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Exhibit 10.23
CREDIT AGREEMENT
BETWEEN
SUNTRUST BANK
AND
NOVEN PHARMACEUTICALS, INC.
DECEMBER 5, 2000
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CREDIT AGREEMENT
DATED AS OF DECEMBER 5, 2000
This CREDIT AGREEMENT is made and entered into as of the date set forth
above by and between NOVEN PHARMACEUTICALS, INC., a Delaware corporation
authorized to transact business in Florida ("Borrower"), and SUNTRUST BANK
("Bank"). For good and valuable consideration, the receipt of which is hereby
acknowledged, Borrower and Bank hereby agree as follows:
ss.1. TERMINOLOGY AND INTERPRETATION.
ss.1.1 DEFINITIONS OF CAPITALIZED TERMS. When used herein, each
capitalized term listed below shall have the meaning indicated below:
"Account" shall mean any account (as that term is defined in the
Uniform Commercial Code as in effect, from time to time, in the State of
Florida) and any trade acceptance, note, letter of credit or other instrument
customarily delivered in payment for a sale of goods or rendering of services by
Borrower.
"Acquisition" shall mean the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant for, or conversion
of securities into, such equity interest, or (ii) assets of another Person which
constitute all or substantially all of the assets of such Person.
"Advance" shall mean an advance made by Bank to Borrower pursuant to
this Agreement.
"Affiliate" shall mean any Person (i) which, directly or indirectly
through one or more intermediaries controls, is controlled by, or is under
common control with, Borrower; or (ii) which beneficially owns or holds 10
percent or more of the aggregate voting rights for all classes of outstanding
Voting Stock (or in the case of a Person which is not a corporation, 10 percent
or more of the aggregate voting rights of such Person) of Borrower; or 10
percent or more of any class of the outstanding Voting Stock (or in the case of
a Person which is not a corporation, 10 percent or more of the aggregate voting
rights of such Person) of which is beneficially owned or held by Borrower (as
used in the foregoing definition, the term "control" means, with respect to a
Person, the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of Voting Stock, by contract or otherwise).
"Agreement" shall mean this Credit Agreement, as amended from time to
time.
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"Agreement Date" shall mean the date as of which this Agreement is
dated.
"Agreement Termination Date" shall mean the date on which the
Commitment Termination Date shall have occurred and Borrower shall have fully,
finally and irrevocably paid and satisfied all Obligations.
"Applicable Law" shall mean (a) all applicable common law and
principles of equity and (b) all applicable provisions of all (i) constitutions,
statutes, rules, regulations and orders of Governmental Authorities, (ii)
Governmental Approvals and (iii) orders, decisions, judgments and decrees of all
courts and arbitrators.
"Authorized Representative" shall mean any of the President, Chief
Executive Officer, Chief Financial Officer or Executive Director - Finance of
Borrower or, with respect to financial matters, the Chief Financial Officer or
Executive Director - Finance of Borrower, or any other Person expressly
designated by the Board of Directors of Borrower (or the appropriate committee
thereof) as an Authorized Representative, as set forth from time to time in a
certificate in a form prescribed by Bank.
"Borrowing Account" shall mean a demand deposit account established by
Borrower with Bank (or any substitute account established by Borrower with
Bank).
"Borrowing Base Certificate" shall mean a certificate of an Authorized
Representative in a form prescribed by Bank.
"Borrowing Notice" shall mean a notice delivered by an Authorized
Representative in connection with an Advance in a form prescribed by Bank.
"Business Day" shall mean a day (other than a Saturday) on which most
banks are open for general commercial business in Miami, Florida ("day", as used
herein, means a calendar day).
"Capital Securities" shall mean, with respect to any Person, any shares
of capital stock of such Person or any security convertible into, or any option,
warrant or other right to acquire, any shares of capital stock of such Person.
"Change of Control" shall mean any "person" or "group" (each as used in
ss.ss.13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934) other than
Xxxxxx Xxxxxxxxx (and/or any trusts or other entities owned or controlled by him
or them) either (i) becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of
Borrower (or securities convertible into or exchangeable for such Voting Stock)
representing more than 50 percent of the combined voting power of all Voting
Stock of Borrower or (ii) otherwise attains the ability, through an express
contractual arrangement, to elect a majority of the board of directors of
Borrower.
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"Change of Management" shall mean Xxxxxx Xxxxxxx' ceasing to be a
senior, active manager of Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"Collateral" shall have the meaning given that term in the Security
Agreement.
"Commitment Termination Date" shall mean April 30, 2002.
"Consequential Loss" shall mean, with respect to any prepayment of all
or part of an Advance, any loss or expense actually incurred by Bank (by reason
of liquidation or reemployment of deposits or other funds acquired by Bank to
make, continue or maintain all or any part of the principal amount prepaid) as a
result of such prepayment.
"Consistent Basis" shall mean, in reference to GAAP, that the
accounting principles observed in such period are comparable in all material
respects to those applied in the preparation of the audited financial statements
of Borrower referred to in ss.7.2(a).
"Contract" shall mean an indenture, agreement (other than this
Agreement and any other Credit Document), other contractual restriction, lease,
instrument (other than the Note), certificate of incorporation or charter, or
bylaw.
"Copyright" shall mean any of the following: any copyright or general
intangible of like nature (whether registered or unregistered), any registration
or recording thereof, and any application in connection therewith, including any
registration, recording and application in the United States Copyright Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof.
"Copyright License" shall mean all rights under any written agreement
granting any right to use any Copyright or Copyright registration.
"Credit Documents" shall mean this Agreement, the Note, the Security
Agreement, any other documents delivered by Borrower to Bank in connection with
this Agreement, all as amended from time to time.
"Debt" shall mean any of the following: (i) indebtedness or liability
for borrowed money, (ii) obligations evidenced by bonds, notes, or other similar
instruments, (iii) obligations for the deferred purchase price of property or
services (excluding trade obligations incurred in the ordinary course of
Borrower's business), (iv) obligations as lessee under capital leases, (v)
current liabilities in respect of unfunded vested benefits
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under plans covered by the Employee Retirement Income Security Act of 1974, as
amended, (vi) obligations under letters of credit or acceptance facilities,
(vii) all guarantees, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, or otherwise to assure creditors against loss, and
(viii) obligations secured by any mortgage, lien, pledge or security interest or
other charge or encumbrance on property, whether or not the obligations have
been assumed.
"Default" shall mean any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived (or, in the case of a judgment, action or proceeding,
dismissed), become an Event of Default.
"Default Rate" shall mean a floating per annum rate equal to 2.00
percent above the rate then applicable to Advances hereunder.
"Deferred Revenue" shall mean, as of any date, the aggregate portions
of lump sum payments which Borrower shall have theretofore received in
connection with licensing transactions but which, pursuant to GAAP or
requirements of the Securities and Exchange Commission, it shall not have
theretofore recognized as current income.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Eligible Account" shall mean, at any particular time, any Account
which is then owed to Borrower based on Borrower's sale in the ordinary course
of its business of goods that have theretofore been shipped or delivered by it
to the applicable account debtor, which is evidenced by an invoice or other
similar written billing, which is a valid, legally enforceable obligation of the
account debtor thereunder, which represents an arms-length, bona fide
transaction completed in accordance with the terms and provisions contained in
any documents related thereto, and in which Bank has a valid, perfected,
first-priority security interest securing the Obligations, excluding (a) any
Account that is then outstanding 90 days or more from its invoice date or that
is owed by an account debtor which has filed or had filed against it a
bankruptcy petition, (b) any Account that is owed by an account debtor who is an
employee or Affiliate (other than the Novogyne Joint Venture) of Borrower, (c)
any Account that is subject to asserted setoff, credit (other than customary
discount for prompt payment and other than amounts then owed by Borrower to the
obligors of those Accounts) or dispute, (d) any Account that is owed by a
governmental entity (unless Bank is reasonably satisfied that all steps have
been taken under the Federal Assignment of Claims Act or other Applicable Law to
ensure that, after an Event of Default and notification by Bank to such account
debtor, such account debtor will be obligated to make payments on such Account
directly to Bank) or by a Person residing or headquartered outside the United
States (other than Novartis or Aventis, S.A. or any of their respective
successors or Affiliates or such other Persons as Bank may approve in writing
from time to time), (e) any Account that is evidenced by a trade
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acceptance, note or other instrument unless such instrument is then in Bank's
possession and endorsed in blank or to Bank, and (f) any Account that Bank
determines in its reasonable discretion to be uncollectible, difficult to
collect or otherwise unsatisfactory for any reason (which determination shall be
conclusive and binding on Borrower). Bank may determine on a daily basis whether
a particular Account is an Eligible Account based on the foregoing criteria, and
if an Account ceases to meet any of such criteria, it shall immediately cease to
be an Eligible Account for so long as such criteria are not met.
"Eligible Accounts Amount" shall mean, at any particular time, (a) the
total amount then owed to Borrower with respect to Eligible Accounts less (b)
the total amount then owed by Borrower to the obligors of those Eligible
Accounts.
"Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of Section 3(3) of ERISA which (i) is maintained for employees of
Borrower or any of its ERISA Affiliates or is assumed by Borrower or any of its
ERISA Affiliates in connection with any Acquisition or (ii) has at any time been
maintained for the employees of Borrower or any current or former ERISA
Affiliate.
"Environmental Law" shall mean any federal, state or local statute,
law, ordinance, code, rule, regulation, order, decree, permit or license
regulating, relating to, or imposing liability or standards of conduct
concerning, any environmental matters, conditions, protection or conservation,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the Superfund Amendments and
Reauthorization Act of 1986, as amended; the Resource Conservation and Recovery
Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all regulations
promulgated thereunder, and any other "Superfund" or "Superlien" law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect from time to time.
"ERISA Affiliate", shall mean, with respect to Borrower, any Person or
trade or business which is a member of a group which is under common control
with Borrower, and which, together with Borrower, is treated as a single
employer within the meaning of Section 414(b) and (c) of the Code.
"Event of Default" shall have the meaning given it in ss.8.1.
"Facility Limit" shall mean, at any particular time, the lesser of (a)
$10,000,000 and (b) the then Eligible Accounts Amount.
"Fiscal Year" shall mean the twelve-month fiscal period of Borrower
commencing on January 1 of each calendar year and ending on December 31 of such
calendar year.
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"GAAP" shall mean accounting principles that are consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect in the United States from time to time.
"Governmental Approval" shall mean an authorization, consent, approval,
license or exemption of, registration or filing with, or report or notice to,
any Governmental Authority, including, without limitation, any such approval
required under ERISA or by the PBGC.
"Governmental Authority" shall mean any Federal, state, municipal,
national or other governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with the United States of America, a state thereof,
or a foreign entity or government.
"Hazardous Material" shall mean any pollutant, contaminant or
hazardous, toxic or dangerous waste, substance or material (including without
limitation petroleum products, asbestos-containing materials and lead) the
generation, handling, storage, transportation, disposal, treatment, release,
discharge or emission of which is subject to any Environmental Law.
"Information" shall mean written data, services, reports, statements
(including, but not limited to, financial statements delivered pursuant to or
referred to in ss.ss.7.1(a) and 7.1(b)), opinions of counsel, documents and
other written information, whether, in the case of any such in writing, it was
prepared by Borrower or any other Person on behalf of Borrower and delivered by
Borrower to Bank.
"Intangible Assets" shall mean those assets of Borrower which are: (1)
deferred assets, other than prepaid insurance, (2) Intellectual Property and
other similar assets which would be classified as intangible assets on a balance
sheet of Borrower prepared in accordance with GAAP (but excluding Borrower's
investment in the Novogyne Joint Venture and assets of the type comprising the
category "Deposits and Other Assets" on Borrower's Form 10-Q dated March 31,
2000), (3) unamortized debt, discount and expense, and (4) assets located
outside of the United States.
"Intellectual Property" shall mean all licenses, Patents, Copyrights,
Trademarks, trade names and customer lists in which Borrower has any interest
and all technology, know-how and processes relating to any inventory of
Borrower.
"Interest Period" shall mean successive one-month periods each
beginning on the first Business Day of a month (or, in the case of the initial
Interest Period, the day on which
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the initial Advance is made) and each ending when the next one begins (or, in
the case of the final Interest Period, on the Commitment Termination Date).
"Leverage Ratio" shall mean, as of any date, the ratio of (i) Total
Liabilities as of that date to (ii) Tangible Net Worth as of that date.
"LIBOR Rate" shall mean, with respect to any Interest Period, the per
annum London interbank offered rate (rounded upwards to the nearest 1/100 of
1.00 percent if not already a whole multiple of that fraction) for 30-day or
one-month Dollar deposits on the first day of such Interest Period (or, if such
first day is not a Business Day, the immediately preceding Business Day) as
determined by Bank based on quotations appearing in or on Telerate Page 3750,
the Reuters Screen LIBOR or LIBO Page, THE WALL STREET JOURNAL's "Money Rates"
section or another recognized source.
"Lien" shall mean any lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement, upon or with respect
to any properties or assets (other than licenses granted by Borrower in the
ordinary course of its business).
"Material Adverse Effect" shall mean any material and adverse effect
(whether occasioned by one or a number of concurrent events) upon (a) Borrower's
assets, business operations, properties or condition, financial or otherwise, or
(b) the ability of Borrower to make payment as and when due of all or any part
of the Obligations.
"Net Income" shall mean, with respect to any quarter of any Fiscal
Year, the net income (loss) of Borrower for such quarter, reflected in the "Net
Income" section of the consolidated statement of operations of Borrower
determined in accordance with GAAP.
"Net Revenue" shall mean, with respect to any quarter of any Fiscal
Year, the amount that is reflected in the "Total Revenue" section of the
consolidated statement of operations of Borrower and that is properly recognized
as revenue in such quarter in accordance with GAAP.
"Note" shall mean the Revolving Promissory Note, of even date herewith,
made by Borrower to Bank's order in the principal amount of $10,000,000, and any
modification, renewal or consolidation thereof or substitute therefor.
"Novogyne Joint Venture" shall mean Vivelle Ventures, LLC, a Delaware
limited liability company established pursuant to the Formation Agreement, dated
as of May 1, 1998, by and between Borrower and Novartis Pharmaceuticals
Corporation.
"Novogyne Joint Venture Agreement" shall mean the Operating Agreement
of Vivelle Ventures, LLC, dated as of May 1, 1998, between Borrower and Novartis
Pharmaceuticals Corporation.
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"Obligations" shall mean all indebtedness, liabilities, obligations and
duties of Borrower to Bank arising under or in connection with this Agreement,
the Note or any other Credit Documents, direct or indirect, absolute or
contingent, due or not due, in contract or tort, liquidated or unliquidated,
arising by operation of law or otherwise, now existing or hereafter arising, and
whether or not for the payment of money or the performance or non-performance of
any act, including, but not limited to, all actual damages which Borrower may
owe to Bank by reason of any breach by Borrower of any Representation and
Warranty, covenant, agreement or other provision of this Agreement or any of the
other Credit Documents.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Patent" shall mean any of the following: (a) patents and letters
patent of the United States or any other country, and all registrations and
recordings thereof and applications therefor, including registrations,
recordings and applications in the United States Patent and Trademark Office or
an any similar office or agency of the United States, any state or territory
thereof, or any other country, and (b) all reissues, continuations or extensions
of any of the foregoing.
"Patent License" shall mean all rights under any written agreement
granting any right with respect to any invention on which a Patent is in
existence.
"Pension Plan" shall mean any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV or ERISA or Section 412 of the Code and
which (i) is maintained for employees of Borrower or any of its ERISA Affiliates
or is assumed by Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees of
Borrower or any current or former ERISA Affiliate.
"Permitted Liens" shall have the meaning given that term in ss.5.5.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust or unincorporated organization or a government or any
agency or political subdivision thereof.
"Prime Rate" shall mean Bank's Prime Rate as quoted or otherwise
established by Bank from time to time (or, if Bank ceases to quote or otherwise
establish a Prime Rate, a comparable index selected by Bank) (the Prime Rate is
purely a discretionary benchmark and is not necessarily the lowest or most
favorable rate at which Bank extends credit to its customers).
"Prohibited Transaction" shall mean a transaction that is prohibited
under Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA.
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"Rate Hedging Obligations" shall mean any and all obligations and
liabilities of Borrower to Bank, whether absolute or contingent and however and
whenever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all agreements, devices or arrangements designed to protect at least one of
the parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including but not limited to Dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or
interest rate options, puts, warrants and those commonly known as interest rate
"swap" agreements; and (ii) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"Representation and Warranty" shall mean each representation and
warranty made by Borrower pursuant to or under (a) ss.4 or any other provision
of this Agreement or any other Credit Document, (b) any amendment of or waiver
or consent under this Agreement, (c) any Schedule to this Agreement or any such
amendment, waiver or consent, or (d) any statement contained in any certificate,
financial statement, or other instrument or document delivered by or on behalf
of Borrower pursuant to any Credit Document, whether or not (except as expressly
provided to the contrary herein), in the case of any representation or warranty
referred to in clause (a), (b), (c) or (d) of this definition, the information
that is the subject matter thereof is within the knowledge of Borrower.
"Security Agreement" shall mean the Security Agreement executed by
Borrower in favor of Bank as of the date hereof, as amended or restated from
time to time.
"Security Interests" shall mean the security interests, liens, pledges
and collateral assignments created by the Security Agreement.
"Single Employer Plan" shall mean any employee pension benefit plan
covered by Title IV of ERISA in respect of which Borrower or any Subsidiary is
an "employer" as described in Section 4001(b) of ERISA and which is not a
Multiemployer Plan.
"Solvent" shall mean, when used with respect to any Person, that at the
time of determination: (a) the fair value of its assets (both at fair valuation
and at present fair saleable value on an orderly basis) is in excess of the
total amount of its liabilities,
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including contingent Obligations; (b) it is then able and expects to be able to
pay its debts as they mature; and (c) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Subsidiary" shall mean any corporation or other entity in which 50
percent or more of its outstanding Voting Stock or 50 percent or more of all
equity interests is owned directly or indirectly by Borrower and/or by one or
more of Borrower's Subsidiaries.
"Tangible Net Worth" shall mean, as of any date, the total
stockholder's equity of Borrower (including capital stock, additional paid-in
capital and retained earnings after deducting treasury stock) as reflected in
the "Stockholders' Equity" section of the balance sheet of Borrower prepared as
of such date in accordance with GAAP, less the aggregate book value of
Intangible Assets, less the amount of Accounts owed by officers or employees of
Borrower.
"Tax" shall mean any federal, state or foreign tax, assessment or other
governmental charge or levy (including any withholding tax) upon a Person or
upon its assets, revenues, income or profits other than income and franchise
taxes imposed upon Bank by the federal government or the State of Florida (or
any political subdivision thereof).
"Termination Event" shall mean: (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the notice
requirement has been waived by applicable regulation); or (ii) the withdrawal of
Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or was
deemed such under Section 4068(f) of ERISA; or (iii) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA; or (iv) the institution of proceedings to terminate a Pension Plan by the
PBGC; or (v) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan; or (vi) the partial or complete withdrawal of
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA; or (viii) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (ix) any event or condition which results in the termination of
a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Liabilities" shall mean, as of any date, the total liabilities
which are reflected as "Current Liabilities" and "Long-Term Liabilities" on the
balance sheet of Borrower prepared as of such date in accordance with GAAP.
"Trademark" shall mean any of the following: (a) trademarks, trade
names,
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corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other country or
any political subdivision thereof; and (b) all reissues, extensions or renewals
thereof.
"Trademark License" shall mean all rights under any written agreement
now owned or hereafter acquired by Borrower granting any right to use any
Trademark.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan at
any time, the amount of unfunded benefit liabilities of such Plan at such time
as determined under Section 4001(18) of ERISA.
"Voting Stock" shall mean, with respect to any Person, Capital
Securities of such Person entitling the holder thereof to vote in the election
of directors of such Person.
ss.1.2 OTHER DEFINITIONAL AND INTERPRETIVE PROVISIONS.
(a) When used in this Agreement, "herein", "hereof" and "hereunder" and
words of similar import shall refer to this Agreement as a whole and not to any
particular section or subsection of this Agreement, and "Section" (and/or "ss.")
or "subsection" and "Schedule" and "Exhibit" shall refer to sections and
subsections of, and Schedules and Exhibits to, this Agreement unless otherwise
specified.
(b) Whenever the context so requires, when used in this Agreement the
neuter gender shall include the masculine or feminine, and the singular number
shall include the plural, and vice versa.
(c) In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
(d) The words "includes" and "including" when used herein are not
limiting.
(e) When used herein, unless specifically provided herein otherwise,
the phrase "acceptable to Bank" or "satisfactory to Bank" shall mean
"acceptable and satisfactory to Bank in its sole and absolute discretion."
(f) Each term defined in Article 1 or Article 9 of the Florida Uniform
Commercial Code shall have the meaning given to it therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of another
jurisdiction is
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controlling, in which case such term shall have the meaning given to it in the
Uniform Commercial Code of the applicable jurisdiction.
ss.1.3 ACCOUNTING TERMS AND MATTERS. Unless the context otherwise
requires, all accounting terms herein (including capitalized terms) that are not
specifically defined herein shall be interpreted and determined under GAAP
applied on a Consistent Basis. Unless otherwise specified herein, all accounting
determinations hereunder and all computations utilized by Borrower in complying
with the covenants contained herein shall be made, and all financial statements
requested to be delivered hereunder shall be prepared, in accordance with GAAP
applied on a Consistent Basis, except, in the case of such financial statements,
for departures from GAAP that may from time to time be approved in writing by
the independent certified public accountants who are at the time, in accordance
with ss.7, reporting on the financial statements of Borrower.
ss.1.4 REPRESENTATIONS AND WARRANTIES. All Representations and
Warranties shall be made at and as of the Agreement Date, at and as of the time
of each Advance, and, in addition, in the case of any particular Representation
and Warranty, at such other time or times as such Representation and Warranty is
made or deemed made in accordance with the provisions of this Agreement or the
document pursuant to, under, or in connection with which such Representation and
Warranty is made or deemed made, except to the extent that any such
Representation or Warranty expressly states that it relates to a different
specified date.
ss.1.5 CAPTIONS. Section and subsection captions in this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
ss.1.6 NEUTRAL INTERPRETATION. This Agreement and each other Credit
Document has been thoroughly reviewed by counsel for Borrower and the
Subsidiaries. No provision of this Agreement or other Credit Document shall be
construed less favorably to Bank because it was drafted by Bank's counsel.
ss.1.7 SEVERABILITY, CONFLICTS, ETC. Any provision of any Credit
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. It is the intention of the parties to this Agreement that if any
provision of any Credit Document is capable of two constructions, one of which
would render the provision void and the other of which would render the
provision valid, the provision shall have the meaning which renders it valid.
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ss.2. GENERAL TERMS.
ss.2.1 COMMITMENT. Bank agrees, upon and subject to the terms and
conditions hereinafter set forth, to make Advances to Borrower from time to time
during the period from the Agreement Date to the Commitment Termination Date.
ss.2.2 LIMITS. At no time shall the aggregate principal amount of
Advances outstanding exceed the then Facility Limit. Moreover, during a period
of 30 consecutive days between the Agreement Date and the Commitment Termination
Date, Borrower shall, by repaying all Obligations prior to the beginning of that
period and borrowing no additional Advances during that period, cause the amount
of the Obligations outstanding to be zero at all times during that period.
ss.2.3 USE OF ADVANCES. Each Advance shall be used for Borrower's
general corporate purposes (including working capital and capital expenditures).
ss.2.4 MAKING OF ADVANCES. Each Advance shall be made on the basis of
written notice from Borrower to Bank specifying for such Advance the date
thereof, the amount thereof, and any other information required under ss.2. Bank
reserves the right to require any such notice to be made at least two Business
Days before the date of the Advance requested by it. Each such notice shall be
given by means of a writing reasonably satisfactory to Bank. Each notice
requesting an Advance shall be irrevocable and binding on Borrower; and Borrower
shall indemnify Bank against any loss or expense incurred by Bank as a result of
any failure to fulfill on or before the date specified for such Advance the
applicable conditions set forth in ss.3, including without limitation any loss
or expense actually incurred by Bank by reason of the liquidation or
reemployment of deposits or other funds acquired or held by Bank to fund the
Advance when such Advance, as a result of such failure, is not made on such
date. Bank shall make each Advance available to Borrower on the date specified
by Borrower in accordance with this ss.2.4, upon fulfillment of the applicable
conditions set forth in ss.3, by crediting the Borrowing Account, except that
Bank may, in its discretion, apply all or any part of any Advance to repay any
Obligations.
ss.2.5 INTEREST RATES AND PAYMENT. (a) Interest shall accrue on the
outstanding principal amount of Advances, during each Interest Period, at a per
annum rate equal to 1.50 percent above the LIBOR Rate for that Interest Period.
Borrower shall pay such accrued interest to Bank in arrears on the first
Business Day of each calendar month and at maturity. Bank is hereby irrevocably
authorized to debit any account of Borrower with Bank to make any interest
payment on its due date. Nothing herein to the contrary withstanding, interest
shall accrue on any overdue principal of Advances, fees or other Obligations at
a floating per annum rate equal to the Default Rate and be payable on demand.
(b) If Bank determines that for any period of time it is impossible or
unfeasible for it to obtain funds in the London interbank market and so notifies
Borrower, the outstanding principal amount of Advances shall, prior to their
maturity, bear interest during
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that period at a floating per annum rate equal to .50 percent below the Prime
Rate.
ss.2.6 MANDATORY REPAYMENT OF ADVANCES.
(a) AT MATURITY. All Advances then outstanding shall mature and become
immediately due and payable in full on the Commitment Termination Date.
(b) PRIOR TO MATURITY. If at any time any of the limitations set forth
in ss.2.2 are exceeded, Borrower shall, within two Business Days after Bank's
demand, prepay the Advances in the amount of the excess. Nothing in this
ss.2.6(b) shall be construed to restrict Bank's right to accelerate the
Obligations or pursue its other remedies under ss.8 based on a limitation in
ss.2.2 being exceeded.
ss.2.7 OPTIONAL PREPAYMENTS OF ADVANCES. Borrower may, at any time and
from time to time, upon one Business Day's advance notice, prepay the Advances
in whole or in part without premium or penalty, except that any prepayment of an
Advance shall be in a principal amount of a whole multiple of $100,000, and
except that no prepayment shall be made on other than the last day of an
Interest Period unless the payment is accompanied by the applicable
Consequential Loss (as computed by Bank). Amounts to be prepaid shall
irrevocably be due and payable on the date specified in the applicable notice of
prepayment, together with interest thereon. Amounts prepaid in respect of
Advances may be reborrowed, subject to the terms and conditions hereof. Borrower
shall also have the right, upon one Business Day's advance notice, to prepay the
Advances in full and terminate this Agreement, provided that (i) such prepayment
shall be subject to the provisions hereinabove set forth with respect to
prepayment, (ii) Borrower must fully prepay all Advances together with all other
outstanding Obligations, and (iii) Borrower shall remit a pro rata payment of
the commitment fee specified in ss.2.8, calculated to the date of receipt by
Bank of the full payment of the Advances and other Obligations, and (iv) the
written notice from Borrower must specify that Borrower desires to terminate
this Agreement and prepay in full the Advances.
ss.2.8 FACILITY AND COMMITMENT FEES. (a) Borrower shall pay to Bank a
non-refundable facility fee in the amount of $10,000 on the Agreement Date.
(b) Within 5 Business Days of being invoiced therefor, Borrower shall
pay to Bank, with respect to each quarter of each Fiscal Year, a commitment fee
equal to 0.0625 percent multiplied by the average daily amount by which the
Facility Limit (based on the Eligible Accounts Amount on the first day of that
quarter) exceeds the outstanding principal amount of Advances during that
quarter.
ss.2.9 PAYMENTS AND COMPUTATIONS. (a) Borrower shall make each payment
hereunder by 11:00 a.m. (Miami, Florida time) on the day when due, in lawful
money of the United States of America and immediately available funds without
setoff or deduction of
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any kind, to Bank at its address referred to in ss.9.9 (or another address of
which Bank gives Borrower notice pursuant to ss.9.9).
(b) All computations of interest, commissions and fees hereunder shall
be made by Bank on the basis of a year of 360 days and the actual number of days
(including the first day but excluding the last day) elapsed in the period for
which such interest, commission or fee is payable. Payments received hereunder
shall be applied first against interest and any lawful charges accrued but
unpaid and the remainder, if any, against outstanding principal. If any interest
payment required to be made hereunder is not made within 10 days after its due
date, Borrower shall pay Bank on demand a late charge equal to 5.00 percent of
the amount of the payment. Each late charge is intended to compensate Bank for
administrative and other costs associated with not receiving a payment when due
and is neither a penalty nor interest.
(c) Whenever any payment to be made under this Agreement or any other
Credit Document (as defined below) shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be reflected in the computation of
interest, commissions or fees, as the case may be.
(d) Borrower irrevocably authorizes Bank -- if and to the extent any
payment is not made to Bank when due hereunder or under any other agreement
relating to any Advance and any applicable grace period has expired -- to charge
from time to time against a demand account in Borrower's name (which Borrower
hereby agrees to maintain with Bank) any amount so due even if doing so creates
an overdraft. Any overdraft so created shall (to the extent permitted by
Applicable Law) bear interest until paid in full at the Default Rate and shall
be due and payable, together with any accrued interest, immediately after being
created.
ss.2.10. CAPITAL ADEQUACY. If as a result of either (i) the
introduction of or any change in, or in the interpretation of, any Applicable
Law subsequent to the date of this Agreement, or (ii) the compliance by Bank
with any request from any Governmental Authority made subsequent to the date of
this Agreement, there is any increase in Bank's actual cost of making, funding
or maintaining all or any part of an Advance or Advances, Borrower shall, from
time to time, promptly upon Bank's request, pay to Bank such additional amounts
as determined by Bank to be sufficient to indemnify Bank against such increased
cost. Moreover, if either the introduction, effectiveness, interpretation, or
phase-in of, or compliance by Bank with, any Applicable Law, directive,
guideline, decision, or request (whether or not having the force of law) of any
court, central bank, regulator, or other Governmental Authority arising
subsequent to the date of this Agreement affects or would affect the amount of
capital required or expected to be maintained by Bank, and Bank determines that
the rate of return on its capital as a consequence of its making or maintaining
any Advance or Advances is reduced to a level below that which Bank could
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have achieved but for the occurrence of such circumstance, Borrower shall, from
time to time, promptly upon Bank's request, pay to Bank such additional amounts
as determined by Bank to be sufficient to compensate Bank for such reduction in
its rate of return. A statement by Bank as to any such amount claimed by it in
this ss.2.10 (including calculations thereof in reasonable detail and using
reasonable attribution methods) shall, in the absence of manifest error, be
conclusive and binding on Borrower.
ss.2.11. EVIDENCE OF INDEBTEDNESS; IMPAIRED NOTE. The Advances and
Borrower's obligations to repay them, with interest in accordance with the terms
of this Agreement, shall be evidenced by this Agreement, the records of Bank,
and the Note. The records of Bank shall be prima facie evidence of the Advances
and the other indebtedness of Borrower under this Agreement, of accrued interest
thereon, of accrued fees, and of all payments made in respect of any thereof.
Upon Borrower's receipt from Bank of (a) reasonably satisfactory evidence of the
loss, theft, destruction or mutilation of the Note (an "Impaired Note") and (b)
(i) in the case of mutilation, such Impaired Note for cancellation or (ii) in
all other cases, indemnity reasonably satisfactory to Borrower and reimbursement
of Borrower's reasonable out-of-pocket expenses incidental thereto, Borrower
shall make and deliver to Bank a new replacement Note of like tenor, date and
principal amount in lieu of the Impaired Note.
ss.3. CONDITIONS OF LENDING.
ss.3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation of Bank
to make the initial Advance hereunder after the date hereof is subject to the
condition precedent that Bank shall have received, on or before the day such
Advance is made, the following, all in form and substance satisfactory to Bank:
(a) The Note, duly executed by Borrower.
(b) The Security Agreement, duly executed by Borrower and creating a
perfected, first-priority security interest in all of Borrower's Accounts and
inventory, and together with:
(i) duly executed financing statements (Form UCC-1) (the
"Financing Statements") to be duly filed under the Uniform Commercial
Code of Florida and all other jurisdictions as may be necessary or, in
the opinion of Bank, desirable to perfect the Security Interests;
(ii) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports acceptable to Bank, listing all
effective financing statements which name Borrower (under its present
name and any previous names) as debtor and which are filed in the
jurisdictions referred to in paragraph (i) above, together with copies
of such other financing statements (none of which may cover the
Collateral);
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(iii) judgment, tax lien and litigation searches in all
relevant jurisdictions showing that there are no outstanding judgments
or tax liens or pending lawsuits against Borrower or any property of
Borrower except as disclosed herein;
(iv) a landlord's lien waiver and agreement from the owner of
each warehouse or other facility where inventory Borrower is being or
may be stored with the exception of Borrower's headquarters building.
(c) A report of Borrower's receivables agings and a Borrowing Base
Certificate in a form provided by Bank.
(d) A certified copy of the resolution of the board of directors of
Borrower approving and authorizing each Credit Document to which it is a party
and of all documents evidencing other necessary corporate action and
Governmental Approvals, if any, with respect to each such Credit Document.
(e) A certificate of the Secretary or an Assistant Secretary of
Borrower certifying the name and true signatures of its officers authorized to
sign each Credit Document to which it is a party and the other documents to be
delivered by it hereunder.
(f) A certificate of good standing certificate issued by the Florida
Secretary of State with respect to Borrower; a copy of Borrower's articles of
incorporation certified by such Secretary of State; and a copy of Borrower's
bylaws certified as true and complete by an Authorized Representative.
(g) A favorable opinion of Steel, Xxxxxx & Xxxxx LLP, counsel for
Borrower, covering such matters as Bank may request.
(h) Whatever certificates and affidavits Bank requests to establish
that no Florida documentary stamp tax is or will be owing in connection with the
Credit Documents and a Tax Indemnity Agreement in favor of Bank, prepared by
Bank, duly executed by Borrower and covering any liability for any such Tax.
(i) Such other approvals, appraisals, opinions, consents and documents
as Bank may reasonably request.
ss.3.2 CONDITIONS TO EACH ADVANCE. The obligation of Bank to make each
Advance to be made by it, including the initial Advance, is subject to the
fulfillment of each of the following conditions to Bank's satisfaction:
(a) As to each Advance made more than five Business Days after the date
hereof, Bank shall have received evidence of the completion of all recordings
and filings
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as may be necessary, or, in the opinion of Bank, desirable, to perfect the
Security Interests, including without limitation the filing of a UCC-1 form
financing statement with the Florida Secretary of State;
(b) each of the Representations and Warranties shall, in the
determination of Bank in its reasonable discretion, be true and correct in all
material respects at and as of the time of such Advance, with and without giving
effect to such Advance and to the application of the proceeds thereof, except
those expressly stated to be made as of a particular date which shall be true
and correct in all material respects as of such date;
(c) no Default or Event of Default shall have occurred and be
continuing at the time of such Advance, with or without giving effect to such
Advance and to the application of the proceeds thereof;
(d) unless agreed to by Bank, no Account described in any of clauses
(a) through (f) of the definition of Eligible Account herein was included in the
computation of Eligible Accounts Amount for purposes of the Facility Limit on
which such Advance is predicated;
(e) receipt by Bank, within a reasonable time after Bank's request, of
such materials as may have been requested pursuant to ss.7 as, when and to the
extent required to be delivered thereunder;
(f) such Advance will not contravene any Applicable Law;
(g) all legal matters incident to such Advance and the other
transactions contemplated by this Agreement shall be reasonably satisfactory to
counsel for Bank;
(h) no Federal tax liens or other Liens (besides the Security Interests
and Permitted Liens) shall have been filed against any property of Borrower;
(i) Borrower is Solvent and will be so after giving effect to such
Advance; and
(j) no limitation set forth in ss.2 will be exceeded after such Advance
is made.
Each Borrowing Notice shall constitute a Representation and Warranty by
Borrower, made as of the time of the making of the Advance requested by it, that
the conditions specified in clauses (b) through (d) have been fulfilled as of
such time, unless a notice to the contrary specifically captioned "Disclosure
Statement" is received by Bank from Borrower prior to 12:00 noon (Miami time),
on the Business Day preceding the date of the requested Advance. To the extent
that Bank agrees to make any Advance after receipt of a Disclosure Statement in
accordance with the preceding sentence, the Representations and Warranties
pursuant to the preceding sentence shall be deemed made as modified by the
contents of such statement and repeated at the time of the making of such
Advance as so modified.
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ss.4. CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWER.
In order to induce Bank to enter into this Agreement and to make
Advances, Borrower represents and warrants to Bank as follows:
ss.4.1 ORGANIZATION: POWER; QUALIFICATION; COMPLIANCE. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has the corporate power and authority to own its
properties and to carry on its businesses as now being and proposed to be
hereafter conducted, and is duly qualified, in good standing, and authorized to
do business, in all jurisdictions in which the character of its properties or
the nature of its businesses requires such qualification, good standing or
authorization except where failure to so qualify would not have a Material
Adverse Effect. Borrower is conducting its business in material compliance with
all Applicable Law.
ss.4.2 SUBSIDIARIES. As of the Agreement Date, Borrower has no
Subsidiaries which have assets or conduct business.
ss.4.3 OWNERSHIP INTERESTS. As of the date of this Agreement, Borrower
owns no equity investments in any Person other than the Novogyne Joint Venture.
ss.4.4 NOVOGYNE JOINT VENTURE. The Novogyne Joint Venture was duly
formed pursuant to the Novogyne Joint Venture Agreement and has not been
dissolved.
ss.4.5 SOLVENCY. Borrower is and will be Solvent after giving effect to
the transactions contemplated by the Credit Documents.
ss.4.6 AUTHORIZATION AND COMPLIANCE OF AGREEMENT AND NOTE. Borrower has
the corporate power, and has taken all necessary corporate and other (including
stockholder, if necessary) action to authorize it to execute, deliver and
perform this Agreement and each of the other Credit Documents to which it is a
party in accordance with their respective terms, to incur its other obligations
under this Agreement and each of the other Credit Documents to which it is a
party and to borrow hereunder. Each of this Agreement and the other Credit
Documents delivered on the Agreement Date has been duly executed and delivered
by Borrower and is a legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms subject to the
applicable bankruptcy and insolvency laws and other laws affecting the
enforceability of creditors rights, generally. The execution, delivery and
performance of this Agreement and the other Credit Documents by Borrower in
accordance with their respective terms, and the incurring of obligations
thereunder by Borrower, do not and will not (a) require (i) any Governmental
Approval or (ii) any consent or approval of the stockholders of Borrower that
has not been obtained, unless, in any such case, the failure to obtain any such
Governmental Approval
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or other consent or approval would not result in a Material Adverse Effect or
adversely affect in any way the validity or enforceability of any Credit
Document, (b) violate or conflict with, result in a breach of, or constitute a
default under, (i) any Contract to which Borrower is a party or by which its or
any of its properties may be bound, (ii) any Applicable Law, unless in any such
case the violation would not have a Material Adverse Effect or adversely affect
in any way the validity or enforceability of any Credit Document or (iii)
Borrower's articles of incorporation or bylaws, or (c) result in or require the
creation of any Lien upon any assets of Borrower (other than the Security
Interests and Permitted Liens).
ss.4.7 LITIGATION. Except as set forth on Schedule 4.7, as of the
Agreement Date there are not, in any court or before any arbitrator of any kind
or before or by any governmental or non-governmental body, any actions, suits or
proceedings, pending (or to the knowledge of Borrower overtly threatened in
writing), against or in any other way relating to or affecting (a) Borrower or
the Novogyne Joint Venture or the business or any property of Borrower or the
Novogyne Joint Venture, except actions, suits or proceedings that, if adversely
determined, would not, (i) singly result in liability more than $1,000,000.00
above the amount of insurance coverage in effect with respect thereto or (ii) in
the aggregate for Borrower and the Novogyne Joint Venture result in liability
more than $3,000,000.00 above the amount of insurance coverage in effect with
respect thereto or (iii) singly or in the aggregate otherwise have a Material
Adverse Effect.
ss.4.8 BURDENSOME PROVISIONS. Borrower is not a party to or bound by
any Contract that is likely to have a Material Adverse Effect (it being
understood, however, that Borrower is or may be a party to exclusive license
agreements a breach of any of which might have a Material Adverse Effect).
ss.4.9 NO MATERIAL ADVERSE CHANGE OR EVENT. Between December 31, 1999
and the Agreement Date, no change in the business, assets, liabilities,
financial condition or results of operations of Borrower or the Novogyne Joint
Venture has occurred, and no event has occurred or failed to occur, which has
had or constituted or would reasonably be expected to have or constitute, either
alone or in conjunction with all other such changes, events and failures, a
Material Adverse Effect. (In determining whether an adverse change or effect has
occurred, it is understood that such an adverse change or effect may have
occurred, and such an event may have occurred or failed to occur, at any
particular time notwithstanding the fact that at such time no Default shall have
occurred and be continuing.)
ss.4.10 NO ADVERSE FACT. No fact or circumstance is known to Borrower
as of the date hereof which Bank could not reasonably be expected to be aware of
and which, either alone or in conjunction with all other such facts and
circumstances, has had a Material Adverse Effect that has not been set forth or
referred to in the financial statements referred to in ss.7.2(a) or in a writing
specifically captioned "Disclosure Statement" and delivered to Bank prior to the
date hereof. If a fact or circumstance disclosed in such financial statements or
Disclosure Statement, or if an action, suit or proceeding disclosed in
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Schedule 4.7, should in the future have or constitute a Material Adverse Effect
upon Borrower or any Subsidiary or upon this Agreement or any other Credit
Document, such Material Adverse Effect shall be a change or event subject to
ss.4.9 notwithstanding such disclosure.
ss.4.11 TITLE TO PROPERTIES. Borrower has, as of the date of such
financial statements or Forms 10-Q or 10-K, as the case may be, title to its
properties reflected on the financial statements referred to in ss.7.2(a) or its
most recent Form 10-Q or Form 10-K subject to no Liens or material adverse
claims except Permitted Liens and the Security Interests.
ss.4.12 PATENTS, TRADEMARKS, ETC. Borrower owns, or is licensed or
otherwise has the lawful right to use, all Intellectual Property used in or
necessary for the conduct of its business as currently in any material respect
conducted. To Borrower's knowledge, the use of such Intellectual Property by
Borrower does not infringe on the rights of any Person.
ss.4.13 SECURITY INTERESTS. The Security Interests are all valid,
perfected, first-priority (subject only to Permitted Liens) security interests
securing all the Obligations.
ss.4.14 MARGIN STOCK; ETC. The proceeds of the Advances will be used by
Borrower only for the purposes expressly authorized herein. None of such
proceeds will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin stock or for the purpose of reducing or retiring any Debt
which was originally incurred to purchase or carry margin stock or for any other
purpose which might constitute any of the Advances a "purpose credit" within the
meaning of Regulation U. Neither Borrower nor any agent acting in its behalf has
taken or will take any action which might cause this Agreement or any of the
documents or instruments delivered pursuant hereto to violate any regulation of
the Board of Governors of the Federal Reserve Board or to violate the Securities
Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, or
any state securities laws, in each case as in effect on the date hereof.
ss.4.15 INVESTMENT COMPANY. Borrower is not an "investment company," or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. ss.80a-1, et seq.). The application of the proceeds
of the Advances and repayment thereof by Borrower and the performance by
Borrower of the transactions contemplated by the Credit Documents will not
violate any provision of that statute, or any rule, regulation or order issued
by the Securities and Exchange Commission thereunder, in each case as in effect
on the date hereof.
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ss.4.16 ERISA.
(a) Borrower and each ERISA Affiliate is in material compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder and in material compliance with all Foreign Benefit
Laws with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section 401(b)
of the Code has not yet expired and except for circumstances where the failure
to comply could not reasonably be expected to have a Material Adverse Effect.
Each Employee Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has been determined to be exempt under Section 501(a) of the Code.
No material liability has been incurred by Borrower or any ERISA Affiliate which
remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(b) Neither Borrower nor any ERISA Affiliate has (i) engaged in a
nonexempt prohibited transaction described in Section 4975 of the Code or
Section 406 of ERISA affecting any of the Employee Benefit Plans or the trusts
created thereunder which could subject any such Employee Benefit Plan or trust
to a material tax or penalty on prohibited transactions imposed under Internal
Revenue Code Section 4975 or ERISA, (ii) incurred any material accumulated
funding deficiency with respect to any Employee Benefit Plan, whether or not
waived, or any other material liability to the PBGC which remains outstanding,
other than the payment of premiums (and there are no premium payments which are
due and unpaid which could reasonably be expected to have a Material Adverse
Effect), (iii) failed to make a required material contribution or payment to a
Multiemployer Plan, or (iv) failed to make a material required installment or
other required payment under Section 412 of the Code, Section 302 of ERISA or
the terms of such Employee Benefit Plan;
(c) No Termination Event has occurred or is reasonably expected to
occur with respect to any Pension Plan or Multiemployer Plan, and neither
Borrower nor any ERISA Affiliate has incurred any unpaid withdrawal liability
with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits under each
Employee Benefit Plan which is subject to Title IV of ERISA, did not, as of the
most recent valuation date for each such plan, exceed the then current value of
the assets of such Employee Benefit Plan allocable to such benefits;
(e) Each Employee Benefit Plan maintained by Borrower or any ERISA
Affiliate, has been administered in accordance with its terms in all material
respects and is in compliance in all material respects with all applicable
requirements of ERISA and other Applicable Law, except for circumstances where
the failure to comply or accord could not reasonably be expected to have a
Material Adverse Effect;
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(f) The making of the Advances will not involve any prohibited
transaction under ERISA which is not subject to a statutory or administrative
exemption; and
(g) No material proceeding, claim, lawsuit and/or investigation exists
or, to the best knowledge of Borrower after due inquiry, is threatened
concerning or involving any Employee Benefit Plan.
ss.4.17 NO DEFAULT. As of the date hereof, there exists no Default or
Event of Default.
ss.4.18 HAZARDOUS MATERIALS. To its knowledge, Borrower is in
compliance with all applicable Environmental Laws in all material respects.
Neither Borrower nor, to Borrower's knowledge, the Novogyne Joint Venture has
been notified in writing of any action, suit, proceeding or investigation which,
and Borrower is not aware of any facts which, (a) calls into question, or could
reasonably be expected to call into question, compliance by Borrower or, to
Borrower's knowledge, the Novogyne Joint Venture with any Environmental Laws,
(b) seeks to suspend, revoke or terminate any license, permit or approval
necessary for the generation, handling, storage, treatment or disposal of any
Hazardous Material, or (c) seeks to cause any property of Borrower to be subject
to any restrictions on ownership, use, occupancy or transferability under any
Environmental Law to which Borrower is not currently subject, which in the case
of any matter described in items (a), (b) or (c) above would result in a
Material Adverse Effect.
ss.4.19 EMPLOYMENT MATTERS. (a) Except as set forth in Schedule 4.19,
none of the employees of Borrower is subject to any collective bargaining
agreement and there are no strikes, work stoppages, election or decertification
petitions or proceedings, unfair labor charges, equal opportunity proceedings,
or other material labor/employee related controversies or proceedings pending
or, to the best knowledge of Borrower, overtly threatened in writing against
Borrower or between Borrower and any of its employees, other than those which
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and
(b) Except as set forth in Schedule 4.19 or to the extent a failure to
maintain compliance would not have a Material Adverse Effect, Borrower is in
compliance in all respects with all Applicable Law pertaining to labor or
employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation and there is neither pending nor to
Borrower's knowledge overtly threatened in writing any litigation,
administrative proceeding nor, to the knowledge of Borrower, any investigation,
in respect of such matters which, if decided adversely, would individually or in
the aggregate have a Material Adverse Effect.
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ss.4.20 RICO. To Borrower's knowledge, Borrower is not engaged in nor
has engaged in any course of conduct that would subject any of its properties to
any Lien, seizure or other forfeiture under any criminal law, racketeer
influenced and corrupt organizations law (civil or criminal) or other similar
laws.
ss.4.21 ELIGIBLE ACCOUNTS. Each item included as an Eligible Account in
the computations contained in each Borrowing Base Certificate fully qualifies as
such.
ss.5. CERTAIN GENERAL COVENANTS.
Until the Agreement Termination Date, unless Bank shall otherwise
consent in writing, Borrower shall:
ss.5.1 PRESERVATION OF EXISTENCE AND PROPERTIES, SCOPE OF BUSINESS,
COMPLIANCE WITH LAW, PAYMENT OF TAXES AND CLAIMS. (a) Preserve and maintain its
corporate existence and all of its other franchises, licenses, rights and
privileges, (b) preserve, protect and obtain all Intellectual Property, and
preserve and maintain in good repair, working order and condition all other
properties, required for the conduct of its business as presently conducted, all
in accordance with customary and prudent business practices, (c) engage only in
the business in which it is engaged as of the Agreement Date and related
businesses that in Bank's reasonable judgment are closely related thereto, (d)
comply with all Applicable Laws (including all Environmental Laws and all
racketeer influenced and corrupt organizations law), (e) except to the extent
permitted otherwise in ss.ss.5.5(b) and 5.5(d), pay or discharge when due (or as
permitted by the Security Agreement) all Taxes owing by it or imposed upon its
property (for the purposes of this clause, such Taxes shall be deemed to be due
on the date after which they become delinquent), and all liabilities which might
become a Lien on any of its properties, (f) take all action and obtain all
Governmental Approvals required so that its obligations under the Credit
Documents will at all times be valid and binding and enforceable in accordance
with their respective terms, and (g) obtain and maintain all licenses, permits
and approvals of Governmental Authorities and as are required for the conduct of
its business as presently conducted, except where failure to do any of the
foregoing would not have a Material Adverse Effect.
ss.5.2 INSURANCE. Maintain insurance with responsible insurance
companies against such risks and in such amounts as is customarily maintained by
similar businesses, as may be required by the Security Agreement or by
Applicable Law.
ss.5.3 USE OF PROCEEDS. Use each Advance only for general corporate
purposes (including working capital and capital expenditures) and refrain from
using proceeds of any Advance to purchase or carry, or to reduce or retire or
refinance any credit incurred to purchase or carry, any margin stock (within the
meaning of Regulation U) or to extend credit to others for the purpose of
purchasing or carrying any margin stock (if requested by Bank, Borrower shall
furnish to Bank statements in conformity with the requirements of Federal
Reserve Form U-1 referred to in Regulation U).
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ss.5.4 DEBT. Not incur, create, assume or permit to exist any Debt,
however evidenced, except:
(a) Debt existing as of the Agreement Date as set forth in Schedule
5.4; provided, none of the instruments and agreements evidencing or governing
any such Debt (other than Debt permitted pursuant to ss.5.4(e)) shall be
amended, modified or supplemented in any material respects after the Agreement
Date to change any terms of subordination, repayment or rights of conversion,
put, exchange or other rights from such terms and rights as in effect on the
Agreement Date;
(b) the Obligations and Rate Hedging Obligations;
(c) the endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business;
(d) Debt incurred in connection with Acquisitions permitted
under ss.5.8;
(e) Debt based on or in connection with equipment leasing;
(f) Debt incurred to purchase plant and equipment of Borrower in a
cumulative amount not to exceed $7,000,000; and
(g) other Debt which is subordinated in right of payment to the
Obligations.
ss.5.5 LIENS. Not incur, create or permit to exist any Lien with
respect to any property or assets now owned or hereafter acquired by Borrower or
any Subsidiary, other than the following ("Permitted Liens"):
(a) Liens existing as of the date hereof as set forth in Schedule 5.5;
(b) Liens imposed by law for taxes, assessments or charges of any
Governmental Authority for claims which either are not yet due or which are
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(c) statutory and contractual Liens of landlords, carriers,
warehousemen, mechanics or materialmen on Borrower's equipment (but not its
inventory (other than inventory which may be subject to a landlord's lien in
favor of Aventis, S.A. on Borrower's inventory that is located at Borrower's
headquarters)) and other Liens on such equipment (but not such inventory)
imposed by law or created in the ordinary course of business for amounts either
which are not yet due or which are being contested in good faith by
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appropriate proceedings diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance with
GAAP;
(d) Liens incurred or deposits made in the ordinary course of business
(including without limitation surety bonds and appeal bonds) in connection with
workers' compensation, Taxes, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
Contracts (other than for the repayment of Debt), statutory obligations and
other similar obligations or arising as a result of progress payments under
government Contracts;
(e) easements (including reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations, encroachments,
variations and zoning and other restrictions, charges or encumbrances (whether
or not recorded), which do not interfere materially with the ordinary conduct of
the business of Borrower and its Subsidiaries taken as a whole and which do not
materially detract from the value of the property to which they attach or
materially impair the use thereof to Borrower;
(f) Liens securing Debt permitted under ss.5.4(d), (e) and (f) provided
that such Liens extend only to the property acquired with the proceeds of such
Debt and Liens on other than Collateral securing Debt permitted under ss.5.4(a);
and
(g) Liens securing Debt permitted under ss.5.4(b).
ss.5.6 TRANSFER OF ASSETS. Not sell, lease, transfer or otherwise
dispose of any assets of Borrower or any Subsidiary other than (a) dispositions
of inventory in the ordinary course of business, (b) dispositions of equipment
or real property which, in the aggregate during any Fiscal Year, have a fair
market value or book value, whichever is less, of $3,000,000 or less and is not
replaced by equipment having at least equivalent value, (c) dispositions of
property that is substantially worn, damaged, obsolete or, in the judgment of
Borrower, no longer best used or useful in its business, (d) transfers of assets
necessary to give effect to merger or consolidation transactions permitted by
ss.5.7, (e) subleases of offices or other facilities of Borrower no longer used
in itS business, and (f) dispositions of Intellectual Property permitted by
ss.5.16.
ss.5.7 MERGER AND CONSOLIDATION. (a) Not consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets; provided, however, (i) any
Subsidiary may merge, sell, transfer, lease or otherwise dispose of, all or
substantially all of its assets into or consolidate with Borrower or any
Subsidiary wholly owned by Borrower, (ii) any Subsidiary may liquidate, windup
or dissolve so long as all of its assets (subject to its liabilities) are
transferred to Borrower or to another Subsidiary, and (iii) any other Person may
merge into or consolidate with Borrower or any Subsidiary wholly owned by
Borrower and any Subsidiary may merge into or consolidate
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with any other Person in order to consummate an Acquisition permitted by ss.5.8,
provided further, that any resulting or surviving entity shall execute and
deliver such agreements and other documents and take such other action as Bank
may reasonably require to evidence or confirm its express assumption of the
obligations and liabilities (if any) of its predecessor entities under the
Credit Documents.
ss.5.8 ACQUISITIONS. Not enter into any Contract, binding commitment or
other binding arrangement providing for any Acquisition, or solicit the tender
of securities or proxies in respect thereof in order to effect any Acquisition,
unless (a) the Person to be (or whose assets are to be) acquired does not oppose
such Acquisition and the line or lines of business of the Person to be acquired
are substantially the same as Borrower or any of its Subsidiaries, (b) Borrower
is the acquiring and surviving entity and either the cost of the Acquisition is
paid entirely in stock or does not exceed $5,000,000, (c) an Authorized
Representative shall have furnished Bank with a certificate to the effect that
no Default or Event of Default shall have occurred and be continuing either
immediately prior to or immediately after giving effect to such Acquisition and
Borrower shall have furnished to Bank (i) pro forma historical financial
statements as of the end of the most recently completed fiscal period of
Borrower (whether quarterly or year end) giving effect to such Acquisition and
assuming that any Debt incurred to effect such Acquisition shall be deemed to
have been outstanding during the four-quarter period preceding such Acquisition
and to have borne a rate of interest during such period equal to that rate in
existence at the date of determination and (ii) a certificate in form and
substance satisfactory to Bank prepared on a historical pro forma basis giving
effect to such Acquisition as of the most recent fiscal quarter of Borrower then
ended, which certificate shall demonstrate that no Default or Event of Default
would exist immediately after giving effect thereof, and (d) the Person acquired
shall be a Subsidiary, or be merged into or with Borrower or one of its
Subsidiaries, immediately upon consummation of the Acquisition (or if assets are
being acquired, the acquiror shall be Borrower or a Subsidiary).
ss.5.9 TRANSACTIONS WITH AFFILIATES. After the date hereof, not enter
into any transaction, including without limitation the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate, except (a) that such Persons may render services to Borrower or
its Subsidiaries for compensation at the same rates generally paid by Persons
engaged in the same or similar businesses for the same or similar services or as
may otherwise be approved by a majority vote of Borrower's Board of Directors,
(b) that Borrower or any Subsidiary may render services to such Persons for
compensation at the same rates generally charged by Borrower or such Subsidiary
and (c) in either case in the ordinary course of business and pursuant to the
reasonable requirements of Borrower's (or any Subsidiary's) business consistent
with past practice of Borrower and its Subsidiaries and upon fair and reasonable
terms no less favorable to Borrower (or any Subsidiary) than would be obtained
in a comparable arm's-length transaction with a Person not an Affiliate.
Notwithstanding anything to the contrary contained herein, any transaction or
agreement with an Affiliate in connection with such
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Affiliate's employment or compensation (including salary, bonus, stock options,
severance arrangements, consulting arrangements and other benefits) payable or
provided by Borrower which is approved by Borrower's Board of Directors
comprised of at least a majority of independent Directors shall be deemed to
have satisfied the requirements of items (a), (b) and (c), above.
ss.5.10 COMPLIANCE WITH ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan, not:
(a) permit the occurrence of any Termination Event which would result
in a material liability on the part of Borrower or any ERISA Affiliate to the
PBGC; or
(b) permit the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension Plans
allocable to such benefit liabilities; or
(c) permit any material accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any Pension
Plan, whether or not waived; or
(d) fail to make any contribution or payment to any Multiemployer Plan
which Borrower or any ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto; or
(e) engage, or permit Borrower or any ERISA Affiliate to engage, in any
prohibited transaction under Section 406 or ERISA or Sections 4975 of the Code
for which a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code may be imposed and which would reasonably be
expected to result in a Material Adverse Effect; or
(f) permit the establishment of any Employee Benefit Plan providing
post-retirement welfare benefits or establish or amend any Employee Benefit Plan
which establishment or amendment could result in liability to Borrower or any
ERISA Affiliate or increase the obligation of Borrower or any ERISA Affiliate to
a Multiemployer Plan where such establishment or amendment would reasonably be
expected to result in a Material Adverse Effect; or
(g) fail, or permit any ERISA Affiliate to fail, to establish, maintain
and operate each Employee Benefit Plan in compliance in all material respects
with the provisions of ERISA, the Code and all other Applicable Law and
interpretations thereof.
ss.5.11 FISCAL YEAR. Not change its Fiscal Year.
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ss.5.12 DISSOLUTION, ETC. Not wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any proceedings seeking any
such winding up, liquidation or dissolution.
ss.5.13 LIMITATIONS OF SALES AND LEASEBACKS. Not enter into any
arrangement with any Person providing for the leasing by Borrower or any
Subsidiary of real or personal property, whether now owned or hereafter acquired
in a related transaction or series of related transactions, which has been or is
to be sold or transferred by Borrower or any Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of Borrower or any Subsidiary.
ss.5.14 CHANGE IN CONTROL. Not cause or permit to exist or occur any
Change of Control.
ss.5.15 NEGATIVE PLEDGE CLAUSES. Not enter into or cause, suffer or
permit to exist any agreement with any Person other than Bank pursuant to this
Agreement or any other Credit Documents which prohibits or limits the ability of
Borrower or any Subsidiary to create, incur, assume or suffer to exist any Lien
upon any of its property, except in connection with Permitted Liens.
ss.5.16 INTELLECTUAL PROPERTY. Not sell, assign, encumber or otherwise
dispose of any of its Intellectual Property, except for the licensing of
Intellectual Property in the ordinary course of business and sales, assignments
or other dispositions of Intellectual Property no longer used or useful in
Borrower's business.
ss.5.17 AMENDMENT OF NOVOGYNE JOINT VENTURE. Not agree to terminate the
Novogyne Joint Venture or materially amend the Novogyne Joint Venture Agreement.
ss.5.18 COVENANTS EXTENDING TO THE NOVOGYNE JOINT VENTURE. Vote
whenever possible to cause the Novogyne Joint Venture to do with respect to
itself, its business and assets, each of the things required of Borrower in
ss.ss.5.1 through 5.3 inclusive and not vote to permit it to do any of the
things prohibited of Borrower in ss.ss.5.4 through 5.16 inclusive.
ss.6. CERTAIN FINANCIAL COVENANTS.
Until the Agreement Termination Date, unless Bank agrees otherwise in
writing, Borrower shall:
ss.6.1 TANGIBLE NET WORTH. Maintain at all times a Tangible Net Worth
of not less than $35,000,000.
ss.6.2 LEVERAGE RATIO. Maintain at all times a Leverage Ratio no
greater than 1.00:1.
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ss.6.3 NET REVENUE. Earn Net Revenue for each quarter of each Fiscal
Year of not less than $5,000,000.
ss.6.4 LOSSES. Not permit its Net Income to be less than zero for any
two consecutive quarters of any Fiscal Year.
Borrower's compliance or non-compliance with the covenants in ss.6
shall be tested quarterly using the statements described in ss.7.1(a).
ss.7. INFORMATION.
ss.7.1 FINANCIAL STATEMENTS AND INFORMATION TO BE FURNISHED. Until the
Agreement Termination Date, Borrower shall deliver to Bank:
(a) QUARTERLY FINANCIAL STATEMENTS OF BORROWER; OFFICER'S CERTIFICATE.
As soon as available and in any event within 50 days after the end of each of
the first three quarters of each Fiscal Year, (i) a balance sheet of Borrower as
at the end of such quarter, and the related statements of income and cash flows
for such quarter and for the period from the beginning of the then current
Fiscal Year through the end of such quarter, and accompanied by a certificate of
an Authorized Representative to the effect that such financial statements
present fairly the financial position of Borrower as of the end of such fiscal
period and the results of its operations and the changes in financial position
for such fiscal period, in conformity with the standards set forth in ss.7.2(b)
with respect to interim financial statements, and (ii) a certificate of an
Authorized Representative containing computations for such quarter comparable to
that required pursuant to ss.7.1(b)(ii).
(b) YEAR-END STATEMENT OF BORROWER; ACCOUNTANTS' AND OFFICER'S
CERTIFICATES. As soon as available and in any event within 100 days after the
end of each Fiscal Year, (i) balance sheet of Borrower as at the end of each
Fiscal Year, and the notes thereto, and the related statement of income,
shareholders' equity and cash flow, and the respective notes thereto, for such
Fiscal Year, setting forth comparative financial statements for the preceding
Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the financial statements, opinions of Deloitte &
Touche LLP or other such independent certified public accountants of national
standing selected by Borrower and reasonably acceptable to Bank, which are
unqualified as to the scope of the audit performed and as to the "going concern"
status of Borrower and without any exception not reasonably acceptable to Bank,
and (ii) a certificate signed by an Authorized Representative and demonstrating
compliance with ss.ss.6.1, 6.2, 6.3 and 6.4.
(c) YEAR-END STATEMENT OF NOVOGYNE JOINT VENTURE; ACCOUNTANTS' AND
OFFICER'S CERTIFICATES. As soon as available and in any event within 100 days
after the end
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of each fiscal year, a balance sheet of the Novogyne Joint Venture as at the end
of each fiscal year, and the notes thereto, and the related statement of income,
shareholders' equity and cash flow, and the respective notes thereto, for such
fiscal year, setting forth comparative financial statements for the preceding
fiscal year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the financial statements, opinions of
PricewaterhouseCoopers LLP or other such independent certified public
accountants of national standing selected by the Novogyne Joint Venture, which
are unqualified as to the scope of the audit performed and as to the "going
concern" status of the Novogyne Joint Venture and without any exception not
acceptable to Bank in its reasonable discretion.
(d) SEC MATERIALS; MANAGEMENT LETTERS. Promptly upon their becoming
available to Borrower, a copy of (i) all Form 10-Qs, 10-Ks and other regular or
special reports or effective registration statements which Borrower shall file
with the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) any proxy statement distributed by Borrower or any
Subsidiary to its shareholders, bondholders or the financial community in
general, and (iii) any management letters submitted to Borrower by independent
accountants in connection with the annual audit of Borrower.
(e) ADDITIONAL MATERIALS.
(i) Promptly upon the sending thereof, copies of all notices,
reports and other communications from Borrower to any of its shareholders or
securities holders generally;
(ii) Promptly upon Borrower's becoming aware thereof, notice
of each federal statutory Lien, tax or other state or local government Lien or
other Lien (other than the Security Interests or Permitted Liens) filed against
the property of Borrower or the Novogyne Joint Venture;
(iii) Within 15 Business Days after the beginning of every
quarter of each Fiscal Year, a report of Borrower's receivable agings certified
by an Authorized Representative;
(iv) Within 15 Business Days after the beginning of every
quarter of each Fiscal Year, a schedule of Borrower's inventory certified by an
authorized officer of Borrower and indicating, with respect to any such
inventory, the location thereof;
(v) Within 15 Business Days after the beginning of every
quarter of each Fiscal Year (or, if Bank so requests, on a more frequent basis),
a Borrowing Base Certificate reflecting Eligible Accounts Amount as of the
beginning of such quarter;
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(vi) From time to time and within a reasonable time after
Bank's request, such data, certificates, reports, statements, documents or
further information regarding this Agreement, any other Credit Document, any
Advance, any Collateral or any other transaction contemplated hereby, or the
business, assets, liabilities, financial condition, results of operations or
business prospects of Borrower or, to the extent available to Borrower using its
best efforts to obtain same in any case in which it is legally entitled to do
so, the Novogyne Joint Venture, as Bank may reasonably request, in each case in
form and substance, with a degree of detail, and certified in a manner,
reasonably satisfactory to Bank.
(f) NOTICE OF DEFAULTS, LITIGATION AND OTHER MATTERS. Promptly after
any Authorized Representative of Borrower obtains knowledge thereof, notice of:
(i) any Default; (ii) the commencement of any action, suit or proceeding or
investigation in any court or before any arbitrator of any kind or by or before
any Governmental Authority or non-governmental body against or in any other way
relating adversely to or materially adversely affecting (A) Borrower, the
Novogyne Joint Venture or any of their respective businesses or properties,
that, if adversely determined, (1) singly would result in liability more than
$500,000.00 (whether or not covered by insurance) or (2) in the aggregate for
Borrower and the Novogyne Joint Venture would result in liability more than
$1,000,000.00 (whether or not covered by insurance) or (3) otherwise would,
singly or in the aggregate, have a Material Adverse Effect, or (B) in any
material way this Agreement or the other Credit Documents or any transaction
contemplated hereby or thereby; (iii) any amendment of the articles of
incorporation or bylaws of Borrower or of the Novogyne Joint Venture Agreement;
and (iv) any significant material adverse development in any lawsuits described
in Schedule 4.7.
ss.7.2 ACCURACY OF FINANCIAL STATEMENTS AND INFORMATION.
(a) HISTORICAL FINANCIAL STATEMENTS. Borrower hereby represents and
warrants to Bank: (i) that the financial statements heretofore furnished to Bank
and listed in Schedule 7.2(a), are complete and correct and present fairly in
all material respects, in accordance with GAAP applied on a Consistent Basis
throughout the periods involved, the financial position of Borrower as at their
respective dates and the results of operations, retained earnings and, as
applicable, the changes in financial position or cash flows of Borrower for the
respective periods to which such statements relate, and (ii) that, except as
disclosed or reflected in such financial statements, Borrower has no
liabilities, contingent or otherwise, nor any unrealized or anticipated losses
as of the respective date(s) of such financial statements and required to be
included in such financial statements, that, singly or in the aggregate, have
had or are likely to have a Material Adverse Effect.
(b) FUTURE FINANCIAL STATEMENTS. All financial statements delivered
pursuant to ss.7.1, shall be complete and correct and present fairly in all
material respects, in accordance with GAAP applied on a Consistent Basis, the
financial position of Borrower
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or the Novogyne Joint Venture (as the case may be), as at their respective dates
and the results of operations, retained earnings, and cash flows of Borrower or
the Novogyne Joint Venture (as the case may be) for the respective periods to
which such statements relate, and their furnishing Bank shall constitute a
Representation and Warranty by Borrower made on the date they are furnished to
Bank to that effect and to the further effect that, except as disclosed or
reflected in such financial statements, as at the respective dates thereof,
Borrower, to Borrower's knowledge, had no liability, contingent or otherwise,
nor any unrealized or anticipated loss as of the respective date(s) of such
financial statements and required to be included in such financial statements,
that, singly or in aggregate, has had or is likely to have a Material Adverse
Effect.
(c) HISTORICAL INFORMATION. Borrower hereby represents and warrants to
Bank that all Information furnished to Bank in writing by or at the direction of
Borrower or, to Borrower's knowledge, the Novogyne Joint Venture prior to the
Agreement Date in connection with or pursuant to this Agreement and the
relationship established hereunder, at the time it was so furnished, but in the
case of Information dated as of a prior date, as of such date, (i) in the case
of any such prepared in the ordinary course of business, was complete and
correct in all material respects in the light of the purpose prepared, and, in
the case of any such the preparation of which was requested by Bank, was
complete and correct in all material respects to the extent necessary to give
Bank true and accurate knowledge of the subject matter thereof, (ii) did not
contain any untrue statement of a material fact, and (iii) did not omit to state
a material fact necessary in order to make the statements contained therein not
misleading in the light of the circumstances under which they were made;
provided, however, Borrower represents and warrants that all plans, projections
and forecasts of future events or future financial results were prepared to the
best of Borrower's knowledge, but does not represent or warrant the achievement
of the future results or the occurrence of the future events.
(d) FUTURE INFORMATION. All Information furnished to Bank in writing by
or at the direction of Borrower or, to Borrower's knowledge, the Novogyne Joint
Venture, on and after the Agreement Date in connection with or pursuant to this
Agreement or in connection with or pursuant to any amendment or modification of,
or waiver under, this Agreement, shall, at the time it is so furnished, but in
the case of Information dated as of a prior date, as of such date, (i) in the
case of any such prepared in the ordinary course of business, be complete and
correct in all material respects in the light of the purpose prepared, and, in
the case of any such required by the terms of this Agreement or the preparation
of which was requested by Bank, be complete and correct in all material respects
to the extent necessary to give Bank true and accurate knowledge of the subject
matter thereof, (ii) not contain any untrue statement of a material fact, and
(iii) not omit to state a material fact necessary in order to make the
statements contained therein not misleading, and the furnishing of them to Bank
shall constitute a Representation and Warranty by Borrower made on the date they
are furnished to Bank to the effect specified in clauses (a), (b) and (c);
provided, however, Borrower represents and warrants that all plans, projections
and
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forecasts of future events or future financial results were prepared to the best
of Borrower's knowledge, but does not represent or warrant the achievement of
the future results or the occurrence of the future events.
ss.7.3 ADDITIONAL AGREEMENTS RELATING TO DISCLOSURE. From the Agreement
Date until the Agreement Termination Date, Borrower shall:
(a) ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete), as may be required or necessary to permit (i) the preparation of
financial statements required to be delivered pursuant to ss.7.1 and (ii) the
determination of Borrower's compliance with the terms of this Agreement and the
other Credit Documents.
(b) VISITS AND INSPECTIONS. Permit (and use its best efforts to cause
the Novogyne Joint Venture to permit to the extent it is legally entitled to
require the Novogyne Joint Venture to do so) representatives (whether or not
officers or employees) of Bank, from time to time during normal business hours,
and as often as may be reasonably requested, to (i) visit and, upon reasonable
prior notice, inspect any properties of Borrower, (ii) inspect and make extracts
from the books and records (including but not limited to management letters
prepared by Borrower's independent accountants) and customer lists of Borrower,
(iii) discuss with principal officers of Borrower and the independent
accountants of each the businesses, assets, liabilities, financial conditions,
results of operations and business prospects of Borrower and the Novogyne Joint
Venture and (iv) inspect the Collateral and the premises upon which any of the
Collateral is located, and verify the amount, quality, quantity, value and
condition of, or any other matter relating to, the Collateral. If any of the
Collateral is under the exclusive control of any third party, Borrower shall in
good faith endeavor to cause such third parties to make the foregoing inspection
rights available to Bank.
ss. 8. DEFAULT.
ss.8.1 EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it is voluntary
or involuntary, or within or without the control of Borrower, or is effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any Governmental Authority or quasi-governmental body:
(a) Borrower shall fail to pay (i) any amount required to reduce the
total Advances to the Facility Limit within 5 days following written demand
therefor from Bank to Borrower or (ii), except as provided in clause (i), any
amount in respect of principal of or interest on an Advance when and as due
(whether at maturity, by reason of notice of prepayment, acceleration or
otherwise) in accordance with the terms of this Agreement and the Note; or
Borrower shall fail to pay within 5 days following written demand therefor from
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Bank to Borrower any amount owing under this Agreement or any other Credit
Document in respect of fees, commissions or other charges (other than interest
on Advances) when and as due (whether as stated, by reason of notice of
prepayment or acceleration or otherwise) in accordance with the terms of this
Agreement or such other Credit Document; or
(b) Any Representation and Warranty shall at any time prove to have
been incorrect or misleading in any material respect when made; or
(c) Borrower shall default in the performance or observance of any
term, covenant, condition or agreement contained in this Agreement (other than a
default described in ss.8.1(a)) and, if the default is of a term, covenant,
condition or agreement other than one contained in ss.5 or ss.ss.6.3 and 6.4,
such default shall remain uncured for a period of 20 days after notice thereof
to Borrower from Bank; or
(d) Borrower shall fail to pay, in accordance with its terms and when
due and payable, after giving effect to any notice, cure or grace periods, the
principal of or interest on any Debt in an aggregate principal amount in excess
of $500,000 (other than the Obligations), or the maturity of any such Debt, in
whole or in part, shall have been accelerated, or any such Debt, in whole or in
part, shall have been required to be prepaid prior to the stated maturity
thereof, in accordance with the provisions of any Contract evidencing, providing
for the creation of or concerning such Debt or, if any event shall have occurred
and be continuing that would permit any holder or holders of such Debt, any
trustee or agent acting on behalf of such holder or holders or any other Person
so to accelerate such maturity or require any such prepayment and such holder or
holders shall have accelerated such Debt or required such prepayment; or
(e) (i) Borrower or the Novogyne Joint Venture shall (A) commence a
voluntary case under the Federal bankruptcy laws (as now or hereafter in effect)
or under any other bankruptcy or insolvency law of any jurisdiction, (B) file a
petition seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, (C) consent to, or fail to contest in a timely and
appropriate manner, any petition filed against it in an involuntary case under
such bankruptcy laws or other laws, (D) apply for, or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of a
substantial part of its assets, domestic or foreign, (E) admit in writing its
inability to pay, or generally not be paying, its debts (other than those that
are the subject of bona fide disputes) as they become due, (F) make a general
assignment for the benefit of creditors, or (G) take any corporate action for
the purpose of effecting any of the foregoing; or
(ii) A case or other proceeding shall be commenced against Borrower
or the Novogyne Joint Venture in any court of competent jurisdiction seeking (A)
relief
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under the Federal bankruptcy laws (as now or hereafter in effect) or under any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts, or (B) the appointment of a
trustee, receiver, custodian, liquidator or the like of Borrower or the Novogyne
Joint Venture of all or any substantial part of the assets, domestic or foreign,
of Borrower or the Novogyne Joint Venture or, and, in each case, such case or
proceeding shall continue undismissed or unstayed for a period of 60 days, or an
order granting the relief requested in such case or proceeding against Borrower
or the Novogyne Joint Venture (including, but not limited to, an order for
relief under such Federal bankruptcy laws) shall be entered; or
(f) (i) A judgment or order for the payment of money in an amount that
(A) individually, exceeds by $500,000.00 or (B) when aggregated with all other
unpaid judgments outstanding against Borrower, exceeds by $1,000,000.00, the
amount of insurance coverage applicable thereto shall be entered against
Borrower or the Novogyne Joint Venture by any court and (ii) either (A) such
judgment or order shall continue undischarged and/or unbonded or unstayed for a
period of 60 days or (B) enforcement proceedings shall have been commenced upon
such judgment or order; or
(g) Any Security Interest shall fail or cease to be fully perfected,
enforceable in accordance with its terms, and prior to the rights of all third
parties (except for the Permitted Liens) or any loss, theft, damage or
destruction of any item or items of Collateral occurs which either (i) has or is
reasonably likely to have a Material Adverse Effect or (ii) materially and
adversely affects the operation of Borrower's business and is not covered by
insurance as required therein; or
(h) Any material provision of any Credit Document, or any portion of
any obligation for the payment of money under any Credit Document, shall fail or
cease to be in full force and effect, or Borrower shall make any written
statement or bring any action challenging the enforceability or binding effect
of any of the Credit Documents or any of the Security Interests; or
(i) The dissolution of Borrower or the Novogyne Joint Venture shall
occur; or
(j) Any Change of Control or Change of Management shall occur; or
(k) Borrower, any Subsidiary or the Novogyne Joint Venture shall engage
in any significant conduct or activity that constitutes a felony (or the
equivalent thereof under Applicable Law); or
(l) All or a substantial part of the property of Borrower shall be
nationalized, expropriated, seized or otherwise appropriated, or custody or
control of such property or of Borrower shall be assumed by any Governmental
Authority or any court of competent jurisdiction at the instance of any
Governmental Authority and the same has or is
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reasonably likely to have a Material Adverse Effect, unless the same is being
contested in good faith by proper proceedings diligently pursued and a stay of
enforcement is in effect; or
(m) Borrower shall breach any of the material terms or conditions of
any agreement under which any Rate Hedging Obligation is created and such breach
continues beyond any applicable grace period, or any action is taken by Borrower
to discontinue (except with the consent of Bank if it is a counterparty to such
agreement) or assert the invalidity or unenforceability of any such agreement or
Rate Hedging Obligation.
ss.8.2 REMEDIES. (a) If and at any time after a Default occurs, Bank's
obligation to make AdvanceS hereunder shall, at Bank's sole option, be
suspended; provided, however, if Borrower cures such event or condition to
Bank's satisfaction prior to its becoming an Event of Default, such obligation
shall be reinstated. Upon the occurrence of an Event of Default, Bank's
obligation to make Advances hereunder shall, at Bank's option, terminate.
(b) If and at any time after an Event of Default occurs, Bank may, at
its sole option, declare the principal of all outstanding Advances, all interest
thereon and all other Obligations to be forthwith due and payable, whereupon all
such principal, interest and other Obligations shall become and be forthwith due
and payable, without presentment, demand, protest, notice of nonpayment or other
notice of any kind, all of which are hereby expressly waived by Borrower;
provided, however that upon the occurrence of an Event of Default described in
ss.8.1(e), the principal of all outstanding Advances, all interest thereon and
all other Obligations shall automatically become and be immediately due and
payable in full.
ss.8.3 NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of Bank
to exercise, and no delay iN exercising, any right under any Credit Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right under any Credit Document preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided in the Credit
Documents are cumulative and not exclusive of any remedies provided by
Applicable Law or the other Credit Documents.
ss.9. MISCELLANEOUS.
ss.9.l AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or other Credit Document, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the amendment or waiver is in
writing and signed by Bank and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
ss.9.2 COSTS, EXPENSES AND CERTAIN TAXES. Borrower shall pay (or, if
already paid by Bank, shall reimburse Bank for) on demand all reasonable costs
and expenses in
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connection with the negotiation, preparation, execution, delivery, filing,
recording, administration and enforcement of the Credit Documents and any other
documents to be delivered under the Credit Documents (including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for Bank)
with respect thereto and with respect to advising Bank as to its rights and
responsibilities under the Credit Documents after an Event of Default, and all
costs and expenses (including reasonable counsel fees and expenses, including
those incurred at the appellate level and in any bankruptcy proceedings) in
connection with the enforcement of any of the Credit Documents and any other
documents to be delivered thereunder or any restructuring or amendment thereof.
Without limiting the generality of the foregoing, Borrower shall, upon demand,
pay Bank a reasonable fee for the audit of its inventory, accounts or records
performed by an employee of Bank and reimburse Bank for the cost of any such
audit performed by a firm or person other than an employee of Bank; provided
that, as long as no Event of Default has occurred within that period, Borrower
shall not be required to pay the cost of any such audits conducted more than
once in each consecutive twelve month period. In addition, Borrower shall pay on
demand any and all documentary stamp, intangible and other taxes, fees,
surcharges and other amounts payable or determined to be payable to any
government or governmental subdivision, agency, agent, officer or
instrumentality in connection with any of the Credit Documents, including the
execution, delivery, filing or recording thereof, any other documents to be
delivered thereunder or any Advances, and agrees to hold Bank harmless from and
against any and all liabilities (including any interest and penalties) with
respect to or resulting from any delay in paying or omission to pay such taxes,
fees, surcharges and other amounts. Borrower shall pay Bank on the Agreement
Date (in addition to the other items listed on any Closing Costs Statement or
the like executed in conjunction herewith) any cost previously incurred by Bank
(not to exceed $1,500) in auditing the Collateral. Borrower hereby authorizes
Bank to deduct from the proceeds of any Advance disbursed the amount of any
costs and expenses then owing pursuant to this ss.9.2 and to deduct any such
amount from any account of Borrower with Bank.
ss.9.3 CERTAIN COLLATERAL. As security for all Obligations, Borrower
hereby grants Bank a continuing lien on and security interest in all deposit
accounts (whether now existing or hereafter established) of Borrower with Bank
or any affiliate thereof and all other property of Borrower that is now or
hereafter owed by or in the possession or control of any branch or affiliate of
Bank. At any time after an Event of Default, Bank may set off and apply any such
deposit accounts against any and all obligations of Borrower under the Credit
Documents, irrespective of whether or not Bank shall have made demand under any
Credit Document and although such obligations may be unmatured. Bank shall
endeavor to promptly notify Borrower after any such setoff has been made but
shall not be liable to Borrower for failing to do so.
ss.9.4 NO JOINT VENTURE. Nothing contained in any Credit Document shall
be deemed or construed by the parties hereto or by any third person to create
the relationship
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of principal and agent or of partnership or joint venture or of any association
between Bank and Borrower other than the relationship of creditor and debtor.
ss.9.5 SURVIVAL. All covenants, agreements and Representations and
Warranties made by Borrower in thiS Agreement shall, notwithstanding any
investigation by Bank, be deemed material and have been relied upon by Bank and
shall survive the execution and delivery to Bank of this Agreement.
ss.9.6 FURTHER ASSURANCES; POWER OF ATTORNEY. Borrower shall, upon the
request of Bank, execute and deliver such further documents and do such further
acts as Bank may reasonably request in order to fully effectuate the purposes of
any Credit Document. In addition, without limiting the generality of the
foregoing, Borrower shall promptly do whatever Bank requests to cure any error
(including any omission) in any of the Credit Documents.
ss.9.7 SOVEREIGN IMMUNITY; GOVERNMENT INTERFERENCE. To the extent that
Borrower has or hereafter maY acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
in aid of execution, attachment prior to judgment, execution or otherwise) with
respect to itself or its property, Borrower hereby irrevocably waives such
immunity in respect of its obligations hereunder or any other Credit Documents.
In addition, Borrower hereby irrevocably waives, as a defense to any action
arising out of or relating hereto, the interference of any administrative or
governmental authority of the jurisdiction(s) in which Borrower is domiciled or
the impossibility of performance resulting from any law or regulation, or from
any change in the law or regulations, of such jurisdiction(s).
ss.9.8 ASSIGNMENT. This Agreement may not be assigned by Borrower
without Bank's prior written consent and any such assignment or attempted
assignment without such prior written consent shall be null and void. Bank, with
Borrower's consent (which shall not be unreasonably withheld or delayed and
shall be deemed given if not denied within five Business Days after Bank's
request therefor) if the assignee or participant is not affiliated with Bank
(but otherwise with no need for such consent), may assign to any commercial
financial institution in whole or in part, and may issue participating interests
to any commercial financial institution in and to, this Agreement, any other
Credit Document and any Advances and, in connection therewith, may make whatever
disclosures regarding Borrower, any Subsidiary, the Novogyne Joint Venture or
any Collateral it considers desirable, provided that any such proposed assignee
shall agree to preserve the confidentiality of such information pursuant to a
written agreement reasonably acceptable to Borrower or standard in the industry.
This Agreement shall be binding upon Bank's and Borrower's respective successors
and assigns and shall inure to the benefit of Bank's and Borrower's respective
successors and assigns. With respect to Borrower's successors and assigns, such
successors and assigns shall include any receiver, trustee or
debtor-in-possession of or for Borrower.
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ss.9.9 NOTICES. All notices, requests, approvals, consents and other
communications provided for hereunder shall be in writing and mailed, telefaxed
or hand-delivered, if to Borrower, at its address at 00000 X.X. 000xx Xxxxxx,
Xxxxx, Xxxxxxx 00000, Attention: Chief Financial Officer, Telefax No. (305)
251-1887, with a copy to Borrower's in-house General Counsel, at the same
address and with Telefax No. (000) 000-0000; and if, to Bank, at its address at
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxxx X.
Xxxxxx, Senior Vice President, Telefax No. (000) 000-0000; or, as to each party,
at such other address as shall be designated by such party in a written notice
to the other party. All such communications shall, when telefaxed or
hand-delivered, be effective when received and, when mailed, be effective when
deposited in the mails postage prepaid, addressed as aforesaid except that
mailed notices to Bank shall not be effective unless and until received by Bank.
ss.9.10 TAXES. All payments provided for herein or in any other Credit
Documents shall be made free and clear of any deductions for any present or
future Taxes. If any Taxes are imposed or required to be withheld from any
payment, Borrower shall (a) increase the amount of such payment so that Bank
will receive a net amount (after deduction of all Taxes) equal to the amount due
hereunder and (b) promptly pay all Taxes to the appropriate taxing authority for
the account of Bank and, as promptly as possible thereafter, send Bank an
original receipt showing payment thereof, together with such additional
documentary evidence as Bank may from time to time reasonably require. Borrower
shall indemnify Bank from and against any and all Taxes (irrespective of when
imposed) and any related interest and penalties that may become payable by Bank
as a consequence of Borrower's failure to perform any of its obligations under
the preceding sentence.
ss.9.11 CURRENCY. Any obligation of Borrower under this Agreement or
the Note to make payments in United States Dollars shall not be discharged or
satisfied by any tender or recovery, whether pursuant to any judgment or
otherwise, expressed in or converted into any other currency except to the
extent that such tender or recovery results in the effective receipt by Bank of
the full amount of United States Dollars payable to it, and Borrower shall
indemnify Bank (and Bank shall have an additional legal claim against Borrower)
for any difference between such full amount and the amount effectively received
by Bank pursuant to any such tender or recovery. In the absence of manifest
error, Bank's determination of amounts effectively received by it shall be
conclusive.
ss.9.12 USURY SAVINGS CLAUSE. Should any interest or other charges paid
hereunder result in the computation or earning of interest in excess of the
maximum rate or amount of interest permitted by Applicable Law, such excess
interest and charges shall be (and the same hereby are) waived by Bank, and the
amount of such excess shall be automatically credited against, and be deemed to
have been payments in reduction of, the principal then due hereunder, and any
portion of such excess which exceeds the principal then due hereunder shall be
paid by Bank to Borrower.
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ss.9.13 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, U.S.A., without
regard to any conflicts-of-law rule or principle that would give effect to the
law of another jurisdiction.
ss.9.14 JURISDICTION. Borrower hereby irrevocably agrees that any
action or proceeding relating to any Credit Document that is brought by Borrower
shall be tried by the courts of the State of Florida sitting in Miami-Dade
County, Florida, U.S.A. or the United States district courts sitting there.
Borrower hereby irrevocably submits, in any such action or proceeding that is
brought by Bank, to the non-exclusive jurisdiction of each such court,
irrevocably waives the defense of an inconvenient forum with respect to any such
action or proceeding, and agrees that service of process in any such action or
proceeding may be made upon Borrower by mailing a copy thereof by registered
mail to Borrower at Borrower's address specified in ss.9.9 (as well as by any
other lawful method). Borrower shall appoint and maintain at all times (in a
manner satisfactory to Bank) an agent that is domiciled in Miami-Dade County,
Florida and is acceptable to Bank to receive service of process in any such
action or proceeding on Borrower's behalf.
ss.9.15 ILLEGALITY. Bank shall have no obligation to make any Advance
if its doing so would or might violate any Applicable Law.
ss.9.16 APPROVALS AND CONSENTS. Bank may grant or deny any approval or
consent contemplated hereby in its sole and absolute discretion, except as
otherwise provided herein.
ss.9.17 NO REPRESENTATIONS REGARDING RENEWAL, ETC. Borrower
acknowledges that Bank has not agreed with or represented to Borrower that the
facility created hereby will be renewed or extended past the Commitment
Termination Date or that any Advances will be made after the Commitment
Termination Date.
ss.9.18 NO THIRD-PARTY RELIANCE. This Agreement is solely for the
benefit of Bank and Borrower and may not be relied on by any third party.
ss.9.19 INDEMNIFICATION; LIMITATION OF LIABILITY. Borrower shall
indemnify and hold harmless Bank and each of its affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities, costs
and expenses (including without limitation reasonable attorneys' fees) that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including without
limitation in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith) the Credit Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of any Advance or the
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manufacture, storage, transportation, release or disposal of any Hazardous
Material on, from, over or affecting any of the Collateral or any of the assets,
properties or operations of Borrower, any Subsidiary or any predecessor in
interest, directly or indirectly, except to the extent such claim, damage, loss,
liability, cost or expense results from such Indemnified Party's gross
negligence or willful misconduct or willful breach of this Agreement. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this ss.9.19 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by Borrower, its directors,
shareholders or creditors or an Indemnified Party or any other Person or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. Borrower hereby waives and
agrees not to assert any claim against Bank, any of its affiliates, or any of
their respective directors, officers, employees, attorneys, agents and advisers,
on any theory of liability, for special, indirect, consequential, or punitive
damages arising out of or otherwise relating to the Credit Documents, any of the
transactions contemplated herein or therein or the actual or proposed use of the
proceeds of any Advance. To the extent that any of the indemnities required from
Borrower under this ss.9.19 are unenforceable because they violate any
Applicable Law or public policy, Borrower shall pay the maximum amount which it
is permitted to pay under Applicable Law.
ss.9.20 CONFIDENTIALITY. Borrower may have furnished and may in the
future furnish to Bank certain information concerning Borrower and/or the
Novogyne Joint Venture which Borrower has or will have advised Bank in writing
is non-public, proprietary or confidential in nature ("Confidential
Information"). Bank confirms to Borrower that it is Bank's policy and practice
to maintain in confidence all Confidential Information which is provided to it
under agreements providing for the extension of credit and which is identified
to it as confidential, and that it will protect the confidentiality of
Confidential Information submitted to it with respect to Borrower under this
Agreement; provided, however, that (i) nothing contained herein shall prevent
Bank or any assignee or participant from disclosing Confidential Information: A)
to its Affiliates and their respective directors, officers and employees and to
any legal counsel, auditors, appraisers, consultants or other persons retained
by it or its Affiliates as professional advisors, on the condition that such
information not be further disclosed except in compliance with this ss.9.20; B)
under color of legal authority, including, without limitation, to any regulatory
authority having jurisdiction over it or its operations or to or under the
authority of any court deemed by it to be competent jurisdiction and C) to any
actual or potential assignee of or participant in Bank's or such assignee's
rights and obligations under this Agreement to the extent such actual or
potential assignee or participant has agreed to maintain such information in
confidence on the basis set forth in this ss.9.20 and ii) the terms of this
ss.9.20 shall be inapplicable to any information furnished to it which is in its
possession prior to the delivery to it of such information by Borrower, or
otherwise has been obtained by it on a non-confidential basis, or which was or
becomes available to the public or otherwise part of the public domain (other
than as a result of Bank's failure or any prospective participant's or
assignee's failure to abide hereby), or which was not non-public, proprietary or
confidential when Borrower delivered it to Bank or any assignee.
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ss.9.21 JURY TRIAL WAIVER. BORROWER AND BANK HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHT THEY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS,
CROSS CLAIMS OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS TO WHICH EITHER IS A PARTY.
BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK NOR BANK'S
COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT, IN THE
EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. BORROWER ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN
A MATERIAL INDUCEMENT TO BANK TO ENTER INTO THIS AGREEMENT AND TO MAKE ADVANCES
HEREUNDER.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
hereof.
Witnessed by: NOVEN PHARMACEUTICALS, INC.
/s/ Xxx X'Xxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- -----------------------------
Captain Xxx X'Xxxx Name: Xxxxx X. Xxxxxxx
----------------------------- ------------------------
Title: Vice President and Chief
----------------------------- ------------------------
Financial Officer
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SUNTRUST BANK
/s/ Xxxxx X'Xxxx By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------- -----------------------------
Xxxxx X'Xxxx Name: Xxxxxxxx X. Xxxxxx
----------------------------- ------------------------
Title: Senior Vice President
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