Exhibit 10.3
CREDIT AND SECURITY AGREEMENT
THIS CREDIT AND SECURITY AGREEMENT (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "AGREEMENT")
is dated as of December 27, 2006 by and among INSULET CORPORATION, a Delaware
corporation, SUB-Q SOLUTIONS, INC., a Delaware corporation, and any additional
Borrower that may hereafter be added to this Agreement (each individually as a
"Borrower" and collectively as "Borrowers"), XXXXXXX XXXXX CAPITAL, A DIVISION
OF XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC., individually as a Lender, and
as Administrative Agent, and the financial institutions or other entities from
time to time parties hereto, each as a Lender.
RECITALS
Borrowers have requested that Lenders make available to Borrowers the financing
facilities as described herein. Lenders are willing to extend such credit to
Borrowers under the terms and conditions herein set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Borrowers, Lenders and Administrative Agent
agree as follows:
ARTICLE 1 - DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS.
The following terms have the following meanings:
"ACCOUNT DEBTOR" means "ACCOUNT DEBTOR", as defined in Article 9 of the
UCC, and any other obligor in respect of an Account.
"ACCOUNTS" means collectively (a) any right to payment of a monetary
obligation, whether or not earned by performance, (b) without duplication, any
"account" (as defined in the UCC), any accounts receivable (whether in the form
of payments for services rendered or goods sold, rents, license fees or
otherwise), any "health-care-insurance receivables" (as defined in the UCC), any
"payment intangibles" (as defined in the UCC) and all other rights to payment
and/or reimbursement of every kind and description, whether or not earned by
performance, (c) all accounts, "general intangibles" (as defined in the UCC),
Intellectual Property, rights, remedies, Guarantees, "supporting obligations"
(as defined in the UCC), "letter-of-credit rights" (as defined in the UCC) and
security interests in respect of the foregoing, all rights of enforcement and
collection relating to the foregoing, all books and records evidencing or
related to the foregoing, (d) all information and data compiled or derived by
any Borrower or to which any Borrower is entitled in respect of or related to
the foregoing, and (e) all proceeds of any of the foregoing.
"ADMINISTRATIVE AGENT" MEANS Xxxxxxx Xxxxx, in its capacity as
administrative agent for the Lenders hereunder, as such capacity is established
in, and subject to the provisions of, Article 11, and the successors of Xxxxxxx
Xxxxx in such capacity.
"AFFILIATE" means with respect to any Person (a) any Person that directly
or indirectly controls such Person, (b) any Person which is controlled by or is
under common control with such controlling Person, and (c) each of such Person's
(other than, with respect to any Lender, any Lender's) officers or directors (or
Persons functioning in substantially similar roles) and the spouses, parents,
descendants and siblings of such officers, directors or other Persons. As used
in this definition, the term "control" of a Person means the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of the
voting securities of such Person or to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"ANTI-TERRORISM LAWS" means any Laws relating to terrorism or money
laundering, including Executive Order No. 13224 (effective September 24, 2001),
the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act,
and the Laws administered by OFAC.
"APPROVED FUND" means any (i) investment company, fund, trust,
securitization vehicle or conduit that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business or (ii) any Person
(other than a natural person) which temporarily warehouses loans for any Lender
or any entity described in the preceding clause (i) and that, with respect to
each of the preceding clauses (i) and (ii), is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) a Person (other than a NATURAL
person) or an Affiliate of a Person (other than a natural person) that
administers or manages a Lender.
"ASSET DISPOSITION" means any sale, lease, license, transfer, assignment or
other consensual disposition by any Credit Party of any asset.
"ASSIGNMENT AGREEMENT" means an agreement substantially in the form of
Exhibit A hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as the same may be amended, modified or supplemented from time to
time, and any successor statute thereto.
"BASE RATE" means the LIBOR Rate.
"BASE RATE MARGIN" means six percent (6.0%) per annum with respect to the
Term Loan and other Obligations.
"BLOCKED PERSON" means any Person: (a) listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224, (b) owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order No.
13224, (c) with which any Lender is prohibited
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from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law,
(d) that commits, threatens or conspires to commit or supports "terrorism" as
defined in Executive Order No. 13224, or (e) that is named a "specially
designated national" or "blocked person" on the most current list published by
OFAC or other similar list or is named as a "listed person" or "listed entity"
on other lists made under any Anti-Terrorism Law.
"BORROWER" AND "BORROWERS" mean the entity(ies) described in the first
paragraph of this Agreement and each of their successors and permitted assigns.
"BORROWER REPRESENTATIVE" means Insulet Corporation, in its capacity as
Borrower Representative pursuant to the provisions of Section 2.9, or any
successor Borrower Representative selected by Borrowers and approved by
Administrative Agent.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which either the New York Stock Exchange is closed, or on which commercial banks
in Chicago and New York City are authorized by law to close.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C.A. Section 9601 et seq., as the same may be
amended from time to time.
"CHANGE IN CONTROL" means any of the following: (a) any change in the legal
or beneficial ownership of the capital stock, partnership interests or
membership interests, or in the capital structure, organizational documents or
governing documents, of the applicable Person; (b) any pledge, assignment or
hypothecation of or Lien or encumbrance on any of the legal or beneficial equity
interests in the applicable Person; (c) any change in the legal or beneficial
ownership or control of the outstanding voting equity interests of the
applicable Person necessary at all times to elect a majority of the board of
directors (or similar governing body) of each such Person and to direct the
management policies and decisions of such Person; or (d) the applicable Person
shall cease to, directly or indirectly, own and control one hundred percent
(100%) of each class of the outstanding equity interests of each Subsidiary of
such Person.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" means all property, now existing or hereafter acquired, that
is mortgaged or pledged to, or purported to be subjected to a Lien in favor of,
Administrative Agent, for the benefit of Administrative Agent and Lenders,
pursuant to this Agreement and the Security Documents, including, without
limitation, all of the property described in Schedule 9.1 hereto.
"COMMITMENT ANNEX" means Annex A to this Agreement.
COMMODITY ACCOUNT" means a "commodity account" as defined in Article 9 of
the UCC.
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"COMPLIANCE CERTIFICATE" means a certificate, duly executed by a
Responsible Officer of Borrower Representative, appropriately completed and
substantially in the form of Exhibit B hereto.
"CONTINGENT OBLIGATION" means, with respect to any Person, any direct or
indirect liability of such Person: (a) with respect to any Debt of another
Person (a "THIRD PARTY OBLIGATION") if the purpose or intent of such Person
incurring such liability, or the effect thereof, is to provide assurance to the
obligee of such Third Party Obligation that such Third Party Obligation will be
paid or discharged, or that any agreement relating thereto will be complied
with, or that any holder of such Third Party Obligation will be protected, in
whole or in part, against loss with respect thereto; (b) with respect to any
undrawn portion of any letter of credit issued for the account of such Person or
as to which such Person is otherwise liable for the reimbursement of any
drawing; (c) under any Swap Contract, to the extent not yet due and payable; (d)
to make take-or-pay or similar payments if required regardless of nonperformance
by any other party or parties to an agreement; or (e) for any obligations of
another Person pursuant to any Guarantee or pursuant to any agreement to
purchase, repurchase or otherwise acquire any obligation or any property
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to preserve the solvency, financial condition or level of
income of another Person. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so Guaranteed or otherwise supported or, if not
a fixed and determinable amount, the maximum amount so Guaranteed or otherwise
supported.
"CONTROLLED GROUP" means all members of any group of corporations and all
members of a group of trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of
ERISA.
"CREDIT EXPOSURE" means any period of time during which the Term Loan
Commitment is outstanding or any Obligation remains unpaid or outstanding;
provided, however, that no Credit Exposure shall be deemed to exist solely due
to the existence of contingent indemnification liability, absent the assertion
of a claim, or the known existence of a claim reasonably likely to be asserted,
with respect thereto.
"CREDIT PARTY" means any Guarantor under a Guarantee of the Obligations or
any part thereof, any Borrower and any other Person (other than Administrative
Agent, a Lender or a participant of a Lender), whether now existing or hereafter
acquired or formed, that becomes obligated as a borrower, guarantor, surety,
indemnitor, pledgor, assignor or other obligor under any Financing Document; and
"CREDIT PARTIES" means all such Persons, collectively.
"DEBT" of a Person means at any date, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising and paid on a timely basis and
in the Ordinary Course of Business, (d) all capital leases of such Person, (e)
all non-contingent obligations of such Person to reimburse any bank or other
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Person in respect of amounts paid under a letter of credit, banker's acceptance
or similar instrument, (f) all equity securities of such Person subject to
repurchase or redemption prior to the Termination Date otherwise than at the
sole option of such Person, (g) all obligations secured by a Lien on any asset
of such Person, whether or not such obligation is otherwise an obligation of
such Person, and (h) all Debt of others Guaranteed by such Person.
"DEFAULT" means any condition or event which with the giving of notice or
lapse of time or both would, unless cured or waived, become an Event of Default.
"DEFAULTED LENDER" means, so long as such failure shall remain in existence
and uncured, any Lender which shall have failed to make any Loan or other credit
accommodation, disbursement, settlement or reimbursement required pursuant to
the terms of any Financing Document.
"DEPOSIT ACCOUNT" means a "deposit account" (as defined in Article 9 of the
UCC), an investment account, or other account in which funds are held or
invested for credit to or for the benefit of any Borrower.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means an agreement, in form and
substance satisfactory to Administrative Agent, among Administrative Agent, any
applicable Borrower and each bank or financial institution in which such
Borrower maintains a Deposit Account, which agreement provides that (a) such
bank or financial institution acknowledges the security interest of
Administrative Agent in such Deposit Account, (b) such bank or financial
institution shall comply with instructions originated by Administrative Agent
after the delivery by Administrative Agent of a notice of exclusive control
directing disposition of the funds in such Deposit Account without further
consent by the applicable Borrower, and (c) such bank or financial institution
shall agree that it shall have no Lien on, or, subject to Section 10.5 hereof,
right of setoff or recoupment against, such Deposit Account or the contents
thereof, other than in respect of usual and customary service fees and of
returned items for which Administrative Agent has been given value, in each such
case expressly consented to by Administrative Agent, and containing such other
terms and conditions as Administrative Agent may reasonably require.
"DOLLARS" or "$" means the lawful currency of the United States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is a "U.S. person" under
and as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended.
"ELIGIBLE ASSIGNEE" means (i) a Lender, (ii) an Affiliate of a Lender,
(iii) an Approved Fund, and (iv) any other Person (other than a natural person)
approved by the Borrowers (unless an Event of Default has occurred and is
continuing) (such approval of Borrower not to be unreasonably withheld or
delayed, and shall be deemed provided unless expressly withheld by any Borrower
within five (5) Business Days of request therefor); provided that
notwithstanding the foregoing, (x) "Eligible Assignee" shall not include any
Borrower or any Affiliates or Subsidiaries of any Borrower and (y) no proposed
assignee
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intending to assume any unfunded portion of the Term Loan Commitment shall be an
Eligible Assignee unless such proposed assignee either already holds a portion
of such Term Loan Commitment, or has been approved as an Eligible Assignee by
Administrative Agent.
"ELIGIBLE SWAP COUNTERPARTY" means Administrative Agent, any Affiliate of
Administrative Agent, any Lender and/or any Affiliate of any Lender, that (a) at
any time it occupies such role or capacity enters into a Permitted Swap Contract
with any Borrower or any Guarantor who has pledged Collateral in respect of the
Obligations or such Guarantee of the Obligations, and (b) in the case of a
Lender or an Affiliate of a Lender other than Administrative Agent, is expressly
identified by Administrative Agent as maintaining a reporting system acceptable
to Administrative Agent with respect to Swap Contract exposure and agrees with
Administrative Agent to provide regular reporting to Administrative Agent, in
form and content reasonably satisfactory to Administrative Agent, with respect
to such exposure.
"ENVIRONMENTAL LAWS" means any present and future federal, state and local
laws, statutes, ordinances, rules, regulations, standards, policies and other
governmental directives or requirements, as well as common law, pertaining to
the environment, natural resources, pollution, human health and safety, or
clean-up (including any environmental clean up statutes and all related
regulations adopted by any local, state, federal or other Governmental
Authority, and any statute, ordinance, code, order, decree, law rule or
regulation all of which pertain to or impose liability or standards of conduct
concerning medical waste or medical products, equipment or supplies), safety or
clean-up that apply to any Borrower and relate to Hazardous Materials,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.),
the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 5101 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.), the
Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. Section 4851 et
seq.), any analogous state or local laws, any amendments thereto, and the
regulations promulgated pursuant to said laws, together with all amendments from
time to time to any of the foregoing and judicial interpretations thereof.
"ENVIRONMENTAL LIENS" means all Liens and other encumbrances imposed
pursuant to any Environmental Law, whether due to any act or omission of any
Borrower or any other Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as the
same may be amended, modified or supplemented from time to time, and any
successor statute thereto, and any and all rules or regulations promulgated from
time to time thereunder.
"ERISA PLAN" means any "employee benefit plan", as such term is defined in
Section 3(3) of ERISA (other than a Multiemployer Plan), which any Borrower
maintains, sponsors or contributes to, or, in the case of an employee benefit
plan which is subject to Section 412 of the Code or Title IV of ERISA, to which
any Borrower or any member of the Controlled Group may
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have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five (5) years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
"EVENT OF DEFAULT" has the meaning set forth in Section 10.1.
"EXCLUDED PROPERTY" has the meaning set forth in Schedule 9.1.
"EXTRAORDINARY RECEIPTS" means any cash received by or paid to or for the
account of any Credit Party not in the Ordinary Course of Business (and not
consisting of proceeds described in any of clauses (i) and/or (iii) of Section
2.1 (a)(ii)(B)), including, without limitation, amounts received in respect of
foreign, United States, State or local tax refunds to the extent not included in
the calculation of EBTTDA, and pension plan reversions. "Extraordinary Receipts"
shall, however, exclude the proceeds of any equity issuance in Principal
Borrower.
"FINANCING DOCUMENTS" means this Agreement, any Notes, the Security
Documents, any fee letter among Xxxxxxx Xxxxx and any of the Borrowers relating
to the transactions contemplated hereby, any subordination or intercreditor
agreement pursuant to which any Debt and/or any Liens securing such Debt is
subordinated to all or any portion of the Obligations and all other documents,
instruments and agreements related to the Obligations and heretofore executed,
executed concurrently herewith or executed at any time and from time to time
hereafter, as any or all of the same may be amended, supplemented, restated or
otherwise modified from time to time.
"FOREIGN LENDER" has the meaning set forth in Section 2.8(c).
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances as of the date
of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof, and any agency, department or Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation or other Person owned or controlled
(through stock or capital ownership or otherwise) by any of the foregoing,
whether domestic or foreign.
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation, or (b) entered into for the purpose of assuring in any
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other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in part)
(in each case under clause (a) or (b) whether arising by virtue of partnership
arrangements, by agreement to keep-well or to make capital contributions or
loans, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise), provided, however, that
the term Guarantee shall not include endorsements for collection or deposit in
the Ordinary Course of Business. The term "Guarantee" used as a verb has a
corresponding meaning.
"GUARANTOR" means any Credit Party that has executed or delivered, or shall
in the future execute or deliver, any Guarantee of any portion of the
Obligations.
"HAZARDOUS MATERIALS" means petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; explosives, flammable
materials; radioactive materials; polychlorinated biphenyls and compounds
containing them; lead and lead-based paint; asbestos or asbestos-containing
materials; underground or above-ground storage tanks, whether empty or
containing any substance; toxic mold, any substance that requires special
handling; and any other material or substance now or in the future defined as a
"hazardous substance," "hazardous material," "hazardous waste," "toxic
substance," "toxic pollutant," "contaminant," "pollutant" or other words of
similar import within the meaning of any Environmental Law, including: (a) any
"hazardous substance" defined as such in (or for purposes of) CERCLA, or any
so-called "superfund" or "superlien" Law, including the judicial interpretation
thereof; (b) any "pollutant or contaminant" as defined in 42 U.S.C.A. Section
9601(33); (c) any material now defined as "hazardous waste" pursuant to 40
C.F.R. Part 260; (d) any petroleum or petroleum by-products, including crude oil
or any fraction thereof; (e) natural gas, natural gas liquids, liquefied natural
gas, or synthetic gas usable for fuel; (f) any "hazardous chemical" as defined
pursuant to 29 C.F.R. Part 1910; (g) any toxic or harmful substances, wastes,
materials, pollutants or contaminants (including, without limitation, asbestos,
polychlorinated biphenyls ("PCB's"), flammable explosives, radioactive
materials, infectious substances, materials containing lead-based paint or raw
materials which include hazardous constituents); and (h) any other toxic
substance or contaminant that is subject to any Environmental Laws or other past
or present requirement of any Governmental Authority.
"HAZARDOUS MATERIALS CONTAMINATION" means contamination (whether now
existing or hereafter occurring) of the improvements, buildings, facilities,
personality, soil, groundwater, air or other elements on or of the relevant
property by Hazardous Materials, or any derivatives thereof, or on or of any
other property as a result of Hazardous Materials, or any derivatives thereof,
generated on, emanating from or disposed of in connection with the relevant
property.
"INDEMNITEES" has the meaning set forth in Section 12.17.
"INTELLECTUAL PROPERTY" means, with respect to any Person, all patents,
patent applications and like protections, including improvements divisions,
continuation, renewals, reissues, extensions and continuations in part of the
same, trademarks, trade names, trade styles, trade dress, service marks, logos
and other business identifiers and, to the extent permitted under applicable
law, any applications therefor, whether registered or not, and the goodwill of
the business of such Person connected with and symbolized thereby, copyright
rights, copyright applications, copyright registrations and like protections in
each work of authorship and
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derivative works, whether published or unpublished, technology, know-how and
processes, operating manuals, trade secrets, computer hardware and software,
rights to unpatented inventions and all applications and licenses therefor, used
in or necessary for the conduct of business by such Person and all claims for
damages by way of any past, present or future infringement of any of the
foregoing.
"INTEREST PERIODS" means the one-month period commencing on the date that
the advance under the Term Loan is made and each subsequent one-month period
commencing on the same day of each month thereafter.
"INVESTMENT" means any investment in any Person, whether by means of
acquiring (whether for cash, property, services, securities or otherwise) or
holding securities, capital contributions, loans, time deposits, advances,
Guarantees or otherwise. The amount of any Investment shall be the original cost
of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect thereto.
"IP PROCEEDS" has the meaning set forth in Schedule 9.1.
"LAWS" means any and all xxxxxxx, xxxxx, xxxxxxxxxx, xxxxxxxxxxx, local and
foreign statutes, laws, judicial decisions, regulations, guidances, guidelines,
ordinances, rules, judgments, orders, decrees, codes, plans, injunctions,
permits, concessions, grants, franchises, governmental agreements and
governmental restrictions, whether now or hereafter in effect, which are
applicable to any Credit Party in any particular circumstance. "Laws" includes,
without limitation, Environmental Laws.
"LENDER" means each of (a) Xxxxxxx Xxxxx, in its capacity as a lender
hereunder, (b) each other Person party hereto in its capacity as a lender
hereunder, (c) each other Person that becomes a party hereto as Lender pursuant
to Section 12.6, and (d) the respective successors of all of the foregoing, and
"Lenders" means all of the foregoing. In addition to the foregoing, for the
purpose of identifying the Persons entitled to share in the Collateral and the
proceeds thereof under, and in accordance with the provisions of, this Agreement
and the Security Documents, the term "LENDER" shall include Eligible Swap
Counterparties.
"LIBOR RATE" means a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to (a) the rate of interest which is identified and
normally published by Bloomberg Professional Service Page BBAM 1 as the offered
rate for loans in United States dollars for the period of one (1) month under
the caption British Bankers Association LIBOR Rates as of 11:00 a.m. (London
time) on the second full Business Day prior to the commencement of the
applicable Interest Period (unless such date is not a Business Day, in which
event the next succeeding Business Day will be used); divided by (b) the sum of
one minus the daily average during the preceding month of the aggregate maximum
reserve requirement (expressed as a decimal) then imposed under Regulation D of
the Board of Governors of the Federal Reserve System (or any successor thereto)
for "Eurocurrency Liabilities" (as defined therein). If Bloomberg Professional
Service (or another nationally-recognized rate reporting source acceptable to
Administrative Agent) no longer reports the LIBOR or Administrative Agent
determines in good faith that the rate so reported no longer
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accurately reflects the rate available to Administrative Agent in the London
Interbank Market or if such index no longer exists or if Page BBAM 1 no longer
exists or accurately reflects the rate available to Administrative Agent in the
London Interbank Market, Administrative Agent may select a comparable
replacement index or replacement page, as the case may be.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement and the
other Financing Documents, any Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"LITIGATION" means any action, suit or proceeding before any court,
mediator, arbitrator or Governmental Authority.
"LOAN ACCOUNT" has the meaning set forth in Section 2.6(b).
"LOAN(S)" means the Term Loan, and each and every advance under the Term
Loan, or any combination of the foregoing, as the context may require. All
references herein to the "making" of a Loan or words of similar import shall
mean, with respect to the Term Loan, the making of any advance in respect of a
Term Loan.
"MATERIAL ADVERSE EFFECT" means with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (i) the financial
condition, operations, business or properties of any of the Credit Parties and
their Subsidiaries, taken as a whole, (ii) the rights and remedies of
Administrative Agent or Lenders under any Financing Document, or the ability of
any Credit Party to perform any of its obligations under any Financing Document
to which it is a party, (iii) the legality, validity or enforceability of any
Financing Document, (iv) the existence, perfection or priority of any security
interest granted in any Financing Document, or (v) the value of any material
Collateral. The parties hereto hereby acknowledge and agree that with regard to
any determination under this Agreement as to whether a material adverse change
in or a material adverse effect upon properties of the Credit Parties and their
Subsidiaries taken as a whole has occurred or would occur, as the case may be,
such determination shall take into account any corresponding payments to the
applicable Credit Party or Subsidiary (including, without limitation, insurance
proceeds) and any corresponding decrease in the liabilities of such Credit Party
or Subsidiary.
"MATERIAL CONTRACTS" has the meaning set forth in Section 3.17.
"MAXIMUM Lawful Rate" has the meaning set forth in Section 2.7.
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"XXXXXXX XXXXX" means Xxxxxxx Xxxxx Capital, a division of Xxxxxxx Xxxxx
Business Financial Services Inc., and its successors.
"MULTIEMPLOYER PLAN" means a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA to which any Borrower or any other member of the
Controlled Group (or any Person who in the last five years was a member of the
Controlled Group) is making or accruing an obligation to make contributions or
has within the preceding five plan years (as determined on the applicable date
of determination) made contributions.
"NOTES" shall have the meaning set forth in Section 2.3.
"NOTICE OF BORROWING" means a notice of a Responsible Officer of Borrower
Representative, appropriately completed and substantially in the form of Exhibit
D hereto.
"OBLIGATIONS" means all obligations, liabilities and indebtedness (monetary
(including post-petition interest, whether or not allowed) or otherwise) of each
Credit Party under this Agreement or any other Financing Document, in each case
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due. In addition to,
but without duplication of, the foregoing, the Obligations shall include,
without limitation, all obligations, liabilities and indebtedness arising from
or in connection with all Permitted Swap Contracts entered into with any
Eligible Swap Counterparty.
"OFAC" means the U.S. Department of Treasury Office of Foreign Assets
Control.
"OFAC LISTS" means, collectively, the Specially Designated Nationals and
Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224,
66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.
"ORDINARY Course of Business" means, in respect of any transaction
involving any Credit Party, the ordinary course of business of such Credit
Party, as conducted by such Credit Party in accordance with past practices.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of designation
for preferred stock or other forms of preferred equity) and which relate to the
internal governance of such Person (such as bylaws, a partnership agreement or
an operating, limited liability or members agreement).
"PAYMENT ACCOUNT" means the account specified on the signature pages hereof
into which all payments by or on behalf of each Borrower to Administrative Agent
under the Financing Documents shall be made, or such other account as
Administrative Agent shall from time to time specify by notice to Borrower
Representative.
"PAYMENT NOTIFICATION" means a written notification substantially in the
form of Exhibit E hereto.
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11
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means any ERISA Plan that is subject to Section 412 of the
Code or Title IV of ERISA.
"PERMITS" means all governmental licenses, authorizations, provider
numbers, supplier numbers, registrations, permits, drug or device authorizations
and approvals, certificates, franchises, qualifications, accreditations,
consents and approvals required under all applicable Laws and required in order
to carry on its business as now conducted.
"PERMITTED AFFILIATE" means with respect to any Person (a) any Person that
directly or indirectly controls such Person, and (b) any Person which is
controlled by or is under common control with such controlling Person. As used
in this definition, the term "control" of a Person means the possession,
directly or indirectly, of the power to vote eighty percent (80%) or more of any
class of voting securities of such Person or to direct or cause the direction of
the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"PERMITTED ASSET DISPOSITIONS" means (x) dispositions of Inventory in the
Ordinary Course of Business and not pursuant to any bulk sale, (y) the granting
of non-exclusive licenses (or exclusive licenses limited to a particular
geographic range or field of use), and (z) the following Asset Dispositions
provided that, at the time of such Asset Disposition, no Default or Event of
Default exists or would result from such Asset Disposition: (i) dispositions of
furniture, fixtures and equipment in the Ordinary Course of Business that the
applicable Borrower determines in good faith is no longer used or useful in the
business of such Borrower and its Subsidiaries, (ii) disposition of the
pharmaceutical business of the Principal Borrower, provided, that, Borrower
receives prior written consent to such disposition from the Required Lenders,
which consent shall not be unreasonably withheld, (iii) the abandonment of
Intellectual Property that the applicable Borrower determines in good faith is
no longer used or useful in the business of such Borrower and its Subsidiaries,
and (iv) dispositions approved by the Required Lenders.
"PERMITTED CONTEST" means, with respect to any tax obligation or other
obligation allegedly or potentially owing from any Borrower to any governmental
tax authority or other third party, a contest maintained in good faith by
appropriate proceedings promptly instituted and diligently conducted and with
respect to which such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made on the books and
records and financial statements of the applicable Borrower(s); provided,
however, that (a) compliance with the obligation that is the subject of such
contest is effectively stayed during such challenge; (b) Borrowers' title to,
and its right to use, the Collateral is not adversely affected thereby and
Administrative Agent's Lien and priority on the Collateral are not adversely
affected, altered or impaired thereby; (c) in the case of real estate taxes or
assessments or mechanic's, workmen's, materialmen's or other like Liens with
respect to any real estate which is part of the Collateral, Borrowers have
obtained an endorsement, in form and substance satisfactory to Administrative
Agent, to the loan policy of title insurance issued to Administrative Agent
insuring over any Lien
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12
created by such obligation, or Borrowers have deposited with Administrative
Agent a bond or other security shall be part of the Collateral satisfactory to
Administrative Agent, in its reasonable discretion, to ensure payment of such
obligation or charge (and if such security is cash, Administrative Agent may,
but shall not be obligated to, deposit the same in an interest-bearing account
and interest accrued thereon, if any, shall be deemed to constitute a part of
such security for purposes of this Agreement, but Administrative Agent (i) makes
no representation or warranty as to the rate or amount of interest, if any,
which may accrue thereon and shall have no liability in connection therewith and
(ii) shall not be deemed to be a trustee or fiduciary with respect to its
receipt of any such security and any such security may be commingled with other
monies of Administrative Agent); (d) the Collateral or any part thereof or any
interest therein shall not be in any danger of being sold, forfeited or lost by
reason of such contest by Borrowers; (e) Borrowers have given Administrative
Agent notice of the commencement of such contest and upon request by
Administrative Agent, from time to time, notice of the status of such contest by
Borrowers and/or confirmation of the continuing satisfaction of this definition;
and (f) upon a final determination of such contest, Borrowers shall promptly
comply with the requirements thereof.
"PERMITTED CONTINGENT OBLIGATIONS" means: (a) Contingent Obligations
arising in respect of the Debt under the Financing Documents; (b) Contingent
Obligations resulting from endorsements for collection or deposit in the
Ordinary Course of Business; (c) Contingent Obligations arising under or with
respect to any Permitted Contest or Permitted Liens; (d) Contingent Obligations
outstanding on the date of this Agreement and set forth on Schedule 5.l; (e)
Contingent Obligations incurred in the Ordinary Course of Business with respect
to surety and appeal bonds, performance bonds and other similar obligations not
to exceed $750,000 in the aggregate at any time outstanding and with respect to
bonds provided to utilities with respect to utility services provided to
Borrowers in the Ordinary Course of Business; (f) Contingent Obligations arising
under indemnity agreements with title insurers to cause such title insurers to
issue to Administrative Agent mortgagee title insurance policies with respect to
any real estate Collateral (if any); (g) Contingent Obligations arising with
respect to customary indemnification obligations in favor of purchasers in
connection with dispositions permitted under Section 5.6; (h) so long as there
exists no Event of Default both immediately before and immediately after giving
effect to any such transaction, Contingent Obligations existing or arising under
any Permitted Swap Contract; and (i) other Contingent Obligations not permitted
by clauses (a) through (h) above, not to exceed $750,000 in the aggregate at any
time outstanding.
"PERMITTED INDEBTEDNESS" means: (a) Borrower's Debt to Administrative Agent
and each Lender under this Agreement and the other Financing Documents; (b) Debt
incurred as a result of endorsing negotiable instruments received in the
Ordinary Course of Business; (c) purchase money Debt not to exceed $1,250,000 at
any time (whether in the form of a loan or a lease) used solely to acquire
equipment used in the Ordinary Course of Business and secured only by such
equipment; (d) Debt existing on the date of this Agreement and described on
Schedule 5.1 (but not including any refinancings, extensions, increases or
amendments to such Debt other than extensions of the maturity thereof without
any other change in terms); (e) Debt, if any, arising under Swap Contracts; and
(f) trade accounts payable arising in the Ordinary Course of Business and paid
on a timely basis unless such trade accounts payable are (i) under
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13
$100,000, (ii) not more than ninety (90) days past due or (iii) the subject of a
bona fide counterclaim by any Borrower.
"PERMITTED INVESTMENTS" means: (a) Investments shown on Schedule 5.7 and
existing on the Closing Date; (b) (i) cash equivalents, and (ii) any similar
short term Investments permitted by Borrowers' investment policy, if any, as
amended from time to time, provided that a copy of such investment policy (and
any such amendment thereto) shall have been approved in writing by
Administrative Agent; (c) Investments consisting of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
Ordinary Course of Business; (d) Investments consisting of (i) travel advances
and employee relocation loans and other employee loans and advances in the
Ordinary Course of Business, and (ii) loans to employees, officers or directors
relating to the purchase of equity securities of Borrowers or their Subsidiaries
pursuant to employee stock purchase plans or agreements approved by Borrowers'
Board of Directors (or other governing body), but the aggregate of all such
loans outstanding may not exceed $250,000 at any time; (e) Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent
obligations of, and other disputes with, customers or suppliers arising in the
Ordinary Course of Business; (f) Investments consisting of notes receivable of,
or prepaid royalties and other credit extensions, to customers and suppliers who
are not Affiliates, in the Ordinary Course of Business; provided that this
subpart (f) shall not apply to Investments of Borrowers in any Subsidiary; (g)
Investments consisting of Deposit Accounts or Securities Accounts in which
Administrative Agent has received a Deposit Account Control Agreement or
Securities Account Control Agreement; (h) Investments consisting of the
acquisition of all or substantially all of the assets or capital stock of
another Person provided that Administrative Agent shall have received prior
written notice of such acquisition, together with pro forma financial statements
for the following twelve months, and provided that after giving effect to such
acquisition, no Event of Default has occurred and is continuing or would exist
after giving effect to such acquisition, and such acquisition would not result
in a decrease of more than twenty percent (20%) of the Tangible Net Worth of the
Borrowers; (i) Investments by any Borrower in any other Borrower made in
compliance with Section 4.11(c); and (j) other Investments in an amount not
exceeding $750,000 in the aggregate.
"PERMITTED LIENS" means: (a) deposits or pledges of cash to secure
obligations under workmen's compensation, social security or similar laws, or
under unemployment insurance (but excluding Liens arising under ERISA)
pertaining to a Borrower's employees, if any; (b) deposits or pledges of cash to
secure bids, tenders, contracts (other than contracts for the payment of money
or the deferred purchase price of property or services), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the Ordinary Course of Business; (c) carrier's, warehousemen's,
mechanic's, workmen's, materialmen's or other like Liens on Collateral, other
than Accounts, arising in the Ordinary Course of Business with respect to
obligations which are not due, or which are being contested pursuant to a
Permitted Contest; (d) Liens on Collateral, other than Accounts, for taxes or
other governmental charges not at the time delinquent or thereafter payable
without penalty or the subject of a Permitted Contest; (e) attachments, appeal
bonds, judgments and other similar Liens on Collateral other than Accounts, for
sums not exceeding $350,000 in the aggregate arising in connection with court
proceedings; provided, however, that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are the subject
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14
of a Permitted Contest; (f) with respect to real estate, easements, rights of
way, restrictions, minor defects or irregularities of title, none of which,
individually or in the aggregate, materially interfere with the benefits of the
security intended to be provided by the Security Documents, materially affect
the value or marketability of the Collateral, impair the use or operation of the
Collateral for the use currently being made thereof or impair Borrowers' ability
to pay the Obligations in a timely manner or impair the use of the Collateral or
the ordinary conduct of the business of any Borrower or any Subsidiary and
which, in the case of any real estate which is part of the Collateral, are set
forth as exceptions to or subordinate matters in the title insurance policy
accepted by Administrative Agent insuring the lien of the Security Documents;
(g) Liens and encumbrances in favor of Administrative Agent under the Financing
Documents; (h) Liens on Collateral other than Accounts existing on the date
hereof and set forth on Schedule 5.2 and (i) any Lien on any equipment securing
Debt permitted under subpart (c) of the definition of Permitted Indebtedness
provided, however, that such Lien attaches concurrently with or within twenty
(20) days after the acquisition thereof.
"PERMITTED MERGERS" means a merger, consolidation or amalgamation of (a)
Principal Borrower with or into any other Person who is not a Blocked Person
provided that (i) the Principal Borrower is the surviving entity, (ii) the
holders of the equity interests in the Principal Borrower immediately prior to
such consolidation or merger or amalgamation represent more than fifty percent
(50%) of the aggregate outstanding equity interests of the Principal Borrower
immediately following such consolidation or merger or amalgamation, and (iii)
such consolidation or merger or amalgamation would not result in a decrease of
more than twenty percent (20%) of the Tangible Net Worth of the Principal
Borrower, and (b) any Borrower (other than Principal Borrower) with or into any
other Borrower.
"PERMITTED MODIFICATIONS" means (a) such amendments or other modifications
to a Borrower's Organizational Documents as are required under this Agreement or
by applicable Law and fully disclosed to Administrative Agent within thirty (30)
days prior such amendments or modifications have become effective, (b) such
amendments or modifications to a Borrower's Organizational Documents (other than
those involving a change in the name of a Borrower or involving a reorganization
of the Borrower under the laws of a different jurisdiction) that would not
adversely affect the rights and interests of the Administrative Agent or Lenders
and disclosed to Administrative Agent within thirty (30) days prior such
amendments or modifications have become effective, and (c) such modifications to
the name of a Borrower or involving a reorganization of the Borrower under the
laws of a different jurisdiction so long as the provisions of Section 9.2(d) are
fully complied with prior to the effectiveness of such amendments or
modifications.
"PERMITTED SWAP CONTRACT" means any Swap Contract by Borrower to provide
protection against fluctuations in interest or currency exchange rates in the
Ordinary Course of Business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held
or reasonably anticipated by such Person and not for purposes of speculation but
only to the extent Administrative Agent provides its prior written consent to
the entry into such Swap Agreement.
"PERMITTED TRANSFERS" means (a) the collective reference to (i) transfers
of ownership in a public offering registered with the SEC and (ii) to one or
more other transfers,
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15
via a sale and not by pledge or hypothecation, which, in the aggregate during
the term of this Agreement, result in a transfer of legal or beneficial
ownership or control of up to forty nine percent (49%) of the direct or indirect
ownership or voting interests in the Borrowers or any Guarantor to a Person
other than a Blocked Person, that is (A) a venture capital investor so long as
Borrowers have given Administrative Agent (which shall promptly give such notice
to Lenders) at least fifteen (15) days prior written notice of the identity of
the assignees, together with such information as Administrative Agent or any
Lender shall deem necessary to confirm that such assignee is not a Blocked
Person or (B) at the time of such transfer, already a holder of direct or
indirect ownership or voting interests in the Borrowers, and (b) the sale of
capital stock of Sub-Q provided that Borrower receives prior written consent to
such sale from the Required Lenders, which consent shall not be unreasonably
withheld. Notwithstanding the limitations set forth in the foregoing sentence
(aa) any holder of direct or indirect ownership or voting interests in the
Borrowers which is a partnership may transfer such holder's rights to such
holder's constituent partners, retired partners (including spouses, ancestors,
lineal descendants and siblings of such partners or spouses who acquire such
interests by gift, will or intestate succession) or their respective Affiliates,
(bb) any holder of direct or indirect ownership or voting interests in the
Borrowers which is a limited liability company may transfer such holder's right
to such holder's members, (cc) any holder of direct or indirect ownership or
voting interests in the Borrowers which is a natural person may transfer such
holder's rights to any immediate family member or to any trust created for the
benefit of such holder or his or her immediate family members, and (dd) any
holder of direct or indirect ownership or voting interests in the Borrowers may
transfer such holder's rights to a Permitted Affiliate of such holder (provided
that no transfer of any given interest pursuant to this subpart may be made more
often than once per twelve (12) month period), subject in each case to such
transferee's agreeing in writing to be bound by the rights and restrictions of
this Agreement; and any such transfer described in the foregoing clauses (aa)
through (dd) shall be deemed a "Permitted Transfer" and shall not count toward
the forty nine percent (49%) limitation described above.
"PERSON" means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any Governmental Authority.
"PRINCIPAL BORROWER" means Insulet Corporation, a Delaware corporation.
"PRO RATA SHARE" means (a) with respect to a Lender's obligation to make
advances in respect of a Term Loan and such Lender's right to receive payments
of principal and interest with respect to the Term Loans, the Term Loan
Commitment Percentage of such Lender, and (b) for all other purposes with
respect to any Lender, the percentage obtained by dividing (i) the sum of the
Term Loan Commitment Amount of such Lender (or, in the event the Term Loan
Commitment shall have been terminated, the then outstanding principal advances
of such Lender under the Term Loan), by (ii) the sum of the Term Loan Commitment
Amount (or, in the event the Term Loan Commitment shall have been terminated,
the then outstanding principal advances of such Lenders under the Term Loan) of
all Lenders.
"REQUIRED LENDERS" means at any time two (2) or more Lenders holding in the
aggregate (a) sixty percent (60%) or more of the Term Loan Commitment (taken as
a whole), or
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16
(b) if the Term Loan Commitment has been terminated, sixty percent (60%) or more
of the aggregate outstanding principal balance of the Loans. For purposes of
this definition only, a Lender shall be deemed to include itself, and any Lender
that is an Affiliate or Approved Fund of such Lender.
"RESPONSIBLE OFFICER" means any of the Chief Executive Officer, Chief
Financial Officer or Controller of the applicable Borrower.
"RESTRICTED DISTRIBUTION" means as to any Person (a) any dividend or other
distribution (whether in cash, securities or other property) on any equity
interest in such Person (except those payable solely in its equity interests of
the same class), (b) any payment on account of (i) the purchase, redemption,
retirement, defeasance, surrender, cancellation, termination or acquisition of
any equity interests in such Person or any claim respecting the purchase or sale
of any equity interest in such Person (except in connection with the Warrant) or
(ii) any option, warrant or other right to acquire any equity interests in such
Person (excluding, however the Warrant), (c) any management fees, salaries or
other fees or compensation to any Person holding an equity interest in a
Borrower or a Subsidiary of a Borrower (other than (A) payments of salaries to
individuals, (B) directors fees, (C) the issuance of stock options or restricted
stock to employees and board members, and (D) advances and reimbursements to
employees or directors, all in the Ordinary Course of Business and consistent
with past practices), an Affiliate of a Borrower or an Affiliate of any
Subsidiary of a Borrower, (d) any lease or rental payments to an Affiliate or
Subsidiary of a Borrower, or (e) repayments of or debt service on loans or other
indebtedness held by any Person holding an equity interest in a Borrower or a
Subsidiary of a Borrower, an Affiliate of a Borrower or an Affiliate of any
Subsidiary of a Borrower unless permitted under and made pursuant to a
subordination agreement applicable to such loans or other indebtedness.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACCOUNT" means a "securities account" (as defined in Article 9
of the UCC), an investment account, or other account in which Investment
Property or Securities are held or invested for credit to or for the benefit of
any Borrower.
"SECURITIES ACCOUNT CONTROL AGREEMENT" means an agreement, in form and
substance satisfactory to Administrative Agent, among Administrative Agent, any
applicable Borrower and each securities intermediary in which such Borrower
maintains a Securities Account, which agreement provides that (a) such
securities intermediary acknowledges the security interest of Administrative
Agent in such Securities Account, (b) such securities intermediary shall comply
with entitlement orders and any other instructions originated by Administrative
Agent after the delivery by Administrative Agent of a notice of exclusive
control directing disposition of the assets and funds in such Securities Account
without further consent by the applicable Borrower, and (c) such securities
intermediary shall agree that it shall have no Lien on, or right of setoff or
recoupment against, such Securities Account or the contents thereof, other than
in respect of usual and customary service fees and of returned items for which
Administrative Agent has been given value, in each such case expressly consented
to by Administrative Agent, and containing such other terms and conditions as
Administrative Agent may require.
Credit and Security Agreement
17
"SECURITY DOCUMENT" means this Agreement and any other agreement, document
or instrument executed concurrently herewith or at any time hereafter pursuant
to which one or more Credit Parties or any other Person either (a) Guarantees
payment or performance of all or any portion of the Obligations, and/or (b)
provides, as security for all or any portion of the Obligations, a Lien on any
of its assets in favor of Administrative Agent for its own benefit and the
benefit of the Lenders, as any or all of the same may be amended, supplemented,
restated or otherwise modified from time to time.
"SOLVENT" means, with respect to any Person, that such Person (a) owns and
will own assets the fair saleable value of which are (i) greater than the total
amount of its liabilities (including Contingent Obligations) required to be
classified upon a balance sheet as liabilities in accordance with GAAP, and (ii)
greater than the amount that will be required to pay the probable liabilities of
its then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it; (b)
has capital that is not unreasonably small in relation to its business as
presently conducted or after giving effect to any contemplated transaction; and
(c) does not intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due.
"SUBSIDIARY" means, with respect to any Person, (a) any corporation of
which an aggregate of more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether, at the time, capital stock of any
other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of more than fifty percent (50%) of such
capital stock whether by proxy, agreement, operation of law or otherwise, and
(b) any partnership or limited liability company in which such Person and/or one
or more Subsidiaries of such Person shall have an interest (whether in the form
of voting or participation in profits or capital contribution) of more than
fifty percent (50%) or of which any such Person is a general partner or may
exercise the powers of a general partner. Unless the context otherwise requires,
each reference to a Subsidiary shall be a reference to a Subsidiary of a
Borrower.
"SUB-Q" means Sub-Q Solutions, Inc., a Delaware corporation.
"SWAP CONTRACT" means any "swap agreement", as defined in Section 101 of
the Bankruptcy Code.
"TANGIBLE NET WORTH" means, on any date, the consolidated total assets of
Borrowers and their Subsidiaries minus, (i) any amounts attributable to (a)
goodwill, (b) intangible items such as unamortized debt discount and expense,
patents, trademarks and service marks and names, copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and minus (ii) Total Liabilities.
"TAXES" has the meaning set forth in Section 2.8
"TERM LOAN" has the meaning set forth in Section 2.1(a).
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"TERM LOAN COMMITMENT" means the sum of each Lender's Term Loan Commitment
Amount, which is equal to Thirty Million Dollars ($30,000,000).
"TERM LOAN COMMITMENT AMOUNT" means, (i) as to any Lender that is a Lender
on the Closing Date, the dollar amount set forth opposite such Lender's name on
the Commitment Annex under the column "Term Loan Commitment Amount", as such
amount may be adjusted from time to time by any amounts assigned (with respect
to such Lender's portion of Term Loans outstanding and its commitment to make
advances in respect of the Term Loan) pursuant to the terms of any and all
effective assignment agreements to which such Lender is a party and (ii) as to
any Lender that becomes a Lender after the Closing Date, the amount of the "Term
Loan Commitment Amount(s)" of other Lender(s) assigned to such new Lender
pursuant to the terms of the effective assignment agreement(s) pursuant to which
such new Lender shall become a Lender, as such amount may be adjusted from time
to time by any amounts assigned (with respect to such Lender's portion of Term
Loans outstanding and its commitment to make advances in respect of the Term
Loan) pursuant to the terms of any and all effective assignment agreements to
which such Lender is a party.
"TERM LOAN COMMITMENT PERCENTAGE" means, as to any Lender, (a) on the
Closing Date, the percentage set forth opposite such Lender's name on the
Commitment Annex under the column "Term Loan Commitment Percentage" (if such
Lender's name is not so set forth thereon, then, on the Closing Date, such
percentage for such Lender shall be deemed to be zero), and (b) on any date
following the Closing Date, the percentage equal to the Term Loan Commitment
Amount of such Lender on such date divided by the Term Loan Commitment on such
date.
"TERM NOTE" means any note evidencing any portion of the Term Loan.
"TERMINATION DATE" means the earlier to occur of (a) June 1, 2010, or (b)
any date on which Administrative Agent accelerates the maturity of the Loans
pursuant to Section 10.2.
"TOTAL LIABILITIES" means, on any day, obligations that should, under GAAP,
be classified as liabilities on Borrowers' consolidated balance sheet, including
all Debt.
"UCC" means the Uniform Commercial Code of the State of Illinois or of any
other state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.
"UNITED STATES" means the United States of America.
"WARRANT" means each of those certain warrants to purchase equity interests
in Borrower by and between (i) the Borrower and Administrative Agent dated as of
the date hereof and (ii) the Borrower and each Lender dated as of the date
hereof.
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder (including, without limitation, determinations made
pursuant to the exhibits hereto) shall be made, and all financial statements
required to be delivered hereunder shall be prepared on a consolidated basis in
accordance with GAAP applied on a basis consistent with the most
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19
recent audited consolidated financial statements of each Borrower and its
consolidated subsidiaries delivered to Administrative Agent and each of the
Lenders on or prior to the Closing Date. If at any time any change in GAAP would
affect the computation of any financial ratio or financial requirement set forth
in any Financing Document, and either Borrowers or the Required Lenders shall so
request, the Administrative Agent, the Lenders and Borrowers shall negotiate in
good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided, however, that until so amended, (a) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (b) Borrowers shall provide to the Administrative Agent and
the Lenders financial statements and other documents required under this
Agreement which include a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP. All
amounts used for purposes of financial calculations required to be made herein
shall be without duplication.
SECTION 1.3 OTHER DEFINITIONAL PROVISIONS. References in this Agreement to
"Articles", "Sections", "Annexes", "Exhibits" or "Schedules" shall be to
Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement
unless otherwise specifically provided. Any term defined herein may be used in
the singular or plural. "Include", "includes" and "including" shall be deemed to
be followed by "without limitation". Except as otherwise specified or limited
herein, references to any Person include the successors and assigns of such
Person. References "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including", respectively.
References to any statute or act shall include all related current regulations
and all amendments and any successor statutes, acts and regulations. References
to any statute or act, without additional reference, shall be deemed to refer to
federal statutes and acts of the United States. References to any agreement,
instrument or document shall include all schedules, exhibits, annexes and other
attachments thereto. As used in this Agreement, the meaning of the term
"material" or the phrase "in all material respects" is intended to refer to an
act, omission, violation or condition which reflects or could reasonably be
expected to result in a Material Adverse Effect. References to capitalized terms
that are not defined herein, but are defined in the UCC, shall have the meanings
given them in the UCC.
SECTION 1.4 FUNDING AND SETTLEMENT CURRENCY. Unless otherwise specified
herein, the settlement of all payments and fundings hereunder between or among
the parties hereto shall be made in lawful money of the United States and in
immediately available funds.
SECTION 1.5 RIDERS. All Riders attached hereto are hereby incorporated
herein by this reference and made a part hereof.
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ARTICLE 2 - LOANS
SECTION 2.1 TERM LOANS.
(a) Term Loans.
(i) Term Loan Amounts. On the terms and subject to the conditions
set forth herein, the Lenders hereby agree to make to Borrowers a term loan in
an original principal amount equal to the Term Loan Commitment ("TERM LOAN").
Each Lender's obligation to fund the Term Loan shall be limited to such Lender's
Term Loan Commitment Percentage, and no Lender shall have any obligation to fund
any portion of any Term Loan required to be funded by any other Lender, but not
so funded. No Borrower shall have any right to reborrow any portion of the Term
Loan that is repaid or prepaid from time to time. The Term Loan shall be funded
in one advance on the Closing Date. Borrowers shall deliver to Administrative
Agent a Notice of Borrowing with respect to the proposed Term Loan advance, such
Notice of Borrowing to be delivered no later than noon (Chicago time) two (2)
Business Days prior to the Closing Date.
(ii) Scheduled Repayments, Mandatory Prepayments; Optional
Prepayments.
(A) There shall become due and payable, and Borrowers shall repay
the Term Loan through, scheduled payments as set forth on Schedule 2.1 attached
hereto. Notwithstanding the payment schedule set forth above, the outstanding
principal amount of the Term Loan shall become immediately due and payable in
full on the Termination Date.
(B) There shall become due and payable and Borrowers shall prepay
the Term Loan in the following amounts and at the following times:
(i) on the date on which any Credit Party (or Administrative
Agent as loss payee or assignee) receives any casualty proceeds in excess of
$350,000 (in the aggregate for all such proceeds in any fiscal year) of assets
upon which Administrative Agent maintained a Lien, an amount equal to one
hundred percent (100%) of such proceeds (net of out-of-pocket expenses and
repayment of secured debt permitted under clause (c) of the definition of
Permitted Indebtedness and encumbering the property that suffered such
casualty), or such lesser portion of such proceeds as Administrative Agent (with
the consent of the Required Lenders) shall elect to apply to the Obligations;
(ii) an amount equal to any interest that is deemed to be in
excess of the Maximum Lawful Rate (as defined below) and is required to be
applied to the reduction of the principal balance of the Loans by any Lender as
provided for in Section 2.7;
(iii) upon receipt by any Credit Party of the proceeds of
any Asset Disposition that is not a Permitted Asset Disposition (unless it is an
Asset Disposition described in clause (z)(iv) of the definition of "Permitted
Asset Dispositions", in which case it shall be subject the provisions of this
Section 2.1(a)(ii)(B)(iii)), an amount equal to one hundred percent (100%) of
the net cash proceeds of such Asset Disposition (net of out-of-pocket expenses
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and repayment of secured debt permitted under clause (c) of the definition of
Permitted Indebtedness and encumbering such asset), or such lesser portion as
Administrative Agent (with the consent of the Required Lenders) shall elect to
apply to the Obligations; provided that, for the avoidance of doubt, in this
Section 2.1(a)(ii)(B), "Asset Disposition" shall include any consideration,
including up-front payments and royalties or licensing fees paid over time,
received by any Credit Party in connection with any exclusive license (which is
not limited to a particular geographic range or field of use) entered into by
such Credit Party as licensor with respect to any Intellectual Property of such
Credit Party; and
(iv) upon receipt by any Credit Party of any Extraordinary
Receipts, an amount equal to one hundred percent (100%) of such Extraordinary
Receipts, or such lesser portion as Administrative Agent (with the consent of
the Required Lenders) shall elect to apply to the Obligations.
Notwithstanding the foregoing and so long as no Event of Default or Default then
exists, any such casualty proceeds in excess of $350,000 (other than with
respect to Inventory and any real property, unless Required Lenders shall
otherwise elect) may be used by Borrowers within one hundred eighty (180) days
from the receipt of such proceeds to replace or repair any assets in respect of
which such proceeds were paid so long as (x) prior to the receipt of such
proceeds, Borrowers have delivered to Administrative Agent a reinvestment plan
detailing such replacement or repair acceptable to Administrative Agent in its
reasonable discretion and (y) such proceeds are deposited into an account over
which Administrative Agent has control promptly upon receipt by such Borrower.
All sums held by Administrative Agent pending reinvestment as described above
shall be deemed additional collateral for the Obligations and may be commingled
with the general funds of Administrative Agent.
(C) Borrowers may from time to time, with at least one (1)
Business Day's prior delivery to Administrative Agent of an appropriately
completed Payment Notification, prepay the Term Loan, plus all accrued interest,
in whole but not in part (other than mandatory partial prepayments required
under this Agreement); provided, however, that each such prepayment shall be
accompanied by any prepayment fees required hereunder.
(iii) All Prepayments. Except as this Agreement may specifically
provide otherwise, all prepayments of the Term Loan shall be applied by
Administrative Agent to the Obligations in inverse order of maturity; provided,
however, that upon the occurrence and during an Event of Default, all
prepayments of the Term Loan shall be applied in accordance with Section 10.6.
The monthly payments required under Schedule 2.1 shall continue in the same
amount (for so long as the Term Loan and/or (if applicable) any advance
thereunder shall remain outstanding) notwithstanding any partial prepayment,
whether mandatory or optional, of the Term Loan.
SECTION 2.2 INTEREST, INTEREST CALCULATIONS AND CERTAIN FEES.
(a) Interest. From and following the Closing Date, the Loans and the
other Obligations shall bear interest at the sum of the Base Rate plus the
applicable Base Rate Margin,
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subject to the provisions of Section 10.4 below regarding default rates of
interest. Interest on the Loans shall be paid in arrears on the first (1st) day
of each month and on the maturity of such Loans, whether by acceleration or
otherwise. Interest on all other Obligations shall be payable on demand and upon
the Termination Date.
(b) Exit Fee. Borrowers shall pay to Administrative Agent, for the
benefit of all Lenders, as compensation for the costs of making funds available
to Borrowers under this Agreement an exit fee (the "EXIT FEE") calculated in
accordance with this subsection and upon the date or dates required under this
subsection. The Exit Fee shall be equal to Nine Hundred Thousand Dollars
($900,000). The Exit Fee shall be due and payable on the earlier to occur of (i)
the Termination Date or (ii) payment in full of the aggregate principal amount
of the Term Loan (whether voluntary, involuntary or mandatory). All fees payable
pursuant to this paragraph shall be deemed fully accrued and earned as of the
Closing Date.
(c) Prepayment Fee. If any advance under the Term Loan is prepaid at
any time, in whole or in part, for any reason (whether by voluntary or mandatory
prepayment by Borrowers, by reason of the occurrence of an Event of Default or
the acceleration of the Term Loan, or otherwise), or if the Term Loan shall
become accelerated and due and payable in full, Borrowers shall pay to
Administrative Agent, for the benefit of all Lenders, as compensation for the
costs of such Lenders making funds available to Borrowers under this Agreement,
a prepayment fee (the "PREPAYMENT FEE") calculated in accordance with this
subsection. If such prepayment occurs prior to the first anniversary date of the
Closing Date, the Prepayment Fee for the Term Loan shall be equal to the amount
prepaid multiplied by three percent (3.0%), if such prepayment occurs on or
after the first anniversary date of the Closing Date, but prior to the second
anniversary date of the Closing Date, the Prepayment Fee for the Term Loan shall
be equal to the amount prepaid multiplied by two percent (2.0%) and if such
prepayment occurs on or after the second anniversary date of the Closing Date,
the Prepayment Fee for the Term Loan shall be equal to the amount prepaid
multiplied by one percent (1.0%). All fees payable pursuant to this paragraph
shall be deemed fully earned and non-refundable as of the Closing Date. For the
avoidance of doubt, the obligations of Borrowers under Sections 2.2(b) and (c)
are distinct and separate obligations, and Borrowers shall be obligated to pay
the Exit Fee and the Prepayment Fee in accordance with Sections 2.2(b) and (c),
respectively.
(d) Audit Fees. Borrowers shall pay to Administrative Agent, for its
own account and not for the benefit of any other Lenders, all reasonable fees
and expenses in connection with audits and inspections of Borrowers' books and
records, audits, valuations or appraisals of the Collateral, audits of
Borrowers' compliance with applicable Laws and such other matters as
Administrative Agent shall deem appropriate, which shall be due and payable on
the later of (i) the first Business Day of the month following the date of
issuance by Administrative Agent of a written request for payment thereof to
Borrowers, or (ii) the tenth (10th) day following the issuance of such notice;
provided, that so long as no Event of Default or Default has occurred, Borrowers
shall be liable for such fees and expenses for no more than one (1) such audit
in any given calendar year.
(e) Wire Fees. Borrowers shall pay to Administrative Agent, for its
own account and not for the account of any other Lenders, on written demand, any
and all fees, costs or expenses which Administrative Agent pays to a bank or
other similar institution (including,
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without limitation, any fees paid by Administrative Agent to any other Lender)
arising out of or in connection with (i) the forwarding to Borrowers or any
other Person on behalf of Borrowers, by Administrative Agent, of proceeds of the
Loans made by any Lender to Borrowers pursuant to this Agreement, and (ii) the
depositing for collection, by Administrative Agent, of any check or item of
payment received or delivered to Administrative Agent on account of Obligations.
(f) Late Charges. If payments of principal (other than a final
installment of principal upon the Termination Date), interest due on the
Obligations, or any other amounts due hereunder or under the other Financing
Documents are not timely made and remain overdue for a period of five (5) days,
Borrowers, without notice or demand by Administrative Agent, promptly shall pay
to Administrative Agent, for the benefit of the Lenders, as additional
compensation to Administrative Agent in administering the Obligations, an amount
equal to five percent (5.0%) of each delinquent payment.
(g) Computation of Interest and Related Fees. All interest and fees
under each Financing Document shall be calculated on the basis of a 360-day year
for the actual number of days elapsed. The date of funding of a Loan shall be
included in the calculation of interest. The date of payment of a Loan shall be
excluded from the calculation of interest. If a Loan is repaid on the same day
that it is made, one (1) day's interest shall be charged.
(h) Automated Clearing House Payments. If Administrative Agent so
elects, monthly payments of interest and amortization shall be paid to
Administrative Agent by Automated Clearing House debit of immediately available
funds from the financial institution account designated by Borrower
Representative in the Automated Clearing House debit authorization executed by
Borrowers or Borrower Representative in connection with this Agreement, and
shall be effective upon receipt. Borrowers shall execute any and all forms and
documentation necessary from time to time to effectuate such automatic debiting.
In no event shall any such payments be refunded to Borrowers.
SECTION 2.3 NOTES. The portion of the Loans made by each Lender shall be
evidenced, if so requested by such Lender, by one or more promissory notes
executed by Borrowers on a joint and several basis (each, a "NOTE") in an
original principal amount equal to such Lender's Term Loan Commitment.
SECTION 2.4 RESERVED.
SECTION 2.5 RESERVED.
SECTION 2.6 GENERAL PROVISIONS REGARDING PAYMENT; LOAN ACCOUNT.
(a) All payments to be made by each Borrower under any Financing
Document, including payments of principal and interest made hereunder and
pursuant to any other Financing Document, and all fees, expenses, indemnities
and reimbursements, shall be made without set-off; recoupment or counterclaim,
in lawful money of the United States and in immediately available funds. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day and,
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with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension (it being understood and agreed that,
solely for purposes of computations contained herein and determining compliance
therewith, if payment is made, in full, on any such extended due date, such
payment shall be deemed to have been paid on the original due date without
giving effect to any extension thereto). Any payments received in the Payment
Account before noon (Chicago time) on any date shall be deemed received by
Administrative Agent on such date, and any payments received in the Payment
Account after noon (Chicago time) on any date shall be deemed received by
Administrative Agent on the next succeeding Business Day.
(b) Administrative Agent shall maintain a loan account (the "LOAN
ACCOUNT") on its books to record Loans and other extensions of credit made by
the Lenders hereunder or under any other Financing Document, and all payments
thereon made by each Borrower. All entries in the Loan Account shall be made in
accordance with Administrative Agent's customary accounting practices as in
effect from time to time The balance in the Loan Account, as recorded in
Administrative Agent's books and records at any time shall be conclusive and
binding evidence of the amounts due and owing to Administrative Agent by each
Borrower absent manifest error; provided, however, that any failure to so record
or any error in so recording shall not limit or otherwise affect any Borrower's
duty to pay all amounts owing hereunder or under any other Financing Document.
Administrative Agent shall endeavor to provide Borrowers with a monthly
statement regarding the Loan Account (but neither Administrative Agent nor any
Lender shall have any liability if Administrative Agent shall fail to provide
any such statement). Unless any Borrower notifies Administrative Agent of any
objection to any such statement (specifically describing the basis for such
objection) within ninety (90) days after the date of receipt thereof, it shall
be deemed final, binding and conclusive upon Borrowers in all respects as to all
matters reflected therein, absent manifest error.
SECTION 2.7 MAXIMUM INTEREST. In no event shall the interest charged with
respect to the Loans or any other Obligations of any Borrower under any
Financing Document exceed the maximum amount permitted under the laws of the
State of Illinois or of any other applicable jurisdiction. Notwithstanding
anything to the contrary herein or elsewhere, if at any time the rate of
interest payable hereunder or under any Note or other Financing Document (the
"Stated Rate") would exceed the highest rate of interest permitted under any
applicable law to be charged (the "Maximum Lawful Rate"), then for so long as
the Maximum Lawful Rate would be so exceeded, the rate of interest payable shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the Stated Rate is less than the Maximum Lawful Rate, each Borrower
shall, to the extent permitted by law, continue to pay interest at the Maximum
Lawful Rate until such time as the total interest received is equal to the total
interest which would have been received had the Stated Rate been (but for the
operation of this provision) the interest rate payable. Thereafter, the interest
rate payable shall be the Stated Rate unless and until the Stated Rate again
would exceed the Maximum Lawful Rate, in which event this provision shall again
apply. In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder in excess of the
Maximum Lawful Rate, such excess amount shall be applied to the reduction of the
principal balance of the Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other
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amounts are then outstanding, such excess or part thereof remaining shall be
paid to Borrowers. Any such reduction in the principal balance shall be applied
to the Obligations owing to Lenders in accordance with the Pro Rata Share of
each Lender. In computing interest payable with reference to the Maximum Lawful
Rate applicable to any Lender, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.
SECTION 2.8 TAXES; CAPITAL ADEQUACY.
(a) Except as otherwise required by law or in this Section 2.8, all
payments of principal and interest on the Loans and all other amounts payable
hereunder shall be made free and clear of and without deduction for any present
or future income, excise, stamp, documentary, payroll, employment, property or
franchise taxes and other taxes, fees, duties, levies, assessments, withholdings
or other charges of any nature whatsoever (including interest and penalties
thereon) imposed by any taxing authority, excluding taxes imposed on or measured
by Administrative Agent's or any Lender's net income as a result of a present or
former connection between such Person and the jurisdictions imposing such tax
(other than solely as the result of entering into any of the Financing Documents
or taking any action thereunder) (all non-excluded items being called "TAXES").
If any withholding or deduction from any payment to be made by any Borrower
hereunder is required in respect of any Taxes pursuant to any applicable Law,
then Borrowers will: (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) promptly forward to Administrative
Agent (with a copy to the applicable Lender) an official receipt or other
documentation satisfactory to Administrative Agent evidencing such payment to
such authority; and (iii) pay to Administrative Agent (and such applicable
Lender) for the account of Administrative Agent and Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by Administrative Agent and each Lender will equal the full amount
Administrative Agent and such Lender would have received had no such withholding
or deduction been required. If any Taxes are directly asserted against
Administrative Agent or any Lender with respect to any payment received by
Administrative Agent or such Lender hereunder, Administrative Agent or such
Lender may pay such Taxes and Borrowers will promptly pay such additional
amounts (including any penalty, interest or expense, except for any amounts
imposed as a result of the gross negligence or willful misconduct of
Administrative Agent or such Lender as finally determined by a court of
competent jurisdiction) as is necessary in order that the net amount received by
such Person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Person would have received had
such Taxes not been asserted so long as such amounts have accrued on or after
the day which is two hundred seventy (270) days prior to the date on which
Administrative Agent or such Lender first made written demand therefor.
(b) If any Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to Administrative Agent, for the account of
Administrative Agent and the respective Lenders, the required receipts or other
required documentary evidence, Borrowers shall indemnify Administrative Agent
and Lenders for any incremental Taxes, interest or penalties that may become
payable by Administrative Agent or any Lender as a result of any such failure.
Credit and Security Agreement
26
(c) Each Lender that (i) is organized or incorporated under the laws
of a jurisdiction other than the United States, and (ii)(A) is a party hereto on
the Closing Date or (B) purports to become an assignee of an interest as a
Lender under this Agreement after the Closing Date (unless such Lender was
already a Lender hereunder immediately prior to such assignment) (each such
Lender a "FOREIGN LENDER") shall execute and deliver to each of Borrowers and
Administrative Agent one or more (as Borrowers or Administrative Agent may
reasonably request) properly completed and duly executed United States Internal
Revenue Service Forms W-8ECI, W-8BEN, W-81MY (as applicable) and other
applicable forms, certificates or documents prescribed by the United States
Internal Revenue Service or reasonably requested by Administrative Agent
certifying as to such Lender's entitlement to a complete exemption from
withholding or deduction of taxes (each such form a "Certificate of Exemption").
Each such Certificate of Exemption shall be delivered (i) on or prior to the
date such Foreign Lender becomes a Lender hereunder and (ii) from time to time
if reasonably requested by any Borrower or Administrative Agent. Borrowers shall
not be required to pay additional amounts to any Lender pursuant to this Section
2.8 with respect to United States withholding and income Taxes to the extent
that the obligation to pay such additional amounts would not have arisen but for
the failure of such Lender to comply with this paragraph other than as a result
of a change in law after the Closing Date or after the date of assignment, if
applicable.
(d) If any Lender shall determine in its commercially reasonable
judgment that the adoption or taking effect of, or any change in, any applicable
Law regarding capital adequacy, in each instance, after the Closing Date, or any
change after the Closing Date in the interpretation, administration or
application thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation, administration or application thereof,
or the compliance by any Lender or any Person controlling such Lender with any
request, guideline or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency adopted or otherwise taking effect after the Closing Date, has
or would have the effect of reducing the rate of return on such Lender's or such
controlling Person's capital as a consequence of such Lender's obligations
hereunder to a level below that which such Lender or such controlling Person
could have achieved but for such adoption, taking effect, change,
interpretation, administration, application or compliance (taking into
consideration such Lender's or such controlling Person's policies with respect
to capital adequacy) then from time to time, upon written demand by such Lender
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail, a copy
of which shall be furnished to Administrative Agent), Borrowers shall promptly
pay to such Lender such additional amount as will compensate such Lender or such
controlling Person for such reduction, so long as such amounts have accrued on
or after the day which is two hundred seventy (270) days prior to the date on
which such Lender first made demand therefore; provided, however, that any
amounts payable under this Section 2.8(d) shall be without duplication of
amounts otherwise payable under Section 2.8.
(e) If any Lender requires compensation under Section 2.8(d), or
requires any Borrower to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.8(a),
then, upon the written request of Borrower Representative, such Lender shall use
reasonable efforts to designate a different lending office
Credit and Security Agreement
27
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder (subject to the terms of this Agreement) to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or materially reduce amounts
payable pursuant to any such subsection, as the case may be, in the future, and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender (as determined in its sole
discretion). Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
SECTION 2.9 APPOINTMENT OF BORROWER REPRESENTATIVE. Each Borrower hereby
designates Borrower Representative as its representative and agent on its behalf
for the purposes of issuing Notices of Borrowing, and giving instructions with
respect to the disbursement of the proceeds of the Loans, giving and receiving
all other notices and consents hereunder or under any of the other Financing
Documents and taking all other actions (including in respect of compliance with
covenants) on behalf of any Borrower or Borrowers under the Financing Documents.
Borrower Representative hereby accepts such appointment Notwithstanding anything
to the contrary contained in this Agreement, no Borrower other than Borrower
Representative shall be entitled to take any of the foregoing actions. The
proceeds of each Loan made hereunder shall be advanced to or at the direction of
Borrower Representative and if not used by Borrower Representative in its
business (for the purposes provided in this Agreement) shall be deemed to be
immediately advanced by Borrower Representative to the appropriate other
Borrower hereunder as an intercompany loan (collectively, "INTERCOMPANY LOANS").
All proceeds of Collateral of each Borrower received by Administrative Agent and
applied to the Obligations shall be deemed to be repayments of the Intercompany
Loans owing by such Borrower to Borrower Representative. Borrowers shall
maintain accurate books and records with respect to all Intercompany Loans and
all repayments thereof. Administrative Agent and each Lender may regard any
notice or other communication pursuant to any Financing Document from Borrower
Representative as a notice or communication from all Borrowers, and may give any
notice or communication required or permitted to be given to any Borrower or all
Borrowers hereunder to Borrower Representative on behalf of such Borrower or all
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
SECTION 2.10 JOINT AND SEVERAL LIABILITY. Borrowers are defined
collectively to include all Persons named as one of the Borrowers herein;
provided, however, that any references herein to "any Borrower", "each Borrower"
or similar references, shall be construed as a reference to each individual
Person named as one of the Borrowers herein. Each Person so named shall be
jointly and severally liable for all of the obligations of Borrowers under this
Agreement. Each Borrower, individually, expressly understands, agrees and
acknowledges, that the credit facilities would not be made available on the
terms herein in the absence of the collective credit of all of the Persons named
as the Borrowers herein, the joint and several liability of all such Persons,
and the cross-collateralization of the collateral of all such Persons.
Accordingly, each Borrower, individually acknowledges that the benefit to each
of the Persons named as one of the Borrowers as a whole constitutes reasonably
equivalent value, regardless
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28
of the amount of the credit facilities actually borrowed by, advanced to, or the
amount of collateral provided by, any individual Borrower. In addition, each
entity named as one of the Borrowers herein hereby acknowledges and agrees that
all of the representations, warranties, covenants, obligations, conditions,
agreements and other terms contained in this Agreement shall be applicable to
and shall be binding upon and measured and enforceable individually against each
Person named as one of the Borrowers herein as well as all such Persons when
taken together. By way of illustration, but without limiting the generality of
the foregoing, the terms of Section 10.1 of this Agreement are to be applied to
each individual Person named as one of the Borrowers herein (as well as to all
such Persons taken as a whole), such that the occurrence of any of the events
described in Section 10.1 of this Agreement as to any Person named as one of the
Borrowers herein shall constitute an Event of Default even if such event has not
occurred as to any other Persons named as the Borrowers or as to all such
Persons taken as a whole.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
To induce Administrative Agent and Lenders to enter into this Agreement and
to make the Loans and other credit accommodations contemplated hereby, each
Borrower hereby represents and warrants to Administrative Agent and each Lender
that:
SECTION 3.1 EXISTENCE AND POWER. Each Credit Party is an entity as
specified on Schedule 3.1, is duly organized, validly existing and in good
standing under the laws of the jurisdiction specified on Schedule 3.1 and no
other jurisdiction, has the same legal name as it appears in such Credit Party's
Organizational Documents and an organizational identification number (if any),
in each case as specified on Schedule 3.1 (except to the extent of any change in
the foregoing information as to any Credit Party following the Closing Date so
long as such change was made and notice of such change was given to
Administrative Agent in accordance with Section 9.2(e)), and has all powers and
all Permits necessary or desirable in the operation of its business as presently
conducted or as proposed to be conducted, except where the failure to have such
Permits could not reasonably be expected to have a Material Adverse Effect. Each
Credit Party is qualified to do business as a foreign entity in each
jurisdiction in which it is required to be so qualified, which jurisdictions as
of the Closing Date are specified on Schedule 3.1, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 3.1, no Credit Party, over the five (5)
year period preceding the Closing Date, (a) has had any name other than its
current name, or (b) was incorporated or organized under the laws of any
jurisdiction other than its current jurisdiction of incorporation or
organization.
SECTION 3.2 ORGANIZATION AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by each Credit Party of the Financing
Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents,
require no further action by or in respect of, or filing with, any Governmental
Authority and do not violate, conflict with or cause a breach or a default under
(a) any Law applicable to any Credit Party or any of the Organizational
Documents of any Credit Party, or (b) any agreement or instrument binding upon
it, except for such violations, conflicts, breaches or defaults as could not,
with respect to this clause (b), reasonably be expected to have a Material
Adverse Effect.
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SECTION 3.3 BINDING EFFECT. Each of the Financing Documents to which any
Credit Party is a party constitutes a valid and binding agreement or instrument
of such Credit Party, enforceable against such Credit Party in accordance with
its respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws relating to the enforcement of
creditors' rights generally and by general equitable principles.
SECTION 3.4 CAPITALIZATION. The authorized equity securities of each of the
Credit Parties as of the Closing Date is as set forth on Schedule 3.4. All
issued and outstanding equity securities of each of the Credit Parties are duly
authorized and validly issued, fully paid and nonassessable, are free and clear
of all Liens other than those in favor of Administrative Agent for the benefit
of Administrative Agent and Lenders, and such equity securities were issued in
compliance with all applicable Laws. The identity of the holders of the equity
securities of each of the Credit Parties and the percentage of their
fully-diluted ownership of the equity securities of each of the Credit Parties
as of the Closing Date is set forth on Schedule 3.4. No shares of the capital
stock or other equity securities of any Credit Party, other than those described
above, are issued and outstanding as of the Closing Date. Except as set forth on
Schedule 3.4, as of the Closing Date there are no preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements
or understandings for the purchase or acquisition from any Credit Party of any
equity securities of any such entity. Except as set forth on Schedule 3.4, none
of the authorized and/or issued capital stock or other equity securities of any
Credit Party are subject to any mandatory repurchase or redemption provisions or
put rights in favor of any holder thereof (not including any repurchase or
redemption provisions exercisable solely at the option of such Credit Party) or
otherwise constitute Debt under the definition set forth herein or are subject
to any provisions requiring the mandatory payment of any dividends at any time
(not including any specified dividends which accrue at specified times but which
are payable only as, when and if declared by the board of directors or other
similar governance body or manager or partner of such Credit Party and/or upon
liquidation of such Credit Party).
SECTION 3.5 FINANCIAL INFORMATION. All information delivered to
Administrative Agent and pertaining to the financial condition of any Credit
Party fairly presents in all material respects the financial position of such
Credit Party as of such date in conformity with GAAP (and as to unaudited
financial statements, subject to normal year-end adjustments and the absence of
footnote disclosures). As of the Closing Date, there has been no material
adverse change in the business, operations, properties or financial condition of
the Credit Parties taken as a whole since the date of the most recent financial
information delivered to Administrative Agent by the Borrowers.
SECTION 3.6 LITIGATION. Except as set forth on Schedule 3.6 as of the
Closing Date, and except as hereafter disclosed to Administrative Agent in
writing, there is no Litigation pending against, or to such Borrower's knowledge
threatened against or affecting, any Credit Party. There is no Litigation
pending in which an adverse decision could reasonably be expected to have a
Material Adverse Effect or which in any manner draws into question the validity
of any of the Financing Documents.
SECTION 3.7 OWNERSHIP OF PROPERTY. Each Borrower and each of its
Subsidiaries is the lawful owner of, has good and marketable title to and is in
lawful possession of, or has valid
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30
leasehold interests in, all properties and other assets (real or personal,
tangible, intangible or mixed) purported or reported to be owned or leased (as
the case may be) by such Person.
SECTION 3.8 NO DEFAULT. No Event of Default, or to such Borrower's
knowledge, Default, has occurred and is continuing. No Credit Party is in breach
or default under or with respect to any contract, agreement, lease or other
instrument to which it is a party or by which its property is bound or affected,
which breach or default could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.9 LABOR MATTERS. As of the Closing Date, there are no strikes or
other labor disputes pending or, to any Borrower's knowledge, threatened against
any Credit Party. Hours worked and payments made to the employees of the Credit
Parties have not been in violation of the Fair Labor Standards Act or any other
applicable Law dealing with such matters. All payments due from the Credit
Parties, or for which any claim may be made against any of them, on account of
wages and employee and retiree health and welfare insurance and other benefits
have been paid or accrued as a liability on their books, as the case may be. The
consummation of the transactions contemplated by the Financing Documents will
not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which it is a party or by
which it is bound.
SECTION 3.10 REGULATED ENTITIES. No Credit Party is an "investment company"
or a company "controlled" by an "investment company" or a "subsidiary" of an
"investment company," all within the meaning of the Investment Company Act of
1940.
SECTION 3.11 MARGIN REGULATIONS. None of the proceeds from the Loans have
been or will be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" (as defined in Regulation U of the Federal Reserve
Board), for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any "margin stock" or for any other
purpose which might cause any of the Loans to be considered a "purpose credit"
within the meaning of Regulation T, U or X of the Federal Reserve Board.
SECTION 3.12 COMPLIANCE WITH LAWS; ANTI-TERRORISM LAWS.
(a) Each Credit Party is in compliance with the requirements of all
applicable Laws, except for such Laws the noncompliance with which could not
reasonably be expected to have a Material Adverse Effect.
(b) None of the Credit Parties, their Affiliates or any of their
respective agents acting or benefiting in any capacity in connection with the
transactions contemplated by this Agreement is (i) in violation of any
Anti-Terrorism Law, (ii) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii)
is a Blocked Person. No Credit Party nor, to the knowledge of any Credit Party,
any of its Affiliates or agents acting or benefiting in any capacity in
connection with the transactions contemplated by this Agreement, (x) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any Blocked Person, or (y) deals in, or
otherwise engages in any
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transaction relating to, any property or interest in property blocked pursuant
to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law.
SECTION 3.13 TAXES. All federal, state and local tax returns, reports and
statements required to be filed by or on behalf of each Credit Party have been
filed with the appropriate Governmental Authorities in all jurisdictions in
which such returns, reports and statements are required to be filed and, except
to the extent subject to a Permitted Contest, all taxes (including real property
taxes) and other charges shown to be due and payable have been timely paid prior
to the date on which any fine, penalty, interest, late charge or loss may be
added thereto for nonpayment thereof. Except to the extent subject to a
Permitted Contest, all state and local sales and use Taxes required to be paid
by each Credit Party have been paid. All federal and state returns have been
filed by each Credit Party for all periods for which returns were due with
respect to employee income tax withholding, social security and unemployment
taxes, and, except to the extent subject to a Permitted Contest, the amounts
shown thereon to be due and payable have been paid in full or adequate
provisions therefor have been made.
SECTION 3.14 COMPLIANCE WITH ERISA.
(a) Each ERISA Plan (and the related trusts and funding agreements)
complies in form and in operation with, has been administered in compliance
with, and the terms of each ERISA Plan satisfy, the applicable requirements of
ERISA and the Code in all material respects. Each ERISA Plan which is intended
to be qualified under Section 401(a) of the Code is so qualified, and the United
States Internal Revenue Service has issued a favorable determination letter with
respect to each such ERISA Plan which may be relied on currently. No Credit
Party currently has any material liability for any excise tax under any of
Sections 4971 through 5000 of the Code.
(b) During the thirty-six (36) month period prior to the Closing Date
or the making of any Loan, (i) no steps have been taken to terminate any Pension
Plan and (ii) no contribution failure has occurred with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by any Credit Party of any
material liability, fine or penalty. No Credit Party has incurred liability to
the PBGC (other than for current premiums) with respect to any employee Pension
Plan. All contributions (if any) have been made on a timely basis to any
Multiemployer Plan that are required to be made by any Credit Party or any other
member of the Controlled Group under the terms of the plan or of any collective
bargaining agreement or by applicable Law; no Credit Party nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Plan, incurred any withdrawal liability with respect to any such plan or
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, could result in a withdrawal or partial withdrawal from any such
plan, and no Credit Party nor any member of the Controlled Group has received
any notice that any Multiemployer Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any such plan is or has been funded at a rate
less than that required under Section 412 of the Code, that any such plan is or
may be terminated, or that any such plan is or may become insolvent.
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SECTION 3.15 CONSUMMATION OF FINANCING DOCUMENTS; BROKERS. Except as set
forth on Schedule 3.15, and except for fees payable to Administrative Agent
and/or Lenders, no broker, finder or other intermediary has brought about the
obtaining, making or closing of the transactions contemplated by the Financing
Documents, and no Credit Party has or will have any obligation to any Person in
respect of any finder's or brokerage fees, commissions or other expenses in
connection herewith or therewith. All brokerage and finder's fees, commissions
and other expenses payable in connection with the transactions contemplated by
the Financing Documents have been paid in full by Borrowers contemporaneously
with the execution of the Financing Documents and the initial funding of the
Loan.
SECTION 3.16 RELATED TRANSACTIONS. All transactions contemplated by the
Financing Documents to be consummated on or prior to the date hereof have been
so consummated (including, without limitation, the disbursement and transfer of
all funds in connection therewith) in all material respects pursuant to the
provisions of the applicable Financing Documents, true and complete copies of
which have been delivered to Administrative Agent, and in compliance with all
applicable Law, except for such Laws the noncompliance with which would not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.17 MATERIAL CONTRACTS. Except for the Financing Documents and the
other agreements set forth on Schedule 3.17 (collectively with the Financing
Documents, the "Material Contracts"), as of the Closing Date there are no
agreements or instruments to which any Credit Party is a party, and the breach,
nonperformance or cancellation of which, or the failure of which to renew, could
reasonably be expected to have a Material Adverse Effect. Schedule 3.17 sets
forth, with respect to each real estate lease agreement to which any Borrower is
a party (as a lessee) as of the Closing Date, the address of the subject
property, the name and address of the landlord and the annual rental (or, where
applicable, a general description of the method of computing the annual rental).
The consummation of the transactions contemplated by the Financing Documents
will not give rise to a right of termination in favor of any party to any
Material Contract (other than any Credit Party).
SECTION 3.18 COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS; NO HAZARDOUS
MATERIALS.
Except in each case as set forth on Schedule 3.18:
(a) no notice, notification, demand, request for information,
citation, summons, complaint or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending,
or to such Borrower's knowledge, threatened to or against any Credit Party or
any Credit Party's real or personal property (now owned or leased or previously
owned or leased) by any Governmental Authority or other Person with respect to
any (i) alleged violation by any Credit Party of any Environmental Law, (ii)
alleged failure by any Credit Party to have any Permits under any Environmental
Law or relating to any Hazardous Materials required in connection with the
conduct of its business or to comply with the terms and conditions thereof,
(iii) generation, treatment, storage, recycling, transportation or disposal of
any Hazardous Materials, or (iv) release of Hazardous Materials; and
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(b) no property now owned or leased by any Credit Party and, to the
knowledge of each Borrower, no such property previously owned or leased by any
Credit Party, on which any Credit Party has generated, stored or disposed of or
to which any Credit Party has, directly or indirectly, transported or arranged
for the transportation of any Hazardous Materials, is listed or, to such
Borrower's knowledge, proposed for listing, on the National Priorities List
promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar
state list or is the subject of federal, state or local enforcement actions or
other investigations which may lead to claims against any Credit Party for
clean-up costs, remedial work, damage to natural resources or personal injury
claims, including, without limitation, claims under CERCLA.
For purposes of this Section 3.18, each Credit Party shall be deemed to include
any business or business entity (including a corporation) that is, in whole or
in part, a predecessor of such Credit Party.
SECTION 3.19 INTELLECTUAL PROPERTY. Each Credit Party owns, is licensed to
use or otherwise has the right to use, all Intellectual Property that is
material to the condition (financial or other), business or operations of such
Credit Party. All Intellectual Property existing as of the Closing Date and
registered with any United States or foreign Governmental Authority (including
without limitation any and all applications for the registration of any
Intellectual Property with any such United States or foreign Governmental
Authority) and all licenses under which any Borrower is the licensee of any such
registered Intellectual Property (or any such application for the registration
of Intellectual Property) owned by another Person are set forth on Schedule
3.19. Such Schedule 3.19 indicates in each case whether such registered
Intellectual Property (or application therefor) is owned or licensed by such
Credit Party, and in the case of any such licensed registered Intellectual
Property (or application therefor), lists the name and address of the licensor
and the name and date of the agreement pursuant to which such item of
Intellectual Property is licensed and whether or not such license is an
exclusive license and indicates whether there are any purported restrictions in
such license on the ability to such Credit Party to grant a security interest in
and/or to transfer any of its rights as a licensee under such license. Except as
indicated on Schedule 3.19 the applicable Credit Party is the sole and exclusive
owner of the entire and unencumbered right, title and interest in and to each
such registered Intellectual Property (or application therefor) purported to be
owned by such Borrower, free and clear of any Liens and/or licenses in favor of
third parties or agreements or covenants not such xxx third parties for
infringement. All Intellectual Property of each Credit Party is fully protected
and/or duly and properly registered, filed or issued in the appropriate office
and jurisdictions for such registrations, filings or issuances, except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect. Borrowers are not a party to, nor are bound by, any material license or
other agreement with respect to which any Borrower is the licensee that
prohibits or otherwise restricts such Borrower from granting a security interest
in such Borrower's interest in such license or agreement or other property. To
such Borrower's knowledge, each Credit Party conducts its business without
infringement or claim of infringement of any Intellectual Property rights of
others and there is no infringement or claim of infringement by others of any
Intellectual Property rights of any Credit Party, which infringement or claim of
infringement could reasonably be expected to have a Material Adverse Effect.
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SECTION 3.20 SOLVENCY. Each Borrower and each additional Credit Party is
Solvent.
SECTION 3.21 FULL DISCLOSURE. None of the written information (financial or
otherwise) furnished by or on behalf of any Credit Party to Administrative Agent
or any Lender in connection with the consummation of the transactions
contemplated in connection with the Financing Documents after the Closing Date,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which such statements were made. All
financial projections delivered to Administrative Agent and the Lenders by
Borrowers (or their agents) have been prepared on the basis of the assumptions
stated therein. Such projections represented such Borrower's good faith estimate
as of the date thereof of such Borrower's future financial performance and such
assumptions were believed by such Borrower to be reasonable as of the date
thereof in light of business conditions then prevailing; provided, however, that
Borrowers can give no assurance that any such projections will be attained.
SECTION 3.22 INTEREST RATE. The rate of interest paid under the Notes and
the method and manner of the calculation thereof do not violate any usury or
other law or applicable Laws, any of the Organizational Documents or any of the
Financing Documents.
SECTION 3.23 SUBSIDIARIES.. Borrowers do not own any stock, partnership
interests, limited liability company interests or other equity securities except
for Permitted Investments.
ARTICLE 4 - AFFIRMATIVE COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
SECTION 4.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Each Borrower will
deliver to Administrative Agent: (1) except as otherwise provided in clause (3)
below, as soon as available, but no later than thirty (30) days after the last
day of each month, a company prepared consolidated balance sheet, cash flow and
income statement covering Borrower's consolidated operations during the period,
prepared under GAAP, consistently applied, certified by a Responsible Officer
and in a form acceptable to Administrative Agent; provided, however, that in the
event that Borrower becomes subject to the reporting requirements under the
Securities Exchange Act of 1934, as amended, Borrower shall provide such
financial statements within forty-five (45) days after the last day of each
fiscal quarter rather than within forty-five (45) days of the last day of each
month; (2) as soon as available, but no later than one hundred twenty (120) days
after the last day of Borrower's fiscal year, audited consolidated financial
statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from an independent certified
public accounting firm acceptable to Administrative Agent in its reasonable
discretion, (3) within five (5) days of delivery or filing thereof, copies of
all statements, reports and notices made available to Borrower's security
holders and copies of all reports and other filings made by Borrower with any
stock exchange on which any securities of any Borrower are traded and/or the SEC
(which, at all times that Borrower is subject to the reporting requirements
under the Securities Exchange Act of 1934, shall be in lieu of the financial
statements required pursuant to clause (1) above); (4) a prompt report of any
legal actions pending or threatened against
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35
any Borrower or any other Credit Party that (i) if adversely determined, could
reasonably be expected to result in damages or costs to any Borrower or any of
its Subsidiaries of Seven Hundred Fifty Thousand Dollars ($750,000) or more or
(ii) if adversely determined, would reasonably be expected to have a Material
Adverse Effect with respect to any Borrower or any other Credit Party; (5)
prompt written notice of an event that materially and adversely affects the
value of any material Intellectual Property; (6) within thirty (30) days after
the end of each fiscal year, an annual budget (unless Borrower is subject to the
reporting requirements under the Securities Exchange Act of 1934); and (7) other
budgets, sales projections, operating plans and other financial information and
information, reports or statements regarding the Borrowers, their business and
the Collateral as Administrative Agent may from time to time reasonably request.
Each Borrower will, in conjunction with the delivery of each set of financial
statements required under clause (1) above, deliver to Administrative Agent, a
duly completed Compliance Certificate signed by a Responsible Officer. Promptly
upon their becoming available, Borrowers shall deliver to Administrative Agent
copies of all Swap Contracts to which any Borrower is a party. Promptly upon
Administrative Agent's receipt of any of the foregoing in this Section 4.1,
Administrative Agent shall deliver a copy to each Lender.
SECTION 4.2 PAYMENT AND PERFORMANCE OF OBLIGATIONS. Each Borrower (a) will
pay and discharge at or prior to maturity, all of their respective obligations
and liabilities, including tax liabilities, except for such obligations and/or
liabilities (i) that may be the subject of a Permitted Contest, and (ii) the
nonpayment or nondischarge of which could not reasonably be expected to have a
Material Adverse Effect, (b) will maintain in accordance with GAAP, appropriate
reserves for the accrual of all of their respective obligations and liabilities,
and (c) will not breach or permit any Subsidiary to breach, or permit to exist
any default under, the terms of any Material Contract or any other lease,
commitment, contract, instrument or obligation to which it is a party, or by
which its properties or assets are bound, except for such breaches or defaults
which could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.3 MAINTENANCE OF EXISTENCE. Each Borrower will preserve, renew
and keep in full force and effect and in good standing their respective
existence and their respective rights, privileges and franchises necessary or
desirable in the normal conduct of business.
SECTION 4.4 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Each Borrower will keep all property useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted.
If all or any part of the Collateral useful or necessary in its business,
becomes damaged or destroyed, each Borrower will promptly and completely repair
and/or restore the affected Collateral in a good and workmanlike manner,
regardless of whether Administrative Agent agrees to disburse insurance proceeds
or other sums to pay costs of the work of repair or reconstruction.
(b) Upon completion of any Permitted Contest, Borrowers shall promptly
pay the amount due, if any, and deliver to Administrative Agent proof of the
completion of the contest and payment of the amount due, if any, following which
Administrative Agent shall
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return the security, if any, deposited with Administrative Agent pursuant to the
definition of Permitted Contest.
(c) Each Borrower will maintain (i) all insurance described on
Schedule 4.4, upon the terms and with the coverages and rights in favor of
Administrative Agent and Lenders as described in Schedule 4.4, and (ii) such
other insurance coverage in such amounts and with respect to such risks as
Administrative Agent may reasonably from time to time request provided however,
that, in no event shall such insurance be in amounts or with coverage less than,
or with carriers with qualifications inferior to, any of the insurance or
carriers in existence as of the Closing Date (or required to be in existence
after the Closing Date under a Financing Document), as evidenced by the
insurance certificates attached hereto as Schedule 4.4 All such insurance shall
be provided by insurers having an A.M. Best policyholders rating reasonably
acceptable to Administrative Agent.
(d) On or prior to the Closing Date, and at all times thereafter, each
Borrower will cause Administrative Agent, for the benefit of Lenders, to be
named as an additional insured, assignee and loss payee (which shall include, as
applicable, identification as mortgagee), as applicable, on each insurance
policy required to be maintained pursuant to this Section 4.4 pursuant to
endorsements in form and content acceptable to Administrative Agent. Borrowers
will deliver to Administrative Agent and the Lenders (i) on the Closing Date, a
certificate from Borrowers' insurance broker dated such date showing the amount
of coverage as of such date, and that such policies will include effective
waivers (whether under the terms of any such policy or otherwise) by the insurer
of all claims for insurance premiums against all loss payees and additional
insureds and all rights of subrogation against all loss payees and additional
insureds, and that if all or any part of such policy is canceled, terminated or
expires, the insurer will forthwith give notice thereof to each additional
insured, assignee and loss payee and that no cancellation, reduction in amount
or material change in coverage thereof shall be effective until at least thirty
(30) days after receipt by each additional insured, assignee and loss payee of
written notice thereof, (ii) upon the request of any Lender through
Administrative Agent from time to time full information as to the insurance
carried, (iii) within five (5) days of receipt of notice from any insurer, a
copy of any notice of cancellation, nonrenewal or material change in coverage
from that existing on the date of this Agreement, and (iv) forthwith, notice of
any cancellation or nonrenewal of coverage by any Borrower.
(e) In the event any Borrower (i) fails to maintain the insurance
coverage required by this Agreement, or (ii) fails to provide Administrative
Agent with evidence of the insurance coverage required by this Agreement and
such failure to provide evidence continues for five (5) Business Days,
Administrative Agent may (but shall have no obligation to) purchase insurance at
Borrowers' expense to protect Administrative Agent's and each Lender's interests
in the Collateral and to protect Administrative Agent and Lenders from liability
claims relating to the Borrowers' operations, and the costs and expenses of
Administrative Agent in obtaining and paying the premiums on any such insurance
shall constitute part of the Obligations for which the Borrowers are jointly and
severally liable hereunder and which are secured by the Collateral.
SECTION 4.5 COMPLIANCE WITH LAWS. Each Borrower will comply with the
requirements of all applicable Laws, except to the extent that failure to so
comply could not
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37
reasonably be expected to (a) have a Material Adverse Effect, or (b) result in
any Lien upon either (i) a material portion of the assets of any such Person in
favor of any Governmental Authority, or (ii) any Accounts.
SECTION 4.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS. Each Borrower will
keep proper books of record substantially in accordance with GAAP in which full,
true and correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit at the sole cost of
Borrowers (subject, however, to any limitations set forth in Section 2.2(d)),
representatives of Administrative Agent and of any Lender (but at such Lender's
expense unless such visit or inspection is made concurrently with Administrative
Agent) to visit and inspect, during regular business hours, any of their
respective properties, to examine and make abstracts or copies from any of their
respective books and records, to conduct a collateral audit and analysis of
their respective operations and the Collateral, to verify the amount and age of
the Accounts, the identity and credit of the respective Account Debtors, to
review the billing practices of Borrower and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants as often as may reasonably be desired. In the
absence of an Event of Default, Administrative Agent or any Lender exercising
any rights pursuant to this Section 4.6 shall give the applicable Borrower or
any applicable Subsidiary commercially reasonable prior notice of such exercise.
No notice shall be required during the existence and continuance of any Event of
Default.
SECTION 4.7 USE OF PROCEEDS. Borrowers shall use the proceeds of the Term
Loan solely for payment of the refinancing on the Closing Date of existing
indebtedness owed to Lighthouse Capital and for working capital needs and
general corporate purposes. No portion of the proceeds of the Loans will be used
for family, personal, agricultural or household use.
SECTION 4.8 ESTOPPEL CERTIFICATES. After written request by Administrative
Agent, Borrowers, within fifteen (15) days and at their expense, will furnish
Administrative Agent with a statement, duly acknowledged and certified, setting
forth (a) the amount of the original principal amount of the Notes, and the
unpaid principal amount of the Notes, (b) the rate of interest of the Notes, (c)
the date payments of interest and/or principal were last paid, (d) any offsets
or defenses to the payment of the Obligations, and if any are alleged, the
nature thereof, (e) that the Notes and this Agreement have not been modified or
if modified, giving particulars of such modification, and (f) that there has
occurred and is then continuing no Default or Event of Default or if such
Default or Event of Default exists, the nature thereof, the period of time it
has existed, and the action being taken to remedy such Default or Event of
Default.
SECTION 4.9 NOTICES OF DEFAULTS. Without limiting or contradicting any
other more specific provision of this Agreement, promptly (and in any event
within three (3) Business Days) upon any Borrower becoming aware of the
existence of any Default or Event of Default, Borrowers shall give written
notice to Administrative Agent of such occurrence, which such notice shall
include a reasonably detailed description of such Default or Event of Default.
SECTION 4.10 HAZARDOUS MATERIALS; REMEDIATION.
If any release or disposal of Hazardous Materials shall occur or shall have
occurred on real property of any Borrower or any other Credit Party, such
Borrower will cause, or direct the
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applicable Credit Party to cause, the prompt containment and removal of such
Hazardous Materials and the remediation of such real property as is necessary to
comply with all Environmental Laws and to preserve the value of such real
property or other assets. Without limiting the generality of the foregoing, each
Borrower shall, and shall cause each other Credit Party to, comply with each
Environmental Law requiring the performance at any real property by any Borrower
or any other Credit Party of activities in response to the release or threatened
release of a Hazardous Material.
If any release or disposal of Hazardous Materials or Hazardous Materials
Contamination shall occur or shall have occurred on real property or other
assets of any Borrower or any other Credit party, Borrowers will provide
Administrative Agent within thirty (30) days after written demand therefor with
a bond, letter of credit or similar financial assurance in an amount up to Two
Hundred Fifty Thousand Dollars ($250,000) evidencing to the reasonable
satisfaction of Administrative Agent that sufficient funds are available to pay
the cost of removing, treating and disposing of any Hazardous Materials and
Hazardous Materials Contamination and discharging any assessment which may be
established on any property as a result thereof, such demand to be made, if at
all, upon Administrative Agent's reasonable business determination that the
failure to remove, treat or dispose of such Hazardous Materials and Hazardous
Materials Contamination, or the failure to discharge any such assessment, could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.11 FURTHER ASSURANCES.
(a) Each Borrower will, at its own cost and expense, cause to be
promptly and duly taken, executed, acknowledged and delivered all such further
acts, documents and assurances as may from time to time be necessary or as
Administrative Agent or the Required Lenders may from time to time reasonably
request in order to carry out the intent and purposes of the Financing Documents
and the transactions contemplated thereby, including all such actions to (i)
establish, create, preserve, protect and perfect a first priority Lien (subject
only to Permitted Liens) in favor of Administrative Agent for the benefit of the
Lenders on the Collateral (including Collateral acquired after the date hereof),
and (ii) unless Required Lenders shall agree otherwise in writing, cause all
Domestic Subsidiaries of Borrowers to be jointly and severally obligated with
the other Borrowers under all covenants and obligations under this Agreement,
including the obligation to repay the Obligations. Without limiting the
generality of the foregoing, at the request of Administrative Agent or the
Required Lenders, following the disclosure by Borrowers on any Compliance
Certificate of the acquisition by any Credit Party of any rights under a license
as a licensee with respect to any registered Intellectual Property or
application for the registration of any Intellectual Property owned by another
Person, Borrowers shall execute any documents requested by Administrative Agent
or the Required Lenders to establish, create, preserve, protect and perfect a
first priority lien in favor of Administrative Agent, to the extent legally
possible, in such Borrower's rights under such license and shall use their
commercially reasonable best efforts to obtain the written consent of the
licensor to the granting in favor of Administrative Agent of a Lien on such
Borrower's rights as licensee under such license.
(b) Upon receipt of an affidavit of an officer of Administrative Agent
or a Lender as to the loss, theft, destruction or mutilation of any Note or any
other Financing
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Document which is not of public record, and, in the case of any such mutilation,
upon surrender and cancellation of such Note or other applicable Financing
Document, Borrowers will issue, in lieu thereof, a replacement Note or other
applicable Financing Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Financing Document in the same principal amount thereof
and otherwise of like tenor.
(c) Upon the formation or acquisition of a new Subsidiary, Borrowers
shall (i) pledge, have pledged or cause or have caused to be pledged to
Administrative Agent pursuant to a pledge agreement in form and substance
satisfactory to Administrative Agent, (A) all of the outstanding equity
interests of each new Domestic Subsidiary owned directly or indirectly by any
Borrower and (B) 65% of the outstanding equity interests of each new Foreign
Subsidiary owned directly by any Borrower or by any Domestic Subsidiary of any
Borrower, in each case, along with undated stock or equivalent powers for such
equity interests, executed in blank; (ii) unless the Required Lenders shall
agree otherwise in writing, cause the new Domestic Subsidiary to take such other
actions (including entering into or joining any Security Documents) as are
necessary or advisable in the reasonable opinion of the Administrative Agent or
the Required Lenders in order to grant the Administrative Agent, acting on
behalf of the Lenders, a first priority Lien to secure the Obligations of all
Credit Parties on all real and personal property and leasehold estates of such
Subsidiary in existence as of such date and in all after acquired property,
which first priority Liens are required to be granted pursuant to this
Agreement; (iii) unless the Required Lenders shall agree otherwise in writing,
cause such new Domestic Subsidiary to either (at the election of the Required
Lenders) become a Borrower hereunder with joint and several liability for all
obligations of Borrowers hereunder and under the other Financing Documents
pursuant to a joinder agreement or other similar agreement in form and substance
satisfactory to Administrative Agent or to become a Guarantor of the obligations
of Borrowers hereunder and under the other Financing Documents pursuant to a
guaranty and suretyship agreement in form and substance satisfactory to
Administrative Agent; and (iv) cause each new Subsidiary to deliver certified
copies of such Subsidiary's certificate or articles of incorporation, together
with good standing certificates, by-laws (or other operating agreement or
governing documents), resolutions of the Board of Directors or other governing
body, approving and authorizing the execution and delivery of the Security
Documents, incumbency certificates and to execute and/or deliver such other
documents and legal opinions or to take such other actions as may be requested
by the Administrative Agent or the Required Lenders, in each case, in form and
substance satisfactory to the Administrative Agent or the Required Lenders.
(d) Upon the request of Administrative Agent or the Required Lenders,
Borrowers shall obtain a landlord's agreement or mortgagee agreement, as
applicable, from the lessor of each leased property or mortgagee of owned
property with respect to any business location where any portion of the
Collateral, or the records relating to such Collateral and/or software and
equipment relating to such records or Collateral, is stored or located, which
agreement or letter shall be reasonably satisfactory in form and substance to
Administrative Agent. Borrowers shall timely and fully pay and perform its
obligations under all leases and other agreements with respect to each leased
location where any Collateral, or any records related thereto, is or may be
located.
SECTION 4.12 RESERVED.
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40
SECTION 4.13 POWER OF ATTORNEY. Each of the officers of Administrative
Agent is hereby irrevocably made, constituted and appointed the true and lawful
attorney for Borrowers (without requiring any of them to act as such) with full
power of substitution to do the following: (a) after the occurrence and during
the continuance of an Event of Default, endorse the name of Borrowers upon any
and all checks, drafts, money orders, and other instruments for the payment of
money that are payable to Borrowers and constitute collections on Borrowers'
Accounts; (b) after the occurrence and during the continuance of an Event of
Default, execute in the name of Borrowers any schedules, assignments,
instruments, documents, and statements that Borrowers are obligated to give
Administrative Agent under this Agreement; (c) after the occurrence and during
the continuance of a Default, take any action Borrowers are required to take
under this Agreement; (d) so long as Administrative Agent has provided not less
than three (3) Business Days' prior written notice to Borrower to perform the
same and Borrower has failed to take such action, do such other and further acts
and deeds in the name of Borrowers that Administrative Agent may deem necessary
or desirable to perfect Administrative Agent's security interest or Lien in any
Collateral; and (e) after the occurrence and during the continuance of an Event
of Default, do such other and further acts and deeds in the name of Borrowers
that Administrative Agent may deem necessary or desirable to enforce its rights
with regard to any Account or other Collateral. This power of attorney shall be
irrevocable and coupled with an interest.
SECTION 4.14 COLLATERAL ADMINISTRATION.
(a) All data and other information relating to Accounts or other
intangible Collateral shall at all times be kept by Borrowers at their
respective principal and/or chief executive offices and shall not be moved from
such locations without (i) providing prior written notice to Administrative
Agent, and (ii) obtaining the prior written consent of Administrative Agent,
which consent shall not be unreasonably withheld (provided, however, that no
such consent shall be required with regard to a move to a location with respect
to which Administrative Agent has received a duly executed landlord waiver or
bailee agreement satisfactory to Administrative Agent).
(b) Administrative Agent reserves the right, after the occurrence and
during the continuance of an Event of Default, to notify Account Debtors that
Administrative Agent has been granted a Lien upon all Accounts.
(c) Borrowers will conduct a physical count of the Inventory at least
once per year, and at such other times as Administrative Agent requests after
the occurrence and during the continuance of an Event of Default, and Borrowers
shall provide to Administrative Agent a written accounting of such physical
count in form and substance satisfactory to Administrative Agent. Borrowers will
use commercially reasonable efforts to at all times keep its Inventory in good
and marketable condition.
SECTION 4.15 MANUFACTURING LINE. Not later than March 31, 2009, Borrowers
shall have completed construction of its second manufacturing line, and such
manufacturing line must be free of all Liens, fully-paid for, fully licensed as
required under this Agreement, including, without limitation, under the Medical
Device Rider, and fully functioning or capable of
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41
functioning; provided, however, that if the completion of the second
manufacturing line in accordance with the above has not occurred on or before
March 31, 2009 but such completion is reasonably likely to occur on or before
June 30, 2009, then the March 31, 2009 deadline referenced above shall be
extended to June 30, 2009.
ARTICLE 5 - NEGATIVE COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
SECTION 5.1 DEBT; CONTINGENT OBLIGATIONS. No Borrower will, or will permit
any Subsidiary to, directly or indirectly, create, incur, assume, guarantee or
otherwise become or remain directly or indirectly liable with respect to, any
Debt, except for Permitted Indebtedness. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, create, assume, incur or suffer to exist
any Contingent Obligations, except for Permitted Contingent Obligations.
SECTION 5.2 LIENS. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, create, assume or suffer to exist any Lien on any asset
now owned or hereafter acquired by it, except for Permitted Liens. Without
limiting the generality of the foregoing, no Borrower will, or will permit any
Subsidiary to, directly or indirectly, create, assume or suffer to exist any
Lien on any of its or their Intellectual Property, except for Permitted Liens.
SECTION 5.3 RESTRICTED DISTRIBUTIONS. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Distribution; provided, however, that the following
Restricted Distributions may be paid: (a) at any time, dividends may be paid by
any Subsidiary of any Borrower to such parent Borrower (and/or to any
intermediate Subsidiary who is also a Borrower); (b) any Borrower may pay
dividends solely in common stock; and (c) Borrower may repurchase the stock of
former employees, directors or consultants pursuant to stock repurchase
agreements so long as an Event of Default does not exist at the time of such
repurchase and would not exist after giving effect to such repurchase, provided
that such repurchase does not exceed $250,000 in the aggregate per fiscal year.
SECTION 5.4 RESTRICTIVE AGREEMENTS. No Borrower will, or will permit any
Subsidiary to, directly or indirectly (a) enter into or assume any agreement
(other than the Financing Documents and any agreements for purchase money debt
permitted under clause (c) of the definition of Permitted Indebtedness)
prohibiting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or (b) create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind (except as provided by the Financing Documents) on the
ability of any Subsidiary to: (i) pay or make Restricted Distributions to any
Borrower or any Subsidiary; (ii) pay any Debt owed to any Borrower or any
Subsidiary; (iii) make loans or advances to any Borrower or any Subsidiary; or
(iv) transfer any of its property or assets to any Borrower or any Subsidiary.
SECTION 5.5 RESERVED.
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SECTION 5.6 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS; CHANGE IN CONTROL.
No Borrower will, or will permit any Subsidiary to, directly or indirectly (a)
consolidate or merge or amalgamate with or into any other Person, other than
Permitted Mergers, or (b) consummate any Asset Dispositions other than Permitted
Asset Dispositions. No Borrower will suffer or permit to occur any Change in
Control with respect to itself, any Subsidiary or any Guarantor other than
Permitted Transfers with respect to such Persons.
SECTION 5.7 PURCHASE OF ASSETS, INVESTMENTS. No Borrower will, or will
permit any Subsidiary to, directly or indirectly (a) acquire or enter into any
agreement to acquire any assets other than in the Ordinary Course of Business or
as permitted under clause (h) of the definition of Permitted Investments; or (b)
acquire or own or enter into any agreement to acquire or own any Investment in
any Person other than Permitted Investments.
SECTION 5.8 TRANSACTIONS WITH AFFILIATES. Except as otherwise disclosed on
Schedule 5.8, and except for transactions that are disclosed to Administrative
Agent in advance of being entered into and which contain terms that are no less
favorable to the applicable Borrower or any Subsidiary, as the case may be, than
those which might be obtained from a third party not an Affiliate of any Credit
Party, no Borrower will, or will permit any Subsidiary to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of any Borrower.
SECTION 5.9 MODIFICATION OF ORGANIZATIONAL DOCUMENTS. No Borrower will, or
will permit any Subsidiary to, directly or indirectly, amend or otherwise modify
any Organizational Documents of such Person, except for Permitted Modifications.
Without limiting the generality of the provisions of Section 5.1, no Borrower
will, or will permit any Subsidiary to, authorize and/or issue any capital stock
or other equity securities which are subject to any mandatory repurchase or
redemption provisions which could give rise to a redemption prior to the
Termination Date or put rights in favor of any holder thereof (not including any
repurchase or redemption provisions exercisable solely at the option of such
Borrower or Subsidiary) that could give rise to a put prior to the Termination
Date or otherwise constitute Debt under the definition set forth herein or are
subject to any provisions requiring the mandatory payment of any dividends at
any time (not including any specified dividends which accrue at specified times
but which are payable only as, when and if declared by the board of directors or
other similar governance body or manager or partner of such Borrower or
Subsidiary and/or upon liquidation of such Borrower or Subsidiary).
SECTION 5.10 RESERVED.
SECTION 5.11 CONDUCT OF BUSINESS. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, engage in any line of business other than
those businesses engaged in on the Closing Date and described on Schedule 5.11
and businesses reasonably related thereto.
SECTION 5.12 LEASE PAYMENTS. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, incur or assume (whether pursuant to a
Guarantee or otherwise) any liability for rental payments except in the Ordinary
Course of Business.
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SECTION 5.13 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. No Borrower
will, or will permit any Subsidiary to, directly or indirectly, enter into any
arrangement with any Person whereby, in a substantially contemporaneous
transaction, any Borrower or any Subsidiaries sells or transfers all or
substantially all of its right, title and interest in an asset and, in
connection therewith, acquires or leases back the right to use such asset.
SECTION 5.14 DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Schedule 5.14 lists
all of the Deposit Accounts and Securities Accounts of each Borrower as of the
Closing Date. No Borrower will, or will permit any Subsidiary to, directly or
indirectly, establish any new bank account, Deposit Account or Securities
Account without prior written notice to Administrative Agent and unless
Administrative Agent, such Borrower or such Subsidiary and the bank, financial
institution or securities intermediary at which the account is to be opened
enter into a Deposit Account Control Agreement or Securities Account Control
Agreement prior to or concurrently with the establishment of such bank account,
Deposit Account or Securities Account.
SECTION 5.15 COMPLIANCE WITH ANTI-TERRORISM LAWS. Administrative Agent and
each Lender hereby notifies Borrowers that pursuant to the requirements of
Anti-Terrorism Laws, and Administrative Agent's and each Lender's policies and
practices, Administrative Agent and each Lender is required to obtain, verify
and record certain information and documentation that identifies Borrowers and
its principals, which information includes the name and address of each Borrower
and its principals and such other information that will allow Administrative
Agent to identify such party in accordance with Anti-Terrorism Laws. No Borrower
will, or will permit any Subsidiary to, directly or indirectly, knowingly enter
into any Material Contracts with any Blocked Person or any Person listed on the
OFAC Lists. Each Borrower shall immediately notify Administrative Agent and each
Lender if such Borrower has knowledge that any Borrower or any additional Credit
Party becomes a Blocked Person or becomes listed on the OFAC Lists or (a) is
convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is
arraigned and held over on charges involving money laundering or predicate
crimes to money laundering. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, (i) conduct any business or engage in any transaction or
dealing with any Blocked Person, including, without limitation, the making or
receiving of any contribution of funds, goods or services to or for the benefit
of any Blocked Person, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224, any similar executive order or other Anti-Terrorism Law, or
(iii) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.
ARTICLE 6 - [RESERVED]
ARTICLE 7 - CONDITIONS
SECTION 7.1 CONDITIONS TO CLOSING. The obligation of each Lender to make
the Loan shall be subject to the receipt by Administrative Agent of each
agreement, document and instrument set forth on the closing checklist prepared
by Administrative Agent or its counsel, each in form and substance satisfactory
to Administrative Agent, and such other closing deliverables reasonably
requested by Administrative Agent and Lenders, and to the satisfaction
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44
of the following conditions precedent, each to the satisfaction of
Administrative Agent and Lenders and their respective counsel in their sole
discretion:
(a) [Reserved];
(b) the payment of all fees, expenses and other amounts due and
payable under each Financing Document;
(c) the absence, as of the Closing Date, of any material adverse
change in any aspect of the business, operations, properties or financial
condition of the Credit Parties taken as a whole, or any event or condition
which could reasonably be expected to result in such a material adverse change;
(d) all of Borrower's existing Debt (other than accounts payable to
third-party vendors incurred in the ordinary course of business), including
without limitation, any related party debt, shall be fully subordinated to the
Obligations pursuant to subordination agreements that are requested by and
satisfactory to the Administrative Agent in its sole discretion;
(e) the receipt by Administrative Agent of such other documents,
instruments and/or agreements as Administrative Agent may reasonably request;
(f) receipt by Administrative Agent of a Notice of Borrowing;
(g) the fact that, immediately before and after such advance, no
Default or Event of Default shall have occurred and be continuing;
(h) the fact that the representations and warranties of each Credit
Party contained in the Financing Documents shall be true, correct and complete
on and as of the date of such borrowing, except to the extent that any such
representation or warranty relates to a specific date in which case such
representation or warranty shall be true and correct as of such earlier date;
and
(i) the fact that no material adverse change in the financial
condition, properties, business or operations of the Credit Parties taken as a
whole shall have occurred and be continuing since the date of this Agreement.
Each giving of a Notice of Borrowing hereunder and acceptance by any
Borrower of the proceeds of the Loan made hereunder shall be deemed to be (y) a
representation and warranty by each Borrower on the date of such notice or
acceptance as to the facts specified in this Section, and (z) a restatement by
each Borrower that each and every one of the representations made by it in any
of the Financing Documents is true and correct in all material respects (except
to the extent that such representations and warranties expressly relate solely
to an earlier date).
SECTION 7.2 RESERVED.
SECTION 7.3 SEARCHES. Before the Closing Date, and thereafter (as and when
determined by Administrative Agent in its discretion), Administrative Agent
shall have the right to perform, all at Borrowers' expense, the searches
described in clauses (a), (b), (c) and (d)
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45
below against Borrowers and any other Credit Party, the results of which are to
be consistent with Borrowers' representations and warranties under this
Agreement and the satisfactory results of which shall be a condition precedent
to all advances of Loan proceeds: (a) UCC searches with the Secretary of State
of each jurisdiction in which the applicable Person is organized, and, if
applicable, local UCC fixture filings searches in each jurisdiction where any
real estate Collateral or fixtures Collateral is located; (b) judgment, pending
litigation, federal tax lien, personal property tax lien, and corporate and
partnership tax lien searches, in the state and/or local filing offices (as
applicable) of each jurisdiction where the applicable Person maintains its
executive offices, a place of business, or assets and the jurisdiction in which
the applicable Person is organized; (c) real property title and lien searches in
each jurisdiction in which any real property Collateral is located; and (d)
searches of applicable corporate, limited liability company, partnership and
related records to confirm the continued existence, organization and good
standing of the applicable Person and the exact legal name under which such
Person is organized.
SECTION 7.4 POST CLOSING REQUIREMENTS. Borrowers shall complete each of the
post closing obligations and/or provide to Administrative Agent each of the
documents, instruments, agreements and information listed on Schedule 7.4
attached hereto on or before the date set forth for each such item thereon, each
of which shall be completed or provided in form and substance satisfactory to
Administrative Agent.
ARTICLE 8 - [RESERVED]
ARTICLE 9 - SECURITY AGREEMENT
SECTION 9.1 GENERALLY. As security for the payment and performance of the
Obligations, and without limiting any other grant of a Lien and security
interest in any Security Document, Borrowers hereby assign and grant to
Administrative Agent, for the benefit of Lenders, a continuing first priority
Lien on and security interest in, upon, and to the personal property set forth
on Schedule 9.1 attached hereto and made a part hereof. The parties hereto
hereby acknowledge and agree that the Administrative Agent and the Lenders shall
not make any filings in connection with the Collateral with the United States
Patent and Trademark Office or the United States Copyright Office.
SECTION 9.2 REPRESENTATIONS AND WARRANTIES AND COVENANTS RELATING TO
COLLATERAL.
(a) Each Borrower has good title to, has rights in, and the power to
transfer each item of Collateral upon which it purports to xxxxx x Xxxx
hereunder, free and clear of any and all Liens except Permitted Liens. Each
Borrower is the sole owner of its Intellectual Property, except for
non-exclusive licenses granted to its customers and suppliers in the Ordinary
Course of Business. No part of Borrower's Intellectual Property has been judged
invalid or unenforceable, in whole or in part, and to the best of Borrowers'
knowledge, no claim has been made that any part of the Intellectual Property of
any Borrower violates the rights of any third party except to the extent such
claim could not reasonably be expected to have a Material Adverse Effect.
Schedule 9.2 sets forth (i) each chief executive office and principal place of
business of each Borrower and each of their respective Subsidiaries and (ii) all
of the addresses
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46
(including all warehouses) at which any of the Collateral is located and/or
books and records of Borrowers regarding any of the Collateral are kept, which
such Schedule 9.2 indicates in each case which Borrower(s) have Collateral
and/or books and records located at such address, and, in the case of any such
address not owned by one or more of the Borrowers(s), indicates the nature of
such location (e.g., leased business location operated by Borrower(s), third
party warehouse, consignment location, processor location, etc.) and the name
and address of the third party owning and/or operating such location.
(b) Without limiting the generality of Section 3.2, except as
indicated on Schedule 3.19 with respect to any rights of any Borrower as a
licensee under any license of Intellectual Property owned by another Person, and
except for the filing of financing statements under the UCC, no authorization,
approval or other action by, and no notice to or filing with, any Governmental
Authority or consent of any other Person is required for (i) the grant by each
Borrower to Administrative Agent of the security interests and Liens in the
Collateral provided for under this Agreement and the other Security Documents
(if any), or (ii) the exercise by Administrative Agent of its rights and
remedies with respect to the Collateral provided for under this Agreement and
the other Security Documents or under any applicable Law, including the UCC and
neither any such grant of Liens in favor of Administrative Agent or exercise of
rights by Administrative Agent shall violate or cause a default under any
agreement between any Borrower and any other Person relating to any such
Collateral, including any license to which a Borrower is a party, whether as
licensor or licensee, with respect to any Intellectual Property, whether owned
by such Borrower or any other Person.
(c) As of the Closing Date, no Borrower has any ownership interest in
any Chattel Paper, Letter of Credit Rights, Commercial Tort Claims, Instruments,
Documents or Investment Property (other than equity interests in any
Subsidiaries of such Borrower disclosed on Schedule 3.4), and Borrowers shall
give notice to Administrative Agent promptly (but in any event not later than
the delivery by Borrowers of the next Compliance Certificate required pursuant
to Section 4.1 above) upon the acquisition by any Borrower of any such Chattel
Paper, Letter of Credit Rights, Commercial Tort Claims, Instruments, Documents
or Investment Property. No Person other than Administrative Agent or (if
applicable) any Lender has "control" (as defined in Article 9 of the UCC) over
any Deposit Account, Investment Property (including Securities Accounts and
Commodities Account), Letter of Credit Rights or Electronic Chattel Paper in
which any Borrower has any interest (except for such control arising by
operation of law in favor of any bank or securities intermediary or commodities
intermediary with whom any Deposit Account, Securities Account or Commodities
Account of Borrowers is maintained).
(d) Borrowers shall not, and shall not permit any Credit Party to,
take any of the following actions or make any of the following changes unless
Borrowers have given at least thirty (30) days prior written notice to
Administrative Agent of Borrowers' intention to take any such action (which such
written notice shall include an updated version of any Schedule impacted by such
change) and have executed any and all documents, instruments and agreements and
taken any other actions which Administrative Agent may request after receiving
such written notice in order to protect and preserve the Liens, rights and
remedies of Administrative Agent with respect to the Collateral: (i) change the
legal name or organizational identification number of any Borrower as it appears
in official filings in the jurisdiction of its organization, (ii) change the
jurisdiction of incorporation or formation of any Borrower or Credit Party or
allow any
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47
Borrower or Credit Party to designate any jurisdiction as an additional
jurisdiction of incorporation for such Borrower or Credit Party, or change the
type of entity that it is, or (iii) change its chief executive office, principal
place of business, or the location of its records concerning the Collateral or
move any Collateral to or place any Collateral on any location that is not then
listed on the Schedules and/or establish any business location at any location
that is not then listed on the Schedules.
(e) Borrowers shall not adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any Account Debtor, or allow
any credit or discount thereon (other than adjustments, settlements,
compromises, credits and discounts in the Ordinary Course of Business, made
while no Default or Event of Default exists and in amounts which are not
material) without the prior written consent of Administrative Agent. Without
limiting the generality of this Agreement or any other provisions of any of the
Financing Documents relating to the rights of Administrative Agent after the
occurrence and during the continuance of an Event of Default, Administrative
Agent shall have the right at any time after the occurrence and during the
continuance of an Event of Default (acting upon the direction of the Required
Lenders) to: (i) exercise the rights of Borrowers with respect to the obligation
of any Account Debtor to make payment or otherwise render performance to
Borrowers and with respect to any property that secures the obligations of any
Account Debtor or any other Person obligated on the Collateral, and (ii) adjust,
settle or compromise the amount or payment of such Accounts.
(f) Without limiting the generality of Sections 9.2(c) and 9.2(e):
(i) Borrowers shall deliver to Administrative Agent all Tangible
Chattel Paper and all Instruments and Documents owned by any Borrower and
constituting part of the Collateral duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Administrative Agent. Borrowers shall provide Administrative
Agent with "control" (as defined in Article 9 of the UCC) of all Electronic
Chattel Paper owned by any Borrower and constituting part of the Collateral by
having Administrative Agent identified as the assignee on the records pertaining
to the single authoritative copy thereof and otherwise complying with the
applicable elements of control set forth in the UCC. Borrowers also shall
deliver to Administrative Agent all security agreements securing any such
Chattel Paper and securing any such Instruments. Borrowers will xxxx
conspicuously all such Chattel Paper and all such Instruments and Documents with
a legend, in form and substance satisfactory to Administrative Agent, indicating
that such Chattel Paper and such Instruments and Documents are subject to the
security interests and Liens in favor of Administrative Agent created pursuant
to this Agreement and the Security Documents. Borrowers shall comply with all
the provisions of Section 5.14 with respect to the Deposit Accounts and
Securities Accounts of Borrowers.
(ii) Borrowers shall deliver to Administrative Agent all letters
of credit on which any Borrower is the beneficiary and which give rise to
Letter-of-Credit Rights owned by such Borrower which constitute part of the
Collateral in each case duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Administrative Agent. Borrowers shall take any and all actions as may be
necessary or desirable, or that Administrative Agent may request, from time to
time, to cause
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48
Administrative Agent to obtain exclusive "control" (as defined in Article 9 of
the UCC) of any such Letter-of-Credit Rights in a manner acceptable to
Administrative Agent.
(iii) Borrowers shall promptly advise Administrative Agent upon
any Borrower becoming aware that it has any interests in any Commercial Tort
Claim that constitutes part of the Collateral, which such notice shall include
descriptions of the events and circumstances giving rise to such Commercial Tort
Claim and the dates such events and circumstances occurred, the potential
defendants with respect such Commercial Tort Claim and any court proceedings
that have been instituted with respect to such Commercial Tort Claim, and
Borrowers shall, with respect to any such Commercial Tort Claim, execute and
deliver to Administrative Agent such documents as Administrative Agent shall
request to perfect, preserve or protect the Liens, rights and remedies of
Administrative Agent with respect to any such Commercial Tort Claim.
(iv) Except for Accounts and Inventory in an aggregate amount of
not more than $100,000, provided, that, upon completion of the second
manufacturing line in accordance with Section 4.15 hereof, such amount shall be
increased to $750,000 in the aggregate, no Accounts or Inventory or other
Collateral shall at any time be in the possession or control of any warehouse,
consignee, bailee or any of Borrowers' agents or processors without prior
written notice to Administrative Agent and the receipt by Administrative Agent,
if Administrative Agent has so requested, of warehouse receipts, consignment
agreements or bailee lien waivers (as applicable) satisfactory to Administrative
Agent prior to the commencement of such possession or control. Borrower has
notified Administrative Agent that Inventory is currently located at the
locations set forth on Schedule 9.2. Borrowers shall, upon the request of
Administrative Agent, notify any such warehouse, consignee, bailee, agent or
processor of the security interests and Liens in favor of Administrative Agent
created pursuant to this Agreement and the Security Documents, instruct such
Person to hold all such Collateral for Administrative Agent's account subject to
Administrative Agent's instructions and shall obtain an acknowledgement from
such Person that such Person holds the Collateral for Administrative Agent's
benefit.
(v) Borrowers shall cause all Equipment and other tangible
Personal Property other than Inventory to be maintained and preserved in the
same condition, repair and in working order as when new, ordinary wear and tear
excepted, and shall promptly make or cause to be made all repairs, replacements
and other improvements in connection therewith that are necessary or desirable
to such end. Upon request of Administrative Agent, Borrowers shall promptly
deliver to Administrative Agent any and all certificates of title, applications
for title or similar evidence of ownership of all such tangible Personal
Property and shall cause Administrative Agent to be named as lienholder on any
such certificate of title or other evidence of ownership. Borrowers shall not
permit any such tangible Personal Property to become Fixtures to real estate
unless such real estate is subject to a Lien in favor of Administrative Agent.
(vi) Each Borrower hereby authorizes Administrative Agent to file
without the signature of such Borrower one or more UCC financing statements
relating to liens on personal property relating to all or any part of the
Collateral, which financing statements may list Administrative Agent as the
"secured party" and such Borrower as the "debtor" and which
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49
describe and indicate the collateral covered thereby as all or any part of the
Collateral under the Financing Documents (including an indication of the
collateral covered by any such financing statement as "all assets" of such
Borrower other than the Excluded Property now owned or hereafter acquired), in
such jurisdictions as Administrative Agent from time to time determines are
appropriate, and to file without the signature of such Borrower any
continuations of or corrective amendments to any such financing statements, in
any such case in order for Administrative Agent to perfect, preserve or protect
the Liens, rights and remedies of Administrative Agent with respect to the
Collateral.
(vii) As of the Closing Date, no Borrower holds, and after the
Closing Date Borrowers shall promptly notify Administrative Agent in writing
upon creation or acquisition by any Borrower of, any Collateral which
constitutes a claim against any Governmental Authority, including, without
limitation, the federal government of the United States or any instrumentality
or agency thereof, the assignment of which claim is restricted by any applicable
Law, including, without limitation, the federal Assignment of Claims Act and any
other comparable Law. Upon the request of Administrative Agent, Borrowers shall
take such steps as may be necessary or desirable, or that Administrative Agent
may request, to comply with any such applicable Law.
(viii) Borrowers shall furnish to Administrative Agent from time
to time any statements and schedules further identifying or describing the
Collateral and any other information, reports or evidence concerning the
Collateral as Administrative Agent may reasonably request from time to time.
SECTION 9.3 UCC REMEDIES.
(a) Upon the occurrence of and during the continuance of an Event of
Default under this Agreement or the other Financing Documents, Administrative
Agent shall, if requested by the Required Lenders, in addition to all other
rights, options, and remedies granted to Administrative Agent under this
Agreement or at law or in equity, exercise, in accordance with applicable law,
either directly or through one or more assignees or designees, all rights and
remedies granted to it under all Financing Documents and under the UCC in effect
in the applicable jurisdiction(s) and under any other applicable law; including,
without limitation:
(i) The right to take possession of, send notices regarding, and
collect directly the Collateral, with or without judicial process;
(ii) The right to (by its own means or with judicial assistance)
enter any of Borrowers' premises and take possession of the Collateral, or
render it unusable, or to render it usable or saleable, or dispose of the
Collateral on such premises in compliance with subsection (iii) below and to
take possession of Borrowers' original books and records, to obtain access to
Borrowers' data processing equipment, computer hardware and software relating to
the Collateral and to use all of the foregoing and the information contained
therein in any manner Administrative Agent deems appropriate, without any
liability to Borrowers for rent, storage, utilities, or other sums, and
Borrowers shall not resist or interfere with such action (if Borrowers' books
and records are prepared or maintained by an accounting service, contractor or
other third party agent, Borrowers hereby irrevocably authorize such service,
contractor or other
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50
agent, upon notice by Administrative Agent to such Person that an Event of
Default has occurred and is continuing, to deliver to Administrative Agent or
its designees such books and records, and to follow Administrative Agent's
instructions with respect to further services to be rendered);
(iii) The right to require Borrowers at Borrowers' expense to
assemble all or any part of the Collateral and make it available to
Administrative Agent at any place designated by the Administrative Agent;
(iv) The right to notify postal authorities to change the address
for delivery of Borrowers' mail to an address designated by Administrative Agent
and to receive, open and dispose of all mail addressed to any Borrower.
(v) The right to enforce Borrowers' rights against Account
Debtors and other obligors, including, without limitation, (i) the right to
collect Accounts directly in Administrative Agent's own name (as agent for
Lenders) and to charge the collection costs and expenses, including attorneys'
fees, to Borrowers, and (ii) the right, in the name of Administrative Agent or
any designee of Administrative Agent or Borrowers, to verify the validity,
amount or any other matter relating to any Accounts by mail, telephone,
telegraph or otherwise, including, without limitation, verification of
Borrowers' compliance with applicable Laws. Borrowers shall cooperate fully with
Administrative Agent in an effort to facilitate and promptly conclude such
verification process. Such verification may include contacts between
Administrative Agent and applicable federal, state and local regulatory
authorities having jurisdiction over the Borrowers' affairs, all of which
contacts Borrowers hereby irrevocably authorize.
(b) Each Borrower agrees that a notice received by it at least ten
(10) days before the time of any intended public sale, or the time after which
any private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted
by applicable law, any perishable Collateral which threatens to speedily decline
in value or which is sold on a recognized market may be sold immediately by
Administrative Agent without prior notice to Borrowers. At any sale or
disposition of Collateral, Administrative Agent may (to the extent permitted by
applicable law) purchase all or any part of the Collateral, free from any right
of redemption by Borrowers, which right is hereby waived and released to the
extent permitted under applicable law. Each Borrower covenants and agrees not to
interfere with or impose any obstacle to Administrative Agent's exercise of its
rights and remedies with respect to the Collateral. Administrative Agent shall
have no obligation to clean-up or otherwise prepare the Collateral for sale.
Administrative Agent may comply with any applicable state or federal law
requirements in connection with a disposition of the Collateral and compliance
will not be considered to adversely affect the commercial reasonableness of any
sale of the Collateral. Administrative Agent may sell the Collateral without
giving any warranties as to the Collateral. Administrative Agent may
specifically disclaim any warranties of title or the like. This procedure will
not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral. If Administrative Agent sells any of the Collateral upon
credit, Borrowers will be credited only with payments actually made by the
purchaser, received by Administrative Agent and applied to the indebtedness of
the purchaser. In the event the purchaser fails to pay for the Collateral,
Administrative Agent may resell the
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51
Collateral and Borrowers shall be credited with the proceeds of the sale.
Borrowers shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all Obligations.
(c) Without restricting the generality of the foregoing and for the
purposes aforesaid, each Borrower hereby appoints and constitutes Administrative
Agent its lawful attorney-in-fact with full power of substitution in the
Collateral, upon the occurrence and during the continuance of an Event of
Default, to use unadvanced funds remaining under this Agreement or which may be
reserved, escrowed or set aside for any purposes hereunder at any time, or to
advance funds in excess of the face amount of the Notes, to pay, settle or
compromise all existing bills and claims, which may be Liens or security
interests, or to avoid such bills and claims becoming Liens against the
Collateral; to execute all applications and certificates in the name of such
Borrower and to prosecute and defend all actions or proceedings in connection
with the Collateral; and to do any and every act which such Borrower might do in
its own behalf; it being understood and agreed that this power of attorney shall
be a power coupled with an interest and cannot be revoked.
(d) Administrative Agent and each Lender is hereby granted an
irrevocable, non-exclusive, royalty-free license or other right to use, without
charge, Borrowers' labels, mask works, rights of use of any name, any other
Intellectual Property and advertising matter, and any similar property as it
pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and, in connection with Administrative Agent's
exercise of its rights under this Article, Borrowers' rights under all licenses
and all franchise agreements inure to Administrative Agent's and each Lender's
benefit.
ARTICLE 10 - EVENTS OF DEFAULT
SECTION 10.1 EVENTS OF DEFAULT.
For purposes of the Financing Documents, the occurrence of any of the
following conditions and/or events, whether voluntary or involuntary, by
operation of law or otherwise, shall constitute an "EVENT OF DEFAULT":
(a) any Borrower shall fail to pay when due any principal, interest,
premium or fee under any Financing Document or any other amount payable under
any Financing Document, or there shall occur any default in the performance of
or compliance with any of the following sections of this Agreement: Article 5;
Article 6; Sections 4.1, 4.3 (solely as it relates to maintaining its
existence), 4.4, 4.6 and 4.15;
(b) any Credit Party defaults in the performance of or compliance with
any term contained in this Agreement or in any other Financing Document (other
than occurrences described in other provisions of this Section 10.1 for which a
different grace or cure period is specified or for which no grace or cure period
is specified and thereby constitute immediate Events of Default) and such
default is not remedied by the Credit Party or waived by the Required Lenders
within thirty (30) days;
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52
(c) any representation, warranty, certification or statement made by
any Credit Party in any Financing Document or in any certificate, financial
statement or other document delivered pursuant to any Financing Document is
incorrect in any respect (or in any material respect if such representation,
warranty, certification or statement is not by its terms already qualified as to
materiality) when made (or deemed made);
(d) failure of any Credit Party to pay when due or within any
applicable grace period any principal, interest or other amount on Debt (other
than the Loans) or in respect of any Swap Contract, or the occurrence of any
breach, default, condition or event with respect to any Debt (other than the
Loans) or in respect of any Swap Contract, if the effect of such failure or
occurrence is to cause or to permit the holder or holders of any such Debt, or
the counterparty under any such Swap Contract, to cause, Debt or other
liabilities having an individual principal amount in excess of $150,000 or
having an aggregate principal amount in excess of $300,000 to become or be
declared due prior to its stated maturity;
(e) any Credit Party or any Subsidiary of a Borrower shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(f) an involuntary case or other proceeding shall be commenced against
any Credit Party or any Subsidiary of a Borrower seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of forty-five (45) days; or an order for relief shall be entered against
any Credit Party or any Subsidiary of a Borrower under applicable federal
bankruptcy, insolvency or other similar law in respect of (i) bankruptcy,
liquidation, winding-up, dissolution or suspension of general operations, (ii)
composition, rescheduling, reorganization, arrangement or readjustment of, or
other relief from, or stay of proceedings to enforce, some or all of the debts
or obligations, or (iii) possession, foreclosure, seizure or retention, sale or
other disposition of, or other proceedings to enforce security over, all or any
substantial part of the assets of such Credit Party or Subsidiary;
(g) (i) institution of any steps by any Person to terminate a Pension
Plan if as a result of such termination any Credit Party or any member of the
Controlled Group could be required to make a contribution to such Pension Plan,
or could incur a liability or obligation to such Pension Plan, in excess of
$50,000, (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA, or (iii) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Plan and
the withdrawal liability (without unaccrued interest) to Multiemployer Plans as
a result of such withdrawal
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53
(including any outstanding withdrawal liability that any Credit Party or any
member of the Controlled Group have incurred on the date of such withdrawal)
exceeds $50,000;
(h) one or more judgments or orders for the payment of money (not paid
or fully covered by insurance maintained in accordance with the requirements of
this Agreement and as to which the relevant insurance company has acknowledged
coverage) aggregating in excess of $350,000 shall be rendered against any or all
Credit Parties and either (i) enforcement proceedings shall have been commenced
by any creditor upon any such judgments or orders, or (ii) there shall be any
period of twenty (20) consecutive days during which a stay of enforcement of any
such judgments or orders, by reason of a pending appeal, bond or otherwise,
shall not be in effect;
(i) any Lien created by any of the Security Documents shall at any
time fail to constitute a valid and perfected Lien on all of the Collateral
purported to be encumbered thereby, subject to no prior or equal Lien except
Permitted Liens, or any Credit Party shall so assert;
(j) the institution by any Governmental Authority of criminal
proceedings against any Credit Party;
(k) a default or event of default occurs under any Guarantee of any
portion of the Obligations;
(l) any Borrower makes any payment on account of any Debt that has
been subordinated to any of the Obligations, other than payments specifically
permitted by the terms of such subordination;
(m) if any Borrower is or becomes an entity whose equity is registered
with the SEC, and/or is publicly traded on and/or registered with a public
securities exchange, such Borrower's equity fails to remain registered with the
SEC in good standing, and/or such equity fails to remain publicly traded on and
registered with a public securities exchange;
(n) the occurrence of any fact, event or circumstance that has or that
could reasonably be expected to result in a Material Adverse Effect, if such
default shall have continued unremedied for a period of ten (10) days after
written notice from Administrative Agent or the Required Lenders; or
(o) if any Financing Document or any material provision thereof is
deemed null and void or any Credit Party repudiates or denies in writing any
portion of its liability or obligation for the Obligations.
All cure periods provided for in this Section shall run concurrently with
any cure period provided for in any applicable Financing Documents under which
the default occurred.
SECTION 10.2 ACCELERATION AND SUSPENSION OR TERMINATION OF TERM LOAN
COMMITMENT. Upon the occurrence and during the continuance of an Event of
Default, Administrative Agent shall, if requested by Required Lenders, (a) by
notice to Borrower Representative suspend or terminate the Term Loan Commitment
and the obligations of Administrative Agent and Lenders with respect thereto, in
whole or in part (and, if in part, each
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54
Lender's Term Loan Commitment shall be reduced in accordance with its Pro Rata
Share), and/or (b) by notice to Borrower Representative declare all or any
portion of the Obligations to be, and all or such portion of the Obligations
shall thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Borrower and Borrowers will pay the same; provided, however, that in the case of
any of the Events of Default specified in Section 10.1(e) or 10.1(f) above,
without any notice to any Borrower or any other act by Administrative Agent or
the Lenders, the Term Loan Commitment and the obligations of Administrative
Agent and the Lenders with respect thereto shall thereupon immediately and
automatically terminate and all of the Obligations shall become immediately and
automatically due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower and
Borrowers will pay the same.
SECTION 10.3 RESERVED.
SECTION 10.4 DEFAULT RATE OF INTEREST. At the election of Required Lenders,
after the occurrence of an Event of Default and for so long as it continues, the
Loans and other Obligations shall bear interest at rates that are three and one
half percent (3.5%) per annum in excess of the rates otherwise payable under
this Agreement; provided that, notwithstanding anything to the contrary
contained in the foregoing or otherwise in this Agreement, the increased rates
of default interest provided for in this section shall be applicable
automatically and immediately upon the occurrence and during the continuance of
any Event of Default occurring under Section 10.1(e) or 10.1(f) above without
the necessity of any further affirmative action by any party.
SECTION 10.5 SETOFF RIGHTS. During the continuance of any Event of Default,
each Lender is hereby authorized by each Borrower at any time or from time to
time, with reasonably prompt subsequent notice to such Borrower (provided that
any failure to provide any such notice shall not impair the validity of the
applicable set-off right) (any prior or contemporaneous notice being hereby
expressly waived) to set off and to appropriate and to apply any and all (a)
balances held by such Lender or any of such Lender's Affiliates at any of its
offices for the account of such Borrower or any of its Subsidiaries (regardless
of whether such balances are then due to such Borrower or its Subsidiaries), and
(b) other property at any time held or owing by such Lender to or for the credit
or for the account of such Borrower or any of its Subsidiaries, against and on
account of any of the Obligations then due; except that no Lender shall exercise
any such right without the prior written consent of Administrative Agent. Any
Lender exercising a right to set off shall purchase for cash (and the other
Lenders shall sell) interests in each of such other Lender's Pro Rata Share of
the Obligations as would be necessary to cause all Lenders to share the amount
so set off with each other Lender in accordance with their respective Pro Rata
Share of the Obligations. Each Borrower agrees, to the fullest extent permitted
by law, that any Lender and any of such Lender's Affiliates may exercise its
right to set off with respect to the Obligations as provided in this Section
10.5.
SECTION 10.6 APPLICATION OF PROCEEDS. Notwithstanding anything to the
contrary contained in this Agreement, upon the occurrence and during the
continuance of an Event of Default, (a) each Borrower irrevocably waives the
right to direct the application of any and all payments at any time or times
thereafter received by Administrative Agent from or on behalf of
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55
such Borrower or any other Credit Party of all or any part of the Obligations,
and, as between Borrowers on the one hand and Administrative Agent and Lenders
on the other, Administrative Agent shall have the continuing and exclusive right
to apply and to reapply any and all payments received against the Obligations in
such manner as Administrative Agent may deem advisable notwithstanding any
previous application by Administrative Agent, and (b) the proceeds of any sale
of, or other realization upon, all or any part of the Collateral and any payment
after an Event of Default shall be applied: first, to all fees, costs,
indemnities, liabilities, obligations and expenses incurred by or owing to
Administrative Agent, in its capacity as Administrative Agent and not in its
capacity as a Lender, with respect to this Agreement, the other Financing
Documents or the Collateral; second, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Financing Documents or the Collateral;
third, to accrued and unpaid interest on the Obligations (including any interest
which, but for the provisions of the Bankruptcy Code, would have accrued on such
amounts); fourth, to any other indebtedness or obligations of Borrowers owing to
Administrative Agent or any Lender under the Financing Documents; fifth, to the
Obligations owing to any Eligible Swap Counterparty in respect of any Swap
Contracts and sixth, to all fees, costs and expenses related to banking services
provided by any Lender or any Affiliate of a Lender. Any balance remaining shall
be delivered to Borrowers or to whoever may be lawfully entitled to receive such
balance or as a court of competent jurisdiction may direct. In carrying out the
foregoing, (x) amounts received shall be applied in the numerical order provided
until exhausted prior to the application to the next succeeding category, and
(y) each of the Persons entitled to receive a payment in any particular category
shall receive an amount equal to its pro rata share of amounts available to be
applied pursuant thereto for such category.
SECTION 10.7 WAIVERS.
(a) Except as otherwise provided for in this Agreement and to the
fullest extent permitted by applicable law, each Borrower waives: (i)
presentment, demand and protest, and notice of presentment, dishonor, intent to
accelerate, acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all Financing Documents,
the Notes or any other notes, commercial paper, Accounts, contracts, Documents,
Instruments, Chattel Paper and Guarantees at any time held by Lenders on which
any Borrower may in any way be liable, and hereby ratifies and confirms whatever
Lenders may do in this regard; (ii) all rights to notice and a hearing prior to
Administrative Agent's or any Lender's taking possession or control of, or to
Administrative Agent's or any Lender's replevy, attachment or levy upon, any
Collateral or any bond or security which might be required by any court prior to
allowing Administrative Agent or any Lender to exercise any of its remedies; and
(iii) the benefit of all valuation, appraisal and exemption Laws. Each Borrower
acknowledges that it has been advised by counsel of its choices and decisions
with respect to this Agreement, the other Financing Documents and the
transactions evidenced hereby and thereby.
(b) Each Borrower for itself and all its successors and assigns, (i)
agrees that its liability shall not be in any manner affected by any indulgence,
extension of time, renewal, waiver, or modification granted or consented to by
Administrative Agent or any Lender; (ii) consents to any indulgences and all
extensions of time, renewals, waivers, or modifications that may be granted by
Administrative Agent or any Lender with respect to the payment or other
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56
provisions of the Financing Documents, and to any substitution, exchange or
release of the Collateral, or any part thereof, with or without substitution,
and agrees to the addition or release of any Borrower, endorsers, guarantors, or
sureties, or whether primarily or secondarily liable, without notice to any
other Borrower and without affecting its liability hereunder; (iii) agrees that
its liability shall be unconditional and without regard to the liability of any
other Borrower, Administrative Agent or any Lender for any tax on the
indebtedness; and (iv) to the fullest extent permitted by law, expressly waives
the benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing.
(c) To the extent that Administrative Agent or any Lender may have
acquiesced in any noncompliance with any requirements or conditions precedent to
the closing of the Loans or to any subsequent disbursement of Loan proceeds,
such acquiescence shall not be deemed to constitute a waiver by Administrative
Agent or any Lender of such requirements with respect to any future
disbursements of Loan proceeds and Administrative Agent may at any time after
such acquiescence require Borrowers to comply with all such requirements. Any
forbearance by Administrative Agent or any Lender in exercising any right or
remedy under any of the Financing Documents, or otherwise afforded by applicable
law, including any failure to accelerate the maturity date of the Loans, shall
not be a waiver of or preclude the exercise of any right or remedy nor shall it
serve as a novation of the Notes or as a reinstatement of the Loans or a waiver
of such right of acceleration or the right to insist upon strict compliance of
the terms of the Financing Documents. Administrative Agent's or any Lender's
acceptance of payment of any sum secured by any of the Financing Documents after
the due date of such payment shall not be a waiver of Administrative Agent's and
such Lender's right to either require prompt payment when due of all other sums
so secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other Liens or charges by
Administrative Agent as the result of an Event of Default shall not be a waiver
of Administrative Agent's right to accelerate the maturity of the Loans, nor
shall Administrative Agent's receipt of any condemnation awards, insurance
proceeds, or damages under this Agreement operate to cure or waive any Credit
Party's default in payment of sums secured by any of the Financing Documents.
(d) Without limiting the generality of anything contained in this
Agreement or the other Financing Documents, each Borrower agrees that if an
Event of Default is continuing (i) Administrative Agent and Lenders shall not be
subject to any "one action" or "election of remedies" law or rule, and (ii) all
Liens and other rights, remedies or privileges provided to Administrative Agent
or Lenders shall remain in full force and effect until Administrative Agent or
Lenders have exhausted all remedies against the Collateral and any other
properties owned by Borrowers and the Financing Documents and other security
instruments or agreements securing the Loans have been foreclosed, sold and/or
otherwise realized upon in satisfaction of Borrowers' obligations under the
Financing Documents.
(e) Nothing contained herein or in any other Financing Document shall
be construed as requiring Administrative Agent or any Lender to resort to any
part of the Collateral for the satisfaction of any of Borrowers' obligations
under the Financing Documents in preference or priority to any other Collateral,
and Administrative Agent may seek satisfaction out of all of the Collateral or
any part thereof, in its absolute discretion in respect of Borrowers'
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57
obligations under the Financing Documents. In addition, Administrative Agent
shall have the right from time to time to partially foreclose upon any
Collateral in any manner and for any amounts secured by the Financing Documents
then due and payable as determined by Administrative Agent in its sole
discretion (acting upon the direction of the Required Lenders), including,
without limitation, the following circumstances: (i) in the event any Borrower
defaults beyond any applicable grace period in the payment of one or more
scheduled payments of principal and/or interest, Administrative Agent may
foreclose upon all or any part of the Collateral to recover such delinquent
payments, or (ii) in the event Administrative Agent elects to accelerate less
than the entire outstanding principal balance of the Loans, Administrative Agent
may foreclose all or any part of the Collateral to recover so much of the
principal balance of the Loans as Administrative Agent may accelerate and such
other sums secured by one or more of the Financing Documents as Administrative
Agent may elect. Notwithstanding one or more partial foreclosures, any
unforeclosed Collateral shall remain subject to the Financing Documents to
secure payment of sums secured by the Financing Documents and not previously
recovered.
(f) To the fullest extent permitted by law, each Borrower, for itself
and its successors and assigns, waives in the event of foreclosure of any or all
of the Collateral any equitable right otherwise available to any Credit Party
which would require the separate sale of any of the Collateral or require
Administrative Agent or Lenders to exhaust their remedies against any part of
the Collateral before proceeding against any other part of the Collateral; and
further in the event of such foreclosure each Borrower does hereby expressly
consent to and authorize, at the option of Administrative Agent, the foreclosure
and sale either separately or together of each part of the Collateral.
SECTION 10.8 INJUNCTIVE RELIEF. The parties acknowledge and agree that, in
the event of a breach or threatened breach of any Credit Party's obligations
under any Financing Documents, Administrative Agent and Lenders may have no
adequate remedy in money damages and, accordingly, shall be entitled to an
injunction (including, without limitation, a temporary restraining order,
preliminary injunction, writ of attachment, or order compelling an audit)
against such breach or threatened breach, including, without limitation,
maintaining any cash management and collection procedure described herein.
However, no specification in this Agreement of a specific legal or equitable
remedy shall be construed as a waiver or prohibition against any other legal or
equitable remedies in the event of a breach or threatened breach of any
provision of this Agreement. Each Credit Party waives, to the fullest extent
permitted by law, the requirement of the posting of any bond in connection with
such injunctive relief. By joining in the Financing Documents as a Credit Party,
each Credit Party specifically joins in this Section as if this Section were a
part of each Financing Document executed by such Credit Party.
SECTION 10.9 MARSHALLING. Administrative Agent and Lenders shall have no
obligation to marshal any assets in favor of any Credit Party, or against or in
payment of any of the other Obligations or any other obligation owed to
Administrative Agent or Lenders by any Credit Party and each Credit Party hereby
waives any such right to marshalling (and by joining in the Financing Documents
as a Credit Party, each Credit Party specifically joins in this Section as if
this Section were a part of each Financing Document executed by such Credit
Party).
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ARTICLE 11 - AGENT
SECTION 11.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably
appoints and authorizes Administrative Agent to be such Lender's agent under and
with respect to this Agreement and the other Financing Documents and the
transactions contemplated hereby and thereby to the extent provided for herein
and therein and in any separate interlender or agency agreement entered into by
Lenders and Administrative Agent in connection herewith and therewith and more
specifically (without limiting the generality of the foregoing) to enter into
each of the Financing Documents to which such Lender is a party (other than this
Agreement) on its behalf and to take such actions as Administrative Agent on
such Lender's behalf and to exercise such powers under the Financing Documents
as are delegated to Administrative Agent by the terms thereof, and/or by the
terms of any interlender or agency agreement entered into among Administrative
Agent and Lenders, together with all such powers as are reasonably incidental
thereto. Subject to the terms of Section 12.5 below and the other Financing
Documents and/or any such interlender or agency agreement, Administrative Agent
is authorized and empowered to amend, modify, or waive any provisions of this
Agreement or the other Financing Documents on behalf of Lenders. The provisions
of this Article 11 are solely for the benefit of Administrative Agent and
Lenders and neither any Borrower nor any other Credit Party shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, Administrative Agent
shall act solely as agent of Lenders and does not assume and shall not be deemed
to have assumed any obligation toward or relationship of agency or trust with or
for any Borrower or any other Credit Party. Administrative Agent may perform any
of its duties hereunder, or under the Financing Documents and/or any such
interlender or agency agreement, by or through its agents or employees.
SECTION 11.2 LIABILITY OF ADMINISTRATIVE AGENT. Neither Administrative
Agent nor any of its directors, officers, agents or employees shall be liable to
any Lender for any action taken or not taken by it in connection with the
Financing Documents, except that Administrative Agent shall be liable with
respect to its specific duties set forth hereunder but only to the extent of its
own gross negligence or willful misconduct in the discharge thereof as
determined by a final non-appealable judgment of a court of competent
jurisdiction. Neither Administrative Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (a) any statement, warranty or representation made in
connection with any Financing Document or any borrowing hereunder; (b) the
performance or observance of any of the covenants or agreements specified in any
Financing Document; (c) the satisfaction of any condition specified in any
Financing Document; (d) the validity, effectiveness, sufficiency or genuineness
of any Financing Document, any Lien purported to be created or perfected thereby
or any other instrument or writing furnished in connection therewith; (e) the
existence or non-existence of any Default or Event of Default; or (f) the
financial condition of any Credit Party. Administrative Agent shall not incur
any liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex, facsimile or
electronic transmission or similar writing) believed by it to be genuine or to
be signed by the proper party or parties. Administrative Agent shall not be
liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other
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59
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them).
SECTION 11.3 INDEMNIFICATION. Each Lender shall, in accordance with its Pro
Rata Share, indemnify Administrative Agent (to the extent not reimbursed by
Borrowers) upon demand against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from Administrative Agent's gross negligence or willful misconduct as determined
by a final non-appealable judgment of a court of competent jurisdiction) that
Administrative Agent, in its capacity as Administrative Agent and not in its
capacity as a Lender, may suffer or incur in connection with the Financing
Documents or any action taken or omitted by Administrative Agent hereunder or
thereunder. If any indemnity furnished to Administrative Agent for any purpose
shall, in the opinion of Administrative Agent, be insufficient or become
impaired, Administrative Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against even if so directed by Required
Lenders until such additional indemnity is furnished.
SECTION 11.4 COLLATERAL MATTERS. Lenders irrevocably authorize
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by Administrative Agent under any Security Document (i) upon
termination of the Loan Commitment and payment in full of all Obligations, and,
to the extent required by Administrative Agent in its sole discretion, the
expiration, termination or cash collateralization (to the satisfaction of
Administrative Agent) of all Swap Contracts secured, in whole or in part, by any
Collateral; or (ii) release or subordinate any Lien granted to or held by
Administrative Agent under any Security Document on property sold or disposed of
as part of or in connection with any disposition permitted under any Financing
Document (it being understood and agreed that Administrative Agent may
conclusively rely without further inquiry on a certificate of a Responsible
Officer as to the sale or other disposition of property being made in full
compliance with the provisions of the Financing Documents). Upon request by
Administrative Agent at any time, Lenders will confirm Administrative Agent's
authority to release and/or subordinate particular types or items of Collateral
pursuant to this Section 11.4.
SECTION 11.5 AGENCY FOR PERFECTION. Administrative Agent and each Lender
hereby appoint each other Lender as agent for the purpose of perfecting
Administrative Agent's security interest in assets which, in accordance with the
Uniform Commercial Code in any applicable jurisdiction, can be perfected by
possession or control. Should any Lender (other than Administrative Agent)
obtain possession or control of any such assets, such Lender shall notify
Administrative Agent thereof, and, promptly upon Administrative Agent's request
therefor, shall deliver such assets to Administrative Agent or in accordance
with Administrative Agent's instructions or transfer control to Administrative
Agent in accordance with Administrative Agent's instructions. Each Lender agrees
that it will not have any right individually to enforce or seek to enforce any
Security Document or to realize upon any Collateral for the Loan unless
instructed to do so by Administrative Agent (except as provided in Section
10.5), it being understood and agreed that such rights and remedies may be
exercised only by Administrative Agent.
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SECTION 11.6 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may at
any time give notice of its resignation to the Lenders and Borrowers. Upon
receipt of any such notice of resignation, Required Lenders shall have the
right, in consultation with Borrowers (provided no Event of Default has occurred
and is continuing), to appoint a successor Administrative Agent. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder and
notice of such acceptance to the retiring Administrative Agent, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, the retiring
Administrative Agent's resignation shall become immediately effective and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder and under the other Financing Documents (if such
resignation was not already effective and such duties and obligations not
already discharged, as provided below in this paragraph). The fees payable by
Borrowers to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed among Borrowers and such successor.
If no such successor shall have been so appointed by Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders (but without any obligation)
appoint a successor Administrative Agent. From and following the expiration of
such thirty (30) day period, Administrative Agent shall have the exclusive
right, upon one (1) Business Days' notice to Borrower Representative and the
Lenders, and the delivery to a Lender, for the benefit of all Lenders, of all
Collateral in the possession of the retiring Administrative Agent, to make its
resignation effective immediately. From and following the effectiveness of such
notice, (a) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Financing Documents, and
(b) all payments, communications and determinations provided to be made by, to
or through Administrative Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor Administrative
Agent as provided for above in this paragraph. The provisions of this Agreement
shall continue in effect for the benefit of any retiring Administrative Agent
and its sub-agents after the effectiveness of its resignation hereunder and
under the other Financing Documents in respect of any actions taken or omitted
to be taken by any of them while the retiring Administrative Agent was acting or
was continuing to act as Administrative Agent.
SECTION 11.7 PAYMENT AND SHARING OF PAYMENT.
(a) Loan Payments. Payments of principal, interest and fees in respect
of the Loan will be settled on the date of receipt if received by Administrative
Agent on a Business Day prior to noon (Chicago time) or on the Business Day
immediately following the date of receipt if received after noon (Chicago time).
All payments of principal, interest and fees (other than fees owed to
Administrative Agent, in its capacity as Administrative Agent and not as a
Lender, pursuant to the express provisions of this Agreement), shall be
allocated among the Lenders in accordance with their respective Pro Rata Shares.
(b) Return of Payments.
(i) If Administrative Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by
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Administrative Agent from a Borrower and such related payment is not received by
Administrative Agent, then Administrative Agent will be entitled to recover such
amount from such Lender on demand without setoff, counterclaim or deduction of
any kind, together with interest accruing on a daily basis at the Federal Funds
Rate.
(ii) If Administrative Agent determines at any time that any
amount received by Administrative Agent under this Agreement must be returned to
any Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Financing Document, Administrative Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender will
repay to Administrative Agent on demand any portion of such amount that
Administrative Agent has distributed to such Lender, together with interest at
such rate, if any, as Administrative Agent is required to pay to any Borrower or
such other Person, without setoff, counterclaim or deduction of any kind.
(c) Defaulted Lenders. The failure of any Defaulted Lender to make any
payment required by it hereunder shall not relieve any other Lender of its
obligations to make payment, but neither any other Lender nor Administrative
Agent shall be responsible for the failure of any Defaulted Lender to make any
payment required hereunder. Notwithstanding anything set forth herein to the
contrary, a Defaulted Lender shall not have any voting or consent rights under
or with respect to any Financing Document or constitute a "Lender" (or be
included in the calculation of "Required Lenders" hereunder) for any voting or
consent rights under or with respect to any Financing Document.
(d) Sharing of Payments. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan in excess of its Pro Rata Share of payments
entitled pursuant to the other provisions of this Section 11.7, such Lender
shall purchase from the other Lenders such participations in extensions of
credit made by such other Lenders (without recourse, representation or warranty)
as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery,
without interest. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this clause (d) may, to the
fullest extent permitted by law, exercise all its rights of payment (including
pursuant to Section 10.5) with respect to such participation as fully as if such
Lender were the direct creditor of Borrowers in the amount of such
participation). If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
clause (d) applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this clause (d) to share in the benefits of any
recovery on such secured claim.
SECTION 11.8 RIGHT TO PERFORM, PRESERVE AND PROTECT. If any Credit Party
fails to perform any obligation hereunder or under any other Financing Document,
Administrative Agent
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itself may, but shall not be obligated to, cause such obligation to be performed
at Borrowers' expense. Administrative Agent is further authorized by Borrowers
and the Lenders to make expenditures from time to time which Administrative
Agent, in its reasonable business judgment, deems necessary or desirable to (a)
preserve or protect the business conducted by Borrowers, the Collateral, or any
portion thereof, and/or (b) enhance the likelihood of, or maximize the amount
of, repayment of the Loan and other Obligations. Each Borrower hereby agrees to
reimburse Administrative Agent on demand for any and all costs, liabilities and
obligations incurred by Administrative Agent pursuant to this Section 11.8. Each
Lender hereby agrees to indemnify Administrative Agent upon demand for any and
all costs, liabilities and obligations incurred by Administrative Agent pursuant
to this Section 11.8, in accordance with the provisions of Section 11.3.
SECTION 11.9 ADMINISTRATIVE AGENT AND AFFILIATES. Administrative Agent
shall have the same rights and powers under the Financing Documents as any other
Lender and may exercise or refrain from exercising the same as though it were
not Administrative Agent, and Administrative Agent and its Affiliates may lend
money to, invest in and generally engage in any kind of business with each
Credit Party or Affiliate of any Credit Party as if it were not Administrative
Agent hereunder.
SECTION 11.10 ACTION BY ADMINISTRATIVE AGENT. The duties of Administrative
Agent shall be mechanical and administrative in nature. Administrative Agent
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender. Nothing in this Agreement or any of the Financing Documents is
intended to or shall be construed to impose upon Administrative Agent any
obligations in respect of this Agreement or any of the Financing Documents
except as expressly set forth herein or therein.
SECTION 11.11 CONSULTATION WITH EXPERTS. Administrative Agent may consult
with legal counsel, independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
SECTION 11.12 RIGHT TO REQUEST AND ACT ON INSTRUCTIONS. Administrative
Agent may at any time request instructions from Lenders with respect to any
actions or approvals which by the terms of this Agreement or of any of the
Financing Documents Administrative Agent is permitted or desires to take or to
grant, and if such instructions are promptly requested, Administrative Agent
shall be absolutely entitled to refrain from taking any action or to withhold
any approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the
Financing Documents until it shall have received such instructions from Required
Lenders or all or such other portion of the Lenders as shall be prescribed by
this Agreement. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against Administrative Agent as a result of Administrative
Agent acting or refraining from acting under this Agreement or any of the other
Financing Documents in accordance with the instructions of Required Lenders (or
all or such other portion of the Lenders as shall be prescribed by this
Agreement) and, notwithstanding the instructions of Required Lenders (or such
other applicable portion of the Lenders), Administrative Agent shall have no
obligation to take any action if it believes, in good faith, that such action
would violate applicable Law or exposes Administrative Agent to any
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liability for which it has not received satisfactory indemnification in
accordance with the provisions of Section 11.3.
SECTION 11.13 CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under the
Financing Documents.
SECTION 11.14 NOTICE OF DEFAULT. Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
except with respect to defaults in the payment of principal, interest and fees
required to be paid to Administrative Agent for the account of Lenders, unless
Administrative Agent shall have received written notice from a Lender or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". Administrative
Agent will promptly notify each Lender of its receipt of any such notice.
Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by Required Lenders (or all or such other
portion of the Lenders as shall be prescribed by this Agreement) in accordance
with the terms hereof. Unless and until Administrative Agent has received any
such request, Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interests of Lenders.
SECTION 11.15 ADDITIONAL TITLED AGENTS. Except for rights and powers, if
any, expressly reserved under this Agreement to any bookrunner, arranger or to
any titled agent named on the cover page of this Agreement, other than
Administrative Agent (collectively, the "Additional Titled Agents"), and except
for obligations, liabilities, duties and responsibilities, if any, expressly
assumed under this Agreement by any Additional Titled Agent, no Additional
Titled Agent, in such capacity, has any rights, powers, liabilities, duties or
responsibilities hereunder or under any of the other Financing Documents.
Without limiting the foregoing, no Additional Titled Agent shall have nor be
deemed to have a fiduciary relationship with any Lender. At any time that any
Lender serving as an Additional Titled Agent shall have transferred to any other
Person (other than any Affiliates) all of its interests in the Loan, such Lender
shall be deemed to have concurrently resigned as such Additional Titled Agent.
SECTION 11.16 RESERVED.
SECTION 11.17 DEFINITIONS. As used in this Article 11, the following terms
have the following meanings:
"ADDITIONAL TITLED AGENTS" has the meaning set forth in Section 11.15.
"FEDERAL FUNDS RATE" MEANS, for any day, the rate of interest per annum
(rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the weighted
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average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided, however, that (a) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day, and (b) if no such rate is so published on
such next preceding Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to Administrative Agent on such day on such transactions
as determined by Administrative Agent.
ARTICLE 12 - MISCELLANEOUS
SECTION 12.1 SURVIVAL. All agreements, representations and warranties made
herein and in every other Financing Document shall survive the execution and
delivery of this Agreement and the other Financing Documents. The provisions of
Section 2.8 and Articles 10, 11 and 12 shall survive the payment of the
Obligations (both with respect to any Lender and all Lenders collectively) and
any termination of this Agreement and any judgment with respect to any
Obligations, including any final foreclosure judgment with respect to any
Security Document, and no unpaid or unperformed, current or future, Obligations
will merge into any such judgment.
SECTION 12.2 NO WAIVERS. No failure or delay by Administrative Agent or any
Lender in exercising any right, power or privilege under any Financing Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein and therein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law. Any reference in any Financing Document to the "continuing"
nature of any Event of Default shall not be construed as establishing or
otherwise indicating that any Borrower or any other Credit Party has the
independent right to cure any such Event of Default, but is rather presented
merely for convenience should such Event of Default be waived in accordance with
the terms of the applicable Financing Documents.
SECTION 12.3 NOTICES.
(a) All notices, requests and other communications to any party
hereunder shall be in writing (including prepaid overnight courier, facsimile
transmission or similar writing) and shall be given to such party at its
address, facsimile number or e-mail address set forth on the signature pages
hereof (or, in the case of any such Lender who becomes a Lender after the date
hereof, in an assignment agreement or in a notice delivered to Borrower
Representative and Administrative Agent by the assignee Lender forthwith upon
such assignment) or at such other address, facsimile number or e-mail address as
such party may hereafter specify for the purpose by notice to Administrative
Agent and Borrower Representative; provided, however, that notices, requests or
other communications shall be permitted by electronic means only in accordance
with the provisions of Section 12.3(b) and (c). Each such notice, request or
other communication shall be effective (i) if given by facsimile, when such
notice is transmitted to the facsimile number specified by this Section and the
sender receives a confirmation of transmission from the sending facsimile
machine, or (ii) if given by mail, prepaid overnight courier or any other means,
when received or when receipt is refused at the applicable address specified by
this Section 12.3(a).
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(b) Notices and other communications to the parties hereto may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved from time to time
by Administrative Agent, provided, however, that the foregoing shall not apply
to notices sent directly to any Lender if such Lender has notified the
Administrative Agent that it is incapable of receiving notices by electronic
communication. The Administrative Agent or Borrower Representative may, in their
discretion, agree to accept notices and other communications to them hereunder
by electronic communications pursuant to procedures approved by it, provided,
however, that approval of such procedures may be limited to particular notices
or communications.
(c) Unless the Administrative Agent otherwise prescribes, (i) notices
and other communications sent to an e-mail address shall be deemed received upon
the sender's receipt of an acknowledgment from the intended recipient (such as
by the "return receipt requested" function, as available, return e-mail or other
written acknowledgment), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor, provided, however, that if any such
notice or other communication is not sent or posted during normal business
hours, such notice or communication shall be deemed to have been sent at the
opening of business on the next Business Day.
SECTION 12.4 SEVERABILITY. In case any provision of or obligation under
this Agreement or any other Financing Document shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 12.5 AMENDMENTS AND WAIVERS.
(a) No provision of this Agreement or any other Financing Document may
be amended, waived or otherwise modified unless such amendment, waiver or other
modification is in writing and is signed or otherwise approved by Borrowers and
the Required Lenders; provided that
(i) no such amendment, waiver or other modification that would
have the effect of increasing or reducing a Lender's Term Loan Commitment Amount
or Term Loan Commitment Percentage shall be effective as to such Lender without
such Lender's written consent;
(ii) no such amendment, waiver or modification that would affect
the rights and duties of Administrative Agent shall be effective without
Administrative Agent's written consent or signature;
(iii) no such amendment, waiver or other modification shall,
unless signed by all the Lenders directly affected thereby, (A) reduce the
principal of, rate of interest on or any fees with respect to any Loan or
forgive any principal, interest (other than default interest)
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or fees (other than late charges) with respect to any Loan (B) postpone the date
fixed for, or waive, any payment of principal of any Loan or of interest on any
Loan (other than default interest) or any fees provided for hereunder (other
than late charges or for any termination of any commitment); (C) change the
definition of the term Required Lenders or the percentage of Lenders which shall
be required for Lenders to take any action hereunder; (D) release all or
substantially all or any material portion of the Collateral, authorize any
Borrower to sell or otherwise dispose of all or substantially all or any
material portion of the Collateral, subordinate the Liens of the Administrative
Agent or the Lenders hereunder, or release any Guarantor of all or any portion
of the Obligations or its Guarantee obligations with respect thereto, except, in
each case with respect to this clause (D), as otherwise may be expressly
permitted under this Agreement or the other Financing Documents (including in
connection with any disposition permitted hereunder); (E) amend, waive or
otherwise modify this Section 12.5 or the definitions of the terms used in this
Section 12.5 insofar as the definitions affect the substance of this Section
12.5; (F) consent to the assignment, delegation or other transfer by any Credit
Party of any of its rights and obligations under any Financing Document or
release any Borrower of its payment obligations under any Financing Document,
except, in each case with respect to this clause (F), pursuant to a merger or
consolidation permitted pursuant to this Agreement or (G) amend any of the
provisions of Section 10.6 or 11.7 or amend any of the definitions Pro Rata
Share, Term Loan Commitment, Term Loan Commitment Amount, Term Loan Commitment
Percentage or that provide for the Lenders to receive their Pro Rata Shares of
any fees, payments, setoffs or proceeds of Collateral hereunder. It is hereby
understood and agreed that all Lenders shall be deemed directly affected by an
amendment, waiver or other modification of the type described in the preceding
clauses (A), (B), (C), (D), (E), (F) and (G) of the preceding sentence;
(iv) the provisions of the foregoing clauses (i), (ii) and (iii)
are subject to the provisions of any interlender or agency agreement among the
Lenders and Administrative Agent pursuant to which any Lender may agree to give
its consent in connection with any amendment, waiver or modification of the
Financing Documents only in the event of the unanimous agreement of all Lenders.
(b) Without limitation of the provisions of the preceding clause (a),
no waiver, amendment or other modification to this Agreement shall, unless
signed by each Eligible Swap Counterparty then in existence, modify the
provisions of Section 10.6 in any manner adverse to the interests of each such
Eligible Swap Counterparty.
SECTION 12.6 ASSIGNMENTS; PARTICIPATIONS; REPLACEMENT OF LENDERS.
(a) Assignments.
(i) Any Lender may at any time assign to one or more Eligible
Assignees all or any portion of such Lender's Loans and interest in the Term
Loan Commitment, together with all related obligations of such Lender hereunder.
Except as Administrative Agent may otherwise agree, the amount of any such
assignment (determined as of the date of the applicable Assignment Agreement or,
if a "Trade Date" is specified in such Assignment Agreement, as of such Trade
Date) shall be in a minimum aggregate amount equal to $1,000,000 or, if less,
the assignor's entire interests in the Term Loan Commitment and outstanding
Loans;
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provided, that, in connection with simultaneous assignments to two or more
related Approved Funds, such Approved Funds shall be treated as one assignee for
purposes of determining compliance with the minimum assignment size referred to
above. Borrowers and Administrative Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned to an Eligible Assignee until Administrative Agent shall have received
and accepted an effective Assignment Agreement executed, delivered and fully
completed by the applicable parties thereto, such other information regarding
such Eligible Assignee as Administrative Agent reasonably shall require and a
processing fee of $3,500; provided, only one processing fee shall be payable in
connection with simultaneous assignments to two or more related Approved Funds.
(ii) From and after the date on which the conditions described
above have been met, (i) such Eligible Assignee shall be deemed automatically to
have become a party hereto and, to the extent of the interests assigned to such
Eligible Assignee pursuant to such Assignment Agreement, shall have the rights
and obligations of a Lender hereunder and (ii) the assigning Lender, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, shall be released from its rights and obligations
hereunder (other than those that survive termination pursuant to Section 12.1).
Upon the request of the Eligible Assignee (and, as applicable, the assigning
Lender) pursuant to an effective Assignment Agreement, Borrower shall execute
and deliver to Administrative Agent for delivery to the Eligible Assignee (and,
as applicable, the assigning Lender) Notes in the aggregate principal amount of
the Eligible Assignee's percentage interest in the Term Loan Commitment (and, as
applicable, Notes in the principal amount of that portion of the Term Loan
Commitment retained by the assigning Lender). Upon receipt by the assigning
Lender of such Note, the assigning Lender shall return to Borrower any prior
Note held by it.
(iii) Administrative Agent, acting solely for this purpose as an
agent of Borrower, shall maintain at its offices located in Chicago, Illinois a
copy of each Assignment Agreement delivered to it and a register for the
recordation of the names and addresses of each Lender, and the commitments of,
and principal amount of the Loans owing to, such Lender pursuant to the terms
hereof. The entries in such register shall be conclusive, and Borrower,
Administrative Agent and Lenders may treat each Person whose name is recorded
therein pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. Such register shall be
available for inspection by Borrower and any Lender, at any reasonable time upon
reasonable prior notice to Administrative Agent.
(iv) Notwithstanding the foregoing provisions of this Section
12.6(a) or any other provision of this Agreement, any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(v) Notwithstanding the foregoing provisions of this Section
12.6(a) or any other provision of this Agreement, Administrative Agent has the
right, but not
Credit and Security Agreement
68
the obligation, to effectuate assignments of Loans and Term Loan Commitments via
an electronic settlement system acceptable to Administrative Agent as designated
in writing from time to time to the Lenders by Administrative Agent (the
"SETTLEMENT SERVICE"). At any time when the Administrative Agent elects, in its
sole discretion, to implement such Settlement Service, each such assignment
shall be effected by the assigning Lender and proposed assignee pursuant to the
procedures then in effect under the Settlement Service, which procedures shall
be consistent with the other provisions of this Section 12.6(a). Each assigning
Lender and proposed Eligible Assignee shall comply with the requirements of the
Settlement Service in connection with effecting any assignment of Loans and Term
Loan Commitments pursuant to the Settlement Service (without any cost to the
Lender, except for the processing fee referred to in clause (1) above). With the
prior approval of each of Administrative Agent and the Borrower, Administrative
Agent's and the Borrower's approval of such Eligible Assignee shall be deemed to
have been automatically granted with respect to any transfer effected through
the Settlement Service. Assignments and assumptions of the Loans and Term Loan
Commitments shall be effected by the provisions otherwise set forth herein until
Administrative Agent notifies Lenders of the Settlement Service as set forth
herein.
(b) Participations. Any Lender may at any time, without the consent
of, or notice to, Borrower or Administrative Agent, sell to one or more Persons
participating interests in its Loans, commitments or other interests hereunder
(any such Person, a "PARTICIPANT"). In the event of a sale by a Lender of a
participating interest to a Participant, (a) such Lender's obligations hereunder
shall remain unchanged for all purposes, (b) Borrower and Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations hereunder and (c) all amounts payable by
Borrower shall be determined as if such Lender had not sold such participation
and shall be paid directly to such Lender. No Participant shall have any direct
or indirect voting rights hereunder except with respect to any event described
in Section 12.5 expressly requiring the unanimous vote of all Lenders or, as
applicable, all affected Lenders. Borrower agrees that if amounts outstanding
under this Agreement are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement;
provided that such right of set-off shall be subject to the obligation of each
Participant to share with Lenders, and Lenders agree to share with each
Participant, as provided in Section 10.5.
(c) Replacement of Lenders. Within thirty (30) days after: (i) receipt
by Administrative Agent of notice and demand from any Lender for payment of
additional costs as provided in Section 2.8(d), which demand shall not have been
revoked, (ii) Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.8(a) or 2.8(b), or (iii) any Lender is a Defaulted Lender, and the
circumstances causing such status shall not have been cured or waived (each
relevant Lender in the foregoing clauses (i) through (iii) being an "AFFECTED
LENDER"), Administrative Agent may, at its option, notify such Affected Lender
of such Person's intention to obtain, at Borrowers' expense, a replacement
Lender ("REPLACEMENT LENDER") for such Lender, which Replacement Lender shall be
an Eligible Assignee. In the event Administrative Agent obtains a Replacement
Lender within ninety (90) days following notice of its intention to do so, the
Affected Lender shall sell, at par, and assign all of its
Credit and Security Agreement
69
Loans and funding commitments hereunder to such Replacement Lender in accordance
with the procedures set forth in Section 12.6(a); provided, that (i) Borrowers
shall have, as applicable, reimbursed such Lender for its increased costs and
additional payments for which it is entitled to reimbursement under Sections 2.8
of this Agreement through the date of such sale and assignment and (ii)
Borrowers shall pay to Administrative Agent the $3,500 processing fee in respect
of such assignment. In the event that a replaced Lender does not execute an
Assignment Agreement pursuant to Section 12.6(a) within five (5) Business Days
after receipt by such replaced Lender of notice of replacement pursuant to this
Section 12.6(c) and presentation to such replaced Lender of an Assignment
Agreement evidencing an assignment pursuant to this Section 12.6(c), such
replaced Lender shall be deemed to have consented to the terms of such
Assignment Agreement, and any such Assignment Agreement executed by
Administrative Agent, the Replacement Lender and, to the extent required
pursuant to Section 12.6(a), Borrower, shall be effective for purposes of this
Section 12.6(c) and Section 12.6(a). Upon any such assignment and payment, such
replaced Lender shall no longer constitute a "Lender" for purposes hereof, other
than with respect to such rights and obligations that survive termination as set
forth in Section 12.1.
(d) Credit Party Assignments. No Credit Party may assign, delegate or
otherwise transfer any of its rights or other obligations hereunder or under any
other Financing Document without the prior written consent of each Lender.
SECTION 12.7 HEADINGS. Headings and captions used in the Financing
Documents (including the Exhibits, Schedules and Annexes hereto and thereto) are
included for convenience of reference only and shall not be given any
substantive effect.
SECTION 12.8 CONFIDENTIALITY. Administrative Agent and each Lender shall
hold all financial statements delivered by any Credit Party, and all other
non-public information regarding the Credit Parties and their respective
businesses identified as such by Borrowers and obtained by Administrative Agent
or any Lender pursuant to the requirements hereof in accordance with such
Person's customary procedures for handling information of such nature, except
that disclosure of such information may be made (a) to their respective agents,
employees, Subsidiaries, Affiliates, attorneys, auditors, professional
consultants, rating agencies, insurance industry associations and portfolio
management services, (b) to prospective transferees or purchasers of any
interest in the Loans, and to prospective contractual counterparties (or the
professional advisors thereto) in Permitted Swap Contracts permitted hereby,
provided, however, that any such Persons shall have agreed to be bound by the
provisions of this Section 12.8, (c) as required by Law, subpoena, judicial
order or similar order and in connection with any litigation, (d) as may be
required in connection with the examination, audit or similar investigation of
such Person, and (e) to a Person that is a trustee, investment advisor,
collateral manager, servicer, noteholder or secured party in a Securitization
(as hereinafter defined) in connection with the administration, servicing and
reporting on the assets serving as collateral for such Securitization. For the
purposes of this Section, "Securitization" shall mean a public or private
offering by a Lender or any of its Affiliates or their respective successors and
assigns, of securities which represent an interest in, or which are
collateralized, in whole or in part, by the Loans. Confidential information
shall include only all financial statements and such other information
identified as such at the time provided to Administrative Agent and shall not
include
Credit and Security Agreement
70
information that either: (i) is in the public domain, or becomes part of the
public domain after disclosure to such Person through no fault of such Person,
or (ii) is disclosed to such Person by a Person other than a Credit Party,
provided, however, Administrative Agent does not have actual knowledge that such
Person is prohibited from disclosing such information. The obligations of
Administrative Agent and Lenders under this Section 12.8 shall supersede and
replace the obligations of Administrative Agent and Lenders under any
confidentiality agreement in respect of this financing executed and delivered by
Administrative Agent or any Lender prior to the date hereof.
SECTION 12.9 WAIVER OF CONSEQUENTIAL AND OTHER DAMAGES. To the fullest
extent permitted by applicable law, no Borrower shall assert, and each Borrower
hereby waives, any claim against any Indemnitee (as defined below), on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of this Agreement, any other Financing Document or any agreement or
instrument contemplated hereby or thereby, the transactions contemplated hereby
or thereby, or the use of the proceeds thereof. No Indemnitee shall be liable
for any damages arising from the use by unintended recipients of any information
or other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Financing Documents or the transactions contemplated hereby or thereby.
SECTION 12.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT,
EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL MATTERS RELATING HERETO OR
THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR
OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES. EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN CHICAGO, STATE OF ILLINOIS AND IRREVOCABLY
AGREES THAT, SUBJECT TO ADMINISTRATIVE AGENT'S ELECTION, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING
DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH
BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
SECTION 12.11 WAIVER OF JURY TRIAL. EACH BORROWER, ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION
Credit and Security Agreement
71
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND THAT EACH WELL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS
AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER
WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.
SECTION 12.12 PUBLICATION; ADVERTISEMENT.
(a) Publication. No Credit Party will directly or indirectly publish,
disclose or otherwise use in any public disclosure, advertising material,
promotional material, press release or interview, any reference to the name,
logo or any trademark of any Lender or any Affiliate of any Lender or any
reference to this Agreement or the financing evidenced hereby, in any case
except (i) as required by Law, subpoena or judicial or similar order, in which
case the applicable Credit Party shall give such Lender prior written notice of
such publication or other disclosure, or (ii) with such Lender's prior written
consent.
(b) Advertisement. Each Credit Party hereby authorizes each Lender
(and the Affiliates of each Lender) (hereinafter referred to as the "Advertising
Party") to publish the name of each such Lender and Credit Party, the existence
of the financing arrangements referenced under this Agreement, the primary
purpose and/or structure of those arrangements, the amount of credit extended
under each facility, the title and role of each party to this Agreement, and the
total amount of the financing evidenced hereby in any "tombstone", comparable
advertisement or press release which such Advertising Party elects to submit for
publication. In addition, each Credit Party agrees that each Advertising Party
may provide lending industry trade organizations with information necessary and
customary for inclusion in league table measurements after the Closing Date.
With respect to any of the foregoing, such Advertising Party shall provide
Borrowers with an opportunity to review and confer with such Advertising Party
regarding the contents of any such tombstone, advertisement or information, as
applicable, prior to its submission for publication and, following such review
period, such Advertising Party may, from time to time, publish such information
in any media form desired by such other Lender (or such Affiliate), until such
time that Borrowers shall have requested such Advertising Party cease any such
further publication.
SECTION 12.13 COUNTERPARTS; INTEGRATION. This Agreement and the other
Financing Documents may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument Signatures by facsimile or by email
delivery of an electronic version of an executed signature page shall bind the
parties hereto. This Agreement and the other Financing Documents constitute the
entire agreement and understanding among the parties hereto and supersede any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof.
Credit and Security Agreement
72
SECTION 12.14 NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
SECTION 12.15 TIME. Time is of the essence in each Borrower's and each
other Credit Party's performance under this Agreement and all other Financing
Documents.
SECTION 12.16 LENDER APPROVALS. Unless expressly provided herein to the
contrary, any approval, consent, waiver or satisfaction of Administrative Agent
or Lenders with respect to any matter that is the subject of this Agreement, the
other Financing Documents may be granted or withheld by Administrative Agent and
Lenders in their sole and absolute discretion and credit judgment.
SECTION 12.17 EXPENSES; INDEMNITY
(a) Borrowers agree to pay all reasonable legal, audit and appraisal
fees and all other reasonable out-of-pocket charges and expenses incurred by
Administrative Agent and Lenders (including the fees and expenses of
Administrative Agent's counsel, advisors and consultants) in connection with the
negotiation, preparation, legal review and execution of each of the Financing
Documents, including but not limited to UCC and judgment lien searches and UCC
filings and fees for post-closing UCC and judgment lien searches. In addition,
Borrowers shall pay all such fees and expenses associated with any amendments,
modifications and terminations to the Financing Documents following closing. If
Administrative Agent or any Lender uses in-house counsel for any of these
purposes, Borrowers further agree that the Obligations include reasonable
charges for such work commensurate with the fees that would otherwise be charged
by outside legal counsel selected by Administrative Agent or such Lender for the
work performed.
(b) Borrowers agree to pay all out-of-pocket charges and expenses
incurred by Administrative Agent (including the fees and expenses of
Administrative Agent's counsel, advisers and consultants) in connection with the
administration of this Agreement and the other Financing Documents and the
credit facilities provided hereunder and thereunder, the administration,
enforcement, protection or preservation of any right or claim of Administrative
Agent, the termination of this Agreement, the termination of any Liens of
Administrative Agent on the Collateral, or the collection of any amounts due
under the Financing Documents, including any such charges and expenses incurred
in connection with any "work-out" or with any proceeding under the Bankruptcy
Code with respect to any Credit Party If Administrative Agent uses in-house
counsel for any of these purposes (i.e., for any task in connection with the
enforcement, protection or preservation of any right or claim of Administrative
Agent and Lenders and the collection of any amounts due under the Financing
Documents or in connection with any other purpose mentioned in the foregoing
sentence), Borrowers further agree that the Obligations include reasonable
charges for such work commensurate with the fees that would otherwise be charged
by outside legal counsel selected by Administrative Agent for the work
performed.
Credit and Security Agreement
73
(c) Borrowers hereby indemnify and agree to defend (with counsel
acceptable to Administrative Agent) and hold harmless Administrative Agent, each
Lender, and their respective shareholders, directors, partners, officers, agents
and employees (collectively in the singular, "Indemnitee") from and against any
liability, loss, cost, expense (including reasonable attorneys' fees and
expenses for both in-house and outside counsel), claim, damage, suit, action or
proceeding ever suffered or incurred by any Indemnitee or in which an Indemnitee
may ever be or become involved (whether as a party, witness or otherwise) (a)
arising from any Credit Party's failure to observe, perform or discharge any of
its covenants, obligations, agreements or duties under the Financing Documents,
arising from the breach of any of the representations or warranties contained in
any Financing Document, arising by reason of this Agreement, the other Financing
Documents or the transactions contemplated hereby or thereby, or (d) relating to
claims of any Person with respect to the Collateral; provided, however, Borrower
shall not be liable under this Section 12.17(c) to the extent such loss is
solely related to Indemnitee's gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction; and,
provided, further, however, that any amounts payable under this Section 12.17(c)
shall be without duplication of amounts otherwise payable under Section 2.8 and
shall exclude any amounts expressly excluded from payment or indemnification
under Section 2.8.
(d) Notwithstanding any contrary provision in this Agreement, the
obligations of Borrowers under this Section 12.17 shall survive the payment in
full of the Obligations and the termination of this Agreement. NO INDEMNITEE
SHALL BE RESPONSIBLE OR LIABLE TO THE BORROWERS OR TO ANY OTHER PARTY TO ANY
FINANCING DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY
OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY
OTHER FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
SECTION 12.18 RESERVED
SECTION 12.19 REINSTATEMENT. This Agreement shall remain in full force and
effect and continue to be effective should any petition or other proceeding be
filed by or against any Credit Party for liquidation or reorganization, should
any Credit Party become insolvent or make an assignment for the benefit of any
creditor or creditors or should an interim receiver, receiver, receiver and
manger or trustee be appointed for all or any significant part of any Credit
Party's assets, and shall continue to be effective or to be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a fraudulent conveyance, preference or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Obligations shall
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
Credit and Security Agreement
74
IN WITNESS WHEREOF, intending to be legally bound, and intending that this
document constitute an instrument executed and delivered under seal, the parties
hereto have caused this Agreement to be duly executed under seal by their
respective authorized officers as of the day and year first above written.
BORROWERS:
INSULET CORPORATION
By: /s/ Xxxxx XxXxxxx [SEAL]
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SUB-Q SOLUTIONS, INC.
By: /s/ Xxxxx XxXxxxx [SEAL]
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address:
0 Xxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
E-Mail:xxxxxx@xxxxxxx.xxx
AGENT:
XXXXXXX XXXXX CAPITAL,
a division of Xxxxxxx Xxxxx & Business
Financial Services Inc.,
as Administrative Agent and a Lender
By: /s/ Xxxxx Xxxx [SEAL]
---------------------------------
Name: Xxxxx Xxxx
-------------------------------
Title: Vice President
------------------------------
Address:
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Account Manager for MLC-HCF Insulet Corporation transaction
Facsimile: (000) 000-0000
E-Mail:MLC HCF XXXX@xx.xxx
With copies to:
Xxxxxxx Xxxxx Capital
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney, Healthcare Finance
Facsimile Number: (000) 000-0000
Xxxxxxx Xxxxx Capital
0000 Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney, Healthcare Finance
Facsimile Number: (000) 000-0000
Payment Account Designation:
LaSalle Bank
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
ABA #: 000000000
Account Name: MLBFS Healthcare Finance
Account #: 5800395088
Attention: Insulet Corporation
LENDERS:
XXXXXXX XXXXX CAPITAL,
A DIVISION OF XXXXXXX XXXXX BUSINESS
FINANCIAL SERVICES INC. AS LENDER
By: /s/ Xxxxx Xxxx [SEAL]
---------------------------------
Name: Xxxxx Xxxx
Title: Vice President
Address:
000 X. XxXxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Account Manager for MLC-HCF Insulet Corporation transaction
Facsimile: (000) 000-0000
E-Mail:MLC HCF XXXX@xx.xxx
With copies to:
Xxxxxxx Xxxxx Capital
000 X. XxXxxxx Xxxxxx, 00X Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney, Healthcare Finance
Facsimile Number: (000) 000-0000
Xxxxxxx Xxxxx Capital
0000 Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Group Senior Transaction Attorney, Healthcare Finance
Facsimile Number: (000) 000-0000
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxx [SEAL]
---------------------------------
Name: Xxxxx Xxxxx
Title: Duly Authorized Signature
Address:
General Electric Capital Corporation
00 Xxxxxxx Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx, SVP Risk
Facsimile: (000) 000-0000
E-Mail_______________________
With copy to:
General Electric Capital Corporation
c/o GE Healthcare Financial Services, Inc.
Xxx Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
OXFORD FINANCE CORPORATION
By: /s/ XX Xxxxxxxxxxx [SEAL]
---------------------------------
Name: XX Xxxxxxxxxxx
Title: CFO
Address:
Oxford Finance Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxx
Facsmile: (000) 000-0000
E-Mail: xxxxxxxxxxxx@xxxxxxxxxxxxx.xxx
SILICON VALLEY BANK
By: /s/ Xxxxxxxxxx X. Xxxxxxx [SEAL]
---------------------------------
Name: Xxxxxxxxxx X. Xxxxxxx
Title: Vice President
Address:
Silicon Valley Bank
0000 Xxxxxx Xxxxx, XX 000
Xxxxx Xxxxx, XX 00000
Attn: __________________________
Facsimile: (000) 000-0000
E-Mail: ________________________
ANNEXES, EXHIBITS, RIDERS AND SCHEDULES
ANNEXES
Annex A Commitment Annex
EXHIBITS
Exhibit A Assignment Agreement
Exhibit B Compliance Certificate
Exhibit C [RESERVED]
Exhibit D Notice of Borrowing
Exhibit E Payment Notification
RIDERS
Medical Device Rider
SCHEDULES
Schedule 2.1 Amortization Schedule
Schedule 3.1 Existence, Organizational ID Numbers, Foreign
Qualification, Prior Names
Schedule 3.4 Capitalization
Schedule 3.6 Litigation
Schedule 3.15 Consummation of Financing Documents; Broker
Schedule 3.17 Material Contracts
Schedule 3.18 Environmental Compliance
Schedule 3.19 Intellectual Property
Schedule 4.4 Insurance
Schedule 5.1 Permitted Indebtedness; Contingent Obligations
Schedule 5.2 Permitted Liens
Schedule 5.7 Permitted Investments
Schedule 5.8 Affiliate Transactions
Schedule 5.11 Business Description
Schedule 5.14 Deposit Accounts and Securities Accounts
Schedule 7.4 Post-Closing Obligations
Schedule 9.1 Collateral
Schedule 9.2 Location of Collateral
ANNEX A TO CREDIT AND AGREEMENT (COMMITMENT ANNEX)
TERM LOAN TERM LOAN
LENDER COMMITMENT AMOUNT COMMITMENT PERCENTAGE
------ ----------------- ---------------------
Xxxxxxx Xxxxx Capital $14,000,000 46.6666%
General Electric Capital Corporation $ 6,000,000 20%
Oxford Finance Corporation $ 5,000,000 16.6667%
Silicon Valley Bank $ 5,000,000 16.6667%
----------- -------
TOTALS $30,000,000 100%
=========== =======
1
EXHIBIT A TO CREDIT AGREEMENT (ASSIGNMENT AGREEMENT)
This Assignment Agreement (this "ASSIGNMENT AGREEMENT") is entered into as
of _____, _____ by and between the Assignor named on the signature page
hereto("ASSIGNOR") and the Assignee named on the signature page hereto
("ASSIGNEE"). Reference is made to the dated as of December 27, 2006 (as amended
or otherwise modified from time to time, the "CREDIT AGREEMENT") among INSULET
CORPORATION, a Delaware corporation, SUB-Q SOLUTIONS, INC., a Delaware
corporation, and any additional Borrower that may hereafter be added to this
Agreement (each individually as a "Borrower" and collectively as "Borrowers"),
XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES
INC., individually as a Lender, and as Administrative Agent, and the financial
institutions or other entities from time to time parties hereto, each as a
Lender. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Credit Agreement.
Assignor and Assignee hereby agree as follows:
1. Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor the interests set forth on the schedule
attached hereto (the "SCHEDULE"), in and to Assignor's rights and obligations
under the Credit Agreement as of the effective date set forth on the Schedule
(the "EFFECTIVE DATE"). Such purchase and sale is made without recourse,
representation or warranty except as expressly set forth herein. On the
Effective Date, Assignee shall pay to Assignor an amount equal to the aggregate
amounts assigned pursuant to the Schedule (exclusive of unfunded portions of the
Term Loan Commitment).
2. Assignor (a) represents that as of the Effective Date, that it is the
legal and beneficial owner of the interests assigned hereunder free and clear of
any adverse claim, (b) makes no other representation or warranty and assumes no
responsibility with respect to any statement, warranties or representations made
in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Financing Documents or any other instrument or document
furnished pursuant thereto; and (c) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any other
Credit Party or any other Person or the performance or observance by any Credit
Party of its Obligations under the Credit Agreement or any other Financing
Documents or any other instrument or document furnished pursuant thereto.
3. Assignee (a) confirms that it has received a copy of the Credit
Agreement and the other Financing Documents, together with copies of the most
recent financial statements delivered pursuant thereto and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (b) agrees that it will,
independently and without reliance upon Administrative Agent, Assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (c) appoints and authorizes
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under the Credit Agreement and the other Financing
Documents as are delegated to Administrative Agent by the
2
terms thereof, together with such powers as are reasonably incidental thereto;
(d) agrees that it will perform in accordance with their terms all obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Lender; (e) represents that on the date of this Assignment Agreement it is not
presently aware of any facts that would cause it to make a claim under the
Credit Agreement; (f) represents and warrants that Assignee is not a Foreign
Lender or, if it is a Foreign Lender, (i) that it has delivered to
Administrative Agent the documentation required to be delivered to
Administrative Agent by Section 13 below and (ii) that if it is claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest", (I) it is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, (Il) it is not a
10-percent shareholder of any Credit Party within the meaning of Section
881(c)(3)(B) or Section 871(h)(3)(B) of the Code, (III) it is not a controlled
foreign corporation related to any Credit Party within the meaning of Section
881(c)(3)(C) of the Code, and (IV) it is not a conduit entity participating in a
conduit financing arrangement (as defined in Section 1.881-3 of the Code
Treasury Regulations); (g) represents and warrants that Assignee is (or, upon
receipt of the required consents hereto by Administrative Agent and Borrowers
will become) an Eligible Assignee; and (h) represents and warrants that it has
experience and expertise in the making or the purchasing of loans such as the
Loans, and that it has acquired the interests described herein for its own
account and without any present intention of selling all or any portion of such
interests.
4. Each of Assignor and Assignee represents and warrants to the other party
hereto that it has full power and authority to enter into this Assignment
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Assignment Agreement has been duly authorized,
executed and delivered by such party and that this Assignment Agreement
constitutes a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by general
principles of equity.
5. Upon the effectiveness of this Assignment Agreement pursuant to Section
13 below, (a) Administrative Agent shall register Assignee as a Lender, pursuant
to the terms of the Credit Agreement, (b) Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment Agreement, have
the rights and obligations of a Lender thereunder, (c) Assignor shall, to the
extent provided in this Assignment Agreement, relinquish its rights and be
released from its obligations under the Credit Agreement, and (d) Administrative
Agent shall thereafter make all payments in respect of the interest assigned
hereby (including payments of principal, interest, fees and other amounts) to
Assignee. Assignor and Assignee shall make all appropriate adjustments in
payments for periods prior to the Effective Date by Administrative Agent or with
respect to the making of this assignment directly between themselves.
6. Each of Assignor and Assignee hereby agrees from time to time, upon
request of the other such party hereto, to take such additional actions and to
execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Assignment Agreement.
7. Neither this Assignment Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party (including, if
3
applicable, any party required to evidence its consent to or acceptance of this
Assignment Agreement) against whom enforcement of such change, waiver, discharge
or termination is sought.
8. For the purposes hereof and for purposes of the Credit Agreement, the
notice address of Assignee shall be as set forth on the Schedule. Any notice or
other communication herein required or permitted to be given shall be in writing
and delivered in accordance with the notice provisions of the Credit Agreement.
9. In case any provision in or obligation under this Assignment Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
11. This Assignment Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
12. This Assignment Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
hereto were upon the same agreement.
13. This Assignment Agreement shall become effective as of the Effective
Date upon the satisfaction of each of the following conditions: (a) the
execution of a counterpart hereof by each of Assignor and Assignee, (b) the
execution of a counterpart hereof by Administrative Agent and each Borrower as
evidence of its consent hereto to the extent required pursuant to Section
12.6(a) of the Credit Agreement, (c) the receipt by Administrative Agent of the
processing fee referred to in Section 12.6(c) of the Credit Agreement, (d) in
the event Assignee is a Foreign Lender, the receipt by Administrative Agent of
United States Internal Revenue Service Forms W-8ECI, W-8BEN or W-8IMY (as
applicable), and such other forms, certificates or documents, including those
prescribed by the United States Internal Revenue Service, properly completed and
executed by Assignee, certifying as to Assignee's entitlement to exemption from
withholding or deduction of Taxes, and (e) the receipt by Administrative Agent
of originals or telecopies of the counterparts described above.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
4
The parties hereto have caused this Assignment Agreement to be executed and
delivered as of the date first written above.
ASSIGNOR:
XXXXXXX XXXXX CAPITAL,
a division of Xxxxxxx Xxxxx Business
Financial Services Inc., as Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ASSIGNEE:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Consented to:
XXXXXXX XXXXX CAPITAL, a division
of Xxxxxxx Xxxxx Business Financial
Services Inc., as Administrative Agent
and Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE TO ASSIGNMENT AGREEMENT
Assignor: Xxxxxxx Xxxxx Capital
Assignee: _____________________
Effective Date: _____________________
Credit and Security Agreement dated as of December 27, 2006 (as amended or
otherwise modified from time to time, the "CREDIT AGREEMENT") among INSULET
CORPORATION, a Delaware corporation, SUB-Q SOLUTIONS, INC., a Delaware
corporation, and any additional Borrower that may hereafter be added to the
Credit Agreement (each individually as a "BORROWER" and collectively as
"BORROWERS"), XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX BUSINESS
FINANCIAL SERVICES INC., individually as a Lender, and as Administrative Agent,
and the financial institutions or other entities from time to time parties
thereto, each as a Lender.
Interests Assigned:
COMMITMENT/LOAN TERM LOAN
--------------- ---------
Assignor Amounts $________
Amounts Assigned $________
Assignor Amounts
(post-assignment) $________
Closing Fee: $__________
Assignee Information:
Address for Notices: Address for Payments:
_____________________________________
_____________________________________ Bank: __________________________________
_____________________________________ ABA #: _________________________________
Attention: __________________________ Account #: _____________________________
Telephone: __________________________ Reference: _____________________________
Facsimile: __________________________
EXHIBIT B TO CREDIT AND SECURITY AGREEMENT (COMPLIANCE CERTIFICATE)
COMPLIANCE CERTIFICATE
DATE:_____________, ____
This certificate is given by __________________, a Responsible Officer of
Insulet Corporation ("BORROWER REPRESENTATIVE"), pursuant to that certain dated
as of December 27, 2006 among Borrower Representative, Sub-Q Solutions, Inc.,
and any additional Borrower that may be a party thereto or from time to time be
added thereto (collectively, "BORROWERS"), Xxxxxxx Xxxxx Capital, a division of
Xxxxxxx Xxxxx Business Financial Services Inc., individually as a Lender and as
Administrative Agent, and the financial institutions or other entities from time
to time parties thereto, each as a Lender (as such agreement may have been
amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"). Capitalized terms used herein without definition shall have
the meanings set forth in the Credit Agreement.
The undersigned Responsible Officer hereby certifies to Administrative
Agent and Lenders that:
(a) the financial statements delivered with this certificate in accordance
with Section 4.1 of the Credit Agreement fairly present in all material respects
the results of operations and financial condition of Borrowers and their
Subsidiaries as of the dates and the accounting period covered by such financial
statements;
(b) I have reviewed the terms of the Credit Agreement and have made, or
caused to be made under my supervision, a review in reasonable detail of the
transactions and conditions of Borrowers and their Subsidiaries during the
accounting period covered by such financial statements;
(c) such review has not disclosed the existence during or at the end of
such accounting period, and I have no knowledge of the existence as of the date
hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth in Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action Borrowers have taken, are undertaking and propose to take with
respect thereto;
(d) Except as noted on Schedule 2 attached hereto, the Credit Agreement
contains a complete and accurate list of all business locations of Borrowers and
Guarantors and all names under which Borrowers or Guarantors currently conduct
business; Schedule 2 specifically notes any changes in the names under which
Borrowers or Guarantors conduct business;
(e) Except as noted on Schedule 3 attached hereto, the undersigned has no
knowledge of any federal or state tax liens having been filed against the
Borrowers, Guarantors or any Collateral;
(f) Except as noted on Schedule 3 attached hereto, the undersigned has no
knowledge of any failure of the Borrowers or Guarantors to make required
payments of withholding or other tax obligations of the Borrowers or Guarantors
during the accounting period to which the attached statements pertain or any
subsequent period.
(g) If the Credit Agreement contemplates a lien on the Deposit Accounts and
Securities Accounts of the Borrowers and/or Guarantors in favor of
Administrative Agent, Schedule 4 attached hereto contains a complete and
accurate statement of all Deposit Accounts and Securities Accounts maintained by
Borrowers or Guarantors;
(h) Except as described in the Credit Agreement or in Schedule 5 attached
hereto, the undersigned has no knowledge of any current, pending or threatened:
(i) Litigation against the Borrowers or Guarantors that (i) if adversely
determined, could reasonably be expected to result in damages or costs to any
Borrower or other Credit Party of Seven Hundred Fifty Thousand Dollars
($750,000) or more or (ii) if adversely determined, would reasonably be expected
to have a Material Adverse Effect with respect to any Borrower or any other
Credit Party;
(j) default by any Credit Party under any Material Contract to which it is
a party; and
(k) Except as noted on Schedule 6 attached hereto, no Borrower has
acquired, by purchase, by the approval or granting of any application for
registration (whether or not such application was previously disclosed to
Administrative Agent by Borrowers) or otherwise, any Intellectual Property that
is registered with any United States or foreign Governmental Authority, or has
filed with any such United States or foreign Governmental Authority, any new
application for the registration of any Intellectual Property, or acquired
rights under a license as a licensee with respect to any such registered
Intellectual Property (or any such application for the registration of
Intellectual Property) owned by another Person, that has not previously been
reported to Administrative Agent on Schedule 3.19 to the Credit Agreement or any
Schedule 6 to any previous Compliance Certificate delivered by Borrower
Representative to Administrative Agent.
2
The foregoing certifications and computations are made as of __________,
____ (end of month) and delivered this ______ day of ___________________, 20__.
Sincerely,
By
-------------------------------------
Name
-----------------------------------
Title
----------------------------------
3
SCHEDULES TO COMPLIANCE CERTIFICATE
Schedule 1 - Non-Compliance with Covenants
Schedule 2 - Business Locations and Names of Borrowers and Guarantors
Schedule 3 - Tax Liens; Unpaid Tax or Withholding Obligations
Schedule 4 - List of all Deposit Accounts and Securities Accounts of Borrowers
and Guarantors
Schedule 5 - Pending Material Litigation; Defaults under Material Contracts
Schedule 6 - Newly Acquired Intellectual Property Licenses
EXHIBIT C TO CREDIT AND SECURITY AGREEMENT
[RESERVED]
EXHIBIT D TO CREDIT AND SECURITY AGREEMENT (NOTICE OF BORROWING)
BORROWER REPRESENTATIVE
DATE: __________
This certificate is given by __________________, a Responsible Officer of
Insulet Corporation ("BORROWER REPRESENTATIVE"), pursuant to Section 2.1(b)(i)
of that certain dated as of December 27, 2006 among Borrower Representative,
Sub-Q Solutions, Inc., and any additional Borrower that may be a party thereto
or from time to time be added thereto (collectively, "BORROWERS"), the Lenders
from time to time party thereto and Xxxxxxx Xxxxx Capital, a division of Xxxxxxx
Xxxxx Business Financial Services Inc., as Administrative Agent for Lenders (as
such agreement may have been amended, restated, supplemented or otherwise
modified from time to time the "CREDIT AGREEMENT"). Capitalized terms used
herein without definition shall have the meanings set forth in the Credit
Agreement.
The undersigned Responsible Officer hereby gives notice to Administrative
Agent of Borrower Representative's request to on December 27, 2006 borrow Thirty
Million Dollars ($30,000,000) of the Term Loan.
The undersigned officer hereby certifies that, both before and after giving
effect to the request above (a) each of the conditions precedent set forth in
Section 7.1 and 7.2 have been satisfied, (b) all of the representations and
warranties contained in the Credit Agreement and the other Financing Documents
are true, correct and complete in all material respects as of the date hereof,
except to the extent such representation or warranty relates to a specific date,
in which case such representation or warranty is true, correct and complete as
of such earlier date, and (c) no Default or Event of Default has occurred and is
continuing on the date hereof.
IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate this day of December, 2006.
By:
------------------------------------
Name:
----------------------------------
Title: Authorized Signatory for Borrower
Representative
EXHIBIT E TO CREDIT AND SECURITY AGREEMENT (PAYMENT NOTIFICATION)
BORROWER REPRESENTATIVE
DATE: __________
Reference is hereby made to the dated December 27, 2006 among the
undersigned and Xxxxxxx Xxxxx Capital, a division of Xxxxxxx Xxxxx Business
Financial Services Inc., as Administrative Agent and the financial institutions
party thereto. Capitalized terms used here have the meanings ascribed thereto in
the Credit Agreement.
Please be advised that funds in the amount of $__________ will be wire
transferred to Administrative Agent on ______________, 200__. Such funds shall
constitute [an optional] [a mandatory] prepayment of the Term Loans, with such
prepayments to be applied in the manner specified in Section 2.1(a)(iii). [Such
mandatory prepayment is being made pursuant to Section _______________ of the
Credit Agreement.]
Fax to MLC Operations 000-000-0000 no later than noon Chicago time.
Note: Funds must be received no later than noon Chicago time for same day
application
Wire Instructions: ____________________________________
Bank Name: LaSalle Bank National Association
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
ABA# 000000000
Account Name: MLBFS Healthcare Finance
Account #: 5800395088
Reference: Insulet Corporation
Address: Xxxxxxx Xxxxx Capital
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate this ________ day of ______________, ___.
By:
------------------------------------
Name:
----------------------------------
Title: Authorized Signatory for Borrower
Representative
MEDICAL DEVICE RIDER
MEDICAL DEVICE RIDER
This Medical Device Rider is made a part of and is incorporated by
reference into that certain (the "CREDIT AGREEMENT") dated December 27, 2006 by
and among INSULET CORPORATION, a Delaware corporation, SUB-Q SOLUTIONS, INC., a
Delaware corporation (individually as a Borrower and collectively as Borrowers),
XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES
INC., individually as a Lender, and as Administrative Agent, and the financial
institutions or other entities from time to time parties hereto, each as a
Lender.
In consideration of the premises and the agreements, provisions and
covenants herein contained and in the Credit Agreement, Borrowers, Lenders and
Administrative Agent agree as follows:
SECTION 1 DEFINITIONS. All capitalized terms not otherwise defined in this
Rider shall have the meanings given them in the Credit Agreement.
SECTION 1.1 ADDITIONAL DEFINED TERMS. The following additional definitions
are hereby appended to Section 1.1 of the Credit Agreement:
"CORRECTION" means repair, modification, adjustment, relabeling,
destruction or inspection (including patient monitoring) of a product without
its physical removal to some other location.
"DEVICE APPLICATION" means a 510(k) premarket notification or premarket
approval (PMA) application, as appropriate, as those terms are defined in the
FDCA.
"FDA" means the Food and Drug Administration of the United States of
America or any successor entity thereto.
"FDCA" means the Federal Food, Drug, and Cosmetic Act, as amended, 21
U.S.C. Section 301 et seq. and all regulations promulgated thereunder, including
but not limited to, 21 C.F.R. Parts 803, 806, 807, 812, and 820.
"GOOD MANUFACTURING PRACTICES" means current good manufacturing practices,
as set forth in the Quality System Regulation, 21 C.F.R. Part 820.
"MARKET WITHDRAWAL" means a Person's Removal or Correction of a distributed
product which involves a minor violation that would not be subject to legal
action by the FDA or which involves no violation, e.g., normal stock rotation
practices, routine equipment adjustments and repairs, etc.
"PERMITS" means registrations, listing, licenses, certificates,
accreditations, product clearances or approvals, provider numbers or provider
authorizations, marketing authorizations,
1
other authorizations, registrations, permits, consents and approvals or
exemptions thereto required in connection with the conduct of any Borrower's or
any Subsidiary's business or to comply with any applicable Laws, including,
without limitation, establishment registrations, device listings,
Investigational Device Exemptions (IDEs), 510(k) exemptions, 510(k) clearances,
and PMA approvals, as those terms are defined in the FDCA and implementing
regulations, and those issued by State governments for the conduct of any
Borrower's or any Subsidiary's business.
"PRODUCTS" means any products manufactured, sold, developed, tested or
marketed by any Borrower or any of its Subsidiaries, including without
limitation, those products set forth on Exhibit F.
"RECALL" means a Person's Removal or Correction of a marketed product that
the FDA considers to be in violation of the laws it administers and against
which the FDA would initial legal action, e.g., seizure.
"REMOVAL" means the physical removal of a device from its point of use to
some other location for repair, modification, adjustment, relabeling,
destruction, or inspection.
"REQUIRED PERMIT" means a Permit issued or required under Laws applicable
to the business of any Borrower or any of its Subsidiaries or necessary in the
manufacturing, importing, exporting, possession, ownership, warehousing,
marketing, promoting, sale, labeling, furnishing, distribution or delivery of
goods or services under Laws applicable to the business of any Borrower or any
of its Subsidiaries or any Device Application (including without limitation, at
any point in time, all licenses, approvals and permits issued by the FDA or any
other applicable Governmental Entity necessary for the testing, manufacture,
marketing or sale of any Product by any applicable Borrower(s) as such
activities are being conducted by such Borrower(s) with respect to such Product
at such time).
"STOCK RECOVERY" means a Person's Removal or Correction of a product that
has not been marketed or that has not left the direct control of the firm, i.e.,
the product is located on the premises owned by, or under the control of, the
firm and no portion of the lot has been released for sale or use.
SECTION 2 ADDITIONAL REPRESENTATIONS AND WARRANTIES. The following is
hereby appended to the Credit Agreement as new Section 3.24:
SECTION 3.24 COMPLIANCE OF PRODUCTS.
(a) Each Credit Party:
(i) has obtained all Required Permits, or has contracted with third
parties holding Required Permits, necessary for compliance with all Laws,
including the FDCA, and all such Required Permits are current;
(ii) has been operating in compliance with the FDCA, including but not
limited to, reporting to FDA of device malfunctions and/or device-related
serious injuries or
2
deaths pursuant to 21 C.F.R. 803 and reporting to FDA of corrections or removals
pursuant to 21 C.F.R. 806;
(iii) warrants and represents that none of its officers, directors,
employees, shareholders, their agents or affiliates has made an untrue statement
of material fact or fraudulent statement to the FDA or failed to disclose a
material fact required to be disclosed to the FDA, committed an act, made a
statement, or failed to make a statement that could reasonably be expected to
provide a basis for the FDA to invoke its policy respecting "Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities," set forth in 56
Fed. Regulation 46191 (September 10, 1991); and
(iv) has not received any written notice that any Governmental
Authority, including without limitation the FDA, the Office of the Inspector
General of HHS or the United States Department of Justice has commenced any
action against a Credit Party, any action to enjoin a Credit Party, their
officers, directors, employees, shareholders or their agents and Affiliates,
from conducting their businesses at any facility owned or used by them or to
seek any material civil penalty, injunction, seizure or criminal action.
(b) None of the Credit Parties, their Affiliates or any of their respective
agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law,
(ii) engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person.
No Credit Party nor, to the knowledge of any Credit Party, any of its Affiliates
or agents acting or benefiting in any capacity in connection with the
transactions contemplated by this Agreement, (x) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages
in any transaction relating to, any property or interest in property blocked
pursuant to Executive Order No. 13224, any similar executive order or other
AntiTerrorism Law.
(c) With respect to Products:
(i) Each Product is not adulterated or misbranded within the meaning
of the FDCA;
(ii) Each Product is not an article prohibited from introduction into
interstate commerce under the provisions of Sections 510(k) or 515 of the FDCA;
(iii) Each Product has been and/or shall be manufactured, imported,
possessed, owned, warehoused, marketed, promoted, sold, labeled, furnished,
distributed and marketed in accordance with all applicable Permits and Laws,
including but not limited to the FDCA;
(iv) Each Product has been and/or shall be designed and manufactured
in accordance with Good Manufacturing Practices as defined in the Quality System
Regulation (21 C.F.R. Part 820);
(v) Without limiting the generality of Section 3.25(a)(i) above, with
respect to any Product being tested or manufactured by any Borrower, Borrower
has received, and such
3
Product shall be the subject of, all Required Permits needed in connection with
the testing or manufacture of such Product as such testing is currently being
conducted by or on behalf of Borrower, and Borrowers have not received any
notice from any applicable Government Authority, specifically including the FDA,
that such Government Authority has commenced any action seeking to revoke or
withdraw any such Required Permit or that any such Required Permit has been
revoked or withdrawn, nor has any such Governmental Authority issued any order
stating that the development, testing and/or manufacturing of such Product by
Borrower should cease; and
(vi) Without limiting the generality of Section 3.25(a)(i) above, with
respect to any Product marketed or sold by any Borrower, Borrower shall have
received, and such Product shall be the subject of, all Required Permits needed
in connection with the marketing and sales of such Product as currently being
marketed or sold by Borrower, and Borrowers have not received any notice from
any applicable Governmental Authority, specifically including the FDA, that such
Governmental Authority has commenced any action seeking to revoke or withdraw
any such Required Permit or approval or that any such Required Permit has been
revoked or withdrawn, nor has any such Governmental Authority issued any order
stating that such marketing or sales of such Product cease or that such Product
be withdrawn from the marketplace.
SECTION 3 ADDITIONAL AFFIRMATIVE COVENANTS. The following is hereby
appended to the Credit Agreement as new Section 4.16:
SECTION 4.16 COVENANTS REGARDING PRODUCTS AND COMPLIANCE WITH REQUIRED
PERMITS
Without limiting the generality of Section 4.5, in connection with the
development, testing, manufacture, marketing or sale of each and any Product by
any Borrower, Borrowers shall comply fully and completely in all material
respects with all Required Permits at all times issued by any Government
Authority, specifically including the FDA, with respect to such development,
testing, manufacture, marketing or sales of such Product by Borrower as such
activities are at any such time being conducted by Borrowers.
SECTION 4 PERMITTED INVESTMENTS. The definition of Permitted Investments as
used in the Credit Agreement is hereby modified to include the following:
purchases by Borrowers of the rights to test, develop, manufacture, sell or
market any new pharmaceutical, drug or medical device (and/or any Intellectual
Property related thereto) that will upon such purchase become a Product of
Borrowers.
SECTION 5 EVENTS OF DEFAULT. In addition to the events listed in Section
10.1, the occurrence of any of the following conditions and/or events, whether
voluntary or involuntary, by operation of law or otherwise, shall constitute an
"Event of Default" under the Credit Agreement:
(a) the institution of any proceeding by FDA or similar Governmental
Authority to order the withdrawal of any Product or Product category from the
market or to
4
enjoin Credit Party or any representative of a Credit Party from manufacturing,
marketing, selling or distributing any Product or Product category; or
(b) the institution of any action or proceeding by any FDA or any
other Governmental Authority to revoke, suspend, reject, withdraw, limit, or
restrict any Required Permit held by a Credit Party or any representative of a
Credit Party, to the extent such loss of such Required Permit would have a
Material Adverse Effect.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
5
IN WITNESS WHEREOF, intending to be legally bound, and intending that this
document constitute an instrument executed and delivered under seal, the
undersigned have executed this document under seal as of the date of the Credit
Agreement.
BORROWERS:
INSULET CORPORATION
By: /s/ Xxxxx XxXxxxx [SEAL]
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SUB-Q SOLUTIONS, INC.
By: /s/ Xxxxx XxXxxxx [SEAL]
---------------------------------
Name:
-------------------------------
Title:
------------------------------
AGENT:
XXXXXXX XXXXX CAPITAL,
a division of Xxxxxxx Xxxxx Business
Financial Services Inc.,
as Administrative Agent and a Lender
By: [SEAL]
---------------------------------
Name:
-------------------------------
Title:
------------------------------
LENDERS:
XXXXXXX XXXXX CAPITAL,
a division of Xxxxxxx Xxxxx Business
Financial Services Inc.,
as Lender
By: /s/ Xxxxx Xxxx [SEAL]
---------------------------------
Name: Xxxxx Xxxx
-------------------------------
Title: Vice President
------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxx [SEAL]
---------------------------------
Name: Xxxxx Xxxxx
-------------------------------
Title: Duly Authorized Signator
------------------------------
OXFORD FINANCE CORPORATION
By: /s/ X.X. Attenburger [SEAL]
---------------------------------
Name: X.X. Attenburger
-------------------------------
Title: CFO
------------------------------
SILICON VALLEY BANK
By: /s/ Xxxxxxxxxx X. Xxxxxxx [SEAL]
---------------------------------
Name: Xxxxxxxxxx X. Xxxxxxx
-------------------------------
Title: Vice President
------------------------------
