EXHIBIT 4.1
CREDIT AGREEMENT
among
FIRST HORIZON PHARMACEUTICAL CORPORATION,
VARIOUS LENDERS,
and
LASALLE BANK NATIONAL ASSOCIATION,
as ADMINISTRATIVE AGENT
------------------------------
Dated as of February 11, 2003
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TABLE OF CONTENTS
PAGE
SECTION 1. Amount and Terms of Credit...................................1
1.1. The Commitment...............................................1
1.2. Minimum Amount of Each Borrowing.............................1
1.3. Notice of Borrowing..........................................1
1.4. Disbursement of Funds........................................2
1.5. Notes........................................................3
1.6. Conversions..................................................4
1.7. Pro Rata Borrowings..........................................4
1.8. Interest.....................................................4
1.9. Interest Periods.............................................5
1.10. Increased Costs, Illegality, etc.............................6
1.11. Compensation.................................................8
1.12. Change of Lending Office.....................................8
1.13. Replacement of Lenders.......................................9
SECTION 2. Letters of Credit...........................................10
2.1. Letters of Credit...........................................10
2.2. Maximum Letter of Credit Outstandings; Final Maturities.....10
2.3. Letter of Credit Requests; Minimum Stated Amount............11
2.4. Letter of Credit Participations.............................12
2.5. Agreement to Repay Letter of Credit Drawings................14
2.6. Increased Costs.............................................14
SECTION 3. Fees; Reductions of Commitment..............................15
3.1. Fees........................................................15
3.2. Voluntary Termination of Unutilized Loan Commitment.........16
3.3. Mandatory Reduction of Commitment...........................17
SECTION 4. Prepayments; Payments; Taxes................................17
4.1. Voluntary Prepayments.......................................17
4.2. Mandatory Repayments........................................18
4.3. Method and Place of Payment.................................21
4.4. Net Payments................................................21
SECTION 5. Conditions Precedent to Credit Events on the Initial
Borrowing Date..............................................23
5.1. Effective Date; Notes.......................................23
5.2. Officer's Certificate.......................................23
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(continued)
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5.3. Opinions of Counsel.........................................23
5.4. Corporate Documents; Proceedings; etc.......................23
5.5. Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Employment Agreements;
Non-Compete Agreements; Collective Bargaining
Agreements; Tax Sharing Agreements; Existing
Indebtedness Agreements...................................24
5.6. Adverse Change; Approvals...................................25
5.7. Litigation..................................................26
5.8. Subsidiaries Guaranty.......................................26
5.9. Security Agreement..........................................26
5.10. Pledge Agreement............................................26
5.11. Business....................................................26
5.12. Corporate and Capital Structure.............................27
5.13. Insurance Certificates......................................27
5.14. Fees, etc...................................................27
5.15. Borrowing Base..............................................27
5.16. Releases....................................................27
5.17. Master Letter of Credit Agreement...........................27
SECTION 6. Conditions Precedent to All Credit Events...................27
6.1. Default; Representations and Warranties.....................27
6.2. Notice of Borrowing; Letter of Credit Request...............28
SECTION 7. Representations, Warranties and Agreements..................28
7.1. Organizational Status.......................................28
7.2. Power and Authority.........................................29
7.3. No Violation................................................29
7.4. Approvals...................................................29
7.5. Financial Statements; Financial Condition;
Undisclosed Liabilities..................................29
7.6. Litigation..................................................31
7.7. True and Complete Disclosure................................31
7.8. Use of Proceeds; Margin Regulations.........................31
7.9. Tax Returns and Payments....................................31
7.10. Compliance with ERISA.......................................32
7.11. The Security Documents......................................33
7.12. Properties..................................................33
7.13. Capitalization..............................................33
7.14. Subsidiaries................................................34
7.15. Compliance with Statutes, etc...............................34
7.16. Investment Company Act......................................34
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TABLE OF CONTENTS
(continued)
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7.17. Public Utility Holdings Company Act.........................34
7.18. Environmental Matters.......................................34
7.19. Labor Relations.............................................35
7.20. Intellectual Property, etc..................................35
7.21. Indebtedness................................................35
7.22. Insurance...................................................35
7.23. Representations and Warranties in Other Documents...........36
7.24. Legal Names; Type of Organization (and Whether
a Registered Organization); Jurisdiction of
Organization, etc. .......................................36
SECTION 8. Affirmative Covenants.......................................36
8.1. Information Covenants.......................................36
8.2. Books, Records and Inspections; Annual Meetings.............39
8.3. Maintenance of Property; Insurance..........................40
8.4. Existence; Franchises.......................................41
8.5. Compliance with Statutes, etc...............................41
8.6. Compliance with Environmental Laws..........................41
8.7. ERISA.......................................................42
8.8. End of Fiscal Years; Fiscal Quarters........................43
8.9. Performance of Obligations..................................43
8.10. Payment of Taxes............................................44
8.11. Use of Proceeds.............................................44
8.12. Additional Security; Further Assurances, etc................44
8.13. Ownership of Subsidiaries; etc..............................45
8.14. Corporate Separateness......................................45
8.15. Landlord Waivers............................................45
8.16. Pledge Agreement Collateral.................................45
SECTION 9. Negative Covenants..........................................46
9.1. Liens.......................................................46
9.2. Consolidation, Merger, Purchase or Sale of Assets, etc......48
9.3. Dividends...................................................49
9.4. Indebtedness................................................49
9.5. Advances, Investments and Loans.............................50
9.6. Transactions with Affiliates................................51
9.7. Capital Expenditures........................................51
9.8. Consolidated Interest Coverage Ratio........................51
9.9. Minimum Consolidated EBITDA.................................51
9.10. Leverage Ratio..............................................52
9.11. Fixed Charge Coverage Ratio.................................52
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TABLE OF CONTENTS
(continued)
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9.12. Modification of Certificate of Incorporation,
By-Laws and Certain Other Agreements, etc.................52
9.13. Limitation on Certain Restrictions on Subsidiaries..........53
9.14. Limitation on Issuance of Capital Stock.....................53
9.15. Business; etc...............................................53
9.16. Limitation on Creation of Subsidiaries......................54
9.17. Change of Legal Names; Type of Organization
(and Whether a Registered Organization; Jurisdiction of
Organization etc...........................................54
SECTION 10. Events of Default...........................................54
10.1. Payments....................................................54
10.2. Representations, etc........................................55
10.3. Covenants...................................................55
10.4. Default Under Other Agreements..............................55
10.5. Bankruptcy, etc.............................................55
10.6. ERISA.......................................................56
10.7. Security Documents..........................................56
10.8. Guaranties..................................................57
10.9. Judgments...................................................57
10.10. Change of Control...........................................57
10.11. Material Adverse Effect.....................................57
10.12. Approvals...................................................57
10.13. Licenses....................................................57
10.14. Supply Agreements...........................................57
10.15. First Horizon International Financing.......................57
SECTION 11. Definitions and Accounting Terms............................58
11.1. Defined Terms...............................................58
SECTION 12. The Administrative Agent....................................79
12.1. Appointment.................................................79
12.2. Nature of Duties............................................80
12.3. Lack of Reliance on the Administrative Agent................80
12.4. Certain Rights of the Administrative Agent..................80
12.5. Reliance....................................................81
12.6. Indemnification.............................................81
12.7. The Administrative Agent in its Individual Capacity.........81
12.8. Holders.....................................................81
12.9. Resignation by the Administrative Agent.....................82
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 13. Miscellaneous...............................................82
13.1. Payment of Expenses, etc....................................82
13.2. Right of Setoff.............................................84
13.3. Notices.....................................................84
13.4. Benefit of Agreement Assignments; Participations............84
13.5. No Waiver; Remedies Cumulative..............................86
13.6. Payments Pro Rata...........................................87
13.7. Calculations; Computations..................................87
13.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL......................................88
13.9. Counterparts................................................89
13.10. Effectiveness...............................................89
13.11. Headings Descriptive........................................89
13.12. Amendment or Waiver; etc....................................89
13.13. Survival....................................................91
13.14. Domicile of Loans...........................................91
13.15. Register....................................................91
13.16. Confidentiality.............................................91
13.17. Restructuring of Assets.....................................92
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SCHEDULE I Commitment
SCHEDULE II Lender Addresses
SCHEDULE III Real Property
SCHEDULE IV Plans
SCHEDULE V Subsidiaries
SCHEDULE VI Legal Names/Types of Organization
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
SCHEDULE XI Litigation
SCHEDULE XII Required Landlord Waivers
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Conversion/Continuation
EXHIBIT B Revolving Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.4(b)(ii) Certificate
EXHIBIT E Opinion of Xxxxx, Xxxxxx, XxxXxx & Xxxxxxxxxx, P.C.
EXHIBIT F Officers' Certificate
EXHIBIT G Borrowing Base Certificate
EXHIBIT H Security Agreement
EXHIBIT I Pledge Agreement
EXHIBIT J Compliance Certificate
EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L Subsidiaries Guaranty
EXHIBIT M Joinder Agreement
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CREDIT AGREEMENT, dated as of February __, 2003, among FIRST HORIZON
PHARMACEUTICAL CORPORATION, a Delaware corporation (the "Borrower"), the Lenders
party hereto from time to time and LASALLE BANK NATIONAL ASSOCIATION, as
Administrative Agent (in such capacity the "Administrative Agent"). All
capitalized terms used herein and defined in Section 11 are used herein as
therein defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions set forth herein the
Lenders are willing to make available to the Borrower the credit facility
provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.1. The Commitment. Subject to and upon the terms and conditions set forth
herein, each Lender with a Revolving Loan Commitment severally, but not jointly,
agrees to make, at any time and from time to time on or after the Initial
Borrowing Date and prior to the Revolving Loan Maturity Date, a revolving loan
or revolving loans (each a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrower, which Revolving Loans (i) shall be denominated in
Dollars, (ii) shall, at the option of the Borrower, be incurred and maintained
as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that,
except as otherwise specifically provided in Section 1.10(b), all Revolving
Loans comprising the same Borrowing shall at all times be of the same Type,
(iii) may be repaid and reborrowed in accordance with the provisions hereof, and
(iv) shall not exceed for any such Lender at any time outstanding that aggregate
principal amount which, when added to the product of (x) such Lender's RL
Percentage and (y) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time then outstanding, equals the lesser of the Revolving Loan
Commitment of such Lender at such time and such Lender's RL Percentage of the
Borrowing Base Amount.
1.2. Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of Loans shall not be less than the Minimum Borrowing Amount.
More than one Borrowing may occur on the same date, but at no time shall there
be outstanding more than five (5) Borrowings of Revolving Loans maintained as
Eurodollar Loans.
1.3. Notice of Borrowing.
(a) Whenever the Borrower, desires to incur (x) Eurodollar Loans
hereunder, it shall give the Administrative Agent at the Notice Office at least
three Business Days' prior notice of each Eurodollar Loan to be incurred
hereunder and (y) Base Rate Loans hereunder, it shall give the Administrative
Agent at the Notice Office at least one Business Day's prior notice of each Base
Rate Loan to be incurred hereunder, provided that (in each case) any such notice
shall be deemed to have been given on a certain day only if given before 12:00
Noon (Chicago time) on such day. Each such notice (each a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be in writing, or by telephone promptly confirmed in
writing, in the form of Exhibit A-1, appropriately completed to specify: (i) the
aggregate principal amount of the Loans to be incurred pursuant to such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day) and
(iii) whether the Loans being incurred pursuant to such Borrowing are to be
initially maintained as Base Rate Loans or, to the extent permitted hereunder
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto. The Administrative Agent shall promptly give each Lender
which is required to make Loans specified in the respective Notice of Borrowing,
notice of such proposed Borrowing, of such Lender's proportionate share thereof
and of the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Administrative Agent may act without liability upon the basis of
telephonic notice of such Borrowing or prepayment, as the case may be, believed
by the Administrative Agent in good faith to be from the President, the
Controller, the Chief Executive Officer, the Chief Financial Officer, the
Treasurer or any Assistant Treasurer of the Borrower, or from any other,
authorized officer of the Borrower designated in writing by the Borrower to the
Administrative Agent as being authorized to give such notices prior to receipt
of written confirmation. In each such case the Borrower hereby waives the right
to dispute the Administrative Agent's record of the terms of such telephonic
notice of such Borrowing or prepayment of Loans, as the case may be, absent
manifest error.
1.4. Disbursement of Funds. No later than 12:00 Noon (Chicago time) on the
date specified in each Notice of Borrowing, each Lender with a Commitment will
make available its pro rata portion (determined in accordance with Section 1.7)
of each such Borrowing requested to be made on such date. All such amounts will
be made available in Dollars and in immediately available funds at the Payment
Office, and the Administrative Agent will make available to the Borrower at the
Payment Office the aggregate of the amounts so made available by the Lenders.
Unless the Administrative Agent shall have been notified by any Lender prior to
the date of Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may (but shall not be obligated to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If the
Administrative Agent shall have made such corresponding amount available to the
Borrower, but such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower and
the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent also shall be entitled to recover
2
on demand from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower until the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Lender, the overnight Federal
Funds Rate for the first three days and at the interest rate otherwise
applicable to such Loans for each day thereafter and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.8. Nothing in this Section 1.4 shall be deemed
to relieve any Lender from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any failure by such Lender to make Loans hereunder.
1.5. Notes.
(a) The Borrower's obligation to pay the principal of, and interest on
the Loans made by each Lender shall be evidenced in the Register maintained by
the Administrative Agent pursuant to Section 13.15 and shall, if requested by
such Lender, also be evidenced by a promissory note duly executed and delivered
by the Borrower substantially in the form of Exhibit B, with blanks
appropriately completed in conformity herewith (each a "Revolving Note" and,
collectively, the "Revolving Notes").
(b) The Revolving Note issued to each Lender that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower,
(ii) be payable to such Lender or its registered assigns and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated
the date of the issuance thereof), (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Lender (or, if issued after the
termination thereof, be in a stated principal amount equal to the outstanding
Revolving Loans of such Lender at such time) and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.8 in respect of the Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.1, and mandatory repayment as provided in Section 4.2, and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and prior to any transfer of
its Note will endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in such notation shall not affect the Borrower's obligations in respect of
such Loans.
(d) Notwithstanding anything to the contrary contained above in this
Section 1.5 or elsewhere in this Agreement, Notes shall only be delivered to
Lenders which at any time specifically request the delivery of such Note. No
failure of any Lender to, request or obtain a Note evidencing its Loans to the
Borrower shall affect or in any manner impair the obligations of the Borrower to
pay the Loans (and all related Obligations) incurred by the Borrower which would
otherwise be evidenced thereby in accordance with the requirements of this
3
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the various Credit Documents. Any Lender which does not
have a Note evidencing its outstanding Loans shall in no event be required to
make the notations otherwise described in preceding clause (c). At any time when
any Lender requests the delivery of a Note to evidence any of its Loans, the
Borrower shall promptly execute and deliver to the respective Lender the
requested Note in the appropriate amount or amounts to evidence such Loans.
1.6. Conversions. The Borrower shall have the option, to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the outstanding principal amount of Loans made pursuant to one or more
Borrowings of one or more Types of Loans into a Borrowing of another Type of
Loan, provided that, (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Loans being converted and no such partial
conversion of Eurodollar Loans shall reduce the outstanding principal amount of
such Eurodollar Loans made pursuant to a single Borrowing to less than the
Minimum Borrowing Amount applicable thereto, (ii) unless the Required Lenders
otherwise agree, Base Rate Loans may only be converted into Eurodollar Loans if
no Default or Event of Default is in existence on the date of the conversion and
(iii) no conversion pursuant to this Section 1.6 shall result in a greater
number of Borrowings of Eurodollar Loans than is permitted under Section 1.2.
Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at the Notice Office prior to 12:00 Noon (Chicago time) at
least three Business Days' prior notice (each a "Notice of
Conversion/Continuation") in the form of Exhibit A-2, appropriately completed to
specify the Loans to be so converted, the Borrowing or Borrowings pursuant to
which such Loans were incurred and, if to be converted into Eurodollar Loans,
the Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Lender prompt notice of any such proposed conversion affecting
any of its Loans. Upon any such conversion the proceeds thereof will be deemed
to be applied directly on the day of such conversion to prepay the outstanding
principal amount of the Loans being converted.
1.7. Pro Rata Borrowings. All Borrowings of Revolving Loans under this
Agreement shall be incurred from the Lenders pro rata on the basis of their
Revolving Loan Commitments. It is understood that no Lender shall be responsible
for any default by any other Lender of its obligation to make Loans hereunder
and that each Lender shall be obligated to make the Loans provided to be made by
it hereunder, regardless of the failure of any other Lender to make its Loans
hereunder.
1.8. Interest.
(a) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Base Rate Loan from the date of Borrowing thereof until
the earlier of (i) the maturity thereof (whether by acceleration or otherwise)
and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
Section 1.6 or 1.9, as applicable, at a rate per annum which shall be equal to
the sum of the relevant Applicable Margin plus the Base Rate, each as in effect
from time to time.
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(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date of Borrowing thereof
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan
pursuant to Section 1.6, 1.9 or 1.10, as applicable, at a rate per annum which
shall, during each interest Period applicable thereto, be equal to the sum of
the relevant Applicable Margin as in effect from time to time during such
Interest Period plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall, in each case, bear interest at a rate
per annum equal to the greater of (x) the rate which is 2% in excess of the rate
then borne by such Loans and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans from time to time and all other overdue
amounts payable hereunder and under any other Credit Document shall bear
interest at a rate per annum equal to the rate which is 2% in excess of the rate
applicable to Revolving Loans maintained as Base Rate Loans from time to time.
Interest that accrues under this Section 1.8(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, (x) in arrears on each Scheduled Interest
Payment Date, (y) on the date of any repayment or prepayment in full of all
outstanding Base Rate Loans, and (z) at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand, and (ii) in respect of each
Eurodollar Loan, (x) on the last day of each Interest Period applicable thereto
and (y) on the date of any repayment or prepayment (on the amount repaid or
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to the
respective Eurodollar Loans and shall promptly notify the Borrower and the
Lenders thereof. Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.
1.9. Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion/Continuation in respect of the making of or
conversion into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or prior to 12:00 Noon (Chicago time) on the third Business
Day prior to the expiration of an Interest Period applicable to such Eurodollar
Loan (in the case of any subsequent Interest Period), the Borrower shall have
the right to elect the interest period (each an "Interest Period") applicable to
such Eurodollar Loan, which Interest Period shall, at the option of the
Borrower, be a one, two or three month period, provided that (in each case):
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including
the date of any conversion thereto from a Base Rate Loan) and each
interest Period occurring thereafter in respect of such Eurodollar
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Loan shall commence on the day on which the next preceding Interest
Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day; provided, however,
that if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(v) unless the Required Lenders otherwise agree, no Interest
Period may be selected at any time when a Default or an Event of
Default is then in existence; and
(vi) no Interest Period in respect of any Borrowing of Loans
shall be selected which extends beyond the Revolving Loan Maturity
Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10. Increased Costs, Illegality, etc.
(a) In the event that any Lender shall have determined (which
determination shall, absent manifest error, subject to Section 1.13, be final
and conclusive and binding upon all parties hereto but, with respect to clause
(i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any such Lender's agreement to make or its making, funding or maintaining
any Eurodollar Loan because of (x) any change since the Effective Date in
any applicable law or governmental rule, regulation, order, guideline or
request (whether or not having the force of law) or in the interpretation
or administration thereof and including the introduction of any new law or
6
governmental rule, regulation, order, guideline or request, such as, but
not limited to: (A) a change in the basis of taxation of payment to any
Lender of the principal of or interest on the Loans or the Notes or any
other amounts payable hereunder (except for changes in the rate of tax on,
or determined by reference to, the net income or net profits of such Lender
pursuant to the laws of the jurisdiction in which it is organized or in
which its principal office or applicable lending office is located or any
subdivision thereof or therein) or (B) a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate and/or (y) other circumstances arising since the Effective Date
affecting such Lender, the interbank Eurodollar market or the position of
such Lender in such market; or
(iii) at any time, that the making or continuance by such Lender or
its applicable lending office of any Eurodollar Loan has been made (x)
unlawful by any law or governmental rule, regulation or order, (y)
impossible by compliance by any Lender in good faith with any governmental
request (whether or not having force of law) or (z) impracticable as a
result of a contingency occurring after the Effective Date which materially
and adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent, in
the case of clause (i) above) shall promptly give notice (by telephone
promptly confirmed in writing) to the Borrower and, except in the case of
clause (i) above, to the Administrative Agent of such determination (which
notice the Administrative Agent shall promptly transmit to each of the
other Lenders). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving
rise to such notice by the Administrative Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion/Continuation given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower,
(y) in the case of clause (ii) above, the Borrower agrees to pay to such
Lender, upon such Lender's written demand therefor, such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such
increased costs or reductions in amounts received or receivable hereunder
(a written notice as to the additional amounts owed to such Lender, showing
in reasonable detail the basis for the calculation thereof, submitted to
the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding on all the parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii), the Borrower may, and in the
case of a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii), the Borrower shall, either (x) if the affected Eurodollar Loan is
7
then being made initially or pursuant to a conversion, cancel such Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Lender or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Lender to
convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than
one Lender is affected at any time, then all affected Lenders must be treated
the same pursuant to this Section 1.10(b).
(c) If any Lender determines that after the Effective Date the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by the NAIC or any governmental authority, central bank
or comparable agency, or compliance therewith by such Lender (or its applicable
lending office) will have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Commitment
hereunder or its obligations hereunder, then the Borrower agrees to pay to such
Lender, upon its written demand therefor, such additional amounts as shall be
required to compensate such Lender or such other corporation for the increased
cost to such Lender or such other corporation or the reduction in the rate of
return to such Lender or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Lender will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable, provided that such Lender's determination of compensation owing
under this Section 1.10(c) shall, absent manifest error, be final and conclusive
and binding on all the parties hereto. Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall show in
reasonable detail the basis for calculation of such additional amounts.
1.11. Compensation. The Borrower agrees to compensate each Lender, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all losses, expenses and liabilities
(including, without, limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund its Eurodollar Loans but excluding loss of anticipated
profits) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, or continuance of, Eurodollar Loans does not occur on a
date or in the amount specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment or repayment
(including any prepayment or repayment made pursuant to Section 4.1, Section
4.2, or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date or in the amount specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of, (x) any
other default by the Borrower to repay Eurodollar Loans when required by the
8
terms of this Agreement or the Note held by such Lender or (y) any election made
pursuant to Section 1.10(b).
1.12. Change of Lending Office. Each Lender agrees that on the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c), Section 2.6 or Section 4.4 with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Sections 1.10, 2.6 and 4.4.
1.13. Replacement of Lenders. (x) If any Lender becomes, a Defaulting
Lender or otherwise defaults in its obligations to make Loans, (y) upon the
occurrence of an event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.6 or Section 4.4 with respect to any Lender
which results in such Lender charging to the Borrower increased costs materially
in excess of those being generally charged by the other Lenders or (z) in the
case of a refusal by a Lender to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders as (and to the extent) provided in Section
13.12(b), the Borrower shall have the right, if no Default or Event of Default
then exists (or, in the case of preceding clause (z), will exist immediately
after giving effect to such replacement), to replace such Lender (the "Replaced
Lender") with one or more other Eligible Transferees, none of whom shall
constitute a Defaulting Lender at the time of such replacement (collectively,
the "Replacement Lender") and each of whom shall be required to be reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Lender shall enter
into one or more Assignment and Assumption Agreements pursuant to Section
13.4(b) (and with all fees payable pursuant to said Section 13.4(b) to be paid
by the Replacement Lender and/or the Replaced Lender (as may be agreed to at
such time by and among the Borrower, the Replacement Lender and the Replaced
Lender)) pursuant to which the Replacement Lender shall acquire all of the
Commitment and outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the Replaced Lender in respect thereof an amount equal to the sum of (I) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, (II) an amount equal to all Unpaid Drawings that
have been funded by (and not reimbursed to) such Replaced Lender, together with
all then unpaid interest with respect thereto at such time, and (III) an amount
equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender
pursuant to Section 3.1, and (y) the Issuing Lender an amount equal to such
Replaced Lender's RL Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Lender to the Issuing Lender and (ii) all obligations of the
Borrower due and owing to the Replaced Lender at such time (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Lender concurrently with such replacement. Upon the execution
9
of the respective Assignment and Assumption Agreement, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
executed by the Borrower, the Replacement Lender shall become a Lender hereunder
and the Replaced Lender shall cease to constitute a Lender hereunder, except
with respect to indemnification provisions under this Agreement (including,
without limitation, Sections 1.10, 1.11, 2.6, 4.4, 12.6 and 13.1), which shall
survive as to such Replaced Lender.
SECTION 2. LETTERS OF CREDIT.
2.1. Letters of Credit.
(a) Upon execution of the Master Letter of Credit Agreement by the
Borrower, subject to and upon the terms and conditions set forth herein, the
Borrower may request that the Issuing Lender issue, at any time and from time to
time on and after the Initial Borrowing Date and prior to the 60th day prior to
the Revolving Loan Maturity Date, for the account of the Borrower and for the
benefit of (x) any holder (or any trustee, agent or other similar representative
for any such holders) of L/C Supportable Obligations, an irrevocable standby
letter of credit, in a form customarily used by the Issuing Lender or in such
other form as is reasonably acceptable to the Issuing Lender, and (y) sellers of
goods to the Borrower or any of its Subsidiaries, an irrevocable trade letter of
credit, in a form customarily used by the Issuing Lender or in such other form
as has been approved by the Issuing Lender (each such letter of credit a "Letter
of Credit" and collectively, the "Letters of Credit"). All Letters of Credit
shall be denominated in Dollars and shall be issued on a sight basis only.
(b) Subject to and upon the terms and conditions set forth herein, the
Issuing Lender agrees that it will, at any time and from time to time on and
after the Initial Borrowing Date and prior to the 60th day prior to the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for account of the Borrower, one or more Letters of Credit
as are permitted to remain outstanding hereunder without giving rise to a
Default or an Event of Default, provided that the Issuing Lender shall not be
under any obligation to issue any Letter of Credit of the types described above
if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Lender or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the
Issuing Lender refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon the Issuing Lender
with respect to such Letter of Credit any restriction or reserve or capital
requirement (for which the Issuing Lender is not otherwise compensated
hereunder) not in effect with respect to the Issuing Lender on the date
hereof, or any unreimbursed loss, cost or expense which was not applicable
or in effect with respect to the Issuing Lender as of the date hereof and
which the Issuing Lender reasonably and in good xxxxx xxxxx material to it;
or
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(ii) the Issuing Lender shall have received from the Borrower, any
other Credit Party or the Required Lenders prior to the issuance of such
Letter of Credit notice of the type described in the second sentence of
Section 2.3(b).
2.2. Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $3,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding would exceed the lesser
of an amount equal to the Total Revolving Loan Commitment at such time and the
Borrowing Base, and (ii) each Letter of Credit shall by its terms terminate (x)
in the case of standby Letters of Credit, on or before the earlier of (A) the
date which occurs 12 months after the date of the issuance thereof (although any
such standby Letter of Credit shall be extendible for successive periods of up
to 12 months, but, in each case, not beyond the tenth Business Day prior to the
Revolving Loan Maturity Date, on terms acceptable to the Issuing Lender) and (B)
ten Business Days prior to the Revolving Loan Maturity Date, and (y) in the case
of trade Letters of Credit, on or before the earlier of (A) the date which
occurs 180 days after the date of issuance thereof and (B) 30 days prior to the
Revolving Loan Maturity Date.
2.3. Letter of Credit Requests; Minimum Stated Amount:
(a) Whenever the Borrower desires that a Letter of Credit be issued
for its account, the Borrower shall give the Administrative Agent and the
Issuing Lender at least five Business Days' (or such shorter period as is
reasonably acceptable to the Issuing Lender) written notice thereof (including
by way of facsimile). Each notice shall be in the form of Exhibit C,
appropriately completed (each a "Letter of Credit Request"). In the event of any
inconsistency between the terms of any Letter of Credit Request, Letter of
Credit application or the Master Letter of Credit Agreement, the terms of this
Agreement shall control.
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower to the Lenders that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of Section 2.2. Unless the Issuing Lender has received notice from the Borrower,
any other Credit Party or the Required Lenders before it issues a Letter of
Credit that one or more of the conditions specified in Section 5 or 6 are not
then satisfied, or that the issuance of such Letter of Credit would violate
Section 2.2, then the Issuing Lender shall, subject to the terms and conditions
of this Agreement, issue the requested Letter of Credit for the account of the
Borrower in accordance with the Issuing Lender's usual and customary practices.
Upon the issuance of or modification or amendment to any standby Letter of
Credit, the Issuing Lender shall promptly notify the Borrower and the
Administrative Agent, in writing of such issuance, modification or amendment and
such notice shall be accompanied by a copy of such Letter of Credit or the
respective modification or amendment thereto, as the case may be. Promptly after
receipt of such notice the Administrative Agent shall notify the Participants,
in writing, of such issuance, modification or amendment. On the first Business
Day of each week, the Issuing Lender shall furnish the Administrative Agent with
11
a written (including via facsimile) report of the daily aggregate outstanding of
trade letters of credit for the immediately preceding week. Notwithstanding
anything to the contrary contained in this Agreement, in the event that a Lender
Default exists with respect to an RL Lender, the Issuing Lender shall not be
required to issue any Letter of Credit unless the Issuing Lender has entered
into arrangements satisfactory to it and the Borrower to eliminate the Issuing
Lender's risk with respect to the participation in Letters of Credit by the
Defaulting Lender or Lenders, including by cash collateralizing such Defaulting
Lender's or Lenders' RL Percentage of the Letter of Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $100,000 or such lesser amount as is acceptable to the Issuing Lender.
2.4. Letter of Credit Participations.
(a) Immediately upon the issuance by the Issuing Lender of any Letter
of Credit, the Issuing Lender shall be deemed to have sold and transferred to
each RL Lender, and each such RL Lender (in its capacity under this Section 2.4,
a "Participant") shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Lender, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's RL
Percentage, in such Letter of Credit, each drawing or payment made thereunder
and the obligations of the Borrower under this Agreement with respect thereto,
and any security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments or RL Percentages of the Lenders pursuant to Section
1.13 or 13.4(b), it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings relating thereto, there shall be an
automatic adjustment to the participations pursuant to this Section 2.4 to
reflect the new RL Percentages of the assignor and assignee Lender, as the case
may be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Lender shall not have any obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Lender under or in connection with
any Letter of Credit issued by it shall not create for the Issuing Lender any
resulting liability to the Borrower, any other Credit Party, any Lender or any
other Person unless such action is taken or omitted to be taken with gross
negligence or willful misconduct on the part of the Issuing Lender (as
determined by a court of competent jurisdiction in a final and non-appealable
decision).
(c) In the event that the Issuing Lender makes any payment under any
Letter of Credit issued by it and the Borrower shall not have reimbursed such
amount in full to the Issuing Lender pursuant to Section 2.5(a), the Issuing
Lender shall promptly notify the Administrative Agent, which shall promptly
notify each Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Issuing Lender, the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative Agent so notifies, prior to 12:00 Noon (Chicago time) on any
Business Day, any Participant required to fund a payment under a Letter of
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Credit, such Participant shall make available to the Issuing Lender in Dollars
such Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its RL Percentage of the amount of such payment available to the Issuing
Lender, such Participant agrees to pay to the Issuing Lender, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Issuing Lender at the overnight
Federal Funds Rate for the first three days and at the interest rate applicable
to Revolving Loans that are maintained as Base Rate Loans for each day
thereafter. The failure of any Participant to make available to the Issuing
Lender its RL Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Issuing Lender its RL Percentage of any payment under any Letter of Credit
on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Issuing Lender such other Participant's RL Percentage of any such payment.
(d) Whenever the Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the Issuing Lender shall pay to each such
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) Upon the request of any Participant, the Administrative Agent
shall furnish to such Participant copies of any standby Letter of Credit issued
by it and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments to the
Issuing Lender with respect to Letters of Credit shall be irrevocable and not
subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower or any Subsidiary of the Borrower and the
beneficiary named in any such Letter of Credit);
13
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.5 Agreement to Repay Letter of Credit Drawings.
(a) The Borrower agrees to reimburse the Issuing Lender, by making
payment to the Administrative Agent in immediately available funds at the
Payment Office, for any payment or disbursement made by the Issuing Lender under
any Letter of Credit issued by it (each such amount, so paid until reimbursed,
an "Unpaid Drawing"), not later than one Business Day following receipt by the
Borrower of notice of such payment or disbursement (provided that no such notice
shall be required to be given if a Default or an Event of Default under Section
10.5 shall have occurred and be continuing, in which case the Unpaid Drawing
shall be due and payable immediately without presentment, demand, protest or
notice of any kind (all of which are hereby waived by the Borrower)), with
interest on the amount so paid or disbursed by the Issuing Lender, to the extent
not reimbursed prior to 12:00 Noon (Chicago time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date such Issuing Lender was reimbursed by the Borrower therefor at a rate per
annum equal to the Base Rate in effect from time to time plus the Applicable
Margin as in effect from time to time for Revolving Loans that are maintained as
Base Rate Loans; provided, however, to the extent such amounts are not
reimbursed prior to 12:00 Noon (Chicago time) on the third Business Day
following the receipt by the Borrower of notice of such payment or disbursement
or following the occurrence of a Default or an Event of Default under Section
10.5, interest shall thereafter accrue on the amounts so paid or disbursed by
the Issuing Lender (and until reimbursed by the Borrower) at a rate per annum
equal to the Base Rate in effect from time to time plus the Applicable Margin
for Revolving Loans that are maintained as Base Rate Loans as in effect from
time to time plus 2%, with such interest to be payable on demand. The Issuing
Lender shall give the Borrower prompt written notice of each Drawing under any
Letter of Credit issued by it, provided that the failure to give any such notice
shall in no way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.5 to
reimburse the Issuing Lender with respect to drafts, demands and other
presentations for payment under Letters of Credit issued by it (each a
"Drawing") (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower or any Subsidiary of the
Borrower may have or have had against any Lender (including in its capacity as
the Issuing Lender or as a Participant), including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any nonapplication or
misapplication by the beneficiary of the proceeds of such Drawing; provided,
however, that the Borrower shall not be obligated to reimburse the Issuing
14
Lender for any wrongful payment made by the Issuing Lender under a Letter of
Credit issued by it as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Issuing Lender (as determined
by a court of competent jurisdiction in a final decision of such court, subject
to any appeal rights of the Issuing Lender).
2.6. Increased Costs. If at any time after the Effective Date, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any governmental authority charged with the interpretation or
administration thereof, or compliance by the Issuing Lender or any Participant
with any request or directive by the NAIC or by any such governmental authority
(whether or not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by the Issuing Lender or participated in by any
Participant, or (ii) impose on the Issuing Lender or any Participant any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to the
Issuing Lender or any Participant of issuing, maintaining or participating in
any Letter of Credit, or reduce the amount of any sum received or receivable by
the Issuing Lender or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of the Issuing
Lender or such Participant pursuant to the laws of the jurisdiction in which it
is organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the delivery of the
certificate referred to below to the Borrower by the Issuing Lender or any
Participant (a copy of which certificate shall be sent by the Issuing Lender or
such Participant to the Administrative Agent), the Borrower agrees to pay to the
Issuing Lender or such Participant such additional amount or amounts as will
compensate the Issuing Lender or such Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. The Issuing Lender or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.6, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by the Issuing Lender or such Participant
(a copy of which certificate shall be sent by the Issuing Lender or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the calculation of such additional amount or amounts necessary to
compensate the Issuing Lender or such Participant. The certificate required to
be delivered pursuant to this Section 2.6 shall, absent manifest error, be final
and conclusive and binding on the Borrower.
SECTION 3. FEES; REDUCTIONS OF COMMITMENT.
3.1. Fees.
(a) The Borrower agrees to pay to the Administrative Agent for
distribution to each RL Lender (based on each such RL Lender's respective RL
Percentage) a fee in respect of each Letter of Credit (the "Letter of Credit
Fee") for the period from and including the date of issuance of such Letter of
Credit to and including the date of termination or expiration of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin then in
15
effect with respect to Letters of Credit on the daily Stated Amount of each such
Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on each Scheduled Interest Payment Date and on the first
day on or after the termination of the Total Revolving Loan Commitment upon
which no Letters of Credit remain outstanding.
(b) The Borrower agrees to pay to the Issuing Lender, for its own
account, a facing fee in respect of each Letter of Credit issued by it (the
"Facing Fee") for the period from and including the date of issuance of such
Letter of Credit to and including the date of termination or expiration of such
Letter of Credit, computed at a rate per annum equal to 1/4 of 1% on the daily
Stated Amount of such Letter of Credit, provided that in any event the minimum
amount of Facing Fees payable in any twelve-month period for each Letter of
Credit shall be not less than $500, it being agreed that, on the day of issuance
of any Letter of Credit and on each anniversary thereof prior to the termination
or expiration of such Letter of Credit, if $500 will exceed the amount of Facing
Fees that will accrue with respect to such Letter of Credit for the immediately
succeeding twelve-month period, the full $500 shall be payable on the date of
issuance of such Letter of Credit and on each such anniversary thereof. Except
as otherwise provided in the proviso to the immediately preceding sentence,
accrued Facing Fees shall be due and payable quarterly in arrears on each
Scheduled Interest Payment Date and upon the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(c) The Borrower agrees to pay to the Issuing Lender, for its own
account, upon each payment under, issuance of, or amendment to, any Letter of
Credit issued by it, such amount as shall at the time of such event be the
administrative charge and the reasonable expenses which the Issuing Lender is
generally imposing in connection with such occurrence with respect to letters of
credit.
(d) The Borrower agrees to pay to the Administrative Agent and its
affiliates such fees as have been or may be agreed to in writing from time to
time by the Borrower or any of its Subsidiaries and the Administrative Agent
and/or its respective affiliates.
(e) The Borrower agrees to pay to the Administrative Agent, for the
account of the applicable Lenders, a non-utilization fee equal to the rate
specified in the definition of "Applicable Margin" of the total of (a) the Total
Revolving Loan Commitment, less (b) the sum of (i) the daily average of the
aggregate principal amount of all Revolving Loans outstanding, plus (ii) the
daily average of the aggregate amount of the Letter of Credit Outstandings.
Accrued non-utilization fees shall be due and payable quarterly in arrears on
each Scheduled Interest Payment Date and upon the first day on or after the
termination of the Total Revolving Loan Commitment.
(f) The Borrower agrees to pay to LaSalle a commitment fee in the
amount of One Hundred Thirty-Seven Thousand and 00/100 Dollars ($137,000.00),
payable on or before the Effective Date.
16
3.2. Voluntary Termination of Unutilized Loan Commitment.
(a) Upon at least three Business Day's prior written notice to the
Administrative Agent at the Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrower shall have the
right, at any time or from time to time, without premium or penalty to terminate
the Total Unutilized Revolving Loan Commitment in whole, or reduce it in part,
pursuant to this Section 3.2(a), in an integral multiple of $500,000 in the case
of partial reductions to the Total Unutilized Revolving Loan Commitment,
provided that each such reduction shall apply proportionately to permanently
reduce the Revolving Loan Commitment of each Lender.
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 13.12(b), the Borrower may, subject to its
compliance with the requirements of Section 13.12(b), upon five Business Days'
prior written notice to such Lender and the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders) terminate all of the Commitment of such Lender, so long as all
Loans, together with accrued and unpaid interest, Fees and all other amounts,
owing to such Lender are repaid concurrently with the effectiveness of such
termination pursuant to Section 4.1(b) (at which time Schedule I shall be deemed
modified to reflect such changed amounts) and such Lender's RL Percentage of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory to
the Administrative Agent and the Issuing Lender, and at such time, such Lender
shall no longer constitute a "Lender" for purposes of this Agreement, except
with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.6, 4.4, 12.6 and 13.1), which shall survive
as to such repaid Lender.
3.3. Mandatory Reduction of Commitment.
(a) The Total Revolving Loan Commitment shall terminate in its
entirety upon the earlier of (i) the Revolving Loan Maturity Date and (ii)
unless the Required Lenders otherwise agree in writing, the date on which a
Change of Control occurs.
(b) Each reduction to, or termination of, the Total Revolving Loan
Commitment shall be applied to proportionately reduce or terminate, as the case
may be, the Revolving Loan Commitment of each Lender with a Revolving Loan
Commitment.
SECTION 4. PREPAYMENTS; PAYMENTS; TAXES.
4.1. Voluntary Prepayments.
(a) The Borrower shall have the right to prepay the Loans, without
premium or penalty, in whole or in part at any time and from time to time on the
following terms and conditions: (i) the Borrower shall give the Administrative
Agent prior to 12:00 Noon (Chicago time) at the Notice Office (x) at least one
Business Day's prior written notice (or telephonic notice promptly confirmed in
17
writing) of its intent to prepay Base Rate Loans and (y) at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of its intent to prepay Eurodollar Loans, which notice (in each case) shall
specify the amount of such prepayment and the Types of Loans to be prepaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant
to which such Eurodollar Loans were made, and which notice the Administrative
Agent shall promptly transmit to each of the Lenders; (ii) each partial
prepayment of Revolving Loans pursuant to this Section 4.1(a) shall be in an
aggregate principal amount of at least $500,000 (or such lesser amount as is
acceptable to the Administrative Agent), provided that if any partial prepayment
of Eurodollar Loans made pursuant to any Borrowing shall reduce the outstanding
principal amount of Eurodollar Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount, then such Borrowing may not be
continued as a Borrowing of Eurodollar Loans (and same shall automatically be
converted into a Borrowing of Base Rate Loans) and any election of an Interest
period with respect thereto given by the Borrower shall have no force or effect;
(iii) at the time of prepayment of Eurodollar Loans pursuant to this Section 4.1
on any date other than the last day of the Interest Period applicable thereto,
the Borrower shall pay the amounts required pursuant to Section 1.11; and (iv)
each prepayment pursuant to this Section 4.1(a) in respect of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans, provided
that at the Borrower's election in connection with any prepayment of Revolving
Loans pursuant to this Section 4.1(a), such prepayment shall not, so long as no
Default or Event of Default then exists, be applied to any Revolving Loan of a
Defaulting Lender.
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 13.12(b), the Borrower may, upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
repay all Loans, together with accrued and unpaid interest, Fees, and other
amounts owing to such Lender in accordance with, and subject to the requirements
of, said Section 13.12(b) so long as (I) the Commitment of such Lender is
terminated concurrently with such repayment pursuant to Section 3.2(b) (at which
time Schedule I shall be deemed modified to reflect the changed Commitment),
(II) such Lender's RL Percentage of all outstanding Letters of Credit is cash
collateralized in a manner satisfactory to the Administrative Agent and the
Issuing Lender and (III) the consents, if any, required under Section 13.12(b)
in connection with the repayment pursuant to this clause (b) have been obtained.
4.2. Mandatory Repayments.
(a) On any day on which the sum of (I) the aggregate outstanding
principal amount of all Revolving Loans (after giving effect to all other
repayments thereof on such date) and (II) the aggregate amount of all Letter of
Credit Outstandings exceeds the lesser of the Borrowing Base Amount and the
Total Revolving Loan Commitment at such time, the Borrower shall prepay on such
day the principal of Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Revolving Loans, the
aggregate amount of the Letter of Credit Outstandings exceeds the Total
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Revolving Loan Commitment at such time, the Borrower shall pay to the
Administrative Agent at the Payment Office on such day an amount of cash and/or
Cash Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash and/or Cash
Equivalents to be held as security for all obligations of the Borrower to the
Issuing Lender and the Lenders hereunder in a cash collateral account to be
established by the Administrative Agent.
(b) In addition to any other mandatory repayments pursuant to this
Section 4.2, on each date on or after the Initial Borrowing Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
capital contribution or any sale or issuance of its equity, the Net Equity
Proceeds in excess of $3,000,000 in the aggregate during any fiscal year of the
Borrower of such capital contribution or sale or issuance of equity shall first
be applied on such date as a mandatory repayment of principal of outstanding
Term Loans (as defined in the First Horizon International Financing documents)
(up to a maximum amount of 50% of such Net Equity Proceeds), second, any
remainder as a mandatory repayment of principal of outstanding Loans in
accordance with the requirements of Sections 4.2(g) and (h), third, any
remainder to any outstanding Term Loans, and fourth, with the balance, if any,
being retained by the Borrower or applicable Domestic Subsidiary.
(c) In addition to any other mandatory repayments pursuant to this
Section 4.2, on each date on or after the Initial Borrowing Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
issuance or incurrence by the Borrower or any of its Domestic Subsidiaries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 9.4 as in effect on the Effective
Date), the Net Debt Proceeds of the respective incurrence of Indebtedness shall
first be applied on such date as a mandatory repayment of principal of
outstanding Term Loans (as defined in the First Horizon International Financing
documents) (up to a maximum amount of 50% of such Net Debt Proceeds), second,
any remainder as a mandatory repayment of principal of outstanding Loans in
accordance with the requirements of Sections 4.2(g) and (h), third, any
remainder to any outstanding Term Loans, and fourth, with the balance, if any,
being retained by the Borrower or applicable Domestic Subsidiary.
(d) In addition to any other mandatory repayments pursuant to this
Section 4.2, on each date on or after the Initial Borrowing Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
Asset Sale, the Net Sale Proceeds therefrom shall first be applied on such date
as a mandatory repayment of principal of outstanding Term Loans (as defined in
the First Horizon International Financing documents) (up to a maximum amount of
50% of such Net Sale Proceeds), second, any remainder as a mandatory repayment
of principal of outstanding Loans in accordance with the requirements of
Sections 4.2(g) and (h), third, any remainder to any outstanding Term Loans, and
fourth, with the balance, if any, being retained by the Borrower or applicable
Domestic Subsidiary; provided, however, that with respect to no more than
$500,000 in the aggregate of cash proceeds from Asset Sales in any fiscal year
of the Borrower, the Net Sale Proceeds therefrom shall not be required to be so
applied on such date so long as no Default and no Event of Default then exits
and such Net Sale Proceeds shall be used to purchase assets (other than working
19
capital) used or to be used in the businesses permitted pursuant to Section 9.15
within 90 days following the date of such Asset Sale, and provided further, that
if all or any portion of such Net Sale Proceeds not required to be so applied as
provided above in this Section 4.2(d) are not so reinvested within such 90-day
period (or such earlier date, if any, as the Borrower or the relevant Domestic
Subsidiary determines not to reinvest the Net Sale Proceeds from such Asset Sale
as set forth above), such remaining portion shall be applied on the last day of
such period (or such earlier date, as the case may be) as provided above in this
Section 4.2(d) without regard to the preceding proviso.
(e) In addition to any other mandatory repayments pursuant to this
Section 4.2, on the date on or after the Initial Borrowing Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
Recovery Event, the Net Recovery Event Proceeds from such Recovery Event shall
first be applied as a mandatory repayment of principal of outstanding Term Loans
(as defined in the First Horizon International Financing documents) (up to a
maximum amount of 50% of such Net Recovery Event Proceeds), second, any
remainder as a mandatory repayment of principal of outstanding Loans in
accordance with the requirements of Sections 4.2(g) and (h), third, any
remainder to any outstanding Term Loans, and fourth, with the balance, if any,
being retained by the Borrower or applicable Domestic Subsidiary; provided,
however, that so long as no Default or Event of Default then exists and such Net
Recovery Event Proceeds do not exceed $1,000,000 in the aggregate in any fiscal
year of the Borrower such Net Recovery Event Proceeds shall not be required to
be so applied on such date to the extent that the Borrower has delivered a
certificate to the Administrative Agent stating that such Net Recovery Event
Proceeds shall be used to replace or restore any properties or assets in respect
of which such Net Recovery Event Proceeds were paid within 180 days following
the date of the receipt of such Net Recovery Event Proceeds (which certificate
shall set forth the estimates of the Net Recovery Event Proceeds to be so
expended); and provided further, that if all or any portion of such Net Recovery
Event Proceeds not required to be so applied pursuant to the preceding proviso
are not so used within 180 days after the date of the receipt of such Net
Recovery Event Proceeds (or such earlier date, if any, as the Borrower or the
relevant Domestic Subsidiary determines not to reinvest the Net Recovery Event
Proceeds relating to such Recovery Event as set forth above), such remaining
portion shall be applied on the last day of such period (or such earlier date,
as the case may be) as provided above in this Section 4.2(e) without regard to
the preceding proviso.
(f) In addition to any other mandatory prepayments pursuant to this
Section 4.2, on March 31 of each year, beginning March 31, 2004, an amount equal
to 75% of Excess Cash Flow of the Borrower and its Domestic Subsidiaries for the
most recently completed fiscal year of the Borrower shall be first applied on
such date as a mandatory repayment of principal of outstanding Loans in
accordance with the requirements of Sections 4.2(g) and (h), second, as a
mandatory repayment of principal of outstanding Term Loans (as defined in the
First Horizon International Financing documents), and third, with the balance,
if any, being retained by the Borrower or the applicable Domestic Subsidiary.
20
(g) Notwithstanding anything in Section 4.2(b), (c), (d) and (e) to
the contrary, so long as no Event of Default or Default shall have occurred and
be continuing, the Borrower may request that all of such Net Equity Proceeds,
Net Debt Proceeds, Net Sale Proceeds or Net Recovery Event Proceeds, as
applicable, be applied first to the outstanding Loans hereunder and any
remainder to Term Loans and upon the consent of the Required Lenders, the
Administrative Agent shall apply the same in such order. All repayments of Loans
pursuant to Section 4.2(b), (c), (d), (e) and (f) shall be applied pro rata to
the Loans.
(h) After an Event of Default shall have occurred and be continuing,
the Administrative Agent shall have the right to designate which loans (Term
Loans or Loans) shall be repaid in its sole discretion. With respect to each
repayment of Loans required by this Section 4.2, so long as no Event of Default
shall have occurred and be continuing, the Borrower may designate the Types of
Loans which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which such Eurodollar Loans were made,
provided that: (i) repayments of Eurodollar Loans pursuant to this Section 4.2
may only be made on the last day of an Interest Period applicable thereto unless
all Eurodollar Loans with Interest Periods ending on such date of required
repayment and all Base Rate Loans have been paid in full; (ii) if any repayment
of Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount, such Borrowing shall be automatically
converted into a Borrowing of Base Rate Loans; and (iii) each repayment of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans.
In the absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion.
(i) In addition to any other mandatory repayments pursuant to this
Section 4.2, (i) all then outstanding Revolving Loans shall be repaid in full on
the Revolving Loan Maturity Date and (ii) unless the Required Lenders otherwise
agree in writing, all then outstanding Loans shall be repaid in full on the date
on which a Change of Control occurs.
4.3. Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement and under any Note shall be made to
the Administrative Agent for the account of the Lender or Lenders entitled
thereto not later than 12:00 Noon (Chicago time) on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
4.4. Net Payments.
(a) All payments made by the Borrower hereunder and under any Note
will be made without setoff, counterclaim or other defense. Except as provided
in Section 4.4(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
21
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as
provided in the second succeeding sentence, any tax imposed on or measured by
the net income or net profits of a Lender pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Lender is located or any subdivision
thereof or therein) and all interest, penalties, expenses or similar liabilities
with respect to such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income or net profits of such Lender pursuant
to the laws of the jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located or
under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Lender is organized or in which the principal office
or applicable lending office of such Lender is located and for any withholding
of taxes as such Lender shall determine are payable by, or withheld from, such
Lender, in respect of such amounts so paid to or on behalf of such Lender
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Lender pursuant to this sentence. The Borrower will furnish to
the Administrative Agent within 45 days after the date the payment of any Taxes
is due pursuant to applicable law certified copies of tax receipts evidencing
such payment by the Borrower. The Borrower agrees to indemnify and hold harmless
each Lender, and reimburse such Lender upon its written request (within 10 days
of such request), for the amount of any Taxes so levied or imposed and paid by
such Lender whether or not such Taxes were correctly or legally imposed or
asserted by the relevant governmental authority.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date or, in the case of a Lender that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 13.4(b) (unless
the respective lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) (or successor forms) certifying to such Lender's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x)
a certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.4(b)(ii) Certificate") and (y) two accurate and complete original
22
signed copies of Internal Revenue Service Form W-8BEN (with respect to the
portfolio interest exemption) (or successor form) certifying to such Lender's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Lender agrees that from time to
time after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, such Lender will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax
treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a
Section 4.4(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or such Lender shall
immediately notify the Borrower and the Administrative Agent of its inability to
deliver any such Form or Certificate, in which case such Lender shall not be
required to deliver any such Form or Certificate pursuant to this Section
4.4(b). Notwithstanding anything to the contrary contained in Section 4.4(a),
but subject to Section 13.4(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 4.4(a) to gross-up payments
to be made to a Lender in respect of income or similar taxes imposed by the
United States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 4.4(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.4 and except as set forth in Section 13.4(b), the Borrower agrees
to pay any additional amounts and to indemnify each Lender in the manner set
forth in Section 4.4(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes that are effective after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
SECTION 5. CONDITIONS PRECEDENT TO CREDIT EVENTS ON THE INITIAL BORROWING
DATE. The obligation of each Lender to make Loans, and the obligation of the
Issuing Lender to issue Letters of Credit, on the Initial Borrowing Date, is
subject at the time of the making of such Loans or the issuance of such Letters
of Credit to the satisfaction of the following conditions:
5.1. Effective Date; Notes. On or prior to the Initial Borrowing Date, (i)
the Effective Date shall have occurred and (ii) there shall have been delivered
to the Administrative Agent for the account of each of the Lenders that has
23
requested same the appropriate Revolving Note executed by the Borrower, in each
case in the amount, maturity and as otherwise provided herein.
5.2. Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Borrower by the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Financial Officer
or the Controller, certifying on behalf of the Borrower that all of the
conditions in Sections 5.5, 5.6, 5.7, 5.8, 5.9 and 6.1 have been satisfied on
such date.
5.3. Opinions of Counsel. On the Initial Borrowing Date, the Administrative
Agent shall have received from Xxxxx, Xxxxxx, XxxXxx & Xxxxxxxxxx, P.C., special
counsel to the Credit Parties, an opinion addressed to the Administrative Agent,
the Collateral Agent and each of the Lenders and dated the Initial Borrowing
Date covering the matters set forth in Exhibit E and such other matters incident
to the transactions contemplated herein as the Administrative Agent may
reasonably request.
5.4. Corporate Documents; Proceedings; etc.
(a) On the Initial Borrowing Date, the Administrative Agent shall have
received a certificate from each Credit Party, dated the Initial Borrowing Date,
signed by the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Financial Officer or the Controller of such Credit Party, and attested
to by the Secretary or any Assistant Secretary of such Credit Party, in the form
of Exhibit F with appropriate insertions, together with copies of the
certificate or articles of incorporation and by-laws (or equivalent
organizational documents), as applicable, of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and each of
the foregoing shall be in form and substance reasonably acceptable to the
Administrative Agent.
(b) On the Initial Borrowing Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
reasonably satisfactory in form and substance to the Administrative Agent, and
the Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams or facsimiles, if
any, which the Administrative Agent reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate, limited liability company or governmental authorities.
5.5. Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Non-Compete Agreements; Collective Bargaining
Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements. On or
prior to the initial Borrowing Date, there shall have been delivered to the
Administrative Agent true and correct copies of the following documents:
24
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and a summary or description of any other "employee benefit
plans," as defined in Section 3(3) of ERISA, and a summary or
description of any other material agreements, plans or arrangements,
with or for the benefit of current or former employees of the Borrower
or any of its Subsidiaries or ERISA Affiliates (provided that the
foregoing shall apply in the case of any multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, only to the extent that any
document described therein is in the possession of the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate, or reasonably
available thereto from the sponsor or trustee of any such Plan)
(collectively, the "Employee Benefits Plans");
(ii) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its equity
interests and any agreements entered into by its shareholders relating
to any such entity with respect to its equity interests (collectively,
the "Shareholders' Agreements");
(iii) all agreements with members of, or with respect to, the
management of the Borrower or any of its Subsidiaries which the
Borrower reasonably believes to be material to its or any of its
Subsidiaries' business or operations (collectively, the "Management
Agreements");
(iv) all employment agreements entered into by the Borrower or
any of its Subsidiaries which the Borrower reasonably believes to be
material to its or any of its Subsidiaries' business or operations
(collectively, the "Employment Agreements");
(v) all non-compete agreements entered into by the Borrower or
any of its Subsidiaries which restrict the activities of the Borrower
or any of its Subsidiaries (collectively, the "Non-Compete
Agreements");
(vi) all collective bargaining agreements applying or relating to
any employee of the Borrower or any of any of its Subsidiaries
(collectively, the "Collective Bargaining Agreements");
(vii) all tax sharing, tax allocation and other similar
agreements entered into by the Borrower or any of its Subsidiaries
(collectively, the "Tax Sharing Agreements"); and
(viii) all agreements evidencing or relating to Indebtedness of
the Borrower or any of its Subsidiaries which is to remain outstanding
after giving effect to the Transaction (the "Existing Indebtedness
Agreements");
25
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Non-Compete Agreements, Collective Bargaining
Agreements, Tax Sharing Agreements and Existing Indebtedness Agreements shall be
in form and substance reasonably satisfactory to the Administrative Agent and
shall be in full force and effect on the Initial Borrowing Date,
5.6. Adverse Change; Approvals.
(a) On or prior to the Initial Borrowing Date, nothing shall have
occurred (and neither the Administrative Agent nor any Lender shall have become
aware of any facts or conditions not previously known) which the Administrative
Agent or the Required Lenders shall determine has had, or could reasonably be
expected to have, (i) a Material Adverse Effect or (ii) a material adverse
effect on the Transaction.
(b) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the Transaction, the other transactions contemplated hereby and
the granting of Liens under the Credit Documents shall have been obtained and
remain in effect, and all applicable waiting periods with respect thereto shall
have expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transaction or the other transactions contemplated by the
Credit Documents or otherwise referred to herein or therein. On the Initial
Borrowing Date, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Transaction or the other transactions contemplated by the
Documents or otherwise referred to herein or therein.
5.7. Litigation. On the Initial Borrowing Date, except as disclosed on
Schedule XI, no litigation by any entity (private or governmental) shall be
pending or threatened with respect to (i) the Transaction, this Agreement, any
other Credit Document or any other documentation executed in connection herewith
and therewith or the transactions contemplated hereby and thereby, or (ii) which
the Administrative Agent and the Required Lenders shall reasonably determine has
had, or could reasonably be expected to have, a Material Adverse Effect.
5.8. Subsidiaries Guaranty. On the Initial Borrowing Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered the Subsidiaries
Guaranty in the form of Exhibit L (as amended, modified, restated or
supplemented from time to time the "Subsidiaries Guaranty"), guarantying all of
the obligations of the Borrower as more fully provided therein, and the
Subsidiaries Guaranty shall be in full force and effect.
5.9. Security Agreement. On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Security Agreement in the
form of Exhibit H (as amended, modified or supplemented from time to time, the
"Security Agreement") covering all of such Credit Party's Security Agreement
Collateral, together with:
26
(i) proper financing statements (Form UCC-1 or the equivalent) fully
authorized and executed for filing under the UCC or other appropriate
filing offices of each jurisdiction as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Security Agreement;
(ii) certified copies of requests for information or copies (Form
UCC-II), or equivalent reports as of a recent date, listing all effective
financing statements that name the Borrower or any of its Subsidiaries as
debtor and that are filed in the jurisdictions referred to in clause (i)
above and in such other jurisdictions in which Collateral is located on the
Initial Borrowing Date, together with copies of such other financing
statements that name the Borrower or any of its Subsidiaries as debtor
(none of which shall cover any of the Collateral except (x) to the extent
evidencing Permitted Liens or (y) those in respect of which the Collateral
Agent shall have received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law fully executed for
filing); and
(iii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement have
been taken, and the Security Agreement shall be in full force and effect.
5.10. Pledge Agreement. On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Pledge Agreement in the
form of Exhibit I (as amended, modified or supplemented from time to time, the
"Pledge Agreement").
5.11. Business. During the period from the date hereof through the Initial
Borrowing Date, the Borrower and its Subsidiaries' business shall have been
operated in the ordinary course and there shall not have been sold any material
assets of such business other than in the ordinary course and consistent with
past practice.
5.12. Corporate and Capital Structure. On the Initial Borrowing Date, all
agreements relating to, and the corporate and capital structure of, the Borrower
and its Subsidiaries, and all organizational documents of the Borrower and its
Subsidiaries, in each case as the same will exist after giving effect to the
consummation of the Transaction, shall be reasonably satisfactory to the
Administrative Agent and the Required Lenders.
5.13. Insurance Certificates. On the Initial Borrowing Date, the
Administrative Agent shall have received certificates of insurance complying
with the requirements of Section 8.3 for the business and properties of the
Borrower and its Subsidiaries, in form and substance reasonably satisfactory to
the Administrative Agent and naming the Collateral Agent as an additional
insured and/or as loss payee, and stating that such insurance shall not be
canceled or the amount of coverage thereunder materially reduced without at
least 30 days' prior written notice by the insurer to the Collateral Agent.
27
5.14. Fees, etc. On the Initial Borrowing Date, the Borrower shall have
paid to the Administrative Agent and each Lender all costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses) and other
compensation contemplated hereby payable to the Administrative Agent or such
Lender to the extent then due.
5.15. Borrowing Base. On the Initial Borrowing Date, the Administrative
Agent shall have received a duly completed Borrowing Base Certificate, dated the
Initial Borrowing Date, substantially in the form of Exhibit G.
5.16. Releases. All security interest in and Liens on the assets of the
Borrower and its Subsidiaries created pursuant to any security documentation
(other than the Security Documents) shall have been terminated and released, and
all such assets shall have been returned to the Borrower or such Subsidiary. The
Administrative Agent shall have received evidence that the matters set forth in
this Section 5.16 have been satisfied on such date.
5.17. Master Letter of Credit Agreement. A Master Letter of Credit
Agreement duly executed by the Borrower.
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation of
each Lender to make Loans (including Loans made on the Initial Borrowing Date),
and the obligation of the Issuing Lender to issue Letters of Credit (including
Letters of Credit issued on the Initial Borrowing Date), is subject, at the time
of each such Credit Event (except as hereinafter indicated), to the satisfaction
of the following conditions:
6.1. Default; Representations and Warranties. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.2. Notice of Borrowing; Letter of Credit Request.
(a) Prior to the making of each Loan, the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of Section 1.3(a).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the Issuing Lender shall have received a Letter of Credit Request
meeting the requirements of Section 2.3(a).
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to the Administrative Agent and each
of the Lenders that all the conditions specified in Section 5 (with respect to
Credit Events on the Initial Borrowing Date) and in this Section 6 (with respect
to Credit Events on or after the Initial Borrowing Date) and applicable to such
28
Credit Event are satisfied as of that time. All of the Notes, certificates,
legal opinions and other documents and papers referred to in Section 5 and in
this Section 6, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the Lenders
and, except for the Notes, in sufficient counterparts or copies for each of the
Lenders and shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce
the Lenders to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes the
following representations, warranties and agreements, in each case after giving
effect to the Transaction, all of which shall survive the execution and delivery
of this Agreement and the Notes and the making of the Loans and the issuance of
the Letters of Credit, with the occurrence of each Credit Event on or after the
Initial Borrowing Date being deemed to constitute a representation and warranty
that the matters specified in this Section 7 are true and correct in all
material respects on and as of the Initial Borrowing Date and on the date of
each such other Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
7.1. Organizational Status. Each of the Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, (ii) has the corporate,
partnership or limited liability company power and authority, as the case may
be, to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the
ownership, leasing or operation of its property or the conduct of its business
requires such qualifications except for failures to be so qualified which,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
7.2. Power and Authority. Each Credit Party has the corporate, partnership
or limited liability company power and authority, as the case may be, to
execute, deliver and perform the terms and provisions of each of the Credit
Documents to which it is party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of each of such Credit
Documents. Each Credit Party has duly executed and delivered each of the Credit
Documents to which it is party, and each of such Credit Documents constitutes
its legal, valid and binding obligation enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.3. No Violation. Neither the execution, delivery or performance by any
Credit Party of the Credit Documents to which it is a party, nor compliance by
it with the terms and provisions thereof (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree of
29
any court or governmental instrumentality, (ii) will conflict with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of any Credit Party or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which any Credit Party or any of its Subsidiaries is
a party or by which it or any its property or assets is bound or to which it may
be subject, or (iii) will violate any provision of the certificate or articles
of incorporation, certificate of formation, limited liability company agreement
or by-laws (or equivalent organizational documents), as applicable, of any
Credit Party or any of its Subsidiaries.
7.4. Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (x) those
that have otherwise been obtained or made on or prior to the Initial Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date and
(y) filings which are necessary to perfect the security interests created under
the Security Documents, which filings will be made within ten days following the
Initial Borrowing Date), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to be obtained or made by, or
on behalf of, any Credit Party to authorize, or is required to be obtained or
made by, or on behalf of, any Credit Party in connection with, (i) the
execution, delivery and performance of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.
7.5. Financial Statements; Financial Condition; Undisclosed Liabilities.
(a) The (i) audited consolidated balance sheets of the Borrower and
its Subsidiaries for its fiscal year ended on December 31, 2001 and the related
audited consolidated statements of income, cash flows and shareholders' equity
of the Borrower and its Subsidiaries for its fiscal year ended on such date, and
(ii) unaudited consolidated balance sheets of the Borrower and its Subsidiaries
for its fiscal quarter ended September 30, 2002 and the related unaudited
consolidated statements of income, cash flows and shareholders' equity of the
Borrower and its Subsidiaries for its fiscal quarter ended on such date, copies
of which have been furnished to the Lenders prior to the Initial Borrowing Date,
present fairly in all material respects the consolidated financial position of
the Borrower and its Subsidiaries at the dates of such balance sheets and the
consolidated results of the operations of the Borrower and its Subsidiaries for
the periods covered thereby. All interim monthly financial statements furnished
prior to the Initial Borrowing Date present fairly the consolidated results of
the operations of the Borrower and its Subsidiaries for the periods covered
thereby. All of the foregoing historical financial statements have been prepared
in accordance with generally accepted accounting principles consistently applied
(except, in the case of the aforementioned interim financial statements, for
normal year-end audit adjustment and the absence of footnotes).
(b) On and as of the Initial Borrowing Date and after giving effect to
the Transaction and to all Indebtedness (including the Loans) being incurred or
assumed and Liens created by the Credit Parties in connection therewith (i) the
sum of the assets, at a fair valuation, of the Borrower on a stand-alone basis
30
and of the Borrower and its Subsidiaries taken as a whole will exceed their
respective debts, (ii) each of the Borrower on a stand alone basis and the
Borrower and its Subsidiaries taken as a whole have not incurred and do not
intend to incur, and do not believe that they will incur, debts beyond their
respective ability to pay such debts as such debts mature, and (iii) the
Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a
whole will have sufficient capital with which to conduct their respective
businesses. For purposes of this Section 7.5(b), "debt" means any liability on a
claim, and "claim" means (a) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(c) Except as fully disclosed in the December 31, 2001 financial
statements delivered pursuant to Section 7.5(a), there were as of the Initial
Borrowing Date no liabilities or obligations with respect to the Borrower or any
of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which either individually or in
the aggregate, could reasonably be expected to be material to the Borrower or
any of its Subsidiaries. As of the Initial Borrowing Date, the Borrower knows of
no reasonable basis for the assertion against it or any of its Subsidiaries of
any liability or obligation of any nature whatsoever that is not fully disclosed
in the December 31, 2001 financial statements delivered pursuant to Section
7.5(a) or referred to in the immediately preceding sentence which, either
individually or in the aggregate, could reasonably be expected to be material to
the Borrower or any of its Subsidiaries.
(d) After giving effect to the Transaction, since December 31, 2001,
there has been no Material Adverse Effect.
7.6. Litigation. Except as disclosed on Schedule XI, there are no actions,
suits or proceedings pending or, to the best knowledge of the Borrower,
threatened, or material adverse development in litigation disclosed on Schedule
XI (i) with respect to the Transaction or any Credit Document or (ii) that could
reasonably be expected, either individually or in the aggregate, to have a
Material Adverse Effect.
7.7. True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of the Borrower in writing to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
31
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.
7.8. Use of Proceeds; Margin Regulations.
(a) All proceeds of the Revolving Loans will be used for the working
capital and general corporate purposes of the Borrower and its Subsidiaries.
(b) No part of any Credit Event (or the proceeds thereof) will be used
to purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
7.9. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has timely filed or caused to be timely filed (taking into account
applicable extensions of time to file) with the appropriate taxing authority all
federal and state income tax returns and all other material tax returns,
domestic and foreign (the "Returns") required to be filed by, or with respect to
the income, properties or operations of, the Borrower and/or any of its
Subsidiaries. The Returns accurately reflect in all material respects all
liability for taxes of the Borrower and its Subsidiaries for the periods covered
thereby. Each of the Borrower and each of its Subsidiaries has paid all taxes
and assessments payable by it which have become due, other than those that are
being contested in good faith and adequately disclosed and fully provided for on
the financial statements of the Borrower and its Subsidiaries in accordance with
generally accepted accounting principles. There is no material action, suit,
proceeding, investigation, audit or claim now pending or, to the best knowledge
of the Borrower, threatened by any authority regarding any taxes relating to the
Borrower or any of its Subsidiaries. As of the Initial Borrowing Date, neither
the Borrower nor any of its Subsidiaries has entered into an agreement or waiver
or been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Borrower or
any of its Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of the Borrower or any of its
Subsidiaries not to be subject to the normally applicable statute of
limitations. Neither the Borrower nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code. Neither the Borrower nor any of its Subsidiaries has incurred, nor
will any of them incur, any material tax liability in connection with the
Transaction or any other transactions contemplated hereby (it being understood
that the representation contained in this sentence does not cover any future tax
liabilities of the Borrower or any of its Subsidiaries arising as a result of
the operation of their businesses in the ordinary course of business).
7.10. Compliance with ERISA. Schedule IV sets forth, as of the Initial
Borrowing Date, the name of each Plan. Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including, without limitation, ERISA and the Code; each
Plan (and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
32
and 501(a) of the Code; neither the Borrower nor any of its ERISA Affiliates has
ever maintained or contributed to, or had any obligation to contribute to (or
borne any liability with respect to) any "employee pension benefit plan," within
the meaning of Section 3(2) of ERISA, that is a "multiemployer plan," within the
meaning of Section 3(37) of ERISA, or that is subject to the minimum funding
standards of Section 412 of the Code or Section 302 of ERISA or subject to Title
IV of ERISA; neither the Borrower nor any of its ERISA Affiliates has ever
maintained or contributed to, or had any obligation to contribute to (or borne
any liability with respect to) any Foreign Pension Plan; all contributions
required to be made with respect to a Plan have been timely made; neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred
any material liability (including any indirect, contingent or secondary
liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4204 or 4212 of ERISA or Section 4975 of the Code or expects to incur any
such material liability under any of the foregoing sections with respect to any
Plan; no condition exists which presents a material risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a material
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, expected or
threatened; each group health plan (as defined in Section 607(l) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of the Borrower, any Subsidiary of the Borrower, or any ERISA
Affiliate has at all times been operated in compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code, except
for any failure to so comply which could not, individually or in the aggregate,
reasonably be expected to result in a material liability of the Borrower or any
Subsidiary of the Borrower; no lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and the Borrower and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
7.11. The Security Documents.
(a) The provisions of the Security Agreement are effective to create
in favor of the Collateral Agent for the benefit of the Secured Creditors a
legal, valid and enforceable security interest in all right, title and interest
of the Credit Parties in the Security Agreement Collateral described therein,
and the Collateral Agent, for the benefit of the Secured Creditors, has (or
within 10 days following the Initial Borrowing Date will have) a fully perfected
security interest in all right, title and interest in all of the Security
Agreement Collateral described therein, subject to no other Liens other than
Permitted Liens. The recordation of (x) the Grant of Security Interest in U.S.
Patents and (y) the Grant of Security Interest in U.S. Trademarks in the
respective form attached to the Security Agreement, in each case in the United
States Patent and Trademark Office, together with filings on Form UCC-1 made
pursuant to the Security Agreement, will create, as may be perfected by such
filings and recordation, a perfected security interest in the United States
trademarks and patents covered by the Security Agreement, and the recordation of
33
the Grant of Security Interest in U.S. Copyrights in the form attached to the
Security Agreement with the United States Copyright Office, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will create, as
may be perfected by such filings and recordation, a perfected security interest
in the United States copyrights covered by the Security Agreement.
(b) The security interests created under the Pledge Agreement in favor
of the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors,
constitute perfected security interests in the Pledge Agreement Collateral
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledge
Agreement Collateral under the Pledge Agreement other than with respect to that
portion of the Pledge Agreement Collateral constituting a "general intangible"
under the UCC.
7.12. Properties. All Real Property owned or leased by the Borrower or any
of its Subsidiaries as of the Initial Borrowing Date, and the nature of the
interest therein, is correctly set forth in Schedule III. Each of the Borrower
and each of its Subsidiaries has good and indefeasible title to all material
properties owned by it, including all material property reflected in the balance
sheets referred to in Section 7.5(a) (except as sold or otherwise disposed of
since the date of such balance sheet in the ordinary course of business or as
permitted by the terms of this Agreement), free and clear of all Liens, other
than Permitted Liens.
7.13. Capitalization. On the Initial Borrowing Date, the authorized capital
stock of the Borrower consists of 100,000,000 shares of common stock, $0.001 par
value, of which 35,414,129 shares are issued and outstanding, and 1,000,000
authorized shares of preferred stock, none of which are outstanding. All
outstanding shares of capital stock of the Borrower have been duly and validly
issued and are fully paid and non-assessable. The Borrower does not have
outstanding any capital stock or other securities convertible into or
exchangeable for its capital stock or any rights to subscribe for or to
purchase, or any options for the purchase of, or any agreement providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, its capital stock.
7.14. Subsidiaries. As of the Initial Borrowing Date, the Borrower has no
Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule V
correctly sets forth as of the Initial Borrowing Date, the percentage ownership
(direct or indirect) of the Borrower in each class of capital stock or other
equity of its Subsidiaries and also identifies the direct owner thereof.
7.15. Compliance with Statutes, etc. Each of the Borrower and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
34
7.16. Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.17. Public Utility Holdings Company Act. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holdings Company
Act of 1935, as amended.
7.18. Environmental Matters.
(a) Each of the Borrower and each of its Subsidiaries is in compliance
with all applicable Environmental Laws and the requirements of any permits
issued under such Environmental Laws. There are no pending or, to the knowledge
of the Borrower, threatened Environmental Claims against the Borrower or any of
its Subsidiaries or any Real Property owned, leased or operated by the Borrower
or any of its Subsidiaries (including any such claim arising out of the
ownership, lease or operation by the Borrower or any of its Subsidiaries of any
Real Property formerly owned, leased or operated by the Borrower or any of its
Subsidiaries but no longer owned, leased or operated by the Borrower or any of
its Subsidiaries). There are no facts, circumstances, conditions or occurrences
with respect to the business or operations of the Borrower or any of its
Subsidiaries, or any Real Property owned, or to the knowledge of the Borrower,
leased or operated by the Borrower or any of its Subsidiaries (including any
Real Property formerly owned, leased or operated by the Borrower or any of its
Subsidiaries but no longer owned, leased or operated by the Borrower or any of
its Subsidiaries) or, to the knowledge of the Borrower, any property adjoining
or adjacent to any such Real Property that could be reasonably expected (i) to
form the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries or (ii) to cause any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries to be subject to any
restrictions on the ownership, lease, occupancy or transferability of such Real
Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, or Released on or from, any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, any property adjoining or
adjacent to any Real Property, where such generation, use, treatment, storage,
transportation or Release has violated or could be reasonably expected to
violate any applicable Environmental Law or give rise to an Environmental Claim.
(c) Notwithstanding anything to the contrary in this Section 7.18, the
representations and warranties made in this Section 7.18 shall be untrue only if
the effect of any or all conditions, violations, claims, restrictions, failures
and noncompliances of the types described above could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
35
7.19. Labor Relations. Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect. There is
(i) no unfair labor practice complaint pending against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the knowledge of
the Borrower, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries and (iii) no union representation question exists with respect to
the employees of the Borrower or any of its Subsidiaries, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.
7.20. Intellectual Property, etc. Each of the Borrower and each of its
Subsidiaries owns or has the right to use all the patents, trademarks, permits,
domain names, service marks, trade names, copyrights, licenses, franchises,
inventions, trade secrets, proprietary information and know-how of any type,
whether or not written (including, but not limited to, rights in computer
programs and databases) and formulas, or rights with respect to the foregoing,
and has obtained assignments of all leases, licenses and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect,
7.21. Indebtedness. Schedule VII sets forth a true and complete list of all
Indebtedness (including Contingent Obligations) of the Borrower and its
Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding
after giving effect to the Transaction, in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any Credit
Party or any of its Subsidiaries which directly or indirectly guarantees such
debt.
7.22. Insurance. Schedule VIII sets forth a true and complete listing of
all insurance maintained by the Borrower and its Subsidiaries as of the Initial
Borrowing Date, with the amounts insured (and any deductibles) set forth
therein.
7.23. Representations and Warranties in Other Documents. All
representations and warranties set forth in the other Credit Documents were true
and correct in all material respects at the time as of which such
representations and warranties were made (or deemed made) and shall be true and
correct in all material respects as of the Initial Borrowing Date as if such
representations or warranties were made on and as of such date (it being
understood and agreed that any such representation or warranty which by its
terms is made as of a specified date shall be true and correct in all material
respects as of such specified date).
7.24. Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization, etc. Schedule VI attached hereto
contains the exact legal name of the Borrower and each Subsidiary Guarantor, the
type of organization of the Borrower and each Subsidiary Guarantor, whether or
36
not the Borrower and each Subsidiary Guarantor is a registered organization, the
jurisdiction of organization of the Borrower and each Subsidiary Guarantor, and
the organizational identification number (if any) of the Borrower and each
Subsidiary Guarantor. To the extent that the Borrower or any Subsidiary
Guarantor does not have an organizational identification number on the date
hereof and later obtains one, the Borrower or such Subsidiary Guarantor shall
promptly thereafter notify the Collateral Agent of such organizational
identification number and shall take all actions reasonably satisfactory to the
Collateral Agent to the extent necessary to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby fully
perfected and in full force and effect.
SECTION 8. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in
each case together with interest thereon), Fees and all other Obligations (other
than indemnities described in Section 13.13 which are not then due and payable)
incurred hereunder and thereunder, are paid in full:
8.1. Information Covenants. The Borrower will furnish to each Lender:
(a) Monthly Reports. Within 30 days after the end of each fiscal month
of the Borrower (45 days in the event such fiscal month is also a fiscal quarter
end of the Borrower) (commencing with its fiscal month ending on February 28,
2003), the consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal month and the related consolidated statement of income
and statement of cash flows for such fiscal month and for the elapsed portion of
the fiscal year ended with the last day of such fiscal month, in each case
setting forth comparative figures for the corresponding fiscal month in the
prior fiscal year and comparable budgeted figures for such fiscal month as set
forth in the respective budget delivered pursuant to Section 8.1(d), all of
which shall be certified by the chief financial officer or the controller of the
Borrower that they fairly present in all material respects in accordance with
generally accepted accounting principles the financial condition of the Borrower
and its Subsidiaries as of the dates indicated and the results of their
operations for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes.
(b) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Borrower, (i) the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statement of cash
flows for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified without qualification or going concern issues by
Deloitte Touche Tohmatsu or other independent auditor of recognized national
standing selected by the Borrower and reasonably acceptable to the Required
Lenders, together with a report of such audit firm stating that in the course of
its regular audit of the financial statements of the Borrower and its
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such audit firm obtained no knowledge of any Default or an
Event of Default relating to financial or accounting matters which has occurred
and is continuing or, if in the opinion of such accounting firm such a Default
or an Event of Default has occurred and is continuing, a statement as to the
nature thereof, (ii) containing a computation of each financial ratio or
37
restriction contained in this Agreement, and (iii) management's discussion and
analysis of the important operational and financial developments during such
fiscal year.
(c) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its auditor and management's response thereto.
(d) Budgets. No later than 30 days following the first day of each
fiscal year of the Borrower, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income, sources and uses
of cash and balance sheets for the Borrower and its Subsidiaries on a
consolidated basis) (i) for each of the twelve months of such fiscal year
prepared in detail and (ii) for the two immediately succeeding fiscal years
prepared in summary form, in each case setting forth, with appropriate
discussion, the principal assumptions upon which such budget is based; provided,
however, for the Fiscal Year 2003, the Borrower shall have until March 31, 2003
to deliver such statement of sources and uses of cash and balance sheet only.
(e) Officer's Certificates. Within 45 days after each fiscal quarter
of the Borrower, a compliance certificate from the chief financial officer or
the controller of the Borrower in the form of Exhibit J certifying on behalf of
the Borrower that, (x) to such officer's best knowledge after due inquiry, no
Default or Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall set forth in reasonable detail the
calculations required to establish whether the Borrower and its Subsidiaries
were in compliance with the provisions of Sections 4.2, 9.1(x), 9.1(xii),
9.2(iv), 9.4(ii), 9.5(v) and 9.7 through 9.12, inclusive, at the end of such
fiscal month, quarter or year, as the case may be and (y) (i) no changes are
required to be made to any of Schedule VI hereto, Xxxxxxx X, X, X, X, 0, X and K
of the Security Agreement or Annexes A through F of the Pledge Agreement, in
each case so as to make the information set forth therein accurate and complete
as of the date of such certificate, or (ii) to the extent that such information
is no longer accurate and complete as of such date, list in reasonable detail
all information necessary to make such Schedule and all such Annexes accurate
and complete (at which time such Schedule and/or all such Annexes, as the case
may be, shall be deemed modified to reflect such information) .
(f) Notice of Default, Litigation and Material Adverse Effect.
Promptly, and in any event within three Business Days after any officer of the
Borrower or any of its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default, (ii)
any litigation or governmental investigation or proceeding pending against the
Borrower or any of its Subsidiaries (x) which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or (y)
with respect to any Credit Document, (iii) the occurrence of any event which
constitutes a default under, or causes the termination of, any material contract
of the Borrower or any of its Subsidiaries, including any license, distribution
agreement, supply agreement or manufacturing agreement, or (iv) any other event,
change or circumstance that has had, or could reasonably be expected to have, a
Material Adverse Effect.
38
(g) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports, if
any, which the Borrower or any of its Subsidiaries shall publicly file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders (or any trustee, agent or other representative therefor) of
its material Indebtedness pursuant to the terms of the documentation governing
such Indebtedness.
(h) Environmental Matters. Promptly after any officer of the Borrower
or any of its Subsidiaries obtains knowledge thereof, notice of one or more of
the following environmental matters to the extent that such environmental
matters, either individually or when aggregated with all other such
environmental matters, could reasonably be expected to have a Material Adverse
Effect:
(i) any pending or threatened Environmental Claim against the Borrower
or any of its Subsidiaries or any Real Property owned, leased or operated
by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries that
(a) results in noncompliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (b) could reasonably be expected
to form the basis of an Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to any
restrictions on the ownership, lease, occupancy, use or transferability by
the Borrower or any of its Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; provided that in any event the Borrower shall
deliver to each Lender all notices received by the Borrower or any of its
Subsidiaries from any government or governmental agency under, or pursuant
to, CERCLA which identify the Borrower or any of its Subsidiaries as
potentially responsible parties for remediation costs or which otherwise
notify the Borrower or any of its Subsidiaries of potential liability under
CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto.
39
(i) Borrowing Base Certificate. Within thirty (30) days after the end
of each month (45 days in the event such month is also a fiscal quarter end of
the Borrower), deliver to the Administrative Agent a Borrowing Base Certificate,
certified as accurate by the Borrower and acceptable to the Administrative Agent
in its sole and absolute discretion.
(j) Aged Accounts Schedule. Within thirty (30) days after the end of
each month (45 days in the event such month is also a fiscal quarter end of the
Borrower), deliver to the Administrative Agent an aged schedule of the Accounts
of the Borrower, listing the name and amount due from each Account Debtor and
showing the aggregate amounts due from (i) 0-30 days, (ii) 31-60 days, (iii)
61-90 days and (iv) more than 90 days, and certified as accurate by an
appropriate officer of the Borrower.
(k) Inventory Reports. Within thirty (30) days after the end of each
month (45 days in the event such month is also a fiscal quarter end of the
Borrower), deliver to the Administrative Agent an inventory report, in form and
substance satisfactory to the Administrative Agent, certified as accurate by an
appropriate officer of the Borrower.
(l) Field Audits. The Borrower shall, and shall cause each Subsidiary
to, allow the Administrative Agent, at the Borrower's sole expense, to conduct
an annual field examination of the Collateral, the results of which must be
satisfactory to the Required Lenders in the Required Lenders' sole and absolute
discretion.
(m) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request.
8.2. Books, Records and Inspections; Annual Meetings.
(a) The Borrower will, and will cause each of its Subsidiaries to,
keep proper books of record and accounts in which full, true and correct entries
in conformity with generally accepted accounting principles and all requirements
of law shall be made of all dealings and transactions in relation to its
business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Lender to visit and inspect, under guidance of
officers of the Borrower or such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of account of the Borrower
or such Subsidiary and discuss the affairs, finances and accounts of the
Borrower or such Subsidiary with, and be advised as to the same by, its and
their officers and independent accountants, all upon reasonable prior notice and
at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any such Lender may reasonably request. If a Default or
an Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by the Administrative Agent,
the Borrower shall, and shall cause each of its Subsidiaries to, provide such
access to the Administrative Agent at all times and without advance notice.
Furthermore, so long as any Default or Event of Default has occurred and is
continuing, the Borrower and each of its Subsidiaries shall provide the
Administrative Agent with access to their suppliers and customers.
40
(b) At a date to be mutually agreed upon between the Administrative
Agent and the Borrower occurring on or prior to the 120th day after the close of
each fiscal year of the Borrower, the Borrower will, at the request of the
Administrative Agent, hold a meeting with all of the Lenders at which meeting
will be reviewed the financial results of the Borrower and its Subsidiaries for
the previous fiscal year and the budgets presented for the current fiscal year
of the Borrower.
8.3. Maintenance of Property; Insurance.
(a) The Borrower will, and will cause each of its Subsidiaries to, (i)
keep all property necessary to the business of the Borrower and its Subsidiaries
in good working order and condition, ordinary wear and tear excepted, (ii)
maintain with financially sound and reputable insurance companies insurance on
all such property and against all such risks as is consistent and in accordance
with industry practice for companies similarly situated owning similar
properties and engaged in similar businesses as the Borrower and its
Subsidiaries and (iii) furnish to the Administrative Agent, upon its request
therefor, full information as to the insurance carried. In addition to the
requirements of the immediately preceding sentence, the Borrower will at all
times cause insurance of the types described in Schedule VIII to be maintained
(with the same scope of coverage as that described in Schedule VIII) at levels
which are consistent with their practices immediately before the Initial
Borrowing Date. Such insurance shall include physical damage insurance on all
real and personal property (whether now owned or hereafter acquired) on an all
risk basis and business interruption insurance. The provisions of this Section
8.3 shall be deemed supplemental to, but not duplicative of, the provisions of
any Security Documents that require the maintenance of insurance. In addition to
the foregoing, the Borrower acknowledges and agrees that (x) the Administrative
Agent has the right, on an annual basis, to review the insurance then being
maintained by the Borrower and its Subsidiaries and to require the Borrower and
its Subsidiaries to increase their levels of coverage from that which then
exists to the extent that the Administrative Agent has a reasonable basis to
require same and (y) it will, and will cause each of its Subsidiaries to, within
30 days following such a request by the Administrative Agent, use reasonable
commercial efforts to obtain such increased insurance coverage.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
all times keep its property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by the Borrower and/or such
Subsidiaries) (i) shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee and/or additional insured), (ii) shall state
that such insurance policies shall not be canceled without at least 30 days'
prior written notice thereof by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the other Secured
Creditors, and (iv) shall be deposited with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain
insurance in accordance with this Section 8.3, or if the Borrower or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
41
with respect thereto, the Administrative Agent shall have the right (but shall
be under no obligation) to procure such insurance and the Borrower agrees to
reimburse the Administrative Agent for all reasonable costs and expenses of
procuring such insurance.
8.4. Existence; Franchises. The Borrower will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses, permits, copyrights, trademarks and patents; provided, however, that
nothing in this Section 8.4 shall prevent (i) sales of assets and other
transactions by the Borrower or any of its Subsidiaries in accordance with
Section 9.2 or (ii) the withdrawal by the Borrower or any of its Subsidiaries
(other than First Horizon International) of its qualification as a foreign
corporation, partnership or limited liability company, as the case may be, in
any jurisdiction if such withdrawal could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.5. Compliance with Statutes, etc. The Borrower will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
8.6. Compliance with Environmental Laws.
(a) The Borrower will comply, and will cause each of its Subsidiaries
to comply, with all Environmental Laws and permits applicable to, or required
by, the ownership, lease or use of its Real Property now or hereafter owned,
leased or operated by the Borrower or any of its Subsidiaries, except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, and will promptly pay or cause to
be paid all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any Liens
imposed pursuant to such Environmental Laws. Neither the Borrower nor any of its
Subsidiaries will generate, use, treat, store, Release or dispose of, or permit
the generation, use, treatment, storage, Release or disposal of Hazardous
Materials on any Real Property now or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries, or transport or permit the transportation
of Hazardous Materials to or from any such Real Property, except for Hazardous
Materials generated, used, treated, stored, Released or disposed of at any such
Real Properties in compliance in all material respects with all applicable
Environmental Laws and as required in connection with the normal operation, use
and maintenance of the business or operations of the Borrower or any of its
Subsidiaries.
(b) (i) After the receipt by the Administrative Agent or any Lender of
any notice of the type described in Section 8.1(h), (ii) at any time that the
Borrower or any of its Subsidiaries are not in compliance with Section 8.6(a) or
(iii) in the event that any Event of Default is in existence, the Borrower will
42
provide, at the sole expense of the Borrower and at the request of the
Administrative Agent, an environmental site assessment report concerning any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with such Hazardous Materials on such Real Property. If the Borrower fails to
provide the same within 45 days after such request was made, the Administrative
Agent may order the same, the cost of which shall be borne by the Borrower, and
the Borrower shall grant and hereby grants to the Administrative Agent and the
Lenders and their respective agents access to such Real Property and
specifically grants the Administrative Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment at any reasonable time upon reasonable notice to the Borrower, all at
the sole expense of the Borrower.
8.7. ERISA. As soon as possible and, in any event, within ten (10) days
after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrower
will deliver to each of the Lenders a certificate of the chief financial officer
or the Controller of the Borrower setting forth the full details as to such
occurrence and the action, if any, that the Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given or filed by the Borrower, such Subsidiary, the
Plan administrator or such ERISA Affiliate to or with the PBGC or any other
governmental agency, or a Plan participant and any notices received by the
Borrower, such Subsidiary or such ERISA Affiliate from the PBGC or any other
government agency, or a Plan participant with respect thereto: that a Reportable
Event has occurred (except to the extent that the Borrower has previously
delivered to the Lenders a certificate and notices (if any) concerning such
event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect to such Plan within the
following 30 days; that an accumulated funding deficiency, within the meaning of
Section 412 of the Code or Section 302 of ERISA, has been incurred or an
application may be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made; that a Plan
has been or may be terminated, reorganized, partitioned or declared insolvent
under Title IV of ERISA; that a Plan has an Unfunded Current Liability; that
proceedings may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA; that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate will or may incur any material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
43
4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(1) of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code; or that the Borrower
or any Subsidiary of the Borrower may incur any material liability for retiree
benefits pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by the severance pay Plans of the Borrower or
any of its Subsidiaries or Section 601 of ERISA) or any Plan or any Foreign
Pension Plan. The Borrower will deliver to each of the Lenders copies of any
records, documents or other information that must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA. At the request of any
Lender, the Borrower will also deliver to such Lender a complete copy of the
annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Lenders
pursuant to the first sentence hereof, copies of annual reports and any records,
documents or other information required to be furnished to the PBGC, and any
material notices received by the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate with respect to any Plan or Foreign Pension Plan or received
from any governmental agency or plan administrator or sponsor or trustee with
respect to any multiemployer plan (as defined in Section 4001(a)(3) of ERISA),
shall be delivered to the Lenders no later than ten (10) days after the date
such records, documents and/or information has been furnished to the PBGC or any
other governmental agency or such notice has been received by the Borrower, the
respective Subsidiary or the ERISA Affiliate, as applicable. The Borrower will
ensure, and cause each of its applicable Subsidiaries to ensure, that all
Foreign Pension Plans administered by it or into which it makes payments obtains
or retains (as applicable) registered status under and as required by applicable
law and is administered in a timely manner in all respects in compliance with
all applicable laws except where the failure to do any of the foregoing could
not, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.8. End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i) each
of its, and each of its Subsidiaries', fiscal years to end on December 31 of
each year and (ii) each of its, and each of its Subsidiaries', fiscal quarters
to end on dates which are consistent with a fiscal year end as described above.
8.9. Performance of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, loan agreement or credit agreement and
each other agreement, contract or instrument by which it is bound, except such
non-performances as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
8.10. Payment of Taxes. The Borrower will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, prior to the date on which penalties attach
44
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Borrower or any of its Subsidiaries not otherwise
permitted under Section 9.1(i); provided that neither the Borrower nor any of
its Subsidiaries shall be required to pay any such tax, assessment, charge, levy
or claim which is being contested in good faith and by proper proceedings if it
has maintained adequate reserves with respect thereto in accordance with
generally accepted accounting principles.
8.11. Use of Proceeds. The Borrower will use the proceeds of the Loans only
as provided in Section 7.8.
8.12. Additional Security; Further Assurances, etc.
(a) The Borrower will, and will cause each of the other Credit Parties
that are Subsidiaries (other than International Subsidiaries) of the Borrower
to, grant to the Collateral Agent for the benefit of the Secured Creditors
security interests and Mortgages in such assets and properties of the Borrower
and such other Credit Parties that are Subsidiaries (other than International
Subsidiaries) of the Borrower as are not covered by the original Security
Documents and as may be reasonably requested from time to time by the
Administrative Agent or the Required Lenders (collectively, the "Additional
Security Documents"). All such security interests and Mortgages shall be granted
pursuant to documentation reasonably satisfactory in form and substance to the
Administrative Agent and shall constitute valid and enforceable perfected
security interests and Mortgages superior to and prior to the rights of all
third Persons and subject to no other Liens except for Permitted Liens. The
Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
(b) The Borrower will, and will cause each of the other Credit Parties
that are Subsidiaries (other than International Subsidiaries) of the Borrower
to, at the expense of the Borrower, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports, landlord waivers, bailee agreements, control
agreements and other assurances or instruments and take such further steps
relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require. Furthermore, the Borrower will, and
will cause the other Credit Parties that are Subsidiaries (other than
International Subsidiaries) of the Borrower to, deliver to the Collateral Agent
such opinions of counsel, title insurance and other related documents as may be
reasonably requested by the Administrative Agent to assure itself that this
Section 8.12 has been complied with.
(c) If the Administrative Agent or the Required Lenders reasonably
determine that they are required by law or regulation to have appraisals
prepared in respect of any Real Property of the Borrower and its Subsidiaries
constituting Collateral, the Borrower will, at their own expense, provide to the
Administrative Agent appraisals which satisfy the applicable requirements of the
45
Real Estate Appraisal Reform Amendments of the Financial Institution Reform,
Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be
in form and substance reasonably satisfactory to the Administrative Agent.
(d) The Borrower agrees that each action required by clauses (a)
through (c) of this Section 8.12 shall be completed as soon as possible, but in
no event later than 75 days after such action is requested to be taken by the
Administrative Agent or the Required Lenders; provided that, in no event will
the Borrower or any of its Subsidiaries be required to take any action, other
than using its reasonable commercial efforts, to obtain consents from third
parties with respect to its compliance with this Section 8.12.
8.13. Ownership of Subsidiaries; etc. The Borrower will, and will cause
each of its Subsidiaries to, own 100% of the capital stock and other equity
interests of each of their Subsidiaries (other than directors' qualifying shares
to the extent required by applicable law).
8.14. Corporate Separateness. Each Credit Party will, and will cause each
of its Subsidiaries to, satisfy customary corporate, limited liability company
or partnership formalities, as the case may be, including the holding of regular
board of directors' and shareholders' meetings or action by directors or
shareholders without a meeting and the maintenance of corporate, limited
liability company or partnership, as the case may be, offices and records.
Finally, neither the Borrower nor any of its Subsidiaries will take any action,
or conduct its affairs in a manner which is likely to result in the corporate,
limited liability company or partnership, as the case may be, existence of the
Borrower or any of its Subsidiaries being ignored, or in the assets and
liabilities of the Borrower or any of its Subsidiaries being substantively
consolidated with those of the Borrower and its other Subsidiaries in a
bankruptcy, reorganization or other insolvency proceeding.
8.15. Landlord Waivers. The Borrower will use its reasonable commercial
efforts to obtain and deliver to the Administrative Agent fully executed
landlord waivers, as requested by the Administrative Agent prior to the Initial
Borrowing Date and listed on Schedule XII, as promptly as possible after the
Initial Borrowing Date.
8.16. Pledge Agreement Collateral. Unless sooner demanded by the Collateral
Agent, concurrently with the funding of the initial loan under the First Horizon
International Financing, each Credit Party shall have delivered to the
Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral,
if any, referred to in the Pledge Agreement and then owned by such Credit Party,
(x) endorsed in blank in the case of promissory notes constituting Pledge
Agreement Collateral and (y) together with executed and undated endorsements for
transfer in the case of equity interests constituting certificated Pledge
Agreement Collateral, along with evidence that all other actions necessary or,
in the reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Pledge Agreement have been
taken and the Pledge Agreement shall be in full force and effect.
SECTION 9. NEGATIVE COVENANTS. The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in
46
each case, together with interest thereon), Fees and all other Obligations
(other than any indemnities described in Section 13.13 which are not then due
and payable) incurred hereunder and thereunder, are paid in full:
9.1. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute; provided that the provisions of this
Section 9.1 shall not prevent the creation, incurrence, assumption or existence
of the following (Liens described below are herein referred to as "Permitted
Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Borrower's or
such Subsidiary's property or assets or materially impair the use thereof
in the operation of the business of the Borrower or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule IX but only
to the respective date, if any, set forth in such Schedule IX for the
removal, replacement and termination of any such Liens, plus renewals,
replacements and extensions of such Liens to the extent set forth on such
Schedule IX, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal, replacement or
extension and (y) any such renewal, replacement or extension does not
encumber any additional assets or properties of the Borrower or any of its
Subsidiaries;
(iv) Liens created pursuant to the Security Documents;
(v) licenses, sublicenses, leases or subleases granted to other
Persons not materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
47
(vi) Liens upon assets of the Borrower or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 9.4(ii), provided that (x) such
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset
of the Borrower or any Subsidiary of the Borrower;
(vii) Liens placed upon equipment or machinery acquired after the
Initial Borrowing Date and used in the ordinary course of business of the
Borrower or any of its Subsidiaries and placed at the time of the
acquisition thereof by the Borrower or such Subsidiary or within 90 days
thereafter to secure Indebtedness incurred to pay all or a portion of the
purchase price thereof or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such equipment or machinery or
extensions, renewals or replacements of any of the foregoing for the same
or a lesser amount, provided that (x) the Indebtedness secured by such
Liens is permitted by Section 9.4(ii) and (y) in all events, the Lien
encumbering the equipment or machinery so acquired does not encumber any
other asset of the Borrower or such Subsidiary;
(viii) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness and not materially interfering with the conduct
of the business of the Borrower or any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into in the ordinary course of business
and in accordance with Section 9.2(v);
(x) Liens arising out of the existence of judgments or awards in
respect of which the Borrower or any of its Subsidiaries shall in good
faith be prosecuting an appeal or proceedings for review and in respect of
which there shall have been secured a subsisting stay of execution pending
such appeal or proceedings, provided that the aggregate amount of all cash
and the fair market value of all other property subject to such Liens does
not exceed $500,000 at any time outstanding;
(xi) statutory and common law landlords' liens under leases to which
the Borrower or any of its Subsidiaries is a party;
(xii) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance and social security benefits and Liens securing the
performance of bids, tenders, leases and contracts in the ordinary course
of business, statutory obligations, surety bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business and consistent with past practice (exclusive of obligations in
respect of the payment for borrowed money), provided that the aggregate
amount of all cash and the fair market value of all other property subject
to all Liens permitted by this clause (xii) shall not at any time exceed
$500,000;
48
(xiii) Permitted Encumbrances; and
(xiv) Liens in favor of the Collateral Agent and the Secured Creditors
in connection with the First Horizon International Financing.
In connection with the granting of Liens of the type described in clauses (vi)
and (vii) of this Section 9.1 by the Borrower of any of its Subsidiaries, the
Administrative Agent and the Collateral Agent shall be authorized to take any
actions deemed reasonably appropriate by it in connection therewith (including,
without limitation, by executing appropriate lien releases or lien subordination
agreements in favor of the holder or holders of such Liens, in either case
solely with respect to the item or items of equipment or other assets subject to
such Liens).
9.2. Consolidation, Merger, Purchase or Sale of Assets, etc. The Borrower
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any partnership, joint venture, or
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of all or any part of its property or assets, or enter into any
sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment in the
ordinary course of business) of any Person (or agree to do any of the foregoing
at any future time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.7;
(ii) each of the Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(iii) Investments may be made to the extent permitted by Section 9.5;
(iv) the Borrower and its Subsidiaries may sell assets (other than the
capital stock or other equity interests of any Subsidiary), so long as (v)
no Default or Event of Default then exists or would result therefrom, (w)
each such sale is in an arm's-length transaction and the Borrower or the
respective Subsidiary receives at least fair market value (as determined in
good faith by the Borrower or such Subsidiary, as the case may be), (x) the
consideration received by the Borrower or such Subsidiary consists solely
of cash and is paid at the time of the closing of such sale, (y) the Net
Sale Proceeds therefrom are applied as required by Section 4.2(d) and (z)
the aggregate amount of the proceeds received from all assets sold pursuant
to this clause (iv) shall not exceed $500,000 in any fiscal year of the
Borrower without the consent of the Required Lenders;
(v) each of the Borrower and its Subsidiaries may lease (as lessee) or
license (as licensee) real or personal property (so long as any such lease
or license does not create a Capitalized Lease Obligation except to the
49
extent permitted by Section 9.4(ii)) and the aggregate rentals thereunder
do not exceed $5,000,000 for leases of automobiles and $1,000,000 for
leases of other equipment;
(vi) each of the Borrower and its Subsidiaries may sell or discount,
in each case without recourse and in the ordinary course of business and
for cash at fair market value (as determined by the Borrower in good
faith), accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof and not as
part of any financing transaction, provided that the aggregate amount of
such sales shall not exceed $500,000 in any fiscal year of the Borrower;
(vii) each of the Borrower and its Subsidiaries may grant licenses,
sublicenses, leases or subleases to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries, in each case so long as no such grant otherwise affects the
Collateral Agent's security interest in the asset or property subject
thereto;
(viii) the Borrower and the International Subsidiaries may enter the
transaction described in Section 13.17 on the conditions contained therein;
and
(ix) in connection with any Acquisition permitted pursuant to Section
9.5(vi) and if the result of such Acquisition is a Subsidiary, the Borrower
and such Subsidiary shall have complied with Section 9.16.
To the extent the Required Lenders waive the provisions of this Section 9.2 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.2 (other than to the Borrower or a Subsidiary thereof), such
Collateral shall be sold free and clear of the Liens created by the Security
Documents, and the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate in order to effect the
foregoing.
9.3. Dividends. The Borrower will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that any Subsidiary of the Borrower
may pay cash Dividends to the Borrower or to any Wholly-Owned Subsidiary of the
Borrower.
9.4. Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Indebtedness of the Borrower and its Subsidiaries evidenced by
Capitalized Lease Obligations (to the extent permitted pursuant to Section
9.7) and purchase money Indebtedness described in Section 9.1(vii),
provided that in no event shall the sum of the aggregate outstanding
principal amount of all Capitalized Lease Obligations and purchase money
50
Indebtedness permitted by this clause (ii) exceed at any time $1,000,000;
(iii) Indebtedness in connection with the First Horizon International
Financing; and
(iv) Indebtedness in connection with Other Hedging Agreements incurred
in the ordinary course of business up to a maximum notional amount of
$3,000,000.
9.5. Advances, Investments and Loans. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents
(each of the foregoing an "Investment" and, collectively, "Investments"), except
that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivable owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms of the Borrower or such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) the Borrower and its Subsidiaries may hold the Investments held
by them on the Initial Borrowing Date and described on Schedule X, provided
that any additional Investments made with respect thereto shall be
permitted only if permitted under the other provisions of this Section 9.5;
(iv) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and advances to
their officers and employees for moving, relocation and travel expenses and
other similar expenditures, in each case in the ordinary course of business
in an aggregate amount not to exceed $500,000 at any time (determined
without regard to any write-downs or write-offs of such loans and
advances); and
(vi) investments in order to consummate Acquisitions, provided that:
(i) in the case of Acquisitions involving mergers or consolidations, the
Borrower or the applicable Subsidiary shall be the continuing or surviving
corporation, (ii) before and after giving effect to the Acquisition, no
51
Default or Event of Default shall have occurred and be continuing, (iii)
such Acquisitions are undertaken in accordance with applicable laws; (iv)
the prior, effective written consent or approval to such Acquisition of the
board or directors or equivalent governing body of the acquiree is
obtained; (v) Borrower and its Subsidiaries hold cash and Cash Equivalents
and Revolving Loan Availability in a minimum amount of $5,000,000; (vi) the
Borrower has additional Revolving Loan Availability of at least $5,000,000;
(vii) the Borrower shall have received the prior written consent of the
Required Lenders for any Acquisition the consideration for which equals or
exceeds $20,000,000; (viii) the Borrower and its Subsidiaries, before and
after giving effect to such Acquisition, shall be compliant with all
financial covenants contained in the Credit Documents on an actual and pro
forma basis; and (ix) the Collateral Agent shall be able to obtain a first
priority Lien on the assets which are the subject of the Acquisition and
have available to it enforcement remedies against the acquirer and acquiree
in order to be able to realize maximum value from such acquired assets in
the event of an Event of Default.
9.6. Transactions with Affiliates. The Borrowers will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions with any Affiliate of the Borrower or any of its
Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except that (i) Dividends may be paid to the extent provided in Section 9.3 and
(ii) customary fees may be paid to non-officer directors of the Borrower and its
Subsidiaries.
9.7. Capital Expenditures. The Borrower will not, and will not permit any
of its Subsidiaries to, make any Capital Expenditures, except that during any
fiscal year of the Borrower (taken as one accounting period), the Borrower and
its Subsidiaries may make Capital Expenditures so long as the aggregate amount
of all such Capital Expenditures does not exceed $600,000 in the aggregate
during any fiscal year ended after December 31, 2002. In addition, Borrower may
spend up to $2,000,000 in the aggregate to implement its sales force automation
system, including hardware and software.
9.8. Consolidated Interest Coverage Ratio. The Borrower will not permit the
Consolidated Interest Coverage Ratio for any Test Period ending on or after
December 31, 2002 to be less than 5.00:1.00.
52
9.9. Minimum Consolidated EBITDA. The Borrower will not permit Consolidated
EBITDA for any Test Period ending on the last day of a fiscal quarter of the
Borrower set forth below to be less than the amount set forth opposite such
fiscal quarter below:
Fiscal Quarter
Ending Closet To Amount
---------------- ------
December 31, 2002 through September 29, 2003 $27,000,000
September 30, 2003 through December 30, 2003 $30,000,000
December 31, 2003 and thereafter $36,000,000
Notwithstanding that the foregoing covenant is measured on the last day of a
fiscal quarter, compliance is required at all times during such fiscal quarter.
9.10. Leverage Ratio. The Borrower will not permit the Leverage Ratio for
any Test Period ending on the last day of the fiscal quarter of the Borrower set
forth below to be greater than the ratio set forth opposite such fiscal quarter
below:
Fiscal Quarter Ending Closest To: Ratio
--------------------------------- -----
December 31, 2002 through December 30, 2003 1.5 to 1.0
December 31, 2003 and thereafter 1.25 to 1.0
Notwithstanding that the foregoing covenant is measured on the last day of a
fiscal quarter, compliance is required at all times during such fiscal quarter.
9.11. Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
Charge Coverage Ratio for any Test Period ending on the last day of any fiscal
quarter of the Borrower set forth below to be less than the ratio set forth
opposite such fiscal quarter below:
Fiscal Quarter Ending Closest To: Ratio
--------------------------------- -----
December 31, 2002 through December 30, 2003 1.75 to 1.0
December 31, 2003 through March 30, 2003 2.00 to 1.0
March 31, 2003 and thereafter 2.25 to 1.0
Notwithstanding that the foregoing covenant is measured on the last day of a
fiscal quarter, compliance is required at all times during such fiscal quarter.
9.12. Modification of Certificate of Incorporation, By-Laws and Certain
Other Agreements, etc. The Borrower will not, and will not permit any of its
Subsidiaries to:
(i) amend, modify or change its certificate or articles of
incorporation (including, without limitation, by the filing or modification
of any certificate or articles of designation), certificate of formation,
limited liability company agreement or by-laws (or the equivalent
53
organizational documents), as applicable, or any agreement entered into by
it with respect to its capital stock or other equity interests (including
any Shareholders' Agreement), or enter into any new agreement with respect
to its capital stock or other equity interests, unless such amendment,
modification, change or other action contemplated by this clause (i) could
not reasonably be expected to be adverse to the interests of the Lenders in
any material respect;
(ii) amend, modify or change any term or provision of any license,
distribution agreement, supply agreement or manufacturing agreement unless
such amendment, modification or change could not reasonably be expected to
be adverse to the interests of the Lenders in any material respect; or
(iii) make any voluntary, optional or mandatory payment or prepayment
in respect of any Indebtedness of the Borrower or its Subsidiaries, except
as otherwise permitted by this Agreement or the First Horizon International
Financing, or amend, modify, or permit the amendment or modification of,
any provision of any agreement evidencing any such Indebtedness, except for
such amendments or modifications that could not reasonably be expected to
be adverse to the interest of the Lenders in any material respect.
9.13. Limitation on Certain Restrictions on Subsidiaries. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Subsidiary to (a) pay dividends or
make any other distributions on its capital stock or any other interest or
participation in its profits owned by the Borrower or any of its Subsidiaries,
or pay any Indebtedness owed to the Borrower or any of its Subsidiaries, (b)
make loans or advances to the Borrower or any of its Subsidiaries or (c)
transfer any of its properties or assets to the Borrower or any of its
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit Documents
or the First Horizon International Financing, (iii) customary provisions
restricting subletting or assignment of any lease governing any leasehold
interest of the Borrower or any of its Subsidiaries, (iv) except where the
existence of such provision causes or may be reasonably believed to cause a
Material Adverse Effect, customary provisions restricting assignment of any
licensing agreement (in which the Borrower or any of its Subsidiaries is the
licensee) or other contract entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business, (v) restrictions on the
transfer of any asset pending the close of the sale of such asset, and (vi)
restrictions on the transfer of any asset subject to a Lien permitted by Section
9.1(iii), (vi) or (vii).
9.14. Limitation on Issuance of Capital Stock.
(a) The Borrower will not issue (i) any preferred stock or other
preferred equity interests , other than Qualified Preferred Stock, or (ii) any
redeemable common stock or other redeemable common equity interests, other than
common stock or other redeemable common equity interests that is redeemable at
54
the sole option of the Borrower or such Subsidiary, as the case may be.
(b) The Borrower will not permit any of its Subsidiaries to issue any
capital stock or other equity interests (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock or other equity interests, except (i) for transfers and
replacements of then outstanding shares of capital stock or other equity
interests, (ii) for stock splits, stock dividends and issuances which do not
decrease the percentage ownership of the Borrower or any of its Subsidiaries in
any class of the capital stock or other equity interests of such Subsidiary,
(iii) to qualify directors to the extent required by applicable law or (iv) for
any issuance of stock or other equity interests by any Subsidiary of the
Borrower to the Borrower or a Wholly-Owned Subsidiary of the Borrower,
9.15. Business; etc. The Borrower will not, and will not permit any of its
Subsidiaries to, engage in any business other than the businesses engaged in by
Borrower and its Subsidiaries as of the Initial Borrowing Date and reasonable
extensions thereof.
9.16. Limitation on Creation of Subsidiaries. Except as provided in
Sections 9.2(ix) and 9.5(vi), the Borrower will not, and will not permit any of
its Subsidiaries to, establish, create or acquire after the Initial Borrowing
Date any Subsidiary. The Borrower hereby acknowledges and agrees that, unless
the Required Lenders amend or waive the provisions of this Section 9.16 after
the Initial Borrowing Date, the Borrower will (i) pledge all the capital stock
of such new Subsidiary to the Collateral Agent pursuant to the terms and
conditions of the Pledge Agreement (unless the Subsidiary shall be designated by
the Borrower and such designation shall be consented to by the Required Lenders
as an International Subsidiary, in which case only 65% of such International
Subsidiary's capital stock shall be pledged as herein provided), (ii) cause such
new Subsidiary (other than an International Subsidiary) to enter into the
Subsidiaries Guaranty and to execute and deliver to the Collateral Agent
counterparts of the Security Agreement and the Pledge Agreement, (iii) to the
extent required by Section 8.12, cause such new Subsidiary (other than an
International Subsidiary) to enter into such Additional Security Documents as
the Administrative Agent or the Required Lenders may require and (iv) cause such
new Subsidiary (other than an International Subsidiary) to execute and deliver
all other relevant documentation (including opinions of counsel) of the type
described in Section 5 as such new Subsidiary would have had to deliver if it
were a Credit Party on the Initial Borrowing Date.
9.17. Change of Legal Names; Type of Organization (and Whether a Registered
Organization; Jurisdiction of Organization etc. Neither the Borrower nor any
Subsidiary Guarantor shall change its legal name, its type of organization, its
status as a registered organization (in the case of a registered organization),
its jurisdiction of organization, its location, or its organizational
identification number (if any), except that any such changes shall be permitted
(so long as such changes are not in violation of the applicable requirements of
the Security Documents and so long as same do not involve (x) a registered
organization ceasing to constitute same or (y) the Borrower or any Subsidiary
Guarantor changing its jurisdiction of organization or location from the United
States or a State thereof to a jurisdiction of organization or location, as the
case may be, outside the United States or a State thereof) if (i) it shall have
55
given to the Collateral Agent not less than 15 days' prior written notice of
each change to the information listed on Schedule VI (as adjusted for any
subsequent changes thereto previously made in accordance with this sentence),
together with a supplement to Schedule VI which shall correct all information
contained therein for the Borrower or the respective Subsidiary Guarantor, and
(ii) in connection with such change or changes, it shall have taken all action
reasonably requested by the Collateral Agent to maintain the security interests
of the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect.
SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
10.1. Payments. The Borrower shall (i) default in the payment when due of
any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any interest on any Loan or Note, any Unpaid Drawing or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
10.2. Representations, etc. Any representation, warranty or statement made
or deemed made by any Credit Party herein or in any other Credit Document or in
any certificate delivered to the Administrative Agent or any Lender pursuant
hereto or thereto in the context in which it was made, taken as a whole, shall
prove to be untrue in any material respect on the date as of which made or
deemed made; or
10.3. Covenants. The Borrower or any of its Subsidiaries shall (i) default
in the due performance or observance by it of any term, covenant or agreement
contained in Section 8.1(f), 8.8, 8.11, 8.16 or Section 9 or (ii) default in the
due performance or observance by it of any other term, covenant or agreement
contained in this Agreement or in any other Credit Document (other than those
set forth in Sections 10.1 and 10.2) and such default described in this clause
(ii) shall continue unremedied for a period of 30 days after written notice
thereof to the defaulting party by the Administrative Agent or the Required
Lenders; or
10.4. Default Under Other Agreements. (i) The Borrower or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in an instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity or (ii) any Indebtedness (other than the
Obligations) of the Borrower or any of its Subsidiaries shall be declared to be
(or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an Event of Default under this
56
Section 10.4 unless the aggregate principal amount of all Indebtedness as
described in preceding clauses (i) and (ii) is at least $1,000,000; or
10.5. Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the petition is not controverted within
30 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days (it is acknowledged and agreed that during the cure period for any such
involuntary proceeding, the Lenders shall have no obligation to extend new Loans
or issue new Letters of Credit), or the Borrower or any of its Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Borrower or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate, limited liability
company or similar action is taken by the Borrower or any of its Subsidiaries
for the purpose of effecting any of the foregoing; or the Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due; or
10.6. ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection 62, .63, .64, .65, .66, .67
or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(1), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
57
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans, a "default" within the meaning of
Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any applicable
law, rule or regulation is adopted, changed or interpreted, or the
interpretation or administration thereof is changed, in each case after the date
hereof, by any governmental authority or agency or by any court (a "Change of
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law, with respect to or otherwise affecting any Plan; (b) there shall result
from any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, either individually and/or in
the aggregate, has had, or could reasonably be expected to have, in the opinion
of the Required Lenders, a Material Adverse Effect; or
10.7. Security Documents. Any of the Security Documents shall cease to be
in full force and effect, or shall cease to give the Collateral Agent for the
benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral, in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.1), and subject to no other Liens (except as
permitted by Section 9.1), or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document and such default
shall continue beyond the period of grace, if any, specifically applicable
thereto pursuant to the terms of such Security Document; or
10.8. Guaranties. Any Guaranty or any provision thereof shall cease to be
in full force or effect as to any Guarantor, or any Guarantor or any Person
acting for or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under the Guaranty to which it is a party or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Guaranty to which it is a party; or
10.9. Judgments. One or more judgments or decrees shall be entered against
the Borrower or any Subsidiary of the Borrower involving in the aggregate for
the Borrower and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments equals or exceeds $1,000,000; or
10.10. Change of Control. A Change of Control shall occur; or
10.11. Material Adverse Effect. The determination by the Required Lenders
that a Material Adverse Effect has occurred; or
58
10.12. Approvals. The FDA or DEA shall revoke, suspend or terminate any
approvals for the manufacture, distribution or sale of any drug(s) which
constitutes a product line offered by the Borrower or any Subsidiary and such
drug(s)' sales equal or exceed 5% of gross sales of the Borrower for the
immediately preceding twelve months; or
10.13. Licenses. Any license to manufacture, distribute or sell any drug(s)
which constitutes part of the product lines offered by the Borrower or any
Subsidiary and such drug(s)' sales equal or exceed 5% of gross sales of the
Borrower for the immediately preceding twelve months shall be suspended,
cancelled, terminated, disputed or shall expire for any reason whatsoever; or
10.14. Supply Agreements. Any manufacturing, coating or supply agreement
for any drug(s) constituting part of the product lines offered by the Borrower
or any Subsidiary and such drug(s)' sales equal or exceed 5% of gross sales of
the Borrower for the immediately preceding twelve months shall be suspended,
interrupted, cancelled, terminated or shall expire and the Borrower or such
Subsidiary shall fail to obtain an alternative manufacturing, coating or supply
source within 90 days; or
10.15. First Horizon International Financing. A default, event of default
or similar event shall occur or continue beyond any applicable cure period under
any document related to the First Horizon International Financing.
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent may, or upon the written
request of the Required Lenders shall, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Lender or the holder of any Note to enforce its claims
against any Credit Party (provided that, if an Event of Default specified in
Section 10.5 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon each
Commitment of each Lender shall forthwith terminate immediately and any Fees
shall forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of and any accrued interest in respect of all Loans
and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Credit Party; (iii) terminate any Letter of Credit which may be terminated
in accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 10.5 with respect to the Borrower, it will pay) to
the Collateral Agent at the Payment Office such additional amount of cash or
Cash Equivalents, to be held as security by the Collateral Agent, as is equal to
the aggregate Stated Amount of all Letters of Credit issued for the account of
the Borrower and then outstanding; (v) enforce, as Collateral Agent, all of the
Liens and security interests created pursuant to the Security Documents; and
(vi) apply any cash collateral held by the Administrative Agent pursuant to
Section 4.2 to the repayment of the Obligations.
59
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS.
11.1. Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Account" shall have the meaning specified in the Security Agreement.
"Account Debtor" shall have the meaning specified in the Security
Agreement.
"Acquisitions" shall mean any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (a) acquires any going business or some or
all of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise; provided, however, that when less than
all of the assets of a firm, corporation or division thereof are acquired, such
acquired assets shall include all the assets and rights necessary to conduct the
business as contemplated by the parties to such acquisition to which such assets
relate or (b) directly or indirectly acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority (in number
of votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding partnership interests of a partnership, in each case
relating to the pharmaceutical business, including drug and drug license
acquisitions.
"Additional Security Documents" shall have the meaning provided in Section
8.12.
"Administrative Agent" shall mean LaSalle, in its capacity as
Administrative Agent for the Lenders hereunder, and shall include any successor
to the Administrative Agent appointed pursuant to Section 12.9. Without limiting
the foregoing, it is understood and agreed that, for purposes of Sections 12 and
13.1 of this Agreement, the term Administrative Agent shall also include LaSalle
in its capacity as Collateral Agent pursuant to the Security Documents.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. For the purposes of Section 9.6, a Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power (i) to vote 20% or more of the securities having ordinary
voting power for the election of directors (or equivalent governing body) of
such Person or (ii) to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that neither the
Administrative Agent nor any Lender (nor any Affiliate thereof) shall be
considered an Affiliate of the Borrower or any Subsidiary thereof.
60
"Agreement" shall mean this Credit Agreement, as modified, supplemented,
amended, restated (including any amendment and restatement hereof), extended or
renewed from time to time.
"Applicable Margin" shall mean, with respect to Loans, Letter of Credit
Outstandings and Letter of Credit fees and non-use fees, until the first Pricing
Date, the basis points per annum shown opposite Level I below, and thereafter
from one Pricing Date to the next the Applicable Margin means the basis points
per annum determined in accordance with the following schedule:
---------------------------------------------------------------------------------------------------------------------
LEVEL LEVERAGE RATIO FOR SUCH APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR UNUSED FEE LETTER OF
PRICING DATE BASE RATE LOANS UNDER EURODOLLAR LOANS CREDIT FEE
REVOLVING LOAN COMMITMENT UNDER REVOLVING LOAN
AND LETTER OF CREDIT COMMITMENT
OUTSTANDINGS
---------------------------------------------------------------------------------------------------------------------
I Less than or equal to 1.50 75 bps 275 bps 37.5 bps 275 bps
to 1.0 but greater than or
equal to 1.25 to 1.0
---------------------------------------------------------------------------------------------------------------------
II Less than 1.25 to 1.0, but 50 bps 250 bps 25 bps 250 bps
greater than or equal to
1.0 to 1.0
---------------------------------------------------------------------------------------------------------------------
III Less than 1.0 to 1.0, but 25 bps 225 bps 25 bps 225 bps
greater than or equal to
.75 to 1.0
---------------------------------------------------------------------------------------------------------------------
IV Less than .75 to 1.0 0 bps 200 bps 25 bps 200 bps
---------------------------------------------------------------------------------------------------------------------
For purposes hereof, the term "Pricing Date" means, for any fiscal quarter of
the Borrower ending on or after December 31, 2002, the date on which the
Administrative Agent is in receipt of the Borrower's most recent compliance
certificate for the fiscal quarter then ended, pursuant to Section 8.1(e) hereof
(it being understood that the first Pricing Date shall be the date upon which
the Administrative Agent receives such compliance certificate for the fiscal
quarter ending December 31, 2002). The Applicable Margin shall be established
based on the Leverage Ratio for the most recently completed fiscal quarter and
the Applicable Margin established on a Pricing Date shall remain in effect until
the next Pricing Date. If the Borrower has not delivered its compliance
certificate by the date such compliance certificate is required to be delivered
under Section 8.1(e) hereof, until such compliance certificate is delivered, the
Applicable Margin shall be the highest Applicable Margin (i.e., the Leverage
Ratio shall be deemed to be greater than 1.25 to 1.0). If the Borrower
subsequently delivers such compliance certificate before the next Pricing Date,
the Applicable Margin established by such late delivered compliance certificate
shall take effect from the date of delivery until the next Pricing Date. In all
other circumstances, the Applicable Margin established by such compliance
certificate shall be in effect from the Pricing Date that occurs immediately
after the end of the fiscal quarter covered by such compliance certificate until
the next Pricing Date. Each determination of the Applicable Margin made by the
Administrative Agent in accordance with the foregoing shall be conclusive and
binding on the Borrower.
61
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Domestic Subsidiaries to any Person (including by way of
redemption by such Person), other than to the Borrower or a Wholly-Owned
Subsidiary of the Borrower, of any asset (including, without limitation, any
capital stock or other securities of, or equity interests in, another Person)
other than sales of assets pursuant to Sections 9.2(ii) and 9.2(vi).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Bankruptcy Code" shall have the meaning provided in Section 10.5.
"Base Rate" shall mean, at any time, the higher of (i) the Prime Lending
Rate at such time and (ii) 1/2 of 1% in excess of the overnight Federal Funds
Rate at such time.
"Base Rate Loan" shall mean each Loan designated or deemed designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall mean First Horizon Pharmaceutical Corporation, a Delaware
corporation.
"Borrowing" shall mean the borrowing of one Type of Loan from all the
Lenders having Commitments on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
"Borrowing Base Amount" shall mean:
(a) an amount equal to 85% of the net amount (after deduction of such
reserves and allowances as the Administrative Agent deems proper and necessary)
of the Eligible Accounts; plus
(b) an amount equal to 50% of the lower of cost or market value (after
deduction of such reserves and allowances as the Administrative Agent deems
proper and necessary) of the non-sample Eligible Inventory; plus
(c) an amount equal to 20% of the lower of cost or market value (after
deduction of such reserves and allowances as the Administrative Agent deems
proper and necessary) of sample Eligible Inventory; provided, however, in no
event shall the sum of clause (b) and clause (c) hereof exceed 50% of the Total
Revolving Loan Commitment.
"Borrowing Base Certificate" shall mean the certificate in the form of
Exhibit G hereto, or in such other form acceptable to the Administrative Agent,
to be delivered to the Administrative Agent and the Lenders pursuant to Section
8.1(i) hereof.
62
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
Chicago, Illinois, a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to any Person, all
rental obligations of such Person which, under generally accepted accounting
principles, are or will be required to be capitalized on the books of such
Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (ii) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public instrumentality thereof maturing within twelve months from the
date of acquisition thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either S&P or Xxxxx'x, (iii) Dollar
denominated time deposits, certificates of deposit and bankers acceptances of
any Lender or any commercial bank having, or which is the principal banking
subsidiary of a bank holding company having, a long-term unsecured debt rating
of at least "A" or the equivalent thereof from S&P or "A2" or the equivalent
thereof from Xxxxx'x with maturities of not more than six months from the date
of acquisition by such Person, (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications specified in
clause (iii) above, (v) commercial paper issued by any Person incorporated in
the United States rated at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Xxxxx'x and in each case maturing not
more than six months after the date of acquisition by such Person, and (vi)
investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same has been amended and may hereafter be
amended from time to time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (i) any "person" or "group" (as such terms
are used in Section 13(d) and 14(d) of the Exchange Act) (other than the
Permitted Holders) is or shall become the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
greater than 30% of the economic or voting interests in the Borrower's capital
63
stock, (ii) the Board of Directors of the Borrower shall cease to consist of a
majority of Continuing Directors or (iii) a "change of control" or similar event
shall occur as provided in any Qualified Preferred Stock or outstanding
Indebtedness (or the documentation governing the same).
"Change of Law" shall have the meaning provided in Section 10.6.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Security Agreement Collateral, all Pledge Agreement Collateral, all Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.2 or 10.
"Collateral Agent" shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.5.
"Commitment" shall mean the Revolving Loan Commitment of any Lender.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income for
such period before deducting therefrom Consolidated Interest Expense for such
period (to the extent that such Consolidated Interest Expense was deducted in
arriving at Consolidated Net Income for such period) and provision for taxes
based on income that were included in arriving at Consolidated Net Income for
such period and without giving effect (x) to any extraordinary gains or any
extraordinary non-cash losses (except to the extent that any such extraordinary
non-cash losses will require a cash payment in a future period) and (y) to any
gains or losses from sales of assets other than from sales of inventory in the
ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT for
such period, adjusted by adding thereto the amount of all amortization of
intangibles and depreciation that were deducted in arriving at Consolidated Net
Income for such period. Upon the consummation of each Acquisition permitted
under the Credit Documents and without any duplication or double counting, a pro
rata portion of the consolidated net income before interest expense, taxes,
depreciation and amortization of the acquiree related to the assets which are
the subject of the Acquisition may be included in the calculation of
Consolidated EBITDA hereunder to the extent each of the components thereof to be
included in Consolidated EBITDA have either (i) been included in pro forma
financials prepared by the Borrower in accordance with applicable regulatory
requirements, including any SEC requirement, and audited or otherwise approved
by the Borrower's auditors in a manner reasonably satisfactory to the Required
Lenders or (ii) been the subject of a written "due diligence" report of the
64
Borrower's auditors or other auditors reasonably acceptable to the Required
Lenders, such report in form and substance acceptable to the Required Lenders;
provided, however, nothing in this sentence shall impair the obligation of the
Borrower and its Subsidiaries to be in compliance with the financial covenants
in this Agreement without giving effect to such Acquisition.
"Consolidated Funded Debt" shall mean, as to the Borrower and its
Subsidiaries, Indebtedness of the Borrower and its Subsidiaries other than
Indebtedness described in clauses (vi) - (viii) inclusive of the definition of
"Indebtedness."
"Consolidated Indebtedness" shall mean, at any time, the principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such time determined
on a consolidated basis.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the sum of the
total consolidated interest expense of the Borrower and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) paid in cash plus, without duplication, (x) that portion of Capitalized
Lease Obligations of the Borrower and its Subsidiaries representing the interest
factor for such period and (y) the "deemed interest expense" (i.e., the interest
expense which would have been applicable if the respective obligations were
structured as on-balance sheet financing arrangements) with respect to all
Indebtedness of the Borrower and its Subsidiaries of the type described in
clause (viii) of the definition of Indebtedness contained herein for such
period.
"Consolidated Net Income" shall mean, for any period, the net income (or
loss) of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis (after any deduction for minority interests), provided that
(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Subsidiary of the Borrower or is accounted for by the Borrower by
the equity method of accounting shall be included only to the extent of the
payment of cash dividends or cash distributions by such other Person to the
Borrower or a Subsidiary thereof during such period, (ii) the net income of any
Subsidiary of the Borrower shall be excluded to the extent that the declaration
or payment of cash dividends or similar cash distributions by that Subsidiary of
that net income is not at the date of determination permitted by operation of
its charter or any agreement, instrument or law applicable to such Subsidiary
and (iii) the net income (or loss) of any other Person acquired by the Borrower
or a Subsidiary of the Borrower in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person as a result of such Person being a general partner of any other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
65
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Continuing Directors" shall mean the directors of the Borrower on the
Effective Date and each other director if such director's nomination for
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Note, the
Subsidiaries Guaranty, the Master Letter of Credit Agreement and each Security
Document.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"DEA" shall mean the Drug Enforcement Agency, together with its successors
and comparable agencies in foreign countries.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a Lender
Default is in effect.
"Dividend" shall mean, with respect to any Person, that such Person has
declared or paid a dividend, distribution or returned any equity capital to its
stockholders, partners or members or authorized or made any other distribution,
payment or delivery of property (other than common equity of such Person) or
cash to its stockholders, partners or members as such, or redeemed, retired,
purchased or otherwise acquired, directly or indirectly, for a consideration any
shares of any class of its capital stock or any partnership or membership
interests outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock or other equity
66
interests), or set aside any funds for any of the foregoing purposes, or shall
have permitted any of its Subsidiaries to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock or any partnership or
membership interests of such Person outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock or other equity interests). Without limiting the foregoing, "Dividends"
with respect to any Person shall also include all payments made or required to
be made by such Person with respect to any stock appreciation rights, plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes.
"Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.
"Domestic Subsidiary" means any Subsidiary which is not designated an
International Subsidiary by the Borrower with the consent of the Required
Lenders.
"Drawing" shall have the meaning provided in Section 2.5(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Accounts" shall mean those Accounts of the Borrower which:
(a) are genuine in all respects and have arisen in the ordinary course
of the Borrower's business from (i) the performance of services by the Borrower,
which services have been fully performed, acknowledged and accepted by the
Account Debtor or (ii) the sale, license, assignment or lease of Goods by the
Borrower, including C.O.D. sales, which Goods have been completed in accordance
with the Account Debtor's specifications (if any) and delivered to and accepted
by the Account Debtor, and the Borrower has possession of, or has delivered to
the Administrative Agent at the Administrative Agent's request, shipping and
delivery receipts evidencing such shipment;
(b) are evidenced by an invoice delivered to the Account Debtor
thereunder, are due and payable within ninety (90) days after the date of the
invoice or shipment of the Inventory referred to in the invoice, whichever is
later, and are not more than ninety (90) days past due;
(c) do not arise from a "sale on approval" or a "sale or return";
(d) have not arisen out of contracts with the United States or any
state, county, city or other governmental body, or any department, agency or
instrumentality thereof;
(e) are not due from an Account Debtor which is a Subsidiary or a
director, officer, employee, agent, parent or Affiliate of the Borrower;
(f) do not arise in connection with a sale to an Account Debtor who is
not a resident or citizen of and is located within the United States of America
{or Canada};
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(g) do not arise in connection with a sale to an Account Debtor who is
located within a state which requires the Borrower, as a precondition to
commencing or maintaining an action in the courts of that state, either to (i)
receive a certificate of authority to do business and be in good standing in
such state, or (ii) file a notice of business activities or similar report with
such state's taxing authority, unless (A) the Borrower has taken one of the
actions described in clauses (i) or (ii), (B) the failure to take one of the
actions described in either clause (i) or (ii) may be cured retroactively by the
Borrower at its election, or (C) the Borrower has proven to the satisfaction of
the Administrative Agent that it is exempt from any such requirements under such
state's laws;
(h) do not arise out of a contract or order which, by its terms,
forbids or makes void or unenforceable the assignment by the Borrower to the
Administrative Agent of the Account arising with respect thereto and are not
unassignable to the Administrative Agent for any other reason;
(i) are the valid, legally enforceable and unconditional obligation of
the Account Debtor, are not the subject of any setoff, counterclaim, credit,
allowance or adjustment by the Account Debtor, or of any claim by the Account
Debtor denying liability thereunder in whole or in part, and the Account Debtor
has not refused to accept and/or has not returned or offered to return any of
the Goods or services which are the subject of such Account;
(j) are not subject to any Lien whatsoever, other than the Lien of the
Administrative Agent; and
(k) no proceedings or actions are pending or threatened against the
Account Debtor which might result in any material adverse change in its
financial condition or in its ability to pay any Account in full.
An Account which is an Eligible Account shall cease to be an Eligible Account
whenever it ceases to meet any one of the foregoing requirements, but shall
again be deemed to be an Eligible Account once such foregoing requirements are
again complied with in a manner reasonably satisfactory to the Administrative
Agent.
If invoices representing twenty-five percent (25%) or more of the
unpaid net amount of all Accounts from any one Account Debtor are unpaid more
than ninety (90) days after the due date of such invoices, then all Accounts
relating to such Account Debtor shall cease to be Eligible Accounts.
"Eligible Inventory" shall mean all Inventory (excluding packaging
materials) of the Borrower constituting first quality finished prescription
pharmaceutical products which:
(a) is not subject to any Lien whatsoever, other than the Lien of the
Administrative Agent;
68
(b) is held for sale, lease or furnished under contracts of service,
and is (except as the Administrative Agent may otherwise consent in writing) new
and unused;
(c) is not now and shall not at any time hereafter be stored with a
bailee, warehouseman or similar party without (i) the Administrative Agent's
prior written approval and (ii) delivery to the Administrative Agent by such
party of non-negotiable warehouse receipts therefor in the Administrative
Agent's name or such other bailee's letter, in form and substance acceptable to
the Administrative Agent;
(d) is not unacceptable to the Administrative Agent, in its sole and
absolute discretion, due to age; provided, however, Inventory which has 15 or
more months to expiry shall constitute Eligible Inventory;
(e) is not produced in violation of the Fair Labor Standards Act
and/or subject to the so-called "hot goods" provisions contained in Title 29
U.S.C. 215(a); {and}
(f) does not violate the negative covenants and satisfies the
affirmative covenants of the Borrower contained in this Agreement[; and
(G) IS LOCATED (I) IN THE UNITED STATES, (II) IN ANY TERRITORY OR
POSSESSION OF THE UNITED STATES THAT HAS ADOPTED REVISED ARTICLE 9 OF THE
UNIFORM COMMERCIAL CODE OR (III) OUTSIDE ANY OF THE FOREGOING JURISDICTIONS (THE
"NON-UCC JURISDICTIONS"), PROVIDED THAT THE AGGREGATE AMOUNT OF ELIGIBLE
INVENTORY IN THE NON-UCC JURISDICTIONS SHALL NOT EXCEED $500,000. ]
Inventory which is Eligible Inventory shall cease to be Eligible Inventory
whenever it ceases to meet any one of the foregoing requirements, but shall
again be deemed to be Eligible Inventory once such foregoing requirements are
again complied with in a manner reasonably satisfactory to the Administrative
Agent.
"Eligible Transferee" shall mean and include a commercial bank, an
insurance company, a finance company, a financial institution, any fund that
invests in loans or any other "accredited investor" (as defined in Regulation D
of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in Section 5.5.
"Employment Agreements" shall have the meaning provided in Section 5.5.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
69
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; the Resource Conservation and Recovery Act, 42 U.S.Css.6901
et seq.; the Federal Water Pollution Control Act, 33 X.X.X.xx. 1251 et seq.; the
Toxic Substances Control Act, 15 X.X.X.xx. 2601 et seq.; the Clean Air Act, 42
X.X.X.xx. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.ss.3803 et seq.;
the Oil Pollution Act of 1990, 33 X.X.X.xx. 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 X.X.X.xx. 11001 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C.ss.1801 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. ss.651 et seq.; and any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by the Borrower
at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean a per annum rate of interest equal to LIBOR
for the relevant Interest Period (rounded upward if necessary, to the nearest
1/16 of 1.00%), which Eurodollar Rate shall remain fixed during such Interest
Period.
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" means, with respect to any period, the amount (if any)
by which (a) Consolidated EBITDA (including for the purpose hereof, Borrower's
Domestic Subsidiaries only) during such period exceeds (b) the sum of (i) the
aggregate amount of payments required to be made by the Borrower and its
Domestic Subsidiaries in cash during such period in respect of all principal on
all Indebtedness (whether at maturity, as a result of mandatory sinking fund
redemption, mandatory prepayment, acceleration or otherwise, but excluding
payments made on the Revolving Loans and prepayments of the Term Loans (as
defined in the First Horizon International Financing documents) made out of
70
Excess Cash Flow), plus (ii) Consolidated Interest Expense (including for the
purpose hereof, Borrower's Domestic Subsidiaries only) paid or payable in cash
during such period, plus (iii) federal, state or local taxes paid or payable in
cash by the Borrower and its Domestic Subsidiaries during such period, plus (iv)
the aggregate amount of Capital Expenditures incurred by the Borrower and its
Domestic Subsidiaries during such period.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder as from time to time in
effect.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.5.
"Facing Fee" shall have the meaning provided in Section 3.1(b).
"FDA" shall mean the Food and Drug Administration, together with its
successors and comparable agencies in foreign countries.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
3.1.
"First Horizon International" means First Horizon Pharmaceutical
International Limited, an Irish corporation, together with its successors and
assigns.
"First Horizon International Financing" means the secured acquisition
financing provided to First Horizon International by LaSalle, certain financial
institutions and the Administrative Agent, as agent, in the initial principal
amount of $15,000,000, as such amount may be modified from time to time.
"Fixed Charge Coverage Ratio" shall mean at any time, the ratio of (a)
Consolidated EBITDA less Capital Expenditures less provision for taxes that were
included in arriving at Consolidated Net Income to (b) Consolidated Interest
Expense and current maturities of long term Consolidated Funded Debt.
"Foreign Exchange Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
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"Foreign Pension Plan" shall mean each employee benefit plan, employment,
bonus, incentive, stock purchase and stock option plan, program, agreement or
arrangement; and each severance, termination pay, salary continuation,
retention, accrued leave, vacation, sick pay, sick leave, medical, life
insurance, disability, accident, profit-sharing, fringe benefit, pension,
deferred compensation or other retirement or superannuation plan, fund, program,
agreement, commitment or arrangement sponsored, established, maintained or
contributed to, or required to be contributed to, or with respect to which any
liability is borne, outside the fifty states of the United States of America, by
the Borrower or any of its Subsidiaries, including, without limitation, any such
plan, fund, program, agreement or arrangement sponsored by a government or
governmental entity.
"Goods" shall have the meaning specified in the Security Agreement.
"Guarantor" shall mean each Subsidiary Guarantor.
"Guaranty" shall mean the Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous waste," "hazardous materials," "extremely hazardous substances,"
"restricted hazardous waste," "toxic substances," "toxic pollutants,"
"contaminants," or "pollutants," or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or substance,
the exposure to, or Release of which is prohibited, limited or regulated by any
governmental authority.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit,
bankers' acceptances and similar obligations issued for the account of such
Person and all unpaid drawings in respect of such letters of credit, bankers'
acceptances and similar obligations, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person (provided that, if the Person has
not assumed or otherwise become liable in respect of such Indebtedness, such
Indebtedness shall be deemed to be in an amount equal to the fair market value
of the property to which such Lien relates as determined in good faith by such
Person), (iv) the aggregate amount of all Capitalized Lease Obligations of such
Person, (v) all obligations of such Person to pay a specified purchase price for
goods or services, whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vi) all Contingent Obligations of such Person, (vii) all
obligations under any Interest Rate Protection Agreement, any Other Hedging
Agreement or under any similar type of agreement and (viii) all monetary
obligations of such Person under (x) a so-called synthetic, off-balance sheet or
tax retention lease, or (y) an agreement for the use or possession of property
creating obligations that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would be characterized
72
as the indebtedness of such Person (without regard to accounting treatment).
Notwithstanding the foregoing, Indebtedness shall not include trade payables and
accrued expenses incurred by any Person in accordance with customary practices
and in the ordinary course of business of such Person.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Loans occurs.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.9.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"International Subsidiary" shall mean First Horizon International, First
Horizon Pharmaceutical Ireland Limited, an Irish corporation, and First Horizon
Pharmaceutical Netherlands BV, a Dutch corporation, and any other direct or
indirect Subsidiary of the Borrower that shall be designated by the Borrower
with the consent of the Required Lenders as an International Subsidiary pursuant
to Section 9.16 of this Agreement, or otherwise.
"Inventory" shall have the meaning specified in the Security Agreement.
"Investments" shall have the meaning provided in Section 9.5.
"Issuing Lender" shall mean LaSalle or any Lender approved by the
Administrative Agent which has agreed to issue Letters of Credit under this
Agreement.
"LaSalle" shall mean LaSalle Bank National Association, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"L/C Supportable Obligations" shall mean (i) obligations of the Borrower or
any of its Subsidiaries with respect to workers compensation, surety bonds and
other similar statutory obligations and (ii) such other obligations of the
Borrower or any of its Subsidiaries as are reasonably acceptable to the Issuing
Lender and otherwise permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I, as
well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13 or
13.4(b).
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"Lender Default" shall mean (i) the refusal (which has not been retracted)
or the failure of a Lender to make available its portion of any Borrowing in
violation of the requirements of this Agreement or to fund its portion of any
unreimbursed payment under Section 2.4(c) or (ii) a Lender having notified in
writing the Borrower and/or the Administrative Agent that such Lender does not
intend to comply with its obligations under Section 1.1 or 2.
"Letter of Credit" shall have the meaning provided in Section 2.1(a).
"Letter of Credit Fee" shall have the meaning provided in Section 3.1(a).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount
of all Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.3(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated Funded
Debt at such time to Consolidated EBITDA for the Test Period then most recently
ended.
"LIBOR" shall mean a rate of interest equal to the LIBOR Index Rate for the
relevant Interest Period, if such index is available, and, if the LIBOR Index
Rate cannot be determined, the per annum rate of interest at which United States
dollar deposits in an amount comparable to the amount of the relevant Eurodollar
Loan and for a period equal to the relevant Interest Period are offered
generally to the Administrative Agent (rounded upward if necessary, to the
nearest 1/16 of 1.00%) in the London Interbank Eurodollar market at 11:00 a.m.
(London time) on the Interest Determination Date, in each case less the maximum
reserve percentages for determining reserves to be maintained by member banks of
the Federal Reserve System for Eurocurrency liabilities, such rate to remain
fixed for such Interest Period. The Administrative Agent's determination of
LIBOR shall be conclusive, absent manifest error.
"LIBOR Index Rate" shall mean, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the nearest 1/16th of 1.00%) for deposits in
U.S. Dollars for a period equal to such Interest Period, which appears on the
Bloomberg Financial Markets System, or other authoritative source selected by
the Administrative Agent in its sole discretion as of 11:00 a.m. (London,
England time) on the Interest Determination Date.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each Revolving Loan.
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"Location" of any Person shall mean its location as determined pursuant to
Section 9-307 of the UCC (or any successor section thereof).
"Management Agreements" shall have the meaning provided in Section 5.5.
"Margin Stock" shall have the meaning provided in Regulation U.
"Master Letter of Credit Agreement" shall mean the Issuing Lender's
standard form of master letter of credit agreement, as amended or modified from
time to time, which shall be executed in connection with this Agreement and
which shall contain terms applicable to Letters of Credit.
"Material Adverse Effect" shall mean (i) a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or
(ii) a material adverse effect (x) on the rights or remedies of the Lenders or
the Administrative Agent hereunder or under any other Credit Document or (y) on
the ability of any Credit Party to perform its obligations to the Lenders or
Administrative Agent hereunder or under any other Credit Document.
"Minimum Borrowing Amount" shall mean $1,000,000 for Revolving Loans.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall mean a mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or
similar security instrument.
"Mortgage Policy" shall mean a mortgage title insurance policy or a binding
commitment with respect thereto.
"Mortgaged Property" shall mean any Real Property owned or leased by the
Borrower or any of its Subsidiaries which is encumbered (or required to be
encumbered) by a Mortgage.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or sale of
any equity by any Person or any capital contribution to such Person, the cash
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) received by such Person from the respective sale or
issuance of its equity or from the respective capital contribution.
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"Net Recovery Event Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with such Recovery Event, including without limitation any such cash
proceeds received pursuant to insurance policies, as condemnation proceeds or
otherwise.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from such
Asset Sale, net of the reasonable costs of such Asset Sale (including fees and
commissions, payments of unassumed liabilities relating to any assets sold and
required payments of any Indebtedness (other than Indebtedness secured pursuant
to the Security Documents) which is secured by any assets sold pursuant to the
respective Asset Sale), and the incremental taxes paid or payable as a result of
such Asset Sale.
"Non-Compete Agreements" shall have the meaning provided in Section 5.5.
"Non-Defaulting Lender" and "Non-Defaulting RL Lender" shall mean and
include each Lender or RL Lender, as the case may be, other than a Defaulting
Lender.
"Note" shall mean each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.3(a).
"Notice of Conversion/Continuation" shall have the meaning provided in
Section 1.6.
"Notice Office" shall mean the office of the Administrative Agent located
at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attention:
Xxxxxxx X'Xxxxx or such other office or person as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative Agent, the
Collateral Agent, the Issuing Lender or any Lender pursuant to the terms of this
Agreement or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency values or
commodity prices.
"Participant" shall have the meaning provided in Section 2.4(a).
"Payment Office" shall mean the office of the Administrative Agent located
at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
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"Permitted Encumbrance" shall mean, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the Mortgage Policy delivered with
respect thereto, all of which exceptions must be acceptable to the
Administrative Agent in its reasonable discretion.
"Permitted Holders" shall mean Xxxx Xxxxxx, his decedents and members of
their immediate families as well as Persons controlled by any of the foregoing.
"Permitted Liens" shall have the meaning provided in Section 9.1.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate on or after the Initial Borrowing Date, and each such plan for the
five year period immediately following the latest date (whether before or after
the Initial Borrowing Date) on which the Borrower, a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.10.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in the
Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which the Administrative Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer by the Administrative Agent, which may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"Qualified Preferred Stock" shall mean any preferred stock of the Borrower
so long as the terms of such preferred stock (i) do not contain any mandatory
put, redemption, repayment, sinking fund or other similar provision prior to the
sixth anniversary of the Initial Borrowing Date, (ii) do not require cash
payments (of dividends or otherwise) at a time when such payment would be
prohibited or not permitted under this Agreement (as amended, modified,
supplemented, refinanced or replaced from time to time), (iii) do not contain
any covenants, (iv) do not grant the holders thereof any voting rights except
for (x) voting rights required to be granted to such holders under applicable
law and (y) limited customary voting rights on fundamental matters such as
mergers, consolidations, sales of substantially all of the assets of the
Borrower, or liquidations involving the Borrower, and (v) are otherwise
satisfactory to the Administrative Agent.
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"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Recovery Event' shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.3.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" shall mean actively or passively disposing, discharging,
injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, pouring, seeping, migrating or the like, into or upon any land or
water or air, or otherwise entering into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum of whose
outstanding Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and RL Percentages of Letter of Credit Outstandings)
represent at least 50.1% of the Total Revolving Loan Commitment less the
Revolving Loan Commitments of all Defaulting Lenders (or after the termination
thereof, the sum of then total outstanding Revolving Loans of Non-Defaulting
Lenders and the aggregate RL Percentages of all Non-Defaulting Lenders of the
total outstanding Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.9.
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"Revolving Loan" shall have the meaning provided in Section 1.1.
"Revolving Loan Availability" shall mean at any time, the lesser of (a) the
Total Revolving Loan Commitments less the Letter of Credit Outstandings, and (b)
the Borrowing Base Amount less the Letter of Credit Outstandings.
"Revolving Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.2, 3.3 and/or 10 or (y) adjusted from time to time
as a result of assignments to of from such Lender pursuant to Section 1.13 or
13.4(b).
"Revolving Loan Maturity Date" shall mean February __, 2006.
"Revolving Note" shall have the meaning provided in Section 1.5(a).
"RL Lender" shall mean each Lender with a Revolving Loan Commitment or with
outstanding Revolving Loans.
"RL Percentage" of any RL Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such RL Lender at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, provided that if the RL Percentage
of any RL Lender is to be determined after the Total Revolving Loan Commitment
has been terminated, then the RL Percentage of such RL Lender shall be
determined immediately prior (and without giving effect) to such termination.
"Scheduled Interest Payment Date" shall mean (x) in the case of Base Rate
Loans, the last Business Day of each calendar month ended after the Initial
Borrowing Date (beginning with February 28, 2003) and on or before the Revolving
Loan Maturity Date, (y) in the case of Letters of Credit fees, on the last
Business Day of the third month following the issuance or renewal of such Letter
of Credit and on the last Business Day of each three month period thereafter,
and (z) in the case of other Fees, on the last Business Day of each calendar
quarter, commencing on the first such date to occur after the Effective Date.
"SEC" shall have the meaning provided in Section 8.1(g).
"Section 4.4(b)(ii) Certificate" shall have the meaning provided in Section
4.4(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section 5.9.
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"Security Agreement Collateral" shall mean all "Collateral" as defined in
the Security Agreement.
"Security Documents" shall mean and include each of the Security Agreement,
the Pledge Agreement and each Mortgage and, after the execution and delivery
thereof, each Additional Security Document.
"Shareholders' Agreements" shall have the meaning provided in Section 5.5.
"Stated Amount" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section 5.8.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
"Subsidiary Guarantor" shall mean each Domestic Subsidiary of the Borrower
existing on the Initial Borrowing Date or established, created or acquired after
the Initial Borrowing Date (unless the Required Banks, in their sole discretion
have waived in writing the requirement that any such Domestic Subsidiary become
a Subsidiary Guarantor).
"Tax Sharing Agreements" shall have the meaning provided in Section 5.5.
"Taxes" shall have the meaning provided in Section 4.4(a).
"Test Period" shall mean each period of four consecutive fiscal quarters of
the Borrower ended on the last day of any fiscal quarter of the Borrower (in
each case taken as one accounting period).
"Total Commitment" shall mean, at any time, the sum of the Commitment of
each Lender at such time.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Lenders at such time.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the Total Revolving Loan Commitment then in
effect less (y) the sum of the aggregate principal amount of all Revolving Loans
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then outstanding plus the aggregate amount of all Letter of Credit Outstandings.
"Transaction" shall mean the entering into of the Credit Documents and the
incurrence of Loans on the Initial Borrowing Date and the payment of all flees
and expenses in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the State of Illinois.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the value of the accumulated plan benefits under the Plan determined on a
plan termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contribution).
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning provided in Section 2.5(a).
"Unutilized Revolving Loan Commitment" shall mean, with respect to any
Lender at any time, such Lender's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such Lender at such time and (ii) such Lender's RL Percentage of the
Letter of Credit Outstandings at such time.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose capital stock is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
SECTION 12. The Administrative Agent.
12.1. Appointment. The Lenders hereby irrevocably designate and appoint
LaSalle as Administrative Agent (for purposes of this Section 12 and Section
13.1, the term "Administrative Agent" also shall include LaSalle in its capacity
as Collateral Agent pursuant to the Security Documents) to act as specified
herein and in the other Credit Documents. Each Lender hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
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hereof and thereof and such other powers as are reasonably incidental thereto.
The Administrative Agent may perform any of its respective duties hereunder by
or through its officers, directors, agents, employees or affiliates.
12.2. Nature of Duties. The Administrative Agent shall not have any duties
or responsibilities except those expressly set forth in this Agreement and in
the other Credit Documents. Neither the Administrative Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision). The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Lender or the holder
of any Note; and nothing in this Agreement or in any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
12.3. Lack of Reliance on the Administrative Agent. Independently and
without reliance upon the Administrative Agent, each Lender and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.
12.4. Certain Rights of the Administrative Agent. If the Administrative
Agent requests instructions from the Required Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Credit Document, the Administrative Agent shall be entitled to refrain from such
act or taking such action unless and until the Administrative Agent shall have
received instructions from the Required Lenders; and the Administrative Agent
shall not incur liability to any Lender by reason of so refraining. Without
limiting the foregoing, neither any Lender nor the holder of any Note shall have
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any right of action whatsoever against the Administrative Agent as a result of
the Administrative Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders.
12.5. Reliance. The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Administrative Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Administrative Agent.
12.6. Indemnification. To the extent the Administrative Agent (or any
affiliate thereof) is not reimbursed and indemnified by the Borrower, the
Lenders will reimburse and indemnify the Administrative Agent (and any affiliate
thereof) in proportion to their respective "percentage" as used in determining
the Required Lenders (determined as if there were no Defaulting Lenders) for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the
Administrative Agent (or any affiliate thereof in performing its duties
hereunder or under any other Credit Document or in any way relating to or
arising out of this Agreement or any other Credit Document or its syndication
efforts in connection herewith; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's (or such affiliate's) gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
12.7. The Administrative Agent in its Individual Capacity. With respect to
its obligation to make Loans, or issue or participate in Letters of Credit,
under this Agreement, the Administrative Agent shall have the rights and powers
specified herein for a "Lender" and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term
"Lender," "Required Lenders," "holders of Notes" or any similar terms shall,
unless the context clearly indicates otherwise, include the Administrative Agent
in its respective individual capacities. The Administrative Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, investment banking, trust or other business with, or provide
debt financing, equity capital or other services (including financial advisory
services) to any Credit Party or any Affiliate of any Credit Party (or any
Person engaged in a similar business with any Credit Party or any Affiliate
thereof) as if they were not performing the duties specified herein, and may
accept fees and other consideration from any Credit Party or any Affiliate of
any Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
12.8. Holders. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
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shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.9. Resignation by the Administrative Agent.
(a) The Administrative Agent may resign from the performance of all
its respective functions and duties hereunder and/or under the other Credit
Documents at any time by giving 15 Business Days' prior written notice to the
Lenders and, unless a Default or an Event of Default under Section 10.5 then
exists, the Borrower. Such resignation shall take effect upon the appointment of
a successor Administrative Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation by the Administrative Agent,
the Required Lenders shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower, which acceptance shall not be unreasonably withheld or delayed
(provided that the Borrower's approval shall not be required if an Event of
Default then exists).
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed, provided that the Borrower's consent shall not be required if an Event
of Default then exists), shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Lenders appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.
(e) Upon a resignation of the Administrative Agent pursuant to this
Section 12.9, the Administrative Agent shall remain indemnified to the extent
provided in this Agreement and the other Credit Documents and the provisions of
this Section 12 shall continue in effect for the benefit of the Administrative
Agent for all of its actions and inactions while serving as the Administrative
Agent.
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SECTION 13. Miscellaneous.
13.1. Payment of Expenses, etc. The Borrower hereby agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and disbursements of Xxxxxxx, Carton & Xxxxxxx
and the Administrative Agent's other counsel and consultants) in connection with
the preparation, execution, delivery and administration of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the Administrative Agent in connection with its syndication efforts with respect
to this Agreement and of the Administrative Agent and, after the occurrence of
an Event of Default, each of the Lenders in connection with the enforcement of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings
(including, in each case, without limitation, the reasonable fees and
disbursements of counsel and consultants for the Administrative Agent and, after
the occurrence of an Event of Default, counsel for each of the Lenders); (ii)
pay and hold the Administrative Agent and each of the Lenders harmless from and
against any and all present and future stamp, court, excise and other similar
documentary taxes, charges or similar levies with respect to the foregoing
matters (collectively, "Other Taxes"), and save the Administrative Agent and
each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to the Administrative Agent or such Lender) to pay such Other
Taxes; (iii) indemnify the Administrative Agent and each Lender for (a) the full
amount of Other Taxes paid by the Administrative Agent and/or such Lender, and
(b) any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Other Taxes were correctly or
legally imposed or asserted by the relevant governmental authority; and (iv)
indemnify the Administrative Agent and each Lender, and each of their respective
officers, directors, employees, representatives, agents, affiliates, trustees
and investment advisors from and hold each of them harmless against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
actual or prospective claim, investigation, litigation or other proceeding
(whether or not the Administrative Agent or any Lender is a party thereto and
whether or not such investigation, litigation or other proceeding is brought by
or on behalf of any Credit Party) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
the Transaction or any other transactions contemplated herein or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, or (b) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property at any time owned, leased or operated
by the Borrower or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials by the Borrower or
any of its Subsidiaries at any location, whether or not owned, leased or
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operated by the Borrower or any of its Subsidiaries, the non-compliance by the
Borrower or any of its Subsidiaries with any Environmental Law (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Borrower, any of its Subsidiaries or
any Real Property at any time owned, leased or operated by the Borrower or any
of its Subsidiaries, including, in each case, without limitation, the reasonable
fees and disbursements of counsel and other consultants incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified (as determined by a court of competent jurisdiction in a final and
non-appealable decision)). To the extent that the undertaking to indemnify, pay
or hold harmless the Administrative Agent or any Lender set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law. All amounts due under this Section 13.1 shall be payable
within ten days after demand therefor.
13.2. Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent and each Lender is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by the
Administrative Agent or such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of the Borrower or any of its Subsidiaries against and on account of the
Obligations and liabilities of the Credit Parties to the Administrative Agent or
such Lender under this Agreement or under any of the other Credit Documents,
including without limitation, all interests in Obligations purchased by such
Lender pursuant to Section 13.6(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them
shall be contingent or unmatured.
13.3. Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to any Credit Party, at the address
specified opposite its signature below or in the other relevant Credit
Documents; if to any Lender, at its address specified on Schedule II; and if to
the Administrative Agent, at the Notice Office; or, as to any Credit Party or
the Administrative Agent, at such other address as shall be designated by such
party in a written notice to the other parties hereto and, as to each Lender, at
such other address as shall be designated by such Lender in a written notice to
the Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
86
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
13.4. Benefit of Agreement Assignments; Participations.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto; provided, however, the Borrower may not assign or transfer any of its
rights, obligations or interest hereunder without the prior written consent of
the Lenders and, provided further, that, although any Lender may from time to
time transfer, assign or grant participations in its rights and/or obligations
hereunder, such Lender shall remain a "Lender" for all purposes hereunder (and
may not transfer or assign all or any portion of its Commitment hereunder except
as provided in Sections 1.13 and 13.4(b)) and the transferee, assignee or
participant, as the case may be, shall not constitute a "Lender" hereunder and,
provided further, that no Lender shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Loan Maturity Date) in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-Default
increase in interest rates) or reduce the principal amount thereof (it being
understood that any amendment or modification to the financial definitions in
this Agreement or to Section 13.7(a) shall not constitute a reduction in the
rate of interest or Fees payable hereunder), or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms of
such participation, and that an increase in any Commitment (or the available
portion thereof) or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement, (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) supporting the Loans or Letters
of Credit hereunder in which such participant is participating or, (iv) release
any Subsidiary Guarantor from the Subsidiaries Guaranty (except as expressly
provided in the Credit Documents). In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Commitment and related outstanding Obligations (or, if the Commitments have
terminated, outstanding Obligations) hereunder to (i)(A) its parent company
and/or any Affiliate of such Lender or (B) to one or more other Lenders or any
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Affiliate of any such other Lender (provided that any fund that invests in loans
and is managed or advised by the same investment advisor of another fund which
is a Lender (or by an Affiliate of such investment advisor) shall be treated as
an Affiliate of such other Lender for the purposes of this sub-clause
(x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests in
loans, any other fund that invests in loans and is managed or advised by the
same investment advisor of any Lender or by an Affiliate of such investment
advisor or (y) assign all, or if less than all, a portion equal to at least
$1,000,000 in the aggregate for the assigning Lender or assigning Lenders, of
such Commitments and related outstanding Obligations (or, if the Commitments
have terminated, outstanding Obligations) hereunder to one or more Eligible
Transferees (treating any fund that invests in loans and any other fund that
invests in loans and is managed or advised by the same investment advisor of
such fund or by an Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment and Assumption Agreement, provided that (i)
at such time, Schedule I shall be deemed modified to reflect the Commitment
and/or outstanding Loans, as the case may be, of such new Lender and of the
existing Lenders, (ii) upon the surrender of its Notes by the assigning Lender
(or, upon such assigning Lender's indemnifying the Borrower for any lost Note
pursuant to a customary indemnification agreement) new Notes will be issued, at
the Borrower's expense, to such new Lender and to the assigning Lender upon the
request of such new Lender or assigning Lender, such new Notes to be in
conformity with the requirements of Section 1.5 (with appropriate modifications)
to the extent needed to reflect the revised Commitments and/or outstanding
Loans, as the case may be, (iii) the consent of the Administrative Agent shall
be required in connection with any such assignment pursuant to clause (y) above
or any such assignment of Revolving Loan Commitments pursuant to clause (x)
above (which consents shall not be unreasonably withheld or delayed), (iv) the
consent of the Issuing Lender shall be required in connection with any such
assignment of Revolving Loan Commitments (which consents shall not be
unreasonably withheld or delayed), (v) the Administrative Agent shall receive at
the time of each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500 and (vi) no such transfer
or assignment will be effective until recorded by the Administrative Agent on
the Register pursuant to Section 13.15. To the extent of any assignment pursuant
to this Section 13.4(b), the assigning Lender shall be relieved of its
obligations hereunder with respect to its assigned Commitment and outstanding
Loans. At the time of each assignment pursuant to this Section 13.4(b) to a
Person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall, to the extent legally
entitled to do so, provide to the Borrower the appropriate Internal Revenue
Service Forms (and, if applicable, a Section 4.4(b)(ii) Certificate) described
in Section 4.4(b). To the extent that an assignment of all or any portion of a
Lender's Commitment and related outstanding Obligations pursuant to Section 1.13
or this Section 13.4(b) would, at the time of such assignment, result in
increased costs under Section 1.10, 2.6 or 4.4 from those being charged by the
respective assigning Lender prior to such assignment, then the Borrower shall
not be obligated to pay such increased costs (although the Borrower, in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).
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(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and Note hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank and, with prior
notification to the Administrative Agent (but without the consent of the
Administrative Agent or the Borrower), any Lender which is a fund may pledge all
or any portion of its Loans and Note to its trustee or to a collateral agent
providing credit or credit support to such Lender in support of its obligations
to its trustee or such collateral agent, as the case may be. No pledge pursuant
to this clause (c) shall release the transferor Lender from any of its
obligations hereunder.
13.5. No Waiver; Remedies Cumulative. No failure or delay on the part of
the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and the Administrative Agent, the Collateral Agent, the Issuing Lender or any
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender to
any other or further action in any circumstances without notice or demand.
13.6. Payments Pro Rata.
(a) Except as otherwise provided in this Agreement, the Administrative
Agent agrees that promptly after its receipt of each payment from or on behalf
of the Borrower in respect of any Obligations hereunder, the Administrative
Agent shall distribute such payment to the Lenders (other than any Lender that
has consented in writing to waive its pro rata share of any such payment) pro
rata based upon their respective shares, if any, of the Obligations with respect
to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Letter of Credit Fees, of a sum which with
respect to the related sum or sums received by other Lenders is in a greater
proportion than the total of such Obligation then owed and due to such Lender
bears to the total of such Obligation then owed and due to all of the Lenders
immediately prior to such receipt, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations of the respective Credit Party to such
Lenders in such amount as shall result in a proportional participation by all
the Lenders in such amount; provided that if all or any portion of such excess
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amount is thereafter recovered from such Lenders, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
13.7. Calculations; Computations.
(a) The financial statements to be furnished to the Lenders pursuant
hereto shall be made and prepared in accordance with generally accepted
accounting principles in the United States consistently applied throughout the
periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by the Borrower to the Lenders); provided that, except as
otherwise specifically provided herein, all computations of the Applicable
Margin, and all computations and all definitions (including accounting terms)
used in determining compliance with financial covenants, shall utilize generally
accepted accounting principles and policies in conformity with those used to
prepare the historical financial statements of the Borrower referred to in
Section 7.5(a).
(b) All computations of interest and other Fees hereunder shall be
made on the basis of a year of 360 days for the actual number of days (including
the first day but excluding the last day; except that in the case of Letter of
Credit Fees and Facing Fees, the last day shall be included) occurring in the
period for which such interest or Fees are payable.
13.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN ANY MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF ILLINOIS. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS,
IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF XXXX, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, THE BORROWER HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
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JURISDICTION OVER THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK
PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10. Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which the Borrower, the Administrative Agent and each
of the Lenders shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at the Notice Office or, in the case of the Lenders, shall have given to
the Administrative Agent telephonic (confirmed in writing), written or telex
notice (actually received) at such office that the same has been signed and
mailed to it. The Administrative Agent will give the Borrower and each Lender
prompt written notice of the occurrence of the Effective Date.
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13.11. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12. Amendment or Waiver; etc.
(a) Neither this Agreement nor any other Credit Document nor any terms
hereof or thereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed by the respective
Credit Parties party hereto or thereto and the Required Lenders, provided that
no such change, waiver, discharge or termination shall, without the consent of
each Lender (other than a Defaulting Lender) (with Obligations being directly
affected in the case of following clause (i)), (i) extend the final scheduled
maturity of any Loan or Note or extend the stated expiration date of any Letter
of Credit beyond the Revolving Loan Maturity Date, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with the
waiver of applicability of any post-default increase in interest rates), or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to Section
13.7(a) shall not constitute a reduction in the rate of interest or Fees for the
purposes of this clause (i)), (ii) release all or substantially all of the
Collateral (except as expressly provided in the Credit Documents) under all the
Security Documents, (iii) release any Subsidiary Guarantor (except as expressly
provided in the Credit Documents) from the Subsidiaries Guaranty, (iv) amend,
modify or waive any provision of this Section 13.12 (except for technical
amendments with respect to additional extensions of credit pursuant to this
Agreement which afford the protections to such additional extensions of credit
of the type provided to the Revolving Loan Commitments on the Effective Date),
(v) reduce the percentage specified in the definition of Required Lenders (it
being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Lenders on substantially the same basis as the
extensions of Revolving Loan Commitments are included on the Effective Date) or
(vi) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement; provided further, that no such change,
waiver, discharge or termination shall (1) increase the Commitment of any Lender
over the amount thereof then in effect without the consent of such Lender (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase of the Commitment of such Lender), (2)
without the consent of the Issuing Lender, amend, modify or waive any provision
of Section 2 or alter its rights or obligations with respect to Letters of
Credit, (3) without the consent of Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent or (4)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the rights or
obligations of the Administrative Agent.
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(b) If, in connection with any proposed change, waiver, discharge or
termination of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Commitment and/or repay the outstanding Loans of such Lender in
accordance with Sections 3.2(b) and/or 4.1(b), provided that, unless the
Commitments that are terminated, and Loans repaid, pursuant to preceding clause
(B) are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to preceding clause (B) the Required Lenders (determined
after giving effect to the proposed action) shall specifically consent thereto,
provided further, that in any event the Borrower shall not have the right to
replace a Lender, terminate its Commitment or repay its Loans solely as a result
of the exercise of such Lender's rights (and the withholding of any required
consent by such Lender) pursuant to the second proviso to Section 13.12(a).
13.13. Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.6, 4.4, 12.6 and 13.1 shall survive the
execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14. Domicile of Loans. Each Lender may transfer and carry its Loans at,
to or for the account of any office Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.6 or 4.4 from
those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15. Register. The Borrower hereby designates the Administrative Agent to
serve as its agent, solely for purposes of this Section 13.15, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Lenders, the Loans made by each of the Lenders and each
repayment in respect of the principal amount of the Loans of each Lender.
Failure to make any such recordation, or any error in such recordation, shall
not affect the Borrower's obligations in respect of such Loans. With respect to
any Lender, the transfer of the Commitment of such Lender and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitment shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitment and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
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Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 13.4(b). Coincident with
the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note (if any) evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Lender and/or the new Lender at the
request of any such Lender. The Borrower agrees to indemnify the Administrative
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.15.
13.16. Confidentiality.
(a) Subject to the provisions of clause (b) of this Section 13.16,
each Lender agrees that it will use its reasonable efforts not to disclose
without the prior consent of the Borrower (other than to its Affiliates,
employees, auditors, advisors or counsel or to another Lender if such Lender or
such Lender's holding or parent company in its sole discretion determines that
any such party should have access to such information, provided such Persons
shall be subject to the provisions of this Section 13.16 to the same extent as
such Lender) any information with respect to the Borrower or any of its
Subsidiaries which is now or in the future furnished by or on behalf of the
Borrower or any of its Subsidiaries pursuant to this Agreement or any other
Credit Document which information is, at the time of its disclosure,
confidential and/or proprietary and clearly identified as such in writing
(hereafter "Confidential Information"), provided that any Lender may disclose
any such Confidential Information (i) as has become generally available to the
public other than by virtue of a breach of this Section 13.16(a) by the
respective Lender, (ii) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body having or claiming to have jurisdiction over such Lender or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(iii) as may be required or appropriate in respect to any summons or subpoena or
in connection with any litigation, (iv) in order to comply with any law, order,
regulation or ruling applicable to such Lender, (v) to the Administrative Agent
or the Collateral Agent, (vi) to any direct or indirect contractual counterparty
in any swap, hedge or similar agreement (or to any such contractual
counterparty's professional advisor), so long as such contractual counterparty
(or such professional advisor) agrees to be bound by the provisions of this
Section 13.16 and (vii) to any prospective or actual transferee or participant
in connection with any contemplated transfer or participation of any Note or
Commitment or any interest therein by such Lender, provided that such
prospective transferee agrees to be bound by the confidentiality provisions
contained in this Section 13.16; and provided further, that in the event that
any Lender is requested or required in an investigation, legal proceeding or
similar process under Sections 13.16(a)(ii)-(iv) above, to disclose any of the
Confidential Information, such Lender shall endeavor to provide, unless
prohibited by applicable law, the Borrower with prompt written notice of any
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such request or requirement so that the Borrower may seek a protective order or
other appropriate remedy or waive compliance with the provisions of this Section
13.16(a).
(b) The Borrower hereby acknowledges and agrees that each Lender may
share with any of its Affiliates, and such Affiliates may share with such
Lender, any information related to the Borrower or any of its Subsidiaries
(including, without limitation, any non-public customer information regarding
the creditworthiness of the Borrower and its Subsidiaries), provided such
Persons shall be subject to the provisions of this Section 13.16 to the same
extent as such Lender.
13.17. Restructuring of Assets. The parties hereto acknowledge that the
Borrower has informed the Lenders that it shall, after the occurrence of the
Initial Borrowing Date, transfer all or a portion of certain assets to First
Horizon International and with the International Subsidiaries enter the First
Horizon International Financing. The Administrative Agent and the Lenders hereby
agree, so long as no Default or Event of Default exists hereunder, that they
will work in good faith with the Borrower and the International Subsidiaries to
consent to transactions described above so long as such transactions are
structured in a manner which is reasonably satisfactory to the Administrative
Agent and the Required Lenders and the Collateral Agent's first perfected lien
remains on any transferred Collateral. In connection with any such transaction,
the parties hereto shall enter into such modifications to the Credit Documents
as the Administrative Agent and the Required Lenders determine are reasonably
necessary or desirable in connection with the transaction so approved, it being
understood and agreed by all parties hereto that the nature of such
modifications may require the consent of the Required Lenders pursuant to
Section 13.12(a). It is further acknowledged and agreed that upon the funding of
the initial loan under the First Horizon International Financing and the
Collateral Agent obtaining Liens in connection therewith as provided in the
documents evidencing such financing, any Lien of the Collateral Agent for the
benefit of the Lenders for the Obligations on any property of First Horizon
International or its subsidiaries transferred from the Borrower or otherwise
shall be released and no property of First Horizon International or its
Subsidiaries shall secure the Obligations.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Credit Agreement as of the date first above
written.
Address
First Horizon Pharmaceutical Corporation FIRST HORIZON PHARMACEUTICAL CORPORATION
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: CFO
--------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
Individually and as Administrative Agent
By: /s/ Xxxxxxx X. X'Xxxxx
---------------------------------
Name: Xxxxxxx X. X'Xxxxx
---------------------------------
Title: Assistant Vice President
---------------------------------
1588405