whether or not
related (a) a material adverse change in, or a material adverse effect upon, any
of (i) the condition (financial or otherwise), operations, business or
properties of Borrowers and their Subsidiaries taken as a whole, (ii) the rights
and remedies of Administrative Agent or
13
Lenders under any Financing Document, or the ability of any Credit Party to
perform any of its obligations under any Financing Document to which it is a
party, (iii) the legality, validity or enforceability of any Financing Document,
(iv) the existence, perfection or priority of any security interest granted in
any Financing Document or the value of any material Collateral; and/or (b) the
imposition of a fine against or the creation of any liability of any Credit
Party to any Governmental Authority under any Healthcare Laws in excess of
$100,000.
"MATERIAL CONTRACTS" has the meaning set forth in Section 3.17.
"MAXIMUM LAWFUL RATE" has the meaning set forth in Section 2.7(b).
"XXXXXXX XXXXX" means Xxxxxxx Xxxxx Capital, a division of Xxxxxxx
Xxxxx Business Financial Services Inc., and its successors.
"MONTHLY FINANCIAL STATEMENTS" has the meaning set forth in the definition
of Base Rate Margin above.
"MULTIEMPLOYER PLAN" means a multiemployer plan, that is intended to meet
the definition set forth in Section 4001(a)(3) of ERISA, to which any Borrower
or any member of the Controlled Group may have any liability.
"NON-FUNDING REVOLVING LENDER" means a Revolving Lender that has delivered
a notice to the Administrative Agent stating that such Revolving Lender shall
cease making Revolving Loans due to the non-satisfaction of one or more
conditions set forth in Article 7, and specifying any such non-satisfied
conditions; provided, however, that any Revolving Lender delivering any such
notice shall be a Non-Funding Revolving Lender solely over the period commencing
on the Business Day following receipt by Administrative Agent of such notice,
and terminating on such date that such Revolving Lender has either revoked the
effectiveness of such notice or acknowledged to Administrative Agent the
satisfaction of the condition specified in such notice.
"NOTES" means the Revolving Loan Notes.
"NOTICE OF BORROWING" means a notice of a Responsible Officer of Borrower
Representative, appropriately completed and substantially in the form of Exhibit
D hereto.
"NOTICE OF LC CREDIT EVENT" means a notice from a Responsible Officer of
Borrower Representative to Administrative Agent with respect to any issuance,
increase or extension of a Letter of Credit specifying: (a) the date of issuance
or increase of a Letter of Credit; (b) the identity of the LC Issuer with
respect to such Letter of Credit, (c) the expiry date of such Letter of Credit;
(d) the proposed terms of such Letter of Credit, including the face amount; and
(e) the transactions that are to be supported or financed with such Letter of
Credit or increase thereof.
"OBLIGATIONS" means all obligations, liabilities and indebtedness
(monetary (including post-petition interest, whether or not allowed) or
otherwise) of each Credit Party under this Agreement or any other Financing
Document, in each case howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing, or due or to
become due. In addition to, but without duplication of, the foregoing, the
Obligations shall include, without limitation, all obligations, liabilities and
indebtedness arising from or in connection with (a) all Support Agreements, and
(b) all Lender Letters of Credit.
"OFAC" means the U.S. Department of Treasury Office of Foreign Assets
Control.
14
"OFAC LISTS" means, collectively, the Specially Designated Nationals
and Blocked Persons List maintained by OFAC pursuant to Executive Order No.
13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of
terrorists or other restricted Persons maintained pursuant to any of the
rules and regulations of OFAC or pursuant to any other applicable Executive
Orders.
"OPERATING ACCOUNT" means a bank account, investment account or other
account in which funds transferred from a Payment Account, advances under this
Agreement, or funds otherwise obtained from or through Administrative Agent may
be held or invested for credit to or for the benefit of any Borrower (for
current operating expenses or otherwise.
"ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving any Credit Party, the ordinary course of such Credit Party's business,
as conducted by such Credit Party in accordance with past practices.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of designation
for preferred stock or other forms of preferred equity) and which relate to the
internal governance of such Person (such as by-laws, a partnership agreement or
an operating, limited liability or members agreement).
"PATENTS" means any patents, patent registrations and patent applications
and all renewals, extensions and continuations of any of the foregoing.
"PAYMENT ACCOUNT" means the account specified on the signature pages
hereof into which all payments by or on behalf of each Borrower to
Administrative Agent under the Financing Documents shall be made, or such other
account as Administrative Agent shall from time to time specify by notice to
Borrower Representative.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means any ERISA Plan that is subject to Section 412 of the
Code or Title IV of ERISA.
"PERMITS" means licenses, certificates, accreditations, product clearances
or approvals, provider numbers or provider authorizations, marketing
authorizations, other authorizations, registrations, permits, consents and
approvals required in connection with the conduct of any Borrower's or any
Subsidiary's business or to comply with any applicable Laws, including, without
limitation, drug listings and drug establishment registrations under 21 U.S.C.
Section 510, registrations issued by DEA under 21 U.S.C. Section 823 (if
applicable to any Product), and those issued by State governments for the
conduct of any Borrower's or any Subsidiary's business.
"PERMITTED CONTEST" means, with respect to any tax obligation or other
obligation allegedly or potentially owing from any Borrower to any governmental
tax authority or other third party, a contest maintained in good faith by
appropriate proceedings promptly instituted and diligently conducted and with
respect to which such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made on the books and
records and financial statements of the applicable Borrower(s); provided that
(a) compliance with the obligation that is the subject of such contest is
effectively stayed during such challenge; (b) Borrowers' title to, and its right
to use, the Collateral is not adversely affected thereby and Administrative
Agent's Lien and priority on the Collateral are not adversely affected, altered
or impaired thereby; (c) Borrowers have given prior written notice to
Administrative Agent of Borrowers' intent to so contest the obligation; (d) in
the case of real estate taxes
15
or assessments or mechanic's, workmen's, materialmen's or other like Liens with
respect to any real estate which is part of the Collateral, Borrowers have
obtained an endorsement, in form and substance satisfactory to Administrative
Agent, to the loan policy of title insurance issued to Administrative Agent
insuring over any Lien created by such obligation, or Borrowers have deposited
with Administrative Agent a bond or other security satisfactory to
Administrative Agent, in its reasonable discretion, against loss or injury by
reason of such contest or the non-payment of such obligation or charge (and if
such security is cash, Administrative Agent may, but shall not be obligated to,
deposit the same in an interest-bearing account and interest accrued thereon, if
any, shall be deemed to constitute a part of such security for purposes of this
Agreement, but Administrative Agent (i) makes no representation or warranty as
to the rate or amount of interest, if any, which may accrue thereon and shall
have no liability in connection therewith and (ii) shall not be deemed to be a
trustee or fiduciary with respect to its receipt of any such security and any
such security may be commingled with other monies of Administrative Agent); (e)
the Collateral or any part thereof or any interest therein shall not be in any
danger of being sold, forfeited or lost by reason of such contest by Borrowers;
(g) Borrowers have given Administrative Agent notice of the commencement of such
contest and upon request by Administrative Agent, from time to time, notice of
the status of such contest by Borrowers and/or confirmation of the continuing
satisfaction of this definition; and (h) upon a final determination of such
contest, Borrowers shall promptly comply with the requirements thereof.
"PERMITTED LIENS" means: (a) deposits or pledges of cash to secure
obligations under workmen's compensation, social security or similar laws, or
under unemployment insurance (but excluding Liens arising under ERISA); (b)
deposits or pledges of cash to secure bids, tenders, contracts (other than
contracts for the payment of money or the deferred purchase price of property or
services), leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the Ordinary Course of Business; (c)
carrier's, warehousemen's, mechanic's, workmen's, materialmen's or other like
Liens on Collateral, other than Accounts, arising in the Ordinary Course of
Business with respect to obligations which are not due, or which are being
contested pursuant to a Permitted Contest; (d) Liens on Collateral, other than
Accounts, for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or the subject of a Permitted Contest; (e)
attachments, appeal bonds, judgments and other similar Liens on Collateral other
than Accounts, for sums not exceeding $25,000 in the aggregate arising in
connection with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are the subject of a Permitted Contest; (f) with respect to real estate,
easements, rights of way, restrictions, minor defects or irregularities of
title, none of which, individually or in the aggregate, materially interfere
with the benefits of the security intended to be provided by the Security
Documents, materially affect the value or marketability of the Collateral,
impair the use or operation of the Collateral for the use currently being made
thereof or impair Borrowers' ability to pay the Obligations in a timely manner
or impair the use of the Collateral or the ordinary conduct of the business of
any Borrower or any Subsidiary and which, in the case of any real estate which
is part of the Collateral, are set forth as exceptions to or subordinate matters
in the title insurance policy accepted by Administrative Agent insuring the lien
of the Security Documents; (g) Liens and encumbrances in favor of Administrative
Agent under the Financing Documents; (h) [RESERVED], (i) Liens on Collateral
other than Accounts existing on the date hereof and set forth on Schedule 5.2
and (j) any Lien on any asset other than Accounts or Inventory securing Debt
permitted under Section 5.1(d), provided, however, that such Lien attaches
concurrently with or within twenty (20) days after the acquisition thereof.
"PERSON" means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any Governmental Authority.
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"PRODUCTS" means any products manufactured, sold, developed, tested or
marketed by any Borrower or any of their Subsidiaries, including without
limitation, those products set forth on Exhibit F (as amended from time to time
pursuant to Section 3.12(a)).
"PRO RATA SHARE" means (a) with respect to a Lender's obligation to make
Revolving Loans, such Lender's right to receive payments of principal and
interest with respect thereto, such Lender's right to receive the unused line
fee described in Section 2.3(b), and such Lender's obligation to share in Letter
of Credit Liabilities and to receive the related Letter of Credit fee described
in Section 2.5(b), the Revolving Loan Commitment Percentage of such Lender, and
(b) for all other purposes (including, without limitation, the indemnification
obligations arising under Section 13.6) with respect to any Lender, the
percentage obtained by dividing (i) the sum of the Revolving Loan Commitment
Amount of such Lender (or, in the event the Revolving Loan Commitment shall have
been terminated, such Lender's then existing Revolving Loan Outstandings), by
(ii) the sum of the Revolving Loan Commitment (or, in the event the Revolving
Loan Commitment shall have been terminated, the then existing Revolving Loan
Outstandings) of all Lenders.
"QUALIFIED IPO" shall mean an initial public offering of the common stock
of Valera pursuant to a firm commitment underwriting which shall result in at
least $20,000,000 in net cash proceeds to Valera (after deduction of all
transaction expenses including fees and expenses of each legal counsel and
underwriters).
"RECALL" means a firm's Removal or Correction of a marketed product that
the FDA considers to be in violation of the laws it administers and against
which the FDA would initial legal action, e.g., seizure.
"REIMBURSEMENT OBLIGATIONS" means, at any date, the obligations of each
Borrower then outstanding to reimburse (a) Administrative Agent for payments
made by Administrative Agent under a Support Agreement, and/or (b) any LC
Issuer, for payments made by such LC Issuer under a Lender Letter of Credit.
"REQUIRED LENDERS" means at any time Lenders holding (a) sixty-six and two
thirds percent (66 2/3%) or more of the sum of the Revolving Loan Commitment, or
(b) if the Revolving Loan Commitment has been terminated, sixty-six and two
thirds percent (66 2/3%) or more of the sum of (x) the then aggregate
outstanding principal balance of the Loans plus (y) the then aggregate amount of
Letter of Credit Liabilities.
"RESPONSIBLE OFFICER" means any of the Chief Executive Officer or Chief
Financial Officer of the applicable Borrower.
"REQUIRED PERMIT" means a Permit (a) issued or required under Laws
applicable to the business of any Borrower or any of its Subsidiaries or
necessary in the manufacturing, importing, exporting, possession, ownership,
warehousing, marketing, promoting, sale, labeling, furnishing, distribution or
delivery of goods or services under Laws applicable to the business of any
Borrower or any of its Subsidiaries or any Drug Application and including
without limitation, at any point in time, all licenses, approvals and permits
issued by the FDA or any other applicable Governmental Entity necessary for the
testing, manufacture, marketing or sale of any Product by any applicable
Borrower(s) as such activities are being conducted by such Borrower(s) with
respect to such Product at such time, and (b) issued by any Person from which
any Borrower or any of its Subsidiaries has, as of the Closing Date, received an
accreditation.
"RESTRICTED DISTRIBUTION" means as to any Person (a) any dividend or other
distribution (whether in cash, securities or other property) on any equity
interest in such Person (except those payable solely in its equity interests of
the same class), (b) any payment on account of (i) the purchase, redemption,
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retirement, defeasance, surrender, cancellation, termination or acquisition of
any equity interests in such Person or any claim respecting the purchase or sale
of any equity interest in such Person or (ii) any option, warrant or other right
to acquire any equity interests in such Person, (c) any management fees,
salaries or other fees or compensation to an Investor, an Affiliate of Borrower
or an Affiliate of any Subsidiary of any Borrower, provided that,
notwithstanding anything to the contrary contained in the foregoing, payments of
salaries and other compensation for the officers and directors of Borrowers and
their Subsidiaries in the ordinary course of Borrowers' and their Subsidiaries'
business consistent with past practices shall not constitute "Restricted
Distributions" for any purposes under this Agreement, (d) any lease or rental
payments to an Affiliate or Subsidiary of any Borrower, or (e) repayments of or
debt service on loans or other indebtedness held by an Investor, an Affiliate of
Borrower or an Affiliate of any Subsidiary of any Borrower.
"REVOLVING LENDER" means each Lender having a Revolving Loan Commitment
Amount in excess of zero (or, in the event the Revolving Loan Commitment shall
have been terminated at any time, each Lender at such time having Revolving Loan
Outstandings in excess of zero).
"REVOLVING LOAN BORROWING" means a borrowing of a Revolving Loan.
"REVOLVING LOAN COMMITMENT" means the sum of each Lender's Revolving Loan
Commitment Amount.
"REVOLVING LOAN COMMITMENT AMOUNT" means, as to any Lender, the dollar
amount set forth opposite such Lender's name on the Commitment Annex under the
column "Revolving Loan Commitment Amount" (if such Lender's name is not so set
forth thereon, then the dollar amount on the Commitment Annex for the Revolving
Loan Commitment Amount for such Lender shall be deemed to be zero), as such
amount may be adjusted from time to time by any "Amounts Assigned" (with respect
to such Lender's portion of Revolving Loans outstanding and its commitment to
make Revolving Loans) pursuant to the terms of any and all effective Assignment
Agreements to which such Lender is a party.
"REVOLVING LOAN COMMITMENT PERCENTAGE" means, as to any Lender, (a) on the
Closing Date, the percentage set forth opposite such Lender's name on the
Commitment Annex under the column "Revolving Loan Commitment Percentage" (if
such Lender's name is not so set forth thereon, then, on the Closing Date, such
percentage for such Lender shall be deemed to be zero), and (b) on any date
following the Closing Date, the percentage equal to the Revolving Loan
Commitment Amount of such Lender on such date divided by the Revolving Loan
Commitment on such date.
"REVOLVING LOAN LIMIT" means, at any time, the lesser of (a) the Revolving
Loan Commitment and (b) the Borrowing Base.
"REVOLVING LOAN NOTE" has the meaning set forth in Section 2.4.
"REVOLVING LOAN OUTSTANDINGS" means at any time of calculation the sum of
the then existing aggregate outstanding principal amount of Revolving Loans and
the then existing Letter of Credit Liabilities.
"REVOLVING LOANS" has the meaning set forth in Section 2.2(a).
"SECURITY DOCUMENTS" means this Agreement and any other agreement,
document or instrument executed concurrently herewith or at any time hereafter
pursuant to which one or more Credit Parties or any other Person either (a)
Guarantees payment or performance of all or any portion of the Obligations
(including, without limitation, any Financing Documents Guarantee), and/or (b)
provides, as security for all or any portion of the Obligations, a Lien on any
of its assets in favor of Administrative Agent for its
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own benefit and the benefit of the Lenders, as any or all of the same may be
amended, supplemented, restated or otherwise modified from time to time.
"SOLVENT" means, with respect to any Person, that such Person (a) owns and
will own assets the fair saleable value of which are (i) greater than the total
amount of its liabilities (including Contingent Obligations), and (ii) greater
than the amount that will be required to pay the probable liabilities of its
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it; (b)
has capital that is not unreasonably small in relation to its business as
presently conducted or after giving effect to any contemplated transaction; and
(c) does not intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due.
"STATED RATE" has the meaning set forth in Section 2.7(b).
"STOCK RECOVERY" means a firm's Removal or Correction of a product that
has not been marketed or that has not left the direct control of the firm, i.e.,
the product is located on the premises owned by, or under the control of, the
firm and no portion of the lot has been released for sale or use.
"SUBORDINATED DEBT" means any Debt of Borrowers incurred with the prior
written consent of the Lenders pursuant to the terms of any Subordinated Debt
Documents.
"SUBORDINATED DEBT DOCUMENTS" means any documents evidencing and/or
securing Debt governed by a Subordination Agreement, all of which documents must
be in form and substance acceptable to Administrative Agent in its sole
discretion.
"SUBORDINATION AGREEMENT" means any agreement between Administrative Agent
and another creditor of Borrowers, as the same may be amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
thereof, pursuant to which the Debt owing from any Borrower(s) and/or the Liens
securing such Debt granted by any Borrower(s) to such creditor are subordinated
in any way to the Obligations and the Liens created under the Security
Documents, the terms and provisions of which such Subordination Agreement have
been agreed to by and are acceptable to Administrative Agent in the exercise of
its sole discretion.
"SUBSIDIARY" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, capital stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of more than 50% of such capital stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than 50% or
of which any such Person is a general partner or may exercise the powers of a
general partner. Unless the context otherwise requires, each reference to a
Subsidiary shall be a reference to a Subsidiary of a Borrower.
"SUPPORT AGREEMENT" has the meaning set forth in Section 2.5(a).
"SUPPORTED LETTER OF CREDIT" means a Letter of Credit issued by an LC
Issuer in reliance on one or more Support Agreements.
"TAXES" has the meaning set forth in Section 2.8.
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"TERMINATION DATE" means the earlier to occur of (a) the Commitment
Expiry Date, or (b) any date on which Administrative Agent accelerates the
maturity of the Loans pursuant to Section 11.2.
"TRADEMARKS" means any trademarks, trademark registrations, and
trademark applications, all renewals and continuations of any of the foregoing
and all goodwill attributable to any of the foregoing.
"UCC" means the Uniform Commercial Code of the State of New York or of
any other state the laws of which are required to be applied in connection with
the perfection of security interests in any Collateral.
"UNITED STATES" means the United States of America.
"VALERA" has the meaning set forth in the Preamble hereto.
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person of which all of the equity securities (other than, in
the case of a corporation, directors' qualifying shares, to the extent legally
required) are directly or indirectly owned and controlled by such Person or one
or more Wholly-Owned Subsidiaries of such Person.
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder (including,
without limitation, determinations made pursuant to the exhibits hereto) shall
be made, and all financial statements required to be delivered hereunder shall
be prepared on a consolidated basis in accordance with GAAP applied on a basis
consistent with the most recent audited consolidated financial statements of
each Borrower and its Consolidated Subsidiaries delivered to Administrative
Agent and each of the Lenders on or prior to the Closing Date. If at any time
any change in GAAP would affect the computation of any financial ratio or
financial requirement set forth in any Financing Document, and either Borrowers
or the Required Lenders shall so request, the Administrative Agent, the Lenders
and Borrowers shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of such change in GAAP (subject
to the approval of the Required Lenders); provided, however, that until so
amended, (a) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (b) Borrowers shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement which include a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP. All amounts used for purposes of financial
calculations required to be made herein shall be without duplication.
SECTION 1.3 OTHER DEFINITIONAL PROVISIONS.
References in this Agreement to "Articles", "Sections", "Annexes",
"Exhibits" or "Schedules" shall be to Articles, Sections, Annexes, Exhibits or
Schedules of or to this Agreement unless otherwise specifically provided. Any
term defined herein may be used in the singular or plural. "Include", "includes"
and "including" shall be deemed to be followed by "without limitation". Except
as otherwise specified or limited herein, references to any Person include the
successors and assigns of such Person. References "from" or "through" any date
mean, unless otherwise specified, "from and including" or "through and
including", respectively. References to any statute or act shall include all
related current regulations and all amendments and any successor statutes, acts
and regulations. References to any statute or act, without additional reference,
shall be deemed to refer to federal statutes and acts of the United States.
References to any agreement, instrument or document shall include all schedules,
exhibits, annexes and other attachments thereto.
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SECTION 1.4 FUNDING AND SETTLEMENT CURRENCY.
Unless otherwise specified herein, the settlement of all payments and
fundings hereunder between or among the parties hereto shall be made in lawful
money of the United States and in immediately available funds.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
SECTION 2.1 [RESERVED].
SECTION 2.2 REVOLVING LOANS.
(a) Revolving Loans and Borrowings.
(i) On the terms and subject to the conditions set
forth herein, each Lender severally agrees to make Loans to Borrowers from time
to time as set forth herein (each a "REVOLVING LOAN", and collectively,
"REVOLVING LOANS") equal to such Lender's Revolving Loan Commitment Percentage
of Revolving Loans requested by Borrower Representative hereunder, provided,
however, that after giving effect thereto, the Revolving Loan Outstandings shall
not exceed the Revolving Loan Limit. Within the foregoing limits, Borrowers may
borrow under this Section 2.2(a)(i), may prepay or repay Revolving Loans from
time to time and may reborrow Revolving Loans pursuant to this Section
2.2(a)(i).
(ii) Borrower Representative shall deliver to
Administrative Agent a Notice of Borrowing with respect to each proposed
Revolving Loan Borrowing (other than Revolving Loans made pursuant to clause
(iii) or clause (iv) below), such Notice of Borrowing to be delivered no later
than 1:00 PM New Jersey time two (2) Business Days prior to such proposed
borrowing. Once given, a Notice of Borrowing shall be irrevocable and Borrowers
shall be bound thereby. Borrower Representative shall also deliver to
Administrative Agent in connection with each such proposed Revolving Loan
Borrowing a Borrowing Base Certificate dated as of the Notice of Borrowing
prepared with figures and information as of the close of business on the
Business Day immediately preceding the date of such Borrowing Base Certificate
(which shall be in addition to any Borrowing Base Certificate required under
Section 4.1(c)).
(iii) Each Borrower hereby authorizes Lenders and
Administrative Agent to make Revolving Loans based on telephonic notices made by
any Person which Administrative Agent, in good faith, believes to be acting on
behalf of Borrower Representative. Borrower Representative agrees to deliver to
Administrative Agent a Notice of Borrowing in respect of each Revolving Loan
requested by telephone no later than one (1) Business Day following such
request. If the Notice of Borrowing differs in any respect from the action taken
by Administrative Agent and Lenders, the records of Administrative Agent and the
Lenders shall govern absent manifest error. Each Borrower further hereby
authorizes Lenders and Administrative Agent to make Revolving Loans based on
electronic notices made by any Person which Administrative Agent, in good faith,
believes to be acting on behalf of Borrower Representative, but only after
Administrative Agent shall have established procedures acceptable to
Administrative Agent for accepting electronic Notices of Borrowing, as indicated
by Administrative Agent's written confirmation thereof.
(iv) Each Borrower and each Revolving Lender hereby
authorizes Administrative Agent to make Revolving Loans on behalf of Revolving
Lenders, at any time in its sole discretion, (A) as provided in Section 2.5(c),
with respect to obligations arising under Support Agreements and/or Lender
Letters of Credit, and (B) to pay principal owing in respect of the Loans and
interest, fees, expenses and other charges of any Credit Party from time to time
arising under this Agreement or any other Financing Document, so long as, in
each case after giving effect to any such
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Revolving Loans, the Revolving Loan Outstandings do not exceed the Revolving
Loan Commitment; provided, however, that (x) Administrative Agent shall have no
obligation at any time to make any Revolving Loan pursuant to the provisions of
the preceding sub-clause (B), and (y) Administrative Agent shall have no right
to make Revolving Loans (I) as provided in Section 2.5(c) for the account of any
Revolving Lender that was a Non-Funding Revolving Lender at the time
Administrative Agent executed a Support Agreement, or at the time of issuance of
any Lender Letter of Credit, for which, in either case, reimbursement
obligations have arisen pursuant to Section 2.5(c), and (II) for the account of
any then existing Non-Funding Revolving Lender to pay interest, fees, expenses
and other charges of any Credit Party (other than reimbursement obligations that
have arisen pursuant to Section 2.5(c) in respect of Support Agreements executed
or Lender Letters of Credit issued at the time any such Non-Funding Revolving
Lender was not then a Non-Funding Revolving Lender). Administrative Agent may
make Revolving Loans under this clause (iv) at any time regardless of whether
any Default or Event of Default has occurred and is continuing at such time or
whether any other condition precedent specified in Section 7.2 for the making of
Loans shall be unsatisfied at such time.
(v) The Borrowing Base shall be determined by
Administrative Agent based on the most recent Borrowing Base Certificate
delivered to Administrative Agent in accordance with this Agreement and such
other information as may be available to Administrative Agent. Without limiting
any other rights and remedies of Administrative Agent hereunder or under the
other Financing Documents, the Revolving Loans shall be subject to
Administrative Agent's continuing right to withhold from the Borrowing Base
reserves, and to increase and decrease such reserves from time to time, if and
to the extent that in Administrative Agent's good faith credit judgment and
discretion, such reserves are necessary, including to protect the Collateral or
to protect against possible non-payment of Accounts for any reason by Account
Debtors or possible diminution of the value of any Collateral or possible
non-payment of any of the Obligations or for any taxes or customs duties or in
respect of any state of facts which may constitute a Default or Event of
Default. Administrative Agent may, at its option, implement reserves by
designating as ineligible a sufficient amount of Accounts that would otherwise
be Eligible Accounts, so as to reduce the Borrowing Base by the amount of the
intended reserves.
(vi) Administrative Agent, in its discretion, may
further adjust the Borrowing Base by applying percentages (known as "liquidity
factors") to Eligible Accounts by payor class based upon the applicable
Borrower's actual recent collection history for each such payor class in a
manner consistent with Administrative Agent's underwriting practices and
procedures. Such liquidity factors may be adjusted by Administrative Agent from
time to time as warranted by Administrative Agent's underwriting practices and
procedures and using Administrative Agent's good faith credit judgment.
(vii) Administrative Agent may from time to time
change the form of Notice of Borrowing and Borrowing Base Certificate and shall
at all times have the right to request a Notice of Borrowing signed by each
entity constituting the Borrowers. Borrower Representative shall deliver a
Borrowing Base Certificate to Administrative Agent no less often than every
thirty (30) days even if Borrower Representative chooses not to deliver a Notice
of Borrowing during such thirty-day (30) period.
(b) Mandatory Revolving Loan Repayments and Prepayments.
(i) The Revolving Loan Commitment shall terminate on
the Termination Date. On such Termination Date, there shall become due, and
Borrowers shall pay, the entire outstanding principal amount of each Revolving
Loan, together with accrued and unpaid interest thereon to, but excluding, the
Termination Date.
(ii) If at any time the Revolving Loan Outstandings
exceed the Revolving Loan Limit, then, on the next succeeding Business Day,
Borrowers shall repay the Revolving Loans or cash collateralize Letter of Credit
Liabilities in the manner specified in Section 2.5(e) or cancel
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outstanding Letters of Credit, or any combination of the foregoing, in an
aggregate amount equal to such excess.
(iii) Principal payable on account of Revolving Loans
shall be payable by Borrowers to Administrative Agent (A) immediately upon the
receipt by any Borrower or Administrative Agent of any payments on or proceeds
from any of the Accounts, to the extent of such payments or proceeds, as further
described in Section 2.12 below, and (B) in full on the Termination Date.
(c) Optional Prepayments. Borrowers may from time to time
prepay the Revolving Loans in whole or in part without penalty; provided,
however, that any such partial prepayment shall be in an amount equal to
$100,000 or a higher integral multiple of $25,000. For the avoidance of doubt,
nothing in this section shall limit the applicability of Section 2.3(d) upon any
termination of the Lenders' funding obligations in respect of the Revolving Loan
Commitment under this Agreement.
SECTION 2.3 INTEREST, INTEREST CALCULATIONS AND CERTAIN FEES.
(a) Interest. From and following the Closing Date, the
Loans and the other Obligations shall bear interest at the sum of the Base Rate
plus the applicable Base Rate Margin.
(b) Unused Line Fee. From and following the Closing Date,
Borrowers shall pay Administrative Agent, for the benefit of all Lenders
committed to make Revolving Loans, in accordance with their respective Pro Rata
Shares, a fee in an amount equal to (i) (A) the Revolving Loan Commitment minus
(B) the average daily balance of the sum of the Revolving Loan Outstandings
during the preceding month, multiplied by (ii) one half of one percent (0.50%)
per annum. Such fee is to be paid monthly in arrears on the first day of each
month.
(c) Collateral Fee. From and following the Closing Date,
Borrowers shall pay Administrative Agent, for its own account and not for the
benefit of any other Lenders, a fee in an amount equal to (i) the average daily
balance of the sum of the Revolving Loan Outstandings during the preceding
month, multiplied by (ii) fifty-four hundredths of one percent (0.54%) per
annum. Such fee is to be paid monthly in arrears on the first day of each month.
(d) Commitment Fee. Contemporaneous with Borrowers'
execution of this Agreement, Borrowers shall pay Administrative Agent, for the
benefit of all Lenders committed to make Revolving Loans on the Closing Date, in
accordance with their respective Pro Rata Shares, a fee in an amount equal to
(i) the Revolving Loan Commitment, multiplied by (ii) one percent (1.00%).
(e) Deferred Commitment Fee. If Lenders' funding
obligations in respect of the Revolving Loan Commitment under this Agreement
terminate for any reason (whether by voluntary termination by Borrowers, by
reason of the occurrence of an Event of Default or otherwise) prior to the
Commitment Expiry Date, Borrowers shall pay to Administrative Agent, for the
benefit of all Lenders committed to make Revolving Loans, a fee (the "DEFERRED
COMMITMENT FEE") as compensation for the costs of such Lenders being prepared to
make funds available to Borrowers under this Agreement, equal to an amount
determined by multiplying the Revolving Loan Commitment by the following
applicable percentage amount: two percent (2.0%) if such termination occurs
prior to the first anniversary of the Closing Date, and one percent (1.0%) if
such termination occurs prior to the second anniversary of Closing Date. No
amount will be payable pursuant to this paragraph if the Revolving Loan
Commitment of the Lenders under this Agreement terminate after the second
anniversary of the Closing Date.
(f) [RESERVED].
(g) Audit Fees. Borrowers shall pay to Administrative
Agent, for its own account and not for the benefit of any other Lenders, all
fees and expenses in connection with audits of
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Borrowers' books and records, audits, valuations or appraisals of the
Collateral, audits of Borrowers' compliance with applicable Laws and such other
matters as Administrative Agent shall deem appropriate, which shall be due and
payable on the first Business Day of the month following the date of issuance by
Administrative Agent of a written request for payment thereof to Borrowers.
(h) Wire Fees. Borrowers shall pay to Administrative
Agent, for its own account and not for the account of any other Lenders, on
written demand, any and all fees, costs or expenses which Administrative Agent
pays to a bank or other similar institution (including, without limitation, any
fees paid by Administrative Agent to any other Lender) arising out of or in
connection with (i) the forwarding to Borrowers or any other Person on behalf of
Borrowers, by Administrative Agent, of proceeds of the Loans made by any Lender
to Borrowers pursuant to this Agreement, and (ii) the depositing for collection,
by Administrative Agent, of any check or item of payment received or delivered
to Administrative Agent on account of Obligations.
(i) Late Charges. If payments of principal (other than a
final installment of principal upon the Termination Date), interest due on the
Obligations, or any other amounts due hereunder or under the other Financing
Documents are not timely made and remain overdue for a period of five (5) days,
Borrowers, without notice or demand by Administrative Agent, promptly shall pay
to Administrative Agent, for its own account and not for the benefit of any
other Lenders, as additional compensation to Administrative Agent in
administering the Obligations, an amount equal to two percent (2%) of each
delinquent payment.
(j) Computation of Interest and Related Fees; Payment of
Interest. All interest and fees under each Financing Document shall be
calculated on the basis of a 360-day year for the actual number of days elapsed.
The date of funding of Loan shall be included in the calculation of interest.
The date of payment of a Loan shall be excluded from the calculation of
interest. If a Loan is repaid on the same day that it is made, one (1) day's
interest shall be charged. Interest on all Loans is payable in arrears on the
first day of each month and on the maturity of such Loans, whether by
acceleration or otherwise.
(k) Automated Clearing House Payments. If Administrative
Agent so elects, monthly payments of interest and amortization shall be paid to
Administrative Agent by Automated Clearing House debit of immediately available
funds from the financial institution account designated by Borrower
Representative in the Automated Clearing House debit authorization executed by
Borrowers or Borrower Representative in connection with this Agreement, and
shall be effective upon receipt. Borrowers shall execute any and all forms and
documentation necessary from time to time to effectuate such automatic debiting.
In no event shall any such payments be refunded to Borrowers.
SECTION 2.4 NOTES.
The portion of the Revolving Loans made by each Lender shall be
evidenced, if so requested by such Lender, by a promissory note executed by
Borrowers on a joint and several basis (a "REVOLVING LOAN NOTE") in an original
principal amount equal to such Lender's Pro Rata Share of the Revolving Loan
Commitment.
SECTION 2.5 LETTERS OF CREDIT AND LETTER OF CREDIT FEES.
(a) Letter of Credit. On the terms and subject to the
conditions set forth herein, the Revolving Loan Commitment may be used by
Borrowers, in addition to the making of Revolving Loans hereunder, for the
issuance, prior to the Termination Date, by (i) Administrative Agent, of letters
of credit, Guarantees or other agreements or arrangements (each, a "SUPPORT
AGREEMENT") to induce an LC Issuer to issue or increase the amount of, or extend
the expiry date of, one or more Letters of Credit and
24
(ii) a Lender, identified by Administrative Agent, as an LC Issuer, of one or
more Lender Letters of Credit, so long as, in each case:
(i) Administrative Agent shall have received a Notice
of LC Credit Event at least two (2) Business Days before the relevant date of
issuance, increase or extension; and
(ii) after giving effect to such issuance, increase
or extension, (A) the aggregate Letter of Credit Liabilities under all Letters
of Credit do not exceed $1,500,000, and (B) the Revolving Loan Outstandings do
not exceed the Revolving Loan Limit.
Nothing in this Agreement shall be construed to obligate any Lender to issue,
increase the amount of or extend the expiry date of any letter of credit, which
act or acts, if any, shall be subject to agreements to be entered into from time
to time between Borrowers and such Lender. Each Lender that is an LC Issuer
hereby agrees to give Administrative Agent prompt written notice of each
issuance of a Lender Letter of Credit by such Lender and each payment made by
such Lender in respect of Lender Letters of Credit issued by such Lender.
(b) Letter of Credit Fee. Borrowers shall pay to
Administrative Agent, for the benefit of the Revolving Lenders in accordance
with their respective Pro Rata Shares, a letter of credit fee with respect to
the Letter of Credit Liabilities for each Letter of Credit, computed for each
day from the date of issuance of such Letter of Credit to the date that is the
last day a drawing is available under such Letter of Credit, at a rate of three
and one quarter percent (3.25%) per annum. Such fee shall be payable in arrears
on the last day of each calendar month prior to the Termination Date and on such
date. In addition, Borrowers agree to pay promptly to the LC Issuer any fronting
or other fees that it may charge in connection with any Letter of Credit.
(c) Reimbursement Obligations of Borrowers. If either (i)
Administrative Agent shall make a payment to an LC Issuer pursuant to a Support
Agreement, or (ii) any Lender shall honor any draw request under, and make
payment in respect of, a Lender Letter of Credit, (A) the applicable Borrower
shall reimburse Administrative Agent or such Lender, as applicable, for the
amount of such payment by the end of the day on which Administrative Agent or
such Lender shall make such payment and (B) Borrower Representative shall be
deemed to have immediately requested that Revolving Lenders make a Revolving
Loan, in a principal amount equal to the amount of such payment (but solely to
the extent such Borrower shall have failed to directly reimburse Administrative
Agent or, with respect to Lender Letters of Credit, the applicable LC Issuer,
for the amount of such payment). Administrative Agent shall promptly notify
Revolving Lenders of any such deemed request and each Revolving Lender (other
than any such Revolving Lender that was a Non-Funding Revolving Lender at the
time the applicable Supported Letter of Credit or Lender Letter of Credit was
issued) hereby agrees to make available to Administrative Agent not later than
1:00 PM New Jersey time on the Business Day following such notification from
Administrative Agent such Revolving Lender's Pro Rata Share of such Revolving
Loan. Each Revolving Lender (other than any applicable Non-Funding Revolving
Lender specified above) hereby absolutely and unconditionally agrees to fund
such Revolving Lender's Pro Rata Share of the Loan described in the immediately
preceding sentence, unaffected by any circumstance whatsoever, including,
without limitation, (x) the occurrence and continuance of a Default or Event of
Default, (y) the fact that, whether before or after giving effect to the making
of any such Revolving Loan, the Revolving Loan Outstandings exceed or will
exceed the Revolving Loan Limit, and/or (z) the non-satisfaction of any
conditions set forth in Section 7.2. Administrative Agent hereby agrees to apply
the gross proceeds of each Revolving Loan deemed made pursuant to this Section
2.5(c) in satisfaction of Borrowers' reimbursement obligations arising pursuant
to this Section 2.5(c). Borrowers shall pay interest, on demand, on all amounts
so paid by Administrative Agent pursuant to any Support Agreement or to any
applicable Lender in honoring a draw request under any Lender Letter of Credit
for each day from the date of such payment until Borrowers reimburse
Administrative Agent or the applicable Lender therefore
25
(whether pursuant to clause (A) or (B) of the first sentence of this subsection
(c)) at a rate per annum equal to the sum of two percent (2%) plus the interest
rate applicable to Revolving Loans for such day.
(d) Reimbursement and Other Payments by Borrowers. The
obligations of each Borrower to reimburse Administrative Agent and/or the
applicable LC Issuer pursuant to Section 2.5(c) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, under all circumstances whatsoever, including the following:
(i) any lack of validity or enforceability of, or any
amendment or waiver of or any consent to departure from, any Letter of Credit or
any related document;
(ii) the existence of any claim, set-off, defense or
other right which any Borrower may have at any time against the beneficiary of
any Letter of Credit, the LC Issuer (including any claim for improper payment),
Administrative Agent, any Lender or any other Person, whether in connection with
any Financing Document or any unrelated transaction, provided, however, that
nothing herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(iii) any statement or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect whatsoever;
(iv) any affiliation between the LC Issuer and
Administrative Agent; or
(v) to the extent permitted under applicable law, any
other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
(e) Deposit Obligations of Borrowers. In the event any
Letters of Credit are outstanding at the time that Borrowers prepay or are
required to repay the Obligations or the Revolving Loan Commitment is
terminated, Borrowers shall (i) deposit with Administrative Agent for the
benefit of all Revolving Lenders cash in an amount equal to one hundred five
percent (105%) of the aggregate outstanding Letter of Credit Liabilities to be
available to Administrative Agent, for its benefit and the benefit of issuers of
Lender Letters of Credit, to reimburse payments of drafts drawn under such
Letters of Credit and pay any fees and expenses related thereto, and (ii) prepay
the fee payable under Section 2.5(b) with respect to such Letters of Credit for
the full remaining terms of such Letters of Credit assuming that the full amount
of such Letters of Credit as of the date of such repayment or termination remain
outstanding until the end of such remaining terms. Upon termination of any such
Letter of Credit and provided no Event of Default has occurred and is
continuing, the unearned portion of such prepaid fee attributable to such Letter
of Credit shall be refunded to Borrowers, together with the deposit described in
the preceding clause (i) to the extent not previously applied by Administrative
Agent in the manner described herein.
SECTION 2.6 GENERAL PROVISIONS REGARDING PAYMENT; LOAN ACCOUNT.
(a) All payments to be made by each Borrower under any
Financing Document, including payments of principal and interest made hereunder
and pursuant to any other Financing Document, and all fees, expenses,
indemnities and reimbursements, shall be made without set-off, recoupment or
counterclaim, in lawful money of the United States and in immediately available
funds. If any payment hereunder 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 (it being understood and agreed
that, solely for purposes of calculating financial covenants and computations
contained herein and determining compliance therewith, if payment is made, in
full, on any such extended due date, such payment shall be deemed to have been
paid on the original due date without giving effect to any extension
26
thereto). Any payments received in the Payment Account before 1:00 PM New Jersey
time on any date shall be deemed received by Administrative Agent on such date,
and any payments received in the Payment Account after 1:00 PM New Jersey time
on any date shall be deemed received by Administrative Agent on the next
succeeding Business Day.
(b) Administrative Agent shall maintain a loan account
(the "LOAN ACCOUNT") on its books to record Loans and other extensions of credit
made by the Lenders hereunder or under any other Financing Document, and all
payments thereon made by each Borrower. All entries in the Loan Account shall be
made in accordance with Administrative Agent's customary accounting practices as
in effect from time to time. The balance in the Loan Account, as recorded in
Administrative Agent's books and records at any time shall be conclusive and
binding evidence of the amounts due and owing to Administrative Agent by each
Borrower absent clear and convincing evidence to the contrary; provided,
however, that any failure to so record or any error in so recording shall not
limit or otherwise affect any Borrower's duty to pay all amounts owing hereunder
or under any other Financing Document. Administrative Agent shall endeavor to
provide Borrowers with a monthly statement regarding the Loan Account (but
neither Administrative Agent nor any Lender shall have any liability if
Administrative Agent shall fail to provide any such statement). Unless any
Borrower notifies Administrative Agent of any objection to any such statement
(specifically describing the basis for such objection) within thirty (30) days
after the date of receipt thereof, it shall be deemed final, binding and
conclusive upon Borrowers in all respects as to all matters reflected therein.
SECTION 2.7 MAXIMUM INTEREST.
(a) In no event shall the interest charged with respect
to the Notes (if any) or any other obligations of any Borrower under any
Financing Document exceed the maximum amount permitted under the laws of the
State of New York or of any other applicable jurisdiction.
(b) Notwithstanding anything to the contrary herein or
elsewhere, if at any time the rate of interest payable hereunder or under any
Note or other Financing Document (the "STATED RATE") would exceed the highest
rate of interest permitted under any applicable law to be charged (the "MAXIMUM
LAWFUL RATE"), then for so long as the Maximum Lawful Rate would be so exceeded,
the rate of interest payable shall be equal to the Maximum Lawful Rate;
provided, however, that if at any time thereafter the Stated Rate is less than
the Maximum Lawful Rate, each Borrower shall, to the extent permitted by law,
continue to pay interest at the Maximum Lawful Rate until such time as the total
interest received is equal to the total interest which would have been received
had the Stated Rate been (but for the operation of this provision) the interest
rate payable. Thereafter, the interest rate payable shall be the Stated Rate
unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in
which event this provision shall again apply.
(c) In no event shall the total interest received by any
Lender exceed the amount which it could lawfully have received had the interest
been calculated for the full term hereof at the Maximum Lawful Rate. If,
notwithstanding the prior sentence, any Lender has received interest hereunder
in excess of the Maximum Lawful Rate, such excess amount shall be applied to the
reduction of the principal balance of the Loans or to other amounts (other than
interest) payable hereunder, and if no such principal or other amounts are then
outstanding, such excess or part thereof remaining shall be paid to Borrowers.
(d) In computing interest payable with reference to the
Maximum Lawful Rate applicable to any Lender, such interest shall be calculated
at a daily rate equal to the Maximum Lawful Rate divided by the number of days
in the year in which such calculation is made.
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SECTION 2.8 TAXES.
(a) All payments of principal and interest on the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp, documentary,
payroll, employment, property or franchise taxes and other taxes, fees, duties,
levies, assessments, withholdings or other charges of any nature whatsoever
(including interest and penalties thereon) imposed by any taxing authority,
excluding taxes imposed on or measured by Administrative Agent's or any Lender's
net income by the jurisdiction under which Administrative Agent or such Lender
is organized or conducts business (other than solely as the result of entering
into any of the Financing Documents or taking any action thereunder) (all
non-excluded items being called "TAXES"). If any withholding or deduction from
any payment to be made by any Borrower hereunder is required in respect of any
Taxes pursuant to any applicable Law, then Borrowers will: (i) pay directly to
the relevant authority the full amount required to be so withheld or deducted;
(ii) promptly forward to Administrative Agent an official receipt or other
documentation satisfactory to Administrative Agent evidencing such payment to
such authority; and (iii) pay to Administrative Agent for the account of
Administrative Agent and Lenders such additional amount or amounts as is
necessary to ensure that the net amount actually received by Administrative
Agent and each Lender will equal the full amount Administrative Agent and such
Lender would have received had no such withholding or deduction been required.
If any Taxes are directly asserted against Administrative Agent or any Lender
with respect to any payment received by Administrative Agent or such Lender
hereunder, Administrative Agent or such Lender may pay such Taxes and Borrowers
will promptly pay such additional amounts (including any penalty, interest or
expense) as is necessary in order that the net amount received by such Person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Taxes not been
asserted so long as such amounts have accrued on or after the day which is two
hundred seventy (270) days prior to the date on which Administrative Agent or
such Lender first made written demand therefor.
(b) If any Borrower fails to pay any Taxes when due to
the appropriate taxing authority or fails to remit to Administrative Agent, for
the account of Administrative Agent and the respective Lenders, the required
receipts or other required documentary evidence, Borrowers shall indemnify
Administrative Agent and Lenders for any incremental Taxes, interest or
penalties that may become payable by Administrative Agent or any Lender as a
result of any such failure.
(c) Each Lender that (i) is organized under the laws of a
jurisdiction other than the United States and (ii)(A) is a party hereto on the
Closing Date or (B) purports to become an assignee of an interest as a Lender
under this Agreement after the Closing Date (unless such Lender was already a
Lender hereunder immediately prior to such assignment) (each such Lender a
"FOREIGN LENDER") shall execute and deliver to each of Borrowers and
Administrative Agent one or more (as Borrowers or Administrative Agent may
reasonably request) United States Internal Revenue Service Forms W-8ECI, W-8BEN,
W-8IMY (as applicable) and other applicable forms, certificates or documents
prescribed by the United States Internal Revenue Service or reasonably requested
by Administrative Agent certifying as to such Lender's entitlement to a complete
exemption from withholding or deduction of Taxes. Borrowers shall not be
required to pay additional amounts to any Lender pursuant to this Section 2.8
with respect to United States withholding and income Taxes to the extent that
the obligation to pay such additional amounts would not have arisen but for the
failure of such Lender to comply with this paragraph other than as a result of a
change in law.
SECTION 2.9 CAPITAL ADEQUACY.
If any Lender shall reasonably determine that the adoption or taking
effect of, or any change in, any applicable Law regarding capital adequacy, in
each instance, after the Closing Date, or any change after the Closing Date in
the interpretation, administration or application thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation,
administration or
28
application thereof, or the compliance by any Lender or any Person controlling
such Lender with any request, guideline or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency adopted or otherwise taking effect after the
Closing Date, has or would have the effect of reducing the rate of return on
such Lender's or such controlling Person's capital as a consequence of such
Lender's obligations hereunder or under any Support Agreement or Lender Letter
of Credit to a level below that which such Lender or such controlling Person
could have achieved but for such adoption, taking effect, change,
interpretation, administration, application or compliance (taking into
consideration such Lender's or such controlling Person's policies with respect
to capital adequacy) then from time to time, upon written demand by such Lender
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail, a copy
of which shall be furnished to Administrative Agent), Borrowers shall promptly
pay to such Lender such additional amount as will compensate such Lender or such
controlling Person for such reduction, so long as such amounts have accrued on
or after the day which is two hundred seventy (270) days prior to the date on
which such Lender first made demand therefor.
SECTION 2.10 MITIGATION OBLIGATIONS.
If any Lender requires compensation under Section 2.9, or requires any
Borrower to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.8, then, upon the
written request of Borrower Representative, such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder (subject to the
terms of this Agreement) to another of its offices, branches or affiliates, if,
in the judgment of such Lender, such designation or assignment (a) would
eliminate or materially reduce amounts payable pursuant to any such Section, as
the case may be, in the future, and (b) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender (as determined in its sole discretion). Without limitation of the
provisions of Section 12.1, Borrowers hereby agree to pay all reasonable costs
and expenses incurred by any Lender in connection with any such designation or
assignment.
SECTION 2.11 APPOINTMENT OF BORROWER REPRESENTATIVE.
Each Borrower hereby designates Borrower Representative as its
representative and agent on its behalf for the purposes of issuing Notices of
Borrowing, Borrowing Base Certificates and Notices of LC Credit Events, giving
instructions with respect to the disbursement of the proceeds of the Loans,
requesting Letters of Credit, giving and receiving all other notices and
consents hereunder or under any of the other Financing Documents and taking all
other actions (including in respect of compliance with covenants) on behalf of
any Borrower or Borrowers under the Financing Documents. Borrower Representative
hereby accepts such appointment. Notwithstanding anything to the contrary
contained in this Agreement, no Borrower other than Borrower Representative
shall be entitled to take any of the foregoing actions. The proceeds of each
Loan made hereunder shall be advanced to or at the direction of Borrower
Representative and if not used by Borrower Representative in its business (for
the purposes provided in this Agreement) shall be deemed to be immediately
advanced by Borrower Representative to the appropriate other Borrower hereunder
as an intercompany loan (collectively, "INTERCOMPANY LOANS"). All Letters of
Credit and Support Agreements issued hereunder shall be issued at Borrower
Representative's request therefor and shall be allocated to the appropriate
Borrower's Intercompany Loan account by Borrower Representative. All collections
of each Borrower in respect of Accounts and other proceeds of Collateral of such
Borrower received by Administrative Agent and applied to the Obligations shall
also be deemed to be repayments of the Intercompany Loans owing by such Borrower
to Borrower Representative. Borrowers shall maintain accurate books and records
with respect to all Intercompany Loans and all repayments thereof.
Administrative Agent and each Lender may regard any notice or other
communication pursuant to any Financing Document from Borrower Representative as
a notice or communication from all Borrowers, and may give any notice or
communication required or permitted to
29
be given to any Borrower or all Borrowers hereunder to Borrower Representative
on behalf of such Borrower or all Borrowers. Each Borrower agrees that each
notice, election, representation and warranty, covenant, agreement and
undertaking made on its behalf by Borrower Representative shall be deemed for
all purposes to have been made by such Borrower and shall be binding upon and
enforceable against such Borrower to the same extent as if the same had been
made directly by such Borrower.
SECTION 2.12 COLLECTIONS AND LOCKBOX ACCOUNT.
(a) Borrowers shall maintain a lockbox (the "LOCKBOX")
with a United States depository institution designated from time to time by
Administrative Agent (the "LOCKBOX BANK"), subject to the provisions of this
Agreement, and shall execute with the Lockbox Bank a Deposit Account Control
Agreement and such other agreements related to such Lockbox as Administrative
Agent may require. Borrowers shall ensure that all collections of Accounts are
paid directly from Account Debtors into the Lockbox for deposit into the Lockbox
Account and/or directly into the Lockbox Account.
(b) Without limiting the generality of the foregoing
clause (a), Borrowers shall direct all Credit Card Issuers and Credit Card
Payment Intermediaries to make cash payments due to Borrowers directly to the
Lockbox Account.
(c) All funds deposited into a Lockbox Account shall be
transferred into the Payment Account by the close of each Business Day.
(d) Notwithstanding anything in any lockbox agreement or
Deposit Account Control Agreement to the contrary, Borrowers agree that they
shall be liable for any fees and charges in effect from time to time and charged
by the Lockbox Bank in connection with the Lockbox and the Lockbox Account, and
that Administrative Agent shall have no liability therefor. Borrowers hereby
indemnify and agree to hold Administrative Agent harmless from any and all
liabilities, claims, losses and demands whatsoever, including reasonable
attorneys' fees and expenses, arising from or relating to actions of
Administrative Agent or the Lockbox Bank pursuant to this Section or any lockbox
agreement or Deposit Account Control Agreement except to the extent arising
solely due to the gross negligence or willful misconduct of Administrative Agent
as finally determined by a court of competent jurisdiction.
(e) Administrative Agent shall apply, on a daily basis,
all funds transferred into the Payment Account pursuant to this Section to
reduce the amount of any Revolving Loans outstanding in such order of
application as Administrative Agent shall elect. If as the result of collections
of Accounts pursuant to the terms and conditions of this Section a credit
balance exists with respect to the Payment Account, such credit balance shall
not accrue interest in favor of Borrowers, but shall be transferred on a weekly
basis by Administrative Agent to one or more Operating Accounts designated by
Borrower Representative, so long as no material Default or Event of Default has
occurred and is continuing.
(f) To the extent that any collections of Accounts or
proceeds of other Collateral are not sent directly to the Lockbox but are
received by any Borrower, such collections shall be held in trust for the
benefit of Administrative Agent pursuant to an express trust created hereby and
immediately remitted, in the form received, to applicable Lockbox and Lockbox
Account. No such funds received by any Borrower shall be commingled with other
funds of the Borrowers.
(g) Borrowers acknowledge and agree that compliance with
the terms of this Section is essential, and that Administrative Agent and
Lenders will suffer immediate and irreparable injury and have no adequate remedy
at law, if any Borrower, through acts or omissions, causes or permits Account
Debtors to send payments other than to the Lockbox, or if any Borrower fails to
immediately deposit collections of Accounts or proceeds of other Collateral in
the Lockbox Account as herein required. Accordingly, in addition to all other
rights and remedies of Administrative Agent and Lenders hereunder,
Administrative Agent shall have the right to seek specific performance of the
Borrowers'
30
obligations under this Section, and any other equitable relief as Administrative
Agent may deem necessary or appropriate, and Borrowers waive any requirement for
the posting of a bond in connection with such equitable relief.
(h) Borrowers shall not, and Borrowers shall not suffer
or permit any Credit Party to, (i) withdraw any amounts from any Lockbox
Account, (ii) change the procedures or sweep instructions under the agreements
governing any Lockbox Accounts, or (iii) send to or deposit in any Lockbox
Account any funds other than payments made with respect to and proceeds of
Accounts or other Collateral. Borrowers shall, and shall cause each Credit Party
to, cooperate with Administrative Agent in the identification and reconciliation
on a daily basis of all amounts received in or required to be deposited into the
Lockbox Accounts. If more than five percent (5%) of the collections of Accounts
received by Borrowers during any given fifteen (15) day period is not identified
or reconciled to the reasonable satisfaction of Administrative Agent within ten
(10) Business Days of receipt, Administrative Agent shall not be obligated to
make further advances under this Agreement until such amount is identified or is
reconciled to the reasonable satisfaction of Administrative Agent, as the case
may be. In addition, if any such amount cannot be identified or reconciled to
the satisfaction of Administrative Agent, Administrative Agent may utilize its
own staff or, if it deems necessary, engage an outside auditor, in either case
at Borrowers' expense (which in the case of Administrative Agent's own staff
shall be in accordance with Administrative Agent's then prevailing customary
charges (plus expenses)), to make such examination and report as may be
necessary to identify and reconcile such amount.
(i) For purposes of calculating interest, all funds
transferred from the Payment Account for application to any Revolving Loans
shall be subject to a four (4) Business Day clearance period.
(j) If any Borrower breaches its obligation to direct
payments of the proceeds of the Collateral to the Lockbox Account,
Administrative Agent, as the irrevocably made, constituted and appointed true
and lawful attorney for Borrowers, may, by the signature or other act of any of
Administrative Agent's officers (without requiring any of them to do so), direct
any Account Debtor to pay proceeds of the Collateral to Borrowers by directing
payment to the Lockbox Account.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
To induce Administrative Agent and Lenders to enter into this Agreement
and to make the Loans and other credit accommodations contemplated hereby, each
Borrower hereby represents and warrants to Administrative Agent and each Lender
that:
SECTION 3.1 EXISTENCE AND POWER.
Each Credit Party is an entity as specified on Schedule 3.1, is duly
organized, validly existing and in good standing under the laws of the
jurisdiction specified on Schedule 3.1, has the same legal name as it appears in
such Credit Party's Organizational Documents and an organizational
identification number (if any), in each case as specified on Schedule 3.1, and
has all powers and all Permits necessary or desirable in the operation of its
business as presently conducted or as proposed to be conducted, except where the
failure to have such Permits would not reasonably be expected to have a Material
Adverse Effect. Each Credit Party is qualified to do business as a foreign
entity in each jurisdiction in which it is required to be so qualified, which
jurisdictions as of the Closing Date are specified on Schedule 3.1, except where
the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 3.1, no Credit Party
(a) has had, over the five (5) year period preceding the Closing Date, any name
other than its current name, or (b) was incorporated or organized under the laws
of any jurisdiction other than its current jurisdiction of incorporation or
organization.
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SECTION 3.2 ORGANIZATION AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION.
The execution, delivery and performance by each Credit Party of the
Financing Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents,
require no further action by or in respect of, or filing with, any Governmental
Authority and do not violate, conflict with or cause a breach or a default under
(a) any Law applicable to any Credit Party or any of the Organizational
Documents of any Credit Party, or (b) any agreement or instrument binding upon
it, except for such violations, conflicts, breaches or defaults as would not,
with respect to this clause (b), reasonably be expected to have a Material
Adverse Effect.
SECTION 3.3 BINDING EFFECT.
Each of the Financing Documents to which any Credit Party is a party
constitutes a valid and binding agreement or instrument of such Credit Party,
enforceable against such Credit Party in accordance with its respective terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws relating to the enforcement of creditors' rights generally
and by general equitable principles.
SECTION 3.4 CAPITALIZATION.
The authorized equity securities of each of the Credit Parties as of
the Closing Date is as set forth on Schedule 3.4. All issued and outstanding
equity securities of each of the Credit Parties are duly authorized and validly
issued, fully paid and nonassessable, and such equity securities were issued in
compliance with all applicable Laws. The identity of the holders of the equity
securities of each of the Credit Parties and the percentage of their
fully-diluted ownership of the equity securities of each of the Credit Parties
as of the Closing Date is set forth on Schedule 3.4. No shares of the capital
stock or other equity securities of any Credit Party, other than those described
above, are issued and outstanding as of the Closing Date. Except as set forth on
Schedule 3.4, as of the Closing Date there are no preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements
or understandings for the purchase or acquisition from any Credit Party of any
equity securities of any such entity.
SECTION 3.5 FINANCIAL INFORMATION.
(a) The consolidated and consolidating balance sheet of
the Borrowers and their Consolidated Subsidiaries as of December 31, 2004 and
the related consolidated and consolidating statements of operations,
stockholders' equity (or comparable calculation, if such Person is not a
corporation) and cash flows for the fiscal year then ended, reported on by Ernst
& Young LLP, copies of which have been delivered to Administrative Agent, fairly
present in all material respects, in conformity with GAAP, the consolidated and
consolidating financial position of Borrowers and its Consolidated Subsidiaries
as of such date and their consolidated and consolidating results of operations,
changes in stockholders' equity (or comparable calculation) and cash flows for
such period.
(b) The unaudited consolidated and consolidating balance
sheet of the Borrowers and their Consolidated Subsidiaries as of July 31, 2005
and the related unaudited consolidated and consolidating statements of
operations and cash flows for the seven months then ended, copies of which have
been delivered to Administrative Agent, fairly present in all material respects,
in conformity with GAAP applied on a basis consistent with the financial
statements referred to in Section 3.5(a), the consolidated and consolidating
financial position of the Borrowers and their Consolidated Subsidiaries as of
such date and their consolidated and consolidating results of operations and
cash flows for the seven months then ended (subject to normal year-end
adjustments and the absence of footnote disclosures). As of the date of such
balance sheet and the date hereof, no Credit Party had or has any material
liabilities, contingent or otherwise, including liabilities for taxes, long term
leases or forward or long term commitments, which are not properly reflected on
such balance sheet.
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(c) [RESERVED]
(d) The information contained in the most recently
delivered Borrowing Base Certificate is complete and correct.
SECTION 3.6 LITIGATION.
Except as set forth on Schedule 3.6 as of the Closing Date, and except
as hereafter disclosed to Administrative Agent in writing, there is no
Litigation pending against, or to such Borrower's knowledge threatened against
or affecting, any Credit Party. There is no Litigation pending in which an
adverse decision would reasonably be expected to have a Material Adverse Effect.
SECTION 3.7 OWNERSHIP OF PROPERTY.
Each Borrower and each of its Subsidiaries is the lawful owner of, has
good and marketable title to and is in lawful possession of, or has valid
leasehold interests in, all properties and other assets (real or personal,
tangible, intangible or mixed) purported or reported to be owned or leased (as
the case may be) by such Person.
SECTION 3.8 NO DEFAULT.
No Event of Default, or to such Borrower's knowledge, Default, has
occurred and is continuing. No Credit Party is in breach or default under or
with respect to any contract, agreement, lease or other instrument to which it
is a party or by which its property is bound or affected, which breach or
default would reasonably be expected to have a Material Adverse Effect.
SECTION 3.9 LABOR MATTERS.
As of the Closing Date, there are no strikes or other labor disputes
pending or, to such Borrower's knowledge, threatened against any Credit Party.
Hours worked and payments made to the employees of the Credit Parties have not
been in violation of the Fair Labor Standards Act or any other applicable Law
dealing with such matters. All payments due from the Credit Parties, or for
which any claim may be made against any of them, on account of wages and
employee and retiree health and welfare insurance and other benefits have been
paid or accrued as a liability on their books, as the case may be. The
consummation of the transactions contemplated by the Financing Documents will
not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which it is a party or by
which it is bound.
SECTION 3.10 REGULATED ENTITIES.
No Credit Party is an "investment company" or a company "controlled" by
an "investment company" or a "subsidiary" of an "investment company," all within
the meaning of the Investment Company Act of 1940. No Credit Party is a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935.
SECTION 3.11 MARGIN REGULATIONS.
None of the proceeds from the Loans have been or will be used, directly
or indirectly, for the purpose of purchasing or carrying any Margin Stock, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any Margin Stock or for any other purpose which
might cause any of the Loans to be considered a "purpose credit" within the
meaning of Regulation T, U or X of the Federal Reserve Board.
33
SECTION 3.12 COMPLIANCE WITH LAWS; ANTI-TERRORISM LAWS; COMPLIANCE
WITH PRODUCTS.
(a) Each Credit Party is in compliance with the
requirements of all applicable Laws, except for such Laws the noncompliance with
which would not reasonably be expected to have a Material Adverse Effect.
Further and without limiting the generality of the foregoing, each Credit Party:
(i) has obtained all Required Permits, or has
contracted with third parties holding Required Permits, necessary for compliance
with all Laws and all such Required Permits are current;
(ii) to its knowledge, has not used the services of
any Person debarred under the provisions of the Generic Drug Enforcement Act of
1992, 21 U.S.C. Section 335a (a) or (b);
(iii) warrants and represents that none of its
officers, directors, employees, shareholders, their agents or, to its knowledge,
affiliates has been convicted of any crime or engaged in any conduct for which
debarment is mandated by 21 U.S.C. Section 335a (a) or authorized by 21 U.S.C.
Section 335a (b);
(iv) warrants and represents that none of its
officers, directors, employees, shareholders, their agents or, to its knowledge,
affiliates has made an untrue statement of material fact or fraudulent statement
to the FDA or failed to disclose a material fact required to be disclosed to the
FDA, committed an act, made a statement, or failed to make a statement that
would reasonably be expected to provide a basis for the FDA to invoke its policy
respecting "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities," set forth in 56 FED. REG. 46191 (September 10, 1991);
(v) has not received any written notice that any
Governmental Authority, including without limitation the FDA, the DEA, the
Office of the Inspector General of HHS or the United States Department of
Justice has commenced or threatened to initiate any action against a Credit
Party, any action to enjoin a Credit Party, their officers, directors,
employees, shareholders or their agents and Affiliates, from conducting their
businesses at any facility owned or used by them or for any material civil
penalty, injunction, seizure or criminal action;
(vi) except as set forth on Schedule 3.12, has not
received from the FDA or the DEA, at any time since January 1, 2003, a Warning
Letter, Form FDA-483, "Untitled Letter," other correspondence or notice setting
forth allegedly objectionable observations or alleged violations of laws and
regulations enforced by the FDA or the DEA, or any comparable correspondence
from any state or local authority responsible for regulating drug products and
establishments, or any comparable correspondence from any foreign counterpart of
the FDA or DEA, or any comparable correspondence from any foreign counterpart of
any state or local authority with regard to any Product or the manufacture,
processing, packing, or holding thereof; and.
(vii) except as set forth on Schedule 3.12, has not
engaged in any Recalls, Market Withdrawals, or other forms of product retrieval
from the marketplace of any Products since January 1, 2003.
(b) None of the Credit Parties, their Affiliates or any
of their respective agents acting or benefiting in any capacity in connection
with the transactions contemplated by this Agreement is (i) in violation of any
Anti-Terrorism Law, (ii) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii)
is a Blocked Person. No Credit Party nor, to the knowledge of any Credit Party,
any of its Affiliates or agents acting or benefiting in any capacity in
connection with the transactions contemplated by this Agreement, (x) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any Blocked Person, or
34
(y) deals in, or otherwise engages in any transaction relating to, any property
or interest in property blocked pursuant to Executive Order No. 13224, any
similar executive order or other Anti-Terrorism Law.
(c) With respect to Products:
(i) All Products are listed on Exhibit F and
Borrowers have delivered to Administrative Agent on or prior to the Closing Date
all Required Permits relating to such Products issued or outstanding as of the
Closing Date; provided that, if after the Closing Date, any Borrower wishes to
manufacture, sell, develop, test or market any new Product, Borrowers shall give
prior written notice to Administrative Agent of such intention (which shall
include a brief description of such Product, plus copies of all Required Permits
relating to such new Product and/or the applicable Borrower's manufacture, sale,
development, testing or marketing thereof issued or outstanding as of the date
of such notice) along with a copy of an amended and restated Exhibit F (and
further provided that, if Borrower shall at any time obtain any new or
additional Required Permits from the FDA, DEA, or parallel state or local
authorities, or foreign counterparts of the FDA, DEA, or parallel state or local
authorities, with respect to any Product which has previously been disclosed to
Administrative Agent, Borrower shall promptly give written notice to
Administrative Agent of such new or additional Required Permits, along with a
copy thereof);
(ii) Each Product is not adulterated or misbranded
within the meaning of the FDCA;
(iii) Each Product is not an article prohibited from
introduction into interstate commerce under the provisions of Sections 404, 505
or 512 of the FDCA;
(iv) Each Product that is sold pursuant to a Credit
Party's belief that it is not a "new drug", as that term is defined in 21 U.S.C.
Section 321(p), is generally recognized by qualified experts as safe and
effective for its intended uses as those terms have been interpreted by FDA and
the United States Supreme Court, and has been used for a material extent and for
a material time for such uses;
(v) Each Product for which a Drug Efficacy Study
Implementation (DESI) Notice has been published in the Federal Register and each
Product that is identical to, related to, or similar to such a drug conforms
with the requirements set forth in such DESI Notice;
(vi) Each Product has been and/or shall be
manufactured, imported, possessed, owned, warehoused, marketed, promoted, sold,
labeled, furnished, distributed and marketed in accordance with all applicable
Permits and Laws;
(vii) Each Product has been and/or shall be
manufactured in accordance with Good Manufacturing Practices;
(viii) Without limiting the generality of Section
3.12(a)(i) above, with respect to any Product being tested by Borrower, Borrower
has received, and such Product shall be the subject of, all Required Permits
needed in connection with the testing of such Product as such testing is
currently being conducted by or on behalf of Borrower. Borrowers have not
received any notice from any applicable Government Authority, specifically
including the FDA, that such Government Authority is conducting an investigation
or review of any such Required Permit or that any such Required Permit has been
revoked or withdrawn, nor has any such Governmental Authority issued any order
or recommendation stating that the development and/or testing of such Product by
Borrower should cease. No Borrower is aware of any facts or clinical indications
which reasonably indicte that the testing of any such Product by Borrowers
should cease or be suspended;
35
(ix) Without limiting the generality of Section
3.12(a)(i) above, with respect to any Product being manufactured by any
Borrower, Borrower has received, and such Product shall be the subject of, all
Required Permits needed in connection with the manufacture of such Product by
Borrowers. Borrowers have not received any notice from any applicable Government
Authority, specifically including the FDA, that such Government Authority has
conducted an inspection of Borrowers' manufacturing facilities and processes for
such Product which have disclosed any material deficiencies or violations of
Laws (including Healthcare laws) and/or the Required Permits related to the
manufacture of such Product, or that such Government Authority has revoked or
withdrawn any such Required Permit related to the manufacture of such Product,
nor has any such Governmental Authority issued any order or recommendation
stating that such manufacture of such Product by Borrower should cease.
Borrowers have not (since the Closing Date) experienced any significant failures
in their manufacturing of any Product such that the amount of such Product
successfully manufactured by Borrower in accordance with all specifications
thereof and the Required Payments related thereto in any month shall decrease
significantly with respect to the quantities of such Product produced in the
prior month; and
(x) Without limiting the generality of Section
3.12(a)(i) above, with respect to any Product marketed or sold by any Borrower,
Borrower shall have received, and such Product shall be the subject of, all
Required Permits needed in connection with the marketing and sales of such
Product as currently being marketed or sold by Borrower. Borrowers have not
received any notice from any applicable Governmental Authority, specifically
including the FDA, that such Governmental Authority is conducting an
investigation or review of any such Required Permit or approval or that any such
Required Permit has been revoked or withdrawn, nor has any such Governmental
Authority issued any order or recommendation stating that such marketing or
sales of such Product cease or that such Product be withdrawn from the
marketplace. No Borrower is aware of any facts or clinical indications which
reasonably indicate that the marketing or sale of such Product by Borrowers
should cease.
(xi) Without limiting the generality of Section
3.12(a)(i) above, Borrowers have complied with the conditions of approval for
NDA 21-732, including but not limited to initiation of the postmarketing study
described in the October 12, 2004 approval letter relating thereto, and shall
complete and report on the study by the date specified in such approval letter
(and a copy of such report shall be sent to Administrative Agent at the same
time it is sent to the FDA or any other Governmental Authority).
SECTION 3.13 TAXES.
All Federal, state and local tax returns, reports and statements
required to be filed by or on behalf of each Credit Party have been filed with
the appropriate Governmental Authorities in all jurisdictions in which such
returns, reports and statements are required to be filed and, except to the
extent subject to a Permitted Contest, all Taxes (including real property Taxes)
and other charges shown to be due and payable in respect thereof have been
timely paid prior to the date on which any fine, penalty, interest, late charge
or loss may be added thereto for nonpayment thereof. Except to the extent
subject to a Permitted Contest, all state and local sales and use Taxes required
to be paid by each Credit Party have been paid. All Federal and state returns
have been filed by each Credit Party for all periods for which returns were due
with respect to employee income tax withholding, social security and
unemployment taxes, and, except to the extent subject to a Permitted Contest,
the amounts shown thereon to be due and payable have been paid in full or
adequate provisions therefor have been made.
SECTION 3.14 COMPLIANCE WITH ERISA.
(a) Each ERISA Plan (and the related trusts and funding
agreements) complies in form and in operation with, has been administered in
compliance with, and the terms of each ERISA Plan satisfy, the applicable
requirements of ERISA and the Code in all material respects. Each ERISA Plan
36
which is intended to be qualified under Section 401(a) of the Code is so
qualified, and the United States Internal Revenue Service has issued a favorable
determination letter with respect to each such ERISA Plan which may be relied on
currently. No Credit Party has incurred liability for any material excise tax
under any of Sections 4971 through 5000 of the Code.
(b) During the thirty-six (36) month period prior to the
Closing Date or the making of any Loan or the issuance of any Letter of Credit,
(i) no steps have been taken to terminate any Pension Plan and (ii) no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA. No condition exists or event
or transaction has occurred with respect to any Pension Plan which would result
in the incurrence by any Credit Party of any material liability, fine or
penalty. No Credit Party has incurred liability to the PBGC (other than for
current premiums) with respect to any employee Pension Plan. All contributions
(if any) have been made on a timely basis to any Multiemployer Plan that are
required to be made by any Credit Party or any other member of the Controlled
Group under the terms of the plan or of any collective bargaining agreement or
by applicable Law; no Credit Party nor any member of the Controlled Group has
withdrawn or partially withdrawn from any Multiemployer Plan, incurred any
withdrawal liability with respect to any such plan or received notice of any
claim or demand for withdrawal liability or partial withdrawal liability from
any such plan, and no condition has occurred which, if continued, would result
in a withdrawal or partial withdrawal from any such plan, and no Credit Party
nor any member of the Controlled Group has received any notice that any
Multiemployer Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of any excise
tax, that any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be terminated, or
that any such plan is or may become insolvent.
SECTION 3.15 BROKERS.
Except for fees payable to Administrative Agent and/or Lenders, and
except as set forth in Schedule 3.15, no broker, finder or other intermediary
has brought about the obtaining, making or closing of the transactions
contemplated by the Financing Documents, and no Credit Party has or will have
any obligation to any Person in respect of any finder's or brokerage fee in
connection herewith or therewith.
SECTION 3.16 [RESERVED].
SECTION 3.17 MATERIAL CONTRACTS.
Except for the Credit Card Contracts and the other agreements set forth
on Schedule 3.17 (collectively, the "MATERIAL CONTRACTS"), as of the Closing
Date there are no (a) employment agreements covering the management of any
Credit Party, (b) collective bargaining agreements or other labor agreements
covering any employees of any Credit Party, (c) agreements for managerial,
consulting or similar services to which any Credit Party is a party or by which
it is bound, (d) agreements regarding any Credit Party, its assets or operations
or any investment therein to which any of its equityholders is a party or by
which it is bound, (e) real estate leases, Intellectual Property licenses or
other lease or license agreements to which any Credit Party is a party, either
as lessor or lessee, or as licensor or licensee, or (f) customer, distribution,
marketing or supply agreements to which any Credit Party is a party, in each
case with respect to the preceding clauses (a), (c), (d), (e) and (f) requiring
payment of more than $1,000,000 in any year, (g) partnership agreements to which
any Credit Party is a general partner or joint venture agreements to which any
Credit Party is a party, (h) third party billing arrangements to which any
Credit Party is a party, or (i) any other agreements or instruments to which any
Credit Party is a party, and the breach, nonperformance or cancellation of
which, or the failure of which to renew, would reasonably be expected to have a
Material Adverse Effect. Schedule 3.17 sets forth, with respect to each real
estate lease agreement to which any Credit Party is a party (as a lessee) as of
the Closing Date, the address of the subject property and the annual rental (or,
where applicable, a general description of the method of computing the annual
rental). The consummation of the transactions contemplated by the Financing
37
Documents will not give rise to a right of termination in favor of any party to
any Material Contract (other than any Credit Party).
SECTION 3.18 COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS; NO
HAZARDOUS MATERIALS.
Except in each case as set forth on Schedule 3.18:
(a) no Hazardous Materials are located on any properties
now or previously owned, leased or operated by any Credit Party or have been
released into the environment, or deposited, discharged, placed or disposed of
at, on, under or near any of such properties in a manner that would require the
taking of any action under any Environmental Law and have given rise to, or
would reasonably be expected to give rise to, remediation costs and expenses on
the part of the Credit Parties in excess of $250,000; and no portion of any such
property is being used, or has been used at any previous time, for the disposal,
storage, treatment, processing or other handling of Hazardous Materials in
violation of any Environmental Law nor is any such property affected by any
Hazardous Materials Contamination;
(b) no notice, notification, demand, request for
information, citation, summons, complaint or order has been issued, no complaint
has been filed, no penalty has been assessed and no investigation or review is
pending, or to such Borrower's knowledge, threatened by any Governmental
Authority or other Person with respect to any (i) alleged violation by any
Credit Party of any Environmental Law, (ii) alleged failure by any Credit Party
to have any Permits required in connection with the conduct of its business or
to comply with the terms and conditions thereof, (iii) any generation,
treatment, storage, recycling, transportation or disposal of any Hazardous
Materials, or (iv) release of Hazardous Materials;
(c) to the knowledge of such Borrower, all oral or
written notifications of a release of Hazardous Materials required to be filed
by or on behalf of any Credit Party under any applicable Environmental Law have
been filed or are in the process of being timely filed by or on behalf of the
applicable Credit Party;
(d) no property now owned or leased by any Credit Party
and, to the knowledge of such Borrower, no such property previously owned or
leased by any Credit Party, to which any Credit Party has, directly or
indirectly, transported or arranged for the transportation of any Hazardous
Materials, is listed or, to such Borrower's knowledge, proposed for listing, on
the National Priorities List promulgated pursuant to CERCLA, or CERCLIS (as
defined in CERCLA) or any similar state list or is the subject of Federal, state
or local enforcement actions or, to the knowledge of such Borrower, other
investigations which may lead to claims against any Credit Party for clean-up
costs, remedial work, damage to natural resources or personal injury claims,
including, without limitation, claims under CERCLA;
(e) there are no underground storage tanks located on any
property owned or leased by any Credit Party that are not properly registered or
permitted under applicable Environmental Laws or that are leaking or disposing
of Hazardous Materials; and
(f) there are no Liens under or pursuant to any
applicable Environmental Laws on any real property or other assets owned or
leased by any Credit Party, and no actions by any Governmental Authority have
been taken or, to the knowledge of such Borrower, are in process which could
subject any of such properties or assets to such Liens.
For purposes of this Section 3.18, each Credit Party shall be deemed to include
any business or business entity (including a corporation) that is, in whole or
in part, a predecessor of such Credit Party.
38
SECTION 3.19 INTELLECTUAL PROPERTY.
Each Credit Party owns, is licensed to use or otherwise has the right
to use, all Intellectual Property that is material to the condition (financial
or other), business or operations of such Credit Party. All such Intellectual
Property existing as of the Closing Date and registered with any United States
or foreign Governmental Authority is set forth on Schedule 3.19. All
Intellectual Property of each Credit Party is fully protected and/or duly and
properly registered, filed or issued in the appropriate office and jurisdictions
for such registrations, filings or issuances, except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect. To such
Borrower's knowledge, each Credit Party conducts its business without
infringement or claim of infringement of any Intellectual Property rights of
others and there is no infringement or claim of infringement by others of any
Intellectual Property rights of any Credit Party, which infringement or claim of
infringement would reasonably be expected to have a Material Adverse Effect.
SECTION 3.20 REAL PROPERTY INTERESTS.
Except for leasehold interests disclosed on Schedule 3.20, and except
for the ownership or other interests set forth on Schedule 3.20, no Credit Party
has, as of the Closing Date, any ownership, leasehold or other interest in real
property. Schedule 3.20 sets forth, with respect to each parcel of real estate
owned by any Credit Party as of the Closing Date, the address and legal
description of such parcel.
SECTION 3.21 SOLVENCY.
Each Borrower and each additional Credit Party is Solvent.
SECTION 3.22 FULL DISCLOSURE.
None of the information (financial or otherwise) furnished by or on
behalf of any Credit Party to Administrative Agent or any Lender in connection
with the consummation of the transactions contemplated by the Financing
Documents, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which such statements were made.
All financial projections delivered to Administrative Agent and the Lenders by
Borrowers (or their agents) have been prepared on the basis of the assumptions
stated therein. Such projections represent each Borrower's best estimate of such
Borrower's future financial performance and such assumptions are believed by
such Borrower to be fair and reasonable in light of current business conditions;
provided, however, that Borrowers can give no assurance that such projections
will be attained.
SECTION 3.23 INTEREST RATE.
The rate of interest paid under the Notes and the method and manner of
the calculation thereof do not violate any usury or other law or applicable Laws
or any of the Organizational Documents.
SECTION 3.24 CREDIT CARD ISSUERS AND CREDIT CARD PAYMENT
INTERMEDIARIES
Schedule 3.24 sets forth a list of all Credit Card Issuers and Credit
Card Payment Intermediaries with whom Borrower does business and indicates with
respect to each such Credit Card Payment Intermediary which Credit Cared
Issuer(s) such Credit Card Payment Intermediary processes payments for on behalf
of Borrower. As of the Closing Date, Borrowers have delivered to Administrative
Agent a fully executed copy of each Credit Card Contract existing as of the
Closing Date.
39
SECTION 3.25 BUSINESS AND ASSETS OF IRISH SUBSIDIARIES
As of the Closing Date, the Irish Subsidiary has no material assets and
does not yet conduct any business operations.
ARTICLE 4
AFFIRMATIVE COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
SECTION 4.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
(a) Each Borrower will maintain a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in accordance with GAAP and to
provide the information required to be delivered to Administrative Agent and the
Lenders hereunder.
(b) Each Borrower will furnish to Administrative Agent
(or cause to be furnished to Administrative Agent) the following financial
information and reports with respect to Borrowers in each case in form and
format and providing information satisfactory to Administrative Agent in its
discretion:
(i) a sales and collections report and accounts
receivable and payable aging schedule on a form reasonably acceptable to Lender
within twenty-five (25) days after the end of each calendar month, which shall
include, without limitation, a report of sales, credits issued, and collections
received;
(ii) within twenty-five (25) days after the end
of each calendar month (specifically including without limitation the last month
of each fiscal year), internally prepared monthly financial statements prepared
for Borrowers and their Consolidated Subsidiaries on a consolidated and
consolidating basis in accordance with GAAP;
(iii) [RESERVED];
(iv) [RESERVED];
(v) within twenty-five (25) days after the end
of each measurement period applicable to any financial covenant hereunder, such
financial reports and information as Administrative Agent shall require
evidencing compliance with the applicable financial covenants, which reports and
information shall include, at a minimum, delivery to Administrative Agent of a
Compliance Certificate, and, if requested by Administrative Agent, back-up
documentation (including, without limitation, invoices, receipts and other
evidence of costs incurred during such quarter as Administrative Agent shall
reasonably require) evidencing the propriety of the deductions from revenues in
determining such compliance;
(vi) [RESERVED];
(vii) internally prepared annual financial
statements prepared for Borrowers and their Consolidated Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP within sixty (60)
days after the end of each fiscal year;
(viii) annual consolidated and consolidating
audited financial statements prepared for Borrowers and their Consolidated
Subsidiaries in accordance with GAAP and prepared by a
40
firm of independent public accountants reasonably satisfactory to Administrative
Agent, within ninety (90) days after the end of each fiscal year;
(ix) promptly upon receipt thereof, copies of any
reports by the independent accountants in connection with any interim audit and
copies of each management control letter provided by independent accountants;
(x) within ten (10) days after Administrative
Agent request, a written statement, duly acknowledged by Borrower, setting forth
any right of set-off, claims, counterclaim, withholdings or other defenses to
which any of the Collateral or the Administrative Agent's rights with respect to
the Collateral are subject or that exist against such sums and Borrowers'
obligations under the Financing Documents are subject; and
(xi) such additional information, reports or
statements regarding the Borrowers as Administrative Agent may from time to time
reasonably request.
All financial statements shall include a balance sheet and
statement of earnings and shall be prepared in accordance with GAAP.
(c) Without limiting the obligation of Borrowers to
provide Borrowing Base Certificates as required pursuant to Section 2.2(a)(ii),
as soon as available and in any event within five (5) Business Days after the
end of each month, and from time to time upon the request of Lender, each
Borrower shall deliver to Administrative Agent a Borrowing Base Certificate as
of the last day of the month most recently ended, together with such
reconciliation reports as may be reasonably requested by Administrative Agent
with respect to the components of such Borrower Base Certificate. Within two (2)
Business Days after any request therefor, each Borrower shall deliver to
Administrative Agent such information in such detail concerning the amount,
composition and manner of calculation of the Borrowing Base as Administrative
Agent may reasonably request.
(d) Upon the request of Administrative Agent, which may
be made not more than once each year so long as no Event of Default exists, and
at any time (but not more often than quarterly) while and so long as an Event of
Default shall be continuing, a report of an independent collateral auditor
satisfactory to Administrative Agent (which may be, or be affiliated with, a
Lender) with respect to the components of the Borrowing Base, which report shall
indicate whether or not the information set forth in the Borrowing Base
Certificate most recently delivered is accurate and complete in all material
respects based upon a review by such auditors of the Accounts of each Borrower
(including verification with respect to the amount, aging, identity and credit
of the respective account debtors and the billing practices of each Borrower)
and Inventory of each Borrower (including verification as to the value, location
and respective types). Nothing in this subsection (d) shall be construed or
interpreted to limit in any way the rights of Administrative Agent and Lenders
under Section 4.6 below.
(e) If at any time any part of the Collateral consists of
real estate, then from time to time, if Administrative Agent determines that
obtaining appraisals is necessary in order for a Lender to comply with
applicable Laws, each Borrower shall furnish to Administrative Agent appraisal
reports in form and substance and from appraisers reasonably satisfactory to
Administrative Agent stating the then current fair market values of all or any
portion of the real estate owned by each Borrower or any Subsidiaries. In
addition to the foregoing, from time to time, but in the absence of a Default or
Event of Default not more than once during each calendar year, Administrative
Agent may require Borrowers to obtain and deliver to Administrative Agent
appraisal reports in form and substance and from appraisers reasonably
satisfactory to Administrative Agent stating the then current fair market values
of all or any portion of the real estate and personal property owned by each
Borrower or any Subsidiaries.
41
(f) Promptly upon receipt or filing thereof, each
Borrower shall deliver to Administrative Agent copies of any reports or notices
related to any material taxes and any other material reports or notices received
by any Credit Party from, or filed by any Credit Party with, any Governmental
Authority. Without limiting the generality of the foregoing, promptly upon the
filing thereof, Borrowers shall deliver to Administrative Agent copies of any
reports, registration forms, proxy statements or other notices or documents
filed by any Credit Party with the United States Securities and Exchange
Commission (whether the filing of such document by such Credit Party is
voluntary or required).
(g) If Accounts in an aggregate book value in excess of
$50,000.00 become ineligible because they fall within one of the specified
categories of ineligibility or otherwise, Borrowers shall notify Administrative
Agent of such occurrence on the first Business Day following such occurrence and
the Borrowing Base shall thereupon be adjusted to reflect such occurrence.
SECTION 4.2 PAYMENT AND PERFORMANCE OF OBLIGATIONS.
Each Borrower (a) will pay and discharge, and cause each Subsidiary to
pay and discharge, at or before maturity, all of their respective obligations
and liabilities, including tax liabilities, except for such obligations and/or
liabilities (i) that may be the subject of a Permitted Contest, and (ii) the
nonpayment or nondischarge of which would not reasonably be expected to have a
Material Adverse Effect, (b) will maintain, and cause each Subsidiary to
maintain, in accordance with GAAP, appropriate reserves for the accrual of all
of their respective obligations and liabilities, and (c) will not breach or
permit any Subsidiary to breach, or permit to exist any default under, the terms
of any lease, commitment, contract, instrument or obligation to which it is a
party, or by which its properties or assets are bound, except for such breaches
or defaults which would not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.3 MAINTENANCE OF EXISTENCE.
Each Borrower will preserve, renew and keep in full force and effect,
and will cause each Subsidiary to preserve, renew and keep in full force and
effect, their respective existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.
SECTION 4.4 MAINTENANCE OF PROPERTY; PAYMENT OF TAXES; INSURANCE.
(a) Each Borrower will keep, and will cause each
Subsidiary to keep, all material property useful and necessary in its business
in good working order and condition, ordinary wear and tear excepted. If all or
any material part of the Collateral becomes damaged or destroyed, each Borrower
will, and will cause each Subsidiary to, promptly and completely repair and/or
restore the affected Collateral in a good and workmanlike manner, regardless of
whether Administrative Agent agrees to disburse insurance proceeds or other sums
to pay costs of the work of repair or reconstruction. Borrowers will not, and
will not permit any Subsidiary to permit impairment or unreasonable
deterioration of the Collateral or abandon all or any material part of the
Collateral outside of the ordinary course of business. Borrowers will, and will
cause each Subsidiary to, perform such acts to preserve the value of Collateral.
Each Borrower will, and will cause each Subsidiary to, (i) preserve its or their
interest in and title to the Collateral and will forever warrant and defend the
same to Administrative Agent and Lenders against any and all claims made by,
through or under Borrowers or Subsidiaries, and (ii) forever warrant and defend
the validity and priority of the lien and security interest created in the
Security Documents against the claims of all Persons whomsoever claiming by,
through or under Borrowers or Subsidiaries. The foregoing warranty of title
shall survive the foreclosure of the Security Documents and shall inure to the
benefit of and be enforceable by Administrative Agent in the event
Administrative Agent acquires title to any Collateral pursuant to any
foreclosure.
(b) Borrowers will, and will cause each Subsidiary to,
pay or cause to be paid all Taxes at least five (5) days (thirty (30) days in
the case of Taxes assessed on real property constituting
42
any portion of the Collateral) prior to the date upon which any fine, penalty,
interest or cost for nonpayment is imposed, and furnish to Administrative Agent,
upon request, receipted bills of the appropriate taxing authority or other
documentation reasonably satisfactory to Administrative Agent evidencing the
payment thereof. If Borrowers shall fail to pay any Taxes in accordance with
this Section and is not contesting or causing a contesting of such Taxes
pursuant to a Permitted Contest, or if there are insufficient funds in the
applicable reserves or escrows under Article 2 to pay any such Taxes,
Administrative Agent shall have the right, but shall not be obligated, to (for
the account of all Lenders) pay such Taxes, and Borrowers shall repay to
Administrative Agent, on written demand, any amount paid by Administrative
Agent, with interest thereon from the date of the advance thereof to the date of
repayment, at the rate applicable during periods of Default hereunder, and such
amount shall constitute a portion of the Obligations. Borrowers shall not pay
any Taxes or other obligations in installments unless permitted by applicable
Laws, and shall, upon the request of Administrative Agent, deliver copies of all
notices and bills relating to any Taxes or other charge covered by this Section
to Administrative Agent.
(c) Upon completion of any Permitted Contest, Borrowers
shall, and will cause each Subsidiary to, immediately pay the amount due, if
any, and deliver to Administrative Agent proof of the completion of the contest
and payment of the amount due, if any, following which Administrative Agent
Lender shall return the security, if any, deposited with Lender pursuant to the
definition of Permitted Contest.
(d) Each Borrower will maintain, and will cause each
Subsidiary to maintain, (i) casualty insurance on all real and personal property
on an all risks basis (including the perils of flood and quake), covering the
repair and replacement cost of all such property and coverage for business
interruption, rent loss, professional liability and public liability insurance
(including products/completed operations liability coverage) in each case of the
kinds customarily carried or maintained by Persons of established reputation
engaged in similar businesses and in amounts acceptable to Administrative Agent,
and (ii) such other insurance coverage in such amounts and with respect to such
risks as Administrative Agent may reasonably request; provided, however, that,
in no event shall such insurance be in amounts or with coverage less than, or
with carriers with qualifications inferior to, any of the insurance or carriers
in existence as of the Closing Date (or required to be in existence after the
Closing Date under a Financing Document). All such insurance shall be provided
by insurers having an A.M. Best policyholders rating reasonably acceptable to
Administrative Agent. Borrowers will not, and will not permit any Subsidiary to,
bring or keep any article on any business location of any Credit Party, or cause
or allow any condition to exist, if the presence of such article or the
occurrence of such condition could reasonably cause the invalidation of any
insurance required by this Section 4.4(d), or would otherwise be prohibited by
the terms thereof.
(e) On or prior to the Closing Date, and at all times
thereafter, each Borrower will cause Administrative Agent to be named as an
additional insured, on each liability insurance policy required to be maintained
pursuant to this Section 4.4 pursuant to endorsements in form and content
acceptable to Administrative Agent. Borrowers will deliver to Administrative
Agent and the Lenders (i) on the Closing Date, a certificate from Borrowers'
insurance broker dated such date showing the amount of coverage as of such date,
and that such policies will include effective waivers (whether under the terms
of any such policy or otherwise) by the insurer of all claims for insurance
premiums against all additional insureds and all rights of subrogation against
all additional insureds, and that if all or any part of such policy is canceled,
terminated or expires, the insurer will forthwith give notice thereof to each
additional insured and that no cancellation, reduction in amount or material
change in coverage thereof shall be effective until at least thirty (30) days
after receipt by each additional insured of written notice thereof, (ii) upon
the request of any Lender through Administrative Agent from time to time full
information as to the insurance carried, (iii) within five (5) days of receipt
of notice from any insurer, a copy of any notice of cancellation, nonrenewal or
material change in coverage from that existing on the
43
date of this Agreement, and (iv) forthwith, notice of any cancellation or
nonrenewal of coverage by any Borrower.
(f) In the event any Borrower fails to provide
Administrative Agent with evidence of the insurance coverage required by this
Agreement, Administrative Agent may purchase insurance at Borrowers' expense to
protect Administrative Agent's interests in the Collateral. This insurance may,
but need not, protect any Borrower's interests. The coverage purchased by
Administrative Agent may not pay any claim made by any Borrower or any claim
that is made against any Borrower in connection with the Collateral. The
applicable Borrower may later cancel any insurance purchased by Administrative
Agent, but only after providing Administrative Agent with evidence that such
Borrower has obtained insurance as required by this Agreement. If Administrative
Agent purchases insurance for the Collateral, to the fullest extent provided by
law Borrowers will be responsible for the costs of that insurance, including
interest and other charges imposed by Administrative Agent in connection with
the placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the
Obligations. The costs of the insurance may be more than the cost of insurance
each Borrower is able to obtain on its own.
(g) If any insurance proceeds are paid by check, draft or
other instrument payable to any Borrower (or any Subsidiary) and Administrative
Agent jointly, such Borrower (and each Subsidiary) authorizes Administrative
Agent to endorse such Borrower's and the Subsidiary's name thereon and do such
other things as Administrative Agent may deem advisable to reduce the same to
cash. Borrowers shall not carry, nor shall Borrowers permit any Subsidiary to
carry, separate insurance concurrent in form or contributing in the event of
loss with that required to be maintained under this Section. Borrowers shall
promptly notify Administrative Agent of any loss, damage, or destruction to any
Collateral, whether or not covered by insurance. Administrative Agent is hereby
authorized to collect all insurance proceeds in respect of Collateral directly
and to apply the same to the Obligations whether or not then due and payable.
Administrative Agent is authorized and empowered, and each Borrower (and each
Subsidiary) hereby irrevocably appoints Administrative Agent as its (or their)
attorney-in-fact (such appointment is coupled with an interest), at
Administrative Agent's option, to make or file proofs of loss or damage and to
settle and adjust any claim under insurance policies which insure against such
risks, or to direct Borrowers (and each Subsidiary), in writing, to agree with
the insurance carrier(s) on the amount to be paid in regard to such loss.
SECTION 4.5 COMPLIANCE WITH LAWS.
Each Borrower will comply, and cause each Subsidiary to comply, with
the requirements of all applicable Laws, except to the extent that failure to so
comply would not reasonably be expected to (a) have a Material Adverse Effect,
or (b) result in any Lien upon either (i) a material portion of the assets of
any such Person in favor of any Governmental Authority, or (ii) any Accounts.
SECTION 4.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS.
Each Borrower will keep, and will cause each Subsidiary to keep, proper
books of record and account in accordance with GAAP in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each Subsidiary to
permit, at the sole cost of the applicable Borrower or any applicable
Subsidiary, representatives of Administrative Agent and of any Lender (but at
such Lender's expense unless such visit or inspection is made concurrently with
Administrative Agent) to visit and inspect any of their respective properties,
to examine and make abstracts or copies from any of their respective books and
records, to conduct a collateral audit and analysis of their respective
operations and the Collateral, to verify the amount and age of the Accounts, the
identity and credit of the respective Account Debtors, to review the billing
practices of Borrower and to discuss their respective affairs, finances and
accounts with their respective officers, employees and independent public
accountants as often as may reasonably be desired. In the absence of
44
an Event of Default, Administrative Agent or any Lender exercising any rights
pursuant to this Section 4.6 shall give the applicable Borrower or any
applicable Subsidiary commercially reasonable prior notice of such exercise. No
notice shall be required during the existence and continuance of any Event of
Default.
SECTION 4.7 USE OF PROCEEDS.
The proceeds of Revolving Loans shall be used by Borrowers solely for
capital improvements, capital expansion and/or working capital needs of
Borrowers and their Subsidiaries. No portion of the proceeds of the Loans will
be used for family, personal, agricultural or household use.
SECTION 4.8 [RESERVED].
SECTION 4.9 [RESERVED.]
SECTION 4.10 HAZARDOUS MATERIALS; REMEDIATION.
(a) If any release or disposal of Hazardous Materials
shall occur or shall have occurred on any real property or any other assets of
any Borrower or any other Credit Party, such Borrower will cause, or direct the
applicable Credit Party to cause, the prompt containment and removal of such
Hazardous Materials and the remediation of such real property or other assets as
is necessary to comply with all Environmental Laws and to preserve the value of
such real property or other assets. Without limiting the generality of the
foregoing, each Borrower shall, and shall cause each other Credit Party to,
comply with each Environmental Law requiring the performance at any real
property by any Borrower or any other Credit Party of activities in response to
the release or threatened release of a Hazardous Material.
(b) Borrowers will provide Administrative Agent within
thirty (30) days after written demand therefor with a bond, letter of credit or
similar financial assurance evidencing to the reasonable satisfaction of
Administrative Agent that sufficient funds are available to pay the cost of
removing, treating and disposing of any Hazardous Materials or Hazardous
Materials Contamination and discharging any assessment which may be established
on any property as a result thereof, such demand to be made, if at all, upon
Administrative Agent's reasonable business determination that the failure to
remove, treat or dispose of any Hazardous Materials or Hazardous Materials
Contamination, or the failure to discharge any such assessment would reasonably
be expected to have a Material Adverse Effect.
SECTION 4.11 [RESERVED.]
SECTION 4.12 FURTHER ASSURANCES.
(a) Each Borrower will, and will cause each Subsidiary
to, at its own cost and expense, cause to be promptly and duly taken, executed,
acknowledged and delivered all such further acts, documents and assurances as
may from time to time be necessary or as Administrative Agent or the Required
Lenders may from time to time reasonably request in order to carry out the
intent and purposes of the Financing Documents and the transactions contemplated
thereby, including all such actions to (i) establish, create, preserve, protect
and perfect a first priority Lien (subject only to Permitted Liens) in favor of
Administrative Agent for the benefit of the Lenders on the Collateral (including
Collateral acquired after the date hereof), including on any and all assets of
each Credit Party, whether now owned or hereafter acquired, and (ii) cause all
Subsidiaries of Borrowers to be jointly and severally obligated with the other
Borrowers under all covenants and obligations under this Agreement, including
the obligation to repay the Obligations.
45
(b) Upon receipt of an affidavit of an officer of
Administrative Agent or a Lender as to the loss, theft, destruction or
mutilation of any Note or any other Financing Document which is not of public
record, and, in the case of any such mutilation, upon surrender and cancellation
of such Note or other applicable Financing Document, Borrowers will issue, in
lieu thereof, a replacement Note or other applicable Financing Document, dated
the date of such lost, stolen, destroyed or mutilated Note or other Financing
Document in the same principal amount thereof and otherwise of like tenor.
(c) Upon the formation or acquisition of a new
Subsidiary, Borrowers shall (i) pledge, have pledged or cause or have caused to
be pledged to the Administrative Agent pursuant to a pledge agreement in form
and substance satisfactory to the Administrative Agent, all of the outstanding
shares of equity interests or other equity interests of such new Subsidiary
owned directly or indirectly by any Borrower, along with undated stock or
equivalent powers for such certificates, executed in blank; (ii) cause the new
Subsidiary to take such other actions (including entering into or joining any
Security Documents) as are necessary or advisable in the reasonable opinion of
the Administrative Agent in order to grant the Administrative Agent, acting on
behalf of the Lenders, a first priority Lien on all real and personal property
and leasehold estates of such Subsidiary in existence as of such date and in all
after acquired property, which first priority Liens are required to be granted
pursuant to this Agreement; and (iii) cause the new Subsidiary to deliver
certified copies of such Subsidiary's certificate or articles of incorporation,
together with good standing certificates, by-laws (or other operating agreement
or governing documents), resolutions of the Board of Directors or other
governing body, approving and authorize the execution and delivery of the
Security Documents, incumbency certificates and to execute and/or deliver such
other documents and legal opinions or to take such other actions as may be
requested by the Administrative Agent, in each case, in form and substance
satisfactory to the Administrative Agent.
(d) Borrower shall give written notice to Administrative
Agent thirty (30) days prior to the purchase or other acquisition of any fee
simple interest in any real estate. Concurrently with the acquisition by any
Borrower or any Subsidiaries following the Closing Date of any real estate or
real property leasehold interests (as a lessee), such Borrower will, within
thirty (30) days following written request by Administrative Agent, deliver or
cause to be delivered to Administrative Agent, with respect to such real estate,
(i) a mortgage or deed of trust, as applicable, in form and substance reasonably
satisfactory to Administrative Agent, executed by the title holder thereof, (ii)
an ALTA lender's title insurance policy issued by a title insurer reasonably
satisfactory to Administrative Agent in form and substance and in amounts
reasonably satisfactory to Administrative Agent insuring Administrative Agent's
first priority Lien on such real estate, free and clear of all defects and
encumbrances except Permitted Liens; (iii) a current ALTA survey, certified to
Administrative Agent by a licensed surveyor, in form and substance reasonably
satisfactory to Administrative Agent, (iv) a certificate, in form and substance
reasonably acceptable to Administrative Agent, to Administrative Agent from a
national certification agency acceptable to Administrative Agent, certifying
that such real estate is not located in a special flood hazard area or if it is,
specifying the flood zone or classification applicable (in which case, Borrowers
shall demonstrate to Administrative Agent that flood hazard insurance reasonably
acceptable to Administrative Agent is in place for such real estate) and (v) in
the case of real estate that consists of a leasehold estate, such estoppel
letters, consents and waivers from the landlords and non-disturbance agreements
from any holders of mortgages or deeds of trust on such real estate as may be
requested by Administrative Agent, all of which shall be in form and substance
reasonably satisfactory to Administrative Agent.
(e) Upon the request of Administrative Agent, Borrowers
shall obtain a landlord's agreement or mortgagee agreement, as applicable, from
the lessor of each leased property or mortgagee of owned property with respect
to any business location where any portion of the Collateral included in or
proposed to be included in the Borrowing Base, or the records relating to such
Collateral and/or software and equipment relating to such records or Collateral,
is stored or located, which agreement or letter shall
46
be reasonably satisfactory in form and substance to Administrative Agent.
Borrowers shall timely and fully pay and perform its obligations under all
leases and other agreements with respect to each leased location where any
Collateral, or any records related thereto, is or may be located.
SECTION 4.13 LITIGATION; EVENTS OF DEFAULT
(a) Borrowers will give prompt written notice to
Administrative Agent of any litigation or governmental proceedings pending or
threatened (in writing) against Borrowers or any Subsidiary or other Credit
Party which would reasonably be expected to have a Material Adverse Effect with
respect to Borrowers, any Subsidiary or any other Credit Party.
(b) Without limiting or contradicting any other more
specific provision of this Agreement, promptly (and in any event within three
(3) Business Days) upon any Borrower becoming aware of the existence of any
Default or Event of Default, Borrowers shall give written notice to
Administrative Agent of such occurrence, which such notice shall include a
reasonably detailed description of such Default or Event of Default.
SECTION 4.14 UPDATES OF REPRESENTATIONS.
Borrowers shall deliver to Administrative Agent within ten (10) days of
the written request of Administrative Agent an Officer's Certificate updating
all of the representations and warranties contained in this Agreement and the
other Financing Documents and certifying that all of the representations and
warranties contained in this Agreement and the other Financing Documents, as
updated pursuant to such Officer's Certificate, are true, accurate and complete
as of the date of such Officer's Certificate.
SECTION 4.15 POWER OF ATTORNEY.
Each of the officers of Administrative Agent is hereby irrevocably
made, constituted and appointed the true and lawful attorney for Borrowers
(without requiring any of them to act as such) with full power of substitution
to do the following: (a) endorse the name of Borrowers upon any and all checks,
drafts, money orders, and other instruments for the payment of money that are
payable to Borrowers and constitute collections on Borrowers' Accounts; (b)
execute in the name of Borrowers any financing statements, schedules,
assignments, instruments, documents, and statements that Borrowers are obligated
to give Administrative Agent under this Agreement; (c) after the occurrence and
during the continuance of a Default, take any action Borrowers are required to
take under this Agreement; and (d) do such other and further acts and deeds in
the name of Borrowers that Administrative Agent may deem necessary or desirable
to enforce any Account or other Collateral or perfect Administrative Agent's
security interest or Lien in any Collateral. This power of attorney shall be
irrevocable and coupled with an interest.
SECTION 4.16 ESTOPPEL CERTIFICATES.
After written request by Administrative Agent, Borrowers, within
fifteen (15) days and at their expense, will furnish Administrative Agent with a
statement, duly acknowledged and certified, setting forth (a) the amount of the
original principal amount of the Notes, and the unpaid principal amount of the
Notes, (b) the rate of interest of the Notes, (c) the date payments of interest
and/or principal were last paid, (d) any offsets or defenses to the payment of
the Obligations, and if any are alleged, the nature thereof, (e) that the Notes
and this Agreement have not been modified or if modified, giving particulars of
such modification, and (f) that there has occurred and is then continuing no
Default or if such Default exists, the nature thereof, the period of time it has
existed, and the action being taken to remedy such Default.
47
SECTION 4.17 BORROWING BASE COLLATERAL ADMINISTRATION.
(a) All data and other information relating to Accounts
or other intangible Collateral shall at all times be kept by Borrowers at their
respective principal offices and shall not be moved from such locations without
(i) providing prior written notice to Administrative Agent, and (ii) obtaining
the prior written consent of Administrative Agent, which consent shall not be
unreasonably withheld.
(b) Whether or not an Event of Default has occurred, any
of Administrative Agent's officers, employees or agents shall have the right, at
any reasonable time or times hereafter, in the name of Administrative Agent or
any designee of Administrative Agent or Borrowers, to verify the validity,
amount or any other matter relating to any Accounts by mail, telephone,
telegraph or otherwise, including, without limitation, verification of
Borrowers' compliance with applicable Laws. Borrowers shall cooperate fully with
Administrative Agent in an effort to facilitate and promptly conclude such
verification process. Such verification may include contacts between
Administrative Agent and applicable federal, state and local regulatory
authorities having jurisdiction over the Borrowers' affairs, all of which
contacts Borrowers hereby irrevocably authorize.
(c) To expedite collection, Borrowers shall endeavor in
the first instance to make collection of Accounts for Administrative Agent.
Administrative Agent shall have the right at any time to notify Account Debtors
that Administrative Agent has been granted a Lien upon all Accounts, that
Accounts have been assigned to Administrative Agent and, following the
occurrence of a Default, that payment of such Accounts shall be made directly by
such Account Debtors to Administrative Agent (and once such notice has been
given to an Account Debtor, Borrowers shall not give any contrary instructions
to such Account Debtor without Administrative Agent's prior written consent).
(d) Borrowers shall provide prompt written notice to each
Person who either is currently an Account Debtor or becomes an Account Debtor at
any time following the date of this Agreement that directs each Account Debtor
to make payments into the Lockbox, and hereby authorizes Administrative Agent,
upon Borrowers' failure to send such notices within ten (10) days after the date
of this Agreement (or ten (10) days after the Person becomes an Account Debtor),
to send any and all similar notices to such Person.
SECTION 4.18 CREDIT CARD CONTRACTS.
Borrowers shall give fifteen (15) days prior written notice to
Administrative Agent prior to entering into any new Credit Card Contract with a
new Credit Card Issuer or Credit Card Payment Intermediary (which such notice
shall be accompanied by a copy of the proposed new Credit Card Contract and an
amended and restated Schedule 3.24). For the avoidance of doubt, so long as
Borrowers shall comply with the notice provisions of this paragraph, and so long
as the representations and warranties contained in Section 3.24 shall continue
to be true and correct, nothing in this Agreement shall prevent Borrowers from
voluntarily ceasing to do business or terminating any Credit Card Contract with
any particular Credit Card Issuer or Credit Card Payment Intermediary and/or
voluntarily replacing any such particular Credit Card Issuer or Credit Card
Payment Intermediary with another Credit Card Issuer or Credit Card Payment
Intermediary.
SECTION 4.19 COVENANTS REGARDING PRODUCTS AND COMPLIANCE WITH
REQUIRED PERMITS
(a) Without limiting the generality of Section 45, in
connection with the development, testing, manufacture, marketing or sale of each
and any Product by any Borrower, Borrowers shall comply fully and completely in
all respects with all Required Permits at all times issued by any Government
Authority, specifically including the FDA, with respect to such development,
testing, manufacture, marketing or sales of such Product by Borrower as such
activities are at any such time being conducted by Borrowers.
48
(b) Without limiting the generality of Section 4.13(B) above,
Borrowers shall immediately and in any case within three (3) Business Days give
written notice to Administrative Agent upon any Borrower becoming aware that any
of the representations and warranties set forth in Section 8.1 with respect to
any Product have become incorrect in any respect (provided that, for the
avoidance of doubt, the giving of such notice shall not cure or result in the
automatic waiver of any Default or Event of Default that may have resulted from
such breach of such representation or warranty).
ARTICLE 5
NEGATIVE COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
SECTION 5.1 DEBT.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, create, incur, assume, guarantee or otherwise become or remain
directly or indirectly liable with respect to, any Debt, except for:
(a) Debt under the Financing Documents and Letter of Credit
Liabilities;
(b) Debt outstanding on the date of this Agreement and set forth on
Schedule 5.1;
(c) Subordinated Debt;
(d) Debt incurred or assumed for the purpose of financing all or any
part of the cost of acquiring any fixed asset (including through Capital
Leases), in an aggregate principal amount at any time outstanding not greater
than $1,000,000;
(e) intercompany Debt arising from loans made between or among any
Borrowers or any Subsidiaries of any Borrower; provided, however, that upon the
request of Administrative Agent at any time, any such Debt shall be evidenced by
promissory notes having terms reasonably satisfactory to Administrative Agent,
the sole originally executed counterparts of which shall be pledged and
delivered to Administrative Agent, for the benefit of Administrative Agent and
Lenders, as security for the Obligations; and
(f) unsecured Debt not otherwise described in clauses (a) through
(e) above not to exceed $200,000 in the aggregate at any time outstanding which
is on terms satisfactory to Administrative Agent.
SECTION 5.2 LIENS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except for Permitted Liens.
SECTION 5.3 CONTINGENT OBLIGATIONS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, create, assume, incur or suffer to exist any Contingent Obligations,
except for:
(a) Contingent Obligations arising in respect of the Debt under the
Financing Documents and Letter of Credit Liabilities;
49
(b) Contingent Obligations resulting from endorsements for
collection or deposit in the Ordinary Course of Business;
(c) Contingent Obligations arising under or with respect to any
Permitted Contest or Permitted Liens;
(d) so long as there exists no Event of Default both immediately
before and immediately after giving effect to any such transaction, Contingent
Obligations existing or arising under any swap contract or other derivative
obligation, provided, however, that such obligations are (or were) entered into
by a Borrower or a Subsidiary in the Ordinary Course of Business for the purpose
of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person
and not for purposes of speculation;
(e) Contingent Obligations outstanding on the date of this Agreement
and set forth on Schedule 5.3;
(f) Contingent Obligations incurred in the Ordinary Course of
Business with respect to surety and appeal bonds, performance bonds and other
similar obligations not to exceed $50,000 in the aggregate at any time
outstanding;
(g) Contingent Obligations arising under indemnity agreements with
title insurers to cause such title insurers to issue to Administrative Agent
mortgagee title insurance policies; and
(h) Contingent Obligations arising with respect to customary
indemnification obligations in favor of purchasers in connection with
dispositions permitted under Section 5.7.
SECTION 5.4 RESTRICTED DISTRIBUTIONS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Distribution; provided, however, that the following Restricted Distributions may
be paid (each, an "ALLOWED DISTRIBUTION") at any given time:
(a) at any time, dividends may be paid by any Subsidiary of any
Borrower to such Borrower (and/or to any intermediate Subsidiary of such
Borrower);
(b) at any time following the Fixed Charge Coverage Ratio
Measurement Start Date, dividends may be paid to a Person (other than a
Borrower) having an equity interest in a Borrower if, and only to the extent
that at the time of such proposed dividend: (i) no Default or Event of Default
has occurred and is continuing and no Default or Event of Default would result
from the making of such distribution, and (ii) after giving effect to any such
proposed dividend, Borrowers are in compliance on a pro forma basis with the
covenants set forth in Article 6 recomputed for the most recently ended month
for which information is available as though such dividends had been paid during
such month and is in compliance with all other terms and conditions of this
Agreement, and Borrowers shall have provided to Administrative Agent written
evidence of such pro forma compliance as required under this clause (ii) at
least five (5) Business Days prior to the making of any such proposed dividend.
SECTION 5.5 RESTRICTIVE AGREEMENTS.
No Borrower will, or will permit any Subsidiary to, directly or indirectly
(a) enter into or assume any agreement (other than the Financing Documents and
the Subordinated Debt Documents, if any) prohibiting the creation or assumption
of any Lien upon its properties or assets, whether now owned or hereafter
acquired, or (b) create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind (except as
provided by the Financing Documents and
50
Subordinated Debt Documents, if any) on the ability of any Subsidiary to: (i)
pay or make Restricted Distributions to any Borrower or any Subsidiary; (ii) pay
any Debt owed to any Borrower or any Subsidiary; (iii) make loans or advances to
any Borrower or any Subsidiary; or (iv) transfer any of its property or assets
to any Borrower or any Subsidiary.
SECTION 5.6 PAYMENTS AND MODIFICATIONS OF SUBORDINATED DEBT.
No Borrower will, or will permit any Subsidiary to, directly or indirectly
declare, pay, make or set aside any amount for payment in respect of
Subordinated Debt except as if and to the extent permitted under the applicable
Subordination Agreement.
SECTION 5.7 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
No Borrower will, or will permit any Subsidiary to, directly or indirectly
(a) consolidate or merge with or into any other Person, or (b) consummate any
Asset Dispositions other than dispositions of personal property assets (other
than Accounts) for cash and fair value in the Ordinary Course of Business that
the applicable Borrower determines in good faith is no longer used or useful in
the business of such Borrower and its Subsidiaries if all of the following
conditions are met (such conditions only to be applicable to transactions under
this clause (b)): (i) the market value of assets sold or otherwise disposed of
in any single transaction or series of related transactions does not exceed
$500,000 and the aggregate market value of assets sold or otherwise disposed of
in any Fiscal Year of the applicable Borrower does not exceed $1,000,000; (ii)
after giving effect to any such disposition and the repayment of Debt with the
proceeds thereof, Borrowers are in compliance on a pro forma basis with the
covenants set forth in Article 6 recomputed for the most recently ended month
for which information is available as though such disposition and repayment had
occurred during such month and is in compliance with all other terms and
conditions of this Agreement; and (iii) no Default or Event of Default has
occurred or is continuing or would result from any such disposition.
Notwithstanding anything to the contrary contained in the above or anywhere else
in this Agreement, under no circumstances shall any Borrower or any Subsidiary
of any Borrower sell, dispose of or otherwise transfer any Accounts.
SECTION 5.8 PURCHASE OF ASSETS, INVESTMENTS.
(a) No Borrower will, or will permit any Subsidiary to, directly or
indirectly (w) acquire or enter into any agreement to acquire any assets other
than in the Ordinary Course of Business; (x) create, acquire or enter into any
agreement to create or acquire any Subsidiary; (y) engage or enter into any
agreement to engage in any joint venture or partnership with any other Person;
or (z) acquire or own or enter into any agreement to acquire or own any
Investment in any Person other than:
(i) Investments or agreements existing on the date of this
Agreement and set forth on Schedule 5.8;
(ii) Investments by Valera in the Irish Subsidiary to the
extent permitted by Section 5.19;
(iii) Cash Equivalents;
(iv) Investments in the capital stock or other equity
interests of any Wholly-Owned Subsidiaries existing as of the Closing Date so
long as such Wholly-Owned Subsidiaries are Borrowers hereunder;
(v) bank deposits established in accordance with Section 5.17;
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(vi) Investments in securities of account debtors received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such account debtors;
(vii) loans to officers and employees in an aggregate
principal amount not to exceed $25,000 at any time outstanding; and
(viii) purchases by Borrowers of the rights to test, develop,
manufacture, sell or market any new pharmaceutical, drug or medical device
(and/or any Intellectual Property related thereto) that will upon such purchase
become a Product of Borrowers (provided that, nothing in the foregoing shall be
interpreted or construed to contradict or limit any of Borrowers' obligations
under Section 3.12 above, particularly including without limitation the
obligations of Borrowers to give prior written notice to Administrative Agent of
Borrowers' intentions to begin testing, developing, manufacturing, selling or
marketing any new Product).
SECTION 5.9 TRANSACTIONS WITH AFFILIATES.
Except as otherwise disclosed on Schedule 5.9, and except for transactions
that are disclosed to Administrative Agent in advance of being entered into and
which contain terms that are no less favorable to the applicable Borrower or any
Subsidiary, as the case may be, than those which might be obtained from a third
party not an Affiliate of any Credit Party, no Borrower will, or will permit any
Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of any Borrower.
SECTION 5.10 MODIFICATION OF ORGANIZATIONAL DOCUMENTS.
Except in connection with or contemplation of an initial public offering
of the common stock of a Borrower or in connection with or in contemplation of a
sale of equity interests in a Borrower, no Borrower will, or will permit any
Subsidiary to, directly or indirectly, amend or otherwise modify any
Organizational Documents of such Person, except for such amendments or other
modifications required (a) under this Agreement or (b) by applicable Law and
fully disclosed to Administrative Agent. All modifications of Organizational
Documents will be fully and promptly disclosed to Administrative Agent when or
before made effective.
SECTION 5.11 MODIFICATION OF CERTAIN AGREEMENTS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, amend or otherwise modify any Material Contract which amendment or
modification in any case:
(a) is contrary to the terms of this Agreement or any other
Financing Document;
(b) would reasonably be expected to (I) be materially adverse to the
rights, interests or privileges of the Administrative Agent or the Lenders or
their ability to enforce the same or (II) have a Material Adverse Effect.
Each Borrower shall, prior to entering into any amendment or other
modification of any of the foregoing documents, deliver to Administrative Agent
reasonably in advance of the execution thereof, any final or execution form copy
of amendments or other modifications to such documents, and, if approval of
Required Lenders is required by the terms of this Section 5.11 prior to the
taking of any such action, such Borrower agrees not to take, nor permit any of
its Subsidiaries to take, any such action with respect to any such documents
without obtaining such approval from Required Lenders.
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SECTION 5.12 FISCAL YEAR.
No Borrower will, or will permit any Subsidiary to, change its Fiscal
Year.
SECTION 5.13 CONDUCT OF BUSINESS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, engage in any line of business other than those businesses engaged
in on the Closing Date and described on Schedule 5.13 and businesses reasonably
related thereto.
SECTION 5.14 INVESTOR FEES.
Except as expressly provided for and permitted under Section 5.4(d),]
Borrower will, or will permit any Subsidiary to, directly or indirectly, pay or
become obligated to pay any management, consulting or similar advisory fees or
other amounts to or for the account of Investor or any Affiliate of Investor,
except for placement agent fees that may be paid to Xxxxxxx Xxxxxx Xxxxxx Inc.
in connection with the sale of equity securities by Borrower.
SECTION 5.15 LEASE PAYMENTS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, incur or assume (whether pursuant to a Guarantee or otherwise) any
liability for rental payments under a lease with a lease term of one year or
more if, after giving effect thereto, the aggregate amount of minimum lease
payments that Borrowers and their Consolidated Subsidiaries have so incurred or
assumed will exceed, on a consolidated basis, $500,000 for any calendar year
under all such leases (excluding Capital Leases).
SECTION 5.16 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, enter into any arrangement with any Person whereby, in a
substantially contemporaneous transaction, any Borrower or any Subsidiaries
sells or transfers all or substantially all of its right, title and interest in
an asset and, in connection therewith, acquires or leases back the right to use
such asset.
SECTION 5.17 BANK ACCOUNTS.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, establish any new bank account without prior written notice to
Administrative Agent and unless Administrative Agent, such Borrower or such
Subsidiary and the bank at which the account is to be opened enter into a
control agreement regarding such bank account pursuant to which such bank
acknowledges the security interest of Administrative Agent in such bank account,
agrees to comply with instructions originated by Administrative Agent directing
disposition of the funds in the bank account without further consent from any
Borrower, and agrees to subordinate and limit any security interest the bank may
have in the bank account on terms satisfactory to Administrative Agent.
SECTION 5.18 COMPLIANCE WITH ANTI-TERRORISM LAWS.
Administrative Agent hereby notifies Borrowers that pursuant to the
requirements of Anti-Terrorism Laws, and Administrative Agent's policies and
practices, Administrative Agent is required to obtain, verify and record certain
information and documentation that identifies Borrowers and its principals,
which information includes the name and address of each Borrower and its
principals and such other information that will allow Administrative Agent to
identify such party in accordance with Anti-Terrorism Laws. No Borrower will, or
will permit any Subsidiary to, directly or indirectly, knowingly enter into
Material Contracts with any Person listed on the OFAC Lists. Each Borrower shall
53
immediately notify Administrative Agent if such Borrower has knowledge that any
Borrower or any additional Credit Party is listed on the OFAC Lists or (a) is
convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is
arraigned and held over on charges involving money laundering or predicate
crimes to money laundering. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, (i) conduct any business or engage in any transaction or
dealing with any Blocked Person, including, without limitation, the making or
receiving of any contribution of funds, goods or services to or for the benefit
of any Blocked Person, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224, any similar executive order or other Anti-Terrorism Law, or
(iii) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.
SECTION 5.19 VALERA PHARMACEUTICALS IRELAND LIMITED.
Notwithstanding anything to the contrary contained in this Agreement,
Borrowers hereby covenant that:
(a) Borrower shall give prior written notice to Administrative Agent
at least thirty (30) days prior to the Irish Subsidiary commencing operations;
(b) Borrowers shall not permit the Irish Subsidiary to incur any
Debt except for trade accounts payables arising and paid on a timely basis in
the Ordinary Course of Business and inter-company loans and advances from Valera
to the Irish Subsidiary to the extent permitted by paragraph (d) below,
(c) Borrowers shall not permit the Irish Subsidiary to grant or
permit its assets to be subject to any Liens other than Liens of the type
described in clauses (a) through (f) of the definition of Permitted Liens, and
(d) Borrowers shall not make any capital contributions, intercompany
loans or advances or other transfers of assets to the Irish Subsidiary other
than sales of Inventory from Borrowers to the Irish Subsidiary for fair market
value in the Ordinary Course of Business, provided that notwithstanding anything
to the contrary contained in the foregoing, at any time and from time to time,
so long as at the time of such proposed transaction, no Event of Default or
Default has occurred and is continuing, Valera may make additional capital
contributions or intercompany loans to the Irish Subsidiary in the limited
amounts necessary to and for the sole purposes of funding the current payment by
the Irish Subsidiary of working capital expenses incurred by the Irish
Subsidiary (specifically including without limitation the payments of salaries
for the sales force and other employees of the Irish Subsidiary) other than
working capital expense incurred in connection with purchases of equipment and
other capital expenditures.
ARTICLE 6
FINANCIAL COVENANTS
Borrowers agree that, so long as any Credit Exposure exists:
SECTION 6.1 FIXED CHARGE COVERAGE RATIO.
Beginning as of the Fixed Charge Coverage Ratio Measurement Start Date,
Borrowers will not permit the Fixed Charge Coverage Ratio of Borrowers and their
Consolidated Subsidiaries for the rolling twelve fiscal month period ending as
of the end of each fiscal month to be less than a ratio of 1.10 to 1.00,
provided that, during the period from December 2005 through November 2006, such
Fixed Charge Coverage Ratio will be calculated and tested as of the end of each
fiscal month during such period based
54
on the financial results and figures (including EBITDA and "Fixed Charges" (as
defined on the Compliance Certificate")) of Borrowers and their Consolidated
Subsidiaries for the period beginning on December 1, 2005 and ending as of the
last day of each such applicable month during such period.
SECTION 6.2 EVIDENCE OF COMPLIANCE.
(a) Borrowers shall furnish to Lender, within ten (10) days of the
end of each calendar month, evidence (in form and content satisfactory to
Lender) of Borrowers' compliance with the covenants in this Article and evidence
that no Event of Default specified in this Article has occurred. Such evidence
shall include, without limitation, (i) a statement and report, on a form
approved by Administrative Agent, detailing Borrowers' calculations and (ii) if
requested by Administrative Agent, back-up documentation (including, without
limitation, invoices, receipts and other evidence of costs incurred during such
quarter as Administrative Agent shall reasonably require) evidencing the
propriety of the calculations.
ARTICLE 7
CONDITIONS
SECTION 7.1 CONDITIONS TO CLOSING.
The obligation of each Lender to make the initial Loans, of Administrative
Agent to issue any Support Agreements on the Closing Date and of any LC Issuer
to issue any Lender Letter of Credit on the Closing Date shall be subject to the
satisfaction of the following conditions precedent, each to the satisfaction of
Administrative Agent and Lenders in their sole discretion:
(a) receipt by Administrative Agent of each agreement, document and
instrument set forth on the Closing Checklist, each in form and substance
satisfactory to Administrative Agent;
(b) the payment of all fees, expenses and other amounts due and
payable under each Financing Document;
(c) the absence, since December 31, 2004, of any material adverse
change in any aspect of the business, operations, properties or condition
(financial or otherwise) of any Credit Party or any seller of any assets or
business to be purchased by any Borrower contemporaneous with the Closing Date,
or any event or condition which would reasonably be expected to result in such a
material adverse change;
(d) the receipt of the initial Borrowing Base Certificate, prepared
as of the Closing Date; and
(e) receipt by Administrative Agent of such other documents,
instruments and/or agreements as Administrative Agent may reasonably request.
SECTION 7.2 CONDITIONS TO EACH LOAN, SUPPORT AGREEMENT AND LENDER LETTER
OF CREDIT.
The obligation of the Lenders to make a Loan (other than Revolving Loans
made pursuant to Section 2.5(c)), of Administrative Agent to issue any Support
Agreement or of any LC Issuer to issue any Lender Letter of Credit (including,
in each case, on the Closing Date) is subject to the satisfaction of the
following additional conditions:
(a) in the case of a Revolving Loan Borrowing, receipt by
Administrative Agent of a Notice of Borrowing (or telephonic notice as permitted
by Section 2.2(b)(ii)) and updated Borrowing
55
Base Certificate in accordance with Section 2.2(b) and, in the case of any
Support Agreement or Lender Letter of Credit, receipt by Administrative Agent of
a Notice of LC Credit Event in accordance with Section 2.5(a);
(b) the fact that, immediately after such borrowing and after
application of the proceeds thereof or after such issuance, the Revolving Loan
Outstandings will not exceed the Revolving Loan Limit;
(c) the fact that, immediately before and after such borrowing or
issuance, no Default or Event of Default shall have occurred and be continuing;
(d) the fact that the representations and warranties of each Credit
Party contained in the Financing Documents shall be true, correct and complete
on and as of the date of such borrowing or issuance, except to the extent that
any such representation or warranty relates to a specific date in which case
such representation or warranty shall be true and correct as of such earlier
date; and
(e) the fact that no Material Adverse Effect on Borrowers then
exists.
Each giving of a Notice of LC Credit Event hereunder, each giving of a
Notice of Borrowing hereunder and each acceptance by any Borrower of the
proceeds of any Loan made hereunder shall be deemed to be (y) a representation
and warranty by each Borrower on the date of such notice or acceptance as to the
facts specified in Section 7.2, and (z) a restatement by each Borrower that each
and every one of the representations made by it in any of the Financing
Documents is true and correct in all material respects (except to the extent
that such representations and warranties expressly relate solely to an earlier
date).
SECTION 7.3 SEARCHES.
Before Closing, and thereafter (as and when determined by Administrative
Agent in its discretion), Administrative Agent shall have the right to perform,
all at Borrowers' expense, the searches described in clauses (a), (b), (c) and
(d) below against Borrowers and any other Credit Party, the results of which are
to be consistent with Borrowers' representations and warranties under this
Agreement and the satisfactory results of which shall be a condition precedent
to all advances of Loan proceeds, all issuances of Lender Letters of Credit and
all undertakings in respect of Support Agreements:
(a) UCC searches with the Secretary of State and local filing
offices of each jurisdiction where the applicable Person maintains its executive
offices, a place of business, or assets and the jurisdiction in which the
applicable Person is organized;
(b) Judgment, pending litigation, federal tax lien, personal
property tax lien, and corporate and partnership tax lien searches, in each
jurisdiction searched under clause (a) above;
(c) Real property title and lien searches in each jurisdiction in
which any real property Collateral is located; and
(d) Searches of applicable corporate, limited liability company,
partnership and related records to confirm the continued existence, organization
and good standing of the applicable Person and the exact legal name under which
such Person is organized.
ARTICLE 8
REGULATORY MATTERS
Each Borrower agrees that, so long as any Credit Exposure exists:
56
SECTION 8.1 REPRESENTATIONS AND WARRANTIES.
To induce Administrative Agent and Lenders to enter into this Agreement
and to make the Loans and other credit accommodations contemplated hereby, each
Borrower hereby represents and warrants to Administrative Agent and each Lender
that:
(a) If (i) any Borrower or Subsidiary is or becomes a "covered
entity" within the meaning of HIPAA, or (ii) any Borrower or Subsidiary is or
becomes subject to the "Administrative Simplification" of HIPAA, each such
Borrower and each Subsidiary is HIPAA Compliant.
ARTICLE 9
[RESERVED]
ARTICLE 10
SECURITY AGREEMENT
SECTION 10.1 GENERALLY.
(a) As security for the payment and performance of the Obligations,
and without limiting any other grant of a Lien and security interest in any
Security Document, subject to the terms of Section 10.1(b) below, Borrowers
hereby assign and grant to Administrative Agent a continuing first priority Lien
on and security interest in, upon, and to all right, title and interest in and
to any and all property and interests in property of Borrowers whether now owned
or hereafter created, acquired or arising including all of the following
properties and interests in properties (the "PERSONAL PROPERTY"; unless
otherwise defined in this Agreement, all terms used in this Article 10 shall
have the meanings given them in Article 9 of the Uniform Commercial Code):
(i) All of Borrowers' Accounts, and all of Borrowers' money,
contract rights, Chattel Paper, documents, Deposit Accounts, securities,
investment property and Instruments with respect thereto, and all of Borrowers'
rights, remedies, security, Liens and supporting obligations, in, to and in
respect of the foregoing, including, without limitation, rights of stoppage in
transit, replevin, repossession and reclamation and other rights and remedies of
an unpaid vendor, lienor or secured party, Guarantees or other contracts of
suretyship with respect to the Accounts, deposits or other security for the
obligation of any Account Debtor, and credit and other insurance;
(ii) To the extent not listed above, all of Borrowers' money,
securities, investment property, Deposit Accounts, Instruments and other
property and the proceeds thereof that are now or hereafter held or received by,
in transit to, in possession of, or under the control of Administrative Agent or
a bailee or Affiliate of Administrative Agent, whether for safekeeping, pledge,
custody, transmission, collection or otherwise;
(iii) To the extent not listed above, all of Borrowers' now
owned or hereafter acquired Deposit Accounts into which Accounts or the proceeds
of Accounts are deposited, including the Lockbox Account and all signature
cards, account agreements and other documents relating to the Deposit Accounts;
(iv) All of Borrowers' right, title and interest in, to and in
respect of all goods relating to, or which by sale have resulted in, Accounts,
including, without limitation, all goods described in invoices or other
documents or instruments with respect to, or otherwise representing or
evidencing, any Account, and all returned, reclaimed or repossessed goods;
(v) All of Borrowers' general intangibles (including, without
limitation, payment intangibles) and other property of every kind and
description with respect to, evidencing or
57
relating to its Accounts, including, without limitation, all existing and future
customer lists, choses in action, claims, books, records, ledger cards,
contracts, licenses, formulae, tax and other types of refunds, returned and
unearned insurance premiums, rights and claims under insurance policies, and
computer programs, tapes, programs, discs, information, software, records, and
data, all computers, word processors, printers, switches, interfaces, source
codes, mask works, software, web servers, website service contracts, internet
connection contract or line lease, website hosting service contract, website
license agreements, back-up copies of website content, contracts with website
advertisers, scripts, codes or Active-X controls, technology escrow agreements,
website content development agreements, all rights, of whatever form, in and to
domain names, instructional material, and connectors and all parts, accessories,
additions, substitutions, or options together with all property or equipment
used in connection with any of the above or which are used to operate or cause
to operate any features, special applications, format controls, options or
software of any or all of the above-mentioned items as the same relates to the
Accounts or is otherwise necessary or helpful in the collection thereof or
realization thereon;
(vi) All of Borrowers' other money, securities, investment
property (specifically including without limitation, with respect to Valera, the
stock of the Irish Subsidiary), Instruments, documents, supporting obligations,
Chattel Paper and Deposit Accounts, however, notwithstanding anything in this
Section 10.1(vi) or elsewhere in this Agreement to the contrary, the security
interest granted in Borrowers' direct and/or indirect interests, now or in the
future, in Valera Pharmaceuticals Ireland Limited and/or any other foreign
Subsidiary shall not include more than 65% of Borrowers' cumulative interests in
any such entity;
(vii) All of Borrowers' letter-of-credit rights and commercial
tort claims;
(viii) All of Borrowers' other general intangibles (including,
without limitation, any proceeds from insurance policies after payment of prior
interests), contract rights, goodwill, literary rights, rights to performance,
rights under licenses, choses-in-action, claims, information contained in
computer media (such as data bases, source and object codes, and information
therein), things in action, and permits, licenses, certifications,
authorizations and approvals, and the rights of Borrowers thereunder, issued by
any governmental, regulatory, or private authority, agency, or entity whether
now owned or hereafter acquired, together with all cash and non-cash proceeds
and products thereof;
(ix) All of Borrowers' now owned or hereafter acquired
Inventory of every description, including, without limitation, all which is held
by any Borrower for sale or lease or is furnished by any Borrower under any
contract of service or is held by any Borrower as raw materials, work in process
or materials used or consumed in a business, wherever located, and as the same
may now and hereafter from time to time be constituted, together with all cash
and non-cash proceeds and products thereof;
(x) All of Borrowers' now owned or hereafter acquired
machinery, equipment, computer equipment, tools, tooling, furniture, fixtures,
goods, supplies, materials, work in process, whether now owned or hereafter
acquired, together with all additions, parts, fittings, accessories, special
tools, attachments, and accessions now and hereafter affixed thereto and/or used
in connection therewith, all replacements thereof and substitutions therefor,
and all cash and non-cash proceeds and products thereof and all present and
future warranties, manuals and other written materials relating thereto;
(xi) All of Borrowers' now owned or hereafter acquired goods
of any kind and any and all tangible and intangible books and records of
Borrowers relating to Borrowers, their businesses, their financial condition,
records and statements, and/or the Collateral; and
58
(xii) To the extent not listed above as original collateral,
the proceeds (including, without limitation, insurance proceeds) and products of
any or all of the foregoing, and all accessions to, substitutions for or
replacements of and rents and profits from any or all of the foregoing.
(b) Notwithstanding anything stated in this Section 10.1 (including,
for the avoidance of any doubt Section 10.1(a)(v) and Section 10.1(a)(viii)) or
otherwise in this Agreement or any other Security Document, Borrower does not
grant, and neither Administrative Agent nor any Lender shall have, any security
interest or Lien in any Intellectual Property of any Borrower or any Subsidiary
of any Borrower, Neither the term "Personal Property" nor "Collateral" as
defined in this Agreement shall be deemed to include, as appropriate, any
Intellectual Property of any Borrower or any Subsidiary of any Borrower.
However, notwithstanding, but without limiting or contradicting the foregoing,
each Borrower hereby grants to Administrative Agent, for the benefit of itself
and the Lenders, a non-exclusive license, exercisable only upon the occurrence
and during the continuance of an Event of Default under this Agreement, for
Agent to use such Intellectual Property as is necessary for the limited purpose
of allowing Administrative Agent to exercise its rights as a secured creditor
with respect to the sale of the Inventory of Borrowers, specifically including
Administrative Agent's rights under Article 9 to conduct public and/or private
sales of such Inventory after the occurrence of any Event of Default, and the
use by Administrative Agent of all Intellectual Property of Borrowers under such
non-exclusive license shall be without any liability for royalties or other
related charges from Administrative Agent to any Borrower, provided that,
although such non-exclusive license may only be exercised upon the occurrence
and during the continuance of an Event of Default and only for the limited
purposes described in this sentence, such non-exclusive license in favor of
Administrative Agent from each Borrower shall be irrevocable and non-terminable
until all of the Obligations are paid in full and the Revolving Credit
Commitment of the Lenders hereunder is terminated, at which time such
non-exclusive license shall automatically terminate without the necessity of
further action by any party. Such license shall be considered granted only for
the limited purpose noted above and only to the extent necessary for the sale of
Inventory.
SECTION 10.2 REPRESENTATIONS AND WARRANTIES REGARDING COLLATERAL.
(a) Pursuant to the Liens created pursuant to Section 10.1 and
pursuant to all of the other Security Documents (if any) (including, without
limitation, any and all UCC financing statements being filed by Administrative
Agent against any Credit Party), and assuming that any such Security Document
that is intended to be filed with any governmental public recording office has
been so filed, Administrative Agent has been granted and has a valid and
perfected first priority security interest and Lien in the Collateral, including
the Personal Property (subject only to any Permitted Liens permitted under the
terms of this Agreement and the other Financing Documents) securing the payment
of the Obligations, and such security interests and Liens are entitled to all of
the rights, priorities and benefits afforded by the UCC or other applicable Laws
as enacted in any relevant jurisdiction which relate to perfected security
interests. Except for the Patents, Trademarks and Copyrights disclosed on
Schedule 3.19 (if any), none of the Collateral is Federal Registration
Collateral. All such Collateral is free and clear of any Liens other than
Permitted Liens.
(b) Schedule 10.2(b) (as amended from time to time in accordance
with Section 10.3(a) below) sets forth all of the addresses at which any of the
Personal Property is located and/or books and records of Borrowers regarding any
of the Personal Property are kept, indicating in each case which Borrower(s)
have Personal Property and/or books and records located at such address, and, in
the case of any such address not owned or leased by one or more of the
Borrower(s) and listed on Schedule 3.20 (as amended from time to time in
accordance with Section 10.3(a) below), indicating the nature of such location
(e.g., third party warehouse, consignment location, processor location, etc.)
and the name and address of the third party operating such location.
(c) Without limiting the generality of Section 3.2, no
authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority or consent of any other Person is
59
required for (i) the grant by each Borrower to Administrative Agent of the
security interests and Liens in the Collateral, including the Personal Property,
provided for under this Agreement and the other Security Documents (if any), or
(ii) the exercise by Administrative Agent of its rights and remedies with
respect to the Collateral, including the Personal Property, provided for under
this Agreement and the other Security Documents or under any applicable Law,
including the UCC.
(d) Each existing Account is and each hereafter arising Account will
be: (i) based on an actual and bona fide sale of goods or rendition of services
to the applicable Account Debtor, made by each applicable Borrower in the
Ordinary Course of Business; (ii) the exclusive property of the applicable
Borrower free and clear of any Liens, consignment arrangements or financing
statements whatsoever (other than Liens in favor of Administrative Agent created
hereunder and under the other Security Documents) (and any and all goods and
Inventory being sold by the applicable Borrower giving rise in whole or in part
to such Account shall also be the exclusive property of such applicable Borrower
free and clear of any such Liens, consignment arrangements and financing
statements other than those in favor of Administrative Agent), and (iii) the
legal, valid and binding obligation of the applicable Account Debtor. The amount
represented by Borrowers to Administrative Agent as owing by each Account Debtor
with respect to each Account from time to time is and will be the correct amount
actually and unconditionally owning from such Account Debtor with respect to
such Account and will be the amount shown as owing on the invoice(s) issued by
Borrowers to the Account Debtor with respect to such Account (subject to any
cash payments or credit card payments received by Borrowers with respect to such
Account subsequent to the issuance of such invoice). No Account Debtor has, or
will have, any defense, set-off, claim or counterclaim against the applicable
Borrower that can be asserted against Administrative Agent with respect to any
Account, whether in any proceeding to enforce Administrative Agent's rights in
the Collateral or otherwise, except for defenses, set-offs, claims or
counterclaims that are not, in the aggregate, material to the value of the
Accounts. None of the Accounts is nor will any hereafter arising Account be
evidenced by a promissory note or other Instrument unless such Instrument is
delivered by Borrowers to Administrative Agent within one (1) business day of
the execution and delivery by the Account Debtor thereof. For the avoidance of
doubt, none of the provisions of this paragraph (d) shall limit or be deemed to
contradict any of the provisions of the definition of "Eligible Accounts".
(e) All Inventory is and will be of good and merchantable quality,
free from any material defects. No Inventory of any Borrower is produced or sold
by the applicable Borrower subject to any licensing agreement (including any
agreement regarding the use of any Intellectual Property) with any Person that
would restrict in any way the ability of Borrowers or Administrative Agent to
produce or sell such Inventory under any circumstances. No Borrower sells any
Inventory to any customer on approval or on any other basis that entitles the
Account Debtor to return such Inventory or which may obligate the applicable
Borrower to repurchase such Inventory. No Inventory of any Borrower has been or
will be produced in violation of any provision of the Fair Labor Standards Act
of 1938 or in violation of any other Law.
(f) [Reserved].
(g) Except as set forth on Schedule 10.2(g), as of the Closing Date,
no Borrower has any ownership interest in any Chattel Paper, letter of credit
rights, commercial tort claims, documents or investment property that constitute
part of the Collateral. Borrowers shall execute and deliver any documents,
agreements or instruments and take any other actions (and shall cause any
necessary third parties to execute and deliver any documents, agreements or
instruments and take any other actions) as Administrative Agent may request from
time to time in order for Administrative Agent to perfect, preserve or protect
the Liens, rights and remedies of Administrative Agent with respect to any such
Chattel Paper, letter of credit rights, commercial tort claims or documents.
(h) No Person other than Administrative Agent or (if applicable) any
Lender has "control" (as defined in Article 9 of the UCC) over any Deposit
Account, investment property (including
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securities accounts and commodities account), letter of credit rights or
electronic chattel paper in which any Borrower has any interest (except for such
control arising by operation of law in favor of any bank or securities
intermediary or commodities intermediary with whom any Deposit Account,
securities account or commodities account of Borrowers is maintained).
(i) Except as set forth on Schedule 10.2(h), no Borrower has any
item of Collateral that is a claim against any Governmental Authority,
including, without limitation, the federal government of the United States or
any instrumentality or agency thereof, the assignment of which claim is
restricted by any applicable Law, including, without limitation, the federal
Assignment of Claims Act and any other comparable Law.
SECTION 10.3 COVENANTS RELATING TO COLLATERAL.
(a) Borrowers shall not take any of the following actions or make
any of the following changes unless Borrowers have given at least thirty (30)
days prior written notice to Administrative Agent of Borrowers' intention to
take any such action (which such written notice shall include an updated version
of Schedules 3.1, 3.17, 3.20 and/or 10.2(b), as applicable) and have executed
any and all documents, instruments and agreements and taken any other actions
with Administrative Agent may request after receiving such written notice in
order to protect and preserve the Liens, rights and remedies of Administrative
Agent with respect to the Collateral: (i) change the legal name or
organizational identification number of any Borrower, (ii) change the
jurisdiction of incorporation or formation of any Borrower or allow any Borrower
to designate any jurisdiction as an additional jurisdiction of incorporation for
such Borrower, or (iii) move any Collateral to or place any Collateral on any
location that is not listed on Schedule 10.2(b) and/or establish any business
location at any location that is not listed on Schedule 3.20 (it being
acknowledged, for the avoidance of doubt, that no notice to Administrative Agent
shall be required in connection with the movement of any Collateral from one
location that has previously been disclosed to Administrative Agent and
appropriately listed on Schedules 3.20 and/or 10.2(b) to another such locations
that has previously been disclosed to Administrative Agent and appropriately
listed on Schedules 3.20 and/or 10.2(b)) provided that, notwithstanding anything
to the contrary in the foregoing, Borrowers may at any time without any notice
to Administrative Agent (x) move any Collateral consisting of equipment to a
location that is not listed on Schedule 10.2(b) in connection with any repair,
refurbishment, upgrade or exchange of such equipment and (y) return to the
applicable vendor or seller any Inventory or other goods purchased by any
Borrower that are not satisfactory to Borrowers for the purposes of returning
such Inventory or other goods for a refund, exchanging such Inventory or other
goods for satisfactory Inventory or goods, or allowing such vendor or seller to
repair or correct the deficiencies of such Inventory or other goods.
(b) Borrowers shall not adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any Account Debtor, or allow
any credit or discount thereon (other than credits and discounts in the Ordinary
Course of Business and in amounts which are not material with respect to the
Account or with respect to the overall relationship with the Account Debtor)
without the prior written consent of Administrative Agent, provided that,
notwithstanding anything to the contrary contained in the foregoing, Borrowers
may without the prior written consent of Administrative Agent either (x) grant
discounts on Accounts that have previously been billed or invoiced in an amount
not to exceed five percent (5%) of the original amount of such xxxx or invoice
or (y) accept returns of Products in the ordinary course of business with
respect to Accounts that have previously been billed or invoiced, but further
provided that, if the effect of any such discounts granted or returns accepted
as permitted by the foregoing clauses (x) and (y) shall be a reduction in the
amount of Borrowers' Accounts by an aggregate amount of $25,000 or more since
the date of the last delivery of a Borrowing Base Certificate by Borrower to
Administrative Agent (or, if later, the last delivery of a notice under this
proviso by Borrowers to Administrative Agent), Borrowers shall deliver to
Administrative Agent within one (1) Business Day written notice of such
discounts granted and returns accepted specifying which accounts have been
subject to such discounts and returns and in what amounts. Without limiting the
generality of
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Sections 4.17, 10.5 or 11.2 of this Agreement or any other provisions of any of
the Financing Documents relating to the rights of Administrative Agent after the
occurrence and during the continuance of an Event of Default, Administrative
Agent shall have the right at any time after the occurrence and during the
continuance of an Event of Default to: (i) exercise the rights of Borrowers with
respect to the obligation of any Account Debtor to make payment or otherwise
render performance to Borrowers and with respect to any property that secures
the obligations of any Account Debtor or any other Person obligated on the
Collateral, and (ii) adjust, settle or compromise the amount or payment of such
Accounts.
(c) If Borrowers shall acquire any Chattel Paper, letter of credit
rights, commercial tort claim, document or investment property not listed on
Schedule 10.2(g), which such property, in any such case, constitutes part of the
Collateral, Borrowers shall, within five (5) Business Days of the acquisition of
any such property, give written notice to Administrative Agent of the
acquisition of such property (which such written notice shall include an updated
version of Schedule 10.2(g). Borrowers shall execute and deliver any documents,
agreements or instruments and take any other actions (and shall cause any
necessary third parties to execute and deliver any documents, agreements or
instruments and take any other actions) as Administrative Agent may request from
time to time in order for Administrative Agent to perfect, preserve or protect
the Liens, rights and remedies of Administrative Agent with respect to any such
newly acquired property.
(d) Without limiting the generality of Sections 10.2(g) or 10.3(b):
(i) Borrowers shall deliver to Administrative Agent all
tangible Chattel Paper and all Instruments owned by any Borrower and
constituting part of the Collateral duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Administrative Agent. Borrowers shall provide Administrative
Agent with "control" (as defined in Article 9 of the UCC) of all electronic
Chattel Paper owned by any Borrower and constituting part of the Collateral by
having Administrative Agent identified as the assignee of the records pertaining
to the single authoritative copy thereof and otherwise complying with the
applicable elements of control set forth in the UCC. Borrowers also shall
deliver to Administrative Agent all security agreements securing any such
Chattel Paper and securing any such Instruments. Borrowers will xxxx
conspicuously all such Chattel Paper and all such Instruments with a legend, in
form and substance satisfactory to Administrative Agent, indicating that such
Chattel Paper and such Instruments are subject to the security interests and
Liens in favor of Administrative Agent created pursuant to this Agreement and
the Security Documents.
(ii) Borrowers shall deliver to Administrative Agent all
letters of credit on which any Borrower is the beneficiary and which give rise
to letter of credit rights owned by such Borrower which constitute part of the
Collateral in each case duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Administrative Agent. Borrowers shall take any and all actions as may be
necessary or desirable, or that Administrative Agent may request, from time to
time, to cause Administrative Agent to obtain exclusive "control" (as defined in
Article 9 of the UCC) of any such letter of credit rights in a manner acceptable
to Administrative Agent.
(iii) Borrowers shall promptly advise Administrative Agent
upon any Borrower becoming aware that it has any interests in any commercial
tort claim that constitutes part of the Collateral, which such notice shall
include descriptions of the events and circumstances giving rise to such
commercial tort claim and the dates such events and circumstances occurred, the
potential defendants with respect such commercial tort claim and any court
proceedings that have been instituted with respect to such commercial tort
claims, and Borrowers shall, with respect to any such commercial tort claim,
execute and deliver to Administrative Agent such documents as Administrative
Agent shall request to perfect, preserve or protect the Liens, rights and
remedies of Administrative Agent with respect to any such commercial tort claim.
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(e) No Accounts or Inventory or other material Collateral shall at
any time be in the possession or control of any warehouse, consignee, bailee or
any of Borrowers' agents or processors without prior written notice to
Administrative Agent and the receipt by Administrative Agent, if Administrative
Agent has so requested, of warehouse receipts, consignment agreements or bailee
lien waivers (as applicable) satisfactory to Administrative Agent prior to the
commencement of such possession or control. Borrowers shall, upon the request of
Administrative Agent, notify any such warehouse, consignee, bailee, agent or
processor of the security interests and Liens in favor of Administrative Agent
created pursuant to this Agreement and the Security Documents, instruct such
Person to hold all such Collateral for Administrative Agent's account subject to
Administrative Agent's instructions and shall obtain an acknowledgement from
such Person that such Person holds the Collateral for from such Person that such
Person holds the Collateral for Lender's benefit.
(f) Borrowers shall cause all material equipment and other tangible
Personal Property other than Inventory to be maintained and preserved in the
same condition, repair and in working order as when new, ordinary wear and tear
excepted, and shall promptly make or cause to be made all repairs, replacements
and other improvements in connection therewith that are reasonably necessary to
such end. Upon request of Administrative Agent, Borrowers shall promptly deliver
to Administrative Agent any and all certificates of title, applications for
title or similar evidence of ownership of all such tangible Personal Property
and shall cause Administrative Agent to be named as lienholder on any such
certificate of title or other evidence of ownership. Borrowers shall not permit
any such tangible Personal Property to become fixtures to real estate other than
real estate that is part of the Collateral unless Administrative Agent has given
its prior written consent.
(g) Without limiting the generality of Section 4.12, each Borrower
hereby authorizes Administrative Agent to file without the signature of such
Borrower one or more UCC financing statements relating to all or any part of the
Collateral, which financing statements may list Administrative Agent as the
"secured party" and such Borrower as the "debtor" and which describe and
indicate the collateral covered thereby as all or any part of the Collateral
under the Financing Documents (including an indication of the collateral covered
by any such financing statement as "all assets" of such Borrower now owned or
hereafter acquired), in such jurisdictions as Administrative Agent from time to
time determines are appropriate, and to file without the signature of such
Borrower any continuations of or amendments to any such financing statements, in
any such case in order for Administrative Agent to perfect, preserve or protect
the Liens, rights and remedies of Administrative Agent with respect to the
Collateral.
(h) Borrowers shall promptly notify Administrative Agent in writing
upon creation or acquisition by any Borrower of any Collateral which constitutes
a claim against any Governmental Authority, including, without limitation, the
federal government of the United States or any instrumentality or agency
thereof, the assignment of which claim is restricted by any applicable Law,
including, without limitation, the federal Assignment of Claims Act and any
other comparable Law. Upon the request of Administrative Agent, Borrowers shall
take such steps as may be necessary or desirable, or that Administrative Agent
may request, to comply with any such applicable Law.
(i) Without limiting or contradicting any of the provisions of
Sections 4.1, 10.3(b) 10.3(c) or any other provisions of the Financing Document
requiring the delivery by Borrowers to Administrative Agent and/or the Lenders
of any reports, certificates, information or schedules, Borrowers shall furnish
to Administrative Agent from time to time any statements and schedules further
identifying or describing the Collateral and any other information, reports or
evidence concerning the Collateral as Lender may reasonably request from time to
time.
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SECTION 10.4 BORROWERS TO REMAIN LIABLE.
Notwithstanding the granting by Borrowers of Liens in the Collateral to
Administrative Agent or any provisions of this Article 10 or any of the
Financing Documents that may indicate to the contrary: (a) Borrowers shall
remain liable and shall perform all of their respective duties and obligations
under the contracts and agreements included in the Collateral and/or out of
which any of the Collateral arises as if this Agreement had not been executed;
(b) the exercise by Administrative Agent of any of its rights and remedies under
the Financing Documents or at law or in equity shall not release Borrowers from
any of their respective duties or obligations under the contracts and agreements
included in the Collateral and/or out of which any of the Collateral arises; (c)
Administrative Agent shall have no obligation or liability under the contracts
and agreements included in the Collateral and/or out of which any of the
Collateral arises nor shall Administrative Agent be obligated to perform any of
the obligations or duties of any Borrower under any such contract or agreement
or to take any action to collect or enforce any claim for payment constituting
part of the Collateral; and (d) Administrative Agent shall have no liability in
contract or tort for any acts or omissions by any Borrower under any contracts
and agreements included in the Collateral and/or out of which any of the
Collateral arises.
SECTION 10.5 UCC REMEDIES.
(a) Upon the occurrence of and during the continuance of an Event of
Default under this Agreement or the other Financing Documents, Administrative
Agent, in addition to all other rights, options, and remedies granted to
Administrative Agent under this Agreement or at law or in equity, may exercise,
either directly or through one or more assignees or designees, all rights and
remedies granted to it under all Financing Documents and under the UCC in effect
in the applicable jurisdiction(s) and under any other applicable law; including,
without limitation:
(i) The right to take possession of, send notices regarding,
and collect directly the Collateral, with or without judicial process;
(ii) The right to (by its own means or with judicial
assistance) enter any of Borrowers' premises and take possession of the
Collateral, or render it unusable, or to render it usable or saleable, or
dispose of the Collateral on such premises in compliance with subsection (iii)
below and to take possession of Borrowers' original books and records, to obtain
access to Borrowers' data processing equipment, computer hardware and software
relating to the Collateral and to use all of the foregoing and the information
contained therein in any manner Administrative Agent deems appropriate, without
any liability for rent, storage, utilities, or other sums, and Borrowers shall
not resist or interfere with such action (if Borrowers' books and records are
prepared or maintained by an accounting service, contractor or other third party
agent, Borrowers hereby irrevocably authorize such service, contractor or other
agent, upon notice by Administrative Agent to such Person that an Event of
Default has occurred and is continuing, to deliver to Administrative Agent or
its designees such books and records, and to follow Administrative Agent's
instructions with respect to further services to be rendered);
(iii) The right to require Borrowers at Borrowers' expense to
assemble all or any part of the Collateral and make it available to
Administrative Agent at any place designated by Lender;
(iv) The right to notify postal authorities to change the
address for delivery of Borrowers' mail to an address designated by
Administrative Agent and to receive, open and dispose of all mail addressed to
any Borrower.
(v) The right to enforce Borrowers' rights against Account
Debtors and other obligors, including, without limitation, the right to collect
Accounts directly in Administrative Agent's
64
own name (as agent for Lenders) and to charge the collection costs and expenses,
including attorneys' fees, to Borrowers.
(b) Each Borrower agrees that a notice received by it at least ten
(10) days before the time of any intended public sale, or the time after which
any private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted
by applicable law, any perishable Collateral which threatens to speedily decline
in value or which is sold on a recognized market may be sold immediately by
Administrative Agent without prior notice to Borrowers. At any sale or
disposition of Collateral, Administrative Agent may (to the extent permitted by
applicable law) purchase all or any part of the Collateral, free from any right
of redemption by Borrowers, which right is hereby waived and released. Each
Borrower covenants and agrees not to interfere with or impose any obstacle to
Administrative Agent's exercise of its rights and remedies with respect to the
Collateral. Administrative Agent shall have no obligation to clean-up or
otherwise prepare the Collateral for sale. Administrative Agent may comply with
any applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered to adversely
affect the commercial reasonableness of any sale of the Collateral.
Administrative Agent may sell the Collateral without giving any warranties as to
the Collateral. Administrative Agent may specifically disclaim any warranties of
title or the like. This procedure will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral. If Administrative Agent
sells any of the Collateral upon credit, Borrowers will be credited only with
payments actually made by the purchaser, received by Administrative Agent and
applied to the indebtedness of the purchaser. In the event the purchaser fails
to pay for the Collateral, Administrative Agent may resell the Collateral and
Borrowers shall be credited with the proceeds of the sale. Borrowers shall
remain liable for any deficiency if the proceeds of any sale or disposition of
the Collateral are insufficient to pay all Obligations.
(c) Without restricting the generality of the foregoing and for the
purposes aforesaid, each Borrower hereby appoints and constitutes Administrative
Agent its lawful attorney-in-fact with full power of substitution in the
Collateral to use unadvanced funds remaining under this Agreement or which may
be reserved, escrowed or set aside for any purposes hereunder at any time, or to
advance funds in excess of the face amount of the Notes, to pay, settle or
compromise all existing bills and claims, which may be liens or security
interests, or to avoid such bills and claims becoming liens against the
Collateral; to execute all applications and certificates in the name of such
Borrower and to prosecute and defend all actions or proceedings in connection
with the Collateral; and to do any and every act which such Borrower might do in
its own behalf; it being understood and agreed that this power of attorney shall
be a power coupled with an interest and cannot be revoked.
ARTICLE 11
EVENTS OF DEFAULT
SECTION 11.1 EVENTS OF DEFAULT.
For purposes of the Financing Documents, the occurrence of any of the
following conditions and/or events, whether voluntary or involuntary, by
operation of law or otherwise, shall constitute an "EVENT OF DEFAULT":
(a) any Borrower shall fail to pay when due any principal, interest,
premium or fee under any Financing Document or any other amount payable under
any Financing Document;
(b) any Borrower shall fail to observe or perform any covenant
contained in Section 2.12, Section 4.1, Section 4.4, Section 4.6, Section 4.7,
Section 4.10, Section 4.19, Article 5, Article 6 and/or Article 8;
65
(c) any Credit Party defaults in the performance of or compliance
with any material term contained in this Agreement or in any other Financing
Document (other than occurrences described in other provisions of this Section
11.1 for which a different grace or cure period is specified or for which no
grace or cure period is specified and thereby constitute immediate Events of
Default) and such default is not remedied or waived within thirty (30) days
after the earlier of (i) receipt by Borrower Representative of notice from
Administrative Agent or Required Lenders of such default, or (ii) actual
knowledge of any Borrower or any other Credit Party of such default;
(d) any representation, warranty, certification or statement made by
any Credit Party or any other Person in any Financing Document or in any
certificate, financial statement or other document delivered pursuant to any
Financing Document is incorrect in any respect (or in any material respect if
such representation, warranty, certification or statement is not by its terms
already qualified as to materiality) when made (or deemed made);
(e) (i) failure of any Credit Party to pay when due or within any
applicable grace period any principal, interest or other amount on Debt (other
than the Loans), or the occurrence of any breach, default, condition or event
with respect to any Debt (other than the Loans), if the effect of such failure
or occurrence is to cause or to permit the holder or holders of any such Debt,
or the counterparty under any swap contract or other derivative obligation, to
cause, Debt or other liabilities having an individual principal amount in excess
of $100,000 or having an aggregate principal amount in excess of $100,000 to
become or be declared due prior to its stated maturity; or (ii) the occurrence
of any material breach or default under any terms or provisions of any
Subordinated Debt Document or under any agreement subordinating the Subordinated
Debt to all or any portion of the Obligations or the occurrence of any event
requiring the prepayment of any Subordinated Debt;
(f) any Credit Party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against any Credit Party seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of forty-five (45) days; or
an order for relief shall be entered against any Credit Party under the federal
bankruptcy laws as now or hereafter in effect;
(h) (i) institution of any steps by any Person to terminate a
Pension Plan if as a result of such termination any Credit Party or any member
of the Controlled Group could be required to make a contribution to such Pension
Plan, or could incur a liability or obligation to such Pension Plan, in excess
of $100,000, (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA, or (iii) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Plan and
the withdrawal liability (without unaccrued interest) to Multiemployer Plans as
a result of such withdrawal (including any outstanding withdrawal liability that
any Credit Party or any member of the Controlled Group have incurred on the date
of such withdrawal) exceeds $100,000;
(i) one or more judgments or orders for the payment of money (not
paid or fully covered by insurance maintained in accordance with the
requirements of this Agreement and as to which
66
the relevant insurance company has acknowledged coverage) aggregating in excess
of $250,000 shall be rendered against any or all Credit Parties and either (i)
enforcement proceedings shall have been commenced by any creditor upon any such
judgments or orders, or (ii) there shall be any period of twenty (20)
consecutive days during which a stay of enforcement of any such judgments or
orders, by reason of a pending appeal, bond or otherwise, shall not be in
effect;
(j) (i) other than in connection with a Qualified IPO, the Investors
as of the Closing Date (and/or any combination or subject thereof) shall
collectively cease to, directly or indirectly, own and control at least (A)
fifty-one percent (51%) of the outstanding equity interests of Borrower
Representative owned by them on the Closing Date or (B) that percentage of the
outstanding voting equity interests of Borrower Representative necessary at all
times to elect a majority of the board of directors (or similar governing body)
of Borrower Representative and to direct the management policies and decisions
of Borrower Representative, (ii) Borrower Representative shall cease to,
directly or indirectly, own and control one hundred percent (100%) of each class
of the outstanding equity interests of each Subsidiary of Borrower
Representative; or (iii) any "Change of Control", "Change in Control", or terms
of similar import occurs under any Subordinated Debt Document;
(k) any Lien created by any of the Security Documents shall at any
time fail to constitute a valid and perfected Lien on all of the Collateral
purported to be secured thereby, subject to no prior or equal Lien except
Permitted Liens, or any Credit Party shall so assert (except if such failure is
due to the action or inaction of Administrative Agent);
(l) any Credit Party shall be prohibited or otherwise materially
restrained from conducting the business theretofore conducted by it by virtue of
any casualty, any labor strike, any determination, ruling, decision, decree or
order of any court or regulatory authority of competent jurisdiction or any
other event and such casualty, labor strike, determination, ruling, decision,
decree, order or other event remains unstayed and in effect for any period of
ten (10) days;
(m) [RESERVED];
(n) the institution by any United States or Irish Governmental
Authority (in either case whether federal, state, county, municipal or local) of
criminal proceedings against any Credit Party;
(o) [RESERVED];
(p) a default or event of default occurs under any Financing
Document Guarantee;
(q) [RESERVED];
(r) any failure of any Credit Party to strictly comply with any of
provisions of any Financing Document pertaining to Hazardous Materials,
Environmental Laws or Environmental Liabilities;
(s) any Borrower makes any payment on account of any Debt or
Contingent Obligation that has been subordinated to any of the Obligations,
other than payments specifically permitted by the terms of such subordination
unless Administrative Agent shall have given its prior written consent to the
making of such payment;
(t) any person holding any Debt or Contingent Obligation that has
been subordinated to the Obligations, terminates the Subordination Agreement or
asserts that it is terminated, or becomes the subject of an insolvency
proceeding, of the type described in Section 11 .1(f) or (g) above;
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(u) the introduction of, or any change in, any law or regulation
governing or affecting the healthcare industry, including, without limitation,
any Healthcare Laws, which would reasonably expected to have a material adverse
effect on Borrowers' business, condition (financial or otherwise) or properties;
and/or
(v) there shall occur any event or circumstance resulting in a
Material Adverse Effect, which default shall have continued unremedied for a
period of ten (10) days after written notice from Administrative Agent.
(w) the institution of any proceeding by FDA or similar Governmental
Authority to order the withdrawal of any Product or Product category from the
market or to enjoin Credit Party or any representative of a Credit Party from
manufacturing, marketing, selling or distributing any Product or Product
category that would reasonably be expected to have a Material Adverse Effect;
(x) the institution of any action or proceeding by any DEA, FDA, or
any other Governmental Authority to revoke, suspend, reject, withdraw, limit, or
restrict any Required Permit held by a Credit Party or any representative of a
Credit Party that would reasonably be expected to have a Material Adverse
Effect;
(y) the commencement of any enforcement action against any Credit
Party by DEA, FDA, or any other Governmental Authority that would reasonably be
expected to have a Material Adverse Effect;
(z) the Recall, Market Withdrawal, Stock Recovery, Correction or
other form of product retrieval of any Products from the marketplace, whether
required or requested by the FDA or similar Governmental Authority or
voluntarily initiated by Borrowers, or any actions to discontinue the sale of
any Products, that would, in any such case, reasonably be expected to have a
Material Adverse Effect;
(aa) a change in Law, including a change in FDA or DEA policies or
procedures, occurs which would reasonably be expected to have a Material Adverse
Effect; and/or
(bb) the termination of any agreements with manufacturers that
supply any Products or any components of any Products or any changes to any
agreements with manufacturers that supply any Products or any components of any
Products that would reasonably be expected to have a Material Adverse Effect.
Notwithstanding the foregoing, if a Credit Party fails to comply with any
same provision of this Agreement two (2) times in any twelve (12) month period
and Administrative Agent has given to Borrower Representative in connection with
each such failure any notice to which Borrowers would be entitled under this
Section before such failure could become an Event of Default, then all
subsequent failures by a Credit Party to comply with such provision of this
Agreement shall effect an immediate Event of Default (without the expiration of
any applicable cure period) with respect to all subsequent failures by a Credit
Party to comply with such provision of this Agreement, and Administrative Agent
thereupon may exercise any remedy set forth in this Article 11 without affording
Borrowers any opportunity to cure such Event of Default.
All cure periods provided for in this Section shall run concurrently with
any cure period provided for in any applicable Financing Documents under which
the default occurred.
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SECTION 11.2 ACCELERATION AND SUSPENSION OR TERMINATION OF REVOLVING LOAN
COMMITMENT.
Upon the occurrence and during the continuance of an Event of Default,
Administrative Agent may, and shall if requested by Required Lenders, (a) by
notice to Borrower Representative suspend or terminate the Revolving Loan
Commitment and the obligations of Administrative Agent and the Lenders with
respect thereto, in whole or in part (and, if in part, such reduction shall be
pro rata among the Lenders having a Revolving Loan Commitment Percentage),
and/or (b) by notice to Borrower Representative declare the Obligations to be,
and the Obligations shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Borrower and Borrowers will pay the same; provided,
however, that in the case of any of the Events of Default specified in Section
11.1(f) or 11.1(g) above, without any notice to any Borrower or any other act by
Administrative Agent or the Lenders, the Revolving Loan Commitment and the
obligations of Administrative Agent and the Lenders with respect thereto shall
thereupon terminate and all of the Obligations shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each Borrower and Borrowers will pay the same.
SECTION 11.3 CASH COLLATERAL.
If (a) any Event of Default specified in Section 11.1(f) or 11.1(g) shall
occur, (b) the Obligations shall have otherwise been accelerated pursuant to
Section 11.2, or (c) the Revolving Loan Commitment and the obligations of
Administrative Agent and the Lenders with respect thereto shall have been
terminated pursuant to Section 11.2, then without any request or the taking of
any other action by Administrative Agent or the Lenders, Borrowers shall
immediately comply with the provisions of Section 2.5(e) with respect to the
deposit of cash collateral to secure the existing Letter of Credit Liability and
future payment of related fees.
SECTION 11.4 DEFAULT RATE OF INTEREST.
At the election of Administrative Agent or Required Lenders, after the
occurrence of an Event of Default and for so long as it continues, (a) the Loans
and other Obligations shall bear interest at rates that are two percent (2.0%)
per annum in excess of the rates otherwise payable under this Agreement, and (b)
the fee described in Section 2.5(b) shall increase by a rate that is two percent
(2.0%) in excess of the rate otherwise payable under such Section.
SECTION 11.5 SETOFF RIGHTS.
During the continuance of any Event of Default, each Lender is hereby
authorized by each Borrower at any time or from time to time, with reasonably
prompt subsequent notice to such Borrower (any prior or contemporaneous notice
being hereby expressly waived) to set off and to appropriate and to apply any
and all (a) balances held by such Lender or any of such Lender's Affiliates at
any of its offices for the account of such Borrower or any of its Subsidiaries
(regardless of whether such balances are then due to such Borrower or its
Subsidiaries), and (b) other property at any time held or owing by such Lender
to or for the credit or for the account of such Borrower or any of its
Subsidiaries, against and on account of any of the Obligations; except that no
Lender shall exercise any such right without the prior written consent of
Administrative Agent. Any Lender exercising a right to set off shall purchase
for cash (and the other Lenders shall sell) interests in each of such other
Lender's Pro Rata Share of the Obligations as would be necessary to cause all
Lenders to share the amount so set off with each other Lender in accordance with
their respective Pro Rata Share of the Obligations. Each Borrower agrees, to the
fullest extent permitted by law, that any Lender and any of such Lender's
Affiliates may exercise its right to set off with respect to the Obligations as
provided in this Section 11.5.
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SECTION 11.6 APPLICATION OF PROCEEDS.
Notwithstanding anything to the contrary contained in this Agreement, upon
the occurrence and during the continuance of an Event of Default, (a) each
Borrower irrevocably waives the right to direct the application of any and all
payments at any time or times thereafter received by Administrative Agent from
or on behalf of such Borrower or any Guarantor of all or any part of the
Obligations, and, as between Borrowers on the one hand and Administrative Agent
and Lenders on the other, Administrative Agent shall have the continuing and
exclusive right to apply and to reapply any and all payments received against
the Obligations in such manner as Administrative Agent may deem advisable
notwithstanding any previous application by Administrative Agent, and (b) the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral shall be applied: first, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to Administrative
Agent with respect to this Agreement, the other Financing Documents or the
Collateral; second, to all fees, costs, indemnities, liabilities, obligations
and expenses incurred by or owing to any Lender with respect to this Agreement,
the other Financing Documents or the Collateral; third, to accrued and unpaid
interest on the Obligations (including any interest which, but for the
provisions of the Bankruptcy Code, would have accrued on such amounts); fourth,
to the principal amount of the Obligations outstanding; and fifth to any other
indebtedness or obligations of Borrowers owing to Administrative Agent or any
Lender under the Financing Documents. Any balance remaining shall be delivered
to Borrowers or to whoever may be lawfully entitled to receive such balance or
as a court of competent jurisdiction may direct. In carrying out the foregoing,
(x) amounts received shall be applied in the numerical order provided until
exhausted prior to the application to the next succeeding category, and (y) each
of the Persons entitled to receive a payment in any particular category shall
receive an amount equal to its pro rata share of amounts available to be applied
pursuant thereto for such category.
SECTION 11.7 WAIVERS.
(a) Except as otherwise provided for in this Agreement and to the
fullest extent permitted by applicable law, each Borrower waives: (i)
presentment, demand and protest, and notice of presentment, dishonor, intent to
accelerate, acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all Financing Documents,
the Notes or any other notes, commercial paper, accounts, contracts, documents,
Instruments, Chattel Paper and Guarantees at any time held by Lenders on which
any Borrower may in any way be liable, and hereby ratifies and confirms whatever
Lenders may do in this regard; (ii) all rights to notice and a hearing prior to
Administrative Agent's or any Lender's taking possession or control of, or to
Administrative Agent's or any Lender's replevy, attachment or levy upon, any
Collateral or any bond or security which might be required by any court prior to
allowing Administrative Agent or any Lender to exercise any of its remedies; and
(iii) the benefit of all valuation, appraisal and exemption Laws. Each Borrower
acknowledges that it has been advised by counsel of its choices and decisions
with respect to this Agreement, the other Financing Documents and the
transactions evidenced hereby and thereby.
(b) Each Borrower for itself and its successors and assigns, (i)
agrees that its liability shall not be in any manner affected by any indulgence,
extension of time, renewal, waiver, or modification granted or consented to by
Lender; (ii) consents to any indulgences and all extensions of time, renewals,
waivers, or modifications that may be granted by Administrative Agent or any
Lender with respect to the payment or other provisions of the Financing
Documents, and to any substitution, exchange or release of the Collateral, or
any part thereof, with or without substitution, and agrees to the addition or
release of any Borrower, endorsers, guarantors, or sureties, or whether
primarily or secondarily liable, without notice to any other Borrower and
without affecting its liability hereunder; (iii) agrees that its liability shall
be unconditional and without regard to the liability of any other Borrower,
Administrative Agent or any Lender for any tax on the indebtedness; and (iv) to
the fullest extent permitted by law, expressly waives the benefit of any statute
or rule of law or equity now provided,
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or which may hereafter be provided, which would produce a result contrary to or
in conflict with the foregoing.
(c) To the extent that Administrative Agent or any Lender may have
acquiesced in any noncompliance with any requirements or conditions precedent to
the closing of the Loans or to any subsequent disbursement of Loan proceeds,
such acquiescence shall not be deemed to constitute a waiver by Administrative
Agent or any Lender of such requirements with respect to any future
disbursements of Loan proceeds and Administrative Agent may at any time after
such acquiescence require Borrowers to comply with all such requirements. Any
forbearance by Administrative Agent or Lender in exercising any right or remedy
under any of the Financing Documents, or otherwise afforded by applicable law,
including any failure to accelerate the maturity date of the Loans, shall not be
a waiver of or preclude the exercise of any right or remedy nor shall it serve
as a novation of the Notes or as a reinstatement of the Loans or a waiver of
such right of acceleration or the right to insist upon strict compliance of the
terms of the Financing Documents. Administrative Agent's or any Lender's
acceptance of payment of any sum secured by any of the Financing Documents after
the due date of such payment shall not be a waiver of Administrative Agent's and
such Lender's right to either require prompt payment when due of all other sums
so secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by
Administrative Agent as the result of an Event of Default shall not be a waiver
of Administrative Agent's right to accelerate the maturity of the Loans, nor
shall Administrative Agent's receipt of any condemnation awards, insurance
proceeds, or damages under this Agreement operate to cure or waive any Credit
Party's default in payment of sums secured by any of the Financing Documents.
(d) Without limiting the generality of anything contained in this
Agreement or the other Financing Documents, each Borrower agrees that if an
Event of Default is continuing (i) Administrative Agent and Lenders are not
subject to any "one action" or "election of remedies" law or rule, and (ii) all
Liens and other rights, remedies or privileges provided to Administrative Agent
or Lenders shall remain in full force and effect until Administrative Agent or
Lenders have exhausted all remedies against the Collateral and any other
properties owned by Borrowers and the Financing Documents and other security
instruments or agreements securing the Loans have been foreclosed, sold and/or
otherwise realized upon in satisfaction of Borrowers' obligations under the
Financing Documents.
(e) Nothing contained herein or in any other Financing Document
shall be construed as requiring Administrative Agent or any Lender to resort to
any part of the Collateral for the satisfaction of any of Borrowers' obligations
under the Financing Documents in preference or priority to any other Collateral,
and Administrative Agent may seek satisfaction out of all of the Collateral or
any part thereof, in its absolute discretion in respect of Borrowers'
obligations under the Financing Documents. In addition, Administrative Agent
shall have the right from time to time to partially foreclose upon any
Collateral in any manner and for any amounts secured by the Financing Documents
then due and payable as determined by Administrative Agent in its sole
discretion, including, without limitation, the following circumstances: (i) in
the event any Borrower defaults beyond any applicable grace period in the
payment of one or more scheduled payments of principal and/or interest,
Administrative Agent may foreclose upon all or any part of the Collateral to
recover such delinquent payments, or (ii) in the event Administrative Agent
elects to accelerate less than the entire outstanding principal balance of the
Loans, Administrative Agent may foreclose all or any part of the Collateral to
recover so much of the principal balance of the Loans as Lender may accelerate
and such other sums secured by one or more of the Financing Documents as
Administrative Agent may elect. Notwithstanding one or more partial
foreclosures, any unforeclosed Collateral shall remain subject to the Financing
Documents to secure payment of sums secured by the Financing Documents and not
previously recovered.
(f) To the fullest extent permitted by law, each Borrower, for
itself and its successors and assigns, waives in the event of foreclosure of any
or all of the Collateral any equitable right otherwise available to any Credit
Party which would require the separate sale of the any of the
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Collateral or require Administrative Agent or Lenders to exhaust their remedies
against any part of the Collateral before proceeding against any other part of
the Collateral; and further in the event of such foreclosure each Borrower does
hereby expressly consent to and authorize, at the option of Lender, the
foreclosure and sale either separately or together of each part of the
Collateral.
SECTION 11.8 INJUNCTIVE RELIEF.
The parties acknowledge and agree that, in the event of a breach or
threatened breach of any Credit Party's obligations under any Financing
Documents, Administrative Agent and Lenders may have no adequate remedy in money
damages and, accordingly, shall be entitled to an injunction (including without
limitation, a temporary restraining order, preliminary injunction, writ of
attachment, or order compelling an audit) against such breach or threatened
breach, including, without limitation, maintaining the cash management and
collection procedure described herein. However, no specification in this
Agreement of a specific legal or equitable remedy shall be construed as a waiver
or prohibition against any other legal or equitable remedies in the event of a
breach or threatened breach of any provision of this Agreement. Each Credit
Party waives, to the fullest extent permitted by law, the requirement of the
posting of any bond in connection with such injunctive relief. By joining in the
Financing Documents as a Credit Party, each Credit Party specifically joins in
this Section as if this Section were a part of each Financing Documents executed
by the Credit Party.
SECTION 11.9 MARSHALLING.
Administrative Agent and Lenders shall have no obligation to marshal any
assets in favor of any Credit Party, or against or in payment of any of the
other Obligations or any other obligation owed to Administrative Agent or
Lenders by any Credit Party.
ARTICLE 12
EXPENSES AND INDEMNITY
SECTION 12.1 EXPENSES.
Each Borrower hereby agrees to promptly pay (a) all reasonable costs and
expenses of Administrative Agent (including, without limitation, the fees, costs
and expenses of counsel to, and independent appraisers and consultants retained
by Administrative Agent) in connection with the examination, review, due
diligence investigation, documentation, negotiation, closing and syndication of
the transactions contemplated by the Financing Documents, in connection with the
performance by Administrative Agent of its rights and remedies under the
Financing Documents and in connection with the continued administration of the
Financing Documents including: (i) any amendments, modifications, consents and
waivers to and/or under any and all Financing Documents and (ii) any periodic
public record searches conducted by or at the request of Administrative Agent
(including, without limitation, title investigations, UCC searches, fixture
filing searches, judgment, pending litigation and tax lien searches and searches
of applicable corporate, limited liability, partnership and related records
concerning the continued existence, organization and good standing of certain
Persons), (b) without limitation of the preceding clause (a), all reasonable
costs and expenses of Administrative Agent (including recordation and transfer
taxes) in connection with the creation, perfection and maintenance of Liens
pursuant to the Financing Documents, (c) without limitation of the preceding
clause (a), all costs and expenses of Administrative Agent in connection with
(i) protecting, storing, insuring, handling, maintaining or selling any
Collateral; (ii) any litigation, dispute, suit or proceeding relating to any
Financing Document; and (iii) any workout, collection, bankruptcy, insolvency
and other enforcement proceedings under any and all of the Financing Documents,
and (d) all reasonable costs and expenses incurred by Lenders in connection with
any litigation, dispute, suit or proceeding relating to any Financing Document
and in connection with any workout, collection, bankruptcy, insolvency and other
enforcement proceedings under any and all Financing Documents, provided,
however, that to the extent that the costs and expenses referred to in this
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clause (d) consist of fees, costs and expenses of counsel, Borrowers shall be
obligated to pay such reasonable fees, costs and expenses for counsel to
Administrative Agent and for only one counsel acting for all Lenders (other than
Administrative Agent).
SECTION 12.2 INDEMNITY.
Each Borrower hereby agrees to indemnify, pay and hold harmless
Administrative Agent and Lenders and the officers, directors, employees,
trustees, agents, investment advisors, collateral managers, servicers, and
counsel of Administrative Agent and Lenders (collectively called the
"INDEMNITEES") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for such Indemnitee) in connection with any
investigative, response, remedial, administrative or judicial matter or
proceeding, whether or not such Indemnitee shall be designated a party thereto
and including any such proceeding initiated by or on behalf of a Credit Party,
and the reasonable expenses of investigation by engineers, environmental
consultants and similar technical personnel and any commission, fee or
compensation claimed by any broker (other than any broker retained by
Administrative Agent or Lenders) asserting any right to payment for the
transactions contemplated hereby, which may be imposed on, incurred by or
asserted against such Indemnitee as a result of or in connection with the
transactions contemplated hereby or by the other Financing Documents (including
(a)(i) as a direct or indirect result of the presence on or under, or escape,
seepage, leakage, spillage, discharge, emission or release from, any property
now or previously owned, leased or operated by any Borrower, any Subsidiary or
any other Person of any Hazardous Materials or any Hazardous Materials
Contamination, (ii) arising out of or relating to the offsite disposal of any
materials generated or present on any such property, or (iii) arising out of or
resulting from the environmental condition of any such property or the
applicability of any governmental requirements relating to Hazardous Materials,
whether or not occasioned wholly or in part by any condition, accident or event
caused by any act or omission of any Borrower or any Subsidiary, and (b)
proposed and actual extensions of credit under this Agreement) and the use or
intended use of the proceeds of the Loans and Letters of Credit, except that no
Borrower shall have any obligation hereunder to an Indemnitee with respect to
any liability resulting from the gross negligence or willful misconduct of such
Indemnitee, as determined by a final non-appealable judgment of a court of
competent jurisdiction. To the extent that the undertaking set forth in the
immediately preceding sentence may be unenforceable, each Borrower shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all such indemnified
liabilities incurred by the Indemnitees or any of them.
ARTICLE 13
ADMINISTRATIVE AGENT
SECTION 13.1 APPOINTMENT AND AUTHORIZATION.
Each Lender hereby irrevocably appoints and authorizes Administrative
Agent to enter into each of the Financing Documents to which it is a party
(other than this Agreement) on its behalf and to take such actions as
Administrative Agent on its behalf and to exercise such powers under the
Financing Documents as are delegated to Administrative Agent by the terms
thereof, together with all such powers as are reasonably incidental thereto.
Subject to the terms of the other Financing Documents, Administrative Agent is
authorized and empowered to amend, modify, or waive any provisions of this
Agreement or the other Financing Documents on behalf of Lenders. The provisions
of this Article 13 are solely for the benefit of Administrative Agent and
Lenders and neither any Borrower nor any other Credit Party shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, Administrative Agent
shall act solely as agent of Lenders and does not assume and shall not be deemed
to have assumed any obligation toward or relationship of agency or trust with or
for any Borrower or any other Credit Party. Administrative Agent may perform any
of its duties hereunder, or under the Financing Documents, by or through its
agents or employees.
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SECTION 13.2 RIGHT TO PERFORM, PRESERVE AND PROTECT.
If any Credit Party fails to perform any obligation hereunder or under any
other Financing Document, Administrative Agent itself may, but shall not be
obligated to, cause such obligation to be performed at Borrowers' expense.
Administrative Agent is further authorized by Borrowers and the Lenders to make
expenditures from time to time which Administrative Agent, in its reasonable
business judgment, deems necessary or desirable to (i) preserve or protect the
business conducted by Borrowers, the Collateral, or any portion thereof and/or
(ii) enhance the likelihood of, or maximize the amount of, repayment of the
Loans and other Obligations. Each Borrower hereby agrees to reimburse
Administrative Agent on demand for any and all costs, liabilities and
obligations incurred by Administrative Agent pursuant to this Section 13.2.
ARTICLE 14
MISCELLANEOUS
SECTION 14.1 SURVIVAL.
All agreements, representations and warranties made herein and in every
other Financing Document shall survive the execution and delivery of this
Agreement and the other Financing Documents. The provisions of Sections 2.8 and
2.9 and Articles 9, 10, 11 and 12 shall survive the payment of the Obligations
(both with respect to any Lender and all Lenders collectively) and any
termination of this Agreement.
SECTION 14.2 NO WAIVERS.
No failure or delay by Administrative Agent or any Lender in exercising
any right, power or privilege under any Financing Document shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein and therein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. Any
reference in any Financing Document to the "continuing" nature of any Event of
Default shall not be construed as establishing or otherwise indicating that any
Borrower or any other Credit Party has the independent right to cure any such
Event of Default, but is rather presented merely for convenience should such
Event of Default be waived in accordance with the terms of the applicable
Financing Documents.
SECTION 14.3 NOTICES.
(a) All notices, requests and other communications to any party
hereunder shall be in writing (including prepaid overnight courier, facsimile
transmission or similar writing) and shall be given to such party at its
address, facsimile number or e-mail address set forth on the signature pages
hereof (or, in the case of any such Lender who becomes a Lender after the date
hereof, in an Assignment Agreement or in a notice delivered to Borrower
Representative and Administrative Agent by the assignee Lender forthwith upon
such assignment) or at such other address, facsimile number or e-mail address as
such party may hereafter specify for the purpose by notice to Administrative
Agent and Borrower Representative; provided, however, that notices, requests or
other communications shall be permitted by electronic means only in accordance
with the provisions of Section 14.3(b). Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such notice is
transmitted to the facsimile number specified by this Section and the sender
receives a confirmation of transmission from the sending facsimile machine, or
(ii) if given by mail, prepaid overnight courier or any other means, when
received or when receipt is refused at the applicable address specified by this
Section.
(b) Notices and other communications to the parties hereto may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to
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procedures approved from time to time by Administrative Agent, provided,
however, that the foregoing shall not apply to notices sent directly to any
Lender if such Lender has notified the Administrative Agent that it is incapable
of receiving notices by electronic communication. The Administrative Agent or
Borrower Representative may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided, however, that approval of such procedures
may be limited to particular notices or communications.
(c) Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgment from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgment), and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor,
provided, however, that if any such notice or other communication is not sent or
posted during normal business hours, such notice or communication shall be
deemed to have been sent at the opening of business on the next Business Day.
SECTION 14.4 SEVERABILITY.
In case any provision of or obligation under this Agreement or any other
Financing Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 14.5 AMENDMENTS AND WAIVERS.
No provision of this Agreement or any other Financing Document may be
amended, waived or otherwise modified unless such amendment, waiver or other
modification is in writing and is signed or otherwise approved by Borrowers, the
Administrative Agent and the Lenders.
SECTION 14.6 ASSIGNMENTS; PARTICIPATIONS.
(a) Assignments by Lenders.
(i) Each Lender may at any time assign or grant participations
in all or any portion of such Lender's Loans and interest in the Revolving Loan
Commitment, together with all related obligations of such Lender hereunder. Each
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided, however, that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(ii) Administrative Agent, acting solely for this purpose as
an agent of Borrowers, shall maintain at its offices located in Chicago,
Illinois a copy of each Assignment Agreement delivered to it and a register for
the recordation of the names and addresses of each Lender, and the commitments
of, and principal amount of the Loans owing to, such Lender pursuant to the
terms hereof. The entries in such register shall be conclusive, and Borrowers,
Administrative Agent and Lenders may treat each Person whose name is recorded
therein pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. Such register shall be
available for inspection by any Borrower and any Lender, at any reasonable time
upon reasonable prior notice to Administrative Agent.
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(b) Credit Party Assignments. No Credit Party may assign, delegate
or otherwise transfer any of its rights or other obligations hereunder or under
any other Financing Document without the prior written consent of Administrative
Agent and each Lender.
SECTION 14.7 HEADINGS.
Headings and captions used in the Financing Documents (including the
Exhibits, Schedules and Annexes hereto and thereto) are included for convenience
of reference only and shall not be given any substantive effect.
SECTION 14.8 CONFIDENTIALITY.
Administrative Agent and each Lender shall hold all non-public information
regarding the Credit Parties and their respective businesses identified as such
by Borrowers and obtained by Administrative Agent or any Lender pursuant to the
requirements hereof in accordance with such Person's customary procedures for
handling information of such nature, except that disclosure of such information
may be made (a) to their respective agents, employees, Subsidiaries, Affiliates,
attorneys, auditors, professional consultants, rating agencies, insurance
industry associations and portfolio management services, (b) to prospective
transferees or purchasers of any interest in the Loans, and to prospective
contractual counterparties (or the professional advisors thereto) in swap
contracts or other derivative obligations permitted hereby, provided, however,
that any such Persons shall have agreed to be bound by the provisions of this
Section 14.8, (c) as required by Law, subpoena, judicial order or similar order
and in connection with any litigation, (d) as may be required in connection with
the examination, audit or similar investigation of such Person, and (e) to a
Person that is a trustee, investment advisor, collateral manager, servicer,
noteholder or secured party in a Securitization (as hereinafter defined) in
connection with the administration, servicing and reporting on the assets
serving as collateral for such Securitization. For the purposes of this Section,
"Securitization" shall mean a public or private offering by a Lender or any of
its Affiliates or their respective successors and assigns, of securities which
represent an interest in, or which are collateralized, in whole or in party, by
the Loans. Confidential information shall include only such information
identified as such at the time provided to Administrative Agent and shall not
include information that either: (i) is in the public domain, or becomes part of
the public domain after disclosure to such Person through no fault of such
Person, or (ii) is disclosed to such Person by a Person other than a Credit
Party, provided, however, Administrative Agent does not have actual knowledge
that such Person is prohibited from disclosing such information. The obligations
of Administrative Agent and Lenders under this Section 14.8 shall supersede and
replace the obligations of Administrative Agent and Lenders under any
confidentiality agreement in respect of this financing executed and delivered by
Administrative Agent or any Lender prior to the date hereof.
SECTION 14.9 WAIVER OF CONSEQUENTIAL AND OTHER DAMAGES.
To the fullest extent permitted by applicable law, no Borrower shall
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of this Agreement, any other Financing Document or any
agreement or instrument contemplated hereby or thereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. No Indemnitee shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Financing Documents or
the transactions contemplated hereby or thereby.
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SECTION 14.10 GOVERNING LAW; SUBMISSION TO JURISDICTION.
THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL
MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN
CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH BORROWER, ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN NEW YORK CITY, STATE OF NEW YORK AND EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. EACH BORROWER IRREVOCABLY AGREES THAT, SUBJECT
TO ADMINISTRATIVE AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED
IN SUCH COURTS. EACH BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON SUCH PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS
BEEN POSTED.
SECTION 14.11 WAIVER OF JURY TRIAL.
EACH OF EACH BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH OF EACH BORROWER,
ADMINISTRATIVE AGENT AND EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.
EACH OF EACH BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS AND
REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.
SECTION 14.12 PUBLICATION; ADVERTISEMENT.
(a) Publication. No Credit Party will directly or indirectly
publish, disclose or otherwise use in any public disclosure, advertising
material, promotional material, press release or interview, any reference to the
name, logo or any trademark of Xxxxxxx Xxxxx or any of its Affiliates or any
reference to this Agreement or the financing evidenced hereby, in any case
except (i) as required by Law, subpoena or judicial or similar order, in which
case the applicable Credit Party shall give Administrative Agent prior written
notice of such publication or other disclosure, or (ii) with Xxxxxxx Xxxxx'x
prior written consent.
(b) Advertisement. Each Lender and each Credit Party hereby
authorizes Xxxxxxx Xxxxx to publish the name of such Lender and Credit Party,
the existence of the financing arrangements referenced under this Agreement, the
primary purpose and/or structure of those arrangements, the amount of credit
extended under each facility, the title and role of each party to this
Agreement, and the total
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amount of the financing evidenced hereby in any "tombstone", comparable
advertisement or press release which Xxxxxxx Xxxxx elects to submit for
publication. In addition, each Lender and each Credit Party agrees that Xxxxxxx
Xxxxx may provide lending industry trade organizations with information
necessary and customary for inclusion in league table measurements after the
Closing Date. With respect to any of the foregoing, Xxxxxxx Xxxxx shall provide
Borrowers with an opportunity to review and confer with Xxxxxxx Xxxxx regarding
the contents of any such tombstone, advertisement or information, as applicable,
prior to its submission for publication and, following such review period,
Xxxxxxx Xxxxx may, from time to time, publish such information in any media form
desired by Xxxxxxx Xxxxx, until such time that Borrowers shall have requested
Xxxxxxx Xxxxx xxxxx any such further publication.
SECTION 14.13 COUNTERPARTS; INTEGRATION.
This Agreement and the other Financing Documents may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Signatures by facsimile shall bind the parties hereto. This Agreement and the
other Financing Documents constitute the entire agreement and understanding
among the parties hereto and supersede any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 14.14 NO STRICT CONSTRUCTION.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
SECTION 14.15 TIME.
Time is of the essence in each Borrower's and each other Credit Party's
performance under this Agreement and all other Financing Documents.
SECTION 14.16 LENDER APPROVALS.
Unless expressly provided herein to the contrary, any approval, consent,
waiver or satisfaction of Administrative Agent or Lenders with respect to any
matter that is the subject of this Agreement, the other Financing Documents may
be granted or withheld by Administrative Agent and Lenders in their sole and
absolute discretion and credit judgment.
SECTION 14.17 [RESERVED].
SECTION 14.18 WAIVERS.
EACH BORROWER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR
RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON SUCH BORROWER ANY
RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR
SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE
ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT.
SECTION 14.19 RELEASE OF ADMINISTRATIVE AGENT AND LENDERS.
Each Borrower, voluntarily, knowingly, unconditionally, and irrevocably,
with specific and express intent, for and on behalf of itself and its agents,
attorneys, heirs, successors, and assigns
78
(collectively the "RELEASING PARTIES") does hereby fully and completely release,
acquit and forever discharge each Indemnitee, and any other person, firm,
business, corporation, insurer, or association which may be responsible or
liable for the acts or omissions of any Indemnitee, or who may be liable for the
injury or damage resulting therefrom (collectively the "RELEASED PARTIES"), of
and from any and all actions, causes of action, suits, debts, disputes, damages,
claims, obligations, liabilities, costs, expenses and demands of any kind
whatsoever, at law or in equity, whether matured or unmatured, liquidated or
unliquidated, vested or contingent, xxxxxx or inchoate, known or unknown that
the Releasing Parties (or any of them) has against the Released Parties or any
of them (whether directly or indirectly) except if resulting from the gross
negligence or willful misconduct of Administrative Agent, as finally determined
by a court of competent jurisdiction. The foregoing release shall be deemed
renewed and reaffirmed as of the date of each advance of proceeds under any
Loans and each other accommodation made or granted to any Borrower by any
Released Party under any Financing Document. Each Borrower acknowledges that the
foregoing release is a material inducement to Administrative Agent's and each
Lender's decision to extend to Borrower the financial accommodations hereunder
and has been relied upon by Administrative Agent and each Lender in agreeing to
extend the credit herein contemplated and in making each advance or other
accommodation hereunder.
ARTICLE 15
JOINT AND SEVERAL LIABILITY; GUARANTOR PROVISIONS
SECTION 15.1 JOINT AND SEVERAL OBLIGATIONS.
(a) Borrowers is defined collectively to include all Persons
constituting the Borrowers; provided, however, that any references herein to
"any Borrower", "each Borrower" or similar references, shall be construed as a
reference to each individual Person comprising the Borrowers. Each Person
comprising Borrowers shall be jointly and severally liable for all of the
obligations of Borrowers under this Agreement, regardless of which of the
Borrowers actually receives the proceeds of the indebtedness governed hereby or
the benefit of any other extensions of credit hereunder, or the manner in which
the Borrowers, the Administrative Agent or the Lenders account therefor in their
respective books and records. In addition, each entity comprising Borrowers
hereby acknowledges and agrees that all of the representations, warranties,
covenants, obligations, conditions, agreements and other terms contained in this
Agreement shall be applicable to and shall be binding upon and measured and
enforceable individually against each Person comprising Borrowers as well as all
such Persons when taken together. By way of illustration, but without limiting
the generality of the foregoing, the terms of Section 11.1 of this Agreement are
to be applied to each individual Person comprising the Borrowers (as well as to
all such Persons taken as a whole), such that the occurrence of any of the
events described in Section 11.1 of this Agreement as to any Person comprising
the Borrowers shall constitute an Event of Default even if such event has not
occurred as to any other Persons comprising the Borrowers or as to all such
Persons taken as a whole (except as otherwise expressly provided therein).
(b) Each Borrower acknowledges that it will enjoy significant
benefits from the business conducted by the other Borrowers because of, inter
alia, their combined ability to bargain with other Persons including, without
limitation, their ability to receive the credit extensions under this Agreement
and the other Financing Documents on favorable terms granted by this Agreement
and other Financing Documents which would not have been available to an
individual Borrower acting alone. Each Borrower has determined that it is in its
best interest to procure the credit facilities contemplated hereunder, with the
credit support of the other Borrowers as contemplated by this Agreement and the
other Financing Documents.
(c) Administrative Agent and Lenders have advised the Borrowers that
each of them is unwilling to enter into this Agreement and the other Financing
Documents and make available the credit facilities extended hereby or thereby to
any Borrower unless each Borrower agrees, among other things, to be jointly and
severally liable for the due and proper payment of the Obligations of each other
79
Borrower under this Agreement and other Financing Documents. Each Borrower has
determined that it is in its best interest and in pursuit of its purposes that
it so induce the Administrative Agent and Lender to extend credit pursuant to
this Agreement and the other documents executed in connection herewith (i)
because of the desirability to each Borrower of the credit facilities hereunder
and the interest rates and the modes of borrowing available hereunder, (ii)
because each Borrower may engage in transactions jointly with other Borrowers
and (iii) because each Borrower may require, from time to time, access to funds
under this Agreement for the purposes herein set forth. Each Borrower,
individually, expressly understands, agrees and acknowledges, that the credit
facilities contemplated hereunder would not be made available on the terms
herein in the absence of the collective credit of all of the Persons
constituting the Borrowers, the joint and several liability of all such Persons,
and the cross-collateralization of the collateral of all such Persons hereunder.
Accordingly, each Borrower, individually acknowledges that the benefit to each
of the Persons comprising the Borrowers as a whole constitutes reasonably
equivalent value, regardless of the amount of the indebtedness actually borrowed
by, advanced to, or the amount of credit provided to, or the amount of
collateral provided by, any individual Borrower.
(d) Each Borrower has determined that it is and, after giving effect
to the transactions contemplated by this Agreement and the other Financing
Documents (including, without limitation, the inter-Borrower arrangement set
forth in this Section) will be Solvent and has and will have the ability to pay
its debts from time to time incurred in connection with the conduct of its
business as such debts mature and that the value of the benefits to be derived
by such Borrower from the access to funds under this Agreement (including,
without limitation, the inter-Borrower arrangement set forth in this Section) is
reasonably equivalent to the obligations undertaken pursuant hereto.
(e) The Borrower Representative (on behalf of each Borrower) shall
maintain records specifying (i) all Obligations incurred by each Borrower, (ii)
the date of such incurrence, (iii) the date and amount of any payments made in
respect of such Obligations, and (iv) all inter-Borrower obligations pursuant to
this Section. The Borrower Representative shall make copies of such records
available to the Administrative Agent, upon request.
(f) To the extent that applicable law otherwise would render the
full amount of the joint and several obligations of any Borrower hereunder,
under the other Financing Documents invalid or unenforceable, such Borrower's
obligations hereunder and under the other Financing Documents shall be limited
to the maximum amount which does not result in such invalidity or
unenforceability; provided, however, that each Borrower's obligations hereunder
and under the other Financing Documents shall be presumptively valid and
enforceable to their fullest extent in accordance with the terms hereof or
thereof, as if this Section were not a part of this Agreement.
(g) To the extent that any Borrower shall make a payment under this
Section of all or any of the Obligations (other than credit facilities made to
that Borrower for which it is primarily liable) (a "JOINT LIABILITY PAYMENT")
which, taking into account all other Joint Liability Payments then previously or
concurrently made by any other Borrower, exceeds the amount which such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Joint Liability Payments in the same proportion that such
Borrower's "ALLOCABLE AMOUNT" (as defined below) (as determined immediately
prior to such Joint Liability Payments) bore to the aggregate Allocable Amounts
of each of the Borrowers as determined immediately prior to the making of such
Joint Liability Payments, then, following indefeasible payment in full in cash
of the Obligations and termination of the Commitments, such Borrower shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Borrower for the amount of such excess, pro rata based
upon their respective Allocable Amounts in effect immediately prior to such
Joint Liability Payments. As of any date of determination, the "ALLOCABLE
AMOUNT" of any Borrower shall be equal to the maximum amount of the claim which
could then be recovered from such Borrower under this Section without rendering
such claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any
80
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.
(h) Administrative Agent and/or Lenders are hereby authorized,
without notice or demand and without affecting the liability of any Borrower
hereunder, to, at any time and from time to time, (i) renew, extend or otherwise
increase the time for payment of the Obligations; (ii) with the written
agreement of any Borrower accelerate or otherwise change the terms relating to
the Obligations or otherwise modify, amend or change the terms of any promissory
note or other agreement, document or instrument now or hereafter executed by any
Borrower and delivered to Administrative Agent and/or any Lender; (iii) accept
partial payments of the Obligations; (iv) take and hold security or collateral
for the payment of the Obligations or for the payment of any Guarantees of the
Obligations and exchange, enforce, waive and release any such security or
collateral; (v) apply such security or collateral and direct the order or manner
of sale thereof as Administrative Agent and/or any applicable Lender, in its
sole discretion, may determine; and (vi) settle, release, compromise, collect or
otherwise liquidate the Obligations and any security or collateral therefor in
any manner, without affecting or impairing the obligations of any Borrower.
Except as specifically provided in this Agreement or any of the other Financing
Documents, Administrative Agent shall have the exclusive right to determine the
time and manner of application of any payments or credits, whether received from
any Borrower or any other source, and such determination shall be binding on all
Borrowers. All such payments and credits may be applied, reversed and reapplied,
in whole or in part, to any of the Obligations as Administrative Agent shall
determine in its sole discretion without affecting the validity or
enforceability of the Obligations of any other Borrower.
(i) Each Borrower hereby agrees that, except as hereinafter
provided, its obligations hereunder shall be unconditional, irrespective of (i)
the absence of any attempt to collect the Obligations from any obligor or other
action to enforce the same; (ii) the waiver or consent by Administrative Agent
and/or any applicable Lender(s) with respect to any provision of any instrument
evidencing the Obligations, or any part thereof, or any other agreement
heretofore, now or hereafter executed by a Borrower and delivered to
Administrative Agent and/or any Lender; (iii) failure by Administrative Agent to
take any steps to perfect and maintain its security interest in, or to preserve
its rights to, any security or collateral for the Obligations; (iv) the
institution of any proceeding under the United States Bankruptcy Code, or any
similar proceeding, by or against a Borrower or Administrative Agent's or any
Lender's election in any such proceeding of the application of Section
1111(b)(2) of the United States Bankruptcy Code; (v) any borrowing or grant of a
security interest by a Borrower as debtor-in-possession, under Section 364 of
the United States Bankruptcy Code; (vi) the disallowance, under Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Bankruptcy Code, of all or any portion of Administrative
Agent's or any Lender's claim(s) for repayment of any of the Obligations; or
(vii) any other circumstance other than payment in full of the Obligations which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor or surety.
(j) Until all Obligations have been paid and satisfied in full, no
payment made by or for the account of a Borrower including, without limitation,
(i) a payment made by such Borrower on behalf of the liabilities of any other
Borrower, or (ii) a payment made by any other person under any Guarantee, shall
entitle such Borrower, by subrogation or otherwise, to any payment from any
other Borrower or from or out of any other Borrower's property and such Borrower
shall not exercise any right or remedy against any other Borrower or any
property of any other Borrower by reason of any performance of such Borrower of
its joint and several obligations hereunder.
(k) Any notice given by one Borrower hereunder shall constitute and
be deemed to be notice given by all Borrowers, jointly and severally. Notice
given by Administrative Agent or any Lender to any one Borrower hereunder or
pursuant to any Financing Documents in accordance with the terms hereof shall
constitute notice to each and every Borrower. The knowledge of one Borrower
shall be
81
imputed to all Borrowers and any consent by one Borrower shall constitute the
consent of and shall bind all Borrowers.
(l) This Section is intended only to define the relative rights of
Borrowers nothing set forth in this Section is intended to or shall impair the
obligations of Borrowers, jointly and severally, to pay any amounts as and when
the same shall become due and payable in accordance with the terms of this
Agreement. Nothing contained in this Section shall limit the liability of any
Borrower to pay the credit facilities made directly or indirectly to that
Borrower and accrued interest, Fees and expenses with respect thereto for which
such Borrower shall be primarily liable.
(m) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of each Borrower to which
such contribution and indemnification is owing. The rights of any indemnifying
Borrower against the other Borrowers under this Section shall be exercisable
upon the full and indefeasible payment of the Obligations and the termination of
the credit facilities hereunder.
SECTION 15.2 GUARANTOR PROVISIONS.
(a) Each Borrower, as joint and several primary obligor of the
Obligations directly incurred by any other Borrower, authorizes Administrative
Agent and Lenders, without giving notice to such Borrower or to any other
Borrower (to the extent permitted hereunder) or obtaining such Borrower's
consent or any other Borrower's consent (to the extent permitted hereunder) and
without affecting the liability of such Borrower for the Obligations directly
incurred by the other Borrower, from time to time to:
(i) compromise, settle, renew, extend the time for payment,
change the manner or terms of payment, discharge the performance of, decline to
enforce, or release all or any of the Obligations; grant other indulgences to
any Borrower in respect thereof; or modify in any manner any documents relating
to the Obligations;
(ii) declare all Obligations due and payable upon the
occurrence and during the continuance of an Event of Default;
(iii) take and hold security for the performance of the
Obligations of any Borrower and exchange, enforce, waive and release any such
security;
(iv) apply and reapply such security and direct the order or
manner of sale thereof as Administrative Agent and/or any applicable Lender(s),
in its sole discretion, may determine;
(v) release, surrender or exchange any deposits or other
property securing the Obligations or on which Administrative Agent and/or any
applicable Lender(s) at any time may have a Lien; release, substitute or add any
one or more endorsers or guarantors of the Obligations of any other Borrower or
such Borrower; or compromise, settle, renew, extend the time for payment,
discharge the performance of, decline to enforce, or release all or any
obligations of any such endorser or guarantor or other Person who is now or may
hereafter be liable on any Obligations or release, surrender or exchange any
deposits or other property of any such Person;
(vi) apply payments received by Administrative Agent and/or
any applicable Lender(s) from any Borrower to any Obligations, in such order as
Administrative Agent shall determine, in its sole discretion; and
(vii) assign this Agreement in whole or in part.
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(b) Each Borrower, as a primary, joint and several obligor with
respect to the Obligations directly incurred by any other Borrower, waives:
(i) any defense based upon any legal disability or other
defense of any other Borrower, or by reason of the cessation or limitation of
the liability of any other Borrower from any cause (other than full payment of
all Obligations), including, without limitation, failure of consideration,
breach of warranty, statute of frauds, statute of limitations, accord and
satisfaction, and usury;
(ii) any defense based upon any legal disability or other
defense of any other guarantor or other Person;
(iii) any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on behalf of
any other Borrower or any principal of any other Borrower or any defect in the
formation of any other Borrower or any principal of any other Borrower;
(iv) any defense based upon the application by any other
Borrower of the proceeds of the credit facilities for purposes other than the
purposes represented by such other Borrower to Administrative Agent and Lenders
or intended or understood by Administrative Agent and Lenders or such Borrower;
(v) any defense based on such Borrower's rights, under statute
or otherwise, to require Administrative Agent and/or any applicable Lender(s) to
xxx any other Borrower or otherwise to exhaust its rights and remedies against
any other Borrower or any other Person or against any collateral before seeking
to enforce its right to require such Borrower to satisfy the Obligations of any
other Borrower;
(vi) any defense based on Administrative Agent's or any
Lender's failure at any time to require strict performance by any Borrower of
any provision of the Financing Documents. Such Borrower agrees that no such
failure shall waive, alter or diminish any right of Administrative Agent and/or
any applicable Lender(s) thereafter to demand strict compliance and performance
therewith. Nothing contained herein shall prevent Administrative Agent and/or
any applicable Lender(s) from foreclosing on any Lien, or exercising any rights
available to Administrative Agent and/or any applicable Lender(s) thereunder,
and the exercise of any such rights shall not constitute a legal or equitable
discharge of such Borrower;
(vii) any defense arising from any act or omission of
Administrative Agent and/or any applicable Lender(s) which changes the scope of
such Borrower's risks hereunder;
(viii) any defense based upon Administrative Agent's or any
Lender's election of any remedy against such Borrower or any other Borrower or
any of them; any defense based on the order in which Administrative Agent and/or
any Lender(s) enforces its remedies;
(ix) any defense based on (A) Administrative Agent's or any
applicable Lender's surrender, release, exchange, substitution, dealing with or
taking any additional collateral, (B) Administrative Agent's or any applicable
Lender's abstaining from taking advantage of or realizing upon any Lien or other
Guarantee, and (C) any impairment of collateral securing the Obligations,
including, without limitation, Administrative Agent's or any applicable Lender's
failure to perfect or maintain a Lien in such collateral;
(x) any defense based upon Administrative Agent's or any
Lender's failure to disclose to such Borrower any information concerning any
other Borrower's financial condition or any other circumstances bearing on any
other Borrower's ability to pay the Obligations;
83
(xi) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
any other respects more burdensome than that of a principal;
(xii) any defense based upon Administrative Agent's and/or any
Lender's election, in any proceeding instituted under the Bankruptcy Code, of
the application of Bankruptcy Code Section 1111(b)(2) or any successor statute;
(xiii) any defense based upon any borrowing or any grant of a
security interest under Bankruptcy Code Section 364;
(xiv) any defense based on Administrative Agent's and/or any
Lender's failure to be diligent or to satisfy any other standard imposed on a
secured party, in exercising rights with respect to collateral securing the
Obligations;
(xv) except as otherwise expressly set forth herein: notice of
acceptance hereof; notice of the existence, creation or acquisition of any
Obligation; notice of any Event of Default; notice of the amount of the
Obligations outstanding from time to time; notice of any other fact which might
increase such Borrower's risk; diligence; presentment; demand of payment;
protest; filing of claims with a court in the event of any other Borrower's
receivership or bankruptcy and all other notices and demands to which such
Borrower might otherwise be entitled (and agrees the same shall not have to be
made on the other Borrower as a condition precedent to such Borrower's
obligations hereunder);
(xvi) any defense based on errors and omissions by
Administrative Agent and/or any Lender in connection with its administration of
the credit facilities;
(xvii) any defense based on application of fraudulent
conveyance or transfer law or shareholder distribution law to any of the
Obligations or the security therefor;
(xviii) any defense based on Administrative Agent's and/or any
Lender's failure to seek relief from stay or adequate protection in any other
Borrower's bankruptcy proceeding or any other act or omission by Administrative
Agent and/or any Lender which impairs such Borrower's prospective subrogation
rights;
(xix) any defense based on legal prohibition of Administrative
Agent's and/or any Lender's acceleration of the maturity of the Obligations
during the occurrence of an Event of Default or any other legal prohibition on
enforcement of any other right or remedy of Administrative Agent and/or any
Lender with respect to the Obligations and the security therefor;
(xx) any defense available to a surety under applicable law;
and
(xxi) the benefit of any statute of limitations affecting the
liability of such Borrower hereunder or the enforcement hereof.
(c) Each Borrower further agrees that its obligations hereunder
shall not be impaired in any manner whatsoever by any bankruptcy, extensions,
moratoria or other relief granted to any other Borrower pursuant to any statute
presently in force or hereafter enacted.
(d) Each Borrower authorizes Administrative Agent and each Lender to
exercise, in its sole discretion, any right, remedy or combination thereof which
may then be available to Administrative Agent or such Lender, since it is such
Borrower's intent that the Obligations be absolute, independent and
unconditional obligations of such Borrower under all circumstances.
Notwithstanding any foreclosure of any Lien with respect to any or all of any
property securing the Obligations, whether
84
by the exercise of the power of sale contained therein, by an action for
judicial foreclosure or by an acceptance of a deed in lieu of foreclosure, each
Borrower shall remain bound under such Borrower's Guarantee of the Obligations
directly incurred by any other Borrower.
(e) This Agreement is a primary and original obligation of each of
the Borrowers and each of the Borrowers shall be liable for all existing and
future Obligations of any other Borrower as fully as if such Obligations were
directly incurred by such Borrower.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
VALERA PHARMACEUTICALS, INC.
By:
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
Address:
0 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
E-Mail: xxxxxxxxxx@xxxxxxxxxxxx.xxx
and with a copy to:
Xxxxxx Xxxxxxxx LLP
000 Xxxxxx Xxxx
000 Xxxxxxx Xxxx
Xxxxxx, XX 00000-00000
Attn: Xxxxxxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxx.xxx
Borrower's Account Designation:
Commerce Bank
ABA No.: 000000000
Account No.: 7855033390
Account Name: Valera Operating Account
[Borrower's Signature Page 1 of 1 to Xxxxxxx Xxxxx/Xxxxxx Credit Agreement]
[Notary Page to Follow]
00
XXXXXX XXXXXX XX XXXXXXX :
STATE OF : S.S.
COUNTY OF :
On this day of October, 2005, before me, a Notary Public for the said
County and State, personally appeared Xxxxxx X. Xxxxxxxxx known to me or
satisfactorily proven to me to be Chief Financial Officer of Valera
Pharmaceuticals, Inc., and he acknowledged to me that he executed the foregoing
Credit Agreement as an authorized officer of said entity, that the said
instrument was signed on behalf of said entity as authorized by its Board of
Directors or other applicable entity governance authority and that he
acknowledged said instrument to be the free act and deed of said corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------
Notary Public
My Commission Expires:
[Borrower's Notary Page 1 of 1 to Xxxxxxx Xxxxx/Xxxxxx Credit Agreement]
87
ADMINISTRATIVE AGENT:
XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX
BUSINESS FINANCIAL SERVICES INC.,
as Administrative Agent and a Lender
By:
----------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Address:
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Account Manager for MLC-HCF Valera
Pharmaceuticals transaction
Facsimile: (0-000) 000-0000
E-Mail: XXX_XXX_XXX0@xx.xxx
With copies to:
Xxxxxxx Xxxxx Capital
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney,
Healthcare Finance
Facsimile Number: (000) 000-0000
Xxxxxxx Xxxxx Capital
0000 Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney,
Healthcare Finance
Facsimile Number: (000) 000-0000
And with an additional copy to:
Blank Rome LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, XX
Facsimile: (000) 000-0000
E-Mail: xxxxx@xxxxxxxxx.xxx
[Administrative Agent's Signature Page 1 of 2 to
Xxxxxxx Xxxxx/Xxxxxx Credit Agreement]
88
Payment Account Designation:
LaSalle Bank
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
ABA #: 000000000
Account Name: MLBFS Healthcare Finance
Account #: 5800395088
Attention: Valera Pharmaceuticals
[Administrative Agent's Signature Page 2 of 2 to
Xxxxxxx Xxxxx/Xxxxxx Credit Agreement]
89
LENDERS:
XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX
BUSINESS FINANCIAL SERVICES, INC., AS LENDER
By:
----------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Address:
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Account Manager for MLC-HCF Valera
Pharmaceuticals transaction
Facsimile: (0-000) 000-0000
E-Mail: XXX_XXX_XXX0@xx.xxx
With copies to:
Xxxxxxx Xxxxx Capital
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney,
Healthcare Finance
Facsimile Number: (000) 000-0000
Xxxxxxx Xxxxx Capital
0000 Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney,
Healthcare Finance
Facsimile Number: (000) 000-0000
[Lenders' Signature Page 1 of 1 to Xxxxxxx Xxxxx/Xxxxxx Credit Agreement]
90
