Exhibit 10.68
Execution Copy
CREDIT AGREEMENT
Dated as of December 30, 2002
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS THE LENDERS
and
BANK OF AMERICA, N.A.
AS THE AGENT
and
BANC OF AMERICA SECURITIES LLC
AS THE SOLE LEAD ARRANGER AND BOOK MANAGER
and
CONGRESS FINANCIAL CORPORATION (CENTRAL)
AS THE SYNDICATION AGENT
and
STANDARD FEDERAL BANK NATIONAL ASSOCIATION,
acting by and through its agent,
LASALLE BUSINESS CREDIT, INC.
AS THE DOCUMENTATION AGENT
and
ANDRX CORPORATION
AS THE PARENT GUARANTOR
and
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS THE BORROWERS
and
EACH OF ITS OTHER SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS GUARANTORS
TABLE OF CONTENTS
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ARTICLE 1 LOANS AND LETTERS OF CREDIT.......................................................1
1.1 Total Facility........................................................................1
1.2 Revolving Loans.......................................................................2
1.3 Letters of Credit.....................................................................6
1.4 Bank Products........................................................................10
1.5 All Obligations to Constitute Joint and Several Obligations..........................10
1.6 Increased Maximum Revolver Amount....................................................14
ARTICLE 2 INTEREST AND FEES................................................................15
2.1 Interest.............................................................................15
2.2 Continuation and Conversion Elections................................................16
2.3 Maximum Interest Rate................................................................17
2.4 Closing Fee..........................................................................17
2.5 Unused Line Fee......................................................................17
2.6 Letter of Credit Fee.................................................................18
ARTICLE 3 PAYMENTS AND PREPAYMENTS.........................................................18
3.1 Revolving Loans......................................................................18
3.2 Termination of Facility..............................................................19
3.3 LIBOR Rate Loan Prepayments..........................................................20
3.4 Payments by the Borrowers............................................................20
3.5 Payments as Revolving Loans..........................................................20
3.6 Apportionment, Application and Reversal of Payments..................................20
3.7 Indemnity for Returned Payments......................................................21
3.8 Agent's and Lenders' Books and Records; Monthly Statements...........................21
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY...........................................22
4.1 Taxes................................................................................22
4.2 Illegality...........................................................................23
4.3 Increased Costs and Reduction of Return..............................................24
4.4 Funding Losses.......................................................................24
4.5 Inability to Determine Rates.........................................................25
4.6 Certificates of Agent................................................................25
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TABLE OF CONTENTS
(continued)
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4.7 Survival.............................................................................25
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES................................25
5.1 Books and Records....................................................................25
5.2 Financial Information................................................................26
5.3 Notices to the Lenders...............................................................30
5.4 Collateral Reporting.................................................................32
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS...........................................33
6.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents.33
6.2 Validity and Priority of Security Interest...........................................34
6.3 Organization and Qualification.......................................................34
6.4 Corporate Name; Prior Transactions...................................................34
6.5 Subsidiaries and Affiliates..........................................................35
6.6 Financial Statements and Projections.................................................35
6.7 Capitalization.......................................................................36
6.8 Solvency.............................................................................36
6.9 Debt.................................................................................36
6.10 Distributions........................................................................36
6.11 Real Estate; Leases..................................................................36
6.12 Proprietary Rights...................................................................36
6.13 Trade Names..........................................................................37
6.14 Litigation...........................................................................37
6.15 Labor Disputes.......................................................................37
6.16 Environmental Laws...................................................................37
6.17 No Violation of Law..................................................................39
6.18 No Default...........................................................................39
6.19 ERISA Compliance.....................................................................40
6.20 Taxes................................................................................41
6.21 Regulated Entities...................................................................41
6.22 Use of Proceeds; Margin Regulations..................................................41
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TABLE OF CONTENTS
(continued)
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6.23 No Material Adverse Change...........................................................41
6.24 Full Disclosure......................................................................41
6.25 Material Agreements..................................................................42
6.26 Bank Accounts........................................................................42
6.27 Governmental Authorization...........................................................42
6.28 Food and Drug Laws...................................................................42
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS...............................................43
7.1 Taxes and Other Obligations..........................................................43
7.2 Legal Existence and Good Standing; Name Changes......................................44
7.3 Compliance with Law and Agreements; Maintenance of Licenses..........................44
7.4 Maintenance of Property; Inspection of Property......................................44
7.5 Insurance............................................................................45
7.6 Insurance and Condemnation Proceeds..................................................46
7.7 Environmental Laws...................................................................46
7.8 Food and Drug Laws...................................................................48
7.9 Compliance with ERISA................................................................49
7.10 Mergers, Consolidations or Sales.....................................................49
7.11 Distributions; Capital Change; Restricted Investments................................51
7.12 Transactions Affecting Collateral or Obligations.....................................52
7.13 Guaranties...........................................................................52
7.14 Debt.................................................................................52
7.15 Prepayment...........................................................................53
7.16 Transactions with Affiliates.........................................................53
7.17 Investment Banking and Finder's Fees.................................................53
7.18 Business Conducted...................................................................53
7.19 Liens................................................................................53
7.20 Sale and Leaseback Transactions......................................................54
7.21 New Subsidiaries.....................................................................54
7.22 Fiscal Year..........................................................................54
7.23 Capital Expenditures.................................................................54
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TABLE OF CONTENTS
(continued)
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7.24 Fixed Charge Coverage Ratio; Minimum Availability....................................55
7.25 Use of Proceeds......................................................................56
7.26 Further Assurances...................................................................56
ARTICLE 8 CONDITIONS OF LENDING............................................................56
8.1 Conditions Precedent to Making of Loans on the Closing Date..........................56
8.2 Conditions Precedent to Each Loan....................................................61
ARTICLE 9 DEFAULT; REMEDIES................................................................62
9.1 Events of Default....................................................................62
9.2 Remedies.............................................................................65
ARTICLE 10 TERM AND TERMINATION.............................................................67
10.1 Term and Termination.................................................................67
ARTICLE 11 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS.....................67
11.1 Amendments and Waivers...............................................................67
11.2 Assignments; Participations..........................................................69
ARTICLE 12 THE AGENT........................................................................71
12.1 Appointment and Authorization........................................................71
12.2 Delegation of Duties.................................................................72
12.3 Liability of Agent...................................................................72
12.4 Reliance by Agent....................................................................72
12.5 Notice of Default....................................................................73
12.6 Credit Decision......................................................................73
12.7 Indemnification......................................................................73
12.8 Agent in Individual Capacity.........................................................74
12.9 Successor Agent......................................................................74
12.10 Withholding Tax......................................................................75
12.11 Collateral Matters...................................................................76
12.12 Restrictions on Actions by Lenders; Sharing of Payments..............................77
12.13 Agency for Perfection................................................................78
12.14 Payments by Agent to Lenders.........................................................78
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TABLE OF CONTENTS
(continued)
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12.15 Settlement...........................................................................79
12.16 Letters of Credit; Intra-Lender Issues...............................................83
12.17 Concerning the Collateral and the Related Loan Documents.............................85
12.18 Field Audit and Examination Reports; Disclaimer by Lenders...........................85
12.19 Relation Among Lenders...............................................................86
12.20 Additional Agents....................................................................86
ARTICLE 13 MISCELLANEOUS....................................................................86
13.1 No Waivers; Cumulative Remedies......................................................86
13.2 Severability.........................................................................87
13.3 Governing Law; Choice of Forum; Service of Process...................................87
13.4 Waiver of Jury Trial.................................................................88
13.5 Survival of Representations and Warranties...........................................88
13.6 Other Security and Guaranties........................................................88
13.7 Fees and Expenses....................................................................89
13.8 Notices..............................................................................89
13.9 Waiver of Notices....................................................................91
13.10 Binding Effect.......................................................................91
13.11 Indemnity of the Agent and the Lenders by the Borrowers..............................91
13.12 Limitation of Liability..............................................................92
13.13 Final Agreement......................................................................93
13.14 Counterparts.........................................................................93
13.15 Captions.............................................................................93
13.16 Right of Setoff......................................................................93
13.17 Confidentiality......................................................................94
13.18 Conflicts with Other Loan Documents..................................................94
13.19 The Administrative Borrower..........................................................94
13.20 Exculpation..........................................................................95
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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A DEFINED TERMS
EXHIBIT A FORM OF REVOLVING LOAN NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FINANCIAL STATEMENTS
EXHIBIT D FORM OF NOTICE OF BORROWING
EXHIBIT E FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT G FORM OF GUARANTOR JOINDER AGREEMENT
EXHIBIT H FORM OF INCREASED MAXIMUM REVOLVER AMOUNT ACTIVATION NOTICE
EXHIBIT I FORM OF NEW LENDER SUPPLEMENT
SCHEDULE 1.1 - ASSIGNED CONTRACTS (ANNEX A - DEFINED TERMS)
SCHEDULE 1.2 - LENDERS' COMMITMENTS (ANNEX A - DEFINED TERMS)
SCHEDULE 1.3 - INVESTMENT GUIDELINES (ANNEX A - DEFINED TERMS)
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 6.4 - CORPORATE NAME; PRIOR TRANSACTIONS
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.7 - CAPITALIZATION
SCHEDULE 6.9 - DEBT
SCHEDULE 6.11 - REAL ESTATE; LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.13 - TRADE NAMES
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16(a) - ENVIRONMENTAL LAWS AND COMPLIANCE
SCHEDULE 6.16(c) - ENVIRONMENTAL LAWS - CONTAMINANTS
SCHEDULE 6.16(f) - ENVIRONMENTAL LAWS - UNDERGROUND STORAGE
SCHEDULE 6.16(g) - ENVIRONMENTAL - SPILLS, RELEASES AND DISCHARGES
SCHEDULE 6.16(h) - ENVIRONMENTAL LAWS - SETTLEMENT AGREEMENTS
SCHEDULE 6.23 - NO MATERIAL ADVERSE CHANGE
SCHEDULE 6.25 - MATERIAL AGREEMENTS
SCHEDULE 6.26 - BANK ACCOUNTS
SCHEDULE 6.28 - FOOD AND DRUG LAWS
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CREDIT AGREEMENT
This Credit Agreement, dated as of December 30, 2002, (this
"Agreement") among the financial institutions from time to time parties hereto
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), Bank of America, N.A. with an office at 000
Xxxxxxxxx Xxxxxx, XX, Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, as agent for the
Lenders (in its capacity as agent, the "Agent"), Andrx Corporation, a Delaware
corporation, with offices at 0000 Xxxxxx Xxxx, Xxxxxx, Xxxxxxx 00000, (the
"Parent Guarantor"), and each of the Parent Guarantor's Subsidiaries identified
on the signature pages hereof as Borrowers and each of the Parent Guarantor's
other Subsidiaries identified on the signature pages hereof as Guarantors.
W I T N E S S E T H:
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WHEREAS, the Borrowers have requested the Lenders to make available to
the Borrowers a revolving line of credit for loans and letters of credit in an
amount not to exceed $185,000,000 (which amount may be increased to an aggregate
amount not to exceed $200,000,000 in accordance with the terms of this
agreement), and which extension of credit the Borrowers will use for the
purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in Annex A which is
attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all Annexes,
Exhibits and Schedules attached hereto are incorporated herein by reference;
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, the Parent
Guarantor and the Borrowers hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
1.1 TOTAL FACILITY. Subject to all of the terms and conditions of this
Agreement, the Lenders agree to make available a total senior credit facility of
up to $185,000,000 (as such amount may be increased pursuant to SECTION 1.6 by
an amount of up to $15,000,000, or as such amount may be decreased pursuant to
the last sentence of SECTION 3.2) the "Total Facility") to the Borrowers from
time to time during the term of this Agreement. The Total Facility shall be
composed of a revolving line of credit consisting of Revolving Loans and Letters
of Credit.
1.2 REVOLVING LOANS.
(a) (i) AMOUNTS. Subject to the satisfaction of the conditions
precedent set forth in ARTICLE 8, each Lender severally, but not
jointly, agrees, upon the Administrative Borrower's request from time
to time on any Business Day during the period from the Closing Date to
the Termination Date, to make revolving loans (including, without
limitation, pursuant to the terms of this Agreement and subject to the
limitations set forth in this Agreement, revolving loans in respect of
the Maximum Fixed Assets Loan Amount) (the "Revolving Loans") to the
Borrowers in amounts not to exceed such Lender's Pro Rata Share of
Excess Availability, except for Non-Ratable Loans and Agent Advances.
The Lenders, however, in their unanimous discretion, may elect to make
Revolving Loans or issue or arrange to have issued Letters of Credit in
excess of the Borrowing Base on one or more occasions, but if they do
so, neither the Agent nor the Lenders shall be deemed thereby to have
changed the limits of the Borrowing Base or to be obligated to exceed
such limits on any other occasion. If any Borrowing would exceed Excess
Availability, the Lenders may refuse to make or may otherwise restrict
the making of Revolving Loans as the Lenders determine until such
excess has been eliminated, subject to the Agent's authority, in its
sole discretion, to make Agent Advances pursuant to the terms of
SECTION 1.2(I).
(ii) The Borrowers shall execute and deliver to Agent, for the
benefit of Lenders, a note to evidence the Revolving Loans. Such note
shall be in the principal amount of the Commitments, dated the date
hereof and substantially in the form of EXHIBIT A (as modified,
amended, restated or replaced from time to time, the "Revolving Loan
Note"). The Revolving Loan Note shall represent the joint and several
obligation of the Borrowers to pay the amount of each Lender's Pro Rata
Share of the Commitments, or, if less, each Lender's Pro Rata Share of
the aggregate unpaid principal amount of all Revolving Loans to the
Borrowers together with interest thereon as prescribed in SECTION 2.1.
The entire unpaid balance of the Revolving Loan and all other
non-contingent Obligations shall be immediately due and payable in full
in immediately available funds on the Termination Date.
(b) PROCEDURE FOR BORROWING.
(1) Each Borrowing shall be made upon the Administrative
Borrower's irrevocable written notice delivered, on behalf of the
Borrowers, to the Agent a notice of borrowing in the form attached
hereto as EXHIBIT D ("Notice of Borrowing"), which must be received by
the Agent prior to (i) 12:00 noon (Atlanta, Georgia time) three (3)
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Business Days prior to the requested Funding Date, in the case of LIBOR
Rate Loans and (ii) 11:00 a.m. (Atlanta, Georgia time) on the requested
Funding Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which in the case of
a LIBOR Rate Loan must equal or exceed $5,000,000 (and
increments of $1,000,000 in excess of such amount);
(B) the requested Funding Date, which must be a
Business Day;
(C) whether the Revolving Loans requested are to be
Base Rate Loans or LIBOR Rate Loans (and if not specified, it
shall be deemed a request for a Base Rate Loan); and
(D) the duration of the Interest Period for LIBOR
Rate Loans (and if not specified, it shall be deemed a request
for an Interest Period of one month);
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Loans only.
(2) In lieu of delivering a Notice of Borrowing, the
Administrative Borrower, on behalf of the Borrowers, may give the Agent
telephonic notice of such request for advances to the Designated
Account on or before the deadline set forth above. The Agent at all
times shall be entitled to rely on such telephonic notice in making
such Revolving Loans, regardless of whether any written confirmation is
received.
(3) The Borrowers shall have no right to request a LIBOR Rate
Loan while a Default or Event of Default has occurred and is
continuing.
(c) RELIANCE UPON AUTHORITY. Prior to the Closing Date, the
Administrative Borrower shall deliver to the Agent, on behalf of the Borrowers,
a notice setting forth the account of the Administrative Borrower ("Designated
Account") to which the Agent is authorized to transfer the proceeds of the
Revolving Loans requested hereunder. The Administrative Borrower may designate a
replacement account from time to time by written notice. All such Designated
Accounts must be reasonably satisfactory to the Agent. The Agent is entitled to
rely conclusively on any person's request for Revolving Loans on behalf of the
Borrowers, so long as the proceeds thereof are to be transferred to the
Designated Account. The Agent has no duty to verify the identity of any
individual representing himself or herself as a person authorized by the
Administrative Borrower to make such requests on its behalf.
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(d) NO LIABILITY. The Agent shall not incur any liability to the
Borrowers as a result of acting upon any notice referred to in SECTIONS 1.2(B)
and (C), which the Agent believes in good faith to have been given by an officer
or other person duly authorized by the Administrative Borrower to request
Revolving Loans on its behalf. The crediting of Revolving Loans to the
Designated Account conclusively establishes the joint and several obligation of
the Borrowers to repay such Revolving Loans as provided herein.
(e) NOTICE IRREVOCABLE. Any Notice of Borrowing (or telephonic notice
in lieu thereof) made pursuant to SECTION 1.2(B) shall be irrevocable. The
Borrowers shall be bound to borrow the funds requested therein in accordance
therewith.
(f) AGENT'S ELECTION. Promptly after receipt of a Notice of Borrowing
(or telephonic notice in lieu thereof), the Agent shall elect to have the terms
of SECTION 1.2(G) or the terms of SECTION 1.2(H) apply to such requested
Borrowing. If the Bank declines in its sole discretion to make a Non-Ratable
Loan pursuant to SECTION 1.2(H), the terms of SECTION 1.2(G) shall apply to the
requested Borrowing.
(g) MAKING OF REVOLVING LOANS. If Agent elects to have the terms of
this SECTION 1.2(G) apply to a requested Borrowing, then promptly after receipt
of a Notice of Borrowing or telephonic notice in lieu thereof, the Agent shall
notify the Lenders by telecopy, telephone or e-mail of the requested Borrowing.
Each Lender shall transfer its Pro Rata Share of the requested Borrowing to the
Agent in immediately available funds, to the account from time to time
designated by the Agent, not later than 12:00 noon (Atlanta, Georgia time) on
the applicable Funding Date. After the Agent's receipt of all proceeds of such
Revolving Loans, the Agent shall make the proceeds of such Revolving Loans
available to the Borrowers on the applicable Funding Date by transferring same
day funds to the account designated by the Borrower; provided, however, that the
amount of Revolving Loans so made on any date shall not exceed the Excess
Availability on such date.
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(h) MAKING OF NON-RATABLE LOANS.
(A) If Agent elects, with the consent of the Bank, to
have the terms of this SECTION 1.2(H) apply to a requested
Borrowing, the Bank shall make a Revolving Loan in the amount
of that Borrowing available to the Borrowers on the applicable
Funding Date by transferring same day funds to Administrative
Borrower's Designated Account. Each Revolving Loan made solely
by the Bank pursuant to this Section is herein referred to as
a "Non-Ratable Loan", and such Revolving Loans are
collectively referred to as the "Non-Ratable Loans." Each
Non-Ratable Loan shall be subject to all the terms and
conditions applicable to other Revolving Loans except that all
payments thereon shall be payable to the Bank solely for its
own account. The Agent shall not request the Bank to make any
Non-Ratable Loan if (1) the Agent has received written notice
from any Lender that one or more of the applicable conditions
precedent set forth in ARTICLE 8 will not be satisfied on the
requested Funding Date for the applicable Borrowing, or (2)
the requested Borrowing would exceed Excess Availability on
that Funding Date.
(B) The Non-Ratable Loans shall be secured by the
Agent's Liens in and to the Collateral and shall constitute
Obligations hereunder.
(i) AGENT ADVANCES.
(A) Subject to the limitations set forth below, the
Agent is authorized by the Borrowers and the Lenders, from
time to time in the Agent's sole discretion, (A) after the
occurrence of a Default or an Event of Default, or (B) at any
time that any of the other conditions precedent set forth in
ARTICLE 8 have not been satisfied, to make Base Rate Loans to
the Borrowers on behalf of the Lenders in an aggregate amount
outstanding at any time not to exceed $10,000,000, but,
together with all other Revolving Loans and Letters of Credit
outstanding, not in excess of the Maximum Revolver Amount
which the Agent, in its reasonable business judgment, deems
necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the
likelihood of, or maximize the amount of, repayment of the
Loans and other Obligations, or (3) to pay any other amount
chargeable to the Borrowers pursuant to the terms of this
Agreement, including costs, fees and expenses as described in
SECTION 13.7 (any of such advances are herein referred to as
"Agent Advances"); PROVIDED,
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that the Majority Lenders may at any time revoke the Agent's
authorization to make Agent Advances and no Agent Advance
shall be outstanding for more than ninety (90) days. Any such
revocation must be in writing and shall become effective
prospectively upon the Agent's receipt thereof.
(B) The Agent Advances shall be secured by the
Agent's Liens in and to the Collateral and shall constitute
Base Rate Loans and Obligations hereunder.
1.3 LETTERS OF CREDIT.
(a) AGREEMENT TO ISSUE OR CAUSE TO ISSUE. Subject to the terms
and conditions of this Agreement, the Agent agrees (i) to cause the Letter of
Credit Issuer to issue for the account of the Borrowers one or more
commercial/documentary and standby letters of credit (each a "Letter of Credit")
and/or (ii) to provide credit support or other enhancement to a Letter of Credit
Issuer acceptable to Agent, which Letter of Credit Issuer issues a Letter of
Credit for the account of the Borrowers (any such credit support or enhancement
being herein referred to as a "Credit Support") from time to time during the
term of this Agreement.
(b) AMOUNTS; OUTSIDE EXPIRATION DATE. The Agent shall not have
any obligation to issue or cause to be issued any Letter of Credit or to provide
Credit Support for any Letter of Credit at any time if: (i) the maximum face
amount of the requested Letter of Credit is greater than the Unused Letter of
Credit Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrowers in connection with the opening thereof would exceed Excess
Availability at such time; or (iii) such Letter of Credit has an expiration date
less than thirty (30) days prior to the Stated Termination Date or more than
twelve (12) months from the date of issuance for standby letters of credit and
one hundred eighty (180) days for documentary letters of credit. With respect to
any Letter of Credit which contains any "evergreen" or automatic renewal
provision, each Lender shall be deemed to have consented to any such extension
or renewal unless any such Lender shall have provided to the Agent, written
notice that it declines to consent to any such extension or renewal at least
thirty (30) days prior to the date on which the Letter of Credit Issuer is
entitled to decline to extend or renew the Letter of Credit. If all of the
requirements of this SECTION 1.3 are met and no Default or Event of Default has
occurred and is continuing, no Lender shall decline to consent to any such
extension or renewal.
(c) OTHER CONDITIONS. In addition to conditions precedent
contained in ARTICLE 8, the obligation of the Agent to issue or to cause to be
issued any Letter of Credit or to provide Credit Support for any Letter of
Credit is subject to the following conditions precedent having been satisfied in
a manner reasonably satisfactory to the Agent:
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(1) The Administrative Borrower shall have delivered
to the Letter of Credit Issuer, at such times and in such
manner as such Letter of Credit Issuer may prescribe, an
application in form and substance satisfactory to such Letter
of Credit Issuer and reasonably satisfactory to the Agent for
the issuance of the Letter of Credit and such other documents
as may be required pursuant to the terms thereof, and the
form, terms and purpose of the proposed Letter of Credit shall
be reasonably satisfactory to the Agent and the Letter of
Credit Issuer; and
(2) As of the date of issuance, no order of any
court, arbitrator or Governmental Authority shall purport by
its terms to enjoin or restrain money center banks generally
from issuing letters of credit of the type and in the amount
of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no
request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over money
center banks generally shall prohibit, or request that the
proposed Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or the issuance of such Letters of
Credit.
(d) ISSUANCE OF LETTERS OF CREDIT.
(1) REQUEST FOR ISSUANCE. The Borrowers must notify
the Agent of a requested Letter of Credit at least three (3)
Business Days prior to the proposed issuance date. Such
notice, which shall be given by the Administrative Borrower,
shall be irrevocable and must specify the original face amount
of the Letter of Credit requested, the Business Day of
issuance of such requested Letter of Credit, whether such
Letter of Credit may be drawn in a single or in partial draws,
the Business Day on which the requested Letter of Credit is to
expire, the purpose for which such Letter of Credit is to be
issued, and the beneficiary of the requested Letter of Credit.
The Administrative Borrower shall attach to such notice the
proposed form of the Letter of Credit.
(2) RESPONSIBILITIES OF THE AGENT; ISSUANCE. As of
the Business Day immediately preceding the requested issuance
date of the Letter of Credit, the Agent shall determine the
amount of the applicable Unused Letter of Credit Subfacility
and Excess Availability. If (i) the face amount of the
requested Letter of Credit is less than the Unused Letter of
Credit Subfacility and (ii) the amount of such requested
Letter of Credit and all commissions, fees, and charges due
from the Borrowers in connection with the opening thereof
would not exceed Excess Availability, the Agent shall cause
the Letter of Credit Issuer to issue the
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requested Letter of Credit on the requested issuance date so
long as the other conditions hereof are met.
(3) NO EXTENSIONS OR AMENDMENT. The Agent shall not
be obligated to cause the Letter of Credit Issuer to extend or
amend any Letter of Credit issued pursuant hereto unless the
requirements of this SECTION 1.3 are met as though a new
Letter of Credit were being requested and issued.
(e) PAYMENTS PURSUANT TO LETTERS OF CREDIT. The Borrowers
agree to reimburse immediately the Letter of Credit Issuer for any draw under
any Letter of Credit and the Agent for the account of the Lenders upon any
payment pursuant to any Credit Support, and to pay the Letter of Credit Issuer
the amount of all other charges and fees payable to the Letter of Credit Issuer
in connection with any Letter of Credit immediately when due, irrespective of
any claim, setoff, defense or other right which the Borrowers may have at any
time against the Letter of Credit Issuer or any other Person. Each drawing under
any Letter of Credit shall constitute a request by the Borrowers to the Agent
for a Borrowing of a Base Rate Loan in the amount of such drawing. The Funding
Date with respect to such borrowing shall be the date of such drawing.
(f) INDEMNIFICATION; EXONERATION; POWER OF ATTORNEY.
(1) INDEMNIFICATION. In addition to amounts payable
as elsewhere provided in this SECTION 1.3, the Borrowers agree
to protect, indemnify, pay and save the Lenders and the Agent
harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) which any Lender or the
Agent (other than a Lender in its capacity as Letter of Credit
Issuer) may incur or be subject to as a consequence, direct or
indirect, of the issuance of any Letter of Credit or the
provision of any Credit Support or enhancement in connection
therewith, except if such claims, demands, liabilities,
damages, losses, costs, charges and expenses are solely as a
result of the Agent's gross negligence or willful misconduct.
The Borrowers' obligations under this Section shall survive
payment of all other Obligations.
(2) ASSUMPTION OF RISK BY THE BORROWERS. As among the
Borrowers, the Lenders, and the Agent, the Borrowers assume
all risks of the acts and omissions of, or misuse of any of
the Letters of Credit by, the respective beneficiaries of such
Letters of Credit, except if any losses or costs incurred in
connection therewith are solely as a result of the Agent's
gross negligence or willful misconduct. In furtherance and not
in limitation of the foregoing, the Lenders and the Agent
shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any Person in connection
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with the application for and issuance of and presentation of
drafts with respect to any of the Letters of Credit, even if
it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) the failure of the beneficiary
of any Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit or of the
proceeds thereof; (G) the misapplication by the beneficiary of
any Letter of Credit of the proceeds of any drawing under such
Letter of Credit; (H) any consequences arising from causes
beyond the control of the Lenders or the Agent, including any
act or omission, whether rightful or wrongful, of any present
or future DE JURE or DE FACTO Governmental Authority or (I)
the Letter of Credit Issuer's honor of a draw for which the
draw or any certificate fails to comply in any respect with
the terms of the Letter of Credit. None of the foregoing shall
affect, impair or prevent the vesting of any rights or powers
of the Agent or any Lender under this SECTION 1.3(F).
(3) EXONERATION. Without limiting the foregoing, no
action or omission whatsoever by the Agent or any Lender
(excluding any Lender in its capacity as a Letter of Credit
Issuer) shall result in any liability of the Agent or any
Lender to the Borrowers, or relieve any Borrower of any of its
obligations hereunder to any such Person.
(4) RIGHTS AGAINST LETTER OF CREDIT ISSUER. Nothing
contained in this Agreement is intended to limit the
Borrowers' rights, if any, with respect to the Letter of
Credit Issuer which arise as a result of the letter of credit
application and related documents executed by and between any
Borrower and the Letter of Credit Issuer.
(5) ACCOUNT PARTY. The Borrowers hereby authorize and
direct any Letter of Credit Issuer to name any Borrower
designated by the Administrative Borrower or the Borrowers, or
in the absence of such designation, the Administrative
Borrower, as the "Account Party" therein and to deliver to the
Agent all instruments, documents and other writings and
property received by the Letter of Credit Issuer pursuant to
the Letter of Credit, and to accept and rely upon the Agent's
instructions and
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agreements with respect to all matters arising in connection
with the Letter of Credit or the application therefor.
(g) SUPPORTING LETTER OF CREDIT; CASH COLLATERAL. If,
notwithstanding the provisions of SECTION 1.3(B) and SECTION 10.1, any Letter of
Credit or Credit Support is outstanding upon the termination of this Agreement,
then upon such termination the Borrowers shall deposit with the Agent, for the
ratable benefit of the Agent and the Lenders, with respect to each Letter of
Credit or Credit Support then outstanding, either (1) cash collateral pursuant
to documentation reasonably acceptable to the Agent, or (2) a standby letter of
credit (a "Supporting Letter of Credit") in form and substance satisfactory to
the Agent, issued by an issuer satisfactory to the Agent, in either case, in an
amount equal to the greater of (x) one hundred five percent (105%) of the
aggregate face value of the then extant Letters of Credit), or (y) the maximum
amount for which such Letter of Credit or such Credit Support may be drawn plus
any fees and expenses associated with such Letter of Credit or such Credit
Support. The Agent is entitled to use such cash collateral or draw all amounts
under the Supporting Letter of Credit, as applicable, as is necessary to
reimburse the Agent and the Lenders for payments to be made by the Agent and the
Lenders under such Letter of Credit or Credit Support and any fees and expenses
associated with such Letter of Credit or Credit Support. Such cash collateral or
Supporting Letter of Credit, as applicable, shall be held by the Agent, for the
ratable benefit of the Agent and the Lenders, as security for, and to provide
for the payment of, the aggregate undrawn amount of such Letters of Credit or
such Credit Support remaining outstanding.
1.4 BANK PRODUCTS. The Borrowers may request and the Agent may, in its
sole and absolute discretion, arrange for the Borrowers to obtain from the Bank
or the Bank's Affiliates Bank Products although the Borrowers are not required
to do so. If Bank Products are provided by an Affiliate of the Bank, the
Borrowers agree to indemnify and hold the Agent, the Bank and the Lenders
harmless from any and all costs and obligations now or hereafter incurred by the
Agent, the Bank or any of the Lenders which arise from any indemnity given by
the Agent to such Affiliate of the Bank related to such Bank Products; PROVIDED,
HOWEVER, nothing contained herein is intended to limit the Borrowers' rights,
with respect to the Bank or its Affiliates, if any, which arise as a result of
the execution of documents by and between the Borrowers and the Bank which
relate to Bank Products. The agreement contained in this Section shall survive
termination of this Agreement. The Borrowers acknowledge and agree that the
obtaining of Bank Products from the Bank or the Bank's Affiliates (a) is in the
sole and absolute discretion of the Bank or the Bank's Affiliates, and (b) is
subject to all rules and regulations of the Bank or the Bank's Affiliates.
1.5 ALL OBLIGATIONS TO CONSTITUTE JOINT AND SEVERAL OBLIGATIONS.
(a) All Obligations shall constitute joint and several
obligations of the Borrowers and shall be secured by the Agent's Lien upon all
of the Collateral, and by all
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other security interests and Liens heretofore, now or at any time hereafter
granted by each Borrower to the Agent, the Letter of Credit Issuer and the
Lenders, to the extent provided in the Loan Documents under which such Lien
arises. Each Borrower expressly represents and acknowledges that it is part of a
common enterprise with the other Borrowers and that any financial accommodations
by the Agent, the Letter of Credit Issuer and the Lenders to any other Borrower
hereunder and under the other Loan Documents are and will be of direct and
indirect interest, benefit and advantage to all Borrowers. Each Borrower
acknowledges that any Notice of Borrowing, Notice of Continuation/Conversion or
other notice or request given by the Administrative Borrower (including the
Administrative Borrower) to the Agent, Letter of Credit Issuer or any Lender
shall bind all Borrowers, and that any notice given by the Agent or any Lender
to any Borrower shall be effective with respect to all Borrowers. Each Borrower
acknowledges and agrees that each Borrower shall be liable, on a joint and
several basis, for all of the Loans and other Obligations, regardless of which
Borrower actually may have received the proceeds of any of the Loans or other
extensions of credit or have had Letters of Credit issued hereunder or the
amount of such Loans received, Letters of Credit issued or the manner in which
the Agent, the Letter of Credit Issuer or any of the Lenders accounts among
Borrowers for such Loans, Letters of Credit or other extensions of credit on its
books and records, and further acknowledges and agrees that Loans to any
Borrower inure to the mutual benefit of all of the Borrowers and that the Agent,
the Letter of Credit Issuer and the Lenders are relying on the joint and several
liability of the Borrowers in extending the Loans and other financial
accommodations hereunder.
Each Borrower shall be entitled to subrogation and contribution rights from and
against the other Borrowers to the extent any Borrower is required to pay to the
Lenders or the Letter of Credit Issuer any amount in excess of the Loans
advanced directly to, or other Obligations incurred directly by, such Borrower
or as otherwise available under Applicable Law; PROVIDED, HOWEVER, that such
subrogation and contribution rights are and shall be subject to the terms and
conditions of this SECTION 1.5.
(b) It is the intent of the Borrowers, the Agent, and the Lenders and
any other Person holding any of the Obligations that each Borrower's maximum
obligations hereunder (such Borrower's "MAXIMUM BORROWER LIABILITY") in any case
or proceeding referred to below (but only in such a case or proceeding) shall
not be in excess of:
(i) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code on or within one (1) year from the
date on which any of the Obligations of such Borrower are incurred, the
maximum amount that would not otherwise cause the Obligations of such
Borrower hereunder (or any other Obligations of such Borrower to the
Agent, the Letter of Credit Issuer, the Lenders and any other Person
holding any of the Obligations) to be avoidable or unenforceable
against such Borrower under (A) Section 548 of the Bankruptcy Code or
(B) any state
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fraudulent transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the Bankruptcy
Code; or
(ii) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code subsequent to one (1) year from the
date on which any of the Obligations of such Borrower are incurred, the
maximum amount that would not otherwise cause the Obligations of such
Borrower hereunder (or any other Obligations of such Borrower to the
Agent, the Letter of Credit Issuer, the Lenders and any other Person
holding any of the Obligations) to be avoidable or unenforceable
against such Borrower under any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or proceeding by
virtue of Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such
Borrower under any law, statute or regulation other than the Bankruptcy
Code relating to dissolution, liquidation, conservatorship, bankruptcy,
moratorium, readjustment of debt, compromise, rearrangement,
receivership, insolvency, reorganization or similar debtor relief from
time to time in effect affecting the rights of creditors generally
(collectively, "OTHER DEBTOR RELIEF LAW"), the maximum amount that
would not otherwise cause the Obligations of such Borrower hereunder
(or any other Obligations of such Borrower to the Agent, the Letter of
Credit Issuer and the Lenders and any other Person holding any of the
Obligations) to be avoidable or unenforceable against such Borrower
under such Other Debtor Relief Law, including, without limitation, any
state fraudulent transfer or fraudulent conveyance act or statute
applied in any such case or proceeding. (The substantive state or
federal laws under which the possible avoidance or unenforceability of
the Obligations of any Borrower hereunder (or any other Obligations of
such Borrower to the Agent, the Letter of Credit Issuer, the Lenders
and any other Person holding any of the Obligations) shall be
determined in any such case or proceeding shall hereinafter be referred
to as the "AVOIDANCE PROVISIONS").
Notwithstanding the foregoing, no provision of this SECTION 1.5(B) shall limit
any Borrower's liability for loans advanced directly or indirectly to it under
this Agreement.
(c) To the extent set forth in SECTION 1.5(B) hereof, but only to the
extent that the Obligations of any Borrower hereunder, or the transfers made by
such Borrower under any Loan Document, would otherwise be subject to avoidance
under any Avoidance Provisions if such Borrower is not deemed to have received
valuable consideration, fair value, fair consideration or reasonably equivalent
value for such transfers or obligations, or if such transfers or obligations of
any Borrower hereunder would render such Borrower insolvent, or leave such
Borrower with an unreasonably
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small capital or unreasonably small assets to conduct its business, or cause
such Borrower to have incurred debts (or to have intended to have incurred
debts) beyond its ability to pay such debts as they mature, in each case as of
the time any of the obligations of such Borrower are deemed to have been
incurred and transfers made under such Avoidance Provisions, then the
obligations of such Borrower hereunder shall be reduced to that amount which,
after giving effect thereto, would not cause the Obligations of such Borrower
hereunder (or any other Obligations of such Borrower to the Agent, the Letter of
Credit Issuer, the Lenders or any other Person holding any of the Obligations),
as so reduced, to be subject to avoidance under such Avoidance Provisions. This
SECTION 1.5(C) is intended solely to preserve the rights hereunder of the Agent,
the Letter of Credit Issuer, the Lenders and any other Person holding any of the
Obligations to the maximum extent that would not cause the obligations of the
Borrowers hereunder to be subject to avoidance under any Avoidance Provisions,
and none of the Borrowers nor any other Person shall have any right, defense,
offset, or claim under this SECTION 1.5(C) as against the Agent, the Letter of
Credit Issuer, the Lenders or any other Person holding any of the Obligations
that would not otherwise be available to such Person under the Avoidance
Provisions.
(d) Each Borrower agrees that the Obligations may at any time and from
time to time exceed the Maximum Borrower Liability of such Borrower, and may
exceed the aggregate Maximum Borrower Liability of all Borrowers hereunder,
without impairing this Agreement or any provision contained herein or affecting
the rights and remedies of the Lenders, the Letter of Credit Issuer or the Agent
hereunder.
(e) In the event any Borrower (a "FUNDING BORROWER") shall make any
payment or payments under this Agreement or shall suffer any loss as a result of
any realization upon any collateral granted by it to secure its obligations
hereunder, each other Borrower (each, a "CONTRIBUTING BORROWER") shall
contribute to such Funding Borrower an amount equal to such payment or payments
made, or losses suffered, by such Funding Borrower determined as of the date on
which such payment or loss was made multiplied by the ratio of (i) the Maximum
Borrower Liability of such Contributing Borrower (without giving effect to any
right to receive any contribution or other obligation to make any contribution
hereunder), to (ii) the aggregate Maximum Borrower Liability of all Borrowers
(including the Funding Borrowers) hereunder (without giving effect to any right
to receive, or obligation to make, any contribution hereunder). Nothing in this
SECTION 1.5(E) shall affect any Borrower's joint and several liability to the
Agent, the Letter of Credit Issuer and the Lenders for the entire amount of its
Obligations. Each Borrower covenants and agrees that its right to receive any
contribution hereunder from a Contributing Borrower shall be subordinate and
junior in right of payment to all obligations of the Borrowers to the Agent, the
Letter of Credit Issuer and the Lenders hereunder.
(f) No Borrower will exercise any rights that it may acquire by way of
subrogation hereunder or under any other Loan Document or at law by any payment
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made hereunder or otherwise, nor shall any Borrower seek or be entitled to seek
any contribution or reimbursement from any other Borrower in respect of payments
made by such Borrower hereunder or under any other Loan Document, until all
amounts owing to the Agent, the Letter of Credit Issuer and the Lenders on
account of the Obligations are paid in full in cash (or, with respect to Letters
of Credit, are either cash collateralized or supported by a Letter of Credit in
accordance with the provisions of SECTION 1.3(G) of this Agreement) and the
Commitments are terminated. If any amounts shall be paid to any Borrower on
account of such subrogation or contribution rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Borrower in trust for the Agent, the Letter of Credit Issuer and the Lenders,
segregated from other funds of such Borrower, and shall, forthwith upon receipt
by such Borrower, be turned over to the Agent in the exact form received by such
Borrower (duly endorsed by such Borrower to the Agent, if required), to be
applied against the Obligations, whether matured or unmatured, as provided for
herein.
1.6 INCREASED MAXIMUM REVOLVER AMOUNT.
(a) The Borrowers, the Guarantors, the Agent and any one or
more Lenders (including New Lenders) may, but shall not be required, on any date
from the Closing Date to the Stated Termination Date, agree that such Lenders
shall make or increase the amount of their Commitment by executing an Increased
Maximum Revolver Amount Activation Notice specifying (i) the amount of such
increase in the Maximum Revolver Amount, (ii) the amount of each such Lender's
Commitment or increase in its Commitment, and (iii) the Increased Maximum
Revolver Amount Closing Date which date shall be determined by the Agent;
PROVIDED, HOWEVER, that increases in the Maximum Revolver Amount pursuant to
this SECTION 1.6 shall not exceed $15,000,000 in the aggregate; PROVIDED
FURTHER, HOWEVER, that no Lender shall have any obligation to participate in any
increase described in this SECTION 1.6 unless it agrees to do so in its sole
discretion; PROVIDED FURTHER, HOWEVER, that any such increase in the Maximum
Revolver Amount shall be subject to (A) the Agent's consent (which consent will
not be unreasonably withheld), (B) the Borrowers' and the Guarantors' consent,
(C) the absence of the existence of any Default or Event of Default and (D) the
Agent's receipt of a replacement Revolving Loan Note in the aggregate amount of
the Commitments. If there are Revolving Loans outstanding on an Increased
Maximum Revolver Amount Closing Date, each Lender issuing a commitment under
this SECTION 1.6(A), shall settle with the other Lenders in accordance with
SECTION 12.15(A) (VII) on such date.
(b) Any bank, financial institution or other entity which,
with the consent of the Borrowers (which consent will not be unreasonably
withheld) and the Agent, elects to become a "Lender" under this Agreement in
connection with any transaction described in Section 1.6(a) hereof must be an
"Eligible Assignee" and must execute a New Lender Supplement substantially in
the form of Exhibit I (each, a "New Lender Supplement"), whereupon such bank,
financial institution or other entity (a "New Lender") shall become a Lender for
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all purposes and to the same extent as if originally a party hereto and shall be
bound by and entitled to the benefits of this Agreement.
ARTICLE 2
INTEREST AND FEES
2.1 INTEREST.
(a) INTEREST RATES. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate PLUS the Applicable Margins as set forth below, but not to exceed
the Maximum Rate. If at any time Loans are outstanding with respect to which the
Administrative Borrower, on behalf of the Borrowers, has not delivered to the
Agent a notice specifying the basis for determining the interest rate applicable
thereto in accordance herewith, those Loans shall bear interest at a rate
determined by reference to the Base Rate until notice to the contrary has been
given to the Agent in accordance with this Agreement and such notice has become
effective. Except as otherwise provided herein, the outstanding Obligations
shall bear interest as follows:
(i) For all Base Rate Loans and other Obligations
(other than LIBOR Rate Loans), at a fluctuating per annum rate
equal to the Base Rate plus the Applicable Margin; and
(ii) For all LIBOR Rate Loans, at a per annum rate
equal to the LIBOR Rate PLUS the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Loans as of the effective date of such change. All interest charges
shall be computed on the basis of a year of three hundred sixty (360) days and
actual days elapsed (which results in more interest being paid than if computed
on the basis of a 365-day year). The Borrowers shall pay to the Agent, for the
ratable benefit of Lenders, interest accrued on all Base Rate Loans in arrears
on the first day of each month hereafter and on the Termination Date. The
Borrowers shall pay to the Agent, for the ratable benefit of Lenders, interest
on all LIBOR Rate Loans in arrears on each LIBOR Interest Payment Date.
(b) DEFAULT RATE. If any Default or Event of Default has
occured and is continuing and the Agent or the Majority Lenders in their
discretion so elect, then, while any such Default or Event of Default is
continuing, all of the Obligations shall bear interest at the Default Rate
applicable thereto.
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2.2 CONTINUATION AND CONVERSION ELECTIONS.
(a) The Borrowers may:
(i) elect, as of any Business Day, in the case of
Base Rate Loans to convert any Base Rate Loans (or any part
thereof in an amount not less than $5,000,000, or that is in
an integral multiple of $1,000,000 in excess thereof) into
LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Loans having
Interest Periods expiring on such day (or any part thereof in
an amount not less than $1,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof);
PROVIDED, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans; PROVIDED FURTHER that if the notice
shall fail to specify the duration of the Interest Period, such Interest Period
shall be one month.
(b) The Administrative Borrower, on behalf of the Borrowers,
shall deliver a notice of continuation/conversion in the form attached hereto as
EXHIBIT E ("Notice of Continuation/Conversion") to the Agent not later than
12:00 noon (Atlanta, Georgia time) at least three (3) Business Days in advance
of the Continuation/Conversion Date, if the Loans are to be converted into or
continued as LIBOR Rate Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be converted or
renewed;
(iii) the type of Loans resulting from the proposed
conversion or continuation; and
(iv) the duration of the requested Interest Period,
PROVIDED, HOWEVER, the Borrowers may not select an Interest
Period that ends after the Stated Termination Date.
(c) If upon the expiration of any Interest Period applicable
to LIBOR Rate Loans, the Borrowers have failed to continue the applicable LIBOR
Rate Loans or if any Default or Event of Default has occurred and is continuing,
the Borrowers shall be deemed to have elected to convert such LIBOR Rate Loans
into Base Rate Loans effective as of the expiration date of such Interest
Period.
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(d) The Agent will promptly notify each Lender of its receipt
of a Notice of Continuation/Conversion. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts of the
Loans held by each Lender with respect to which the notice was given.
(e) There may not be more than seven (7) different LIBOR Rate
Loans in effect hereunder at any time.
2.3 MAXIMUM INTEREST RATE. In no event shall any interest rate provided
for hereunder exceed the maximum rate legally chargeable by any Lender under
applicable law for such Lender with respect to loans of the type provided for
hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that interest rate
shall remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that, upon payment in
full of the Obligations, the total amount of interest paid or accrued under the
terms of this Agreement is less than the total amount of interest which would,
but for this SECTION 2.3, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrowers shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which would
have accrued had the interest rate otherwise set forth in this Agreement, at all
times, been in effect over (b) the amount of interest actually paid or accrued
under this Agreement. If a court of competent jurisdiction determines that the
Agent and/or any Lender has received interest and other charges hereunder in
excess of the Maximum Rate, such excess shall be deemed received on account of,
and shall automatically be applied to reduce, the Obligations other than
interest, in the inverse order of maturity, and if there are no Obligations
outstanding, the Agent and/or such Lender shall refund to the Borrowers such
excess.
2.4 CLOSING FEE. The Borrowers agree to pay the Agent on the Closing
Date a closing fee (the "Closing Fee") as set forth in the fee letter dated as
of the Closing Date, between the Agent and the Borrowers.
2.5 UNUSED LINE FEE. On the first day of each month and on the
Termination Date, the Borrowers agree to pay to the Agent, for the account of
the Lenders, in accordance with their respective Pro Rata Shares, an unused line
fee (the "Unused Line Fee") equal to (a) if the average daily outstanding amount
of Revolving Loans and the average daily undrawn face amount of outstanding
Letters of Credit during the calculation period is equal to or less than fifty
percent (50%) of the Maximum Revolver Amount, three-fourths of one percent
(0.75%) per annum or (b) if the average daily
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outstanding amount of Revolving Loans and the average daily undrawn face amount
of outstanding Letters of Credit during the calculation period is greater than
fifty percent (50%) of the Maximum Revolver Amount, one-half of one percent
(0.50%) per annum, in each case under clause (a) or (b), times the amount by
which the Maximum Revolver Amount exceeded the sum of the average daily
outstanding amount of Revolving Loans and the average daily undrawn face amount
of outstanding Letters of Credit, during the immediately preceding month or
shorter period if calculated for the first month hereafter or on the Termination
Date. The Unused Line Fee shall be computed on the basis of a 360-day year for
the actual number of days elapsed. All principal payments received by the Agent
shall be deemed to be credited to the Borrowers' Loan Account immediately upon
receipt for purposes of calculating the Unused Line Fee pursuant to this SECTION
2.5. Notwithstanding the foregoing, until the earlier of the date the North
Carolina Real Estate Collateral Conditions have been satisfied or March 28,
2003, for purposes of calculating the Unused Line Fee, the Maximum Revolver
Amount shall be reduced by $14,000,000.
2.6 LETTER OF CREDIT FEE. The Borrowers agree to pay, for each Letter
of Credit, (a) to the Agent, for the account of the Lenders, in accordance with
their respective Pro Rata Shares, a fee (the "Letter of Credit Fee") equal to a
per annum rate in the amount of (i) if there are Loans outstanding hereunder,
the Applicable Margin for LIBOR Rate Loans then in effect or (ii) if there are
no Loans outstanding hereunder, one and one quarter of one percent (1.25%), (b)
to Agent for the benefit of the Letter of Credit Issuer, a fronting fee of (i)
if there are Loans outstanding hereunder, one-half of one percent (0.50%) per
annum of the undrawn face amount of each Letter of Credit or (ii) if there are
no Loans outstanding hereunder, one quarter of one percent (0.25%) per annum of
the undrawn face amount of each Letter of Credit, and (c) to the Letter of
Credit Issuer, all out-of-pocket costs, fees and expenses incurred by the Letter
of Credit Issuer in connection with the application for, processing of, issuance
of, extension of, or amendment to any Letter of Credit, which costs, fees and
expenses shall include any additional "fronting fee" charged by the Letter of
Credit Issuer. The Letter of Credit Fee shall be payable monthly in arrears on
the first day of each month following any month in which a Letter of Credit is
outstanding and on the Termination Date. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 REVOLVING LOANS. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, on the Termination Date. The Borrowers may prepay Revolving Loans at
any time, and reborrow subject to the terms of this Agreement. In addition, and
without limiting the generality of the foregoing, upon demand the Borrowers
shall pay to the Agent, for account of the Lenders, the amount, without
duplication, by which the Aggregate Revolver Outstandings exceeds the lesser of
the Borrowing Base or the Maximum
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Revolver Amount, in each case, less Reserves other than Reserves deducted in the
calculation of the Borrowing Base.
3.2 TERMINATION OF FACILITY. The Borrowers may terminate this Agreement
upon at least ten (10)-Business Days' notice to the Agent and the Lenders, upon
(a) the payment in full of all outstanding Revolving Loans, together with
accrued interest thereon, and (i) the cancellation and return of Letters of
Credit then outstanding or (ii) the deposit of cash collateral or the delivery
of a Supporting Letter of Credit in accordance with the provisions of SECTION
1.3(G), (b) the payment of the early termination fee set forth below, (c) the
payment in full in cash of all reimbursable expenses and other Obligations, and
(d) with respect to any LIBOR Rate Loans prepaid, payment of the amounts due
under SECTION 4.4, if any. If this Agreement is terminated at any time prior to
the First Anniversary of the Closing Date, whether pursuant to this Section or
pursuant to SECTION 9.2, the Borrowers shall pay to the Agent, for the account
of the Lenders, an early termination fee in an amount equal to $1,500,000;
provided, however, that no such early termination fee shall be due and payable
if the Borrowers elect to terminate this Agreement within one hundred twenty
(120) days of the date the Majority Lenders have elected not to permit (I) any
acquisition that is not otherwise a Permitted Acquisition so long as consent for
such acquisition was requested by the Borrower Parties in good faith and not as
a means to avoid such early termination fee as determined by the Agent in its
reasonable judgment or (II) any request for subordinated Debt under Section 7.14
so long as such consent for such Debt was requested by the Borrower Parties in
good faith and not as a means to avoid such early termination fee as determined
by the Agent in its reasonable judgment. Notwithstanding the foregoing, (i) if
the Borrowers refinance the Obligations hereunder from the proceeds of a
financing from (or arranged by) an Affiliate or division of the Bank, the
Borrowers shall not be required to pay to the Agent or the Lenders such early
termination fee and (ii) without payment of a early termination premium or any
amount under SECTION 4.4, the Borrowers may, upon ten (10) Business Day's
written notice to the Agent and the Lenders, elect to eliminate the Maximum
Fixed Assets Loan Amount portion of the Borrowing Base so long as (x) (A) with
respect to any refinancing of the Fixed Assets Loan Amount in connection with an
alternative fixed assets financing under SECTION 7.14(E), the proceeds (less
reasonable closing costs) from such refinancing are deposited in a Payment
Account or (B) in connection with any other elimination of the Maximum Fixed
Assets Loan Amount, the amount, if any, by which the outstanding principal
amount of the Loans and Letters of Credit exceeds the Borrowing Base, after
giving effect to such termination of the Maximum Fixed Assets Loan Amount, is
deposited into a Payment Account. In connection with any such elimination of the
Maximum Fixed Assets Loan Amount, upon ten (10) Business Days prior written
notice (which notice may be concurrent with the notice referred to in the
immediately preceding sentence of this SECTION 3.2) the Borrowers may elect to
permanently reduce the Total Facility, the Commitments and the Maximum Revolver
Amount by an amount up to $50,000,000.
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3.3 LIBOR RATE LOAN PREPAYMENTS. In connection with any prepayment, if
any LIBOR Rate Loans are prepaid prior to the expiration date of the Interest
Period applicable thereto, the Borrowers shall pay to the Lenders the amounts
described in SECTION 4.4.
3.4 PAYMENTS BY THE BORROWERS.
(a) All payments to be made by the Borrowers shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrowers shall be made to the Agent for the account
of the Lenders, at the account designated by the Agent and shall be made in
Dollars and in immediately available funds, no later than 12:00 noon (Atlanta,
Georgia time) on the date specified herein. Any payment received by the Agent
after such time shall be deemed (for purposes of calculating interest only) to
have been received on the following Business Day and any applicable interest
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period", whenever any payment is due on a day other than a Business Day, such
payment shall be due on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
3.5 PAYMENTS AS REVOLVING LOANS. At the election of the Agent, all
payments of principal, interest, reimbursement obligations in connection with
Letters of Credit and Credit Support for Letters of Credit, fees, premiums,
reimbursable expenses and other sums payable hereunder, may be paid from the
proceeds of Revolving Loans made hereunder. The Borrowers hereby irrevocably
authorize the Agent to charge the Loan Account for the purpose of paying all
amounts from time to time due hereunder and agree that all such amounts charged
shall constitute Revolving Loans (including Non-Ratable Loans and Agent
Advances).
3.6 APPORTIONMENT, APPLICATION AND REVERSAL OF PAYMENTS. Principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Loans held by each Lender and to which such
payments relate) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to the Agent and the
Letter of Credit Issuer. All payments shall be remitted to the Agent and all
such payments not relating to principal or interest of specific Loans, or not
constituting payment of specific fees, and all proceeds of Accounts or other
Collateral received by the Agent, shall be applied, ratably, subject to the
provisions of this Agreement, FIRST, to pay any fees, indemnities or expense
reimbursements then due to the Agent from the Borrowers; SECOND, to pay any fees
or expense reimbursements then due to the Lenders from the Borrowers; THIRD, to
pay interest due in respect of all Loans, including Non-Ratable Loans and Agent
Advances; FOURTH, to pay or prepay principal of the Non-Ratable Loans and Agent
Advances; FIFTH, pro rata, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans and Agent Advances) and unpaid reimbursement
obligations in respect of Letters
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of Credit and to pay an amount to the Agent equal to all outstanding Letter of
Credit Obligations to be held as cash collateral for such Obligations; SIXTH to
the payment of any other Obligation including any amounts relating to Bank
Products due to the Agent or any Lender by the Borrowers; and SEVENTH upon
request by the Borrowers, to the Borrowers. Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the Borrowers, or
unless an Event of Default has occurred and is continuing, neither the Agent nor
any Lender shall apply any payments which it receives to any LIBOR Rate Loan,
except (a) on the expiration date of the Interest Period applicable to any such
LIBOR Rate Loan, or (b) in the event, and only to the extent, that there are no
outstanding Base Rate Loans and, in any event, the Borrowers shall pay LIBOR
breakage losses in accordance with SECTION 4.4. The Agent and the Lenders shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Obligations.
3.7 INDEMNITY FOR RETURNED PAYMENTS. If, after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the
Agent, any Lender, the Bank or any Affiliate of the Bank is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Agent or such Lender and the Borrowers shall be liable to
pay to the Agent and the Lenders, and each Borrower hereby does indemnify the
Agent and the Lenders and hold the Agent and the Lenders harmless for the amount
of such payment or proceeds surrendered. The provisions of this SECTION 3.7
shall be and remain effective notwithstanding any contrary action which may have
been taken by the Agent or any Lender in reliance upon such payment or
application of proceeds, and any such contrary action so taken shall be without
prejudice to the Agent's and the Lenders' rights under this Agreement and shall
be deemed to have been conditioned upon such payment or application of proceeds
having become final and irrevocable. The provisions of this SECTION 3.7 shall
survive the termination of this Agreement.
3.8 AGENT'S AND LENDERS' BOOKS AND RECORDS; MONTHLY STATEMENTS. The
Agent shall record the principal amount of the Loans owing to each Lender, the
undrawn face amount of all outstanding Letters of Credit and the aggregate
amount of unpaid reimbursement obligations outstanding with respect to the
Letters of Credit from time to time on its books. In addition, each Lender may
note the date and amount of each payment or prepayment of principal of such
Lender's Loans in its books and records. Failure by the Agent or any Lender to
make such notation shall not affect the obligations of the Borrowers with
respect to the Loans or the Letters of Credit. The Borrowers agree that the
Agent's and each Lender's books and records showing the Obligations and the
transactions pursuant to this Agreement and the other Loan Documents shall be
admissible in any action or proceeding arising therefrom, and shall constitute
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rebuttably presumptive proof thereof, irrespective of whether any Obligation is
also evidenced by a promissory note or other instrument. The Agent will provide
to the Administrative Borrower a monthly statement of Loans, payments, and other
transactions pursuant to this Agreement. Such statement shall be deemed correct,
accurate, and binding on the Borrowers and an account stated (except for
reversals and reapplications of payments made as provided in SECTION 3.6 and
corrections of errors discovered by or acknowledged and agreed to by the Agent),
unless the Administrative Borrower, on behalf of the Borrowers, notifies the
Agent in writing to the contrary within thirty-five (35) days after such
statement is rendered in accordance with Section 13.8 (provided that no such
statement shall be required to be provided to Broad and Xxxxxx as otherwise
would be required under SECTION 13.8). In the event a timely written notice of
objections is given by the Administrative Borrower, only the items to which
exception is expressly made will be considered to be disputed by the Borrowers.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 TAXES.
(a) Any and all payments by the Borrowers to each Lender or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for, any Taxes. In addition,
the Borrowers shall pay all Other Taxes.
(b) Each Borrower agrees to indemnify and hold harmless each
Lender and the Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by any Lender or the Agent and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within thirty (30)
days after the date such Lender or the Agent makes written demand therefor.
(c) If the Borrowers shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary
so that after making all required deductions and withholdings
(including deductions and withholdings applicable to
additional sums payable under this Section) such Lender or the
Agent, as the case may be, receives an amount equal to the sum
it would have received had no such deductions or withholdings
been made;
(ii) the Borrowers shall make such deductions and
withholdings;
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(iii) the Borrowers shall pay the full amount
deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the Borrowers shall also pay to each Lender or
the Agent for the account of such Lender, at the time interest
is paid, all additional amounts which the respective Lender
specifies as necessary to preserve the after-tax yield such
Lender would have received if such Taxes or Other Taxes had
not been imposed.
(d) At the Agent's request, within thirty (30) days after the
date of any payment by any Borrower of Taxes or Other Taxes, such Borrower shall
furnish the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Agent.
(e) If the Borrowers are required to pay additional amounts to
any Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrowers which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
4.2 ILLEGALITY.
(a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by that Lender to the Administrative
Borrower through the Agent, any obligation of that Lender to make LIBOR Rate
Loans shall be suspended until that Lender notifies the Agent and the
Administrative Borrower that the circumstances giving rise to such determination
no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
LIBOR Rate Loan, the Borrowers shall, upon receipt by the Administrative
Borrower of notice of such fact and demand from such Lender (with a copy to the
Agent), prepay in full such LIBOR Rate Loans of that Lender then outstanding,
together with interest accrued thereon, either on the last day of the Interest
Period thereof, if that Lender may lawfully continue to maintain such LIBOR Rate
Loans to such day, or immediately, if that Lender may not lawfully continue to
maintain such LIBOR Rate Loans. For the avoidance of doubt it is understood and
agreed that no amount under SECTION 4.4 shall be due in connection with such
prepayment. If the Borrowers are required to so prepay any LIBOR Rate Loans,
then concurrently with such prepayment, the Borrowers shall borrow from the
affected Lender, in the amount of such repayment, a Base Rate Loan.
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4.3 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender determines that due to either (i) the
introduction of or any change in the interpretation of any law or regulation or
(ii) the compliance by that Lender with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to make
or making, funding or maintaining any LIBOR Rate Loans, then the Borrowers,
within ten (10) Business Days of receipt by the Administrative Borrower of
written notice from such Lender of such a Lender's determination (with a copy of
such notice to be sent to the Agent), shall be liable for, and shall pay to the
Agent for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Lender or any corporation or other entity controlling such
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by such Lender or any
corporation or other entity controlling such Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, within
ten (10) Business Days of receipt by the Administrative Borrower of notice from
such Lender of such a Lender's determination (with a copy of such notice to be
sent to the Agent), the Borrowers shall pay to such Lender additional amounts
sufficient to compensate such Lender for such increase.
4.4 FUNDING LOSSES. Except as specifically set forth in the last
sentence of SECTION 3.2 and in SECTION 4.2(B), the Borrowers shall reimburse
each Lender and hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of:
(a) the failure of the Borrowers to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrowers to borrow or continue a LIBOR
Rate Loan or convert a Base Rate Loan into a LIBOR Rate Loan after the
Administrative Borrower has given (or are deemed to have given) a Notice of
Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after
acceleration thereof) of any LIBOR Rate Loans on a day that is not the last day
of the relevant Interest Period;
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including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans or from fees payable to terminate the deposits from which such
funds were obtained. The Borrowers shall also pay any customary administrative
fees charged by any Lender in connection with the foregoing. If a mandatory
prepayment is required on any day that, after payment of all Base Rate Loans
outstanding on such date, prepayment of LIBOR Rate Loans would result in charges
under this SECTION 4.4, so long as no Default or Event of Default has occurred
and is continuing, to the extent there is Excess Availability hereunder in the
amount of such mandatory prepayment, no breakage costs under this SECTION 4.4
shall be due from the Borrowers.
4.5 INABILITY TO DETERMINE RATES. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrowers and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrowers may revoke any Notice of
Borrowing or Notice of Continuation/ Conversion then submitted by the
Administrative Borrower, on behalf of the Borrowers. If the Borrowers do not
revoke such notice, the Lenders shall make, convert or continue the Loans, as
proposed by the Borrowers, in the amount specified in the applicable notice
submitted by the Administrative Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
4.6 CERTIFICATES OF AGENT. If any Lender claims reimbursement or
compensation under this Article 4, Agent shall determine the amount thereof and
shall deliver to the Borrowers (with a copy to the affected Lender) a
certificate setting forth in reasonable detail the amount payable to the
affected Lender, and such certificate shall be deemed presumptively correct
absent manifest error.
4.7 SURVIVAL. The agreements and obligations of the Borrowers in this
Article 4 shall survive the payment of all other Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 BOOKS AND RECORDS. The Parent Guarantor and each Subsidiary shall
maintain, at all times, correct and complete books, records and accounts in
which complete, correct and timely entries are made of its transactions and such
books, records and accounts on a consolidated basis shall be prepared in
accordance with GAAP applied consistently with the audited Financial Statements
required to be delivered pursuant to SECTION 5.2(A). The Parent Guarantor on a
consolidated basis shall, by means of appropriate entries, reflect in such
accounts and in all Financial Statements proper
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liabilities and reserves for all taxes and proper provision for depreciation and
amortization of property and bad debts, all in accordance with GAAP. Each
Borrower Party shall maintain at all times books and records pertaining to the
Collateral consistent with the Parent Guarantor's and the Subsidiaries' current
accounting practices or in such detail, form and scope as the Agent or any
Lender shall reasonably require (taking into consideration the ability of the
Borrower Parties to produce such information, the cost involved and the time
required to produce such information), including, but not limited to, records of
(a) all payments received and all credits and extensions granted with respect to
the Accounts; (b) the return, rejection, repossession, stoppage in transit,
loss, damage, or destruction of any Inventory; and (c) all other dealings
affecting the Collateral.
5.2 FINANCIAL INFORMATION. The Borrower Parties shall promptly furnish
to each Lender, all such financial information as the Agent shall reasonably
request (taking into consideration the ability of the Borrower Parties to
produce such information, the cost involved and the time required to maintain
such information). Without limiting the foregoing, the Administrative Borrower
will furnish to the Agent, in sufficient copies for distribution by the Agent to
each Lender (and the Agent shall deliver such copies to such Lenders), in such
detail as the Agent or the Lenders shall reasonably request, the following:
(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, (i) consolidated audited
balance sheets as at the end of each Fiscal Year, and consolidated audited
income statements, statements of cash flows and changes in consolidated
stockholders' equity for the Parent Guarantor for such Fiscal Year, and the
accompanying notes thereto, setting forth in each case in comparative form
figures for the previous Fiscal Year, all in reasonable detail, fairly
presenting the consolidated financial position and the consolidated results of
operations of the Parent Guarantor as at the date thereof and for the Fiscal
Year then ended, and prepared in accordance with GAAP and (ii) consolidating
unaudited balance sheets, as at the end of each Fiscal Year, and consolidating
unaudited income statements for the Parent Guarantor and each Subsidiary,
prepared in accordance with the Parent Guarantor's and each Subsidiary's current
accounting practices, but in any event reconciling to the consolidated
statements referred to in clause (i) of this SECTION 5.2(A). The consolidated
annual statements shall be audited in accordance with generally accepted
auditing standards by and, in the case of such statements performed on a
consolidated basis, accompanied by a report thereon unqualified in any respect
of independent certified public accountants selected by the audit committee of
the board of directors of the Parent Guarantor and reasonably satisfactory to
the Agent. The Parent Guarantor, simultaneously with retaining such independent
public accountants to conduct such annual audit, shall send a letter to such
accountants, with a copy to the Agent and the Lenders, notifying such
accountants that one of the primary purposes for retaining such accountants'
services and having audited financial statements prepared by them is for use by
the Agent and the Lenders. The Borrower Parties hereby authorize the Agent to
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communicate directly with their certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Parent Guarantor and the Subsidiaries and to discuss directly
with the Agent the finances and affairs of the Parent Guarantor and the
Subsidiaries.
(b) As soon as available, but in any event not later than
forty-five (45) days after the end of each Fiscal Quarter, (i) with respect to
the Fiscal Quarters ended March 31, June 30 and September 30, the Parent
Guarantor's Form 10-Q financial statements filed with the Securities and
Exchange Commission as at the end of and for such Fiscal Quarter and (ii) with
respect to the Fiscal Year ended December 31, the consolidated unaudited balance
sheets of the Parent Guarantor as at the end of such Fiscal Quarter, and
consolidated unaudited income statements and statements of cash flows for the
Parent Guarantor for the Fiscal Year then ended, in each case under clauses (i)
and (ii) above, in reasonable detail, fairly presenting the consolidated
financial position and results of operations of the Parent Guarantor as at the
date thereof and for such period, and, in comparable form, figures for the
corresponding period in the prior Fiscal Year, and prepared in accordance with
GAAP applied consistently with the audited Financial Statements required to be
delivered pursuant to SECTION 5.2(A). In addition, as soon as available, but in
any event not later than forty-five (45) days after the end of each Fiscal
Quarter, the Administrative Borrower shall provide such financial statements on
a consolidating basis prepared in accordance with the Parent Guarantor's and
each Subsidiary's current accounting practices, but in any event reconciling to
the consolidated statements referred to in this SECTION 5.2(B). The Parent
Guarantor shall certify by a certificate signed by its president, chief
financial officer or an executive vice president thereof that all such
consolidated statements referred to in the first sentence of this SECTION 5.2(B)
have been prepared in accordance with GAAP and present fairly the Parent
Guarantor's consolidated financial position as at the dates thereof and its
consolidated results of operations for the periods then ended, subject to normal
year-end adjustments and such consolidating statements referred to in the second
sentence of this SECTION 5.2(B) were prepared in accordance with the Parent
Guarantor's and each Subsidiary's current accounting practices, but in any
event, reconciling to the consolidated statements referred to in this SECTION
5.2(B).
(c) As soon as available, but in any event not later than
thirty (30) days after the end of each month (or forty-five (45) days with
respect to each month end corresponding with a Fiscal Quarter end), consolidated
unaudited balance sheets of the Parent Guarantor as at the end of such month,
and consolidated unaudited income statements and statements of cash flows for
the Parent Guarantor for such month and for the period from the beginning of the
Fiscal Year to the end of such month, all in reasonable detail, fairly
presenting the consolidated financial position and results of operations of the
Parent Guarantor as at the date thereof and for such periods, and prepared in
accordance with GAAP applied consistently with the audited Financial Statements
required to be delivered pursuant to SECTION 5.2(A). The Parent Guarantor shall
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certify by a certificate signed by its president, chief financial officer or an
executive vice president thereof that all such statements have been prepared in
accordance with GAAP and present fairly the Parent Guarantor's consolidated
financial position as at the dates thereof and its consolidated results of
operations for the periods then ended, subject to normal year-end and, except
with respect to periods ended March 31, June 30, September 30 and December 31,
quarter-end adjustments.
(d) With each of the audited Financial Statements delivered
pursuant to SECTION 5.2(A), a certificate of the independent certified public
accountants that audited such statements to the effect that they have reviewed
and are familiar with this Agreement and that, in auditing such Financial
Statements, they did not become aware of any fact or condition which then
constituted a Default or Event of Default with respect to a financial covenant,
except for those, if any, described in reasonable detail in such certificate.
(e) With each of the annual audited Financial Statements
delivered pursuant to SECTION 5.2(A), a certificate of the president, chief
financial officer or an executive vice president of the Parent Guarantor setting
forth in reasonable detail the calculations required to establish that the
Borrower Parties were in compliance with the covenants set forth in SECTIONS
7.23 and 7.24 during the period covered in such Financial Statements and as at
the end thereof. Within thirty (30) days after the end of each Fiscal Month
(other than a Fiscal Month end corresponding with a Fiscal Quarter end) and
within forty-five (45) days after the end of each Fiscal Quarter (after making
all quarter end adjustments), a certificate of the president, chief financial
officer or an executive vice president of the Parent Guarantor setting forth in
reasonable detail (i) the amount of all Capital Expenditures for the Fiscal Year
to date and (ii) the calculations required to establish that the Borrower
Parties were in compliance with the covenant set forth in SECTION 7.24 during
the period covered in such Financial Statements and as at the end thereof.
Within thirty (30) days after the end of each Fiscal Month with respect to items
(A) through (C) of this sentence and within forty-five (45) days after the end
of each Fiscal Quarter with respect to items (A) through (D) of this sentence, a
certificate of the president, chief financial officer or an executive vice
president of the Parent Guarantor stating that, except as explained in
reasonable detail in such certificate, (A) all of the representations and
warranties of the Borrower Parties contained in this Agreement and the other
Loan Documents are correct and complete in all material respects as at the date
of such certificate as if made at such time, except for those that speak as of a
particular date, (B) the Borrower Parties are, at the date of such certificate,
in compliance with all of their respective covenants and agreements in this
Agreement and the other Loan Documents, (C) no Default or Event of Default then
exists or existed during the period covered by the Financial Statements for such
month, and (D) the Management's Discussion and Analysis contained in the Form
10-Q for such Fiscal Quarter filed with the SEC complies in all material
respects with the requirements of the SEC for that disclosure and does not
contain any untrue statement of material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
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circumstances under which they were made, not misleading in any material
respect. If such certificate discloses that a representation or warranty is not
correct or complete in all material respects, or that a covenant has not been
complied with, or that a Default or Event of Default existed or exists, such
certificate shall set forth what action the Borrower Parties have taken or
propose to take with respect thereto.
(f) Within ten (10) Business Days after approval by the Parent
Guarantor's board of directors, but in any event not later than the date sixty
(60) days following the first day of each Fiscal Year, annual forecasts (to
include forecasted consolidated and consolidating balance sheets, income
statements and cash flow statements) for the Parent Guarantor and its
Subsidiaries as at the end of and for each month of such Fiscal Year.
(g) Promptly, and in any event within three (3) Business Days,
after filing with the PBGC and the IRS, a copy of each annual report or other
filing filed with respect to each Plan of any Borrower Party.
(h) Promptly, and in any event within three (3) Business Days,
upon the filing thereof, copies of all periodic reports, if any, to or other
documents filed by the Parent Guarantor or any of its Subsidiaries with the SEC
under the Exchange Act, and all reports, notices, or statements sent or received
by the Parent Guarantor or any of its Subsidiaries to or from the holders of any
equity interests of the Parent Guarantor (other than routine non-material
correspondence sent by shareholders of the Parent Guarantor to the Parent
Guarantor and filings with the SEC by any shareholder of the Parent Guarantor
pursuant to Section 13(d) or 16(a) of the Exchange Act) or any such Subsidiary
or of any Debt of the Parent Guarantor or any of its Subsidiaries registered
under the Securities Act of 1933, as in effect from time to time, or to or from
the trustee under any indenture under which the same is issued.
(i) As soon as available, but in any event not later than
fifteen (15) days after any Borrower Party's receipt thereof, a copy of all
management reports and management letters prepared for such Borrower Party by
any independent certified public accountants of the Borrower Parties.
(j) Immediately upon filing with the SEC, copies of any and
all proxy statements, financial statements, and reports which the Parent
Guarantor makes available to its shareholders. Unless the Agent or any Lender
requests paper copies of such documents, such documents may be delivered to the
Agent and the Lenders via electronic mail at the e-mail address set forth in
SECTION 13.8. The Agent shall have no duty to maintain copies of any such
documents.
(k) If requested by the Agent, promptly, and in any event
within three (3) Business Days, after filing with the IRS, a copy of each tax
return filed by the Parent Guarantor or by any Subsidiary.
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(l) Not less than thirty (30) days after the First Anniversary
Date and each subsequent Anniversary Date thereafter, a certificate regarding
the Parent Guarantor's and the Subsidiaries' compliance in all material respects
with Food and Drug Laws, together with such other information regarding the
Parent Guarantor's and the Subsidiaries' compliance with Food and Drug Laws as
the Agent shall reasonably request.
(m) On or before the date fifteen (15) months following the
Closing Date, the Parent Guarantor shall deliver to the Agent evidence
reasonably satisfactory to the Agent that the Borrower Parties have used their
commercially reasonable efforts to complete the corrective actions recommended
in Section 6 of the phase 1 environmental report dated November 27, 2002
prepared by PBS&J for the Real Estate Collateral located at 0000 Xxxxxx Xxxxx,
Xxxxx, Xxxxxxx.
(n) Such additional information as the Agent and/or any Lender
may from time to time reasonably request regarding the financial and business
affairs of the Parent Guarantor or any Subsidiary.
5.3 NOTICES TO THE LENDERS. The Administrative Borrower shall notify
the Agent and the Lenders in writing of the following matters at the following
times:
(a) Immediately after becoming aware of any Default or Event
of Default;
(b) Immediately after becoming aware of the assertion by the
holder of any capital stock of the Parent Guarantor or of any Subsidiary or the
holder of any Debt of the Parent Guarantor or any Subsidiary in an amount
outstanding in excess of $5,000,000 that a default exists with respect thereto
or that the Parent Guarantor or such Subsidiary is not in compliance with the
terms thereof, or the threat or commencement by such holder of any enforcement
action because of such asserted default or non-compliance;
(c) Immediately after becoming aware of any event or
circumstance which could reasonably be expected to have a Material Adverse
Effect;
(d) Immediately after any settlement offer is made by the
Parent Guarantor or any Subsidiary in an amount that would, if consummated,
result in an Event of Default hereunder;
(e) Immediately after becoming aware of any pending or
threatened action, suit, or proceeding, by any Person, or any pending or
threatened investigation by a Governmental Authority, which could reasonably be
expected to have a Material Adverse Effect or which involves the same matters
that are the subject of the Class Action Litigation or matters related thereto;
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(f) Immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting the Parent Guarantor or any Subsidiary in a manner which could
reasonably be expected to have a Material Adverse Effect;
(g) Immediately after becoming aware of any violation of any
law, statute, regulation, or ordinance of a Governmental Authority affecting the
Parent Guarantor or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect;
(h) Immediately after receipt of any notice of any violation
by the Parent Guarantor or any Subsidiary of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted in writing that the Parent Guarantor or any
Subsidiary is not in compliance with any Environmental Law or is investigating
the Parent Guarantor's or such Subsidiary's compliance therewith which could
reasonably be expected to have a Material Adverse Effect;
(i) Immediately after receipt of any written notice that the
Parent Guarantor or any Subsidiary is or may be liable to any Person as a result
of the Release or threatened Release of any Contaminant or that the Parent
Guarantor or any Subsidiary is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to the
Release or threatened Release of any Contaminant which, in either case, is
reasonably likely to give rise to liability in excess of $2,000,000;
(j) Immediately after receipt of any written notice of the
imposition of any Environmental Lien against any property of the Parent
Guarantor or any Subsidiary that is included in the Borrowing Base or against
any other property to the extent the liability with respect thereto is in excess
of $5,000,000;
(k) Any change in the Parent Guarantor's or any Subsidiary's
name as it appears in the state of its incorporation or other organization,
state of incorporation or organization, type of entity, organizational
identification number, locations of Collateral, or form of organization, trade
names under which such Person will sell Inventory or create Accounts, or to
which instruments in payment of Accounts may be made payable, in each case at
least thirty (30) days prior thereto;
(l) Within ten (10) Business Days after any Borrower Party or
any ERISA Affiliate knows or has reason to know, that an ERISA Event or a
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Code) has occurred, and, when known, any action taken or threatened by the IRS,
the DOL or the PBGC with respect thereto;
(m) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within three (3)
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Business Days after the filing thereof with the PBGC, the DOL or the IRS, as
applicable, copies of the following: (i) each annual report (form 5500 series),
including Schedule B thereto, filed with the PBGC, the DOL or the IRS with
respect to each Plan, (ii) a copy of each funding waiver request filed with the
PBGC, the DOL or the IRS with respect to any Plan and all communications
received by any Borrower Party or any ERISA Affiliate from the PBGC, the DOL or
the IRS with respect to such request, and (iii) a copy of each other filing or
notice filed with the PBGC, the DOL or the IRS, with respect to each Plan by
either a Borrower Party or any ERISA Affiliate;
(n) Upon request, copies of each actuarial report for any Plan
or Multi-employer Plan and annual report for any Multi-employer Plan; and within
three (3) Business Days after receipt thereof by any Borrower Party or any ERISA
Affiliate, copies of the following: (i) any notices of the PBGC's intention to
terminate a Plan or to have a trustee appointed to administer such Plan; (ii)
any favorable or unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code; or (iii) any notice
from a Multi-employer Plan regarding the imposition of withdrawal liability;
(o) Within three (3) Business Days after the occurrence
thereof: (i) any changes in the benefits of any existing Plan which increase any
of the Parent Guarantor's or any Subsidiary's annual costs with respect thereto
by an amount in excess of $3,000,000, or the establishment of any new Plan or
the commencement of contributions to any Plan to which any Borrower Party or any
ERISA Affiliate was not previously contributing; or (ii) any failure by any
Borrower Party or any ERISA Affiliate to make a required installment or any
other required payment under Section 412 of the Code on or before the due date
for such installment or payment; or
(p) Within three (3) Business Days after any Borrower Party or
any ERISA Affiliate knows or has reason to know that any of the following events
has or will occur: (i) a Multi-employer Plan has been or will be terminated;
(ii) the administrator or plan sponsor of a Multi-employer Plan intends to
terminate a Multi-employer Plan; or (iii) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a Multi-employer
Plan.
Each notice given under this Section shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that the Parent
Guarantor, any Subsidiary or any ERISA Affiliate, as applicable, has taken or
proposes to take with respect thereto.
5.4 COLLATERAL REPORTING. Each Accounts Receivable Borrower, Inventory
Borrower and other Borrower, a portion of whose assets are included in the
Borrowing Base, shall provide the Agent with the following documents at the
following times in form satisfactory to the Agent: (a) within fifteen (15) days
after the end of each month (for such month), or more frequently if reasonably
requested by the Agent, a Borrowing Base Certificate; (b) within fifteen (15)
days after the end of each month (for such month), or more frequently if
reasonably requested by the Agent, an aging of each
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Accounts Receivable Borrower's Accounts, together with a reconciliation to the
detailed calculation of the Borrowing Base and to such Borrower's general
ledger; (c) within thirty (30) days after the end of each month (for such
month), or more frequently if requested by the Agent, a listing of each Accounts
Receivable Borrower's and Inventory Borrower's accounts payable; (d) within
fifteen (15) days after the end of each month (for such month), or more
frequently if requested by the Agent, a detailed calculation of Eligible
Accounts and Eligible Inventory; (e) within fifteen (15) days after the end of
each month (for such month), or more frequently if reasonably requested by the
Agent, Inventory reports of each Inventory Borrower by category and facility
location, together with a reconciliation to the detailed calculation of the
Borrowing Base and to such Borrower's general ledger; (f) upon reasonable
request, copies of invoices in connection with each Accounts Receivable
Borrower's Accounts, customer statements, credit memos, remittance advices and
reports, deposit slips, shipping and delivery documents in connection with such
Borrower's Accounts, provided that so long as no Default or Event of Default has
occurred and is continuing and Excess Availability is at least $5,000,000, the
Agent shall limit any such request under this clause (f) to a sampling of each
of the items referred to in this clause (f) rather than all of each of such
items; (g) copies of invoices for each Inventory Borrower's Inventory; (h) such
other reports as to the Collateral of such Borrower as the Agent shall
reasonably request from time to time; and (i) with the delivery of each of the
foregoing, a certificate of the Administrative Borrower executed by an officer
thereof certifying as to the accuracy and completeness of the foregoing. The
Parent Guarantor shall provide the Agent with the following documents at the
following times in form satisfactory to the Agent: (i) upon reasonable request,
a statement of the balance of each intercompany account; (ii) such other reports
as to the Collateral of each Borrower Party as the Agent shall reasonably
request from time to time; and (iii) with the delivery of each of the foregoing,
a certificate of the Parent Guarantor executed by an officer thereof certifying
as to the accuracy and completeness of the foregoing. If any of the Borrower
Parties' records or reports of the Collateral are prepared by an accounting
service or other agent, each Borrower Party hereby authorizes such service or
agent to deliver such records, reports, and related documents to the Agent, for
distribution to the Lenders.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower Party warrants and represents to the Agent and the
Lenders that, except as hereafter disclosed to and accepted by the Agent and the
Majority Lenders in writing:
6.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS AGREEMENT AND
THE LOAN DOCUMENTS. Each Borrower Party has the power and authority to execute,
deliver and perform the Loan Documents to which it is a party and to grant to
the Agent Liens upon and security interests in the Collateral with respect to
which it has rights, title or ownership and each Borrower has the authority to
incur the Obligations. Each Borrower
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Party has taken all necessary action (including obtaining approval of its
stockholders if necessary) to authorize its execution, delivery, and performance
of the Loan Documents to which it is a party. The Loan Documents to which it is
a party have been duly executed and delivered by each Borrower Party, and
constitute the legal, valid and binding obligations of such Borrower Party,
enforceable against it in accordance with their respective terms, subject, as to
the enforcement of remedies, to the following qualifications: (i) an order of
specific performance and an injunction are discretionary remedies and, in
particular, may not be available where damages are considered an adequate remedy
at law, and (ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction, and other similar laws affecting
enforcement of creditors' rights generally (insofar as any such law relates to
the bankruptcy, insolvency or similar event of any Borrower Party). Each
Borrower Party's execution, delivery, and performance of the Loan Documents to
which it is a party do not and will not conflict with, or constitute a violation
or breach of, or result in the imposition of any Lien upon the property of the
Parent Guarantor or any Subsidiary, by reason of the terms of (a) any contract,
mortgage, lease, agreement, indenture, or instrument to which the Parent
Guarantor or such Subsidiary is a party or which is binding upon it, (b) any
Requirement of Law applicable to the Parent Guarantor or such Subsidiary, or (c)
the certificate or articles of incorporation or bylaws or the limited liability
company operating agreement or limited partnership agreement of such Borrower
Party.
6.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The provisions of this
Agreement, the Mortgages, and the other Loan Documents create legal and valid
Liens on all the Collateral in favor of the Agent, for the ratable benefit of
the Agent and the Lenders, and such Liens constitute perfected and continuing
Liens on all the Collateral, having priority over all other Liens on the
Collateral, except for those Liens identified in clauses (c), (d), (e), (g) and
(h) of the definition of Permitted Liens and real property ad valorem taxes to
the extent they are Permitted Liens under clause (a) of the definition thereof,
securing all the Obligations, and enforceable against the Borrower Parties and
all third parties.
6.3 ORGANIZATION AND QUALIFICATION. Each of the Parent Guarantor and
each Borrower (a) is duly organized or incorporated and validly existing in good
standing under the laws of the state of its organization or incorporation, (b)
is qualified to do business and is in good standing in the jurisdictions set
forth on SCHEDULE 6.3, which are the only jurisdictions in which qualification
is necessary in order for it to own or lease its property and conduct its
business, except for any jurisdiction in which the failure to so qualify or be
in good standing could not reasonably be expected to have a Material Adverse
Effect and (c) has all requisite power and authority to conduct its business and
to own its property.
6.4 CORPORATE NAME; PRIOR TRANSACTIONS. Except as set forth on SCHEDULE
6.4, to the Knowledge of the Parent Guarantor, neither the Parent Guarantor nor
any Subsidiary has, during the past five (5) years, been known by or used any
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other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property outside of the ordinary course of business.
6.5 SUBSIDIARIES AND AFFILIATES. SCHEDULE 6.5 is a correct and complete
list of the name and relationship to the Parent Guarantor of each and all of the
Subsidiaries and other Affiliates. Each Subsidiary (other than the Dormant
Xxxxxxxxxxx.xxx Subsidiary) is (a) duly incorporated or organized and validly
existing in good standing under the laws of its state of incorporation or
organization set forth on SCHEDULE 6.5, and (b) qualified to do business and in
good standing in each jurisdiction, except any jurisdiction in which the failure
to so qualify or be in good standing could not reasonably be expected to have a
Material Adverse Effect and (c) has all requisite power and authority to conduct
its business and own its property.
6.6 FINANCIAL STATEMENTS AND PROJECTIONS.
(a) The Administrative Borrower has delivered to the Agent and
the Lenders the audited consolidated balance sheet and related consolidated
statements of income, cash flows, and changes in stockholders equity for the
Parent Guarantor and its Subsidiaries as of December 31, 2001, and for the
Fiscal Year then ended, accompanied by the report thereon of the Parent
Guarantor's independent certified public accountants, Xxxxxx Xxxxxxxx LLP. The
Administrative Borrower has also delivered to the Agent and the Lenders the
unaudited consolidated balance sheet and related consolidated statements of
income and cash flows for the Parent Guarantor and its Subsidiaries as of
September 30, 2002. Such financial statements are attached hereto as EXHIBIT C.
All such financial statements have been prepared in accordance with GAAP and
present accurately and fairly in all material respects the financial position of
the Parent Guarantor and its consolidated Subsidiaries as at the dates thereof
and their results of operations for the periods then ended.
(b) The Latest Projections when submitted to the Lenders as
required herein represent the Borrower Parties' best estimate of the future
consolidated financial performance of the Parent Guarantor and its Subsidiaries
for the periods set forth therein. The Latest Projections have been prepared on
the basis of the assumptions set forth therein, which the Borrower Parties
believe are fair and reasonable in light of current and reasonably foreseeable
business conditions at the time submitted to the Lenders.
(c) The pro forma consolidated balance sheet of the Parent
Guarantor at September 30, 2002, attached hereto as Exhibit C, presents fairly
and accurately the Parent Guarantor's consolidated financial condition as at
such date after giving effect to the transactions contemplated by this Agreement
as if such transactions had occurred on such date and the Closing Date had been
such date, and has been prepared in accordance with GAAP.
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6.7 CAPITALIZATION. SCHEDULE 6.7 sets forth, as of the Closing Date, a
complete and accurate description of the authorized capital stock of the Parent
Guarantor and each Subsidiary, by class, and a description of the number of
shares of each class that are issued and outstanding and the par value thereof.
All such shares of capital stock are validly issued, fully-paid and
non-assessable.
6.8 SOLVENCY. The Parent Guarantor and the Subsidiaries are Solvent on
a consolidated basis prior to and after giving effect to the Borrowings to be
made on the Closing Date and the issuance of the Letters of Credit to be issued
on the Closing Date, and shall remain Solvent during the term of this Agreement.
6.9 DEBT. After giving effect to the making of the Revolving Loans to
be made on the Closing Date, the Parent Guarantor and its Subsidiaries have no
Debt, except (a) the Obligations, and (b) Debt described on SCHEDULE 6.9.
6.10 DISTRIBUTIONS. Since December 31, 2001, no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
securities of the Parent Guarantor or any Subsidiary.
6.11 REAL ESTATE; LEASES. SCHEDULE 6.11 sets forth, as of the Closing
Date, a correct and complete list of all Real Estate owned by the Parent
Guarantor or any Subsidiary, all leases and subleases of real or personal
property held by the Parent Guarantor or any Subsidiary as lessee or sublessee,
including all locations where the Parent Guarantor or any Subsidiary conducts
any manufacturing operations or distribution business (other than leases of
personal property as to which the Parent Guarantor or any Subsidiary is lessee
or sublessee for which the value of such personal property in the aggregate is
less than $500,000 or which consist of leases of automobiles and computers
provided to the Parent Guarantor's and the Subsidiaries' sales force), and all
leases and subleases of real or personal property held by any of the Parent
Guarantor or any Subsidiary as lessor, or sublessor. Each of such leases and
subleases is valid and enforceable in accordance with its terms and is in full
force and effect, no default by any of the Parent Guarantor or any Subsidiary
under any such lease or sublease exists and, to the Knowledge of the Parent
Guarantor, no default by any other party under any such lease or sublease
exists. Each of the Parent Guarantor and each Subsidiary has good and marketable
title in fee simple to the Real Estate identified on SCHEDULE 6.11 as owned by
the Parent Guarantor or such Subsidiary, or valid leasehold interests in all
Real Estate designated therein as "leased" by any of the Parent Guarantor or
such Subsidiary and each of the Parent Guarantor and each Subsidiary has good,
indefeasible, and merchantable title to all of its other property reflected on
the December 31, 2001 Financial Statements delivered to the Agent and the
Lenders, except as disposed of in the ordinary course of business since the date
thereof, free of all Liens except Permitted Liens.
6.12 PROPRIETARY RIGHTS. SCHEDULE 6.12 sets forth a correct and
complete list of all of each of the Parent Guarantor's and each Subsidiary's
Proprietary Rights. None of
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the Proprietary Rights is subject to any licensing agreement or similar
arrangement except as set forth on SCHEDULE 6.12. To the Parent Guarantor's
Knowledge (including, at the time of any launch of any new product, after review
of a patent search with respect to the Proprietary Rights related to such
product or an opinion of counsel with respect thereto and determination by the
Parent Guarantor or a Subsidiary that there is no infringement or conflict),
none of the Proprietary Rights infringes on or conflicts with any other Person's
property, and, to the Parent Guarantor's Knowledge, no other Person's property
infringes on or conflicts with the Proprietary Rights. The Proprietary Rights
described on SCHEDULE 6.12 constitute all of the property of such type necessary
to the current and anticipated future conduct of each of the Parent Guarantor's
and each Subsidiary's business. No claim or litigation regarding any of the
foregoing is pending or, to the Parent Guarantor's Knowledge, threatened, and no
patent, invention, device or application for the same is pending or, to the
Parent Guarantor's Knowledge, proposed, which, in either case, could reasonably
be expected to have a Material Adverse Effect.
6.13 TRADE NAMES. All trade names or styles under which the Parent
Guarantor or any Subsidiary will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on SCHEDULE
6.13.
6.14 LITIGATION. Except as set forth on SCHEDULE 6.14, there is no
pending, or to the Parent Guarantor's Knowledge threatened, action, suit,
proceeding, or counterclaim by any Person, or to the Parent Guarantor's
Knowledge, investigation by any Governmental Authority, which could reasonably
be expected to have a Material Adverse Effect.
6.15 LABOR DISPUTES. Except as set forth on SCHEDULE 6.15, as of the
Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of any of the Parent Guarantor or any of its
Subsidiaries, (b) no such collective bargaining agreement or other labor
contract is scheduled to expire during the term of this Agreement, (c) no union
or other labor organization is seeking to organize, or to be recognized as, a
collective bargaining unit of employees of the Parent Guarantor or any
Subsidiary or for any similar purpose, and (d) there is no pending or (to the
Parent Guarantor's Knowledge) threatened, strike, work stoppage, material unfair
labor practice claim, or other material labor dispute against or affecting the
Parent Guarantor or its Subsidiaries or their employees that, either
individually or in the aggregate, could reasonably be expected to result in a
material liability to the Parent Guarantor and its Subsidiaries taken as a
whole.
6.16 ENVIRONMENTAL LAWS.
(a) Except as disclosed on SCHEDULE 6.16(A), each of the
Parent Guarantor and each Subsidiary is and has been in compliance with, in all
material respects, all Environmental Laws and neither the Parent Guarantor nor
any Subsidiary, nor any of its presently owned real property or presently
conducted operations, nor its previously owned real property or prior
operations, is subject to any Environmental
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Claim from any Governmental Authority or private Person respecting (i)
compliance with any Environmental Law or (ii) any potential liabilities and
costs or actions arising from a Release or threatened Release, except with
respect to clauses (i) and (ii) of this SECTION 6.16 for such matters that,
individually or in the aggregate, could not reasonably be expected to result in
liability to the Parent Guarantor or any Subsidiary, together with any liability
under SECTIONS 6.16(B) AND (H), in excess of the lesser of (x) $5,000,000 or (y)
fifty percent (50%) of the sum of (A) Excess Availability plus (B) consolidated
cash and cash equivalents on hand of the Parent Guarantor and the Subsidiaries
as of the reporting date of such matter.
(b) Each of the Parent Guarantor and each Subsidiary has
obtained all permits necessary for its current operations under Environmental
Laws, and all such permits are in good standing and each of the Parent Guarantor
and each Subsidiary is in compliance with all material terms and conditions of
such permits, except for such failures to obtain, to be in good standing or to
comply that, individually or in the aggregate, could not reasonably be expected
to result in liability to the Parent Guarantor or any Subsidiary, together with
any liability under SECTIONS 6.16(A) AND (H), in excess of the lesser of (x)
$5,000,000 or (y) fifty percent (50%) of the sum of (A) Excess Availability plus
(B) consolidated cash and cash equivalents on hand of the Parent Guarantor and
the Subsidiaries as of the reporting date of such matter.
(c) Except as disclosed on SCHEDULE 6.16(C), neither the
Parent Guarantor nor any Subsidiary, nor, to the Parent Guarantor's Knowledge
(after appropriate due diligence), any of its predecessors in interest, has in
violation of applicable law stored, treated or disposed of any Contaminants on
any property owned by the Parent Guarantor or any Subsidiary.
(d) Neither the Parent Guarantor nor any Subsidiary (during
the period that such Subsidiary has been a Subsidiary or otherwise to the Parent
Guarantor's Knowledge) has received any summons, complaint, order or similar
written notice or an Environmental Claim indicating that it is not currently in
compliance with or (other than those that have been cured or dismissed) within
the past five (5) years has not been in compliance with, or that any
Governmental Authority is investigating its compliance with, any Environmental
Laws or that it is or may be liable to any other Person as a result of a Release
or threatened Release.
(e) To the Parent Guarantor's Knowledge, none of the present
or past operations of the Parent Guarantor and its Subsidiaries is the subject
of any investigation by any Governmental Authority evaluating whether any
remedial action is needed to respond to a Release or threatened Release of a
Contaminant.
(f) Except as disclosed in the phase 1 environmental report
delivered to the Agent prior to the Closing Date with respect to Andrx
Pharmaceuticals (NC), Inc.'s owned Real Estate and except as set forth on
Schedule 6.16(f), (i) there is not now, nor to the Parent Guarantor's Knowledge
has there ever been, on or in the owned Real Estate
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and (ii) to the Parent Guarantor's Knowledge, there is not now nor has there
ever been on or in the leased Real Estate:
(1) any underground storage tanks or surface
impoundments,
(2) any asbestos-containing material, or
(3) any polychlorinated biphenyls (PCBs) used in
hydraulic oils, electrical transformers or other equipment.
(g) Except as disclosed on SCHEDULE 6.16(G), neither the
Parent Guarantor nor any Subsidiary has filed, or has had the duty to file, any
notice under any requirement of Environmental Law reporting a spill or
accidental and unpermitted Release or discharge of a Contaminant into the
environment.
(h) Except as disclosed on SCHEDULE 6.16(H), neither the
Parent Guarantor nor any Subsidiary has for the past five (5) years entered into
any negotiations or settlement agreements with any Person (including any prior
owner of its Real Property) imposing obligations or liabilities on the Parent
Guarantor or any Subsidiary with respect to any Environmental Claim in response
to a Release except for obligations or liabilities that, individually or in the
aggregate, could not reasonably be expected to result in liability to the Parent
Guarantor or any Subsidiary, together with any liability under SECTIONS 6.16(A)
AND (B), in excess of the lesser of (x) $5,000,000 or (y) fifty percent (50%) of
the sum of (A) Excess Availability plus (B) consolidated cash and cash
equivalents on hand of the Parent Guarantor and the Subsidiaries as of the
reporting date of such matter.
(i) None of the products manufactured, distributed or sold by
the Parent Guarantor or any Subsidiary contain asbestos containing material.
(j) No Environmental Lien is attached to any of the owned Real
Estate.
6.17 NO VIOLATION OF LAW. Except as set forth on SCHEDULES 6.16(A),
6.16(C), 6.16(H) and 6.29, neither the Parent Guarantor nor any Subsidiary is in
violation of any law, statute, regulation, ordinance, judgment, order, or decree
applicable to it which violation could reasonably be expected to have a Material
Adverse Effect.
6.18 NO DEFAULT. Neither the Parent Guarantor nor any Subsidiary is in
default with respect to any note, indenture, loan agreement, mortgage, lease,
deed, or other agreement to which the Parent Guarantor or such Subsidiary is a
party or by which it is bound, which default could reasonably be expected to
have a Material Adverse Effect.
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6.19 ERISA COMPLIANCE.
(a) As of the Closing Date, the Parent Guarantor's 1995 401(k)
Plan is the only Plan applicable to the Borrowers and the Guarantors. Each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other applicable federal or state law. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the Parent Guarantor's Knowledge,
nothing has occurred which would cause the loss of such qualification. Each of
the Parent Guarantor, each Subsidiary and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the Parent Guarantor's
Knowledge, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur that, either individually or in the aggregate, will result in liability
to the Parent Guarantor or any Subsidiary, together with any liability under
clauses (iii), (iv) and (v) of this SECTION 6.19(C), in excess of the lesser of
(x) $5,000,000 or (y) fifty percent (50%) of the sum of (A) Excess Availability
plus (B) consolidated cash and cash equivalents on hand of the Parent Guarantor
and the Subsidiaries as of the reporting date of such ERISA Event; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) none of the Parent
Guarantor, any Subsidiary or any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA) that, either individually or in the aggregate, could reasonably be
expected to result in liability to the Parent Guarantor or any Subsidiary,
together with any liability under clauses (i), (iv) and (v) of this SECTION
6.19(C), in excess of the lesser of (x) $5,000,000 or (y) fifty percent (50%) of
the sum of (A) Excess Availability plus (B) consolidated cash and cash
equivalents on hand of the Parent Guarantor and the Subsidiaries as of the
reporting date of such event; (iv) none of the Parent Guarantor, any Subsidiary
or any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multi-employer Plan that individually or in the
aggregate, could reasonably be expected to result in liability to the Parent
Guarantor or any Subsidiary, together with any liability under clauses (i),
(iii) and (v) of this SECTION 6.19(C), in excess of the lesser of (x) $5,000,000
or (y) fifty percent (50%) of the sum of (A) Excess Availability plus (B)
consolidated cash and cash equivalents on hand of the Parent Guarantor and the
Subsidiaries as of the reporting date of such event;
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and (v) none of the Parent Guarantor, any Subsidiary or any ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA that, either individually or in the aggregate, could reasonably be
expected to result in liability to the Parent Guarantor or any Subsidiary,
together with any liability under clauses (i), (iii) and (iv) of this SECTION
6.19(C), in excess of the lesser of (x) $5,000,000 or (y) fifty percent (50%) of
the sum of (A) Excess Availability plus (B) consolidated cash and cash
equivalents on hand of the Parent Guarantor and the Subsidiaries as of the
reporting date of such event.
6.20 TAXES. The Parent Guarantor and the Subsidiaries have filed all
federal and other tax returns and reports required to be filed, and have paid
all federal and other taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable unless such unpaid taxes and assessments would constitute a
Permitted Lien.
6.21 REGULATED ENTITIES. No Borrower Party, any Person controlling a
Borrower Party, or any other Subsidiary, is an "Investment Company" within the
meaning of the Investment Company Act of 1940. No Borrower Party or any other
Subsidiary is subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code or law, or any other federal or state statute or regulation
limiting its ability to incur indebtedness.
6.22 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
to be used solely for working capital and other lawful corporate purposes. None
of the Parent Guarantor or any Subsidiary is engaged in the business of
purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.
6.23 NO MATERIAL ADVERSE CHANGE. No Material Adverse Effect has
occurred since the latest date of the Financial Statements delivered to the
Lenders; PROVIDED, in the interest of disclosure, the Borrower Parties disclose
to the Lenders the possibly adverse events listed on SCHEDULE 6.23. The Borrower
Parties do not currently believe that such events can reasonably be expected to
result in a Material Adverse Effect.
6.24 FULL DISCLOSURE. None of the representations or warranties made by
any Borrower Party in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of any
Borrower Party in connection with the Loan Documents (including the offering and
disclosure materials delivered by or on behalf of any Borrower Party to the
Lenders prior to the Closing Date), contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered.
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6.25 MATERIAL AGREEMENTS. SCHEDULE 6.25 hereto sets forth as of the
Closing Date all agreements and contracts material to the Parent Guarantor and
the Subsidiaries taken as a whole to which any of the Parent Guarantor or any
Subsidiary is a party or is bound as of the date hereof.
6.26 BANK ACCOUNTS. SCHEDULE 6.26 contains, as of the Closing Date, a
complete and accurate list of all bank accounts maintained by each Borrower
Party with any bank or other financial institution.
6.27 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, any
Borrower Party of any Loan Document.
6.28 FOOD AND DRUG LAWS.
(a) Except as otherwise disclosed on SCHEDULE 6.28, each of
the Parent Guarantor and each Subsidiary has been and is in compliance in all
material respects with all applicable Food and Drug Laws, including but not
limited to federal and state laws, statutes, rules and regulations that relate
to the manufacture, handling, transport, management, disposal or sale of
pharmaceutical and drug products, including those relating to (i) "good
manufacturing practices," "good laboratory practices," "good clinical
practices," labeling, record keeping, or filing of reports, or (ii) obligations
for products under an Investigational New Drug Application ("INDA"), a New Drug
Application ("NDA") or an Abbreviated New Drug Application ("ANDA").
(b) SCHEDULE 6.28 sets forth a true and complete list of (i)
all licenses, permits, designations, and approvals required and received by any
of the Parent Guarantor and/or any Subsidiary pursuant to Food and Drug Laws
with respect to any pharmaceutical or drug or other product sold, stored,
licensed to or managed by any of the Parent Guarantor and/or any Subsidiary and
(ii) each INDA, NDA, ANDA and analogous foreign application or filing filed or
required to be filed by the Parent Guarantor or any Subsidiary and currently
pending before the FDA or similar United States or foreign Governmental
Authority with respect to any pharmaceutical or drug or other product. Each of
the Parent Guarantor and each Subsidiary has all material licenses, permits,
designations, applications and approvals necessary or required under applicable
Food and Drug Laws for the conduct of the business of the Parent Guarantor and
the Subsidiaries taken as a whole in its present form, and no material licenses,
permits, designations, applications and approvals have been terminated,
suspended or revoked, and there are presently no termination, suspension or
revocation proceedings, actual, pending, or threatened, in respect thereof, in
each case, except to the extent any such termination, suspension or revocation
of such material licenses, permits, designations, applications and approvals,
individually or in the aggregate, could not reasonably be likely to result in
liability to the Parent Guarantor or any Subsidiary in excess of $5,000,000 and,
in any event, no such termination, suspension or revocation of any such material
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licenses, permits, designations, applications and approvals is reasonably likely
to have any effect on the Inventory of the Inventory Borrowers or the ability of
the Inventory Borrowers to sell such Inventory.
(c) Except as disclosed on SCHEDULE 6.28, neither the Parent
Guarantor nor any Subsidiary is, or for the last three years has been, the
subject of any current or pending investigations, enforcement action or orders,
QUI TAM actions, consent decrees, corporate integrity agreements, settlements,
recalls or other extraordinary examinations or review (i) by any Governmental
Authority under Food and Drug Laws, or (ii) by fiscal intermediaries or carriers
under the respective policies and contracts with such fiscal intermediaries or
carriers, other than routine audits and inspections conducted on a periodic
basis by such Governmental Authorities, fiscal intermediaries or carriers in the
ordinary course of business. Each of the Parent Guarantor and each Subsidiary
has provided to the Agent true, complete and correct copies of all material
correspondence with the FDA or any similar regulatory authority relating to
actual or pending investigations, violations or any instances of alleged
non-compliance with applicable Food and Drug Laws.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower Party covenants to the Agent and each Lender that so long
as any of the Obligations remain outstanding or this Agreement is in effect:
7.1 TAXES AND OTHER OBLIGATIONS. Each of the Parent Guarantor and each
Subsidiary shall (a) file when due all tax returns and other reports which it is
required to file; (b) pay, or provide for the payment, when due, of all taxes,
fees, assessments and other governmental charges against it or upon its
property, income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
provide to the Agent and the Lenders, upon reasonable request, satisfactory
evidence of its timely compliance with the foregoing; and (c) pay when due all
Debt owed by it and all claims of materialmen, mechanics, carriers,
warehousemen, landlords, processors and other like Persons, and all other
indebtedness owed by it and perform and discharge in a timely manner all other
obligations undertaken by it; PROVIDED, HOWEVER, so long as the Administrative
Borrower has notified the Agent in writing, neither the Parent Guarantor nor any
Subsidiary need pay any tax, fee, assessment, or governmental charge (i) it is
contesting in good faith by appropriate proceedings diligently pursued, (ii) as
to which the Parent Guarantor or such Subsidiary, as the case may be, has
established proper reserves as required under GAAP, and (iii) the nonpayment of
which does not result in the imposition of a Lien (other than a Permitted Lien).
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7.2 LEGAL EXISTENCE AND GOOD STANDING; NAME CHANGES.
(a) Each of the Parent Guarantor and each Subsidiary shall
maintain its legal existence and its qualification and good standing in all
jurisdictions in which qualification is necessary for it to own or lease its
property or conduct its business except for any jurisdiction in which the
failure to maintain such existence and qualification or good standing could not
reasonably be expected to have a Material Adverse Effect.
(b) Except in connection with a merger permitted by SECTION
7.10, neither the Parent Guarantor nor any Subsidiary shall change its name,
Federal Employment Identification Number, organizational identification number,
corporate structure or identity, or add any new fictitious name or reincorporate
or reorganize itself under the laws of any jurisdiction other than the
jurisdiction in which it is incorporated or organized as of the date hereof;
PROVIDED, HOWEVER, that the Parent Guarantor or any Subsidiary may change its
name upon at least thirty (30)-days' prior written notice by the Administrative
Borrower to the Agent of such change and so long as, at the time of such written
notification, the Parent Guarantor or such Subsidiary authorizes the filing of
any financing statements or fixture filings necessary to perfect and continue
perfected the Agent's Liens.
7.3 COMPLIANCE WITH LAW AND AGREEMENTS; MAINTENANCE OF LICENSES. Each
of the Parent Guarantor and each Subsidiary shall comply in all material
respects with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal Fair Labor Standards
Act, Food and Drug Laws and all Environmental Laws). Each of the Parent
Guarantor and each Subsidiary shall obtain and maintain all licenses, permits,
franchises, and governmental authorizations material to the Parent Guarantor and
the Subsidiaries taken as a whole and necessary to own its property and to
conduct its business as conducted on the Closing Date. None of the Parent
Guarantor or any Subsidiary shall modify, amend or alter its certificate or
articles of incorporation, or its limited liability company operating agreement
or limited partnership agreement, as applicable, other than in a manner which
does not adversely affect, in any material respect, the rights of the Lenders or
the Agent (it being understood that a modification or amendment made solely to
the extent necessary to effect a merger permitted under Section 7.10 or a name
change permitted under Section 7.2(b) shall not be deemed to adversely affect,
in any material respect, the rights of the Lenders or the Agent).
7.4 MAINTENANCE OF PROPERTY; INSPECTION OF PROPERTY.
(a) Each of the Parent Guarantor and each Subsidiary shall
maintain all of its property necessary and useful in the conduct of its
business, in good operating condition and repair, ordinary wear and tear
excepted.
(b) In addition to the inspection rights provided in SECTION
7.8(C), each of the Parent Guarantor and each Subsidiary shall permit
representatives and independent
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contractors of the Agent (at the expense of the Borrowers not to exceed four (4)
times per year unless an Event of Default has occurred and is continuing) to
visit and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom and to discuss
its affairs, finances and accounts with its directors, officers and independent
public accountants, at such reasonable times during normal business hours and as
soon as may be reasonably desired, upon reasonable advance notice to the
Administrative Borrower; PROVIDED, HOWEVER, when an Event of Default exists, the
Agent or any Lender may do any of the foregoing at the expense of the Borrowers
at any time during normal business hours and without advance notice.
7.5 INSURANCE.
(a) Each of the Parent Guarantor and each Subsidiary shall
maintain, with financially sound and reputable insurers having a rating of at
least A+ or better by Best Rating Guide, insurance against loss or damage by
fire with extended coverage; theft, burglary, pilferage and loss in transit;
products liability; larceny, embezzlement or other criminal liability; business
interruption; public liability and third party property damage; and such other
hazards or of such other types as is customary for Persons engaged in the same
or similar business, as the Agent, in its discretion, or acting at the direction
of the Majority Lenders, shall specify, in amounts, and under policies
acceptable to the Agent and the Majority Lenders. Without limiting the
foregoing, in the event that any improved Real Estate covered by the Mortgages
is determined to be located within an area that has been identified by the
Director of the Federal Emergency Management Agency as a Special Flood Hazard
Area ("SFHA"), the Parent Guarantor and the Subsidiaries shall purchase and
maintain flood insurance on the improved Real Estate and any Equipment and
Inventory located on such Real Estate. The amount of said flood insurance will
be reasonably determined by the Agent, and shall, at a minimum, comply with
applicable federal regulations as required by the Flood Disaster Protection Act
of 1973, as amended. Each of the Parent Guarantor and each Subsidiary shall also
maintain flood insurance for its Inventory and Equipment which is, at any time,
located in a SFHA.
(b) The Borrower Parties shall cause the Agent, for the
ratable benefit of the Agent and the Lenders, to be named as secured party or
mortgagee and sole loss payee or additional insured, in a manner reasonably
acceptable to the Agent. Each policy of insurance shall contain a clause or
endorsement requiring the insurer to give not less than thirty (30)-days' prior
written notice to the Agent in the event of cancellation of the policy for any
reason whatsoever and a clause or endorsement stating that the interest of the
Agent shall not be impaired or invalidated by any act or neglect of the Parent
Guarantor or any Subsidiary or the owner of any Real Estate for purposes more
hazardous than are permitted by such policy. All premiums for such insurance
shall be paid by the Borrower Parties when due, and certificates of insurance
and, if requested by the Agent or any Lender, photocopies of the policies, shall
be delivered to the Agent, in each case in sufficient quantity for distribution
by the Agent to each of the Lenders. If
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the Borrower Parties fail to procure such insurance or to pay the premiums
therefor when due, the Agent may, and at the direction of the Majority Lenders
shall, do so from the proceeds of Revolving Loans.
7.6 INSURANCE AND CONDEMNATION PROCEEDS. The Borrower Parties shall
notify the Agent and the Lenders of any casualty or condemnation loss of, damage
to or destruction of the Collateral (y) immediately, with respect to any
Borrowing Base Collateral with a value in excess of $250,000 or any other
Collateral with a value in excess of $5,000,000 or (z) otherwise within five (5)
Business Days, whether or not any such loss referred to in either clause (y) or
clause (z) is covered by insurance. The Agent is hereby authorized to collect
all insurance and condemnation proceeds in respect of Collateral directly and
after deducting from such proceeds the expenses, if any, incurred by the Agent
in the collection or handling thereof, the Agent shall deposit such proceeds in
a Payment Account. With respect to insurance and condemnation proceeds relating
to any Borrower's Collateral consisting of Fixed Assets, an amount equal to such
proceeds may be used by the Borrowers to replace, repair, restore or rebuild the
relevant Fixed Assets within one hundred twenty (120) days of the deposit
thereof into a Payment Account or on the one hundred and twentieth (120th) day
following the date of receipt thereof the Maximum Equipment Loan Amount shall be
permanently reduced by such amount.
7.7 ENVIRONMENTAL LAWS.
(a) Each of the Parent Guarantor and each Subsidiary shall
conduct its business in compliance in all material respects with all
Environmental Laws applicable to it, including those relating to the generation,
handling, use, storage, and disposal of any Contaminant. Each of the Parent
Guarantor and each Subsidiary shall take prompt and appropriate action to
respond to any material non-compliance with Environmental Laws and shall
regularly report to the Agent on such response.
(b) Without limiting the generality of the foregoing, the
Borrower Parties shall submit to the Agent and the Lenders (i) with respect to
the Real Estate Collateral, annually, commencing on the First Anniversary Date,
and on each Anniversary Date thereafter or (ii) with respect to all other Real
Estate owned by the Parent Guarantor or a Subsidiary, upon the request of the
Agent and, so long as no Event of Default has occurred and is continuing, not
more frequently than once per year, an update of the status of any actual or
threatened Environmental Claims. The Agent or any Lender may obtain copies of
technical reports prepared by the Parent Guarantor and the Subsidiaries and
their communications with any Governmental Authority to determine whether the
appropriate Borrower Parties are proceeding reasonably to correct, cure or
address in good faith any alleged Environmental Claim. If an Environmental Claim
has been made or if a Default or Event of Default has occurred and is
continuing, the Borrower Parties shall, at the Agent's or the Majority Lenders'
request and at the Borrowers' expense, (i) retain an independent environmental
engineer acceptable to the
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Agent to evaluate the site, including tests if appropriate, where the
Environmental Claim has occurred and prepare and deliver to the Agent, in
sufficient quantity for distribution by the Agent to the Lenders, a report
setting forth the results of such evaluation, a proposed plan for responding to
any potential environmental liabilities described therein, and an estimate of
the costs thereof, and (ii) provide to the Agent and the Lenders a supplemental
report of such engineer whenever the scope of the actual or potential
environmental liability or the estimated costs thereof, shall increase in any
material respect.
(c) If an Environmental Claim has been made or if a Default or
Event of Default has occurred and is continuing, the Agent and its
representatives will have the right at any reasonable time to enter and visit
any Real Estate Collateral for the purposes of observing such Real Estate, the
taking of soil or environmental samples, and conducting tests on any part of
such Real Estate. The Agent is under no duty, however, to visit or observe the
Real Estate Collateral or to conduct tests, and any such acts by the Agent will
be solely for the purposes of protecting the Agent's Liens and preserving the
Agent and the Lenders' rights under the Loan Documents. No site visit,
observation or testing by the Agent and the Lenders will result in a waiver of
any default of the Borrower Parties or impose any liability on the Agent or the
Lenders. In no event will any site visit, observation or testing by the Agent be
a representation that hazardous substances are or are not present in, on or
under the Real Estate Collateral, or that there has been or will be compliance
with any Environmental Law. Neither any Borrower Party nor any other party is
entitled to rely on any site visit, observation or testing by the Agent. The
Agent and the Lenders owe no duty of care to protect the Borrower Parties or any
other party against, or to inform the Borrower Parties or any other party of,
any Contaminant or any other adverse condition affecting the Real Estate
Collateral. The Agent may in its discretion disclose to the Borrower Parties or
to any other party if so required by law any report or findings made as a result
of, or in connection with, any site visit, observation or testing by the Agent.
The Borrower Parties understand and agree that the Agent makes no warranty or
representation to the Borrower Parties or any other party regarding the truth,
accuracy or completeness of any such report or findings that may be disclosed.
The Borrower Parties also understand that, depending on the results of any site
visit, observation or testing by the Agent and disclosed to the Borrower
Parties, the Borrower Parties may have a legal obligation to notify one or more
environmental Governmental Authorities of the results, that such reporting
requirements are site-specific, and that the Borrower Parties must evaluate such
results without advice or assistance from the Agent. In each instance, the Agent
will give the Administrative Borrower reasonable notice before entering the Real
Estate Collateral. The Agent will make reasonable efforts to avoid interfering
with the Borrower Parties' use of the Real Estate Collateral or any other
property in exercising any rights provided hereunder.
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7.8 FOOD AND DRUG LAWS.
(a) The Parent Guarantor and each Subsidiary shall conduct its
business in compliance in all material respects with all Food and Drug Laws
applicable to it, including those relating to the manufacture, sale, disposal
and transport of pharmaceutical, drug and biological products. The Parent
Guarantor and each Subsidiary shall take timely and appropriate action to
respond to any notice from the FDA of or any actual knowledge of any material
non-compliance by it with Food and Drug Laws and shall regularly (at least
quarterly) report to the Agent on such response.
(b) Without limiting the generality of the foregoing, the
Borrower Parties shall submit to the Agent and the Lenders annually, commencing
on the First Anniversary Date, and on each Anniversary Date thereafter, an
update of the status of the Parent Guarantor's and the Subsidiaries' compliance
with Food and Drug Laws, and any actual or threatened liabilities or actions
under such laws. Any notices or allegations of non-compliance, including a
request or order to recall a product, provided to Parent Guarantor or any
Subsidiary shall be forwarded to the Agent or any Lender within five (5)
Business Days of receipt. Upon reasonable request of the Agent or the Lenders,
the Borrower Parties shall forward all material communications with any
Governmental Authority regarding the alleged violation or non-compliance with
Food and Drug Laws. Upon receipt of notice from the FDA with respect to an
alleged violation or non-compliance with Food and Drug laws (excluding alleged
violations with respect to products that have not been launched) or at any time
that a Default or Event of Default has occurred and is continuing, the Borrower
Parties shall, at the Agent's or the Majority Lenders' reasonable request and at
the Borrowers' expense, (i) retain an independent contractor reasonably
acceptable to the Agent to evaluate the operations and the alleged violations
(excluding alleged violations with respect to products that have not been
launched) (it being understood that so long as no Default or Event of Default
has occurred and is continuing, any such evaluation of operations shall be
limited to the operations that are the subject of the alleged violations), and
(ii) prepare and deliver to the Agent, in sufficient quantity for distribution
by the Agent to the Lenders, a report setting forth the results of such
evaluation, a proposed plan for responding to any potential liabilities
described therein, and an estimate of the costs thereof.
(c) Upon receipt of notice from the FDA with respect to an
alleged violation or non-compliance with Food and Drug laws in all material
respects (excluding alleged violations with respect to products that have not
been launched) or at any time that a Default or Event of Default has occurred
and is continuing, the Agent or its representatives or independent contractors
shall have the right at any reasonable time to enter and visit any Real Estate
currently owned and/or leased by the Parent Guarantor or any Subsidiary for the
purposes of observing the operations and possibly sampling products and product
lines of the Parent Guarantor and the Subsidiaries with respect to their
compliance with Food and Drug Laws. The Agent is under no duty, however, to
undertake such visits, and any such acts by the Agent will be solely for the
purposes of
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protecting the Agent's Liens and preserving the Agent and the Lenders' rights
under the Loan Documents. No site visit, observation or testing by the Agent and
the Lenders will result in a waiver of any Default of the Borrower Parties or
impose any liability on the Agent or the Lenders. In no event shall any such
site visit or reports therefrom be a representation that the Parent Guarantor or
any Subsidiary is in compliance or non-compliance with any Food and Drug Laws.
None of the Parent Guarantor, any Subsidiary or any other party is entitled to
rely on any site visit, observation or testing by the Agent.
7.9 COMPLIANCE WITH ERISA. Each Borrower Party shall, and shall cause
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in
a prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan; and (e) not engage in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
7.10 MERGERS, CONSOLIDATIONS OR SALES. Neither the Parent Guarantor nor
any Subsidiary shall enter into any transaction of merger, reorganization, or
consolidation, or transfer, sell, assign, lease, or otherwise dispose of all or
any part of its property, or wind up, liquidate or dissolve, or agree to do any
of the foregoing, except the following:
(i) sales of Inventory in the ordinary course of its
business;
(ii) (A) sales or other dispositions of Borrowing
Base Equipment of the Borrowers (meaning equipment that was
appraised in connection with the closing of this Agreement and
included in the calculation of the Maximum Equipment Loan
Amount and any replacements thereof) in the ordinary course of
business that are obsolete or no longer useable on a
commercially reasonable basis by any Borrower in its business
with a net orderly liquidation value not to exceed $2,500,000
in the aggregate in any Fiscal Year, (B) sales or other
dispositions of Equipment of the Parent Guarantor or and the
Subsidiaries (other than Equipment of the Borrowers referred
to in clause (A) above) in the ordinary course of business
that are obsolete or no longer useable on a commercially
reasonable basis by any such Person in its business, (C) the
sale or disposition of the stock of any Subsidiary (other than
a Borrower) or any other assets of a Subsidiary (other than
assets included in the Borrowing Base (including equipment
that was appraised in connection with the closing of this
Agreement and included in the calculation of the Maximum
Equipment Loan Amount and any replacements thereof)) so long
as no Default or Event of Default has occurred or is
continuing or would be caused thereby, the purchase price with
respect to each such sale or disposition is for the fair
market value of
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the assets sold, and the aggregate net value of assets sold in
such sales and dispositions does not exceed $20,000,000 per
year (or, if the Borrower Parties can demonstrate to the
reasonable satisfaction of the Agent that the Fixed Charge
Coverage Ratio for the immediately preceding twelve (12)
Fiscal Months is, and would be after giving pro forma effect
to such sale(s), at least 1.25 to 1.00, $30,000,000 per year),
and (D) so long as no Default or Event of Default has occurred
and is continuing, the sale of Equipment by a Borrower to
another Borrower and the sale of Equipment by a Guarantor to
another Borrower Party. All proceeds of a sale or disposition
under clause (A), (B), (C) or (D) above, after payment of
reasonable selling costs, shall be deposited in a Payment
Account. Within one hundred twenty (120) days following each
Equipment sale or disposition under clause (A) of this SECTION
7.10(II), (y) so long as no Default or Event of Default has
occurred and is continuing, the Borrowers may reinvest the
proceeds of that sale or disposition in other Equipment or (z)
the Maximum Equipment Loan Amount shall be permanently reduced
by such amount. All Equipment purchased with such proceeds
shall be free and clear of all Liens, except the Agent's
Liens;
(iii) the merger of a Borrower into another Borrower
so long as (A) no Default or Event of Default has occurred and
is continuing or would be caused thereby, (B) the Borrower
Parties provide the Agent with 10 days prior written notice of
such merger, and (C) contemporaneously with such merger, the
Borrower Parties deliver to the Agent all documents reasonably
requested by the Agent to continue the Agent's Liens on the
Collateral, in each case, in form and substance satisfactory
to the Agent, including, without limitation, such pledge
agreements, new stock certificates and stock powers, financing
statements or other documents as shall be reasonably requested
by the Agent;
(iv) the merger of a Guarantor (other than the Parent
Guarantor) into another Guarantor so long as (A) no Default or
Event of Default has occurred and is continuing or would be
caused thereby, (B) in the event of a merger involving the
Parent Guarantor, the Parent Guarantor shall be the surviving
Person, (C) the Borrower Parties provide the Agent with 10
days prior written notice of such merger, and (D)
contemporaneously with such merger, the Borrower Parties
deliver to the Agent all documents reasonably requested by the
Agent to continue the Agent's Liens on the Collateral, in each
case, in form and substance satisfactory to the Agent,
including, without limitation, such pledge agreements, new
stock certificates and stock powers, financing statements or
other documents as shall be reasonably requested by the Agent;
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(v) the merger of a Guarantor (other than the Parent
Guarantor) into a Borrower so long as (A) no Default or Event
of Default has occurred and is continuing or would be caused
thereby, (B) the applicable Borrower shall be the surviving
Person, (C) the Borrower Parties provide the Agent with 10
days prior written notice of such merger, (D)
contemporaneously with such merger, the Borrower Parties
deliver to the Agent all documents reasonably requested by the
Agent to continue the Agent's Liens on the Collateral, in each
case, in form and substance satisfactory to the Agent,
including, without limitation, such pledge agreements, new
stock certificates and stock powers, financing statements or
other documents as shall be reasonably requested by the Agent,
and (E) the Guarantor that is merging into a Borrower does not
have liabilities in excess of $2,000,000; and
7.11 DISTRIBUTIONS; CAPITAL CHANGE; RESTRICTED INVESTMENTS. Neither the
Parent Guarantor nor any Subsidiary shall (i) directly or indirectly declare or
make, or incur any liability to make, any Distribution, except Distributions to
a Borrower by its Subsidiaries and, so long as no Default or Event of Default
has occurred and is continuing or would be caused thereby and only to the extent
necessary to pay reasonable accounting and administrative expenses and to pay
regularly scheduled interest payments on Debt permitted under SECTION 7.14(F) to
the extent such interest payments are permitted under the subordination
provisions applicable thereto, Distributions by the Subsidiaries to the Parent
Guarantor, (ii) make any change in its capital structure which could have a
Material Adverse Effect or (iii) make any Restricted Investment. Notwithstanding
the foregoing, Andrx Management Corporation may temporarily transfer its
investment securities currently held in account number 107-89630-1-2-516 at Bank
of America Securities LLC and account number 033-50061 at CIBC Xxxxxxxxxxx to
the Andrx 2002 Irrevocable Trust dated December 13, 2002 (the "2002 Trust
Agreement") so long as (a) Andrx Management Corporation remains the sole
beneficiary of such trust at all times, (b) such investment securities are
transferred back to Andrx Management Corporation and to the accounts referenced
above no later than January 3, 2002 and (c) no Loans or Letters of Credit are
outstanding at any time during such period. At future year ends, Andrx
Management Corporation may temporarily transfer its investment securities to a
trust pursuant to similar arrangements so long as (a) the trust documents with
respect thereto are substantially similar to, or provide substantially similar
tax treatment as, the 2002 Trust Agreement or such other documentation
reasonably acceptable to the Agent and, in any event, Andrx Management
Corporation is the sole beneficiary of such trust, (b) such investment
securities are held in such trust for a period of time no greater than fifteen
(15) days, (c) no Loans or Letters of Credit are outstanding at any time while
such investment securities are held in such trust or the Agent has received
Collateral documentation reasonably acceptable to it, (d) the investment
securities are returned to the same investment accounts of Andrx Management
Corporation within fifteen (15) days of the date such investment securities are
transferred out of such investment accounts, and (e) no Default or Event of
Default has occurred or is continuing.
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7.12 TRANSACTIONS AFFECTING COLLATERAL OR OBLIGATIONS. Neither the
Parent Guarantor nor any Subsidiary shall enter into any transaction which would
be reasonably expected to have a Material Adverse Effect.
7.13 GUARANTIES. Neither the Parent Guarantor nor any Subsidiary shall
make, issue, or become liable on any Guaranty, except (a) Guaranties of the
Obligations in favor of the Agent, (b) Guaranties by the Parent Guarantor of
Debt permitted by SECTION 7.14, trade payables and real estate operating leases,
(c) Guaranties by Subsidiaries of Debt permitted by SECTION 7.14(F) and (d)
indemnifications by the Parent Guarantor and Andrx Pharmaceuticals, Inc. in
favor of Chicago Title Insurance Company in connection with the issuance of the
title policy for the Mortgage in favor of the Agent with respect to the Real
Estate Collateral located in Florida.
7.14 DEBT. Neither the Parent Guarantor nor any Subsidiary shall incur
or maintain any Debt, other than: (a) the Obligations; (b) Debt described on
SCHEDULE 6.9; (c) Capital Leases of Equipment, secured Debt incurred to purchase
Equipment or Real Estate and Debt incurred to finance insurance policy premiums
provided that (i) Liens securing the same attach only to the applicable
Equipment, Real Estate or insurance policy acquired by the incurrence of such
Debt, and (ii) the aggregate amount of such Debt (including Capital Leases)
outstanding does not exceed $20,000,000 at any time; (d) Debt evidencing a
refunding, renewal or extension of the Debt described on SCHEDULE 6.9; provided
that (i) the principal amount thereof is not increased, (ii) the Liens, if any,
securing such refunded, renewed or extended Debt do not attach to any assets in
addition to those assets, if any, securing the Debt to be refunded, renewed or
extended, (iii) no Person that is not an obligor or guarantor of such Debt as of
the Closing Date shall become an obligor or guarantor thereof, and (iv) the
terms of such refunding, renewal or extension are no less favorable to the
Parent Guarantor and its Subsidiaries, the Agent or the Lenders than the
original Debt; (e) Debt incurred to refinance the Revolving Loans made on
account of the Fixed Assets component of the Borrowing Base on such terms and
conditions and in such amount as shall be acceptable to the Agent (it is
understood and agreed that, upon payment of amounts required under SECTION 3.2,
the Agent shall release its lien on any Fixed Assets so refinanced); (f) Debt of
the Parent Guarantor that is subordinated to the Obligations on such terms and
conditions (including subordination terms) and in such amount as shall be
acceptable to the Majority Lenders, provided that in any event no payments other
than current interest payments (so long as no standstill is in effect) in an
amount acceptable to the Majority Lenders shall be made in respect of such Debt
until the date six (6) months following the Stated Termination Date; and (g) so
long as no Default or Event of Default has occurred and is continuing, loans
from a Borrower Party to another Borrower Party (other than the Parent
Guarantor) and the Borrower Parties (other than the Parent Guarantor) may
otherwise have "due to / due from" transactions among themselves in the ordinary
course of business to facilitate the payment of accounts payables of such
Borrower Parties. The Parent Guarantor shall not enter into any amendment or
modification of the documents evidencing the Debt
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permitted under clause (f) above that is in any manner adverse to the Parent
Guarantor, any Subsidiary, the Agent or any Lender.
7.15 PREPAYMENT. Neither the Parent Guarantor nor any Subsidiary shall
voluntarily prepay any Debt, except the Obligations in accordance with the terms
of this Agreement.
7.16 TRANSACTIONS WITH AFFILIATES. Except as set forth below and except
for mergers permitted under Section 7.10, neither the Parent Guarantor nor any
Subsidiary shall sell, transfer, distribute, or pay any money or property,
including, but not limited to, any fees or expenses of any nature (including,
but not limited to, any fees or expenses for management services), to any
Affiliate, or lend or advance money or property to any Affiliate, or invest in
(by capital contribution or otherwise) or purchase or repurchase any stock or
indebtedness, or any property, of any Affiliate, or become liable on any
Guaranty of the indebtedness, dividends, or other obligations of any Affiliate.
Notwithstanding the foregoing, while no Event of Default has occurred and is
continuing, the Parent Guarantor and their Subsidiaries may engage in
transactions with Affiliates in the ordinary course of business consistent with
past practices, in amounts and upon terms fully disclosed to the Agent and the
Lenders, and no less favorable to the Parent Guarantor and the Subsidiaries than
would be obtained in a comparable arm's-length transaction with a third party
who is not an Affiliate.
7.17 INVESTMENT BANKING AND FINDER'S FEES. Neither the Parent Guarantor
nor any Subsidiary shall pay or agree to pay, or reimburse any other party with
respect to, any investment banking or similar or related fee, underwriter's fee,
finder's fee, or broker's fee to any Person in connection with this Agreement.
Each Borrower Party shall defend and indemnify the Agent and the Lenders against
and hold them harmless from all claims of any Person that the Parent Guarantor
or any Subsidiary is obligated to pay for any such fees, and all costs and
expenses (including reasonable attorneys' fees) incurred by the Agent and/or any
Lender in connection therewith.
7.18 BUSINESS CONDUCTED. Neither the Parent Guarantor nor any
Subsidiary shall engage, directly or indirectly, in any line of business other
than the businesses in which such Person is engaged on the Closing Date or
businesses that are ancillary to, complementary with or related to businesses in
which any of the Borrower Parties are engaged in on the Closing Date. Without
limiting the generality of the foregoing, the Parent Guarantor shall not engage
in any material business other than holding the Stock of the Subsidiaries and
the Dormant Xxxxxxxxxxx.xxx Subsidiary shall not engage in any material
business, own any material assets or have any material liabilities and such
Subsidiary shall be merged into Xxxxxxxxxxx.xxx (US) Ltd. on or before February
28, 2003.
7.19 LIENS. Neither the Parent Guarantor nor any Subsidiary shall
create, incur, assume, or permit to exist any Lien on any property, including
without limitation to the Real Estate, now owned or hereafter acquired by any of
them, except Permitted Liens.
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7.20 SALE AND LEASEBACK TRANSACTIONS. Neither the Parent Guarantor nor
any Subsidiary shall, directly or indirectly, enter into any arrangement with
any Person providing for the Parent Guarantor or such Subsidiary to lease or
rent property that the Parent Guarantor or such Subsidiary has sold or will sell
or otherwise transfer to such Person.
7.21 NEW SUBSIDIARIES. Neither the Parent Guarantor nor any Subsidiary
shall, directly or indirectly, organize, create, acquire or permit to exist any
Subsidiary other than those listed on SCHEDULE 6.5 or reinstate Aspire
Pharmaceuticals, LLC which has been administratively dissolved prior to the
Closing Date; provided, however, that the Borrower Parties may create new wholly
owned direct or indirect domestic Subsidiaries and reinstate Aspire
Pharmaceuticals, LLC after the Closing Date so long as at the time of the
formation or reinstatement of any such direct or indirect Subsidiary of any
Borrower Party, the Borrower Parties, or any of them, as appropriate, shall (a)
cause such new Subsidiary or reinstated Subsidiary to provide to the Agent a
joinder agreement in the form of Exhibit G hereto (a "Guarantor Joinder
Agreement"), a supplement to the Subsidiary Guaranty, a supplement to the
Security Agreement, and such other security documents requested by the Agent in
its discretion, together with appropriate UCC-1 financing statements, all in
form and substance satisfactory to the Agent, (b) provide to the Agent a pledge
agreement and appropriate certificates and powers or UCC-1 financing statements,
pledging all direct or beneficial ownership interests in such new Subsidiary or
reinstated Subsidiary, in form and substance satisfactory to the Agent, and (c)
provide to the Agent all other documentation, including one or more opinions of
counsel satisfactory to the Agent, which in its opinion is appropriate with
respect to such formation or reinstatement and the execution and delivery of the
applicable documentation referred to above. Upon execution and delivery of a
Credit Agreement Supplement by each new or reinstated domestic Subsidiary, such
domestic Subsidiary shall become a Guarantor hereunder with the same force and
effect as if originally named as a Guarantor herein. The execution and delivery
of any Guaranty Joinder Agreement shall not require the consent of any Borrower
Party hereunder. The rights and obligations of each Borrower Party hereunder
shall remain in full force and effect notwithstanding the addition of any
Guarantor hereunder. Any document, agreement or instrument executed or issued
pursuant to this SECTION 7.21 shall be a "Loan Document" for purposes of this
Agreement.
7.22 FISCAL YEAR. The Parent Guarantor shall not change its Fiscal Year
without the prior written consent of the Agent.
7.23 CAPITAL EXPENDITURES. Neither the Parent Guarantor nor any of its
Subsidiaries shall make or incur any Capital Expenditure if, after giving effect
thereto, the aggregate amount of all Capital Expenditures by the Parent
Guarantor and the Subsidiaries on a consolidated basis would exceed during any
fiscal period the amount set forth in the table below for such fiscal period:
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----------------------------------------- --------------------------------------
Fiscal Year: Maximum Capital Expenditures:
----------------------------------------- --------------------------------------
2003 Capital Expenditures shall not exceed
$95,000,000 during such Fiscal Year,
provided, that, in addition to such
annual limit, if at any time during
any Fiscal Quarter during such Fiscal
Year a Sweep Period is in effect,
Capital Expenditures during such
Fiscal Quarter shall not exceed 158%
of EBITDA for such Fiscal Quarter
----------------------------------------- --------------------------------------
2004 Capital Expenditures shall not exceed
$92,000,000 during such Fiscal Year,
provided, that, in addition to such
annual limit, if at any time during
any Fiscal Quarter during such Fiscal
Year a Sweep Period is in effect,
Capital Expenditures during such
Fiscal Quarter shall not exceed 35% of
EBITDA for such Fiscal Quarter
----------------------------------------- --------------------------------------
2005 and thereafter Capital Expenditures shall not exceed
$60,000,000 during such Fiscal Year,
provided, that, in addition to such
annual limit, if at any time during
any Fiscal Quarter during such Fiscal
Year a Sweep Period is in effect,
Capital Expenditures during such
Fiscal Quarter shall not exceed 20% of
EBITDA for such Fiscal Quarter
----------------------------------------- --------------------------------------
7.24 FIXED CHARGE COVERAGE RATIO; MINIMUM AVAILABILITY. If as of the
last day of any Fiscal Month (each, a "CALCULATION MONTH") the Parent Guarantor
fails to maintain a Fixed Charge Coverage Ratio for the immediately preceding
twelve (12) Fiscal Month period of at least 1.25 to 1.00, the Borrowers will
maintain Availability of at least $75,000,000 (or, if the Maximum Fixed Assets
Loan Amount portion of the Borrowing Base has been terminated and the Maximum
Revolver Amount has been permanently reduced to $150,000,000 in connection
therewith pursuant to Section 3.2, $50,000,000), at all times (a) with respect
to all Calculation Months other than March, June, September and December, during
the second Fiscal Month following the Calculation Month, and (b) with respect to
March, June, September and December, during remaining portion of the second
Fiscal Month following the Calculation Month after the due date (without giving
effect to any cure periods set forth in SECTION 9.1(C)) for delivery of the
financial statements with respect to such Calculation Month pursuant to SECTION
5.2(B); PROVIDED, HOWEVER, that (i) with respect to February, May, August and
November, the Availability requirement will apply during the second Fiscal Month
following the Calculation Month plus the first portion of the third Fiscal Month
following the Calculation Month until the
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due date (without giving effect to any cure periods set forth in SECTION 9.1(C))
for delivery of the financial statements with respect to the most recently ended
Fiscal Quarter, and (ii) if the Borrowers fail to deliver financial statements
on the due date therefor (without giving effect to any cure periods set forth in
SECTION 9.1(C)) such that the Fixed Charge Coverage Ratio set forth in this
sentence cannot be calculated, the Fixed Charge Coverage Ratio shall be deemed
to be less than 1.25 to 1.00 until such time as financial statements are
actually delivered.
7.25 USE OF PROCEEDS. No Borrower shall, nor shall it suffer or permit
any Subsidiary or the Parent Guarantor to, use any portion of the Loan proceeds,
directly or indirectly, (a) on the Closing Date, for any purpose other than to
pay transactional fees, costs, and expenses incurred in connection with this
Agreement, the other Loan Documents, and the transactions contemplated hereby
and thereby, (b) after the Closing Date, for any purpose inconsistent with the
purposes, terms and conditions hereof or other than for lawful and permitted
purposes, (c) to purchase or carry Margin Stock, (d) to repay or otherwise
refinance indebtedness of the Borrowers or others incurred to purchase or carry
Margin Stock, (e) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (f) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act.
7.26 FURTHER ASSURANCES. The Borrower Parties shall execute and
deliver, or cause to be executed and delivered, to the Agent and/or the Lenders
such documents and agreements, and shall take or cause to be taken such actions,
as the Agent or any Lender may, from time to time, request to carry out the
terms and conditions of this Agreement and the other Loan Documents. If any of
the North Carolina Real Estate Conditions shall not have been satisfied on or
before March 28, 2003 or such later date as shall be approved by the Agent, New
Andrx Pharmaceuticals, Inc. shall enter into a modification of the Mortgage on
the property at 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxxxx to increase the amount secured
by such Mortgage to the appraised value of the property covered by such
Mortgage.
ARTICLE 8
CONDITIONS OF LENDING
8.1 CONDITIONS PRECEDENT TO MAKING OF LOANS ON THE CLOSING DATE. The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date, and the obligation of the Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit on the Closing Date, are subject to the following
conditions precedent having been satisfied in a manner reasonably satisfactory
to the Agent and each Lender:
(a) This Agreement and the other Loan Documents shall have
been executed by each party thereto and the Parent Guarantor and the
Subsidiaries shall have performed and complied with all covenants, agreements
and conditions contained herein and the other Loan Documents which are required
to be performed or complied with by the Parent Guarantor and the Subsidiaries
before or on such Closing Date.
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(b) Upon making the Revolving Loans (including such Revolving
Loans made to finance the Closing Fee or otherwise as reimbursement for fees,
costs and expenses then payable under this Agreement) and with all its
obligations current, the Borrowers shall have Availability of at least
$100,000,000.
(c) All representations and warranties made hereunder and in
the other Loan Documents shall be correct and complete as if made on such date.
(d) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of Credit
to be issued on the Closing Date.
(e) The Agent and the Lenders shall have received such
opinions of counsel for the Parent Guarantor and the Subsidiaries as the Agent
or any Lender shall request, each such opinion to be in a form, scope, and
substance reasonably satisfactory to the Agent, the Lenders, and their
respective counsel.
(f) The Agent shall have received ALTA title policies, in form
and substance acceptable to Agent, with respect to the Mortgages.
(g) The Agent shall have received:
(i) acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the
UCC of all jurisdictions that the Agent may deem necessary or
desirable in order to perfect the Agent's Liens; and
(ii) duly executed UCC termination statements and
such other instruments, in form and substance reasonably
satisfactory to the Agent, as shall be necessary to terminate
and satisfy all Liens on the Property of the Parent Guarantor
and the Subsidiaries except Permitted Liens.
(h) The Borrowers shall have paid all fees and expenses of the
Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent invoiced.
(i) The Agent shall have received evidence, in form, scope,
and substance, reasonably satisfactory to the Agent, of all insurance coverage
as required by this Agreement.
(j) The Agent and the Lenders shall have completed their
business, legal and collateral due diligence, including (i) if they so choose an
examination of the books of account and other records and files of the Parent
Guarantor and the Subsidiaries and the opportunity to make copies thereof, and
to conduct a pre-closing audit which shall include, without limitation,
verification of Inventory, Accounts, and the Borrowing
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Base, and the results of such examination and audit shall have been satisfactory
to the Agent and the Lenders in all respects, (ii) an inspection of each of the
locations where the Inventory is located, the results of which shall be
satisfactory to the Agent, and (iii) a review of the Borrower Parties' material
contracts.
(k) All proceedings taken in connection with the execution of
this Agreement, all other Loan Documents and all documents and papers relating
thereto shall be satisfactory in form, scope, and substance to the Agent and the
Lenders.
(l) The Agent shall have received a phase-I or phase-II
environmental report with respect to each parcel of Real Estate Collateral
(other than the North Carolina Real Estate Collateral), and the environmental
consultants retained for such reports, the scope of the reports, and remediation
costs and procedures, if any, and the results thereof shall be reasonably
acceptable to Agent and its counsel.
(m) The Agent shall have received a landlord waiver, bailee
letter, or acknowledgement agreement from any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a lien upon, or having
rights or interests in the Borrowers' Inventory or Equipment.
(n) The Agent shall have a notice from the Administrative
Borrower setting forth the Designated Account.
(o) The Agent shall have received an appraisal of the Real
Estate Collateral (other than the North Carolina Real Estate Collateral), the
results of which shall be satisfactory to the Agent and the Lenders.
(p) The Agent shall have received evidence satisfactory to it
that the following have occurred prior to the Closing Date:
(i) Anda Consumer Products, Inc. has merged into
Anda, Inc. and Anda, Inc. is the surviving Person;
(ii) Andrx Pharmaceuticals (NJ), Inc. has merged into
Andrx Florida and Andrx Florida is the surviving Person or
Andrx Pharmaceuticals (NJ), Inc. has dissolved and its assets
have been distributed to Andrx Florida;
(iii) Andrx Pharmaceuticals Sales, Inc. has merged
into Andrx Florida and Andrx Florida is the surviving Person
or Andrx Pharmaceuticals Sales, Inc. has dissolved and its
assets have been distributed to Andrx Florida;
(iv) Andrx Financial Corp. has merged into Andrx
Florida and Andrx Florida is the surviving Person or Andrx
Financial Corp. has
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dissolved and its assets have been distributed to Andrx
Florida (it being understood that prior to such merger or
distribution a note receivable to Andrx Financial Corp. from
Andrx Florida in the approximate amount of $33,000,000 shall
be forgiven by Andrx Financial Corp.);
(v) Aura Pharmaceuticals, Inc. has merged into Andrx
Florida and Andrx Florida is the surviving Person or Aura
Pharmaceuticals, Inc. has dissolved and its assets have been
distributed to Andrx Florida;
(vi) After consummation of items (i) through (v)
above, the assets of Andrx Florida (other than the Stock of
its Subsidiaries) have been contributed to Anda Sales, Inc., a
Florida corporation, and the employees of Andrx Florida have
ceased being employees of Andrx Florida and have become
employees of Anda Sales, Inc., a Florida corporation;
(vii) Anda Sales, Inc., a Florida corporation, has
changed its name to Andrx Management Corporation;
(viii) New Andrx Pharmaceuticals, Inc. and Andrx
Pharmaceuticals (NC), Inc. have been formed under the laws of
Florida;
(ix) Telegraph Consulting Corp. has merged into
Cybear, LLC and Cybear, LLC is the surviving Person or
Telegraph Consulting Corp. has dissolved and its assets have
been distributed to Cybear, LLC;
(x) Cybear Acquisition Corp. has merged into Cybear,
LLC and Cybear, LLC is the surviving Person or Cybear
Acquisition Corp. has dissolved and its assets have been
distributed to Cybear, LLC;
(xi) Valmed Pharmaceutical, LLC has merged into
Valmed Pharmaceutical, Inc. and Valmed Pharmaceutical, Inc. is
the surviving Person or Valmed Pharmaceutical, LLC has
dissolved and its assets have been distributed to Valmed
Pharmaceutical, Inc.;
(xii) Andrx Florida has merged into the Parent
Guarantor and the Parent Guarantor is the surviving Person;
(xiii) Andrx Pharmaceuticals, Inc. has merged into
Andrx Pharmaceuticals, LLC, a Delaware limited liability
company ("Andrx Pharmaceuticals, LLC");
(xiv) The research and development, real estate,
manufacturing and distribution assets of Andrx
Pharmaceuticals, LLC have been contributed to New Andrx
Pharmaceuticals, Inc.;
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(xv) Andrx Pharmaceuticals, LLC has distributed to
the Parent Guarantor its equity interests in Andrx
Pharmaceuticals Equipment #1, LLC and New Andrx
Pharmaceuticals, Inc.;
(xvi) Andrx Pharmaceuticals Equipment #1, L.C. shall
have changed its name to Andrx Pharmaceuticals Equipment #1,
LLC;
(xvii) The research and development assets of Andrx
Labs, Inc. have been contributed to Andrx Laboratories (NJ),
Inc.;
(xviii) Andrx Labs, Inc. has merged into Andrx Labs,
LLC, a Delaware limited liability company ("Andrx Labs, LLC");
(xix) Andrx Labs, LLC has distributed to the Parent
Guarantor its equity interests in Andrx Laboratories (NJ),
Inc.;
(xx) Physicians' Online, Inc., a Delaware
corporation, has converted to a Delaware limited liability
company and changed its name to Physicians' Online, LLC; and
(xxi) Each of (A) I Health, Inc. of Delaware, a
Delaware corporation, f/k/a Ihealth Inc., a Delaware
corporation, (B) Xxxxxxxxxxxx.xxx, Inc., a Delaware
corporation and (C) Web North Star Interactive Corp., a New
York corporation, shall have merged into Xxxxxxxxxxx.xxx (US)
Ltd. or shall have dissolved and the assets thereof shall have
been distributed to Xxxxxxxxxxx.xxx, Inc.
(q) The Agent shall have received a corporate organizational
chart for the Parent Guarantor and the Subsidiaries certified by the secretary
of the Parent Guarantor as being correct and complete as of the Closing Date.
(r) Without limiting the generality of the items described
above, the Borrower and each Person guarantying or securing payment of the
Obligations shall have delivered or caused to be delivered to the Agent (in form
and substance reasonably satisfactory to the Agent), the financial statements
and projections, instruments, resolutions, documents, agreements, certificates,
opinions and other items set forth on the "Closing Checklist" delivered by the
Agent to the Borrowers prior to the Closing Date.
The acceptance by the Borrowers of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrower Parties to the effect that all of the conditions precedent
to the making of such Loans or the issuance of such Letters of Credit have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Administrative Borrower,
dated the Closing Date, to such effect.
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Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this SECTION 8.1 have been fulfilled to the satisfaction
of such Lender, (ii) the decision of such Lender to execute and deliver to the
Agent an executed counterpart of this Agreement was made by such Lender
independently and without reliance on the Agent or any other Lender as to the
satisfaction of any condition precedent set forth in this SECTION 8.1, and (iii)
all documents sent to such Lender for approval, consent, or satisfaction were
acceptable to such Lender.
8.2 CONDITIONS PRECEDENT TO EACH LOAN. The obligation of the Lenders to
make each Loan, including the initial Revolving Loans on the Closing Date, and
the obligation of the Agent to cause the Letter of Credit Issuer to issue any
Letter of Credit, shall be subject to the further conditions precedent that on
and as of the date of any such extension of credit:
(a) The following statements shall be true, and the acceptance
by the Borrowers of any extension of credit shall be deemed to be a statement to
the effect set forth in clauses (i), (ii) and (iii) with the same effect as the
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer of the Administrative Borrower, dated the date of such extension of
credit, stating that:
(i) The representations and warranties contained in
this Agreement and the other Loan Documents are correct in all
material respects on and as of the date of such extension of
credit as though made on and as of such date, other than any
such representation or warranty which relates to a specified
prior date and except to the extent the Agent and the Lenders
have been notified in writing by the Borrowers that any
representation or warranty is not correct and the Majority
Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes
a Default or an Event of Default; and
(iii) No event has occurred and is continuing, or
would result from such extension of credit, which has had or
would reasonably be expected to have a Material Adverse
Effect.
(b) No such Borrowing shall exceed Excess Availability,
provided, however, that the foregoing conditions precedent are not conditions to
each Lender participating in or reimbursing the Bank or the Agent for such
Lenders' Pro Rata Share of any Non-Ratable Loan or Agent Advance made in
accordance with the provisions of SECTIONS 1.2(H) and (I).
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ARTICLE 9
DEFAULT; REMEDIES
9.1 EVENTS OF DEFAULT. It shall constitute an event of default ("Event
of Default") if any one or more of the following shall occur for any reason:
(a) any failure by the Borrowers to pay the principal of or
interest or premium on any of the Obligations or any fee or other amount owing
hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by any
Borrower Party in this Agreement or in any of the other Loan Documents, any
Financial Statement, or any certificate furnished by any Borrower Party at any
time to the Agent or any Lender shall prove to be untrue in any material respect
as of the date on which made, deemed made, or furnished;
(c) (i) any default shall occur in the observance or
performance of any of the covenants and agreements contained in SECTIONS 5.2(L),
5.4, 7.2(A), 7.5, 7.8-7.27, or Section 10 of the Security Agreement, provided,
however, that if there are no Loans or Letters of Credit outstanding upon the
occurrence and during the continuance of a Default under SECTION 5.4 or SECTION
7.5 there shall be a three (3) day cure period with respect thereto prior to
such Default constituting an Event of Default hereunder, (ii) any default shall
occur in the observance or performance of any of the covenants and agreements
contained in SECTIONS 5.2 (OTHER THAN 5.2(L)) or 5.3 and such default shall
continue for three (3) days or more; or (iii) any default shall occur in the
observance or performance of any of the other covenants or agreements contained
in any other Section of this Agreement or any other Loan Document, any other
Loan Documents, or any other agreement entered into at any time to which any
Borrower Party and the Agent or any Lender are party (including in respect of
any Bank Products) and such default shall continue for twenty (20) days or more;
(d) any default shall occur with respect to any Debt (other
than the Obligations) of the Parent Guarantor or any Subsidiary in an
outstanding principal amount which exceeds (i) if there are no outstanding Loans
or Letters of Credit hereunder, $10,000,000 or (ii) if there are outstanding
Loans or Letters of Credit hereunder, the lesser of $5,000,000 or an amount
equal to fifty percent (50%) of the sum of (A) Excess Availability plus (B)
consolidated cash and cash equivalents on hand of the Parent Guarantor and the
Subsidiaries as of the date of the occurrence of such Event of Default, or under
any agreement or instrument under or pursuant to which any such Debt may have
been issued, created, assumed, or guaranteed by the Parent Guarantor or any
Subsidiary and such default shall continue for more than the period of grace, if
any, therein specified, if the effect thereof (with or without the giving of
notice or further lapse of time or both) is to accelerate, or to permit the
holders of any such Debt to accelerate, the maturity of any such Debt; or any
such Debt shall be declared due and payable or be
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required to be prepaid (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof;
(e) the Parent Guarantor or any Subsidiary shall (i) file a
voluntary petition in bankruptcy or file a voluntary petition or an answer or
otherwise commence any action or proceeding seeking reorganization, arrangement
or readjustment of its debts or for any other relief under the Bankruptcy Code
or under any Other Debtor Relief Law, or consent to, approve of, or acquiesce
in, any such petition, action or proceeding; (ii) apply for or acquiesce in the
appointment of a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for it or for all or any part of its
property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(f) an involuntary petition shall be filed or an action or
proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Parent Guarantor or any
Subsidiary or for any other relief under the Bankruptcy Code or under any Other
Debtor Relief Law and such petition or proceeding shall not be dismissed within
sixty (60) days after the filing or commencement thereof or an order of relief
shall be entered with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for the Parent Guarantor or any Subsidiary
or for all or any part of its property shall be appointed or a warrant of
attachment, execution or similar process shall be issued against any part of the
property of the Parent Guarantor or any Subsidiary;
(h) the Parent Guarantor or any Subsidiary shall file a
certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against it any action
or proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(i) all or any material part of the property (including
Inventory) of the Parent Guarantor or any Subsidiary shall be nationalized,
expropriated or condemned, recalled, seized or otherwise appropriated, or
custody or control of such property or of the Parent Guarantor or such
Subsidiary shall be assumed by any Governmental Authority or any court of
competent jurisdiction at the instance of any Governmental Authority, except
where contested in good faith by proper proceedings diligently pursued where a
stay of enforcement is in effect; provided, however, that with respect to any
property that is recalled and is not included in the Borrowing Base such
event(s) shall not constitute an Event of Default hereunder unless such
event(s), either individually or in the aggregate, are reasonably likely to
result in a Material Adverse Effect;
(j) any Loan Document shall be terminated (except by the prior
written consent of the requisite Lenders), revoked or declared void or invalid
or unenforceable or challenged by any Borrower Party or any other obligor;
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(k) Except as otherwise agreed by the Lenders and the Agent in
writing on or before the Closing Date, one or more judgments, orders, decrees
(including, without limitation, out of court settlements) or arbitration or
mediation awards is entered against or paid by any Borrower Party involving in
the aggregate liability (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage) as to any single or
related or unrelated series of transactions, incidents or conditions, of
$5,000,000 or more or $5,000,000 or more in the aggregate, or an amount
exceeding fifty percent (50%) of the sum of (A) Excess Availability plus (B)
consolidated cash and cash equivalents on hand of the Parent Guarantor and the
Subsidiaries as of the date of the entry or any date during the continuance of
such judgment, order or decree and the same shall remain unsatisfied, unvacated
and unstayed pending appeal for a period of thirty (30) days after the entry
thereof;
(l) any loss, theft, damage or destruction of any item or
items of Collateral or other property of the Parent Guarantor or any Subsidiary
occurs which could reasonably be expected to cause a Material Adverse Effect and
is not adequately covered by insurance;
(m) there is filed against the Parent Guarantor or any
Subsidiary any action, suit or proceeding under any federal or state
racketeering statute (including the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding (i) is not dismissed
within one hundred twenty (120) days, and (ii) could reasonably be expected to
result in the confiscation or forfeiture of any material portion of the
Collateral;
(n) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens, pursuant
to the Loan Documents, any Loan Document ceases to be in full force and effect
or any Lien with respect to any material portion of the Collateral intended to
be secured thereby ceases to be, or is not, valid, perfected and prior to all
other Liens (other than Permitted Liens) or is terminated, revoked or declared
void (except for any termination that is approved in writing by the requisite
Lenders);
(o) an ERISA Event shall occur with respect to a Pension Plan
or Multi-employer Plan which has resulted or could reasonably be expected to
result in liability of any Borrower Party under Title IV of ERISA to the Pension
Plan, Multi-employer Plan or the PBGC in an aggregate amount, together with the
amount of any liability under clauses (ii) and (iii) of this SECTION 9.1(O), in
excess of $5,000,000 or fifty percent (50%) of the sum of (A) Excess
Availability plus (B) consolidated cash and cash equivalents on hand of the
Parent Guarantor and the Subsidiaries as of the date of the occurrence of the
ERISA Event or at any time during the continuance thereof; (ii) the aggregate
amount of Unfunded Pension Liability among all Pension Plans at any time,
together with the amount of any liability under clauses (i) and (iii) of this
SECTION 9.1(O), exceeds $5,000,000 or fifty percent (50%) of the sum of (A)
Excess Availability plus (B)
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consolidated cash and cash equivalents on hand of the Parent Guarantor and the
Subsidiaries as of the date of the occurrence of the Unfunded Pension Liability
or at any time during the continuance thereof; or (iii) any Borrower Party or
any ERISA Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multi-employer Plan in an
aggregate amount, together with the amount of any liability under clauses (i)
and (ii) of this SECTION 9.1(O), in excess of $5,000,000 or fifty percent (50%)
of the sum of (A) Excess Availability plus (B) consolidated cash and cash
equivalents on hand of the Parent Guarantor and the Subsidiaries as of the date
such payment is due or at any time thereafter until paid in full;
(p) there occurs a Change of Control; or
(q) there occurs an event having a Material Adverse Effect.
9.2 REMEDIES.
(a) If a Default or an Event of Default exists, the Agent may,
in its discretion, and shall, at the direction of the Majority Lenders, do one
or more of the following at any time or times and in any order, without notice
to or demand on the Borrower Parties: (i) reduce the Maximum Revolver Amount, or
the advance rates against Eligible Accounts and/or Eligible Inventory used in
computing the Borrowing Base, or reduce one or more of the other elements used
in computing the Borrowing Base or increasing Reserves; (ii) restrict the amount
of or refuse to make Revolving Loans; and (iii) restrict or refuse to provide
Letters of Credit or Credit Support. If an Event of Default exists, the Agent
shall, at the direction of the Majority Lenders, do one or more of the
following, in addition to the actions described in the preceding sentence, at
any time or times and in any order, without notice to or demand on the Borrower
Parties: (A) terminate the Commitments and this Agreement; (B) declare any or
all Obligations to be immediately due and payable; provided, however, that upon
the occurrence of any Event of Default described in SECTIONS 9.1(E), 9.1(F),
9.1(G), or 9.1(H), the Commitments shall automatically and immediately expire
and all Obligations shall automatically become immediately due and payable
without notice or demand of any kind; (C) require the Borrowers to cash
collateralize one hundred five percent (105%) all outstanding Letter of Credit
Obligations; and (D) pursue its other rights and remedies under the Loan
Documents and applicable law.
(b) If an Event of Default has occurred and is continuing: (i)
the Agent shall have for the benefit of the Lenders, in addition to all other
rights of the Agent and the Lenders, the rights and remedies of a secured party
under the Loan Documents and the UCC; (ii) the Agent may, at any time, take
possession of the Collateral and keep it on the Borrower Parties' premises, at
no cost to the Agent or any Lender, or remove any part of it to such other place
or places as the Agent may desire, or the Borrower Parties shall, upon the
Agent's demand, at the Borrowers' cost, assemble the Collateral and make it
available to the Agent at a place reasonably convenient to the Agent; and (iii)
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the Agent may sell and deliver any Collateral at public or private sales, for
cash, upon credit or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its sole discretion, and may, if the Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement at
the time and place of sale or of such postponed or adjourned sale without giving
a new notice of sale. Without in any way requiring notice to be given in the
following manner, the Borrower Parties agree (on their behalf and on behalf of
their Subsidiaries) that any notice by the Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the UCC
or otherwise, shall constitute reasonable notice to the Parent Guarantor and the
Subsidiaries if such notice is mailed by registered or certified mail, return
receipt requested, postage prepaid, or is delivered personally against receipt,
at least ten (10) Business Days prior to such action to the Administrative
Borrower's address specified in or pursuant to SECTION 13.8. If any Collateral
is sold on terms other than payment in full at the time of sale, no credit shall
be given for the non-cash portion of the purchase price with respect thereto
against the Obligations until the Agent or the Lenders receive cash payment, and
if the buyer defaults in payment, the Agent may resell the Collateral without
further notice to the Parent Guarantor and the Subsidiaries. In the event the
Agent seeks to take possession of all or any portion of the Collateral by
judicial process, the Borrower Parties (on their behalf and on behalf of their
Subsidiaries) irrevocably waive: (A) the posting of any bond, surety or security
with respect thereto which might otherwise be required; (B) any demand for
possession prior to the commencement of any suit or action to recover the
Collateral; and (C) any requirement that the Agent retain possession and not
dispose of any Collateral until after trial or final judgment. The Borrower
Parties agree (on their behalf and on behalf of their Subsidiaries) that the
Agent has no obligation to preserve rights to the Collateral or marshal any
Collateral for the benefit of any Person. The Agent is hereby granted a license
or other right to use, without charge, the Parent Guarantor's and the
Subsidiaries' labels, patents, copyrights, names, trade secrets, trade names,
trademarks, and advertising matter, or any similar property, in completing
production of, advertising or selling any Collateral, and the Parent Guarantor's
and the Subsidiaries' rights under all licenses and all franchise agreements
shall inure to the Agent's benefit for such purpose. The proceeds of sale shall
be applied first to all expenses of sale, including attorneys' fees, and then to
the Obligations. The Agent will return any excess to the Parent Guarantor and
the Subsidiaries and the Parent Guarantor and the Subsidiaries shall remain
liable for any deficiency.
(c) If an Event of Default occurs, the Borrower Parties hereby
waive (on their behalf and on behalf of the Subsidiaries) all rights to notice
and hearing prior to the exercise by the Agent of the Agent's rights to
repossess the Collateral without judicial process or to replevy, attach or levy
upon the Collateral without notice or hearing.
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ARTICLE 10
TERM AND TERMINATION
10.1 TERM AND TERMINATION. The term of this Agreement shall end on the
Stated Termination Date unless sooner terminated in accordance with the terms
hereof. The Agent upon direction from the Majority Lenders may terminate this
Agreement without notice upon the occurrence of an Event of Default. Upon the
effective date of termination of this Agreement for any reason whatsoever, all
Obligations (including all unpaid principal, accrued and unpaid interest and any
early termination or prepayment fees or penalties) shall become immediately due
and payable and the Borrowers shall immediately arrange for (a) the cancellation
and return of Letters of Credit then outstanding or (b) the deposit of cash
collateral or the delivery of a Supporting Letter of Credit in accordance with
the provisions of SECTION 1.3(G). Notwithstanding the termination of this
Agreement, until all Obligations are indefeasibly paid and performed in full in
cash, the Borrower Parties shall remain bound by the terms of this Agreement and
shall not be relieved of any of their respective Obligations hereunder or under
any other Loan Document, and the Agent and the Lenders shall retain all their
rights and remedies hereunder (including the Agent's Liens in and all rights and
remedies with respect to all then existing and after-acquired or after-arising
Collateral).
ARTICLE 11
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 AMENDMENTS AND WAIVERS.
(a) No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent with respect to any departure by the
Borrower Parties therefrom, shall be effective unless the same shall be in
writing and signed by the Majority Lenders (or by the Agent at the written
request of the Majority Lenders) and the Borrower Parties party thereto and then
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; PROVIDED, HOWEVER, that no such
waiver, amendment, or consent shall, unless in writing and signed by the
Required Lenders and the Borrower Parties and acknowledged by the Agent, change
the definition of Eligible Accounts, Eligible Inventory or Maximum Inventory
Loan Amount; PROVIDED FURTHER, HOWEVER, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the Borrower
Parties party thereto and acknowledged by the Agent, do any of the following:
(i) except as set forth in SECTION 1.6, increase or
extend the Commitment of any Lender (it being understood and
agreed that a waiver of any Default or Event of Default or a
modification of any of the defined terms contained herein
shall not constitute a change in the terms of any Commitment
of any Lender);
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(ii) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document;
(iii) reduce the principal of, or the rate of
interest specified herein on any Loan, or any fees or other
amounts payable hereunder or under any other Loan Document;
(iv) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Loans which is
required for the Lenders or any of them to take any action
hereunder;
(v) increase any of the percentages set forth in the
definition of the Borrowing Base;
(vi) amend this Section or any provision of this
Agreement providing for consent or other action by all
Lenders;
(vii) release any material Guaranties of the
Obligations or release Collateral other than as permitted by
SECTION 12.11;
(viii) change the definitions of "Majority Lenders"
or "Required Lenders";
(ix) increase the Maximum Revolver Amount, the
Maximum Fixed Assets Loan Amount or Letter of Credit
Subfacility; or
(x) any change to the amortization provisions in the
definition of Maximum Fixed Assets Loan Amount;
PROVIDED, HOWEVER, the Agent may, in its sole discretion and notwithstanding the
limitations contained in CLAUSES (V) and (IX) above and any other terms of this
Agreement, make Agent Advances in accordance with SECTION 1.2(I) and, PROVIDED
FURTHER, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document and provided further, that SCHEDULE 1.2
hereto (Commitments) may be amended from time to time by Agent alone to reflect
assignments of Commitments in accordance herewith.
(b) [Intentionally omitted.]
(c) If, in connection with any proposed amendment, waiver or
consent (a "Proposed Change") requiring the consent of all Lenders, the consent
of Majority Lenders is obtained, but the consent of other Lenders is not
obtained (any such Lender whose consent is not obtained is hereinafter referred
to as a "Non-Consenting Lender")
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then, so long as the Agent is not a Non-Consenting Lender, at the Borrowers'
request, the Agent or an Eligible Assignee shall have the right (but not the
obligation) with the Agent's approval, to purchase from the Non-Consenting
Lenders, and the Non-Consenting Lenders agree that they shall sell, all the
Non-Consenting Lenders' Commitments for an amount equal to the principal
balances thereof and all accrued interest and fees with respect thereto through
the date of sale pursuant to Assignment and Acceptance agreement(s), without
premium or discount.
11.2 ASSIGNMENTS; PARTICIPATIONS.
(a) Any Lender may, with the written consent of the Agent
(which consent shall not be unreasonably withheld), assign and delegate to one
or more Eligible Assignees (provided that no consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to an
Affiliate of such Lender) (each an "ASSIGNEE") all, or any ratable part of all,
of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $10,000,000 (provided that, unless an
assignor Lender has assigned and delegated all of its Loans and Commitments, no
such assignment and/or delegation shall be permitted unless, after giving effect
thereto, such assignor Lender retains a Commitment in a minimum amount of
$10,000,000); PROVIDED, HOWEVER, that the Borrower Parties and the Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Administrative Borrower
and the Agent by such Lender and the Assignee; (ii) such Lender and its Assignee
shall have delivered to the Administrative Borrower and the Agent an Assignment
and Acceptance in the form of EXHIBIT F ("ASSIGNMENT AND ACCEPTANCE") and (iii)
the assignor Lender or Assignee has paid to the Agent a processing fee in the
amount of $3,500; provided, however, that no such processing fee shall be due in
connection with any assignment by a Lender to an Affiliate of such Lender.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
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(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment, perfection, or priority of any Lien granted
by the Parent Guarantor and any Subsidiary to the Agent or any Lender in the
Collateral; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Parent
Guarantor and the Subsidiaries or the performance or observance by the Parent
Guarantor and the Subsidiaries, as applicable, of any of their obligations under
this Agreement or any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Agent, such
assigning Lender 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 this Agreement; (v) such
Assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers, including the
discretionary rights and incidental power, as are reasonably incidental thereto;
and (vi) such Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of
SECTION 11.2(A), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) Any Lender may at any time sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of any Borrower
Party (a "PARTICIPANT") participating interests in any Loans, the Commitment of
that Lender and the other interests of that Lender (the "ORIGINATING LENDER")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower Parties and the Agent shall continue to
deal solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
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any consent or waiver with respect to, this Agreement or any other Loan Document
except the matters set forth in SECTION 11.1(A) (I), (II) and (III), and all
amounts payable by the Borrowers hereunder shall be determined as if such Lender
had not sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent and subject to the same limitation as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement.
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Board or United States Treasury Regulation 31 C.F.R. ss. 203.14, and such
Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
ARTICLE 12
THE AGENT
12.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby designates and
appoints Bank as its Agent under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this Article 12. The provisions of this
Article 12 are solely for the benefit of the Agent and the Lenders and, except
as otherwise expressly provided in this Article 12, no Borrower Party shall have
any rights as a third party beneficiary of any of the provisions contained
herein. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Agent have or be deemed to have any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is
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expressly entitled to take or assert under this Agreement and the other Loan
Documents, including (a) the determination of the applicability of ineligibility
criteria with respect to the calculation of the Borrowing Base, (b) the making
of Agent Advances pursuant to SECTION 1.2(I), and (c) the exercise of remedies
pursuant to SECTION 9.2, and any action so taken or not taken shall be deemed
consented to by the Lenders.
12.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
12.3 LIABILITY OF AGENT. None of the Agent Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower Party, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Borrower Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Parent Guarantor or any of the Parent Guarantor's Subsidiaries or
Affiliates.
12.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrower Parties), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Lenders (or all Lenders if so required by
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SECTION 11.1) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
12.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, unless the Agent
shall have received written notice from a Lender or the Borrowers referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with SECTION 9; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the 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.
12.6 CREDIT DECISION. Each Lender acknowledges that none of the Agent
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereinafter taken, including any review of the affairs of Borrower
Parties and their Affiliates, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrower Parties and their Affiliates, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrowers. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrower Parties. Except for
notices, reports and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of Borrower Parties which may come into the possession of any
of the Agent Related Persons.
12.7 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the Agent
Related Persons (to the extent not reimbursed by or on behalf of the Borrowers
and without limiting the obligation of the Borrowers to do so), in accordance
with their Pro Rata Shares, from and against any and all Indemnified Liabilities
as such term is defined in SECTION 13.11; provided, however, that no Lender
shall be liable for the payment to the Agent Related Persons of any portion of
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such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its Pro Rata Share of any costs
or out of pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
12.8 AGENT IN INDIVIDUAL CAPACITY. The Bank and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Parent Guarantor and
its Subsidiaries and Affiliates as though the Bank were not the Agent hereunder
and without notice to or consent of the Lenders. The Bank or its Affiliates may
receive information regarding the Parent Guarantor, the Borrowers, their
Affiliates and Account Debtors (including information that may be subject to
confidentiality obligations in favor of the Parent Guarantor, the Borrowers or
such Affiliates) and acknowledge that the Agent and the Bank shall be under no
obligation to provide such information to them. With respect to its Loans, the
Bank shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" include the Bank in its individual capacity.
12.9 SUCCESSOR AGENT. The Agent may resign as Agent upon at least
thirty (30)-days' prior notice to the Lenders and the Borrowers, such
resignation to be effective upon the acceptance of a successor agent to its
appointment as Agent. In the event the Bank sells all of its Commitment and
Revolving Loans as part of a sale, transfer or other disposition by the Bank of
substantially all of its loan portfolio, the Bank shall resign as Agent and such
purchaser or transferee shall become the successor Agent hereunder. Subject to
the foregoing, if the Agent resigns under this Agreement, the Majority Lenders
shall appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Lenders and the
Borrowers, a successor agent from among the Lenders. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article 12 shall continue to inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
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12.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Lender claims exemption from, or
a reduction of, United States withholding tax under Sections 1441 or 1442 of the
Code, such Lender agrees with and in favor of the Agent, to deliver to the
Agent:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed IRS Forms W-8BEN and W-8ECI before
the payment of any interest in the first calendar year and
before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this
Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade
or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before the payment of any
interest is due in the first taxable year of such Lender and
in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement, and IRS Form W-9;
and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form FW-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations owing to such Lender, such Lender
agrees to notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrowers to such Lender. To the extent
of such percentage amount, the Agent will treat such Lender's IRS Form W-8BEN as
no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations owing
to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
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an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney Costs). The obligation of the
Lenders under this subsection shall survive the payment of all Obligations and
the resignation or replacement of the Agent.
12.11 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Liens upon any
Collateral, other than any cash collateral or Supportive Letter of Credit
provided by Borrowers pursuant to SECTION 1.3(G) (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrowers of all Loans and
reimbursement obligations in respect of Letters of Credit and Credit Support,
and the termination of all outstanding Letters of Credit (whether or not any of
such obligations are due), unless such Letters of Credit are cash collateralized
or supported by a Supporting Letter of Credit pursuant to SECTION 1.3(G) and all
other Obligations; (ii) constituting property being sold or disposed of if the
Borrowers certify to the Agent that the sale or disposition is made in
compliance with SECTION 7.10 (and the Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which the
Borrower Parties owned no interest at the time the Lien was granted or at any
time thereafter; (iv) constituting property leased to the Borrower Parties under
a lease which has expired or been terminated in a transaction permitted under
this Agreement or (v) constituting property that is subject to any alternative
fixed assets financing obtained by the Borrowers in accordance with SECTIONS 3.2
and 7.14. Except as provided above, the Agent will not release any of the
Agent's Liens without the prior written authorization of the Lenders; provided
that the Agent may, in its discretion, release the Agent's Liens on Collateral
valued in the aggregate not in excess of $5,000,000 during each Fiscal Year
without the prior written authorization of the Lenders and the Agent may release
the Agent's Liens on Collateral valued in the aggregate not in excess of
$7,500,000 during each Fiscal Year with the prior written authorization of
Majority Lenders. Upon request by the Agent or the Borrowers at any time, the
Lenders will confirm in writing the Agent's authority to release any Agent's
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Liens upon particular types or items of Collateral pursuant to this SECTION
12.11.
(b) Upon receipt by the Agent of any authorization required
pursuant to SECTION 12.11(A) from the Lenders of the Agent's authority to
release any Agent's Liens upon particular types or items of Collateral, and upon
at least five (5)-Business Days' prior written request by the Borrowers, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Agent's Liens
upon such Collateral; PROVIDED, HOWEVER, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens (other than those expressly being released) upon (or
obligations of the Borrower Parties in respect of) all interests retained by any
Borrower Party, including the proceeds of any sale, all of which shall continue
to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the Borrower
Parties or is cared for, protected or insured or has been encumbered, or that
the Agent's Liens have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Agent may act in
any manner it may deem appropriate in its sole discretion given the Agent's own
interest in the Collateral in its capacity as one of the Lenders and that the
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing.
12.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of all Lenders, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of all Lenders, set-off against the
Obligations, any amounts owing by such Lender to the Borrowers or any accounts
of the Borrower Parties now or hereafter maintained with such Lender. Each of
the Lenders further agrees that it shall not, unless specifically requested to
do so by the Agent, take or cause to be taken any other action to enforce its
rights under this Agreement or against the Borrower Parties, including the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrowers to such Lender arising
under, or relating to, this
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Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from the Agent pursuant to the terms of this Agreement,
or (ii) payments from the Agent in excess of such Lender's ratable portion of
all such distributions by the Agent, such Lender shall promptly (1) turn the
same over to the Agent, in kind, and with such endorsements as may be required
to negotiate the same to the Agent, or in same day funds, as applicable, for the
account of all of the Lenders and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (2) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received shall
be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
12.13 AGENCY FOR PERFECTION. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
12.14 PAYMENTS BY AGENT TO LENDERS. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, on the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans or otherwise.
Unless the Agent receives notice from the Borrowers prior to the date on which
any payment is due to the Lenders that the Borrowers will not make such payment
in full as and when required, the Agent may assume that the Borrowers have made
such payment in full to the Agent on such date in immediately available funds
and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made
such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
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12.15 SETTLEMENT.
(a) (i) Each Lender's funded portion of the Revolving Loans is
intended by the Lenders to be equal at all times to such Lender's Pro Rata Share
of the outstanding Revolving Loans. Notwithstanding such agreement, the Agent,
the Bank, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by the Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Revolving Loans, the Non-Ratable Loans and the Agent Advances
shall take place on a periodic basis in accordance with the following
provisions:
(ii) The Agent shall request settlement
("Settlement") with the Lenders on at least a weekly basis, or
on a more frequent basis at Agent's election, (A) on behalf of
the Bank, with respect to each outstanding Non-Ratable Loan,
(B) for itself, with respect to each Agent Advance, and (C)
with respect to collections received, in each case, by
notifying the Lenders of such requested Settlement by
telecopy, telephone or other similar form of transmission, of
such requested Settlement, no later than 12:00 noon (Atlanta,
Georgia time) on the date of such requested Settlement (the
"Settlement Date"). Each Lender (other than the Bank, in the
case of Non-Ratable Loans and the Agent in the case of Agent
Advances) shall transfer the amount of such Lender's Pro Rata
Share of the outstanding principal amount of the Non-Ratable
Loans and Agent Advances with respect to each Settlement to
the Agent, to Agent's account, not later than 2:00 p.m.
(Atlanta, Georgia time), on the Settlement Date applicable
thereto. Settlements may occur during the continuation of a
Default or an Event of Default and whether or not the
applicable conditions precedent set forth in Article 8 have
then been satisfied. Such amounts made available to the Agent
shall be applied against the amounts of the applicable
Non-Ratable Loan or Agent Advance and, together with the
portion of such Non-Ratable Loan or Agent Advance representing
the Bank's Pro Rata Share thereof, shall constitute Revolving
Loans of such Lenders. If any such amount is not transferred
to the Agent by any Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the
Federal Funds Rate for the first three (3) days from and after
the Settlement Date and thereafter at the Interest Rate then
applicable to the Revolving Loans (A) on behalf of the Bank,
with respect to each outstanding Non-Ratable Loan, and (B) for
itself, with respect to each Agent Advance.
(iii) Notwithstanding the foregoing, not more than
one (1) Business Day after demand is made by the Agent
(whether before or after the occurrence of a Default or an
Event of Default and regardless of whether the Agent has
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requested a Settlement with respect to a Non-Ratable Loan or
Agent Advance), each other Lender (A) shall irrevocably and
unconditionally purchase and receive from the Bank or the
Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such Non-Ratable Loan
or Agent Advance equal to such Lender's Pro Rata Share of such
Non-Ratable Loan or Agent Advance and (B) if Settlement has
not previously occurred with respect to such Non-Ratable Loans
or Agent Advances, upon demand by Bank or Agent, as
applicable, shall pay to Bank or Agent, as applicable, as the
purchase price of such participation an amount equal to
one-hundred percent (100%) of such Lender's Pro Rata Share of
such Non-Ratable Loans or Agent Advances. If such amount is
not in fact made available to the Agent by any Lender, the
Agent shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after such
demand and thereafter at the Interest Rate then applicable to
Base Rate Loans.
(iv) From and after the date, if any, on which any
Lender purchases an undivided interest and participation in
any Non-Ratable Loan or Agent Advance pursuant to clause (iii)
above, the Agent shall promptly distribute to such Lender,
such Lender's Pro Rata Share of all payments of principal and
interest and all proceeds of Collateral received by the Agent
in respect of such Non-Ratable Loan or Agent Advance.
(v) Between Settlement Dates, the Agent, to the
extent no Agent Advances are outstanding, may pay over to the
Bank any payments received by the Agent, which in accordance
with the terms of this Agreement would be applied to the
reduction of the Revolving Loans, for application to the
Bank's Revolving Loans including Non-Ratable Loans. If, as of
any Settlement Date, collections received since the then
immediately preceding Settlement Date have been applied to the
Bank's Revolving Loans (other than to Non-Ratable Loans or
Agent Advances in which such Lender has not yet funded its
purchase of a participation pursuant to clause (iii) above),
as provided for in the previous sentence, the Bank shall pay
to the Agent for the accounts of the Lenders, to be applied to
the outstanding Revolving Loans of such Lenders, an amount
such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the
Revolving Loans. During the period between Settlement Dates,
the Bank with respect to Non-Ratable Loans, the Agent with
respect to Agent Advances, and each Lender with respect to the
Revolving Loans other than Non-Ratable Loans and Agent
Advances, shall be entitled to interest at the applicable rate
or rates payable under this Agreement on the actual average
daily amount of funds employed by the Bank, the Agent and the
other Lenders.
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(vi) Unless the Agent has received written notice
from a Lender to the contrary, the Agent may assume that the
applicable conditions precedent set forth in ARTICLE 8 have
been satisfied and the requested Borrowing will not exceed
Excess Availability on any Funding Date for a Revolving Loan
or Non-Ratable Loan.
(vii) On each Increased Maximum Revolver Amount
Closing Date, each New Lender shall transfer to the Agent, for
the benefit of the Lenders (other than the New Lenders joining
as Lenders on such date), an amount such that each Lender's
(including each such New Lender's) funded portion of the
Revolving Loans shall be equal to such Lender's Pro Rata Share
of the outstanding Revolving Loans. No breakage fees under
SECTION 4.4 shall be payable by the Borrowers in connection
with any such settlement under this SECTION 12.15(A)(VII).
(b) LENDERS' FAILURE TO PERFORM. All Revolving Loans (other
than Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make any
Revolving Loans hereunder shall excuse any other Lender from its obligation to
make any Revolving Loans hereunder, and (iii) the obligations of each Lender
hereunder shall be several, not joint and several.
(c) DEFAULTING LENDERS. Unless the Agent receives notice from
a Lender on or prior to the Closing Date or, with respect to any Borrowing after
the Closing Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Agent that Lender's Pro Rata Share of a Borrowing, the Agent may assume that
each Lender has made such amount available to the Agent in immediately available
funds on the Funding Date. Furthermore, the Agent may, in reliance upon such
assumption, make available to the Borrowers on such date a corresponding amount.
If any Lender has not transferred its full Pro Rata Share to the Agent in
immediately available funds and the Agent has transferred corresponding amount
to the Borrowers on the Business Day following such Funding Date that Lender
shall make such amount available to the Agent, together with interest at the
Federal Funds Rate for that day. A notice by the Agent submitted to any Lender
with respect to amounts owing shall be conclusive, absent manifest error. If
each Lender's full Pro Rata Share is transferred to the Agent as required, the
amount transferred to the Agent shall constitute that Lender's Revolving Loan
for all purposes of this Agreement. If that amount is not transferred to the
Agent on the Business Day following the Funding Date, the Agent will notify the
Borrowers of such failure to fund and, upon demand by the Agent, the Borrowers
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shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the Interest Rate applicable at the time to the
Revolving Loans comprising that particular Borrowing. The failure of any Lender
to make any Revolving Loan on any Funding Date (any such Lender, prior to the
cure of such failure, being hereinafter referred to as a "Defaulting Lender")
shall not relieve any other Lender of its obligation hereunder to make a
Revolving Loan on that Funding Date. No Lender shall be responsible for any
other Lender's failure to advance such other Lenders' Pro Rata Share of any
Borrowing.
(d) RETENTION OF DEFAULTING LENDER'S PAYMENTS. The Agent shall
not be obligated to transfer to a Defaulting Lender any payments made by
Borrowers to the Agent for the Defaulting Lender's benefit; nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder. Amounts
payable to a Defaulting Lender shall instead be paid to or retained by the
Agent. In its discretion, the Agent may loan to the Borrowers the amount of all
such payments received or retained by it for the account of such Defaulting
Lender. Any amounts so loaned to the Borrowers shall bear interest at the rate
applicable to Base Rate Loans and for all other purposes of this Agreement shall
be treated as if they were Revolving Loans, PROVIDED, HOWEVER, that for purposes
of voting or consenting to matters with respect to the Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender". Until a Defaulting Lender cures its failure to fund its Pro Rata Share
of any Borrowing (A) such Defaulting Lender shall not be entitled to any portion
of the Unused Line Fee and (B) the Unused Line Fee shall accrue in favor of the
Lenders which have funded their respective Pro Rata Shares of such requested
Borrowing and shall be allocated among such performing Lenders ratably based
upon their relative Commitments. This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement. The terms of this
Section shall not be construed to increase or otherwise affect the Commitment of
any Lender, or relieve or excuse the performance by the Borrowers of their
duties and obligations hereunder.
(e) REMOVAL OF DEFAULTING LENDER. At the Borrowers' request,
the Agent or an Eligible Assignee reasonably acceptable to the Agent and the
Borrowers shall have the right (but not the obligation) to purchase from any
Defaulting Lender, and each Defaulting Lender shall, upon such request, sell and
assign to the Agent or such Eligible Assignee, all of the Defaulting Lender's
outstanding Commitments hereunder. Such sale shall be consummated promptly after
Agent has arranged for a purchase by Agent or an Eligible Assignee pursuant to
an Assignment and Acceptance, and at a price equal to the outstanding principal
balance of the Defaulting Lender's Loans, plus accrued interest and fees,
without premium or discount.
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12.16 LETTERS OF CREDIT; INTRA-LENDER ISSUES.
(a) NOTICE OF LETTER OF CREDIT BALANCE. On each Settlement
Date, the Agent shall notify each Lender of the issuance of all Letters of
Credit since the prior Settlement Date.
(b) PARTICIPATIONS IN LETTERS OF CREDIT.
(i) PURCHASE OF PARTICIPATIONS. Immediately upon
issuance of any Letter of Credit in accordance with SECTION
1.3(D), each Lender shall be deemed to have irrevocably and
unconditionally purchased and received without recourse or
warranty, an undivided interest and participation equal to
such Lender's Pro Rata Share of the face amount of such Letter
of Credit or the Credit Support provided through the Agent to
the Letter of Credit Issuer, if not the Bank, in connection
with the issuance of such Letter of Credit (including all
obligations of the Borrowers with respect thereto, and any
security therefor or guaranty pertaining thereto).
(ii) SHARING OF REIMBURSEMENT OBLIGATION PAYMENTS.
Whenever the Agent receives a payment from the Borrowers on
account of reimbursement obligations in respect of a Letter of
Credit or Credit Support as to which the Agent has previously
received for the account of the Letter of Credit Issuer
thereof payment from a Lender, the Agent shall promptly pay to
such Lender such Lender's Pro Rata Share of such payment from
the Borrowers. Each such payment shall be made by the Agent on
the next Settlement Date.
(iii) DOCUMENTATION. Upon the request of any Lender,
the Agent shall furnish to such Lender copies of any Letter of
Credit, Credit Support for any Letter of Credit, reimbursement
agreements executed in connection therewith, applications for
any Letter of Credit, and such other documentation as may
reasonably be requested by such Lender.
(iv) OBLIGATIONS IRREVOCABLE. The obligations of each
Lender to make payments to the Agent with respect to any
Letter of Credit or with respect to their participation
therein or with respect to any Credit Support for any Letter
of Credit or with respect to the Revolving Loans made as a
result of a drawing under a Letter of Credit and the
obligations of the Borrowers for whose account the Letter of
Credit or Credit Support was issued to make payments to the
Agent, for the account of the Lenders, shall be irrevocable
and shall not be subject to any qualification or exception
whatsoever, including any of the following circumstances:
(1) any lack of validity or enforceability
of this Agreement or any of the other Loan Documents;
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(2) the existence of any claim, setoff,
defense or other right which the Borrowers may have at any
time against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), any Lender, the Agent, the
issuer of such Letter of Credit, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrowers
or any other Person and the beneficiary named in any Letter of
Credit);
(3) any draft, certificate or any other
document presented under the Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect;
(4) the surrender or impairment of any
security for the performance or observance of any of the terms
of any of the Loan Documents;
(5) the occurrence of any Default or Event
of Default; or
(6) the failure of the Borrowers to satisfy
the applicable conditions precedent set forth in Article 8.
(c) RECOVERY OR AVOIDANCE OF PAYMENTS; REFUND OF PAYMENTS IN
ERROR. In the event any payment by or on behalf of the Borrowers received by the
Agent with respect to any Letter of Credit or Credit Support provided for any
Letter of Credit and distributed by the Agent to the Lenders on account of their
respective participations therein is thereafter set aside, avoided or recovered
from the Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided or recovered,
together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it. Unless the Agent receives notice from the
Borrowers prior to the date on which any payment is due to the Lenders that the
Borrowers will not make such payment in full as and when required, the Agent may
assume that the Borrowers have made such payment in full to the Agent on such
date in immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrowers have not made such payment in full to the Agent, each
Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
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(d) INDEMNIFICATION BY LENDERS. To the extent not reimbursed
by the Borrowers and without limiting the obligations of the Borrowers
hereunder, the Lenders agree to indemnify the Letter of Credit Issuer ratably in
accordance with their respective Pro Rata Shares, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees) or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Letter of
Credit Issuer in any way relating to or arising out of any Letter of Credit or
the transactions contemplated thereby or any action taken or omitted by the
Letter of Credit Issuer under any Letter of Credit or any Loan Document in
connection therewith; provided that no Lender shall be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand
for its Pro Rata Share of any costs or expenses payable by the Borrowers to the
Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrowers. The agreement
contained in this Section shall survive payment in full of all other
Obligations.
12.17 CONCERNING THE COLLATERAL AND THE RELATED LOAN DOCUMENTS. Each
Lender authorizes and directs the Agent to enter into the other Loan Documents,
for the ratable benefit and obligation of the Agent and the Lenders. Each Lender
agrees that any action taken by the Agent, Majority Lenders or Required Lenders,
as applicable, in accordance with the terms of this Agreement or the other Loan
Documents, and the exercise by the Agent, the Majority Lenders, or the Required
Lenders, as applicable, of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders. The Lenders acknowledge that the Revolving
Loans, Agent Advances, Non-Ratable Loans, Hedge Agreements, Bank Products and
all interest, fees and expenses hereunder constitute one Debt, secured PARI
PASSU by all of the Collateral.
12.18 FIELD AUDIT AND EXAMINATION REPORTS; DISCLAIMER BY LENDERS. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by or
on behalf of the Agent;
(b) expressly agrees and acknowledges that neither the Bank
nor the Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or the Bank or other party
performing any audit or examination will inspect only specific information
regarding the Borrower Parties and will rely significantly upon the Borrower
Parties' books and records, as well as on representations of the Borrower
Parties' personnel;
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(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrowers; and (ii) to pay and protect, and
indemnify, defend and hold the Agent and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses and other amounts (including Attorney Costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
12.19 RELATION AMONG LENDERS. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
12.20 ADDITIONAL AGENTS. None of the Lenders or other entities
identified on the facing page of or elsewhere in this Agreement as a "Book
Manager", "Sole Lead Arranger", "Syndication Agent" or "Documentation Agent"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement or any other Loan Document other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
other Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other entities so identified in deciding to enter
into this Agreement or any other Loan Document or in taking or not taking action
hereunder or thereunder.
ARTICLE 13
MISCELLANEOUS
13.1 NO WAIVERS; CUMULATIVE REMEDIES. No failure by the Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
the Borrower Parties and the Agent and/or any Lender, or delay by the Agent or
any Lender in exercising the same, will operate as a waiver thereof. No waiver
by the Agent or any Lender will be effective unless it is in writing, and then
only to the extent specifically stated. No waiver by the Agent or the Lenders on
any occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower Parties of any
provision of this Agreement. The Agent and the Lenders may proceed directly to
collect the Obligations without any prior recourse to the Collateral.
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The Agent's and each Lender's rights under this Agreement will be cumulative and
not exclusive of any other right or remedy which the Agent or any Lender may
have.
13.2 SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any Loan Document or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder.
13.3 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION
ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE
OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF
GEORGIA; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF GEORGIA OR OF THE UNITED STATES LOCATED IN XXXXXX COUNTY, GEORGIA; AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF EACH BORROWER PARTY, THE AGENT
AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF EACH BORROWER PARTY, THE
AGENT EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE THE
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER PARTIES OR THEIR
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY
FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY
APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) EACH BORROWER PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE
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ADMINISTRATIVE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME SHALL
HAVE BEEN SO DEPOSITED IN THE U.S. MAILS POSTAGE PREPAID. NOTHING CONTAINED
HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY
ANY OTHER MANNER PERMITTED BY LAW.
13.4 WAIVER OF JURY TRIAL. THE BORROWER PARTIES, THE LENDERS AND THE
AGENT EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE BORROWER PARTIES, THE LENDERS AND THE AGENT EACH AGREE THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
13.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the Borrower
Parties' representations and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
13.6 OTHER SECURITY AND GUARANTIES. The Agent, may, without notice or
demand and without affecting the Borrower Parties' obligations hereunder, from
time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
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13.7 FEES AND EXPENSES. The Borrowers agree to pay to the Agent, for
its benefit, on demand, all costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents, including: (a) Attorney Costs; (b) costs and expenses
(including attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) costs and expenses of
lien and title searches and title insurance; (d) taxes, fees and other charges
for recording the Mortgages, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Agent's Liens (including
costs and expenses paid or incurred by the Agent in connection with the
consummation of Agreement); (e) sums paid or incurred to pay any amount or take
any action required of the Borrower Parties under the Loan Documents that the
Borrower Parties fail to pay or take; (f) costs of appraisals, inspections, and
verifications of the Collateral and other due diligence, including travel,
lodging, and meals for inspections of the Collateral and the Borrower Parties'
operations by the Agent plus the Agent's then customary charge for field
examinations and audits and the preparation of reports thereof (such charge is
currently $750 per day (or portion thereof) for each Person retained or employed
by the Agent with respect to each field examination or audit); and (g) costs and
expenses of forwarding loan proceeds, collecting checks and other items of
payment, and establishing and maintaining Payment Accounts and lock boxes, and
costs and expenses of preserving and protecting the Collateral. In addition, the
Borrowers agree to pay costs and expenses incurred by the Agent (including
Attorneys' Costs) to the Agent, for its benefit, on demand, and to the other
Lenders for their benefit, on demand, and all reasonable fees, expenses and
disbursements incurred by such other Lenders for one law firm retained by such
other Lenders, in each case, paid or incurred to obtain payment of the
Obligations, enforce the Agent's Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to
defend any claims made or threatened against the Agent or any Lender arising out
of the transactions contemplated hereby (including preparations for and
consultations concerning any such matters). The foregoing shall not be construed
to limit any other provisions of the Loan Documents regarding costs and expenses
to be paid by the Borrowers. All of the foregoing costs and expenses shall be
charged to the Borrowers' Loan Account as Revolving Loans as described in
SECTION 3.5.
13.8 NOTICES. Except as otherwise provided herein, all notices, demands
and requests that any party is required or elects to give to any other shall be
in writing, or by a telecommunications device capable of creating a written
record, and any such notice shall become effective (a) upon personal delivery
thereof, including, but not limited to, delivery by overnight mail and courier
service, (b) five (5) days after it shall have been mailed by United States
mail, first class, certified or registered, with postage prepaid, or (c) in the
case of notice by such a telecommunications device, when properly transmitted
and confirmed, in each case addressed to the party to be notified as follows:
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If to the Agent or to the Bank:
Bank of America, N.A.
000 Xxxxxxxxx Xxxxxx, X.X., 0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Business Credit
Account Executive
Telecopy No.: (000) 000-0000
Electronic Mail: xxxxx.x.xxxxxxxx@xxxxxxxxxxxxx.xxx;
xxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
with copies to:
Xxxx Xxxxxxxx, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Borrower Parties, or any of them:
Andrx Corporation
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
with copies to:
Andrx Corporation
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
Broad and Xxxxxx
000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, P.A.
Telecopy No.: (000) 000-0000
If to a Lender, to such Lender at such address as shall be set forth on
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its signature page hereof, in each case above, or to such other address as each
party may designate for itself by like notice. Failure or delay in delivering
copies of any notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies shall not
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. Electronic mail may only be used
in connection with routine delivery of documents referred to in SECTION 5.2(J)
and may not be used for any other purpose.
13.9 WAIVER OF NOTICES. Unless otherwise expressly provided herein, the
Borrower Parties waive presentment, and notice of demand or dishonor and protest
as to any instrument, notice of intent to accelerate the Obligations and notice
of acceleration of the Obligations, as well as any and all other notices to
which it might otherwise be entitled. No notice to or demand on the Borrower
Parties which the Agent or any Lender may elect to give shall entitle the
Borrower Parties, or any of them, to any or further notice or demand in the
same, similar or other circumstances.
13.10 BINDING EFFECT. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective representatives, successors, and
assigns of the parties hereto; provided, however, that no interest herein may be
assigned by the Borrower Parties without prior written consent of the Agent and
each Lender. The rights and benefits of the Agent and the Lenders hereunder
shall, if such Persons so agree, inure to any party acquiring any interest in
the Obligations or any part thereof.
13.11 INDEMNITY OF THE AGENT AND THE LENDERS BY THE BORROWERS.
(a) Each Borrower agrees to defend, indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, representatives, agents and attorneys in fact
(each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding, or
appellate proceeding or proceeding brought by, on behalf of or with respect to
the FDA) related to or arising out of this Agreement, any other Loan Document,
or the Loans or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED, the Borrowers shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting solely from
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the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
(b) Each Borrower agrees to indemnify, defend and hold
harmless the Agent and the Lenders from any loss or liability directly or
indirectly arising out of the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal or presence of a Contaminant
relating to the Borrowers' operations, business or property. This indemnity will
apply whether the Contaminant is on, under or about the Borrower's property or
operations or property leased to the Borrowers. The indemnity includes but is
not limited to Attorneys Costs. The indemnity extends to the Agent and the
Lenders, their parents, affiliates, subsidiaries and all of their directors,
officers, employees, agents, successors, attorneys and assigns.
(c) It is understood that the handling of the Loan Account and
Collateral of the Borrowers in a combined fashion, as more fully set forth
herein, is done solely as an accommodation to the Borrowers in order to utilize
the collective borrowing powers of the Borrowers in the most efficient and
economical manner and at their request, and that Lender shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Agent to do so, and in consideration thereof, each Borrower hereby
jointly and severally agrees to indemnify and hold harmless the Agent against
any and all liability, expense, loss or claim of damage or injury, made against
the Agent by any Borrower or by any third party whosoever, arising from or
incurred by reason of (i) the handling of the Loan Account and Collateral of the
Borrowers as herein provided, (ii) the Agent's relying on any instructions of
the Administrative Borrower, or (iii) any other action taken by the Agent
hereunder or under the other Loan Documents, except that the Borrowers will have
no liability to any Indemnified Person under this SECTION 13.11(C) with respect
to any liability that has been finally determined by a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Person.
13.12 LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY EACH OF ANY
BORROWER PARTY, ANY LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS OR
ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH, AND EACH OF EACH BORROWER PARTY AND EACH
LENDER HEREBY WAIVES, RELEASES AND
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AGREES NOT TO XXX UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND
WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
13.13 FINAL AGREEMENT. This Agreement and the other Loan Documents are
intended by the Borrower Parties, the Agent and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrower Parties party thereto and a duly
authorized officer of each of the Agent and the requisite Lenders.
13.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender, and each Borrower Party in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
13.15 CAPTIONS. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
13.16 RIGHT OF SETOFF. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrowers, any such notice being waived by the
Borrowers to the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of the Borrowers
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrowers and
the Agent after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL
EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT
ACCOUNT OR PROPERTY OF ANY BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT
THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
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13.17 CONFIDENTIALITY.
(a) The Borrower Parties hereby consent that the Agent and
each Lender may issue and disseminate to the public general information
describing the credit accommodation entered into pursuant to this Agreement,
including the name and address of the Borrower Parties and a general description
of the Borrower Parties' businesses and may use the Borrower Parties' name in
advertising and other promotional material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrowers Parties
and provided to the Agent or such Lender by or on behalf of the Borrower
Parties, under this Agreement or any other Loan Document, except to the extent
that such information (i) was or becomes generally available to the public other
than as a result of disclosure by the Agent or such Lender, or (ii) was or
becomes available on a nonconfidential basis from a source other than the
Borrower Parties, provided that such source is not bound by a confidentiality
agreement with the Borrower Parties known to the Agent or such Lender; PROVIDED,
HOWEVER, that the Agent and any Lender may disclose such information (1) at the
request or pursuant to any requirement of any Governmental Authority to which
the Agent or such Lender is subject or in connection with an examination of the
Agent or such Lender by any such Governmental Authority; (2) pursuant to
subpoena or other court process; (3) when required to do so in accordance with
the provisions of any applicable Requirement of Law; (4) to the extent
reasonably required in connection with any litigation or proceeding (including,
but not limited to, any bankruptcy proceeding) to which the Agent, any Lender or
their respective Affiliates may be party; (5) to the extent reasonably required
in connection with the exercise of any remedy hereunder or under any other Loan
Document; (6) to the Agent's or such Lender's independent auditors, accountants,
attorneys and other professional advisors; (7) to any prospective Participant or
Assignee under any Assignment and Acceptance, actual or potential, provided that
such prospective Participant or Assignee agrees to keep such information
confidential to the same extent required of the Agent and the Lenders hereunder;
(8) as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower Parties are party or is deemed
party with the Agent or such Lender, and (9) to its Affiliates.
13.18 CONFLICTS WITH OTHER LOAN DOCUMENTS. Unless otherwise expressly
provided in this Agreement (or in another Loan Document by specific reference to
the applicable provision contained in this Agreement), if any provision
contained in this Agreement conflicts with any provision of any other Loan
Document, the provision contained in this Agreement shall govern and control.
13.19 THE ADMINISTRATIVE BORROWER. Each Borrower hereby irrevocably
appoints the Andrx Management Corporation as the borrowing agent and
attorney-in-fact for all Borrowers (the "ADMINISTRATIVE BORROWER"), which
appointment shall remain in
-94-
full force and effect unless and until the Agent shall have received prior
written notice signed by each Borrower that such appointment has been revoked
and that another Borrower has been appointed the Administrative Borrower. Each
Borrower hereby irrevocably appoints and authorizes the Administrative Borrower
(i) to provide the Agent with all notices with respect to Revolving Loans and
Letters of Credit obtained for the benefit of any Borrower and all other notices
and instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Revolving
Loans and Letters of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement.
13.20 EXCULPATION. Except in the case of fraud or intentional
misconduct in connection with the performance by the Borrower Parties of their
respective obligations pursuant to this Agreement or any of the other Loan
Documents, no shareholder of the Parent Guarantor or director or officer of any
of the Borrower Parties shall be individually or personally liable for the
payment of the interest, principal or fees in connection with the Loans, but
nothing contained herein shall relieve any director or officer of any of the
Borrower Parties from the performance of their respective duties on behalf of
the Borrower Parties. Notwithstanding anything in the Loan Documents to the
contrary, the Agent and each Lender agree that in any action brought to enforce
the obligations of any of the Borrower Parties to pay the indebtedness evidenced
by the Revolving Loan Note or to enforce the obligations of any of the Borrower
Parties created or arising under any of the Loan Documents, absent such fraud or
intentional misconduct, the Agent and the Lenders shall not seek to invoke
personal liability for such obligations against (i) any shareholder of the
Parent Guarantor or director or officer of any of the Borrower Parties or (ii)
any legal representative, heir, legatee, successor or assignee of any of the
foregoing.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
BORROWERS:
ANDA, INC., a Florida corporation
By:
---------------------------------
Title:
------------------------------
ANDA PHARMACEUTICALS, INC., a
Florida corporation
By:
---------------------------------
Title:
------------------------------
ANDRX LABORATORIES, INC., a
Mississippi corporation
By:
---------------------------------
Title:
------------------------------
ANDRX LABS, LLC, a Delaware limited
liability company
By:
---------------------------------
Title:
------------------------------
ANDRX MANAGEMENT
CORPORATION, formerly known as
Anda Sales, Inc., a Florida corporation
By:
---------------------------------
Title:
------------------------------
ANDRX PHARMACEUTICALS
EQUIPMENT #1, LLC, a Florida
limited liability company
By:
---------------------------------
Title:
------------------------------
S-1
ANDRX PHARMACEUTICALS, INC., a
Florida corporation
By:
---------------------------------
Title:
------------------------------
ANDRX PHARMACEUTICALS, LLC, a
Delaware limited liability company
By:
---------------------------------
Title:
------------------------------
ANDRX PHARMACEUTICALS (NC), INC.,
a Florida corporation
By:
---------------------------------
Title:
------------------------------
VALMED PHARMACEUTICAL, INC.,
a New York corporation
By:
---------------------------------
Title:
------------------------------
GUARANTORS:
ANDA PUERTO RICO, INC.,
a Puerto Rico corporation
By:
---------------------------------
Title:
------------------------------
ANDRX CORPORATION, a Delaware
corporation
By:
---------------------------------
Title:
------------------------------
S-2
ANDRX LABORATORIES (NJ), INC.,
a Delaware corporation
By:
---------------------------------
Title:
------------------------------
ANDRX PHARMACEUTICALS SALES
AND MARKETING, INC., a
Florida corporation
By:
---------------------------------
Title:
------------------------------
XXXXXXXXX PHARMACEUTICALS, INC.,
a Delaware corporation
By:
---------------------------------
Title:
------------------------------
CARAN PHARMACEUTICALS, INC.,
a Nevada corporation
By:
---------------------------------
Title:
------------------------------
CYBEAR, LLC,
a Delaware limited liability company
By:
---------------------------------
Title:
------------------------------
XXXXXXXXXXX.XXX, INC.,
a Delaware corporation,
By:
---------------------------------
Title:
------------------------------
S-3
XXXXXXXXXXX.XXX (US), LTD.,
a Delaware corporation
By:
---------------------------------
Title:
------------------------------
PHYSICIANS' ONLINE, LLC,
a Delaware limited liability company
By:
---------------------------------
Title:
------------------------------
SR SIX, INC.,
a Florida corporation
By:
---------------------------------
Title:
------------------------------
S-4
AGENT AND LENDERS:
BANK OF AMERICA, N.A., as the Agent
and a Lender
By:
--------------------------------
Its:
-------------------------------
S-5
CONGRESS FINANCIAL
CORPORATION (CENTRAL), as the
Syndication Agent and as a Lender
By:
------------------------------
Its:
-----------------------------
Address for Notices:
Credit:
Congress Financial Corporation (Central)
000 X. Xxxxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
Electronic Mail:
xxxxxxxxxxxx@xxxxxxxxxxxxxxxxx.xxx
----------------------------------
Operations:
Congress Financial Corporation (Central)
000 X. Xxxxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Facsimile: (000) 000-0000
Electronic Mail:
xxxxxx@xxxxxxxxxxxxxxxxx.xxx
----------------------------
S-6
STANDARD FEDERAL BANK
NATIONAL ASSOCIATION, acting by
and through its agent, LASALLE BUSINESS
CREDIT, INC., as the Documentation
Agent and as a Lender
By:
------------------------------
Its:
-----------------------------
Address for Notices:
Credit:
LaSalle Business Credit, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
Electronic Mail:
xxxxxx.x.xxxxxx@xxxxxxx.xxx
---------------------------
Operations:
LaSalle Business Credit, Inc.
000 X. XxXxxxx Xx., Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
Facsimile: (000) 000-0000
Electronic Mail:
xxxxx.xxxxx@xxxxxxx.xxx
-----------------------
S-7
TRANSAMERICA BUSINESS CAPITAL
CORPORATION,
as a Lender
By:
------------------------------
Its:
-----------------------------
Address for Notices:
Credit:
Transamerica Business Capital Corporation
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxx, Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
Electronic Mail:
xxxxxxx.xxxxx@xxxxxxxxxxxx.xxx;
------------------------------
xxxxxx.xxxxxx@xxxxxxxxxxxx.xxx
------------------------------
Operations:
Transamerica Business Capital Corporation
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Artnita Xxxxx, Xxxxxx Xxxx
Facsimile: (000) 000-0000
Electronic Mail:
xxxxxx.xxxxx@xxxxxxxxxxxx.xxx;
-----------------------------
xxxxxx.xxxx@xxxxxxxxxxxx.xxx
----------------------------
S-8
PNC BANK, NATIONAL ASSOCIATION
as a Lender
By:
------------------------------
Its:
-----------------------------
Address for Notices:
Credit and Operations:
PNC Business Credit
000 Xxxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Alex Council
Facsimile: (000) 000-0000
Electronic Mail:
xxxx.xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
----------------------------------
S-9
THE CIT GROUP/BUSINESS CREDIT,
INC., as a Lender
By:
------------------------------
Its:
-----------------------------
Address for Notices:
Credit:
The CIT/Business Credit, Inc.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
Facsimile: (000) 000-0000
Electronic Mail:
xxx.xxxxxxxx@xxx.xxx
--------------------
Operations:
The CIT/Business Credit, Inc.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
Electronic Mail:
xxxx.xxxxxxxx@xxx.xxx
---------------------
S-10
ANNEX A
to
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have the following
respective meanings (unless otherwise defined therein), and all section
references in the following definitions shall refer to sections of the
Agreement:
"ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account, Chattel Paper or General Intangibles (including a
payment intangible).
"ACCOUNTS" means all of the Parent Guarantor's and each Subsidiary's
now owned or hereafter acquired or arising accounts, as defined in the UCC,
including any rights to payment for the sale or lease of goods or rendition of
services, whether or not they have been earned by performance.
"ACCOUNTS RECEIVABLE BORROWERS" means Anda, Inc., Anda Pharmaceuticals,
Inc., Valmed Pharmaceutical, Inc. and each other Borrower whose Accounts are
included in the Borrowing Base, in each case, and any successor thereto in
connection with a merger permitted by SECTION 7.10(III), and "ACCOUNTS
RECEIVABLE BORROWER" shall mean any one of the foregoing Accounts Receivable
Borrowers.
"ACH TRANSACTIONS" means any cash management or related services
including the automatic clearing house transfer of funds by the Bank for the
account of any Borrower Party pursuant to agreement or overdrafts.
"ADMINISTRATIVE BORROWER" has the meaning specified in SECTION 13.19.
"ADJUSTED NET EARNINGS FROM OPERATIONS" means, with respect to any
fiscal period of the Parent Guarantor, the Parent Guarantor's net income, on a
consolidated basis, after provision for income taxes for such fiscal period, as
determined in accordance with GAAP and reported on the Financial Statements for
such period, excluding, without duplication, any and all of the following
included in such net income: (a) gain or loss arising from the sale of any
capital assets; (b) gain arising from any write-up in the book value of any
asset; (c) earnings of any Person, substantially all the assets of which have
been acquired by the Parent Guarantor or any consolidated Subsidiary in any
manner, to the extent realized by such other Person prior to the date of
acquisition; (d) earnings of any Person in which the Parent Guarantor or a
consolidated Subsidiary has an ownership interest, other than another Borrower
or any Guarantor, unless (and only to the extent) such earnings shall actually
have been received by the Parent Guarantor or such Subsidiary in the form of
cash distributions; (e) earnings of any Person to which assets of the Parent
Guarantor or a consolidated Subsidiary shall have been sold, transferred or
disposed of, or into which the Parent Guarantor or a consolidated Subsidiary
shall have
A-1
been merged, or which has been a party with the Parent Guarantor or any
consolidated Subsidiary to any consolidation or other form of reorganization,
prior to the date of such transaction; (f) gain arising from the acquisition of
debt or equity securities of the Parent Guarantor or any consolidated Subsidiary
or from cancellation or forgiveness of Debt; (g) non-cash gain or loss arising
from extraordinary items, as determined in accordance with GAAP, or from any
other non-cash non-recurring transaction; and (h) non-cash costs of options
granted by the Parent Guarantor.
"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, five percent (5%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"AGENT" means the Bank, solely in its capacity as agent for the
Lenders, and any successor agent.
"AGENT ADVANCES" has the meaning specified in SECTION 1.2(I).
"AGENT'S LIENS" means the Liens in the Collateral granted to the Agent,
for the benefit of the Lenders, Bank, and the Agent pursuant to this Agreement
and the other Loan Documents.
"AGENT RELATED PERSONS" means the Agent, together with its Affiliates,
and the officers, directors, employees, counsel, representatives, agents and
attorneys-in-fact of the Agent and such Affiliates.
"AGGREGATE REVOLVER OUTSTANDINGS" means, at any date of determination:
the sum of (a) the unpaid balance of Revolving Loans, (b) the aggregate amount
of Pending Revolving Loans, (c) one hundred percent (100%) of the aggregate
undrawn face amount of all outstanding Letters of Credit, and (d) the aggregate
amount of any unpaid reimbursement obligations in respect of Letters of Credit.
"AGREEMENT" means the Credit Agreement to which this Annex A is
attached, as from time to time amended, modified or restated.
"ANDA" has the meaning specified in SECTION 6.29(A).
"ANDA, INC." means Anda, Inc., a Florida corporation.
"ANDA PHARMACEUTICALS, INC." means Anda Pharmaceuticals, Inc., a
Florida corporation.
A-2
"ANDA CONSUMER PRODUCTS, INC." means Anda Consumer Products, Inc., a
Florida corporation.
"ANDRX FINANCIAL CORP." means Andrx Financial Corp., a Nevada
corporation.
"ANDRX FLORIDA" means Andrx Corporation, a Florida corporation.
"ANDRX LABORATORIES, INC." means Andrx Laboratories, Inc., a
Mississippi corporation.
"ANDRX LABORATORIES (NJ), INC." means Andrx Laboratories (NJ), Inc., a
Delaware corporation.
"ANDRX LABS, INC." means Andrx Labs, Inc., a Florida corporation.
"ANDRX LABS, LLC" has the meaning specified in SECTION 8.1(P).
"ANDRX MANAGEMENT CORPORATION" means Andrx Management Corporation,
formerly known as Anda Sales, Inc., a Florida corporation.
"ANDRX PHARMACEUTICALS EQUIPMENT #1, L.C." means Andrx Pharmaceuticals
Equipment #1, L.C., a Florida limited liability company.
"ANDRX PHARMACEUTICALS EQUIPMENT #1 LLC" means Andrx Pharmaceuticals
Equipment #1, LLC, a Florida limited liability company, formerly known as Andrx
Pharmaceuticals Equipment #1, L.C.
"ANDRX PHARMACEUTICALS, INC." means Andrx Pharmaceuticals, Inc., a
Florida corporation, the predecessor to Andrx Pharmaceuticals, LLC.
"ANDRX PHARMACEUTICALS, LLC" has the meaning specified in SECTION
7.10(V)(3).
"ANDRX PHARMACEUTICALS (NC), INC." means Andrx Pharmaceuticals (NC),
Inc., a Florida corporation.
"ANDRX PHARMACEUTICALS (NJ), INC." means Andrx Pharmaceuticals (NJ),
Inc., a Florida corporation.
"ANDRX PHARMACEUTICALS SALES, INC." means Andrx Pharmaceuticals Sales,
Inc., a Florida corporation.
"ANNIVERSARY DATE" means each anniversary of the Closing Date.
"APPLICABLE MARGIN" means
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(i) with respect to Base Rate Loans and all other Obligations (other
than LIBOR Rate Loans), 0.0%; and
(ii) with respect to LIBOR Rate Loans, 2.25%.
The Applicable Margins shall be adjusted (up or down) prospectively on
a quarterly basis as determined by the Parent Guarantor's consolidated financial
performance, commencing with the first day of the first calendar month that
occurs more than five (5) days after delivery of the Parent Guarantor's
Consolidated annual audited Financial Statements to Lenders for the fiscal year
ending December 31, 2003. Adjustments in Applicable Margins shall be determined
by reference to the following grids:
-------------------------------------------------- ----------------------------- --------------------
IF THE AVERAGE AVAILABILITY FOR THE IMMEDIATELY IF THE AVERAGE AGGREGATE LEVEL OF
PRECEDING FISCAL QUARTER IS: REVOLVER OUTSTANDINGS FOR APPLICABLE MARGINS:
THE IMMEDIATELY PRECEDING
FISCAL QUARTER ARE:
-------------------------------------------------- ----------------------------- --------------------
Greater than $150,000,000 Not Applicable Level I
-------------------------------------------------- ----------------------------- --------------------
Greater than $75,000,000, but less than or equal Less than or equal to Level II
to $150,000,000 $75,000,000
-------------------------------------------------- ----------------------------- --------------------
Greater than $75,000,000, but less than or equal Greater than $75,000,000 Level III
to $150,000,000
-------------------------------------------------- ----------------------------- --------------------
Less than or equal to $75,000,000 Not Applicable Level IV
-------------------------------------------------- ----------------------------- --------------------
LOW TO HIGH
--------------------------------------- ------------------------------------------------------------------
APPLICABLE MARGINS
--------------------------------------- ----------------- --------------- ----------------- --------------
XXXXX X XXXXX XX XXXXX XXX XXXXX XX
------- -------- --------- --------
--------------------------------------- ----------------- --------------- ----------------- --------------
Base Rate Loans 0.00% 0.00% 0.25% 0.50%
--------------------------------------- ----------------- --------------- ----------------- --------------
LIBOR Rate Loans 2.00% 2.25% 2.50% 2.75%
--------------------------------------- ----------------- --------------- ----------------- --------------
All adjustments in the Applicable Margins after December 31, 2003 shall
be implemented quarterly on a prospective basis, for each calendar month
commencing at least five (5) days after the date of delivery to the Lenders of
quarterly unaudited or annual audited (as applicable) Financial Statements
evidencing the need for an adjustment. Concurrently with the delivery of those
Financial Statements, the Administrative Borrower, on behalf of the Borrowers,
shall deliver to the Agent and the Lenders a certificate, signed by its
president, chief financial officer or an executive vice president thereof,
setting forth in reasonable detail the basis for the continuance of, or any
change in, the Applicable Margins. Failure to timely deliver such Financial
Statements shall, in addition to any other remedy provided for in this
Agreement, result in an increase in the Applicable Margins to the highest level
set forth in the foregoing grid,
A-4
until the first day of the first calendar month following the delivery of those
Financial Statements demonstrating that such an increase is not required. If a
Default or Event of Default has occurred and is continuing at the time any
reduction in the Applicable Margins is to be implemented, no reduction may occur
until the first day of the first calendar month following the date on which such
Default or Event of Default is waived or cured.
"ASSIGNED CONTRACTS" means, collectively, all of the Parent Guarantor's
and each Subsidiary's rights and remedies under, and all moneys and claims for
money due or to become due to the Parent Guarantor and the Subsidiaries under
those contracts set forth on SCHEDULE 1.1, and any other material contracts, and
any and all amendments, supplements, extensions, and renewals thereof including
all rights and claims of the Parent Guarantor or any Subsidiary now or hereafter
existing: (i) under any insurance, indemnities, warranties, and guarantees
provided for or arising out of or in connection with any of the foregoing
agreements; (ii) for any damages arising out of or for breach or default under
or in connection with any of the foregoing contracts; (iii) to all other amounts
from time to time paid or payable under or in connection with any of the
foregoing agreements; or (iv) to exercise or enforce any and all covenants,
remedies, powers and privileges thereunder.
"ASSIGNEE" has the meaning specified in SECTION 11.2(A).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in SECTION
11.2(A).
"ATTORNEY COSTS" means and includes all reasonable fees, expenses and
disbursements of any law firm or other counsel engaged by the Agent, and the
reasonably allocated costs and expenses of internal legal services of the Agent.
"AURA PHARMACEUTICALS, INC." means Aura Pharmaceuticals, Inc., a
Florida corporation.
"AVAILABILITY" means, at any time (a) the lesser of (i) the Maximum
Revolver Amount or (ii) the Borrowing Base, MINUS (b) Reserves other than
Reserves deducted in the calculation of the Borrowing Base, MINUS (c) in each
case, the Aggregate Revolver Outstandings.
"AVOIDANCE PROVISIONS" has the meaning specified in SECTION
1.5(B)(III).
"BANK" means Bank of America, N.A., a national banking association, or
any successor entity thereto.
"BANK PRODUCTS" means any one or more of the following types of
services or facilities extended to the Borrower Parties by the Bank or any
affiliate of the Bank in reliance on the Bank's agreement to indemnify such
affiliate or any other Lender: (i)
A-5
credit cards; (ii) ACH Transactions; (iii) cash management, including controlled
disbursement services; and (iv) Hedge Agreements.
"BANK PRODUCT RESERVES" means all reserves which the Agent from time to
time establishes in its reasonable discretion for the Bank Products then
provided or outstanding.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
X.X.X.xx. 101 ET SEQ.), as in effect from time to time.
"BASE RATE" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by the Bank in Charlotte, North
Carolina as its "prime rate" (the "prime rate" being a rate set by the Bank
(which is not necessarily the lowest of such rates) based upon various factors
including the Bank's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate). Any change in the prime
rate announced by the Bank shall take effect at the opening of business on the
day specified in the public announcement of such change. Each Interest Rate
based upon the Base Rate shall be adjusted simultaneously with any change in the
Base Rate.
"BASE RATE LOAN" means a Revolving Loan during any period in which it
bears interest based on the Base Rate.
"BLOCKED ACCOUNT AGREEMENT" means an agreement among a Borrower, the
Agent and a Clearing Bank, in form and substance reasonably satisfactory to the
Agent, concerning the collection of payments which represent the proceeds of
Accounts or of any other Collateral.
"BORROWER PARTIES" means the Parent Guarantor, the Borrowers and the
other Guarantors, and "BORROWER PARTY" shall mean any one of the foregoing
Borrower Parties.
"BORROWERS" means Anda, Inc., Anda Pharmaceuticals, Inc., Andrx
Laboratories, Inc., Andrx Labs, LLC, Andrx Management Corporation, Andrx
Pharmaceuticals Equipment #1, LLC, New Andrx Pharmaceuticals, Inc., Andrx
Pharmaceuticals, LLC, Andrx Pharmaceuticals (NC), Inc., and Valmed
Pharmaceutical, Inc., and "Borrower" shall mean any one of the foregoing
Borrowers.
"BORROWING" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders to the Borrowers or by the Bank in the case
of a Borrowing funded by Non-Ratable Loans or by the Agent in the case of a
Borrowing consisting of an Agent Advance, or the issuance of Letters of Credit
hereunder.
"BORROWING BASE" means, at any time, an amount equal to (a) the sum of
(A) eighty-five percent (85%) of the Net Amount of Eligible Accounts, PLUS, (B)
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the least of (I) sixty-five percent (65%) of the value of the Eligible
Inventory, (II) eighty-five percent (85%) of the Net Liquidation Value of
Inventory and (III) the Maximum Inventory Loan Amount, PLUS (C) the Maximum
Fixed Assets Loan Amount; MINUS (b) Reserves from time to time established by
the Agent in its reasonable credit judgment.
"BORROWING BASE CERTIFICATE" means a certificate by a Responsible
Officer of the Administrative Borrower, substantially in the form of EXHIBIT B
(or another form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to the Agent. All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrowers and certified to the
Agent; provided, that the Agent shall have the right to review and adjust, in
the exercise of its reasonable credit judgment, any such calculation (1) to
reflect its reasonable estimate of declines in value of any of the Collateral
described therein, and (2) to the extent that such calculation is not in
accordance with this Agreement.
"BUSINESS DAY" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Atlanta, Georgia or Charlotte, North Carolina are required
or permitted to be closed, and (b) with respect to all notices, determinations,
fundings and payments in connection with the LIBOR Rate or LIBOR Rate Loans, any
day that is a Business Day pursuant to clause (a) above and that is also a day
on which trading in Dollars is carried on by and between banks in the London
interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"CAPITAL EXPENDITURES" means all payments due (whether or not paid
during any fiscal period) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those costs
arising in connection with the direct or indirect acquisition of such asset by
way of increased product or service charges or in connection with a Capital
Lease.
"CAPITAL LEASE" means any lease of property by the Parent Guarantor or
a Subsidiary which, in accordance with GAAP, should be reflected as a capital
lease on the consolidated balance sheet of the Parent Guarantor.
"CHANGE OF CONTROL" shall mean (i) directly or indirectly a sale,
transfer, or other conveyance of all or substantially all of the assets of the
Parent Guarantor in one transaction or a series of transactions, (ii) any
"person" or "group" (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act, whether or not applicable), other than the
shareholders of the Parent Guarantor as of the Closing Date (or any Person or
group of Persons that, as of the Agreement Date, are Affiliates of such
A-7
shareholders), is or becomes the "beneficial owner" (as that term is used in
Rules 13d-3 and 13d-5 under the Exchange Act, whether or not applicable, except
that a Person shall be deemed to have "beneficial ownership" of all shares that
any such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than twenty-five percent (25%) of the aggregate number of votes of all classes
of capital stock of the Parent Guarantor that ordinarily have voting power for
the election of directors of the Parent Guarantor, (iii) during any period of
twenty-four (24) consecutive months, individuals who at the beginning of such
period constituted the board of directors of the Parent Guarantor, together with
any new directors whose election by such board or whose nomination for election
by the shareholders of the Parent Guarantor was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the board of
directors of the Parent Guarantor then in office or (iv) the Parent Guarantor
shall cease to own, directly or indirectly, one hundred percent (100%) of the
Capital Stock of any Subsidiary, except as otherwise permitted by SECTION 7.10.
"CHATTEL PAPER" means all of the Parent Guarantor's and each
Subsidiary's now owned or hereafter acquired chattel paper, as defined in the
UCC, including electronic chattel paper and tangible chattel paper.
"CLASS ACTION LITIGATION" means the class actions and other lawsuits,
including those brought by states attorneys general, concerning allegations that
the Parent Guarantor and the Subsidiaries violated antitrust laws with respect
to their development of a generic Cardizem (R) CD product that are or have been
consolidated or coordinated for pre-trial proceedings in the United Stated
District Court for the Eastern District of Michigan, MDL 1278; and (b) the
actions pending in xxxxx xxxxx xx Xxxxxxx, 00-00000-XX and 00-2461-CA (11th
Judicial Circuit Miami-Dade County) and in Kansas, 99-000200 and 99-C-2350
(District Court Xxxxxxx County) involving similar claims with respect to the
Parent Guarantor's and the Subsidiaries' development of a generic Cardizem (R)
CD product.
"CLEARING BANK" means the Bank or any other banking institution with
whom a Payment Account has been established pursuant to a Blocked Account
Agreement.
"CLOSING DATE" means the date of this Agreement.
"CLOSING FEE" has the meaning specified in SECTION 2.4.
"CODE" means the Internal Revenue Code of 1986, as in effect from time
to time.
"COLLATERAL" means the Real Estate Collateral, all of the Parent
Guarantor's and each Subsidiary's personal property and all other assets of any
Person from time to time subject to the Agent's Liens securing payment or
performance of the Obligations.
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"COMMITMENT" means, at any time with respect to a Lender, the principal
amount set forth (a) beside such Lender's name under the heading "COMMITMENT" on
SCHEDULE 1.2 attached to the Agreement, (b) on the Lender Supplement pursuant to
which such Lender became a Lender hereunder in accordance with SECTION 1.6, or
(c) on the signature page of the Assignment and Acceptance pursuant to which
such Lender became a Lender hereunder in accordance with the provisions of
SECTION 11.2, as such Commitment may be adjusted from time to time in accordance
with the provisions of SECTION 11.2, and "COMMITMENTS" means, collectively, the
aggregate amount of the commitments of all of the Lenders.
"CONTAMINANT" means any material defined as waste, pollutant, hazardous
substance, toxic substance, hazardous waste or special waste under Environmental
Laws, including without limitation, petroleum or petroleum-derived substance or
waste, asbestos in any form or condition, polychlorinated biphenyls ("PCBS"), or
any constituent of any such substance or waste.
"CONTINUATION/CONVERSION DATE" means the date on which a Loan is
converted into or continued as a LIBOR Rate Loan.
"CONTRIBUTING BORROWER" has the meaning specified in SECTION 1.5(E).
"CREDIT SUPPORT" has the meaning specified in SECTION 1.3(A).
"CYBEAR ACQUISITION CORP." means Cybear Acquisition Corp., a Florida
corporation.
"CYBEAR, LLC" means Cybear, LLC, a Delaware limited liability company.
"DEBT" means, without duplication, all liabilities, obligations and
indebtedness of the Parent Guarantor or any Subsidiary to any Person, of any
kind or nature, now or hereafter owing, arising, due or payable, howsoever
evidenced, created, incurred, acquired or owing, whether primary, secondary,
direct, contingent, fixed or otherwise, consisting of indebtedness for borrowed
money or the deferred purchase price of property, excluding trade payables, but
including (a) all Obligations; (b) all obligations and liabilities of any Person
secured by any Lien on property of the Parent Guarantor or any Subsidiary, even
though the Parent Guarantor or such Subsidiary shall not have assumed or become
liable for the payment thereof; PROVIDED, HOWEVER, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Parent Guarantor or such Subsidiary prepared in
accordance with GAAP; (c) all obligations or liabilities created or arising
under any Capital Lease or conditional sale or other title retention agreement
with respect to property used or acquired by the Parent Guarantor or any
Subsidiary, even if the rights and remedies of the lessor, seller or lender
thereunder are limited to repossession of such property; PROVIDED, HOWEVER, that
all such obligations and liabilities which are limited in recourse to such
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property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of the Parent Guarantor or such
Subsidiary prepared in accordance with GAAP; (d) all obligations and liabilities
under Guaranties and (e) the present value (discounted at the Base Rate) of
lease payments due under synthetic leases.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured, waived, or otherwise
remedied during such time) constitute an Event of Default.
"DEFAULT RATE" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two
percent (2%) per annum. Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate. In addition, the Default Rate shall
result in an increase in the Letter of Credit Fee by two (2) percentage points
per annum.
"DEFAULTING LENDER" has the meaning specified in SECTION 12.15(C).
"DEPOSIT ACCOUNTS" means all "deposit accounts" as such term is defined
in the UCC, now or hereafter held in the name of the Parent Guarantor or any
Subsidiary, including, without limitation, any checking or other demand deposit
account, time, savings, passbook or similar account maintained with a bank.
"DESIGNATED ACCOUNT" has the meaning specified in SECTION 1.2(C).
"DISTRIBUTION" means, in respect of any corporation: (a) the payment or
making of any dividend or other distribution of property in respect of capital
stock (or any options or warrants for, or other rights with respect to, such
stock) of such corporation, other than distributions in capital stock (or any
options or warrants for such stock) of the same class; or (b) the redemption or
other acquisition by such corporation of any capital stock (or any options or
warrants for such stock) of such corporation.
"DOCUMENTS" means all "documents" as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by the Parent Guarantor or any Subsidiary.
"DOL" means the United States Department of Labor or any successor
department or agency.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States. Unless otherwise specified, all payments under the Agreements shall be
made in Dollars.
"DORMANT XXXXXXXXXXX.XXX SUBSIDIARY" means, collectively, Cyberdiet,
Inc., a California corporation, MCNS Merger Subsidiary, Inc., a California
corporation, f/k/a Mood Sciences, Inc., and MCNS Merger Subsidiary II, a New
Jersey corporation, f/k/a Cybear-Tech, Inc.
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"EBITDA" means, with respect to any fiscal period of the Parent
Guarantor, Adjusted Net Earnings from Operations, plus, to the extent deducted
in the determination of Adjusted Net Earnings from Operations for that fiscal
period, interest expenses, Federal, state, local and foreign income taxes,
depreciation and amortization (including, without limitation, amortization of
restricted stock, stock appreciation rights and similar equity instruments).
"ELIGIBLE ACCOUNTS" means the Accounts of the Borrowers arising from
the sale of Qualifying Inventory which the Agent in the exercise of its
reasonable commercial discretion determines to be Eligible Accounts. Without
limiting such discretion of the Agent to establish other criteria of
ineligibility, Eligible Accounts shall not, unless the Agent in its sole
discretion elects, include any Account:
(a) with respect to which more than ninety (90) days have elapsed since
the date of the original invoice therefor or which is more than sixty (60) days
past due;
(b) with respect to which any of the representations and warranties in
any material respect or any covenants, and agreements contained in the Security
Agreement are incorrect or have been breached;
(c) with respect to which Account (or any other Account due from such
Account Debtor), in whole or in part, a check, promissory note, draft, trade
acceptance or other instrument for the payment of money has been received,
presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined) or as
to which any Borrower has extended the time for payment without the consent of
the Agent; for the purposes hereof, "progress billing" means any invoice for
goods sold or leased or services rendered under a contract or agreement pursuant
to which the Account Debtor's obligation to pay such invoice is conditioned upon
such Borrower's completion of any further performance under the contract or
agreement;
(e) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: death or judicial declaration of
incompetency of an Account Debtor who is an individual; the filing by or against
the Account Debtor of a request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or
other relief under the bankruptcy, insolvency, or similar laws of the United
States, any state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by the Account Debtor
for the benefit of creditors; the appointment of a receiver or trustee for the
Account Debtor or for any of the assets of the Account Debtor, including,
without limitation, the appointment of or taking possession by a "custodian," as
defined in the Bankruptcy Code; the institution by or against the Account Debtor
of any other type of insolvency proceeding (under the bankruptcy laws of the
United States or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation
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of, settlement of claims against, or winding up of affairs of, the Account
Debtor; the sale, assignment, or transfer of all or any material part of the
assets of the Account Debtor, except where the buyer, assignor or transferee, as
applicable, assumes the liability to pay the Account and the new Account Debtor
is otherwise acceptable to the Agent in its reasonable judgment; the nonpayment
generally by the Account Debtor of its debts as they become due; or the
cessation of the business of the Account Debtor as a going concern;
(f) if fifty percent (50%) or more of the aggregate Dollar amount of
outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States or Canada (provided, that, at any time
promptly upon the Agent's request, the Borrowers shall execute and deliver, or
cause to be executed and delivered, such other agreements, documents and
instruments as may be required by the Agent to perfect the security interests of
the Agent in those Accounts of an account debtor with its chief executive office
or principal place of business in Canada in accordance with the applicable laws
of the applicable Province of Canada in which such chief executive office or
principal place of business is located and take or cause to be taken such other
and further actions as the Agent may request to enable the Agent as secured
party with respect thereto to collect such Accounts under the applicable Federal
or Provincial laws of Canada); or (ii) is not organized under the laws of the
United States or Canada or any state or province thereof; or (iii) is the
government of any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof; except to the
extent that such Account is secured or payable by a letter of credit
satisfactory to the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of any
Borrower;
(i) except as provided in clause (k) below, with respect to which
either the perfection, enforceability, or validity of the Agent's Liens in such
Account, or the Agent's right or ability to obtain direct payment to the Agent
of the proceeds of such Account, is governed by any federal, state, or local
statutory requirements other than those of the UCC;
(j) owed by an Account Debtor to which the Parent Guarantor, any
Borrower or any other Subsidiary, is indebted in any way, or which is subject to
any right of setoff or recoupment by the Account Debtor, unless the Account
Debtor has entered into an agreement acceptable to the Agent to waive setoff
rights; or if the Account Debtor thereon has disputed liability or made any
claim with respect to any other Account due from such Account Debtor; but in
each such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;
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(k) owed by the government of the United States, or any department,
agency, public corporation, or other instrumentality thereof, unless the Federal
Assignment of Claims Act of 1940, as amended (31 U.S.C. ss. 3727 ET SEQ.), and
any other steps necessary to perfect the Agent's Liens therein, have been
complied with to the Agent's satisfaction with respect to such Account;
(l) owed by any state, municipality, or other political subdivision of
the United States, or any department, agency, public corporation, or other
instrumentality thereof and as to which the Agent determines that its Lien
therein is not or cannot be perfected;
(m) which represents a sale on a xxxx-and-hold, guaranteed sale, sale
and return, sale on approval, consignment, or other repurchase or return basis;
(n) which is evidenced by a promissory note or other instrument or by
chattel paper;
(o) if the Agent believes, in the exercise of its reasonable judgment,
that the prospect of collection of such Account is impaired or that the Account
may not be paid by reason of the Account Debtor's financial inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit any Borrower to seek judicial enforcement in such State of
payment of such Account, unless such Borrower has qualified to do business in
such state or has filed a Notice of Business Activities Report or equivalent
report for the then current year;
(q) which arises out of a sale not made in the ordinary course of a
Borrower's business;
(r) with respect to which the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the Borrowers,
and, if applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services;
(s) owed by an Account Debtor which is obligated to the Borrowers
respecting Accounts the aggregate unpaid balance of which exceeds twenty percent
(20%) of the aggregate unpaid balance of all Accounts owed to the Accounts
Receivables Borrowers at such time by all of the Borrowers' Account Debtors, but
only to the extent of such excess; or
(t) which is not subject to a first priority and perfected security
interest in favor of the Agent for the benefit of the Lenders.
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If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank, commercial finance
company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default has occurred and
is continuing, any Person reasonably acceptable to the Agent.
"ELIGIBLE INVENTORY" means Qualifying Inventory of the Borrowers,
valued at the lower of cost (on a first-in, first-out basis), or market, which
the Agent, in its reasonable commercial discretion, determines to be Eligible
Inventory. Without limiting such discretion of the Agent to establish other
criteria of ineligibility, Eligible Inventory shall not, unless the Agent in its
sole discretion elects, include any Inventory:
(a) that is not owned by a Borrower;
(b) that is not subject to the Agent's Liens, which are perfected as to
such Inventory, or that are subject to any other Lien whatsoever (other than the
Liens described in clause (d) of the definition of Permitted Liens provided that
such Permitted Liens (i) are junior in priority to the Agent's Liens or subject
to Reserves and (ii) do not impair directly or indirectly the ability of the
Agent to realize on or obtain the full benefit of the Collateral);
(c) that does not consist of finished goods;
(d) that consists of work-in-process, chemicals (other than
pharmaceuticals), samples, prototypes, supplies, or packing and shipping
materials;
(e) (i) that is not in good condition, is unmerchantable, or does not
meet all standards imposed by any Governmental Authority, having regulatory
authority over such goods, their use or sale or (ii) that has not been approved
by the FDA or, with respect to any Inventory manufactured by the Parent
Guarantor or any Subsidiary, is subject to ongoing patent infringement
litigation;
(f) that is not currently either usable or salable, at prices
approximating at least cost, in the normal course of a Borrower's business, or
that is slow moving or stale;
(g) that is obsolete or returned or repossessed or used goods taken in
trade (other than returned goods that are readily saleable and without defects);
(h) that is located outside the United States (or that is in-transit
from vendors or suppliers or to buyers);
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(i) that is located in a public warehouse or in possession of a bailee
or in a facility leased by a Borrower, if the warehouseman, or the bailee, or
the lessor has not delivered to the Agent, if requested by the Agent, a
subordination agreement in form and substance satisfactory to the Agent or if a
Reserve for rents or storage charges has not been established for Inventory at
that location;
(j) that contains or bears any Proprietary Rights licensed to a
Borrower by any Person, if the Agent is not reasonably satisfied that it may
sell or otherwise dispose of such Inventory in accordance with the terms of the
Security Agreement and SECTION 9.2 without infringing the rights of the licensor
of such Proprietary Rights or violating any contract with such licensor (and
without payment of any royalties other than any royalties due with respect to
the sale or disposition of such Inventory pursuant to the existing license
agreement), and, as to which the applicable Borrower has not delivered to the
Agent a consent or sublicense agreement from such licensor in form and substance
acceptable to the Agent if requested;
(k) that is not reflected in the details of a current perpetual
inventory report;
(l) that is Inventory placed on consignment;
(m) that is Inventory that is subject to a xxxx-and-hold sale; or
(n) that is Inventory that is to be returned to the vendor.
If any Inventory at any time ceases to be Eligible Inventory, such
Inventory shall promptly be excluded from the calculation of Eligible Inventory.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"ENVIRONMENTAL COMPLIANCE RESERVE" means any reserve which the Agent
establishes in its reasonable discretion after prior written notice to the
Borrowers from time to time for amounts that are reasonably likely to be
expended by the Borrower Parties (a) to comply with any notice from a
Governmental Authority asserting material non-compliance with Environmental
Laws, or (b) to correct any such material non-compliance identified in a report
delivered to the Agent and the Lenders pursuant to SECTION 7.7 in each case,
with respect to the Real Estate Collateral and the Borrower Parties' operations
thereon.
"ENVIRONMENTAL INDEMNITY AGREEMENT" means the Environmental Indemnity
Agreement of even date herewith executed and delivered to the Borrower Parties
party thereto for the benefit of the Agent and other Lenders.
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"ENVIRONMENTAL LAWS" means all United States federal, state or local,
or foreign Governmental Authority, laws, statutes, common law duties, rules,
regulations, ordinances and codes, together with all administrative orders,
directed duties, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case relating to environmental, health,
safety and land use matters.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"EQUIPMENT" means all of the Parent Guarantor's and each Subsidiary's
now owned and hereafter acquired machinery, equipment, furniture, furnishings,
fixtures, and other tangible personal property (other than consumer goods, farm
products or Inventory), including embedded software, motor vehicles with respect
to which a certificate of title has been issued, aircraft, dies, tools, jigs,
molds and office equipment, as well as all of such types of property leased by
the Parent Guarantor or a Subsidiary and all of the Parent Guarantor's or such
Subsidiary's rights and interests with respect thereto under such leases
(including, without limitation, options to purchase); together with all present
and future additions and accessions thereto, replacements therefor, component
and auxiliary parts and supplies used or to be used in connection therewith, and
all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto; wherever any of the
foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder, as in effect from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Borrower Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan, (b) a withdrawal by the Parent Guarantor, any Subsidiary or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations which is treated as such a withdrawal under
Section 4062(e) of ERISA, (c) a complete or partial withdrawal by the Parent
Guarantor, any Subsidiary or any ERISA Affiliate from a Multi-employer Plan or
notification that a Multi-employer Plan is in reorganization, (d) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multi-employer Plan, (e)
the occurrence of an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multi-employer Plan,
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or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any
Borrower Party or any ERISA Affiliate.
"EVENT OF DEFAULT" has the meaning specified in SECTION 9.1.
"EXCESS AVAILABILITY" means, as of any date of determination,
Availability, MINUS, at any time that the Borrowers are required to maintain at
least $75,000,000 of Availability under Section 7.24, $75,000,000.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder, as in effect from time to time.
"FDA" means the United States Food and Drug Administration, and any
Governmental Authority succeeding to any of its principal functions.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted 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 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 as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Bank on such
day on such transactions as determined by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"FINANCIAL STATEMENTS" means, according to the context in which it is
used, the financial statements referred to in SECTIONS 5.2 and 6.6 or any other
financial statements required to be given to the Lenders pursuant to this
Agreement.
"FISCAL MONTH" means any fiscal month of any Fiscal Year.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the Parent Guarantor's fiscal year for financial
accounting purposes. The current Fiscal Year of the Parent Guarantor will end on
December 31, 2002.
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"FIXED ASSETS" means the Equipment and Real Estate of the Parent
Guarantor or any Subsidiary.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any fiscal period
of the Parent Guarantor, on a consolidated basis, the ratio of EBITDA to Fixed
Charges.
"FIXED CHARGES" means, with respect to any fiscal period of the Parent
Guarantor on a consolidated basis, without duplication, interest expense,
Capital Expenditures (excluding Capital Expenditures funded with Debt other than
Revolving Loans, but including, without duplication, principal payments with
respect to such Debt), scheduled principal payments of Debt, scheduled
reductions of the Maximum Fixed Assets Loan Amount as set forth in the
definition of "Maximum Fixed Assets Loan Amount", and Federal, state, local and
foreign income taxes paid in cash.
"FLORIDA REAL ESTATE COLLATERAL CONDITIONS" means the receipt by the
Agent of an endorsement, which endorsement must be in form and substance
satisfactory to the Agent, to the title policy issued to the Agent with respect
to the Real Estate Collateral located at 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxxxx
removing the following title exceptions (to the extent such title exceptions are
not removed prior to the issuance of such original title policy): Filed December
20, 2001 in O.R. Book 32520, Page 142; Filed December 20, 2001 in O.R. Book
32520, Page 145; Filed December 20, 2001 in O.R. Book 32520, Page 148; Filed May
10, 2002 in O.R. Book 331112, Page 1287; Filed May 10, 2002 in O.R. Book 331112,
Page 1290; Filed May 10, 2002 in O.R. Book 331112, Page 1293; Filed May 10, 2002
in O.R. Book 331112, Page 1296; and Filed July 2, 2002 in O.R. Book 33378, Page
958.
"FOOD AND DRUG LAWS" means all federal, state or local statues, rules,
regulations, ordinances and codes, together with all administrative orders,
directed duties, licenses, authorization and permits of, and agreements with,
any United States and foreign Governmental Authority, in each case relating to
manufacture, sale, testing, handling, management, marketing and disposal or
pharmaceutical, medical device, biological and drug products, including but not
limited to those relating to good manufacturing practices, good clinical
practices, labeling, record keeping and obligations for products for which (a)
monograph conditions must be met, or (b) a 510K or similar application must be
filed, or (c) approval of the FDA and/or similar foreign Governmental Authority
is required, before they may be marketed or sold.
"FOREIGN PLEDGE AGREEMENT" means that certain Deed of Charge over
Shares and Securities of even date herewith among the Parent Guarantor, Andrx
(EU) Limited, a company formed under the laws of the England and Wales, and the
Agent for the benefit of the Agent and the other Lenders.
"FOREIGN SUBSIDIARY" means each Subsidiary incorporated or organized
under the laws of a jurisdiction outside of the United States.
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"FUNDING BORROWER" has the meaning specified in SECTION 1.5(E).
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices 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 Closing Date.
"GENERAL INTANGIBLES" means all of the Parent Guarantor's and each
Subsidiary's now owned or hereafter acquired general intangibles, choses in
action and causes of action and all other intangible personal property of the
Parent Guarantor and each Subsidiary of every kind and nature (other than
Accounts), including, without limitation, all contract rights, payment
intangibles, Proprietary Rights, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to the Parent
Guarantor or any Subsidiary in connection with the termination of any Plan or
other employee benefit plan or any rights thereto and any other amounts payable
to the Parent Guarantor or any Subsidiary from any Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, property,
casualty or any similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which the Parent Guarantor or
any Subsidiary is beneficiary, rights to receive dividends, distributions, cash,
Instruments and other property in respect of or in exchange for pledged equity
interests or Investment Property and any letter of credit, guarantee, claim,
security interest or other security held by or granted to the Parent Guarantor
or any Subsidiary.
"GOODS" means all "goods" as defined in the UCC, now owned or hereafter
acquired by the Parent Guarantor or any Subsidiary, wherever located, including
embedded Software to the extent included in "goods" as defined in the UCC,
manufactured homes, standing timber that is cut and removed for sale and unborn
young of animals.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
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"GUARANTORS" means the Parent Guarantor and those Subsidiaries
signatory to the Subsidiary Guaranty from time to time.
"GUARANTY" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"HEDGE AGREEMENT" means any and all transactions, agreements or
documents now existing or hereafter entered into, which provides for an interest
rate, credit, commodity or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging the Borrower Parties' exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.
"INCREASED MAXIMUM REVOLVER AMOUNT ACTIVATION NOTICE" means a notice in
the form of EXHIBIT H.
"INCREASED MAXIMUM REVOLVER AMOUNT CLOSING DATE" means any Business Day
designated as such in an Increased Maximum Revolver Amount Activation Notice.
"INDA" has the meaning specified in SECTION 6.29(A).
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignment for the benefit of
creditors, formal or informal moratoria, composition, extension generally with
creditors or proceedings seeking reorganization, arrangement or other similar
relief.
"INSTRUMENTS" means all "instruments" as such term is defined in the
UCC, now owned or hereafter acquired by the Parent Guarantor or any Subsidiary.
"INTEREST PERIOD" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Administrative Borrower in its Notice of Borrowing, in the form attached hereto
as EXHIBIT D, or Notice of Continuation/Conversion, in the form attached hereto
as EXHIBIT E, provided that:
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(a) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following Business
Day unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end on
the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(c) no Interest Period shall extend beyond the Stated Termination Date.
"INTEREST RATE" means each or any of the interest rates, including the
Default Rate, set forth in SECTION 2.1.
"INVENTORY" means all of the Parent Guarantor's and each Subsidiary's
right, title and interest with respect to "inventory," as such term is defined
in the UCC, wherever located, and in any event including now owned and hereafter
acquired inventory, goods and merchandise, wherever located, to be furnished
under any contract of service or held for sale or lease, all returned goods, raw
materials, work-in-process, finished goods (including embedded Software), other
materials and supplies of any kind, nature or description which are used or
consumed in the Parent Guarantor's or any Subsidiary's business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods, merchandise, and all documents of title or other Documents representing
them.
"INVENTORY BORROWERS" means Anda, Inc., Valmed Pharmaceutical, Inc.,
Anda Pharmaceuticals, Inc., and each other Borrower whose Inventory is included
in the Borrowing Base, in each case, and any successor thereto in connection
with a merger permitted by SECTION 7.10(III), and "INVENTORY BORROWER" shall
mean any one of the foregoing Inventory Borrowers.
"INVESTMENT PROPERTY" means all of the Parent Guarantor's and each
Subsidiary's right title and interest in and to any and all: (a) securities
whether certificated or uncertificated; (b) securities entitlements; (c)
securities accounts; (d) commodity contracts; or (e) commodity accounts.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"KNOWLEDGE" means, with respect to the Parent Guarantor or the
Administrative Borrower, as applicable, the actual or imputed knowledge of the
senior executive officers of the Parent Guarantor or the Administrative
Borrower, as applicable. Imputed knowledge of the senior executive officers of
the Parent Guarantor or the Administrative Borrower, as applicable, means the
existence of circumstances by reason of which the
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senior executive officers of the Parent Guarantor or the Administrative
Borrower, as applicable, in the reasonable exercise of their duties, should have
known of such particular fact including, without limitation, based in part on
compliance with reporting mechanisms in place as of the Closing Date (as
modified from time to time so long as such modifications are not intended to
materially reduce disclosure with respect to the Parent Guarantor and the
Subsidiaries) that are designed to keep the senior executive officers of the
Parent Guarantor or the Administrative Borrower, as applicable, informed of
material events or circumstances affecting the Parent Guarantor and the
Subsidiaries taken as a whole.
"LATEST PROJECTIONS" means: (a) on the Closing Date and thereafter
until the Agent receives new projections pursuant to SECTION 5.2(F), the
projections of the Parent Guarantor's and the Subsidiaries' financial condition,
results of operations, and cash flows, for the period commencing on September
30, 2002 and ending on December 31, 2007 and delivered to the Agent prior to the
Closing Date; and (b) thereafter, the projections most recently received by the
Agent pursuant to SECTION 5.2(F).
"LENDER" and "LENDERS" have the meanings specified in the introductory
paragraph hereof and shall include any New Lender and the Agent to the extent of
any Agent Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share.
"LETTER OF CREDIT" has the meaning specified in SECTION 1.3(A).
"LETTER OF CREDIT FEE" has the meaning specified in SECTION 2.6.
"LETTER OF CREDIT ISSUER" means the Bank, any affiliate of the Bank or
any other financial institution that issues any Letter of Credit pursuant to
this Agreement.
"LETTER-OF-CREDIT RIGHTS" means "letter-of-credit rights" as such term
is defined in the UCC, now owned or hereafter acquired by the Parent Guarantor
or any Subsidiary, including rights to payment or performance under a letter of
credit, whether or not the Parent Guarantor or a Subsidiary, as beneficiary, has
demanded or is entitled to demand payment or performance.
"LETTER OF CREDIT SUBFACILITY" means $35,000,000.
"LIBOR INTEREST PAYMENT DATE" means, with respect to a LIBOR Rate Loan,
the Termination Date and the last day of each Interest Period applicable to such
Loan or, with respect to each Interest Period of greater than one month in
duration, the last day of each month of such Interest Period, including, without
limitation, the last day of such Interest Period.
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"LIBOR RATE" means, for any Interest Period, with respect to LIBOR Rate
Loans, the rate of interest per annum determined pursuant to the following
formula:
LIBOR Rate = Offshore Base Rate
------------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"OFFSHORE BASE RATE" means the rate per annum appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available, the Offshore
Base Rate shall be, for any Interest Period, the rate per annum appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
If for any reason none of the foregoing rates is available, the Offshore Base
Rate shall be, for any Interest Period, the rate per annum determined by Agent
as the rate of interest at which dollar deposits in the approximate amount of
the LIBOR Rate Loan comprising part of such Borrowing would be offered by the
Bank's London Branch to major banks in the offshore dollar market at their
request at or about 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period.
and
"EURODOLLAR RESERVE PERCENTAGE" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"). The Offshore Rate
for each outstanding LIBOR Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"LIBOR RATE LOAN" means a Revolving Loan during any period in which it
bears interest based on the LIBOR Rate.
"LIEN" means: (a) any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (b) to the extent not included
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under the preceding clause (a), any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception or encumbrance affecting property; and (c) any contingent or other
agreement to provide any of the foregoing.
"LOAN ACCOUNT" means the loan account of the Borrowers, which account
shall be maintained by the Agent.
"LOAN DOCUMENTS" means this Agreement, the Revolving Loan Note, the
Patent and Trademark Security Agreement, the Security Agreement, the Mortgages,
the Environmental Indemnity Agreement, the Subsidiary Guaranty, the Pledge
Agreement, the Foreign Pledge Agreement, the fee letter described in SECTION
2.4, and any other agreements, instruments, and documents heretofore, now or
hereafter evidencing, securing, guaranteeing or otherwise relating to the
Obligations, the Collateral, or any other aspect of the transactions
contemplated by this Agreement.
"LOANS" means, collectively, all loans and advances provided for in
Article 1.
"MAJORITY LENDERS" means at any date of determination Lenders whose Pro
Rata Shares aggregate more than fifty percent (50%).
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower Parties on a consolidated
basis or of the Collateral (b) a material impairment of the ability of the
Borrower Parties, taken as a whole, to perform under any Loan Document or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Borrower Party of any Loan Document to which it is a
party.
"MAXIMUM EQUIPMENT LOAN AMOUNT" has the meaning specified in clause (a)
of the definition of Maximum Fixed Assets Loan Amount.
"MAXIMUM INVENTORY LOAN AMOUNT" means $100,000,000.
"MAXIMUM FIXED ASSETS LOAN AMOUNT" means, as of any date of
determination, an amount, not to exceed $50,000,000 in the aggregate, equal to
the sum of the following: (a) $8,496,000 minus, as of the last day of each
fiscal quarter following the Closing Date (commencing on March 31, 2003) through
the date of determination, one twenty-fourth (1/24) of such amount (the "MAXIMUM
EQUIPMENT LOAN AMOUNT"), PLUS (b) so long as the Florida Real Estate Collateral
Conditions have been satisfied to the satisfaction of the Agent on or before
March 28, 2003, from and after the date such conditions are satisfied,
$27,650,000 minus, as of the last day of each fiscal quarter following the
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Closing Date (commencing on March 31, 2003) through the date of determination,
one twenty-fourth (1/24) of such amount (the "MAXIMUM FLORIDA REAL ESTATE
COLLATERAL AMOUNT"), PLUS (c) so long as the North Carolina Real Estate
Collateral Conditions have been satisfied to the satisfaction of the Agent on or
before March 28, 2003, from and after the date such conditions are satisfied,
70% of the fair market value of the North Carolina Real Estate Collateral as
determined by the appraisal thereof referred to in the definition of North
Carolina Real Estate Collateral Conditions minus, as of the last day of each
fiscal quarter following the Closing Date (commencing on March 31, 2003) through
the date of determination, one twenty-fourth (1/24) of such amount.
"MAXIMUM FLORIDA REAL ESTATE COLLATERAL AMOUNT" has the meaning
specified in clause (b) of the definition of Maximum Fixed Assets Loan Amount.
"MAXIMUM RATE" has the meaning specified in SECTION 2.3.
"MAXIMUM REVOLVER AMOUNT" means (a) $185,000,000, plus (b) the amount
of any increase in the Maximum Revolver Amount pursuant to SECTION 1.6, minus
(c) the amount of any reduction in the Maximum Revolver Amount pursuant to
SECTION 3.2.
"MORTGAGES" means and includes any and all of the mortgages, deeds of
trust, deeds to secure debt, assignments and other instruments executed and
delivered by the Parent Guarantor or any Subsidiary to or for the benefit of the
Agent by which the Agent, on behalf of the Lenders, acquires a Lien on the Real
Estate or a collateral assignment of the Parent Guarantor or applicable
Subsidiary's interest under leases of Real Estate, and all amendments,
modifications and supplements thereto.
"MULTI-EMPLOYER PLAN" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by the Parent
Guarantor, any Subsidiary or any ERISA Affiliate.
"NDA" has the meaning specified in SECTION 6.29(A).
"NET AMOUNT OF ELIGIBLE ACCOUNTS" means, at any time, the gross amount
of Eligible Accounts less sales, excise or similar taxes, and less returns,
discounts, claims, credits, allowances, accrued rebates, offsets, deductions,
counterclaims, disputes and other defenses of any nature at any time issued,
owing, granted, outstanding, available or claimed.
"NET LIQUIDATION VALUE OF INVENTORY" means the book value of the
Inventory Borrowers' Qualifying Inventory that is estimated to be recoverable in
an orderly liquidation of such Inventory net of estimated liquidation expenses,
such amounts to be determined from time to time by a qualified appraisal company
selected by the Agent.
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"NEW ANDRX PHARMACEUTICALS, INC." means Andrx Pharmaceuticals, Inc., a
Florida corporation, formerly known as Andrx Pharmaceuticals Services, Inc.
"NEW LENDER" has the meaning set forth in SECTION 1.6.
"NEW LENDER SUPPLEMENT" has the meaning set forth in SECTION 1.6.
"NON-RATABLE LOAN" and "NON-RATABLE LOANS" have the meanings specified
in SECTION 1.2(H).
"NORTH CAROLINA REAL ESTATE COLLATERAL" means the Real Estate located
at 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx.
"NORTH CAROLINA REAL ESTATE COLLATERAL CONDITIONS" means the receipt by
the Agent of the following: (a) a Mortgage duly executed by Andrx
Pharmaceuticals (NC), Inc. in favor of the Agent granting a lien on the North
Carolina Real Estate Collateral in form and substance reasonably satisfactory to
the Agent, (b) environmental reports with respect to the North Carolina Real
Estate Collateral which environmental reports shall have been prepared by
consultants acceptable to the Agent and shall otherwise be in form and substance
reasonably satisfactory to the Agent and any remediation costs to be incurred or
actions to be taken with respect to the North Carolina Real Estate Collateral in
connection therewith shall be acceptable to the Agent, (c) an appraisal of the
North Carolina Real Estate Collateral, the results of which shall be reasonably
satisfactory to the Agent, and (d) such other documents or information as shall
be required by the Agent in its discretion, all in form and substance reasonably
satisfactory to the Agent.
"NOTICE OF BORROWING" has the meaning specified in SECTION 1.2(B).
"NOTICE OF CONTINUATION/CONVERSION" has the meaning specified in
SECTION 2.2(B).
"OTHER DEBTOR RELIEF LAW" has the meaning specified in SECTION
1.5(B)(III).
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrowers to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect, absolute or contingent, due or to become due,
primary or secondary, as principal or guarantor, and including all principal,
interest, charges, expenses, fees, attorneys' fees, filing fees and any other
sums chargeable to any Borrower hereunder or under any of the other Loan
Documents. "Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter arising from or in connection with
the Letters of Credit and (b) all debts, liabilities and obligations now or
hereafter arising from or in connection with Bank Products.
A-26
"OTHER TAXES" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Documents.
"PARENT GUARANTOR" has the meaning specified in the preamble of this
Agreement.
"PARENT GUARANTY" means the Parent Guaranty dated as of the date
hereof, executed and delivered by the Parent Guarantor for the benefit of the
Agent and the Lenders to guarantee the Obligations of the Borrowers under this
Agreement.
"PARTICIPANT" means any Person who shall have been granted the right by
any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"PATENT AND TRADEMARK SECURITY AGREEMENT" means the Patent Security
Agreement and the Trademark Security Agreement, dated as of the date hereof,
executed and delivered by certain of the Borrower Parties to the Agent to
evidence and perfect the Agent's security interest in such Borrower Parties'
present and future patents, trademarks, and related licenses and rights, for the
benefit of the Agent and the Lenders.
"PAYMENT ACCOUNT" means each bank account, including without limitation
each lockbox account, established pursuant to the Security Agreement, to which
the proceeds of Accounts and other Collateral are deposited or credited, and
which is maintained in the name a Borrower or, at any time after Agent has taken
full dominion over the Payment Accounts in accordance with Section 10 of the
Security Agreement, the Agent, as the Agent may determine, on terms acceptable
to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"PENDING REVOLVING LOANS" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Agent which have not yet been advanced.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Parent Guarantor or any Subsidiary
sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"PERMITTED ACQUISITION" means any acquisition by any domestic
Subsidiary of the Parent Guarantor of all or substantially all of the assets of
a Person so long as (a) no Default or Event of Default exists or would be caused
thereby, (b) the assets acquired are
A-27
not stock or other equity interests of a Person, (c) the assets acquired are
located in the United States, (d) the EBITDA (with respect to product
acquisitions after sales and costs adjustments giving pro forma effect to such
acquisition to the extent such adjustments are approved by the Agent in its
reasonable discretion) attributable to such acquired assets for the most
recently ended twelve (12) month period prior to such acquisition is greater
than zero, (e) after giving effect to such acquisition and payment of the
purchase price therefor, Availability is equal to or greater than $75,000,000,
as adjusted for any past due accounts payable, (f) the purchase price for such
acquisition (cash or otherwise), together with the purchase price of all other
Permitted Acquisitions during such calendar year, shall not exceed $150,000,000
in the aggregate, and (g) (i) no Loans or Letters of Credit shall be outstanding
on the date on which such acquisition is consummated both before and after
giving effect thereto or (ii) if Loans or Letters of Credit shall be outstanding
on the date on which such acquisition is consummated either before or after
giving effect thereto, the Fixed Charge Coverage Ratio for the immediately
preceding twelve (12) Fiscal Month period (after giving pro forma effect to such
acquisition) shall be not less than 1.25 to 1.0; PROVIDED, HOWEVER, that no
assets so acquired shall be included in the Borrowing Base without the prior
written consent of the Agent and completion of a field examination of such
assets by the Agent; and "PERMITTED ACQUISITIONS" means each Permitted
Acquisition.
"PERMITTED LIENS" means:
(a) (i) Liens for taxes not delinquent or (ii) statutory Liens for
taxes in an amount not to exceed $100,000 (or such greater amount as shall be
covered by a bond) provided that the payment of such taxes which are due and
payable is being contested in good faith and by appropriate proceedings
diligently pursued and as to which adequate financial reserves have been
established on the Parent Guarantor's and the Subsidiaries' books and records
and a stay of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of Debt) or to secure indemnity, performance or other similar bonds
for the performance of bids, tenders or contracts (other than for the repayment
of Debt) or to secure statutory obligations (other than liens arising under
ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons, provided that if any
such Lien arises from the nonpayment of such claims or demand when due, such
claims or demands do not exceed $100,000 in the aggregate (or such greater
amount as shall be covered by a bond);
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(e) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running with the
land, and other similar title exceptions or encumbrances affecting any Real
Estate; provided that they do not in the aggregate materially detract from the
value of the Real Estate or materially interfere with its use in the ordinary
conduct of the Parent Guarantor's and the Subsidiaries' business;
(f) Liens arising from judgments and attachments in connection with
court proceedings provided that the attachment or enforcement of such Liens
would not result in an Event of Default hereunder and such Liens are being
contested in good faith by appropriate proceedings, adequate reserves have been
set aside and no material Property is subject to a material risk of loss or
forfeiture and the claims in respect of such Liens are fully covered by
insurance (subject to ordinary and customary deductibles) and a stay of
execution pending appeal or proceeding for review is in effect;
(g) Liens, if any, in effect as of the Closing Date described in
SCHEDULE 6.9 securing Debt described in SCHEDULE 6.9;
(h) Liens securing Capital Leases and Debt permitted in SECTION 7.14;
and
(i) Liens on certain Fixed Assets of the Borrower Parties approved by
the Agent in writing, securing Debt permitted under SECTION 7.14(E).
"PERSON" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which a Borrower Party sponsors or maintains or to which a Borrower Party
makes, is making, or is obligated to make contributions and includes any Pension
Plan.
"PLEDGE AGREEMENT" means the Pledge Agreement of even date herewith
among certain of the Borrower Parties party thereto and the Agent for the
benefit of the Agent and the other Lenders.
"PROPRIETARY RIGHTS" means all of the Parent Guarantor's and each
Subsidiary's now owned and hereafter arising or acquired: licenses, franchises,
permits, patents, patent rights, copyrights, works which are the subject matter
of copyrights, trademarks, service marks, trade names, trade styles, patent
applications, copyright applications, trademark and service xxxx applications,
and all licenses and rights related to any of the foregoing, including those
patents, trademarks, service marks, trade names and copyrights set forth on
SCHEDULE 6.12 hereto, and all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to xxx for past,
present and future infringement of any of the foregoing.
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"PRO RATA SHARE" means, with respect to a Lender, a fraction (expressed
as a percentage), the numerator of which is the amount of such Lender's
Commitment and the denominator of which is the sum of the amounts of all of the
Lenders' Commitments, or if no Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate amount of the
Obligations owed to the Lenders, in each case giving effect to a Lender's
participation in Non-Ratable Loans and Agent Advances.
"QUALIFYING INVENTORY" means (a) Inventory that was manufactured by a
Person other than the Parent Guarantor, a Subsidiary or an Affiliate thereof
(each a "Third Party") and is to be distributed by a Borrower, (b) Inventory
manufactured by a Borrower consisting of branded products that were developed
and launched by a Third Party and acquired by such Borrower, provided, that such
Inventory shall be Qualifying Inventory only upon completion by the Agent of a
field examination of such assets and the Agent's satisfaction with the results
of such field examination, and (c) upon the prior written consent of the
Majority Lenders, Inventory manufactured and developed by a Borrower consisting
of branded products. It is agreed that there will be no consent fee charged by
the Agent or the Lenders in connection with a consent issued solely in
connection with clause (c) of this definition.
"REAL ESTATE" means all of the Parent Guarantor's and each Subsidiary's
now or hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds and future interests, together with all of the
Parent Guarantor's and each Subsidiary's now or hereafter owned or leased
interests in the improvements thereon, the fixtures attached thereto and the
easements appurtenant thereto.
"REAL ESTATE COLLATERAL" means all of the Parent Guarantor's and each
Subsidiary's owned Real Estate, excluding that certain parcel located at 0000
Xxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxx Xxxx, other than owned Real Estate acquired
after the Closing Date that is financed by a third party pursuant to SECTION
7.14(C).
"RELEASE" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, other than any such event for which the
thirty (30)-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"REQUIRED LENDERS" means at any time Lenders whose Pro Rata Shares
aggregate more than sixty-six and two-thirds percent (66-2/3%).
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"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"RESERVES" means reserves that limit the availability of credit
hereunder, consisting of reserves against Availability, Eligible Accounts or
Eligible Inventory, established by Agent from time to time in Agent's reasonable
credit judgment. Without limiting the generality of the foregoing, the following
reserves shall be deemed to be a reasonable exercise of Agent's credit judgment:
(a) Bank Product Reserves, (b) a reserve for accrued, unpaid interest on the
Obligations, (c) reserves for rent at leased locations where Collateral that is
included in the Borrowing Base (including equipment that was appraised in
connection with the closing of this Agreement and included in the calculation of
the Maximum Equipment Loan Amount and any replacements thereof) is located
unless a landlord agreement with respect to such location reasonably acceptable
to the Agent has been delivered to the Agent, (d) reserves for Inventory
shrinkage, (e) Environmental Compliance Reserves, (f) reserves for customs
charges, (g) reserves for dilution with respect to Accounts, (h) reserves for
warehousemen's or bailees' charges, (i) reserves for royalties payable by any
Accounts Receivable Borrower to a third party, (j) reserves for accrued rebates
or returns of Inventory, and (k) reserves for any other matter that has a
negative impact on the value of the Borrowers' Collateral.
"RESPONSIBLE OFFICER" means the chief financial officer, the president
or any executive vice president of the Administrative Borrower, any other
officer having substantially the same authority and responsibility.
"RESTRICTED INVESTMENT" means, as to the Parent Guarantor or any
Subsidiary, any acquisition of property by the Parent Guarantor or such
Subsidiary in exchange for cash or other property, whether in the form of an
acquisition of stock, debt, or other indebtedness or obligation, or the purchase
or acquisition of any other property, or a loan, advance, capital contribution,
or subscription, except the following: (a) acquisitions of Equipment to be used
in the business of the Parent Guarantor or such Subsidiary so long as the
acquisition costs thereof constitute Capital Expenditures permitted hereunder;
(b) acquisitions of Inventory in the ordinary course of business of the Parent
Guarantor or such Subsidiary; (c) acquisitions of current assets acquired in the
ordinary course of business of the Parent Guarantor; (d) investments made in
accordance with the Parent Guarantor's and the Subsidiaries' investment
guidelines attached hereto as SCHEDULE 1.3; (g) Hedge Agreements, (h) Permitted
Acquisitions, (i) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, any Borrower Party may make loans to
another Borrower Party (other than the Parent Guarantor) and the Borrower
Parties (other than the Parent Guarantor) may otherwise have "due to / due from"
transactions among themselves in the ordinary course of business to facilitate
the payment of accounts payables of such Borrower Parties, (j) so long as no
Default or Event of Default has occurred and is continuing or would be caused
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thereby and only to the extent necessary to pay reasonable accounting and
administrative expenses and to pay regularly scheduled interest payments on Debt
permitted under SECTION 7.14(F) to the extent such interest payments are
permitted under the subordination provisions applicable thereto, any Subsidiary
may make loans to the Parent Guarantor, and (k) other investments in an amount
not to exceed (i) if there are no Loans or Letters of Credit outstanding after
giving effect to such investments, $50,000,000 in the aggregate at any time
outstanding or (ii) if there are Loans or Letters of Credit outstanding after
giving effect to such investments, $10,000,000 in the aggregate at any time
outstanding.
"REVOLVING LOANS" has the meaning specified in SECTION 1.2 and includes
each Agent Advance and Non-Ratable Loan.
"REVOLVING LOAN NOTE" has the meanings specified in SECTION 1.2(A)(II).
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"SECURITY AGREEMENT" means the Security Agreement of even date herewith
among the Borrower Parties and the Agent for the benefit of the Agent and other
Lenders.
"SETTLEMENT" and "SETTLEMENT DATE" have the meanings specified in
SECTION 12.15(A)(II).
"SOFTWARE" means all "software" as such term is defined in the UCC, now
owned or hereafter acquired by the Parent Guarantor or any Subsidiary, other
than software embedded in any category of Goods, including all computer programs
and all supporting information provided in connection with a transaction related
to any program.
"SOLVENT" means, when used with respect to any Person, that at the time
of determination:
(a) the assets of such Person, at a fair valuation, are in excess of
the total amount of its debts (including contingent liabilities); and
(b) the present fair saleable value of its assets is greater than its
probable liability on its existing debts as such debts become absolute and
matured; and
(c) it is then able and expects to be able to pay its debts (including
contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as conducted and
as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of
any contingent liability shall be computed as the amount that, in light of all
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the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"STATED TERMINATION DATE" means December 30, 2006.
"STOCK" means all shares, options, warrants, interests, participations,
or other equivalents (regardless of how designated) of or in a Person, whether
voting or nonvoting, including common stock, preferred stock, or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Exchange Act).
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Parent Guarantor, including, without limitation, each
Borrower.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty dated as of the
date hereof, executed and delivered by the Guarantors (other than the Parent
Guarantor) for the benefit of the Agent and the Lenders to guarantee the
Obligations of the Borrowers under this Agreement and the obligations of the
Parent Guarantor under the Parent Guaranty.
"SUPPORTING LETTER OF CREDIT" has the meaning specified in SECTION
1.3(G).
"SUPPORTING OBLIGATIONS" means all "supporting obligations" as such
term is defined in the UCC, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments,
or Investment Property.
"SWEEP PERIOD" means any period of time in which, pursuant to Section
10 of the Security Agreement, the Agent shall be entitled to direct each
Clearing Bank to sweep funds in each Payment Account to an account designated by
the Agent; provided, that any period of time in which the Agent is required
pursuant to Section 10 of the Security Agreement to direct each Clearing Bank to
sweep funds in each Payment Account to the Designated Account shall not
constitute a Sweep Period.
"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Agent's or
each Lender's net income in any the jurisdiction (whether federal, state or
local and including any political subdivision thereof) under the laws of which
such Lender or the Agent, as the case may be, is organized or maintains a
lending office.
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"TELEGRAPH CONSULTING CORP." means Telegraph Consulting Corp., a
Florida corporation.
"TERMINATION DATE" means the earliest to occur of (i) the Stated
Termination Date, (ii) the date the Total Facility is terminated either by the
Borrowers pursuant to SECTION 3.2 or by the Majority Lenders pursuant to SECTION
9.2, and (iii) the date this Agreement is otherwise terminated for any reason
whatsoever pursuant to the terms of this Agreement.
"TOTAL FACILITY" has the meaning specified in SECTION 1.1.
"UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of Georgia or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests; provided, that to the extent that the UCC is
used to define any term herein or in any other documents and such term is
defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"UNUSED LETTER OF CREDIT SUBFACILITY" means an amount equal to
$35,000,000 MINUS the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus, without duplication, (b) the aggregate unpaid
reimbursement obligations with respect to all Letters of Credit.
"UNUSED LINE FEE" has the meaning specified in SECTION 2.5.
"VALMED PHARMACEUTICAL, INC." means Valmed Pharmaceutical, Inc., a New
York corporation.
ACCOUNTING TERMS. Any accounting term used in the Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations in the Agreement shall be
computed, unless otherwise specifically provided therein, in accordance with
GAAP as consistently applied and using the same method for inventory valuation
as used in the preparation of the Financial Statements.
INTERPRETIVE PROVISIONS. (a) The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to the Agreement as a whole and not to any particular provision of the
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Agreement; and Subsection, Section, Schedule and Exhibit references are to the
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and
the word "through" means "to and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including the Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of the Agreement and other Loan Documents
are for convenience of reference only and shall not affect the interpretation of
the Agreement.
(f) The Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) For purposes of SECTION 9.1, a breach of a financial covenant
contained in SECTIONS 7.23-7.24 shall be deemed to have occurred as of any date
of determination thereof by the Agent or as of the last day of any specified
measuring period, regardless of when the Financial Statements reflecting such
breach are delivered to the Agent.
(h) The Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrower
Parties and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Lenders or the Agent merely because of
the Agent's or Lenders' involvement in their preparation.
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