EXHIBIT H
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CREDIT AGREEMENT
dated as of
February 18, 1999
between
MIRAVANT MEDICAL TECHNOLOGIES
and
PHARMACIA & UPJOHN TREASURY SERVICES AB
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01. Definitions....................................................1
(a) Terms Generally................................................1
(b) Accounting Terms...............................................2
(c) Other Terms....................................................2
ARTICLE II
The Credit Facility
Section 2.01. Loans.........................................................15
Section 2.02. Borrowing Procedure...........................................16
Section 2.03. Repayment.....................................................16
Section 2.04. Prepayment....................................................17
ARTICLE III
Interest
Section 3.01. Interest on Loans.............................................18
Section 3.02. Interest on Overdue Amounts...................................19
Section 3.03. Day Counts....................................................19
Section 3.04. Maximum Interest Rate.........................................19
ARTICLE IV
Disbursement and Payment
Section 4.01. Method and Time of Payments...................................20
Section 4.02. Compensation for Losses.......................................20
Section 4.03. Withholding...................................................21
Section 4.04. Expenses; Indemnity...........................................21
Section 4.05. Survival......................................................22
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ARTICLE V
Representations and Warranties
Section 5.01. Representations and Warranties................................23
(a) Subsidiaries..................................................23
(b) Good Standing and Power.......................................23
(c) Corporate Authority...........................................23
(d) Authorizations................................................23
(e) Binding Obligation............................................23
(f) Litigation....................................................24
(g) No Conflicts..................................................24
(h) Financial Condition...........................................24
(i) Taxes.........................................................25
(j) Use of Proceeds...............................................25
(k) Margin Regulations............................................25
(l) Compliance with ERISA.........................................25
(m) Not an Investment Company.....................................26
(n) Properties....................................................26
(o) Compliance with Laws and Charter Documents....................26
(p) Environmental Protection......................................27
(q) Insurance.....................................................28
(r) Adverse Contracts.............................................28
(s) Solvency......................................................28
(t) Disclosure....................................................28
Section 5.02. Survival......................................................29
ARTICLE VI
Conditions Precedent
Section 6.01. Conditions to the Availability of the Commitment..............29
(a) This Agreement................................................29
(b) Evidence of Corporate Action..................................29
(c) Opinions of Counsel...........................................30
(d) Representations and Warranties................................30
(e) Other Documents...............................................30
Section 6.02. Conditions to All Quarterly Loans.............................30
(a) Borrowing Request.............................................30
(b) Note..........................................................30
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Page
(c) Warrant Certificate...........................................30
(d) No Default....................................................31
(e) Representations and Warranties; Covenants.....................31
Section 6.03. Satisfaction of Conditions Precedent..........................31
ARTICLE VII
Covenants
Section 7.01. Affirmative Covenants.........................................31
(a) Financial Statements; Compliance Certificates.................31
(b) Corporate Existence...........................................33
(c) Conduct of Business...........................................33
(d) Authorizations................................................33
(e) Taxes.........................................................34
(f) Insurance.....................................................34
(g) Inspection....................................................34
(h) Maintenance of Records........................................34
(i) Maintenance of Property.......................................35
(j) ERISA.........................................................35
(k) Notice of Defaults and Adverse Developments...................36
(l) Environmental Matters.........................................37
Section 7.02. Negative Covenants............................................37
(a) Mergers, Consolidations and Sales of Assets...................37
(b) Liens.........................................................38
(c) Indebtedness..................................................38
(d) Contingent Liabilities........................................38
(e) Loans and Investments.........................................39
(f) Capital Expenditures..........................................40
(g) Redemptions, etc..............................................41
(h) Dividends and Purchase of Stock...............................41
(i) Stock of Subsidiaries.........................................42
(j) Distributions by Subsidiaries.................................42
(k) Related Agreements............................................42
(l) Sale and Leaseback Transactions...............................43
(m) Transactions with Affiliates and Related Persons..............43
(n) Asset Dispositions............................................43
(o) Securities Offerings..........................................43
(p) Surplus Cashflows.............................................44
Section 7.03. Financial Covenants...........................................44
(a) Shareholders' Equity..........................................44
(b) Current Ratio.................................................44
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(c) Minimum Operating Income......................................44
(d) Ophthalmology Expense.........................................44
ARTICLE VIII
Events of Default
Section 8.01. Events of Default.............................................45
(a) ..............................................................45
(b) ..............................................................45
(c) ..............................................................45
(d) ..............................................................45
(e) ..............................................................45
(f) ..............................................................45
(g) ..............................................................45
(h) ..............................................................46
(i) ..............................................................46
(j) ..............................................................46
(k) ..............................................................47
(l) ..............................................................47
Section 8.02. Assignments...................................................47
(b) ..............................................................48
Section 8.03. Certain Pledges...............................................48
ARTICLE IX
Miscellaneous
SECTION 9.01. APPLICABLE LAW................................................48
SECTION 9.02. WAIVER OF JURY................................................49
Section 9.03. Jurisdiction and Venue; Service of Process....................49
Section 9.04. Set-off.......................................................49
Section 9.05. Amendments and Waivers........................................50
Section 9.06. Cumulative Rights; No Waiver..................................50
Section 9.07. Notices.......................................................50
Section 9.08. Certain Acknowledgments.......................................52
Section 9.09. Separability..................................................52
Section 9.10. Parties in Interest...........................................53
Section 9.11. Execution in Counterparts.....................................53
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SCHEDULES
Schedule 5.01(a) Subsidiaries of the Borrower
EXHIBITS
Exhibit A Form of Borrowing Request
Exhibit B Form of Note
Exhibit C Form of Opinion of Counsel for the Borrower to be
Delivered Upon Payment of Shares
Exhibit D Form of Opinion of Counsel for the Borrower to be
Delivered at the Effective Time
Exhibit E Form of Compliance Certificate
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CREDIT AGREEMENT, dated as of February 18, 1999, between Miravant
Medical Technologies, a Delaware corporation (the "Borrower") and Pharmacia &
Upjohn Treasury Services AB, a Swedish corporation (the "Lender").
W I T N E S S E T H :
WHEREAS, the Borrower has requested the Lender to commit to lend to the
Borrower, for general corporate purposes, an aggregate amount not to exceed
$22,500,000, in the form of up to six term loans, with not more than one such
term loan to be made in each of the six calendar quarters between January 1,
1999 and June 30, 2000; and
WHEREAS, the Lender is willing to make such loans, and the additional
loans described in Section 3.01(b) hereof, on the terms and conditions provided
herein;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this
Agreement apply equally to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun shall be deemed to include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be interpreted as if followed by the phrase
"without limitation". The phrase "individually or in the aggregate" shall be
deemed general in scope and not to refer to any specific Section or clause of
this Agreement. All references herein to the Preamble, Recitals, Articles,
Sections, Exhibits and Schedules shall be deemed references to the Preamble and
Recitals, Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. The table of contents,
headings and captions herein shall not be given effect in interpreting or
construing the provisions of this Agreement. Except as otherwise expressly
provided herein, all references to "dollars" or "$" shall be deemed references
to the lawful money of the United States of America.
(b) Accounting Terms. Except as otherwise expressly provided herein,
the term "consolidated" and all other terms of an accounting nature shall be
interpreted and construed in accordance with GAAP, as in effect from time to
time; provided, however, that, for purposes of determining compliance with any
covenant set forth in Article VII, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement, applied on a basis
consistent with the construction thereof applied in preparing the Borrower's
audited financial statements referred to in Section 5.01(h).
(c) Other Terms. The following terms have the meanings ascribed to them
below or in the Sections of this Agreement indicated below:
"Additional Loans" means, collectively, Loans made pursuant to Section
3.01(b).
"Affiliate" means, with respect to any Person, any other Person that
controls, is controlled by, or is under common control with, such Person.
"Agreement" means this credit agreement, as it may be amended, modified
or supplemented from time to time.
"Approved Subsidiary" has the meaning assigned to such term in Section
8.02(a).
"Asset Disposition" by any Person means any transfer, conveyance, sale,
lease or other disposition by such Person or any of its Subsidiaries (including
a consolidation or merger or other sale of any such Subsidiary with, into or to
another Person in a transaction in which such Subsidiary ceases to be a
Subsidiary, but excluding a disposition by a Subsidiary of such Person to such
Person or a Wholly Owned Subsidiary of such Person or by such Person to a Wholly
Owned Subsidiary of such Person) of (i) shares of capital stock (other than
directors' qualifying shares) or other ownership interests of a Subsidiary of
such Person, (ii) substantially all of the assets of such Person or any of its
Subsidiaries representing a division or line of business or (iii) other assets
or rights of such Person or any of its Subsidiaries transferred, conveyed, sold,
leased or disposed of on or subsequent to the date of this Agreement for cash
consideration not in excess of, and having a book value or fair market value not
in excess of, $1,000,000 in the aggregate.
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"Assignee" has the meaning assigned to such term in Section 8.02(a).
"Average Price" means the average of the Closing Prices of the Common
Stock for the 10 Trading Days immediately preceding the Maturity Date.
"Base Rate" means, for any day, a rate per annum equal to the rate of
interest from time to time publicly announced by Citibank, N.A. in The City of
New York as its prime commercial loan rate in effect on such day. The Base Rate
shall change as and when the foregoing rate shall change. Any change in the Base
Rate shall become effective as of the opening of business on the day of such
change.
"Board of Directors" means the board of directors of the Borrower.
"Borrower" has the meaning assigned to such term in the Preamble.
"Borrowing Amount" has the meaning set forth in Section 2.02.
"Borrowing Date" means, with respect to any Quarterly Loan, the
Business Day set forth in the relevant Borrowing Request as the date upon which
the Borrower desires to borrow such Quarterly Loan; provided, however, that such
Borrowing Date shall be not fewer than 10 Business Days and not more than 20
Business Days following the Lender's receipt of such Borrowing Request; and
provided, further, that the Borrowing Date with respect to any Loan for the
Quarter consisting of January, February and March, 1999 may be any Business Day
not fewer than five Business Days and not more than ten Business Days following
Lender's receipt of the Borrowing Request relating to such Loan.
"Borrowing Request" means a request by the Borrower for a Quarterly
Loan, which shall specify (i) the requested Borrowing Date, (ii) the Borrowing
Amount for such Quarterly Loan, and (iii) a calculation of the Exercise Price of
the related Warrants.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in The City of New York or in Los Angeles,
California, are authorized by law to close.
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"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including that
portion of Capital Lease Obligations that is capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries) by the Borrower and its
Subsidiaries during such period that are included in the property, plant or
equipment reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries.
"Capital Lease Obligations" means, with respect to any Person, the
obligation of such Person to pay rent or other amounts under any lease with
respect to any property (whether real, personal or mixed) acquired or leased by
such Person that is required by GAAP to be accounted for as a liability on a
consolidated balance sheet of such Person.
"Closing Price" means the last reported sale price regular way on the
day in question or, in case no such sale takes place on such day, the reported
closing bid price regular way of the Common Stock, in each case on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading on any national securities
exchange, the closing bid price of the Common Stock on the Nasdaq National
Market. In the case of a closing price of Common Stock on the Nasdaq National
Market, such price shall mean the closing price reported in the New York City
edition of The Wall Street Journal or, if not so reported, another authoritative
source.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Common Stock" means the common stock, par value $.01 per share, of the
Company and any other stock of the Borrower into which such common stock may be
converted or reclassified (other than stock of the Borrower into which unissued
Common Stock has been reclassified) or that may be issued in respect of, in
exchange for, or in substitution of, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations,
recapitalizations or other like events.
"Credit Documents" means, collectively, this Agreement; all of the
Notes; that certain Security Agreement, of even date herewith, between the
Borrower, as debtor, and the Lender, as secured party; and any documents
executed and delivered, or filings made, pursuant to or in connection with such
Security Agreement, including any financing statements filed by the Lender
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pursuant to the Uniform Commercial Code and any filings made by the Lender with
the Patent and Trademark Office.
"Current Assets" means, at any date of determination, consolidated
current assets of the Borrower and its Subsidiaries.
"Current Liabilities" means, at any date of determination, consolidated
current liabilities of the Borrower and its Subsidiaries, less the amount of the
current portion of, and any accrued interest on, Indebtedness of the Borrower
and its Subsidiaries.
"Default" means any event or circumstance which, with the giving of
notice or the passage of time, or both, would be an Event of Default.
"Disclosure Package" has the meaning assigned to such term in Section
5.01(h).
"EBITDA" means, for any period, the sum of (i) consolidated net income
of the Borrower and its Subsidiaries for such period, adjusted to exclude
non-recurring gains and losses on unusual items and (ii) consolidated income
taxes, interest income, Interest Expense, depreciation, and amortization
(including, without limitation, amortization associated with goodwill, deferred
debt expenses, restricted stock and option costs and non-competition agreements)
of the Borrower and its Subsidiaries for such period.
"Effective Time" has the meaning assigned to such term in Section 6.01.
"Environmental Claim" means any claim, assertion, demand, notice of
violation, suit, administrative or judicial proceeding, regulatory action,
investigation, information request or order involving any hazardous substance,
Environmental Law, noise or odor pollution or any injury or threat of injury to
human health, property or the environment.
"Environmental Law" means any federal, state, local or foreign statute
or common law, regulation, order, decree, opinion or agency requirement as now
in effect or hereinafter adopted relating to (i) the handling, use, presence,
disposal or release of any hazardous substance or (ii) the protection,
preservation or restoration of the environment, natural resources or human
health or safety.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Group" means the Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code or are considered to be one employer
under Section 4001 of ERISA.
"Event of Default" has the meaning assigned to such term in Section
8.01.
"Excluded Taxes" means all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges imposed
on or measured by the overall net income of the Lender (or any office, branch or
Subsidiary of the Lender) or any franchise taxes, taxes on doing business or
taxes measured by capital or net worth imposed on the Lender (or any office,
branch or Subsidiary of the Lender), in each case imposed by the United States
of America or any political subdivision or taxing authority thereof or therein,
or taxes on or measured by the overall net income of any office, branch or
Subsidiary of the Lender or any taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar changes imposed by any foreign
country or subdivision thereof.
"Exercise Price" has the meaning assigned to such term in the Warrant
Agreement.
"External Scaleup Costs" means the costs incurred by the Borrower
associated with the development of the scale-up of raw materials, the active
pharmaceutical ingredient and final dose formulation necessary to permit the
Product (as defined in that certain Amended and Restated Ophthalmology
Development & License Agreement between the Borrower and an affiliate of the
Lender) to be manufactured by an entity other than the Borrower. Such costs
include, but are not limited to, the costs of development work performed, raw
materials used in development and stability and equipment needed.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System (or any successor Governmental Authority).
"GAAP" means generally accepted accounting principles, as set forth in
the opinions and pronouncements of the Accounting
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Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entities as may be approved by a significant
segment of the accounting profession of the United States of America.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (ii) to purchase property, securities or services for the purpose
of assuring the holder of such Indebtedness of the payment of such Indebtedness
or (iii) to maintain working capital, equity capital or the financial condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness. The terms "Guaranteed", "Guaranteeing" and "Guarantor" shall
have corresponding meanings.
"Hazardous Substance" means any substance, in any concentration or
mixture, that is (i) listed, classified or regulated pursuant to any
Environmental Law, (ii) petroleum product or by-product, asbestos containing
material, polychlorinated biphenyls, radioactive material or radon or (iii) any
waste or other substance regulated by any Governmental Authority or any
Environmental Law.
"Indebtedness" means, with respect to any Person, (i) all obligations
of such Person for borrowed money or for the deferred purchase price of property
or services (including all obligations, contingent or otherwise, of such Person
in connection with letters of credit, bankers' acceptances, Interest Rate
Protection Agreements or other similar instruments, including currency swaps)
other than indebtedness to trade creditors and service providers incurred in the
ordinary course of business and payable on usual and customary terms, (ii) all
obligations of such Person evidenced by bonds, notes, debentures
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or other similar instruments, (iii) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the remedies available to the seller or
lender under such agreement are limited to repossession or sale of such
property), (iv) all Capital Lease Obligations of such Person, (v) all
obligations of the types described in clauses (i), (ii), (iii) or (iv) above
secured by (or for which the obligee has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in any property (including
accounts, contract rights and other intangibles) owned by such Person (up to the
value of such property), even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vi) all preferred stock issued by
such Person or any Subsidiary of such Person, valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (vii) all Indebtedness of others Guaranteed by such Person and (viii)
all Indebtedness of any partnership of which such Person is a general partner.
"Indemnitee" has the meaning assigned to such term in Section 4.04(b).
"Interest Expense" means, for any period, consolidated interest expense
(including that attributable to Capital Lease Obligations) whether paid or
accrued, of the Borrower and its Subsidiaries with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letter of credit and
bankers' acceptance financing and net costs under Interest Rate Protection
Agreements.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or similar hedging arrangement used by a
Person to fix or cap a floating rate of interest on Indebtedness to a negotiated
maximum rate or amount.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution to (by means of transfers
of cash or other property to others or payments for property or services for the
account or use of others, or otherwise), or purchase or acquisition of capital
stock, bonds, notes, debentures or other securities or evidence of Indebtedness
or other obligations of or issued by any other Person.
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"Key Agreements" means, collectively, the License Agreement, effective
July 1, 1989, between the University of Toledo, the Medical College of Ohio, St.
▇▇▇▇▇▇▇ Medical Center and the Borrower, as amended prior to the date hereof,
and the Development and Distribution Agreement, dated May 28, 1996, between
Iridex Corporation and the Borrower, as amended prior to the date hereof.
"Lender" has the meaning assigned to such term in the Preamble.
"Lien" means, with respect to any asset of a Person, (i) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (ii) the interest of a vendor or lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset,
and (iii) in the case of securities, any purchase option, call or similar right
of any other Person with respect to such securities.
"Loans" means, collectively, the Quarterly Loans and the Additional
Loans.
"Material Adverse Effect" means any material and adverse effect on (i)
the consolidated business, properties, condition (financial or otherwise) or
operations, present or prospective, of the Borrower and its Subsidiaries, (ii)
the ability of the Borrower timely to perform any of its material obligations,
or of the Lender to exercise any remedy, under any Credit Document or (iii) the
legality, validity, binding nature or enforceability of any Credit Document.
"Maturity Date" means the fifth anniversary of the Borrowing Date for
the first Loan made pursuant to this Agreement.
"Maximum Quarterly Amount" means, (i) for the Quarter comprising
January, February and March, 1999, $3,750,000, and (ii) for any other Quarter
(the "Reference Quarter"), the sum of $3,750,000 plus either (A) if and only if
no Quarterly Loan was made in the Quarter immediately preceding the Reference
Quarter or the principal amount of the Quarterly Loan made in the Quarter
immediately preceding the Reference Quarter was less than $3,750,000, then the
amount equal to the amount by which $3,750,000 exceeds the principal amount of
the Quarterly Loan, if any, made in the Quarter immediately preceding the
Reference Quarter, or (B) if and only if the principal amount of the
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Quarterly Loan made in the Quarter immediately preceding the Reference Quarter
was equal to or greater than $3,750,000, then zero.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any member of the ERISA Group is making or accruing
an obligation to make contributions or has within the preceding five plan years
made or accrued contributions.
"Net Available Asset Disposition Proceeds" means, with respect to any
Asset Disposition by any Person, all cash or readily marketable cash equivalents
received (including by way of sale or discounting of a note, instalment
receivable or other receivable, but excluding any other consideration received
in the form of assumption by the acquiree of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash form)
therefrom by such Person, net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred and all federal,
state, provincial, foreign and local taxes required to be accrued as a liability
as a consequence of such Asset Disposition, (ii) all payments made by such
Person or its Subsidiaries on any Indebtedness which is secured by such assets
in accordance with the terms of any Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition or by applicable law be repaid out of the proceeds
from such Asset Disposition, and (iii) all distributions and other payments made
to minority interest holders in Subsidiaries of such Person or joint ventures
as a result of such Asset Disposition.
"Net Available Securities Offering Proceeds" means, with respect to any
offer or sale of securities by any Person, all cash or readily marketable cash
equivalents received therefrom by such Person, net of all underwriting discounts
and commissions, SEC filing fees, legal fees and disbursements, printing fees,
fees of national securities exchanges or the Nasdaq National Market and auditing
fees incurred by such Person in connection with such offer or sale.
"New Site" has the meaning assigned to such term in Section
7.02(e)(ix).
"Note" means a promissory note of the Borrower in the form set forth in
Exhibit B, executed and delivered in accordance
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with Section 2.02, 3.01(b) or 6.02(b) in order to evidence a
Loan.
"Operating Income" of any Person means, for any period, the
consolidated operating income (or loss) of such Person for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that there shall be excluded therefrom (a)
noncash expense items, including but not limited to depreciation, amortization,
noncash compensation costs and reserves, (b) the operating income (or loss) of
any Person acquired by such Person or a Subsidiary of such Person in a
pooling-of-interests transaction for any period prior to the date of such
transaction, (c) the operating income (but not operating loss) of any Subsidiary
of such Person which is subject to restrictions which prevent the payment of
dividends or the making of distributions to such Person to the extent of such
restrictions, (d) the operating income (or loss) of any Person that is not a
Subsidiary of such Person except to the extent of the amount of dividends or
other distributions actually paid to such Person by such other Person during
such period, (e) gains or losses on Asset Dispositions by such Person or its
Subsidiaries and (f) all extraordinary gains and extraordinary losses.
"Ophthalmology Expense" means, for any period, the direct and indirect
costs incurred by the Company associated with the field of ophthalmology for
research, pharmaceutical, device and manufacturing development and preclinical
and clinical costs, including, (but not limited to) general and administrative
costs, internal scale-up costs, preclinical costs as required for NDA filing,
clinical and regulatory costs, drug and device development and manufacturing
costs and consultants, but excluding External Scaleup Costs.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
Governmental Authority).
"Pension Plan" means a Plan that (i) is an employee pension benefit
plan, as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) and
(ii) is subject to the provisions of Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Code.
"Permitted Liens" means, collectively, the following: (i) Liens for
taxes, assessments or charges not yet due or that are being contested in good
faith by appropriate proceedings and (unless the amount thereof is not material
to the Borrower's
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consolidated financial condition) for which adequate reserves are being
maintained (in accordance with GAAP); (ii) deposits or pledges to secure
obligations under workers' compensation, social security or similar laws, or
under unemployment insurance; (iii) deposits or pledges to secure bids, tenders,
contracts (other than contracts constituting Indebtedness), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business; (iv) mechanics', workers',
materialmen's or similar Liens arising in the ordinary course of business with
respect to obligations which are not overdue for a period of more than 30 days
or which are being contested in good faith by appropriate proceedings; (v) Liens
securing judgments in an amount and for a period not constituting an Event of
Default under Section 8.01(i); (vi) minor imperfections of title on real estate
that do not interfere materially with the use of such property or render title
unmarketable; (vii) any Lien upon or in any property hereafter acquired by the
Borrower or a Subsidiary of the Borrower, provided that such Lien is created
contemporaneously with such acquisition to secure or provide for the payment or
financing of any part of the cost (including construction costs) thereof, and
provided, further, that such Lien attaches only to the property so acquired and
fixed improvements thereon, accessions thereto, replacements and proceeds
thereof, and substitutions therefor; (viii) Liens existing on the date hereof;
(ix) Liens on equipment leased by the Borrower or any Subsidiary of the Borrower
pursuant to a capital lease in the ordinary course of business (including
replacements and proceeds thereof, substitutions therefor and accessions
thereto) incurred solely for the purpose of financing the lease of such
equipment; (x) leases or subleases granted to others in the ordinary course of
Borrower's or its Subsidiary's business not interfering in any material respect
with the business of Borrower and its Subsidiaries taken as a whole, and any
interest or title of a lessor under any lease; (xi) Liens on assets that existed
at the time such assets were acquired by Borrower or any Subsidiary (including
Liens on assets of any corporation that existed at the time it became or becomes
a Subsidiary of the Borrower); provided such Liens were not granted in
contemplation of or in connection with the acquisition of such asset by Borrower
or any such Subsidiary; (xii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of customs duties in connection
with the importation of goods; (xiii) Liens which constitute rights of set-off
of a customary nature or banker's Liens with respect to amounts on deposit,
whether arising by operation of law or by contract, in connection with
arrangement entered into with banks in the ordinary course
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of business; (xiv) Liens on insurance proceeds in favor of insurance companies
granted solely as security for financed premiums; and (xv) any Lien renewing,
extending or refinancing a Lien permitted by the foregoing, provided that the
principal amount secured is not increased and the Lien is not extended to other
property (other than by a substitution of like property).
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA (other than a Multiemployer Plan) which is maintained or contributed to by
the Borrower or any member of the ERISA Group.
"Quarter" means each of the six calendar quarters consisting of
January, February and March, 1999; April, May and June, 1999; July, August and
September, 1999; October, November and December, 1999; January, February and
▇▇▇▇▇, ▇▇▇▇; and April, May and June, 2000.
"Quarterly Loan" has the meaning assigned to such term in Section 2.01.
"Related Person" of any Person means, without limitation, any officer
or director of such Person or any other Person owning 5% or more of the
outstanding common stock of such Person or 5% or more of the Voting Stock of
such Person. For purpose of this Agreement, the Lender and its Affiliates shall
not be deemed to be Related Persons of the Borrower or any of its Subsidiaries.
"Repayment Shares" has the meaning assigned to such term in Section
2.03(b).
"Responsible Officer" means the chief executive officer, president,
chief financial officer, chief accounting officer or treasurer of the Borrower.
"Sale and Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or asset of such Person
which has been or is
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being sold or transferred by such Person after the acquisition thereof or the
completion of construction or commencement of operation thereof to such lender
or investor or to any person to whom funds have been or are to be advanced by
such lender or investor on the security of such property or asset.
"SEC" means the Securities and Exchange Commission (or any successor
Governmental Authority).
"Share Repayment Amount" has the meaning assigned to such term in
Section 2.03(b).
"Shareholders' Equity" means, as of any date of determination, the
total consolidated shareholders' equity (determined without duplication) of the
Borrower and its Subsidiaries at such date.
"Solvent" means, with respect to a Person and a specified date of
determination, that at such date:
(a) the present fair saleable value of such Person's assets is in
excess of the total amount of such Person's probable liabilities on its existing
debts and obligations (including contingent liabilities) as they become absolute
and matured;
(b) such Person is able to pay its debts as they become due; and
(c) such Person does not have unreasonably small capital to carry on
such Person's business as theretofore operated and all businesses in which such
Person then is about to engage.
"Subsidiary" means, at any time and with respect to any Person, any
other Person the shares of stock or other ownership interests of which having
ordinary voting power to elect a majority of the board of directors or other
matters of such Person are at the time owned, or the management or policies of
which is otherwise at the time controlled, directly or indirectly through one or
more intermediaries (including other Subsidiaries) or both, by such first
Person. Unless otherwise qualified or the context indicates clearly to the
contrary, all references to a "Subsidiary" or "Subsidiaries" in this Agreement
refer to a Subsidiary or Subsidiaries of the Borrower.
"Surplus" has the meaning assigned to such term in Section 7.02(p).
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"Taxes" has the meaning assigned to such term in Section 4.03.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a day on
which the Nasdaq National Market is open for the transaction of business.
"Voting Stock" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person.
"Warrant" has the meaning assigned to such term in the Warrant
Agreement.
"Warrant Agreement" means the Warrant Agreement, of even date herewith,
between the Borrower and the Lender.
"Warrant Certificate" has the meaning assigned to such term in the
Warrant Agreement.
"Warrant Number" means, with respect to any Quarterly Loan, a number of
Warrants equal to the product of (i) the Borrowing Amount for such Quarterly
Loan, divided by (ii) 62.50.
"Wholly Owned Subsidiary" means, at any time and with respect to any
Person, a Subsidiary, all the shares of stock of all classes of which (other
than directors' qualifying shares) or other ownership interests at the time are
owned directly or indirectly by such Person and/or one or more other Wholly
Owned Subsidiaries of such Person.
ARTICLE II
The Credit Facility
Section 2.01. Loans. Subject to the terms and conditions of this
Agreement, the Lender agrees to make a single term loan (each, a "Quarterly
Loan") in dollars to the Borrower not more than once in each Quarter in a
principal amount not to exceed the Maximum Quarterly Amount per Quarter. Each
Quarterly Loan shall be made on the applicable Borrowing Date only in a
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principal amount of $1,000,000 or an integral multiple of $250,000 in excess
thereof, but in no event greater than the Maximum Quarterly Amount for such
Quarter.
Section 2.02. Borrowing Procedure. In order to borrow a Quarterly Loan,
the Borrower shall deliver a Borrowing Request to the treasurer of Lender, no
later than 12:00 Noon, New York time, on the thirtieth Business Day of the
Quarter to which the Loan relates; provided, however, that any Borrowing Request
with respect to a Quarterly Loan for the Quarter consisting of January, February
and March, 1999 may be furnished to the Lender at any time no later than 12:00
Noon, New York time, on the fifteenth Business Day following the Effective Time.
Each Borrowing Request shall be accompanied by a duly executed Note in the form
of Exhibit B, dated as of the Borrowing Date and evidencing a loan in the
principal amount set forth in the Borrowing Request (the "Borrowing Amount",
which shall be $1,000,000 or an integral multiple of $250,000 in excess thereof
but shall not exceed the Maximum Quarterly Amount for such Quarter), and a duly
executed Warrant Certificate evidencing a number of Warrants equal to the
Warrant Number. Subject to satisfaction, or waiver by the Lender in writing, of
each of the applicable conditions precedent contained in Article VI, on the
applicable Borrowing Date the Lender shall make available to the Borrower the
Borrowing Amount.
Section 2.03. Repayment. (a) The aggregate outstanding principal of the
Loans shall be repaid in full, together with any accrued interest as of the date
of repayment, not later than the Maturity Date. Except as permitted by Section
2.03(b), such principal and interest shall be repaid in cash. Repaid Loans may
not be reborrowed.
(b) If and only if the Common Stock shall have been listed or admitted
to trading on a national securities exchange or quoted on the Nasdaq National
Market on each of the 180 calendar days preceding and including the Maturity
Date, then on, but not following, the Maturity Date, the Borrower may, at its
option, repay all or a portion of the aggregate principal of the Loans, together
with any accrued interest as of the Maturity Date, by delivering to the office
of the Lender theretofore designated in writing to the Borrower not later than
12:00 Noon, New York time, on the Maturity Date, (i) an unlegended certificate
for the number of shares of Common Stock (the "Repayment Shares") equal to the
product, rounded up to the nearest whole number, of (A) the portion of the
aggregate principal of the Loans to be repaid pursuant to this Section
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2.03(b), together with any accrued interest thereon as of the Maturity Date (the
"Share Repayment Amount"), divided by (B) the Average Price; (ii) an opinion of
counsel for the Borrower (which counsel shall be satisfactory to the Lender) in
the form of Exhibit C; (iii) evidence satisfactory to the Lender of the previous
expiration or termination of any waiting period (and any extension thereof)
applicable to the acquisition by the Lender of the Repayment Shares under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the
previous receipt of all governmental and contractual permits, consents and
approvals necessary in connection with such acquisition; (iv) evidence
satisfactory to the Lender of Borrower's compliance with Section 2.03(c); and
(v) a certified or official bank check in same day funds equal to the difference
of (A) the aggregate principal amount of the Loans, together with any accrued
interest as of the Maturity Date, minus (B) the Share Repayment Amount.
(c) The Borrower shall pay all transfer, stamp and other similar taxes
that may be imposed in respect of the issuance or delivery of the Repayment
Shares pursuant to Section 2.03(b) and any and all filing fees incurred by the
Lender pursuant to Section 2.03(b)(iv).
Section 2.04. Prepayment. The Borrower may prepay portions of the Loans
by giving notice to the treasurer of the Lender, by telephone, telecopy or in
writing, not later than 12:00 Noon (if not in writing, to be so confirmed not
later than 2:00 P.M.), New York time, on the Business Day preceding the proposed
date of prepayment. Each such prepayment shall be in an aggregate principal
amount of $[Confidential treatment requested] or integral multiples of
$[Confidential treatment requested] in excess thereof (or if the aggregate
amount of outstanding Loans is less than $[Confidential treatment requested],
then all of such lesser amount), together with accrued interest on the principal
being prepaid to the date of prepayment; provided, however, that in the case of
any prepayment pursuant to Section 7.02(n), 7.02(o) or 7.02(p), such prepayment
shall be in an aggregate principal amount equal to [Confidential treatment
requested]% of the Net Available Asset Disposition Proceeds, [Confidential
treatment requested]% of the Net Available Securities Offering Proceeds or
[Confidential treatment requested]% of the amount of the Surplus, as the case
may be, in any such case together with accrued interest on the principal being
repaid to the date of prepayment, up to but not in excess of the aggregate
principal amount of, and accrued interest on, the outstanding Loans. Each
partial prepayment shall be applied to the principal amount of the Loan or Loans
designated by the Lender in its sole discretion, and the Lender will provide
Borrower with reasonable notice concerning such designation. Prepaid Loans may
not be reborrowed.
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ARTICLE III
Interest
Section 3.01. Interest on Loans. (a) Each Loan shall bear interest from
the date made until the date repaid, payable pursuant to Section 3.01(b), at a
rate per annum equal to the Base Rate in effect from time to time, which rate
shall change as and when said Base Rate shall change.
(b) Interest on the Loans shall be payable in arrears on the last day
of each calendar quarter of each year (each such day, a "Quarterly Payment
Date"), commencing with the first such Quarterly Payment Date after the
Effective Date, and on the date such Loan is repaid or prepaid, in the manner
set forth in Section 4.01 or, if and only if permitted below, by the delivery of
a Note evidencing an additional loan made pursuant to this Agreement and having
a principal amount equal to the amount of such interest, as set forth below.
(i) On or prior to the fifth Business Day following each
Quarterly Payment Date prior to January 1, 2001, the Borrower shall
execute and deliver to the treasurer of the Lender a Note having a
principal amount equal to the aggregate amount of all interest on Loans
(including Additional Loans) payable on such Quarterly Payment Date.
Each such Note shall evidence an additional loan made pursuant to this
Agreement and shall bear interest in the manner and at the rate set
forth in Section 3.01(a), which interest shall be payable in the manner
set forth in this Section 3.01(b).
(ii) All interest on Loans (including Additional Loans)
payable on any Quarterly Payment Date subsequent to December 31, 2000
shall be paid in the manner set forth in Section 4.01; provided that if
and only if EBITDA for the calendar quarter ending on such Quarterly
Payment Date does not exceed the amount of such interest as is payable
on such Quarterly Payment Date, then, subject to Section 3.01(b)(iii),
on or prior to the fifth Business Day following such Quarterly Payment
Date, the Borrower shall execute and deliver to the treasurer of the
Lender a Note having a principal amount equal to the aggregate amount
of all interest on Loans (including Additional Loans) payable on such
Quarterly Payment Date. Each such Note shall evidence an additional
loan made pursuant to this Agreement
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and shall bear interest in the manner and at the rate set forth in
Section 3.01(a), which interest shall be payable in the manner set
forth in this Section 3.01(b).
(iii) The Borrower shall not be entitled to pay interest on
Loans in the manner set forth in Section 3.01(b)(ii) in respect of
interest payable on any of the four Quarterly Payment Dates immediately
following the closing of a primary offering or sale of securities by
the Borrower in which the Net Available Securities Offering Proceeds
from such offering or sale equals or exceeds $5,000,000.
(c) No Warrants shall be issuable in connection with any Additional
Loan.
Section 3.02. Interest on Overdue Amounts. All overdue amounts
(including principal, interest and fees) hereunder, and, during the continuance
of any Event of Default that shall have occurred, each Loan shall bear interest,
payable on demand, at a rate per annum equal to the sum of (i) 10% and (ii) the
rate of interest applicable to such Loan, changing as and when such rate shall
change.
Section 3.03. Day Counts. Interest on Loans shall be calculated on the
basis of (a) a 365- or, if applicable, a 366- day year for the actual number of
days elapsed.
Section 3.04. Maximum Interest Rate. (a) Nothing in this Agreement
shall require the Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
(b) If the amount of interest payable to the Lender on any interest
payment date in respect of the immediately preceding interest computation
period, computed pursuant to this Article III, would exceed the maximum amount
permitted by applicable law to be charged by the Lender, the amount of interest
payable for its account on such interest payment date shall automatically be
reduced to such maximum permissible amount.
(c) If the amount of interest payable to the Lender in respect of any
interest computation period is reduced pursuant to Section 3.04(b) and the
amount of interest payable for its account in respect of any subsequent interest
computation period would be less than the maximum amount permitted by law to be
charged by the Lender, then the amount of interest payable in respect of such
subsequent interest computation period shall be
-19-
automatically increased to such maximum permissible amount; provided that at no
time shall the aggregate amount by which interest paid to the Lender has been
increased pursuant to this Section 3.04(c) exceed the aggregate amount by which
interest paid to the Lender has theretofore been reduced pursuant to Section
3.04(b).
ARTICLE IV
Disbursement and Payment
Section 4.01. Method and Time of Payments. (a) Except as specifically
permitted by Section 3.01(b), and except in the case of payments pursuant to
Sections 3.02, 4.02, 4.03, 4.04 or payments otherwise specified as payable upon
demand, which payments shall be made forthwith upon written demand therefor, all
payments by the Borrower hereunder shall be made without setoff or counterclaim
to the Lender in dollars and in immediately available funds at the office of the
Lender theretofore designated in writing to the Borrower not later than 2:00
p.m., New York time, on the later of the date when due or the fifth Business Day
following the Borrower's receipt of an oral or written confirmation made in
response to the request contemplated by Section 4.01(c).
(b) Whenever any payment from the Borrower shall be due on a day that
is not a Business Day, the date of payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for such
extended time.
(c) Promptly upon receipt of a request by the Borrower therefor (which
request may be made by telephone to the treasurer or any assistant treasurer of
Pharmacia & Upjohn, Inc.) the Lender shall confirm the Lender's calculation of
the amount of any payment due on a particular date.
Section 4.02. Compensation for Losses. If the Borrower revokes any
Borrowing Request, then the Borrower shall reimburse the Lender, promptly upon
demand therefor, for all fees and costs actually incurred or paid by the Lender
to third parties in respect of funds obtained by the Lender for the purpose of
making or maintaining the related Loan, or any portion thereof. If requested by
the Borrower, Lender shall provide to
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the Borrower reasonable documentation concerning such fees and costs.
Section 4.03. Withholding. All payments under this Agreement and under
the Notes (including payments of principal and interest) shall be payable to the
Lender free and clear of any and all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges other
than Excluded Taxes (collectively, "Taxes"). If any Taxes are required to be
withheld or deducted from any amount payable under this Agreement, then the
amount payable under this Agreement shall be increased to the amount which,
after deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, will yield to the Lender the amount stated to be payable
under this Agreement; provided, however, that amounts payable under this
Agreement shall not be increased in respect of any Taxes required to be withheld
or deducted solely as a consequence of the Lender's status as a nonresident
alien, as such term is defined in the Code. The Borrower shall also hold the
Lender harmless and indemnify it for any stamp or other taxes with respect to
the preparation, execution, delivery, recording, performance or enforcement of
the Credit Documents (all of which shall be included within "Taxes"). If any of
the Taxes specified in this Section 4.03 are paid by the Lender, the Borrower
shall, upon demand of the Lender, promptly reimburse the Lender for such
payments, together with any interest, penalties and expenses incurred in
connection therewith. The Borrower shall deliver to the Lender certificates or
other valid vouchers for all Taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder.
Section 4.04. Expenses; Indemnity. (a) The Borrower agrees to pay or
reimburse the Lender for all reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, any other Credit Documents, and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Lender (but excluding fees and disbursements incurred on or prior to the date
hereof in negotiating and preparing the Credit Documents); provided, however,
that in the event of any litigation between the Borrower and the Lender
initiated prior to any Event of Default specified in Section 8.01(g) or (h) and
arising out of the matters set forth in Section 4.04(b)(i), the fees and
disbursements of counsel to the Lender shall be borne by the Borrower if and
only if the Lender is the prevailing party. The Borrower also agrees to
indemnify the Lender against any transfer taxes, documentary taxes, assessments
or charges made by
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any Governmental Authority by reason of the execution and delivery of any Credit
Document.
(b) The Borrower agrees to indemnify the Lender and its directors,
officers, employees, agents and Affiliates (for purposes of this paragraph,
each, an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all claims, liabilities, damages, losses, costs, charges and expenses
(including fees and expenses of counsel) incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of any Credit Document or any agreement or instrument
contemplated by any Credit Document, the performance by the parties thereto of
their respective obligations under any Credit Document, the enforcement or
preservation by the parties thereto of their respective rights under any Credit
Document or the consummation of the transactions contemplated by any Credit
Document, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto. The provisions of this Section
4.04(b) shall not operate or be construed to indemnify the Lender against, or
hold it harmless from, any claims, liabilities, damages, losses, costs, charges
and expenses (including fees and expenses of counsel) incurred by or asserted
against the Lender arising out of or connected with any litigation initiated
prior to any Event of Default specified in Section 8.01(g) or (h) solely between
the Borrower and the Lender in which the Lender is not the prevailing party.
(c) All amounts due under this Section 4.04 shall be payable in
immediately available funds upon written demand therefor.
Section 4.05. Survival. The provisions of Sections 4.02, 4.03, 4.04 and
this Section 4.05 shall remain operative and in full force and effect regardless
of the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of any Credit Document,
or any investigation made by or on behalf of the Lender.
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ARTICLE V
Representations and Warranties
Section 5.01. Representations and Warranties. The Borrower represents
and warrants to the Lender as follows:
(a) Subsidiaries. At the date hereof, the Borrower has no Subsidiaries
other than those Persons listed on Schedule 5.01(a).
(b) Good Standing and Power. The Borrower and each of its Subsidiaries
is a corporation, duly incorporated and validly existing in good standing under
the laws of the jurisdiction of its incorporation; each has the corporate power
to own its property and to carry on its business as now being conducted; and
each is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified, or to be in good
standing, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(c) Corporate Authority. The Borrower has full corporate power and
authority to execute and deliver, and to incur and perform its obligations
under, each of the Credit Documents, all of which have been duly authorized by
all proper and necessary corporate action. No consent or approval of
stockholders is required as a condition to the validity or performance of, or
the exercise by the Lender of any of its rights or remedies under, any Credit
Document.
(d) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from any Governmental
Authority or other Person necessary for the execution, delivery and performance
by the Borrower of, and the incurrence and performance of each of its
obligations under, each of the Credit Documents, and the exercise by the Lender
of its remedies under each of the Credit Documents have been effected or
obtained and are in full force and effect.
(e) Binding Obligation. This Agreement constitutes and, when issued in
accordance with the terms hereof, each Note will constitute the valid and
legally binding obligation of the Borrower enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium
-23-
and similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(f) Litigation. There are no proceedings or investigations now pending
or, to the knowledge of the Borrower, threatened before any court or arbitrator
or before or by any Governmental Authority which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(g) No Conflicts. There is no statute, regulation, rule, order or
judgment, and no provision of any agreement or instrument binding upon the
Borrower or any of its Subsidiaries, or affecting their properties, and no
provision of the certificate of incorporation or bylaws (or similar constitutive
instruments) of the Borrower or any of its Subsidiaries, that would prohibit,
conflict with or in any way impair the execution or delivery of, or the
incurrence or performance of any obligations of the Borrower under, any Credit
Document, or result in or require the creation or imposition of any Lien on
property of the Borrower or any of its Subsidiaries as a consequence of the
execution, delivery and performance of any Credit Document.
(h) Financial Condition. Except as disclosed in filings made by the
Borrower with the SEC prior to the date hereof or in the press releases issued
by the Company since September 30, 1998 and prior to the date hereof and
attached to that certain letter, dated the date hereof, from an officer of the
Borrower to an employee of the Lender making reference to this Section (such
filings and such press releases collectively, the "Disclosure Package"), (i) The
consolidated balance sheet of the Borrower as of December 31, 1997, together
with consolidated statements of income, shareholders' equity and cash flows for
the fiscal year then ended, reported upon by Ernst & Young LLP, and the
unaudited consolidated balance sheet of the Borrower as of September 30, 1998,
together with consolidated statements of income and cash flows for the nine
months then ended, heretofore delivered to the Lender, present fairly, in all
material respects, the Borrower's consolidated financial condition and
consolidated results of operations as of the dates and for the periods referred
to and have been prepared in accordance with GAAP consistently applied
throughout the period involved. There are no material liabilities (whether known
or unknown, direct or indirect, fixed or contingent, and of any nature
whatsoever) of the Borrower or any of its Subsidiaries as of the date of such
balance sheet that are not reflected therein or in the notes thereto.
-24-
(ii) Except as disclosed in the Disclosure Package, there has been no
material adverse change in the business, properties, condition (financial or
otherwise) or operations, present or prospective, of the Borrower and its
Subsidiaries since the date of the balance sheet dated December 31, 1997
referred to in Section 5.01(h)(i). Except as disclosed in the Disclosure
Package, since December 31, 1997, there has not occurred or arisen any event,
condition or circumstance that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(i) Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns that are required to be filed and paid all
taxes that are required to be shown to be due and payable on said returns or on
any assessment made against it or any of its property and all other taxes,
assessments, fees, liabilities, penalties or other charges imposed on it or any
of its property by any Governmental Authority, except for any taxes,
assessments, fees, liabilities, penalties or other charges which are being
contested in good faith and (unless the amount thereof is not material to the
Borrower's consolidated financial condition) for which adequate reserves have
been established in accordance with GAAP.
(j) Use of Proceeds. The proceeds of the Loans will be used by the
Borrower for general corporate purposes.
(k) Margin Regulations. The making of the Loans and the use of the
proceeds thereof as contemplated by the Credit Documents will not violate or be
inconsistent with any of the provisions of Regulation U, T or X (or any
successor regulation or regulations) of the Federal Reserve Board.
(l) Compliance with ERISA. Each member of the ERISA Group is in
compliance with the applicable provisions of ERISA and the Code with respect to
each Plan, except for any failure so to comply that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No member of the ERISA Group has (i) an accumulated funding deficiency under
Section 412 of the Code in respect of any Pension Plan, whether or not waived,
(ii) failed to make any contribution or payment to any Pension Plan, or made any
amendment to any Pension Plan, which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security under Section
302(f) of ERISA or Section 401(a)(29) of the Code, (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
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Section 4007 of ERISA, all of which have been paid or (iv) engaged in a
transaction with respect to a Plan, which (assuming the taxable period of such
transaction, within the meaning of Section 4975(f)(2) of the Code, to have
expired as of the date hereof) has resulted or could reasonably be expected to
result in such member being subject to a material tax or penalty imposed by
Section 4975 of the Code or Section 502 of ERISA.
(m) Not an Investment Company. Neither the Borrower nor any of its
Subsidiaries is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or (ii) subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, each as amended, or any foreign,
federal, state or local statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
(n) Properties. Each of the Borrower and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all of its respective
properties and assets (excluding intellectual property) that are reflected on
the consolidated balance sheet of the Borrower as of September 30, 1998 referred
to in Section 5.01(h), except for such immaterial properties and assets as have
been disposed of in the ordinary course of business and except for minor defects
in title that do not interfere with the ability of the Borrower or any of its
Subsidiaries to conduct its business as now conducted. Except as set forth in
the Disclosure Package, the Borrower and its Subsidiaries own or are licensed to
use or otherwise have the right to use (or could obtain such ownership or
licences or rights on terms not materially adverse to the Borrower and its
Subsidiaries, taken as a whole) all of the intellectual property rights that are
reasonably necessary for the operation of their respective businesses. All such
assets and properties are so owned or held free and clear of all Liens, except
Permitted Encumbrances.
(o) Compliance with Laws and Charter Documents. (i) As a result of the
Borrower's performing any of its obligations under the Credit Documents, neither
the Borrower nor any of its Subsidiaries will be in violation of (a) any law,
statute, rule, regulation or order of any Governmental Authority (including
Environmental Laws) applicable to it or its properties or assets or (b) its
certificate of incorporation or bylaws.
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(ii) Neither the Borrower nor any of its Subsidiaries is in
violation of (A) any law, statute, rule, regulation or order of any Governmental
Authority (including Environmental Laws) applicable to it or its properties,
except for any violations which could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, or (B) its certificate
of incorporation or bylaws.
(iii) Each of the Borrower and its Subsidiaries has all
authorizations, consents, approvals, registrations, franchises, licenses and
permits, with or from Governmental Authorities and other Persons as are
necessary for it to own its properties and conduct its business as now conducted
and the absence of which could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(p) Environmental Protection. To the Borrower's knowledge, based upon
reasonable investigation, all real property owned or leased by the Borrower or
any of its Subsidiaries is free of contamination from any substance that could
result in the incurrence of material liabilities, or constituent thereof,
currently identified or listed as hazardous or toxic pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601, et seq., or any other Environmental Laws, or any other substance which has
in the past or could at any time in the future cause or constitute a health,
safety or environmental hazard to any person or property, including asbestos in
any building, petroleum products, PCBs, pesticides, or radioactive materials. To
the Borrower's knowledge, based upon reasonable investigation, neither the
Borrower nor any of its Subsidiaries has caused or suffered to occur any release
of any Hazardous Substance into the environment or any other conditions that,
individually or in the aggregate, could reasonably be expected to result in the
incurrence of material liabilities or any material violations of any
Environmental Laws. To the Borrower's knowledge, based upon reasonable
investigation, neither the Borrower nor any of its Subsidiaries has caused or
suffered to occur any condition on any of their property that could give rise to
the imposition of any lien under the Environmental Laws. Except as disclosed in
the Disclosure Package, to the Borrower's knowledge, based on reasonable
investigation, neither the Borrower nor any Subsidiary is engaged in any
manufacturing or any other operations, other than the use of petroleum products
for vehicles, that require the use, handling, transportation, storage or
disposal of any Hazardous Substance, where such operations require permits or
are otherwise regulated pursuant to the Environmental Laws.
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(q) Insurance. All of the properties and operations of the Borrower and
each of its Subsidiaries of a character usually insured by companies of
established reputation engaged in the same or a similar business similarly
situated are adequately insured, by financially sound and reputable insurers,
against loss or damage of the kinds and in amounts customarily insured against
by such Persons, and the Borrower and each of its Subsidiaries carry, with such
insurers in customary amounts, such other insurance as is usually carried by
companies of established reputation engaged in the same or a similar business
similarly situated.
(r) Adverse Contracts. Except as disclosed in the Disclosure Package,
neither the Borrower nor any of its Subsidiaries is a party to, nor is it or any
of its property subject to or bound by, any agreement or instrument which
restricts its ability to conduct its business, or could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(s) Solvency. The Borrower and each of its Subsidiaries is and, after
giving effect to Loans and the other transactions contemplated hereby, and after
payment of all estimated legal, investment banking, accounting and other fees
related thereto, the Borrower and each of its Subsidiaries will be Solvent.
Neither the Borrower nor any of its Subsidiaries is and, after giving effect to
Loans and the other transactions contemplated hereby, and after payment of all
estimated legal, investment banking, accounting and other fees related thereto,
the Borrower and each of its Subsidiaries will not be insolvent (as defined in
any of Uniform Laws Annotated, Uniform Fraudulent Transfer Act ss. 2 (West
1985); Cal. Civ. Code ss. 3439.02 (West 1997); and Del. Code ▇▇▇. tit. 6, ss.
1302 (1997)).
(t) Disclosure. All information relating to the Borrower or its
Subsidiaries delivered in writing to the Lender in connection with the
negotiation, execution and delivery of this Agreement and the other Credit
Documents, taken together with the information set forth in the Disclosure
Package, is true and complete in all material respects. There is no material
fact of which the Borrower is aware which, individually or in the aggregate,
would reasonably be expected adversely to influence the Lender's credit analysis
relating to the Borrower and its Subsidiaries which has not been disclosed to
the Disclosure Package.
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Section 5.02 Survival. All representations and warranties made by the
Borrower in this Agreement, and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement, shall
(i) be considered to have been relied upon by the Lender, (ii) survive the
making of Loans regardless of any investigation made by, or on behalf of, the
Lender, and (iii) continue in full force and effect so long as any Loan, or
other amount payable under any Credit Document remains unpaid.
ARTICLE VI
Conditions Precedent
Section 6.01. Conditions to the Availability of the Commitment. The
obligations of the Lender hereunder are subject to, and no Quarterly Loans shall
be made until the earliest time (the "Effective Time") (which shall be no later
than the close of business in The City of New York on the fifth Business Day
following the Closing contemplated by that certain Equity Investment Agreement,
dated as of January 15, 1999, among the Borrower and certain Affiliates of the
Lender) on which each of the following conditions precedent shall have been
either satisfied or waived in writing by the Lender:
(a) This Agreement. The Agreement shall have been duly executed and
delivered by each of the Lender and the Borrower and each of the other Credit
Documents shall have been duly executed and delivered by each of the parties
thereto.
(b) Evidence of Corporate Action. The Lender shall have received the
following:
(i) a copy of the Certificate of Incorporation, of the
Borrower, as in effect on the Effective Date, certified by the
Secretary of State of the State of Delaware, and a certificate from
such Secretary of State as to the good standing of the Borrower, in
each case as of a date reasonably close to the Effective Date; and
(ii) a certificate of the Secretary or an Assistant Secretary
of the Borrower, dated the Effective Date, and stating (A) that
attached thereto is a true and complete copy of the bylaws of the
Borrower as in effect on such date and at all times since the date of
the resolutions described in clause (B) below, (B) that attached
thereto is a true and
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complete copy of resolutions duly adopted by the Board of Directors of
the Borrower authorizing the execution, delivery and performance of
this Agreement, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate of incorporation of the Borrower has not been amended since
the date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (i) above, and (D) as to the
incumbency and signature of each officer executing this Agreement or
any document delivered in connection herewith on behalf of the
Borrower.
(c) Opinions of Counsel. The Lender shall have received a favorable
written opinion, dated the Effective Date, of Nida & ▇▇▇▇▇▇▇ PC, counsel for the
Borrower, in substantially the form of Exhibit D.
(d) Representations and Warranties. The representations and warranties
contained in Section 5.01 shall be true and correct on the Effective Date, and
the Lender shall have received a certificate, signed by a Responsible Officer of
the Borrower, to that effect.
(e) Other Documents. The Lender shall have received such other
certificates, opinions and other documents as the Lender reasonably may require.
Section 6.02. Conditions to All Quarterly Loans. The obligations of
each Lender to make each Quarterly Loan are subject to the conditions precedent
that, on the date of each Quarterly Loan and after giving effect thereto, each
of the following conditions precedent shall have been satisfied, or waived in
writing by the Lender:
(a) Borrowing Request. The Lender shall have received a Borrowing
Request in accordance with the terms of this Agreement.
(b) Note. The Lender shall have received a duly executed Note in the
form of Exhibit B, dated as of the Borrowing Date and evidencing a Quarterly
Loan in an aggregate principal equal to the Borrowing Amount.
(c) Warrant Certificate. The Borrower shall have duly issued to the
Lender a number of Warrants equal to the Warrant Number in connection with such
Quarterly Loan and shall have duly
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executed and delivered to the Lender a Warrant Certificate evidencing such
Warrants.
(d) No Default. No Default or Event of Default shall have occurred and
be continuing, nor shall any Default or Event of Default occur as a result of
the making of such Quarterly Loan.
(e) Representations and Warranties; Covenants. The representations and
warranties contained in Section 5.01 shall have been true and correct when made
and (except to the extent that any representation or warranty speaks as of a
date certain) shall be true and correct on the Borrowing Date with the same
effect as though such representations and warranties were made on such Borrowing
Date; and the Borrower shall have complied with all of its covenants and
agreements under the Credit Documents.
Section 6.03. Satisfaction of Conditions Precedent. Each of (i) the
delivery by the Borrower of a Borrowing Request (unless the Borrower notifies
the Lender in writing to the contrary prior to the Borrowing Date) and (ii) the
acceptance of the proceeds of a Quarterly Loan shall be deemed to constitute a
certification by the Borrower that, as of the Borrowing Date, each of the
conditions precedent contained in Sections 6.02(d) and (e) has been satisfied
with respect to any Loans then being made.
ARTICLE VII
Covenants
Section 7.01. Affirmative Covenants. Until satisfaction in full of all
the obligations of the Borrower under the Credit Documents, the Borrower will:
(a) Financial Statements; Compliance Certificates. Furnish to the
Lender:
(i) as soon as available, but in no event more than 60 days
following the end of each of the first three quarters of each fiscal
year, copies of the Borrower's Quarterly Report on Form 10-Q being
filed with the SEC, which shall include a consolidated balance sheet
and consolidated income statement of the Borrower and its Subsidiaries
for such quarter;
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(ii) as soon as available, but in no event more than 100 days
following the end of each fiscal year, a copy of the Borrower's Annual
Report on Form 10-K being filed with the SEC, which shall include the
consolidated financial statements of the Borrower and its Subsidiaries,
together with a report thereon by Ernst & Young LLP (or another firm of
independent certified public accountants reasonably satisfactory to the
Lender), for such year;
(iii) together with each report delivered pursuant to Sections
7.01(a)(i) and (ii), a certificate of the Borrower, signed by a
Responsible Officer, in substantially the form of Exhibit E, stating
whether, as of the last date of the financial statements included in
such report, any event has occurred or circumstance existed which,
individually or in the aggregate, constituted a Default or Event of
Default (and, if so, detailing the facts with respect thereto) and
whether the Borrower was in compliance with the covenants set forth in
this Article VII, together with calculations to establish the
Borrower's compliance with the covenants contained in Section 7.03;
(iv) promptly upon the filing by the Borrower with the SEC or
any national securities exchange or national quotation system of any
registration statement (other than a registration statement on Form S-8
or an equivalent form) or regular periodic report (other than the
reports referred to in Sections 7.01(a)(i) and (ii)), notification of
such filing; and, at the request of any Lender, the Borrower shall
deliver to such Lender a copy of such filing (excluding exhibits);
(v) promptly upon the mailing thereof to the shareholders of
the Borrower generally copies of all financial statements, reports and
proxy statements so mailed;
(vi) within five Business Days of any Responsible Officer of
the Borrower obtaining knowledge of any Default or Event of Default of
any type specified in Section 8.01(a), (b), (d), (f), (g), (h) or (l),
if such Default or Event of Default is then continuing, a certificate
of a Responsible Officer of the Borrower stating that such certificate
is a "Notice of Default" and setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
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(vii) within ten Business Days of any Responsible Officer of
the Borrower obtaining knowledge of any Default or Event of Default of
any type specified in Section 8.01(c),(e), (i), (j) or (k), if such
Default or Event of Default is then continuing, a certificate of a
Responsible Officer of the Borrower stating that such certificate is a
"Notice of Default" and setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto; and
(viii) such additional information, reports or statements,
regarding the business, financial condition or results of operations of
the Borrower and its Subsidiaries, as the Lender from time to time may
reasonably request.
(b) Corporate Existence. Except as permitted by Section 7.02(a),
maintain, and cause each Subsidiary to maintain, its corporate existence in good
standing and qualify and remain qualified to do business in each jurisdiction in
which the character of the properties owned or leased by it therein or in which
the transaction of its business is such that the failure to qualify,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(c) Conduct of Business. Engage in as its principal business the
development of photoselective drugs and light producing and light delivery
medical devices and related or ancillary businesses, including but not limited
to the businesses of the Borrower described in the Disclosure Package; preserve,
renew and keep in full force and effect, and cause each of its Subsidiaries to
preserve, renew and keep in full force and effect, all franchises and licenses
necessary or desirable in the normal conduct of its and its Subsidiaries'
business and the loss of which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and comply, and cause
each of its Subsidiaries to comply, with all applicable laws, orders, rules and
regulations of all Governmental Authorities the failure with which so to comply,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(d) Authorizations. Obtain, make and keep in full force and effect all
authorizations from and registrations with Governmental Authorities required for
the validity or enforceability of the Credit Documents.
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(e) Taxes. Pay and discharge, and cause each of its Subsidiaries to pay
and discharge, all taxes, assessments and governmental charges upon it, its
income and its properties prior to the date on which penalties are attached
thereto, except to the extent that (i) such taxes, assessments and governmental
charges shall be contested in good faith and by appropriate proceedings by the
Borrower or such Subsidiary, as the case may be, (ii) unless the amount thereof
is not material to the Borrower's consolidated financial condition, adequate
reserves are maintained (in accordance with GAAP) by the Borrower or such
Subsidiary, as the case may be, with respect thereto, and (iii) any failure to
pay and discharge such taxes, assessments and governmental charges could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(f) Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with reputable insurance companies against such risks, of
such types (including general liability), on such properties and in such amounts
as is customarily maintained by similar businesses similarly situated, and
provide to the Lender a certificate or certificates of insurance showing that
the Lender has been named as loss payee by endorsement to the policies for such
insurance.
(g) Inspection. Permit, and cause each of its Subsidiaries to permit,
upon no fewer than five Business Days' notice, the Lender to have one or more of
their officers and employees, or any other Person designated by the Lender, to
visit and inspect any of the properties of the Borrower and such Subsidiary and
to examine the minute books, books of account and other corporate and financial
records of the Borrower and such Subsidiary, and discuss its affairs, finances
and accounts with its officers and with the Borrower's independent accountants,
during normal business hours and at such other reasonable times, for the purpose
of monitoring the Borrower's compliance with its obligations under agreements to
which the Lender is a party and for no other purpose.
(h) Maintenance of Records. For the Borrower and each of its
Subsidiaries (i) keep proper books of record and account in which entries
sufficient to provide financial statements in accordance with GAAP will be made
of all dealings or transactions of or in relation to its business and affairs;
(ii) set up on its books reserves with respect to all taxes, assessments,
charges, reviews and claims; and (iii) on a current basis, set up on its books,
from its earnings, appropriate reserves against doubtful
-34-
accounts receivable, advances and investments and all other proper reserves
(including by reason of enumeration, reserves for premiums, if any, due on
required prepayments and reserves for depreciation, obsolescence, or
amortization of properties), which should be set aside from such earnings in
connection with its business. (All determinations pursuant to this Section
7.01(h) shall be made in accordance with, or as required by, GAAP.)
(i) Maintenance of Property. Maintain, keep and preserve and cause each
of its Subsidiaries to maintain, keep and preserve all of its properties in good
repair, working order and condition and from time to time make all necessary and
proper repairs, renewals, replacements, and improvements thereto, except to the
extent that any failure so to maintain, keep and preserve such properties,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(j) ERISA. Furnish to the Lender:
(i) within ten days after a Responsible Officer learns that
any "reportable event" (as defined in Section 4043(c) of ERISA), other
than a reportable event for which the 30-day notice requirement has
been waived by the PBGC, has occurred with respect to a Pension Plan, a
statement setting forth details as to such reportable event and the
action proposed to be taken with respect thereto;
(ii) within ten days after receipt thereof, a copy of any
notice that any member of the ERISA Group may receive from the PBGC
relating to the intention of the PBGC to terminate any Pension Plan or
to appoint a trustee to administer any Plan;
(iii) within ten days after filing with any affected party (as
such term is defined in Section 4001 of ERISA) of a notice of intent to
terminate a Pension Plan, a copy of such notice and a statement setting
forth the details of such termination, including the amount of
liability, if any, of any member of the ERISA Group under Title IV of
ERISA;
(iv) within ten days after the adoption of a material
amendment to a Pension Plan if, after giving effect to such amendment,
the Pension Plan is a plan described in Section 4021(b) of ERISA, a
statement setting forth the details thereof;
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(v) within 30 days after withdrawal from a Pension Plan during
a plan year for which any member of the ERISA Group could be subject to
liability under Section 4063 or 4064 of ERISA, a statement setting
forth the details thereof, including the amount of such liability;
(vi) within 30 days after cessation of operations by any
member of the ERISA Group at a facility under the circumstances
described in Section 4062(e) of ERISA, a statement setting forth the
details thereof, including the amount of liability of the Borrower or a
member of the ERISA Group under Title IV of ERISA;
(vii) within ten days after adoption of an amendment to a
Pension Plan which would require security to be given to the Pension
Plan pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, a statement setting forth the details thereof, including the
amount of such security;
(viii) within ten days after failure by any member of the
ERISA Group to make payment to a Pension Plan which would give rise to
a lien in favor of the Plan under Section 302(f) of ERISA, a statement
setting forth the details thereof, including the amount of such lien;
(ix) within ten days after the due date for filing with the
PBGC, pursuant to Section 412(n) of the Code, of a notice of failure to
make a required installment or other payment with respect to a Pension
Plan, a statement setting forth details as to such failure and the
action proposed to be taken with respect thereto; and
(x) within 30 days after receipt thereof by any member of the
ERISA Group from the sponsor of a Multiemployer Plan, a copy of each
notice concerning the imposition of withdrawal liability or the
termination or reorganization of a Multiemployer Plan.
(k) Notice of Defaults and Adverse Developments. Promptly notify the
Lender upon the discovery by any Responsible Officer of the occurrence of (i)
any Default or Event of Default; (ii) any event, development or circumstance
whereby the financial statements most recently furnished to the Lender fail to
present fairly, in all material respects, and in accordance with GAAP, the
financial condition and operating results of the Borrower and its Subsidiaries
as of the date of such financial statements; (iii) any material litigation or
proceedings that are instituted
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or threatened (to the knowledge of the Borrower) against the Borrower or any of
its Subsidiaries or any of their respective assets; (iv) any event, development
or circumstance which, individually or in the aggregate, could reasonably be
expected to result in an event or default (or, with the giving of notice or
lapse of time or both, an event of default) under any Indebtedness and the
amount hereof; and (v) any other development in the business or affairs of the
Borrower or any of its Subsidiaries if the effect thereof would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
in each case describing the nature thereof and the action the Borrower proposes
to take with respect thereto.
(l) Environmental Matters. (i) Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable
Environmental Laws, (ii) notify the Lender promptly after becoming aware of any
Environmental Claim, or any fact or circumstance that is reasonably likely to
result in an Environmental Claim or a material violation of any Environmental
Law, with respect to the Borrower's or any of its Subsidiaries' properties or
facilities, and (iii) promptly forward to the Lender a copy of any material
order, notice, permit, application, or any other communication or report
received in connection with any such matters as they may affect such premises.
Section 7.02. Negative Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will not:
(a) Mergers, Consolidations and Sales of Assets. Enter into any merger,
consolidation or share exchange, or acquire assets of any Person, or sell, lease
or otherwise dispose of any of its assets, or permit any of its Subsidiaries so
to do, except that (i) any such Subsidiary may merge or consolidate (A) with or
into the Borrower, if the Borrower shall be the continuing or surviving
corporation, or (B) with or into any one or more Wholly Owned Subsidiary of the
Borrower,(ii) the Borrower or any Subsidiary of the Borrower may make any Asset
Disposition to the extent permitted by Section 7.02(n) and (iii) the Borrower or
any Subsidiary of the Borrower may acquire assets for cash consideration which,
together with all other cash consideration paid by the Borrower or any
Subsidiary for assets on or following the date of this Agreement, does not
exceed $[Confidential treatment requested], and may acquire assets in exchange
for shares of Common Stock having a market value at the time of issuance which,
together with the market value at time of issuance of all other shares of Common
Stock issued by the Borrower in consideration for or in
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connection with the acquisition of assets on or following the date of this
Agreement, does not exceed $[Confidential treatment requested]; provided that
the amount of Indebtedness assumed or incurred by the Borrower or any
Subsidiary of the Borrower in connection with the acquisition of assets on or
following the date of this Agreement pursuant to this Section 7.02(a)(iii) may
not exceed [Confidential treatment requested]% of the sum of the cash
consideration paid, and the market value at time of issuance of Common Stock
issued, in consideration therefor or in connection therewith.
(b) Liens. Create, incur, assume or suffer to exist any Lien, other
than Permitted Liens, upon or in any of its or any of its Subsidiaries' property
or assets, whether now owned or hereafter acquired.
(c) Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, or permit any of its Subsidiaries so to do, except:
(i) Indebtedness to the Lender under the Credit
Documents,
(ii) Indebtedness of the Borrower or any of its
Subsidiaries secured by Liens specifically permitted by
Section 7.02(b),
(iii) Guaranties to the extent permitted by
Section 7.02(d),
(iv) Indebtedness existing on the date hereof,
(v) Indebtedness of Borrower to any Subsidiary, and
Indebtedness of any Subsidiary to Borrower or any other
Subsidiary, and
(vi) Extension, refinancings, modifications, amendments and
restatements of any of items of Permitted Indebtedness (i) through (v)
above, provided that the principal amount thereof is not increased.
(d) Contingent Liabilities. Assume, Guaranty, endorse, contingently
agree to purchase or otherwise become liable upon the obligation of any other
Person, or permit any of its Subsidiaries to do so, except:
(i) in connection with a merger or consolidation
permitted by Section 7.02(a),
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(ii) by the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business,
(iii) Guaranties by the Borrower of contractual obligations
(other than for the payment of Indebtedness) of any of its Wholly Owned
Subsidiaries, and
(iv) Guaranties existing on the date hereof, but not
extensions thereof.
(e) Loans and Investments. Make any Investment or permit any of its
Subsidiaries to do so, except:
(i) Investments existing on the date hereof,
(ii) Investments consisting of the endorsement of negotiable
instrument for deposit or collection or similar transaction in the
ordinary course of business,
(iii) Investments accepted in connection with asset
dispositions permitted by Section 7.02(n),
(iv) Investments of the Borrower in or to Subsidiaries of the
Borrower or of Subsidiaries of the Borrower in or to other Subsidiaries
of the Borrower or in or to the Borrower,
(v) Investments consisting of travel advances, employee
relocation loans and other employee loans and advances in the ordinary
course of business,
(vi) Investments consisting of loans to employees, officers
or directors of the Borrower or its Subsidiaries outstanding on the
date of this Agreement and not exceeding an aggregate principal balance
of $[Confidential treatment requested], relating to the purchase or
equity securities of the Borrower or its Subsidiaries pursuant to
employee stock purchase plans approved by the Borrower's Board of
Directors,
(vii) Investments consisting of loans to employees, officers
or directors of the Borrower and its Subsidiaries made on or subsequent
to the date of this Agreement and not exceeding an aggregate principal
balance of $[Confidential treatment requested] at any time outstanding,
(viii) Investments in the form of debt securities or other
evidence of Indebtedness of Ramus Medical Technologies
-39-
acquired or received on or subsequent to the date of this Agreement
pursuant to agreements or instruments in effect on the date of this
Agreement and having an aggregate principal amount not exceeding
$[Confidential treatment requested],
(ix) [Confidential treatment requested]
(x) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or
suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of
business,
(xi) Investments pursuant to or arising under currency
agreements or interest rate agreements entered into in the ordinary
course of business,
(xii) Investments consisting of notes receivable of, or
prepaid royalties and other credit extensions, to customers and
suppliers made or received in the ordinary course of business, and
(xiii) Investments in the form of deposit accounts and
marketable securities made pursuant to the cash management policy
adopted by the Borrower's Board of Directors and furnished to the
Lender prior to the date of this Agreement.
(f) Capital Expenditures. Make any Capital Expenditures, or permit any
of its Subsidiaries to do so, exceeding $[Confidential treatment requested] in
the aggregate for the Borrower and the Subsidiaries in any one calendar year;
provided that following the earliest to occur of [Confidential treatment
requested].
-40-
(g) Redemptions, etc. Redeem, defease (including but not limited to
legal or covenant defeasance), repurchase, retire or otherwise acquire or retire
for value prior to any scheduled maturity, repayment or sinking fund payment,
Indebtedness, other than Indebtedness to the Lender under the Credit Documents,
or permit any of its Subsidiaries to do so.
(h) Dividends and Purchase of Stock. Declare any dividends (other than
dividends payable in capital stock of the Borrower) on any shares of any class
of capital stock, or purchase, acquire, redeem or retire, or apply any property
or assets to the purchase, acquisition, redemption or retirement of, or set
apart any sum for the payment of any dividends on, or for the purchase,
acquisition, redemption or retirement of, or make any other distribution by
reduction of capital or otherwise in respect of, any shares of any class of
capital stock of the Borrower or any of its Subsidiaries or any options,
warrants or rights to purchase or acquire shares of any class of capital stock
of the Borrower or any such Subsidiary, or permit any of its Subsidiaries which
is not a Wholly Owned Subsidiary to do so, except that
(i) the Borrower may purchase, redeem or otherwise acquire
shares of Common Stock pursuant to any agreement existing on the date
hereof between it, or any Subsidiary of the Borrower, and any officer,
director, employee or consultant to the Borrower or any of its
Subsidiaries, in which the Borrower is obligated or has the option to
repurchase from such officer, director, employee or consultant shares
of Common Stock upon such Person's termination of employment or the
services with the Borrower or any such Subsidiary,
(ii) the Borrower may convert, exchange or redeem any
Indebtedness outstanding on the date hereof which by its terms is
convertible or exchangeable or constitutes the right to purchase any
shares of any class of capital stock of the Borrower,
(iii) [Confidential treatment requested], and
-41-
(iv) [Confidential treatment requested].
(i) Stock of Subsidiaries. Sell, pledge or otherwise dispose of any
shares of capital stock of any of its Subsidiaries (except in connection with a
merger or consolidation of a Wholly Owned Subsidiary of the Borrower permitted
by Section 7.02(a) or with the dissolution of any Subsidiary of the Borrower) or
permit any of its Subsidiaries to issue any additional shares of capital stock
except pro rata to its stockholders.
(j) Distributions by Subsidiaries. Suffer to exist, or permit any of
its Subsidiaries to suffer to exist, any consensual encumbrance or restriction
on the ability of any such Subsidiary (i) to pay, directly or indirectly,
dividends or make any other distributions in respect of its capital stock or pay
any Indebtedness or other obligation owed to the Borrower or any other
Subsidiary of the Borrower; (ii) to make loans or advances to the Borrower or
any Subsidiary of the Borrower; or (iii) to transfer any of its property or
assets to the Borrower.
(k) Related Agreements. Amend, modify or waive, or permit to be
amended, modified or waived, any provision of the Key Agreements unless, within
not less than 30 days prior to such amendment, modification or waiver, the
Borrower shall have given the Lender notice thereof, including all relevant
terms and conditions thereof, and the Lender shall have consented in writing
thereto.
-42-
(l) Sale and Leaseback Transactions. Enter into, or permit any of its
Subsidiaries to enter into, any Sale and Leaseback Transaction.
(m) Transactions with Affiliates and Related Persons. Directly or
indirectly enter into, or permit any of its Subsidiaries to directly or
indirectly enter into, on or following the date hereof, any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property, the rendering of any service or the making of any loan or advance, but
excluding transactions between the Borrower and Wholly Owned Subsidiaries of the
Borrower) with any Affiliate or Related Person of the Borrower or any of its
Subsidiaries.
(n) Asset Dispositions. Make any Asset Disposition, or permit any of
its Subsidiaries to make any Asset Disposition, in one or more related
transactions, unless
(i) the Borrower (or such Subsidiary, as the case may be)
receives consideration at the time of such disposition at least equal
to the fair market value of the shares or assets disposed of (which
shall be as determined in good faith by the Board of Directors and
evidenced by a resolution adopted thereby),
(ii) the consideration for such disposition consists of cash
or readily marketable cash equivalents or the assumption of
Indebtedness of the Borrower or other obligations relating to such
assets and release from all liability on the Indebtedness or other
obligations assumed, and
(iii) [Confidential treatment requested]% of the Net
Available Asset Disposition Proceeds from such disposition (including
from the sale of any marketable cash equivalents received therein) are
applied by the Borrower (or such Subsidiary, as the case may be),
within 48 hours of the receipt thereof, to prepayment of Loans pursuant
to Section 2.04.
(o) Securities Offerings. Sell or offer to sell any securities, or
permit any of its Subsidiaries to offer or sell any securities, in one or more
related transactions, unless
(i) the consideration for such disposition consists of cash,
and
-43-
(ii) [Confidential treatment requested]% of the Net Available
Securities Offering Proceeds from such offering or sale are applied by
the Borrower (or such Subsidiary, as the case may be), within 48 hours
of the receipt thereof, to prepayment of Loans pursuant to Section
2.04.
(p) Surplus Cashflows. Fail to apply to the prepayment of Loans
pursuant to Section 2.04 at least [Confidential treatment requested]% of the
amount (the "Surplus") by which EBITDA in any calendar quarter exceeds
$[Confidential treatment requested].
Section 7.03 Financial Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will not:
(a) Shareholders' Equity. Permit Shareholders' Equity as of the last
day of any calendar quarter designated below to be less than the amount set
forth opposite such quarter below.
Calendar quarter ending Shareholders' Equity
----------------------- --------------------
March 31, 1999 [Confidential Treatment requested]
June 30, 1999 [Confidential Treatment requested]
September 30, 1999 [Confidential Treatment requested]
December 31, 1999 [Confidential Treatment requested]
March 31, 2000 [Confidential Treatment requested]
June 30, 2000 [Confidential Treatment requested]
Each calendar quarter
ending after June 30,
2000 [Confidential Treatment requested]
(b) Current Ratio. Permit the ratio of Current Assets to Current
Liabilities to be less that [Confidential treatment requested] at any time.
(c) Minimum Operating Income. [Confidential Treatment requested]
(d) Ophthalmology Expense. [Confidential Treatment requested]
-44-
ARTICLE VIII
Events of Default
Section 8.01. Events of Default. If one or more of the following events
(each, an "Event of Default") shall occur:
(a) the Borrower shall fail duly to pay any principal of any Loan when
due, whether at maturity, by notice of intention to prepay or otherwise; or
(b) the Borrower shall fail duly to pay any interest, fee or any other
amount payable under the Credit Documents within five Business Days after the
same shall be due, in the manner set forth in this Agreement; or
(c) the Borrower shall fail duly to observe or perform any term,
covenant, or agreement contained in Section 7.02 or 7.03; or
(d) the Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement, and such failure shall have
continued unremedied for a period of 30 days following written notice to the
Borrower thereof; or
(e) any representation or warranty made or deemed made by the Borrower
in a Credit Document, or any statement or representation made in any
certificate, report or opinion delivered by or on behalf of the Borrower in
connection with a Credit Document, shall prove to have been false or misleading
in any material respect when so made or deemed made; or
(f) the Borrower or any of its Subsidiary shall fail to pay any
Indebtedness (other than obligations hereunder) in an amount of $[Confidential
treatment requested] or more when due; or any such Indebtedness having an
aggregate principal amount outstanding of $[Confidential treatment requested] or
more shall become or be declared to be due prior to the expressed maturity
thereof; or
(g) an involuntary case or other proceeding shall be commenced against
the Borrower or any of its Subsidiaries seeking liquidation, reorganization or
other relief with respect
-45-
to it or its debts under any applicable bankruptcy, insolvency, reorganization
or similar law or seeking the appointment of a custodian, receiver, liquidator,
assignee, trustee, sequestrator or 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 more than 60 days; or an order or
decree approving or ordering any of the foregoing shall be entered and continued
unstayed and in effect; or
(h) the Borrower or any of its Subsidiaries shall commence a voluntary
case or proceeding under any applicable bankruptcy, insolvency, reorganization
or similar law or any other case or proceeding to be adjudicated a bankrupt or
insolvent, or any of them shall consent to the entry of a decree or order for
relief in respect of the Borrower or any such Subsidiary in an involuntary case
or proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against any of them, or any of them shall file a petition or answer
or consent seeking reorganization or relief under any applicable law, or any of
them shall consent to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Borrower or any such Subsidiary or any
substantial part of their respective property, or any of them shall make an
assignment for the benefit of creditors, or any of them shall admit in writing
its inability to pay its debts generally as they become due, or the Borrower or
any Subsidiary shall take corporate action in furtherance of any such action; or
(i) one or more judgments against the Borrower or any of its
Subsidiaries or attachments against its property, which in the aggregate exceed
$[Confidential treatment requested], or the operation or result of which could
be to interfere materially and adversely with the conduct of the business of the
Borrower or any such Subsidiary remain unpaid, unstayed on appeal, undischarged,
unbonded, or undismissed for a period of more than 30 days; or
(j) notice of intent to terminate a Pension Plan shall have been filed
with any affected party (as defined in Section 4001 of ERISA), or notice of an
application by the PBGC to institute proceedings to terminate a Pension Plan
pursuant to Section 4042 of ERISA shall have been received by any member of the
ERISA Group, in each case only if the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA)
-46-
as of the date such notice is filed or received exceeds $500,000; any member of
the ERISA Group incurs liability under Sections 4062(e), 4063 or 4064 of ERISA
in respect of a Pension Plan in an amount in excess of $1,000,000; an amendment
is adopted to a Pension Plan which would require security to be given to such
Pension Plan pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA
in an amount in excess of $1,000,000; any member of the ERISA Group fails to
make a payment to a Pension Plan which would give rise to a Lien in favor of
such Plan under Section 302(f) of ERISA in an amount in excess of $500,000; or
(k) any court or governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts, in a manner that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, any of the transactions
contemplated under the Credit Documents; or
(l) any person or group of persons (within the meaning of Section 13 or
14 of the Securities Exchange Act of 1934, as amended), other than the Lender
and its Affiliates and other than any person or group of persons which has
beneficial ownership of 5% or more of the outstanding shares of Common Stock as
of the date of this Agreement, shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of 19.9% or more of the outstanding shares of Common Stock; or,
during any period of 24 consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower;
then, and at any time during the continuance of such Event of Default, the
Lender may, by written notice to the Borrower declare any Loans then outstanding
to be due, whereupon the principal of the Loans so declared to be due, together
with accrued interest thereon and any unpaid amounts accrued under the Credit
Documents, shall become forthwith due, without presentment, demand, protest or
any other notice of any kind (all of which are hereby expressly waived by the
Borrower).
Section 8.02. Assignments. (a) Upon reasonable prior notice having been
given to the Borrower, the Lender may at any time assign to one or more of The
Pharmacia & Upjohn
-47-
Company, Pharmacia & Upjohn B.V., Pharmacia & Upjohn AB or Pharmacia & Upjohn
S.p.A. (any such entity, an "Approved Subsidiary") all, or a proportionate part
of all, of its rights and obligations under this Agreement, and such Approved
Subsidiary shall assume such rights and obligations, pursuant to a written
instrument executed by such Approved Subsidiary and the Lender. If there shall
have occurred an Event of Default that is continuing, the Lender may assign to
any Person, other than a Person which engages in, as its principal business or
one of its principal businesses, the development of photoselective drugs or
light producing and light delivery medical devices (any such assignee, or any
Approved Subsidiary referred to in the previous sentence being referred to as an
"Assignee"), all, or a proportionate part of all, of its rights and obligations
under this Agreement, and such Assignee shall assume such rights and
obligations, pursuant to a written instrument executed by such Assignee and the
Lender. Any such Assignee shall have all the rights and obligations of the
Lender, and the Lender shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required.
(b) No Assignee of the Lender's rights shall be entitled to receive any
greater payment under Section 4.03 or 4.04 than the Lender would have been
entitled to receive with respect to the rights transferred, and amounts payable
under this Agreement shall not be increased in respect of any Taxes required to
be withheld or deducted solely as a consequence of the Lender's status as a
nonresident alien, as such term is defined in the Code.
Section 8.03. Certain Pledges. Notwithstanding any other provision in
this Agreement, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under this Agreement and any Note held
by it in favor of any Person.
ARTICLE IX
Miscellaneous
SECTION 9.01. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
-48-
SECTION 9.02. WAIVER OF JURY. THE BORROWER AND THE LENDER EACH HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE NOTES OR
THE RELATIONSHIPS ESTABLISHED HEREUNDER.
Section 9.03. Jurisdiction and Venue; Service of Process. (a) The
Borrower and the Lender each hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court in the Borough of Manhattan, The City
of New York for the purpose of any suit, action, proceeding or judgment relating
to or arising out of any Credit Document and to the laying of venue in the
Borough of Manhattan, The City of New York. The Borrower and the Lender each
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) The Borrower agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.07 or at such other address of
which the Lender shall have been notified pursuant thereto. The Borrower further
agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to ▇▇▇ any other
jurisdiction.
(c) Each of the Borrower and the Lender waives, to the maximum extent
not prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section 9.03 any special, exemplary,
punitive or consequential damages. The waiver set forth in this Section 9.03(c)
shall terminate automatically upon the occurrence of a "Separation Event" as
defined in that certain stockholder rights protection plan of Pharmacia &
Upjohn, Inc. in effect on the date of this Agreement, as it may from time to
time be amended.
Section 9.04. Set-off. The Borrower hereby authorizes the Lender and
each of its Affiliates, upon the occurrence of an Event of Default and at any
time and from time to time during the continuance thereof, to the fullest extent
permitted by law, to set-off and apply any and all sums payable
-49-
by such Lender or any such Affiliate to or for the credit or the account of the
Borrower or any of its Affiliates against any of the obligations of the Borrower
or any of its Affiliates, now or hereafter existing under any Credit Document,
irrespective of whether the Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of the
Lender and its Affiliates under this Section 9.04 are in addition to other
rights and remedies (including other rights of set-off) which the Lender and its
Affiliates may have.
Section 9.05. Amendments and Waivers. (a) Any provision of this
Agreement may be amended, modified, supplemented or waived, but only by a
written amendment or supplement, or written waiver, signed by the Borrower and
the Lender.
(b) Except to the extent expressly set forth therein, any waiver shall
be effective only in the specific instance and for the specific purpose for
which such waiver is given.
Section 9.06. Cumulative Rights; No Waiver. Each and every right
granted to the Lender hereunder or under any other document delivered in
connection herewith, or allowed the Lender by law or equity, shall be cumulative
and not exclusive and may be exercised from time to time. No failure on the part
of the Lender to exercise, and no delay in exercising, any right will operate as
a waiver thereof, nor will any single or partial exercise by the Lender of any
right preclude any other or future exercise thereof or the exercise of any other
right.
Section 9.07. Notices. (a) Any communication, demand or notice to be
given hereunder will be duly given when delivered in writing or by telecopy to a
party at its address as indicated below or such other address as such party may
specify in a notice to each other party hereto. A communication, demand or
notice given pursuant to this Section 9.07 shall be addressed:
If to the Borrower, to
Miravant Medical Technologies
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-50-
with copies (which, in and of themselves, shall not constitute
notice) to
Nida & ▇▇▇▇▇▇▇ PC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
If to the Lender, to
Pharmacia & Upjohn Treasury Services AB
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Telecopy: ▇▇▇ ▇ ▇▇▇ ▇▇ ▇▇
Attention: Associate General Counse
and
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer
and
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President of Business
Development
and
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy (which, in and of itself, shall not constitute
notice) to
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
This Section 9.07 shall not apply to notices referred to in Article II
of this Agreement, except to the extent set forth therein.
(b) Unless otherwise provided to the contrary herein, any notice which
is required to be given in writing pursuant to the terms of this Agreement may
be given by telecopy.
Section 9.08. Certain Acknowledgments. The Borrower hereby confirms and
acknowledges that the Lender does not have any fiduciary or similar relationship
to the Borrower and that the relationship established by the Credit Documents
between the Lender and the Borrower is solely that of creditor and debtor and
(b) that no joint venture exists between the Borrower and the Lender.
Section 9.09. Separability. In case any one or more of the provisions
contained in any Credit Document shall be invalid, illegal or unenforceable in
any respect under any law,
-52-
the validity, legality and enforceability of the remaining provisions contained
herein or in any other Credit Document shall not in any way be
affected or impaired thereby.
Section 9.10. Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower may not assign any of its
rights hereunder without the prior written consent of the Lender, and any
purported assignment by the Borrower without such consent shall be void.
Section 9.11. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.
-53-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Chief Executive Officer
PHARMACIA & UPJOHN TREASURY SERVICES AB
By: /S/ Mats Pettersson
---------------------------------
Title: Attorney-In-Fact
-54-
Schedule 5.01(a)
Subsidiaries of the Borrower
Miravant Pharmaceuticals, Inc.
Miravant Cardiovascular, Inc.
Miravant Systems, Inc.
Exhibit A
Form of Borrowing Request
[Date]*
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Borrowing Request
Ladies and Gentlemen:
reena
Reference is made to the Credit Agreement, dated as of February 18,
1999 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), between Miravant Medical Technologies and Pharmacia & Upjohn
Treasury Services AB. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
The Borrower hereby gives you notice, pursuant to Section 2.02(a) of
the Credit Agreement, that it requests a Quarterly Loan in a principal amount
equal to the Borrowing Amount set forth below, to be made on the Borrowing Date
set forth below.
Borrowing Date:** _________, ____
Borrowing Amount:*** $___________
------------
* See Section 2.02 the Credit Agreement.
** See the definition of "Borrowing Date" in Section 1.01(c) of the Credit
Agreement.
*** See Section 2.01 and the definition of "Maximum Quarterly Amount in
Section 1.01(c) of the Credit Agreement.
Warrant Number:**** ___________
A duly executed Note in the form of Exhibit B to the Credit Agreement,
dated as of the Borrowing Date set forth above and evidencing a Quarterly Loan
in a principal amount equal to the Borrowing Amount set forth above, is
enclosed.
A duly executed Warrant Certificate evidencing a number of Warrants
equal to the Warrant Number is enclosed. The Exercise Price for each such
Warrant is $______, and the closing bid prices for the 10 Trading Days preceding
this bid request and a calculation of the Exercise Price are set out below. The
Exercise Price is the sum of [A] plus [B].
Trading Day Closing Bid Price
----------- -----------------
1. $
2.
3.
4.
5.
6.
7.
8.
9.
10. =================
Total _________________
divided by 10 _________________ [A]
x 0.40 _________________ [B]
[A]+[B] _________________
Very truly yours,
MIRAVANT MEDICAL TECHNOLOGIES
By:
---------------------------
Name:
Title:
----------
**** See the definition of "Warrant Number" in Section 1.01(c) of the
Credit Agreement.
A-2
Exhibit B
Form of Note
PROMISSORY NOTE
$[Principal Amount] [Date]
MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the "Borrower"),
for value received, promises to pay to the order of Pharmacia & Upjohn Treasury
Services AB (the "Lender"), on [MATURITY DATE], the principal sum of $[PRINCIPAL
AMOUNT] pursuant to and in the manner contemplated by that certain Credit
Agreement, dated as of February 18, 1999 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), between the Borrower and the Lender.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding, from the date hereof until the date
of repayment, at the rate or rates per annum and on the date or dates determined
pursuant to the Credit Agreement.
Payments of both principal and interest are to be made in lawful money
of the United States of America in funds immediately available to the Lender at
its office or offices designated in accordance with the Credit Agreement, or, if
and only if specifically permitted by Section 2.01(b) of the Credit Agreement,
in the manner set forth in such Section 2.01(b).
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive diligence, presentment, demand, protest and notice of any kind
whatsoever. The failure or forbearance by the holder to exercise any of its
rights hereunder in any particular instance shall in no event constitute a
waiver thereof.
The Credit Agreement, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events and for
the amendment or waiver of certain provisions of the Credit Agreement and/or
this Note, all upon the terms and conditions therein specified. Capitalized
terms used and not otherwise defined herein have the meanings ascribed thereto
in the Credit Agreement.
B-1
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
This Note is not negotiable and may be assigned only upon the terms and
conditions specified in the Credit Agreement.
MIRAVANT MEDICAL TECHNOLOGIES
By:
--------------------------
Name:
Title:
B-2
Exhibit C
Form of Opinion of Counsel for the Borrower
to be Delivered Upon Payment of Shares
[TO COME]
C-1
Exhibit D
Form of Opinion of Counsel for the
Borrower to be Delivered at the Effective Time
[Effective Date]
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with the execution and delivery today of the Credit
Agreement, dated as of February 18, 1999 (the "Credit Agreement"), between
Miravant Medical Technologies, Inc., a Delaware corporation (the "Borrower"),
and Pharmacia & Upjohn Treasury Services AB, a Swedish corporation (the
"Lender"), the Security Agreement, dated as of February 18, 1999 (the "Security
Agreement"), among the Borrower, as debtor, and the Lender, as Secured Party,
and [add references to other Credit Documents] (collectively with the Credit
Agreement and the Security Agreement, the "Credit Documents"), we, as counsel
for the Borrower, have examined such corporate records, certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such
examination, it is our opinion that:
(1) The Borrower has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
(2) Each of the Credit Documents has been duly authorized,
executed and delivered, and, if and when duly executed and delivered in
accordance with the terms of the Credit Agreement, any Notes will be
duly authorized, executed and delivered by the Borrower; and each of
the Credit Documents (other than any Notes) constitutes, and each Note
(if and when duly executed and delivered in accordance with the terms
of the Credit Agreement) will constitute, the valid and legally binding
obligation of the Borrower enforceable in accordance with its
respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
D-1
(3) [OPINION ON THE WARRANTS AND EXERCISE SHARES]
(4) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Borrower under the
Federal laws of the United States and the laws of the State of New York
for the borrowing by the Borrower from the Lender under the Credit
Agreement, the execution and delivery of each of the Credit Documents
to the Lender and the performance by the Company of its obligations
thereunder have been obtained or made; provided, however, that, insofar
as performance by the Borrower of its obligations under each of the
Credit Documents is concerned, we express no opinion as to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights or as to general equity principles.
(5) The Borrower is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940.
For purposes of this letter, terms defined in the Credit Agreement have
the meanings set forth therein.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
With your approval, we have relied as to certain matters on information
obtained from public officials, officers of the Borrower and other sources
believed by us to be responsible, and we have assumed that each of the Credit
Documents has been duly authorized, executed and delivered by the parties
thereto other than the Borrower and its Affiliates, and that the signatures on
all documents examined by us are genuine, assumptions which we have not
independently verified.
D-2
This letter is delivered by us as counsel for the Borrower to you, and
is solely for your benefit.
Very truly yours,
NIDA & ▇▇▇▇▇▇▇ PC
D-3
Exhibit E
Form of Compliance Certificate
COMPLIANCE CERTIFICATE
[For the Fiscal Quarter ending ________]
[For the Fiscal Year ending ________]
Reference is made to the Credit Agreement, dated as of February 18,
1999 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), between Miravant Medical Technologies (the "Borrower") and
Pharmacia & Upjohn Treasury Services AB Pursuant to Section 7.01(a)(iii) of the
Credit Agreement, the undersigned Responsible Officer of the Borrower hereby
certifies on behalf of the Borrower that:
(a) During the period of four consecutive fiscal quarters ended on
____________, __, such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as follows: [Specify with particularity].
The financial statements referred to in Section 7.01(a) of the Credit
Agreement which are delivered concurrently with the delivery of this Compliance
Certificate fairly present the financial position, results of operations, cash
flows and changes in shareholders' equity of the Borrower and its Subsidiaries,
subject to normal year-end audit adjustments which are not expected to be
material in amount.*
(b) The covenant calculations set forth below are based on the
Borrower's [audited] balance sheet and statements of earnings, cash flows and
shareholders' equity for the fiscal [quarter] [year] ended ___________, ____
(the "Period-End Date").
[Insert calculations demonstrating compliance with Section 7.03
of the Credit Agreement]
----------
* Insert only in Compliance Certificates accompanying quarterly financial
statements delivered pursuant to Section 7.01(a) of the Credit Agreement.
IN WITNESS WHEREOF, on behalf of the Borrower, the undersigned has
hereto set his or her hand.
Dated:_________, ___
MIRAVANT MEDICAL TECHNOLOGIES
By: _______________________________
A Responsible Officer
E-2
